London-headquartered African focused copper miner Weatherly (AIM: WTI) announced today it has entered into an agreement to sell a controlling stake in the company to East China Mineral Exploration Development Bureau (EME) for a total consideration of £16.1 million.
The miner said it had signed a letter of intent to issue 446,851,840 shares to ECE through its subsidiary at 3.6p per share for a total £16.1, thereby giving it a 50.1% stake in the company.
The proceeds will be used to redeem US$3 million plus accrued interest of about US$1 million of the outstanding convertible loan notes of WTI’s capital and funding its mining operations, smelter and development projects in Namibia and Burkina Faso.
The companies also agreed that WTI may acquire the entire issued capital of ECE’s wholly owned subsidiary Namibia non-Ferrous East China Minerals Exploration and Development Pty and ECE’s mining resource projects in China and elsewhere for more of its shares. ECE has assumed responsibility for all exploration work carried out by the Weatherly group.
“I believe that the proposed relationship with ECE will enable Weatherly to put a close to what has been a very difficult period for the Company. We can now look forward to the growth of our significant asset base, and to the new opportunities that we are confident will arise as a result of ECE's exciting plans for the development of the Company,” said Weatherly Chief Executive Rod Webster.
WTI’s mining operations in Namibia were halted in December last year due to lower copper prices, while now the company is looking to take advantage of increased copper value.
The transaction is set to be completed by the end of January 2010.