Rambler Metals and Thundermin propose merger

Drillers in 2014 at Thundermin Resources and Rambler Metals & Mining's Little Deer copper project in Newfoundland. Credit: Thundermin ResourcesDrillers in 2014 at Thundermin Resources and Rambler Metals & Mining's Little Deer copper project in Newfoundland. Credit: Thundermin Resources

Less than two months after a prefeasibility study showed that Rambler Metals & Mining (TSXV: RAB; LSE:RMM) could extend the life of its underground Ming copper-gold mine in Newfoundland’s Baie Verte region from six to 21 years, the company has signed a letter of intent to acquire Thundermin Resources (TSX: THR; US-OTC: TUDMF) and expand its footprint on the island.

Rambler Metals already holds a 50% stake in Thundermin’s flagship copper assets Little Deer and Whalesback, and the proposed all-share deal is a logical progression for both companies, Rambler’s president and CEO Norman Williams says.

“Their share price was at less than a cent, and they were having trouble raising funds,” Williams says in an interview shortly after the proposed merger was made public. “The market we’re in now is a tough market for miners in general, and it’s even more so for junior explorers, and raising money is as tough as it has ever been. They wanted to move their assets forward … consolidation is the theme of the day, and it makes sense for us and for Thundermin’s shareholders.”

Rambler already has much of the infrastructure needed if the neighbouring past-producing deposits get back into production. Little Deer and Whalesback sit 10–15 km from Rambler’s Goodyear’s Cove port site on the Baie Verte Peninsula, where Rambler loads concentrate from its Ming mine before shipping it to customers overseas. Ore from Little Deer and Whalesback could be sent to Goodyear’s Cove and barged 63 km up the coast to Rambler’s Nugget Pond facility. (Rambler’s Ming mine is 90 km northwest of Little Deer and Whalesback.)

“That’s the key — this asset makes sense in our portfolio because we already have a base metal facility at Nugget Pond, so obviously there would be a whole lot less investment involved,” Williams says. “There’s great opportunity there. When you remove all that infrastructure cost from the mix, obviously your economics are going to make a lot more sense.” Williams notes that the asset “has a nice resource to start.”

Little Deer — the biggest draw for Rambler — has indicated resources of 1.9 million tonnes at a grade of 2.4% copper and inferred resources of 3.8 million tonnes at 2.1% copper. Whalesback has indicated resources of 797,000 tonnes at 1.7% copper and inferred resources of 443,000 tonnes at 1.6% copper.

While the Ming mine is Rambler’s focus, Williams says, the company is looking at the two assets’ potential. “They definitely need more exploration and work before we can make any kind of decision,” he says. “There is definitely a basis for further studies, but for us, it’s a longer-term view. We’ll work it, but it’s not going to be in production in the next five years.”

Williams says there could be a lot of “optionality.” For instance, Rambler could increase production at its Nugget Pond mill if it puts Little Deer and Whalesback into production at the same time as the Ming mine. Alternatively, production could start at Little Deer and Whalesback at the back-end of Ming’s mine life.

Thundermin and Rambler acquired the Little Deer property from Weyburn in June 2007. Little Deer is a volcanogenic massive sulphide deposit, 10 km north of Springdale in north-central Newfoundland. Copper mineralization was found in 1952 by Falconbridge Nickel and mined by British Newfoundland Exploration Co. (BRINEX) from 1970 to 1972. BRINEX accessed Little Deer via a 1,140-metre drift on the 244-metre level from the Whalesback mine to the north.

Green Bay Mining operated the mine between 1973 and 1974 via a 330-metre decline. Between 1998 and 2000, Mutapa Gold Corp. undertook geological mapping, surface and borehole geophysical surveys, and 6,800 metres of diamond drilling in 12 holes. Mutapa intersected copper mineralization below and west of areas that had been mined previously. Historic records say the westernmost hole returned a 10.3-metre intercept grading 3.8% copper. In 2000, Mutapa dropped the property due to low copper prices, and worked on redirecting the company to the high-tech sector.

Whalesback is open along strike to the east and west, as well as downdip and down-plunge, and Little Deer is open to depth and along strike. More resource delineation and infill drilling is in store before a prefeasibility study.

Under the proposed merger, holders of the 116.6 million issued Thundermin shares will receive 7.1 million Rambler shares valued at $0.013 per Thundermin share. If Thundermin’s shareholders approve the deal, Rambler’s current shareholders will hold 95.3% of the outstanding shares of the combined company, while current Thundermin shareholders will hold 4.7%.

John Heslop, Thundermin’s president and CEO, noted in a press release that the merger would give Thundermin shareholders “an ongoing investment in a well-managed, copper-producing company, with an expected minimum 21-year mine life” at the Ming mine, “along with further upside potential with future production” from Little Deer and Whalesback. “Thundermin believes that this merger will provide the best opportunity for Thundermin’s shareholders to participate in the long-term value and advancement of Thundermin’s assets, which we have worked diligently to advance through difficult market conditions over the past couple of years.”


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