Dow Jones Story:
By Lynne Olver
Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Junior exploration firm Rubicon Minerals Corp. (V.RMX)
has acquired a portfolio of cash streams on properties in the Red Lake gold
camp in Ontario, and in the process hired the services of well-known Ontario
prospector Perry English.
Earlier this week, Rubicon said it acquired interests in 63 mineral
properties from English for C$500,000 and 250,000 shares, which had a value
Monday of just more than C$250,000. The deal gives Rubicon rights to receive
all payments from the mineral properties, which are optioned to 21 different
exploration companies, including 14 properties optioned by Rubicon itself. If
a discovery is found on them and in the event mineral production begins,
Rubicon is also entitled to royalties.
Rubicon said the scheduled 2003 option payments are C$360,000 in cash, plus
shares valued at an estimated C$220,000, offering a two-year payback. Its
shareholders will be exposed directly to Rubicon's own drilling programs at
Red Lake, and indirectly to any exploration success by competitors on the
optioned properties.
Vancouver-based Rubicon also wanted to tie up English's services for the
next several years, and will pay him a consulting salary of C$75,000 a year
for at least two years. "It's not just a question of acquiring what he's got
now, but what he might generate over the next couple of years," Rubicon
president David Adamson told Dow Jones this week at a Toronto mining
convention.
He described the deal as unusual in the junior exploration business. "If
it's not unique, it's almost unique," Adamson said.
Rubicon is already a big landholder in the Red Lake area, where Goldcorp
Inc.'s (GG) Red Lake mine is situated. The junior company started acquiring
ground there about seven years ago.
"At a relatively early stage, we became aware of what was then a fly in the
ointment: this guy, Perry English, held a lot of property in the belt and in
our view, it was a lot of good property," Adamson said.
Prospector Became Too Busy
English, 51, said he started in the prospecting business 15 or 20 years ago
with a property or two. "After I made my first deal I figured, geez, this is
simple, so I started acquiring more and more land," English said, adding that
he later found it wasn't so simple. His business got to the point where the
land holdings became too extensive to manage, and prevented him from spending
time prospecting in the bush.
"If you take 60-some-odd deals, most companies would have a whole little
division looking after it," English told Dow Jones. "I'm trying to do it with
the help of my wife and I can't do it anymore."
He was approached by several companies interested in a deal for his property
interests. English said he chose Rubicon because they've been able to work in
the past on a handshake, and he calls the Rubicon team "more than adequate"
technically.
He also noted that he isn't doing the deal out of the goodness of his heart.
"I get a chunk of cash and these people are letting me keep my finger in
things; I'm still going to continue to vend properties," English said. "I like
that, because I've been at this for a while and it would be hard to get right
out of it."
He spends most of his winters in Souris, Manitoba, just outside Brandon, but
still spends summers in Red Lake.
Rubicon wanted to control the cash-flow stream primarily from its own
optioned properties, but was also interested in becoming "the landlords" of
the other properties English had optioned, Adamson said. After the two-year
payback, Rubicon will generate cash flow in year three and beyond. It will
also have "lottery tickets" that will pay off if other players are successful
on lands optioned from English, Adamson noted.
Rubicon and joint-venture partner AngloGold Ltd. (AU) plan to spend C$5
million on exploration at Red Lake this year, most of it on the McFinley
project, Adamson said.
Company Web Site: rubiconminerals.com
-Lynne Olver, Dow Jones Newswires; 416-306-2028
lynne.olver@dowjones.com
(END) Dow Jones Newswires
03-12-03 1200ET
End of News |
