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Rambler Metals & Mining announces positive results from Ming mine feasibility study

Rambler Metals & Mining (LON:RMM, TSX-V:RAB) has taken “another dramatic step” in transforming to mine producer with the release of positive results of the feasibility study for its wholly owned Ming mine project.

The final feasibility study of the project, which is located at Baie Verte, in Newfoundland and Labrador, Canada, 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%.

The study was based on an average copper price of US$3/lb, gold price of US$1,000/oz and silver US$14.5/oz. All are below the current price levels of US$3.26/lb for copper, US$1,240/oz for gold and US$19/oz for silver.

Another basis for the study was first mineable reserve statement for the project, which included 651,563 tonnes of 2.25% copper for 32.4 Mlbs, 3.24 g/t (grammes per tonne) gold for 67,612 ounces contained and 16.44 g/t silver for 343,008 ounces in the proven category and 572,292 tonnes of 1.67% copper for 21 Mlbs, 2.61 g/t gold for 47,938 ounces and 9.90 g/t silver for 182,131 ounces probable.

Rambler noted that since its last resource update in February, its geological team has been actively compiling all historical information to add any un-mined and pillar remnants left from previous operators to the resource.

This exercise has added 7,980 ounces of gold in the indicated category along with 17,601 ounces of gold in the inferred category, along with the associated pounds of copper.

For the first two years, the project is expected to support an operation producing 24.6 million lbs of copper, 24,455 ounces of gold and 101,644 ounces of silver as the high grade 1807 copper zone and gold rich 1806 zone are brought online.

Rambler is set to invest US$1.4 million in exploration and definition diamond drilling during the first two years to increase the mineable reserve and extend the known high grade ore bodies.

The company called today’s news “another dramatic step” in transitioning from explorer to mine producer.

“We are confident that the initial life of mine will provide a solid financial basis for the Company to expand the reserves at the Ming Mine. With Feasibility work behind us we look forward to beginning construction while completing our permitting for the Ming Mine site and port facility, expected in Q3 2010.

“In addition before year end we will be re-initiating our exploration program on the Ming Mine property outside of the 1.5 million tonne reserve envelope, where there is the potential to add additional high grade reserves,” said President and Chief Executive of Rambler Metals & Mining George Ogilvie.

Upon the receipt of the feasibility study and the submission of a complete development plan to the authorities, the project’s financier Sandstorm Resources will be able to assess for release the remaining portion of the US$20 million financing, enabling Rambler to construct all new infrastructure for the three sites to prepare for first production by June 2011.

Shares in the company rose 4.5% on the update.