Rambler confident after first quarter despite setbacks

Copper and gold explorer, developer and producer Rambler Metals and Mining updated the market on its first quarter on Friday, reporting that throughput reflected the start of its production capacity rebuilding, following financing events in December and February.

The AIM-traded firm said “significant” progress was made in returning the condition of the mining fleet and the processing plant to good working order, with work in those areas continuing.

Pumping of water from the bottom levels of the mine was completed in February, along with improvements to the existing dewatering system.

That allowed capital development to resume in the higher-grade zones that were being targeted in the lower levels of the mine for ore production later in the year.

A new primary sump was developed as part of the system upgrade, the board said.

Capital development, which was a key focus of the recovery plan, achieved a “significant” step up in the quarter ended 31 March, with 579 metres of advance, up from 371 metres in the fourth quarter of 2020.

Total development was 776 metres for the quarter, compared to 631 metres in the prior three-month period.

Ventilation to support operations at the bottom of the mine was established, with new raises, auxiliary and secondary fans, and associated construction.

The increased flow of fresh air to the lower sections would enable development rates to accelerate with simultaneous access to multiple headings.

Ventilation infrastructure would be maintained in advance for future levels of mining.

Power supply to the underground mine was also being upgraded on surface, with modifications to infrastructure and transformers to support the planned increase in underground activity, which was expected to be complete in the third quarter.

In the quarter, several key positions were filled including chief financial officer, project director and chief mining engineer.

The board said the addition of those personnel further strengthened the company, with the skills and competencies it needed to drive operations forward.

Following funding in December, two four-tonne bulk samples were despatched to Germany for full-scale ore sorting tests.

The testing was completed in the first quarter, with the results said to support the target estimate of 30% removal of run-of-mine feed as waste rock.

Detailed assay work of the sorted fractions was now underway, with the ore sorting plant design work also ongoing with independent engineers, with a view to start plant construction in 2021.

The plant would comprise a crushing and screening facility feeding an x-ray transmission sorting machine.

On the financial front, Rambler completed an oversubscribed equity financing of $10.5m in February, with the proceeds earmarked for improvements to operations in the near term, as well as mining equipment procurement, accelerated exploration and the initiation of longer term optimisation projects.

Negotiations were undertaken with selected mining equipment suppliers for the mining fleet equipment supply schedule to the end of 2022.

At the same time, on the back of the strengthened balance sheet, certain pieces of equipment had been converted from rental to finance terms, resulting in cost savings of CAD 0.59m per year going forward.

Revenue totalled $7.06m for the three months ended 31 March, up from $6.58m year-on-year.

A total of 263 tonnes of copper was sold at $5,820 per tonne to fulfill the remaining obligation in the 2020 hedge contract, and 578 tonnes of copper was sold at $7,700 per tonne as per the 2021 copper price hedge contract.

One of the conditions in the debt financing with West Face Capital, completed in December, was to hedge 3,600 tonnes of copper in 2021.

As at 31 March, there were 3,022 tonnes of copper to be fulfilled at $7,700 for the rest of the year.

Debt repayments of $1.29m were made in the period, compared to $0.4m a year earlier, while net debt stood at $3.46m at period end, down from $3.53m at the end of December.

Cash totalled $6.27m at the end of the quarter, broadly in line with the $6.24m it reported three months prior.

“2021 is a rebuilding year for the operation,” said president and chief executive officer Toby Bradbury.

“Relative to our financing plan announced in September, we got a late start with financing received in December.

“This slightly delayed the planned remedial works but good progress has been made in delivering essential elements of the recovery.”

Bradbury said that, despite the set-back in ore production in the first quarter and into April, the company was confident in a return to full production capacity by the end of 2021, with a “more flexible and robust” production schedule.

“The resumption of diamond drilling is increasing the confidence in our near-term production outlook and we have already identified additional areas that may lead to an expansion of the resources.

“On our projects, we are busy with preparations for ore sorting at the Ming Mine which will improve margins and profitability from 2022, once the developed state of the mine has been re-established.”

Toby Bradbury also said Rambler had received a number of unsolicited offers of interest in its Little Deer and Whalesback Mines, and was actively seeking arrangements that could advance the projects while retaining significant interest.

“These deposits have existing NI 43-101 Resource Statements which are in the process of being updated.”

At 1120 BST, shares in Rambler Metals and Mining were down 19.36% at 0.44p.