Financial Results Quarter Ended January 31, 2011
FOR: RAMBLER METALS & MINING PLC
TSX VENTURE SYMBOL: RAB
AIM SYMBOL: RMM
March 21, 2011
Rambler Metals & Mining PLC: Financial Results Quarter Ended January 31, 2011
LONDON, ENGLAND and BAIE VERTE, NEWFOUNDLAND AND LABRADOR--(Marketwire - March 21, 2011) - Rambler Metals and
Mining PLC (TSX VENTURE:RAB)(AIM:RMM) ("Rambler" or the "Company") today is pleased to report its financial
results and operational highlights for the quarter year ended 31 January 2011. The Company is focused on
bringing the Ming Copper-Gold Mine located in Newfoundland and Labrador's Baie Verte Peninsular, Canada, into
full production.
Significant Operational Achievements
/T/
-- Officially submitted the environmental registration for the mining of
the Nugget Pond Crown Pillar located less than 150 metres away from its
gold hydromet processing facility. The Group plans on mining the crown
pillar in calendar Q2, 2011.
-- Announced it had received further approval for the construction of its
Office/Dry facility and fresh water source at the Ming Mine. The receipt
of these permits allowed for the drawdown of US$7 million from Sandstorm
Gold Ltd. ('Sandstorm').
-- Successfully negotiated Net Smelter Royalty (NSR) terms with Metals
Creek Resources Corp. ('MEK') to process surface material remaining at
Tilt Cove's East Mine, Newfoundland and Labrador, located 23 kilometres
from the Group's Nugget Pond Mill.
-- Nugget Pond Mill foundation work, site construction and the new office
and dry facility continued at pace and on schedule. Completed the
installation of the second means of egress via the mine shaft
-- Terms for all major underground equipment, components for the new
concentrator negotiated and purchased orders issued. The majority of
this equipment has arrived on site with additional deliveries scheduled
throughout the coming months ahead of the start up of production.
-- Restarted the exploration program at the Ming Mine through the
development of an exploration drift to the top of the 1807 zone
resulting in the intersection of high grade copper and gold
mineralization. Further exploration development is scheduled for the
1700 level historical wire gold zone.
-- Subsequent to the quarter end the Group received the final construction
approval from the Government of Newfoundland and Labrador for the Ming
Copper-Gold Mine allowing access to the final US$6M tranche of financing
from Sandstorm.
Financial Highlights (All expressed in CAD$)
-- During the quarter the Group generated gross profit of $68,000 from the
completion of its first toll milling agreement compared with a gross
profit of $374,000 in Q1/11. The net loss for the quarter ended January
31, 2011 was $555,000 or $0.006 per share which compares to a net loss
of $268,000 for Q1/11 and $591,000 for Q2/10.
-- Cash flows utilized for operating activities were $979,000 in Q2/11
compared to $483,000 in Q1/11 and $676,000 in Q2/10. The increase in the
cash utilized is due to increased operating losses following the
completion of toll processing. The major components of the working
capital changes are an increase in inventory and accounts receivable
changes offset by an increase in trade payables.
-- Cash resources (including short-term investments) as at January 31, 2011
were $4.9 million and as of March 21, 2011 had increased to $7.6
million.
/T/
George Ogilvie, President and CEO, Rambler Metals & Mining commented;
"We are extremely pleased with the progress made over the past quarter in developing the Ming Copper-Gold Mine
as well as the renewed exploration program. Following receipt of complete construction approval from the
provincial authorities Rambler is now financially positioned to begin pre-production development in the mine
whilst continuing work on the Nugget Pond Mill expansion.
Supported with high copper and gold prices and strong fundamentals we aim to further advance both the Nugget
Pond Crown Pillar and the Tilt Cove East Mine projects into production during 2011. Furthermore, we look
forward to developing the Baie Verte region into a resurgent copper and gold producer."
About Rambler
Rambler Metals and Mining is Junior Mining Company that has 100% ownership of the Ming Copper-Gold Mine in Baie
Verte, Newfoundland and Labrador, Canada. Our objective is to become a mid-tier mining company by bringing the
Ming Mine into production, discovering new deposits and through M&A's. Following the acquisition of the Ming
Mine, Rambler, listed on the London AIM in 2005 and Toronto TSX-V in 2007.
The Ming property had been a former underground copper and gold producing mine that ceased production when the
deposit reached a then third party property boundary. This neighbouring property was subsequently consolidated
before being brought into Rambler's portfolio. Rambler now owns a 100% interest in the property.
The area where the mine is located is a former mining centre and subsequently good infrastructure exists
including roads, fresh water, hydro, access to a working port while the town of Baie Verte, population 1,300 is
located 17km away.
Over the last several years Rambler has been exploring on the property leading to the publication of three NI43-
101 resource statements, a newly published reserve statement, the discovery of new mineralized lenses and the
extension of pre-existing lenses. Today all mineralization remains open in multiple directions while,
importantly, the deposit has not been cut-off at depth. The underground workings have been dewatered and
services including air, water and electrical re-installed.
In October 2009, Rambler purchased an operational gold hydrometallurgical mill, Nugget Pond, which is situated
approximately 40km from the Ming Mine. Rambler intends to expand the mill so that it is capable of handling
massive sulphides from the Ming Mine and produce a copper concentrate with gold and silver as by-products. By
utilizing the hydrometallurgical facility, in conjunction with the concentrator, the company anticipates
increased gold recovery as well as recovering any free gold.
Following the successful publication of a positive Feasibility Study Rambler has now entered the construction
phase of the project and expects to bring the Ming Mine back into production in 2011.
Management's Discussion & Analysis ('MD&A')
For the Quarter Ended January 31, 2011
/T/
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This MD&A, including appendices, is intended to help the reader understand
Rambler Metals and Mining plc ('the parent company') and its subsidiaries
(the 'Group' or 'Rambler'), our operations and our present business
environment. It has been prepared as of March 21, 2011 and covers the
results of operations for the quarter ended January 31, 2011. This
discussion should be read in conjunction with the audited Financial
Statements for the year ended 31 July 2010 and notes thereto. These
consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and their
interpretations adopted by the International Accounting Standards Board
("IASB"), as adopted by the European Union and with IFRS and their
interpretations adopted by the IASB. The presentation currency is Canadian
dollars. This is a change from previous MD&As which were presented in United
Kingdom pounds sterling (GB pounds). Amounts previously reported in GB
pounds have been translated at the closing exchange rate for balance sheet
items and the average rate for income statement and cash flow items. These
statements together with the following MD&A are intended to provide
investors with a reasonable basis for assessing the potential future
performance.
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Rambler Metals and Mining plc
Salatin House
19 Cedar Road
Sutton
Surrey
SM2 5DA.
CONTENTS
GROUP OVERVIEW 2
HIGHLIGHTS OF THE SECOND QUARTER 2
FINANCIAL RESULTS 3
HEALTH AND SAFETY 3
OUTLOOK 4
CAPITAL PROJECTS UPDATE 5
FINANCIAL REVIEW 7
SUMMARY OF QUARTERLY RESULTS 8
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION 9
COMMITMENTS AND LOANS 11
RELATED PARTY TRANSACTIONS 11
SUBSEQUENT EVENTS 11
APPENDIX 1 12
SELECTED FINANCIAL INFORMATION & REVIEW OF OVERALL PERFORMANCE 12
APPENDIX 2 13
CRITICAL ACCOUNTING POLICIES AND ESTIMATES 13
CHANGES IN ACCOUNTING POLICIES 15
APPENDIX 3 16
OTHER MATTERS 16
Outstanding Share & Option Data 16
Forward Looking Information 16
Further information 17
/T/
GROUP OVERVIEW
The principal activity of the Group is the development and exploration of the Ming Copper-Gold Mine located on
Newfoundland and Labrador's Baie Verte Peninsula.
The parent company's Ordinary Shares trade on the London AIM market under the symbol "RMM" and the TSX Venture
Exchange under the symbol "RAB".
The Group has established the following priorities:
/T/
1. Safety and Environmental - including Loss Control, Security, and Closure
activities.
2. Expediting construction and development at both the Nugget Pond Mill,
Ming Mine and Port sites.
3. Driving forward our exploration program.
4. Achieve sustainable production during calendar 2H 2011.
5. Continue to evaluate and seek toll milling opportunities for the
Hydromet facility at the Nugget Pond Mill.
6. Develop a sound business plan for development of Ming Mine Lower
Footwall Zone.
/T/
The Group's directors and management believe that focussing on these priorities will provide the Group with the
best opportunity to build a successful and long term mining operation.
HIGHLIGHTS OF THE SECOND QUARTER
/T/
-- On December 20, 2010 the Group officially submitted the environmental
registration for the mining of the Nugget Pond Crown Pillar located less
than 150 metres away from its gold hydromet processing facility. The
Group plans on mining the crown pillar in calendar Q2, 2011.
-- On January 6, 2011 the Group announced it had received further approval
for the construction of its Office/Dry facility and fresh water source
at the Ming Mine. The receipt of these permits allowed for the drawdown
of US$7 million from Sandstorm Gold Ltd. ('Sandstorm'). The final
tranche of US$6 million is due once the final construction permit is
approved. This is expected before 31 March 2011.
-- Successfully negotiated Net Smelter Royalty (NSR) terms with Metals
Creek Resources Corp. ('MEK') to process surface material remaining at
the MEK's East Mine Dump in Tilt Cove, Newfoundland and Labrador,
located 23 kilometres from Group's Nugget Pond Mill.
-- Nugget Pond Mill foundation work, site construction and the new office
and dry facility continued at pace and on schedule.
-- Completed the installation of the second means of egress via the mine
shaft.
-- The Group continued to work with the Department of Natural Resources on
the final construction permit for the Ming Copper-Gold Mine.
-- Terms for all major underground equipment, components for the new
concentrator negotiated and purchased orders issued. The majority of
this equipment has arrived on site with additional deliveries scheduled
throughout the coming months ahead of the start up of production.
-- Restarted the exploration program at the Ming Mine through the
development of an exploration drift to the top of the 1807 zone
resulting in the intersection of high grade copper and gold
mineralization. Further exploration development is scheduled for the
1700 level historical wire gold zone.
-- Completed toll milling contract for the Crosshair Exploration and Mining
Corp. confirming the Group's belief that the Nugget Pond Mill is
amendable to a wide range of ore types and will allow access to further
business opportunities on the Baie Verte peninsula.
-- At quarter end a total of 62 employees were employed on the Ming Mine
project. During the early part of Q2 2011, a further 23 offers were
accepted by miners, tradesmen and other support staff to help bring the
Ming Mine back into operation.
FINANCIAL RESULTS
-- During the quarter the Group generated gross profit of $68,000 from the
completion of its first toll milling agreement compared with a gross
profit of $374,000 in Q1/11. The net loss for the quarter ended January
31, 2011 was $555,000 or $0.006 per share which compares to a net loss
of $268,000 for Q1/11 and $591,000 for Q2/10.
-- Cash flows utilized for operating activities were $979,000 in Q2/11
compared to $483,000 in Q1/11 and $676,000 in Q2/10. The increase in the
cash utilized is due to increased operating losses following the
completion of toll processing. The major components of the working
capital changes are an increase in inventory and accounts receivable
changes offset by an increase in trade payables.
-- Cash resources (including short-term investments) as at January 31, 2011
were $4.9 million and as of March 21, 2011 had increased to $7.6
million.
HEALTH AND SAFETY
-- The Group completed the quarter without any lost time accidents or
medical add injuries.
-- The Health and Safety of the Group's employees continues to be a high
priority.
-- There were no environmental incidents.
OUTLOOK
In the near future management expects to:
-- Continue work on the Nugget Pond Mill expansion, including finishing the
foundation work and beginning steel erection.
-- Following receipt of the Ming Mine final construction approval from the
Department of Natural Resources, anticipated in calendar Q1, drawdown
the final US$6M tranche of financing from Sandstorm.
-- Continue an active recruitment drive for key management positions and
underground personnel for the Ming Mine.
-- Begin pre-production development in the Ming Mine to expose the 1807 ore
zone and allow for updip and downdip exploration of the zone.
-- Continue evaluating the potential of a bulk tonnage mining scenario for
the Lower Footwall Zone.
-- Further advancement of both the Nugget Pond Crown Pillar and the Tilt
Cove East Mine projects into production.
/T/
See 'Forward Looking Information' for a description of the factors that may cause actual results to differ from
forecast.
CAPITAL PROJECTS UPDATE
During the quarter the Group incurred $4,212,000 on Mineral Property, $9,017,000 on property, plant and
equipment and $16,000 on exploration and evaluation of the Ming Mine.
/T/
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Mineral Property (capital development of Ming Mine) Q2/11 Q1/11 Q2/10
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$,000 $,000 $,000
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Labour costs 923 243 -
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Consultancy expenses 1,076 744 -
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Contractors' costs 9 22 -
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General materials and other costs 289 144 -
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Surface development 117 48 -
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Underground development 1,141 293 -
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Finance costs 220 120 -
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Depreciation 386 187 -
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Reclamation and closure provision 51 811 -
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Total 4,212 2,612 -
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/T/
Effective September 1, 2010, following acceptance of the Ming Mine feasibility study by Sandstorm, the Ming
Mine project moved from pure Exploration & Evaluation into the Mine Development stage. Subsequently, all
expenditures incurred in bringing the Ming Mine through the construction and development stage are now being
capitalised to Mineral Properties. Mineral property costs increased in Q2/11 compared to Q1/11 as underground
capital development was increased in line with the aim of bringing the mine into production during the second
half of 2011.
/T/
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Property, plant and equipment Q2/11 Q1/11 Q2/10
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$,000 $,000 $,000
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Mill purchase and construction 4,536 439 -
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Plant and equipment 3,790 166 -
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Buildings 674 2 5
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Other assets 17 69 -
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Total 9,017 676 5
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/T/
Property, plant and equipment increased during Q2/11 compared to Q1/11 following the acquisition of a mine
truck, scooptram, jumbo drill and bolter and commencement of work on the mine site office and dry building and
concentrator building at the mill.
/T/
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Exploration and evaluation costs (Ming Mine) Q2/11 Q1/11 Q2/10
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$,000 $,000 $,000
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Labour costs 1 126 282
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Consultancy expenses 14 112 226
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Operating costs 1 77 210
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Finance costs - 50 -
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Depreciation - 96 444
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Total 16 461 1,162
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/T/
Effective September 1, 2010, following acceptance of the Ming Mine feasibility study by Sandstorm, the Ming
Mine project moved from pure Exploration & Evaluation into the Mine Development stage. As a consequence, all
construction and development costs associated with the Ming Mine project is now capitalised to Mineral
Properties which accounts for the large decrease in costs compared to Q1/11.
FINANCIAL REVIEW
/T/
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Comparatives
Q2/11
Results B/(W)
($000's) Commentary Q1/11 (i) Q2/10 B/(W)
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266 Revenue was generated by the
group for the first time from
toll processing at the Nugget
Pond Mill. The current
processing agreement was
completed in November 2010. 985 (73)% - N/a
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198 Operating Costs relate to
labour, material, consultancy
and power costs for operating
the mill for processing the
ore under the toll processing
agreement. 611 (68)% - N/a
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698 General and administrative
expenses were higher than the
previous quarter by $15,000.
Employment costs reduced by
$47,000 as a result of reduced
share based payment expenses,
legal and professional fees
increased by $25,000 due to
increased registrar charges
and increased auditor review
fees, travel and investor
relation costs increased by
$27,000 and general office
expenses increased by $10,000.
In comparison to Q2/10
administrative expenses
increased by $140,000.
Employment costs increased by
$96,000 as a result of key
management promotions and
increases in employee related
benefit obligations and share
based payment expense, legal
and professional fees reduced
by $9,000 due to reduced AGM
costs and travel and investor
relations also rose by $43,000
due to increased marketing
activities offset by a
decrease in general office
expenses of $10,000 683 (2)% 558 (25%)
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81 Foreign exchange gains arising
on the Gold Loan increased in
Q2/11 as a result of the
continued strengthening of the
Canadian dollar against the US
dollar during the quarter. 64 26% - N/a
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31 Exploration costs increased
compared to the previous
quarters as a result of the
review of various
opportunities in the Ming Mine
area. 28 (10)% 50 38%
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4,212 Mineral Properties. The group
incurred costs of $4.2 million
in the quarter including
labour costs of $0.9 million,
consultancy costs of $1.1
million, contractor and
material costs of $0.3
million, underground
development costs of $1.1
million depreciation of $0.4
million, and finance costs of
$0.2 million. 2,612 61% - N/a
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9,017 Capital spending on property,
plant and equipment increased
during the quarter compared to
the previous quarter
reflecting the continued
spending on equipment for the
refurbishment of the mill,
acquisition of underground
mining equipment and
office/dry building and other
purchases related to the
preparation of the Ming Mine
for production. Underground
mining equipment additions
include $3.3 million financed
through capital lease
financing.
The increase from Q2/10 is due
to the reasons outlined above. 676 1,233% 5 180,240%
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16 Capital spending on
exploration and evaluation
costs reduced during the
quarter following the
commencement of mine
development on September 1,
2010. 461 (97)% 1,034 (98)%
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(i)B / (W) = Better / (Worse)
/T/
SUMMARY OF QUARTERLY RESULTS
The quarterly results for the Group for the last eight fiscal quarters are set out in the following table.
/T/
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Quarterly Results
(All amounts in 000s of Canadian
Dollars, except Loss per share 4th 3rd 2nd 1st
figures) Quarter Quarter Quarter Quarter
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Fiscal 2011
Revenue 266 985
Net Income/ (Loss) (555) (268)
Loss per Share (Basic & Diluted) (0.006) (0.003)
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Fiscal 2010
Revenue - - - -
Net Income/ (Loss) (676) (644) (591) (515)
Loss per Share (Basic & Diluted) (0.008) (0.008) (0.007) (0.006)
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Fiscal 2009
Revenue - -
Net Income/ (Loss) (470) (520)
Loss per Share (Basic & Diluted) (0.008) (0.009)
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/T/
Losses for the third and fourth quarters of 2009 started to fall as a result of a cost reduction programme.
Losses for the first quarter of 2010 increased slightly mainly as a result of the weakening of the GB Pound
against the Canadian Dollar. Losses for the second quarter of 2010 further increased as a result of increased
legal and professional charges in connection with financing options and the AGM. The continued weakening of the
GB Pound against the Canadian Dollar resulted in a further increase in losses in the third quarter of 2010.
Losses in the fourth quarter of 2010 increased as a result of an unrealised exchange loss offset by reductions
in legal and professional charges and staff costs. Losses in the first quarter of 2011 reduced as a result of
revenue from toll processing and rose again in the second quarter of 2011 following the completion of toll
processing in November 2010.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION
The Group's holding of cash balances is kept under constant review and surplus funds are held on deposit. Given
the current climate, the Group has taken a very risk averse approach to management of cash resources and
Management and Directors monitor events and associated risks on a continuous basis.
Cash and short-term investment resources, (cash, cash equivalents and short-term investments) were as follows:
/T/
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Resource At January 31,
--------------------------------
2011 2010
$'000 $'000
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Cash $CDN 903 95
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Cash $US 1,688 -
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Cash GBP 52 39
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Short-term Investments $CDN 2,024 4,175
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Short-term Investments GBP 198 727
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Total 4,865 5,036
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/T/
Interest received on Canadian dollar deposits ranged from 1.06 - 1.10% during the quarter.
Net proceeds from financing activities during the quarter amounted to $6.6 million from the partial draw down
received from the Gold loan of $6.7 million net of financing fees offset by finance lease repayments of $0.1
million.
Cash flows used in investing activities amounted to $8.2 million for the quarter. Investments included $0.1
million in a bearer deposit note, $3.9 million in mine development, $3 million on the Nugget Pond Mill and $1.2
million on property, plant and equipment. The group is required to hold a Letter of Credit in favour of the
Government of Newfoundland and Labrador in respect of the reclamation and closure liability at the existing
Nugget Pond Mill and Ming Mine. At quarter end the Group holds bearer deposit notes totalling $1.96 million.
Subsequent to the quarter end, the final US$6M available under the Gold Loan agreement was received following
approval of the final construction permits for the Ming Mine. Management continue to evaluate possible sources
of finance to provide sufficient working capital for the forthcoming 12 months and are confident that such
funds will be raised. At 21 March 2011 the Group has $7.6 million in cash and cash equivalents with a
proportion invested in short dated term deposits and bankers acceptances.
Financial Instruments
The Group's financial instruments as at January 31, 2011 comprised of financial assets of cash and cash
equivalents and trade and other receivables and financial liabilities comprised of trade payables; other
payables; accrued expenses and interest bearing loans and borrowings.
All of the Group's financial liabilities are measured at amortised cost.
The board of directors determines, as required, the degree to which it is appropriate to use financial
instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be
appropriate are foreign currency risk, liquidity risk, credit risk, interest rate risk and commodity price risk
each of which is discussed in note 10 of the consolidated financial information for the six months ended
January 31, 2011. There were no derivative instruments outstanding at January 31, 2011.
COMMITMENTS AND LOANS
At January 31, 2011, capital commitments made to third parties included:
/T/
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Capital Commitments $000
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Property, Plant and Equipment 2,570
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TOTAL 2,570
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/T/
These commitments together with the ongoing evaluation and development of the mine will be partially financed
from existing cash reserves from earlier equity fund raisings and cash provided under the terms of the Gold
Loan agreement with Sandstorm Resources Ltd.
Purchase orders included mill equipment, groundwork and foundations, as well as steel fabrication and erection.
At January 31, 2001, interest bearing loans and borrowings comprised a gold loan of $13,990,000, finance lease
commitments of $3,758,000 and a bank loan of $31,000.
The Group received an advance of US$ 7 million from the Gold Loan during the quarter. Subsequent to the quarter
end, the final US$6 million available was received following approval of the final construction permits for the
Ming Mine. The Group will now be required to place an additional $1.33 million in Letters of Credit to cover
the full reclamation and closure liabilities on the project.
The Group entered into new finance leases of $3.3 million during the quarter to finance underground mining
equipment.
RELATED PARTY TRANSACTIONS
Details of related party transactions are included in note 8 of the unaudited consolidated financial
information for the six months ended January 31, 2011 and note 22 of the financial statements for the year
ended July 31, 2010.
SUBSEQUENT EVENTS
On March 8, 2011 the Group received the final permits from the Government of Newfoundland and Labrador for the
Ming Copper-Gold Mine. Subsequently, on March 14, 2011 the final US$6 million from Sandstorm under the terms of
the Gold Loan agreement was received.
APPENDIX 1
SELECTED FINANCIAL INFORMATION & REVIEW OF OVERALL PERFORMANCE
/T/
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Financial Highlights Three months ended,
(All amounts in 000s of Canadian
Dollars, except shares and per share
figures)
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January 31, October 31, January 31,
2011 2010 2010
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Revenue 266 985 -
Operating Expenses (198) (611) -
Exploration Expenditure (31) (28) (50)
Administrative expenses (698) (619) (558)
Net Income (loss) (555) (268) (591)
Per share (basic and diluted) (0.006) (0.000) (0.007)
Cash Flow used in operating activities (979) (483) (676)
Cash Flow used in investing activities (8,248) (1,941) (716)
Cash Flow from (used in) financing
activities 6,585 1,924 (103)
Net increase (decrease) in cash (2,642) (382) (1,495)
Cash and cash equivalents at end of
period 4,865 7,494 5,036
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Total Assets 68,909 58,219 45,487
Total Liabilities (22,758) (11,555) (1,431)
Working Capital 3,324 7,115 4,596
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Weighted average number of shares
outstanding 95,515 95,485 95,485
Loss per share (0.006) (0.003) (0.007)
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/T/
APPENDIX 2
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The details of the Group's accounting policies are presented in accordance with International Financial
Reporting Standards as set out in Note 2 to the financial statements. The preparation of financial statements
in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The following estimates are considered by management to be the most critical for investors to understand some
of the processes and reasoning that go into the preparation of the Group's financial statements, providing some
insight also to uncertainties that could impact the Group's financial results.
Going Concern
The Group's ability to continue as a going concern, and the recoverability of its mineral properties, is
dependent on the copper and gold prices, its ability to fund its development and exploration programs, and to
manage and generate positive cash flows from operations in the future. These financial statements do not
reflect the adjustments to carrying values of assets and liabilities and the reported expenses and balance
sheet classifications that would be necessary should the going concern assumption be inappropriate, and these
adjustments could be material.
In common with many exploration companies, the Group raises finance for its exploration and appraisal
activities in discrete tranches. In August 2010, the Group released its final NI43-101 Feasibility Study for
the Ming Copper-Gold Mine. This enabled the Group to draw down the second instalment of the Gold Loan (see
commitments and loan section above) of US$2 million. A further US$7 million of the final US$13 million was
received in January 2011 and the final US$6 million was received subsequent to the quarter end. The Directors
and management continue to evaluate possible sources of finance to provide sufficient project finance and
working capital for the forthcoming 12 months. Whilst they are confident that such funds will be raised and
have therefore concluded that the Group is a going concern, there is no certainty that such funds will be
available when needed.
Share-based payments
The Group calculates the cost of share based payments using the Black-Scholes model. Inputs into the model in
respect of the expected option life and the volatility are subject to management estimate and any changes to
these estimates may have a significant effect on the cost. The assumptions used in calculating the cost of
share based payments are explained in note 5 of the financial statements for the year ended July 31, 2010.
Gold Loan
The Group calculates the effective interest rate on the Gold Loan based on estimates of future cash flows
arising from the sale of payable gold (see note 6 to the Unaudited Consolidated Financial Information for the
six months ended January 31, 2011).The cash flows will be dependent on the production of gold and its selling
price at the time of delivery which have been estimated in line with the mine plan, future prices of gold and
reserve estimates. Management's estimates of these factors are subject to risk and uncertainties affecting the
amount of the interest charge. Any changes to these estimates may result in a significantly different interest
charge which would affect the carrying value of the exploration and evaluation costs and the corresponding Gold
Loan liability.
The financial statements do not reflect the adjustments to the carrying values of assets and liabilities and
the reported expenses and balance sheet classifications that would be necessary were the going concern
assumption inappropriate, and these adjustments could be material.
Mineral Property and Exploration and Evaluation Costs
The directors have assessed whether there are any indicators of impairment in respect of mineral property and
exploration and evaluation costs. In making this assessment they have considered the Group's business plan
which includes resource estimates, future processing capacity, the forward market and longer term price outlook
for copper and gold. Resource estimates have been based on the most recently filed NI43-101 report.
Management's estimates of these factors are subject to risk and uncertainties affecting the recoverability of
the Group's mineral property and exploration and evaluation costs. Any changes to these estimates may result in
the recognition of an impairment charge with a corresponding reduction in the carrying value of such assets.
After consideration of the above factors, the directors do not consider that there are any indicators that
mineral property and exploration and evaluation costs are impaired at the year end.
Closure Costs
The Group has an obligation to reclaim its properties after the minerals have been mined from the site, and has
estimated the costs necessary to comply with existing reclamation standards. These estimates are recorded as a
liability at their fair values in the periods in which they occur. If the estimate of reclamation costs proves
to be inaccurate, the Group could be required to increase the provision for site closure and reclamation costs,
which would increase the amount of future reclamation expense, resulting in a reduction in the Group's earnings
and net assets.
CHANGES IN ACCOUNTING POLICIES
In the current quarter, new and revised standards which have been adopted have not affected the disclosures
presented in these financial statements.
No standards issued but not yet effective have been adopted early.
International Financial Reporting Standards that have recently been issued or amended but are not yet effective
have not been adopted for the annual reporting period ended July 31, 2011:
/T/
Nature of change Application Application
IFRS to accounting date of date for
/Amendment Title policy standard Group
----------------------------------------------------------------------------
Various Annual No change to Various 1 August
Improvements to accounting policy, 2011
IFRSs therefore, no
impact
----------------------------------------------------------------------------
IAS 24 Related Party No change to 1 January 1 August
revised Disclosures accounting policy, 2011 2011
therefore, no
impact
----------------------------------------------------------------------------
IFRS 9 Financial No change to 1 January 1 August
instruments: accounting policy, 2013 2013
Classification and therefore, no
Measurement impact
----------------------------------------------------------------------------
/T/
Management have reviewed the impact of the above standards and interpretations and have concluded that they
will not result in any material changes to reported results.
Details of the main accounting policies of the Group are included in note 2 of the financial statements for the
year ended 31 July 2010. Additional accounting policies have been applied in the current quarter are explained
note 2 of the Unaudited Consolidated Financial Information for the six months ended January 31, 2011.
APPENDIX 3
OTHER MATTERS
Outstanding Share & Option Data
As at the date of this MD&A the following securities are outstanding:
/T/
----------------------------------------------------------------------------
Security Shares issued or Issuable Weighted Average Exercise Price
----------------------------------------------------------------------------
Common Shares 95,515,000 --
----------------------------------------------------------------------------
Options 4,032,000(i) $0.47
----------------------------------------------------------------------------
(i)if all options have fully vested
/T/
Effective 1 January 2011, in conjunction with the retirement of Mr. Leslie Little, Mr. Peter Mercer assumed the
role of Corporate Secretary along with his other duties as VP Corporate Development. For future assistance
please contact Mr. Mercer directly at +1-709-532-4990 or pmercer@ramblermines.com.
Forward Looking Information
This MD&A contains "forward-looking information" which may include, but is not limited to, statements with
respect to the future financial or operating performance of the Group, its subsidiaries and its projects,
exploration expenditures, costs and timing of the development of new deposits, costs and timing of future
exploration, requirements for additional capital, government regulation of mining exploration, environmental
risks, title disputes or claims and limitations of insurance coverage. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the parent company and/or its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. Such factors include, among
others, general business, economic, competitive, political and social uncertainties; the actual results of
current exploration activities; conclusions of economic evaluations; fluctuations in the relative value of
United States dollars, Canadian dollars and British Pounds; changes in planned parameters as plans continue to
be refined; future prices of metals and commodities; possible variations of ore grade or recovery rates;
failure of equipment; accidents and other risks of the mining exploration industry; political instability,
insurrection or war; delays in obtaining governmental approvals or financing or in the completion of
development or construction activities, as well as those factors discussed in the section entitled "Risk
Factors" in this MD&A. Although the Group has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in forward-looking statements, there may
be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date of this MD&A and the Group disclaims any
obligation to update any forward-looking statements, whether as a result of new information, future events or
results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements.
Further information
Additional information relating to the Group is on SEDAR at www.sedar.com and on the Group's web site at
www.ramblermines.com.
Unaudited Consolidated Financial Information
For the Quarter Ended 31 January 2011
The accompanying financial information for the quarter ended 31 January 2011 and 31 January 2010 has not been
reviewed or audited by the Group's auditors and has an effective date of 21 March 2011.
/T/
Rambler Metals and Mining PLC
Unaudited Consolidated Income Statement
For the Quarter Ended 31 January 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Six months Six months
ended 31 ended 31 ended 31 ended 31
January January January January
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Revenue 266 - 1,251 -
Cost of sales (198) - (809) -
-----------------------------------------------
Gross profit 68 - 442 -
Administrative expenses (698) (558) (1,381) (1,048)
Exploration expenses (31) (50) (59) (58)
-----------------------------------------------
Operating loss (661) (608) (998) (1,106)
-----------------------------------------------
Bank interest receivable 14 4 32 4
Finance costs (18) (17) (31) (34)
Foreign exchange differences 81 - 145 -
-----------------------------------------------
Net financing
income/(expense) 77 (13) 146 (30)
-----------------------------------------------
Loss before tax (584) (621) (852) (1,136)
Income tax credit 29 30 29 30
-----------------------------------------------
Loss for the period and
attributable to owners of
the parent (555) (591) (823) (1,106)
-----------------------------------------------
-----------------------------------------------
Loss per share
Quarter Quarter Six months Six months
ended 31 ended 31 ended 31 ended 31
January January January January
2011 2010 2011 2010
$ $ $ $
Basic and diluted loss per
share (0.006) (0.007) (0.009) (0.013)
-----------------------------------------------
Rambler Metals and Mining PLC
Unaudited Consolidated Statement of Comprehensive Income
For the Quarter Ended 31 January 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Six months Six months
ended 31 ended 31 ended 31 ended 31
January January January January
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Loss for the period (555) (591) (823) (1,106)
-----------------------------------------------
Exchange differences on
translation of foreign
operations (net of tax) (10) (109) (6) 37
-----------------------------------------------
Other comprehensive loss for
the quarter (10) (109) (6) 37
-----------------------------------------------
-----------------------------------------------
Total comprehensive loss for
the period and attributable
to the owners of the parent (565) (700) (829) (1,032)
-----------------------------------------------
-----------------------------------------------
Rambler Metals and Mining PLC
Consolidated Balance Sheet
As at 31 January 2011
(EXPRESSED IN CANADIAN DOLLARS)
Note Unaudited Audited
31 January 31 July
2011 2010
$,000 $,000
Assets
Property, plant and equipment 3 16,387 7,461
Mineral Properties 4 27,728 -
Intangible assets 5 16,627 37,051
-----------------------
Total non-current assets 60,742 44,512
-----------------------
Inventory 109 -
Trade and other receivables 1,235 285
Cash and cash equivalents 4,865 8,000
Restricted cash 1,958 1,365
-----------------------
Total current assets 8,167 9,650
-----------------------
Total assets 68,909 54,162
-----------------------
-----------------------
Equity
Issued capital 1,864 1,863
Share premium 51,537 51,532
Merger reserve 214 214
Translation reserve 19 25
Accumulated losses (7,483) (6,811)
-----------------------
Total equity 46,151 46,823
-----------------------
Liabilities
Interest-bearing loans and borrowings 6 17,054 5,591
Provision 7 861 559
-----------------------
Total non-current liabilities 17,915 6,150
-----------------------
Interest-bearing loans and borrowings 6 725 388
Trade and other payables 4,118 800
-----------------------
Total current liabilities 4,843 1,188
-----------------------
Total liabilities 22,758 7,338
-----------------------
Total equity and liabilities 68,909 54,162
-----------------------
-----------------------
Rambler Metals and Mining PLC
Consolidated Statement of Changes in Equity
Share Share Merger Translation Accumulated
capital premium reserve reserve Losses Total
(EXPRESSED IN
CANADIAN
DOLLARS) $,000 $,000 $,000 $,000 $,000 $,000
Group
Audited
Balance at 1
August 2009 1,255 39,296 214 50 (4,638) 36,177
----------------------------------------------------------
Comprehensive
loss
Loss for the year - - - - (2,426) (2,426)
----------------------------------------------------------
Foreign exchange
translation
differences - - - (25) - (25)
----------------------------------------------------------
Other
comprehensive
loss - - - (25) - (25)
----------------------------------------------------------
Total
comprehensive
loss for the
year - - - (25) (2,426) (2,451)
----------------------------------------------------------
Transactions with
owners
Issue of share
capital 608 13,128 - - - 13,736
Share issue
expenses - (892) - - - (892)
Share-based
payments - - - - 253 253
----------------------------------------------------------
Transactions with
owners 608 12,236 - - 253 13,097
----------------------------------------------------------
Balance at 31
July 2010 1,863 51,532 214 25 (6,811) 46,823
----------------------------------------------------------
----------------------------------------------------------
Unaudited
Balance at 1
August 2010 1,863 51,532 214 25 (6,811) 46,823
----------------------------------------------------------
Comprehensive
loss
Loss for the
period - - - (823) (823)
----------------------------------------------------------
Foreign exchange
translation
differences - - - - - -
----------------------------------------------------------
Other
comprehensive
loss - - - (6) - (6)
----------------------------------------------------------
Total
comprehensive
income for the
period - - - (6) (823) (829)
----------------------------------------------------------
Transactions with
owners
----------------------------------------------------------
Issue of share
capital 1 5 - - - 6
Share-based
payments - - - - 151 151
----------------------------------------------------------
Transactions with
owners 1 5 - - 151 157
----------------------------------------------------------
Balance at 31
January 2011 1,864 51,537 214 19 (7,483) 46,151
----------------------------------------------------------
----------------------------------------------------------
/T/
/T/
Rambler Metals and Mining PLC
Unaudited Statements of Cash Flows
For the Quarter Ended 31 January 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Six months Six months
ended 31 ended 31 ended 31 ended 31
January January January January
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Cash flows from operating
activities
Operating loss (661) (608) (998) (1,106)
Depreciation 18 38 57 77
Share based payments 45 23 143 78
Exchange differences (62) - (115) -
Increase in inventory (26) - (109) -
(Increase)/decrease in
receivables (388) 20 (949) (55)
Increase/(decrease) in
payables 84 (163) 511 (115)
-----------------------------------------------
Cash utilised in operations (990) (690) (1,460) (1,121)
Interest paid (18) (16) (31) (34)
Income tax received 29 30 29 30
-----------------------------------------------
Net cash utilised for
operating activities (979) (676) (1,462) (1,125)
-----------------------------------------------
Cash flows from investing
activities
Interest received 14 3 32 4
Purchase of bearer deposit
note (81) - (593) -
Acquisition of evaluation
and exploration assets (17) (704) (251) (1,212)
Acquisition of mineral
properties (3,888) - (4,589) -
Acquisition of property,
plant and equipment (4,276) (15) (4,788) (47)
Prepayment for acquisition
of property, plant and
equipment - - - (3,500)
-----------------------------------------------
Net cash from investing
activities (8,248) (716) (10,189) (4,755)
-----------------------------------------------
Cash flows from financing
activities
Proceeds from issue of share
capital 6 - 6 9,511
Payment of share issue
expenses - (54) - (644)
Proceeds from issue of share
options 2 - 8 3
Proceeds from Gold Loan
(note 6) 6,685 - 8,697 -
Capital element of finance
lease payments (108) (49) (202) (78)
-----------------------------------------------
Net cash from financing
activities 6,585 (103) 8,509 8,792
-----------------------------------------------
Net (decrease)/increase in
cash and cash equivalents (2,642) (1,495) (3,142) 2,912
Cash and cash equivalents at
beginning of period 7,493 6,642 8,000 2,089
Effect of exchange rate
fluctuations on cash held 14 (111) 7 35
-----------------------------------------------
Cash and cash equivalents at
end of period 4,865 5,036 4,865 5,036
-----------------------------------------------
-----------------------------------------------
/T/
Rambler Metals and Mining PLC
Unaudited Notes to the Financial Statements
1. Nature of operations and going concern
The principal activity of the Group is the development and exploration programme of the Ming Copper-Gold Mine
in Baie Verte, Newfoundland and Labrador, Canada.
The Group's ability to continue as a going concern, and the recoverability of its mineral properties, is
dependent on the copper and gold prices, its ability to fund its development and exploration programs, and to
manage and generate positive cash flows from operations in the future. These financial statements do not
reflect the adjustments to carrying values of assets and liabilities and the reported expenses and balance
sheet classifications that would be necessary should the going concern assumption be inappropriate, and these
adjustments could be material.
In common with many exploration companies, the Group raises finance for its exploration and appraisal
activities in discrete tranches. In August 2010, the Group released its final NI43-101 Feasibility Study for
the Ming Copper-Gold Mine Project. This enabled the Group to draw down the second instalment of the Gold Loan
(see note 6) of US$2 million. A further US$7 million of the final US$13 million was received in January 2011
and the final US$6 million was received subsequent to the quarter end. The Directors and management continue to
evaluate possible sources of finance to provide sufficient project finance and working capital for the
forthcoming 12 months. Whilst they are confident that such funds will be raised and have therefore concluded
that the Group is a going concern, there is no certainty that such funds will be available when needed.
2. Accounting policies
Details of the main accounting policies of the Group are included in note 2 of the financial statements for the
year ended 31 July 2010. The following additional accounting policies have been applied in the current six
months:
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services
in the ordinary course of the Group's activities. Revenue is shown net of sales tax.
The group recognises revenue when the amount of the revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and when specific criteria have been met as described below:
Toll processing
The Group processes ore at its milling facility. Sales of this service are recognised as the ore is processed.
The customer is invoiced based on tonnes processed each month at the price specified in the toll processing
agreement.
Mineral properties
Upon transfer of 'Exploration and evaluation costs' into 'Mineral Properties', all subsequent expenditure on
the construction, installation or completion of infrastructure facilities is capitalised within 'Mineral
Properties'. Development expenditure is net of proceeds from all but the incidental sale of ore extracted
during the development phase.
Inventory
Operating supplies are valued at the lower of cost and net realisable value. Cost is determined on an average
cost basis.
3. Property, plant and equipment
/T/
Land and Assets under Motor Plant and
buildings construction vehicles equipment
$,000 $,000 $,000 $,000
Cost
Balance at 1 August
2009 1,025 8 118 6,019
Acquisitions 71 5,191 - 19
Effect of movements in
foreign exchange - - - -
-----------------------------------------------------
Balance at 31 July
2010 1,096 5,199 118 6,038
-----------------------------------------------------
-----------------------------------------------------
Balance at 1 August
2010 1,096 5,199 118 6,038
Acquisitions 676 4,975 43 3,955
Disposals - - (39) -
-----------------------------------------------------
Balance at 31 January
2011 1,772 10,174 122 9,993
-----------------------------------------------------
-----------------------------------------------------
Depreciation and
impairment losses
Balance at 1 August
2009 524 - 18 2,926
Depreciation charge
for the period 251 - 33 1,456
Effect of movements in
foreign exchange - - - -
-----------------------------------------------------
Balance at 31 July
2010 775 - 51 4,382
-----------------------------------------------------
-----------------------------------------------------
Balance at 1 August
2010 775 - 51 4,382
Depreciation charge
for the period 63 - 19 586
On disposals - - (20) -
-----------------------------------------------------
Balance at 31 January
2011 838 - 50 4,968
-----------------------------------------------------
-----------------------------------------------------
Carrying amounts
At 1 August 2009 501 8 100 3,093
-----------------------------------------------------
At 31 July 2010 321 5,199 67 1,656
-----------------------------------------------------
-----------------------------------------------------
At 1 August 2010 321 5,199 67 1,656
-----------------------------------------------------
-----------------------------------------------------
At 31 January 2011 934 10,174 72 5,025
-----------------------------------------------------
-----------------------------------------------------
Fixtures,
fittings and Computer
equipment equipment Total
$,000 $,000 $,000
Cost
Balance at 1 August
2009 54 496 7,720
Acquisitions 2 46 5,329
Effect of movements in
foreign exchange - (1) (1)
-----------------------------------------------
Balance at 31 July
2010 56 541 13,048
-----------------------------------------------
-----------------------------------------------
Balance at 1 August
2010 56 541 13,048
Acquisitions 5 39 9,693
Disposals - - (39)
-----------------------------------------------
Balance at 31 January
2011 61 580 22,702
-----------------------------------------------
-----------------------------------------------
Depreciation and
impairment losses
Balance at 1 August
2009 31 191 3,690
Depreciation charge
for the period 13 145 1,898
Effect of movements in
foreign exchange - (1) (1)
-----------------------------------------------
Balance at 31 July
2010 44 335 5,587
-----------------------------------------------
-----------------------------------------------
Balance at 1 August
2010 44 335 5,587
Depreciation charge
for the period 5 75 748
On disposals - - (20)
-----------------------------------------------
Balance at 31 January
2011 49 410 6,315
-----------------------------------------------
-----------------------------------------------
Carrying amounts
At 1 August 2009 23 305 4,030
-----------------------------------------------
At 31 July 2010 12 206 7,461
-----------------------------------------------
-----------------------------------------------
At 1 August 2010 12 206 7,461
-----------------------------------------------
-----------------------------------------------
At 31 January 2011 12 170 16,387
-----------------------------------------------
-----------------------------------------------
/T/
4. Mineral Properties
/T/
Mineral Property
$,000
Cost
Balance at 1 August 2010 -
Transfer from exploration and evaluation costs 20,902
Acquisitions 6,826
----------------
Balance at 31 January 2011 27,728
----------------
----------------
Carrying amounts
At 1 August 2010 -
----------------
At 31 January 2011 27,728
----------------
----------------
/T/
Effective 1 September 2010 following acceptance of the Ming Mine feasibility study by Sandstorm Resources Ltd.
('Sandstorm') (see note 6), the Ming Mine project moved from pure Exploration & Evaluation into the Mine
Development stage. As a consequence, evaluation and exploration costs of $20.9 million relating to the Massive
Sulfide Ore Zones of the Ming Mine were transferred to Mineral Properties.
5. Intangible assets
/T/
Exploration and
evaluation
Costs
$,000
Cost
Balance at 1 August 2009 31,476
Acquisitions 5,575
---------------------
Balance at 31 July 2010 37,051
---------------------
---------------------
Balance at 1 August 2010 37,051
Acquisitions 478
Transfer to mineral properties (20,902)
---------------------
Balance at 31 January 2011 16,627
---------------------
---------------------
Carrying amounts
At 1 August 2009 31,476
---------------------
---------------------
At 31 July 2010 37,051
---------------------
---------------------
At 1 August 2010 37,051
---------------------
---------------------
At 31 January 2011 16,627
---------------------
---------------------
/T/
6. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group's interest-bearing loans and
borrowings. For more information about the Group's exposure to interest rate and foreign currency risk, see
note 10.
/T/
31 January 31 July
2011 2010
$,000 $,000
Non-current liabilities
Bank loan 28 29
Finance lease liabilities 3,036 412
Gold Loan 13,990 5,150
---------------------
17,054 5,591
---------------------
---------------------
Current liabilities
Current portion of bank loan 3 3
Current portion of finance lease liabilities 722 385
---------------------
725 388
---------------------
---------------------
Finance lease liabilities
Finance lease liabilities are payable as follows:
Minimum Minimum
lease lease
Payments Interest Principal Payments Interest Principal
31 January 31 January 31 January 31 July 31 July 31 July
2011 2011 2011 2010 2010 2010
$,000 $,000 $,000 $,000 $,000 $,000
Less than
one year 925 203 722 426 41 385
Between
one and
five
years 3,379 343 3,036 427 16 412
-----------------------------------------------------------------
4,304 546 3,758 853 57 797
-----------------------------------------------------------------
-----------------------------------------------------------------
/T/
Under the terms of the equipment lease agreements, no contingent rents are payable.
The bank loan is secured by way of a fixed charge over a property and is repayable in monthly instalments of
$384 over 12 years.
Gold Loan
During the previous year, the Group entered into an agreement ("Gold Loan") with Sandstorm) to sell a portion
of the life-of-mine gold production from its Ming Mine.
Under the terms of the agreement Sandstorm will make staged upfront cash payments for the gold to the Group
totalling US$20 million. Payment milestones are as follows:
/T/
-- US$5 million available immediately and received on 10 March 2010;
-- US$2 million on completion of a NI43-101 feasibility study and received
on 8 September 2010;
-- US$13 million when Rambler is awarded all permits required for the Ming
mine construction. In January 2011 Sandstorm advanced US$7 million of
the remaining US$13 million.
/T/
For this, the Group has agreed to sell 32% of the payable gold in the first year of production. In each
production year following the first year of production, until 175,000oz of payable gold has been produced, the
Group has agreed to sell a percentage equal to 25% x (85% divided by the actual percentage of metallurgical
recovery of gold realized in the immediately preceding production year) provided that, if the payable gold
production in any production year after the third production year is less than 15,000 ounces, then in each such
production year, Sandstorm payable gold shall not be less than 25% of the payable gold. In each production year
following the first year of production, after 175,000oz of payable gold has been produced, the Group has agreed
to sell a percentage equal to 12% x (85% divided by the actual percentage of metallurgical recovery of gold
realized in the immediately preceding production year) provided that, if the payable gold production in any
production year after the third production year is less than 15,000 ounces, then in each such production year,
Sandstorm payable gold shall not be less than 12% of the payable gold for the remainder of the period ending 40
years after the date of the agreement. After the expiry of the 40 year term, the agreement is renewable in 10
year terms at the option of Sandstorm.
A 4.5% cash commission is payable with each payment received under the agreement.
There are certain circumstances in which the Gold Loan may be repaid earlier than by the delivery of payable
gold as follows:
/T/
i. If within 18 months of 4 March 2010 (the date of the agreement) the Ming
Mine has not started producing gold any amounts advanced will become
repayable on demand together with interest at a rate of 8% per annum.
ii. If within 24 months of the date that gold is first produced, the Ming
Mine has not produced and sold a minimum of 24,000oz of payable gold
then a portion of the US$20 million will be repayable based on the
shortfall of payable gold.
iii.Within the first 36 months of Commercial production of gold any
shortfall in the value of payable gold below the following amounts will
be required to be paid in cash:
-- within the first 12 months - US$3.6 million
-- within the second 12 months - US $3.6 million
-- within the third 12 months - US$3.1 million
/T/
The Gold Loan is accounted for as a financial liability carried at amortised cost. In determining the effective
interest rate implicit in the cash flows arising from the loan the cash flows are forecast at each quarter end
based on management's best estimates of the time of delivery of payable gold, the total amount of gold expected
to be produced over the mine life and the timing of that production.
Total interest of $389,915 was accrued during the six months. $49,906 was included in exploration and
evaluation expenditure and $340,009 charged to mineral properties.
7. Provisions
/T/
31 January 31 July
2011 2010
$,000 $,000
Reclamation and closure provision
At 1 August 2010 559 -
Provision during the period 287 559
Unwinding of discount 15 -
---------------------
At 31 January 2011 861 559
---------------------
---------------------
/T/
The reclamation and closure provision has been made in respect of costs of land restoration and rehabilitation
expected to be incurred at the end of the Nugget Pond Mill and Ming Mine's useful life. The provision has been
calculated based on the present value of the expected future cash flows associated with reclamation and closure
activities as required by the Government of Newfoundland and Labrador. The provision relates to restoration of
the mill and mine sites. The liability is secured by a Letters of Credit totalling $1.96 million. A further
provision of $0.55 million will be required following receipt of the final construction permits from the
Government of Newfoundland and Labrador to be secured by additional letters of credit totalling $1.1 million.
8. Related parties
/T/
Transactions with key management personnel
Total key management personnel compensations were as follows:
3 months 3 months 6 months 6 months
to to to to
31.01.11 31.01.10 31.01.11 31.01.10
$,000 $,000 $,000 $,000
Salaries 127 88 230 88
Share based payments 15 17 40 17
-------------------------------------------
142 105 270 105
-------------------------------------------
-------------------------------------------
/T/
Directors' fees of $76,123 remained outstanding at January 31, 2011 (July 31, 2010: $38,738).
9. Share-based payments
The number and weighted average exercise prices of share options are as follows:
/T/
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
31 January 31 January 31 July 31 July
2011 2011 2010 2010
$ No. 000 $ No. 000
Outstanding at the
beginning of the period 0.467 3,952 0.416 3,313
Granted during the period 0.452 422 0.500 704
Adjustment 0.190 (12) - -
Exercised 0.190 (30) - -
Cancelled during the
period 0.190 (300) 0.890 (65)
-------------- -------------
Outstanding and
exercisable at the end of
the period 0.476 4,032 0.467 3,952
-------------- -------------
-------------- -------------
/T/
The options outstanding at 31 January 2011 have an exercise price in the range of $0.19 to $1.10 and a weighted
average remaining contractual life of 8 years (31 July 2010: 9 years).
The fair value of services received in return for share options granted are measured by reference to the fair
value of share options granted. The estimate of the fair value of the services received is measured based on
the Black-Scholes model. The contractual life of the option (10 years) is used as an input into this model.
Expectations of early exercise are incorporated into the Black-Scholes model.
/T/
3 months 3 months 6 months 6 months
Fair value of share options to to to to
and assumptions 31.01.11 31.01.10 31.01.11 31.01.10
$,000 $,000 $,000 $,000
Fair value at measurement date
of options granted in the
period 16 - 116 -
---------------------------------------------
Weighted average fair value
per option granted in period 0.380 - 0.275 -
Share price (weighted average) 0.600 - 0.452 -
Exercise price (weighted
average) 0.600 - 0.452 -
Expected volatility (expressed
as weighted average
volatility used
in the modelling under Black-
Scholes model) 80.0% - 75.5% -
Expected option life 5 - 5 -
Expected dividends 0 - 0 -
Risk-free interest rate (based
on national government bonds) 2.50% - 2.50% -
---------------------------------------------
/T/
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining
life of the share options), adjusted for any expected changes to future volatility due to publicly available
information.
There is no performance or market conditions associated with the share option grants.
/T/
3 months 3 months 6 months 6 months
to to to to
31.01.11 31.01.10 31.01.11 31.01.10
$,000 $,000 $,000 $,000
Total expense recognised as
employee costs 45 23 143 78
-------------------------------------------
-------------------------------------------
/T/
10. Financial risk management
The Group's principal financial assets comprise: cash and cash equivalents and other receivables. In addition
the Company's financial assets include amounts due from subsidiaries. The Group and Company's financial
liabilities comprise: trade payables; other payables; and accrued expenses. The Group's financial liabilities
also include interest bearing loans and borrowings.
All of the Group's and Company's financial liabilities are measured at amortised cost and their financial
assets are classified as loans and receivables.
The board of directors determines, as required, the degree to which it is appropriate to use financial
instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be
appropriate are foreign exchange risk, interest rate risk, credit risk and liquidity risk each of which is
discussed below. There were no derivative instruments outstanding at 31 January 2011.
Foreign currency risk
The Group's cash resources are held in GB pounds and Canadian Dollars and the Gold Loan is repayable in US
dollars. The Group has a downside exposure to any strengthening of the GB pound as this would increase expenses
in Canadian dollar terms. This risk is mitigated by reviewing the holding of cash balances in GB pounds. Any
weakening of the GB pound would however result in the reduction of the expenses in Canadian dollar terms and
preserve the Group's cash resources. In addition, any such movements would affect the Consolidated Balance
Sheet when the net assets of the Parent Company are translated into Canadian dollars. The Group has a downside
exposure to any strengthening of the US dollar as this would increase the amount repayable on the Gold Loan in
Canadian dollar terms. This risk, however, is relevant only should the Gold Loan be repaid in cash under terms
set out in note 6. Repayment is envisaged in payable gold which is denominated in US dollars. Once the Ming
Mine is in production, this will mitigate this foreign currency risk.
The Group does not hedge its exposure of foreign investments held in foreign currencies. There is no
significant impact on profit or loss from foreign currency movements associated with the Parent company's
assets and liabilities as the foreign currency gains or losses are recorded in the translation reserve.
Exchange rate fluctuations may adversely affect the Group`s financial position and results. The following table
details the Group`s sensitivity to a 10% strengthening and weakening in the GB pound against the Canadian/US
Dollar. 10% represents management's assessment of the reasonable possible exposure.
/T/
Equity
31 January 31 July
2011 2010
$,000 $,000
10% strengthening of GB pound 13 53
10% weakening of GB pound (12) (47)
10% strengthening of US dollar (1,362) (515)
10% weakening of US dollar 1,316 468
----------------------
----------------------
/T/
Liquidity risk
Prior to Q3 2010 the Group had relied on shareholder funding to finance its operations. During Q3, 2010 the
Group entered into a financing arrangement in US dollars (see note 6). With finite cash resources and no
material income, the liquidity risk is significant. This risk is managed by controls over expenditure and
concentrating on achieving the payment milestones under the financing arrangement. Success will depend largely
upon the outcome of ongoing and future exploration and development programmes. Given the nature of the Group's
current activities the entity will remain dependent on a mixture of debt and equity funding in the short to
medium term until such time as the Group becomes self-financing from the commercial production of mineral
resources. The liabilities of the parent company are due within one year. The parent company has adequate
financial resources to meet the obligations existing at 31 January 2011.
The Group's and Company's trade payables, other payables and accrued expenses are generally due between one and
three months and the Group's financial liabilities are due as follows:
Financial liabilities
At the year end the analysis of finance leases, hire purchase contracts and bank loans which were all due in
Canadian Dollars and are at fixed interest rates was as follows:
/T/
31 January 31 July
Fixed rate liabilities 2011 2010
$,000 $,000
Due within one year 725 388
Due within one to two years 826 374
Due within two to three years 716 22
Due within three to four years 748 24
Due within four to five years 759 5
Due after five years 15 16
---------------------
3,789 829
---------------------
---------------------
/T/
The average fixed interest rate for the finance leases and hire purchase contracts outstanding at 31 January
2011 was 6.06%.
Credit risk
With effect from July 2007, the Group has held the majority of its cash resources in Canadian Dollars given
that the majority of the Group's outgoings are denominated in this currency. As at 31 January 2011, 46% of the
Group's cash resources were invested in a short dated term deposits and bankers acceptances. Given the current
climate, the Group has taken a very risk averse approach to management of cash resources and management and
Directors monitor events and associated risks on a continuous basis. There is little perceived credit risk in
respect of other receivables. The Group's maximum exposure to credit risk at 31 January 2011 was represented by
receivables and cash resources.
Interest rate risk
The Group's policy is to retain its surplus funds on the most advantageous term of deposit available up to
twelve month's maximum duration. Details of the Group's borrowings are described in note 6. If the interest
rate on deposits were to fluctuate by 1% there would be no material effect on the Group's reported result.
Commodity price risk
Commodity price risk is the risk that the Group's future earnings will be adversely impacted by changes in the
market prices of commodities. The Group is exposed to commodity price risk as its future revenues will be
derived based on contracts with customers at prices that will be determined by reference to market prices of
copper and gold at the delivery date.
The Group calculates the effective interest rate on the Gold Loan based on estimates of future cash flows
arising from the sale of payable gold. In estimating the cash flows the following table details the Group's
sensitivity to a 10% increase and a 25% decrease in the price of gold. These percentages represent management's
assessment of the reasonable possible exposure.
/T/
Gross assets
31 January 31 July
2011 2010
$,000 $,000
10% increase in the price of gold (85) (37)
25% decrease in the price of gold 290 106
----------------------
----------------------
/T/
Financial assets
The floating rate financial assets comprise interest earning bank deposits at rates set by reference to the
prevailing LIBOR or equivalent to the relevant country. Fixed rate financial assets are cash held on fixed term
deposit.
At the period end the cash and short term deposits were as follows:
/T/
Average Average
period for interest
Floating which rates for
Fixed rate rate rates are fixed rate
At 31 January 2011 assets Assets Total fixed assets
$,000 $,000 $,000 Months %
Sterling 198 52 250 1 0.25
US $ - 1,688 1,688 - -
Canadian $ 2,024 903 2,927 1 1.07
---------------------------------
2,222 2,643 4,865
---------------------------------
---------------------------------
At 31 July 2010
$,000 $,000 $,000 Months %
Sterling 484 67 551 1 0.25
Canadian $ 6,351 1,098 7,449 2 0.35
---------------------------------
6,835 1,165 8,000
---------------------------------
---------------------------------
/T/
Fair values
In the directors' opinion there is no material difference between the book value and fair value of any of the
group's financial instruments.
11. Subsequent Events
On March 8, 2011 the Group received the final construction approval from the Government of Newfoundland and
Labrador for the Ming Copper-Gold Mine. Subsequently, on March 14, 2011 the final US$6 million from Sandstorm
under the terms of the Gold Loan agreement was received.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Rambler Metals and Mining Canada Limited
George Ogilvie, P.Eng.
President and CEO
709-532-4990
OR
Rambler Metals & Mining Plc.
Corporate Office
+44 (0) 20 8652-2700
+44 (0) 20 8652-2719 (FAX)
www.ramblermines.com
OR
Seymour Pierce Limited
Nandita Sahgal
+44 (0) 20-7107-8000
OR
Seymour Pierce Limited
Jeremy Stephenson
+44 (0) 20-7107-8000
OR
Pelham Bell Pottinger
Charles Vivian
+44 (0) 20 7861 3126
OR
Pelham Bell Pottinger
Philippe Polman
+44 (0) 20 7861 3861
OR
Ocean Equities Limited
Guy Wilkes
+44 (0) 20-7786-4370
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
-0-
Rambler Metals & Mining Plc
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