Year End Financial Results

RNS Number : 6259M

Rambler Metals & Mining PLC

30 April 2018

 

30 April 2018

Rambler Reports Financial Results

Year Ended December 31, 2017

London, England & Baie Verte, Newfoundland and Labrador, Canada - Rambler Metals and Mining plc (TSXV: RAB, AIM: RMM) ('Rambler' or the 'Company'), a copper and gold producer operating in Newfoundland and Labrador, Canada, today reports its audited financial results and operational highlights for the year  ended December 31, 2017.

Yearend Highlights

·     Revenue for the year was US$28.3 million (2016: US$28.0 million) and for the Q4/17, US$8.4 million (Q3/17: US$7.3 million, Q4/16 US$5.4 million);

·     Production of 97,997 dmt (Q3/17: 79,300 dmt, Q4/16: 72,036 dmt) for the quarter with copper concentrate grade of 28% (Q3/17: 29%, Q4/16: 27%). Increased total production to 339,631 dmt for the year (2016: 267,347 dmt) , a 27% increase representing the highest annual throughput on record;

·     Net direct cash costs net of by-product credits ('C1 costs') for the year were US$2.86 per pound of saleable copper (2016: US$1.96) and for the quarter US$2.84 (Q3/17: US$2.87, Q4/16: US$2.99);

·     Operating loss for the year was US$9.4 million (2016: US$15.6 million) and for Q4/17 US$1.0 million (Q3/17: US$2.5 million, Q4/16: US$3.4 million).  Earnings before interest, taxes, depreciation, amortisation ('EBITDA') for the year were US$2.2 million (2016: US$4.6 million) and for Q4/17 of US$1.3 million (Q3/17: US$1.1 million, Q4/16 US$(1.0 million));

·     Rambler delivered on all of its safety targets during 2017. For the fiscal year there were no lost time incidents or medical aids, with the twelve-month rolling average lost time frequency rate remaining at 0%.

SUBSEQUENT EVENT

On March 5, 2018 the Company announced the completion of a new mineral and reserves estimate for the Ming mine. Contained copper in the mineral reserves is estimated at 329 million pounds with gold of 114 thousand ounces, fully replacing reserves after two years of mining.  The life of mine, production, cost and financial highlights are as follows:

·     Over a planned 20 year life-of-mine, ending 2037, the project will produce 514 thousand tonnes of high-grade copper concentrate containing saleable metal of 312 million pounds of copper and 57 thousand ounces of gold.  Average annual sales is 26 thousand tonnes of copper concentrate;

·     Average annual cash operating cost of US$1.98 per pound of copper net of by-product credits ('C1'), with an all-in pre-tax costs of US$2.37 per pound of copper and after-tax cost of US$2.49 per pound;

·     Net undiscounted cash flow from operations of US$277 million. Net pre-tax cash flow of US$195 million (after-tax US$157 million);

·     Project pre-tax net present value ('NPV7%') of US$100 million. After-tax NPV7% of US$83 million.

KEY annual FINANCIALS METRICS ($US)

	2017	2016
Revenue	$28.3 M	$28.0 M
Cash Production Expenses	$26.4 M	$22.3 M
G&A	$3.4 M	$3.2 M
EBITDA	$2.2 M	$4.6 M
Operating (loss) profit before impairment	$(9.4) M	$(4.8) M
Loss before tax	$(5.4) M	$(19.4) M
Loss after tax	$(4.1)M	$(12.7) M
Loss per share (US$)	$(0.008)	$(0.032)
Cash Flows from Operations	$1.3 M	$4.8 M
Cash cost per lbs of copper, net of credits (C1) (US$)	$2.86	$1.96

Key annual Operating METRICS

	2017	2016
Concentrate Production (dry metric tonnes)	15,214	15,863
Copper (saleable dry metric tonnes)	3,968	4,174
Gold (saleable ounces)	3,357	6,132
Concentrate Grade Copper (%)	27.7	27.2
Gold Concentrate Grade (g/t)	8.0	12.6
Copper Grades (%)	1.27	1.79
Gold Grades (g/t)	0.58	1.14
Avg. Copper Price (US$ per pound)	2.79	2.17
Avg. Gold Price (US$ per ounce)	1,257	1,248

Norman Williams, President and CEO, Rambler Metals & Mining commented:

"During the year the mine showed significant performance improvements with increases in daily development meters, mine ore production along with waste movement and backfilling.   Also during the year a number of high capacity tests were completed on the mill proving that the 1,250 mtpd target throughput rate was indeed achievable."

"At year end work continued on the ventilation project at the mine site and was successfully completed during March 2018. Upon completion, the mine's ventilation system was reversed allowing for  increases in mine production and  improved cycle times.  The operation can now focus its attention on mine productivity improvements, increasing the overall mill feed grade, reducing unit costs, and returning the Company to positive cash flows.  Our project expansion is being completed during a time that has seen significant run up in short term copper and gold price forecasts with a positive long-term outlook. The Company has now completed the capital improvements for its Phase II expansion with sustained production of 1,250 mtpd mining and milling to follow shortly."

"With the return to positive cash flow the Company will continue its evaluation on a potential Phase III expansion to demonstrate the full value of the copper-gold asset.  Given its successes during the year the Company will also look to continue its surface exploration drill program.  In 2017 the surface exploration program demonstrated that the Lower Footwall Zone ('LFZ') mineralization continues well beyond the currently defined mineral reserves with increases in grade and thickness at depth. The final drill hole in the 2017 returned the thickest LFZ mineralization discovered on the property with 1.65% copper over 102 meters, including 36 meters of 2.59% copper.   These initiatives could potentially add significant longer term value to the project."

FINANCIAL Results

·     Earnings before interest, taxes, depreciation, amortisation ("EBITDA") for the year were US$2.2 million (2016: US$4.6 million). The net loss before tax for the year was US$5.4 million (2016: US$19.4 million (US$8.1 million before impairment)). The net profit after tax for Q4/17 was US$0.7 million or US$0.001 per share which compares to a loss of US$1.4 million for Q3/17 and a loss of US$1.1 million for Q4/16;

·     Revenue for the year of US$28.3 million (2016 - US$28.0 million);

·     A total of 15,214 dmt (2016 - 15,239 dmt) of concentrate was provisionally invoiced during the year containing 4,026 (FY2016 - 3,992) tonnes of saleable copper metal, 3,410 (2016 - 6,057) ounces of saleable gold at an average price of US$2.79 (FY2016 - US$2.17) per pound copper and US$1,257 (FY2016 - US$1,248) per ounce gold;

·     Cash flows generated from operating activities for the year were US$1.3 million (2016: US$4.8 million) and for the quarter were US$0.7 million (Q3/17: US$2.2 million, Q4/16: US$0.1 million). The decrease in the cash generated relates to the operating loss and changes in working capital.

OPERATIONAL HIGHLIGHTS

Ore and Concentrate Production Summary for Fiscal 2017

PRODUCTION	Q1 2017	Q2  2017	Q3 2017	Q4 2017	FY2017		Revised F2017 Guidance
Dry Tonnes Milled	75,438	86,895	79,300	97,997	339,631		330,000 - 360,000
Copper Recovery (%)	96.6	94.2	95.4	96.1	95.6		94 - 96
Gold Recovery (%)	64.0	56.5	61.7	61.0	60.7		60 - 65
Copper Head Grade (%)	1.13	1.41	1.38	1.17	1.27		1.3 - 1.6
Gold Head Grade (g/t)	0.30	0.67	0.66	0.65	0.58		0.5 - 1.0

CONCENTRATE (Delivered to Warehouse)	Q1 2017	Q2  2017	Q3 2017	Q4 2017	FY2017		F2017 Guidance
Copper (%)	28.2	26.6	28.9	27.5	27.7		26 - 28
Gold (g/t)	5.2	7.7	9.0	9.6	8.0		4.0 - 8.0
Dry Tonnes Produced	2,930	4,359	3,614	4,014	14,907		14,000 - 16,000
Saleable Copper Metal (tonnes)	794	1,112	1,004	1,061	3,968		3,800 - 4,200
Saleable Gold (ounces)	391	939	930	1,112	3,357		3,400 - 3,900

OUTLOOK

With the Phase II expansion nearing completion, management continues to pursue the following objectives:

ü Finalize Phase II mine expansion with production sustained at 1,250 mtpd delivering improved grades from fiscal 2018 onward.  Targeting grades between 1.3% to 1.5% Cu and 0.6 to 0.9 g/t Au in 2018 with copper grade continuing to improve as production moves further into the LFZ.  As we continue to develop deeper into the LFZ, over the projected 20 year mine life, diamond drill results show that grades and mineralized thickness continue to strengthen at depth.  

ü Further evaluate the potential of a Phase III operation with increase in mine production and mill throughput to about 2,000 mtpd.

ü Continuing with the underground exploration program to allow for further exploration of the mineralized trends both up-dip and down-dip with the goal to increase near-mine mine resource and reserves.

ü Continue with the surface exploration diamond drilling program aimed to double the current plunge length of the known massive sulphide and LFZ mineralization.

For further information see Appendix 1 of this release.  The audited financial statements and MD&A will be available on the Company's website at http://www.ramblermines.com and on SEDAR.

Tim Sanford, P.Eng., is the Qualified Person responsible for the technical content of this release and has reviewed and approved it accordingly. Mr. Sanford is an employee of Rambler Metals and Mining Canada Limited.  Tonnes referenced are dry metric tonnes unless otherwise indicated.

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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Rambler is dual listed in London under AIM:RMM and in Canada under TSX-V:RAB.

For further information, please contact: 

Norman Williams, CPA,CA President and CEO Rambler Metals & Mining Plc Tel No: 709-800-1929 Fax No: 709-800-1921	Peter Mercer Vice President, Corporate Secretary Rambler Metals & Mining Plc Tel No: [phone] Fax No: [phone]
Nominated Adviser (NOMAD)	Investor Relations
David Porter, Peter Malovany Cantor Fitzgerald Europe Tel No: [phone]	Nicole Marchand Investor Relations Tel No: 416- 428-3533 [e-mail]

Website: www.ramblermines.com 

Caution Regarding Forward Looking Statements:

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements".  Such forward-looking statements include, without limitation, statements regarding copper, gold and silver forecasts, the financial strength of the Company, estimates regarding timing of future development and production and statements concerning possible expansion opportunities for the Company.  Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis.  Such assumptions include, without limitation, the price of and anticipated costs of recovery of, copper concentrate, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others.  However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements.  Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations.  Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection.  Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable security law.

APPENDIX 1 - Supplemental Financial Information

(See Company website www.ramblermines.com or SEDAR for full Stub year 2017 Results)

Consolidated income statement

For the Year Ended December 31, 2017

(EXPRESSED IN US DOLLARS)           

	Note	Year to 31 December	Five months to 31 December	Year to  31 December
		2017	2016	2016
		US$'000	US$'000	US$'000
Revenue	4	28,324	9,680	28,021
Production costs		(26,444)	(9,845)	(22,344)
Depreciation and amortisation		(7,798)	(2,937)	(7,322)
Gross loss		(5,918)	(3,102)	(1,645)
Administrative expenses		(3,441)	(1,299)	(3,107)
Exploration expenses		(6)	(14)	(32)
Operating loss before impairment		(9,365)	(4,415)	(4,784)
Impairment charge		-	-	(11,284)
Operating loss after impairment	5	(9,365)	(4,415)	(16,068)
Exchange gain/(loss)		940	(452)	288
Bank interest receivable		43	17	30
Profit on disposal of available for sale investments		779	451	463
Gain on derivative financial instruments	7	2,015	1,504	1,327
Net finance costs	8	144	(3,176)	(5,464)
Net expense		3,921	(1,656)	(3,356)
Loss before tax		(5,444)	(6,071)	(19,424)
Income tax credit	9	1,296	3,326	6,752
Loss for the period		(4,148)	(2,745)	(12,672)

Loss per share

	Note	Year to 31 December	Five months to 31 December	Year to 31 December
		2017	2016	2016
		US$	US$	US$
Basic loss per share	20	(0.008)	(0.007)	(0.032)
Diluted loss per share	20	(0.008)	(0.007)	(0.032)

Consolidated statement of financial position

As at December 31, 2017

(EXPRESSED IN US DOLLARS)           

	Note	31 December	31 December
		2017	2016
		US$'000	US$'000
Assets
Intangible assets	10	3,397	2,169
Mineral property	11	38,834	34,453
Property, plant and equipment	12	28,443	23,056
Available for sale investments	13	610	1,333
Deferred tax	9	13,851	11,545
Restricted cash	18	3,530	3,243
Total non-current assets		88,665	75,799
Inventory	14	2,467	2,496
Trade and other receivables	15	829	1,284
Derivative financial asset	16	1,830	756
Cash and cash equivalents	17	3,351	2,156
Total current assets		8,477	6,692
Total assets		97,142	82,491
Equity
Issued capital	19	8,061	6,374
Share premium	19	89,309	81,442
Share warrants reserve	19	859	2,089
Merger reserve	19	180	180
Translation reserve	19	(14,584)	(18,749)
Fair value reserve	19	86	476
Retained profits		(19,479)	(15,443)
Total equity		64,432	56,369
Liabilities
Interest-bearing loans and borrowings	22	16,696	14,412
Provision	23	1,961	1,804
Total non-current liabilities		18,657	16,216
Interest-bearing loans and borrowings	22	6,739	4,814
Trade and other payables	21	7,314	5,092
Total current liabilities		14,053	9,906
Total liabilities		32,710	26,122
Total equity and liabilities		97,142	82,491

Consolidated statement of cash flows

For the Year Ended December 31, 2017

(EXPRESSED IN US DOLLARS)           

				31 December	5 months to 31 December	Year to 31 December
				2017	2016	2016
				$'000	$'000	$'000
Cash flows from operating activities
Operating loss				(9,365)	(4,415)	(16,068)
Depreciation and amortisation				7,824	2,927	7,308
Gain on disposal of property, plant and equipment				-	(12)	(12)
Provision for impairment				-	-	11,268
Share based payments				112	33	45
Foreign exchange difference				(259)	(126)	(1,996)
Decrease/(increase) in inventory				29	(114)	(842)
Decrease/(increase) in debtors				455	(685)	(81)
Decrease in derivative financial instruments				941	1,335	1,530
Increase/(decrease) in creditors				1,961	232	(200)
Cash generated from operations				1,698	(825)	952
Interest paid				(376)	(122)	(275)
Net cash generated from operating activities				1,322	(947)	677
Cash flows from investing activities
Interest received				43	17	30
Acquisition of bearer deposit note				-	-	(844)
Acquisition of subsidiary net of cash				-	-	(49)
Acquisition of evaluation and exploration assets				(1,020)	-	(197)
Acquisition of Mineral property - net				(5,277)	(1,673)	(3,766)
Acquisition of property, plant and equipment				(4,103)	(1,676)	(2,974)
Disposal of property, plant and equipment				-	30	30
Net cash utilised in investing activities				(10,357)	(3,302)	(7,770)
Cash flows from financing activities
Issue of share capital (note 19)				8,436	-	15,106
Share issue expenses				(112)	(13)	(909)
Disposal of available for sale investments				1,103	783	783
Loans received (note 22)				5,598	-	-
Repayment of Gold Loan (note 22)				(1,105)	(1,255)	(2,411)
Repayment of Loans				(1,137)	(913)	(2,093)
Capital element of finance lease payments				(2,593)	(866)	(2,365)
Net cash utilised in financing activities				10,190	(2,264)	8,111
Net increase/(decrease) in cash and cash equivalents				1,155	(6,513)	1,018
Cash and cash equivalents at beginning of period				2,156	8,929	1,166
Effect of exchange rate fluctuations on cash held				40	(260)	(28)
Cash and cash equivalents at end of period				3,351	2,156	2,156

 

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