WeatherlyInternational Plc on July 22 announced a drop in copper cathodeproduction in the quarter ended June 30 from the Tschudi copper mine in Namibia, due to higher-than-expectedgroundwater inflow.
The news sent the company's stock down more than 40% inopening London trade, and by midday, it was still trading 32% lower than theJuly 21 close.
In its regular production update, the group said output in thequarter was 3,812 tonnes of copper, which was 10% below the target of 4,250tonnes per quarter.
In the period under review, open pit mining operations atTschudi reached the depth where the water table was intersected. Certain ratesof groundwater inflow were expected and incorporated in the bankablefeasibility study, but the actual inflow exceeded the highest rates the companyhad planned for.
This, in turn, interrupted the ore supply to the heap leachoperation. Weatherly had to install additional groundwater management systemsand infrastructure.
The company currently expects production in the September2016 quarter to be approximately 15% below nameplate, but it should return todesign rates by the end of the following quarter.
In a separate development related to cost reductions, WolfMartinick and Charilaos Stavrakis have retired from the board, and will not bereplaced in the near term. Martinick was the co-founder and initial chairman ofWeatherly.
The company also said it expects that arbitrationproceedings are likely to be started following several disputes between itsNamibian subsidiary Ongopolo Mining Ltd. and the contractor who built theTschudi plant, LogiMan.