June 29, 2011 / 3:08 PM / in 7 years

Rubicon Minerals tumbles after F2 Gold assessment

* Shares of Rubicon fall 16 pct on TSX

* Production, other metrics miss analyst expectations (In U.S. dollars unless noted)

TORONTO, June 29 (Reuters) - Shares of gold exploration company Rubicon Minerals (RMX.TO) fell 16 percent on Wednesday, after it outlined development plans for its F2 Gold system that fell well below some investor expectations.

Rubicon said its preliminary economic assessment indicated that annual gold production from F2 would be 180,000 ounces, with average gold grades of 13.87 grams per tonne. Initial capital expenditure on the project, with an estimated 12 year mine life, is expected to be $214 million.

TD Newcrest analyst Daniel Earle forecast in a note to clients earlier this week that the project would produce about 210,000 ounces a year over a 14 year period. Earle had expected average gold grades from F2 of 16 grams per tonne with initial capital costs of about $150 million.

Rubicon contends the preliminary economic assessment (PEA) is a good start and it indicates that F2 Gold is a potentially viable project.

“The deposit remains open in all directions and the PEA outlines a number of areas for potential future optimization,” Chief Executive David Adamson said in a statement.

The F2 Gold system is part of Rubicon’s 100 percent owned Phoenix gold project in Red Lake, Ontario. The area is home to the largest gold mine in Canada — Goldcorp’s (G.TO) Red Lake asset, which produced more than 700,000 ounces in 2010.

Shares of Rubicon were down 74 Canadian cents at C$3.94 in on Wednesday morning. (Reporting by Euan Rocha; editing by Rob Wilson)

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