Rubicon Hikes Red Lake Spending

As soon as Rubicon Minerals (RMX-T, RBY-X) completes a $25-million first-phase drill program at the Phoenix gold project in Red Lake at the end of the first quarter of 2010, it will embark on a $60-million phase-two drill program, the company says.

The 120,000-metre surface and underground drill program will continue to test the F2 gold system over a period of about 12 months. Once the second phase is completed, Rubicon will have drilled a total of about 250,000 metres on the F2 gold system, which remains open in all directions and was discovered in March 2008.

Rubicon is fully cashed up to finish the remaining 38,500 metres it needs to drill in the first phase and to fund the second, following a bought-deal financing completed earlier this month. The company has about $133 million in its treasury.

In the near term, Rubicon plans underground excavation of about 750 metres and the establishment of drill stations to provide new access to several parts of the target area for second-phase underground drilling. It also plans to take a bulk sample if the results from delineation drilling are positive. (Bulk samples would be used to estimate grade, and for metallurgical and other studies.)

In late October, Rubicon released updated drill results for the F2 gold system, which represented the deepest high-grade hits to date (between 1,349 metres and 1,384 metres) and confirm the system’s depth potential. Drill hole F2-64-W1 returned 0.7 metre of 80.7 grams gold per tonne from 1,349 metres depth, and hole F2- 122-13 cut 4 metres of 14.1 grams gold starting at 658 metres.

In an investor presentation on Oct. 22, Rubicon highlighted some of the exploration program’s results to date. These included hole F2-10, which returned 8.33 grams gold over 30 metres; hole F2-07’s 16 grams gold over 7 metres; hole F2-06’s 19.4 grams over 4.5 metres and hole F2-05’s 6 grams over 17 metres.

Rubicon also plans to spend some of its exploration dollars drilling outside the F2 gold system, including preliminary drill testing on one or more of the company’s other gold projects in Red Lake. The company controls about 263 sq. km in the Red Lake gold district.

At presstime, Rubicon traded at $4.46 per share. Over the past year, Rubicon has traded in a window of 90¢-$4.94. The company has 209.3 million shares outstanding.

Rob McEwen, president and chief executive of McEwen Capital and the former chairman and chief executive of Goldcorp (G-T, GG-N), owns 21.6% of Rubicon.