Rubicon adds $3 million to coffers

Vancouver — Rubicon Minerals (RMX-V) has managed to raise $3 million through a brokered private placement which it will use to fund exploration on its Red Lake properties in Ontario as well as for general working capital.

The financing will consist of 3.75 million units priced at 80 per unit. Each unit will consist of one common share plus half a common share purchase warrant. Each full warrant will entitle the holder to purchase one common share at a price of $1.10 for a year from the closing date and $1.50 for an additional six months. The units will be subjected to a minimum four-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 common share at a price of 80. The deal is still subject to regulatory approval.

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 on its recently acquired McFinley gold project that covers 4 km of ultramafic rocks of the East Bay trend. This trend is associated with a number of 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 Abino gold 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. Rubicon states that due to legal issues, McFinley has not been properly explored since the mid 1980’s and has only recently become 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 a number of cash payments. The property is subject to a 2% net smelter return royalty.