'We believe in the potential of the
'Our job is to maximize value for our shareholders. After conducting an initial assessment of the Project following my appointment as interim CEO, we believe that we need to better define the value of the deposit with further work. Therefore, we have decided to temporarily suspend underground activities, further enhance our geological model, and create a project implementation plan with the goal of providing a better path towards profitability. We are focused on building both the right plan and the right leadership team to accomplish this goal.'
Project Update Highlights:
- The Company is moving to temporarily suspend underground activities at the Project. The gold mineralization is more geologically complex compared to historical drilling data;
-
Rubicon will work with
SRK Consulting (Canada) Inc. ('SRK') and a team of qualified advisors to enhance the geological model, develop a new mineral resource estimate, and produce the Phoenix Project Implementation Plan ('PPIP');
- The first trial stope result reconciled well with the 2012 SRK in-situ mineral resource block model estimate ('2012 SRK Model'). The average milled grade of the first trial stope was 5.03 grams per tonne of gold ('g/t Au') and is approximately 4% higher compared to the 4.85 g/t Au in the 2012 SRK Model;
-
Since the start of commissioning in
May 2015 , Rubicon has produced 3,704 ounces of gold (and sold 2,498 ounces of gold);
-
On
October 30, 2015 , theMinistry of Environment and Climate Change ('MOECC') gave Rubicon permission to restart mill operations. The Company has been successful in reducing ammonia levels, discharging treated effluent to the environment, and upgrading its tailings management facility ('TMF'). The mill operations resumed onOctober 31, 2015 ;
- Currently, the Company has a stockpile of approximately 11,000 tonnes of mineralized material at an estimated gold grade of approximately 4.0 g/t Au, which Rubicon expects to process in November;
-
Rubicon is carefully managing its working capital balance of
C$23 million as ofOctober 31, 2015 and believes this is sufficient to carry the Company through the PPIP period, which is expected to be completed in second quarter 2016;
- Rubicon has initiated a cost cutting plan. Associated with the suspension of underground activities is the temporary layoff of approximately 200 employees and 110 contractors, representing 87% of Company employment.
Complexity in the Geological Interpretation of the F2 Gold Deposit
Trial stoping has revealed the complexity of the F2 Gold Deposit. Gold mineralization at the F2 Gold Deposit is primarily hosted within and along the boundaries of two rock types: high-titanium basalts ('HiTi basalts') and felsic intrusive rocks. The majority of the gold distribution is contained within the HiTi basalts, with gold grades that are spatially highly variable and associated with visible, nuggety gold. Applying data from core drilling, underground chip samples, and an appreciation of the lithologies that host gold at the F2 Gold Deposit, the Company is further refining its interpretation of the geological framework which hosts the F2 Gold Deposit.
Although the mill results from the first trial stope reconciled well with the 2012 SRK Model (see discussion below), subsequent trial stopes have highlighted the local variability in the continuity of the HiTi basalt unit. For example, Figure 1 shows the planned stope shape of the 489 Stope (located between the 244- and 305-metre levels), which was expected to be rectangular in nature. Figures 2 to 6 show the actual mapped geology of the levels and sublevels within the stope, which demonstrate that the spatial variability of the rock types and mineralization were much greater than expected. The Company believes that with additional analysis, it can further enhance its three-dimensional geological interpretation of the F2 Gold Deposit, which will contribute to the optimization of planned tonnes and gold grades in the future. Rubicon will continue to work with SRK and other consultants to enhance its three-dimensional geological/mineral resource modelling and to develop its PPIP, with a goal to provide a better path towards profitability. The PPIP is a detailed engineering and economic framework that includes the new mineral resource estimate, conceptual mine planning, underground infrastructure, geotechnical analysis, maintenance, processing, safety and environmental management, sustainability planning, human resources, cost estimation, economic analysis, and risk assessment. The Company anticipates this process to be completed in second quarter of 2016.
Trial Stoping Period to the end of
Rubicon commenced the trial stoping period in
Table 3: Trial Stoping Period to the end of September 30, 2015 | ||||||||
Trial Stoping Period(a) | ||||||||
Operating Metrics | July | Aug | Sep | Total | ||||
Mineralized material milled (tonnes) | 5,940 | 8,460 | 6,318 | 20,718 | ||||
Waste (tonnes) | 13,326 | 9,339 | 16,475 | 39,140 | ||||
Average daily throughput (tonnes per day) | 192 | 273 | 211 | 225 | ||||
Grade to the mill (g/t Au) | 3.34 | 5.26 | 3.89 | 4.29 | ||||
Average mill recovery (%) | 94.4 | 92.9 | 90.6 | 92.6 | ||||
Gold produced (ounces) | 602 | 1,329 | 716 | 2,647 | ||||
(a) Includes results from first trial stope |
First Trial Stope Reconciliation
SRK was engaged to complete a third-party reconciliation of Rubicon's first trial stope. The Company completed the drawdown and processing of material from its first trial stope at the 305-metre level in
Table 1: First Trial Stope Mill results Compared to the 2012 SRK Model | ||||||||
2012 SRK Model | Mill Reconciliation | Variance (?) | Variance (%) | |||||
Mineralized material tonnes (t) | 17,190 | 15,584 | -1,606 | -9% | ||||
Gold grade (g/t Au) | 4.85 | 5.03 | +0.18 | +4% |
Rubicon believes that there are opportunities to optimize the stope design and stoping method of future stopes. Figures 7 displays the grade distribution of the 2012 SRK Model. SRK calculated internal dilution of 66.5% (tonnage less than 5.0 g/t Au cut-off grade) and external dilution of 2.4% in the first trial stope. The results of the first trial stope reconciliation provide important information that will allow the Company to further enhance its geological interpretation of the F2 Gold Deposit.
Underground Activities
The Company has completed the following underground initiatives:
- The fall of ground at the 183-metre level has been fully remediated;
- The 305-metre level haulage upgrades, including the installation of a car dump at the shaft station, have been completed. The Company has received all the mobile and rail equipment on site;
- Ramp connection between the 244- and 305-metre levels is complete;
- Construction of the rock breaker and grizzly at the 305-metre level has been complete;
- Rubicon has stockpiled approximately 11,000 tonnes of mineralized material, at a grade of approximately 4.0 g/t Au (based on sampling). The Company will process all the stockpiled mineralized material once mill operations resume; and
- The Company has eleven test stopes (both full and small) in various stages of development and drawdown.
The Company is in the process of suspending all underground activities, including development, trial stoping, and infrastructure construction.
Mill Operations Resumes
The MOECC has given permission to Rubicon to recommence its mill operations on
Balance Sheet and Guidance
Working capital at
Conference Call Details
The Company's senior management team will host a conference call today,
A recorded playback of the conference call can be accessed after the event by dialing +1 (855) 669-9658 or +1 (604) 674-8052 for calls outside
Cautionary Statement regarding Forward-Looking Statements and other Cautionary Notes
Forward-Looking Statements
This news release contains statements that constitute 'forward-looking statements' and 'forward looking information' (collectively, 'forward-looking statements') within the meaning of applicable Canadian and
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and represent management's best judgment based on facts and assumptions that management considers reasonable. The material assumptions upon which such forward-looking statements are based include, among others, that: the demand for gold and base metal deposits will develop as anticipated; the price of gold will remain at levels that will render the
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rubicon to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others: possible variations in mineralization, grade or recovery or throughput rates; actual results of current exploration activities; actual results of reclamation activities; conclusions of future economic evaluations; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; accidents and other risks of the mining industry; delays and other risks related to construction activities and operations; timing and receipt of regulatory approvals of operations; the ability of Rubicon and other relevant parties to satisfy regulatory requirements; the availability of financing for proposed transactions, programs and working capital requirements on reasonable terms; the ability of third-party service providers to deliver services on reasonable terms and in a timely manner; market conditions and general business, economic, competitive, political and social conditions.
The PEA is preliminary in nature as it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The quantity and grade of reported inferred resources referred to in the PEA are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource category.
It is important to note that the information provided in this news release is preliminary in nature. There is no certainty that a potential mine will be realized. A mine production decision that is not based on a feasibility study demonstrating economic and technical viability does not provide adequate disclosure of the increased uncertainty and specific risks of failure associated with such a production decision.
Forward-looking statements contained herein are made as of the date of this release and Rubicon disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Cautionary Note to U.S. Readers Regarding Estimates of Indicated and Inferred Resources
This news release uses the terms 'measured' and 'indicated' mineral resources and 'inferred' mineral resources. The Company advises U.S. investors that while these terms are recognized and required by Canadian securities administrators, they are not recognized by the
Under Canadian rules, estimates of 'inferred mineral resources' may not form the basis of feasibility studies, pre-feasibility studies or other economic studies, except in prescribed cases, such as in a preliminary economic assessment under certain circumstances. The
Mineral Resources
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category. The inclusion of inferred mineral resources are considered too speculative geologically to have the economic considerations applied to enable them to be categorized as mineral reserves. The mineral resources in this press release were reported using CIM Standards.
Qualified Persons
The content of this news release has been read and approved by
To view the Figures accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/1031045.pdf
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