As part of its update for the quarter ended 30 June 2016, Weatherly International announced that its open pit mining operations at Tschudi reached the depth where the water table was intersected and groundwater inflow to the pit occurred.
Production at Tschudi for the quarter was 3 812 t of copper cathode, down from the previous quarter’s 4 442 t in March.
Based on hydro-geological studies, conducted as part of the feasibility study, certain rates of groundwater inflow were expected and the operation was equipped to deal with the highest level of inflow rates predicted.
But the Tschudi operation had been hampered with groundwater inflows which were significantly higher than predicted during the Bankable Feasibility Study (BFS) says Craig Thomas, CEO of Weatherly. The water inflow rates experienced have exceeded the highest rates indicated in the BFS studies.
As a result, it has been necessary to design, procure and commission additional groundwater management systems and infrastructure whilst engaging additional Namibian and international specialist consulting expertise to assist with this process.
“Expertise and equipment have been procured to resolve the issue and full production rates are expected to resume before the end of the 2016 calendar year,” says Thomas.
The immediate impact has been a delay in mining the scheduled ore volumes from the pit to supply to the heap leach operation, with resulting reductions in copper output.
Current expectations are for production levels in the September 2016 quarter to be approximately 15% below nameplate.
Production is then expected to return to design rates by the end of the December 2016 quarter.
Financial difficulties and a court arbitration
Weatherly International previously advised that if copper prices remain at current levels it is unlikely that the company and its subsidiaries will generate sufficient surplus cash to meet all loan repayments when due.
This remains the case and Weatherly continues to positively engage with Orion Mine Finance (Master) Fund I LP on the subject.
In addition, Weatherly International anticipates that arbitration proceedings are most likely to start between the Namibian subsidiary of Weatherly, and LogiMan (the EPC contractor responsible for building the Tschudi plant) arising from LogiMan’s work on the Tschudi plant.