Rambler in gold agreement

Production and Markets

Rambler Metals & Mining plc has sold forward 25% of the first 175,000oz of payable gold from its Ming mine in Newfoundland, as well as additional future production, for a total of US$20 million.

TSX-listed Sandstorm Resources Ltd will make an initial cash payment of US$5 million, and then make additional aggregate payments of US$15 million subject to certain conditions being met (including the completion of a feasibility study and the receipt of permits).

Analyst Asa Bridle from Seymour Pierce estimates that the copper-gold mine will produce 159,000oz in its first nine years, translating to a delivery of about 40,000oz to Sandstorm over that period.

“The deal effectively provides, interest free, at least 60% of the outstanding project funding required,” said Mr Bridle.

Under the agreement, the Ming mine will need to be producing within 18 months of the closing of the transaction, and have produced 24,000oz within a further six months. Rambler will also guarantee a minimum cash flow of US$3.6 million in the first two years of production.

George Ogilvie, Rambler’s president and chief executive, said: "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 and silver, and the majority of the gold production from the mine."