Tschudi continues to outshine nameplate
Weatherly has hedged both copper and currency to meet its funding requirements.
Jo-Maré Duddy
Weatherly International's Tschudi near Tsumeb delivered 15 466 tonnes of copper cathode in the 2017 calendar year, bringing its total harvest since the mine started production in 2015 to 42 516 tonnes.
UK-based Weatherly released its latest production results on Friday, which shows Tshudi delivered 4 739 tonnes of copper cathode in the last quarter of 2017.
This is 11.5% above nameplate and 15% more than the mine produced in the third quarter.
In terms of Weatherly's current financial year, production for the third and fourth quarter totals 8 843 tonnes of copper cathode, which means production for the company's first half-year is 4% ahead of nameplate.
“This outcome was assisted by some short-term benefits from relatively fast leaching of additional oxide ore mined from an interim pit pushback bringing forward some leaching output,” Weatherly said. However, the grade of this additional oxide ore was lower, the company said, reducing the tonnage of contained copper metal stacked in the quarter.
Despite the strong December quarter, which demonstrated the capacity of the Tschudi SXEW plant to operate at well-above nameplate levels when leaching rates provide sufficient copper into solution, the company doesn't expect production for its full financial year to exceed nameplate.
Weatherly said as a result of the improved production levels, the Tschudi's C1 unit costs fell to US$4 551 per tonne during the quarter under review – nearly 15.8% lower than that of the third quarter. C1 costs is a standard metric used in copper mining as a reference point to denote the basic cash costs of running a mining operation to allow a comparison across the industry.
The Namibia dollar strengthened notably in December. “This will impact US$ costs going forward if sustained,” according to Weatherly.
Money worries
Weatherly's dire financial situation, which stems from low copper prices in previous years, forced the company to stop mining at Otjihase and Matchless in 2015, continues.
Weatherly suffered a net loss of nearly US$40.1 million in its financial year ended June 2017, up from a net loss of about US$10.6 million the previous year.
The company and its subsidiaries are unlikely to generate sufficient surplus cash to meet all its loan repayments when due, particularly in the near term, Weatherly said Friday. It continues to “positively engage” with Orion Mine Finance on the matter, Weatherly said.
The company has made no further drawdowns on Orion's uncommitted loan of US$10 million. The loan was secured last July to accelerate the building of leach pads and to fund working capital requirements at Tschudi.
Weatherly said it has only drawn down US$3 million on the loan.
“To seek to ensure the loan would be sufficient to meet the necessary funding requirements, the company has hedged both copper and currency out to July 2018. In addition to hedges previously announced, Weatherly has 990 tonnes fixed in July at an average copper price of US$7 171 per tonne.”
Orion also has the right to buy, if available, up to 700 tonnes of unhedged cathode from Weatherly each month until the end of April this year at a price of US$6 000 per tonne.
Weatherly International's Tschudi near Tsumeb delivered 15 466 tonnes of copper cathode in the 2017 calendar year, bringing its total harvest since the mine started production in 2015 to 42 516 tonnes.
UK-based Weatherly released its latest production results on Friday, which shows Tshudi delivered 4 739 tonnes of copper cathode in the last quarter of 2017.
This is 11.5% above nameplate and 15% more than the mine produced in the third quarter.
In terms of Weatherly's current financial year, production for the third and fourth quarter totals 8 843 tonnes of copper cathode, which means production for the company's first half-year is 4% ahead of nameplate.
“This outcome was assisted by some short-term benefits from relatively fast leaching of additional oxide ore mined from an interim pit pushback bringing forward some leaching output,” Weatherly said. However, the grade of this additional oxide ore was lower, the company said, reducing the tonnage of contained copper metal stacked in the quarter.
Despite the strong December quarter, which demonstrated the capacity of the Tschudi SXEW plant to operate at well-above nameplate levels when leaching rates provide sufficient copper into solution, the company doesn't expect production for its full financial year to exceed nameplate.
Weatherly said as a result of the improved production levels, the Tschudi's C1 unit costs fell to US$4 551 per tonne during the quarter under review – nearly 15.8% lower than that of the third quarter. C1 costs is a standard metric used in copper mining as a reference point to denote the basic cash costs of running a mining operation to allow a comparison across the industry.
The Namibia dollar strengthened notably in December. “This will impact US$ costs going forward if sustained,” according to Weatherly.
Money worries
Weatherly's dire financial situation, which stems from low copper prices in previous years, forced the company to stop mining at Otjihase and Matchless in 2015, continues.
Weatherly suffered a net loss of nearly US$40.1 million in its financial year ended June 2017, up from a net loss of about US$10.6 million the previous year.
The company and its subsidiaries are unlikely to generate sufficient surplus cash to meet all its loan repayments when due, particularly in the near term, Weatherly said Friday. It continues to “positively engage” with Orion Mine Finance on the matter, Weatherly said.
The company has made no further drawdowns on Orion's uncommitted loan of US$10 million. The loan was secured last July to accelerate the building of leach pads and to fund working capital requirements at Tschudi.
Weatherly said it has only drawn down US$3 million on the loan.
“To seek to ensure the loan would be sufficient to meet the necessary funding requirements, the company has hedged both copper and currency out to July 2018. In addition to hedges previously announced, Weatherly has 990 tonnes fixed in July at an average copper price of US$7 171 per tonne.”
Orion also has the right to buy, if available, up to 700 tonnes of unhedged cathode from Weatherly each month until the end of April this year at a price of US$6 000 per tonne.
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