Vale and Rubicon shake hands over Warburton Lorna Seatter -...

Vale and Rubicon shake hands over Warburton

Lorna Seatter - MINING NEWS
Monday, 4 February 2008

DIVERSIFIED explorer Rubicon Resources' shares leapt 20.7% to 17.5c in late morning trade, on news it has entered an agreement with mining giant Vale over Rubicon's Warburton base metals project in Western Australia's Musgrave province.

Under the deal, the world's second-largest miner, Vale, will become Rubicon's largest shareholder, holding 8% after subscribing for a further 4 million shares at 25c each.

Rubicon will raise $1 million from the subscription, which will fund an initial evaluation program at Warburton over 18 months.

After Perth-based Rubicon has completed the evaluation, Vale can opt to spend up to $3 million over three years for a 51% stake in the project.

The Brazilian miner can earn up to 75% in the project by sole funding a bankable feasibility study.

"The Warburton project is a large and remote project area where our immediate target is a world-class copper deposit," Rubicon managing director Peter Eaton said.

"While operating costs may be relatively higher in this part of Australia, this is offset by the enormous potential of exploring a part of one of Australia's truly unexplored Proterozoic provinces, where the only significant exploration program has already defined copper mineralisation."

According to Eaton, Native Title access agreements with the Ngaanyatjarra people are in place for all of the western leases and these will enable the start of exploration programs in the 2008 field season.

The Warburton project comprises 3200 square kilometres and has the potential to host iron oxide-copper-gold-uranium mineralisation.