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Weatherly International plc announces that it is set to double its smelting capacity following a keystone agreement to process copper concentrate through its Tsumeb copper smelter in Namibia.
The concentrate will be supplied by Canadian-quoted miner Dundee Precious Metals Inc., (“DPM”) and the deal will underpin refurbishment work to raise the capacity of the Tsumeb smelter from 25,000 to 50,000 tonnes per annum by early 2008.
The expansion of the smelter will be funded through a placing of 16,882,695 new ordinary shares of 0.5p each in Weatherly with DPM at 25.05p per new ordinary share to raise net proceeds of US $8 million (#4.02 million). Following completion of the placing, DPM will have a 4.7% holding in Weatherly. The placing is expected to complete on or about 27 June 2007 and application will be made for the new ordinary shares to be admitted to trading on the AIM market in due course.
The concentrate will come from DPM’s Chelopech Mine in Bulgaria, and first deliveries to Tsumeb are expected during the first part of 2008. DPM has agreed a long term supply contract at normal commercial terms.
Weatherly Chief Executive Rod Webster said: “We are particularly delighted to have agreed this deal not only because it represents a milestone in the continued rapid development of Weatherly, but also because we are able to increase our contribution to Namibia’s economic growth.”
Under the terms of the deal, DPM will supply 20,000 tonnes of copper concentrate annually for 3 years, with a rolling 12 month extension. It has also undertaken to supply at least a further 15,000 tonnes per year with options for further tonnage upon the completion of the extension and refurbishment work at the Tsumeb Smelter by the first quarter of 2008.
The Tsumeb smelter is currently processing concentrate using feedstock from Weatherly’s own mines at Matchless, Tsumeb West and Otjihase, along with throughput from third party supplies and tolling agreements.
Background details follow:
Weatherly International plc arrived on AIM at 3p per in June 2005. Following the acquisition of 97% of Namibia’s Ongopolo Mining & processing Ltd in October 2006, it is now positioned as a fully integrated mining group owning mining exploration and production assets and one of only four copper smelters in Southern Africa.
The company is currently producing copper from mines in the Tsumeb area of Northern Namibia and at Otjihase and Matchless around the Namibian capital, Windhoek.
Weatherly is also continuing work at its Kombat West mine, where it is dewatering underground workings.
The smelter at Tsumeb in Northern Namibia, owned by Weatherly’s subsidiary Namibian Custom Smelters, is processing material from Weatherly’s own mines with additional throughput from tolling agreements and third party sales. The first of two furnaces is currently operational, at an annualised rate of approximately 24,000 tonnes of blister copper.