LONDON (Alliance News) - Rambler Metals and Mining PLC Monday said it has completed a pre-feasibility engineering study and economic assessment aimed to integrate the mineral resource in the lower footwall zone into the life of mine plan for the Ming copper-gold mine in Canada.
The miner said the study will allow the company to carry out a staged, low capital strategy for the optimisation of all the existing infrastructure which will allow the operation to run at full capacity of 1,250 metric tonnes per day by 2018.
"The results show positive economics, a strong internal rate of return and significant cash flow under reasonable commodity price assumptions. In addition, there remain further opportunities for improvement as the operation becomes fully optimised," said the company in a statement.
The study is significant, as it will allow production to increase from its current level of 650 metric tonnes of massive sulphide ore per day. That will increase to 850 metric tonnes per day in 2016 and then to 1,180 metric tonnes per day in 2017 before reaching its final goal in 2018.
The study has shown the Ming mine project has an after-tax net present value of CAD62.1 million with an internal rate of return of 45%.
Rambler will invest CAD66 million in developing the lower footwall zone, which lies 100 metres below the Ming mine's sulphide zones, over a five-year period which will be funded from existing operations at the Ming mine, however the initial capital expenditure to do this will require the company to source additional working capital, it said.
Currently, the company said it has an CAD8.4 million shortfall in working capital in the first year of development of the lower footwall zone, and it is now holding discussions with debt type financing partners to try to source CAD25 million to "strengthen the working capital shortfall", it said.
"The company has been advancing discussions with a selection of financing partners, focusing on debt type financing arrangements. This main project financing is intended to mainly cover working capital shortfalls as the company progresses its optimisation plan," said the company.
Rambler said there are additional opportunities to improve the current scenario at the project, including the integration of ore pre-concentration at the mine site which could further optimise mine production with equal tonnage but higher grades being delivered to the mill for processing.
The company said it can also further explore the lower footwall zone which could grow the resource and further utilise the Nugget Pond mill by sourcing other third-party material from new copper and gold plays in the surrounding areas.
Based on the current plans following the inclusion of the lower footwall zone, Rambler said the Ming mine will produce 536,000 tonnes of copper concentrate, 89,600 ounces of gold and 527,800 ounces of silver over the 21 year mine life.
"I am pleased with the results of the pre-feasibility study, demonstrating a low risk and low capital solution to optimise and expand the operation into a profitable mine with an expected life of more than 20 years. Being a Canadian producer, Rambler benefits not only from working in one of the safest jurisdictions in the world, but also from selling commodities in US dollars whilst most of our costs remain in Canadian dollars," said President Norman Williams.
Rambler shares were up 5.1% to 10.25 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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