Shares in Rubicon Minerals (TSX:RMX, AMEX:RBY) powered higher after the company released an updated inferred mineral resource for the Phoenix Gold Project in Red Lake, Ontario.
Rubicon originally released a maiden inferred resource for Phoenix in November 2010, but the British Columbia Securities Commission requested an amended technical report for the project, raising concerns in the market about a possible sharp revision in the size of the resource.
This morning Rubicon put to rest this concern, reporting a inferred resource estimate of 5.5 million tonnes averaging 20.34 grams per tonne gold, or 3.597 million ounces when applying a polygonal model and uncapped grade. The company also reported the resource with a 10-5-2 (see note at bottom) empirical capping strategy and Polygonal Model of 3.057 million ounces of gold at an average grade of 17.29 grams per tonne gold.
Rubicon further reported the inferred resources using a block model using a 5 gram per tonne gold cut-off. Using this model, the uncapped estimate came in at 6.017 million tonnes averaging 16.49 grams per tonne gold for 3.19 million ounces. Again, applying the 10-5-2 capped block model formula the inferred resource came in at 3.035 million ounces averaging 15.69 grams per tonne.
In addition to the revised estimate, the company also noted that the geological interpretation of the mineralization suggested that additional ounces could be added at below 500 meters.
“The Author estimates exclusive of the inferred resources, geological potential on a uncapped basis of between 1,670,000 and 4,360,000 tonnes grading 21.2 to 29.2 g/t gold for an additional 1,300,000 to 5,600,000 ounces of gold,“ the announcement stated. “If the 10-5-2 capping described above were applied, these estimates of potential would be reduced to 800,000 to 4,300,000 ounces of gold grading between 16.9 g/t and 23.2 g/t gold.”
"We appreciate the input the British Columbia Securities Commission has provided and especially wish to thank our shareholders for their patience and support during this period,” David Adamson, President and CEO of Rubicon said.
“All of us on the Rubicon team are pleased that the amended estimates confirm the fundamental and material nature, aspects and integrity of the mineral resource and look forward to moving the Project forward.”
Note: 10-5-2 refers to an empirical capping strategy that caps gold values greater than 10 oz/ton to 10 oz/ton, those between 5 and 10 oz/ton to 5 oz/ton, those between 2 and 5 oz/ton to 2 oz/ton. Values less than 2oz/ton remain uncapped.