Rambler Metals & Mining

Newfound prosperityAfter more than two decades, operations are starting again in Ming Mine in Newfoundland, Rambler Metals & MiningÔÇÖs CEO George Ogilvie tells Ruari McCallion. Newfoundland has tended to be somewhere people come from rather than go to. The prosperity and energy of Montreal, Toronto and points west have proved to be magnets for the energetic and ambitious, and it has been easy to understand why.   Lack of resources and the sheer distance to markets have contributed to long-term economic struggles. Of late, that trend has begun to reverse. Newfoundland has finally become a ÔÇ£haveÔÇØ rather than a ÔÇ£have-notÔÇØ province, and the Baie Verte peninsula, center of operations for Rambler Metals & Mining, has even seen something of a mini housing boomÔÇöby the standards of the past two decades, anyway.ÔÇ£There were six new houses built during 2007, and eight have been constructed up to July this year,ÔÇØ says George Ogilvie, president and CEO of Rambler. Okay, that isnÔÇÖt a huge new suburb leaping from the green fields, but this is an area that has seen drift and decline for over 20 years. Settlements have been turning into ghost towns; what prosperity has been arriving has been on the Avalon Peninsula of Newfoundland Island, to the southeast, and related to oil and gas. ÔÇ£The rural areas have continued to struggle while the Avalon area has prospered. The community here has a mining background, but itÔÇÖs only recently that the sector has started to see life again.ÔÇØThe Ming Mine, now owned by Rambler Metals, saw closure in 1982 not because it ran out of ore but because it came up against a competitorÔÇÖs property. The ore on that property still remains unmined, and Rambler has consolidated the properties and is now exploring the known extension of the ore deposits. Rambler committed to open up the mines again and get them into production, with modern techniques, equipment and technology.  Having been established in 2005 to ÔÇ£invest in the base metal sector in politically stable jurisdictions,ÔÇØ it acquired what are now the Rambler Cu-Au operations in 2006. Its first task was to clear the mine workings of water; since then, it has been busy exploring and confirming the presence and value of the resources, both at the old workings and deeper. Ming Mine produced 2.1 million tons of ore at 3.5 percent copper and 2.5 g/t gold over a 10-year period up to closure; Ming West extracted 271,000 tons of ore with 4 percent copper and 5.8 g/t gold in 1995/6.ÔÇ£We have some 26 miners currently on the payroll,ÔÇØ says Ogilvie. ÔÇ£TheyÔÇÖre working underground putting services such as air, water and electrical back into the mine while the development work of accessing the 1807 zone has started. There are two underground diamond drills on the property, one for exploration while the other is carrying out delineation drilling. WeÔÇÖre finding high-grade ore with a valuable gold content as well.ÔÇØ The company has an advantage over previous owners of the Ming mines: advances in exploration and mining over the past decade or so, which have been significant.ÔÇ£WeÔÇÖre using some leading-edge technology to explore for deposits,ÔÇØ says chief geologist Larry Pilgrim. ÔÇ£We have recently completed a Quantec Titan 24 deep imaging surface geophysical survey. This survey will test the sub-surface for mineralization well beyond the depth of several hundred meters tested by historical surveys completed over the areas. This high-tech approach should save Rambler Metals significant time and money in evaluating the favorable ground that we have control of. Hopefully, the Titan 24 survey will reveal undiscovered ore bodies that will add to the Rambler economic picture and help in reactivating the old facility.ÔÇØNewfoundland has an unusual geological aspect, being located where continents have collided in the extreme past. This orogenic collision zone has given rise to a large variety of geological settings favorable to ore deposition. The Baie Verte Peninsula alone has a large concentration of base metal and precious metal prospects and showings that are certainly underexplored at depth.When gold touched $1,000 per ounce in March 2008, there was obviously a major attraction in going into it; since then, the price has dropped 20 percent, to around $800. Copper also has declined from its recent highs. How does that affect the profitability and attractiveness of the Ming complex?ÔÇ£This is a copper mine, but gold gives us a useful credit,ÔÇØ Ogilvie says. ÔÇ£Based on current projected production rates over an eight-year period, we expect to extract around 115,000 ounces of goldÔÇöabout 14,000 to 15,000 ounces a year. At $650 per ounce, it provides $60 per ton of ore revenue; ongoing operational costs we expect to be at $80 to $90 a ton.ÔÇØ So the gold is helpful, but it isnÔÇÖt the whole reason for reopening Ming. ÔÇ£On the copper side, weÔÇÖre looking at a production yield in the region of 10 million pounds annually over the first five years. During this period weÔÇÖll be developing the infrastructure for mining in the footwall deposit, which lends itself to a bulk tonnage mining method. Once mining begins in the footwall deposit, annual copper production will increase to 40 million pounds. The bulk of our revenues will come from copper. It has performed as well as or better than other base metals. ThereÔÇÖs still a lot of demand for it, from the Far East and Asia. And India is the potential dark horse; China has a large population, but the birthrate is limited. India has no birth limits at the moment.ÔÇØRambler went to the Alternative Investment Market (AIM) in London to raise its capital. Its immediate plans are to use the current scoping study to provide the base information for a prefeasibility and feasibility document that will be complete in early 2009. A NI43-101 resource has already been released for the mine, with an update expected also in early 2009. Production is expected to start in 2010, and, 20 years after the closure of Ming Mine, improved technology will help to keep operating costs down. The future looks pretty good, too.ÔÇ£Rambler is interested in the potential of this area, as well as immediate opportunities,ÔÇØ says Ogilvie. ÔÇ£We were very fortunate this summer, when the Federal GovernmentÔÇÖs geological data were made available to be integrated with new exploration data. ThatÔÇÖs going to help companies like ours find new sources more easily.ÔÇØ And the revitalization of NewfoundlandÔÇÖs economy is attracting another type of resource. ÔÇ£A lot of departed Newfoundlanders have talked about wanting to return home,ÔÇØ he says. ÔÇ£When we advertised 26 mining positions last year, we received over 300 applicationsÔÇömore than half of them expatriate Newfoundlanders. WeÔÇÖre able to attract professional geologists, engineers, mine planners and all the skills we need from people who have built on their experience elsewhere, which is great for everyone.ÔÇØ┬á