Rambler Metals & Mining Expects To Start Producing Gold, Copper And Silver This Summer
By Charles Wyatt
minesite.com
The New Year has kicked off in style for Aim-traded Rambler Metals and Mining. First it received the final construction permits for its Ming underground copper-gold-silver mine, and for its Nugget Pond concentrator 40 kilometres away. Then it announced it had submitted environmental registration for mining the crown pillar at Nugget Pond, only 150 metres from its gold hydromet facility. Provided everything falls into place from now onwards there does not seem much doubt that commercial production will start at the end of the first half of 2011. The advance from developer to producer always merits a re-rating and it will be a feather in the cap of George Ogilvie, who was appointed chief executive in March 2008, a very difficult time for the junior mining industry, after serving as chief operating officer for a couple of years. The way in which he slowed things down at that stage, but without losing all momentum, gains praise from Simon Gardener-Bond, a mining analyst at broker Ocean Equities.
Rambler acquired the rights to the 140L mining lease, which encompasses the crown pillar, through its C$3.5 million purchase of the Nugget Pond processing facility back in 2009. At the time, and at that price, Nugget Pond looked as near a perfect fit as Rambler ever could have dreamed of when it came onto the market. Although the facility was the prime reason for the deal, Rambler also acquired the mineral rights to the surrounding area, which has allowed its geologists to evaluate the historical resource potential on this past producing property which is now considered to be highly prospective and to hold significant value. The crown pillar itself is accessible from surface and is sited less than 150 metres from the primary crusher, so the project will require a low capital cost investment with quick start up and minimal operating costs.
The crown pillar contains a historical resource of 8,100 tonnes grading 7.7 grammes per tonne gold to contain 2,005 ounces, and historical information indicates that potential recovery should be around 95 per cent. A simple bit of arithmetic indicates that 2,000 ounces of gold should be produced at a low cost of, say, US$400 per ounce, given that it will be mined by open pit. Under that scenario, Rambler could make around US$2 million. That’s useful cashflow in its own right, but the processing will also help to iron out any teething problems in the plant.
Mind you, last November 2,241 tonnes of ore were received for toll treatment at Nugget Pond from the Golden Promise deposit own by Crosshair, located about 250 kilometres from the facility. It took only nine days to process, and the resulting gold confirmed the viability of the plant. The message will now have gone out to any other owners of gold deposits in the neighbourhood not sufficiently big to warrant a standalone plant of their own, that Nugget Pond is open for toll treatment contracts.
It will prove to be highly beneficial for Rambler to be able to mine the crown pillar while construction is still taking place at the Ming mine. The point that investors should not miss is that the cash flow generated will accelerate exploration all around the facility, and there is clearly plenty of potential to boost resources within this mining lease and over the entire mineralised trend. As Peter Mercer, the vice president of corporate development also points out: “The successful toll milling of Crosshair’s bulk sample confirms our belief that the Nugget Pond facility is amenable to a wide range of ore types, and will allow Rambler access to further business opportunities on the Baie Verte peninsula, with a view to it becoming the premier gold and base metal hydrometallurgical facility in the region.”
So an interesting future lies ahead of Rambler, which is now involved in construction at both the Ming mine and the Nugget Pond mill following receipt of the final construction permits for both. Receipt of these permits allows it to draw down a further C$7 million of the C$20 million gold loan negotiated with Sandstorm Resources last year. This is essentially a gold hedge in everything but name, as Sandstorm is paying this sum in stages and will be entitled to 25 per cent of the first 175,000 ounces of payable gold, and thereafter 12 per cent of all payable gold from the Ming mine for 40 years. With hindsight this looks a good deal for Sandstorm, but Rambler shareholders get all the copper and silver produced and 88 per cent of the gold. There is no bank lurking in the background and they get the benefit of accelerated production, which is expected to average 7.7 million pounds of copper, 11,600 ounces of gold and 452,600 ounces of silver per year.
Construction is proceeding on schedule, with foundation work at Nugget Pond due for completion this month and purchase of all long lead items finalised for the underground mine and the new concentrator. What’s more, an exploration programme has now restarted at Ming, with the initial aim of upgrading the 1.8 million tonnes of inferred resources. The outlook for the prices of gold, silver and copper looks bright for this year, and the inclusion of the Lower Footwall Zone in the mining plan should boost copper production above the feasibility level. Rambler is a company which more investors will come to love in 2011 as its operating mine and copper-gold concentrator will be the only ones in Newfoundland, and will offer plenty of potential in terms of further opportunities in toll treatment and possible acquisitions. |
