Battle North Gold Corp. (fka BNAUF)

[silver100]

Rubicon Says Gold Deposit May Rival Campbell Complex (Update2)

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By Rob Delaney

Aug. 19 (Bloomberg) -- Rubicon Minerals Corp. Chief Executive Officer David Adamson said gold resources at the company’s Phoenix deposit in Canada may rival Goldcorp Inc.’s nearby Campbell mine.

“The size of the system we’re currently defining is as large as the Campbell deposit, and the Campbell system was producing for well over 40 years,” Adamson said in a telephone interview yesterday. “The more we drill, the larger this system gets.”

Rubicon and other gold producers aim to increase gold reserves and benefit from the precious metal’s price, which climbed 17 percent in the year through yesterday. Gold reached a record $1,033.90 in March 2008 and has gained for eight straight calendar years.

The Campbell mine, one of several that Goldcorp bought in 2006 for a combined price of $1.49 billion, has produced more than 11 million ounces of gold since 1949, said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York.

“Major producers need to replenish their pipelines and are constantly on the lookout for big resources, and the number of 5 million-plus ounce deposits worldwide is only about 40,” Groenewegen said. Gold Arrow holds 100,000 Rubicon shares and none of Goldcorp’s stock, he said.

Rubicon rose 27 cents, or 9.3 percent, to C$3.17 at 12:04 p.m. in Toronto Stock Exchange trading. The shares earlier climbed as much as 10 percent, the largest intraday percentage gain since June 19. The shares have more than doubled this year.

Goldcorp Output

Goldcorp, the world’s second-largest producer of the metal by market value, posted output of 2.32 million ounces last year, according to the company’s 2008 annual report.

The Phoenix and Campbell deposits are located in northwestern Ontario’s Red Lake district. Rubicon is about halfway through a C$25 million ($22.8 million) exploration program at Phoenix, which will end in March, and has another C$35 million in reserve, Adamson said. The company’s largest shareholder is Goldcorp founder and former CEO Rob McEwen.

The Phoenix property may contain 3 million to 8 million ounces of gold, John Graham, a Macquarie Research analyst in Toronto, said in a note to clients yesterday. Graham initiated Macquarie’s coverage of Rubicon with an “outperform” rating and a C$5.50 target price.

To contact the reporter on this story: Rob Delaney in Toronto at [e-mail].

Last Updated: August 19, 2009 12:28 EDT