JOHANNESBURG (miningweekly.com) – Copper miner Weatherly International has inked a deal with investment group Polo Resources for the subscription of 30.83-million new ordinary Weatherly shares at a price of 2.9p per share to raise around £900 000.

In addition, Polo has conditionally committed to subscribing for a further 76-million new ordinary shares at the subscription price, subject to clawback and depending on take-up from existing shareholders, as part of the proposed open offer, being a further investment of around £2.2-million.

Weatherly on Monday announced its intention to provide an opportunity for shareholders to participate in the fundraising by way of a 4-for-19 open offer of about 129.8-million new ordinary shares at a price of 2.9p each to raise up to £3.8-million.

In the event that there were no applications or other placees under open offer and Polo exercised its right to take all the shortfall, Polo's holding would represent 20.7% of the enlarged share capital.

The proceeds from the subscription and open offer would be used for general working capital purposes. 

Meanwhile, Weatherly outlined that there was a “strong case” for accelerating the waste stripping to provide greater certainty that the company's Tschudi copper project, in Namibia, would achieve its stated targets. 

“To do this, it will most likely be necessary to draw down on the Orion $8-million overrun facility, which requires the company to contribute on a dollar-for-dollar basis,” said the miner.

The minimum raising under the open offer, combined with the company's existing cash reserves, ensured that the overrun facility could be fully used, making available a cash reserve of $16-million.

The subscription was conditional upon the admission of the subscription shares to trading on Aim becoming effective by no later than December 31.

The subscription proceeds were expected to be received on or around December 8, at which time it was expected that admission would become effective.

Weatherly CEO Rod Webster said in a statement that having Polo as a cornerstone investor was a welcome vote of confidence in the Tschudi project and in Weatherly as a whole.

“I look forward to working with [Polo] as we take Weatherly to the next stage of its development. As we reminded investors last week, we are on track to start production from Tschudi in the second quarter of next year,” he commented.

Polo chairperson Michael Tang added that the deal presented an “excellent” opportunity for Polo to add copper to its portfolio of investments.