Ridge Mining (AIM:RDG) is expecting to produce first concentrate at its Blue Ridge project at the end of February and to reach full production capacity of 149 000 6PGE by the middle of 2009. However, the company has put its large nickel and PGM project, Sheba's Ridge, on hold while the outlook for commodities is still bleak.Chief executive officer Terence Wilkinson said today the company was not unhappy about bringing the Blue Ridge mine into production at current PGM prices; these prices are still stronger than the prices assumed in the feasibility study. The company believes the platinum price will recover to around $1200/ounce in the short-to medium-term, as the number of platinum shafts that were not profitable at current prices brought pressure to bear.He said shareholders generally understood that the Sheba's Ridge project could not go ahead while the whole scenario facing the mining industry is very gray. The project's bankable feasibility study was completed last year, but Ridge could only take the project forward once the outlook for commodities improved and the time of this recovery became clear.The Sheba's Ridge project comprises of a large, open pit mine and processing plant producing a concentrate containing nickel, platinum group metals and copper. Following its feasibility study the company said the project would produce 23 000t of nickel, 11 000t of copper and 352 000 ounces of PGE. Ridge had been in discussions with the IDC, Impala and ARM regarding the construction of an independent smelter complex at Sheba's Ridge that would further process the 600 000t of concentrate the mine would produce each year.Wilkinson said the major issue for the company this year is to bring the Blue Ridge concentrate plant on stream as planned. The company has built a stockpile of 250 000t on the surface and the first ore will be processed in the middle of February.Blue Ridge consists of two decline shafts that at full capacity will extract 120 000 tonnes of ore a month over a projected mine life of 18 years.Wilkinson said the next issue for the company was to increase production at Blue Ridge from the orebody that continued on the adjacent Millennium property the company bought last year. The expansion would give Ridge Mining tighter control of costs as the mine infrastructure was built and the mill was already capable of handling 2.4mt a year.The mill is currently processing 1.5mt a year, so an expansion to 2.4mt a year is fairly significant, said Wilkinson. He said the company was in the process of evaluating the value the expansion would add.The chief executive said the company was still planning a secondary listing on the JSE, but when a company goes to market like that it wants to raise money at the same time. Wilkinson said the company was fully-funded at the moment and could cash in its hedge of 20% of Blue Ridge's platinum palladium and rhodium production over the next three years if it needed funds.The company was continuing with the optimisation of the Sheba's Ridge project to attain higher production and lower costs here.
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