Weatherly : Posting of Open Offer Circular

Weatherly International PLC



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE CIRCULAR TO BE PUBLISHED BY THE COMPANY AND ANY SUPPLEMENT THERETO IN CONNECTION WITH ADMISSION.

Weatherly International Plc

("Weatherly" or "the Company")

 Posting of Open Offer Circular

Weatherly is pleased to announce that, further to its announcement of 10 November 2014, it has today posted a circular (the "Circular ") to Qualifying Shareholders regarding an Open Offer of up to approximately £3.8 million. The Circular is also available on the Company's website at www.weatherlyplc.com.

All capitalised terms in this announcement have the same meanings as those given to them in the Circular, unless the context otherwise requires.

The Open Offer is being made to Qualifying Shareholders on the register as at the Record Date of 14 November 2014, for up to 129,811,609 Open Offer Shares at 2.925p per Open Offer Share (being the same price as the Issue Price for the Subscription, announced on 10 November 2014) on the basis of:

4 Open Offer Shares for every 19 Existing Ordinary Shares

The Issue Price represented a discount of approximately 22% to the then prevailing middle market closing price per Ordinary Share of 3.75p on 7 November 2014 and now represents a premium of approximately 2% to the middle market closing price per Existing Ordinary Share of 2.875p on 17 November 2014, being the business day before the posting of the Circular.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlements in full, to apply for additional Open Offer Shares through an Excess Application Facility.

Applications up to each Qualifying Shareholder's Guaranteed Excess Entitlement which satisfy the relevant terms and conditions will be met in full. Applications under the Excess Application Facility for any Excess Shares beyond a Qualifying Shareholder's Guaranteed Excess Entitlement shall be determined by the Directors in their absolute discretion.

For further information please contact:

Weatherly International Plc [phone]

Rod Webster, Chief Executive Officer

Kevin Ellis, CFO and Company Secretary

RFC Ambrian Limited [phone]

(Nominated Adviser & Broker)

Samantha Harrison / James Biddle

Finncap                                                                              [phone]

(Joint Broker)

Joanna Weaving

Blytheweigh                                                                      [phone]

(Financial PR)
Tim Blythe / Halimah Hussain

Record Date and time for entitlements under the Open Offer	5.00 p.m. on 14 November2014
Existing Ordinary Shares marked'ex'by the LSE	8.00 a.m. on 18 November2014
Posting of the Document and Application Form	18 November2014
Open OfferEntitlements credited to stock accounts in CREST of Qualifying CREST Shareholders	19 November2014
Recommended latest time for requesting withdrawalof Open Offer Entitlements and Excess Open OfferEntitlements from CREST	4.30 p.m. on 26 November2014
Latest time for depositing Open OfferEntitlements and Excess Open OfferEntitlements into CREST	3.00 p.m. on 27 November2014
Latest time and date for splitting of Application Forms (to satisfy bona fidemarketclaims only)	3.00 p.m. on 29 November2014
Latest time and date for receipt of completed Application Formsand payment in full under the Open Offeror settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 2 December 2014
Results of Open Offerannounced through RNS	3 December 2014
Admission and commencement of dealings in Open OfferShares	8.00 a.m. on 8 December 2014
Open OfferShares to be held in uncertificatedform credited to CREST stock accounts	8 December 2014
Despatch of definitiveshare certificatesfor Open OfferShares to be held in Certificatedform	by 17 December 2014

Each of the dates in the above timetable is subject to change at the absolute discretion of the Company. If any of the details should change, where appropriate, the revised times and/or dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service.

Backgroundto and reasonsforthe Capital Raising

On 7 November2014, the Companyannouncedthat it had commenced mining at its Tschudi copper mine in Namibia ("Tschudi "). The firstcopper production is expected in Q4 of FY2015.

Constructionof the Tschudi project remainson schedule and budgetwith 85% of the workscompleted matchedwith the drawdownof 79% of the projectfinanceloan provided by Orion Mine Finance.

Administration and plant officesare operational at the Tschudimine, and senior staffmembers havebeen appointed within the processing group to ensure operational readinessby Q4 FY2015.

The firstleach pad which will allowthe copper to be dissolved from ore using sulphuric acid is close to completion and mining for silica to providethe drainage layer for the heap leach pads from a nearby quarry has commenced. Commission of the crushing and agglomeration plant is scheduled for December 2014 followedby commissioning of the solventextraction-electrowinning(SX/EW) plant in Q3 FY2015 which will recycle the acid to be reused on the heap leach pads.

The mining contractor,Basil Read, commencedwastestripping at the beginning of the quarter and by the end of the quarter the firstore wasexposedin the initial pits. The bulkof the wasteremovedis being used to form the base of the heap leach pads and the ore stockpilearea abovethe primarycrusher.In total, 251,450bcm of wasteand 1,920 bcm of mineralised material wasmined at the Tschudi mine during the quarterto 30 September 2014.

The Board believethat there is a strong case for accelerating the wastestripping, in order to providegreater certaintythat the Tschudiproject will achieveits stated targetsin the firstyear of production. This wouldrequire the Company to provideadditional workingcapitalto the Tschudi project during Q3 of FY2015. In order to do this, the Companywill most likelyneed to drawdownon the US$8m overrunfacility providedby Orion Mine Finance, which requires the Company to contributeon a dollar for dollar basis.

The Board originally anticipated that the Company's contributionto the overrunwouldcome from cash reserves builtfrom its existingundergroundmines. However,the weak copper price and re-organisationof the undergroundoperations has meant that cash flowsfrom these operations are not anticipated to allowfor buildingof sufficient cash reservesby the time the expected drawdownis required. Consequently,Subscription together with the minimum raisedunder the Placingand Open Offer,togetherwith the Company'scash reserves will enable the Company to utilise the overrun facilityin full and provide approximately US$16m in cash reservesto deal with wastestripping into the nextquarter in addition to anycommissioning costs that may arise in connection.

Currenttrading and prospects

Production in Q1 of FY2015 remained strong and tonnes  mined  overall in  the  quarter  increased  by 14% compared with the previous quarter. However, lower grades from some of the development areas offset the increase in mining, resulting in copper producedfor the quarterbeing slightly less than the previous quarter at 1,462 tonnes produced at a rate of US$5,700/t. The Companydelivered 6,906 tonnes of concentrate (1,497 tonnes of contained copper) to metal trader Louis Dreyfus at a weighted average price of US$6,989/t copper (US$ 3.17/lb).

During the quarterended 30 September 2014, theCompany paid offUS$0.55million of theworking capital loan to Orion Mine Finance reducingthe outstanding loan in respectof Central Operations to US$830,000. This left the companywith cash reserves,excludingdrawdownsunderthe Orion loan,of approximately US$5.4million.

Q1 of FY2015is the second quarter where production has continued at an annualised rate approaching 6,000 copper tonnes, and also the highesthalf year recordedsince the mines were reopenedin 2010.

The pillar retreatprogramme at Otjihasecontinues with higherore recoverythan initially expected.As a result,developmentof the twonewprimarymining areas has slowedfor the time being.

As part of the mobilefleet upgrade, twonewAtlas Copco 1530 scoops were commissioned havingan immediate effecton productivity.Similarly,a newAtlas Copco282 drill jumbowasmobilised to site for trialwith positiveearly results.A number of expatriatedrill trainers havealso arrived on site as part of the programto upgrade the skills of operators using the newequipment.

The Tschudi projectremains on trackand the management team is focussedon drivingefficienciesat Central Operations and bringing Tschudiinto production in Q4 of FY2015.

Use of proceeds

The Companyconsiders the principal areas of focus, in relation to which it proposes to utilise the proceedsof the Capital Raising, to be:

•         Acceleration of the wastestripping at Tschudi to mitigate againstcommissioning risks (as set out below) and ensure productiontargets are met. This will mostlikely involve provision of an additional workingcapitalto Tschudi.

•         Toensure the Company has the financialresourcesavailableto meet its working capital needs duringthe commissioning and post commissioning period of the Tschudi mine. While the Company does not anticipate a requirement to utilise the Orion overrunfacilityon the basis of the current mine plan, there are also a number of risk factors that could effectthe commissioning of the Tschudi,such as slower leach times, poorer metallurgical recoveries, inferior ore grade, grade dilution, power outages, mechanical breakdowns,copperprice and US$/randexchangerates.Anynumber of the above(individuallyor collectively)can impact on the commissioning timetable and adverselyimpact the Company'sworkingcapitalneeds.

In these circumstances, the Directors' believeit is prudentto ensure that the Companyhas sufficient cash reservesto ensure that it is fully able to utilise the Orion overrunfacility.

The total costs and expenses of, and incidental to, the Capital Raising payable by the Company (including professional fees, commissions, the cost of printing and the fees payable to the registrars) are estimated to amount to approximately £150,000.

The net proceeds of the Capital Raising are expected to be approximately £4.5 million, assuming the Open Offer is fully subscribed.

Estimated minimum net cash proceeds of the Subscription and the Placing £3.2 million receivable by the Company. Assuming that there are no applications under the Open Offer

Directors'participation in the Open Offer

The Directors listed in the table belowhaveconditionally agreed to subscribefor a total of £158,270 in the Open Offer, representing 5,410,932 New Ordinary Shares, in the amounts set out next to their names, which includeExcess Shares under the ExcessApplication Facility.

	No. of Open OfferShares
John Bryant	341,880
Rod Webster	928,000
WolfMartinick	3,720,000
Charilaos Stavrakis	421,052

The interests (all of which are beneficial unless stated otherwise) of the Directors and of persons connected with them (within the meaning of section 252 of the 2006 Act) in the issued ordinary share capital of the Company and the existence of which is known to, or could with reasonable due diligence be ascertained by, any Director as at the date of this document and as they are expected to be immediately following Admission are as follows:

	As at the date of this document		Immediately following Admission
	No. of OrdinaryShares	% of Existing OrdinaryShares	No. of OrdinaryShares	% ofEnlarged ShareCapital*
John Bryant	397,500	0.06	739,380	0.10
Rod Webster	27,343,800	4.4	28,271,800	3.63
WolfMartinick	19,263,200	3.1	22,983,200	2.96
Alan Stephens	300,300	0.05	300,300	0.04
Charilaos Stavrakis	1,000,000	0.18	1,421,052	0.18

*           Assuming that the Open Offer is fully  subscribed, the Directors receive their  Open  Offer Entitlements  and  full applications for Excess Shares and no options or warrants are exercisedprior to Admission.

Placing and Open Offer Agreement

RFC Ambrian has conditionally placed 85,750,937 Placing Shares at 2.925 pence per Placing Share, subject to clawback, with institutional and other investors. Of the 85,750,937 Placing Shares, 76,007,350 Placing Shares have been placed with Polo Resources. All of the Placing Shares have been placed on the basis of there being Unallocated Shares under the Open Offer.

The Placing and Open Offer Agreement contains certain warranties and indemnities from the Company in favour of RFC Ambrian and is conditional, inter alia, on:

(a)          the posting of this document and the Application Forms;

(b)          the allotment of the New Ordinary Shares;

(c)           there being no breach of warranty under the Placing and Open Offer Agreement; and

(d)          Admission occurring by not later than 8.00 a.m. on 8 December 2014 (or such other time and/or date as RFC Ambrian and the Company may agree being not later than 31 December 2014).

RFC Ambrian Limited ('RFC Ambrian') and Finncap Limited (''Finncap") (each of which is regulated in the UK by the Financial Conduct Authority) are acting exclusively for Weatherly in connection with the requirements of the AIM Market and the UK Listing Authority and for no one else and will not be responsible to any other person for providing the protection afforded to customers of RFC Ambrian or Finncap respectively nor for providing advice in connection with this announcement.

Participation in the proposed Open Offer will not be available to shareholders resident in the United States, Australia, Canada, South Africa or Japan or any other jurisdiction where it would be unlawful to offer participation.

This announcement does not constitute, or form part of, an offer of, or the solicitation of any offer to subscribe for or buy, any of the Ordinary Shares to be issued or sold in connection with the Open Offer.

This announcement does not constitute a prospectus or prospectus equivalent document. Nothing in this announcement should be interpreted as a term or condition of the Open Offer. A circular relating to the Open Offer will be prepared and made available to shareholders. Any decision to invest in Weatherly under the Open Offer must be made only on the basis of the information contained in the circular.

This announcement contains certain "forward ‐ looking statements" regarding the belief or current expectations of the Group, the Directors and other members of its senior management about the Company's financial condition, results of operations and business and the transactions described in this announcement. Generally, but not always, words such as "may", "could", "should", "will", "expect", "intend", "estimate", "anticipate", "assume", "believe", "plan", "seek", "continue", "target". "goal", "would" or their negative variations or similar expressions identify forward ‐ looking statements.

Such forward ‐ looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and are difficult to predict, that may cause the actual results, performance, achievements or developments of the Company or the industries in which it operates to differ materially from any future results, performance, achievements or developments expressed or implied from the forward ‐ looking statements.

The offer of securities in certain jurisdictions may be restricted by law and therefore potential investors should inform themselves about and observe any such restrictions. This announcement is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand, South Africa, Switzerland or any other jurisdiction in which such publication or distribution would be a violation of the relevant laws of such jurisdiction. This announcement is for information only and does not constitute an offer or invitation to acquire or dispose of securities in the United States, Australia, Canada, Japan, New Zealand, South Africa or Switzerland or any other jurisdiction in which such offer or invitation would be a violation of the relevant laws of such jurisdiction. In particular, this announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein (the "Securities")  have not been and will not be registered under the US Securities Act of 1933, as amended ('the Securities Act'), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any relevant state securities laws. There will be no public offer of Securities in the United States.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

The distribution of this announcement may be restricted by law. No action has been taken that would permit the possession or distribution of this announcement in any jurisdiction where action for that purpose is required.

This information is provided by RNS

The company news service from the London Stock Exchange

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