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Rambler Metals and Mining PLC: THE INVESTMENT CASE

Rambler Metals and Mining digs in for long term at Ming

The AIM-listed junior now sees at least 20 years of operations at the Newfoundland-based copper/gold operation
copper ore
INVESTMENT OVERVIEW: RMM The Big Picture
Copper and gold at Ming

Rambler Metals and Mining PLC (LON:RMM, CVE:RAB) has reset the dial at its Ming mine for the long-term.

Supported by new reserve and resource numbers, the AIM-listed junior now sees at least 20 years of operations at the Newfoundland-based copper/gold project.

20 years of profitability in copper and gold

Ming is estimated to contain 329mln pounds of copper reserves with a substantial gold credit, according to an update in March.

That fully replaces the ore mined over the past two years and will result in production of 514,000 tonnes of high-grade copper concentrate containing saleable metal of 312mln pounds of copper and 57,000 ounces of gold.

How much that is worth depends on movements in metal prices but on an estimate for copper of US$2.99 per pound and gold of US$1,300 per oz, cash generated over the estimated mine life (net present value) would be about US$195mln.

That compares to the current market cap of £37mln (US$52mln) at 6.5p.

Mismatch

A mismatch? House broker Cantor Fitzgerald suggests so.

The broker has set a new price target of 12p, admittedly lower than its previous 16.5p, and is impressed by the recent progress at Ming.

“RMM has nearly doubled the production rate at both the Ming mine and the Nugget Pond mill, and completion of the new mine ventilation system in 1Q18 should allow the company to operate at the 1,250tpd targeted rate from now on. “

While Cantor expects a loss of about US$4.3mln in 2017, production at that level should see the group miner into profit in 2018 and stay there.

Record numbers at Ming and Nugget Pond

Rambler is already mining record amounts at Ming, while Nugget Pond set a new throughput benchmark in the last three months of 2017

The mill even ran as high as 1,260 metric tonnes per day for over two weeks during November.

Ore processed overall in 2017 rose 27% to 339,631 tonnes, which generated 3,968 tonnes of saleable copper and 3,357 ounces of gold.

New gold plan

A finance deal with offtake partner, Transamine, provided US$4mln to finish off the new mine plan.

This update introduced substantial changes compared to the original 2015 study.

In essence, gold production is brought forward in the early years, while copper output is lower before rising again from 2022.

According to Cantor, management is also assessing the potential for an additional (third) phase of expansion.

Recent exploration has been encouraging while there are other mining prospects in the vicinity (Little Deer, Whaleback) that can use the Nugget Pond facility says Cantor.

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