It seems that a licence change was needed (since the gem included a GPL data file), versions prior to 0.4 were yanked but Rails depends on ~> 0.3.0; A new 0.3.6 with GPL has been released and so a "bundle update mimemagic" should fix this ...
> "bundle update mimemagic" should fix this...
assuming your codebase is ok with an MIT-licensed dependency suddenly becoming a GPL-licensed dependency.