View of the headframe and mill at Rubicon's Phoenix gold project.

View of the headframe and mill at Rubicon's Phoenix gold project.

Two announcements this morning from Red Lake gold developer Rubicon Minerals that could make it a lively day for the company's shares:  CEO Michael Lalonde "has left the company" and the Ontario environment ministry has ordered a shutdown of mill operations at the company's Phoenix gold project while it deals with tailings and ammonia problems.

Director Michael Winship, an engineer, will take over as interim president and CEO until a permanent replacement for Lalonde is found.

On the operations front, the mill shutdown was ordered so Rubicon could "treat elevated ammonia levels, discharge sufficient water from the tailings management facility (TMF), and to upgrade the TMF, under specific timelines."

For now, underground development, construction and trial stoping continue while the mill is closed.

The initial order to commission new interim and permanent ammonia treatment systems, as well as upgrade its tailings treatment facility, came on Sept. 8, according to the news release. The company was given a Nov. 30 deadline to implement a new ammonia treatment system, and a Nov. 15 deadline to upgrade its tailings dam.

The amended Sept. 30 order allows Rubicon to begin to discharge treated effluent from the tailings facility - something the company has begun - and orders submission of a report "containing various updates and engineering opinions" by Oct. 9 - Friday.

"The Rubicon Management team and the Board of Directors take these matters seriously and are committed to operating at the highest environmental standards," stated Michael Winship, interim President and Chief Executive Officer of Rubicon. "We have made progress towards treating the elevated ammonia levels in the effluent and have made it a priority to resolve these issues in a timely manner. Our underground operations continue uninterrupted during this time and we hope to resume mill operations shortly once we have met all the requirements outlined by the Ministry of Environment and Climate Change."

Rubicon poured its first gold from the high-grade underground Phoenix project on June 24. On Aug. 20, the company announced a rockfall that delayed the development of two stopes, as well as haulage complications.

Rubicon's stock closed Friday at $1, giving the company a market cap of $394 million. The shares have a 52-week trading range of 88 cents to $1.63.

Rubicon had working capital of $50 million as of July 31.

Rubicon Minerals has been a favourite pick of Casey Research analyst Louis James, who described it as a possible takeover target at the Sprott Stansberry show in Vancouver earlier this year.

Rubicon Minerals has been a popular topic of discussion at chat.ceo.ca, the "investment conference in your pocket." Join the conversation!

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