Rubicon arranges financing for African spin-off vehicle

Vancouver – A newly arranged financing agreement paves the way for Rubicon Minerals (RMX-T, RBY-X) to proceed with plans to spin off its African interests into a new public company.

Rubicon announced plans earlier this summer to spin-off its African and Newfoundland assets into two new public companies, which would leave the company with gold projects in Ontario’s Red Lake camp and about $10 million in cash. Rubicon shareholders would also have exposure to a new copper-cobalt development company, and a Newfoundland-focused company with an extensive data base.

Rubicon currently holds a 40% interest (or 7.74 million shares) in Africo, which is developing the Kalukundi copper-cobalt project in the Democratic Republic of Congo (DRC). The proposed financing, to be carried out by Canaccord Capital on a “best efforts” private-placement basis, calls for the sale of subscription receipts of Africo for targeted gross proceeds of $25 million. Each receipt will allow the holder to acquire (without any additional payment) one common share of CopperCo Resource, which will be the new publicly listed company holding 100% of the shares of Africo once the plan of arrangement is completed.

The net proceeds will be used for development of the Kalukundi project, and for general corporate purposes.

A positive feasibility study for a 10-year operation has been completed for the Kalukundi project. Africo’s current equity share of reserves and resources include proven and probable resources containing 308 million lbs. copper and 89 million lbs. of cobalt, plus another 178 million lbs. copper and 34 million lbs of cobalt in measured and indicated resources, along with additional inferred resources.

The Newfoundland assets will be held by Paragon Minerals, which has applied to list its shares on the TSX Venture Exchange.