Rubicon Minerals Corporation (RMX-T)

Hold or Sell? He doesn’t think this is going to go back into production. This was put into production on a prefeasibility study, and the deposit wasn’t rolled off as well as it should have been. There is too much non-mineralized material in between the ore chutes and he doesn’t think it is going to work.

Not going to be a take out candidate. This is a disaster. The mineralization is very erratically distributed in structures. Even within those structures, the gold mineralization itself is very erratically distributed. It is difficult to put together any continuity for a mine plan. He thinks they are going to stay broke.

They were very loud saying “I’ve got a million ounces”, etc. and then went ahead with the mine without the real deep science and engineering behind it. It is in such a mess that they really don’t know what the consistency of the asset is. Somebody has to come in and fix it. It all has to be reworked from scratch.

Development costs seem to be escalating. His company has upped the target to $1.50, but NAV has decreased. He would prefer the ones that are already producing.

They have a gold play in northern Ontario and cash in the bank and a good balance sheet. They are hoping to bring the Phoenix online in the next 6 months. Have issued a lot more shares, so the possibility exists for a stock consolidation. Has a lot of upside. He could see this as a flyer.

Owns this in one of his specialty funds, but doesn't own it in his normal resource fund. It is going through the process of finishing the mine with production expected in the 1st half of 2015. It is fully funded, and he doesn't anticipate any errors or changes in terms of capital spending. This is a hard one to tell. As long as gold remains at around $1300, it will probably do well, but it just might take a little longer than people anticipate.

Thinks the stock will go up, but thinks you are coming into the period where development takes place and you have a transition in ownership from Canadian retail to global institutional. Those transitions often chart like the electrocardiogram of a corpse.

There is a rumour that Goldcorp (G-T) might take them out. Goldcorp failed on the Osisko takeover, but Rubicon would have to finish the Phoenix project. Doesn’t expect this is going to happen within the next year, but are likely looking at the next 18 months. Just on its own, without a takeout, he could see this doubling as a producer multiple, and could be beyond that on a takeover.

Have the right address being near Goldcorp’s (G-T) Red Lake mine of high-grade material. Have undergone a change in their program in terms of their feasibility study. Expects he will own this one in the future, but hasn’t figured out what he feels the value of the company is.

High grade deposit in Ontario. More than 2 million oz of gold. They are a developer rather than cash flower. There is a question about how they finish developing this asset. The asset is a good one, however.

Have a joint venture in developing a property in Red Lake with Goldcorp (G-T). Have the money to advance their properties but, because it is a junior gold exploration company, they are at the mercy of the market malaise. This company will bounce back with the junior sector.

What is the upside potentia on Rubicon? They are ramping up a new mine so their cash flow is not available for 2- 2 plus years. Not in his portfolio. Balance sheet is tight. Share price is under pressure during development stage as there are risks during this stage and the stock tends to go sideways.

(Market Call Minute.) Very interesting asset. He is always perplexed in figuring out the valuation.

Capital footprint is not in the billions and would be a good acquisition for someone like G-T