JOHANNESBURG (miningweekly.com) – Aim-listed Ridge Mining, announced on Wednesday that its subsidiary platinum-miner Blue Ridge Platinum has closed out its hedging arrangements and generated R541-million in the process.

However, Blue Ridge Platinum would require a further R400-million in working capital to bring the project, a 50:50 joint venture (JV) between Ridge Mining and Imbani Platinum, to steady state production and to a stage where it would generate positive cash flow.

“We put our hedging in place at a time when metal prices were close to their historic high and feel that in the present market for bank lending it is wise to use the value in our hedge to reduce significantly project borrowings and to fund working capital in the short term,” Ridge Mining CEO Terence Wilkinson said in a statement to shareholders.

Blue Ridge Platinum has experienced some delays in the commissioning of its concentrator plant, requiring the company to raise funds for further working capital.

The company explained that the project lenders were withholding the drawdown on its remaining facilities until the JV partners contributed additional funding.

The platinum-miner would repay its R487-million senior facility, while the R137-million in mezzanine debt would remain.

In addition, the miner planned on meeting its additional working capital requirements through a combination of debt and equity from the JV partners.

Blue Ridge Platinum was in advanced discussions with its bankers regarding new facilities, with Wilkinson stating that, “our bankers remain supportive and we hope to be able to announce terms of a new debt finance package shortly”.

Ridge Mining, meanwhile, earlier this month became an acquisition target for fellow platinum-miner Aquarius Platinum.

Aquarius intended on making a firm offer for the Aim-listed miner at the end of March.

Aquarius CEO Stuart Murray had said in a statement on the ASX on February 18, that it believed now was the right time to “seek a strategic partnership” with Ridge Mining, in light of the Blue Ridge mine entering production.

At the time, the miner said that it was prepared to offer one of its own shares for every 2,75 Ridge Mining shares in issue.

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