Rubicon adds $3m to coffers

Vancouver — Rubicon Minerals (RMX-V) has raised $3 million through a brokered private placement and will use a portion of the funds to explore its Red Lake properties in northern Ontario.

The financing will consist of 3.7 million units priced at 80 each. A unit consists of one share and half a share purchase warrant. Each full warrant will entitle the holder to buy one share at $1.10 for a year from the closing date and at $1.50 for an additional six months. The units will be subjected to a minimum 4-month hold period from the date of closing. Haywood Securities is acting as the agent and is entitled to receive a 7% cash commission, an $8,000 financing fee and 10% brokers warrants. These warrants will be exercisable for one share at 80 each. The deal has yet to be approved by regulators.

Rubicon recently kicked off a 3,050-metre drill program on the McCuaig gold project in Red Lake. The company is targeting a gold-bearing structural zone discovered last year. The zone is believed to be a continuation of the “mine trend,” which hosted more than 15 million oz. of past gold production. McCuaig is 1.2 km northwest of the Cochenour mine and immediately north of the McKenzie Red Lake mine. Both are past producers.

Rubicon and partner Golden Tag Resources (GOG-V) each hold a half-interest in the McCuaig project. The former can earn an additional 10% by funding the next $522,000 in drill-related expenses; of this, $325,000 must be spent this winter.

The junior is also keen to explore its recently acquired McFinley gold project, which covers 4 km of ultramafic rocks of the East Bay trend. This trend is associated with several gold deposits, including the former Cochenour mine (1.2 million oz. gold grading 0.56 oz. gold per tonne). The property lies immediately adjacent to, and on strike with, Goldcorp‘s (G-T) Abino property, where recent drill intersections cut 18.11 oz. gold per ton over 2.5 ft., and 2.92 oz. gold per ton over 4.9 ft. As a result of legal issues, McFinley has not been properly explored since the mid-1980s and only recently became available.

To earn a 100% interest in the McFinley property, Rubicon is required to spend US$1.3 million on exploration over the next 4.5 years plus issue shares and make certain cash payments. The property is subject to a 2% net smelter return royalty.