A GOLD and copper exploration company chaired by Scottish mining magnate Harry Dobson is poised to hit the acquisition trail on Canada’s eastern seaboard after profitably relaunching a mine in Newfoundland.
Two other Scots, chief executive George Ogilvie and finance director John Thomson, are on the board of AIM-quoted Rambler Metals & Mining, which in a City investor update last week claimed it has the “credibility” to lead sector consolidation in the region.
Ogilvie told Scotland on Sunday that volatile trading conditions for smaller mining businesses favoured producers with proven cash flows and that Rambler was “actively investigating acquisitions”.
Ogilvie, who lives in Canada but was due to run in today’s Edinburgh marathon, said: “We are in the Canadian province of Newfoundland and Labrador, but will also look at areas such as Nova Scotia and New Brunswick. Rambler Metals & Mining would be interested in buying both assets and companies.
“We are getting proposals for acquisitions and partnerships coming across our desk much more frequently as other smaller mining companies in this volatile climate are getting desperate. They cannot raise the money to fund exploration or keep the lights on.”
He said that Rambler had a potential war chest of C$10 million (£6.4m) to spearhead gold and copper mining consolidation “and there might be some paper [shares] we can use”.
The company’s existing Ming copper-gold mine in Newfoundland at Baie Verte, went out of business in 1982 under previous management. But a local mining company, Altius Minerals, acquired the assets in 2001, and floated the group on AIM with Dobson in 2005, raising £8m.
Production started again at the end of 2011, and the company’s market capitalisation is now £36m. Rambler has returned to the London market five times to raise a total of £56m.
Ming produces gold bars and copper concentrate from a mill 40 miles away from the mine.
In its latest published trading quarter from November 2012 to January 2013, Rambler made revenues of C$11.4m and an operating profit of US$1.1m.
There is also room for organic expansion around its current site, with only 600 of 1,600 hectares of land it owns currently in production.
The group said it hopes for a positive reception from local provincial government to consolidation proposals.
Ogilvie said: “Baie Verte was a community that was turning into a ghost town over three decades before the mine started production again. It has been rejuvenated, houses are going up, and businesses are coming back.”
Rambler employs 150 in a town with a population of 1,300. Analysts said Dobson’s status in the mining industry may also pave the way for acquisition activity by Rambler. One of Scotland’s richest men, worth an estimated £200m, he is also non-executive chairman of two other AIM companies, Kirkland Lake Gold in northern Ontario in Canada, and Borders & Southern Petroleum, which last year made a major discovery of oil and gas off the Falkland islands.