As the stock market continues its odd climb higher and investors begin to wonder about the future, commodities remain a hedge. Those supposedly “in-the-know” indicate that all portfolios should contain about 10% of a base metal position, most likely gold. The non-technical term for this market is going sideways so if there is no gold in your investment strategy there are some options available.
Rubicon Minerals Corp., a development stage base metals exploration company, works to find, develop and exploit base metals primarily in the United States and Canada. As of March 31, 2019 the company controlled over 650,000 acres of leases in northern Ontario, Nevada and Alaska.
In recent days the company has announced option agreements for a small part of its Red Lake gold district holdings in Ontario. The company’s overall holdings amount to 65,000 acres with the potential sale being comprised of approximately 6,600 acres. Although the sale is a nice cash infusion for the company, it is the prospects and improvements to the district that it speaks to more than the low cost high grade product that the district represents. The sale has fleshed out potential of the district, producing over 30 million oz. of gold since the mid-1960s (600,000 annually), and indicated that improvements to infrastructure that have hampered year-round mining have been addressed. In past seasons there was just a seasonal logging access road. Today, the road has been improved to support year round mining activities, making the property that much more attractive.
Being a development stage mining company, one might not think that Rubicon would be as far along in its development as it is. For the most part, the company is an underground mining company now focusing on its Red Lake F2 project. With as many acres as the company controls, and its development work at 1,000 feet below ground, it has been remarkably restrained in its cash burn. Although exploration is just that, the company is working in known gold production regions. If gold can maintain its recent price rise, there is little reason to believe that Rubicon Minerals will not be able to benefit with its fully built out Canadian operations. It may be a bit longer than an investor may like, but as far as development stage mining companies are concerned this one deserves a look.
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