Rambler Metals and Mining plc Financial Results...
FOR: RAMBLER METALS & MINING PLC
AIM SYMBOL: RMM
TSX VENTURE SYMBOL: RAB
October 22, 2012
Rambler Metals and Mining plc Financial Results Year Ended 31 July 2012
LONDON, UNITED KINGDOM and BAIE VERTE, NEWFOUNDLAND AND LABRADOR--(Marketwire - Oct. 22, 2012) - Rambler Metals
and Mining PLC (TSX VENTURE:RAB)(AIM:RMM) ("Rambler" or the "Company") is pleased to report its financial
results and operational highlights for the year ended 31 July 2012. The Company is focused on ramping up
production at the Ming Copper-Gold Mine ("Ming Mine") and the development and exploration of the asset located
on Newfoundland and Labrador's Baie Verte Peninsula.
George Ogilvie, President and CEO, Rambler Metals & Mining commented;
"Commencing and accelerating production at our Ming Copper-Gold
Mine has been a great achievement for the Company this
year.Generating revenue and a consistent focus on reducing cash
costs has given us a strong balance sheet which will further
support organic growth and acquisitions.
The progress towards our goal of being the leading mine operator
and resource developer in Atlantic Canada was further supported by
the off-take agreement with Transamine and Tinma's strategic
investment."
Operational Highlights
-- Fiscal 2012 was a transformational year for the Company as it continues
to work its way towards the declaration of commercial production,
expected to be announced 2H 2012
-- During the 12 month period 14,918 ounces of gold was produced and sold
during commissioning of the Ming Mine at an average price of CAD$1,650,
generating revenue of $25.2 million. Following the completion of
construction and commissioning of the copper concentrator, first revenue
of $3.0 million was realised from the sale of 1,271 tonnes of
concentrate in July 2012
-- Finalized off-take agreement with Transamine Trading S.A. for the sale
of 85,000 tonnes of copper concentrate over the initial 6 years of mine
production
-- Announced the completion of a preliminary economic assessment ('PEA') to
include all Lower Footwall Zone mineralization and evaluating the
potential for an expansion of the Ming Mine into a 20+ year bulk tonnage
operation
-- Finalised construction of the 9,500 wet metric tonne concentrate storage
facility at the Goodyear's Cove Port. At year end, 2,500 tonnes of
copper concentrate was in storage at the facility generated during the
commissioning of the new floatation facility
Financial Highlights (CAD$)
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2011 2012
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Revenue 3,523,000 1,219,000
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Cost of sales 1,754,000 674,000
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Net Loss 53,000 3,367,000
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Loss per share (0.026) (0.001)
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Cash & Cash Equivalents 10.2 million 7.8 million
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-- The Company generated first revenue of $28.2 million from its Ming Mine
project during the commissioning of the operation during fiscal 2012.
Ming Mine revenues were credited to the Mineral Properties asset and
will continue until commercial production is declared
-- Revenue in fiscal 2011 ($3,523,000) and 2012 ($1,219,000) and related
operating costs arose from tolling milling agreements and mining of the
Company's Tilt Cove East Mine and Nugget Pond crown pillar satellite
deposits
-- During the year repayments of US$7,855,411 were made from the delivery
of 4,774 ounces of gold. The payments satisfies the requirements in the
gold loan agreement to repay a minimum of US$3.6 million in each of the
first two 12 month periods of production
-- At October 19, 2012 the Company had $6.5 million in cash and cash
equivalents.
Corporate Highlights
-- Accepted an offer from Tinma International Ltd. ('Tinma') to become a
strategic shareholder through non-brokered private placements raising
total proceeds of $8.71 million. Tinma now holds 16 per cent of the
issued share capital of the Company
-- Completed the acuisition of a total of 5,088,230 shares of Maritime
Resources Corp (TSX VENTURE:MAE) ('Maritime') for a total of $1,135,000
providing Rambler with a 17% equity stake and an invitation to appoint a
representative to join Maritime's Board of Directors
ABOUT RAMBLER METALS AND MINING
Rambler Metals and Mining plc is a copper and gold producer that has 100% ownership of the Ming Copper-Gold
Mine in Baie Verte, Newfoundland and Labrador, Canada. Rambler's strategy is to become a mid-tier mining
company by continuing the development of the Ming Mine, discovering new deposits and pursuing mergers and
acquisitions.
REGISTERED NUMBER: 05101822 (ENGLAND AND WALES)
REPORT OF THE DIRECTORS AND
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JULY 31, 2012
RAMBLER METALS AND MINING PLC
CONTENTS OF THE FINANCIAL STATEMENTS
Page
Company Information 1
Chairman's Statement 2
Management's Discussion and Analysis 3
Report of the Directors 29
Directors' Responsibilities statement 32
Corporate Governance 33
Independent Auditor's report 34
Consolidated Income Statement 36
Consolidated Statement of Comprehensive Income 37
Consolidated Statement of Financial Position 38
Consolidated Statement of Changes in Equity 39
Consolidated Statement of Cash Flows 40
Notes to the Consolidated Financial Statements 41
Company Statement of Comprehensive Income 69
Company Statement of Financial Position 70
Company Statement of Changes in Equity 71
Company Statement of Cash Flows 72
Notes to the Company Financial Statements 73
RAMBLER METALS AND MINING PLC
COMPANY INFORMATION
FOR THE YEAR ENDED JULY 31, 2012
Directors: T S Chan
D H W Dobson
L D Goodman
B Hinchcliffe
S Neamonitis
G Ogilvie
J M Roberts
J S Thomson
Secretary: P Mercer
Registered office: Salatin House
19 Cedar Road
Sutton
Surrey
SM2 5DA
Registered number: 5101822 (England and Wales)
Auditor: PKF (UK) LLP
20 Farringdon Road
London
EC1M 3AP
RAMBLER METALS AND MINING PLC
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED JULY 31, 2012
We are pleased to report the results for the year ended July 31, 2012.
The principal activity of Rambler Metals and Mining plc ('the parent Company') and its subsidiaries (the
'Group', or 'Rambler') is the development, mining and exploration of the Ming Copper-Gold Mine ("Ming 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 on the TSX
Venture Exchange under the symbol "RAB".
The presentational currency of the Group's financial statements is Canadian dollars ($).
OPERATIONAL HIGHLIGHTS
The Group reached considerable milestones and other key achievements during the fiscal year. Highlights
include:
-- Revenue generated from saleable material produced during commissioning
through the sale of 14,918 ounces of gold and additional revenue from
the sale of 1,271 tonnes of copper concentrate from its newly completed
copper concentrator.
-- Accepted an offer from Tinma International Ltd. ('Tinma') to become a
strategic shareholder through non-brokered private placements raising
total proceeds of $8.71 million. Tinma now holds 16 per cent of the
issued share capital of the Group.
-- Finalized an off-take agreement for the copper concentrate production.
-- Announced the completion of a preliminary economic assessment ('PEA') to
include the Lower Footwall Zone mineralization evaluating the potential
for an expansion of the Ming Mine into a 20+ year bulk tonnage
operation.
FINANCIAL HIGHLIGHTS
The consolidated loss after taxation of the Company in respect of the year ended July 31, 2012 amounted to
$3,367,000 (a loss per share of $0.026) versus a loss of $53,000 for the year ended 31 July 2011 (a loss per
share of $0.001).
The Group generated revenue from saleable material produced during commissioning of $25.2 million from the sale
of gold and $3.0 million from the sale of copper concentrate during the year and offset this revenue against
the Mineral Property asset as commercial production was not declared during the year.
The gross assets of the Company amounted to $107.2 million as at the end of the year. This included mineral
properties of $44.5 million and intangible assets of $17.3 million which consisted of accumulated deferred
exploration and evaluation expenditures on the Lower Footwall Zone at the Ming Mine.
Management is to be congratulated in commencing commissioning of the Ming Mine and generating early production.
We looking forward to announcing commercial production before the end of the calendar year. My thanks to our
employees, officers and directors for the progress which has been made during the year and I look forward to
continued success in fiscal 2013.
DHW Dobson
Chairman
October 19, 2012
RAMBLER METALS AND MINING PLC
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JULY 31, 2012
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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 October 19, 2012 and covers the
results of operations for the quarter and year ended July 31, 2012. This
discussion should be read in conjunction with the audited Financial
Statements for the year ended July 31, 2012 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. These statements together with the following MD&A are intended to
provide investors with a reasonable basis for assessing the potential future
performance. See Forward Looking Statement disclosure in Appendix 5.
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GROUP OVERVIEW
The principal activity of the Group is the development, mining and exploration of the Ming Copper-Gold Mine
('Ming Mine') located on Newfoundland and Labrador's Baie Verte Peninsula. See Appendix 1. On November 28, 2011
the Group reached a significant milestone in commencing the testing and commissioning of the gold mill with
1806 gold ore, resulting in saleable material. A total of 14,918 ounces of gold was poured generating revenues
of $25.2 million. In May 2012, following completion of construction of the copper concentrator the Group began
the live commissioning of its new facility generating first revenue from the sale of copper concentrate in July
2012.
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 three strategic goals:
1. Become a profitable copper and gold producer by maximizing the use of
the Nugget Pond processing facility.
2. Increase existing Ming Mine resources and reserves through further
exploration.
3. Selectively pursue growth opportunities within Atlantic Canada including
joint ventures, acquisitions, strategic alliances and equity positions.
The Group's directors and management believe that focussing on these priorities will instil a solid foundation
for Rambler, while providing the best opportunity to build a successful and long term mining company.
HIGHLIGHTS OF THE YEAR ENDED JULY 31, 2012
This was a significant year for the Group as Management successfully commenced commissioning the Ming Mine,
first by producing gold during the commissioning and testing of the 1806 zone ores. Trucking of gold ore from
the mine to the Group's gold processing facility at Nugget Pond began on November 28, 2011 followed by the
Company's first gold dore bar being poured on December 12, 2011 resulting in first revenue from the Ming Mine
project. Subsequently the Group reached its second significant milestone with the start-up of its newly
constructed copper concentrator generating first revenue from copper concentrate sales before year end.
Commercial production for the project is anticipated to be announced during the second half of calendar 2012.
Highlights of the 2012 fiscal year included:
Capital Development and Production
-- Produced a total of 14,918 ounces of gold while testing the 1806 zone
ore and commissioning the gold milling facility. During a five month
period commencing in November 2011 91,835 wet metric tonnes were
processed with daily milling throughput ranging between 465 and 845 wet
metric tonnes per day ('wmtpd'), with an overall average of 619 wmtpd.
With an average grade of 4.94 grams per tonne gold the Group realized
revenue of $25.2 million. For the period operating costs ranged between
$900 and $1,000 per ounce.
-- Completed the construction and dry commissioning of the copper
concentrator concurrent with the processing of 1806 zone ore. Following
the live ore commissioning of the Group's new copper flotation facility
in May 2012 the first copper concentrate was trucked from the Nugget
Pond to Goodyear's Cove for storage. Lower Footwall Zone material, with
a head grade of 1.30% copper, was used during early stage commissioning
followed by gradual blending of high grade ore from the 1807 ore zone
pushing the overall copper equivalent head grade to 2.76% at July year
end. The quality of concentrate produced varied depending on the ore
blending strategy used and concentrate grades ranged between 22% and 32%
copper.
-- Development into the high grade 1807 copper zone continued throughout
the year with ore being stockpiled as development progressed. With the
majority of tonnes for the 2013 fiscal year coming from this zone, ore
access on multiple levels was the main focus for underground development
crews.
-- Finalized construction of the 9,500 wet metric tonne concentrate storage
facility at the Goodyear's Cove Port. Building services and electrical
hook up was concluded subsequent to year end. The installation of a ship
loading 850 tonnes per hour conveyor system had begun during the year
and is scheduled to be completed before the Group's first shipment of
copper concentrate in the second half of calendar 2012. At year end
approximately 2,500 wet metric tonnes of copper concentrate was in
storage at the facility.
Financing, Royalty and Investment
-- Accepted an offer from Tinma International Ltd. ('Tinma'), a wholly-
owned subsidiary of a China-based investor, to become a strategic
shareholder in Rambler through a non-brokered private placement. On
March 19, 2012 Rambler announced the closing of this private placement
resulting in the issuance of 10,403,980 ordinary shares to Tinma at a
placing price of $0.44 per ordinary share for total proceeds of $4.58
million. Subsequent to the completion of the initial placement the Group
entered into a second subscription agreement with Tinma to subscribe for
7,118,012 ordinary shares by way of a non-brokered private placement at
a price of CAD $0.58 per ordinary share for total proceeds of $4.13
million. Upon receipt of shareholder approval at the Company's General
meeting on June 28, 2012 Rambler announced the closing of the second
private placement. Immediately following the closing of the second
placement Tinma's total shareholdings in Rambler was 22,736,992 being
the total of both private placements plus any shares bought on the open
market. Tinma is now a strategic shareholder of Rambler owning sixteen
per cent of the issued share capital.
-- During the year repayments of US$7,855,441 were made from the delivery
of 4,774 ounces of gold thereby satisfying requirements in the gold loan
agreement to repay a minimum of US$3.6 million in each of the first two
12 month periods of production.
-- Completed an acquisition of 4,500,000 shares of Maritime Resources Corp
(TSX VENTURE:MAE) ('Maritime') through a non-brokered private
transaction priced at $0.23 per share for a total consideration of
$1,035,000. Subsequently Rambler acquired an additional 588,230 shares
through a non-brokered private transaction priced at $0.17 per share for
a total consideration of $100,000 The acquisitions provided Rambler with
a 17% equity stake and an invitation to appoint a representative to join
Maritime's Board of Directors. Maritime continues to advance the Green
Bay portfolio of properties, specifically the Hammerdown mine, and the
Orion and Lochinvar deposits.
-- Announced the purchase of Ming Mine's 2% net smelter royalty held by
Philippine Metals Inc., formerly Meridian Mining Corporation, for
CAD$600,000. Before the buyout the mine had a 4.5% combined net smelter
royalty held by four separate groups.
-- Finalized an off-take agreement with Transamine Trading for the copper
concentrate produced from the Ming Mine. The agreement includes the sale
of 85,000 tonnes of concentrate over the initial 6 year mine life, at
international spot rates and envisages a 90% provisional payment option
for concentrate as it arrives at the Goodyear's Cove port facility. This
is of particular significance as it will ensure steady cash flow to the
Group during its early years of production.
-- The Group drew down its first installment of $5.0 million from the $10.0
million credit facility agreed to in September 2011. Interest will be
payable at a fixed rate of 9.25% per annum, is repayable by March 29,
2013 and secured by a fixed and floating charge over the assets of the
Group. Upon the completion of a second site visit from Sprott Resource
Lending Partnership and execution of the off-take agreement the final
tranche of $5.0 million was made available. On January 30, 2012 the
Group drew down a second installment of $2.5 million. A remaining $2.5
million was available until August 2012 and was not drawn.
Exploration and evaluation
-- Announced the completion of a preliminary economic assessment ('PEA') to
include the Lower Footwall Zone mineralization in its mine plan. This
assessment evaluated the potential for an expansion of the Ming Mine to
first optimize the current high grade operation and available
infrastructure followed by a transition into a 20+ year bulk tonnage
operation through a four year ramp-up period. Production throughput will
increase from the current 630 mtpd to 1,000 mtpd at Nugget Pond, then
3,500 mtpd at a newly constructed milling facility at the Ming Mine
site. Future optimization and engineering studies will focus on
improving the business case to ensure the project will benefit from
additional upside of the existing operation. PEA results currently
envisage: a pre-tax net present value of US$251 million (discount 5%);
an internal rate of return of 18%, an undiscounted pre-tax cash flow
from operations of $861 million and initial capital requirements of
US$231 million.
-- Exploration diamond drilling in the 1806 gold zone, beyond current
mining blocks, has reported visible gold and significant assayed
intersections. Of particular importance are drill holes MMUG12-34 and
MMUG12-51 with uncut gold intersections of 5.10 metres grading 227.65
g/t (21.19 g/t cut) and 4.45 metres grading 49.69 g/t (7.57 g/t cut)
respectively.
Staffing
-- Continued to strengthen the operations team, including the appointment
of a Mill Operations Foreman with 16 years of flotation experience and a
Mill Metallurgist as it prepared to run "live" feed through the copper
concentrator.
-- Coinciding with the start of testing and commissioning, the Nugget Pond
facility was staffed through the addition of 14 employees to the
operating, electrical and maintenance fields. The mine operation
continued to fill underground staffing positions as dictated by
production and development requirements.
-- At year end a total of 130 full time employees were employed at the Ming
Mine compared to 111 full time employees at July 31, 2011.
FINANCIAL RESULTS
-- Revenue
-- A total of 14,918 ounces of gold were sold from the Ming Mine during
the year at an average price of CAD$1,650 generating revenue of
$25.2 million. Additional revenue of $3.0 million was realized on
the sale 1,271 tonnes of copper concentrate in July 2012. Revenue
realized during the testing and commissioning of the Ming Mine are
credited to the Mineral Property asset until commercial production
is achieved. During the year a total of $28.2 million was credited
to Mineral Property.
-- A total of 621 ounces of gold were processed from the Tilt Cove East
Mine satellite deposit during the first quarter generating revenue
of $1,095,000. The Group suspended the ore processing in early
August due to sodium cyanide supply issues and further postponed
processing to make way for first production from Ming Mine ores.
Further revenue of $124,000 generated through further refining of
slag materials from the Nugget Pond Crown Pillar satellite deposit
recovering an additional 74 ounces of gold. Revenue from satellite
deposits totalling $1,219,000 was recorded in the Company's
consolidated statement of income and offset by operating costs of
$674,000 resulting in a gross profit of $545,000 for the fiscal
year.
-- Loss
-- The net loss for the year was $3,367,000 compared with a loss of
$53,000 for the year ended July 31, 2011. The net loss for the
quarter ended July 31, 2012 was $1,202,000 or $0.009 per share which
compares to $281,000 for Q3/12 and a net profit of $577,000 for
Q4/11.
-- Cash flow and cash resources
-- Cash flows utilized for operating activities were $1,209,000
compared with $1,352,000 in the previous fiscal year. Cash flows
utilized in operating activities were $1,211,000 in Q4/12 compared
to $752,000 in Q3/12 and cash generated of $573,000 in Q4/11. The
increase in the cash utilized relates to changes in working capital
and an increase in operating loss.
-- Cash resources (including short-term investments) as at July 31,
2012 were $7.8 million and as of October 19, 2012 had reduced to
$6.5 million.
HEALTH AND SAFETY
-- The Group completed the year with 1 lost time accident and 9 medical aid
injuries. The lost time accident was the first one ever recorded on the
project's 7 year life and resulted when an employee drove an underground
haulage truck over a large rock on the roadway causing the employee to
jar their back.
-- The Health and Safety of the Group's employees continues to be a high
priority with prevention and hazard recognition being key components of
the Group's strategy.
OUTLOOK
Management continue to pursue the following objectives:
-- Move the Ming Mine into commercial production before the end of calendar
year 2012.
-- Continue mining and milling the exposed 1807 workplaces for the
generation of copper concentrate revenue from the Ming Mine. Place
additional development focus into preparing this high grade zone for
further exploration both up-dip and down-dip for inclusion in future
resource and reserve estimates.
-- Optimize the mining and processing of ores from the Ming Mine in
addition to continuing to evaluate opportunities for a possible future
expansion into the Lower Footwall Zone.
-- Become a strategic long term low-cost producer on the Baie Verte
Peninsula, and throughout Atlantic Canada, by selectively pursuing
growth opportunities including joint ventures and acquisitions,
including the Group's investment in Maritime Resources Corp.
See 'Forward Looking Information' for a description of the factors that may cause actual results to differ from
forecast.
CAPITAL PROJECTS UPDATE
During the year the Group incurred expenditures of $37,821,000 on Mineral Property which were offset by revenue
of $28,225,000 from gold and copper concentrate sales, $10,451,000 on property, plant and equipment and
$633,000 on exploration and evaluation of the Ming Mine.
Prior to the mine being considered substantially complete and ready for its intended use, all direct operating
costs, including costs associated with stockpile ores, are capitalized within mineral property and offset by
revenues generated from on-going production.
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Mineral Property (capital
development of Ming Mine) Total Q4/12 Q3/12 Q2/12 Q1/12
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$,000 $,000 $,000 $,000 $,000
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Labour costs 8,449 2,332 2,297 2,031 1,789
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Contractors' and consultancy
expenses 336 27 78 88 143
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General materials and other costs 972 217 234 250 271
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Surface development 591 228 128 171 64
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Underground development 7,324 2,405 2,132 1,666 1,121
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Processing and ore transportation 5,546 2,340 1,983 1,223 -
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Concentrate transportation & other
allowances 241 241 - - -
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Sub-total 23,459 7,790 6,852 5,429 3,388
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Other Charges
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Finance costs 9,320 4,945 2,337 1,408 630
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Depreciation 4,092 1,099 1,023 1,056 914
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Royalties 784 59 668 57
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Reclamation and closure provision 166 218 23 23 (98)
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Total 37,821 14,111 10,903 7,973 4,834
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Revenue recognized from gold and
copper concentrate sales (28,225) (11,610) (14,136) (2,479) -
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Net 9,596 2,501 (3,233) 5,494 4,834
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Total mineral property costs before other charges increased in Q4/12 compared to Q3/12 in line with an increase
in underground capital development, start-up of the copper concentrator at the Nugget Pond processing facility
and the trucking of copper concentrate to the Goodyear's Cove storage facility. Labour and underground
development costs increased over the comparable quarters as the result of hiring additional full time operators
for the copper concentrator and increased development of the Ming Mine's 1807 ore zone. Processing and ore
transportation expenditures increased in Q4/12 due to more ore tonnes being trucked to Nugget Pond ahead of
starting the copper concentrator. Concentrate transportation and other allowances were incurred following the
start of the copper concentrator and include trucking expenditures, treatment, refining and freight charge
allowances.
Finance costs increased in Q4/12 compared to Q3/12 due to adjustments in the timing of planned production
affecting the effective interest charge on the Gold Loan liability. Royalty expenditures decreased in Q4/12
directly related to the CAD$600,000 purchase of a 2% net smelter royalty held on the Ming Copper-Gold Mine
project in Q3/12. Revenue recognized in Q4/12 decreased compared to Q3/12 marking the completion of 1806 gold
zone processing and switch over to the copper concentrator commissioning.
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Mineral Property (capital development of
Ming Mine by area, before other charges) Total Q4/12 Q3/12 Q2/12 Q1/12
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$,000 $,000 $,000 $,000 $,000
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Surface 4,037 1,166 1,251 997 623
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1806 ore zone 4,126 878 1,113 1,440 695
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1807 ore zone 3,561 2,128 1,206 212 15
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Lower Footwall ore zone 965 253 441 103 168
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Ramp improvements & ongoing maintenance 3,840 530 619 1,288 1,403
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Shaft manway rehab 188 26 134 8 20
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Administrative 1,786 460 447 427 452
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Port site 592 433 107 40 12
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Nugget Pond Mill 4,364 1,916 1,534 914 -
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Total 23,459 7,790 6,852 5,429 3,388
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Surface related costs fluctuated through fiscal 2012 quarters due to a timing of ore trucking to the Nugget
Pond Mill. Decreased costs experienced on the 1806 ore zone are in line with completion of production drilling
and underground development towards the end of Q3/12. Current quarter expenditures are represented mainly by
final drilling and ore haulage activities. 1807 ore zone expenditures increased in Q4/12 compared to Q3/12 in
line with a ramp up in development and production as the Group began the commissioning of the copper
concentrator. Lower Footwall ore zone expenditures decreased in Q4/12 compared to Q3/12 as fewer low grade
tonnes were mined during the quarter. Q3/12 and Q2/12 expenditures in this zone related to on-going development
aimed at accessing ores for the commissioning of the Group's copper concentrator. Ramp improvements &
maintenance decreased further in Q4/12 in line with the move towards increased development in the 1807 zone and
a reduction in required maintenance. Nugget Pond Mill expenditures increased in Q4/12 as operating expenditures
were incurred during the clean out of 1806 zone ore production at the gold mill and the start of commissioning
at the newly construction copper concentrator in May 2012.
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Property, plant and equipment Total Q4/12 Q3/12 Q2/12 Q1/12
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$,000 $,000 $,000 $,000 $,000
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Mill purchase and construction 6,189 (25) 383 1,671 4,160
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Plant and equipment 3,378 164 1,053 2,089 72
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Buildings 733 71 - 152 510
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Other assets 151 (21) 1 80 91
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Total 10,451 189 1,437 3,992 4,833
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Property, plant and equipment reduced during Q4/12 compared to Q3/12 reflecting the significant increase in
underground equipment purchased during Q3/12. Mill purchase and construction decreased during Q4/12 in line
with bringing the Group's copper concentrator on-line in May 2012.
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Exploration and evaluation costs
(Ming Mine) Total Q4/12 Q3/12 Q2/12 Q1/12
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$,000 $,000 $,000 $,000 $,000
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Consultancy expenses 633 10 337 248 38
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Total 633 10 337 248 38
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Effective September 1, 2010, following completion of the Ming Mine feasibility study, the Ming Mine project
moved from pure Exploration & Evaluation into the Mine Development stage. Exploration expenditures incurred
related to updating and validating of the Footwall Zone resources.
FINANCIAL REVIEW
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Comparatives
Fiscal Commentary Fiscal
2012 2011 B/(W)(i)
($000's) ($000's)
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Revenue of $1.2 million was generated through
gold sales from the Group's Tilt Cove East
Mine and the further refining of slag
materials from the Nugget Pond Crown Pillar
1,219 satellite deposits. This compared with revenue 3,523 (65)%
of $3.5 million in the prior year on the sale
of gold from the Group's satellite deposits
and toll processing agreements.
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Operating Costs of $674,000 relate to the
processing, mining, royalty and general
administrative costs associated with the
completion of the Group's Tilt Cove satellite
674 deposit during Q1/12. Fiscal 2011 expenditures 1,754 62%
represent similar expenditures incurred on the
Group's Tilt Cove East Mine and Nugget Pond
Crown Pillar satellite deposits and toll
processing agreements.
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General and administrative expenses were higher
than the previous year by $272,000. Employment
costs increased $69,000 as a result of key
management promotions and the recruitment of
additional administrative staff, travel and 2,750 (10)%
3,022 investor relation costs increased $42,000 and
security and general office expenses increased
$156,000 due to the addition of security
personnel at the mine site and the move to the
new office and dry facility.
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Foreign exchange losses arising on the Gold
Loan increased in the year as a result of the 897 (207)%
(959) weakening of the Canadian dollar against the
US dollar during the year.
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Exploration costs decreased compared to the
previous year as the Group's main focus was on
the construction and development of the Ming
24 Mine. As the Group moves towards and in 79 70%
through commercial production Management will
revisit various exploration opportunity in the
area.
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Mineral Properties The group incurred costs of
$37.8 million in the year offset by revenue on
gold production of $28.2 million (see further
below). The costs include labour of $8.4
million, contractor and material costs of $0.3
million, underground development costs of $7.3
million, depreciation of $4.1 million and
finance costs of $9.3 million. Finance costs
include $7.9 million in effective interest
charges arising on the gold loan due to higher
than estimated gold prices and actual gold
ounces delivered during the year as well as
changes to future gold pricing and volume
estimates. Finance costs include actual cash
cost of $1.4 million relating to interest on
the Group's Credit Facility and equipment
capital leases.
9,596 17,566 45%
Ming Mine Revenue of $28.2 million was realized
in the year on the sale of 14,918 ounces of
gold and 1,271 tonnes of copper concentrate.
Processing and ore transportation costs of
$5.5 million and concentrated transportation &
other allowances of $241,000 were incurred to
generate this revenue. Revenue realized during
the testing and commissioning of the Ming Mine
has been credited against Mineral Properties
and will continue until commercial production
is announced.
----------------------------------------------------------------------------
Capital spending on property, plant and
equipment decreased during the year reflecting
the substantial completion of the copper
concentrator at the Nugget Pond gold and base
10,451 metal milling facility, a reduction in the 20,320 49%
amount of new equipment being leased and
substantial completion of the Goodyear's Cove
Storage Facility.
----------------------------------------------------------------------------
Capital spending on exploration and evaluation
costs increased in the year as a result of
633 consultancy expenditure incurred on the 478 (32)%
preliminary economic assessment of the Lower
Footwall Zone at the Ming Mine.
----------------------------------------------------------------------------
(i)B /(W) = Better / (Worse)
SUMMARY OF QUARTERLY RESULTS
The quarterly results for the Group for the last eight fiscal quarters are set out in the following table.
----------------------------------------------------------------------------
Quarterly Results 4th 3rd 2nd 1st
(All amounts in 000s of Canadian Dollars, Quarter Quarter Quarter Quarter
except Loss per share figures)
----------------------------------------------------------------------------
Fiscal 2012
Revenue -(i) -(i) -(i) 1,219
Net Income/ (loss) (1,202) (281) (1,039) (845)
Earnings/(loss) per Share (Basic & Diluted) (0.009) (0.002) (0.008) (0.007)
----------------------------------------------------------------------------
Fiscal 2011
Revenue 2,089 183 266 985
Net Income/ (loss) 577 193 (555) (268)
Earnings/(loss) per Share (Basic & Diluted) 0.008 0.002 (0.006) (0.003)
----------------------------------------------------------------------------
(i)gold and copper sales resulting from the testing and commissioning of the
Ming Mine are credited to Mineral Properties until commercial production is
achieved
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 a toll processing agreement in November 2010. The profit
arising in Q3 2011 included an exchange gain of $0.8 million arising on the retranslation of the Gold Loan
following the weakening of the US Dollar against the Canadian Dollar during the quarter. The profit arising in
Q4 2011 arose from the profits realised on the sale of gold from the Group's satellite deposits. Losses
increased in first quarter of 2012 and further increased in the second quarter of 2012 as a result of an
exchange loss of $0.7 million and $0.30 million respectively and reduced sales activity due to the processing
of the Group's satellite deposits completed in the first quarter of 2012. The reduction in losses in the third
quarter of 2012 reflects exchange gains on the retranslation of the Gold Loan with the increase in losses in
the fourth quarter of 2012 reflecting a reversal of such exchange gains.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION
To date the Group has relied on private placement financings of equity securities, a Gold Loan facility,
capital leases and a credit facility (see 'Commitments and Loans' section) to finance its development
requirements. Positive cash flows are expected to continue after commercial production at the Ming Mine
commences; however, there is no guarantee that expenses will not exceed income particularly during the start-up
phase. If this is the case, the liquidity risk could be material, even with current cash resources.
The Group's holding of cash balances is kept under constant review. Given the current climate, the Group takes
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:
----------------------------------------------------------------------------
Resource July 31, 2012 July 31, 2011
$'000 $'000
----------------------------------------------------------------------------
Cash $CDN 7,394 9,431
----------------------------------------------------------------------------
Cash GBP 77 47
----------------------------------------------------------------------------
Short-term Investments $CDN - 25
----------------------------------------------------------------------------
Short-term Investments GBP 355 667
----------------------------------------------------------------------------
Total 7,826 10,170
----------------------------------------------------------------------------
Sales of copper concentrate are in US dollars and the majority of the Group's expenses are incurred in Canadian
dollars. The Group's principal exchange rate risk relates to movements between the Canadian and US dollar. The
Gold Loan is repayable in US dollars from future sales of gold mitigating the exchange risk. Management will
closely monitor exchange fluctuation and consider the use of forward exchange contracts as required.
Interest rates on the capital leases and short term borrowings are fixed, eliminating interest rate risk.
Cash flows utilised from investing activities amounted to $7.1 million for the year. Net cash of $4.5 million
was incurred on the Group's Mineral Property ($28.2 million proceeds received from the sale of gold and copper
concentrate less $32.7 million in mine development). $10.0 million was spent on property, plant and equipment,
$0.7 million on Exploration and Evaluation of the Lower Footwall Zone and $1.1 million invested in Maritime
Resources Corp.
Cash flows generated from financing activities during the year amounted to $5.9 million and included receipt of
$8.7 million from the placing of 17,521,992 Ordinary Shares to Tinma and net proceeds of $7.0 million from the
Group's credit facility both offset by gold loan repayments of $7.9 million and finance lease repayments of
$1.7 million.
The group is required to hold Letters 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 year end
the Group holds bearer deposit notes totalling $3.26 million.
The Group's ability to continue as a going concern, and the recoverability of its mineral properties, is
dependent on future trends in copper and gold prices, its ability to fund its development and exploration
programs, and to manage and generate positive cash flows from current operations. Through the use of current
cash reserves and continued production during the commissioning phase, management is satisfied that the Group
has sufficient working capital for the forthcoming 12 months. However, there are risks associated with the
commencement of a new mining and processing operation, which may give rise to the possibility that additional
working capital may be required to fund delays in commissioning the copper concentrator and continued mine
development and the repayment of loans falling due for repayment in March 2013. Should additional working
capital be required, the Directors consider that further sources of finance could be secured in the required
timescale. On this basis, the Directors have concluded that the Group is a going concern; however, there is no
certainty that these funds will be forthcoming. 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.
At October 19, 2012 the Group has $6.5 million in cash and cash equivalents.
Financial Instruments
The Group's financial instruments as at July 31, 2012 comprised of financial assets of available for sale
investments, 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 21 of the financial statements for the year ended July 31, 2012. There were
no derivative instruments outstanding at July 31, 2012.
COMMITMENTS AND LOANS
At July 31, 2012, there were no capital commitments made to third parties.
Gold Loan
In March 2010, 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 made staged upfront cash
payments for the gold to the Group totalling US$20 million.
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.
The remaining circumstances in which the Gold Loan may be repaid earlier than by the delivery of payable gold
are as follows:
i. If within 24 months of the date that gold is first produced (November
28, 2011), the Ming Mine has not produced and sold a minimum of 24,000oz
of payable gold (14,918 oz produced to July 31, 2012) then a portion of
the US$20 million will be repayable based on the shortfall of payable
gold, and/or;
ii. Within the first 36 months of 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
During the first eight months of commissioning, repayments of US$7,855,441 were made from the delivery of 4,774
ounces of gold thereby satisfying the requirement to repay a minimum of US$3.6 million cash during the first
and second 12 month periods and partially meeting the requirements for the third 12 months.
Credit Facility
On September 29, 2011 the Group agreed a Credit Facility of up to $10 million with Sprott Resource Lending
Partnership ('Sprott') for use as additional funding for the development of the Ming Mine. Subsequent to
amending the agreement in December 2011 the facility is available in three instalments; the first instalment of
$5 million was drawn on October 29, 2011, the second instalment of $2.5 million was drawn on January 30, 2012
and the final instalment for the balance up to $10 million was available until August 31, 2012. Interest will
accrue at a fixed rate of 9.25% per annum. Principal is repayable by March 29, 2013 and secured by a fixed and
floating charge over the assets of the Group. In connection with the Credit Facility, a Structuring Fee of
$100,000 and a 3% Commitment Fee of $300,000 were paid to Sprott in cash. Pursuant to the terms of the Credit
Facility, the Company issued $300,000 of ordinary shares of 1p each in the capital of the Company to Sprott in
exchange for the repayment of the previously paid cash Commitment Fee. In addition, a further 4% Drawdown Fee
on all amounts drawn under the Credit Facility was satisfied by the issuance of ordinary shares by the Company.
Loan and lease balances
At July 31, 2012, interest bearing loans and borrowings comprised a Gold Loan of $20,889,000, finance lease
commitments of $7,689,000, a Credit Facility of $7,500,000 and a bank loan of $26,000. The Group entered into
finance lease commitments of $2,442,000 to finance the acquisition of a mine truck, scoop tram and conveyor in
the year.
SUBSEQUENT EVENTS
On October 9, 2012 the Company announced the purchase of a 1% net smelter royalty ('NSR') held over the Ming
Mine by Ming Minerals Inc. for a total consideration of $500,000. The mine was initially encumbered by a
combined 4.5% NSR held by four separate groups. Of the four net smelter royalties, two included a buyout clause
allowing the Company to purchase 3% of the total NSR for a combined payment of $1,100,000. This is the second
royalty Rambler purchased since starting commissioning at the Ming Mine leaving a combined net smelter royalty
of 1.5% on the Ming Mine.
APPENDIX 1 - LOCATION MAP: http://media3.marketwire.com/docs/RMMAppendix1.jpg
APPENDIX 2 - SELECTED FINANCIAL INFORMATION & REVIEW OF OVERALL PERFORMANCE
----------------------------------------------------------------------------
Financial Highlights Year ended July 31,
(All amounts in 000s of Canadian Dollars,
except shares and per share figures)
-------------------------------
2012 2011 2010
----------------------------------------------------------------------------
Gold sales (Ounces)(1) 15,613(2) 1,399 -
Copper concentrate sales (dmt)(1) 1,271 - -
Average price (per ounce) 1,654 1,492 -
----------------------------------------------------------------------------
Revenue 1,219(2) 3,523 -
Operating Expenses (674) (1,754) -
Exploration Expenditure (24) (79) (91)
Administrative expenses (3,022) (2,750) (2,172)
Net Income (loss) (3,367) (53) (2,426)
Cash Flow used in operating activities (1,209) (1,352) (2,107)
Cash Flow used in investing activities (7,075) (25,092) (9,705)
Cash Flow from (used in) financing activities 5,903 28,623 17,725
Net increase (decrease) in cash (2,381) 2,179 5,913
Cash and cash equivalents at end of period 7,826 10,170 8,000
----------------------------------------------------------------------------
Total Assets 110,718 96,473 54,162
Total Liabilities (43,317) (34,495) (7,338)
Working Capital (7,625) 7,804 8,462
----------------------------------------------------------------------------
Weighted average number of shares outstanding 128,477 102,282 83,581
Loss per share (0.026) (0.001) (0.029)
----------------------------------------------------------------------------
(1)gold and copper concentrate sales relating to the testing and
commissioning of the Ming Mine are credited to Mineral Properties until
commercial production is achieved.
(2)includes 621 ounces from the Group's Tilt Cove East Mine satellite
deposit and 74 ounces from further refining of slag materials from the
Nugget Pond Crown Pillar satellite deposit generating $1.219 million in
revenue.
APPENDIX 3 - FINANCIAL REVIEW FOR THE QUARTER ENDED JULY 31, 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Q4/12 Comparatives
Results Commentary
($000's) Q3/12 B/(W)(i) Q4/11 B/(W)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue in Q4/11 was generated
through gold sales from the
Group's satellite deposits.
Revenues realized in Q4/12 during
the testing and commissioning of
- the Ming Mine have been credited
against Mineral Property and will
continue until commercial
production is achieved (see 'Ming - N/a 2,088 (100)%
Mine Revenue' below).
----------------------------------------------------------------------------
Operating Costs in Q4/11 relate to
the processing, mining and general
- and administrative costs
associated with Groups satellite - N/a 770 100%
deposits.
----------------------------------------------------------------------------
General and administrative
expenses were higher than the
previous quarter by $24,000.
Promotional and travel costs
reduced by $13,000 and security
and general office expenses
increased by $37,000.
785 761 (3)% 755 (4)%
In comparison to Q4/11
administrative expenses increased
by $30,000. Promotional and travel
costs increased by $23,000, and
security and general office
expenses by $33,000 offset by
reduced depreciation costs of
$19,000.
----------------------------------------------------------------------------
Foreign exchange differences
arising on the Gold Loan resulted
in a loss in Q4/12 as a result of
(447) the weakening of the Canadian
dollar against the US dollar
during the quarter. 476 (110)% (84) 432%
----------------------------------------------------------------------------
Mineral Properties The group
incurred costs of $14.1 million in
the quarter offset by revenue on
gold and copper concentrate sales
of $11.6 million (see further
below). The cost includes labour
costs of $2.3 million, underground
development costs of $2.4 million,
processing and ore transportation
of $2.3 million, depreciation of
$1.1 million and finance costs of
$4.9 million. Finance costs
include actual cash cost of $0.5
million relating to interest on
the Group's Credit Facility and
equipment capital leases and a
non-cash cost of $4.4 million in
effective interest charges arising
on the gold loan due to higher
than estimated gold prices and
actual ounces delivered as well as
changes to future gold pricing and
volume estimates. Net mineral
properties expenditures increased
in Q4/12 resulting from a decrease
in the number of gold ounces sold
during the quarter as compared to
Q3/12 following the switch over
and commissioning of the Group's
copper concentrator.
2,501 (3,233) (177)% 5,820 52%
Ming Mine Revenue in Q4/12
included $3.0 million from the
sale of 1,271 tonnes of copper
concentrate and $8.6 million from
the sale and settlement of 5,263
ounces of gold compared with $14.1
million in Q3/12 on the sale and
settlement of 8,194 ounces of gold
with the Group's third party
refinery. Revenues realized during
the testing and commissioning of
the Ming Mine have been credited
against Mineral Property and will
continue until commercial
production is achieved.
----------------------------------------------------------------------------
Capital spending on property,
plant and equipment decreased
during the quarter compared to
Q3/12 reflecting the substantial
completion of the copper
concentrator at the Nugget Pond
gold and base metal milling
facility, fewer capital lease
189 acquisitions on plant and
equipment and substantial
completion of the Goodyear's Cove
Storage Facility. The decrease
from Q3/12 is due to the reasons
outlined above and the overall 1,437 87% 3,342 94%
movement from capital development
into production.
----------------------------------------------------------------------------
Capital spending on exploration
and evaluation costs reduced in
Q4/12 compared to Q3/12
10 representing the final expenditure
on the preliminary economic
assessment completed on the Lower
Footwall Zone of the Ming Mine. 337 97% (31)
----------------------------------------------------------------------------
(i)B / (W) = Better / (Worse)
APPENDIX 4 - 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 future trends in copper and gold prices, its ability to fund its development and exploration
programs, and to manage and generate positive cash flows from current operations. Through the use of current
cash reserves and continued production during the commissioning phase, management is satisfied that the Group
has sufficient working capital for the forthcoming 12 months. However, there are risks associated with the
commencement of a new mining and processing operation which may give rise to the possibility that additional
working capital may be required to fund delays in commissioning the copper concentrator and continued mine
development and the repayment of loans falling due for repayment in March 2013. Should additional working
capital be required, the Directors consider that further sources of finance could be secured in the required
timescale. On this basis, the Directors have concluded that the Group is a going concern; however, there is no
certainty that these funds will be forthcoming. 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.
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, 2012.
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 19 of the financial statements for the year ended July 31,
2012). 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 resource 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 mineral properties costs and the corresponding Gold Loan liability.
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 and its
opportunities economic model which includes resource estimates and conversion of its inferred resources.
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.
Revenue
Revenues are subject to variation after the date of sale due to assay, price and foreign exchange fluctuations.
Management monitors these changes closely and at the end of the period the directors will consider whether the
effect of these variations are material on the whole and determine whether an adjustment is therefore
appropriate.
Available for sale investment
Management consider that they do not have significant influence over the financial and policy decisions of
Maritime and therefore have included the investment as an available for sale investment.
Commercial production
The Group monitors the on-going testing and commissioning of its copper concentrate milling facility to assess
when commercial production has been achieved. Commercial Production is the assessment that the mill is capable
of operating in the manner intended was defined by management at the onset of development to be 60 days of
continuous production from both the mill and mine, being 85% of target rates envisaged in the Group's
Feasibility Study. Prior to commercial production being declared costs and revenues are offset to the Mineral
Properties asset and post commercial production will be charged to the Group's income statement. Commercial
production was not achieved at July 31, 2012.
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, 2012:
IFRS Title Nature of change
/Amendment to accounting Application date of
policy Application date
standard for Group
----------------------------------------------------------------------------
Various Annual No change to
Improvements to accounting
IFRSs policy,
therefore, no
impact Various August 1, 2012
----------------------------------------------------------------------------
IFRS 9 Financial No change to
instruments: accounting
Classification policy,
and Measurement therefore, no
impact January 1, 2015 August 1, 2015
----------------------------------------------------------------------------
IFRS 10 Consolidated No change to
Financial accounting
Statements policy,
therefore, no
impact January 1, 2013 August 1, 2013
----------------------------------------------------------------------------
IFRS 11 Joint No change to
Arrangements accounting
policy,
therefore, no
impact January 1, 2013 August 1, 2013
----------------------------------------------------------------------------
IFRS 12 Disclosure of No change to
Interests in accounting
Other Entities policy,
therefore, no
impact January 1, 2013 August 1, 2013
----------------------------------------------------------------------------
IFRS 13 Fair Value No change to
Measurement accounting
policy,
therefore, no
impact January 1, 2013 August 1, 2013
----------------------------------------------------------------------------
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 July 31, 2012.
APPENDIX 5 - OTHER MATTERS
Outstanding Share & Option Data
As at the date of this MD&A the following securities are outstanding:
----------------------------------------------------------------------------
Security Shares issued or Weighted Average Exercise Price
Issuable
----------------------------------------------------------------------------
Common Shares 142,360,240 --
----------------------------------------------------------------------------
Options 3,966,000(i) $0.46
----------------------------------------------------------------------------
(i)if all options have fully vested
For further assistance Mr. Peter Mercer, Corporate Secretary can be reached directly at +1-709-800-1929 ext.500
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 Group's objectives and strategy, future financial or operating performance of the Group 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 and
development, environmental risks, title disputes or claims and limitations of insurance coverage. All
statements, other than statements of historical fact, are forward-looking statements. 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 are
necessarily based on a number of estimates and assumptions that, while considered reasonably by the Company,
involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Group 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;
availability and cost of credit; fluctuations in Canadian dollar interest rates; fluctuations in the relative
value of United States dollars, Canadian dollars and British Pounds; changes in planned parameters as plans
continue to be refined; fluctuations in the market and forward prices of copper, gold, silver or certain other
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 the Report of Directors. 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. Unless stated otherwise, forward-
looking statements contained herein are made as of the date of this MD&A. Other than as required by applicable
securities law, the Company 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. All of the forward-looking statements made in this MD&A are qualified by
these cautionary 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.
RAMBLER METALS AND MINING PLC
REPORT OF THE DIRECTORS FOR THE YEAR ENDED JULY 31, 2012
The Directors present their report with the audited financial statements of the Group for the year ended July
31, 2012.
PRINCIPAL ACTIVITY
The principal activity of the Group is the development, mining and exploration of the Ming Copper-Gold Mine
located in Baie Verte, Newfoundland and Labrador, Canada. The principal activity of the parent company is that
of a holding company.
REVIEW OF BUSINESS
A review of the Group's business and prospects is set out in the Management's Discussion and Analysis.
FUTURE DEVELOPMENTS
The Group is looking forward to becoming a profitable copper and gold producer with the continued commissioning
of its newly producing copper concentrator and underground mine throughout calendar Q4 2012 and continue its
growth through the selective pursuit of opportunities within the region and Atlantic Canada as a whole
including joint ventures and acquisitions.
DIVIDENDS
No dividends will be distributed for the year ended July 31, 2012.
DIRECTORS
The Directors during the period under review were:
T S Chan (appointed 26 March 2012)
D H W Dobson
L D Goodman
B Hinchcliffe
S Neamonitis
G Ogilvie
J M Roberts
J Thomson
J A Baker (resigned 13 October 2011)
B F Dalton (resigned 13 October 2011)
POLICY ON PAYMENT OF CREDITORS
It is the Group's and Company's policy to settle all amounts due to creditors in accordance with agreed terms
of supply and market practice in the relevant country.
The Group's average creditor payment period at July 31, 2012 was 74 days (2011: 39 days). The Company's average
creditor payment period at July 31, 2012 was 62 days (2011: 33 days).
POLITICAL AND CHARITABLE CONTRIBUTIONS
During the year, the Group made charitable donations of $2,950 (2011: $2,988) to various charities in the Baie
Verte area.
SUBSTANTIAL SHARE INTERESTS
At October 19, 2012 the parent Company was aware of the following substantial share interests:
Number of Ordinary % of Share
Shares Capital
Tinma International Ltd. 22,807,322 16.02%
Legal and General Investment Management 17,575,000 12.35%
HSBC Nominee (UK) Limited 13,825,530 9.71%
The Bank of New York (Nominees) Limited 11,665,487 8.19%
Whitmill Trust (Zila Corporation) 8,838,000 6.21%
Vidacos Nominees Limited 8,744,962 6.14%
Henderson Global Investors 6,889,605 4.84%
Vestra Nominees Limited 5,632,651 3.96%
TD Direct Investing Nominees Limited 4,883,552 3.43%
Hargreaves Lansdown (Nominees) Limited 4,591,761 3.23%
FINANCIAL INSTRUMENTS
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, liquidity risk, credit risk, interest rate risk and commodity price
risk, each of which is discussed in note 21 to the financial statements. There were no derivative instruments
outstanding at July 31, 2012.
SUBSEQUENT EVENTS
Details of subsequent events are set out in the Management's Discussion and Analysis.
RISKS AND UNCERTAINTIES
An investment in Rambler should be considered highly speculative due to its present stage of development, the
nature of its operations and certain other factors. An investment in Rambler's securities should only be made
by persons who can afford the total loss of their investment. The risk factors which should be taken into
account in assessing Rambler's activities and an investment in securities of Rambler include, but are not
limited to, those set out below. Should any one or more of these risks occur, it could have a material adverse
effect on the value of securities of Rambler and the business, prospects, assets, financial position or
operating results of Rambler, any one of which may have a significant adverse effect on the price or value of
any securities of Rambler.
The risks noted below do not necessarily comprise all those faced by Rambler and are not intended to be
presented in any assumed order of likelihood or magnitude of consequences.
Mining risks
Mining operations are inherently risky. These operations are subject to all hazards and risks encountered in
the exploration for, and development and production of underground ore, including formation pressures, seismic
activity, rock bursts, fires, power outages, cave-ins, flooding, explosions and other conditions involved in
the drilling and removal of material. Any of these events could result in serious damage to the mine and other
infrastructure, damage to life or property, environmental damage and possible legal liability.
The Company's profitability will depend, in part, on the economic returns and actual costs of developing its
mining projects, which may differ from the estimates made by the Company. Events such as delays in
construction, commissioning, and technical difficulties may result in the Company's current or future project
target dates being delayed or additional capital expenditure being incurred.
Copper and Gold Price Volatility
The Group's revenues are expected to be derived from the extraction and sale of copper and gold concentrate.
The prices of copper and gold have fluctuated widely, particularly in recent years, and are affected by
numerous factors beyond the Group's control including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumption
patterns, speculative activities and increased global production due to new extraction developments and
improved extraction and production methods. In recent years the price of copper has been affected by changes in
the worldwide balance of copper supply and demand, largely resulting from economic growth and political
conditions in China and other major developing economies. While this demand has resulted in higher prices for
copper in recent years, if Chinese economic growth slows, it could result in lower demand for copper. The
effect of these factors on the price of copper and gold cannot be accurately predicted. Any material decrease
in the prevailing price of copper in particular for any significant period of time would have an adverse and
material impact on the Group's economic evaluations and on the Group's results of operations and financial
condition.
Additional Requirement for Capital
The Group may need to raise additional capital in due course to fund anticipated future development and on-
going operations. Future development of the Ming Mine, future acquisitions, base metal prices, environmental
rehabilitation or restitution, revenues, taxes, capital expenditures and operating expenses and geological and
processing successes are all factors which will have an impact on the amount of additional capital required.
Any additional equity financing may be dilutive to shareholders and debt financing, if available, may involve
restrictions on financing and operating activities. There is no assurance that additional financing will be
available on terms acceptable to the Group. If the Group is unable to obtain additional financing as needed, it
may be required to reduce the scope of its operations or anticipated expansion, forfeit its interests in some
or all of its properties, incur financial penalties and reduce or terminate its operations.
Uncertainty in the estimation of mineral resources and mineral reserves
The calculation of mineral reserves and mineral resources and related grades mined has a degree of uncertainty.
Until such a time as the mineral reserves and mineral resources are actually mined and processed, the quantity
of grades must be considered as estimates only. The mineral reserves estimates of the Company have been
determined based on assumed metal prices, cut-off grades and costs that may prove to be inaccurate. Any
material change in these variables, along with differences in actual metal recoveries when compared to
laboratory test results, may affect the economic outcome of current and future projects.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of
any information needed by the Group's Auditor for the purposes of their audit and to establish that the Auditor
is aware of that information. The Directors are not aware of any relevant audit information of which the
Auditor is unaware.
AUDITOR
The auditor, PKF (UK) LLP, will be proposed for re-appointment in accordance with Section 489 of the Companies
Act 2006.
ON BEHALF OF THE BOARD:
P Mercer
Company Secretary
October 19, 2012
RAMBLER METALS AND MINING PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the report of the directors and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have, as required by the AIM Rules of the London Stock Exchange, elected to prepare the group
financial statements in accordance with International Financial Reporting Standards as adopted by the European
Union and have also elected to prepare the parent company financial statements in accordance with those
standards. Under company law the directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the company and the group and of the profit or
loss of the group for that period.
In preparing these financial statements the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether the financial statements have been prepared in accordance
with IFRSs as adopted by the European Union; and
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company and the group will continue in
business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the company's transactions, to disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company's website. Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included in annual reports may differ from
legislation in other jurisdictions.
RAMBLER METALS AND MINING PLC
CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED JULY 31, 2012
In formulating the Group's corporate governance procedures the Board of Directors takes due regard of the
principles of good governance set out in the UK Corporate Governance Code issued by the Financial Reporting
Council in September 2012 (as appended to the Listing Rules of the Financial Services Authority) and the size
and development of the Group. The Group also has regard to the Quoted Companies Alliance (QCA) Guidelines on
Corporate Governance for AIM Companies.
The Board of Rambler Metals and Mining PLC is made up of one executive Director and seven non-executive
Directors. D H W Dobson is the senior non-executive director and G Ogilvie is the Group's President and Chief
Executive. It is the Board's policy to maintain independence by having at least half of the Board comprising
non- executive directors. The structure of the Board ensures that no one individual or group dominates the
decision making process.
The Board ordinarily meets no less than quarterly providing effective leadership and overall control of the
Group's affairs through the schedule of matters reserved for its decision. This includes the approval of
budgets and business plans, items of major capital expenditure, risk management policies and the approval of
the financial statements. Formal agendas, papers and reports are sent to the directors in a timely manner,
prior to Board meetings. The Board also receives a summary financial report before each Board meeting. The
Board delegates certain of its responsibilities to Board committees which have clearly defined terms of
reference. Between the Board meetings, the executive Director, the Chief Financial Officer and some of the non-
executive directors meet on a regular basis to review and discuss progress.
All Directors have access to the advice and services of the company secretary, who is responsible for ensuring
that all Board procedures are followed. Any Director may take independent professional advice at the Group's
expense in the furtherance of his duties.
The Audit Committee, which meets not less than quarterly and considers the Group's financial reporting
(including accounting policies) and internal financial controls, is chaired by J M Roberts, the other members
being L Goodman and J S Thomson. The committee receives reports from management and from the Group's auditor.
The Group has in place a series of procedures and controls designed to identify and prevent the risk of loss.
These procedures are formally documented and are reported on regularly. The Audit Committee has reviewed the
systems in place and considers these to be appropriate.
The Remuneration Committee, which meets at least once a year and is responsible for making decisions on
directors' remuneration packages, is chaired by L Goodman. J M Roberts and J S Thomson are the other committee
members.
Remuneration of executive Directors is established by reference to the remuneration of executives of equivalent
status both in terms of time commitment, level of responsibility of the position and by reference to their job
qualifications and skills. The Remuneration Committee will also have regard to the terms which may be required
to attract an executive of equivalent experience to join the Board from another company. Such packages may
include performance related bonuses and the grant of share options.
The Board attaches importance to maintaining good relationships with all its shareholders and ensures that all
price sensitive information is released to all shareholders at the same time in accordance with AIM and Toronto
Stock Exchange-Venture market rules. The Group's principal communication is through the Annual General Meeting
and through the annual report and accounts, quarterly and interim statements.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RAMBLER METALS AND MINING PLC
We have audited the financial statements of Rambler Metals and Mining plc for the year ended 31 July 31 2012
which comprise the consolidated income statement, the consolidated and parent company statements of
comprehensive income, the consolidated and parent company statements of financial position, the consolidated
and parent company statements of changes in equity, the consolidated and parent company statements of cash
flows and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as
regards the parent company financial statements, as applied in accordance with the provisions of the Companies
Act 2006.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those
matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the directors' responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the
group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the annual report
to identify material inconsistencies with the audited financial statements. If we become aware of any apparent
material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the state of the
group's and the parent company's affairs as at 31 July 31 2012 and of
the group's loss for the year then ended;
-- the group financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union as applied in
accordance with the provisions of the Companies Act 2006; and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in Note 2 to the group financial statements the group, in addition to applying IFRSs as adopted by
the European Union, has also applied IFRSs as issued by the International Accounting Standards Board (IASB).
In our opinion the group financial statements comply with IFRSs as issued by the IASB.
Emphasis of matter - going concern
In forming our opinion, which is not modified, we have considered the adequacy of the disclosures made in Note
1 to the financial statements concerning the Group's ability to continue as a going concern. The Group is
dependent on its ability to manage and generate positive cash flows from current operations in order to
continue as a going concern. However, there are risks associated with the commencement of a new mining and
processing operation and additional working capital may be required to fund delays in commissioning the mine
and the repayment of loans falling due for repayment in March 2013. These conditions, along with the other
matters explained in Note 1 to the financial statements indicate the existence of a material uncertainty which
may cast significant doubt about the Company and the Group's ability to continue as a going concern. The
financial statements do not include the adjustments that would result if the Company and the Group were unable
to continue as a going concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the report of the directors for the financial year for which the
financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
-- the parent company financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not
made; or
-- we have not received all the information and explanations we require for
our audit.
Jason Homewood (Senior statutory auditor) London, UK
for and on behalf of PKF (UK) LLP, Statutory auditor October 19, 2012
RAMBLER METALS AND MINING PLC
CONSOLIDATED INCOME STATEMENT
For the Year Ended July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
Note 2012 2011
$'000 $'000
Revenue 3 1,219 3,523
Cost of sales (674) (1,754)
----------------------
Gross profit 545 1,769
Administrative expenses (3,022) (2,750)
Exploration expenses (24) (79)
----------------------
Operating loss 4 (2,501) (1,060)
----------------------
Exchange gain/(loss) (959) 897
Bank interest receivable 102 90
Finance costs (9) (9)
----------------------
Net financing income/(expense) (866) 978
----------------------
Loss before tax (3,367) (82)
Income tax credit 6 - 29
----------------------
Loss for the year attributable to owners of the
parent (3,367) (53)
----------------------
----------------------
Loss per share
Note 2012 2011
$ $
Basic and diluted loss per share 17 (0.026) (0.001)
----------------------
----------------------
RAMBLER METALS AND MINING PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
2012 2011
$'000 $'000
Loss for the year (3,367) (53)
----------------------
Exchange differences on translation of foreign
operations (net of tax) 8 110
----------------------
Loss on available for sale investment (422) -
----------------------
Other comprehensive income for the year (414) 110
----------------------
----------------------
Total comprehensive income for the year and
attributable to the owners of the parent (3,781) 57
----------------------
----------------------
REGISTERED NUMBER: 05101822 (ENGLAND AND WALES)
RAMBLER METALS AND MINING PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
Note
2012 2011
$'000 $'000
Assets
Intangible assets 7 17,260 16,627
Mineral properties 8 48,064 38,468
Property, plant and equipment 9 31,494 25,332
Available for sale investments 10 712 -
--------------------
Total non-current assets 97,530 80,427
--------------------
Inventory 12 1,100 934
Trade and other receivables 13 999 1,565
Cash and cash equivalents 14 7,826 10,170
Restricted cash 15 3,263 3,377
--------------------
Total current assets 13,188 16,046
--------------------
Total assets 110,718 96,473
--------------------
--------------------
Equity
Issued capital 16 2,599 2,299
Share premium 74,756 65,934
Merger reserve 214 214
Translation reserve 143 135
Fair value reserve (422) -
Accumulated losses (9,888) (6,604)
--------------------
Total equity 67,402 61,978
--------------------
Liabilities
Interest-bearing loans and borrowings 19 20,691 24,606
Provision 20 1,812 1,647
--------------------
Total non-current liabilities 22,503 26,253
--------------------
Interest-bearing loans and borrowings 19 14,827 2,282
Trade and other payables 18 5,986 5,960
--------------------
Total current liabilities 20,813 8,242
--------------------
Total liabilities 43,317 34,495
--------------------
Total equity and liabilities 110,718 96,473
--------------------
--------------------
ON BEHALF OF THE BOARD:
J S Thomson
Director
Approved and authorised for issue by the Board on
October 19, 2012
RAMBLER METALS AND MINING PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Translation
capital Premium Reserve reserve
(EXPRESSED IN CANADIAN DOLLARS) $'000 $'000 $'000 $'000
Group
Balance at 1 August 2010 1,863 51,532 214 25
-----------------------------------------
Comprehensive income
Loss for the year - - - -
-----------------------------------------
Foreign exchange translation
differences - - - 110
-----------------------------------------
Total other comprehensive income - - - 110
-----------------------------------------
Total comprehensive income for the
year - - - 110
-----------------------------------------
Transactions with owners
Issue of share capital 436 15,252 - -
Share issue expenses - (850) - -
Share-based payments - - - -
-----------------------------------------
Transactions with owners 436 14,402 - -
-----------------------------------------
Balance at 31 July 2011 2,299 65,934 214 135
-----------------------------------------
-----------------------------------------
Balance at 1 August 2011 2,299 65,934 214 135
-----------------------------------------
Comprehensive income
Loss for the year - - - -
-----------------------------------------
Foreign exchange translation
differences - - - 8
Loss on available for sale
investments - - - -
-----------------------------------------
Total other comprehensive income - - - 8
-----------------------------------------
Total comprehensive income for the
year - - - 8
-----------------------------------------
Transactions with owners
Issue of share capital 300 9,047 - -
Share issue expenses - (225) - -
Share-based payments - - - -
-----------------------------------------
Transactions with owners 300 8,822 - -
-----------------------------------------
Balance at July 31, 2012 2,599 74,756 214 143
-----------------------------------------
-----------------------------------------
Fair value Accumulated
reserve Losses Total
(EXPRESSED IN CANADIAN DOLLARS) $'000 $'000 $'000
Group
Balance at 1 August 2010 - (6,811) 46,823
------------------------------------------
Comprehensive income
Loss for the year - (53) (53)
------------------------------------------
Foreign exchange translation
differences - - 110
------------------------------------------
Total other comprehensive income - - 110
------------------------------------------
Total comprehensive income for the
year - (53) 57
------------------------------------------
Transactions with owners
Issue of share capital - - 15,688
Share issue expenses - - (850)
Share-based payments - 260 260
------------------------------------------
Transactions with owners - 260 15,098
------------------------------------------
Balance at 31 July 2011 - (6,604) 61,978
------------------------------------------
------------------------------------------
Balance at 1 August 2011 - (6,604) 61,978
------------------------------------------
Comprehensive income
Loss for the year - (3,367) (3,367)
------------------------------------------
Foreign exchange translation
differences - - 8
Loss on available for sale
investments (422) - (422)
------------------------------------------
Total other comprehensive income (422) - (414)
------------------------------------------
Total comprehensive income for the
year (422) (3,367) (3,781)
------------------------------------------
Transactions with owners
Issue of share capital - - 9,347
Share issue expenses - - (225)
Share-based payments - 83 83
------------------------------------------
Transactions with owners - 83 9,205
------------------------------------------
Balance at July 31, 2012 (422) (9,888) 67,402
------------------------------------------
------------------------------------------
RAMBLER METALS AND MINING PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
2012 2011
$'000 $'000
Cash flows from operating activities
Operating loss (2,501) (1,060)
Depreciation 131 141
Share based payments 80 248
Increase in inventory (167) (934)
Decrease/(increase) in debtors 847 (1,280)
Increase in creditors 410 1,513
------------------------
Cash utilised in operations (1,200) (1,372)
Interest paid (9) (9)
Tax received - 29
------------------------
Net cash utilised in operating activities (1,209) (1,352)
------------------------
Cash flows from investing activities
Interest received 102 90
Redemption/(purchase) of bearer deposit note 114 (2,012)
Acquisition of listed investment (1,135) -
Acquisition of evaluation and exploration assets (658) (604)
Acquisition of mineral properties - net 4,508 (10,710)
Acquisition of property, plant and equipment (10,006) (11,856)
------------------------
Net cash utilised in investing activities (7,075) (25,092)
------------------------
Cash flows from financing activities
Proceeds from issue of share capital 8,714 15,688
Payment of transaction costs (225) (850)
Proceeds from exercise of share options 38 12
(Repayment)/proceeds from Gold Loan (note 19) (7,888) 14,268
Proceeds of Credit Facility 6,976 -
Capital element of finance lease payments (1,712) (495)
------------------------
Net cash from financing activities 5,903 28,623
------------------------
Net (decrease)/increase in cash and cash equivalents (2,381) 2,179
Cash and cash equivalents at beginning of period 10,170 8,000
Effect of exchange rate fluctuations on cash held 37 (9)
------------------------
Cash and cash equivalents at end of period 7,826 10,170
------------------------
------------------------
RAMBLER METALS AND MINING PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Nature of operation and going concern
The principal activity of the Group is the development and exploration of the Ming Copper-Gold Mine ("Ming
Mine") located 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 future trends in copper and gold prices, its ability to fund its development and exploration
programs, and to manage and generate positive cash flows from current operations. Through the use of current
cash reserves and continued production during the commissioning phase, management is satisfied that the Group
has sufficient working capital for the forthcoming 12 months.
However, there are risks associated with the commencement of a new mining and processing operation which may
give rise to the possibility that additional working capital may be required to fund delays in commissioning
the copper concentrator and continued mine development and the repayment of loans falling due for repayment in
March 2013. Should additional working capital be required, the Directors consider that further sources of
finance could be secured in the required timescale. On this basis, the Directors have concluded that the Group
is a going concern; however, there is no certainty that these funds will be forthcoming. 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.
2 Significant accounting policies
Rambler Metals and Mining Plc (the "Company") is a company registered in England and Wales. The consolidated
financial statements of the Company for the year ended July 31, 2012 comprise the Company and its subsidiaries
(together referred to as the "Group").
These financial statements are presented in Canadian dollars. Although the parent company has a functional
currency of GB pounds the majority of the Group's operations are carried out by its operating subsidiary which
has a functional currency of Canadian dollars. Foreign operations are included in accordance with the policies
set out in note 2(d). At July 31, 2012 the closing rate of exchange of Canadian dollars to 1 GB pound was 1.58
(31 July 2011: 1.57) and the average rate of exchange of Canadian dollars to 1 GB pound for the year was 1.60
(2011: 1.59).
(a) Statement of compliance
The consolidated financial statements of Rambler Metals and Mining plc have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and their interpretations issued by the International
Accounting Standards Board ("IASB"), as adopted by the European Union and with IFRS and their interpretations
adopted by the IASB. There are no material differences on application to the Group. The consolidated financial
statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
New and revised standards which have been adopted during the year have not affected the disclosures presented
in these financial statements.
The Group has not adopted any standards or interpretations in advance of the required implementation dates. It
is not expected that adoption of standards or interpretations which have been issued by the International
Accounting Standards Board but have not been adopted will have a material impact on the financial statements.
(b) Basis of preparation
The financial statements are presented in Canadian dollars, rounded to the nearest thousand dollars.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances, the results of which form
the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS that have a significant effect on the financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in note
25.
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements.
The accounting policies have been applied consistently by Group entities.
(c) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that presently are exercisable or convertible are
taken into account. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
(ii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements.
(d) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets
and liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to the functional currency at foreign exchange rates
ruling at the dates the fair value was determined.
(ii) Translation into presentation currency
The assets and liabilities of the UK parent are translated to Canadian dollars at foreign exchange rates ruling
at the balance sheet date. The revenues and expenses of the parent company are translated to Canadian dollars
at rates approximating to the foreign exchange rates ruling at the dates of the transactions.
(iii) Net investment in foreign operations
Exchange differences arising from the translation of the net investment in foreign operations are taken to
translation reserve. They are released into the income statement upon disposal.
(e) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost. The cost of self-constructed assets includes the
cost of materials, direct labour and the initial estimate, where relevant, of the costs of dismantling and
removing the items and restoring the site on which they are located.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
(ii) Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified
as finance leases. All other leases are classified as operating leases.
(iii) Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing
part of such an item when that cost is incurred if it is probable that the future economic benefits embodied
with the item will flow to the Group and the cost of the item can be measured reliably. All other costs are
recognised in the income statement as an expense as incurred.
(iv) Depreciation
Depreciation is charged to the income statement or capitalised as part of the exploration and evaluation costs
or Mineral Properties where appropriate, on a straight-line basis over the estimated useful lives of each part
of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as
follows:
- buildings 5 to 10 years
- plant and equipment 2 to 5 years
- motor vehicles 3 years
- computer equipment 3 years
- fixtures, fittings and equipment 3 years
The estimated useful lives and residual values of the assets are considered annually and restated as required.
(f) 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 sale of gold and copper concentrate extracted
during the development phase and until commercial production is declared.
Mineral properties are amortised on a unit of production basis.
(g) Intangible assets
(i) Exploration and evaluation costs
These comprise costs directly incurred in exploration and evaluation. They are capitalised as intangible assets
pending determination of the feasibility of the project. When the existence of economically recoverable
reserves and the availability of finance is established, the related intangible assets are transferred to
Mineral properties. Where a project is abandoned or is determined not to be economically viable, the related
costs are written off.
The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to
the natural resource sector. These include the extent to which the Group can establish economically recoverable
reserves on its properties, the ability of the Group to obtain necessary financing to complete the development
of such reserves and future profitable production or proceeds from the disposition thereof.
(ii) Impairment of exploration and evaluation costs
Impairment reviews for exploration and evaluation costs are carried out on a project by project basis, with
each project representing a potential single cash generating unit. An impairment review is undertaken when
indicators of impairment arise but typically when one of the following circumstances apply:
-- unexpected geological occurrences that render the resource
uneconomic;
-- title to the asset is compromised;
-- variations in metal prices that render the project uneconomic; and
-- variations in the exchange rate for the currency of operation.
(h) Available for sale investments
Available for sale investments are recognised at fair value with changes in value recorded in other
comprehensive income. Subsequent to initial recognition available-for-sale financial assets are stated at fair
value. Movements in fair values are recognised in other comprehensive income, with the exception of impairment
losses which are recognised in profit or loss. Fair values are based on prices quoted in an active market if
such a market is available. If an active market is not available, the group establishes the fair value of
financial instruments by using a valuation technique, usually discounted cash flow analysis. When an investment
is disposed, any cumulative gains and losses previously recognised in equity are recognised in profit or loss.
(i) Inventory
Stockpiled ore is recorded at the lower of production cost and net realisable value. Production costs include
all direct costs plus an allocation of fixed costs associated with the mine site.
Operating supplies are valued at the lower of cost and net realisable value. Cost is determined on an average
cost basis.
(j) Trade and other receivables
Trade and other receivables are stated at their cost less impairment losses (see accounting policy l).
Receivables in respect of sale of copper concentrate are revalued using metal prices ruling at the balance
sheet date.
(k) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
(l) Impairment
The carrying amounts of the Group's assets (except deferred exploration and evaluation costs (see accounting
policy (g)(ii)) and deferred tax assets (see accounting policy 2(r)), are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated (see accounting policy 2(l)(i)).
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
(i) Calculation of recoverable amount
Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
(ii) Reversals of impairment
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount.
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
(m) Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities.
Financial liabilities include bank loans and the Gold Loan which are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at
amortised cost with any difference between cost and redemption value being recognised in the statement of
comprehensive income over the period of the borrowings on an effective interest basis except where the
difference between cost and redemption value qualify to be capitalised as part of the cost of a qualifying
asset.
(n) Trade and other payables
Trade and other payables are stated at amortised cost.
(o) 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.
Any revenues generated during commissioning are treated as a contribution towards previously incurred costs and
are therefore credited against mining and development assets accordingly.
Sale of gold
Revenue associated with the sale of gold dore bars is recognised in accordance with contract terms negotiated
with the refiner and when significant risks and rewards of ownership of the asset sold are transferred to the
refiner, which is when the minimum determinable or agreed amount of gold has been determined and title has
passed to the refiner.
Sale of concentrate
Revenue associated with the sale of copper concentrate is recognised when significant risks and rewards of
ownership of the asset sold are transferred to the Group's off-taker, which is when the group receives
provisional payment for each lot of concentrate invoiced. Where a provisional invoice is not raised, risks and
rewards of ownership transfers when the concentrate pass over the rail of the shipping vessel. Adjustments
arising due to differences in commodity prices and assays, from the time of provisional invoicing to the time
of final settlement, are adjusted to revenue at each balance sheet date.
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.
(p) Expenses
(i) Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the income statement as an integral part of the
total lease expense.
(ii) Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding
liability. The finance charge is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
(iii) Borrowing costs
Borrowing costs are recognised in the income statement where they do not meet the criteria for capitalisation.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised.
(q) Equity settled share based payments
All share based payments are recognised in the financial statements.
All goods and services received in exchange for the grant of any share-based remuneration are measured at their
fair values. Fair values of employee services are determined indirectly by reference to the fair value of the
share options awarded. Their value is appraised at the grant dates and excludes the impact of non-market
vesting conditions.
All share-based remuneration is ultimately recognised as an expense in the income statement with a
corresponding credit to the accumulated losses in the balance sheet.
If vesting periods apply, the expense is allocated over the vesting period, based on the best available
estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense
recognised in prior periods if the number of share options ultimately exercised is different to that estimated
on vesting. Upon exercise of share options the proceeds received net of attributable transaction costs are
credited to share capital.
(r) Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in
the income statement except to the extent that it relates to items recognised directly in equity, in which case
it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax
purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit,
and differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted
at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3. Operating segments
The Group's operations relate to the exploration for and development of mineral deposits with support provided
from the UK and as such the Group has only one operating segment.
Information about geographical areas
2012 2011
UK Canada Consolidated UK Canada Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
Segment
revenue - 1,219 1,219 - 3,523 3,523
--------------------------------------------------------------
Segment non-
current
assets - 97,530 97,530 - 80,427 80,427
--------------------------------------------------------------
Information about major customers
Revenues from transactions with a single customer exceeding 10% of total revenues were as follows:
2012 2011
$'000 $'000
Customer A 1,219 2,087
Customer B - 1,063
Others - 373
------------------------------
1,219 3,523
------------------------------
------------------------------
4. Operating loss
The operating loss is after
charging/(crediting):
2012 2011
$'000 $'000
Depreciation - owned assets 131 141
Directors' emoluments (see note 23) 338 332
Auditor's remuneration:
Audit of these financial statements 64 57
Fees payable to the auditor for other
services:
Other services 10 6
------------------------------
------------------------------
The Audit Committee reviews the nature and extent of non-audit services to ensure that independence is
maintained.
In addition to the depreciation charge shown above, depreciation of $nil (2011: $96,000) was capitalised within
exploration and evaluation assets and $4,092,000 (2011: $2,172,000) within mineral properties.
5. Personnel expenses
Salary costs
Group Group
2012 2011
$'000 $,000
Wages and salaries 9,543 6,083
Compulsory social security contributions 1,367 997
Share based payments 79 248
------------------------------
10,989 7,328
------------------------------
------------------------------
Salary costs of $nil (2011: $127,000) were capitalised as exploration and evaluation costs, $8,449,000 as
mineral properties and $948,000 as assets under construction costs during the year.
Number of employees
The average number of employees during the year was as follows:
Group Group
2012 2011
Directors 7 9
Administration 10 9
Development 126 68
------------------------------
143 86
------------------------------
------------------------------
During the year the Group granted share options to key personnel to purchase shares in the entity. The options
are exercisable at the market price of the shares at the date of grant.
Share-based payments
The number and weighted average exercise prices of share options are as follows:
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
2012 2012 2011 2011
$ '000 $ '000
Outstanding at the beginning
of the year 0.484 4,167 0.467 3,952
Granted during the year 0.503 646 0.506 647
Exercised during the year 0.175 (202) 0.186 (52)
Cancelled during the year 0.541 (674) 0.379 (380)
------------- -------------
Outstanding at the end of
the year 0.461 3,937 0.484 4,167
------------- -------------
------------- -------------
Exercisable at end of year 0.446 3,313 0.495 3,077
------------- -------------
------------- -------------
The options outstanding at July 31, 2012 have an exercise price in the range of $0.16 to $1.10 and a weighted
average remaining contractual life of 6 years (2011: 7 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.
Fair value of share options and assumptions 2012 2011
$'000 $'000
Fair value at measurement date 186 168
--------------------------------
Share price (weighted average) 0.503 0.490
Exercise price (weighted average) 0.503 0.490
Expected volatility (expressed as weighted
average volatility used in the modelling
under Black-Scholes model) 68.0% 70.7%
Expected option life 5 5
Expected dividends 0 0
Risk-free interest rate (based on national
government bonds) 1.67% 2.35%
--------------------------------
The expected volatility is based on the historical 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.
The share-based payment expense relates to the following grants:
2012 2011
$'000 $'000
Share options granted in 2008 - 21
Share options granted in 2009 17 64
Share options granted in 2010 4 64
Share options granted in 2011 36 99
Share options granted in 2012 22 -
------------------------------
Total expense recognised as employee costs 79 248
------------------------------
------------------------------
6. Income tax credit
Recognised in the income statement
2012 2011
$'000 $'000
Current tax expense
Current year - -
------------------------------
- -
Deferred tax credit
Origination and reversal of temporary
differences - 1,737
Benefit of tax losses recognised - (1,737)
Tax losses surrendered for tax credit - (29)
------------------------------
Total income tax credit in income statement - (29)
------------------------------
------------------------------
Reconciliation of effective tax rate
2012 2011
$'000 $'000
Loss before tax (3,367) (82)
--------------------------------
--------------------------------
Income tax using the UK corporation tax rate
of 25.33% (2011: 27.33%) (853) (22)
Effect of tax rates in foreign jurisdictions
(rates increased) (105) 14
Non-deductible expenses (25) (183)
Other timing differences (7,161) (38)
Capital allowances in excess of depreciation (6,458) (1,103)
Effect of tax losses carried forward 230 1,303
--------------------------------
- (29)
--------------------------------
--------------------------------
7. Intangible assets
Exploration and
evaluation
costs
$'000
Cost
Balance at 1 August 2010 37,051
Additions 478
Transfer to mineral properties (20,902)
----------------
Balance at 31 July 2011 16,627
----------------
----------------
Balance at 1 August 2011 16,627
Additions 633
----------------
Balance at July 31, 2012 17,260
----------------
----------------
Carrying amounts
At 1 August 2010 37,051
----------------
At 31 July 2011 16,627
----------------
At 1 August 2011 16,627
----------------
----------------
At July 31, 2012 17,260
----------------
----------------
Consideration of impairment for exploration and evaluation costs
The directors have assessed whether there are any indicators of impairment in respect of exploration and
evaluation costs. In making this assessment they have considered the Group's preliminary economic assessment
which includes resource estimates, future processing capacity, the forward market and longer term price outlook
for copper and gold. The directors do not consider that there are any indicators that exploration and
evaluation costs are impaired ay the year end.
8. Mineral properties
Mineral
property
$'000
Cost
Balance at 1 August 2010 -
Transfer from exploration and evaluation costs 20,902
Additions 17,566
---------------
Balance at July 31, 2011 38,468
---------------
---------------
Balance at 1 August 2011 38,468
Additions 9,596
---------------
Balance at 31 July 2012 48,064
---------------
---------------
Carrying amounts
At 1 August 2010 -
---------------
---------------
At 31 July 2011 38,468
---------------
---------------
At 1 August 2011 38,468
---------------
---------------
At July 31, 2012 48,064
---------------
---------------
Consideration of impairment for mineral property costs
The directors have assessed whether there are any indicators of impairment in respect of mineral property
costs. In making this assessment they have considered the Group's recent Feasibility Study as well as its
opportunities economic model which includes resource estimates and conversion of its inferred resources,
movement of future processing capacity, the forward market and longer term price outlook for copper and gold.
The directors do not consider that there are any indicators that mineral property costs are impaired at the
year end.
The Group generated revenue from saleable material produced during commissioning of $25.2 million from the sale
of gold dore bar and $3.0 million from the sale of copper concentrate during the year and offset this revenue
against the mineral property asset as commercial production was not declared during the year.
9. Property, plant and equipment
Land and Assets under Motor
buildings construction vehicles
$'000 $'000 $'000
Cost
Balance at 1 August 2010 1,096 5,200 118
Additions 1,845 10,110 74
Disposals - - (39)
-------------------------------------------------
Balance at 31 July 2011 2,941 15,310 153
-------------------------------------------------
-------------------------------------------------
Balance at 1 August 2011 2,941 15,310 153
Additions 733 6,189 59
Disposals - - -
-------------------------------------------------
Balance at July 31, 2012 3,674 21,499 212
-------------------------------------------------
-------------------------------------------------
Depreciation and impairment
losses
Balance at 1 August 2010 775 - 51
Depreciation charge for the
year 151 - 40
Eliminated on disposals - - (20)
-------------------------------------------------
Balance at 31 July 2011 926 - 71
-------------------------------------------------
-------------------------------------------------
Balance at 1 August 2011 926 - 71
Depreciation charge for the
year 333 - 58
Eliminated on disposals - - -
-------------------------------------------------
Balance at July 31, 2012 1,259 - 129
-------------------------------------------------
-------------------------------------------------
Carrying amounts
At 1 August 2010 321 5,200 67
-------------------------------------------------
-------------------------------------------------
At 31 July 2011 2,015 15,310 82
-------------------------------------------------
-------------------------------------------------
At 1 August 2011 2,015 15,310 82
-------------------------------------------------
-------------------------------------------------
At July 31, 2012 2,415 21,499 83
-------------------------------------------------
-------------------------------------------------
Fixtures,
Plant and fittings and Computer
equipment equipment equipment Total
$'000 $'000 $'000 $'000
Cost
Balance at 1 August 2010 6,038 56 540 13,048
Additions 8,127 34 130 20,320
Disposals - - - (39)
-------------------------------------------------
Balance at 31 July 2011 14,165 90 670 33,329
-------------------------------------------------
-------------------------------------------------
Balance at 1 August 2011 14,165 90 670 33,329
Additions 3,378 3 89 10,451
Disposals (189) - (6) (195)
-------------------------------------------------
Balance at July 31, 2012 17,354 93 753 43,585
-------------------------------------------------
-------------------------------------------------
Depreciation and impairment
losses
Balance at 1 August 2010 4,382 44 335 5,587
Depreciation charge for the
year 2,070 13 156 2,430
Eliminated on disposals - - - (20)
-------------------------------------------------
Balance at 31 July 2011 6,452 57 491 7,997
-------------------------------------------------
-------------------------------------------------
Balance at 1 August 2011 6,452 57 491 7,997
Depreciation charge for the
year 3,755 15 128 4,289
Eliminated on disposals (189) - (6) (195)
-------------------------------------------------
Balance at July 31, 2012 10,018 72 613 12,091
-------------------------------------------------
-------------------------------------------------
Carrying amounts
At 1 August 2010 1,656 12 205 7,461
-------------------------------------------------
-------------------------------------------------
At 31 July 2011 7,713 33 179 25,332
-------------------------------------------------
-------------------------------------------------
At 1 August 2011 7,713 33 179 25,332
-------------------------------------------------
-------------------------------------------------
At July 31, 2012 7,336 21 140 31,494
-------------------------------------------------
-------------------------------------------------
Leased plant and machinery
The Group leases surface and underground equipment under a number of finance lease agreements. At the end of
each lease the Group has the option to purchase the equipment at a beneficial price. At July 31, 2012, the net
carrying amount of leased plant and machinery was $5,542,000 (2011: $6,032,000). The leased plant and machinery
secures lease obligations (see note 19). During the year plant and equipment additions of $2,422,000 (2011:
$7,019,000) were acquired through finance lease arrangements.
10. Available for sale investments
Available for sale
investments
$'000
Cost
Balance at 1 August 2011 -
Acquisitions 1,134
Revaluation (422)
Balance at 31 July 2012 712
--------------------
--------------------
Carrying amounts
At 31 July 2011 -
--------------------
--------------------
At 31 July 2012 712
--------------------
--------------------
On February 15, 2012 the Group completed an acquisition of 4,500,000 shares of Maritime Resources Corp (TSX
VENTURE:MAE) ('Maritime') through a non-brokered private transaction priced at $0.23 per share for a total
consideration of $1,035,000. The acquisition gives Rambler a 17% equity stake and an invitation to appoint a
representative to join Maritime's Board of Directors. On May 23, 2012 the Group acquired a further 588,230
shares at $0.17 per share. The market price at July 31, 2012 was $0.14 per share.
11. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
Balance Balance Balance Balance
July 31, 2012 July 31, 2012 July 31, 2012 July 31, 2011
$'000 $'000 $'000 $'000
Property, plant and
equipment - - 21 97
Mineral property - - 3,104 1,556
Intangible assets - - 1,327 1,556
Available for sale
investment (61) - - -
Tax value of loss
carry-forwards
recognised (4,391) (3,209) - -
---------------------------------------------------------
Net tax (assets)/
liabilities (4,452) (3,209) 4,452 3,209
---------------------------------------------------------
---------------------------------------------------------
Net
Balance Balance
July 31, 2012 July 31, 2011
$'000 $'000
Property, plant and
equipment 21 97
Mineral property 3,104 1,556
Intangible assets 1,327 1,556
Available for sale
investment (61)
Tax value of loss
carry-forwards
recognised (4,391) (3,209)
----------------------------
Net tax (assets)/
liabilities - -
----------------------------
----------------------------
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following
items:
2012 2011
$'000 $'000
UK tax losses 1,126 831
Canadian tax losses - 49
Other Canadian tax credits 5,442 3,768
------------------------------
6,568 4,648
------------------------------
------------------------------
The Canadian tax losses and other Canadian tax credits expire if not realized within 20 years based on current
tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not
probable that future taxable profit will be available against which the Group can utilise the benefits there
from.
Movement in recognised deferred
tax assets and liabilities
Recogn-
Balance ised in Balance
Aug 1, 2010 income July 31, 2011
$'000 $'000 $'000
Property, plant and equipment (273) 370 97
Mineral properties - 1,556 1,556
Intangible assets 1,745 (189) 1,556
Tax value of loss carry-forwards (1,472) (1,737) (3,209)
------------------------------------------
- - -
------------------------------------------
------------------------------------------
Recogn-
Balance ised in Balance
Aug 1, 2011 income Jul 31, 2012
$'000 $'000 $'000
Property, plant and equipment 97 (76) 21
Mineral properties 1,556 1,548 3,104
Intangible assets 1,556 (229) 1,327
Available for sale investment - (61) (61)
Tax value of loss carry-forwards (3,209) (1,182) (4,391)
------------------------------------------
- - -
------------------------------------------
------------------------------------------
12. Inventory
2012 2011
$'000 $'000
Metals in process - 540
Operating supplies 1,100 394
-----------------------------
1,100 934
-----------------------------
-----------------------------
13. Trade and other receivables
2012 2011
$'000 $'000
Trade receivables 281 653
Other receivables 72 37
Sales taxes recoverable 478 616
Prepayments and accrued income 168 259
-----------------------------
999 1,565
-----------------------------
-----------------------------
14. Cash and cash equivalents
2012 2011
$'000 $'000
Short term deposits 355 692
Bank balances 7,471 9,478
-----------------------------
Cash and cash equivalents in the
statement of cash flows 7,826 10,170
-----------------------------
-----------------------------
15. Restricted cash
2012 2011
$'000 $'000
Bearer deposit notes 3,263 3,377
------------------------------
------------------------------
The Group is required to hold Letters of Credit in favour of the Government of Newfoundland and Labrador in
respect of the reclamation and closure liability associated with the Ming Mine. The bearer deposit notes mature
on differing dates throughout fiscal 2013 and have a nominal value of $3,302,000 (2011 - $3,424,000) giving an
effective yield of 1.1% (2011 - 1.4%).
16. Capital and reserves
Share capital and share premium - group and company
Number '000
In issue at 1 August 2010 95,485
Issued for cash 27,778
Issued on exercise of options 52
---------------
In issue at 31 July 2011 123,315
---------------
---------------
In issue at 1 August 2011 123,315
Issued for cash 17,522
Issued in consideration for finance fees 1,321
Issued on exercise of options 202
---------------
In issue at July 31, 2012 142,360
---------------
---------------
At July 31, 2012, the authorised share capital comprised 1,000,000,000 ordinary shares of 1p each.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Company.
Details of shares issued during the year ended July 31, 2012 are as follows:
On August 22, 2011 the company received monies to subscribe for 22,000 shares for $0.18 each raising a total of
$3,960 following the exercise of options.
On October 7, 2011 the company issued 643,227 shares for $0.4664 to satisfy $300,000 of finance expenses.
On October 31, 2011 the company issued 481,001 shares for $0.4158 to satisfy $200,000 of finance expenses.
On February 3, 2012 the company issued 197,242 shares for $0.5070 to satisfy $100,000 of finance expenses.
On February 9, 2012 the company received monies to subscribe for 180,000 shares for an average of $0.1754 each
raising a total of $31,573 following the exercise of options.
On March 19, 2012 the company received monies to subscribe for 10,403,980 shares for $0.44 each raising a total
of $4,408,323 net of expenses.
On July 18, 2012 the company received monies to subscribe for 7,118,012 shares for $0.58 each raising a total
of $4,073,014 net of expenses.
Merger reserve
The merger reserve arose from the acquisition of Rambler Mines Limited by Rambler Metals and Mining PLC. This
acquisition was accounted for in accordance with the merger accounting principles set out in UK Financial
Reporting Standard 6 and the Companies Act 1985, which continue under the Companies Act 2006, whereby the
consolidated financial statements were presented as if the business previously carried out through Rambler
Mines Limited had always been owned and controlled by the Company. The transition provisions of IFRS 1 allow
all business combinations prior to transition to IFRS to continue to be accounted for under the requirements of
UK GAAP at that time. Accordingly this acquisition has not been re-stated in accordance with that standard.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of the parent company which has a different functional currency from the presentation
currency. Exchange differences arising are classified as equity and transferred to the Group's translation
reserve. Such translation differences are recognised in the income statement in the period of disposal of the
operation.
Fair value reserve
The fair value reserve comprises cumulative adjustments made to the fair value of available for sale
investments.
Capital management
The Group's objectives when managing capital are to safeguard the entity's ability to continue as a going
concern so that it can continue to increase the value of the entity for the benefit of the shareholders. Given
the nature of the Group's current activities the entity will remain dependent on a mixture of debt and equity
funding until such a time as the Group becomes self-financing from the commercial production of mineral
resources.
The Group's capital was as follows:
2012 2011
$'000 $'000
Cash and cash equivalents 7,826 10,170
Finance leases (7,689) (6,956)
Bank loan (26) (29)
Gold loan (20,889) (19,903)
Credit facility (6,914) -
--------------------
Net debt (27,692) (16,718)
Equity (67,402) (61,978)
--------------------
Total capital (95,094) (78,696)
--------------------
--------------------
Details of employee share options outstanding are set out in note 5.
17. Loss per share
Basic loss per share
The calculation of basic loss per share at July 31, 2012 was based on the loss attributable to ordinary
shareholders of $3,367,000 and a weighted average number of ordinary shares outstanding during the period ended
July 31, 2012 of 128,477,000 calculated as follows:
Loss attributable to ordinary shareholders
2012 2011
$'000 $
Loss for the period (3,367) (53)
--------------------------------
Loss attributable to ordinary shareholders (3,367) (53)
--------------------------------
--------------------------------
Weighted average number of ordinary shares
Number '000
At August 1, 2010 95,485
Effect of shares issued during the year 6,797
----------------
----------------
At July 31, 2011 102,282
----------------
----------------
In issue at August 1, 2011 123,315
Effect of shares issued during year 5,162
----------------
----------------
Weighted average number of ordinary shares
at July 31, 2012 128,477
----------------
----------------
There is no difference between the basic and diluted loss per share. At July 31, 2012 there were 3,937,000
(2011: 4,167,000) share options in issue which may have a dilutive effect on the basic earnings or loss per
share in the future.
18. Trade and other payables
2012 2011
$'000 $'000
Trade payables 4,918 4,710
Non trade payables 65 187
Accrued expenses 1,003 1,063
------------------------------
5,986 5,960
------------------------------
------------------------------
19. 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 21.
2012 2011
$'000 $'000
Non-current liabilities
Bank loan 23 26
Finance lease liabilities 5,727 5,326
Gold Loan 14,941 19,254
------------------------------
20,691 24,606
------------------------------
------------------------------
Current liabilities
Current portion of bank loan 3 3
Current portion of finance lease liabilities 1,962 1,630
Current portion of Gold Loan 5,948 649
Credit Facility 6,914 -
------------------------------
14,827 2,282
------------------------------
------------------------------
Finance lease liabilities
Finance lease liabilities are payable as follows:
Minimum
lease
Payments Interest Principal
2012 2012 2012
$'000 $'000 $'000
Less than one year 2,189 227 1,962
Between one and five years 6,361 634 5,727
---------------------------------------------
8,550 861 7,689
---------------------------------------------
---------------------------------------------
Minimum
lease
Payments Interest Principal
2011 2011 2011
$'000 $'000 $'000
Less than one year 1,965 335 1,630
Between one and five years 5,918 592 5,326
---------------------------------------------
7,883 927 6,956
---------------------------------------------
---------------------------------------------
Under the terms of the lease agreements, no contingent rents are payable. The finance lease liabilities are
secured on the underlying assets. Total interest of $428,000 (2011: $188,000) was charged to mineral properties
during the year.
Gold Loan
In March 2010, 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 made staged upfront cash payments for the gold to the Group
totalling US$20 million.
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 was payable with each payment received under the agreement.
The remaining circumstances in which the Gold Loan may be repaid earlier than by the delivery of payable gold
are as follows:
(iii) If within 24 months of the date that gold is first produced (November 28, 2011), 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.
(iv) Within the first 36 months of 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
During the first eight months of commissioning, repayments of US$7,855,441 were made from the delivery of 4,774
ounces of gold thereby satisfying the requirement to repay a minimum of US$3.6 million cash during the first
and second 12 months and partially meeting the requirements for the third 12 months.
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 $7,886,000 was accrued during the period. $nil (2011: $49,906) was included in exploration
and evaluation expenditure and $4,340,000 (2011: $3,446,000) charged to mineral properties.
The Gold Loan is secured by a fixed and floating charge over the assets of the Group.
Credit Facility
On September 29, 2011 the Group agreed a credit facility of up to $10 million with Sprott Resource Lending
Partnership ("Sprott") for use as additional funding for the development of the Ming Mine. Subsequent to
amending the agreement in December 2011 the facility is available in three instalments; the first instalment of
$5 million was drawn on October 29, 2011, the second instalment of $2.5 million was drawn on January 30, 2012
and the final instalment for the balance up to $10 million is available until August 31, 2012. Interest accrues
at a fixed rate of 9.25% per annum. The principle is repayable by March 29, 2013 and is secured by a fixed and
floating charge over the assets of the Group. In connection with the credit facility, a structuring fee of
$100,000 and a 3% commitment fee of $300,000 were paid to Sprott in cash. Pursuant to the terms of the credit
facility, the Company issued $300,000 of ordinary shares of 1p each in the capital of the Company to Sprott in
exchange for the repayment of the previously paid cash commitment fee. In addition, a further 4% drawdown fee
on all amounts drawn under the credit facility was satisfied by the issuance of ordinary shares by the Company.
Total financing and interest charges of $1,004,000 (2011: $nil) were charged to mineral properties during the
year.
20. Provision
2012 2011
$'000 $'000
Reclamation and closure provision
Opening balance 1,647 599
Provision (utilised)/made during the year (121) 1,007
Unwinding of discount 286 81
-------------------------------
Ending balance 1,812 1,647
-------------------------------
-------------------------------
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 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 all three
sites associated with the Ming Mine project: mill, mine and port sites. Following the completion and
restoration of the Group's Nugget Pond Crown Pillar satellite deposit government released a Letter of Credit
valued at $121,000. The remaining liability is secured by Letters of Credit for $3,255,155.
21. Financial risk management
The Group's principal financial assets comprise: cash and cash equivalents, restricted cash, available for sale
investments 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 and 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 exchange risk, liquidity risk, credit risk, interest rate risk and commodity price risk
each of which is discussed below. There were no derivative instruments outstanding at July 31, 2012.
Foreign exchange 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 19. Repayment is envisaged in payable gold which is denominated in US dollars. Once the Mine is
in production, this will mitigate this foreign currency risk.
The policy in relation to the translation of foreign currency assets and liabilities is set out in note 2(d),
'Accounting Policies Foreign Currencies' to the consolidated financial statements.
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.
Equity
2012 2011
$ $
10% strengthening of GB pound 24 64
10% weakening of GB pound (22) (57)
10% strengthening of US dollar (1,734) (1,920)
10% weakening of US dollar 1,576 1,746
--------------------------------
--------------------------------
Liquidity risk
With finite cash resources 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 July 31, 2012.
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 other financial liabilities are due as follows:
Financial liabilities 2012 2011
$'000 $'000
Due within one year 16,174 5,056
Due within one to two years 5,667 6,118
Due within two to three years 4,795 6,915
Due within three to four years 4,778 4,021
Due within four to five years 3,168 3,614
Due after five years 16,240 18,238
------------------------------
50,822 43,962
------------------------------
------------------------------
Fixed rate 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:
Fixed rate liabilities 2012 2011
$'000 $'000
Due within one year 8,879 1,633
Due within one to two years 2,021 1,465
Due within two to three years 2,015 1,508
Due within three to four years 1,461 1,478
Due within four to five years 243 888
Due after five years 10 13
------------------------------
14,629 6,985
------------------------------
------------------------------
The average fixed interest rate for the finance leases and hire purchase contracts outstanding at July 31, 2012
was 6.46%.
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. 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
trade and other receivables (see note 13). The Group maximum exposure to credit risk at July 31, 2012 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 19.
If the interest rate on deposits were to fluctuate by 1% there would be no material effect on the Group's and
Company's reported results.
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.
As explained in note 25 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.
Gross assets
2012 2011
$'000 $'000
10% increase in the price of gold (2,089) (292)
25% decrease in the price of gold 5,222 783
--------------------------------
--------------------------------
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 year end the cash and short term deposits were as follows:
Fixed rate Floating Average Average
assets rate period for interest
Assets Total which rates for
rates are fixed rate
At July 31, 2012 fixed assets
$'000 $'000 $'000 Months %
Sterling 355 77 432 1 0.25
Canadian $ - 7,394 7,394 - -
------------------------------
355 7,471 7,826
------------------------------
------------------------------
At 31 July 2011
$'000 $'000 $'000 Months %
Sterling 667 47 714 1 0.25
Canadian $ 25 9,431 9,456 1.3 0.95
------------------------------
692 9,478 10,170
------------------------------
------------------------------
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.
22. Capital and operating lease commitments
The Group has commitments totalling $nil (2011: $2.506 million) with various vendors relating to the purchase
of equipment for the Nugget Pond Mill copper concentrator upgrade.
23. Related parties
Identity of related parties
The Group has a related party relationship with its subsidiaries and with its directors and executive officers.
Transactions with key management personnel
The directors' compensations were as follows:
2012 2011
$'000 $'000
Salary - executive
G Ogilvie 270 229
Fees - non-executive
D H W Dobson - -
S Neamonitis 13 13
J M Roberts 13 13
L D Goodman 13 13
B F Dalton - 2
J A Baker - 2
B D Hinchcliffe 13 13
T S Chan 3 -
J Thomson 13 47
------------------------------
338 332
------------------------------
------------------------------
D H W Dobson waived his entitlement to director's fees for the current and preceding periods. At July 31, 2012
fees of $21,000 (2011: $19,000) remained outstanding.
Brian Dalton and John Baker, directors of the company until October 13, 2011 are also directors of Altius
Resources Inc. ("Altius").
Consultancy fees were payable to Altius Mineral Corporation for the year ended July 31, 2012 for the
consultancy services of J Baker & B Dalton amounting to $2,700 (2011: $21,000). At July 31, 2012, consultancy
fees of $nil (2011: $5,000) were outstanding.
Share options held by directors were as follows:
At 31.07.12 At 31.07.11
No. No.
'000 '000
G Ogilvie(1) 1,100 1,100
J Thomson(2) 400 400
D H W Dobson(3) 45 45
S Neamonitis(4) 100 45
J M Roberts(3) 45 45
L D Goodman(3) 45 45
B D Hinchcliffe(3) 45 45
------------------------
1,780 1,725
------------------------
------------------------
(1) 200,000 options at an exercise price of $0.93 expiring on 7 December 2016, 150,000 options at an exercise
price of $1.10 expiring on 12 November 2017 and 750,000 options at an exercise price of $0.19 expiring on 10
November 2018.
(2) 100,000 options at an exercise price of $0.93 expiring on 7 December 2016 and 300,000 options at an
exercise price of $0.19 expiring on 10 November 2018.
(3) options at an exercise price of $0.19 expiring on 10 November 2018.
(4) options at an exercise price of $0.53 expiring on 22 March 2022.
Total key management personnel compensations were as follows:
2012 2011
$'000 $'000
Short term employee benefits 659 641
Social security costs 33 30
Share based payments 17 80
------------------------------
709 751
------------------------------
------------------------------
24. Subsequent events
On October 9, 2012 the Company announced the purchase of a 1% net smelter royalty ('NSR') held over the Ming
Mine by Ming Minerals Inc. for a total consideration of $500,000. The mine was initially encumbered by a
combined 4.5% NSR held by four separate groups. Of the four net smelter royalties, two included a buyout clause
allowing the Company to purchase 3% of the total NSR for a combined payment of $1,100,000. This is the second
royalty Rambler purchased since starting commissioning at the Ming Mine leaving a combined net smelter royalty
of 1.5% on the Ming Mine.
25. Critical accounting estimates and judgements
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 Company's financial statements, providing
some insight also to uncertainties that could impact the Company's financial results.
Going Concern
The risks associated with going concern are explained in note 1.
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.
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.
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 19).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.
Revenue
Revenues are subject to variation after the date of sale due to assay, price and foreign exchange fluctuations.
Management monitors these changes closely and at the end of the period the directors will consider whether the
effect of these variations are material on the whole and determine whether an adjustment is therefore
appropriate.
Available for sale investment
Management consider that they do not have significant influence over the financial and policy decisions of
Maritime and therefore have included the investment as an available for sale investment.
Commercial production
The Group monitors the on-going testing and commissioning of its copper concentrate milling facility to assess
when commercial production has been achieved. Commercial Production is the assessment that the mill is capable
of operating in the manner intended was defined by management at the onset of development to be 60 days of
continuous production from both the mill and mine, being 85% of target rates envisaged in the Group's
Feasibility Study. Prior to commercial production being declared costs and revenues are offset to the Mineral
Properties asset and post commercial production will be charged to the Group's income statement. Commercial
production was not achieved at July 31, 2012.
COMPANY STATEMENT OF COMPREHENSIVE
INCOME
For the Year Ended July 31, 2012
Note Restated
2012 2011
$'000 $'000
(Loss)/profit for the year (1,232) 309
Exchange differences on translation
into presentation currency 361 (1,352)
--------------------------------
Other comprehensive income/(loss) for
the year 361 (1,352)
--------------------------------
Total comprehensive loss for the year (871) (1,043)
--------------------------------
--------------------------------
REGISTERED NUMBER: 05101822 (ENGLAND AND WALES)
RAMBLER METALS AND MINING PLC
COMPANY STATEMENT OF FINANCIAL POSITION
As at July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
Note Restated Restated
2012 2011 2010
$'000 $'000 $'000
Assets
Property, plant and equipment - - 1
Investments C4 68,848 60,285 46,619
---------------------------------
Total non-current assets 68,848 60,285 46,620
---------------------------------
Trade and other receivables C5 50 47 68
Cash and cash equivalents C6 437 714 553
---------------------------------
Total current assets 487 761 621
---------------------------------
Total assets 69,335 61,046 47,241
---------------------------------
---------------------------------
Equity
Issued capital 16 2,599 2,299 1,863
Share premium 74,756 65,934 51,532
Translation reserve (10,067) (10,428) (9,076)
Retained profit 1,893 3,115 2,774
---------------------------------
Total equity 69,181 60,920 47,093
---------------------------------
Liabilities
Trade and other payables C7 154 126 148
---------------------------------
Total current liabilities 154 126 148
---------------------------------
Total liabilities 154 126 148
---------------------------------
Total equity and liabilities 69,335 61,046 47,241
---------------------------------
---------------------------------
ON BEHALF OF THE BOARD:
J S Thomson
Director
Approved and authorised for issue by the Board on October 19, 2012
RAMBLER METALS AND MINING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Share Translation Accumulated
capital premium reserve losses Total
(EXPRESSED IN CANADIAN
DOLLARS) $'000 $'000 $'000 $'000 $'000
Balance at 1 August 2010
(as previously stated) 1,863 51,532 (9,076) (3,845) 40,474
Prior period adjustment
(see note C3) - - - 6,619 6,619
---------------------------------------------------
Balance at 1 August 2010
(restated) 1,863 51,532 (9,076) 2,774 47,093
---------------------------------------------------
Comprehensive income
Profit for the year - - - 309 307
---------------------------------------------------
Foreign exchange
translation differences - - (1,352) - (1,352)
---------------------------------------------------
Total other comprehensive
income - - (1,352) (1,352)
---------------------------------------------------
Total comprehensive
income for the year - - (1,352) 309 (2,085)
---------------------------------------------------
Issue of share capital 436 15,252 - - 15,688
Share issue expenses - (850) - - (850)
Share-based payments - - - 32 32
---------------------------------------------------
Balance at 31 July 2011
(restated) 2,299 65,934 (10,428) 3,115 60,920
Comprehensive income
Loss for the year - - - (1,232) (1,232)
---------------------------------------------------
Foreign exchange
translation differences - - 361 - 361
---------------------------------------------------
Total other comprehensive
income - - 361 361
---------------------------------------------------
Total comprehensive
income for the year - - 361 (1,232) (871)
Issue of share capital 300 9,047 - - 9,347
Share issue expenses - (225) - - (225)
Share-based payments - - - 10 10
---------------------------------------------------
Balance at July 31, 2012 2,599 74,756 (10,067) 1,893 69,181
---------------------------------------------------
---------------------------------------------------
RAMBLER METALS AND MINING PLC
STATEMENT OF CASH FLOWS
For the Year Ended July 31, 2012
(EXPRESSED IN CANADIAN DOLLARS)
2012 2011
$'000 $'000
Cash flows from operating activities
Operating (loss)/profit (1,232) 309
Share based payments 6 21
Foreign exchange losses 313 (1,250)
(Increase)/decrease in debtors (3) 20
Increase/(decrease) in creditors 28 (21)
--------------------------------
Net cash utilized in operating activities (888) (921)
--------------------------------
Cash flows from investing activities
Interest received 1 1
Loans to subsidiaries (7,923) (13,879)
--------------------------------
Net cash utilised in investing activities (7,922) (13,878)
--------------------------------
Cash flows from financing activities
Proceeds from the issue of share capital 8,714 15,688
Payment of transaction costs (225) (850)
Proceeds from exercise of share options 38 12
--------------------------------
Net cash from financing activities 8,527 14,850
--------------------------------
Net (decrease)/increase in cash and cash
equivalents (283) 51
Cash and cash equivalents at beginning of
period 713 553
Effect of exchange rate fluctuations on cash
held 7 109
--------------------------------
Cash and cash equivalents at end of period 437 713
--------------------------------
--------------------------------
RAMBLER METALS AND MINING PLC
NOTES TO THE COMPANY FINANCIAL STATEMENTS
C1. Accounting policies
The accounting policies of the company are consistent with those adopted by the Group with the addition of the
following:
Investments
Investments are stated at their cost less impairment losses.
C2. Loss of parent company
As permitted by section 408 of the Companies Act 2006, the income statement of the parent company is not
presented as part of these financial statements. The parent company's loss for the financial year was
$1,232,000 (2011: Profit $309,000).
C3. Prior period adjustment
The parent company has provided finance in the form of loans to its Canadian subsidiary over a number of years.
The loans have previously been recorded in the books of the parent company in British pounds. However, the
directors have determined that the intercompany loan is, and always has been, denominated in Canadian dollars
and have restated the comparative information in accordance with IAS8, "Accounting policies, changes in
accounting estimates and errors" to reflect this. Accordingly, the foreign exchange translation differences
have been determined for each period presented, resulting in a decrease of $1,250,000 in losses, a decrease in
other comprehensive income of $208,000 presented for the year ended 31 July 2011 and a increase of $7,661,000
in total equity as at 31 July 2011. The correction to total equity as at 1 August 2010, being the start of the
earliest period presented, was an increase of $6,619,000.
C4. Investments
Investment in
subsidiary Loans Total
$'000 $'000 $'000
Cost
Balance at 1 August 2010 (restated) 387 46,232 46,619
Advances (net) - 13,879 13,879
Effect of movements in foreign exchange (11) (202) (213)
------------------------------------
Balance at 31 July 2011 (restated) 376 59,909 60,285
------------------------------------
------------------------------------
Balance at 1 August 2011 (restated) 376 59,909 60,285
Advances (net) - 8,523 8,523
Effect of movements in foreign exchange 2 38 40
------------------------------------
Balance at July 31, 2012 378 68,470 68,848
------------------------------------
------------------------------------
The company has interests in the following material subsidiary undertakings, which are included in the
consolidated financial statements.
Name Class Holding Activity Country of
Incorporation
Rambler Mines Ordinary 100% Holding company England
Limited
Rambler Metals and Common 100% Exploration and Canada
Mining Canada (indirectly) development
Limited
The aggregate value of shares in subsidiary undertakings is stated at cost less any amounts provided for
impairment as deemed necessary by the directors.
The loans to the subsidiary undertakings are interest free.
C5. Trade and other receivables
2012 2011
$'000 $'000
Other receivables 1 4
Sales taxes recoverable 23 14
Prepayments and accrued income 26 29
------------------------------
50 47
------------------------------
------------------------------
C6. Cash and cash equivalents
2012 2011
$'000 $'000
Short term deposits 355 667
Bank balances 82 47
------------------------------
Cash and cash equivalents in the statement of
cash flows 437 714
------------------------------
------------------------------
C7. Trade and other payables
2012 2011
$'000 $'000
Trade payables 35 5
Non trade payables 1 3
Accrued expenses 118 118
------------------------------
154 126
------------------------------
------------------------------
C8. Related party transactions
The Company has a related party relationship with its subsidiaries (see note C4) and with its directors and
executive officers (see note 23).
Transactions with subsidiary undertakings
Details of loans advanced to subsidiary undertakings are included in note C4.
Other related parties
Transactions with other related parties are detailed in note 23.
FOR FURTHER INFORMATION PLEASE CONTACT:
Rambler Metals and Mining
George Ogilvie, P.Eng.
President and CEO
709-800-1929 or 709-800-1921
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
Stewart Dickson / Jeremy Stephenson
+44 (0) 20-7107-8000
OR
Pelham Bell Pottinger
Charles Vivian / Daniel Thole
+44 (0) 20 7861 3921
OR
Ocean Equities Limited
Guy Wilkes
+44 (0) 20-7786-4370
Rambler Metals & Mining Plc
Latest directors dealings
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