Rubicon expands Red Lake gold portfolio

Junior Rubicon Minerals (RMX-V) has signed an agreement with a private company to acquire the McFinley gold project in the Red Lake camp of northwestern Ontario.

The Vancouver-based company must pay $800,000 and issue 260,000 shares to earn a 100% interest in McFinley. It must also spend US$1.3 million on exploration over the next 4.5 years and make various advanced royalty payments to a maximum of US$1 million. Another payment of US$675,000 and a 2% net smelter return royalty is payable if the project advances to production.

Rubicon is the Red Lake’s region largest landowner, with more than 300 sq. km of ground. A large portion is under option to AngloGold (AU-N).

McFinley covers about 4 km of the prospective East Bay trend, host of the past-producing Cochenour mine. Although the property has not been explored since the 1980s, owing to various reasons, Goldcorp (g-t) recently reasserted the area’s potential by intersecting multi-ounce gold grades in drilling at an adjoining property.

Rubicon intends to finance the acquisition using proceeds from a non-brokered private placement. The company will sell 1.5 million units at 52 apiece, subject to regulatory approval. A unit consists of a share and a warrant that can be converted into a share within 18 months of the deal’s closing, at 65.