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Explorer With 'Highly Undervalued Stock' Increases Project Resource
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The report updates and the company being a takeout target are discussed in an iA Securities report.

In a Jan. 7 research note, iA Securities analyst George Topping reported that Rubicon Minerals Corp. (RMX:TSX; RBYCF:OTCMKTS) updated the mineral resource at its Phoenix gold project in Red Lake, Ontario.

Topping highlighted that the updated resource now contains 811,000 ounces (811 Koz) in the Measured and Indicated category, up 38% since the previous estimate of 589 Koz. The boost was driven primarily by M&I tonnage growing 34% to 3.9 million tons (3.9 Mt) from 2 Mt and Inferred ounces converted to M&I ounces. Gold grades mostly stayed the same at about 6.5 grams per ton.

The Phoenix project's total resource is now about 1.3 million ounces. Another resource update is expected in H2/20.

The new resource, Topping indicated, "underpins the feasibility study," also anticipated in H2/20. "With the updated ounces we expect the mine life and economics to improve substantially to our $2.50 per share target price," he added. For one, the ramp-up is expected to exceed the level outlined in the preliminary economic assessment, and that would lower the all-in sustaining cost. Further, the current M&I resource supports production of about 90,000 ounces per year over an eight-year mine life, but exploration work should add years.

Certainly, exploration upside exists at the property, Topping pointed out. His firm listed the Top 20 drill results from Rubicon's regional drilling since 1998. They indicated that the "limited amount of drilling done in the past on the McFinley, Island and CARZ zones yielded several high grade intercepts (e.g.,) 3 meters (3m) at 70 grams per ton (70 g/t) or 4.8m at 15 g/t," and that those zones "provide a good place to start work on satellite deposits."

Finally, Topping purported that Rubicon is an ideal takeout target. Along with its existing mine and "tightly drilled resource," it holds value in its $690+ million in tax pools, its plant with a capacity of 1,500 tons per day, its mobile equipment and its prospective, 29,000 hectare land position. "Rubicon may get taken out due to mis(under)pricing by the market as majors look to consolidate the camp," the analyst commented, noting that Evolution Mining and Anglogold are present there.

Along with its CA$2.50 per share target price on Rubicon Minerals, iA Securities has a Buy rating on the exploration company. Its stock is currently trading at around CA$1.08 per share.


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Disclosures from iA Securities, Rubicon Minerals Corp., Research Update, January 7, 2020

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst's Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst's personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst's recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
Rubicon Metals Corp.:
In the past 12 months, Industrial Alliance Securities Inc. has managed or co-managed a public offering of securities for the issuer.
The analyst has visited the issuer’s operations. No payment or reimbursement was received from the issuer for the associated travel costs.
In the past 12 months, Industrial Alliance Securities Inc., its officers, directors, or analysts involved in the preparation of this report has provided services to the issuer for remuneration other than normal course investment advisory or trade execution services.

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