Rambler adds 15 years to mine life at Ming

VANCOUVER — Rambler Metals & Mining (TSXV: RAB) is looking to upgrade its underground Ming copper-gold mine, 17 km east of the town of Baie Verte on the north-central coast Newfoundland, after positive results from a prefeasibility study have extended the mine life from six to 21 years.

Peter Mercer, vice-president and corporate secretary of Rambler, tells The Northern Miner during a phone interview that the results are a milestone for Canada’s easternmost copper-gold operation.

“This is truly a transformational year for the company,” he says. “The study really demonstrates the longevity and flexibility of the mine.”

The mine plan upgraded reserves with mineralization from the lower footwall zone and aims to nearly double production to 1,250 tonnes per day by 2018.

The revitalized operation has a $62.1-million after-tax net present value at a 5% discount rate and a 45% internal rate of return.

Mercer adds that the economics have improved since the project’s 2012 preliminary economic assessment (PEA), which called for a $231-million capex to build a mill at the Ming mine site. 

“We did the PEA as a way to gauge what the projects weaknesses were, and the one we saw was its sensitivity to capex,” Mercer says. “So this feasibility is all about optimizing infrastructure and getting full advantage of the assets we already have in place, rather than building everything from scratch.”

The company expects the upgrade to cost $66 million, with part of that used to upgrade its wholly owned Nugget Pond mill facility, 40 km east of the mine site, to handle the extra tonnes. 

Mercer says more production would compensate for the lower-grade material from the lower footwall zone, which has different mineralization than the main deposit. 

Ming is a volcanogenic massive sulphide deposit made from metal-rich fluids from ancient seafloor vents known today as “black smokers.”

Over time, the vents spewed mounds of massive sulphides that formed the high-grade core of the deposit. Mercer explains that underneath the blankets of ore is a lower-grade zone where metal-rich fluids migrated laterally through the rock and deposited stockworks of sulphides.

“We’re planning to blend material from the two zones, and are looking at pre-concentrating ore before feeding it to the mill,” he says. “There are numerous opportunities to further enhance the projects economics. The prefeasibility represents the base-case, least-risk scenario for the operation.”

Total proven and probable reserves (diluted and recovered) for the project are 8.7 million tonnes at 1.8% copper and 0.52 gram gold for a total of 348.1 million lb. copper and 145,300 oz. gold. 

The estimate assumes a long-term metal price of US$2.79 per lb. copper and US$1,100 per oz. gold, and a long-term US$/C$ exchange rate of 0.88.

“The exchange rate is important because it’s not just a cent for a cent, it’s a ratio, so it has a much bigger impact when it goes up or down,” Mercer says, adding that a number of other Canadian producers, along with Rambler, have benefitted from the strong American dollar against the loonie. 

Mercer says the operation produces enough cash flow to cover most of the capital required for expansion, though the company would benefit from a $25-million injection from debt financers.

“We’re talking strictly debt financing, because we’re certainly not looking to dilute our existing shareholders,” he says.

Rambler has traded within a 52 week range of 17¢ to 50¢, and closed at 21¢ at press time. The company has 144.2 million shares outstanding for a $30.3-million market capitalization.