The chances are very good that the transaction will go through before the end of January 2010, Weatherly Group Financial Director Kevin Ellis commented yesterday on a letter of intent (LOI), whereby the copper miner will issue 446,8 million shares to East China Mineral Exploration and Development Bureau (ECE) at 3,6 pence per share. The US$26,8 million deal will ensure the semi-state-owned ECE of 50,1 per cent of the shares.
Not only does the deal mean that production can start at Otjihase and Matchless again, but it will also provide WTI with the working capital to fast-track the development of the Tschudi open-pit copper project and to underpin the current expansion of Namibia Customs Smelters operation at Tsumeb.
In the process about 600 jobs will be created, Ellis told The Namibian from London.
The proposed relationship with ECE will enable Weatherly to put a close to what has been a very difficult period for the company, WTI Chief Executive Officer Rod Webster said yesterday.
A slump in world copper prices forced the company to close its mines at Matchless and Tsumeb West last year.
To save costs, Otjihase and Tschudi were put on a care and maintenance basis. In the process, more than 600 workers were sent packing. We can now look forward to the growth of our significant asset base and to the new opportunities that we are confident will arise as a result of ECEs exciting plans for the development of the company, Webster said.
The copper price has recovered significantly since last year, gaining nearly 135 per cent on its 2008 lows.
The WTI-ECE deal provides for an immediate injection of substantial working capital. Most of this money is meant for Namibia, Hans Nolte, Managing Director of Weatherly Mining Namibia (WMN), told The Namibian.
The rest is geared for WTIs projects in Burkina Faso, and will be used to settle debts. WTI aims to pump nearly US$6 million into its smelter at Tsumeb. The money will be invested in an oxygen plant, among others, to increase the capacity of the smelter by 40 per cent.
The NamibianPost published in: Economy