Seymour Pierce says 'buy' Rambler Metals after Nugget Pond copper-gold project update

London based investment bank Seymour Pierce has issued a 'buy' recommendation on Rambler Metals & Mining (AIM: RMM, TSX-V: RAB) with a price target of 51p per share. Following an analyst’s assessment of the company’s newly acquired Nugget Pond property. Last week Rambler announced it is investigating the gold resource potential within the 140L mining lease of the property in north-eastern Newfoundland.

Rambler has reviewed the property’s digital database and it estimates exploration targets of between 13,000-15,000oz gold across three zones on the property; the Crown Pillar, Main zone and the Footwall zone. The company will now start a programme to evaluate the potential of restarting gold mining at Nugget Pond.

According to Seymour Pierce, the most straightforward target, the Crown Pillar, could contain up to 3,000oz, which could be accessed via the existing underground ramp or through a new open pit. The analyst said that the other, larger targets need further assessment work and Rambler plans to complete an engineering and resource study on the property to fully quantify the opportunity that exists.

“Clearly there is the potential for a low cost, short term project which could yield cash-flow that could reduce the project financing requirement for the company's original copper-gold project” Seymour Pierce mining analyst, Asa Bridle noted.

Nugget Pond was acquired primarily for its gold processing facility, which the company also intends to expand for copper processing. The Nugget Pond gold mine ran for 4 years from 1997 yielding a 169koz from a high grade ore-body which was accessed via an underground operation, during this period the mill achieved a 95% recovery rate. Subsequently the mill continued to operate, successfully treating ore from other mining operations.

The Nugget Pond mill facility is a fully operational gold hydrometallurgical mill, which includes a gold concentrator. The facility will process base metal sulphides from Rambler’s Ming copper mine through the addition of a copper flotation circuit, as well as process the 'free gold' that exists in the Rambler geological system. The modification will diversify the existing facility and allow for a range of processing capabilities. The purchase price for the facility, as agreed in the sale and purchase agreement signed with Crew Gold Corp (TSX: CRU, OTCBB: CRUGF) is C$3.5 million.

http://www.proactiveinvestors.co.uk/companies/news/12862/seymour-pierce-says-buy-rambler-metals-after-nugget-pond-copper-gold-project-update-12862.html