Weatherly posts bumper production at Tschudi

Weatherly International issued its update for the quarter to 31 December on Friday, reporting that Tschudi cathode production improved by 15% quarter-on-quarter to 4,739 tonnes, which was 11.5% above nameplate over the quarter.

The AIM-traded firm also said Tschudi C1 costs reduced by 16% to $4,551 per tonne.

It explained that Tschudi production for the December quarter was 4,739 tonnes of copper cathode, or 11.5% above nameplate.

“This brings year to date production to 8,843 tonnes or 4% ahead of nameplate half way through the financial year,” the board said in its statement.

“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.

“The grade of this additional oxide ore was lower, reducing the tonnage of contained copper metal stacked in the quarter.”

Some early seasonal rains were received on site, but they had minimal impact upon the operation thus far, the board added.

It said mining and stacking of slower-leaching mixed ore had now resumed, and the main wet season was now approaching.

“Construction of the heap leach pad extension is complete,” the board confirmed, adding that “some operational delays are expected during a typical local rainy season, but the expected impacts are reduced due to stacking of ore on new leach pads rather than upon previously leached ore, and because healthy stockpile levels of ore have been placed on the ROM pad near the crusher in anticipation of rain delays impacting mining.

“Forced aeration of some panels has commenced as part of ongoing testing of how leach rates for mixed and sulphide ore may be improved under modified operating conditions designed to increase bacterial activity in the heap.”

Open pit groundwater inflows, and the costs of dealing with them, continued to increase as pit mining proceeds to greater depths, but the flow rates were being managed adequately to ensure a reliable supply of ore for stacking.

While the strong December quarter demonstrated the capacity of the Tschudi SXEW plant to operate at well above nameplate levels when leaching rates provide sufficient copper into solution, the board warned that full year production was not expected to exceed nameplate.

“As a result of the improved production levels, Tschudi C1 unit costs have fallen to $4,551 per tonne,” the board said.

“The Namibia dollar strengthened notably in December, and this will impact US dollar costs going forward if it is sustained.”

Weatherly also advised it has made no further drawdowns on the $10m uncommitted loan from Orion Mine Finance announced on 28 July last year to accelerate the building of the leach pads and to fund working capital requirements at Tschudi.

The company has only drawn down $3m on the loan, the board confirmed.

“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 $7,171 per tonne.”

As it previously advised on 28 April last year as a loan rescheduling fee, Orion held the right - but not the obligation - to buy, if available, up to 700 tonnes of unhedged cathode each month from Weatherly until 30 April this year at a price of $6,000 per tonne.

Orion could only exercise its option to the extent of unhedged tonnes produced in the month and so far this financial year Orion had not elected to do so.

“The company and its subsidiaries are unlikely to generate sufficient surplus cash to meet all loan repayments when due, particularly in the near term,” the board noted.

“The company continues to positively engage with Orion on the subject.”