PRICE 32.0-35.0 PENCE - 12/09/2005

http://www.ridgemining.com/pages/default.asp (The Company's website)http://www.wallstreetreporter.com/linked/RidgeMining.html (Informative interview)http://www.forexdirectory.net/zar.html



6 things to look forward to in September/October 2005 :

1. Joint Venture Agreement
2. Feasiblity News
3. Johannesburg Listing
4. Takeover...wild card though a 75 pence approach was rejected this time last year.
5. Interim Results are also due at the end of September.
6. Large buyer about

Depressed PGM Prospector Primed for a Comeback?

By Stephen Clayson
24 Aug 2005 at 06:47 PM EDT


LONDON (ResourceInvestor.com) -- Ridge Mining [AIM:RDG] aims to defy its dismal record of share price performance over the past few years by proving the viability of its South African PGM assets.

The company, formerly known as Cluff Mining, has three key projects in South Africa: Blue Ridge, Shebas Ridge and Fountain Ridge. Of these, Blue Ridge was thought some time ago to be the one that would get the company off the ground, but a feasibility study completed at the end of 2003 found it to be practically uneconomic.




Unsatisfied with this outcome, Ridge commissioned a revised study that is attempting to adumbrate a viable smaller scale operation extracting only the higher grade material with a better platinum to less valuable palladium ratio from the projects section of the UG2 reef.

This would be achieved via an underground method the company terms efficient cut, which essentially entails leaving in place, against local received wisdom, a hanging wall of lower grade PGM mineralisation while higher grade material is extracted beneath. As one would imagine, the feasibility of this hinges on the competence of the overhang, which along with other unknowns is being tested in a trial mining operation taking place now.

Full-scale mining at the Blue Ridge project would take place from a surface outcrop down to about 800 metres, after which Ridge expects costs to rise prohibitively due to the ever increasing heat encountered at depth in the area. Annual 4PGE output under the revised feasibility study would be around 114,000oz, down from 136,000oz in the original.

The improvement proffered by the efficient cut scheme to the Blue Ridge projects economics is actually fairly marginal, its main accomplishment being the reduction of capital costs from $159 million to $81 million whilst retaining most of the previously expected output. The projects estimated internal rate of return is hence raised to 15% from 10%. This may seem relatively unspectacular, but Ridge believes it is more than adequate to justify the project.

The company expects operating costs to be inline with existing profitable South African PGM operations, CEO Terence Wilkinson offering Lonmins mines as an appropriate yardstick. Escalating labour costs or an adverse move in the value of the rand could put Ridges projections in jeopardy, but despite these risks Wilkinson remains fairly sanguine about the outlook for the companys cost base.

An intriguing possibility lies in the expansion of the project using neighbouring ground owned by Lonmin. According to Wilkinson, a deal on this matter could add significantly to the quality material available to the Blue Ridge project, and hence boost its economics appreciably.

Another interesting aspect of Blue Ridge is that after the updated feasibility study is completed, then given a successful outcome, Ridge intends to bring in the Black Economic Empowerment group Imbani as a sizable stakeholder in exchange for the necessary finance to construct the project in its entirety, which Imbani in turn would receive from the South African Development Bank.

This may prove be a useful move politically, and will circumvent any difficulties that Ridge might have in raising money in London arising from its current relatively low market capitalisation, but does mean that the company will lose ownership of a substantial portion of its project.

Owing to Ridges poor regard in the market, the company does not intend to raise any equity finance in London in the near future. Instead, Ridge has arranged around $12m of bank finance to carry it through the coming year, after which it hopes to have raised its standing sufficiently to issue equity at greater value if necessary.

Ridges second project, Shebas Ridge, is probably best described as a nickel project with copper and PGM credits, and is currently at the pre-feasibility stage. Envisaged is a large scale open pit operation mining 18mt/yr to produce 600,000t/yr concentrate, which would be smelted on site. This would result in an output of 23,900t/yr nickel, 12,000t/yr copper and 380,000oz/yr 4PGE.

Such an ambitious project naturally would require sizable capital expenditure, estimated at around $690m. The plus side of this is that a large scale of operation and a combination of valuable metals means low projected cash production costs of around $1.30/lb nickel.

The Shebas Ridge project is a joint venture with Anglo Platinum, with Ridge holding a 65% interest, expandable to 87.5%. However, Wilkinson expects that the project will eventually have to be taken forward with an additional partner in order to share in the large upfront costs, Ridges slice of which given the companys current stake would be difficult for it to procure.

At first glance, the obvious solution would be for Anglo Platinum to take a much larger share of the joint venture, but Wilkinson believes that Anglo Platinum may have enough expenditure obligations already, and that therefore the base metals division of Anglo American might be a likelier partnership candidate. If not that, then a variety of other firms could also be interested.

Ridges third project, Fountain Ridge, is an early stage exploration play, and is a joint venture with a black empowerment group and sundry local parties, Ridge holding 51%. Previous drilling at the project intersected the UG2 reef, and adjacent is Anglo Platinums Elandsfontein property, which hosts a large PGM resource.

A further investigative drilling programme has been underway at Fountain Ridge since May, and Wilkinson feels that a PGM resource of 600,000oz is a possibility in the Fountain Ridge area if consolidation with neighbouring tenements were to take place.

As aforementioned, Ridges share price has for a long period traced a long decline, interspersed with various spikes. The company has clearly found it difficult to add lasting value for its shareholders, at least in the eyes of the market. However, if first the Blue Ridge and then Shebas Ridge projects get the go ahead, then the companys woes might be at an end.

If the two projects were to proceed, and assuming that PGM and base metal prices remain firm, as seems likely, then Ridge would be involved in two projects of significant worth. Such a situation could also make Ridge a tempting takeover target, perhaps for any company that might enter into a joint venture on the Shebas Ridge project.

Although South Africa is now anathema to many investors on account of its unpalatable political situation, its unpredictable currency and its labour cost issues, the possibility of gaining through an investment in Ridge meaningful exposure to two viable PGM projects merits some notice.

http://www.resourceinvestor.com/pebble.asp?relid=12363

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SueHelen,

I see that the sp has already increased this morning quite dramatically... But then again it might be one to hold in the portfolio for the lnog term

Up another 10.00% today to 45.00-46.00 pence.

Recommended at 34 pence to buy. Well done to whoever got in then.

Lol what time did you buy back in Sue ?

8 posts in 2 days back in September , then you flog out and and go quiet and come back expecting us to believe you have held for four months without opening that big gob of yours.

Dream on d*ckhead.

Yeah u missed this one as Dil whilst you were swagging away ramping HRR. Loser who hides under multiple aliases.

Bullshare - 22 Dec 2005 09:21 - 531 of 545
Suehelen; Assuming your user name in the game is SuhailM3471 you are -36% on the overall game and up 18% this month; You should be ranked in the top 250 for the month so will get a techie to see why its not showing
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She doing well compared to real life then :-)

Morning all! I think this one has been undervalued as well (and no, I'm not a ramper!). The Sheba's Ridge project, with an estimated 23,900 tonnes of nickel per year, is apparently worth a potential US$334 million in turnover (in which RDG will take an apparent 39% interest, which boils down to US$130 million/75 million turnover) and that's not counting the gold and other precious metals they also hope to find. On the basis of a quick comparison with peers such as Patagonia Gold, the market cap should surely be somewhere near 50 million right now?

Clearly I'm not the only one who thinks RDG is a worthwhile investment. Since the middle of January, Merrill Lynch Investment Managers has been the proud owner of 15% of the current issued share capital.

Anyway, today's good news is that RDG has agreed project finance of US$108m, for the smaller Blue Ridge project, with Joint Venture partner due to take an equity stake of undisclosed proportions. The Blue Ridge project is envisaged to produce 75,000 oz platinum per year (that's US 75 million Bucks!, 43 million Sterling), plus gold, palladium and rhodium in lesser quantities. Assuming RDG gets left with 40% of Blue Ridge, that could give them a turnover of around 24 million, resulting in ample cash generation while they are completing the feasibility study on Sheba's Ridge (which itself has been paid for by another joint venture).

Does anybody else have any thoughts on this?

Merrill Lynch just acquired another 500,000 shares on 3rd March - now they own 15.14%. (Actually my broker has an even higher holding/% figure, but these figures were quoted in the RNS).

Another 1.2 million shares changed hands today but still the share price doesn't advance . . . ???