Rubicon Minerals Corp. (TSE:RMX) (NYSE MKT:RBY) Monday said that based on achieving its “scheduled milestones” and the continued progress of construction at the Phoenix gold project, its timeline for potential production would be the second half of 2014.
The company said it also plans to release its updated mineral resource estimate at the end of the first quarter of this year. The report will include data from over 100,000 metres of core drilling since late 2011.
Currently, the F2 gold deposit at Phoenix, located in Red Lake, Ontario, 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 grams for a total of 2.31 million ounces of the precious metal.
In an update of construction efforts at the Phoenix project, the company said it continues to make “good progress” with the sinking of the shaft. Ground conditions have improved significantly in January, it noted, and “better development rates” are expected going forward.
Rubicon said that its mill and carbon-in-leach (CIL) building foundation has been completed, as well as the erection of the steel framework, and it is expected that mill construction will be completed in the second quarter of 2014.
The company continues to carry out a program designed to optimize certain aspects of its preliminary economic assessment (PEA), released in the summer of 2011, and potentially improve the efficiency and productivity of the Phoenix project.
Under the current PEA, the 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.
Rubicon said it is working to optimize “several key areas” of the PEA, including mining methods, equipment, throughput, and shaft depth, as well as building an exploration platform to follow up on higher grade intercepts and potentially increase the mineral resource at depth.
"Our objective is to optimize the Phoenix gold project to make it the best it can be," said president and CEO Mike Lalonde.
The optimization studies are scheduled to be completed in the second quarter of this year. Rubicon warned, however, that the implementation of the new methods would likely increase the initial capital cost of developing Phoenix, compared to the $214 million outlined in the initial economics report.
The company said that though it is not able to provide an accurate estimate of the capital cost increase at this time, it plans to evaluate financing alternatives once the studies are done to address any potential boost in capex.
As of December 31, 2012, Rubicon had about $171 million in cash and equivalents, and investments, and $157 million in working capital. Roughly $85 million has been spent on the project to date.
The company said it is well funded and its flagship Phoenix project is fully permitted to potential production. In addition to the Phoenix project, Rubicon controls over 100 square miles of exploration ground in the prolific Red Lake gold district, which hosts Goldcorp's (TSE:G) Red Lake mine.
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