RMX -Project-timeline

Rubicon timeline for the high grade Phoenix deposit. (Image: Rubicon)

Rubicon Minerals (RMX:TSX) is on track to be the next high grade gold producer in Canada at the Phoenix Gold Project in Ontario. The project is expected to begin production in mid 2015 and commissioning of the mill is ahead of schedule. Rubicon is fully funded to production after closing a $115 million dollar bought deal in 2014 ($1.55 per share) as while as a $75 million dollar ($US) stream with Royal Gold. A recent $15 million dollar flow through financing was in heavy demand and was closed for $30.2 million at $1.28 per share.

"I am pleased to announce that the Phoenix Gold Project is now on the homestretch to projected initial production," stated Michael A. Lalonde, President and Chief Executive Officer of Rubicon. "We have begun commissioning the mill circuit ahead of schedule. We expect commissioning to continue throughout the second quarter, including the limited processing of low-grade development material. The stockpiling of mill feed continues. We expect that all remaining underground development prior to projected initial production will be completed by the end of May."

The Phoenix project has great economics as it will be in the top tier of producing mines in the world by grade. The average feed to the mill is expected to be 8.1 grams per tonne gold. At $1200 gold project economics show a 19.1% internal rate of return after tax.

Rubicon appears to be on track or ahead of schedule in all key mine developments as while as being on budget.

In fact Rubicon will have a cash balance of ~$23 million as they enter production with a current working capital position of $56 million and $33 million left in capital expenditures. This line in the press release was interesting though "Rubicon is in advanced discussions with potential lenders on securing a $50 million debt facility to ensure adequate working capital to fund the ramp-up period, potential delays and cost overruns."

Rubicon Chart 3 year

Mining stocks historically tend to get a re-rating as they enter production as cash flow starts to come in. The stock was as high as $3.50 a few years back at much higher gold prices. In the construction phase the stocks has been trading for the most part between $1-$1.75. Rubicon shares today can be had for $1.22.

If the gold price remains at or above current levels I would expect a re-rating on RMX stock. Watch for resistance at the $1.55 level from the previous $115 million dollar bought deal.

Rubicon is a favourite of CEO Chat regular Allan Barry Laboucan and I believe is the latest stock promoted by Louis James of Casey Research here.

rubicon chat

Read: Rubicon's Phoenix Gold Project Commences Mill Commissioning and Remains on Schedule for Mid-2015 Projected Initial Production

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This is not investment advice.All facts are to be checked and verified by reader. As always please do your own due diligence.