Half Yearly Report

RNS Number : 2889I

Weatherly International PLC

09 March 2010

 

 

9 March 2010

 

Weatherly International plc

("Weatherly" or the "Company")

 

Unaudited interim financial statements

for the period from 1 July 2009 to 31 December 2009

 

 

Weatherly International plc today announces its unaudited interim results for the six months ended 31 December 2009.

 

 

For further information contact:

 

Rod Webster, Chief Executive Officer Weatherly International +44 (0)207 868 2232

Max Herbert, Company Secretary

 

Richard Brown Ambrian Partners Limited +44 (0)207 634 4700

Richard Greenfield

 

 

Summary highlights

for the six months ended 31 December 2009

 

Financial

·; Turnover of US$21.4 million on a toll basis

 

·; Cash at bank US$1.8 million as at 31 December 2009

 

·; Net assets of US$11.5 million as at 31 December 2009

 

Corporate and operational

·; Post 31 December 2009 agreement for sale of the smelter business to Dundee Precious Metals Inc ('DPM') for US$33 million.

 

·; All mining operations continued in care and maintenance.

 

·; Detailed proposals being developed for reopening mines.  

 

Post Completion of Sale of NCS

 

·; Cash in bank of approx US$11m and further cash receipts of $2m from agreed sales of non core assets.(in total approximately 1.9p per ordinary share)

 

·; Focus on plans to reopen Otjihase and Matchless and development of Tschudi Open pit.

 

·; DPM Shares are to be distributed to Shareholders in two dividends in specie with an aggregate value of 0.8p per ordinary share.

 

 

Chairman's statement

 

Results for the half year

 

I am pleased to present the half year unaudited results for Weatherly International Plc for the period from June 30th 2009 to 31st December 2009. During this period Weatherly's main operating business was that of the smelter at Tsumeb operated by the wholly owned subsidiary Namibian Custom Smelters (Pty) Ltd, ('NCS'). Following the period end we have now contracted to sell NCS and associated assets to DPM with completion set for shortly after the general meeting of the Company to be held on 11 March 2010.

 

The smelter was transformed into a toll smelter in January 2009. Since then revenue has only been on a toll basis and has been reduced to US$21.4 million in the half year. The smelter performed well considering that the Ausmelt furnace only operated in 'interim' mode while awaiting the commissioning of the oxygen plant. The smelter operating cost also includes a full 'mark to market' of the precious metals exposures (actual versus contractual recoveries) as a pre-condition of the subsequent purchase of the smelter by DPM. (Offsetting consideration of approximately US$5 million is built into the purchase price).

 

Our mines have been on care and maintenance since December 2008 which has resulted in costs in the 6 months under review of US$1.3 million. Depreciation of property plant and equipment amounted to US$1.6 million resulting in total costs in the Mining segment of US$2.9 million. All care and maintenance costs are expensed in the period in which they are incurred until such time as a decision is made to reopen the mines.

 

Corporate costs amounted to US$1.5 million, resulting in a gross operating loss of US$10.5 million.

 

Issue of Equity

 

On 31 July 2009, Weatherly concluded a placement of 40,468,000 ordinary shares (approximately 9% of the enlarged issued share capital) to DPM to raise proceeds of US$2 million. The placement proceeds were applied to NCS and used to complete the construction of a new residue disposal site and working capital.

 

Letter of Intent with ECE

 

On 15 September 2009, the company announced that it had signed a Letter of Intent ('LOI') with East China Mineral Exploration and Development Bureau ('ECE') whereby a wholly owned subsidiary of ECE was to subscribe for 446,851,840 new shares in the company at a price of 3.6 pence per share, for total proceeds of approximately £16.1 million and resulting in ECE being interested in approximately 50.1% of the Company's enlarged issued share capital.

 

Following the announcement of the disposal of the smelter business to DPM, the LOI with ECE was no longer capable of being fulfilled and was terminated. While the Directors considered that a strategic relationship with ECE could have benefited the Company, the disposal of the smelter business to DPM provides the Company with the funding it requires without the issue of new equity and a change of control and was considered to represent better value for shareholders.

 

Sale of Smelter Business

 

On 14th January 2010 Weatherly International plc announced its intention to sell the smelter business to DPM and the Company entered into a conditional sale and purchase agreement with DPM on 26th February 2010. This transaction is subject to shareholder approval at a meeting convened for 11th March 2010 and is expected to complete shortly thereafter. Pursuant to the sale and purchase agreement, Weatherly is to sell NCS together with certain associated property and assets owned by Ongopolo Mining and Processing Limited for consideration of US$18 million cash and 4,446,420 new common shares in DPM ('DPM Shares').

 

Immediately upon completion of the Disposal, US$5 million of the cash consideration and 2,678,571 DPM Shares will be 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 have a face value of US$12 million and accrued interest stood at approximately US$2.2 million as at 31 January 2010.

 

The balance of the share based consideration of 1,767,849 DPM Shares will be distributed to shareholders appearing on the Company's register of members on 19 March 2010 through the payment of two dividends in specie of approximately 0.002 DPM Shares per Weatherly ordinary share, payable on 20 September 2010 and 21 March 2011.

 

Outlook for restart of mining operations

 

Following the sale of NCS Weatherly will have cash resources of approximately US$11 million with further cash receipts of approximately US$2 million expected from agreed non-core real estate and equipment sales in Namibia.

 

We have significant copper mining assets in Namibia and our immediate strategy will be to to reactivate mining at the Central Operations (Otjihase and Matchless) followed by the development of an open pit at Tschudi, near the northern town of Tsumeb. Preliminary discussions are underway to finance both these projects.

 

On 15 December 2009, the Company announced the completion of a new five year mine plan for the Otjihase and Matchless mines currently on care and maintenance. The new plans incorporate substantial changes in the way the mines are to be operated, in particular a much reduced workforce that would be newly recruited and trained for the task. Hedging to protect against future downturns in the copper price, and the likely involvement of a local empowerment partner would also be key elements in ensuring a sustainable future operation. Once these are in place, Otjihase and Matchless could be brought back into production within six months. Coffey Mining (SA) were engaged to carry out an independent review and evaluation which is expected to be announced shortly.

 

At Tschudi, the plan would be to establish a medium scale open pit with a strike length of approximately two kilometres and a depth of around 180 vertical metres. Based on a report by Coffey Mining (SA) in November 2009, this pit would contain a measured and indicated resource of 25.2 million tonnes grading 0.92 per cent. Cu. All ore, both oxides and sulphides, contained within the pit is amenable to simple low cost acid leaching and electro-winning to recover the copper.

 

On 16 December 2009, the Company announced the publication of a preliminary pit optimisation study prepared in conjunction with Coffey Mining Pty Ltd. This study concluded that a number of economically viable pits could be established and recommends that further work should be performed to firm up the optimum mine design, metallurgical route and associated capital and operating costs. The Company intends to initiate the feasibility work as soon as the Disposal has completed. Assuming the results are positive, and funding is available, the Company believes that it could establish an operation producing more than 10,000 tonnes of copper per annum for at least 10 years. It is hoped that a concurrent exploration program further along strike will increase the size of the resource and extend the mine-life. Work on the pit could commence within 12 months.

 

Weatherly has a number of other mining assets and a significant portfolio of real estate in Namibia. It is the Company's intention to either divest these assets or enter into joint venture arrangements to maintain focus on the development of the Otjihase/Matchless and Tschudi projects. Weatherly, through its partner, Wadi Al Rawda Industrial Investments, is also continuing to pursue its rights in securing the Tambao manganese project in Burkina Faso.

 

Going concern

 

On the basis of its assumptions and current projections of expenditure the Directors consider that the Group will continue to operate within its currently available funds for at least the next 12 months and that it is appropriate to prepare the financial statements on the Going Concern basis. The Directors also note that to implement fully its strategy to put the three mines into production it may need to raise further funds.

 

 

Rod Webster

9 March 2009

 

 

Condensed consolidated statement of comprehensive income

for the period from 1 July 2009 to 31 December 2009

			6 months to		6 months to		Year ended
			31 Dec 2009		31 Dec 2008		30 June 2009
	Note		US$'000		US$'000		US$'000
			Unaudited		Unaudited		Audited
Revenue			21,417		77,259		108,517
Cost of sales			(28,648)		(88,789)		(124,707)
Gross loss			(7,231)		(11,530)		(16,190)
Other income	3		323		8,082		8,150
Administrative expenses			(3,618)		(4,596)		(12,800)
Profit/ (Loss) on sales of assets			7		-		(1,152)
Fair value movement on investments			3		(2,994)		(2,760)
Impairment of assets			-		-		(495)
Operating loss			(10,516)		(11,038)		(25,247)
Foreign exchange loss			(26)		(1,741)		460
Finance costs	4		(2,103)		(2,695)		(5,987)
Finance income			2		36		48
Loss before tax			(12,643)		(15,438)		(30,726)
Income tax expense			-		-		-
LOSS FOR THE PERIOD			(12,643)		(15,438)		(30,726)
Other comprehensive income
Exchange difference on translating foreign operations			1,603		(5,668)		(2,171)
Fair value movement on investments			-		(5,762)		(4,760)
Income tax relating to components of other comprehensive income			-		-		-
Other comprehensive income for the period net of tax			1,603		(11,430)		(6,931)
TOTAL COMPREHENSIVE INCOME FOR PERIOD			(11,040)		(26,868)		(37,657)
Loss attributable to:
Owners of the Parent			(12,643)		(15,467)		(30,767)
Non controlling interests			-		29		41
			(12,643)		(15,438)		(30,726)
Total comprehensive income attributable to:
Owners of the Parent			(11,040)		(26,897)		(37,698)
Non controlling interests			-		29		41
			(11,040)		(26,868)		(37,657)
Loss per share
Basic (US cents per share)	8		(2.88)		(3.87)		(7.59)
Diluted (US cents per share)	8		(2.88)		(3.87)		(7.59)

 

 

 

Condensed consolidated statement of financial position

as at 31 December 2009

 

				As at		As at		As at
				31 Dec 2009		31 Dec 2008		30 June 2009
	Note			US$'000		US$'000		US$'000
				Unaudited		Unaudited		Audited
Assets
Non-current assets
Property, plant and equipment	6			53,524		54,019		51,524
Investment properties				-		1,078		-
Intangible assets				20		1,800		34
Investments				263		819		260
				53,807		57,716		51,818
Current assets
Inventories				2,668		16,599		1,880
Trade and other receivables				4,568		4,438		5,402
Cash and cash equivalents				1,846		3,530		2,048
				9,082		24,567		9,330
Assets held for resale	7			1,961		-		2,368
				11,043		24,567		11,698
Total assets				64,850		82,283		63,516
Current liabilities
Trade and other payables				24,079		27,705		14,433
Deferred revenue				-		1,385		-
Unsecured creditors subject to a compromise on acquisition				3,118		1,712		2,933
Loans				7,000		-		7,000
				34,197		30,802		24,366
Non-current liabilities
Unsecured creditors subject to a compromise on acquisition				1,900		948		1,788
Loans				17,260		19,773		17,051
				19,160		20,721		18,839
Total liabilities				53,357		51,523		43,205
Net assets				11,493		30,760		20,311
Equity
Issued capital				5,527		3,520		3,527
Share premium reserve				71,729		71,729		71,729
Merger reserve				18,471		18,471		18,471
Capital redemption reserve				454		454		454
Share-based payments reserve				1,635		1,080		1,413
Other reserves				(469)		(1,471)		(469)
Foreign exchange reserve				(8,003)		(13,103)		(9,606)
Retained earnings				(77,851)		(49,908)		(65,208)
Equity attributable to shareholders of the parent company				11,493		30,772		20,311
Non controlling interests				-		(12)		-
				11,493		30,760		20,311

 

 

 

Condensed consolidated statement of changes in equity

for the period from 1 July 2009 to 31 December 2009

 

	Issued capital	Share premium	Merger reserve	Capital redemption reserve	Share-based payment reserve	Translation of foreign operations	Other reserve	Retained earnings	Subtotal	Non controlling interests	Total equity
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	$,000	$,000	$,000	$,000	$,000	$,000	$,000	$,000	$,000	$,000	$,000
At 1 July 2008	3,519	71,702	18,471	454	775	(7,435)	4,291	(34,441)	57,336	(41)	57,295
Issue of shares	1	27	-	-	-	-	-	-	28	-	28
Share-based payments	-	-	-	-	305	-	-	-	305	-	305
Total comprehensive income for the period	-	-	-	-	-	(5,668)	(5,762)	(15,467)	(26,897)	29	(26,868)
At 31 December 2008	3,520	71,729	18,471	454	1,080	(13,103)	(1,471)	(49,908)	30,772	(12)	30,760
Issue of shares	7	-	-	-	-	-	-	-	7	-	7
Share-based payments	-	-	-	-	333	-	-	-	333	-	333
Total comprehensive income for the period	-	-	-	-	-	3,497	1,002	(15,300)	(10,801)	12	(10,789)
At 30 June 2009	3,527	71,729	18,471	454	1,413	(9,606)	(469)	(65,208)	20,311	-	20,311
Issue of shares	2,000	-	-	-		-	-	-	2,000	-	2,000
Share-based payments					222				222		222
Total comprehensive income for the period	-	-	-	-	-	1,603	-	(12,643)	(11,040)	-	(11,040)
At 31 December 2009	5,527	71,729	18,471	454	1,635	(8,003)	(469)	(77,851)	11,493	-	11,493

 

 

 

Condensed consolidated cash flow statement

for the period from 1 July 2009 to 31 December 2009

			6 months to		6 months to		Year to
			31 Dec 2009		31 Dec 2008		30 June 2009
			US$'000		US$'000		US$'000
	Note		Unaudited		Unaudited		Audited
Cash flows from operating activities
Loss for the period			(12,643)		(15,438)		(30,726)
Adjusted by:
Depreciation and amortisation			2,818		3,219		6,475
Share-based payment expenses			222		305		638
(Profit)/loss on sale of assets			(7)		-		1,152
Loss on sale of EML shares			-		-		318
Impairment of assets			-		-		495
Deferred revenue released to profit and loss			-		(4,944)		(4,944)
Fair value adjustment on financial instruments			(3)		2,994		2,760
Finance costs	4		2,103		2,695		5,987
Finance income			(2)		(36)		(48)
			(7,512)		(11,205)		(17,893)
Movements in working capital
(Increase)/decrease in inventories			(788)		(7,820)		6,899
(Increase)/decrease in trade and other receivables			834		18,592		18,378
Increase/(decrease) in trade and other payables			7,162		(5,556)		(23,671)
Net cash used in operating activities			(304)		(5,989)		(16,287)
Cash flows used in investing activities
Interest received			2		36		48
Payments for intangibles, property, plant and equipment			(1,699)		(3,198)		(2,237)
Proceeds from sales of property, plant and equipment			544		-		5,999
Proceeds from sale of EML shares			-		-		1,477
Net cash used in investing activities			(1,153)		(3,162)		5,287
Cash flows from financing activities
Proceeds from issue of equity shares	5		2,000		-		35
Receipts from loans							11,582
Financing of creditors compromise on acquisition			-		(913)		(1,112)
Interest and finance charges			(793)		(1,719)		(2,944)
Proceeds from convertible note			-		750		-
Proceeds from loans			-		5,004		-
Net cash from financing activities			1,207		3,122		7,561
Decrease in cash			(250)		(6,029)		(3,439)
Reconciliation to net cash
Cash at beginning of period			2,048		5,385		5,385
Decrease in cash			(250)		(6,029)		(3,439)
Foreign exchange gains			48		4,174		102
Net cash at end of period			1,846		3,530		2,048
Cash at bank			1,846		3,530		2,048
Net cash at end of period			1,846		3,530		2,048

 

 

Notes to the condensed consolidated financial statements

for the period 1 July to 31 December 2009

 

1. a. Basis of preparation

 

These interim condensed consolidated financial statements are for the six months ended 31 December 2009. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2009. The information for the year ended 30 June 2009 does not constitute all the information required for annual statutory accounts at that date.

 

These financial statements have been prepared under the historical cost convention, except for revaluation of certain properties and financial instruments.

 

These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2009 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating Segments.

 

The adoption of IAS1 (Revised 2007) does not affect the financial position or profits of the Group, but gives rise to additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged however some items that were recognised directly in equity are now recognised in other comprehensive income, for example exchange differences on translating foreign operations. IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces a statement of comprehensive income.

 

In the previous annual and interim financial statements, segments were identified by reference to the dominant source and nature of the group's risks and returns. Under IFRS 8 the accounting policy for identifying segments is now based on the internal management reporting information that is regularly reviewed by the chief operating decision maker. There is no change in the segments reported as a result of the way segments are identified.

 

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condenses consolidated interim financial statements.

 

 

b. Nature of operations and general information

 

Weatherly International plc and its subsidiaries' ("the group") principal activities include the mining, smelting and sale of copper.

 

Weatherly International plc is the group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of Weatherly International plc's registered office, which is also its principal place of business, is 180 Piccadilly, London W1J 9HF. The company's shares are listed on the Alternative Investment Market of the London Stock Exchange.

 

Weatherly International's consolidated interim financial statements are presented in United States dollars (US$), which is also the functional currency of the parent company.

 

These consolidated condensed interim financial statements have been approved for issue by the Board of Directors on 28th February 2010.

 

The financial information for the period ended 31st December 2009 set out in this interim report does not constitute statutory accounts as defined by the Companies Act 2006. The Group's statutory financial statements for the year ended 30th June 2009 have been filed with the Registrar of Companies. The auditors report on those financial statements were modified by the inclusion of an emphasis of matter.

 

 

2. Segmental reporting

 

Business segments

The Board receives and reviews reports from each of its operating companies. Ongopolo Mining Ltd is a mining company and Namibian Custom Smelters is a smelting company. Two operating segments are identified, mining and smelting under IFRS 8. While the basis of segmentation has changed under IFRS 8 compared to that reported in the June 2009 Annual Financial Statements under IAS 14 (reporting segments are now based on operating segments, whose operating results are regularly reviewed by the company's board Chief Operating Decision Maker) the segments reported are unchanged from those previously reported and no reconciliations to the previous segments are necessary.

 

Basis for inter-segment transfer price: the transfer price is a third party arms length price based on the London Metals Exchange price, calculated by the percentage of copper in concentrate.

 

Segment information about these businesses is presented below.

 

6 months to 31 December 2009
				Mining		Smelting		Eliminations		Consolidated
By business				US$'000		US$'000		US$'000		US$'000
Sales and other operating revenues
External sales				148		21,269		-		21,417
Inter-segment sales						-		-		-
Segment revenues				148		21,269		-		21,417
				Mining		Smelting				Consolidated
				US$'000		US$'000				US$'000
Segmental loss before tax				(2,860)		(6,214)				(9,074)
Unallocated corporate expenses										(1,468)
Interest expense										(2,103)
Interest income										2
Net loss before tax										(12,643)
Segment assets				50,016		11,147				61,163
Unallocated Corporate assets										3,687
Total assets										64,850

 

 

6 months to 31 December 2008
				Mining		Smelting		Eliminations		Consolidated
By business				US$'000		US$'000		US$'000		US$'000
Sales and other operating revenues
External sales						77,259		-		77,259
Inter-segment sales				14,827		-		(14,827)		-
Segment revenues				14,827		77,259		(14,827)		77,259
				Mining		Smelting				Consolidated
				US$'000		US$'000				US$'000
Segmental loss before tax				(9,171)		(1,154)				(10,325)
Unallocated corporate expenses										(2,454)
Interest expense										(2,695)
Interest income										36
Net loss before tax										(15,438)
Segment assets				44,482		23,913				68,395
Unallocated Corporate assets										13,888
Total assets										82,283
12 months to 30 June 2009
				Mining		Smelting		Eliminations		Consolidated
By business				US$'000		US$'000		US$'000		US$'000
Sales and other operating revenues
External sales				10		108,507		-		108,517
Inter-segment sales				17,751		-		(17,751)		-
Segment revenues				17,761		108,507		(17,751)		108,517
				Mining		Smelting				Consolidated
				US$'000		US$'000				US$'000
Segmental loss before tax				(15,174)		(3,804)				(18,978)
Unallocated corporate expenses										(5,809)
Interest expense										(5,987)
Interest income										48
Net loss before tax										(30,726)
Segment assets				35,573		25,951				61,524
Unallocated Corporate assets										1,992
Total assets										63,516

 

 

3. Other income

 

					6 months to		6 months to		Year ended
					31 Dec 2009		31 Dec 2008		30 June 2009
					US$,000		US$,000		US$,000
					Unaudited		Unaudited		Audited
Profit from exercise of copper put options					-		2,734		2,760
Deferred revenue released to income statement					-		4,944		4,944
Other income					323		404		446
Total other income					323		8,082		8,150

 

 

4. Finance costs

 

					6 months to		6 months to		Year ended
					31 Dec 2009		31 Dec 2008		30 June 2009
					US$,000		US$,000		US$,000
					Unaudited		Unaudited		Audited
Third party loans					1,244		1,767		2,838
Convertible loan note interest					778		540		1,103
Unwinding of creditors' compromise agreement 1					-		318		1,925
Other interest					81		70		121
Total finance costs					2,103		2,695		5,987
1 The unwinding of creditors' compromise relates to the change in the net present value the 311 creditors' compromise agreement that was entered into at acquisition of Ongopolo Mining Ltd. This change is classified as a finance cost.

 

 

5. Share issues

 

During the period to 31 December 2009 40,468,000 shares were issued for $2 million in cash.

 

6 months to 31 December 2009
			Number		US$
At 1 July 2009			405,425,427		75,256
Issue of shares			40,468,000		2,000
At 31 December 2009			445,893,427		77,256
6 months to 31 December 2008
			Number		US$
At 1 July 2008			405,327,066		75,221
Issue of shares			78,689		28
At 31 December 2008			405,405,755		75,249
Year to 30 June 2009
			Number		US$
At 1 July 2008			405,327,066		75,221
Issue of shares			98,361		35
At 30 June 2009			405,425,427		75,256

 

 

6. Property, plant and equipment

			Freehold property		Plant and machinery		Assets under construction		Development costs		Total
			US$,000		US$,000		US$,000		US$,000		US$,000
Six months ended 31 December 2009
Cost or valuation:
At 1 July 2009			36,258		31,889		1,044		40,395		109,586
Additions			-		-		1,699		-		1,699
Disposals			-		-		-		(40,395)		(40,395)
Exchange adjustment			2,207		4,076		125		-		6,408
At 31 December 2009			38,465		35,965		2,868		-		77,298
Depreciation:
At 1 July 2009			(5,401)		(12,266)		-		(40,395)		(58,062)
Provided during the period			(1,157)		(1,645)		-		-		(2,802)
Disposals			-		-		-		40,395		40,395
Exchange adjustment			(463)		(2,842)		-		-		(3,305)
At 31 December 2009			(7,021)		(16,753)		-		-		(23,774)
Net book value at 31 December 2009			31,444		19,212		2,868		-		53,524
Six months ended 31 December 2008
Cost or valuation:
At 1 July 2008			38,916		40,760		-		40,395		120,071
Additions			-		1,935		-		-		1,935
Exchange adjustment			(6,054)		(6,351)		-		(6,439)		(18,844)
At 31 December 2008			32,862		36,344		-		33,956		103,162
Depreciation:
At 1 July 2008			(3,205)		(11,233)		-		(40,395)		(54,833)
Provided during the period			(1,080)		(2,092)		-		-		(3,172)
Exchange adjustment			511		1,912		-		6,439		8,862
At 31 December 2008			(3,774)		(11,413)		-		(33,956)		(49,143)
Net book value at 31 December 2008			29,088		24,931		-		-		54,019
Year ended 30 June 2009
Cost or valuation:
At 1 July 2008			38,916		40,760		-		40,395		120,071
Additions			-		1,339		898		-		2,237
Transfer to current assets			(2,543)		-		-		-		(2,543)
Disposals			(466)		(9,632)		-		-		(10,098)
Exchange adjustment			351		(578)		146		-		(81)
At 30 June 2008			36,258		31,889		1,044		40,395		109,586
Depreciation:
At 1 July 2008			(3,205)		(11,233)		-		(40,395)		(54,833)
Provided during the year			(1,997)		(4,381)		-		-		(6,378)
Transfer to current assets			175		-		-		-		175
Disposals			25		3,854		-		-		3,879
Exchange adjustment			(399)		(506)		-		-		(905)
At 30 June 2009			(5,401)		(12,266)		-		(40,395)		(58,062)
Net book value at 30 June 2009			30,857		19,623		1,044		-		51,524

 

Notes to the consolidated financial statements

for the period from 1 July 2009 to 31 December 2009

 

7. Assets held for sale

			Total
			US$,000
Six months ended 31 December 2009
Cost or valuation:
At 1 July 2009			2,543
Disposals			(567)
Exchange adjustment			140
At 31 December 2009			2,116
Depreciation:
At 1 July 2009			(175)
Disposals			30
Exchange adjustment			(10)
At 31 December 2009			(155)
Net book value at 31 December 2009			1,961
Six months ended 31 December 2008
Cost or valuation at 31 December 2008			-
Depreciation at 31 December 2008			-
Net book value at 31 December 2008			-
Year ended 30 June 2009
Cost or valuation:
At 1 July 2008			-
Transfers from non current assets			2,543
At 30 June 2009			2,543
Depreciation:
At 1 July 2008			-
Transfers from non current assets			(175)
At 30 June 2009			(175)
Net book value at 30 June 2009			2,368

 

 

8. Loss per share

 

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Shares held in employee share trusts are treated as cancelled for the purposes of this calculation.

 

The calculation of diluted loss per share is based on the basic loss per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

 

Reconciliations of the loss and weighted average number of shares used in the calculations are set out below.

 

			6 months to		6 months to		Year ended
			31 Dec 2009		31 Dec 2008		30 June 2009
			US$'000		US$'000		US$'000
			Unaudited		Unaudited		Audited
Loss for the period attributable to owners of parent			(12,643)		(15,467)		(30,767)
Weighted average number of ordinary shares in issue during the period - basic earnings per share			438,594,919		391,979,359		405,413,300
Effect of share options in issue			-		8,196,042		-
Weighted average number of ordinary shares fully diluted at end of the period - diluted earnings per share			438,594,919		400,175,401		405,413,300
Basic loss per share (US cents)			(2.88)		(3.87)		(7.59)
Diluted loss per share (US cents)			(2.88)		(3.87)		(7.59)

 

 

Where a loss has been incurred for the period, the diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.

 

9. Contingent liabilities

 

In November 2008, the company became aware of a potential claim in the amount of £3.5 million against the company from a third party in relation to an alleged previously unknown financial obligation. In pursuance of that claim, Barclays Bank plc issued a writ against Weatherly International on 18 September 2009. A thorough investigation of this claim has been conducted. As a result, the company believes that it has a robust defence and will pursue a counterclaim for loss and damages against Barclays Bank plc. In these circumstances, the directors do not believe that any provision for this contingent liability should be made.

 

10. Post balance sheet events

 

On 14th January 2010 Weatherly International plc announced its intention to sell the smelter business to DPM and the Company entered into a conditional sale and purchase agreement with DPM on 26th February 2010. This transaction is subject to shareholder approval at a meeting convened for 11th March 2010 and is expected to complete shortly thereafter. Pursuant to the sale and purchase agreement, Weatherly is to sell NCS together with certain associated property and assets owned by Ongopolo Mining and Processing Limited for consideration of US$18 million cash and 4,446,420 new common shares in DPM ('DPM Shares').

 

At 31st December 2009 no decision had been made to dispose of the smelter business and the criteria for classification as held for sale in respect of this disposal had not been met. The smelter business is therefore not disclosed as a discontinuing business in these financial statements.