Dec 23, 2009 (The Namibian/All Africa Global Media via COMTEX) -- WRLYF | Quote | Chart | News | PowerRating -- WEATHERLY International (WTI) intends mining an initial average of 26 000 tonnes of ore per month at the Otjihase and Matchless Mines when they start producing again next year.
This will increase to a monthly average of 50 000 tonnes after three years, the copper miner told the UK-based IBTimes yesterday.
"Combined ore production from Otjihase and Matchless is scheduled to ramp up from a year one average of 26 071 tonnes per month to an average of 50 000 tons by the end of year three. Ore production is scheduled to average 43 873 tonnes per month, yielding concentrates containing 688 tonnes of copper, 237 kilogrammes of silver and nine kilogrammes of gold," the business paper reported.
SmallCapNews also yesterday said it will cost about US$10,7 million, or nearly N$80 million, to bring the mines back into operation in the first year. For the two years after that, Matchless will need an additional US$1,6 million, or approximately N$12 million.
Weatherly plans to extract about 2,3 million tonnes of ore over five years, and believes that additional resources will still be available afterwards.
According to IBTimes, Otjihase will start production in the third quarter of 2010, with Matchless following "some months later". A slump in the world copper price forced Weatherly to shut down Matchless and Tsumeb West last year. Otjihase and Tschudi were put on a care and maintenance basis as a cost-cutting measure.
Meanwhile, WTI Chief Executive Officer Rod Webster has reported that the transaction between Weatherly and East China Mineral Exploration and Development Bureau (ECE), through which the Chinese parastatal wants to become the majority shareholder in the copper producer, is progressing well. "We are pleased to report that, further to the signed Letter of Intent (LOI) announced on September 15 2009, the parties are making good progress towards completing the share subscription," Webster said in an update on the company's website.
ECE is willing to buy 50,1 per cent of the shares in WTI for US$26,8 million. This means that WTI needs to issue 446,8 million shares to the Chinese company at 3,6 pence per share.
According to Webster, the ECE's due diligence is well advanced. He also said that the ECE has obtained, in principle, the Chinese government's stamp of approval on the investment, and is confident that the deal will be clinched by next month. "The company currently anticipates that it will send a circular to shareholders seeking approval for the transaction before January 31 2010 in line with the previously notified expected timeline for the transaction," Webster said.
The N$190-million deal will not only kick-start Otjihase and Matchless again, but will also inject enough working capital into WTI to fast-track the development of the Tschudi open-pit copper project and to back the US$6-million expansion of Namibia Custom Smelters at Tsumeb. The upgrade will include an oxygen plant and will increase the capacity of the smelter by 40 per cent.
The re-opening of Otjihase and Matchless will create about 600 jobs, WTI Financial Director Kevin Ellis recently told The Namibian.
WTI is also in the process of selling the Kombat mine. They are in negotiations with Cubenco 192, a South African close corporation, which has an option to buy the copper mine for US$3 million. Cubenco is currently busy with due diligence, for which it had to pay WTI a non-refundable US$160 000.
