Final Results

Weatherly International Plc

("Weatherly" or "the Company")

Final Results for the year ended 30 June 2013

Weatherly International Plc (AIM:WTI) is pleased to announce its final results for the year ended 30 June 2013.

Summary Highlights for the Year Ended 30 June 2013

Highlights

Financial

· Profit after tax of US$1.6 million.

· Cash generated from operating activities US$1.9 million (excluding US$4.7 million at port)

· Cash or cash equivalent at 30 June 2013 of US$7.5 million.

Operational and Corporate

· Copper production at Central Operations maintained at 2012 levels.

· Appointment of Charilaos Stravrakis as Non-executive Director in January 2013 strengthening the Board.

· Completion of Tschudi Feasibility Study in December 2012.

Post year end

· Execution of loan and project documentation for the development of Tschudi.

For further information contact:

Rod Webster, Chief Executive Officer Weatherly International plc +44 (0) 207 917 2989

Rolf Gerritsen, Investor Relations +44 (0) 207 917 2989 / +44 (0) 7766 916 557

Andrew Chubb, Canaccord Genuity Limited +44 (0) 207 523 8350

Chairman's and Chief Executive's Statement

We are pleased to report Weatherly's results for the year ended 30 June 2013 in what has been a very encouraging year for the Company as we have achieved the major objective of funding the development of our project Tschudi.

During the year, the Group generated a profit after tax of US$1.6 million. US$2.0 million of this profit came about as a result of settling an outstanding insurance claim relating to the flooding of the Kombat mine, a business segment that was disposed of two years ago. The Company also benefitted from a US$2.0 million settlement of its claim for a licence to develop the Tambao mine in Burkina Faso.

The Group made an operating loss in the year of US$2.1 million. Which comprises a profit of US$1.1 million on Central Operations (after charging depreciation of US$5.0 million), US$0.6 million of other local costs and US$2.6 million relating to the head office in London.

Sales are dependent on our offtaker shipping concentrate out of Walvis Bay. At year-end inventory with a sales value of US$5.4 million (based on contracted prices) was still at Walvis Bay (June 2012 US$0.8 million). Our offtaker made loans against this stock to the value of US$4.7 million (June 2012: US$0.7 million) which has resulted in the increased loans at June 2013 despite US$2.0 million being paid off our working capital loan from Louis Dreyfus in the year.

The Group generated US$1.9 million of cash from operating activities. This figure would have been US$4.7 million higher if all inventory at Walvis Bay had been shipped. The Company invested US$1.0 million in property, plant and equipment, US$2.1 million in developing the Central Operations and US$2.7 million in completing the Tschudi feasibility study. The Company repaid US$2.4 million off its long term loans.

Throughout the year, Weatherly continued to pursue its two main strategic objectives, namely the development of the Tschudi project and the consolidation of production from its Central Operations.

During the year the newly appointed project team reported on their optimisation of the Tschudi project and completed the feasibility study which showed a highly profitable, robust project. We signed a term sheet for the full funding of the project with Red Kite and having completed due diligence at year end we were in the process of completing the project contracts the loan documentation and satisfying all conditions precedent to drawdown. We are pleased to be able to report that the loan documentation with Orion Mine Finance ("Orion") (formerly RK Mine Finance) was completed on the 20 September 2013 and we are on track to initiate development of the project. Note 34 sets out further details of the term sheet.

The Company produced 5,182 tonnes of copper in concentrate from Central Operations. The loss of an area at Otjihase due to subsidence caused us to reduce our production estimate for the remainder of the year. However we have continued to improve operational flexibility and reduce production costs. We anticipate more sustainable increased production and lower operating costs will be achieved when we start to mine previously unworked ore bodies.

Notwithstanding that we have significantly improved our safety systems this year our contactors had another fatality at the Matchless mine. We have concentrated on training and the safety culture of both staff and contractors and are continuing to focus on this very important area of our operations as we strive to achieve industry best standards.

Having completed the financing of Tschudi the focus of the Company will change and we will continue to seek to improve the performance at Otjihase and Matchless. We will be looking to phase out pillar recovery and mine new unworked ore bodies which should provide a more reliable increase in production. We are also seeking opportunities that would utilise the spare capacity in our concentrator at Otjihase and so further reduce production costs. The development of the new mine at Tschudi is of the highest priority as it gives us the opportunity to produce an additional 17,000 tonnes of copper per annum open pit mine. This is significant in moving the Company closer to its stated objective of being a 25,000 tpa copper producer.

In January 2013 we were pleased to welcome Mr. Charilaos Stavrakis on to the Board as a Non-executive Director, strengthening the board with his considerable financial expertise and banking experience. In view of the state of negotiations with the Tschudi funding this proved a timely appointment.

We are grateful for the hard work and dedication of our staff and contractors which have enabled the Company to achieve so much this year. In the year ahead we have the resources to meet the challenges of the development of Tschudi and improving the performance of central operations and we are looking forward to achieving these objectives.

John Bryant Rod Webster

Chairman Chief Executive Officer

14 October 2013

Review of Operations

Central Operations

Copper production for the year was 5,182 tonnes, as summarised in the quarterly production table below. (5,204 tonnes of copper in 2011/12)

During the third quarter a significant ground subsidence occurred in the upper levels of the Otjihase compartment, unfortunately resulting in a decision to abandon the area. Inspections and monitoring permitted the controlled withdrawal of personnel several days before the event occurred, so avoiding any risk of injury. With the loss of future production from this area, the Company revised the Otjihase mine plan, bypassing the conveyor system to improve efficiencies and restructured the contractual arrangements. Under the new arrangements Weatherly agreed to the appointment by the contractor of a new Otjihase management team with extensive international experience in successfully turning around safety and production performance to achieve best practice. Realising that it would take time for these changes to bed down we announced that we would expect Central Operations to produce at around the recent rate of 5,000 tonnes of copper per annum. Further production uplift is expected when a new compartment (Hoffnung West) becomes available to replace the ore blocks lost through subsidence, and, in the longer term, from Old Matchless. During the final quarter (Q4) of the year production increased by about 15% month on month with June's production being 503 tonnes of copper. During the last part of the year we took strong action to reduce our costs with encouraging results. Whilst the [C1] cash costs per tonne for the year were US$6,532 and for June was US$6,041 and costs have remained at or around these levels.

We anticipate additional improvements to be realised over the next few quarters as we continue to focus on reducing unit costs and increasing volumes through a number of initiatives. We have revised the long term mining plan for Matchless in order to accelerate production from existing areas (Matchless Western Extension) allowing for a sequential development of Old Matchless. The plan effectively reduces the amount of additional capital required and will now be self funding, while still achieving the overall production plan.

In our future development we are gradually phasing out pillar recovery and will be mining new unworked ore bodies which should help us increase production. We are also seeking ways to increase the utilisation of the concentrator which will put further downward pressure on production costs. 

Tschudi

The development of Tschudi, with an annual production of 17,000 tonnes of copper and a life of 11 years is of the highest priority to the Company. In May 2012 we announced that we had engaged a new project team to work on the optimisation of this project. In late 2012 we were able to report the progress of that optimisation and the completion of the Bankable Feasibility Study (BFS). The BFS had established the main parameters of the project including capital and operating costs.

The original feasibility study which was completed in December 2012 showed the project to be robust against a wide range of economic assumptions and concluded that "despite a relatively conservative outlook on the consensus copper price, the Project [under the Consensus Case] still showed an Internal Rate of Return (IRR) of 32.1%...", and "under the current currency and copper prices [the Alternative Case] the Project is very robust with an IRR of 50.8%..."

In December 2012 we announced that we had signed a term sheet with Red Kite Mine Finance ("RK"), to provide the total funding for the development of the project. RK agreed to provide US$88 million comprising a secured loan of US$80 million with a cost overrun facility of a further US$8.0 million. Following the completion of the due diligence in May 2013 and an internal reorganisation of RK, the negotiation of all the detailed project documents and loan facility documentation was completed and it was announced on the 20 September 2013 that we had signed loan documentation with Orion (the successor to RK) (the "Orion Loan"). There was one advantageous change in terms whereby the period for repayment was extended and the interest rate increased slightly.

The key elements of the Orion Loan are as follows: 

Project Loan amount US$80 million

Interest rate Libor+7% (with a minimum Libor of 2%)

Project Overrun facility US$8.0 million

Interest rate Libor + 9% (with a minimum Libor of 2%)

Duration of loan 6½ years (repayment period 4 ½ years)

Assumption of LD Loan US$3.0 million

Interest rate Libor +3%

The former LD loan has been rescheduled to expire at the end of December 2014.

In addition, Orion will purchase, on an exclusive basis, 100% of the project's copper cathode production based on LME/Comex market prices.

A change to the Company's articles of association approved at the General meeting in February 2013 allowed the Company to undertake this level of borrowing.

It is not surprising that the financing has taken longer than we thought in these difficult times but after extensive due diligence and scrutiny it is a testament to the quality of the project that funding has been achieved. We have been able to use this delay to continue to progress the development of the project and this means that once drawdown occurs we can mobilise immediately. We expect first copper production approximately 16 months after drawdown.

Berg Aukas and China Africa Resources plc

Weatherly has a 25% shareholding in China Africa Resources plc, and administers the business under the provisions of a management services agreement. The primary focus of China Africa Resources has been the progression of the Berg Aukas feasibility study. The drilling results that confirmed the JORC resource were very encouraging and the feasibility study will be completed before the end of 2013.

Safety

The vast majority of mine labour is employed by three major contracting groups although they have changed during the year in question. Weatherly as the principal sets the standards and procedures applying to all contracting groups active at the mine sites. This year taking all the contractors into account there were 36 lost time injuries.

Very regrettably, we experienced a fatality at the mine in March 2013 when an employee of our mining contractors at Matchless was electrocuted while attending a pump. The fatality caused a temporary shutdown of Matchless, while an independent audit of all electrical installations was undertaken, and the incident is currently under investigation by the Chief Inspector of Mines in Namibia. The mine continues to operate normally.

During the last two years we have undertaken a radical review of our safety procedures and safety culture and whilst the Company has always operated under the appropriate Namibian Safety Standards, the Board has taken the decision to upgrade the Company's entire safety management system to meet the international standard (OSHAS18001) and progress is being made to achieve industry best standards.

Environment

Weatherly is committed to maintaining the highest environmental standards and during the coming year, the Company has been reviewing its environmental management and reporting systems to ensure it continues to do so. Weatherly is in full compliance with all appropriate Namibian legislation at all its sites, and there were no environmental incidents on any of our sites during the year.

As a result of changes in environmental legislation in Namibia (in February 2012), Weatherly, along with all other existing mining companies, was asked to submit a revised environmental impact statement and management plan for both Central Operations and Tschudi and this was done by February 2013. Weatherly has engaged environmental consultants, Synergistics, to assist with these clearances. Tschudi has received its full environmental clearance.

John Bryant Rod Webster

Chairman Chief Executive Officer

14 October 2013

Reserves and Resources Statement

All reserves and resources in tables A and B below have been updated by a competent person, A Thomson BSc (Hons) Geology, Country Manager & Technical Director, Weatherly Mining Namibia, member of South African Council for Natural Scientific Professions (registered number 400052/86), in accordance with the Australian Code of Reporting Mineral Resources and Reserves (JORC).

Table A

Weatherly Mining Namibia: Mineral Reserves as at 30 June 2013

Table B

Weatherly Mining Namibia: Mineral Resources as at 30 June 2013

Note: *In addition to the reserves and resources contained in the table above, Old Matchless has a historical (non-compliant) reserve (Chaplin, TCL, 1984) of 812,639t at 2.4% equating to 19,506t of copper.

Directors' Report

The directors present their report, together with the Group and Parent Company financial statements and auditor's reports, for the year ended 30 June 2013.

Principal Activity and Review of the Business

The principal activity of Weatherly International plc during the year was to act as a holding Company for the Group's activities in mining and production of base metals, primarily copper.

The subsidiary and associated undertakings principally affecting the profits or net assets of the Group in the year are listed in note 19.

A review of business can be found in the Chairman's and Chief Executive's Statement on page 4 and the Review of Operations on pages 5 to 6.

The Directors

The directors during the year ended 30 June 2013 were:

J Bryant (Non-executive Chairman)

R J Webster (Chief Executive Officer)

W G Martinick (Non-executive)

A J Stephens (Senior Independent Non-executive)

C G Stavrakis (Non-executive) joined the board on 17 January 2013)

Going Concern

The Company expects to generate sufficient funds to operate as a going concern for the next 12 months, based on its projected production levels and prevailing exchange rates and copper prices. Exchange rates and the price of copper will continue to have a significant impact on the Group's cash flow.

The business has taken steps to manage its exposure to the commodity markets; at 30 June 2013 it had sold forward 2,575 tonnes of copper at an average price of US$7,959/tonne of copper, which it is currently delivering. The Group policy is to maintain forward contracts extending out to between 15 and 18 months when target prices can be achieved. As a result of the fall in copper prices the group had forward sales for 13 months in place at 30 June 2013. These forward sales were negotiated to preserve the profitability of the mines in the face of an economic crisis similar in scale to that of 2008-2009. In addition, the Group has fixed the US$:N$ exchange rate for US$1.5 million of revenue per month for 10 months at an average exchange rate of 8.71.

The business has a debt financing facility of US$3.9 million with Louis Dreyfus. The loan is linked to an offtake agreement and is structured with repayment terms linked to the production of concentrate at the Central Operations. The Board considers this financing model reduces risk by better matching its debt service obligations with projected cash flows. 

Results and Dividends

The consolidated profit for the year after taxation was US$1,589,000 (2012 US$ 21,350,000). No dividends were declared or paid during the year (2012: US$ nil).

Key Performance Indicators

Production:the Board monitors monthly production against budgeted figures, which management monitors on a daily basis. Production concentrate grades are monitored by management on a shipment basis and the Board monitors ore grades on a monthly basis. For the year ended 30 June 2013, 300,000 tonnes of ore was extracted producing 5,200 tonnes of copper contained in concentrate.

Costs:the Board and management monitor actual against budgeted costs on a monthly basis.

Finance:The Company monitors, on a weekly basis by management, monthly and quarterly by the Board its cash position. Cash needs have been continually met.

Key Risk Factors and Mitigations

Commodity price risk and foreign exchange risks: the Company's revenues and expenses are affected by changes in the price of copper and exchange rate movements between the US dollar and the Namibian dollar.

Management and directors review trends in the copper price and exchange rates on a regular basis when considering the Company's risk management strategy.

The Board determines that it is in the Group's interest to ensure that we achieve at least a minimum price in Namibian dollars for a proportion of its production such that all future cash flows are forecast to cover costs even if copper prices fall.

The business has taken steps to manage its exposure to the commodity markets; at 30 June 2013 it had sold forward 2,575 tonnes of copper at an average price of US$7,959/tonne of copper, which it is currently delivering. The Group policy is to maintain forward contracts extending out to between 15 and 18 months when target prices can be achieved. As a result of the fall in copper prices the group had forward sales for 13 months in place at 30 June 2013. These forward sales were negotiated to preserve the profitability of the mines in the face of an economic crisis similar in scale to that of 2008-2009. In addition, the Group has fixed the US$:N$ exchange rate for US$1.5 million of revenue per month for 10 months at an average exchange rate of 8.71.

More information on the potential effect of the risk is contained in note 33.

Liquidity risk: The Group aims to ensure it has adequate funds to meet its cash flow needs at all times. To this end management monitors cash flow on a daily basis and the Board on a monthly basis at Board meetings in the context of their expectations for the business, in order to ensure sufficient liquidity is available to meet foreseeable needs.

Project development risk:all potential projects are subject to an investment appraisal procedure that involves the Board at the key stages of initiation, mandate and sanction. Projects are constantly monitored as new data is obtained and reassessed to ensure further expenditure is worthwhile.

Operational risks: Currently the Group's mining operations are concentrated on two mines, Otjihase and Matchless. These are both old deep mines and Otjihase is also a pillar recovery operation. There are inherent risks in mining this type of ore body with risk of interruptions to production from shifting ground conditions and rock falls as well mechanical failures. The risks are managed by employing a highly experienced management team skilled in these types of operations. We have also invested in training including safety. We are looking to open other faces at these locations with primary mining which has lower inherent risk. The Group is also planning a major shift in its production by opening an open pit copper mine at Tschudi of 17,000 tonnes copper per annum which will in the future provide much more reliable and predictable production at lower operating costs.

Customer risk: Because of the nature of the current contract with our concentrate purchaser whereby proceeds are received prior to shipment the Directors do not consider this to be any material risk.

Risks Relating to Investing in Namibia

Political: Namibia is considered one of the lowest-risk economies on the African continent. The Government pursues a consistent strategy of encouraging investment in the country, and is keen to keep the climate attractive for foreign investors. Weatherly maintains strong links with the Prime Minister, Minister for Mines, and other Government members and officials. The Board reviews the strategic impact of political changes within the country on an ongoing basis.

Black Economic Empowerment and local participation: there is currently no Black Economic Empowerment legislation embodied in Namibian law, however the Government encourages local participation through a number of avenues. Weatherly has adopted a proactive stance in making equity in its projects available to appropriate empowerment groups. Accordingly, Labour Investment Holdings Inc (LIH), the investment arm of the National Union of Namibian Workers, hold a 2.5% stake in Ongopolo Mining Ltd, Weatherly's wholly-owned subsidiary which owns and operates our Namibian mines. LIH also have an option to purchase a further 2.5%. There is also local participation of 1% within Weatherly Mining Namibia Ltd. Additionally we continue to discuss with the Government of Namibia its 5.10% shareholding in Weatherly and its transfer to Epangelo, the state-owned mining company. These arrangements will be for the long-term benefit of the community and the Company.

Substantial Holdings

Shareholdings of 3% and more of the issued share capital of the Company were extracted from the shareholders' register at close of business on 31 August 2013 as follows:

Major Shareholders' Information

(*Director)

Events Subsequent to Balance Sheet Date

On 19 September 2013 Ongopolo Mining executed the loan documentation with Orion Mine Finance Fund I to fund the Tschudi project. For full details see note 34.

Future Developments

Discussion of future developments can be found in the Chairman's and Chief Executive's Statement on page 4 and the Review of Operations on pages 5 to 6.

Company's Policy on Payment of Creditors

It is the Group's policy to settle terms of payment with suppliers when agreeing the terms of each transaction, to ensure that suppliers are made aware of these terms of payment, and to endeavour to adhere to them. Trade creditors of the Group at 30 June 2013 were equivalent to 32 days' purchases (2012: 42 days), based on the average daily amount invoiced by suppliers during the year. The Company does not have significant trade creditor balances.

Exchange Rates

The following rates have been used in the compilation of the financial statements and notes supporting the accounts:

The use of average rates to translate foreign trading is considered appropriate as the revenue and expenditure is relatively stable.

Statement of Directors' Responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have prepared financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

· so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

· the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor

Grant Thornton UK LLP have expressed their willingness to continue in office as auditor, and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.

On behalf of the Board:

John Bryant

Chairman

14 October 2013

Corporate Governance Report

Introduction

The Board of Directors is committed to high standards of corporate governance.

The Board is accountable to its shareholders for good governance, and the statement below is based on the review of corporate governance that was carried out by the Audit Committee and describes how the principles of good governance have been applied.

Constitution of the Board

During the year ended 30 June 2013, the Board was comprised of the following:

John Bryant Chairman

Rod Webster Chief Executive Officer

Alan Stephens Senior Independent Non-executive Director

Wolf Martinick Non-executive Director

Charilaos Stavrakis Non-executive Director (joined the Board on 17 January 2013)

Non-executive Directors

During the year, the Board had four non-executive directors: John Bryant (Non-executive Chairman), Alan Stephens, (Senior Independent Non-executive Director), Wolf Martinick and Charilaos Stavrakis. Alan Stephens, John Bryant and Charilaos Stavrakis were considered to be independent. Due to the size of Wolf Martinick's shareholding of 3.59%, he is not considered to be an independent director. The relatively small number of share options that have been granted to the other three non-executive directors does not, in the opinion of Weatherly's advisers or its directors, impair their independence.

Committees of the Board

The Board has three Standing Committees, each of which has terms of reference setting out its authority and duties, as follows:

The Audit Committee was made up of John Bryant as Chairman and Alan Stephens for the year ended 30 June 2013. When Charilaos Stavrakis joined the Board he was appointed to this sub-committee.

The Audit Committee meets as required. It reviews the financial reports and accounts and the preliminary and interim statements, including the Board's statement on internal financial control in the annual report, prior to their submission to the Board for approval. The Audit Committee also reviews corporate governance within the Group and reports on this to the Board. In addition, it assesses the overall performance of the external auditor including scope, cost-effectiveness and objectivity of the audit.

The Audit Committee is also charged with reviewing the independence of the external auditor and monitors the level of non-audit fees. These fees are disclosed in note 10 to the accounts. In the opinion of the Audit Committee, which has reviewed these fees and the procedures that Grant Thornton UK LLP have in place to ensure they retain their independence, the auditor's independence is not compromised. The Audit Committee met three times during the period, and John Bryant and Alan Stephens were present on all occasions.

The Audit Committee can meet for private discussion with the external auditor, who attends these meetings as required. The Company Secretary acts as secretary to the Committee.

The Remuneration Committee was made up of Alan Stephens as Chairman and John Bryant during the year, with the Company Secretary serving as secretary. When he joined the Board Charilaos Stavrakis was appointed to this sub-committee.

The Remuneration Committee determines, on behalf of the Board, the Group's policy on executive remuneration and the remuneration packages for executive directors. It also approves and administers the executive share option scheme, the long-term incentive plan (LTIP) and the grant of options as part of the remuneration package. The Remuneration Committee met four times during the period, with Alan Stephens and John Bryant in attendance on each occasion.

The Nominations Committee is made up of John Bryant and Rod Webster with at least one of the Non-executive Directors.

In addition to its role of considering the appointment of directors and senior managers, the Nominations Committee is also charged with reporting to the Board on the effectiveness of the Board, its sub-committees and its directors, and it does this at the end of the annual audit cycle. The Nominations Committee meet twice during the year.

Attendance at Meetings

During the year, there were eleven Board meetings. Directors' attendance at meetings of the Board and its sub-committees during the period was as follows:

John Bryant Board 11/11 Audit Committee 2/2 Remuneration Committee 2/2

Rod Webster Board 11/11

Alan Stephens Board 10/11 Audit Committee 2/2 Remuneration Committee 2/2

Wolf Martinick Board 10/11

Charilaos Stavrakis Board 5/5 Audit Committee 0/0 Remuneration Committee 0/0

Of the eleven Board meetings, three were of a procedural nature and eight were substantive meetings.

The Nominations Committee met on two occasions and John Bryant, Rod Webster and Alan Stephens were present for both meetings.

The Board is responsible for reviewing and approving the adequacy and effectiveness of the Group's internal controls, including financial and operational control, risk management and compliance.

In order to establish effective procedures for internal control and communicate these throughout the Group, including its subsidiaries, the Board has issued two important documents to all staff known as the Board Protocol and the Manual of Internal Control.

The key elements of the Group's internal control are set out in these documents, and contain:

· a clearly defined structure for the Group, its subsidiaries and management teams;

· powers which the Board has reserved to itself. These include the approval of all business plans and budgets for the Group and all its subsidiaries, the establishment of subsidiary companies and appointment of directors to them, and the process for project approval and capital expenditure;

· terms of reference for the Audit, Remuneration and Nominations Committees, which define the roles of their members;

· information about how often the Board should meet (as a minimum) and an annual cycle of meetings. This covers the process for the preparation of Board agendas and Board papers, and their prior consideration by the management team at its weekly meetings;

· detailed business plans and budgets to be approved annually and performance monitored by the management team and the Board at its monthly meetings; and

· procedures for the approval of expenditure, the levels of authority and the management controls.

The directors acknowledge their responsibility for the Group's system of internal financial control and risk management, and place considerable importance on maintaining this. The Manual of Internal Control and the process for authorisation that it imposes, together with the Board Protocol setting out the process for authorising business plans, budgets and projects, form an important part of our decision-making process; however, this can only provide reasonable and not absolute assurance against material errors, losses or fraud.

There is currently no internal audit function within the Group owing to the small size of the administrative function. . There is however a high level of review by directors and a clear requirement for them to authorise transactions. Should the need for a separate internal audit function become apparent, the Board will establish one.

The Board Protocol and the Manual of Internal Control have both been updated and refined as Weatherly's business evolves and grows.

Bribery Act Compliance

In response to the introduction of the Bribery Act 2010 and in order to ensure compliance, the Board approved a suite of documentation that included a policy statement on anti-corruption and bribery, a code of conduct for employees, a set of management procedures, a note defining responsibilities within the Company and an implementation plan which has been rolled out in the Company. Progress on the implementation has been reported to the Audit Committee. The Audit Committee noted that documentation has been circulated and meetings to explain the procedures have been held with all staff and contractors on site including our operating mines in Namibia. Notices have been displayed at our locations with the "whistle-blowing" procedure. The implementation and effectiveness of these procedures is continually monitored and reported to the Board. This year members of the senior management team in Namibia were interviewed and confirmed that all new members of staff and all new contractors had been instructed on the Company's policies and procedures for compliance with the Bribery Act and there were no issues arising from this.

Relations with Shareholders

The Company endeavours to maintain regular communications with shareholders through regulatory announcements, via the Weatherly International website and by direct contact with its major shareholders. Rod Webster has taken the opportunity to meet the smaller shareholders at regular investor presentations. The Board values the views of its shareholders and fosters continuing dialogue with investment and fund managers, other investors and equity analysts to ensure that the investing community receives an informed view of the Group's prospects, plans and progress. This year we have appointed a new Investor Relations executive, Rolf Gerritsen to strengthen this area.

Directors' Remuneration Report

Remuneration Committee

The Company has established a Remuneration Committee which is constituted in accordance with the recommendations of the UK Corporate Governance Code (June 2010). The members of the Committee for the year ended 30 June 2013 were Alan Stephens and John Bryant, who are both independent non-executive directors, and the Committee was chaired by Alan Stephens.

None of the members of the Committee has any personal financial interest (other than as a shareholder), conflicts of interests arising from cross-directorships, or day-to-day involvement in running the business. The Committee makes recommendations to the Board. No director plays a part in any discussion about his own remuneration.

In determining the directors' remuneration for the year, the Committee consulted Rod Webster (Chief Executive) and Max Herbert (Company Secretary) about its proposals. The Committee also appointed PricewaterhouseCoopers to provide options valuation advice.

Remuneration Policy for the Executive Directors

Executive remuneration packages are designed to attract, motivate and retain directors of the highest calibre to lead the Company and to reward them for enhancing value to shareholders. The performance management of the executive directors and key members of senior management, and the determination of their annual remuneration package, are undertaken by the Committee.

There are five main elements of the remuneration package for executive directors and senior management:

· basic annual salary;

· benefits in kind;

· annual bonus payments;

· share option incentives;

· pension arrangements.

The Company's policy is that a substantial proportion of the remuneration of the executive directors should be performance related. Executive directors may earn an annual bonus payment together with the benefits of participation in share option schemes.

Basic Salary

An executive director's basic salary is reviewed by the Committee prior to the beginning of each year and when an individual changes position or responsibility. In deciding appropriate levels, the Committee considers the Group as a whole and relies on objective research which gives up-to-date information on a comparable group of companies. In considering the Chief Executive's basic salary, the Remuneration Committee took into account his extensive responsibilities.

Benefits in Kind

The executive director receives benefits in kind, principally private medical insurance.

Annual Bonus Payments

The Committee establishes the objectives that must be met for each financial year if a cash bonus is to be paid. In setting appropriate bonus parameters, the Committee refers to the objective research on a comparator group of companies, as noted above. The Committee believes that any compensation awarded should be tied to the interests of the Company's shareholders and that the principal measure of those interests is total shareholder return. Account is also taken of the relative success of the different parts of the business for which the executive directors are responsible and the extent to which the strategic objectives set by the Board are being met. The maximum performance-related bonus that can be achieved is 100% of basic annual salary. The strategic objectives, control system and indicators are also aligned to total shareholder return.

Share Options

The Company has issued share options to its staff under an unapproved share option scheme. The Remuneration Committee has responsibility for the administration of the scheme and the granting of options under its terms. This includes setting the performance criteria when appropriate and the strike price of the options. The details of these awards are set out below and their accounting treatment is dealt with in note 31 to the financial statements.

Pension Arrangements

Executive directors receive pension contributions to their own private pension schemes.

Directors' Contracts

All the directors have signed contracts with the Company. Rod Webster's appointment does not have a fixed term but is subject to 12 months' notice by either party. The non-executive directors are appointed for a fixed term: John Bryant and Wolf Martinick for two years, Alan Stephens and Charilaos Stavrakis for three years. These may be terminated by giving two months' notice, without compensation for loss of office. All newly appointed directors are required to offer themselves for election at the next Annual General Meeting of the Company and their appointments are subject to them being so elected. Non-executive remuneration is determined by the Board within the limits set by the Articles of Association and is based on independent salary surveys of fees paid to non-executive directors of similar companies. The basic salary paid to each non-executive director in the year was £30,000. The non-executive directors receive further fees for additional work performed for the Company on the basis of the number of additional days worked.

Aggregate Directors' Remuneration

The total amounts for directors' remuneration, paid by Weatherly International plc and its subsidiaries, were as follows:

* this relates to period ending 30 June 2011

Directors' Share Options

Aggregate directors' remuneration disclosed above does not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held by the directors. No options have been granted to directors since 2010. Details of the total number of options granted to date are set out below.

Each director's options (except for Mr Stravrakis) were exercisable as one third on 1/4/2011, one third on 1/4/2012, and one third on 1/4/2013, and remain exercisable over a ten-year period. Mr Stravrakis's options vested one third on 11/3/2014, one third 11/3/2015 and one third 11/3/2016.

The share price movements during the year were as follows: high of 6.5 pence, low of 2.12 pence and a closing share price at 30 June 2013 of 2.62 pence.

There have been no variations to the terms and conditions or performance criteria for directors' share options during the financial year.

Approval

This report was approved by the Board of Directors on 14 October 2013 and signed on its behalf by:

John Bryant

Chairman

Independent Auditor's Report to the Members of Weatherly International plc

We have audited the Group financial statements of Weatherly International plc for the year ended 30 June 2013, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement set out on page 11, the directors are responsible for the preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the Group financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion, the Group financial statements:

· give a true and fair view of the state of the Group's affairs as at 30 June 2013 and of its profit for the year then ended;

· have been properly prepared in accordance with IFRS as adopted by the European Union; and

· have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report, in the financial year for which the Group financial statements are prepared is consistent with the Group financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters.

Under the Companies Act 2006 we are required to report to you if, in our opinion:

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Other matter

We have reported separately on the Parent Company financial statements of Weatherly International plc for the year ended 30 June 2013.

Nicholas Page

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Gatwick

Consolidated Income Statement

For the year ended 30 June 2013

Consolidated Statement of Comprehensive Income

At 30 June 2013

Consolidated Statement of Financial Position

At 30 June 2013

.......................................................................

On behalf of the Board:

John Bryant

Chairman

Approved by the Board on 14 October 2013

Consolidated Statement of Changes in Equity

For the year ended 30 June 2013

Consolidated Cash Flow Statement

For the year ended 30 June 2013