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Jovicaon Jan 12, 2016 9:32am
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Phony gold reserve estimate by RMX
Phony gold reserve estimate by RMX
Globe/wire say Rubicon admission "black eye" for mining
Investors can not trust most of mining engineering firms these days.
2016-01-12 08:44 ET - In the News
The Globe and Mail reports in its Tuesday edition that Rubicon Minerals has cut the gold reserve estimate for its Phoenix mine in Ontario by 86 per cent and put itself on the block. A Reuters dispatch to The Globe quotes Rubicon as saying Monday that the inferred gold reserves at the mine was now 300,000 ounces, compared with the 2.2 million ounces it estimated in 2013. "Not only is this a huge negative development for RMX, but it is also a huge black-eye for the industry," Mackie Research Capital analysts wrote in a note. "We are totally shocked ... particularly after so many engineering firms have reviewed the data." Rubicon mainly raised funds for the mine through issuing shares and through streaming agreements. Royal Gold signed a $75-million (U.S.) gold streaming agreement on the mine in January, 2014. The Canada Pension Plan Investment Board (CPPIB) provided a $50-million loan facility last May to develop the mine. The company suspended operations at Phoenix in November and said it had temporarily laid off about 200 employees and 110 contractors. Rubicon hired BMO and TD to help the company evaluate long-term options. Rubicon closed at five cents, down nine cents in Toronto.
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