Weatherly International announced that it signed a letter of intent to sell more than half of its shares to East China Mineral Exploration and Development Bureau for about Namibian dollars 199 million (or 16 million pounds).

The selling of shares would provide working capital for the four copper mines that Weatherly mining shut down and placed under care and maintenance late last year due to high mining costs and low copper prices.

The shutting of the copper mines resulted in more than 600 workers losing their jobs.
Weatherly country manager Hans Nolte told a local daily that the deal means quite a lot for Namibian copper mining operations.

“We have always maintained that we are waiting for a joint venture partnership with enough capital to recapitalise operations. We have made it clear that we intend to re-open the mines again,” he said.

However, the entire process to close the deal could take 10 months before the copper mines do re-open.

Nolte dismissed the notion that the copper mines have been sold to the Chinese company, saying while the two companies would eventually have to work out the management structures, the understanding is that the Chinese have bought a majority shareholding of Weatherly International.

Weatherly International said the proceeds from the sales of half of the company to East China Mineral Exploration and Development Bureau would provide working capital for the mining operations, smelter and development projects in Namibia and Burkina Faso.

The current bid is for a wholly owned subsidiary of Eastern China Mineral Exploration and Development Bureau to subscribe for new shares in Weatherly International.
Once completed this would see the Chinese company owning 50.1 percent shares of Weatherly International.

As of now the deal is subjected to a complete satisfactory due diligence and would need to get approval from boards of directors of both companies.

Weatherly International would in turn acquire the entire issued share capital of the Namibian subsidiary, once the deal goes through, and subject to various requirement and agreements.

Weatherly shut Matchless, Otjihase, Tschudi and Tsumeb West copper mines late last year, saying the low copper prices in international market have made it difficult to continue with mining activities. Since then, the four mines have been under care and maintenance.

The Chinese company already has a footprint in Namibia, with seven Exclusive Prospecting Licences (EPL) in pending stages for base and rare metals, industrial minerals and precious metals in the districts of Khorixas, Tsumeb, Opuwo, and Outjo.

The EPLs are held through Namibia Non-Ferrous East China Minerals Exploration and Development Pty Ltd, a wholly owned subsidiary of East China Minerals Exploration and Development Bureau.