EXPLORATION 1998 — Rubicon seeks growth through exploration — Junior focuses mine-finding efforts on Canadian projects, including nickel prospect in High Arctic

Hoping to capitalize on its home-field advantage, newly listed Rubicon Minerals (RMX-V) is preparing to explore gold and base metal projects in some of Canada’s foremost mining camps.

Launched late last year by a team of seasoned mining professionals, Rubicon has assembled a portfolio of more than 17 gold and base metal exploration projects. These include gold targets in Ontario’s Red Lake and Timmins camps, and base metal opportunities in Ontario, the High Arctic and northeastern Newfoundland.

One of the newer additions is a promising massive-sulphide project near Haines, Alaska, within rocks that are similar to those hosting the giant Windy Craggy deposit in neighboring British Columbia.

Douglas Forster, a director of Rubicon, says the company is bullish about the potential of its domestic projects. “The three principals of Rubicon have resisted the somewhat trendy allure of international project development to focus the company’s mine-finding abilities on the major mineral camps in Canada,” he says, pointing out that the company has five geologists on board, either as officers or directors.

Rubicon’s management team

is led by President Garfield MacVeigh, who previously had a hand in the discovery of the Hoyle Pond gold deposit in Ontario, as well as the HW zinc-copper-silver-gold deposit and several new zones at the Buttle Lake mine on Vancouver Island, B.C.

The two remaining principals, David Adamson and Michael Gray, were previously with Lac Minerals, where they worked with MacVeigh on a range of projects. Director Craig Nelson is another former Lac geologist, while director Forster worked on several prominent mineral projects in British Columbia.

While Rubicon’s efforts so far this year have focused largely on the Red Lake gold camp where a drill program is under way, an intriguing, but little-known, project on southern Baffin Island may be the company’s proverbial dark horse.

Over the past two years, Rubicon and partner Northstar Exploration (founded by Eric Friedland) have spent about $5 million exploring a 1.5-million-acre land package underlain by prospective mafic-ultramafic bodies. Preliminary drilling on three of these bodies has intersected anomalous nickel-bearing semi-massive-to-massive sulphide mineralization.

The aptly named Incognita joint-venture was initiated by Rubicon on the basis of a correlation by the Geological Survey of Canada relating the mafic-ultramafic rocks of south Baffin Island with those of the Cape Smith belt in northern Quebec. The company’s geologists interpreted this to mean that the Arctic region had economic potential for Raglan-type deposits, similar to those being developed by Falconbridge (fl-t) in the Cape Smith belt. Falco recently began mining at its Raglan project, which hosts a deposit of 18 million tonnes grading 3.13% nickel and 0.88% copper.

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Geologically similar

South Baffin Island also is viewed as being geologically similar to the Thompson nickel belt in Manitoba. All three areas — southern Baffin Island, the Thompson camp and the Cape Smith belt — share a Paleoproterozoic age.

Also, each area contains an important komatiitic component consisting of mafic and ultramafic intrusive rock suites, and all three areas are underlain (at least in part) by sulphidic and graphitic sedimentary rocks that potentially provided a suitable sulphur source required to form magmatic sulphide deposits.

The Thompson nickel deposits are now thought to be the most geologically similar to the Incognita property, particularly in relation to general stratigraphy, metamorphic grade and massive iron sulphides in the metasedimentary stratigraphy.

Rubicon was not alone in making this assessment. Several majors, including BHP Minerals, Cominco (CLT-T) and Phelps Dodge (PD-N), rushed to the region to stake ground.

Rubicon and partner Northstar acquired 1.5 million acres on three main claim blocks referred to as East, West and Lake Harbour. The agreement between the companies called for Northstar to spend the first $2 million on exploration before May 1, 1999. Northstar will have a 51% interest once all commitments are met, while Rubicon will retain a 40% stake.

Michael Gray says the company will be meeting with its joint-venture partner shortly to discuss financing plans for the 1998 season. “We’re at the tantalizing stage, but it is an expensive place to explore.” Gray does not rule out the possibility of taking on a major as a joint-venture partner, at least for portions of the land package. “We have that flexibility. A number of majors looked at our core at the Cordilleran Roundup (a mining show recently held in Vancouver) and said they thought we are on to something. But we are not going to make our call quickly. This is more than a project; it’s a possible mineral district.”

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Palmer property

Gray says another priority project is the newly acquired Palmer property, a zinc-copper-lead-silver-gold massive sulphide prospect 35 miles northwest of Haines. Late last year, Rubicon negotiated an exclusive 99-year lease of the 340-claim project from Alyu Mining and Haines Mining. The agreement calls for Rubicon to make annual cash payments of US$42,500 and issue 200,000 shares over four years. The owners retain a 2.5% net smelter royalty.

MacVeigh is bullish about the potential of the project and says it is “ripe for drilling and discovery by an experienced massive sulphide team.” The property is in the Alexander Terrane, which consists of rocks similar to those hosting Windy Craggy’s 297 million tonnes of 1.4% copper, 0.07% cobalt, 0.2 gram gold and 3.8 grams silver per tonne (unfortunately now part of a park). Palmer also has geological similarities to the Greens Creek deposit in Alaska, which, unlike Windy Craggy, was placed in production.

Rubicon notes that its property is accessible and close to infrastructure, with logging roads on site and the Haines Highway 2 miles distant. The claims also lie in a historic placer-mining region where small-scale operations are still under way. All this means permitting will be less onerous than if the project area were in a pristine wildernesss.

Previous operators discovered at least 25 separate showings of base metals and barite over a strike length of 5.7 miles, within a broad, west-northwest-trending mineralized belt. Rubicon says extensive pyrite-sericite schist and siliceous rocks provide a common link to the showings, “suggesting the presence of a large, extensive mineralized system [that] has potential to host multiple, large base metal showings.”

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High-grade float

About half the 21 holes (totalling 15,000 ft.) drilled in the past were directed at locating the source of high-grade float on the property. The U.S. Bureau of Mines collected 26 float samples, which averaged 19.35% zinc, 1% copper, 0.4% lead, 38.2 grams silver and 0.33 gram gold. A 6-ft. chip sample from the largest boulder averaged 33% zinc, 2.5% copper, 0.11% lead and 55 grams silver, with trace amounts of gold.

Rubicon says the source of the float was not discovered, though extensive mineralization was intersected by previous operators, including 120 ft. of 0.29% copper. The company has its own interpretation for a possible different source area for this float.

Numerous other targets require more testing, Gray says. “Most of the past work was performed in piecemeal programs and many of the showings were tested with only one hole,” he explains.

In Eastern Canada, Rubicon is preparing to carry out a 4,000-metre drill program at its core project in the Red Lake camp. Over the past two years, the company has carried out mapping, rock sampling, magnetic and induced-polarization surveys and re-logging and sampling of core drilled by previous operators.

This work has identified a 2-by-0.5-km target corridor, called Dorion-McCuaig, which is believed to have potential to host deposits similar to the nearby Campbell and Cochenour-Willans mines. Campbell has turned out 8.7 million oz. at a grade of 0.6 oz., and is now producing 320,000 oz.

annually at a cost off US$157 per oz., whereas past production at Cochenour-Wil
lans totalled 1.24 million oz. at a grade of 0.56 oz.

Rubicon recently acquired three properties contiguous to its core 222 claim units, thereby expanding the land package to 539 claim units covering 87.3 sq. km. The new properties cover known gold-bearing trends and alteration zones.

This year’s 10-to-15-hole program is aimed at testing known gold showings and targets in the Dorion-McQuaig corridor. The holes will target vertical depths of 150 to 200 metres along the prospective corridor, which the company says is “essentially unexplored.”

In Newfoundland, Rubicon has the right to earn up to a 65% interest in Falconbridge’s Seal Bay copper-zinc-silver-gold property, a volcanogenic massive sulphide (VMS) prospect near Grand Falls. To earn the interest, the company must spend $700,000 on exploration in stages.

The Seal Bay property is underlain by the Wild Bight group, which hosts a number of VMS-type base metal deposits and occcurrencs, the largest being the 13.8-million-tonne Point Leamington deposit (at grades of 0.5% copper, 2% zinc, 18 grams silver and 0.9 gram gold) situated 12 km south of, and on strike with, the Seal Bay property. Rubicon believes its property has potential for deposits of this type. A drill program is planned for early April. Drilling also is planned for the West Cleary property near Robert’s Arm, Nfld., where the company is earning a 51% interest from Falconbridge.

The property is viewed as prospective for gold and base metal deposits.

Rubicon has numerous other mineral projects in Canada, including the Axelgold property near Smithers, B.C. With so much on its plate, the company hopes to find a partner to continue work on the project. “We are not spending any money in B.C. right now,” Gray says, “but we still think this is an attractive alkaline intrusive-related gold porphyry target.”