Two hundred miners at Rubicon Minerals’ advanced Phoenix Gold Project were laid off on Nov. 3 after the Toronto-based miner decided to shutter underground development operations in Red Lake.
The company is calling it a temporary suspension of activity, which also affects 110 contractors and, overall, approximately 87 per cent of the entire project workforce.
It’s part of a cost-cutting plan while Rubicon goes back to the drawing board to come up with a new mine implementation plan.
Rubicon attributes the suspension to the complex geological structure in the Red Lake camp.
The company, which poured its first gold bar last June as it continued underground development, said it needs to go back to the drawing board.
SRK Consulting will work with the company to work on a new mineral resource estimate and come up with an improved mine implementation plan.
"Our job is to maximize value for our shareholders,” said Michael Winship, Rubicon’s interim president-CEO in a statement. “After conducting an initial assessment of the project following my appointment as interim CEO, we believe that we need to better define the value of the deposit with further work.”
Winship said during a trial stoping period, its F2 Gold Deposit proved much more geologically challenging then was first understood based on historical drilling data.
Winship said he’s focused on putting the right leadership team and building the right plan to achieve profitability.
He served on Rubicon’s board of directors when he was suddenly appointed to the top job following the abrupt departure of Michael Lalonde last month.
The company has a stockpile of 11,000 tonnes of mineralized material, which it expects to process in November.
"We believe in the potential of the Phoenix Gold Project," said Winship. "We have high-grade gold mineralization with extensive infrastructure, in one of the top producing gold camps in the world. Similar to other high-grade, narrow-vein, underground gold deposits, the geology can be quite challenging and requires additional analysis to be fully understood.”
