JOHANNESBURG (miningweekly.com) – Aim-listed copper producer Weatherly International reported lower copper output for the three months ended March, as challenges hampered its Namibia-based operations.

The group produced 4 948 t of copper concentrate during the third quarter, lower than the output of 5 780 t and 6 499 t during the first and second quarters respectively, on the back of the abandonment of the Otjihase compartment, the restructuring of the contractual arrangements and the loss of production associated with a fatality at Old Matchless mine.

The challenges weighed on the cash cost for the period, which reached an “unusually high” $7 344/t, compared with the year’s average of $6 238/t.

“Operationally, we have not delivered against our plans at the central operations and, during the quarter, we completed a detailed review of both our underground mines,” said Weatherly CEO Rod Webster.

A detailed operational review and resultant restructuring was completed at the group’s central operations, bringing the costs in line with the revised production levels.

While the operational changes, which were also expected to bring down the cash cost, were effected, production from Weatherly’s central operations were expected to reach a rate of 5 000 t/y of copper.

Weatherly revised the Otjihase copper mine’s plan, bypassing the conveyor system to improve efficiencies, after significant ground subsidence in the upper levels of the Otjihase compartment forced the copper mining company to abandon the region.

A new compartment, Hoffnung West, was expected to replace the ore blocks lost through subsidence. The reopening of Old Matchless would replace the lost ore production in the longer term.

A new environmental-impact assessment and environmental-management plan for Old Matchless had been submitted to the Namibia Ministry of Environment and Tourism. In the interim, dewatering of the mine was ongoing and power to the site was being procured.

The group had also restructured the contractual arrangements, in which the contractor appointed a new management team for the Otjihase mine.

Meanwhile, Weatherly had, in principle, accepted a revised term-sheet for the $88-million funding for its third Namibian copper project, Tschudi.

The company, which reported having significantly progressed the project during the third quarter, said the loan would be subject to an additional review of the company’s operations, but would continue to fund the initial development through existing cash flow to avoid delays to the project.

“Weatherly is making significant strides towards becoming a midtier copper-producing company by the end of 2014. The Tschudi project is progressing and we are currently working with Red Kite to finalise the outstanding requirements for the loan,” said Webster, adding that the due diligence by RK Capital was nearing completion.

Further, the producer said it had largely completed the front-end engineering and design for the project and would, as soon as the funding was finalised, dispatch the various tender packages and orders for long-lead items. The group had also been advancing contractual arrangements with the four main consultants and contractors working on the Tschudi project.

The Tschudi environmental amendments had also been submitted and were progressing through the approval process “as anticipated”.