Layoffs announced at mine

Terry Roberts
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Downsizing necessary in order to safeguard company, says CEO

The operator of a mining project on the Baie Verte Peninsula has been forced to lay off employees and scale back operations because of plummeting commodity prices and a credit crunch.

Rambler Metals Mining is the latest sector of the province's natural resources industry to feel the pinch of worldwide financial challenges.

The operator of a mining project on the Baie Verte Peninsula has been forced to lay off employees and scale back operations because of plummeting commodity prices and a credit crunch.

Rambler Metals Mining is the latest sector of the province's natural resources industry to feel the pinch of worldwide financial challenges.

Company CEO George Ogilvie said Thursday 18 employees have been laid off, and underground drilling and pre-development work has been suspended at the Ming copper-gold project.

The company's working capital would have been depleted by the summer at the current "burn rate," Ogilvie explained, and efforts to acquire project financing have been hampered by shrinking access to credit.

"This is a fail-safe measure to protect the assets and the company," Ogilvie said.

By scaling back, Ogilvie said, the company can stay afloat for another nine months. He hopes some level of normalcy will have returned to the marketplace by then, and access to capital will have improved.

The price for copper has also dropped by 60 per cent in recent months, he added.

Despite the slump, Ogilvie said the mine can still be profitable.

Meanwhile, the company will continue work on a resource update, technical report and engineering study, due to be completed early this year. He said these reports are necessary in order to acquire financing.

The company had hoped to secure financing by this summer in order to meet its mid-2010 target date for production.

Ogilvie said those targets are still achievable, and the company has been in talks with "seven or eight" prospective funding partners for many months.

"As soon as we can provide them with an engineering report, we can determine if financing can be done this summer," he said.

With the layoffs, the number of employees at the site has dropped to 23.

Technical and management staff are being retained, and only care and maintenance personnel will remain at the site.

The company called it the first phase of a cost-reduction program, and Ogilvie hinted further cuts might come at the company's corporate office in the United Kingdom.

"The company is still committed and confident that financing can be completed in 2009. However, by implementing this plan, Rambler will be able to care and maintain its high-quality asset without requiring any external funding until 2010."

The mine last operated in 1982.

A resource estimate released last April indicated the deposit could support a 4,000-tonne-per-day operation for more than 10 years.

Rambler had hoped to employ from 50 to 100 people during initial operation, and up to 350 during full production.

troberts@thetelegram.com

Geographic location: United Kingdom

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Recent comments

  • Tim
    July 02, 2010 - 13:16

    So, with all these lay offs and shut downs in the province, can someone tell us what we are expected to do to live?

    Time is running short now for some people, and investment and employment are needed, not games with NAFTA and trying to have the biggest toys in the toy box.

    Get it together Danny/Stevie. Time to help Canadians stay off welfare and create employment to sustain the population. Soon we will be looking like Africa if we do not do something quick.

  • Tim
    July 01, 2010 - 19:56

    So, with all these lay offs and shut downs in the province, can someone tell us what we are expected to do to live?

    Time is running short now for some people, and investment and employment are needed, not games with NAFTA and trying to have the biggest toys in the toy box.

    Get it together Danny/Stevie. Time to help Canadians stay off welfare and create employment to sustain the population. Soon we will be looking like Africa if we do not do something quick.