RHPS 22 Oct 2010 09:24
RAMBLER METRALS & MINING (RMM): Last week I spoke to George Ogilvie, President and Chief Executive of Rambler, and he made an important point about the final Feasibility Study for the Ming Mine project that was announced in August 2010. This indicated that the project has a net present value of an unexciting US$14.3 million, based on a 6% discount rate and a six year mine life.
However this was based only on the current 1.5m ton reserve estimate. Rambler has now commenced a drilling program and is confident of being able to boost this figure. It expects to announce an updated reserve early next year.
The second strand of Rambler’s strategy is to offer its processing plant to other miners in this area of Newfoundland. Already it is processing ore on behalf of Tenacity Gold Mining, and we could see further ventures of this type next year.
Rambler is on course to be producing from the Ming Mine next summer, with about 65% of revenues expected to come from sales of copper and 35% from gold. I see this as a low risk mining play, and although the shares have underperformed other resource stocks this year it should make up the lost ground over the next twelve months. BUY UP TO 40p