Weatherly enters into agreement to purchase additional 65% of Berg Aukas
Weatherly International plc entered into a binding agreement to increase its ownership of China Africa Resources Namibia Limited (CARN) from 25% to 90%.
CARN is a private local company which owns 100% of the high-grade Berg Aukas underground zinc-lead-vanadium project near Grootfontein, which is located 450 km north of Windhoek.
In a statement from Weatherly this week it was said in December 2016, 100% of the shares in CARN were distributed via a dividend to existing shareholders of China Africa Resources plc (CAR). The two largest shareholders of CAR at that stage were Weatherly with 25% and Hong Kong East China Non-Ferrous Mineral Resources Co Ltd (ECE) with 65%.
“Weatherly and ECE have now entered into a binding agreement whereby Weatherly will purchase all of ECE’s shares in CARN for cash consideration of US$600,000 U.S dollars in order to increase Weatherly’s ownership of CARN to 90%,” the statement read.
Meanwhile, the transaction is subject to regulatory approval in Namibia, following which the full consideration will be paid to ECE immediately. The company expects to fund the transaction through operating cash flow but in the event that it cannot, Weatherly has obtained a waiver from Orion Mine Finance to use part of the uncommitted US$10 million loan announced on 28 July 2017 to fund the transaction.
Meanwhile in other developments announced this week by the Weatherly Board, Edwin Bennet, a director of the Company and appointee of Orion Mine Finance a significant shareholder, has tendered his resignation as a director.
The Company is involved in negotiations with Orion to agree a long term restructuring of its secured debt facilities with Orion and to avoid the formal, quarterly amendments to its debt facilities.