Update on Berg Aukas

Weatherly International plc ('Weatherly' or the 'Company')

Agreement with East China Mineral Exploration and Development Bureau

for the development of Berg Aukas

and

Incorporation of China Africa Resources plc

Weatherly is pleased to announce that it has signed a legally binding Implementation Agreement with a wholly owned subsidiary of East China Mineral Exploration and Development Bureau ('ECE') setting out how the two companies will work together to develop Weatherly's Berg Aukas lead/zinc mine in Northern Namibia.

On 12 July 2010, Weatherly announced the signing of a Letter of Intent ('LOI') for this purpose. A comprehensive Implementation Agreement has now been concluded with ECE whereby the two companies have set up a new UK company, China Africa Resources plc ("CAR" or "China Africa Resources"), which is 65% owned by ECE and 35% owned by Weatherly. ECE has already paid one hundred thousand pounds (£100,000) to cover the costs of the first phase of implementation.

Under the terms of this Agreement it is proposed that

- The Berg Aukas mine will be transferred into the new company. The Government of Namibia has now given consent to the transfer of the Berg Aukas mining licence for this purpose. 

- Application will be made for the shares of CAR to be admitted to trading on the AIM market of the London Stock Exchange ('AIM' and 'Admission').

- In order for ECE to maintain its interest of 65% in CAR, and concurrent with Admission of the CAR shares, ECE will provide funding of £4.8 million for the transfer of the Berg Aukas mine to CAR.

- Following the transfer of the Berg Aukas mine to CAR and concurrent with Admission, Weatherly will distribute 10% of its 35% shareholding in CAR to its shareholders as a dividend in specie.

A detailed programme for admission has now been agreed between the parties with Admission scheduled for Spring 2011.

Following Admission, the first objective of the new company will be to complete a bankable feasibility study for Berg Aukas as a starting point to building a profitable and widely-based resources business.

More details on the business plan for CAR will be published in due course in the Admission Document. 

 ABOUT BERG AUKAS

The Berg Aukas deposit was originally discovered in 1913 and worked for a short period between 1920 and 1928. In more recent times, the deposit was worked from 1959 until closure in 1978 when annual production reached a rate of around 130,000tpa of ore, producing an array of lead, zinc and vanadium concentrates. Based on historical records in place at the time of closure, the mine reserve was 1.651 million tonnes grading 17% zinc, 5% lead and 0.6% vanadium pentoxide (Misiewicz, 1988). 

ABOUT ECE

East China Mineral Exploration & Development Bureau for Non Ferrous Metals ('ECE') was established in 1955 in China and is a Jiangsu Provincial Government subordinate organisation focusing on geological and mineral exploration and development activities. Historically its activities have been principally based in China where it has several operating mines and refining operations and where it conducts extensive exploration activities. ECE has discovered more than 160 ore deposits and has developed several mines including the China Meishan iron mine, Qixia lead-zinc-silver mine and the Fujian Meishan zinc-lead mine.

ECE is actively reviewing opportunities for overseas expansion and has acquired exploration licences and projects in Namibia and Australia as well as reviewing opportunities in Canada, Indonesia, Cambodia, Iran, Nigeria and Chile. As part of its strategy of overseas expansion, ECE completed a transaction in 2009 to acquire an interest of approximately 24.8 per cent in Arafura Resources Limited, an Australian company listed on the Australian Stock Exchange with exploration rights for uranium and various 'rare earth' metals in Australia. In November 2010 ECE also entered into a legally binding strategic partnership with Globe Metals and Mining Limited ("Globe"), an Australian based mining company, to acquire a 51% equity stake. The deal is subject to a number of conditions precedent including the approval of Australia's Foreign Investment Review Board (FIRB). Globe's primary focus is a multi-commodity (niobium, uranium, tantalum and zircon) project in Malawi and has interests in Malawi and Mozambique.

ECE has established a Namibian subsidiary which has been granted a number of exploration licences for copper, base and precious metals in Namibia.

Rod Webster, CEO of Weatherly said:

"I am really pleased that we have been able to create a new Joint Venture Company with ECE in a binding relationship with such exciting possibilities. With our complementary skills and our joint commitment, we can work together to our mutual benefit. We think that China Africa Resources offers an enormous growth opportunity for Weatherly and its shareholders".

Mr Shao Yi, General Director of ECE said

"We are very pleased to be working with Weatherly to develop this new Company, China Africa Resources Ltd, towards an AIM listing on the London Stock Exchange. Berg Aukas is a very good initial project to start building a profitable business.

ECE has recently obtained 18 exploration rights in Namibia, including gold, copper, iron ore, zinc and other mineral assets that cover an area of approximately 7,146 square kilometres. We are planning to inject these assets into China Africa Resources when the exploration is complete."

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

 Carina Corbett, 4C Communications Limited+44 (0) 20 3170 7973