25 May 2012

Weatherly copper deal pleases

28/06/2006 Robert Tyerman

Investors have welcomed mineral play Weatherly International's £26 million shares and cash deal to acquire Ongopolo Mining and Processing of Namibia.

AIM-quoted Weatherly is paying £11.2 million for new shares in Ongopolo. That gives it a 50 per cent stake in the target company, which operates three copper mines in northern Namibia and a smelter that last year produced 24,000 tonnes of copper, half from its own mines.

As part of the deal, Weatherly, which last December bought Zambian copper hopeful from its own Australian chairman Wolf Martinick and chief executive Rod Webster and related interests for £3.25 million, is also contributing to reconstruction of Ongopolo's heavy debt burden. It is paying £16.8 million cash and issuing 47 million Weatherly shares at 20p, worth £9.4 million, to secured creditors in Ongopolo in exchange for the debt owed to them.

To help fund the deal, Weatherly intends to raise £6.43 million at 17p through Libertas Capital. If approved by shareholders, this process should bring Weatherly 97 per cent of Ongopolo, leaving employees and existing shareholders as minorities.

Weatherly shares, which traded below 0.10p three years ago, rose 2.75p this morning to 14.5p, valuing the company at £33.5 million.

Sector: Industrial Engineering

Companies: Weatherly

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