Weatherly International, the London AIM-listed base metals producer with four copper mines and a smelter in Namibia, has suspended trading of its ordinary shares.
The copper company stated in an advisory note last week that a potential claim has been made by a third party over an ‘alleged, previously unknown financial obligation’. Weatherly said the claim is ‘material’ in the context of available cash resources.
The global financial crisis has also affected its cash reserves as copper prices have plummeted. The firm’s Namibian operations have been severely affected by the cash flow shortage and about 100 workers are in negotiations with the management over their dismissal packages. The company did state in October that its Tsumeb West mine will close.
While it was still upbeat that production at its other mines would increase, Weatherly has now made an about-turn and released the following statement: ‘Matchless mine near Windhoek which is also operated by contractors is in the process of closure and will be placed on ‘care and maintenance’. A further 100 staff will be made redundant from the company’s two remaining operating mines, Otjihase and Tschudi. This is expected to result in a significant reduction in costs with only a small reduction in overall output.’
It also warned that the decline in copper prices will mean that production costs will have to be cut to ensure the future of its operations.
