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halcroon Jan 11, 2016 8:35pm
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Ashes to ashes
Ashes to ashesGold Summary for Jan. 11, 2016
2016-01-11 20:28 ET - Market Summary
by Stockwatch Business Reporter
David Beatty and Michael Winship's foundering Rubicon Minerals Corp. (RMX), crashed another nine cents to five cents on 22.47 million shares. The stock, $6.50 in 2010 and $1.63 a year ago, gapped down to 65 cents from $1 in early October after it suspended milling at its $460-million Phoenix gold mine near Red Lake because of environmental concerns raised by the Ontario government. It gapped down again in early November, this time to 25 cents, after it halted mining to enhance its geological model and create a project implementation plan with the goal of providing a better path toward profitability. The latest slump is the result of the company suspending its Phoenix project implementation plan and announcing it was looking for a way out of its mess, including putting itself on the block.
If Phoenix is to rise from the ashes, it will have to do so with a massive reduction in its gold resource. A revised estimate credits the project with 492,000 tonnes indicated at 6.73 grams of gold per tonne and another 1.52 million inferred at 6.28 grams per tonne. An estimate prepared three years ago, which formed the basis for Rubicon's decision to build the mine, listed 4.1 million tonnes indicated at 8.52 grams per tonne and 7.45 million inferred at 9.26 grams per tonne. The net result of the change is that all but 413,000 of the earlier 3.35 million ounces of gold went poof because the deposit is "more geologically complex" -- not nearly as good -- as previously believed.
Mr. Winship, a director since 2011 and the company's interim president and chief executive officer, is the fellow left holding the bag. The man in charge at Rubicon while the mine was being built was Michael Lalonde, who arrived in the spring of 2012 as president and CEO to "optimize the development" of Phoenix. The developing went better than the optimizing and Mr. Lalonde abruptly "left Rubicon" just a few hours after the company revealed that Phoenix was in serious trouble. The discovery, the development of the big now-you-see-it-now-you-don't resource and the decision to build the mine was made when the company's founder, David Adamson, was in charge. (Mr. Adamson stayed on as a director until he retired last spring.)
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