2 Min Read
Jan 11 (Reuters) - Canadian gold miner Rubicon Minerals Corp cut the gold reserve estimate for its Phoenix mine in Ontario by 86 percent and said it was evaluating strategic options including a sale, sending its shares down 60 percent.
Rubicon said on Monday the inferred gold reserves at the mine was now 0.3 million ounces, compared with the 2.2 million ounces it estimated in 2013.
"Not only is this a huge negative development for RMX, but is it also a huge black-eye for the industry," Mackie Research Capital analysts wrote in a note.
"We are totally shocked ... particularly after so many engineering firms have reviewed the data," the analysts wrote.
The miner said the drop in resources was due to new drilling information and changes in modeling.
The company suspended operations at the mine in November and said it temporarily laid off about 200 employees and 110 contractors, accounting for 87 percent of the total workforce.
Rubicon said it has hired BMO Capital Markets and TD Securities to assist in evaluating strategic alternatives.
Rubicon shares were down 60 percent at 5 Canadian cents. (Reporting by Amrutha Gayathri in Bengaluru; Editing by Don Sebastian)