Each one in plain English, with the numbers worked through for a shareholder.
11 Jan 2016resource reserve update▼ BadMajor
SRK's rebuilt model cut indicated resources 91% to 106,000 ounces (0.492 Mt at 6.73 g/t) and inferred 86% to 307,000 ounces (1.519 Mt at 6.28 g/t) against the 2013 estimate, and Rubicon stated that the study it built the mine on "is no longer considered to be correct". The reason given: east-west D2 shear structures control the high-grade gold, which is far less continuous than the wider-spaced 2013 drilling had suggested. Phoenix produced 4,906 ounces from 57,793 tonnes in 2015 against the 2013 plan's 165,300 ounces a year, and the board hired BMO and TD Securities to look at a sale, merger or restructuring.
Reported 9,553 m of surface drilling in 21 holes north of the F2 deposit, testing the carbonate zone and a possible northern extension, together with an update on its Nevada properties.
Completed the 38,000 m infill programme, reporting high-grade intercepts in sparsely drilled ground at the north and south ends of the 244 m level, and started surface drilling to test a possible northern extension of the deposit.
Further infill results including 136.5 g/t gold over 4.0 m, again described as confirming the deposit's continuity and grade, with some intercepts falling outside the planned stoping blocks.
First results from a 38,000 m infill drilling programme aimed at converting inferred ounces to indicated between surface and the 610 m level. The company said the results confirmed the continuity of mineralisation it had expected.
Filed an amended and restated version of the June 2013 technical report, re-issued 28 February 2014 with the effective date unchanged. This is the specific document - effective 25 June 2013, issued 28 February 2014 - that Rubicon said in January 2016 "is no longer considered to be correct".
The SRK report itself, running to the resource model and mine plan behind the 2.19-million-ounce, 13-year case. It states plainly that the study is preliminary, includes inferred resources too speculative to be reserves, and that "there is no inference of mineral reserves" - Rubicon built and started the Phoenix mine without ever declaring one.
SRK's rebuilt estimate put indicated resources at 4.12 million tonnes grading 8.52 g/t gold (1.129 million ounces) and inferred at 7.45 million tonnes grading 9.26 g/t (2.219 million ounces), both at a 4.0 g/t cut-off - 111% more indicated ounces than 2011, but on far more tonnes at a lower cut-off and at roughly half the grade AMC had estimated. The new mine plan switched to longhole stoping for 2.19 million ounces over 13 years, a 27.0% after-tax return and a C$531m net present value, and disclosed a C$106m funding shortfall against C$118m of working capital.
The early-April estimate did not appear. Instead SRK said it was rebuilding the geological interpretation of the gold trends, which would also change the cut-off grade, and the result would be folded into a whole new preliminary economic assessment expected late May or early June.
Told the market that SRK Consulting's updated resource estimate for the F2 system was close to complete and would be summarised in early April. The 2011 estimate had been prepared by AMC; the rebuild was being done by a different consultant.
Shaft down to 552 m and mill building foundations being poured, with drilling returning 767.0 g/t gold over 1.0 m and extending the system to more than 1,600 m below surface. The optimisation studies meant to improve on the 2011 study were nearly finished, with an update promised in Q4 2012.
Final underground infill results included 55.8 g/t gold over 2.0 m and 198.6 g/t over 1.0 m. Underground drilling was halted so shaft sinking to the 610 m level could run without interruption; surface drilling aimed at extending the deposit continued.
More infill and expansion drilling on the F2 system: 156.9 g/t gold over 1.7 m and 152.4 g/t over 1.5 m from the WLB2 zone and 33.6 g/t over 3.0 m from the 122-10 zone, with 32,000 m still planned before the end of Q3 under the enlarged C$82.8m programme.
Surface and underground drilling returned 446.4 g/t gold over 2.0 m and 113.8 g/t over 2.9 m, and hit gold 1,511 m below surface, the deepest intercept at the project to that date. Part of the C$55m programme, which then had 41,000 m of its 68,000 m still to drill.
Committed to a 12-month, C$55m programme: extending the shaft from 338 m to 610 m, 600 m of new underground development on three levels, and 70,000 m of drilling, with the stated aim of proving enough additional indicated resources to support at least five years of production and keep the mine on track for a possible start in Q4 2013. C$3.6m went to long-lead orders including the SAG and ball mills.
Underground "9X" drilling south and northwest of the F2 core zone returned 61.6 g/t gold over 2.0 m and 37.7 g/t over 3.0 m. All of it post-dates the June 2011 study, so none of it is in that resource estimate.
The AMC study itself: indicated resources of 1.03 million tonnes at 14.5 g/t gold (477,000 ounces) and inferred of 4.23 million tonnes at 17.0 g/t (2,317,000 ounces) at a 5.0 g/t cut-off, supporting a conceptual 12-year, 450,000-tonne-a-year mine costing C$214m to build, with a 5% net present value of C$433m and a 28% return at US$1,100 gold. AMC warned that the estimated grades depend heavily on a small number of high-grade drill intercepts and that being able to find and mine those zones "presents both its greatest risk and greatest reward potential".
Filed the NI 43-101 technical report behind the preliminary economic assessment announced on 29 June 2011, prepared by AMC Mining Consultants with metallurgy by Soutex, and said it contained no material differences from that announcement.
The original AMC preliminary economic assessment: 477,000 indicated ounces declared for the first time, a 12-year mine at 1,250 tonnes a day producing 180,000 ounces a year at a mined grade of 13.87 g/t, C$214m to build, a 28% pre-tax return and a C$433m net present value at US$1,100 gold. The mine plan used 2.0 million ounces - 72% recovery of the resources then identified - at a 6.0 g/t mining cut-off. This is the study Rubicon built the Phoenix mine on.
The amended estimate came in lower: 5.5 million tonnes at 20.34 g/t for 3,597,000 inferred ounces uncapped, or 17.29 g/t for 3,057,000 ounces once high assays were capped - against the 4,007,000 ounces announced in November 2010, on the same drilling. Rubicon's resource had been cut by a quarter, at a regulator's insistence, five years before the model failed outright.
The British Columbia Securities Commission reviewed the technical report carrying the 4.0-million-ounce inferred resource and geological potential estimates, and Rubicon said it expected to file an amended report - the first time a regulator questioned the numbers underpinning the project.
Bulk sampling began in the core of the F2 system, with delineation drilling inside the 4.0-million-ounce inferred resource returning 544.5 g/t gold over 2.3 m.
First NI 43-101 resource: an inferred 6.2 million tonnes at 20.1 g/t gold for 4,007,000 ounces at a 5 g/t cut-off, prepared by Geoex on the polygonal method from 166,886 m of drilling in 237 holes to 31 July 2010, alongside a stated geological potential of 13.3-16.1 million ounces. Everything is inferred; there is no indicated or measured category and no reserve.
First results from the 27,000 m underground delineation programme, including 568.9 g/t gold over 2.5 m in a previously unrecognised north-east-trending subzone. Cross-cuts had by now physically exposed the core zone, and the drilling was outlining several discrete subzones trending at different angles - the structural complexity that the 2016 remodelling later put at the centre of its explanation.
