Ridge clinches R1bn mine funding
Ridge exploring LionOre option
Ridge enlisting partner for $690m mine



Ridge may sell shares to Chinese firm
David McKay
Posted: Sun, 01 Oct 2006
[miningmx.com] -- RIDGE Mining, the London-listed platinum company, may sell about a fifth of its share capital to finance its portion of Blue Ridge, a platinum project in South Africas North West province. Blue Ridge is expected to produce 125,000 oz/year from 2008.


Ridge Mining requires about R120m to complete funding its 50% equity in Blue Ridge, estimated to cost R1bn to complete. Terence Wilkinson, Ridge Mining CEO, declined to comment when contacted on the weekend.

On August 30, Ridge Mining announced it had sold 50% of its Blue Ridge project to empowerment company, Imbani for about R300m. In addition, Ridge Mining secured the support of a banking consortium consisting of Investec and Standard Bank to debt finance half of the project. Ridge had already sunk about R200m in the project.

According to a market source, Ridge will sell about 16 million shares to Zijin Mining Company, to complete the financing of Blue Ridge. Zijn is a $5.2bn company that accounts for about 10% of Chinas gold output. It operates the large open pit mine Zijnshan, but is thought to be seeking exposure to platinum group metals as a means of diversification.

Ridge is also expected to confirm the issue of shares to Imbani in terms of which the empowerment company will gain access to the holding company as well as asset level investment.

Imbani has been a long-standing potential partner in the project but the going has been tough. It was originally intended to take a 70% stake in the Blue Ridge project but it's thought the improvement in the platinum price, and weakening of the rand, made a higher equity stake for Ridge more viable.

Ridge Mining has had a very frustrating past, with projected economic uncertainty, lack of funds and a strong rand exchange rate, said Mark Smith, an analyst at RBC Capital Markets in a note dated 13 March. However, Ridge has picked itself up and has come back fighting.

Shebas Ridge, another platinum prospect owned by Ridge Mining, is thought to be the company maker, however.
Free news alerts: click here to subscribeCurrently carrying an estimated capital cost of R4.5bn far in excess of Blue Ridge Shebas Ridge has projected production of 390,000 oz /year of PGMs as well as by-products copper (12,000 t/year) and nickel (23,900 t/year).

The project could also require the participation of major mining or industry participants. Anglo Platinum has a stake in the project, but Ridge Mining has the option to dilute it down to 12,5% an option that Wilkinson says remains attractive.

Its thought that Zijns investment in Blue Ridge might also be extended to Shebas Ridge.

cynic...buy on rumour sell on fact...thought you'd know that

BINGO!!!!!!!!!!!!!!!

Ridge Mining PLC
02 October 2006

Ridge Mining plc

('the Company' or 'Ridge') (AIM:RDG)

2 October 2006



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.'

yes the story was correct, but even so, sp has moved barely 10% on small volume and more importantly ........ "We anticipate being in a position to commence
planning construction following the completion of the bankable feasibility study
towards the end of 2007"....... still no hurry to dive in

Cynic, Maestro needs something to distract him from the car crash that has been LNG and any other of his online betting tips. :o)

I've been in Ridge for a number of months; unfortunately I'm down about 28% even after today's news, but see the long-term prospects as excellent. More incisive comment on the main thread.