By: Neal Goldwyer
26th January 2007
Earlier this month, Johannesburg newspaper Business Report reported that the mining company had begun shaft sinking, with first production anticipated to begin in June 2008.
Ridge Mining’s commercial director Francis Johnstone tells Mining Weekly that site work already began last year, with the portals completed in December and road construction under way.
The banking consortium mandated to provide debt facilities for the $180-million project has completed all legal and technical due diligence. Credit committees have been approved and Johnstone was hopeful that the formal term sheet could be signed before last Christmas.
The Blue Ridge project is the most advanced project in the company’s portfolio and was formerly a wholly- owned concern of Ridge.
Equity interest in the project is now split 50:50 between Ridge and its black economic-empowerment partner, Imbani Platinum.
“Imbani is buying into Blue Ridge by contributing R320-million towards the capital development,” explains Johnstone.
Additional funding will come from Ridge (R120-million) and a banking consortium consisting of the Industrial Development Corporation of South Africa (IDC), the Development Bank of South Africa, Investec and Standard Bank (R610-million).
Ridge is strategically concentrating on developing its two eastern limb projects: Blue Ridge and Sheba’s Ridge.
In September, the company sold a 20% stake to China’s Zijin Mining Group, giving the resource-hungry Chinese economy its first foothold in South Africa’s platinum industry. The �8,2-million proceeds from the sale provided Ridge with the funding for its additional stake in Blue Ridge.
The company received another R70-million in December when it decided to sell its 51% stake in the early stage western limb Fountain Ridge project held by Madibeng Platinum.
Situated on the farm Blaauwbank south-east of Groblersdal, Blue Ridge is expected to produce its first concentrate in the second half of 2008. Annual production is estimated at 124 500 oz 4E (three platinumgroup elements (PGE) plus gold) a year with a formulated 18-year life- of-mine. Ridge Mining holds an old-order mining permit from 2004, giving it authority to commence mining on the Blue Ridge project.
However, in line with the Minerals and Petroleum Resources Development Act, Ridge will soon apply for a conversion to new- order mining rights, which it needs to receive by April 2009.
A bankable feasibility study (BFS) into the nearby Sheba’s Ridge project is under way and is due for completion by the end of 2007.
Further, “a pilot plant test is currently ongoing at Mintek to determine the metallurgical paramenters for the plant”, Johnstone says. The next step after completion of the BFS will be financing and development, which should take about six months and two years respectively.
The Sheba’s Ridge project is a joint venture (JV) between Ridge (65%) and Anglo Platinum (35%). The project should produce 24 000 t of nickel and 390 000 oz of PGMs a year and will cost $700-million.
The mineral resource at Sheba’s Ridge contains 19-million ounces 3PGE, 1,4-million tons of nickel and 500 000 t of copper. In a total mineral resource comparison, it rivals that of Northam Platinum’s mine on the western limb. Northam Platinum is currently South Africa’s fifth-largest platinum producer.
Discussions regarding Sheba ore transportation, concentration, smelting, toll treatment and refining have elicited expressions of interest in closer participation from local and international parties. These will be followed up in the feasibility stage. Ridge CE Terence Wilkinson told Bloomberg that Zijin is “hell bent on getting in”.
Johnstone confirms that it has expressed a desire to take a direct interest in the Sheba’s Ridge project once the BFS has been completed and can provide the majority of funding for its development.
“Zijin are experts in low-cost openpit mining and will assist with the feasibility study by seconding one of their top technical people to site,” says Johnstone.
The completion of the BFS requires R60-million. Ridge has agreed to sell a 26% stake in the venture to the IDC in exchange for the funding. With a payment of $12,5-million, Ridge can acquire a further 22,5% interest in the project from Angloplat upon completion of the BFS. Should it exercise this option, the partners’ interests in the JV would be Ridge (61,5%), IDC (26%) and Angloplat (12,5%).
Ridge Mining hopes to make considerable headway in its pri- mary projects in 2007. By the end of the year, Johnstone says, Ridge hopes to “be well on the way to completing the development of Blue Ridge”.
Its other goals include the completion of the Sheba’s Ridge BFS, of sales of peripheral projects (Fountain Ridge, Fonte Verde, Red Bush Ridge and Rooikraal) for a total of R90-million, and finally, the completion of sufficient exploration on Western Ridge in order to make a resource estimation.
Edited by: Neal Goldwyer