Royal Gold Acquires Gold Stream On Phoenix Gold Project
DENVER, CO - Royal Gold, Inc. reported that its wholly owned subsidiary, RGLD Gold AG has entered into a $75 million gold stream transaction with Rubicon Minerals Corporation CA:RMX -6.51% RBY -5.51% that will finance a significant portion of the construction of the Phoenix Gold Project in Ontario, Canada.
╥The Phoenix gold stream is Royal Gold’s first significant investment in the Red Lake District,╙ commented Tony Jensen, President and CEO of Royal Gold. ╥This area is known for its high-grade gold deposits and long lived assets. Rubicon’s management team has a history of success in this district, and we are pleased to assist them in securing a portion of the financing necessary to complete construction of the Phoenix Gold Project.╙
The Phoenix Gold Project is located in Red Lake, Ontario, Canada. The deposit extends 1,650 meters below surface, and remains open at depth and along strike. Gold production is projected to commence 12-14 months following the completion of the remaining financing. The Red Lake greenstone belt is host to one of Canada’s preeminent gold producing districts, the Red Lake District. Twenty-eight mines in the district have produced over 26 million ounces of gold since the 1930╒s. The Phoenix Gold Project is located in this belt, which also hosts the Red Lake and Cochenour mines.
Based on a preliminary economic assessment issued in 2013, Rubicon projects a total life of mine production of 2.19 million ounces, with average estimated annual production of 165,300 ounces based on a 13 year mine life. Preliminary economic assessments do not contain reserves, and this estimate is based on mineralized material only.
Construction on the Phoenix Gold Project is well advanced, with its shaft sinking completed to 730 meters below surface. Civil works are largely complete, the mill building has been erected, major components such as SAG and ball mills are onsite, and underground development is underway.
The advanced deposit from Royal Gold will assist Rubicon in securing the financing necessary to complete construction of the Phoenix Gold Project. In addition to Royal Gold’s deposit, Rubicon estimates it will require approximately $100 million of additional financing to complete construction, inclusive of corporate expenses. Rubicon had approximately $78 million in cash and short term investments and no debt at December 31, 2013.