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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (26271)	9/23/2008 9:32:36 AM
From: LoneClone	Read Replies (1) \| Respond to of 193667

Ridge bringing in partner for Sheba's Ridge Allan Seccombe Posted: Mon, 22 Sep 2008 miningmx.com [miningmx.com] -- RIDGE Mining has postponed its move to the LSE and JSE to April next year because of market turmoil. It is looking at bringing in a fourth company to the Sheba’s Ridge nickel project. “The markets are appalling,” Don McAlister, Ridge’s financial director, told Miningmx. The point of listing on the JSE would be to give its South African management team, which McAlister described as one of the strongest in the sector, share-based incentive schemes as a key plank in efforts to retain skills. The markets are appalling The April listing would raise some cash, but it wouldn’t be a large capital raising exercise because it will have started generating revenue from its Blue Ridge mine, which will start production in November. Blue Ridge is a 149,000 oz/year producer of six platinum group elements. One hiccup is that the mine needs to provide four to six megawatts of internally generated power it needs as it ramps up production. South African power utility Eskom, which is under severe capacity pressure, has promised to up its power supply to 25 megawatts by June 2009 from its supply of 12 MW from November, said McAlister. Ridge will early next year begin in earnest two studies that will add to the project. One is the downdip and contiguous Millennium property it acquired from Lonmin and the other is adding a ferrochrome concentrate plant to the backend of the plant to treat tailings. The ferrochrome plant could be in construction by mid-2009, but McAlister declined to be drawn on the Millennium project. At Sheba’s Ridge, where a pre-feasibility study has shown a resource of 3.2 billion pounds of nickel, 1.2 billion pounds of copper and 22.3 million oz of platinum group metals, Ridge is bringing in a fourth partner. At the moment, Ridge has 61.5% of the project, Anglo Platinum 12.5% and 26% with the Industrial Development Corporation. With the total initial capital coming in at $707m, Ridge recognises it cannot fund its portion entirely. “We are looking at bringing in another partner and we’ll probably make an announcement in the coming few weeks,” McAlister said. The company will be a base-metal play and take part of Ridge stake, he said. “We need help with the financing,” he said, pointing out Ridge has a market capitalisation of $84m. “For us to put up our share of the equity and guarantee our share of the debt is not possible. We’re looking at bringing in a big balance sheet, which can take a small chunk now and provide us some help with financing.” The other party could also be an offtake customer for the nickel produced at Sheba’s Ridge. Ridge, Impala Platinum, African Rainbow Minerals and the IDC are investigating the feasibility of setting up a smelter to treat material from Sheba’s sulphide nickel deposit. The beauty of the scheme is that the sulphide material could be used to blend the chromite-rich UG2 ore on the Eastern Limb. A bankable feasibility study into the smelter would take up to two years. The four parties will agree a formal joint venture within the next couple of months. Asked about consolidation in the South African platinum sector, which has seen Xstrata unveil a possible $10bn bid for Lonmin and Impala in talks with Mvelaphanda Resources and Northam Platinum to create a South African “platinum champion”, McAlister said Ridge would like to be the hunter rather than the hunted. Their shallow deposits and near-term production makes them a rather tasty takeover target, especially with the share price down by nearly two thirds to 50 pence from 143 pence in April.