JOHANNESBURG (miningweekly.com) – Aim-listed copper miner Weatherly International’s share price on the LSE fell by nearly 70% on Thursday after it announced the appointment of additional financial advisers to review strategic alternatives for the company, including its potential sale.

Weatherly has now hired Numis Securities and Treadstone Resource Partners to join Strand Hanson in a review of strategic alternatives for the company and its assets.

The companies will consider the scope of options under the strategic review.

The options include the sale of the entire issued, and to be issued, share capital of the company; restructuring of the company debt; the disposal of certain assets; and raising of capital through equity issuance.

As part of the investigation into the potential sale of the entire issued, and to be issued, share capital of Weatherly, Numis has consulted with the takeover panel, which agreed that any discussions with third parties may be conducted within the context of a “formal sale process”.

Weatherly is inviting interested parties to submit their proposals. It is expected that the formal sale process will be concluded within six months.

The company’s share price was trading 68.33% lower at 0.19p a share on Thursday afternoon, compared with Wednesday’s close of 0.60p a share.

Meanwhile, Weatherly on Thursday also released its quarterly operations and production update for the quarter ended March 31, with production at 98% of nameplate capacity.

The Tschudi copper mine, in Namibia, produced 4 161 t of copper cathode in the quarter, taking year-to-date production to 13 005 t of copper – 2% ahead of nameplate after three quarters of the financial year.

Tschudi’s direct operating cash costs for the quarter increased to $5 606/t, as a result of the expected lower quarterly cathode production, as well as the stronger Namibian dollar.

ACQUISITION UPDATE

Weatherly is, meanwhile, expecting regulatory approval by June to increase its ownership in private company China Africa Resources Namibia (Carn) from 25% to 90% by buying Hong Kong East China Non-Ferrous Mineral Resources’ shares in Carn for $600 000.

Carn owns the high-grade underground zinc/lead/vanadium Berg Aukus project, which hosted an estimated 2.3-million tonnes deposit at an average grade of 15% zinc, 3.9% lead and 0.85% vanadium between 1958 and 1978 when initial mining operations started.

A prefeasibility study (PFS) published in 2014 found Berg Aukus’ mineral resource estimate to be about 1.23-million tonnes at 15.47% zinc, 3.84% lead and 0.33% vanadium, using a cut-off grade of 3% zinc.

However, Weatherly initiated an updated PFS from Minxcon, which prepared the 2014 PFS, who deemed the reserve estimate unchanged.

Meanwhile, Weatherly has sought alternative financing for its acquisition of the Kitumba mine, in Zambia, from Intrepid Mines.

This follows after the company announced earlier this month that it had entered into an amendment and restatement agreement in relation to its existing debt facility with Orion Mine Finance Fund, which included changes that resulted in the company having reduced flexibility on the use of cash generated from the mine. It also provided Orion with certain approval rights on Weatherly’s expenditure. 

However, the purchase lapsed on April 24 owing to Orion not approving an extension of the backstop date.

Nonetheless, Orion agreed to allow Weatherly to seek alternative financing for the Kitumba transaction.