News

February 23, 2009

Aquarius Platinum's Offer For Ridge Mining Is Still A Long Way From Being A Done Deal

By Charles Wyatt

Two minuses do not make a plus, unless you multiply them. In the case of Aquarius Platinum and Ridge Mining the proposal from the former is to add the two together, and all-too recent memories of the merger of Oxiana and Zinifex immediately start to circle at the back of the brain. Owen Hegarty, the founder of Oxiana, one of Australia’s great successes in its heyday with its gold and copper operations, was seeking to widen his company’s resource base. He looked over the roofs in Melbourne and spied the tower block inhabited by Zinifex which was big in zinc. Ah, said he, the combination of the two might make a very powerful company and take the financial pressure off Oxiana as we continue to explore and develop new mines.

A merger took place even as the zinc price fell further and within a matter of weeks the merged company imploded and the remnants are now being bought by the Chinese. There is no suggestion that the same thing would happen when Aquarius merges with Ridge, but it does provide a warning that size is not everything. Also the price of platinum – the metal common to both companies – fell levels of around US$2,100 per ounce in June last year, to below US$900 per ounce by the end of the same year. The...