Business Overview & Strategy

From an investment perspective, Weatherly (WTI) offers highly-leveraged exposure to an improving environment for copper mining fundamentals. Prices are cyclically low, copper grades in the largest producing region continue to decline, pushing average costs of production higher, and though demand growth has slowed, it continues to rise with no clear prospects for large-scale substitution.

Within this fundamentally improving environment, Weatherly has proved its ability to adapt to cyclical lows while it prepares to maximise shareholder upside during a cyclical bull market.

In practical terms, we are a proven team of mine builders and operators focused on base metals in lower-risk parts of Africa. We seek medium-scale opportunities that do not attract the attention of the major miners, but which are beyond the skill set of junior explorers and/or first-time developer hopefuls.

Our strategic goal is to grow a reliably-profitable long-term mining business comprised of these “Weatherly-style” mines.

Our immediate plans are to continue optimising our flagship Tschudi mine while carefully preparing Central Operations (placed on care and maintenance in 2015) for a resumption of operations on a larger scale than previously, targeting sustainable copper production of 30ktpa in Namibia at costs below US$2/lb.

We are strongly supported in these endeavours by our largest shareholder, lender and main offtake partner, Orion Mine Finance.

We are not explorers, but we are logical partners for junior explorers who need development expertise. It is of course far more common for junior explorers to discover something small- or medium-scale than to discover a giant, and Weatherly is better-positioned than anyone else in low-risk parts of southern Africa to bring medium scale projects into development.

In the meantime, in addition to cautiously advancing a phased and low risk Central Operations restart plan, we intend to concentrate on continuous improvement of our practical risk management practices to improve operational reliability and further tighten operating cost control. We are a simple back-to-basics mining business, really. Strong mining, processing and project development skills form the basis of our ability to achieve our strategic goals, and continually growing those skills is a strategic imperative for us.

Capital discipline is key. We will build a small profitable mine before we will consider building a bigger mine which might never repay its investment.

In 20 years if Weatherly is comprised of ten well-run Tschudi’s in 3 or 4 low-risk African countries, delivering consistent strong returns, we will be happy. If we have also scaled-up an operation or two beyond Tschudi-size, funded largely internally, we will be happy. If we have substantially de-leveraged in terms of debt compared to today, we will be happy.

We use our Safe Copper vision, values and behaviours to assist us in managing all of the risks involved in order to ensure we achieve these goals.