Interim Results Quarter Ended April 30, 2011
FOR: RAMBLER METALS & MINING PLC
TSX VENTURE SYMBOL: RAB
AIM SYMBOL: RMM
June 20, 2011
Rambler Metals and Mining PLC: Interim Results Quarter Ended April 30, 2011
LONDON, UNITED KINGDOM and BAIE VERTE, NEWFOUNDLAND AND LABRADOR--(Marketwire - June 20, 2011) - Rambler Metals
and Mining PLC (TSX VENTURE:RAB)(AIM:RMM) ("Rambler" or the "Company") today is pleased to report its financial
results and operational highlights for the quarter year ended 30 April 2011. The Company is focused on bringing
the Ming Copper-Gold Mine ("Ming Mine") located in Newfoundland and Labrador's Baie Verte Peninsula, Canada,
into full production.
Operational Highlights
/T/
-- Successfully raised CAD$15 million after expenses through the placing of
27,777,778 ordinary shares on May 3, 2011. The proceeds will be used to
provide the working capital required ahead of full production at the
Ming Mine.
-- Final permits received from the Government of Newfoundland and Labrador
for the Ming Mine, allowing for the final payment of US$6 million to
Rambler under the terms of the Gold Loan agreement with Sandstorm Gold
Ltd.
-- Processing of the Nugget Pond Crown Pillar commenced in mid May 2011 at
an average throughput rate of 430 tonnes per day and concluded on June
13, producing approximately 880 gold ounces at estimated cash cost of
$493 per ounce. Final reconciliation of totalled recovered ounces will
be known following the completion of further refining and the treatment
of material recovered during system cleanout.
-- Following completion of the Crown Pillar ore haulage and processing of
the Tilt Cove-East Mine Deposit commenced on June 13, 2011.
-- Updated NI43-101 resource estimates for the Lower and Upper footwall
Zones at the Ming Mine with an increase of 1.63 million tonnes
representing an additional 27,375 tonnes of contained copper, 403 ounces
of gold and 53,827 ounces of silver resulting in a 21% increase.
-- All construction continued on schedule including the concentrator
expansion and mine site. The new office/dry facility was completed in
preparation for an increase in the underground workforce. Construction
of concentrate storage facility in Goodyear's Cove scheduled to begin
late June.
-- Exploration continued during the quarter, including a notable discovery
of high grade visible gold on the 1700 level at the Ming Mine.
/T/
Financial Highlights (All expressed in CAD$)
/T/
-- During the quarter, the Group generated gross profit of $8,000 some of
which was attributable to the completion of a third party test program
at the Nugget Pond Mill compared with a gross profit of $68,000 in
Q2/11.
-- The Net Profit for the quarter ended April 30, 2011 was $193,000
including an exchange gain of $836,000 or $0.002 per share compared to a
net loss of $555,000 for Q2/11 and a net loss of $630,000 for Q3/10.
-- Cash flows utilized for operating activities were $406,000 in Q3/11
compared to $979,000 in Q2/11 and $307,000 in Q2/10. The decrease in the
cash utilized is due to changes in working capital.
-- Cash resources (including short-term investments) as at April 30, 2011
were $2.4 million and as of June 20, 2011 had increased to $12.3
million.
/T/
George Ogilvie, President and CEO, Rambler Metals & Mining commented;
"The Group's performance over the past quarter has been extremely positive with new revenue being generated
from the Company's own mineral property, the Nugget Pond Crown Pillar. Furthermore, our continued exploration
at the Ming Mine has resulted in the discovery of visible gold underlining our belief that the Ming Mine will
continue to provide high grade discoveries with continued exploration.
The coming months will be a pivotal turning point for the company as our flagship project will be in production
during the second half of 2011."
About Rambler
Rambler Metals and Mining is Junior Mining Company that has 100% ownership of the Ming Copper-Gold Mine in Baie
Verte, Newfoundland and Labrador, Canada. Our objective is to become a mid-tier mining company by bringing the
Ming Mine into production, discovering new deposits and through M&A's. Following the acquisition of the Ming
Mine, Rambler, listed on the London AIM in 2005 and Toronto TSX-V in 2007.
The Ming property had been a former underground copper and gold producing mine that ceased production when the
deposit reached a then third party property boundary. This neighbouring property was subsequently consolidated
before being brought into Rambler's portfolio. Rambler now owns a 100% interest in the property.
The area where the mine is located is a former mining centre and subsequently good infrastructure exists
including roads, fresh water, hydro, access to a working port while the town of Baie Verte, population 1,300 is
located 17km away.
Over the last several years Rambler has been exploring on the property leading to the publication of three NI43-
101 resource statements, a newly published reserve statement, the discovery of new mineralized lenses and the
extension of pre-existing lenses. Today all mineralization remains open in multiple directions while,
importantly, the deposit has not been cut-off at depth. The underground workings have been dewatered and
services including air, water and electrical re-installed.
Following the successful publication of a positive Feasibility Study Rambler has now entered the construction
phase of the project and expects to bring the Ming Mine back into production in the second half of 2011.
Management's Discussion & Analysis ('MD&A')
For the Quarter Ended April 30, 2011
/T/
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This MD&A, including appendices, is intended to help the reader understand
Rambler Metals and Mining plc ('the parent company') and its subsidiaries
(the 'Group' or 'Rambler'), our operations and our present business
environment. It has been prepared as of June 20, 2011 and covers the results
of operations for the quarter ended April 30, 2011. This discussion should
be read in conjunction with the audited Financial Statements for the year
ended 31 July 2010 and notes thereto. These consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards ("IFRS") and their interpretations adopted by the
International Accounting Standards Board ("IASB"), as adopted by the
European Union and with IFRS and their interpretations adopted by the IASB.
The presentation currency is Canadian dollars. This is a change from
previous MD&As which were presented in United Kingdom pounds sterling (GB
pounds). Amounts previously reported in GB pounds have been translated at
the closing exchange rate for balance sheet items and the average rate for
income statement and cash flow items. These statements together with the
following MD&A are intended to provide investors with a reasonable basis for
assessing the potential future performance.
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Rambler Metals and Mining plc
Salatin House
19 Cedar Road
Sutton
Surrey
SM2 5DA.
/T/
GROUP OVERVIEW
The principal activity of the Group is the development 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 the TSX Venture
Exchange under the symbol "RAB".
The Group has established the following three strategic goals:
/T/
1. Become a profitable copper and gold producer.
2. Increase existing Ming Mine resources and reserves through further
exploration.
3. Selectively pursue growth opportunities within Atlantic Canada including
joint ventures and acquisitions.
/T/
The Group's directors and management believe that focussing on these priorities will provide the Group with the
best opportunity to build a successful and long term mining operation.
HIGHLIGHTS OF THE THIRD QUARTER
/T/
-- On May 3, 2011 the Group raised finance of $15 million after expenses
from the placing of 27,777,778 ordinary shares at 36 pence each
(approximately CDN$0.57) to support bringing the Ming Mine into
production.
-- On April 18, 2011 the Group received production approval from the
Department of Natural Resources to begin the open pit development of its
Nugget Pond Crown Pillar satellite deposit. With the final approval the
Group signed contracts for the drilling, blasting and haulage of the
waste and ore materials. Processing commenced in mid May 2011 at an
average throughput rate of 430 tonnes per day and concluded on June 13
producing approximately 880 gold dore ounces at an estimated total cash
cost of $493 per ounce. Final reconciliation of totalled recovered
ounces will be known following the completion of further refining and
the treatment of material recovered during system cleanout.
-- Following completion of the Crown Pillar ore haulage and processing of
the Tilt Cove-East Mine Deposit commenced on June 13 2011.
-- On March 8, 2011 the Group received the final permits from the
Government of Newfoundland and Labrador for the Ming Mine. Subsequently,
on March 14, 2011 the final US$6 million payment under the terms of the
Gold Loan agreement was received from Sandstorm Gold Ltd ('Sandstorm').
-- Updated the Group's NI43-101 Resource Estimate for the Lower and Upper
Footwall Zones at the Ming Mine which included an increase of 1.63
million tonnes in the Lower Footwall Zone representing an additional
27,375 tonnes of contained copper, 403 ounces of gold and 53,827 ounces
of silver representing an overall indicated resource increase of 21%.
-- Nugget Pond Mill concentrator expansion, site construction and the new
office and dry facility continued on schedule. The new office/dry
facility is now complete and will now support an increase in the
underground work force. Construction of the concentrate storage facility
is scheduled to begin in Goodyear's Cove in late June.
-- The majority of underground equipment has arrived on site with
additional deliveries scheduled throughout the coming months ahead of
the start up of production.
-- Exploration of the Ming Mine continued as new drifts provided access to
previously underexplored areas. The discovery of high grade visible gold
on the 1700 level during the quarter was of particular significance and
exploration will continue alongside pre-production development.
-- At quarter end a total of 108 employees were employed on the Ming Mine
project including a Chief Mining Engineer and Human Resources Manager
who were successfully recruited during the quarter. Additional
employment is anticipated as the Group moves closer to bringing the mine
back into production in the second half of calendar 2011.
/T/
FINANCIAL RESULTS
/T/
-- During the quarter the Group generated gross profit of $8,000 some of
which was attributable to the completion of a third party test program
at the Nugget Pond Mill compared with a gross profit of $68,000 in
Q2/11. The net profit for the quarter ended April 30, 2011 was $193,000
including an exchange gain of $836,000 or $0.002 per share which
compares to a net loss of $555,000 for Q2/11 and a net loss of $630,000
for Q3/10.
-- Cash flows utilized for operating activities were $406,000 in Q3/11
compared to $979,000 in Q2/11 and $307,000 in Q2/10. The decrease in the
cash utilized is due to changes in working capital.
-- Cash resources (including short-term investments) as at April 30, 2011
were $2.4 million and as of June 20, 2011 had increased to $12.3
million.
/T/
HEALTH AND SAFETY
/T/
-- The Group completed the quarter without any lost time accidents or
medical aid injuries.
-- The Health and Safety of the Group's employees continues to be a high
priority.
-- There were no environmental incidents.
/T/
OUTLOOK
The Group continues to look at the following short term objectives:
/T/
-- Complete construction and development at both the Nugget Pond Mill, Ming
Mine and Port sites in order to become a revenue generating operation
during the calendar 2H 2011.
-- Actively recruit additional underground personnel and process operators
for the Ming Mine.
-- Continue pre-production development in the Ming Mine to expose the 1806
and 1807 ore zones to permit both up-dip and down-dip exploration of
these zones.
-- Develop a sound business plan for development of the Footwall Zones.
-- Commence the processing of the Tilt Cove East Mine Deposit.
/T/
See 'Forward Looking Information' for a description of the factors that may cause actual results to differ from
forecast.
CAPITAL PROJECTS UPDATE
Effective September 1, 2010, following acceptance of the Ming Mine feasibility study by Sandstorm, the Ming
Mine project moved from pure Exploration & Evaluation into the Mine Development stage. Subsequently, all
expenditures incurred in bringing the Ming Mine through the construction and development stage are now being
capitalised to Mineral Properties.
During the quarter the Group incurred $4,920,000 on Mineral Property, $7,246,000 on property, plant and
equipment and $32,000 on exploration and evaluation of the Ming Mine.
/T/
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Mineral Property (capital development of
Ming Mine by category) Q3/11 Q2/11 Q3/10
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$,000 $,000 $,000
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Labour costs 1,612 923
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Contractors' and consultancy expenses 122 1,085 -
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General materials and other costs 216 289 -
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Surface development 231 117 -
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Underground development 1,103 1,141 -
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Sub-total 3,284 3,555 -
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Finance costs 383 220 -
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Depreciation 692 386 -
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Reclamation and closure provision 561 51 -
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Total 4,920 4,212 -
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/T/
Mineral property costs increased in Q3/11 compared to Q2/11 in line with the aim of bringing the mine into
production during the second half of 2011. Q3 expenditure included a full quarter with an increased workforce,
increased reclamation and closure costs following the receipt of the construction permits, increased finance
costs following the receipt of the final instalment of the Gold Loan and increased depreciation costs offset by
a reduction in contractors and consultancy expenses due to the completion of the shaft manway rehab in Q2.
/T/
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Mineral Property (capital development of
Ming Mine by area, before finance cost,
depreciation and reclamation)) Q3/11 Q2/11 Q3/10
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$,000 $,000 $,000
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Surface 705 265
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1806 ore zone 642 8 -
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1807 ore zone 108 827 -
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Ramp improvements 1,361 667 -
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Shaft manway rehab 190 1,400
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Administrative 278 388 -
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Total 3,284 3,555 -
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/T/
Surface related costs increases in Q3/11 compared to Q2/11 mainly due to construction timing of the new
office/dry facility. Increased costs were also experienced on the 1806 ore zone and ramp improvements in Q3/11
compared to Q2/11. Underground operations increased the focus on ramp improvements which subsequently allowed
further development of the 1806 ore zone. 1807 ore zone expenditures decreased in Q3/11 compared to Q2/11 as a
consequence of the increased focus previously noted. The Shaft manway rehabilitation was completed during Q3/11
/T/
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Property, plant and equipment Q3/11 Q2/11 Q3/10
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$,000 $,000 $,000
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Mill purchase and construction 2,996 4,536 482
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Plant and equipment 3,650 3,790 11
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Buildings 552 674 71
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Other assets 48 17 23
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Total 7,246 9,017 587
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/T/
Property, plant and equipment reduced during Q3/11 compared to Q2/11 due to more significant contractor's
expenditures being incurred on the Mill Construction in Q2 for steel fabrication and installation and concrete
preparation.
/T/
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Exploration and evaluation costs (Ming
Mine) Q3/11 Q2/11 Q3/10
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$,000 $,000 $,000
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Labour costs 15 1 352
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Consultancy expenses 16 14 514
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Operating costs 1 1 194
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Finance costs - - 231
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Depreciation - - 437
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Total 32 16 1,728
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/T/
Effective September 1, 2010, following acceptance of the Ming Mine feasibility study by Sandstorm, the Ming
Mine project moved from pure Exploration & Evaluation into the Mine Development stage. Exploration expenditures
incurred during these two quarters related to updating and validation of the Footwall Zone resources.
FINANCIAL REVIEW
/T/
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Comparatives
Q3/11
Results
($000's) Commentary Q2/11 B/ (W)(i) Q3/10 B/ (W)
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183 Revenue was generated
through further toll
milling contracts at the
Nugget Pond Mill during Q3
and subsequently concluded
in early May 2011. 266 (31)% - N/a
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175 Operating Costs relate to
labour, material,
consultancy and power
costs for operating the
mill for processing the
ore under the toll
processing agreements. 198 12% - N/a
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618 General and administrative
expenses were lower than
the previous quarter by
$80,000. Employment costs
reduced by $16,000 as a
result of the retirement
of the UK based company
secretary, legal and
professional fees reduced
by $32,000 due to reduced
registrar charges , travel
and investor relation
costs reduced by $36,000
and general office
expenses increased by
$4,000.
In comparison to Q3/10
administrative expenses
increased by $5,000.
Employment costs increased
by $4,000, general office
expenses by $21,000 offset
by a decrease in legal and
professional fees of
$20,000 due to reduced AGM
costs. 698 11% 613 (0%)
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836 Foreign exchange gains
arising on the Gold Loan
increased in Q2/11 as a
result of the continued
strengthening of the
Canadian dollar against
the US dollar during the
quarter. 81 932% - N/a
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16 Exploration costs
decreased compared to the
previous quarters as a
result of reduced activity
relating to the various
opportunities in the Ming
Mine area. 31 48% 19 16%
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4,920 Mineral Properties. The
group incurred costs of
$4.9 million in the
quarter including labour
costs of $1.6 million,
contractor and material
costs of $0.3 million,
underground development
costs of $1.1 million
depreciation of $0.7
million, finance costs of
$0.4 million and
reclamation and closure
costs of $0.6 million. 4,212 17% - N/a
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7,246 Capital spending on
property, plant and
equipment decreased during
the quarter compared to
the previous quarter
reflecting the continued
spending on equipment for
the refurbishment of the
mill, acquisition of
underground mining
equipment and office/dry
building and other
purchases related to the
preparation of the Ming
Mine for production.
Underground mining
equipment additions
include $3.3 million
financed through capital
lease financing.
The increase from Q3/10 is
due to the reasons
outlined above. 9,017 (20)% 587 1,134%
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32 Capital spending on
exploration and evaluation
costs remained at a low
level during the quarter
following the commencement
of mine development on
September 1, 2010. 16 (100)% 1,728 (98)%
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(i)B / (W) = Better / (Worse)
/T/
SUMMARY OF QUARTERLY RESULTS
The quarterly results for the Group for the last eight fiscal quarters are set out in the following table.
/T/
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Quarterly Results
(All amounts in 000s of Canadian
Dollars, except Loss per share 4th 3rd 2nd 1st
figures) Quarter Quarter Quarter Quarter
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Fiscal 2011
Revenue 183 266 985
Net Income/ (loss) 193 (555) (268)
Earnings/(loss) per Share (Basic
& Diluted) 0.002 (0.006) (0.003)
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Fiscal 2010
Revenue - - - -
Net Income/ (loss) (676) (644) (591) (515)
Loss per Share (Basic & Diluted) (0.008) (0.008) (0.007) (0.006)
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Fiscal 2009
Revenue -
Net Income/ (loss) (470)
Loss per Share (Basic & Diluted) (0.008)
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/T/
Losses for the third and fourth quarters of 2009 started to fall as a result of a cost reduction programme.
Losses for the first quarter of 2010 increased slightly mainly as a result of the weakening of the GB Pound
against the Canadian Dollar. Losses for the second quarter of 2010 further increased as a result of increased
legal and professional charges in connection with financing options and the AGM. The continued weakening of the
GB Pound against the Canadian Dollar resulted in a further increase in losses in the third quarter of 2010.
Losses in the fourth quarter of 2010 increased as a result of an unrealised exchange loss offset by reductions
in legal and professional charges and staff costs. Losses in the first quarter of 2011 reduced as a result of
revenue from toll processing and rose again in the second quarter of 2011 following the completion of toll
processing in November 2010. 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.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION
The Group's holding of cash balances is kept under constant review and surplus funds are held on deposit. Given
the current climate, the Group has taken a very risk averse approach to management of cash resources and
Management and Directors monitor events and associated risks on a continuous basis. Cash and short-term
investment resources, (cash, cash equivalents and short-term investments) were as follows:
/T/
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April 30, 2011 July 31, 2010
Resource $'000 $'000
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Cash $CDN 1,519 1,098
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Cash $US 789 -
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Cash GBP 51 67
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Short-term Investments $CDN - 6,351
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Short-term Investments GBP 118 484
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Total 2,477 8,000
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/T/
Interest of 1.10% was received on Canadian dollar deposits during the quarter.
Net proceeds from financing activities during the quarter amounted to $5.4 million from the final draw down
received from the Gold loan of $5.6 million net of financing fees offset by finance lease repayments of $0.2
million.
Cash flows used in investing activities amounted to $7.4 million for the quarter. Investments included $1.1
million in a bearer deposit note, $2.5 million in mine development, $2.8 million on the Nugget Pond Mill and
$0.9 million on property, plant and equipment. The group is required to hold a Letter of Credit in favour of
the Government of Newfoundland and Labrador in respect of the reclamation and closure liability at the existing
Nugget Pond Mill and Ming Mine. At quarter end the Group holds bearer deposit notes totalling $3.13 million.
On May 3, 2011 the Company raised finance of $15 million after expenses from the placing of 27,777,778 ordinary
shares at 36 pence each. Management continues to closely monitor key milestones associated with bringing the
mine into production in the second half of calendar 2011 and is satisfied the Group has sufficient working
capital for the forthcoming 12 months. On this basis, the Directors have concluded that the Group is a going
concern, however, slippage against key milestones may necessitate other sources of finance to be considered to
satisfy short term working capital requirements as marketing commences. There is no certainty that these funds
will be forthcoming.
At 20 June 2011 the Group has $12.3 million in cash and cash equivalents with a proportion invested in short
dated term deposits and bankers acceptances.
Financial Instruments
The Group's financial instruments as at April 30, 2011 comprised of financial assets of cash and cash
equivalents and trade and other receivables and financial liabilities comprised of trade payables; other
payables; accrued expenses and interest bearing loans and borrowings.
All of the Group's financial liabilities are measured at amortised cost.
The board of directors determines, as required, the degree to which it is appropriate to use financial
instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be
appropriate are foreign currency risk, liquidity risk, credit risk, interest rate risk and commodity price risk
each of which is discussed in note 11 of the consolidated financial information for the nine months ended April
30, 2011. There were no derivative instruments outstanding at April 30, 2011.
COMMITMENTS AND LOANS
At April 30, 2011, capital commitments made to third parties included:
/T/
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Capital Commitments $000
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Property, Plant and Equipment 3,144
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TOTAL 3,144
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/T/
These commitments together with the ongoing evaluation and development of the mine will be partially financed
from existing cash reserves provided under the terms of the Gold Loan agreement with Sandstorm and funds of $15
million (after expenses) received from a private placement on May 3, 2011.
Purchase orders included mill equipment, groundwork, foundations and concrete, as well as steel fabrication and
erection.
At April 30, 2011, interest bearing loans and borrowings comprised a gold loan of $19,087,000, finance lease
commitments of $6,852,000 and a bank loan of $30,000.
The Group received the final advance of US$ 6 million from the Gold Loan during the quarter.
The Group entered into new finance leases of $3.3 million during the quarter to finance underground mining
equipment.
RELATED PARTY TRANSACTIONS
Transactions with key management personnel
Total key management personnel compensations were as follows:
/T/
3 months to 3 months to 9 months to 9 months to
30 April 30 April 30 April 30 April
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Salaries 169 95 455 290
Share based payments 26 5 66 29
------------------------------------------------
195 100 521 319
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/T/
Directors' fees of $63,323 remained outstanding at April 30, 2011 (July 31, 2010: $38,738).
SUBSEQUENT EVENTS
On May 3, 2011, the Company placed 27,777,778 Ordinary shares at 36 pence each raising CAD$15 million after
expenses.
On June 1, 2011 the Group signed an Exploration and Development Alliance with Maritime Resources Corp. and
Commander Resources Corp. which will see the sharing of technical expertise for the exploration and development
of two main properties in the Green Bay area of Newfoundland and Labrador. As part of the Alliance the Group
plans to complete an economic assessment on the reopening of the former producing Hammerdown Mine which
originally processed its ore at Rambler's Nugget Pond Mill. In addition the Alliance plans to evaluate the
economic viability of the Orion Deposit as a potential feed source of the Nugget Pond Mill.
To view APPENDIX 1 - LOCATION MAP, please visit the following link:
http://media3.marketwire.com/docs/rab0620appendix1.pdf.
APPENDIX 2 - SELECTED FINANCIAL INFORMATION & REVIEW OF OVERALL PERFORMANCE
/T/
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Financial Highlights Three months ended,
(All amounts in 000s of
Canadian Dollars, except
shares and per share
figures)
---------------------------------------------------
April 30, January 31, October 31, April 30,
2011 2011 2010 2010
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Revenue 183 266 985 -
Operating Expenses (175) (198) (611) -
Exploration Expenditure (16) (31) (28) (50)
Administrative expenses (618) (698) (619) (558)
Net Income (loss) 193 (555) (268) (591)
Per share (basic and
diluted) 0.002 (0.006) (0.000) (0.007)
Cash Flow used in
operating activities (406) (979) (483) (676)
Cash Flow used in
investing activities (7,370) (8,248) (1,941) (716)
Cash Flow from (used in)
financing activities 5,388 6,585 1,924 (103)
Net increase (decrease)
in cash (2,388) (2,642) (382) (1,495)
Cash and cash equivalents
at end of period 2,477 4,865 7,494 5,036
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Total Assets 79,238 68,909 58,219 45,487
Total Liabilities (32,847) (22,758) (11,555) (1,431)
Working Capital 219 3,324 7,115 4,596
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Weighted average number
of shares outstanding 95,515 95,515 95,485 95,485
Earnings/(loss) per share 0.002 (0.006) (0.003) (0.007)
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/T/
APPENDIX 3 - CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The details of the Group's accounting policies are presented in accordance with International Financial
Reporting Standards as set out in Note 2 to the financial statements. The preparation of financial statements
in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The following estimates are considered by management to be the most critical for investors to understand some
of the processes and reasoning that go into the preparation of the Group's financial statements, providing some
insight also to uncertainties that could impact the Group's financial results.
Going Concern
The Group's ability to continue as a going concern, and the recoverability of its mineral properties, is
dependent on the copper and gold prices, its ability to fund its development and exploration programs, and to
manage and generate positive cash flows from operations in the future. These financial statements do not
reflect the adjustments to carrying values of assets and liabilities and the reported expenses and balance
sheet classifications that would be necessary should the going concern assumption be inappropriate, and these
adjustments could be material.
In common with many exploration companies, the Group raises finance for its exploration and appraisal
activities in discrete tranches. On May 3, 2011 the Company raised finance of $15 million after expenses from
the placing of 27,777,778 ordinary shares at 36 pence each. Management continues to closely monitor key
milestones associated with bringing the mine into production in the second half of calendar 2011 and is
satisfied the Group has sufficient working capital for the forthcoming 12 months. On this basis, the Directors
have concluded that the Group is a going concern, however, slippage against key milestones may necessitate
other sources of finance to be considered to satisfy short term working capital requirements as marketing
commences. There is no certainty that these funds will be forthcoming.
Share-based payments
The Group calculates the cost of share based payments using the Black-Scholes model. Inputs into the model in
respect of the expected option life and the volatility are subject to management estimate and any changes to
these estimates may have a significant effect on the cost. The assumptions used in calculating the cost of
share based payments are explained in note 5 of the financial statements for the year ended July 31, 2010.
Gold Loan
The Group calculates the effective interest rate on the Gold Loan based on estimates of future cash flows
arising from the sale of payable gold (see note 7 to the Unaudited Consolidated Financial Information for the
nine months ended April 30, 2011).The cash flows will be dependent on the production of gold and its selling
price at the time of delivery which have been estimated in line with the mine plan, future prices of gold and
reserve estimates. Management's estimates of these factors are subject to risk and uncertainties affecting the
amount of the interest charge. Any changes to these estimates may result in a significantly different interest
charge which would affect the carrying value of the exploration and evaluation costs and the corresponding Gold
Loan liability.
The financial statements do not reflect the adjustments to the carrying values of assets and liabilities and
the reported expenses and balance sheet classifications that would be necessary were the going concern
assumption inappropriate, and these adjustments could be material.
Mineral Property and Exploration and Evaluation Costs
The directors have assessed whether there are any indicators of impairment in respect of mineral property and
exploration and evaluation costs. In making this assessment they have considered the Group's business plan
which includes resource estimates, future processing capacity, the forward market and longer term price outlook
for copper and gold. Resource estimates have been based on the most recently filed NI43-101 report.
Management's estimates of these factors are subject to risk and uncertainties affecting the recoverability of
the Group's mineral property and exploration and evaluation costs. Any changes to these estimates may result in
the recognition of an impairment charge with a corresponding reduction in the carrying value of such assets.
After consideration of the above factors, the directors do not consider that there are any indicators that
mineral property and exploration and evaluation costs are impaired at the year end.
Closure Costs
The Group has an obligation to reclaim its properties after the minerals have been mined from the site, and has
estimated the costs necessary to comply with existing reclamation standards. These estimates are recorded as a
liability at their fair values in the periods in which they occur. If the estimate of reclamation costs proves
to be inaccurate, the Group could be required to increase the provision for site closure and reclamation costs,
which would increase the amount of future reclamation expense, resulting in a reduction in the Group's earnings
and net assets.
CHANGES IN ACCOUNTING POLICIES
In the current quarter, new and revised standards which have been adopted have not affected the disclosures
presented in these financial statements.
No standards issued but not yet effective have been adopted early.
International Financial Reporting Standards that have recently been issued or amended but are not yet effective
have not been adopted for the annual reporting period ended July 31, 2011:
/T/
Nature of
change to Application
accounting date of Application
IFRS /Amendment Title policy standard date for Group
----------------------------------------------------------------------------
Various No change to
accounting
Annual policy,
Improvements to therefore, no
IFRSs impact Various 1 August 2011
----------------------------------------------------------------------------
IAS 24 revised No change to
accounting
policy,
Related Party therefore, no
Disclosures impact 1 January 2011 1 August 2011
----------------------------------------------------------------------------
IFRS 9 No change to
Financial accounting
instruments: policy,
Classification therefore, no
and Measurement impact 1 January 2013 1 August 2013
----------------------------------------------------------------------------
/T/
Management have reviewed the impact of the above standards and interpretations and have concluded that they
will not result in any material changes to reported results.
Details of the main accounting policies of the Group are included in note 2 of the financial statements for the
year ended 31 July 2010. Additional accounting policies have been applied in the current quarter are explained
note 2 of the Unaudited Consolidated Financial Information for the nine months ended April 30, 2011.
APPENDIX 4 - OTHER MATTERS
Outstanding Share & Option Data
As at the date of this MD&A the following securities are outstanding:
/T/
----------------------------------------------------------------------------
Shares issued or Weighted Average
Security Issuable Exercise Price
----------------------------------------------------------------------------
Common Shares 123,314,778 -
----------------------------------------------------------------------------
Options 4,131,000(i) $ 0.48
----------------------------------------------------------------------------
(i)if all options have fully vested
/T/
Effective 1 January 2011, in conjunction with the retirement of Mr. Leslie Little, Mr. Peter Mercer assumed the
role of Corporate Secretary along with his other duties as VP Corporate Development. For future assistance
please contact Mr. Mercer directly at +1-709-800-1929 or pmercer@ramblermines.com.
Forward Looking Information
This MD&A contains "forward-looking information" which may include, but is not limited to, statements with
respect to the future financial or operating performance of the Group, its subsidiaries and its projects,
exploration expenditures, costs and timing of the development of new deposits, costs and timing of future
exploration, requirements for additional capital, government regulation of mining exploration, environmental
risks, title disputes or claims and limitations of insurance coverage. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the parent company and/or its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. Such factors include, among
others, general business, economic, competitive, political and social uncertainties; the actual results of
current exploration activities; conclusions of economic evaluations; fluctuations in the relative value of
United States dollars, Canadian dollars and British Pounds; changes in planned parameters as plans continue to
be refined; future prices of metals and commodities; possible variations of ore grade or recovery rates;
failure of equipment; accidents and other risks of the mining exploration industry; political instability,
insurrection or war; delays in obtaining governmental approvals or financing or in the completion of
development or construction activities, as well as those factors discussed in the section entitled "Risk
Factors" in this MD&A. Although the Group has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in forward-looking statements, there may
be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date of this MD&A and the Group disclaims any
obligation to update any forward-looking statements, whether as a result of new information, future events or
results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements.
Further information
Additional information relating to the Group is on SEDAR at www.sedar.com and on the Group's web site at
www.ramblermines.com.
/T/
Unaudited Consolidated Financial Information
For the Quarter Ended 30 April 2011
/T/
The accompanying financial information for the quarter ended 30 April 2011 and 30 April 2010 has not been
reviewed or audited by the Group's auditor and has an effective date of 20 June 2011.
/T/
Rambler Metals and Mining Plc
Unaudited Consolidated income statement
For the Quarter Ended 30 April 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Nine months Nine months
ended 30 ended 30 ended 30 ended 30
April 2011 April 2010 April 2011 April 2010
$,000 $,000 $,000 $,000
Revenue 183 - 1,434 -
Cost of sales (175) - (984) -
---------------------------------------------------
Gross profit 8 - 450 -
Administrative expenses (618) (613) (1,999) (1,661)
Exploration expenses (16) (19) (75) (77)
---------------------------------------------------
Operating loss (626) (632) (1,624) (1,738)
---------------------------------------------------
Bank interest receivable 12 4 44 8
Finance costs (29) (18) (60) (52)
Foreign exchange
differences 836 - 981 -
---------------------------------------------------
Net financing
income/(expense) 819 (14) 965 (44)
---------------------------------------------------
Profit/(loss) before tax 193 (646) (659) (1,782)
Income tax credit - 2 29 32
---------------------------------------------------
Profit/(loss) for the
period and attributable
to owners of the parent 193 (644) (630) (1,750)
---------------------------------------------------
Earnings/(loss) per share
Quarter Quarter Nine months Nine months
ended 30 ended 30 ended 30 ended 30
April 2011 April 2010 April 2011 April 2010
$ $ $ $
Basic and diluted
earnings/(loss)per share 0.002 (0.008) (0.007) (0.021)
---------------------------------------------------
Rambler Metals and Mining Plc
Unaudited Consolidated statement of comprehensive income
For the Quarter Ended 30 April 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Nine months Nine months
ended 30 ended 30 ended 30 ended 30
April 2011 April 2010 April 2011 April 2010
$,000 $,000 $,000 $,000
Profit/(loss) for the
period 193 (644) (630) (1,750)
-----------------------------------------------------
Exchange differences on
translation of foreign
operations (net of
tax) 5 277 (5) 240
-----------------------------------------------------
Other comprehensive
income/(loss) for the
period 5 277 (5) 240
-----------------------------------------------------
-----------------------------------------------------
Total comprehensive
income/(loss) for the
period and
attributable to the
owners of the parent 198 (367) (635) (1,510)
-----------------------------------------------------
-----------------------------------------------------
Rambler Metals and Mining Plc
Consolidated balance sheet
As at 30 April 2011
(EXPRESSED IN CANADIAN DOLLARS)
Note Unaudited Audited
30 April 2011 31 July 2010
$,000 $,000
Assets
Property, plant and equipment 3 22,901 7,461
Mineral Properties 4 32,648 -
Intangible assets 5 16,659 37,051
-------------------------------
Total non-current assets 72,208 44,512
-------------------------------
Inventory 6 431 -
Trade and other receivables 993 285
Cash and cash equivalents 2,477 8,000
Restricted cash 3,129 1,365
-------------------------------
Total current assets 7,030 9,650
-------------------------------
Total assets 79,238 54,162
-------------------------------
-------------------------------
Equity
Issued capital 1,864 1,863
Share premium 51,537 51,532
Merger reserve 214 214
Translation reserve 20 25
Accumulated losses (7,244) (6,811)
-------------------------------
Total equity 46,391 46,823
-------------------------------
Liabilities
Interest-bearing loans and
borrowings 7 24,613 5,591
Provision 8 1,423 559
-------------------------------
Total non-current liabilities 26,036 6,150
-------------------------------
Interest-bearing loans and
borrowings 7 1,356 388
Trade and other payables 5,455 800
-------------------------------
Total current liabilities 6,811 1,188
-------------------------------
Total liabilities 32,847 7,338
-------------------------------
Total equity and liabilities 79,238 54,162
-------------------------------
-------------------------------
Rambler Metals and Mining Plc
Consolidated Statement of Changes in Equity
Share Share Merger Translation Accumulated
capital premium reserve reserve Losses Total
(EXPRESSED IN
CANADIAN
DOLLARS) $,000 $,000 $,000 $,000 $,000 $,000
Group
Audited
Balance at 1
August 2009 1,255 39,296 214 50 (4,638) 36,177
------------------------------------------------------------
Comprehensive
loss
Loss for the
year - - - - (2,426) (2,426)
------------------------------------------------------------
Foreign exchange
translation
differences - - - (25) - (25)
------------------------------------------------------------
Other
comprehensive
loss - - - (25) - (25)
------------------------------------------------------------
Total
comprehensive
loss for the
year - - - (25) (2,426) (2,451)
------------------------------------------------------------
Transactions
with owners
Issue of share
capital 608 13,128 - - - 13,736
Share issue
expenses - (892) - - - (892)
Share-based
payments - - - - 253 253
------------------------------------------------------------
Transactions
with owners 608 12,236 - - 253 13,097
------------------------------------------------------------
Balance at 31
July 2010 1,863 51,532 214 25 (6,811) 46,823
------------------------------------------------------------
------------------------------------------------------------
Unaudited
Balance at 1
August 2010 1,863 51,532 214 25 (6,811) 46,823
------------------------------------------------------------
Comprehensive
loss
Loss for the
period - - - (630) (630)
------------------------------------------------------------
Foreign exchange
translation
differences - - - - - -
------------------------------------------------------------
Other
comprehensive
loss - - - (5) - (5)
------------------------------------------------------------
Total
comprehensive
income for the
period - - - (5) (630) (635)
------------------------------------------------------------
Transactions
with owners
------------------------------------------------------------
Issue of share
capital 1 5 - - - 6
Share-based
payments - - - - 197 197
------------------------------------------------------------
Transactions
with owners 1 5 - - 197 203
------------------------------------------------------------
Balance at 30
April 2011 1,864 51,537 214 20 (7,244) 46,391
------------------------------------------------------------
------------------------------------------------------------
Rambler Metals and Mining Plc
Unaudited statements of cash flows
For the Quarter Ended 30 April 2011
(EXPRESSED IN CANADIAN DOLLARS)
Quarter Quarter Nine months Nine months
ended ended ended ended
30 April 30 April 30 April 30 April
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Cash flows from
operating activities
Operating loss (626) (632) (1,624) (1,738)
Depreciation 61 35 118 112
Share based payments 43 80 186 158
Exchange differences (20) 2 (135) 2
Increase in inventory (322) - (431) -
Decrease/(increase)
in receivables 241 (85) (708) (140)
Increase/(decrease)
in payables 246 311 700 196
-------------------------------------------------------
Cash utilised in
operations (377) (289) (1,894) (1,410)
Interest paid (29) (18) (60) (52)
Income tax received - - 29 30
-------------------------------------------------------
Net cash utilised for
operating activities (406) (307) (1,925) (1,432)
-------------------------------------------------------
Cash flows from
investing activities
Interest received 12 4 44 8
Acquisition of bearer
deposit note (1,171) - (1,764) -
Acquisition of
evaluation and
exploration assets (17) (1,280) (363) (2,492)
Acquisition of
mineral properties (2,473) - (6,200) -
Acquisition of
property, plant and
equipment (3,721) (451) (9,219) (498)
Prepayment for
acquisition of
property, plant and
equipment - - - (3,500)
-------------------------------------------------------
Net cash utilised in
investing activities (7,370) (1,727) (17,502) (6,482)
-------------------------------------------------------
Cash flows from
financing activities
Proceeds from issue
of share capital - 4,469 6 13,980
Payment of share
issue expenses - (244) - (888)
Proceeds from issue
of share options 2 2 10 5
Proceeds from Gold
Loan (note 6) 5,571 5,081 14,268 5,081
Capital element of
finance lease
payments (185) (84) (387) (162)
-------------------------------------------------------
Net cash from
financing activities 5,388 9,224 13,897 18,016
-------------------------------------------------------
Net
(decrease)/increase
in cash and cash
equivalents (2,388) 7,190 (5,530) 10,102
Cash and cash
equivalents at
beginning of period 4,865 5,036 8,000 2,089
Effect of exchange
rate fluctuations on
cash held - (274) 7 (239)
-------------------------------------------------------
Cash and cash
equivalents at end
of period 2,477 11,952 2,477 11,952
-------------------------------------------------------
-------------------------------------------------------
/T/
Rambler Metals and Mining Plc
Unaudited Notes to the financial statements
1. Nature of operations and going concern
The principal activity of the Group is the development and exploration programme of the Ming Copper-Gold Mine
in Baie Verte, Newfoundland and Labrador, Canada.
The Group's ability to continue as a going concern, and the recoverability of its mineral properties, is
dependent on the copper and gold prices, its ability to fund its development and exploration programs, and to
manage and generate positive cash flows from operations in the future. These financial statements do not
reflect the adjustments to carrying values of assets and liabilities and the reported expenses and balance
sheet classifications that would be necessary should the going concern assumption be inappropriate, and these
adjustments could be material.
In common with many exploration companies, the Group raises finance for its exploration and appraisal
activities in discrete tranches. On May 3, 2011 the Company raised finance of $15 million after expenses from
the placing of 27,777,778 ordinary shares at 36 pence each. Management continues to closely monitor key
milestones associated with bringing the mine into production in the second half of calendar 2011 and is
satisfied the Group has sufficient working capital for the forthcoming 12 months. On this basis, the Directors
have concluded that the Group is a going concern, however, slippage against key milestones may necessitate
other sources of finance to be considered to satisfy short term working capital requirements as marketing
commences. There is no certainty that these funds will be forthcoming.
2. Accounting policies
Details of the main accounting policies of the Group are included in note 2 of the financial statements for the
year ended 31 July 2010.The following additional accounting policies have been applied in the current nine
months:
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services
in the ordinary course of the Group's activities. Revenue is shown net of sales tax.
The group recognises revenue when the amount of the revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and when specific criteria have been met as described below:
Toll processing
The Group processes ore at its milling facility. Sales of this service are recognised as the ore is processed.
The customer is invoiced based on tonnes processed each month at the price specified in the toll processing
agreement.
Mineral properties
Upon transfer of 'Exploration and evaluation costs' into 'Mineral Properties', all subsequent expenditure on
the construction, installation or completion of infrastructure facilities is capitalised within 'Mineral
Properties'. Development expenditure is net of proceeds from all but the incidental sale of ore extracted
during the development phase.
Inventory
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.
3. Property, plant and equipment
/T/
Land and Assets under Motor Plant and
buildings construction vehicles equipment
$,000 $,000 $,000 $,000
Cost
Balance at 1 August 2009 1,025 8 118 6,019
Acquisitions 71 5,191 - 19
Effect of movements in foreign
exchange - - - -
-------------------------------------------
Balance at 31 July 2010 1,096 5,199 118 6,038
-------------------------------------------
-------------------------------------------
Balance at 1 August 2010 1,096 5,199 118 6,038
Acquisitions 1,228 7,971 43 7,606
Disposals - - (39) -
-------------------------------------------
Balance at 30 April 2011 2,324 13,170 122 13,644
-------------------------------------------
-------------------------------------------
Depreciation and impairment
losses
Balance at 1 August 2009 524 - 18 2,926
Depreciation charge for the
period 251 - 33 1,456
Effect of movements in foreign
exchange - - - -
-------------------------------------------
Balance at 31 July 2010 775 - 51 4,382
-------------------------------------------
-------------------------------------------
Balance at 1 August 2010 775 - 51 4,382
Depreciation charge for the
period 90 - 29 1,239
On disposals - - (20) -
-------------------------------------------
Balance at 30 April 2011 865 - 60 5,621
-------------------------------------------
-------------------------------------------
Carrying amounts
At 1 August 2009 501 8 100 3,093
-------------------------------------------
At 31 July 2010 321 5,199 67 1,656
-------------------------------------------
-------------------------------------------
At 1 August 2010 321 5,199 67 1,656
-------------------------------------------
-------------------------------------------
At 30 April 2011 1,459 13,170 62 8,023
-------------------------------------------
-------------------------------------------
Fixtures,
fittings
and Computer
equipment equipment Total
$,000 $,000 $,000
Cost
Balance at 1 August 2009 54 496 7,720
Acquisitions 2 46 5,329
Effect of movements in foreign
exchange - (1) (1)
-----------------------------
Balance at 31 July 2010 56 541 13,048
-----------------------------
-----------------------------
Balance at 1 August 2010 56 541 13,048
Acquisitions 26 65 16,939
Disposals - - (39)
-----------------------------
Balance at 30 April 2011 82 606 29,948
-----------------------------
-----------------------------
Depreciation and impairment
losses
Balance at 1 August 2009 31 191 3,690
Depreciation charge for the
period 13 145 1,898
Effect of movements in foreign
exchange - (1) (1)
-----------------------------
Balance at 31 July 2010 44 335 5,587
-----------------------------
-----------------------------
Balance at 1 August 2010 44 335 5,587
Depreciation charge for the
period 8 114 1,480
On disposals - - (20)
-----------------------------
Balance at 30 April 2011 52 449 7,047
-----------------------------
-----------------------------
Carrying amounts
At 1 August 2009 23 305 4,030
-----------------------------
At 31 July 2010 12 206 7,461
-----------------------------
-----------------------------
At 1 August 2010 12 206 7,461
-----------------------------
-----------------------------
At 30 April 2011 30 157 22,901
-----------------------------
-----------------------------
/T/
4. Mineral Properties
/T/
Mineral Property
$,000
Cost
Balance at 1 August 2010 -
Transfer from exploration and evaluation costs 20,902
Acquisitions 11,746
----------------
Balance at 30 April 2011 32,648
----------------
----------------
Carrying amounts
At 1 August 2010 -
----------------
At 30 April 2011 32,648
----------------
----------------
/T/
Effective 1 September 2010 following acceptance of the Ming Mine feasibility study by Sandstorm Gold Ltd.
('Sandstorm') (see note 7), the Ming Mine project moved from pure Exploration & Evaluation into the Mine
Development stage. As a consequence, evaluation and exploration costs of $20.9 million relating to the Massive
Sulfide Ore Zones of the Ming Mine were transferred to Mineral Properties.
5. Intangible assets
/T/
Exploration and
evaluation
Costs
$,000
Cost
Balance at 1 August 2009 31,476
Acquisitions 5,575
-------------------
Balance at 31 July 2010 37,051
-------------------
-------------------
Balance at 1 August 2010 37,051
Acquisitions 510
Transfer to mineral properties (20,902)
-------------------
Balance at 30 April2011 16,659
-------------------
-------------------
Carrying amounts
At 1 August 2009 31,476
-------------------
-------------------
At 31 July 2010 37,051
-------------------
-------------------
At 1 August 2010 37,051
-------------------
-------------------
At 30 April 2011 16,659
-------------------
-------------------
/T/
6. Inventories
/T/
30 April 2011 31 July 2010
$,000 $,000
Stockpiled ore 117 -
Operating supplies 314 -
--------------------------------
431 -
--------------------------------
--------------------------------
/T/
7. 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 11.
/T/
30 April 2011 31 July 2010
$,000 $,000
Non-current liabilities
Bank loan 27 29
Finance lease liabilities 5,499 412
Gold Loan 19,087 5,150
--------------------------------
24,613 5,591
--------------------------------
--------------------------------
Current liabilities
Current portion of bank loan 3 3
Current portion of finance lease liabilities 1,353 385
--------------------------------
1,356 388
--------------------------------
--------------------------------
/T/
Finance lease liabilities
Finance lease liabilities are payable as follows:
/T/
Minimum Minimum
lease lease
Payments Interest Principal Payments Interest Principal
30 April 30 April 30 April 31 July 31 July 31 July
2011 2011 2011 2010 2010 2010
$,000 $,000 $,000 $,000 $,000 $,000
Less than one
year 1,504 151 1,353 426 41 385
Between one and
five years 6,388 889 5,499 427 16 412
------------------------------------------------------------
7,892 1,040 6,852 853 57 797
------------------------------------------------------------
------------------------------------------------------------
/T/
Under the terms of the equipment lease agreements, no contingent rents are payable.
The bank loan is secured by way of a fixed charge over a property and is repayable in monthly instalments of
$384 over 12 years.
Gold Loan
During the previous year, the Group entered into an agreement ("Gold Loan") with Sandstorm to sell a portion of
the life-of-mine gold production from its Ming Mine.
Under the terms of the agreement Sandstorm made staged upfront cash payments for the gold to the Group
totalling US$20 million including the final payment of US$6 million received during the quarter.
For this, the Group has agreed to sell 32% of the payable gold in the first year of production. In each
production year following the first year of production, until 175,000oz of payable gold has been produced, the
Group has agreed to sell a percentage equal to 25% x (85% divided by the actual percentage of metallurgical
recovery of gold realized in the immediately preceding production year) provided that, if the payable gold
production in any production year after the third production year is less than 15,000 ounces, then in each such
production year, Sandstorm payable gold shall not be less than 25% of the payable gold. In each production year
following the first year of production, after 175,000oz of payable gold has been produced, the Group has agreed
to sell a percentage equal to 12% x (85% divided by the actual percentage of metallurgical recovery of gold
realized in the immediately preceding production year) provided that, if the payable gold production in any
production year after the third production year is less than 15,000 ounces, then in each such production year,
Sandstorm payable gold shall not be less than 12% of the payable gold for the remainder of the period ending 40
years after the date of the agreement. After the expiry of the 40 year term, the agreement is renewable in 10
year terms at the option of Sandstorm.
A 4.5% cash commission is payable with each payment received under the agreement.
There are certain circumstances in which the Gold Loan may be repaid earlier than by the delivery of payable
gold as follows:
/T/
i. If within 18 months of 4 March 2010 (the date of the agreement) the Ming
Mine has not started producing gold any amounts advanced will become
repayable on demand together with interest at a rate of 8% per annum.
ii. If within 24 months of the date that gold is first produced, the Ming
Mine has not produced and sold a minimum of 24,000oz of payable gold
then a portion of the US$20 million will be repayable based on the
shortfall of payable gold.
iii.Within the first 36 months of Commercial production of gold any
shortfall in the value of payable gold below the following amounts will
be required to be paid in cash:
-- within the first 12 months - US$3.6 million
-- within the second 12 months - US $3.6 million
-- within the third 12 months - US$3.1 million
/T/
The Gold Loan is accounted for as a financial liability carried at amortised cost. In determining the effective
interest rate implicit in the cash flows arising from the loan the cash flows are forecast at each quarter end
based on management's best estimates of the time of delivery of payable gold, the total amount of gold expected
to be produced over the mine life and the timing of that production.
Total interest of $772,900 was accrued during the nine months. $49,906 was included in exploration and
evaluation expenditure and $722,994 charged to mineral properties.
8. Provisions
/T/
30 April 2011 31 July 2010
$,000 $,000
Reclamation and closure provision
At 1 August 2010 559 -
Provision during the period 836 559
Unwinding of discount 28 -
--------------------------------
At 30 April 2011 1,423 559
--------------------------------
--------------------------------
/T/
The reclamation and closure provision has been made in respect of costs of land restoration and rehabilitation
expected to be incurred at the end of the Nugget Pond Mill and Ming Mine's useful life. The provision has been
calculated based on the present value of the expected future cash flows associated with reclamation and closure
activities as required by the Government of Newfoundland and Labrador. The provision relates to restoration of
the mill and mine sites. The liability is secured by Letters of Credit totalling $3.13 million.
9. Related parties
Transactions with key management personnel
Total key management personnel compensations were as follows:
/T/
3 months to 3 months to 9 months to 9 months to
30 April 2011 30 April 2010 30 April 2011 30 April 2010
$,000 $,000 $,000 $,000
Salaries 169 95 455 290
Share based payments 26 5 66 29
--------------------------------------------------------
195 100 521 319
--------------------------------------------------------
--------------------------------------------------------
/T/
Directors' fees of $63,323 remained outstanding at April 30, 2011 (July 31, 2010: $38,738).
10. Share-based payments
The number and weighted average exercise prices of share options are as follows:
/T/
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
30 April 30 April 31 July 31 July
2011 2011 2010 2010
$ No. 000 $ No. 000
Outstanding at the
beginning of the
period 0.467 3,952 0.416 3,313
Granted during the
period 0.494 572 0.500 704
Exercised 0.190 (30) - -
Cancelled during the
period 0.190 (330) 0.890 (65)
-------------- -------------
Outstanding and
exercisable at the
end of the period 0.481 4,164 0.467 3,952
-------------- -------------
-------------- -------------
/T/
The options outstanding at 30 April 2011 have an exercise price in the range of $0.19 to $1.10 and a weighted
average remaining contractual life of 8 years (31 July 2010: 9 years).
The fair value of services received in return for share options granted are measured by reference to the fair
value of share options granted. The estimate of the fair value of the services received is measured based on
the Black-Scholes model. The contractual life of the option (10 years) is used as an input into this model.
Expectations of early exercise are incorporated into the Black-Scholes model.
/T/
Fair value of share 3 months to 3 months to 9 months to 9 months to
options and 30 April 30 April 30 April 30 April
assumptions 2011 2010 2011 2010
$,000 $,000 $,000 $,000
Fair value at
measurement date of
options granted in
the period 16 96 116 96
-------------------------------------------------------
Weighted average fair
value per option
granted in period 0.350 0.318 0.287 0.318
Share price (weighted
average) 0.610 0.530 0.482 0.530
Exercise price
(weighted average) 0.610 0.530 0.482 0.530
Expected volatility
(expressed as
weighted average
volatility used in
the modelling under
Black-Scholes model) 70.0% 75% 74.3% 75%
Expected option life 5 5 5 5
Expected dividends 0 0 0 0
Risk-free interest
rate (based on
national government
bonds) 2.34% 2.50% 2.47% 2.50%
-------------------------------------------------------
/T/
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining
life of the share options), adjusted for any expected changes to future volatility due to publicly available
information.
There is no performance or market conditions associated with the share option grants.
/T/
3 months to 3 months to 9 months to 9 months to
30 April 30 April 30 April 30 April
2011 2010 2011 2010
$,000 $,000 $,000 $,000
Total expense recognised as
employee costs 43 80 186 158
------------------------------------------------
------------------------------------------------
/T/
11. Financial risk management
The Group's principal financial assets comprise: cash and cash equivalents and other receivables. In addition
the Company's financial assets include amounts due from subsidiaries. The Group and Company's financial
liabilities comprise: trade payables; other payables; and accrued expenses. The Group's financial liabilities
also include interest bearing loans and borrowings.
All of the Group's and Company's financial liabilities are measured at amortised cost and their financial
assets are classified as loans and receivables.
The board of directors determines, as required, the degree to which it is appropriate to use financial
instruments and hedging techniques to mitigate risks. The main risks for which such instruments may be
appropriate are foreign exchange risk, interest rate risk, credit risk and liquidity risk each of which is
discussed below. There were no derivative instruments outstanding at 30 April 2011.
Foreign currency risk
The Group's cash resources are held in GB pounds and Canadian Dollars and the Gold Loan is repayable in US
dollars. The Group has a downside exposure to any strengthening of the GB pound as this would increase expenses
in Canadian dollar terms. This risk is mitigated by reviewing the holding of cash balances in GB pounds. Any
weakening of the GB pound would however result in the reduction of the expenses in Canadian dollar terms and
preserve the Group's cash resources. In addition, any such movements would affect the Consolidated Balance
Sheet when the net assets of the Parent Company are translated into Canadian dollars. The Group has a downside
exposure to any strengthening of the US dollar as this would increase the amount repayable on the Gold Loan in
Canadian dollar terms. This risk, however, is relevant only should the Gold Loan be repaid in cash under terms
set out in note 6. Repayment is envisaged in payable gold which is denominated in US dollars. Once the Ming
Mine is in production, this will mitigate this foreign currency risk.
The Group does not hedge its exposure of foreign investments held in foreign currencies. There is no
significant impact on profit or loss from foreign currency movements associated with the Parent company's
assets and liabilities as the foreign currency gains or losses are recorded in the translation reserve.
Exchange rate fluctuations may adversely affect the Group's financial position and results. The following table
details the Group's sensitivity to a 10% strengthening and weakening in the GB pound against the Canadian/US
Dollar. 10% represents management's assessment of the reasonable possible exposure.
/T/
Equity
30 April 2011 31 July 2010
$,000 $,000
10% strengthening of GB pound 3 53
10% weakening of GB pound (3) (47)
10% strengthening of US dollar (2,121) (515)
10% weakening of US dollar 1,735 468
-------------------------------
-------------------------------
/T/
Liquidity risk
Prior to Q3 2010 the Group had relied on shareholder funding to finance its operations. During Q3, 2010 the
Group entered into a financing arrangement in US dollars (see note 7). With finite cash resources and no
material income, the liquidity risk is significant. This risk is managed by controls over expenditure. 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 Group's and Company's trade payables, other payables and accrued expenses are generally due between one and
three months and the Group's financial liabilities are due as follows:
Financial liabilities
At the year end the analysis of finance leases, hire purchase contracts and bank loans which were all due in
Canadian Dollars and are at fixed interest rates was as follows:
/T/
Fixed rate liabilities 30 April 2011 31 July 2010
$,000 $,000
Due within one year 1,356 388
Due within one to two years 1,431 374
Due within two to three years 1,445 22
Due within three to four years 1,462 24
Due within four to five years 1,174 5
Due after five years 14 16
----------------------------
6,882 829
----------------------------
----------------------------
/T/
The average fixed interest rate for the finance leases and hire purchase contracts outstanding at 30 April 2011
was 5.84%.
Credit risk
With effect from July 2007, the Group has held the majority of its cash resources in Canadian Dollars given
that the majority of the Group's outgoings are denominated in this currency. As at 30 April 2011, 5% of the
Group's cash resources were invested in a short dated term deposits and bankers acceptances. 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. There is little perceived credit risk in respect of other receivables.
The Group's maximum exposure to credit risk at 30 April 2011 was represented by receivables and cash resources.
Interest rate risk
The Group's policy is to retain its surplus funds on the most advantageous term of deposit available up to
twelve month's maximum duration. Details of the Group's borrowings are described in note 6.
If the interest rate on deposits were to fluctuate by 1% there would be no material effect on the Group's
reported result.
Commodity price risk
Commodity price risk is the risk that the Group's future earnings will be adversely impacted by changes in the
market prices of commodities. The Group is exposed to commodity price risk as its future revenues will be
derived based on contracts with customers at prices that will be determined by reference to market prices of
copper and gold at the delivery date.
The Group calculates the effective interest rate on the Gold Loan based on estimates of future cash flows
arising from the sale of payable gold. In estimating the cash flows the following table details the Group's
sensitivity to a 10% increase and a 25% decrease in the price of gold. These percentages represent management's
assessment of the reasonable possible exposure.
/T/
Gross assets
30 April 2011 31 July 2010
$,000 $,000
10% increase in the price of gold (170) (37)
25% decrease in the price of gold 462 106
-------------------------------
-------------------------------
/T/
Financial assets
The floating rate financial assets comprise interest earning bank deposits at rates set by reference to the
prevailing LIBOR or equivalent to the relevant country. Fixed rate financial assets are cash held on fixed term
deposit.
At the period end the cash and short term deposits were as follows:
/T/
Average
Average interest
Floating period for rates for
Fixed rate rate which rates fixed rate
At 30 April 2011 assets Assets Total are fixed assets
$,000 $,000 $,000 Months %
GB Pound 118 51 169 1 0.25
US $ - 789 789 - -
Canadian $ - 1,519 1,519 - -
------------------------------------
118 2,359 2,477
------------------------------------
------------------------------------
At 31 July 2010
$,000 $,000 $,000 Months %
GB Pound 484 67 551 1 0.25
Canadian $ 6,351 1,098 7,449 2 0.35
------------------------------------
6,835 1,165 8,000
------------------------------------
------------------------------------
/T/
Fair values
In the directors' opinion there is no material difference between the book value and fair value of any of the
group's financial instruments.
12. Subsequent Events
On May 3, 2011, the Company placed 27,777,778 Ordinary shares at 36 pence each raising CAD$15 million after
expenses.
On June 1, 2011 the Group signed an Exploration and Development Alliance with Maritime Resources Corp. and
Commander Resources Corp. which will see the sharing of technical expertise for the exploration and development
of two main properties in the Green Bay area of Newfoundland and Labrador. As part of the Alliance the Group
plans to complete an economic assessment on the reopening of the former producing Hammerdown Mine which
originally processed its ore at Rambler's Nugget Pond Mill. In addition the Alliance plans to evaluate the
economic viability of the Orion Deposit as a potential feed source of the Nugget Pond Mill.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Rambler Metals and Mining Canada Limited
George Ogilvie, P.Eng.
President and CEO
709-8001929
709-800-1921 (FAX)
OR
Rambler Metals & Mining Plc.
Corporate Office
+44 (0) 20 8652-2700
+44 (0) 20 8652-2719 (FAX)
www.ramblermines.com
OR
Seymour Pierce Limited
Nandita Sahgal/ Jeremy Stephenson
+44 (0) 20-7107-8000
OR
Pelham Bell Pottinger
Charles Vivian
+44 (0) 20 7861 3126
OR
Pelham Bell Pottinger
Philippe Polman
+44 (0) 20 7861 3861
OR
Ocean Equities Limited
Guy Wilkes
+44 (0) 20-7786-4370
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
-0-
Rambler Metals & Mining Plc
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