Rambler Metals to raise £2.7 mln working capital as Ming mine construction starts

Rambler Metals & Mining PLC (TSX-V: RAB; AIM:RMM) said it plans to raise approximately £2.7 million before expenses through a private placing of up to 8.6 million shares at 32 pence each, or approximately C$0.50 per share.

The money is earmarked to serve as working capital as the company embarks on the construction phase required to bring its Ming copper-gold mine in Newfoundland into production following the signing of a US$20 million gold sale agreement announced on March 4 2010.

Rambler is planning to start production at Ming in 2011 following the environmental release of the project. The mine is located on the Baie Verte Peninsula. Ming is Rambler’s primary focus, and it was initially a copper play, however, an extensive exploration programme conducted by Rambler over recent years has increasingly identified elevated gold grades. In February 2009, a NI 43-101 compliant resource update, showed a total measured and indicated resource of 3.651 million tons grading 2.21 percent copper and 1.37 grams per ton of gold.
On March 4, Rambler announced a deal with Sandstorm Resources Ltd. (TSX-V: SSL) to sell a portion of the Ming mine’s ‘life-of-mine’ gold production for  staged upfront cash payments totalling US$20m, with the first US$5m available immediately.

“The agreement represents an attractive source of funding for Rambler allowing us to bring the Ming mine into production while still giving Rambler shareholders full upside exposure to 100% of the copper, silver and the majority of the gold production at the Ming mine", Rambler CEO and president George Ogilvie had commented.

Upon completion and delivery of a satisfactory NI43-101 feasibility study, a second instalment of US$2m will be paid to Rambler. The company expects to complete the study in the second quarter of 2010. The remaining US$13m, will be paid once the Ming mine has been awarded all necessary permits, anticipated in Q3 2010.

In return for the upfront payments, Sandstorm will be entitled to 25% of the Ming mine’s first 175,000 ounces of payable gold, and 12% of all payable gold thereafter. Initially the agreement will last for 40 years, and Sandstorm has the right to renew the deal for successive 10 year periods thereafter.

http://www.proactiveinvestors.co.uk/companies/news/14983/rambler-metals-to-raise-27-mln-working-capital-as-ming-mine-construction-starts-14983.html