Rambler Metals & Mining Share Discussion Threads

[king suarez] 14/9/2012 17:04

Thanks guys!

[k4r] 14/9/2012 16:29

"During the first five months of commissioning, repayments of US 5,180,936 were made from the delivery of 3089 oz gold thereby satisfying the requirement to pay a minimum of US 3.6 million cash during the first 12 months and partially meeting the requirements for the second 12 months."

It's in the MDA document, page 14

[snowydays] 14/9/2012 15:56

"Rambler has provided Sandstorm with the following completion guarantees: (i) that within 24 months of commencement of production, Rambler will have produced and sold a minimum of 24,000 ounces of payable gold or Sandstorm will have the option to require a partial refund of the upfront deposits, and (ii) that Sandstorm will receive minimum cash flows from the gold stream of $3.6 million in the first year of production, $3.6 million in the second year of production, and $3.1 million in the third year of production."

No real problem meeting those requirements. One issue is the low recovery rate from the concentrator. Fortunately recovery through the hydromet was above 90% and the initial ore fed to the concentrator had very low gold levels. As such the first 12 months (which ends about now) production will be above the 85% recovery level overall and next years payments to Sandstorm will be the minimum 25% level. However, without secondary processing of the tailings next years recovery level will probably fall below the 85% mark at which higher proportions are payable to Sandstorm.

Presumably we will get our next update with the full year results next month.

[king suarez] 14/9/2012 14:27

Snowy,

Thanks, I had read that part.

Excuse my ignorance, but is there not a minimum level of gold production that needs to be met annually to satisfy the gold loan? I understand that Rambler paid off the current financial years loan committment + some of next years with the current gold production. If correct, that should reduce the finance charge next year somewhat.

Very fortunate timing with regards QE3, or perhaps just a canny gamble by the management not to forward hedge some of the copper prodcution at lower prices!

Do you know when we can expect the next quarterly financial/production update?

Thanks,
KS

[snowydays] 14/9/2012 09:13

The finance costs are explained in the quarterly results:

" Finance costs increased in Q3/12 compared to Q2/12 due to the timing of planned production and the market price of gold increasing the interest charge on the Gold Loan liability and an increase in finance and interest charges resulting from the additional CAD$2.5 million drawn under the Group's credit facility on January 30, 2012."

The switch from gold production to (mostly) copper will clearly reduce the payments to Sandstorm significantly. I cannot see why cashflow should be $16m less than operating profits. Anyway, the recent sharp rise in the price of metals should add several million to profits if it is sustained over the year. The timing has been quite fortuitous as we are now ready to allow the first shipment of concentrate. Presumably the 90% provisional payment is subject to adjustment when Transamine actually sells the concentrate. The final price will hopefully be based on prices at that time. If so Rambler should receive an unexpected bonus when the final figures are known. Perhaps an extra 20% rather than just 10% on top of the provisional payments.

[king suarez] 13/9/2012 11:46

Profit per month of $3m would tie in with the earnings figure of $36m for 2013, so that makes sense, but obviously there appears a big downgrade in forecast free cashflow, for some reason.

I mean it wouldn't make sense to generate $30m of free cash flow between March 2012 and 2013, but only $20m between August 2012 and 2013 unless the company is forecasting to spend big on something (perhaps initial capex on upgrading the mill to 1,000 tpd?) or assumptions have changed significantly.

I don't know if you have read any of the MD&A documents from Rambler but there is reference to $2.3m of finance costs for fiscal Q3 2012. I'm guessing this mostly relates to the Sandstorm loan. This could be one reason why earnings before interest etc are higher than free cash flow - presumably these costs are being included as a finance charge, rather than incorporated in the cost of production?

[killing_time] 13/9/2012 11:03

With Thanks to ManicMiner2 on iii.

The results are out on the drilling Maritime has been doing at the Hammerdown deposit over the summer.



Rambler holds 4,500,000 shares in Maritime Resources at C$0.23 per share which = a 17% equity stake.

The share price of Maritime Resources is C$0.30 as of yesterday.
Market cap C$ 7.95 million.

[king suarez] 13/9/2012 10:03

Snowy,

I think "earnings" referred to in that article will proably be 'gross operating profits', before interest, admin and taxation charges.

You are correct that there will be significant depreciation charges that impact the P&L and these will not effect cash flow, however the capex costs themselves will come out of free cash flow, and will obviously be larger than the associated depreciation charge, so it makes sense to me that "gross earnings" will be greater than free cash flow.

I would imagine 2014 and onwards will see much higher free cash flow, once all capex requirements have been met and there are just ongoing opex costs associated with production. Earnings will still be a similar figure, however, due to a similar annual depreciation charge on the capex. Once the gold loan and credit facility are paid off, Rambler will be a saving a few million a year in interest payments also, which will enhance earnings and cashflow.

Any idea when the major study on the LFZ is due to be completed?

[snowydays] 13/9/2012 08:17

This was Ramblers prediction for Phase 2.



Going back to the Minesite article. I wonder if the reporter has become confused with the earnings and cashflow projections. It makes more sense the other way around, i.e. free cash flow of $36m and earnings of $20m. I assume that earnings means profits. For the earnings figure I would expect that there would be substantial depreciation to take into account as the capital costs in bringing the mine back to life are written off. The cashflow figure should be much larger than earnings IMHO.

[king suarez] 12/9/2012 23:08

Thanks for that. Wouldn't the bulk tonnage operation be at more than 10,000 tonnes p.a using a 3500 tpd mill v 700 tpd current?

Or is it just that the grade is so much lower that it counters the additional throughput? Probably answered my own question here! Bulk tonnage is c1.5% cu grade, I think?

[snowydays] 12/9/2012 21:43

The 10,000tonnes pa target was for phase 2, bulk mining of the LFZ. However this is from an earlier Rambler presentation. They seem to be suggesting that production from the 1807 zone would be around 7,500 tonnes copper and 25,000 oz gold pa. Much higher than current estimates for 2013. This chart is also from before it was known that the mill could handle well above its 630tpd rated capacity.

I do not understand why they are expecting such low grades particularly when in the last announcement they stated that they wereclose to mining the first stoping tonnes with grades equivalent to 8% copper and higher.

[king suarez] 12/9/2012 20:47

I think I remember George O stating that Capex was fairly high for the first 6 months or so of production, so that will be eating into cashflow initially?

Depending on the level of interest and tax those figures probably put RMM on a p/e between 2 and 3 for 2013, which is pretty cheap?

I agree that the 2013 production forecast seems a little low, especially considering I thought the mill is supposed to ramp up to 1,000 tpd in the first 12 months? Either the daily production rate is being very conservative or the grades are not as high as predicted?

I'm sure I remember hearing a target of 10,000 tonnes copper per annum somewhere, which is more in line with your expectation Snowy?

[snowydays] 12/9/2012 17:55

I find the figures quoted disappointing.

Predicted 577 equivalent tons of copper in September and 555 equivalent tons in October as the grade drops.

Why would the head grade be dropping? We were told it would improve as less LFZ ore was mixed in and headers were developed for the 1807 zone.

Forecast 2013 production of 5,500 to 6,500 tons of copper plus 11,500 to 13,500 oz of gold. Reveue of $66m, although that is based on lower prices than we have today.

Earnings of $36m but free cash flow of just $20m? I was hoping for something rather better.

I had hoped that once we were no longer blending in LFZ ore, the higher grades from the 1807 zone would mean close to 5% copper equivalent. At 725tpd ore processed that should mean closer to 1,000 tons copper equivalent each month and revenues closer to $100m over a whole year, though 2013 would be lower due to the slow start.

[snowydays] 12/9/2012 17:42

A very disappointing article on Minesite today.

[redhill] 11/9/2012 12:21

agreed snowydays.Market makers bidding for stock agressively.

[snowydays] 11/9/2012 10:04

Looks like the big buyer might be back today.

Reverse head and shoulders forming on the charts. The price of copper is playing ball and Rambler are close to developing headings allowing them to blast away at high grade areas within the 1807 zone. Looks good.

[killing_time] 05/9/2012 12:15

Yes, agree with you cfro, (on low balling).

When i was writing my post i did not see your post, i was just replying to the posts snowy put up. KT.

[cfro] 05/9/2012 12:09

Guess what i meant Killing time, was Tinma would likely block any 'low-ball' hostile bid.

[killing_time] 05/9/2012 11:20

Borrowed from the boys on iii.



" Rambler said on Tuesday it imminently expected to declare commercial production following completion of an audit of its production figures well ahead of schedule."

Do not take any notice of the mistakes in the artical like first shipment in 2013 or share price at £29.38.

Another RNS on commercial production any day now.

[killing_time] 05/9/2012 09:55

Would Tinma block a hostile bid?

Two things, first never trust anybody you do not know well, second, everybody has a price.
If Tinma were offered a double your money on there investment after only 6 months would they really turn in down. Also with 16% of the company if Tinma were to do a hostile bid how would George stop them, maybe George has already let the fox into the hen house.

A share buy-back is very interesting as you say snowy.
First this tells me that he really is trying to find ways to raise the share price which is good.
I personally would like to see some acquisitions around the Baie Verte peninsula especially while prices seem cheap. Sometimes people look at share buy-backs as a way of the company saying that we are running out of ideas but maybe we are going to throw off so much free cash flow that picking up a few shares will not be a problem.

Is anybody starting to get a bit peed off with the fact that all these analysts are getting to hear all this news and us share holders are just being fed the crumbs from the table.

Edit: great posts snowy.

[cfro] 05/9/2012 09:51

Thanks snowydays. Im so pleased we have someone like George O in charge of our co who recognizes the plight of the shareholder. That is rare to find in a miner, i can tell you !!

We certainly are vulnerable to a takeover down here on a forward pe of not much more than 1.5. So Tinmas large stake is comforting for RMM to have to block any potential hostile bid.

[snowydays] 05/9/2012 09:19

Well this is something very interesting!

With commercial production and profitability approaching, the company expects an improvement in its share price, and if greater investor interest fails to materialise it may embark on a share buyback, Ogilvie said.

Rambler's AIM-listed shares were trading at 29.38 pence (45.25 cents) at 14:47 BST, up 0.43% while the AIM all-share index fell by a similar percentage.

"If we get to the end of the year and we have cash in hand we would certainly consider a share buy-back should our share price not re-rate by then. We have instructed our corporate secretary to examine what is necessary to put such a programme in place," he said.

[snowydays] 05/9/2012 08:57

Is The Og worried about a takeover?


Rambler's Tinma deal shields it from takeover as Ming mine ramps up
September 05, 2012 - 03:29 GMT Location: London


Tinma International's strategic stake in Rambler Metals and Mining will help the company to block predatory acquisition challenges as progress at the Ming copper-gold mine in Canada makes it a potential acquisition target, president and ceo George Ogilvie told Metal Bulletin.

Rambler sold 7.1 million shares to Tinma in July for gross proceeds of C$4.13 million ($4.06 million), allowing the Chinese investment group to take its total stake in the company to 16%. Company employees own a further 12% stake and collectively Tinma and Rambler would be in a strong position to vote down any potential takeover proposals as it nears commercial production, Ogilvie said on Tuesday September 4. "[A takeover] could be attractive but certainly at this valuation we wouldn't look at selling up at this time. With Tinma holding 16% and company insiders holding 12%, in the event of a hostile takeover we would consider that a blocking stake," he said. His...