The Gold Report
Notable Quotes
"ICG has closed a CA$2.5M flow-through placement." (12/24/15) Integra Gold Corp. - Thibaut Lepouttre, Caesars Report More >
"The exploration upside at MAG's Juanicipio project is substantial." (12/23/15) MAG Silver Corp. - Gwen Preston, Resource Maven More >
"AKG's management continues to deliver on its development milestones." (12/22/15) Asanko Gold Inc. - Nana Sangmuah, Clarus Securities More >
"We are initiating coverage on KDX with a Buy rating." (12/21/15) Klondex Mines Ltd. - Don Blyth, Paradigm Capital More >
"VIT's Eagle is a shovel-ready, fully permitted, prefinanced gold project." (12/17/15) Victoria Gold Corp. - Tom Hayes, Edison Investment Research More >
F2 Keeps Getting Stronger; Raising Estimates
|
ANDREW MIKITCHOOK, GMP Securities
(10/05/2009)
What's New Rubicon announced on September 14 a high-grade extension to its F2 Zone on the 100%-owned Phoenix property in Red Lake. Drill hole 122-10 intercepted 0.4oz/t over 147 feet, including two higher grade sections with 3.25 oz/t over 6.6 feet, and 3.82oz/t over 4.9 feet. Rubicon’s ongoing progress with delineating the high-grade lenses within F2 gives us sufficient confidence to switch our valuation to a DCF based methodology and we are increasing our price target to US$5.50 (from US$4.00). Why it Matters The new intercepts continue a trend at F2 of identifying high-grade lenses both in the main F2 core and also in sub-parallel structures such as the drill holes on September 14. Based on these consistent high-grade intercepts, we have modeled our DCF valuation at 1oz/t grade for 4mnoz – conservatively below the 1-2+oz/t grades being mined at Goldcorp's Red Lake mine. We expect the detailed underground drilling from the 122 level to continue delivering high-grade intercepts and the exploration drift to be completed in 1H10 should allow test mining through the F2 zone. Valuation & Recommendation Our revised valuation methodology drives an increased 12-month target price of US$5.50 (from US$4.00). With a current estimated treasury of $60mn, Rubicon remains well funded to continue the current 80,000m drilling campaign while advancing shaft deepening that now stands at 175m. In our opinion, this remains a unique, advanced and high-grade asset that will continue to gain market attention—we reiterate our Overweight rating. |
PRINT THIS PAGE
EMAIL THIS PAGE
Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.
More Experts
"We expect PGLC's Relief Canyon site to be meaningfully advanced in 2016." (12/16/15) Pershing Gold Corp. - Heiko Ihle, Rodman & Renshaw More >
"ICG continues to stand out as one of the most active junior exploration companies globally." (12/9/15) Integra Gold Corp. - Michael Gray, Macquarie Equity Research More >
"We are initiating coverage on NMI with a Buy rating." (12/9/15) Newmarket Gold Inc. - Heiko Ihle, Rodman & Renshaw More >
"TV's mill throughput was up 19% MOM; zinc recovery improved by 9%." (12/9/15) Trevali Mining Corp. - Joseph Gallucci, More >
"THO pays a good dividend and produces at the lowest quartile costs." (12/9/15) Tahoe Resources Inc. - Gwen Preston, Resource Maven More >