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Ridge seeks land from Lonmin
Allan Seccombe
Posted: Wed, 25 Oct 2006

[miningmx.com] -- RIDGE MINING is talking to Lonmin to acquire a portion of the Millennium property to extend the life of it its nearby Blue Ridge prospect, which will come into production in mid-2008, Ridge CEO Terence Wilkinson said on Wednesday.

The two companies have been talking for a while about AIM-traded Ridge acquiring the land neighbouring its Blue Ridge project on the southern portion of the Eastern Limb of the Bushveld Igneous Complex.

“It would be a nice-to-have from our point of view. It wouldn’t really enable us to increase production but it would certainly add to the life of mine,” Wilkinson told Miningmx in an interview.

“I would hope we could bring this discussion to a head quite soon,” the former CEO of Lonmin said.
bring this discussion to a head quite soon
"The way that area is fragmented at the moment there is perhaps another way of putting it together to make it more attractive to everybody concerned," said Lonmin's vice president of investor relations Alex Shorland-Ball, who declined further comment.

Blue Ridge will not go deeper than 700 metres because of the costs involved at its lower grade ore body. It could access the Millennium property from its underground workings. Decline work will start in earnest at Blue Ridge in January and two of the three portals have already been excavated.

“Getting Millennium will enable us to stay shallower for longer. It will effectively increase our current strike length of 3.6km,” he said. “On its own Millennium would never see the light of day. It’s not a stand-alone deposit, so it would make sense to utilise it.”

Lonmin acquired the Millennium Project area with its takeover of Southern Era. The portion of Millennium south of a substantial fault is of interest to Ridge.

The Blue Ridge project, which will produce 125,000 oz/year of platinum group metals in concentrate to be toll treated by Impala Platinum, will cost $165m. Standard Bank, Investec and the Industrial Development Corporation will provide $98m of that. The debt is project financed.

Ridge’s empowerment partner Imbani Platinum, which holds 50% of Blue Ridge, will contribute $48m and Ridge the remainder.

An application to convert Blue Ridge's old-order mining right to a new-order right will be submitted at the end of this year or early next. The minerals department reckons it will take a year to issue such a conversion.

CONSOLIDATION?

Another project, but one which has a much lower priority for Ridge, is the Fountain Ridge exploration area, which is contiguous to the Eland Platinum opencast project on the southern reaches of the Western Limb.

“Consolidation could make a lot of sense but we need to know what we’ve got there first,” he said, adding there were many months of exploratory drilling still to be done.

The second project in terms of priority is a planned opencast mine at the Sheba’s Ridge, which lies just west of Blue Ridge. It will be predominantly a nickel mine, with by-products of copper and platinum group metals.

The opencast mine is forecast to produce 600,000 tonnes/year of base metal concentrate or 24,000 tonnes/year of nickel metal, 12,000 tonnes of copper and 400,000 oz of platinum group elements.

“Anglo Platinum (which has 11% of the project) has an offtake commitment, but it will be interesting to see whether they are very interested in taking 600,000 tonnes of base metals concentrate. It’s highly unlikely that would feature on their horizon,” Wilkinson said.

Ridge is therefore considering building a $300m smelter at Sheba. It might add a base metal refinery in the future, but at the moment the planning foresees production of a white matte to sell to either local or foreign base metal and precious metals refineries.

A recently unveiled second draft of a Royalty Bill proposes a lower charge if metals are beneficiated, or have value added to them in South Africa, something Ridge will bear in mind when it looks for buyers of its matte.
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A bankable feasibility study will be completed at Sheba by December 2007, with production starting 18 to 24 months later.

An idea to share the cost and risk of building a smelting and refining complex suggested by Wilkinson is based on the concept of the world’s single largest coal export terminal, the Richards Bay Coal Terminal in South Africa, where a group of companies hold an equity share in the facility.

Ridge is keeping a close watch on work done on an independent smelter and refinery that can handle ore with high chromitite levels by state minerals research body Mintek and Australia’s Atomaer subsidiary Independence Platinum.

“It’s highly unlikely the technology will be amenable to what we’re looking at, but we have an absolutely open mind about it,” Wilkinson said.

“An independent smelter on the Eastern Limb is overdue and will come about one way or the other. We would be very nicely placed for smelter at Sheba’s Ridge to provide a base load for a much larger smelter that could handle a lot of the independents coming on stream in due course.”