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From: Nigel
ArtDate: 2nd October 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.115.61
Date: 10/10/06
Time: 22:54
2nd October 2006
Ridge Mining in Long Term Relationship with Chinese Miner Zinjin
News Item - Conduit PR
Leading Chinese Mining Company forges Long Term Relationship with Ridge and subscribes for £8.2 million in Ordinary Shares and Warrants
Ridge announces that it has conditionally agreed to issue 16 million new ordinary shares of US$ 0.05 each in the capital of the Company (the "Subscription Shares") at 45 pence per share and grant warrants to subscribe for up to 10 million ordinary shares of US$ 0.05 each in the capital of the company ("Ordinary Shares") at a price of 70 pence per Ordinary Share (the "Warrants"), to a subsidiary of Zijin Mining Group Company Limited ("Zijin") in consideration for the payment of £8.2 million (US$15.3 million) (together, the "Subscription"). The Subscription is subject, inter alia, to shareholders passing appropriate resolutions (“the Resolutions”) at an Extraordinary General Meeting of the Company (“EGM”) to be held on 30 October 2006.
Zijin is a Chinese resource company listed on the Hong Kong Stock Exchange with a market capitalisation of approximately US$5.2bn and is one of China’s leading mining groups principally engaged in the exploration, mining, production, refining and sale of gold and other mineral resources in China. During 2005, Zijin produced approximately 491,000 ounces of gold of which some 369,000 ounces were produced from the large open pit Zijinshan gold mine in Fujian province. It also produced 19,869 tonnes of copper during 2005 primarily from the Ashele copper mine in Xinjiang.
The investment by Zijin in Ridge is intended to provide a platform for future collaboration and technical cooperation between the two companies for the development of future projects. Zijin’s expertise in the open pit mining of large scale lower grade ore bodies is expected to be particularly valuable in respect of Sheba’s Ridge. Immediately following the Subscription, Zijin will be interested in approximately 20% of the issued Ordinary Share capital of Ridge.
At the EGM, Ridge is also seeking approval to permit the proposed grant of options to subscribe for up to 25 million new Ordinary Shares at a price of 70 pence per Ordinary Share (the “Options”) to Imbani Platinum (Pty) Limited (“Imbani”) for a consideration of £2.5 million. The Options will be issued pursuant to an option agreement in accordance with the Company's obligations under the Heads of Agreement with Imbani announced by Ridge on 30 August 2006 (the “Imbani Agreement”).
The proceeds of the Subscription and the grant of the Options will be applied principally to fund the Company’s share of the equity component of the Blue Ridge project in South Africa and for general working capital purposes.
Principal terms of the Subscription
The Company is proposing pursuant to a subscription agreement dated 29 September 2006 between the Company, Zijin and Gold Mountains (H.K.) International Mining Company Limited (“Gold Mountains”), a wholly owned subsidiary of Zijin, to raise £8.2 million through the Subscription. The Subscription Shares will represent approximately 20 per cent. of the enlarged issued share capital of the Company on their admission to trading on AIM (“Admission”), which is expected to take place on or around 2 November 2006. The Subscription Shares will be issued credited as fully paid and will, on Admission, rank pari passu with the existing ordinary share capital of the Company.
In addition, Gold Mountains will be granted the Warrants which will entitle it to subscribe for 10 million new Ordinary Shares at an exercise price of 70p per share with an exercise period of three years from the date of grant.
The Company, Gold Mountains and Zijin have also signed a relationship deed dated 29 September 2006 to govern the basis of future cooperation on the Company’s projects and to ensure the independence of the board of directors of the Company (the "Board"). The deed entitles Zijin to appoint a non-executive director to the Board.
Zijin
Zijin is a Chinese resource company listed on the Hong Kong Stock Exchange and is principally engaged in the exploration, mining, production and sale of gold and other mineral resources in China.
Following completion of the Subscription, it is intended that Ms Shan Shan Li (Susan Li) be appointed a non-executive director of the Company. Ms Li, a Mechanical Engineer, is General Manager of Zijin’s Division of Overseas Development with 20 years of experience in the metallurgical, mining and mineral industries in China and an MBA from the University of Victoria, British Columbia, Canada.
The Imbani Options
Under the terms of the Imbani Agreement, announced on 30 August 2006, Imbani has agreed to purchase, for £2.5 million, options to acquire up to 25 million new ordinary shares for 70p per share. The Options will be granted pursuant to an option agreement to be entered into between the Company and Imbani. It is proposed that the Options will be exercisable for a period of five years from date of grant and, upon exercise of the Options, the Company will have the right (but not the obligation) to pay out the difference in the market price of the Ordinary Shares at that time and the exercise price of 70p per share for the Options instead of the issue of new ordinary shares. Authority will be sought at the EGM to permit the grant of the Options.
Extraordinary General Meeting
An EGM is to be held at 10.00 am on 30 October 2006 at the offices of the Company, 7th Floor, Brettenham House, 5 Lancaster Place, London WC2E 7EN at which the approval of shareholders for the Resolutions will be sought. Notice of this meeting is contained in a circular, which is expected to be sent to shareholders tomorrow. Copies of the circular will be available free of charge at the offices of Field fisher Waterhouse LLP., 35 Vine Street, London, EC3N 2AA (Saturdays, Sundays and public holidays excepted) until 3 November 2006
Terence Wilkinson, Chief Executive commented: “The agreement with Zijin marks an important step forward for Ridge and introduces a powerful potential partner for the exploitation of the Company’s substantial Sheba’s Ridge project. We anticipate being in a position to commence planning construction following the completion of the bankable feasibility study towards the end of 2007. Zijin will be available to provide technical and financial assistance as required, significantly decreasing the risks associated with such a large project. We welcome Zijin and look forward to a fruitful and profitable partnership.”
Chen Jinghe, Chairman of Zijin commented: “The investment in Ridge Mining is an important step in our long-term strategic objective to increase our resources and production base overseas. It also represents a breakthrough for Zijin in the South African precious metals mining industry."
Contacts:
Conduit PR: Tel: +44 20 7429 6666 Mob: +44 79 7995 5923 Laurence Read
Ridge Mining plc: +44 20 7379 1474 Francis Johnstone, Commercial Director Donald McAlister, Finance Director
Zijin Mining Ltd: 0086-597-3933105
Leesa Peters Conduit PR 76 Cannon St London EC4N 6AE Dir: + 44 (0) 20 7429 6600 Office: + 44 (0) 20 7429 6666 Mob: ++ 44 (0) 781 215 9885 Fax: + 44 (0) 20 7429 6699
www.conduitpr.com
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