Rubicon proposes three-way split (December 05, 2005)

Vancouver — A proposed corporate reorganization will have Rubicon Minerals (RMX-V, RBY-X) split into three separate public companies, each holding a distinct asset group.

The plan cleaves up Rubicon’s mineral asset portfolio into three groups, namely:

– the 37.8% interest in Africo Resources, a private company, which holds an option to acquire 75% in the Kalukundi copper-cobalt project in the Democratic Republic of the Congo (DRC);

– its 250-sq.-km Red Lake, Ont., gold project portfolio (including the flagship McFinley project) and some Nevada exploration interests; and

– exploration interests in Newfoundland.

Management views the reorganization as a means of providing more focused vehicles for the separate project portfolios that may garner better market valuations.

Reports by financial advisors Roman Friedrich & Co. and by Research Capital reviewed that Rubicon’s asset value is not reflected in its share price and that a significant portion of the company’s market value is attributed to the interest in Africo. Further, successful completion of the current feasibility study on Kalukundi would most likely further boost the project’s value.

A proposed structure for the reorganization will see Rubicon shareholders receive:

– One new share in the company to hold the Africo interest (Kalukundi project) for each block of 8-10 Rubicon shares;

– One new share of the Red Lake-Nevada focused company for each share of Rubicon; and

– One new share in the Newfoundland-focused company for each block of 6-8 Rubicon shares.

Final share-exchange ratios will be determined once the Kalukundi feasibility study is completed. Rubicon is also in merger discussions with the Africo board to put the full interest in Kalukundi into the new company.

With 66.2 million shares outstanding, Rubicon posts a $60 million market capitalization given its recent 90-per-share trading level. The company has a 52-week trading range of 64-$1.45.