Rubicon Up Nearly 11 Percent on Phoenix Drill Results

Shares of Rubicon Minerals (TSX:RMX,NYSEMKT:RBY) jumped nearly 11 percent on Thursday after the release of additional drill results from the 38,000-meter infill drilling program currently taking place at the company’s Phoenix gold project.  

The goal of the program is to convert inferred mineral resource ounces in the upper part of the F2 deposit to the indicated category at 25-meter drill spacings or less. The company is currently 21,983 meters, or 124 holes, into the program, though altogether it’s completed an impressive 377,594 meters of drilling on the deposit since 2002.

Highlights from today’s release include:

• Hole 244L-69: 136.5 grams per tonne (g/t) gold over 4 meters
• Hole 244L-83: 61.2 g/t gold over 2.6 meters
• Hole 244L-63: 34.8 g/t gold over 2.5 meters
• Hole 244L-39: 20.6 g/t gold over 5 meters, including 32.7 g/t gold over 3 meters

Positive reactions

Commenting positively on those results, President and CEO Michael A. Lalonde said, “[i]nfill drilling results to-date continue to confirm our expectations of the F2 Deposit with respect to the continuity of mineralization and grade.” He added, “[w]e continue to encounter potential economic intercepts outside of planned stoping blocks, which could expand the mineral resource in the upper levels of the deposit. We have also encountered visible gold with significant grades in a number of holes between sections 50125N and 50250N in areas that previously had limited information.”

He’s not the only one who’s pleased with today’s numbers. Seeking Alpha contributor Hard Asset Investments was blown away by the results, commenting, “I think Rubicon’s current share price is actually below what it should be, given the recent bullish developments.” Meanwhile, Ben Kramer-Miller, also writing for Seeking Alpha, described the results from hole 244L-69 as “an incredible grade.”

As noted, market participants at large seem to agree with those assessments given that Rubicon’s share price ended the day up 10.79 percent.

Next steps

Moving forward, Rubicon will of course be looking to complete the current drill program at Phoenix; following its completion, the company will start a definition program “on a tighter pattern of 12.5 m or less” with the goal of “better defin[ing] the grade and geometry of individual stopes.”

Looking even further into the future, Rubicon’s prospects look just as promising. The company said at the beginning of the month that Phoenix is on budget and on schedule to start production midway through 2015. At the time, Lalonde noted, “[m]ost of the construction and development risk is behind us, as the Project is well over half completed.”

Time to buy?

Today’s results combined with Rubicon’s overall plans paint an encouraging picture for investors, but is now the time to buy?

Overall, the consensus seems to be “yes.” As noted, Hard Asset Investments has a favorable opinion of the company, while Kramer-Miller, who notes in his article that “the stock is probably a mixed bag,” nevertheless admits that “Rubicon shares have outperformed other junior gold miners” — definitely an important consideration in today’s price environment. Finally, The Investment Doctor, another Seeking Alpha contributor, has said the company is worth keeping an eye on as it’s “one of those classic high-grade Ontario gold plays.”

At close of day Thursday, shares of Rubicon were selling for $1.54 each. The company is up an impressive 57.14 percent year-to-date.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.