Rambler Metals and Mining plc was established to invest in the base metal sector in politically stable jurisdictions. Its principal project is the Rambler copper-gold property, located on the Baie Verte Peninsula of Newfoundland and Labrador, Canada.
Rambler to receive US$2m from Sandstorm off-take
Rambler Metals and Mining (LON:RMM; CVE:RAB) is set to receive a US$2m cash boost, after Sandstorm Resources (CVE:SSL) accepted the company’s feasibility study for the Ming Mine.
The payment represents the second installment under the gold off-take deal, which was arranged in March 2010.
Sandstorm paid an initial US$5m in March, and the third payment of US$13,000,000 will be made once Rambler has secured the key permits for the Ming Mine's construction.
It is currently anticipated that the permitting will be completed during the second half of 2010.
In return for the upfront payments, Sandstorm will be entitled to 25% of the Ming mine’s first 175,000 ounces of payable gold, and 12% of all payable gold thereafter. Initially the agreement will last for 40 years and Sandstorm has the right to renew the deal for successive 10 year periods thereafter.
The Ming mine is located on Newfoundland and Labrador's Baie Verte Peninsula. Ming is Rambler’s primary focus and it was initially a copper play. However, an extensive exploration programme conducted by Rambler over recent years has increasingly identified elevated gold grades.
Last week, upon completion of the feasibility study, Rambler told investors that it had taken “another dramatic step” in transforming itself into a gold producer.
The final feasibility study of the project confirmed an initial 6-year mine life at 630 tonnes per day with an average annual production of 7.7 million lbs of copper, 11,600 ounces of gold and 42,600 ounces of silver. Production is targeted in Q2 2011.
Total production for the 6 year mine life is expected to be at 46.24 Mlbs (million pounds) of copper, 69,468 ounces of gold and 255,388 ounces of silver.
The total revenue is projected to be US$210 million with unit revenue estimated to be US$167.52 per tonne. Initial capital costs were estimated at US$25.5 million, while sustaining capital costs have been placed at US$27.9 million during the life of the mine.
Other conclusions of the study included a pre-tax operating cash flow of US$71 million, an NPV (net present value) 6% of US$14.3 million, payback time of 1.5 years and an IRR (internal rate of return) of 23.7%.
