Aquarius Pt sells non-core assets for R755m

[miningmx.com] – AQUARIUS Platinum has bolstered its cash reserves selling non-core assets for a gross of $67m (R755m) including Blue Ridge and Sheba’s Ridge, platinum resources that once comprised the UK-listed Ridge Mining.

Aquarius Platinum bought Ridge Mining in an all-share offer in 2009 but technical and safety problems at the then R1.3bn Blue Ridge project meant the asset under-performed. It was shut in 2011.

Blue Ridge, situated near Groblersdal on the eastern limb of the Bushveld Complex
consisted of two decline shafts which at full capacity were expected to mine 120,000 tonnes a month of ore over a projected economic life of 18 years.

The project was expected to produce at a rate of 150,000 ounces a year of platinum group metals (PGM), while sister deposit, Sheba’s Ridge contained 1.4 million tonnes (mt) of nickel, 19 million ounces of PGM and 0.5mt of copper.

A 2007 study estimated that a mine could be developed at Sheba’s Ridge at a cost of $690m producing 12,000t/year copper; 24,000t/year nickel and 390,000oz/year of PGM. Ridge Mining once said in 2007 that it was considering selling a stake in the project to China’s Zijn Mining, valuing the total project at $700m.

Instead, the assets have been sold for a total of $37m, an indication of how much of the enthusiasm for platinum expansion of less than five years ago, has been replaced by hard economic reality. The buyer is the improbably named China National Arts & Crafts Corporation. Of the $37m, some $4m will be forwarded to Blue Ridge.

Conclusion of the transaction is dependent on approvals from the Chinese authorities, which can be a lengthy process. Aquarius Platinum said the outside date for deal closure had been fixed at June 30, but could be extended if required.

Aquarius Platinum has also sold prospecting rights to Kruidfontein for some $30m of which $10.8m is due to the original vendor and which can be paid in Aquarius Platinum shares, the company said.

The buyer is Sedibelo Platinum, the Pallinghurst Resources company that is expected to debut its platinum firm on the Johannesburg Stock Exchange later this year. The sale is conditional on the transfer of ownership and renewal of prospecting rights – a matter that’s in the hands of the Department of Mineral Resources.

Cash resources for Aquarius Platinum is critical. Analysts have said the company has to start generating cash as it seeks a way of refinancing some $270m in convertible debt which is due in the 2015 calendar year.

The company’s cash position improved to $90.1m in the September quarter from $77.8m in the previous June quarter. The company recently turned in another credible operating performance for the December quarter, producing some 84,528 ounces of attributable platinum representing a 7% increase over the corresponding quarter in the previous financial year.