Rubicon Minerals Reports Impairment Loss of C$203.50 Million for 2015

Rubicon Minerals (TSX:RMX) reported its financial results for 2015, reporting an impairment charge of C$203.50 million related to property, plant, and equipment, and inventories in 2015. The company also pointed to material uncertainties raising concerns over the ability of Rubicon to continue.
As quoted in the press release:

The 2016 SRK Geological Model and Resource Estimate significantly decreased the tonnes, grade and ounces in the F2 Gold Deposit. More exploration is required at depth and along strike in order to potentially develop an economic mining operation at the Phoenix Gold Project (the “Project“). However, other than conducting desktop studies and preparing future exploration plans, Rubicon does not have any intentions to proceed with an exploration program in the immediate future. An exploration program would require the Company to secure additional funding. Rubicon continues to evaluate strategic alternatives for the benefit of the Company and its stakeholders and remains in discussions with its lenders and other parties.
As at December 31, 2015, the Company had negative working capital of C$179.9 million, including cash and cash equivalents of C$22.3 million. On February 12, 2016, the Company was in breach of a technical covenant of its Loan Facility as the Project did not meet processing requirements of 875 tonnes per day over a period of 60 consecutive days. On March 12, 2016, the breach of technical covenant became an event of default under the Loan Facility terms and conditions. The Company continues to be in discussion with its Loan Facility secured lender, CPPIB Credit Investments (“CPPIB“). However, there can be no assurance that CPPIB will not exercise any rights or remedies in relation to the event of default as outlined in the Loan Facility agreement.
The material uncertainties raise significant doubt as to the ability of Rubicon to continue as a going concern. The Company may be unable to realize on its assets or discharge its liabilities in the normal course of business. Rubicon may incur significant dilution to the holdings of existing shareholders in any restructuring and financing, or may be required to seek relief under a court-approved restructuring process.

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