Final Results

ANNUAL REPORT 2014

Weatherly International plc

Company No. 3954224

("Weatherly" or "the Company")

Final Results for the year ended 30 June 2014

Weatherly International Plc (AIM:WTI) announces its final results for the year ended 30 June 2014.

2014 Highlights

Highlights

· Tschudi fully funded during the year.

· Tschudi on budget, on time and expected to be in production second quarter 2015.

· Central Operations moved to owner mining from contractor mining reducing costs with increased capacity.

· Central Operations remains self funding in a difficult trading environment.

· Mobile equipment fleet overhauled and renewed during the year.

· US$4.6m raised from equity placements in the year.

· Orion Mine Finance Tranche A loan reduced by US$2.5m in the year.

Chairman's Statement

Overview

In a pivotal year, we have made significant progress towards bringing our Tschudi operation into production. I want to be extremely clear to our investors, customers and staff about the significance of Tschudi. Once in operation, it will transform the performance of Weatherly and, at the time of writing, we are ahead of schedule and looking forward to Tschudi producing its first copper in the second quarter of 2015.

As well as our 'on the ground' progress we should not overlook the significant achievement of delivering the successful funding of the Tschudi project. We used operating and 'build own operate' (BOO) contracts to both reduce the capital requirement and minimise our own operational risk and then funded the remainder entirely through a debt facility of US$88m from Orion.

This funding arrangement was a significant achievement for a company with a market capitalisation (at the time) of around US$20m and I should like to pay tribute to our CEO Rod Webster and his team for a job very well done. Looking to the future, and once Tschudi is up and running, your Board will examine the possibilities of developing some of the potential copper deposits in the Windhoek area; we believe these may offer us an excellent opportunity to make the most of our Concentrator's idle capacity.

We should also note the benefits of operating in Namibia. The internationally-respected Fraser Institute (which ranks countries according to their disposition towards mining companies) says that Namibia is one of the top three countries in Africa. The country is a stable multi-party democracy with a long-established Mining Act and we can be very proud that, during our eight years in the country, Weatherly has developed strong relationships with all our stakeholders.

Financial Performance

While copper output and costs were largely unchanged from the previous year, copper prices declined by some 15% further reducing already tight margins. Despite this, the operations remained cashflow positive throughout and were able to meet all ongoing capital and debt repayments. To reduce costs and restore margins in a lower copper price environment, the Company undertook a radical overhaul of its operations aimed at boosting productivity in the second half of the year. Unfortunately, this year investors will only see the costs of these changes while the benefits will accrue in the following year. However, the changes we have introduced should help us take Central Operations closer towards our goal of 7,000 tonnes of copper per year and in doing so restore profitability.

To further improve the Company's cash position, two equity placements totalling $4.6m were made during the year, the second tranche at a significant premium to the prevailing share price.

The Board remains confident about the long-term prospects of copper. Countries around the world will continue the now established trend of urbanisation and, in so doing, will continue to drive demand for copper and its applications in wire, cables, electronics and electric motors. Global copper production is currently running at around 17 million tonnes per year. Worldwide, consumption of copper over the next 24 years is predicted to exceed all of the copper ever mined.

Management

On 31 December 2013 Max Herbert retired as Company Secretary after five years of excellent service. The Board's thanks go to Max and we wish him every success in the future. The Company Secretary duties have now been taken over by our Chief Financial Officer, Kevin Ellis. I would like to thank all of Team Namibia where our local Board and strong management group continue to work diligently to take the Company into its exciting next phase.

China Africa Resources

During the year, China Africa Resources plc, in which Weatherly holds a 25% stake, completed a pre-feasibility study for the development of the Berg Aukas lead/zinc mine, also in Namibia. The pre-feasibility study conclusions were that a mine would be viable and that the Company should proceed with the next stage of development.

Finally, it just remains for me to thank all our shareholders for their support during the year. I hope you will share the Board's confidence as we look towards the next 12 months and the successes it should bring.

John Bryant

Chairman

6 October 2014

Chief Executive's Statement

This has been a year of significant progress for the Company as we developed our assets in Namibia; at Tschudi we moved ever closer to production while the performance of our two producing copper mines at Otjihase and Matchless, known as our 'Central Operations', has been enhanced as a result of the changes we introduced.

These assets will take Weatherly one step closer to achieving its medium term goal of establishing a business producing approximately 25,000 tonnes of copper annually. The development of Tschudi will help us deliver this as we work towards its first production of copper during the second quarter of 2015.

Financial

In the year revenues were down from US$35.6m to US$32.2m. Actual contained copper tonnes shipped rose from 4,485 tonnes to 4,590 tonnes but the average sales price went down from US$8,273 per tonne to US$7,397 per tonne. While this was a reduction on the previous year we benefitted from copper hedges as the average spot price over the period was US$7,014 per tonne.

As the copper price has reduced the Board has chosen to run down its hedges and the Company is now unhedged on both commodity price and currency. The Board regularly reviews this policy.

The lower copper prices received reduced the gross profit to US$0.6m compared with US$4.4m in the previous year resulting in an overall loss of US$5.7m compared with US$1.6m in the previous year.

Production costs in Namibia were on a similar level year on year. The C1 cost for the year was US$6,729/ tonne (2013, US$6,532) Costs outside Namibia were reduced from US$2.6m to US$2.1m.

At the end of the year, inventory with a sales value of US$8.8m was still awaiting shipment compared to US$5.4m at the previous year end. We only record a sale when the concentrate is aboard ship although the sales price is agreed when the concentrate reaches Walvis Bay, the port in Namibia, and our off-taker pays us a loan equivalent to 95% of the agreed sales price. This is netted against the sales revenue due when the ship departs port.

Working capital increased from US$18.5m to US$23.2m during the year. Inventory increased due to stock at Walvis Bay while cash increased predominately as a result of cash holdings on the Tschudi project. If this is excluded, year-on-year cash was similar on a like-for-like basis.

During the year we raised US$4.6m net of expenses from equity raises. In December we raised US$1.7m from a placement to shareholders at 3p per share and in June, Logiman, the project manager of the Tschudi project, invested US$2.9m at 3.95p per share.

In November 2013 we received our first drawdown against our loan with Orion Mine Finance to build the capital infrastructure for the Tschudi project. The Tschudi project loan is for US$80m with a US$8m over run facility (Tranche C). At year end we had drawn down US$47.8m of the facility and invested US$44.0m into the project.

Orion Mine Finance also assumed the existing loan from Louis Dreyfus which stood at US$3.9m at 30 June 2013. This loan has been reduced during the year by US$2.5m to US$1.4m at year end.

Central Operations

The output from our two underground mines for the year was 5,086 tonnes of copper (2013, 5,182 tonnes) and this is summarised in the table below:

The Company's annual production of 5,086 tonnes was similar to last year despite a concerted effort to boost production in the second half of the year. Production in our final quarter (the three months ending 30 June 2014) of 1,507 tonnes was the highest achieved to date since the mines were reopened in 2011. This performance would equate to an annualised rate of over 6,000 tonnes of copper.

The Company's unit cash cost (C1) for the year was US$ US$6,729/ tonne. Once again, I would draw shareholders' attention to the final quarter of the year when we achieved the lowest cost level for the last two years. Management believes that the improvements highlighted below should help us take Central Operations towards our target production of 7,000 tonnes of copper per year.

Increasing Efficiency at Central Operations

It had become clear to your management that Central Operations was not sustainable unless productivity was improved and costs reduced and that we had to effect major changes to achieve this. This was done by targeting three specific areas, manning levels and skill requirements, equipment and reliability and mining methods.

Manning and Skills

The first step was to bring the mining functions in house where we would have more control over performance and safety. The changeover from contract mining to owner mining went well and resulted in a 67% productivity increase. It also provided the opportunity to reduce management layers and establish better discipline and accountability throughout the organisation. The company is now working on restructuring salaries to incorporate a larger productivity-based component which is also linked to increased training and certification. Plans are underway to open a mining school based around the development heading to Hoffnung Fault West. Skills development remains the single most important building block in improving productivity on a sustainable basis.

Mobile Equipment Reliability

Much of the equipment used to reopen the mines in 2010 was rebuilt at the time and, four years on, had become increasingly difficult and costly to maintain, especially in an environment where maintenance skills are at a premium. The Company's response has been to invest heavily in key new equipment and in this respect the Company added three new trucks, two new scoops and a rebuilt drill jumbo during the latter part of the year. Accompanying this has been a programme of rationalising and rebuilding the remaining equipment to optimise the fleet.

A number of expatriate mechanics were employed on a temporary basis to help train and improve maintenance practices at both underground mines. Training modules are being developed for all heavy mobile equipment and will form the basis of an ongoing in-house programme to train and certify our employees.

Mining Methods

Significant changes to the mining methods at both mines are an important part of the overall strategy to improve productivity. At Otjihase, the plan is to move from costly and complicated pillar recovery to primary mining. A new area known as Hoffnung Fault West, has been accessed and the first ore, albeit low grade fringe material, was mined during the last quarter of the year. This is expected to gradually ramp up both in tonnes and grade as more working faces are established. In the meantime considerable effort has gone into steamlining the pillar recovery activities which are now retreating updip eliminating many of the issues relating to pumping, backfill and support. While the plan is to phase out the pillar recovery as soon as possible, it will still remain the major source of ore for at least the first half of 2015.

At Matchless, the focus during the year was on improving the open stoping method which was introduced to replace the cut and fill method that has traditionally been used. Despite initial difficulties during the changeover, the benefits were demonstrated in the last quarter with significant gains in the production and lower levels of grade dilution.

We believe that the combination of these improvements will enable the Central Operations to operate profitably in the future.

Tschudi

The developments at Tschudi are key to the future of the company and will help us grow into the '25,000 tonne producer' we aspire to be. Tschudi will transform the Company by adding 17,000 tonnes of copper cathode to existing production from Central Operations; the project is on schedule to deliver its first copper in the second quarter of 2015.

So significant is the progress that we have dedicated a separate section to Tschudi in this report.

However, in summary, let me state that we have made excellent progress and as at the 31 August 2014, the project was 75% complete.

We were also extremely pleased to welcome Logiman, our engineering contractor for the Tschudi project, as a shareholder. This is a great vote of confidence in both the management and the project itself, especially given the fact that Logiman bought the shares at a significant premium to the market.

Safety

Weatherly is committed to the safe production of copper. Our goal is to deliver exceptional shareholder value while respecting the environment, community and safety of our employees and contractors. To raise awareness about our goal a 'Safe Copper' model was developed that includes our vision, mission, values and behaviours. The Safe Copper model is a focal point in educating our workforce that we aim to produce without injuries to our people, without harm to our environment and provide positive contributions to our community and the health and safety of our employees and contractors is paramount in everything we do. We achieve this through effective leadership and teamwork by ensuring that our safety systems, policies and procedures reflect the work we do. Weatherly is committed to the development of an integrated management system aligned to OSHAS 18001 and ISO 14001.

Our safety standards improved significantly over the course of the 2014 year. This is shown in a drop in the number of lost time injuries from 36 to 22 for the reporting period. The lost time injury frequency rate (LTIFR) also improved from 21 in June 2013 to 13 at the end of June 2014.

Environment

Weatherly has a proactive approach towards environmental performance. In setting up the Company's Safety Management System we have adopted the international standard ISO 14001 Environmental Management Systems to ensure an integrated approach towards health, safety and the environment. Our commitment to minimising potential environmental impacts extends throughout our management practices, policies and standards.

We are pleased to report that no environmental incidents or fines for non-compliance were received during the reporting period. Some of the environmental initiatives implemented in 2014 include:

· Improved in-house resourcing for environmental specialists.

· The development and implementation of the Weatherly land clearing permit system.

· Management strategies for the handling and stockpiling of topsoil for closure.

· Weed and seed clearance certificates for equipment working on our sites.

· Air quality monitoring to ensure our operators understand and manage the risks associated with dust generated from our activities.

· Water management strategies for water disposed from old workings.

In 2014 we hosted our first environmental forum for Matchless and Tschudi with great success. The Environmental Forum comprises representatives from Weatherly, Government, local councils, communities and neighbouring property owners who review environmental performance relating to our operations.

China Africa Resources plc

The Company has a 25% stake in the AIM listed company, China Africa Resources (CAF), which is currently focused on the development of lead/zinc project at Berg Aukas in Northern Namibia.

During the year China Africa Resources completed a pre-feasibility study based on a mineable resource of 2.05 million tonnes grading 11.2% zinc, 2.81% lead and 0.2% vanadium oxide. The study looked at a 250,000 tonnes per year underground mine producing approximately 20,000t zinc and 5,000t lead annually over a life of 10 years The initial capital cost was estimated at US$50m and the operating cost was approximately US$1,000/t zinc equivalent. The financial analysis showed a pre-tax Net Present Value (NPV) using a discount rate of 10% of between US$49 million and US$51 million and an IRR of 25%.

Minxcon, who prepared the independent financial evaluation stated that under the current economic environment the 'Project is robust and recommends that the project continue to be advanced'.

Other

No work was carried out on the Company's Northern projects Tsumeb Tailings and Tsumeb West Mine, although the Company's strategic exploration licence (EPL132A) surrounding the Tsumeb - Tschudi strike was renewed for a further two years.

Rod Webster

Chief Executive Officer

6 October 2014

Tschudi Story

Early Days

In 2006, your Company acquired the assets of Ongopolo, a Namibian copper producer, including a major undeveloped resource known as Tschudi.

For shareholders old and new it is worth recounting the history of Tschudi and the progress the Company has made as well as exploring some of the exciting potential which the new mine will offer.

In the wake of the 2008 global financial crisis work on the project was suspended and, it was not until December 2009 that we published our preliminary pit optimisation study. Throughout 2011 and 2012 we made progress with feasibility studies which started to show that the ore body, including the deeper ore, was amenable to direct leaching using sulphuric acid. Up until then, it was assumed that the deeper ore would be treated using conventional flotation, smelting and refining. This was a significant breakthrough at the time.

By the end of 2012 we were able to publish our Bankable Feasibility Study (BFS) based on an open pit mine using heap leach, solvent extraction and electro-winning to produce high quality copper cathodes.

The BFS was completed in December 2012 and the financial results were announced together with the funding from Orion Mine Finance (then Red Kite). At the time, the BFS resulted in a Net Present Value (at eight per cent discount rate) of US$105m based on an average Life of Mine copper price of US$6,067 per tonne of copper.

2013; Contractors Appointed and Ground Breaking

By September 2013 we had made sufficient progress to start appointing the key contactors. All the companies appointed were Namibian subsidiaries of South African organisations.

Basil Read Mining Namibia joined the team as mining contractor while B&E Int. were appointed to carry out the crushing, agglomeration and stacking of the leach pads. Logiman, a boutique engineering contractor, was appointed in charge of the design and construction of the process plant.

As we reported last year, the official ground breaking ceremony was held in Namibia in November 2013, which heralded the official launch of the mine and the start of the plant construction phase.

Tschudi Today

During 2014 our progress has accelerated and we have passed some significant milestones, ahead of schedule.

Civil engineering works and construction commenced in April 2014 and Logiman, our EPC contractor, also became a shareholder. This was a great vote of confidence in both the management and the project itself, especially given the fact that Logiman bought the shares at a significant premium to the market price.

In June, our mining contractor, Basil Read, was mobilised. This was well ahead of the original schedule. Waste stripping commenced, again well ahead of schedule. This augurs well for ensuring that the required stripping will be completed ahead of time resulting in a further de-risking of the project

B&E has commenced its crushing and agglomeration facility which is being constructed on a build own and operate (BOO) basis. It is estimated that both Basil Read and B&E have invested over US$40m of their own money in establishment costs which can only be recovered from the operating contract payments. The fact that they are prepared to do this is indicative of their commitment to the project.

We have also concluded the main supply contracts for the project; Nampower for the power and Dundee's Tsumeb smelter for the acid required in our leaching process.

All of the main contract cost inputs, mining, crushing, power and acid are estimated to be approximately 10% below those assumed in our BFS which adds to the financial robustness of the project.

The project has made excellent progress and, as at the 31 August 2014 was approximately 75% complete.

Team

Due to Tschudi's importance to Weatherly, the Company has moved quickly to establish a dedicated management team reporting to the Company's Chief Operating Officer in Namibia, Craig Thomas.

The mining manager, Mike Stuart, the processing manager, Stefan Engelbrecht, the plant maintenance manager, Greg Edmonds and the finance manager, Gary Spinas, are all in place. Recruitment of the mining department's senior staff has been completed and the other departments are well advanced in the recruitment process.

The Future at Tschudi

Tschudi is an open pit that is expected to mine 190 million tonnes of ore and waste over its 11 year mine life. The mine has a proven and probable JORC ore reserve of 22.7 million tonnes of ore at a grade of 0.95% copper.

The ore will be processed using acid leaching, solvent extraction, electro-winning (SX-EW) technology. This is a proven process that bypasses the conventional concentrating and smelting steps to produce refined copper. Using this approach, we expect output to average 17,000 tonnes of copper cathode annually.

The process is relatively straight forward and low risk. Once ore is mined, it is fed to a three-stage crushing plant. The crushed ore is then agglomerated with sulphuric acid and stacked onto four to six metre high heaps for leaching with dilute sulphuric acid. The resulting 'pregnant' liquor containing the dissolved copper is collected from the base of the pads and upgraded (through the SX) to a clean high grade electrolyte which is pumped to the EW cell house where copper is plated onto cathodes. The 99.99% pure copper sheets are then stripped from the cathodes, bundled together and transported to the deep water port of Walvis Bay and exported to fabricators around the world. Overall metal recovery is expected to be 85% of the copper contained in the ore.

Towards the end of 2014, we expect to commission the crushing plant and begin building the first ore pads for leaching. In the first quarter of 2015 we will install the plastic pipes and drippers and commence irrigation .We would then expect to commission the SW-EX plant in the same quarter before producing our first copper in the second quarter of the year.

Tschudi is expected to employ approximately 500 people in the operating stage. Tsumeb, the closest town, is well developed with respect to services, amenities and accommodation.

2015 will truly mark the start the start of a new chapter in the Weatherly story.

Principal Risks and Uncertainties

The Group is exposed to a number of risks and uncertainties which could have a material impact on the performance of the business. The management of these risks is an important part of the day-to-day responsibility of the management team.

The Board recognises the risks below as the principal risks within the business:

Key Performance Indicators

The Board sets key performance indicators relevant to the stage of operation of the mines. Safety and adherence to environmental legislation are of paramount concern across all our mines. For those mines within Central Operations, Otjihase and Matchless, our cost per tonne and overall production levels are key measures of performance. For Tschudi which is in the development stage, the key measure is being on budget in terms of time and cost. The Board is conscious that shareholder return is of paramount importance and share price is a key measure for the business.

Corporate and Social Responsibility (CSR)

Weatherly is committed to complying with all Health and Safety, environmental and social legislation in the countries in which it operates and protecting the Health and general well being of its employees and contractors. It is committed to preserving the environment and the communities in the areas where we operate.

Environment

Concern for the environment is of upmost importance to Weatherly. As well as meeting all the environmental standards required by Namibian legislation it is our policy to reduce to a minimum the potential environmental impact of our activities and have a positive impact on the areas in which we operate.

We have adopted an integrated approach to the way we manage our Environmental responsibilities. The management system (currently under development) will also align to the international standard ISO 14001 Environmental Management Systems to ensure the Company takes a proactive and holistic view towards health, safety and the environment. Our commitment to minimising potential environmental impacts extends throughout our management practices, policies and standards.

For more details of the initiatives that took place in the current year see the environmental section of the Chief Executive report.

Health, Safety and Security

The health, safety and security of the personnel and communities in which we operate takes priority in the management of our operations. Our goal is to prevent injury and ill health to employees and contractors by providing a safe and healthy working environment and by minimising risks associated with occupational hazards.

Weatherly is developing an integrated management system aligned to OSHAS 18001 and ISO 14001. For more information see the safety section of the Chief Executive report.

Business Ethics

Weatherly is committed to carrying out all its operations with high moral and legal standards. Weatherly has a well developed Anti corruption and Anti bribery policy in line with the Bribery Act. All staff are made aware of their obligations on recruitment and with periodical updates. The company maintains a 'whistle blower' programme.

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 2014

Table B

Weatherly Mining Namibia: Mineral Resources as at 30 June 2014

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.

*Reserves is a sub set of resources and not in addition to them.

Table C

Weatherly Mining Namibia: Historical Resources

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.

* Remaining resource/reserve calculated by Tsumeb Corporation Limited in 1984.

The Strategic Report was approved by the Board of Directors on 6 October 2014 and was signed on its behalf by Rod Webster, Chief Executive Officer.

Rod Webster

Chief Executive Officer

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 2014, 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

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 3.12% 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 Charilaos Stavrakis as Chairman, Alan Stephens and John Bryant for the year ended 30 June 2014.

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 twice during the period, and all committee members were present on each occasion.

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, John Bryant and Charilaos Stavrakis.

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 and the grant of options as part of the remuneration package. The Remuneration Committee met once during the period, with all committee members in attendance on each occasion.

The Nominations Committee is made up of John Bryant and Rod Webster with either Wolf Martinick 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 in the year.

Attendance at Meetings

During the year, there were 13 Board meetings. Directors' attendance at meetings of the Board and its sub-committees during the period was as follows:

John Bryant Board 13/13 Audit Committee 2/2 Remuneration Committee 1/1

Rod Webster Board 13/13

Alan Stephens Board 13/13 Audit Committee 2/2 Remuneration Committee 1/1

Wolf Martinick Board 9/13

Charilaos Stavrakis Board 11/13 Audit Committee 2/2 Remuneration Committee 1/1

Of the 13 Board meetings, three were of a procedural nature and 10 were substantive meetings.

The Nominations Committee did not meet in the year.

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.

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 2014 were Alan Stephens, John Bryant and Charilaos Stavrakis, who are 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.

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:

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. Details of the total number of options granted to date are set out below.

1. Vested one third on 1/4/2011, one third on 1/4/2012, and one third on 1/4/2013.

2. Vest one-third on 11/3/2014, one third on 11/3/2015 and one third 11/3/2016.

3. Vested on 17/6/2014. All options are exercisable for 10 years from the vesting date.

The share price movements during the year were as follows: high of 5.62 pence, low of 2.12 pence and a closing share price at 30 June 2014 of 2.88 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 6 October 2014 and signed on its behalf by:

Rod Webster

Chief Executive Officer

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.

During the year ended 30 June 2014 the Board and Audit Committee approved an extension of one year to the period of service of the Senior Statutory Auditor responsible for the audit of Weatherly International plc beyond the normal five-year period set out in the APB Ethical Standards. As a result the year ended 31 March 2014 was the sixth year for which the individual has served.

The Audit Committee determined that following the commencement of the Tschudi project, including the drawdown of the Orion loan and the associated capital programme, and other changes in the senior audit team it had been in the best interest of audit quality that the current audit partner continued in his role for this sixth year. The Audit Committee is satisfied that by the application of safeguards, the extension did not undermine the objectivity and independence of the auditor.

On behalf of the Board:

Rod Webster

Chief Executive Officer

6 October 2014

Directors' Report

Principal Activities

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.

Review of the Business and Future Developments

The review of the business and future developments of the group are included within the Chief Executive's report.

Financial Risk management has been assessed within note 33.

The Directors

The Directors during the year ended 30 June 2014 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)

Directors' indemnities

Weatherly International plc maintains liability insurance for its Directors and officers during the year and also as at the date of the report of the Directors. This group cover extends to and includes the Directors and officers of the Company.

Going Concern

The Group expects to generate sufficient funds to operate as a going concern for 12 months following the signing of the accounts, based on its projected production levels and prevailing exchange rates and copper prices. The loan facilities available for the capital investment and working capital required for the Tschudi open pit project are believed to be adequate to meet the Group's needs.

Exchange rates and the price of copper will continue to have a significant impact on the Group's cash flow.

Results and Dividends

The consolidated loss for the year after taxation was US$5,730,000 (2013 Profit US$ 1,589,000). No dividends were declared or paid during the year (2013: US$ nil).

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 22 September 2014 as follows:

Major Shareholders' Information

(*Director)

Source: Capita

Events Subsequent to Statement of Financial Position Date

There have been no disclosable events subsequent to the date of the statement of Financial Position.

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.

The Directors' report was approved by the board and signed on its behalf.

John Bryant

Chairman

6 October 2014

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 2014, 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, 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 FRC'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 2014 and of its loss 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 Strategic Report and 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 2014.

Nicholas Page

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Gatwick

6 October 2014

Consolidated Income Statement

For the year ended 30 June 2014

Consolidated Statement of Comprehensive Income

At 30 June 2014

Consolidated Statement of Financial Position

At 30 June 2014

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

On behalf of the Board:

R J Webster

Chief Executive Officer

Approved by the Board on 6 October 2014

Consolidated Statement of Changes in Equity

For the year ended 30 June 2014

Consolidated Cash Flow Statement

For the year ended 30 June 2014