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UPDATE - Rambler Metals shrugs off freezing weather with production rise

Last updated: 04:30 19 Feb 2014 EST, First published: 05:30 19 Feb 2014 EST

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Rambler Metals & Mining (LON:RMM, CVE:RAB) saw copper production rise from its Ming mine in Newfoundland amid extreme cold weather in the latest quarter.

Production of copper concentrate totalled 6,818 tonnes in the (fiscal) second quarter, which is a 3% increase on the previous quarter and a 71% jump from the same quarter the year before.

The amount of dry tonnes milled fell 8% from the preceding three months to 50,957 tonnes, resulting in production of 1,978 tonnes of copper, 1,551 ounces of gold, and 10,764 ounces of silver.

It came as freezing conditions swept across North America, hitting Canada further to the north particularly hard.

The company reiterated its full-year production guidance despite this.

“The executives and board of directors are pleased with the steady results being delivered from the Baie Verte operations,” said newly-inducted chief executive Norman Williams.

“I am pleased to see that past issues, such as the freezing of the coarse ore bin, have mitigated, resulting in more consistent throughput, especially in such extreme weather conditions.

“This, I believe, demonstrates the strength of the operational team and their ability to provide effective solutions to challenging operating issues.”

Broker finnCap, which rates the shares a 'buy', says the fact the results were achieved during extreme weather means the firm has overcome difficulties in production at the same time last year.

It also notes that the miner has been able to replace all the ore mined from the copper rich 1807 zone so far.

"This has enabled Rambler to continue production from 1807 longer than expected and enabled copper production to be maintained at the current level and, significantly, 12% above our own forecasts, which were based on declining copper grades," highlighted analyst Mark Heyhoe, who has a target price of 40p.

Meanwhile, VSA Capital said the reducing of ore grade and recovery variability improves predictability of cash flows and debt payments.

"We expect more of the same and retain our speculative BUY recommendation on the stock," it said.

Rambler shares were unchanged at 30.75p.

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