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Friday, 7 December 2012
Rubicon Minerals' new CEO Lalonde to start in Jan, optimization studies ongoing at Red Lake
Toronto-based Rubicon Minerals (TSE:RMX) (NYSE-MKT:RBY) has said that Mike Lalonde will assume the position of president and CEO, effective at the start of the new year, replacing prior chief David Adamson.
Adamson will assume the role of non-executive chairman of Rubicon. The change was first announced in April of this year.
Optimization studies at Rubicon's F2 Gold system at its Phoenix project in Red Lake, Ontario are ongoing, and are expected to continue through the first quarter of next year. The purpose of these studies is to evaluate different mining scenarios with a goal of improving the economic outputs in its existing preliminary economic assessment (PEA).
"I am excited to take up the new challenge as CEO and to have the opportunity to take the Phoenix Gold Project to the next level," said Lalonde in a statement.
"I believe it is important that we thoroughly analyse the various components of our optimization plan in order to secure the best outcome possible."
The company said shaft sinking and mill construction are continuing at the site. Shaft sinking began after the completion of the underground infill drilling program this year, which saw intercepts including 767.0 grams per tonne (g/t) gold over 1 metre, 278.4 g/t gold over 1 metre, and 24.1 g/t gold over 2.3 metres. The results extended the gold system to depth over a mile below surface.
The company continues to evaluate the cost/benefit of extending the shaft to around 1,000 metres, as a deeper shaft could provide the company with the opportunity to drill test deeper targets, including the sub 1,200 metre target area.
The 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 gold for a total of 477,000 ounces of gold, and an inferred resource of 4.23 million tonnes, grading 17.0 grams for a total of 2.31 million ounces of the precious metal.
The Phoenix project produced a preliminary economic assessment that allowed the company to go to market earlier this year with a bought deal equity financing of just over C$200 million.
The company is carrying out a 12-month, $82.8 million program designed to optimise certain aspects of its preliminary economic assessment, accelerate site infrastructure and expand on current engineering studies.
The Phoenix project, which is fully permitted and funded, 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 in June that 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
According to the PEA, the F2 System is expected to yield a net present value of $433 million, at a five percent discount rate, and a pre-tax 28 percent internal rate of return, with a payback period of 3.3 years from the start of production.
These base case results were calculated using a gold price of $1,100 per ounce, the company said, and increase when using a higher, spot gold price.