new weatherly acquisition, page-9

wti new announcement new mine starts Company Weatherly International PLC
TIDM WTI
Headline Copper output rises
Released 07:00 07-Dec-06
Number 4083N

New mine starts to help production towards 20,000 tonne target

The Company is pleased to announce that following recent developments at the Tschudi/Tsumeb West mine, combined with production at other operating mines at Kombat, Otjihase/Matchless will contribute to its move to raise its overall copper output to more than 20,000 tonnes a year.

Weatherly’s subsidiary, Ongopolo, has begun operations at two former mine-sites in the Tsumeb area. The main operation is at a place called Tschudi, approximately 20 kilometres due west of Tsumeb. This area was last worked as an underground mine between 1989 and 1992. In 1998 Gold Fields of South Africa departed Namibia and the mine was placed in the hands of the Receiver. The mine was purchased from the Receiver by Ongopolo in 2000, and apart from a bulk sampling exercise to test the near surface oxides in 2003, the underground mine remained dormant.

The Tschudi deposit is a tabular orebody dipping at around 35 degrees, and extending over a known strike length of approximately 4 kilometres (although it remains open in both directions and at depth). The orebody was drilled extensively in the 1970’s, and various historical reserves were reported using cut off grades between 0.2% and 1.0% Cu. At the lower cut off, the resource was approx. 40 million tonnes at an average grade of around 0.8% Cu, while at the higher cut off the resource dropped to around 10 million tonnes at 1.4% Cu.

The most recent Tschudi resource model, prepared by James Lonergan of Mintek Inc in August 2002, estimated a total resource of 43.4 million tonnes grading 0.83% Cu and 10.5g/t Ag using a cut off of 0.2% Cu. This work was reviewed by Australian consultants RSG global in October 2006 as part of a more detailed Mining Study.

The Mining Study confirmed the viability of underground mining, and designed an initial campaign to exploit one of the higher grade areas making use of a previously constructed decline for access to the underground sulphide ore. Based on the study, the initial campaign would recover approximately one million tonnes of ore grading 1.5% Cu and 15g/t Ag over a period of 3.3years. Mining would be relatively shallow, between 80 and 590 metres below surface, and as a result mining costs would be around US$17/t. Ore would be trucked to the concentrator in Tsumeb at an average rate of 300,000t per annum once full production build-up is achieved. Ore production from stoping operations would be expected within 6 months of project start-up, with ore development commencing almost immediately.

The first ore is to be mined early next year, and stockpiled until the Tsumeb concentrator starts up in June 2007. The plan is to feed the concentrator at a rate of up to 500,000tpa with a blend of additional ore from Tsumeb West, another small mine just on the outskirts of Tsumeb town. This mine, which was last operating in 2004, has a small but high grade resource of 742,000 tonnes grading 2.0% Cu. It is planned to operate this mine at around 150,000tpa.

Tsumeb West is also the site of a newly established training school, where cadets conducted their first blasts about a month ago. Tsumeb West is unique in being the only underground mine in Namibia with female miners. The new cadets will complete their training in about two months and a new intake is expected to follow.

Ongopolo plans to man the two new mines with a combination of older experienced miners transferred from its Kombat operations, and the new trainees above. Overall, manning requirements at both mines are expected to reach 100, which will have a significant and positive impact on employment prospects for young people in the area and the local economy of Tsumeb.

The mine start-up costs are expected to be in the order of US$3 million, with US$2.5 million to be spent on equipping the mines and the rest refurbishing the Tsumeb concentrator. All capital required to bring the mines to full production will be funded from internal cash flow.

Plans are also in place to develop open pits at Tschudi in two other high grade sections to the west of the proposed underground workings. Based on detailed mine plans prepared by A. Cameron and Associates (and reviewed by RSG), the open pittable reserve is 3.2 million tonnes grading 1.2% Cu at an overall stripping ratio of 8 to 1. The pits would be completed in about four years after which remaining high grade ore would be accessed by further underground development from the base of the open pits. Given that the orebody is open at depth (virtually no drilling below 500 metres depth), mining could continue well beyond the first seven years contemplated to date.


For further information contact:

Weatherly International plc
John Norris +44 (0) 20 7917 2989

Libertas Capital Corporate Finance
Jonathan Flory +44 (0) 20 7569 9650

First City Financial Public Relations
Allan Piper +44 (0) 20 7436 7486

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