Rubicon Minerals provides updated Mineral Resource Estimate for Phoenix Gold project

Key highlights

2019 Mineral Resource Estimate metrics, based on a 3.0 g/t Au cut-off grade:

• Measured and Indicated Resources increased 110% to 589 000 oz of gold compared to the 2018 Indicated Resources of 281 000 oz of gold; Measured and Indicated grades decreased 2% to 6.26 g/t Au compared to 2018 Measured and Indicated gold grades of 6.37 g/t Au;
• As a result of the successful conversion to Measured and Indicated Resources, Inferred Resources decreased 28% to 540 000 oz of gold compared to the 2018 Inferred Resources of 749 000 oz of gold. Inferred grades increased 9% to 6.53 g/t Au compared to the 2018 Inferred grades of 6.00 g/t Au;
• The increase in Measured and Indicated Resources is mainly attributed to the company's successful 20 000 m oriented infill drilling programme in 2018, with the primary objective to improve confidence in the Mineral Resources above the 854 m Level;
• The company has increased the Measured and Indicated Resources by 456% over a two year period from 2016; and
• Rubicon commenced a Preliminary Economic Assessment (the New PEA) on the project, scheduled to be released in the second half of 2019. The company will continue oriented infill drilling to expand the Measured and Indicated Resources to a threshold of more than 650 000 oz of gold, which Rubicon believes is the required level to advance the Project to the Feasibility Study-level stage.
• General observations and commentary on the 2019 Mineral Resource Estimate The company has observed a relatively robust conversion rate of Inferred Resources to the Measured and Indicated categories;
• Sparsely-drilled Explore Target areas (greater than 80 m centres) have the potential of between 0.9 million to 1.2 million t of mineralised material grading between 5.0 to 7.0 g/t Au, mostly at depth;
• Test trial mining and bulk sampling programme completed at the end of 2018 validates the current geological model and supports the parameters and methods used to compile the 2019 Mineral Resource Estimate; and
• Potential to further upgrade the classifications and expand the 2019 Mineral Resources with data from up to 20 000 m of oriented drilling planned in 2019.
• Potential information for consideration in the New PEA (scheduled for H2/19) Phoenix Gold Project mill processing metrics (gained from 2018 bulk sample programme): 1540 tpd (tpd) throughput rate (based on 22 hour mill availability) and 1800 tpd capacity at current configuration, gold recoveries of 95.1% (43.2% from gravity);
• Bulk mining and development rates (gained from 2018 test trial mining programme): Sublevel longhole mining achieved 8.7% external dilution of test stopes, current development costs, rock mechanics, ground control;
• Surface infrastructure ready for operations: Hoist fully operational, civil and earthworks in place, electric substation operational, and upgrades to the 200 person camp, tailings management facility (TMF) and water treatment plant; and
• Significant underground infrastructure: More than 14 000 m of development already in place, including an operational shaft down to 730 m below surface, and an assessment of an underground ramp to surface.

Uniquely positioned: the existing infrastructure provides the opportunity to move the Project back into potential commercial production in a short time frame and at lower construction risk than development-stage peers, subject to an economic conceptual mine plan.

Rubicon President and CEO George Ogilvie, P.Eng., stated: "The significant growth in Measured and Indicated Resources, without a significant decline in grade, brings additional confidence and validation for the Phoenix Gold Project and its potential as a commercially viable operation. We are also pleased with the improvement in ounces and grades at the 3.5 g/t Au and 4.0 g/t Au cut-off grades. We will further evaluate the continuity of mineralisation at these higher cut-offs, as either of these scenarios could further improve the economics of the Project. We remain firmly on the path to building a conceptual mine plan with new economics for the Phoenix Gold Project, which will be reflected in a New PEA scheduled for the second half of 2019. We believe the New PEA has the potential to show strong economics considering all the new, fully commissioned surface and underground infrastructure already in place. The New PEA will also benefit from real, operational data collected during our recent test trial mining and bulk sampling programme, where we implemented actual mining techniques that could be utilised under a potential commercial production scenario while using our own processing facility."

"Over the last two years, our management, our site operating and geology teams have delivered on all the major goals towards turning around and bringing confidence back to the project. We believe our successful 35 000 t test trial mining and bulk sampling programme in late 2018 validates the geological model and the mineral resources. In the coming months, we plan to enhance value to shareholders by delivering a New PEA and continue oriented infill and expansion drilling to potentially convert Inferred ounces to Measured and Indicated categories and grow the overall mineral resources at depth, where there is high-grade mineralisation from historical drilling and where the deposit remains open."

"We believe Rubicon is uniquely positioned and has significant upside potential on a go forward basis. With more than 28 000 ha of prime exploration real estate, we are the second largest property holder in the prolific Red Lake Gold Camp and we hold a very strategic position considering we own newly installed working infrastructure in the region. Combine that with a de-risked and potentially robust Phoenix Gold Project, and a management team with a strong operational and turnaround experience, we believe we have the recipe to increase shareholder value in the near- to long-term."

"I look forward to updating our shareholders when the New PEA is completed as it will provide us with a first glimpse at a conceptual long-term life of mine plan for the Phoenix Gold Project."

2019 Mineral Resource Estimate

The 2019 Mineral Resource Estimate  benefits from 551 811 m of core drilling in 1631 drill holes. The 2019 Mineral Resource model covers a strike length of approximately 1200 m and depths down to 1403 m Level and remains open along strike and at depth. The 2019 Mineral Resource Estimate excludes the crown pillar and depleted resources from test trial mining.

The 2019 Mineral Resource Estimate was evaluated using a geostatistical block modelling approach constrained by mineral and lithologic domains interpreted from the drill hole and mapping data. The block model grades were interpolated using inverse distance cubed (ID3), which the company evaluated as the most representative method. Rubicon assessed other grade interpolation methodologies, including ordinary kriging (OK), and determined that the ID3 estimates controlled grade smoothing and achieved an appropriate grade-tonnage profile relative to the characteristics of the deposit. A nearest neighbour (NN) model was interpolated to support model validation. Density data was assigned based on average values for each lithologic unit.

The block model was classified in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 2014). Drill spacing for the Mineral Resources in the Measured, Indicated, and Inferred categories were approximately 20 m, 40 m, and 80 m centres, respectively, where geology and grade continuity were reasonably understood. Measured Resources are additionally supported with proximity to sub-level development, mapping, chip samples and supported by the bulk sample reconciliation data, where available. Measured and Indicated Resources are predominantly located near existing underground infrastructure and development.

The Mineral Resources are sensitive to the selection of reporting assumptions.

In late 2018, the company completed more than 35 000 t of test trial mining and bulk sample processing, resulting in a positive reconciliation of mill results to the 2018 Mineral Resource block model estimates for the test stopes mined (for further details, see news release dated 28 November 2018). The results validate the geological model, while the test trial mining the demonstrated the amenability of sublevel longhole stoping (a bulk mining method) in the mining of the deposit.

Comparison between the 2019 and 2018 Minerals Resource Estimates

The company believes the 2019 Mineral Resource Estimate brings more confidence, due to the growth of Measured and Indicated Resources compared to the 2018 Mineral Resource Estimate. At the reporting cut-off grade of 3.0 g/t Au, the 2019 Measured and Indicated Resources' tonnes and gold ounces increased by 113% and 110%, respectively, and grades slightly decreased 2%, compared to the 2018 Measured and Indicated Resources. The 2019 Inferred Mineral Resources' tonnes and gold ounces decreased by 34% and 28%, respectively, and grades increased 9% compared to the 2018 Inferred Resources. The significant increase in the Measured and Indicated Resources is mainly attributed to the company's successful 2018 oriented infill drilling programme of more than 20 000 m and the high conversion rates of Inferred Resources. Rubicon has changed some of the estimation parameters for the 2019 Mineral Resource Estimate.

New PEA scheduled for 2H19

The company has elected to conduct a new PEA to determine the economic potential of the Project, utilising information from the 2019 Mineral Resource Estimate, and the successful test trial mining and bulk sample processing Rubicon undertook in 2018. Rubicon will continue exploration drilling to expand the Measured and Indicated Resources to more than 650 000 oz, which is the current main threshold that the company believes is needed to advance the Project to a Feasibility Study. Work on the New PEA for the project is underway and is scheduled to be delivered in the second half of 2019. The New PEA will provide a preliminary glimpse at a potential production schedule and associated cash flows and will benefit from the following information:

• Mill processing: Rubicon owns a state-of-the-art mill that was constructed in 2015, with a capacity of 1800 tpd based on its current configuration. In 2015, more than 40 000 t of mineralised material were processed through its mill, achieving gold recoveries of 91.5%. In 2018, as part of the company's successful test trial mining and bulk sampling programme, Rubicon processed more than 35 000 t of mineralised material through its mill, achieving throughput and gold recoveries of 1540 tpd (based on a 22 hour mill availability) and 95.2% (with 43.2% via gravity), respectively.
• Bulk mining: the company has successfully demonstrated the amenability of sublevel longhole stoping during its 2018 test trial mining programme, achieving external dilution of 8.7%. Average dimensions of the test stopes were 21 m height by 27 m strike length by 6 m stope width, however, Rubicon believes that it has the potential to increase stope dimensions;
• Surface infrastructure ready for operations: Rubicon has a fully operational hoist, all the civil and earthworks in place, and a working electrical substation. The company believes some capital is required for upgrades to the 200 person camp, adding another lift to the TMF to account for bulk mining, and an ammonia reactor (to treat ammonia) upgrade to the water treatment plant. The company has roughly CAN$300 million in sunk capital consisting of hard, tangible assets at site, including its new state-of-the-art mill; and 
• Significant underground infrastructure: the project has more than 14 000 m of underground development already in place, included an operational shaft down to 730 m below surface and the capacity to be able to hoist more than 3000 t of material a day. The company will assess the economics of completing an underground ramp to surface to exclusively transport personnel and equipment to the underground.

Next steps

The company believes it can potentially improve upon the 2019 Mineral Resource Estimate in the following areas:

• Targeted infill and step-out drilling in areas containing Inferred Resources and exploration targets: Rubicon intends to upgrade resources to the higher Measured and Indicated categories by drilling areas at depth of the deposit where existing drill spacing is on 40 m centres or more. Furthermore, Rubicon has identified Exploration Target areas11 (greater than 80 m centres) potentially between 0.9 - 1.2 million t of sparsely drilled mineralised material with grades potentially between 5.0 - 7.0 g/t Au where the company intends to infill drill. Rubicon has budgeted up to 20 000 m of drilling from the 610 m and 685 m Levels.
• Evaluating McFinley and close proximity targets: Rubicon is evaluating Mineral Resource data from the historic McFinley Deposit, located near existing underground development at the Project, using current standards and parameters, which could be potentially included in any future Mineral Resource Estimate. The company is also evaluating historical drill data from its close proximity targets (Peninsula, CARZ, and Island Zones) located within two kilometres northeast of the project, which could possibly be included in any future updated Mineral Resource Estimate.
• F2 Gold Deposit remains open at depth and along strike: historical drilling intersected high-grade intercepts to a depth of 1600 m below surface, well below the bottom of the 2018 Mineral Resource Estimate at 1403 m level. These intercepts warrant follow up drilling in the future.

Read the article online at: https://www.globalminingreview.com/exploration-development/28032019/rubicon-minerals-provides-updated-mineral-resource-estimate-for-phoenix-gold-project/