Projects - Sheba's Ridge

SHEBA'S RIDGE SUMMARY

Sulphide Mineral Resource containing:

• 1.4 million tonnes nickel
• 19 million ounces 3PGE
• 0.5 million tonnes copper

Pre-feasibility study completed:

• mine processing 18 million tonnes ore per annum
• production of 24,000 tonnes nickel and 390,000 ounces PGE per annum
• operating cost of US$1.30 /lb Ni (net of by products)

Feasibility study underway - due to be completed end 2007

LOCATION AND LICENCE

The core area of the Sheba’s Ridge project is on the farm Loskop Suid, some 20 kilometres south of the town of Groblersdal and is owned jointly between Ridge and Anglo Platinum, on the basis of a joint venture agreement signed in February 2003. Ridge Mining holds a 65% interest in the joint venture and Anglo Platinum the remaining 35%. Ridge has also agreed to sell to the Industrial Development Corporation of South Africa (IDC) a 26% interest in the JV in return for funding the Rand 60 million required to complete a feasibility study on the project.

Following the completion of the bankable feasibility study, Ridge Mining’s interest in the joint venture can acquire a further 22.5% of the project from Anglo Platinum on payment of a further US$12.5 million. On exercise of this option the JV partners interests would be Ridge 61.5%, IDC 26% and Anglo Platinum 12.5%.

The project is held under "new order" prospecting permit which was received in January 2006.

EXPLORATION AND RESOURCES

Ridge Mining commenced exploration of the Sheba’s Ridge Project in April 2001. The Phase I programme identified three distinct units of mineralisation: a layer similar to the UG2 termed the "Platchro layer"; an upper mineralised pyroxenite (UMP) layer analogous to the Merensky Reef; and a wide sulphide zone similar to the platreef.

Discontinuity of the UMP and Platchro layers led to the Company concentrating its Phase II exploration programme on the bulk sulphide mineralisation.

The Phase II exploration programme commenced in July 2002 and included 126 diamond boreholes of which 104 boreholes (totalling 32,600m) were drilled on a 100m grid along an arc 3,5km in length. A fourth phase of drilling 45 holes in 2004 investigated the oxide zone together with some exploration of the extensions to the mineralization. The resource identified lies within a mineralised sulphide layer approximately 80m thick which contains a richer mineralized continuous unit of approximately 30 metres thick. The mineral resource has been modeled to 450m below surface and excludes overburden and weathered material to a depth of 40m from surface. The mineral resource set out below was prepared in accordance with the JORC code and audited by Snowden Mining Industry Consultants.

The above mineral resource contains 19 million ounces of 3PGE, 1.4 million tonnes of nickel and 500,000 tonnes of copper. Based on forecast long term prices for the various metals, approximately 63 per cent. of the value of the ore is represented by nickel, 30 per cent. PGE, 5 per cent. copper and 2 per cent gold.

PRE-FEASIBILITY STUDY AND ORE RESERVES

A pre-feasibility study into the economic viability of the Sheba’s Ridge project was completed in March 2005. This study examined the project in considerable detail including: environmental and social impact studies; geology; mineral resource and ore reserve estimation; mine planning; engineering geology; mining equipment and method; waste storage infrastructure; experimental metallurgy; planning of the concentrator; smelter; converters and acid plant; further treatment of matte and a detailed financial model.

The study envisages an open pit approximately three kilometers long, one kilometer wide and 400 metres deep. Ore will be trucked using 250 tonne trolley assist trucks which will derive the majority of their power from an overhead electricity line. 1.5 million tonnes of ore per month will be delivered to a concentrator plant consisting of three separate streams each capable of treating 500,000 tonnes per month. 50,000 tonnes of concentrate will be produced and smelted in two 35 MVA 6-in-line furnaces and then converted to produce a white matte. There will be sufficient capacity in these smelting facilities to toll treat additional feed from third parties. The white matte will be shipped to third party refineries and discussions have commenced with a number of local and international refiners for its treatment. Certain of these discussions have led to expressions of interest in a closer participation in the project which will be followed up during the feasibility stage.

FORECAST PRODUCTION

An 18 year mine life has been formulated with average annual production as follows:

PROJECT ECONOMICS

The project economics were run using the following average metal prices:

Metal	Metal Price
Nickel	US$5.00 /lb
Copper	US$0.95 /lb
Platinum	US$750/oz
Palladium	US$250/oz
Rhodium	US$1,200/oz
Gold	US$420/oz

Economic Indicators
Capital cost (incl working capital)	US$691 million
Cash operating cost /lb Nickel;	US$1.30
NPV @ 5% (real)	US$549 million
IRR (real)	15.8%
Annual Free Cash Flow	US$180 million
First production	24 months
Life of Mine	18 years

FEASIBILITY STUDY

The Company has commenced a full feasibility study to further define the project. This work will include detailed metallurgical sampling and pilot plant testwork, detailed mine design and scheduling, the completion of environmental and hydrological studies and detailed capital and operating cost estimates. The feasibility study is scheduled for completion around the end of 2007.