Blue Ridge PGE Project, South Africa

Ridge Mining's Blue Ridge project is situated on the Blaauwbank farm, about 30km south-east of Groblersdal, on the eastern limb of the Bushveld Igneous Complex (BIC), South Africa.

Ridge Mining started exploration work on the project in 2001 and completed a feasibility study at the end of 2005. Mine development, estimated to cost $170m, began in January 2007.

The project is a 50:50 joint venture between Ridge Mining and BEE partner Imbani, which had invested more than $100m of equity by December 2008. In December 2007, project finance agreements were signed with a consortium of banks consisting of the Development Bank of Southern Africa, the Industrial Development Corporation of South Africa, Standard Bank and Investec Bank for R715m, giving full finance through to first production, which is set for the end of 2008.

The cash operating cost assumption for Blue Ridge is $660/oz to produce platinum, palladium, rhodium and gold, giving an expected payback period of five years.

Geology

The eastern limb of the BIC, like the rest of the complex, consists of distinct rock strata, including three PGE-bearing layers known as reefs, with one being the UG2 chromitite reef.

The PGEs in the UG2 chromitite occur primarily in discrete mineral phases, varying from sulphide assemblages (predominantly cooperite, braggite, malanite and laurite) to those consisting of a significant component of alloys (such as Pt-Fe alloy) or various telluride, bismuthinide, bismuthotelluride, arsenide and sulpharsenide phases.

Resources

Total Measured, Indicated and Inferred resources are put at 89.9Mt, which includes 38.7Mt of Indicated resources from the neighbouring Millennium area, acquired by Ridge in March 2008, giving a contained 4PGE figure of 9.2Moz at an average grade of 3.2g/t. Total Proved and Probable reserves are nearly 22Mt to give a contained 4PGE figure of nearly 2.3Moz at 3.3g/t.

Production

The mine development is based on two decline shafts; a 700m-long belt decline, which will be used for transporting ore, and an 850m-long truck decline. During 2008 work focused on opening up production levels and faces in readiness for mining to begin in earnest. The plan is to mine only the higher grade portion of the reef, using a method called "Efficient Cut".

Before the plant was commissioned, Ridge Mining stockpiled more than 200,000t of ore – about two months’ worth of throughput for the plant in full production – allowing enough ore to be processed through the concentrator plant while the underground workings continue the ramp-up to full capacity, which is planned for the middle of 2009.

Annually the mine is forecast to produce about 75,000oz of platinum, 35,000oz of palladium, 22,000oz of ruthenium, 13,000oz of rhodium, 2,500oz of iridium and 1,500oz of gold over its initial 18-year life.

Processing

The ore will be processed using crushing, milling and flotation, then milling and flotation again to produce a concentrate. The ore will be fed through a primary ball mill and into primary roughers and cleaners, from where some of the feed will go to a care thickener and the rest to a secondary ball mill and roughers and cleaners, then on to tails thickeners. The concentrator plant is next to the entrance to the main decline shaft, which has a conveyor belt to bring the ore to the surface. Processing testwork show recoveries into concentrate of 82%-86%.

Once the mine has achieved steady-state production, Ridge Mining plans to boost its performance by re-treating the tailings and processing ore from Millennium, which it acquired from Lonmin in March 2008 for an undisclosed amount. Millennium has raised the original resources at Blue Ridge by more than 70% and allows the company to mine at a higher rate because it gives a greater strike length. An offtake agreement has been signed with Impala Refining Services for all the production from the mine.

Water will come from a combination of boreholes and the nearby Loskop Dam.

For electrical power, Ridge Mining signed up with state utility Eskom before the moratorium on new supply contracts. The first power line, which will supply about 70% of the mine’s requirements of 17MVA at full production, was installed in November 2008, with the rest due in 2009. To cater for any shortfall in the interim and for any unforeseen outages, however, Ridge Mining has back-up diesel generators that can provide all the mine’s power, albeit at higher cost.

The process plant, which will be operated by Minopex, was built by Bateman Engineering; Murray & Roberts Cementation are responsible for the underground mine development.