Rambler Metals & Mining Share Discussion Threads

[snowydays] 18/6/2012 08:48

"Subsequent to start-up on June 4, 1012 the Group began blending higher grade ore from the 1807 zone bringing the run of mine head grade to 1.7 % copper with 0.56 g/t gold. Head grade will continue to increase as more 1807 zone material is blended further displacing LFZ ores. First revenues from copper production are anticipated in June 2012."

That is reasonably good news.

Is anyone here going to the EGM? I would like to go but my shares are all in nominee accounts.

[johnrxx99] 17/6/2012 05:41

It is unlikely anyone is rushing anywhere into AIM stocks pending Sunday's outcome.

[count chris] 15/6/2012 12:45

It's not so much a tip as an update to a currently tipped stock but things start looking bad when he can't come up with any positive news or changes to hold / sell so it's steady as she goes for RHPS subscribers I think.

[snowydays] 15/6/2012 11:13

The RHPS subscribers don't seem to be running out to buy Rambler shares this morning in the wake of that tip. Thanks for posting that though Count. A few mentions like that in tipsheets or newspapers is probably what we need to draw attention to this share.

It is quite frustrating to see the shareprice stubbornly refusing to respond to good news.

[count chris] 14/6/2012 21:55

FYI from tonights RHPS update

RAMBLER METALS AND MINING (RMM): In the first five months of production from its Ming Mine in Newfoundland Rambler has produced and sold 14,500oz of gold generating revenues of over C$24M (£15m). The operating cash cost per ounce was $900-$1000, quite high but still sufficient to permit a good profit, and Rambler has been able to repay a $7.5m loan to Sandstorm Gold. In future Rambler will be producing copper as well as gold from Ming. BUY UP TO 40p (Current Price: 33.38p)

[snowydays] 14/6/2012 09:29

"
Fellow gold company Rambler Metals & Mining (LON:RMM) was rated a 'buy' by Seymour Pierce today.

The broker is urging investors to buy now ahead of what is likely to be a share price jump.

The Canadian firm produced 14,500 ounces of gold in the first five months of production from the 1806 zone at its Ming mine, while revenue was over £15 million.

"We believe that, despite the general market malaise, the stock's significant discount to its intrinsic value is unlikely to last as the company continues to beat expectations amid its ramp up of copper production," said Seymour Pierce analyst Matthew McDonald.

His target price of 62 pence is almost double the current market price of 34 pence, up 2 per cent today."



By now Rambler must have worked its way through most of the remaining 12,000 tons of ore from the LFZ which were left at 30th May. Hopefully just days away from processing the profitable high grade ore and making some big money. Third quarter results due soon, perhaps next week. Hopefully an update with results or sooner.

[chipperfrd] 13/6/2012 09:24

jgraggaber,

No, not 'standard' for the industry at all. The Sandstorm deal is an example of the financial innovation that we now see in various forms since the GFC in 2008. With banks in such a poor state it has become very difficult for developers to raise finance in the more conventional way via bank loans so it has frequently been left to off-takers, royalty companies, private equity, etc, to plug the gap. We should, perhaps, be thankful that the mine start-up does not have the sort of onerous hedge terms that might well have been part of a bank loan prior to the GFC.

I agree with snowydays that Sandstorm took quite a risk with their $20m advance as they were both betting on Rambler and the gold price. They could just have easily have bought bullion in 2010 and eliminated the execution risk of Rambler's prospective operation.

Given the net present value of future cash returns it may well be very many years before they see a positive return on their cash in real terms. So I believe they should be applauded for making such a substantial commitment to the Ming start-up.

The inclusion of a gold recovery factor in their annual return from Rambler is interesting as it provides an incentive to Rambler to maximise gold recovery - ie concentrator tailings re-treatment through the hydromet plant.

As far as I can see the agreement only relates to the Ming mine. So if there is ultimately a new concentrator built at the Ming site and Nugget Pond becomes free to toll-process ore from out-lying deposits, those potential gold revenues would appear to be outside the terms of the agreement.
Chip

[snowydays] 12/6/2012 22:47

I think Sandstorm gave us a very fair deal. Even today Ramblers estimated gold reserve is only 115,549 oz. Sandstorm had to consider that Rambler might not be able to mine all of that and then factor in an 85% recovery rate. Sandstorm's 25 % of the gold could have just been 20,000 oz or so. Gold prices were lower when the agreement was reached and Sandstorm had to consider that the gold price could have fallen. There was the further risk that Rambler might not deliver and Sandstorm could have lost their money. Even now Sandstorm are likely to get the minimum payments most years. With Rambler concentrating on copper concentrate production it seems unlikely we will hit the 15,000oz gold mark most years.

[king suarez] 12/6/2012 21:51

Thanks Chip,

A great deal for Sandstorm!

[jgraggaber] 12/6/2012 19:05

Dear Chipperfrd,
Thanks for that info and forgive my ignorance.
Could you elaborate on these terms? Are they standard for the industry?
In the end it is all about net profits after financing costs etc and there are a few creditors to be paid, Sandstorm, Sprott, others? They also received fees and shares. Do you regard the agreements made on favourable terms for RMM?
In short does the larger share of profit from the gold mine just go to Sandstorm, Sprott?

[chipperfrd] 12/6/2012 14:50

KS,

The agreement calls for 32% of payable gold in first year then 25% x (85%/Rcy%) for subsequent years until production has reached 175koz of payable gold.

So 32% of 14,500oz is 4,640oz - which looks about right for $7.5m (depending on spot PoG).

If Recoveries work out at c. 80% for gold then 25% x 85%/80% = 26.6% for future years.

If payable gold in any year is less than 15,000 oz then Sandstorm will get not less than 25% of payable gold.

After Ming production of payable gold has reached 175koz the percentage will drop to c. 12.8% depending on gold recovery percentage. This will continue for 40 years and will then be renewable at the option of Sandstorm.
Chip

[king suarez] 12/6/2012 14:14

Excuse my ignorance, but is there any alternative 'payback method' for the Sandstorm agreement? i.e can Rambler give them X amount of cash over a certain time period instead of the % of gold sales?

From memory I think Rambler had agreed to give them something like 25% of the first 175k oz of gold production? which is about $70m at $1,600 an oz.

Obviously that cuts into potential profit from the gold production somewhat, but if the agreement is set in stone then surely it's a good thing to have 'paid back' a chunk already?

Also - why did we pay them $7.5m instead of $6m?

[snowydays] 12/6/2012 08:55

Hmm, C$24m in revenues. Sandstorm was entitled to 25% or $6m but we actually paid them $7.5m. With cash costs of between $900 and $1000 per oz operating profits were about $10m. But with $7.5m going to Sandstorm this was not really a very lucrative exercise.

It would have been nice to have received an update on copper production.

[fangorn2] 12/6/2012 07:45

Rambler Produces 14,500 Ounces of Gold with Revenues in Excess of C$24M

[snowydays] 11/6/2012 09:23

"He stated the company is planning a significant exploration program near the mining site in the coming months."

Let's hope they expand the 1807 zone reserves. That's where the money lies. The fall in copper prices means that the pipedream of mining the LFZ should be put on the back burner for now.

The 1807 zone which has so far been explored is a mineralized area about 500m long (slanting downwards at an angle of 30 degrees) between 4m and 15m high and up to 80m wide. Looking at the planned drilling programme below it seems that Rambler believes that the zone probably extends significantly down plunge. As a very rough rule of thumb, every meter in length that the mineralization extends for will add a days mining. If the size of the zone is double that which has been mapped so far that could be worth an extra $100m to Rambler and should put a rocket under the shareprice.

[k4r] 08/6/2012 12:24

The big bucks article - direct:

[rrr] 08/6/2012 12:22

Thanks 344654. Encouraging!
rrr

[king suarez] 07/6/2012 18:45

Not the only mining share putting out good news and not seeing the share price rising. Whole junior mining market sentiment remains low....for now.

[cfro] 07/6/2012 12:14

Snowydays, agreed RMM have done everthing asked of them and delivered on all fronts AND infact achieved above expectations. Any shareholder cant ask for more imo.

[ned] 07/6/2012 11:57

snowydays

Fear not. Cash sales are on the horizon.

ned

[ned] 07/6/2012 11:57

snowydays

Fear not. Cash sales are on the horizon.

ned

edit
That's what I was trying to say - repeat cash sales of concentrate.
Should concentrate a few Investors minds

[snowydays] 07/6/2012 11:25

Pity George Ogilvie. He must be wondering what he has to do to get the shareprice up. Short of a takeover it doesn't seem that any announcement by Rambler will help the shareprice.

Perhaps we just have to wait for a few tipsheets or newspapers to notice.