By: Dylan Sikes - AllPennyStocks.com News

Monday, February 9, 2015

2015 has begun on a mixed note for the mining industry. While prices for industrial commodities such as copper have remained under pressure after falling sharply last year, gold prices have gained more than 3% since the start of this year. Industrial commodities have been under pressure due to concerns over the global economy. While the U.S. economic recovery has remained on track, the real concern is the euro zone and a slowdown in China. Indeed, China is a very big worry for miners as the country has been the major consumer of raw materials over the past decade-and-a-half.

While concerns over a slowdown in the global economy have kept industrial commodities under pressure, it is precisely the reason why gold prices have done well so far this year. The weakness in the global economy, uncertainty in the euro zone, and ongoing geopolitical tensions have boosted gold’s safe-haven appeal. Although gold prices have seen some pullback lately, they are still up for the year.

The key for miners in the existing environment is to bring down costs. This means focus should be on prolific mines that can help in bringing cash costs per ton down. On Monday, Rambler Metals & Mining Plc (TSX-Venture:RAB), a holding company engaged in the development, mining and exploration of the Ming Copper-Gold Mine located in Baie Verte, Newfoundland and Labrador, Canada, provided an update on the Densa Media Separation (DMS) project and the pre-feasibility study associated with the Lower Footwall Zone (LFZ).

Late last year, the company had announced a Mineral Resource for the Lower Footwall Zone to contain around 839,593,090 tons of copper, 87,667 ounces of gold and 1,071,176 ounces of silver in the Measured and Indicated categories. This mineralization though is not included in the current reserve estimate for the Ming Copper-Gold Mine.

Last month, Rambler Metals & Mining also provided an update on operations at the Ming Copper-Gold Mine. The company said that due to the uncertainty in the copper price and an unforeseen decline in copper grade in January, it has begun implementing short-term cost cutting measures. At the same time, the company also plans to address grade and production issues at the Ming mine.

The ongoing weakness in the copper market is a concern for RAB and other miners. However, RAB has taken the right steps to operate in the existing environment. Copper prices are likely to remain under pressure in the short-to medium-term. However, longer-term, the market is expected to become fundamentally balanced, which will boost prices. By bringing down costs, RAB is positioning itself well for such a scenario.

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