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George Ogilvie of Rambler Metals & Mining Speaks to Proactive Investors

Please give us a brief introduction to Rambler Metals and Mining

Rambler was founded in 2004 when we acquired 100 percent ownership of the former Ming Mine. We listed in London on the AIM in 2005 at 50 pence. As the Ming Mine was located Newfoundland, Canada we also decided to joint list on the TSX-V which we did in 2007. We currently have some 60 million shares issued and fully diluted and over the last 52 weeks we’ve traded as high as 72.5 pence and a low of 8 pence which is currently where we are trading at today.

Our Chairman is the well renowned Harry Dobson who is also the Chairman of Kirkland Lake Gold, Belvedere Resources and Borders & Southern. Brian Hinchcliffe is also on our Board of Directors and he is the Managing Director with Kirkland Lake Gold and Brian Dalton, the President and CEO of Altius Minerals who are our largest shareholder, is also on the Rambler Board of Directors.

 
What differences are you finding between the upper and lower footwall zones at the Ming Mine project?

Well, with respect to the upper zone we are finding that it contains massive sulphides, which is the higher grade material, grading around 3.5% copper and 2.5 grams per tonne of gold, but much lower tonnage, currently in the known resource about 1.5 million tons of ore at those types of grades. In the lower footwall zone we have a much, much larger resource closer to 12 million tonnes grading only 1.7% copper with only 0.25 grams per ton of gold.

 
Tell us about the 43-101 compliant resource that was published in April 2008, and what can you tell us about the update scheduled for early 2009?

The resource that was issued this year was the first national instrument compliant resource for the property, basically it showed that we have some 1.5 million tons of better than 5 percent copper equivalent which we are currently focused in on mining initially in a five year business plan. There is then about an 11.5 - 12 million tons of lower grade material which is sitting in the lower footwall zone, grading about 1.78% copper and 0.25 grams per ton of gold. All in all though, when you look at the resource in total we have in excess of 500 million pounds of contained copper, we have 150,000 ounces of contained gold and we have 1.1 million ounces of contained silver. I should also say that all the zones remain open in all directions and there is lots of potential on the property for expanding on the resource. As we have been drilling over the last seven or eight months since publishing this resource it is our intention to put a resource update out in the first quarter of 2009. That resource update will move tonnage in the lower footwall zone from the inferred and indicated categories up into the measured categories but more importantly it will add some new high grade massive sulphide zones which we are now finding on the property and we expect those zones to have grades between 5% copper equivalent and as high as 10% copper equivalent which is going to figure significantly in our five year business plan.

 
Talk us through the scoping study that was published in June 2008 and tell us your thoughts about the scoping study and the way forward

The scoping study was conducted by SRK Consulting out of Toronto. It worked with a non 43-101 compliant resource, at that time which was some 16.3 million tons at 1.82% copper and 0.35 grams per ton of gold. Importantly it did show that the lower footwall zone could substantiate the 4,000 metric ton per day mine which would give us about 18,000 tons of copper metal annually with a life of the mine in excess of 10 years. The basic metallurgical testing was excellent; with the lower footwall zones showing copper recoveries as high as 98% and a 28% copper concentrate and no deleterious material which could possibly incur a penalty in an off-take agreement. The total mine cash cost at that time was also $60.15 per ton.

The large challenge we had though with the scoping document was that the level of capital required to bring the mine into production at that 4,000 metric ton per day production rate, was in excess of $200million which was going to be challenging even before we saw a meltdown in the financial market. So at that point in time Rambler already changed tack to bring the mine into production closer to the historical production rate which would be about 650 tons per day of ore which would generate about 6000 tons of contained copper metal annually, but importantly that minimises the capital requirements significantly to some CA$30million and brings the mine into production much sooner.

 
What is Rambler’s current financial position and how much money will Rambler need to raise in the foreseeable future and what are your thoughts about raising it?

Well Rambler’s current working capital at the current burn rate would take it through into the third quarter of 2009. We currently foresee doing the project financing in the second quarter of 2009 after we have produced the detailed engineering and the resource update. We do have confidentiality agreements with several parties including two banks that we have been talking to for the last year in connection with possibly doing some debt financing. We are also talking to several commodities traders and building the potential for off-take agreements and forward sales of copper and gold concentrate. We are also speaking to some other interested parties who currently have cash on the balance sheet and are looking for projects to joint venture with and partner potentially with Rambler. So those are three particular options which we currently have on the table that we will be investigating over the next four to five months as we move closer to the project financing in the second quarter of 2009.

 
What can we expect from Rambler Metals and Mining over the next 12-24 months?

Some of the key milestones that you will see from the company will be a resource update being issued in the first quarter of 2009 at the same point in time we will also be releasing a completion of our detailed engineering and once we have those two documents in place it will then allow us to update our cash flow models with the various sensitivities and on the back of that we then expect to do the project financing in the second quarter of 2009.

There is then a 9-12 month period whereby we will be doing detailed engineering, construction drawing, site construction and commissioning of a new mill with refurbished components which then brings the mine into production in the middle of 2010. Of course while all of that work is ongoing we will be continuing with our exploration program and recently we have completed a Titan geophysics over the entire property which is the first time that has been done and the Titan geophysics is able to penetrate through the ground down to about a kilometre in depth and it has actually shown that there are two or three new zones previously undiscovered that have to be followed up on, on the property over the coming 12-24 months. So there is the potential to add additional resources to the known 43-101 resource.

 
Is the aspiration that you are undertaking currently giving you cause to rethink the Ming Project property?

I would have to say the answer to that question is yes. As you are aware we have just recently completed the Titan geophysics over the entire property which is the first time that has been done. We are certainly seeing that there are some anomalies being indicated which previously were not identified and a couple of those anomalies are close to surface. So they certainly represent an opportunity for Rambler to drill off sometime in 2009 going into 2010 once the project financing is in place we will want to drill those off from the surface. With respect to underground, we have been primarily focused on a five year business plan so we have been drilling off at the moment the nearer ore bodies to the existing infrastructure but we also know that all of the zones at the Ming Project are open at depth. Interestingly, as we drilled the deposits off about a year ago when we were doing the drilling from surface, we have been finding that the deeper holes that we had been putting in - particularly in the lower footwall zones - have been improving with grade. Indeed one of the last holes that we put in there had some 30 metres of better than 5 percent copper in the lower footwall zone and of course that zone is open at depth. So that has represented an opportunity for us once we have completed our detailed engineering to drive out into the hanging wall with an exploration drift and then test that zone for the down plunge extension. Of course it would be our hope that it does continue and the grades improve.

 
Exploration is one thing, developing a project and bringing it into profitable production is another, what skill does Rambler have in Mine development and production?

I think certainly our operations team that we had assembled for this project is second to none. Jason McKenzie who is the general manager we hired in August this year brings with him 30 years of experience in operations, not just in Canada but internationally around the world, and he worked at Tara Mines which is the largest lead-zinc mine in Europe. Don Seymour, our project superintendent, is a native of Newfoundland and Labrador has 35 years operational experience. And then of course myself. I have some 19 years in the mining industry with 16 years actual experience at the operations level; most of that with Anglo American. So I think we have assembled a very, very strong team of individuals with lots of operations experience.

We are also very fortunate in that where the mine is located it is a historic mining camp that was in production between 1962 and the mid 1980’s and there are lots of experienced miners working throughout Canada who originally emanated from that area. We have been quite fortunate as we have brought the mine back into pre-production that we have been able to attract some of those miners back to the project and back to the property and they are actually doing the physical mining for us underground. I think that is some of the strengths that Rambler has when it comes to developing and getting the mine back into production.

 
What are the disadvantages and advantages of working in Newfoundland?

Well, certainly if we look at the advantages; the provincial government so far on the project has been very supportive in assisting us in getting the mines back into production. For example, I just attended the China Mining Expo under a trade delegation that the provincial government actually sent there, and they were actively promoting the mining business within Newfoundland, but specifically Rambler was taken on that trade delegation and we were heavily promoted by the provincial government. We have also been given first right of refusal on some of the old components and equipment within that whole mining area, Because it is a former mining camp and a brownfield site, that is going to assist us with the speed at which we can gain our environmental permits. I should also say that the site has access to power and the provincial grid runs within 100 metres of the mine site. There is a workforce to draw upon and the workforce has a very good work ethic. We are 5 kilometres from the Atlantic Ocean with access to several ports so we have the ability to ship concentrate around the world. I think these are some of the advantages we have doing business in Newfoundland.

If we consider some of the disadvantages I would say probably that we are an island; a lot of the consumables and goods that we require for the project and for when the mine comes into production are not actually made in Newfoundland or Labrador, so they have to be shipped in from mainland Canada. That takes some extra time. I would also say that we are doing business in North America and as we all know in North America, compared to other areas of the world, certainly labour cost is a big component of our operating costs on the project.

 
What are your thoughts on the short, medium and long term prospects for copper?

In the short term we have seen a tremendous destruction in the copper price like many other commodities over the last 3-4 months. I believe currently at the existing copper prices of £1.60 per pound I think that 40-50percent of the current copper producers at those prices are probably operating below their production marginal cost and therefore are losing money which is not sustainable. So there is going to come a point in time where we are going to see more operations being put on care and maintenance which will further reduce the supply and some of the surplus copper that we are seeing sitting in the inventories around the world.

For the medium and longer term, actually I am still very bullish on copper. I believe that a lot of the stimulus packages that many of the governments have introduced over the last several months will start taking effect sometime in late 2009. Because we are going to see further disruptions on the supply side, once we start to see a recovery taking place in the global economy and demand starting to come back for these commodities, with the supply disruption I think we are likely to see commodity prices increasing to levels which we saw not less than a year ago.

 
What are your thoughts on the debt markets, the stock markets in general and the AIM and the TSX-V exchanges in particular?

First of all with respect to the debt markets, I think at the moment there is obviously a lack of confidence out there. I think that once 2008 draws to an end and a lot of the banks and financial institutions have taken the various write-downs. I think we will start to see the debt markets starting to open back up in 2009. I think with the governments in the western world taking some part ownerships in some of these financial institutions I think they are going to be forced to start lending again to stimulate the economies, so I do expect the debt markets to start coming back in 2009.

With respect to the stock markets and particularly commodities companies, obviously most of these companies have seen 90percent of their share value erased in the last 6 months so I would have to say that there are tremendous opportunities out there to buy at this moment in time if the investor actually understands the risk and is able to accept the risk. I do however think that in the longer term once confidence comes back into the retail side with the investors I think we are going to see a rebound in the stock markets, probably some time in late 2009/2010. Obviously on the AIM and particularly the TSX-V which is heavily weighted to energy and commodities I think we are going to see a strong rebound once these mining companies start coming back into favour in 2010.

I would also say that a lot of these companies may not survive over the next year to 18 month so we are actually going to see a clean slate with respect to a lot of the junior exploration and mining companies that don’t have strong projects, over the next 18 months are probably going to fall by the way side I think in the longer run that’s going to be better for the investor because they will have less choice but they will also know that the companies that have survived are the companies that actually have tangible assets that have economic value and that will make it easier for the investor.