Nearly seven years after Rambler Metals and Mining (RAB-V, RMM-L) took control of the past-producing Ming copper-gold mine on Newfoundland Baie Verte peninsula, the company has poured its first gold doré bar and shipped it for further refining.
Following the start of underground mining and milling operations on Nov. 28, Rambler has been processing ore from Ming at an average throughput rate of 525 tonnes per day, with the help of its Nugget Pond mill 40 km away.
It bought the mill two years ago from Crew Gold, and has since adapted it to process base-metal sulphides and gold from Ming.
After reaching commercial production, Rambler plans to produce an average of 7.7 million lbs. copper, 11,600 oz. gold and 42,600 oz. silver each year over an initial six-year mine life.
“Having the Ming mine in production is a milestone for the company, while we will see first revenues from our gold sales in early 2012,” George Ogilvie, Rambler’s president and CEO, stated in a press release about the first gold pour. “These revenues should allow the company to strengthen its treasury position over the coming months.”
With the mine now up and running, Rambler is getting positioned to begin paying back its lenders. The company has $3.4 million in its treasury and has just been approved to draw down the final $5-million tranche of a $10-million loan from Sprott Resource Lending Partnership. The loan bears interest at 9.25% per year compounded monthly until maturity in early 2013, and includes issuing up to 2.75 million bonus shares.
Rambler also received $20 million from Sandstorm Gold (SSL-V) under a March 2010 agreement. In return, Sandstorm is entitled to 25% of the first 175,000 oz. gold produced from Ming, and 12% of all gold production thereafter.
In all, Ming cost Rambler $30 million to put back into production. The mine last operated in the eighties, with a brief two-year stint in the mid-nineties.
An August 2010 feasibility study projects $210 million in total revenue from the mine, with a $71-million pre-tax operating cash flow. Revenue from the mine based on trailing historical metals prices is projected at $167.52 per tonne, while cash costs from operation are forecast at $110.89 per tonne. Capital payback is expected to take 1.5 years.
Rambler also plans to spend $1.4 million on drilling over the next two years to increase the mine life through exploration and infill drilling, extending the known high-grade orebodies along plunge.
Drill results released on Dec. 15 show mineralization at the gold-rich 1806 zone extends farther up and down-plunge than previously modelled, including intersections of 26 metres at 8.88 grams gold per tonne, and 32 metres at 6.84 grams gold per tonne.
Rambler’s mine plan involves mining and processing ore from the 1806 zone – which has an average head grade of 4.10 grams gold per tonne – before moving on to more copper-rich ore from the Lower Footwall area.
Construction of the copper concentrator at the Nugget Pond mill has just been completed, with the plant ready for first ore testing shortly.
Following further testing and refinement, Rambler will switch over to ore from its higher-base-metal grade 1807 zone, which has a National Instrument 43-101-compliant resource of 432,000 tonnes averaging 3.86% copper, 1.75 grams gold and 7.19 grams silver.
The company has 124.4 million shares outstanding and last traded at 42¢ on Dec. 15. It has a 52-week range of 35¢-85¢.
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