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Rubicon Minerals Shares Rise Ahead Of Expected Updated Resource For Phoenix

Rubicon Minerals (TSE:RMX) (NYSE MKT:RBY) jumped Monday as investors looked ahead to the company's planned updated mineral resource estimate for its Phoenix gold project - due out at the end of the quarter.

Shares shot up 24 cents this afternoon, to close at $2.39 in Toronto.

Late last month, the company said that based on achieving its "scheduled milestones" and the continued progress of construction at Phoenix, its timeline for potential production would be the second half of 2014.

The company also said the updated mineral resource estimate due out shortly would include data from over 100,000 metres of core drilling since late 2011.

Currently, the F2 gold deposit at Phoenix, located in Red Lake, Ontario, boasts an indicated resource of 1.02 million tonnes, grading 14.5 grams per tonne (g/t) gold for a total of 477,000 ounces of gold, and an inferred resource of 4.23 million tonnes, grading 17.0 grams for a total of 2.31 million ounces of the precious metal.

In an update of construction efforts at the Phoenix project in January, the company said it continued to make "good progress" with the sinking of the shaft. Ground conditions also improved, it noted, with "better development rates" expected going forward.

It is expected that mill construction will be completed in the second quarter of 2014.

The company continues to carry out a program designed to optimize certain aspects of its preliminary economic assessment (PEA), released in the summer of 2011, and potentially improve the efficiency and productivity of the Phoenix project.

Under the current PEA, the project is expected to produce 180,000 ounces of gold per year for the 12 years of mine life, with grades of roughly 14 grams per tonne (g/t) and a forecasted 92.5 per cent recovery.

Rubicon is working to optimize several key areas of the PEA, including mining methods, equipment, throughput, and shaft depth, as well as building an exploration platform to follow up on higher grade intercepts and potentially increase the mineral resource at depth.

The optimization studies are scheduled to wrap up in the second quarter of this year.

Rubicon cautioned, however, that the implementation of the new methods would likely increase the initial capital cost of developing Phoenix, compared to the $214 million outlined in the initial economics report.

As such, it plans to evaluate financing alternatives once the studies are done to address any potential boost in capex.

As of the end of last year, the company had about $171 million in cash and equivalents, and investments, and $157 million in working capital.

In addition to the Phoenix project, Rubicon controls over 100 square miles of exploration ground in the prolific Red Lake gold district, which hosts Goldcorp's (TSE:G) Red Lake mine.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.