Weatherly plc is planning a resumption of activities at its dormant Matchless and Otjihase mines, Weatherly believing that the discontinued operations still offer much promise it said this week.
“Otjihase, Matchless West and Old Matchless, still represent a significant opportunity for the Weatherly. Plans are being prepared to support a future resumption of operations at higher production rates and lower unit costs than previously achieved, taking full advantage of the installed processing plant capacity and the geological resources available” its Chief Executive Officer Craig Thomas said.
He added “an important part of these plans include the skills development required to ensure high levels of safety and productivity for future underground mining. When the outlook for copper price improves, we expect to be able to deliver significant shareholder value from these operations.”
Thomas did not give an indication of the level the copper price had to settle on that would make Weatherly comfortable with the resumption of mining activities.
“We have not yet indicated specific copper prices necessary to support a resumption of mining at Otjihase and Matchless. However we have stated previously that we expect to be able to resume production at larger volumes and lower unit costs than those which were obtained during the period of operation from 2011 to 2015. We have further stated that the installed processing infrastructure at Otjihase is currently capable of treating much greater quantities of copper ore than the two underground mines were producing for the last five years. Further the identified mineral resources at Otjihase and Matchless are considered by Weatherly to be sufficient to support viable plans for increased production volumes when copper prices improve and sufficient mine development work is completed.
He added, “Weatherly continues to evaluate the opportunities in the region surrounding Otjihase, which is known to host several copper deposits as well as having exploration potential. The regional endowment may present additional potential for further expansion of production, and Weatherly is well positioned to take advantage of any future opportunities due to synergies provided by its Otjihase Concentrator to materially lower unit costs for production. Weatherly believes that an enlarged business unit based around the Otjihase and Matchless assets would have significantly enhanced capability for weathering any future downturns in the commodity price cycle.
Continued Thomas “the tough copper price environment made it clear that the Central Operations consisting of Matchless and Otjikoto could not continue in their current form, and in the first quarter we took decisive action to preserve their future value to shareholders.”
He emphasised that cost management remained a high priority in what he described challenging times for copper producers. “Every opportunity to conserve cash or recover value from peripheral assets is being pursued vigorously.”