JUNIOR MINING

Rubicon nets $200M to build new gold mine in Ontario

Rubicon crosses key threshold towards building its Phoenix gold project in the Red Lake district through a financing that has pulled in enough cash to cover estimated CAPEX in full.

HALIFAX, NS (MINEWEB) - 

So long as its capital costs projections hold, Rubicon Minerals (TSX: RMX, AMEX: RBY) now has enough money to build its Phoenix gold project in Canada's Red Lake district. Rubicon said on Tuesday it raised C$200.9 million in a bought deal financing, previously reported on by Mineweb, to fund construction of Phoenix.

Adding to cash it raised last year, the bought deal more than covers the C$214 million in capital costs Rubicon has estimated it will take to get the Phoenix gold project up and running. 
In terms of development, Rubicon has said it will continue to sink a shaft into the Phoenix gold deposit and expand underground workings. Meanwhile, at surface, it will erect a mill building and then begin installing mill equipment.

In total Rubicon budgets C$55 million in capital expenditures at Phoenix for 2012.

If all goes according to plan, Rubicon aims to be in production by the end of next year at this gold project which is especially notable for its high grade. Rubicon plans on producing 180,000 ounces gold a year from ore grading 13.87 g/t gold.

Rubicon has said that at an $1,100 gold price the Phoenix gold project generates a C$433 million net present value.

For the bought deal financing Rubicon issued 49 million shares at C$4.10. It was led by GMP Securities and TD Securities.

In a tougher financing environment mid-last year, Rubicon raised C$70 million in a private placement with Agnico-Eagle Mines. That fetched the latter a 9.2-percent stake in Rubicon.

As part of the terms of the 2011 financing Agnico-Eagle has the right to maintain its ownership stake in subsquent financings, though it is not clear if Agnico-Eagle has elected to do so.

A spokesperson for Agnico-Eagle could not be immediately be reached for comment Wednesday morning.