Weatherly unable to cover loan repayments despite narrowed losses

AIM-quoted development and exploration firm Weatherly International narrowed operating losses in the first half of its current trading year as revenues soared more than a quarter compared to the same period twelve months earlier.

Revenue grew 26.19% to $47.7m in the six months leading to 31 December, helping the Hertfordshire-based group cut losses from the $11.3m seen at the end of the 2016 calendar year down to $5.9m twelve months later, however, Weatherly cautioned investors on Monday that it was not quite enough to allow it to cover its loan repayments.

The firm warned that its $20m loan repayment to Orion Mine Finance before the end of March, already renegotiated after being unable to cover the loans in August 2017, led Weatherly to tell its shareholders that it was "unlikely" to generate enough cash to meet its revised loan repayments schedule in time.

While copper cathode production rose 86.62% to 8,844 thanks to a strong December quarter and its Tschudi SXEW plant's ability to operate "well above nameplate levels when leaching rates provide sufficient copper into solution", Weatherly warned that its full-year production was not expected to exceed its nameplate capacity of 17,000 tonnes per year of copper cathode.

Weatherly's Tschudi project in Namibia produced a total 4,739 tonnes of copper cathode, 11.5% above its nameplate production, but costs at its C1 operations cost rose 8.64% to $4,944 per copper tonne, impacting margins despite being below the $5,288 per tonne the programme cost the firm in its previous full year of trading.

Weatherly said its "ability to continue as a going concern will be dependent on Orion's continued support, of which there is no certainty", but highlighted that should Orion allow it to further defer its repayments, the Tschudi project would generate more-than-enough cash to whether the storm moving forward.

The group's loss per share narrowed to $0.54 from the $1.02 posted at the same time a year earlier.

As of 1320 GMT, shares had tumbled 17.78% to 1.48p.