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From: Nigel
ArtDate: 30th August 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.114.152
Date: 09/09/06
Time: 16:10
30th August 2006
Ridge Mining plc US$42 Million Financing for Blue Ridge PGM Mine
News Item - Conduit PR
US$42 million financing for Blue Ridge PGM Mine sets the stage for production in 2008
ZAR300m (US$ 42m) equity funding to be provided by Imbani for 50% interest in the Blue Ridge Mine, South Africa (Ridge retains 50%) 125,000 ozs 4PGM production per annum to commence in 2008 ZAR650m (US$91m) project debt facilities with DBSA, Standard Bank and Investec at an advanced stage Ridge Mining plc, the Platinum Group Metals (“PGM”) developer announces that it has signed binding Heads of Agreement (“the Agreement”) with Imbani Platinum (Pty.) Ltd. (“Imbani”) whereby Imbani will provide ZAR300m (US$ 42m) of equity funding for the Blue Ridge development in return for a 50% equity interest in the project. The remaining equity requirement of ZAR100m will be provided by Ridge.
Ridge’s retention of 50% of the Blue Ridge mine represents an improvement on the previously announced terms reflecting its commitment to the project and the project’s improved economic returns.
Imbani is 100% owned by black South Africans and as such qualifies as an empowerment company in terms of the Minerals and Petroleum Resources Development Act 2002 (“Minerals Act”). The majority of Imbani’s investment in Blue Ridge is to be funded by the Industrial Development Corporation of South Africa (“IDC”), and the Development Bank of Southern Africa (“DBSA”) who have completed all their internal approval processes.
Imbani, led by Briss Mathabathe and Joel Mokgohlwa is a member of the Imbani Group founded in 1977, which has interests in mining and exploration, industrial supplies and services, property development, engineering and construction, train and rail operations, telecommunications and power utilities.
The agreement with Imbani and confirmation of their funding was the last condition required for the consortium of South African banks (DBSA, Standard Bank of South Africa and Investec Bank) to obtain their final approvals for the project debt facilities of ZAR560m (US$ 91m ) (ZAR650m including cost overrun facility).
Under the terms of the Agreement, Ridge will be the operator of the project during both the construction and operating phases in conjunction with Imbani. Ridge is at an advanced stage of negotiating contracts for the major components of the project development. The participation of an empowerment company in the development will assist in the conversion of the Mining Licence to a “new order” Mining Right as required by 2009 under the Minerals Act.
The Blue Ridge project, located 190 km from Johannesburg, has been designed to produce 125,000ozs of PGMs (in concentrate) per annum which will be sold to Impala Refining Services under an agreement announced in May. Production of PGM concentrate is expected by mid 2008. A bankable feasibility study completed at the end of 2005 indicated an NPV (at 10%) of US$83m (real) based on a price for the basket of PGMs produced of US$909/oz and a Rand/Dollar exchange rate of 6.62. Today’s basket price of approximately US$1,300/oz and R/US$ 7.1 both significantly improve the project economics.
Under the terms of the Agreement (subject to shareholder approval) Imbani will purchase, for £2.5m, options to acquire 25 million ordinary shares of Ridge for £0.70 pence per share. The options will have a life of five years from date of issue.
Ridge Mining has a number of funding options with regard to its contribution to the project financing under consideration. A further announcement will be made in due course.
Terence Wilkinson, Chief Executive commented:
“Today’s securing of the US$42 million towards the development of the Blue Ridge mine and the empowerment credentials accompanying this investment will enable us to start production at the rate of 125,000 ounces PGM from 2008. We are now in a position to conclude the US$91 million project debt facility with the consortium of banks that include DBSA, Investec and Standard Bank.
This agreement enables Ridge to make the progression from ‘explorer’ to mine developer and operator – a role we are well equipped to perform. We welcome Imbani as our partners in the project along with their backers IDC and DBSA and together we are committed to unlock the significant value in Blue Ridge which has also been improved by the increase in metal prices and exchange rates.”
Contacts:
Conduit PR : Tel: +44 20 7429 6666 Leesa Peters Mob: +44 (0) 7812 159 885 Laurence Read, Mob: +44 (0) 7979 955 923
Ridge Mining plc: +44 (0) 20 7379 1474 Terence Wilkinson, Chief Executive Francis Johnstone, Commercial Director
Editors notes:
Ridge is a South African focused PGM and base metal developer with several projects on the Bushveld complex, the dominant primary source of world PGM production.
Other Ridge projects are:
Sheba’s Ridge; a large scale near surface deposit hosting a resource containing 19m ozs of PGM (3E) and 1.3million tonnes of nickel. A feasibility study on this project is underway. Ridge is in joint venture with Anglo Platinum and has recently agreed with IDC for it to fund the Feasibility Study in return for a 26% interest in the project.
Fountain Ridge a PGM exploration project on the Western limb of the Bushveld complex in joint venture with Mmakau Mining and the local community. Early exploration results have confirmed the presence of the UG2 reef and further drilling is planned to recommence shortly.
Ridge also has a number of early stage exploration properties on the Bushveld Complex.
Edward Portman Conduit PR Ltd 76 Cannon St EC4N 6AE Office: +44 (0) 20 7429 6666 Direct: +44 (0) 20 7429 6607 Fax: +44 (0) 20 7429 6699 Mob: +44 (0) 773 3363 501
www.conduitpr.com
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