Rubicon Minerals purchases 3% land claims royalty at Phoenix

Rubicon Minerals (TSE:RMX) (AMEX:RBY) said Tuesday that it has acquired the three percent net smelter returns royalty payable on the properties covering the land portion of the company's Phoenix gold project in Red Lake, Ontario.
The company said the acquisition, and thereby the extinguishment of the royalty, was completed by exercising its right of first refusal. On closing, Rubicon issued a total of 1.22 million shares to the seller of the land claims royalty, at a price of $3.50 per share, for total consideration of $4.266 million.
The royalty excludes the mining properties lying beneath the waters of Red Lake, known as the Water Claims, and therefore is separate from the acquisition in August by Franco-Nevada Corp of the two percent pre-existing net smelter royalty on these Water Claims. Rubicon retains the right to purchase 25 percent of the Water Claims royalty, or a 0.5 percent portion, for US $675,000.
Rubicon said that due to the royalty it just acquired on the land claims, and given the proximity of these claims to the F2 Gold System at Phoenix, it expects a number of benefits, including the elimination of future advance and one-time royalty payments, and any production royalties.
In addition, very little drilling to depth has been carried out so far on the land claims, but over 60 shallow diamond drill holes completed by Rubicon at the Island Zone have shown encouraging intercepts, meriting further follow up.
Rubicon controls over 100 square miles of prime exploration ground in the prolific Red Lake gold district of Ontario which hosts Goldcorp's high-grade Red Lake mine.