Vancouver — Hard work appears to be paying off for London-based Rambler Metals and Mining (RAB-V, RMM-L). The company has reported three-month operational highlights, including maiden-gold production details from its Ming gold-copper mine on Newfoundland’s Baie Verte peninsula.
Rambler plans to use gold-copper production from Ming’s 1806 and 1807 ore zones to improve cash and revenue flows, pay back creditors, and proceed with the development of the Lower Footwall zone (LFZ), which holds the real prize — a significant amount of copper reserves and resources.
According to the report 4,000 oz. of gold were processed from the 1806 zone with 3,500 oz. of gold poured and shipped for additional refining at an average price of $1,662 per oz.
Rambler’s revenues were C$2.5 million during the quarter and it sold 1,459 oz. of gold recovered during the commissioning and testing of the 1806 zone ores. The company subsequently sold 2,105 oz. of additional gold since the end of January, resulting in C$3.6 million in added revenues.
“Bringing the mine into production was really a testament to the hard work of all Rambler’s employees, and bodes well for our future success,” said company president and chief executive officer George Ogilvie, “While the company enjoys first gold pours and ramping up production we look forward to mining of higher grade ore from the 1807 zone while firing up our copper production capacities.”
The first six years of Ming’s life will involve underground mining of massive sulphides with reserves of 1.5 million tonnes grading 1.62% copper, 2.4 grams gold per tonne, and 11 grams silver, equaling 24,252 tonnes contained copper, 115,550 oz. contained gold, and 525,000 oz. contained silver.
Rambler has been diverse in its choice of financing methods.
The company has pledged 25% of the initial 175,000 oz. of gold produced to Sandstorm Gold (SSL-T) under a gold-stream agreement worth US$20 million that also entitles Sandstorm to 12% of production thereafter.
In January Rambler drew down a second C$2.5-million installment from a C$10-million credit facility issued by Sprott Resource Lending Partnership. The company retains access to the final C$2.5 million portion of the facility until August 2012.
In early March Rambler accepted an offer from Tinma International — a subsidiary of a China-based private company — for C$4.9 million in cash in exchange for 10.4 million shares priced at 44¢. The Chinese company now owns 10% of Rambler’s shares and has a first right of refusal in any subsequent equity-finance deals that could see its stake increase to 20%.
“This new alliance has been specifically formed to provide us with increased financial strength,” Ogilvie said, “With Tinma’s international connections and Rambler’s proven ability in developing its mineral properties, there is now new potential to expand, both at the existing Ming copper-gold mine and regionally.”
Tinma is reportedly involved in the nonferrous metals trading and processing business, and is likely eyeing the long-term potential of the LFZ copper deposits.
Rambler released a preliminary feasibility study on the LFZ deposit on March 12. The study was based on the current high-grade operation at Ming — including the existing Nugget Pond milling facility — followed by a transition into a 20+ year bulk-tonnage mine.
Ming’s expansion would carry a pre-tax net present value of $231 million with an 18% internal rate of return at a 5% discount rate, assuming C$3.53 per lbs. of copper, C$1320 per oz. of gold, and C$24.16 per oz. of silver.
The project would carry an initial capital expenditure totaling $231 million, which would include a mining fleet expansion, a 3,500-tonnes-per-day copper concentrator, upgraded production hoists, as well as a backfill plant and fresh air intake-exhaust raises.
Ming’s LFZ deposit holds proven and probable reserves of 20 million tonnes grading 1.33% copper, 0.28 gram gold, and 2.17 grams silver, for 268,200 tonnes contained copper, 185,100 oz. contained gold, and 1.4 million oz. contained silver. Additional measured and indicated resources total 21 million tonnes grading 1.5% copper, 0.35 gram gold, and 2.5 grams silver for 310,000 tonnes contained copper, 232,000 oz. contained gold, and 1.7 million oz. contained silver.
The company plans to continue expanding Ming’s current capacity, moving onto the higher-grade ore materials at the 1807 zone once it has reached optimum processing levels. At that point, the company should begin to see healthy cash-flow increases as gold, copper-concentrate and silver production pick-up.
Rambler signed an off-take agreement for 85,000 tonnes of copper concentrate with Transamine Trading — a Switzerland-based non-ferrous metal trader — in early January. The copper concentrate will be sold at international market rates, and will boost revenues and provide more cash-on-hand.