Rambler Metals and Mining (TSX-V: RAB, AIM: RMM) reported reduced losses per share for Q2 after reducing exploration expenditure to conserve cash and now intends to further advance its aggressive exploration programme and continue to delineate near term underground resources, while focusing on the development of the Ming mine after securing an off-take agreement for the Newfoundland-based copper and gold project.
Net losses for the quarter ending 31 January 2010 increased slightly from a year earlier, by£5,208 to 338,087, and the loss per share reduced from 0.56 pence to 0.38 pence, largely due to exploration expenses of £28,745 incurred on the geological evaluation of the Corkscrew/Big Bear property and Nugget Pond Crown Pillar, as well as costs incurred in connection with the AGM (annual general meeting) and various financing opportunities.
The company conserved cash by reducing cash flows for investing activities by £0.71 million due to a reduction in exploration expenditure on the Ming mine of £0.61 million and expenditure on tangible fixed assets by £0.2 million.
Cash and cash equivalents stood at £2.94 million at the end of Q2, while working capital amounted to £2.6 million. At 18 March 2010, Rambler has GBP 5.9 million in cash and cash equivalents.
On the operational front, the company has progressed with detailed engineering and environmental work for the Ming mine, mill and port sites, which are due for completion by 30 April 2010. Back in January, the company announced that it will be investigating the resource potential within the mining lease at its recently purchased Nugget Pond facility close to Ming with an exploration target of 13,000 to 15,000 oz of gold within 50,000 to 66,000 t (tonnes) grading at 7-9 g/t (grammes per tonne) gold.
Following the end of the period, Rambler has entered into an agreement with Sandstorm Resources Ltd. (TSX-V: SSL) to sell 25% of the first 175,000 oz (ounces) of payable gold produced at Ming and 12% of all further payable gold up to 40 years for upfront payments of US$20 million.
“We are extremely pleased that we have signed this gold agreement with Sandstorm Resources for US$20 million which gives Rambler shareholders full upside exposure to 100% of the copper, silver and the majority of the gold production at the Ming mine. We believe this deal adds credibility to Rambler and reaffirms the capabilities of the operational and management team. This is an exciting period for the company as we now have the funds available to focus on bringing the Ming mine back into production during fiscal year 2011,” said president and chief executive of Rambler George Ogilvie.
By the end of Q3, Rambler expects to complete metallurgical testing on start-up ore primarily focusing on the Ming mine 1807 Zone, the feasibility study on surface engineering including mill expansion and tailings impoundment area, mine surface facilities and port Infrastructure as well as the application for the environmental licensing.
The company intends to pursue what it said was an aggressive exploration programme while continuing to delineate its near term underground resources. Rambler is also planning to start procuring long lead items of mill equipment to produce copper concentrates at the Nugget Pond facility in the near future.
The Nugget Pond gold mine began commercial production in April 1997 at a milling rate of 350 mtpd (metric tonnes per day) and was later optimized to 500 mtpd. After four years of profitable operations, production ceased in August 2001 due to depleting reserves and depressed gold prices. During operations the deposit produced a total of 168,748 ounces of gold from 487,765 tonnes of ore grading approximately 10.76 g/t.
The facility surpassed all expectations during oparations by running continuously at 98% availability with an average recovery of 95%. Since its initial start up in 1997 the mill has seen ore from three other gold deposits with almost 1.5 Mt (million tonnes) of ore processed over its life to date.
Disclosure: The author holds no positions in the company