JOHANNESBURG (miningweekly.com) – TSX-V- and Aim-listed Rambler Metals & Mining has entered into a letter of intent (LoI) with TSX-V-listed Maritime Resources to evaluate the economic potential of reopening the past-producing Hammerdown gold mine in Maritime's Green Bay property, in Newfoundland and Labrador, Canada.

Rambler Metals & Mining president and CEO Norman Williams explained that the company was pleased to have signed the LoI with Maritime to begin evaluating the potential of extracting remaining resources from Hammerdown, which was in production from 2000 until 2004 with grades averaging about 16 g/t of gold.

“Previously, all ore produced from Hammerdown was processed at our Nugget Pond facility with a recovery better than 97%.  With this history, combined with our own expertise of restarting former producing underground mines, there remains great potential for the future redevelopment of this property.

"Maritime's management have proven themselves as sound explorers and have produced a solid NI43-101 resource estimate on the Green Bay property.  The agreement between us will also allow Maritime to continue exploring the property during and after the evaluation process with which with continued success will benefit all parties involved," noted Williams.

As per the LoI, Rambler would oversee engineering and evaluation work, funded by Maritime, to determine the mineable ounces available at Hammerdown.  The work would be initiated following the successful completion of equity financing by Maritime and after the negotiation of a mutually agreeable engineering and evaluation service agreement.

Following a positive economic analysis, should both companies agree to proceed with the development of the project, they would negotiate and enter into mutually agreeable management services and toll milling agreements that would see Rambler manage the process of re-opening Hammerdown.

Maritime president and CEO Doug Fulcher stated that the toll milling option to reopen the mine would allow the project to get into full production in a timely manner over the coming years.

“The high-grade nature of the deposit, the historic workings and other infrastructure already in place allow for the toll milling option to be a viable alternative.  Maritime hopes that this option will cut capital costs and the time to production versus building a new milling and tailings storage facilities at the Hammerdown property," added Fulcher.

Further to defining the role of each party throughout the process, the LoI included several strategic options for the development of the property, including possible dividend structures.  “Until the economics are known, no commitments will be made on these items; however, both groups feel that it is important to demonstrate that it is being discussed at a high level to ensure appropriate return of shareholder value during the development and production of the Hammerdown asset,” the companies said in a joint statement on Monday. 

Throughout the process, the Green Bay property would remain 100% owned by Maritime, along with all rights to continue exploring the land package.  There remained good exploration potential on the property, which Maritime would continue to advance while Rambler focused its efforts on the economic viability of Hammerdown.  

In order to assist Maritime and the management team in advancing the mine, in line with the LoI, Rambler had agreed to vote all its common shares of Maritime in favour of management at Maritime’s next annual general meeting.