Rubicon Minerals Corp. (TSE:RMX) (NYSE:RBY) recently touted its Phoenix gold deposit in Red Lake, Ontario as “one of the most unique opportunities out there”.
deposit, located on a high grade gold camp near the mining friendly
community of Red Lake, already boasts an indicated resource of 1.02
million tonnes, grading 14.5 grams per tonne (g/t) gold for a total of
477,000 ounces of gold, and an inferred resource of 4.23 million tonnes,
grading 17.0 g/t gold for a total of 2.31 million ounces of gold.
an annual general meeting on Wednesday with its shareholders, Rubicon
gave an update on the year ahead for the Phoenix project, under the
leadership of its new president and COO Michael Lalonde, who will assume
the role of CEO after a six month transition period.
David Adamson started the meeting by providing an update on the Phoenix
gold project, saying he is “very excited about where this project is
“It’s taken a huge amount of effort from a huge team
here and we’re very happy to have Michael Lalonde on board for the next
“In a nutshell, we believe this [the Phoenix gold project] is one of the most unique opportunities out there.”
The project’s location, access to infrastructure and economics make it quite low risk.
project is well advanced, and we’re in a fantastic jurisdiction,”
Adamson said of the gold-rich, historic mining community of Red Lake.
“Red Lake is a great place for geology, exploration and development.”
Phoenix project has a $214 million capex, is fully permitted and funded
and has produced a “positive preliminary economic assessment” (PEA)
that allowed the company to go to market in earlier this year with
bought deal equity financing of 49,000,000 common shares of the company
at a price of C$4.10 per share.
Rubicon closed the financing at the end of February, raising C$200.9 million.
said that with Ontario being the “lowest tax jurisdiction in Canada”,
the Phoenix project will be sheltered from taxes for its first two to
three years of production because of $400 million in accumulated tax
pools and losses.
Because of this, shareholders can reap the benefits of money generated flowing back into the project for capital expenses.
the company, the tax break means that Rubicon may be able to spend the
capital to explore the so far under-explored 100 square miles that it
controls in Red Lake – aside from the Phoenix deposit.
that one of the reasons we’ve outperformed our peers in the last three,
six and 12 months is because we have these unique advantages,” said
New president and COO Lalonde also addressed
shareholders, pointing out his over 25 years of experience in gold
mining - 15 of them in narrow vein gold deposits.
“What I see is a really good story and soon we’ll make it a great story,” he said.
spoke to the geology of the project and said that of the two second
generation folds in the camp, one lines up directly through the Phoenix
“For the last year, we have been doing additional
drilling [in the areas near the indicated resource] and we feel we’ve
done sufficient drilling that we believe we can upgrade a large amount
of this material into the indicated status,” said Lalonde.
“The focus of drilling for the next year will be on expansion drilling, rather than infill drilling.”
The company plans to do 16,000 metres of expansion drilling between now and September.
will be reviewed at the end of the program and at the same time we’ll
be doing some optimization studies,” Lalonde said at the meeting. “We
feel that there is a lot of room to optimize the project.”
intention in the next six months is to deepen the Phoenix shaft to the
610 metre level, expected to be complete by the end of the year. Once
the shaft is down, the company will resume infill drilling.
Another area of focus will be mill construction at the site.
“Without the mill, we can’t process this material into gold bars,” he stressed.
The mill foundation is underway, the shell has been ordered and the building will be erected by January.
Last month, Rubicon released an update on exploration activities at its F2 Gold system, part of the Phoenix gold project.
company is carrying out a 12-month, $82.8 million program designed to
optimize certain aspects of its preliminary economic assessment,
accelerate site infrastructure and expand on current engineering
“Over the next three months, we will concentrate on
introducing lower cost mining methods to drop the operating cost,” said
“We will modify the infrastructure for improved
flexibility and productivity with the objective of these studies being
to improve the [project’s] net present value (NPV) and internal rate of
At a five per cent discount rate, the 100 per
cent-owned F2 gold system - part of the Phoenix gold project – has a net
present value (NPV) of $433 million with gold prices at $1,100 an
At current prices of about $1,500 an ounce, the project has an NPV of about $933 million.
Phoenix project is expected to produce 180,000 ounces of gold per year
for the 12 years of mine life, with grades of roughly 14 grams per tonne
(g/t) and a forecasted 92.5 per cent recovery.
Lalonde said Rubicon is looking to begin “producing gold bars” in early 2014 under the existing PEA.
Rubicon controls over 100 square miles of prime exploration ground in the prolific Red Lake gold district, which hosts Goldcorp's (TSE:G) high-grade Red Lake Mine.