RE: Question from a prospective investor in RMM26 Feb 2021 09:14
COTRARIWISE. This is a post from early Feb by Cornish Knocker, a bit of a mining expert to say the least. There are other very knowledgeable posters. I suggest you go through some posts starting end of Jan, you will get the picture.
I think in some respects Covid very nearly killed the mine and probably saved it at the same time.
In March/April the bottom fell out of the market when the scale of the Covid problem became apparent. Initially working restrictions would have had a massive effect on production, with staff being reduced to tge bare minimum on the mine.
The company were desperately trying to cut costs, it sounds like all development stopped, the bottom of the mine allowed to flood, diamond drilling would have stopped, maintenance and support staff would have been reduced, the mine would have effectively been a stopping operation - if a rescue package was not secured when it was I believe the mine would have shut by Christmas.
By June, as working conditions settled, if the mine could have afforded it they could have bought the entire staff back they couldn't afford it - and this is where Covid ultimately saved the mine - Rambler were able to take advantage of government aid to allow everyone but the production miners to stay at home.
The problem is there is now a legacy of an underdeveloped mine, which will limit production until new production areas are opened up (which us happening). Equipment that is knackered from lack of maintenance (being replaced/repaired) and a lack of control diamond drilling.
Its probably going to take until June to get back to where it needs to be, but the fortunate thing is the mine has the capital and market conditions to achieve that - by the end of this year it will essentially be a new mine.
I think what you're suggesting is the H2 update from the middle of last year wasn't particularly honest - I would agree with that. I think last weeks update went some way to coming clean.
When I read that report it took me back to 1997, when I was lucky enough to be given a tour of South Crofty (At the time owned by Crew Natural Resources, who coincidentally built the nugget pond mill). The first thing I saw that day was a memo from the manager advising that all work had been suspended on the bottom 2 levels of the mine and development staff had been redeployed to stopping. Underground equipment was sitting idle where repairs weren't possible due to a lack if money. A month later it was announced the mine was going to close in 6 months unless a rescue package could be put together - I'm sure you'll agree it all sounds very familiar. The difference is Rambler got the rescue package, South Crofty didn't. But things move on as they say and here we are 23 years later and South Croftys new owners (Cornish Metals) currently have an IPO out to list on AIM this month.
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