Shares of Rubicon Minerals Corp. (RBY) have had an amazing run lately as investors get more and more excited about the company's Phoenix gold project in Red Lake, Ontario.
Research Capital analyst Barry Allan is one of the believers. He raised his target price to $4.00 a share (from $2.78) on Monday, noting that he is not prepared to back away from the stock just because it is rising.
"In our opinion, there is a very good probability that [Phoenix's] F2 Zone is materially larger than [the] 1.5 million ounces we initially calculated," he wrote in a note.
Mr. Allan based his original thesis on drilling of the core portion of the F2 Zone. But step-out drilling in the winter intersected gold mineralization on either side of the core zone. Based on that, Mr. Allan wrote that there is a "very real chance" that the F2 zone holds three million ounces, and has the possibility of being six million ounces.
"In our opinion, the summer drill campaign [just started] will in all probability establish that the F2 Zone is in fact twice the size that we previously estimated," he wrote.
He added that additional good drilling results at Phoenix are likely given past discoveries in the Red Lake area. He continues to rate the stock a "buy."
Rubicon unveiled some new drill results Monday morning.