Rambler Metals & Mining PLC

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On the first of the month, Ramblers Metals & Mining PLC announced that it intended to use the net proceeds realized from a private placement to provide additional working capital for its principle project in Newfoundland—bringing the company’s Ming copper-gold mine one step closer to production.  The funds will help mitigate any risk should there be delays in environmental permitting for the team at Rambler, who have a firm belief in their prospects in the politically-friendly region of Newfoundland, Canada. CEO George Ogilvie says that Rambler is in Newfoundland because “socio-economically, it’s a very good place to do business and there is a lot of infrastructure already in place.”

Origins and prospects

Rambler was originally established to invest in the base metal sector in politically stable jurisdictions, hence its project’s location on the Baie Verte Peninsula of Newfoundland and Labrador. In mining-friendly Canada, this particular area of Newfoundland has a history and culture of gold, base metals and industrial minerals mining. Baie Verte offers several mining and exploration service providers, deep water loading, hotels, schools, shopping, medical facilities and recreational facilities. Rambler’s property contains the former producing Ming and Ming West Cu-Au mines, Ming Mine having last been in operation in 1982. At the time, it produced about 2.1 million tons of ore (according to the company) grading 3.5 per cent Cu and 2.5 g/t Au over 10 years. Ming West produced 271,000 tons grading 4.0 per cent Cu and 5.8 g/t Au, between 1995 and 1996. However, mining was halted when operations reached a neighbouring property boundary.

Things are most certainly on track now at Ming, and Rambler’s other property—Big Bear, which is also in Baie Verte—and is undergoing exploration as well. Rambler has an option agreement with Seaside Realty Ltd (Seaside) to earn up to a 50 per cent undivided interest in the Big Bear Property, and Rambler has responsibility for all project management of Big Bear for two years. For this project, Rambler is responsible for all geologic compilation and exploration management while Seaside is responsible for all diamond drilling related costs. The Big Bear project, for Rambler, is “really a grassroots exploration project,” according to Ogilvie, and he is excited about the prospects of Big Bear and the Corkscrew gold zones in Baie Verte.

“We entered into a partnership with a current lease holder whereby we supply them with our technical ability and management ties and they supply all drilling machines and loose costs, accordingly. It hasn’t cost us nearly anything,” he explains. “Over the next couple of years, as we drill onto that property, Rambler has the ability to acquire 50 per cent of that project.”

“I think the key thing for me,” Ogilvie continues, “is that [Big Bear and] Corkscrew really show the company strategy we expect for other projects. The fact that we have a working permitted mill gives the company a huge strategic opportunity to leverage on grassroots projects around the Peninsula.”  

Prudent management

“We’ve got a well-seasoned board of directors who have been very successful in these types of ventures,” Ogilvie says of his team, adding that the company also boasts “an experienced group of managers on the ground, who over the years have delivered on what we’ve promised we’re going to do.” Having a strong management team has leveraged the company’s credibility and enabled them to move forward.

Of their recent ability to raise financing, Ogilvie says, “I think it speaks volumes to the credibility to Rambler’s project. We’re a small, junior cap company and yet, at the same time, we’re able to raise significant funds during a difficult financial period.”

Without question, Rambler has been able to do what many other companies have not—raise financing and continue exploration in a time where other explorers have simply struggled to stay afloat. However, Ogilvie says, that development in the last couple of years has not been without its challenges.

Ogilvie explained that measures had to be taken to preserve working capital through the financial crisis—and unfortunately, that meant laying off staff.  “Early in 2009, we saw the extent of the financial crisis. In order to preserve working capital, we shut down the underground exploration drills and laid off about 50 per cent of workforce. At that time, we had about 41 people on the payroll, but we ended up letting out 18 and that was purely just to preserve working capital—we didn’t know when the market would come back and how long it would be before we could raise the funds again,” he reasons. 

But Rambler has always made prudent decisions for the future of the company, and Ogilvie has no regrets. “Looking back in hindsight, it was an extremely prudent move on management’s behalf because it allowed us to return to the market last fall [2009] when things had slightly improved. The timing worked out really well for us.”

Plans for growth and expansion

Ogilvie says that Rambler has extensive plans for expansion. “The first one is the main mine itself,” he explains. “If you look specifically at the 44-101 resource that we last put out on that property, we’re very focused on the massive sulfites. And if you look at the resource mastheads, I think we’re setting about 2.1 million tonnes.”

“The lowest zone is very sensitive to the price of copper because it’s only carried by 0.3 grams of gold. But for example, if you had to use the copper price of 1.50, then the resource and frugal zone become 13 million tons—the average grade is 1.6 per cent copper giving us 200,000 tons of contained copper metal. Through the company’s strategy, when we are actually in production the mining markets will be very different from how they are accessed today, as a small cap company. At that point in time, once we are into year two or three, and estimated copper prices are high, we will look at changing our focus to looking at lower foot-wall zones, but mining at a much higher production rate.  That’s why we can take advantage of the economy’s scale.”

Ogilvie says that another way the company can grow is by leveraging other properties throughout the peninsula, by securing strategic partnerships. “We’re even considering mergers and acquisitions, with the right companies that fit our corporate culture and ones that are well-suited for one another at some point down the line.”

Partnerships with community

Rambler has always had a tremendous amount of community and political support. But that community development took years to grow. In the area of Rambler’s property, there was a former mining camp that dated back to the beginning of the 1900s. However, when the last mine closed in 1996, there really wasn’t any mining going on—so people in the community began to give up their homes over time and moved away to find work. The surrounding Newfoundland communities are very dependent on fisheries, paper and pulp, logging, all of which according to Ogilvie “have seen themselves be minimized.” With Rambler’s exploration in full effect, the company believes it can bring the community back to what it was. “Over the past five years, we’ve invested close to $40 million dollars in that property, and when we can, we’ve used local contractors. We’ve employed people locally and have found that $40 million has gone long way to advance the project, but it has also gone into the community, as well as increased our credibility and reputation there.”

Rambler’s investment into the community and planned production has ultimately helped grow a shrinking population—and more of the same is expected over the next few years. Currently, the nearby town of Beaver has a population of about 1,300. However, due to its mining past the community has infrastructure that can accommodate a much larger population. “It’s about one sixth of what it would’ve been several decades ago,” says Ogilvie.

“That puts a lot of pressure on the town council to keep up that infrastructure, even when they don’t have the population. As a result, taxes have gone up over the years and that puts burdens on the people living there. They all recognize (because we’ve had public town hall meetings) that once we get into production we will have a fully-manned labor force of about 158 people. As a result, people are moving back to the area, building homes, going into the old apartments to renovate them, and this means new tax dollars going into the community not just from Rambler, but also others moving back,” he adds.

Overall, local communities can expect a much-needed economic stimulus for the Beaver peninsula area, which according to Rambler is “not just good for the community, but also the stakeholders.”

Building a future

Ogilvie has high expectations for Rambler and its local communities—both in the short and long term.  “This is a great news story for rural Newfoundland at a time when we’re seeing other industries decimated and we’re also coming out of a recession. So we do have a lot of support from the local community and also from various government agencies and politicians who want to see this project succeed.”

Of course, this only helps Rambler move forward with its 2010 projects and others to come in the future—all of which will sustain environment and local community. Ogilvie concludes that the company is simply trying to “limit our environmental impact and run a business that is socially responsible,” and adds that he thinks Rambler has “good building blocks to build this company and make ourselves into a mid-tier mining company over the 3-4 years.”

www.ramblermines.com