Rubicon to spend $60 million more on Red Lake

As soon as Rubicon Minerals (RMX-T, RBY-X) completes a $25 million phase-one drill program at its 100%-owned Phoenix gold project in Red Lake it will embark on a $60-million phase-two drill program, the company announced today.

Phase one is expected to be completed by the end of the first quarter of 2010, and the 120,000-metre phase two surface and underground drill program will continue to test the F2 gold system over a period of about 12 months. Once phase two is completed, Rubicon will have drilled a total of about 250,000 metres on the F2 gold system, which remains open in all directions and was discovered in March 2008.

Rubicon is fully cashed up to finish the remaining 38,500 metres it needs to drill in phase one and to fund phase two, following a bought deal financing completed earlier this month. The company currently has about $133 million in its treasury.

In the near term, Rubicon plans underground excavation of about 750 metres and the establishment of drill stations to provide new access to several parts of the target area for phase two underground drilling. It also plans to take a bulk sample if the results from delineation drilling are positive. (Bulk samples would be used to estimate grade, and for metallurgical and other studies.)

In late October, Rubicon released updated drill results for the F2 gold system, which represented the deepest high-grade hits to date (between 1,349 metres and 1,384 metres) and confirm the system’s depth potential. Drill hole F2-64-W1 returned 80.7 grams gold per tonne over 0.7 metres at a depth of 1,349 metres and hole F2-122-13 cut 14.1 grams over 4 metres at a depth of 658 metres.

In an investor presentation on Oct. 22, Rubicon highlighted some of the exploration program’s results to date. These included hole F2-10, which returned 8.33 grams gold over 30 metres; hole F2-07’s 16 grams gold over 7 metres; hole F2-06’s 19.4 grams over 4.5 metres and hole F2-05’s 6 grams over 17 metres.

Rubicon also plans to spend some of its exploration dollars drilling outside the F2 gold system including preliminary drill testing on one or more of the company’s other gold projects in Red Lake. The company controls about 65,000 acres in the Red Lake gold district.

At presstime Rubicon was trading at $4.46 per share. Over the last year Rubicon has traded between a low of 90¢ on Dec. 8, 2008 and $4.94 on Oct. 14 2009. The company has 209.3 million shares outstanding.

Rob McEwan, president and chief executive of McEwen Capital and the former chairman and chief executive of Goldcorp (G-T, GG-N), owns 21.6% of Rubicon.