Final Results

RNS Number : 7570T

Weatherly International PLC

04 October 2010

 

 

 

 

Weatherly International Plc ("Weatherly" or the "Company")

 

Final results for Year Ended 30 June 2010

 

 

Weatherly is pleased to announce its final results for the year ended 30 June 2010.

 

Financial highlights

 

·; Profit for the year of US$9.1 million (2009: Loss US$30.7 million)

·; Cash at bank US$7 million as at 30 June 2010

·; Repayment of all loans, leaving the group debt free

 

Operational highlights

 

·; Otjihase and Matchless production re-start on schedule for production in Q1 2011

·; Tschudi pit optimisation study confirms potentially economically viable operations

·; New managerial appointments

 

Corporate highlights

 

·; Equity fund raising of US$2 million in July 2009

·; Sale of smelter business

·; Settlement of Barclays claim

·; Provision of funding from Louis Dreyfus for Otjihase and Matchless agreed September 2010

·; Proposed joint venture with ECE for the development of Berg Aukas

·; Capital restructuring generating distributable reserves in the holding company Weatherly International plc

·; Declaration of two dividends in specie for the distribution of DPM shares to shareholders on the register as at 19 March 2010

 

For further information, please contact:

 

Rod Webster, Chief Executive Officer, Weatherly International Plc

+44 (0) 20 7917 2989

 

Samantha Harrison / Jen Boorer, Ambrian Partners Limited

+44 (0) 20 7634 4700

 

Chairman's statement

 

I am pleased to announce the 2010 full year results for Weatherly International and to provide an overview of the company's activities. Looking back at the year, the company has achieved a great deal in difficult circumstances.

 

Put simply we survived the economic downturn that caused the collapse in copper prices and in the current year have made a profit and repaid all our debts. We achieved this through the sale of the smelter, which was never intended to be our core business. Throughout this time we have preserved our mines in good standing and we have cash in hand so that we are now poised to restart our mining operations and deliver on our original mining strategy at a very opportune time.

 

Results

 

On 24 March 2010 the group disposed of its smelter business consisting of its subsidiary Namibia Custom Smelters (Pty) Ltd and associated fixed assets owned by Ongopolo Mining Limited for US$32 million to Dundee Precious Metals Inc (DPM). The proceeds consisted of US$18 million of cash and 4,446,420 shares in DPM valued at US$14 million at disposal in addition to the assumption of debts and other liabilities. The group made a profit before tax on disposal of the Smelter business of US$29.2 million. The company applied US$5 million of the cash proceeds and 2,678,571 of the DPM shares to pay off all loans in the group, leaving Weatherly with US$7 million of cash at the year end. The remaining DPM shares will be distributed to shareholders on the register as at close of business on 19 March 2010 by way of two dividends in specie to be paid in October 2010 and April 2011.

 

The smelter business made a loss of US$8.7 million up to the date of its disposal. The Kombat mine was also disposed of, subject to Ministerial consent, and the cost of this operation amounted to US$0.4 million in the year. Continuing operations made a loss of US$11 million which together with the profit on disposal of US$29.2 million left the group with a profit for the year of US$9.1 million. The losses on the continuing business consisted of care and maintenance costs at the mines of US$6.4 million, nearly half of which consisted of depreciation of property plant and equipment, UK head office costs of US$3.3 million including costs arising from the settlement of the Barclay's claim, and interest of US$1.3 million on the convertible loans prior to repayment.

 

Developments during the year

 

Last November we were reporting that with the closure of our mines we would concentrate on improving our smelter business. Whilst the operation and development of the smelter business was progressing well, the Directors had no hesitation in supporting the sale of the smelter business to DPM when they made an attractive offer. This transaction received overwhelming support at the shareholder meeting held on 11 March 2010, and, subsequently completed on 24 March 2010. The payment of the consideration enabled the company to redeem its convertible loan notes in full and left the company debt free and with US$11 million cash in the bank at the time of disposal.

 

Following the announcement of the disposal of the smelter business to DPM, a letter of intent signed with East China Mineral Exploration and Development Bureau ("ECE") concerning a proposed equity investment by ECE was no longer capable of being fulfilled and was terminated. While the directors considered that a strategic relationship with ECE would have benefited the company, the disposal of the smelter business to DPM provided the company with the funding it required without the issue of new equity or a change of control, and was considered to represent better value for shareholders.

 

As soon as we had contracted for the sale of the smelter we conducted a strategic review of the company's assets and priorities for their development. Our overall objective is to develop a copper mining business capable of sustaining production of approximately 20,000tpa of copper at average industry cost of production for the next ten years. Our immediate priority in pursuit of this objective was to reopen the mines at Otjihase and Matchless (Central Operations) and to develop an open pit at Tschudi. We are acting quickly to deliver these projects and in September signed an offtake agreement and a prepayment facility with Louis Dreyfus. The restart is on schedule with copper production expected to recommence in Q1 2011. The feasibility study for Tschudi is underway with metallurgical test work expected to be completed by the end of 2010 and the final study due for completion by mid 2011.

 

Prior to the current mine development plans we considered other ways of realising value. Accordingly we have now sold Kombat for US$3.0 million, subject to Ministerial consent. Following the termination of the Letter of Intent with ECE referred to above we continued to discuss with them ways in which the companies could work together and this has culminated in signing a new Letter of Intent whereby Berg Aukas, our lead/zinc project, would be transferred to a new company with ECE taking a majority shareholding with the objective of listing the company on the London Alternative Investment Market (AIM). I believe this structure and association with ECE offers an excellent growth opportunity for Weatherly.

 

During the year, we were also able to reach a very satisfactory agreement regarding a claim made by Barclays in respect of an alleged foreign exchange transaction, and so removed a significant contingent liability from our accounts.

 

This has been a very challenging period for the company, its directors, and staff on whom we have had to make increasing demands, often at short notice, to consider a number of complex issues that the company faced. In recognition of this we issued share options to our staff and our directors to thank them for the hard work and loyalty they have shown to the company during the past difficult years and to encourage a similar level of achievement during the next phase.

 

I am also grateful for the continued support of our shareholders and am pleased that we are able to reward their loyalty through the 'in specie' dividend made possible by the sale of the smelter, which has also enabled us to pay off all our debts and replenish our cash reserves. We also completed a capital restructuring to create distributable reserves to enable this to be done.

 

I look forward to the resumption of our mining operations in the first half of 2011 and believe the measures we have taken will deliver significant value for our shareholders in the coming years.

 

Wolf Martinick

Chairman

1 October 2010

Chief Executive's review

 

Overview

 

This has been another challenging year in which we have achieved a considerable amount and laid the foundations for a successful copper mining business. With our mines closed and on care and maintenance at the start of the year we focused our attention on the development of our smelter business which culminated in its sale. As a result of the sale of the smelter business we were able to repay all our outstanding loans and, with cash in the bank, plan the re-opening of our mines.

 

Operational Review

 

Smelting

 

After the closure of the company's mines at the end of 2008, the smelter continued to operate as a stand-alone facility importing concentrates from a number of sources around the world. In order to maximise revenue, the smelter focussed on concentrates high in arsenic which, because of its technical configuration, it is able to treat. Over the year a number of improvements were implemented to improve performance, the most important being the construction of an oxygen plant for the Ausmelt furnace. This was finally commissioned in February 2010, just prior to completion of the sale.

 

During 2009, we extended our agreements with existing concentrate suppliers, namely the Chelopech Mine in Bulgaria owned by Dundee Precious Metals ("DPM"), and the metals trader, Louis Dreyfus. In July 2009, the company completed a placement of 40,468,000 ordinary shares (approximately 9% of the company) to DPM to raise proceeds of US$2 million. The placement proceeds were used to complete the construction of a new residue disposal site and to provide additional working capital.

 

The smelter performed well for most of the year considering that the Ausmelt furnace was operating in an 'interim' mode pending the commissioning of the oxygen plant. In this interim mode, the smelter was not able to achieve the precious metals recoveries originally anticipated when signing the tolling agreements at the end of 2008. As a result the smelter operated at a loss mainly due to low gold recoveries. Plans were implemented to increase gold recoveries by expanding the slag milling and flotation plant and also by revising the commercial contracts. Both these initiatives were overtaken by the subsequent sale of the smelter.

 

On 24 March 2010, Weatherly completed the sale of the smelting company ("NCS"), together with certain assets owned by Weatherly for consideration of US$18 million cash and 4,446,420 new ordinary shares in DPM. Total consideration when allowing for debt within NCS was approximately US$55 million.

 

This transaction has been approved by a shareholder meeting on 11 March 2010. The consideration exceeded the company's valuation of the potential income from the smelter and enabled the company to reposition itself. Immediately upon completion of the disposal, US$5 million of the cash consideration and 2,678,571 DPM Shares were delivered to the holders of the company's convertible loan notes to redeem those loan notes in full together with accrued interest. The loan notes had a face value of US$12 million and accrued interest stood at US$2.5 million.

 

The balance of the share-based consideration (1,767,849 DPM shares) is to be distributed to shareholders through the payment of two dividends of 0.00198 DPM shares per Weatherly ordinary share, payable during October 2010 and April 2011.

 

Financial results

 

During the period prior to the smelter sale, the smelter generated revenue of US$25.5 million. Total operating costs including precious metals shortfalls were US$34.2 million, resulting in an operating loss of US$8.7 million.

 

The average US dollar to South African rand exchange rate was 7.59 and fluctuations in the exchange rate were much less severe than the previous year ranging from 7.21 to 8.31.

 

As at 30 June 2010, Weatherly held cash reserves (in sterling and US dollars) equivalent to US$7 million.

 

Re-start of central operations

 

Plans for the reopening of Otjihase and Matchless were submitted to an independent mining consultancy Coffey Mining (SA) Pty Ltd for review. Their report was received in March 2010 and it confirmed recoverable reserves of 3.9mt @ 1.7% copper and 0.25g/t gold and the feasibility of commencing production in Q1 2011 together with an annual production of 7,100 tonnes of copper contained in concentrates over the five year period with production peaking at just over 9,000 tonnes in 2013/14.

 

On 12 July 2010 (post year end) following significant progress in developing these plans, Weatherly announced that the board of the company had approved the go ahead in principle. The board also considered it desirable that a percentage (up to 20%) of the project be offered to local investors.

 

Memoranda of Understanding were signed with two groups; Labour Investment Holdings, a combined union investment company, and Shali, a local company that is expected to be involved in the operation of the mines as a contractor. We also initiated discussions with Epangelo, the newly formed Namibian state mining company, and Nam-mic, the investment arm of the mineworkers union. Our aim is to conclude negotiations and finalise the allocation of shareholdings (within the 20% interest allocated) before the end of 2010.

 

Weatherly proposes to operate the Otjihase and Matchless mines under a system of contract mining with operations allocated to discrete manageable contracts to improve accountability and maximise operating efficiencies while retaining direct control of elements such as mine planning and grade control. The company is currently in negotiations with a number of potential contractors most of which have previous experience in the operation of the Otjihase and Matchless mines.

 

Under the proposed operating model, the number of employees directly employed by the company will be significantly reduced and be limited largely to management personnel and key technical and financial roles. It is anticipated that the contractors will operate a continuous shift system, and a more grade focused mine plan will lead to further reductions in costs. Another contributing factor to lower costs is the benefit arising from capital invested in the mines just prior to closure, in particular the cement/sand backfilling of the main production area (Karuma).

 

In September 2010, the company signed both an offtake agreement and a prepayment facility with the Swiss metals trader Louis Dreyfus ("LD"). Under these arrangements, Weatherly will sell its entire output to LD from the mine for the next seven years at a discount to world benchmark terms for copper concentrates. Under the agreement, LD will provide US$7 million in funds to be applied to the reopening of the Central Operations.

 

Repayment of this facility is linked to concentrate production with monthly payments matched to the amount of concentrate produced and deducted from sales proceeds, thus reducing risk in the event of an unexpected delay to production. Repayments are scheduled to begin seven months after first drawdown of the loan.

 

All monies outstanding under the terms of this facility attract interest at 3% above LIBOR and are secured against the assets of Weatherly's subsidiary, Ongopolo Mining Limited.

 

The prepayment facility contains a hedging framework which will also allow Weatherly to forward sell up to 35% of its output for a period of 18 months. Should the company elect to do this, then part of the downside risk of the project is reduced, while at the same time retaining a sufficient un-hedged component that will benefit accordingly should copper prices increase. Other hedging alternatives are also being considered.

 

The capital cost of reopening the mines is US$6.7 million. The company's current estimate of peak funding requirements including working capital build up at assumed production and copper price assumptions is approximately US$12 million. In addition to the LD facility the remaining funds will be generated though cash holdings in Namibia, the proceeds of the sale of the Kombat mine, and from the proceeds of real estate sales. It is not currently anticipated that additional loans from the holding company will be required.

 

Since the commitment was made to commence the restart programme there has been no change to the overall timetable which has both mines back in production in the first quarter of 2011. All critical equipment items have been ordered, further recruitment is underway and negotiations with key contractors are at an advanced stage.

 

Tschudi

 

At Tschudi, the plan is to establish a medium scale open pit with a strike length of approximately two kilometres and a depth of around 180 metres. Based on a report by Coffey Mining (SA) Pty Ltd in November 2008, this pit would contain a measured and indicated resource of 25.2 mt grading 0.92% copper. All ore, both oxides and sulphides, contained within the pit is, based on historic test work, amenable to simple low cost acid leaching and electro-winning to recover the copper.

 

In December 2009, the company announced the publication of a preliminary pit optimisation study prepared in conjunction with Coffey Mining (SA) Pty Ltd. This study concluded that a number of economically viable pits could be established and recommended that further work be performed to firm up the optimum mine design, metallurgical route and associated capital and operating costs.

 

In June 2010, the company appointed Sedgman Limited, an Australian metals engineering company, to manage the first stage of a feasibility study for the project. Based on the results of initial metallurgical test work carried out at AMDEL Ltd's laboratories in Perth, the results of which are expected before the end of the year, an appropriate processing route will be chosen and then the full feasibility study will commence in 2011, with the final study being completed by mid 2011.

 

Previous metallurgical work carried out by both Gold Fields (1980 - 1996) and Indec (2003) has demonstrated that the mineralisation responds well to both acid leaching and conventional flotation. Broadly speaking, two alternative processing routes will be evaluated.

 

The first processing route under consideration is to heap leach the entire orebody to produce either an intermediate product (copper sulphate) or a final copper cathode. Based on historical testwork by Gold Fields this would result in an average annual recovery of around 11,000t of copper over a life of ten years.

 

The second alternative is to heap leach the low grade component of the orebody (approximately 0.6% copper) and truck a higher grade component (approximately 1.2% Cu) to the existing Tsumeb concentrator. The additional trucking cost would be offset by higher copper recoveries and the recovery of the silver as a by-product. Based on the Gold Fields data and Weatherly's own recent experience, this would increase annual production to approximately 13,000t of copper and 280,000oz of silver over a ten year life.

 

Subject to a positive outcome of the Sedgman feasibility study and funding, construction could proceed as early as fourth quarter 2011 as environmental approval for an open pit at Tschudi was granted in 2003.

 

Berg Aukas and ECE

 

During ultimately unsuccessful negotiations last year over a proposed equity investment by ECE in Weatherly, the companies recognised the mutual benefit of working together after the end of the reporting period. On 9 July this year we signed a Memorandum of Understanding with ECE whereby the parties intend to jointly pursue the development of Weatherly's Berg Aukas lead/zinc project Northern Namibia.

 

Pursuant to the Memorandum of Understanding, it is intended that the parties will form a new company, China Africa Resources (CAR), whose primary asset would be the Berg Aukas mine and which would seek the admission to trading of its shares on the AIM market of the London Stock Exchange. It is intended that ECE would provide funding of £4.8 million to acquire an interest of 65% in CAR. It is intended that Weatherly would retain a 35% interest in CAR with 10% of its interest being distributed to underlying Weatherly shareholders.

 

Completion of the transaction is subject to the satisfaction of a number of conditions precedent including relevant regulatory, government and third party approvals, and the admission of CAR's shares to trading on AIM. The due diligence process to support an AIM listing has commenced and the parties hope to conclude the proposed transaction before the end of 2010.

 

If this agreement is successfully concluded it will represent a significant and exciting additional growth opportunity for Weatherly and its shareholders. The first objective of the new company will be to complete a feasibility study for Berg Aukas as a starting point in building a profitable and a widely based resource business.

 

Tambao

 

Weatherly's partner Wadi Al Rawda Industrial Investments (Wadi) is continuing to pursue its rights in securing the Tambao manganese project in Burkina Faso. A bankable feasibility study was submitted by Wadi in 2008 in accordance with its agreement and an application for a mining licence submitted. The government of Burkina Faso has not granted the licence and has, in contravention of the agreement, opened discussions with other parties. It is anticipated that Wadi will commence arbitration proceedings in the international court in Paris to protect its rights.

 

Other assets

 

Where we have no immediate plans to develop a mine, we will divest the asset in a way that maximises value. This can be seen through the sale of Kombat for US$3 million which is currently awaiting Ministerial approval. We also own an important tailings dam project at Tsumeb which contains approximately 113,000t of copper metal. We will be looking to either develop this ourselves or joint venture, whichever is more appropriate.

 

Appointments

 

In September, 2010, Weatherly made two key appointments to oversee its operations in Namibia. These are Craig Thomas, who has been appointed Managing Director of Weatherly's Namibian subsidiaries (Weatherly Mining Namibia and Ongopolo Mining Limited), and Andrew Thomson who has been appointed as his Technical Director and Country Manager. Craig Thomas is an Australian mining engineer with a strong track record in new mine developments in Australia, Papua New Guinea and Botswana. Andrew Thomson is a local geologist and former General Manager of Weatherly.

 

In addition, the boards of Weatherly's Namibian subsidiaries are being strengthened by two significant appointments. Mr Titus Haimbili, the Chief Executive Officer of TransNamib, the Namibian national road and rail company and Mr Frans Ndoroma, the Chief Executive Officer of Telecom Namibia, the government owned telecoms company, have been appointed as non-executive directors. Mr Haimbili and Mr Ndoroama have significant corporate experience in Namibia and they will add considerable weight to the Namibian boards.

 

Outlook

 

There is no doubt that we have a busy and challenging time ahead, but I am confident that we have the resources and the experience to take advantage of the opportunities now in front of us. We survived the economic downturn of 2008 by quickly closing our mines and drastically cutting our costs while maintaining the mines in good order. The sale of our smelter has enabled us to clear all our debts and to position Weatherly for renewed growth and value creation.

 

We have considerable mining assets in Namibia and are ready to begin the reopening process at what is a very opportune time. Production is scheduled to resume at Otjihase and Matchless early next year, with new mine plans that build on our earlier experiences and are designed to minimise costs and maximise productivity. We have also been able to recruit some highly capable new key employees who will help build the future of the company, and we will welcome the participation of local investors in that future if the current negotiations are concluded successfully.

 

Development of the large Tschudi open pit project, which is expected to be under way by mid-2011, will be another important step in achieving growing and sustainable profitability. We are also looking forward to advancing our relationship with ECE and jointly forming our new company, CAR, with the initial mission of developing the Berg Aukas lead/zinc project, as well as resuming our exploration activity and continuing to identify ways of realising value from our other assets.

 

Rod Webster

Chief Executive Officer

1 October 2010

 

Table A

 

Weatherly Mining Namibia : Ore Reserves as at 30 June 2010
Deposit	Reserve	Reserve Tonnes and Grade				Contained Metal
	Category	Tonnes	Cu (%)	Ag (g/t)	Au (g/t)	Cu (t)	Ag (kg)	Au (kg)
Otjihase	Proven	2,947,800	1.67	7.07	0.30	49,209	20,843	881
	Probable	287,600	1.01	7.57	0.15	2,895	2,177	42
	Total	3,235,000	1.61	7.11	0.29	52,104	23,020	923
	Proven	-	-	-	-	-	-	-
Matchless (West Ext.)	Probable	710,000	1.81	-	-	12,830	-	-
	Total	710,000	1.81	-	-	12,830	-	-
Grand Total (Proven + Probable)		3,945,000	1.65	5.83	0.24	64,934	23,020	923

 

Table B

 

Weatherly Mining Namibia : Mineral Resources as at 30 June 2010
Deposit	Resource	Insitu Tonnes and Grade				Insitu Metal
	Category	Tonnes	Cu (%)	Ag (g/t)	Au (g/t)	Cu (t)	Ag (kg)	Au (kg)
Otjihase	Measured	3,502,444	2.37	8.91	0.42	85,850	31,200	1,474
	Indicated	3,828,064	1.94	7.76	0.32	74,217	29,639	1,204
	Inferred	3,718,494	1.41	5.19	0.23	52,335	19,293	839
	Total	11,049,002	1.90	5.51	024	212,402	80,132	3,517
	Measured	-	-	-	-	-	-	-
Matchless	Indicated	591,660	2.13	-	-	12,628	-	-
Western Extension	Inferred	230,460	2.32	-	-	5,346	-	-
	Total	822,120	2.18	-	-	17,974	-	-
Tschudi	Measured	13,232,447	0.82	9.75	-	108,506	129,016	-
	Indicated	26,312,000	0.83	10.85	-	217,863	285,446	-
	Inferred	3,531,000	0.84	11.01	-	29,625	38,875	-
	Total	43,075,447	0.83	10.52	-	355,994	453,337	-
Tsumeb West	Measured	35,255	2.45	13.00	-	864	458	-
	Indicated	520,400	2.24	20.02	-	11,680	10,417	-
	Inferred	413,200	1.88	16.35	-	7,757	6,757	-
	Total	968,855	2.10	18.20	-	20,301	17,632	-
Kombat Asis West	Measured	4,790	2.74	8.34	-	131	40	-
	Indicated	241,654	2.07	16.43	-	5,006	3,971	-
	Inferred	377,000	3.10	34.00	-	11,837	12,800	-
	Total	623,444	2.72	26.96	-	16,974	16,811	-
Grand Total : All Categories		56,538,868	1.10	9.71	0.05	623,645	567,912	3,517

 

Table C

 

Weatherly Mining Namibia : Historical Resources
Deposit	Tonnes	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)	V (%)	Ge (ppm)	Cu (t)	Pb (t)	Zn (t)	Ag (kg)	Au (kg)	Remarks
Old Matchless Mine	1,060,000	2.50	-	-	-	-	-	-	26,500	-	-	-	-	Remaining resource/reserve calculated by Gold Fields in 1984
Elbe (A-Gossan)	5,910,000	1.20	-	0.97	8.30	0.45	-	-	70,920	-	57,327	49,053	2,660	Resource calculated by Gold Fields in 1989
Tsumeb Mine (Open Pit)	150,000	2.96	-	-	61.00	-	-	-	4,440	-	-	9,150	-	Remaining resource/reserve calculated by Gold Fields in 1984
Uris Mining Area	180,000	2.27	-	-		-	-	-	4,086	-	-	-	-	Remaining resource/reserve calculated by Gold Fields in 1984
Kombat Central (Open Pit)	115,000	1.08	0.10	-	8.00	-	-	-	1,242	115	-	920	-	Model refining required
Kombat East	70,009	1.62	1.01	-	13.42	-	-	-	1,132	706	-	939	-	Historical remnant ore
Kombat Lead	465,224	0.33	2.14	-	15.00	-	-	-	1,535	9,955	-	6,978	-	Recalculated using new diamond drilling data
Kombat Asis Far West	2,214,639	2.29	-	-	-	-	-	-	50,715	-	-	-	-	Historical resource calculated by TCL
Gross Otavi Central	160,000	1.54	5.85	-	15.40	-	-	-	2,464	9,360	-	2,464	-	Historical resource calculated by Gold Fields
Harasib	1,240,000	-	1.66	2.67	-	-	-	-	-	20,584	33,108	-	-	Historical resource calculated by Gold Fields
Berg Aukas	1,650,000	-	4.60	17.40	-	-	0.60	-	-	75,900	287,100	-	-	Remaining resource/reserve calculated by Gold Fields in 1987
Total : Deposit Resources	13,214,872	1.23	0.88	2.86	5.26	0.20	-	-	163,034	116,620	377,535	69,504	2,660
Kombat Tailings	10,600,000	0.21	0.19	-	2.00	-	-	-	22,260	20,140	-	21,200	-	Remaining resource/reserve calculated by Gold Fields in 1984
Tsumeb Tailings	16,000,000	0.71	-	-	-	-	-	-	113,600	-	-	-	-	Remaining resource/reserve calculated by Gold Fields in 1994
Total : Dump Resources	26,600,000	0.51	0.08	-	0.80	-	-	-	135,860	20,140	-	21,200	-
Note:
Reserves contained in table C are 'historical' and although most were prepared at the time in accordance with South African reporting standards (SAMREC) they will not comply with current standards until a further process of independent verification has been carried out.

 

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 2010.

 

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 20.

 

A review of business can be found in the Chairman's statement and the Chief Executive's review.

 

The directors

 

The directors during the year ended 30 June 2010 were:

 

W G Martinick (non-executive)

R J Webster (CEO)

J Bryant (non-executive)

A Stephens (non-executive)

 

Going concern

 

The major element of this year's business plan is to reopen the mines at Otjihase and Matchless and start copper production in Q1 2011. The directors have reviewed the business model and the assumptions contained within it for the reopening of the mines, and believe them to be reasonable. However, there are a number of uncertainties around the assumptions that have the potential to affect the company's ability to deliver the forecast cash flows.

 

Exchange rates and copper prices have a significant impact on the income that the company achieves when it sells its concentrate. The cash flow in the reopening model assumes a copper price of US$6,600/ tonne with an exchange rate of US$1=$N7.6 and a base case of US$5,500/ tonne and US$1=$N8.5. Obviously if prices fall below this level there will be a reduction in forecast cashflows possibly to a point where the project is no longer viable.

 

The model assumes that a loan of US$7 million provided by LD will form the basis of the overall funding package for the reopening of the mines. The loan is linked to an offtake agreement whereby repayment is linked to copper concentrate production, a model which the company considers reduces risk by better matching the debt servicing obligations to project cash flow.

 

Additional funding of approximately US$5 million is to be obtained from a number of different internal sources, the main one being the sale of the Kombat mine for US$3 million. The model assumes the company will get Ministerial consent for the sale. The model also assumes the majority of property sales will be completed in the next 18 months which will yield at least another US$2 million. The model assumes the company will be able to employ sufficient staff of the right calibre within the planned timescales and that an export licence for copper concentrates will be obtained. The directors will not release the project until all these matters have been resolved.

 

There has been no settlement of creditors N$37.2 million (US$4.7 million) arising under the terms of the compromise agreement negotiated as part of the original mine acquisition in 2006. While the mines are closed the directors do not consider these monies to be payable although no agreement of repayment terms has been reached with the creditor trustees.

 

In the event that the company does not reopen the mines for any reasons, the company has sufficient funds within the group to maintain the current level of activity for at least the next 12 months and the directors consider it is appropriate to prepare the financial statements on the going concern basis.

 

 

Results and dividends

 

The consolidated profit for the year after taxation was US$9.1 million (2009: loss of US$30.7 million). Post year end an in specie dividend was declared (see note 16).

 

Key performance indicators

 

Finance

 

The liquidity requirements of the company are monitored on a weekly basis by management, monthly and quarterly by the board, and semi-annually by external parties.

 

Performance

 

The board monitors 71 comparable AIM-quoted stocks against Weatherly's share price; the review relating to 30 June 2010 ranked Weatherly 52 in the league of the best performing stocks in that comparison.

 

Key risk factors and mitigations

 

Human resources

 

Management: Attracting and retaining key commercial and technical staff will be a major challenge especially in the light of the company's reopening strategies and buoyant market conditions in the resources sector.

 

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 assessed by their strategic fit and contribution to earnings. All projects are scrutinised for consistency of assumptions and accuracy of modelling prior to presentation to the board.

 

Risks relating to investing in Namibia

 

Political: Namibia is considered one of the lowest-risk economies in 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 President, 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: There is currently no Black Economic Empowerment legislation embodied in Namibian law; however the government encourages local participation through a number of unofficial avenues. Weatherly monitors legislative changes and at the same time adopts a proactive stance in making equity in its projects available to appropriate empowerment groups.

 

Exchange controls: The company maintains a consistent and compliant approach to exchange regulations within Namibia.

 

Currency and exchange rate fluctuations: Weatherly manages its treasury function through its London office. Treasury balances the needs of the Namibian subsidiary against fluctuations in the currency and optimises transfer through its advisers, drawing down funds on a prudent basis.

 

Market risk: The successful reopening of the mines and future profitability of the group is dependent upon global demand for and the market price of copper. The group is considering putting agreements in place to sell a proportion of its production at a price sufficient to reduce its exposure to fluctuations in the copper price.

 

Infrastructure: Weatherly's operations are serviced by good regional infrastructure, and the board reviews its infrastructure requirements on an ongoing basis. Any challenges relating to the supply of electricity, water or rail links are incorporated into investment decisions and addressed as needed in the overall projects. Any infrastructure requirements outside the project scope are addressed through dialogue with the government and the relevant parastatal institutions.

 

Contingent liabilities

 

The accounts for the prior year disclosed a potential contingent liability to Barclays Bank plc based on a claim in the amount of approximately £3.5m. On 11 June 2010 the Company entered into an agreement with Barclays Bank plc for full and final settlement of all claims that each party had against the other relating to the subject matter of the claim which was then in the process of litigation at the High Court of Justice. The terms of the settlement included, inter alia, the company making a payment to Barclays Bank plc in the sum of £700,000 with no admission of liability on the part of either party to the proceedings.

 

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 28 September 2010 as follows:

 

Major shareholders	Number of ordinary 0.5p shares
Matterhorn Investment Management LLP	71,170,952	15.96%
Dundee Precious Metals Inc.	40,468,000	9.08%
Bank Windhoek (Namibia)	33,948,233	7.62%
RAB Capital	31,357,294	7.03%
R J Webster	27,343,800	6.13%
W G Martinick	19,263,200	4.32%
Ezenet Ltd	18,281,200	4.10%
Gersec	14,882,000	3.34%

 

 

Post balance sheet events

 

Central Operations (reopening of Otjihase and Matchless) Funding

 

On 24 September the company's subsidiary Ongopolo Mining Limited signed both a prepayment facility and an offtake agreement with Louis Dreyfus Commodities Metals Suisse S.A. whereby they will provide US$7 million in funds to be applied to the reopening of the Central Operations. Full details are contained in the Chief Executives review.

 

Environment

 

Since the sale of the smelter, and with the mines being on care and maintenance the company's ongoing environmental exposure is considered to be minimal. Going forward, the company is committed to complying fully with Namibia's new legislation and to maintaining the highest international standards in its operations.

 

Future developments

 

Discussion of future developments can be found in the Chairman's statement and the Chief Executive's review.

 

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 2010 were equivalent to 48 days' purchases (2009: 96 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:

 

	Translation	2010	2009
Year end	1 GBP - USD	1.5067	1.6520
Average	1 GBP - USD	1.5789	1.6159
Year end	1 USD - ZAR	7.6529	7.8820
Average	1 USD - ZAR	7.5904	9.1666

 

 

 

 

 

 

 

 

 

 

 

Statement of directors' responsibilities - group

 

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 elected to prepare financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the group and of the 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 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.

 

In so far as each of the directors is aware:

 

·; there is no relevant audit information of which the company's auditors are unaware; and

·; the directors have taken all steps that they ought to have taken 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 board:

 

 

 

 

 

Rod Webster

Chief Executive Officer

 

1 October 2010

 

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 2010, the Board was comprised of the following:

Wolf Martinick Chairman

Rod Webster Chief Executive Officer

John Bryant Senior independent non-executive director

Alan Stephens Non-executive director

 

Non-executive directors

 

During the year, the board had three non-executive directors: Alan Stephens, John Bryant, and Wolf Martinick who is also the Chairman of the board. Alan Stephens and John Bryant were considered to be "independent" and John Bryant is the senior independent non-executive director; due to the size of Wolf Martinick's shareholding of 4.32% and his ability to influence Ezenet Ltd's holding of 4.1%, he is not considered to be an independent director. The relatively small number of share options that has been granted to the 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 is made up of John Bryant as Chairman and Alan Stephens for the year ended 30 June 2010.

 

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 its meetings as required. The Company Secretary acts as secretary to the committee.

 

The Remuneration Committee is made up of Alan Stephens as Chairman and John Bryant during the year, with the Company Secretary serving as secretary.

 

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 Wolf Martinick and Rod Webster with either John Bryant or Alan Stephens.

 

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 did not meet formally during the year.

 

In accordance with the Quoted Companies Alliance Guidance, the board nominated John Bryant as the senior independent non-executive director on 10 October 2008. At the same board meeting, the directors also adopted the guidance on Corporate Governance for AIM Listed Companies by the Quoted Company Alliance and in future will be reporting our performance against the guidance.

 

Attendance at meetings

 

During the year, there were a large number of substantive board meetings. Directors' attendance at meetings of the board and its sub-committees during the period was as follows:

 

Wolf Martinick Board 19/21

Rod Webster Board 21/21

 

Alan Stephens Board 20/21 Audit Committee 3/3 Remuneration Committee 4/4

John Bryant Board 20/21 Audit Committee 3/3 Remuneration Committee 4/4

 

Internal control

 

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 this 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. However, there is 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.

 

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 also participated in conference calls with groups of smaller shareholders. 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.

 

 

Directors' remuneration report

 

Remuneration Committee

 

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

 

Neither member 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 LTIP management and 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 comparator group of companies. In considering the Chief Executive's basic salary the Remuneration Committee took into account his extended role since the departure of the Chief Financial Officer and the lack of executive support.

 

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 rewarded 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% per cent of basic annual salary. The strategic objectives, control system and indicators are also aligned to total shareholder return.

 

Share options

 

The company issues share options to its staff under two incentive schemes: an unapproved share option scheme and a long term incentive plan. The Remuneration Committee has responsibility for the administration of these schemes and the grant of options under its terms. This includes setting the performance criteria that must be met and the strike price of the options, which is at a premium to market price at the time of grant. 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 and Alan Stephens 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 fee paid to each non-executive director in the year was £30,000. Wolf Martinick as Chairman receives £40,000.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:

 

	Salary and		Bonus		Benefits		Pension		Total
	Fees				in kind
	US$'000		US$'000		US$'000		US$'000		US$'000
2010
Executive
R J Webster	359		53		3		51		466
Non Executive
W G Martinick	63		-		-		-		63
J Bryant	81		-		-		-		81
A Stephens	89		-		-		-		89
	592		53		3		51		699
2009
Executive
R J Webster	356		-		5		76		437
Non Executive
W G Martinick	119		-		-		-		119
J Bryant	53		-		-		-		53
A Stephens	48		-		-		-		48
	576		-		5		76		657

 

 

 

Directors' share options

 

Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the company granted to or held by the directors. Details of the options during the year are as follows:

 

Name of director	30 June 2009		Warrants/ options issued			30 June 2010	Warrant/option price pence		Expiry date
R J Webster	1,248,489		-			1,248,489	5.0		15 July 2010
	1,248,491		-			1,248,491	12.0		15 July 2010
	-		2,500,000			2,500,000	3.0		*
W G Martinick	1,248,490		-			1,248,490	5.0		15 July 2010
	1,248,488		-			1,248,488	12.0		15 July 2010
	-		750,000			750,000	3.0		*
J Bryant	-		750,000			750,000	3.0		*
A Stephens	-		750,000			750,000	3.0		*
	4,993,958		3,250,000			8,243,958

 

* Each Directors options are exercisable 1/3 on the 1/4/2011, 1/3 on 1/4/2012 and 1/3 on 1/4/2013 and remain exercisable over a ten year period. The options were issued on 1/4/2010.

 

The share price movements during the year were as follows: high of 6.3 pence, low of 1.5 pence and a closing share price at 30 June 2010 of 2.74 pence.

 

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

 

Approval

 

This report was approved by the Board of directors on 1 October 2010 and signed on its behalf by:

 

 

 

 

 

Rod Webster

Chief Executive Officer

 

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 2010 which comprise 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 (IFRSs) 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 auditors

As explained more fully in the directors' responsibilities statement 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 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/UKNP.

 

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 2010 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 where the Companies Act 2006 requires us 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 2010.

 

 

 

 

 

 

 

 

Nicholas Page

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Gatwick

1 October 2010

Consolidated statement of comprehensive income

For the year ended 30 June 2010

 

						Year ended		Year ended
						30 June 2010		30 June 2009
	Note					US$'000		US$'000
Revenue	5					145		17,761
Cost of sales						(5,405)		(27,886)
Gross loss						(5,260)		(10,125)
Other operating income	6					275		5,573
Administrative expenses						(5,819)		(11,072)
Loss on sales of assets	9					(246)		(1,152)
Impairment of assets	34					-		(495)
Operating loss	9					(11,050)		(17,271)
Fair value of financial instruments through profit and loss	13					-		(2,760)
Profit on settlement of noteholder loans						559		-
Settlement of compound financial instrument						469		-
Foreign exchange gain/ (loss)						316		973
Finance costs	14					(1,291)		(3,149)
Finance income	12					19		25
Loss on continuing operations						(10,978)		(22,182)
Profit from discontinued operations	8					20,047		(8,544)
Profit / (Loss) for year before taxation						9,069		(30,726)
Income tax expense	15					-		-
						9,069		(30,726)
Exchange differences on translation of foreign operations						(68)		(2,171)
Fair value movement in investments						2,153		(4,760)
Other comprehensive income for the year net of tax						2,085		(6,931)
Total comprehensive income for the year						11,154		(37,657)
Profit attributable to:
Owners of the parent						9,307		(30,767)
Non- controlling interests						(238)		41
						9,069		(30,726)
Total Comprehensive income attributable to:
Owners of the parent						11,392		(37,060)
Non- controlling interests						(238)		41
						11,154		(37,019)
Total and continuing earning/ (loss) per share
Basic earnings / (loss) per share (US cents)
Loss from continuing activities	17					(2.43c)		(5.48c)
Earnings / (loss) from discontinuing activities	17					4.53c		(2.11c)
Total	17					2.10c		(7.59c)
Diluted earnings / (loss) per share (US cents)
Loss from continuing activities	17					(2.43c)		(5.48c)
Earnings / (loss) from discontinuing activities	17					4.53c		(2.11c)
Total	17					2.10c		(7.59c)

 

The notes on pages 26 to 69 form part of these financial statements.

Consolidated statement of financial position

At 30 June 2010

						As at		As at
						30 June 2010		30 June 2009
	Note					US$'000		US$'000
Assets
Non-current assets
Property, plant and equipment	19					22,803		51,524
Intangible assets	18					3		34
Investments	20(b)					-		260
Total non-current assets						22,806		51,818
Current assets
Investments	20(b)					7,724		-
Inventories	22					52		1,880
Trade and other receivables	23					579		5,402
Cash and cash equivalents						6,984		2,048
						15,339		9,330
Non current assets held for sale	21					3,764		2,368
						19,103		11,698
Total assets						41,909		63,516
Current liabilities
Trade and other payables	25					10,574		14,433
Unsecured payables subject to a compromise on acquisition	25					3,118		2,933
Loans	24					-		7,000
Total current liabilities						13,692		24,366
Non-current liabilities
Unsecured payables subject to a compromise on acquisition	26					1,900		1,788
Loans	24					-		17,051
Provisions	27					262		-
Total non-current liabilities						2,162		18,839
Total liabilities						15,854		43,205
Net assets						26,055		20,311
Equity
Issued capital	28					3,860		3,527
Share premium						-		71,729
Merger reserve						18,471		18,471
Capital redemption reserve						-		454
Share-based payments reserve						556		1,413
Other reserves						-		(469)
Foreign exchange reserve						(9,691)		(9,606)
Retained earnings						13,097		(65,208)
Equity attributable to shareholders of the parent company						26,293		20,311
Non-controlling interests	29					(238)		-
						26,055		20,311

 

 

 

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

On behalf of the Board:

R J Webster

Chief Executive Officer

Approved by the Board on 1 October 2010