I am writing in reference to your short article on the Rubicon-AngloGold letter-of-intent to form a joint venture to explore Rubicon’s Red Lake project in northwestern Ontario (T.N.M., Feb. 14-20/00). I am pleased that you recognize the potential importance of this agreement to the Red Lake district. Unfortunately, your article contained two important omissions.
Although you correctly state that Anglo can earn an extra 10% interest in the project by making a US$250,00 payment after earn-in, you neglect to mention that Rubicon, in exchange, can elect to have AngloGold fund Rubicon’s share of project costs through to the completion of a positive and bankable feasibility study. Only in the event of completion of a positive and bankable study will Rubicon have to pay back its share of joint-venture costs at a rate of prime plus 3% within 180 days. This means Rubicon does not have to raise any funds for exploration on the project until such time as a deposit that meets AngloGold’s criteria is shown to be economic. We believe this to be of major benefit to Rubicon and its shareholders and worthy of inclusion in your article.
In addition, you state that the agreement is subject to due diligence, More accurately, this is “title due diligence,” AngloGold having completed its technical due diligence.
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