Aquarius Platinum proposes to make an all-share bid worth some £64 million for fellow platinum group metals play Ridge Mining.
Aquarius Platinum proposes to make an all-share bid worth some £64 million for fellow platinum group metals play Ridge Mining.
Fully listed Aquarius, which produces platinum group metals (PGMs) in South Africa’s Bushveld and Great Dyke in Zimbabwe, has signed a ‘non-binding’ letter of intent with AIM-quoted Ridge, now poised to go into production at Blue Ridge in the Bushveld.
Subject to due diligence and a recommendation from Ridge’s board, Aquarius will offer one of its own shares for every 2.75 Ridge shares held, which would represent a 17 per cent premium over Ridge’s current share price of 57p.
Aquarius, steered by chief executive officer Stuart Murray, expects Blue Ridge to produce 75,000 oz of PGMs this year, half attributable to Ridge Mining, with 125,000 oz on the cards for 2011. Longer term, Ridge Mining’s Sheba’s Ridge project could be more significant.
Murray and his colleagues reckon buying Ridge would increase Aquarius’s proven and probable reserves 61 per cent to 140 million oz of PGMs and augment the company’s measured, indicated and inferred resources by 12.5 per cent to 119.9 million oz. Aquarius, which says it is pursuing a range of debt and equity financing alternatives for another Bushveld project, reopening the Everest mine, argues that the merged company’s enlarged resource base would help further exploration and growth, notably at Sheba’s Ridge.
Ridge’s CEO, Terence Wilkinson, suggests the proposed combination will enable Ridge shareholders to “retain the upside potential” of its projects, while “reducing the risk”.
