04 February 2008 Media Release VALE TO INCREASE STAKE IN RUBICON RESOURCES AND UNDERPIN EXPLORATION AT WARBURTON BASE METALS PROJECT • Vale to become Rubicon’s biggest shareholder by subscribing for 4 million Rubicon shares at $0.25 per share • Vale to spend up to $3 million on exploration to earn 51% of Warburton project over three years • Vale may earn up to 75% of Warburton by sole funding all work up to completion of bankable feasibility studies Rubicon Resources Limited (Rubicon) is pleased to announce it has entered into a landmark Share Subscription Deed and Evaluation and Farm-in Agreement over its Warburton Project with CVRD Australia EA Pty Limited (CVRD EA), a wholly owned subsidiary of Vale (formerly CVRD), the world’s second largest mining company by market capitalisation. Under the terms of the Share Subscription Deed, CVRD EA will immediately subscribe for four million Rubicon shares at a price of $0.25 per share, thereby raising $1 million. The transaction will increase Vale’s stake in the company to approximately 8%, making it Rubicon’s single largest shareholder. Under the terms of the Evaluation and Farm-in Agreement, Rubicon will expend $1 million on the initial evaluation and exploration of its Warburton project over a maximum period of 18 months. An Evaluation Work Program will be agreed between Rubicon and Vale and managed and implemented by Rubicon. At the end of this evaluation period, subject to obtaining CVRD EA Board approval, Vale will spend $3 million over a three year period on further exploration and potential development. Upon spending this $3 million, Vale may exercise an option to enter into an Exploration Joint Venture Agreement with Rubicon, thereby earning 51% of the project. Vale may proceed to a 70% interest in the project by sole funding exploration and development studies up to the commencement of a Bankable Feasibility Study (BFS). Vale may earn an additional 5% interest in the project by sole funding the BFS. Rubicon cannot be diluted below 25% equity before the completion of a BFS. Rubicon Managing Director, Mr Peter Eaton, said that the agreements facilitated a number of positive outcomes for Rubicon. “The Warburton Project is a large and remote project area where our immediate target is a world-class copper deposit. 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. Native Title access agreements with the Ngaanyatjarra people are in place for all of the western leases, which will enable the commencement of active exploration programs in the 2008 field season.” “This agreement secures initial exploration funding for the project, the involvement of a major partner that will be providing technical input and resources and the strong potential for ongoing funding of a major base metal exploration and development project right through to the completion of a successful BFS.” “Vale is already a shareholder through the initial float of Rubicon and this placement at a significant premium to market price will make it the largest Rubicon shareholder with an 8% holding. Vale is the world’s second largest mining group and we welcome the input that this strategic investment in Rubicon will give to the Warburton project. The Warburton project area subject to the joint venture comprises 3,200km2 of exploration licences within the remote western Musgrave Province in Western Australia. The project area is analogous to the South Australian Gawler Craton-Stuart Shelf and has the potential for Iron Oxide Copper Gold Uranium mineralisation (eg. Olympic Dam and Prominent Hill) as well as sediment-hosted stratabound copper deposits (eg. Mt Isa and White Pine, Michigan). The project area is largely unexplored other than a program completed by WMC Limited in the late-1960’s which defined significant copper occurrences. A fuller description of the project is appended. For more information on Rubicon Resources please contact: Peter Eaton Managing Director T: 0407 983 484 John Phaceas Porter Novelli T :61 8 9386 1233 About Rubicon Resources Rubicon listed on the ASX in February 2007, raising $10 million. The company controls 11,000 km² of highly prospective tenements in seven project areas located in Western Australia and Queensland (Figure 1). The target commodities are specifically gold, copper and zinc, along with other base metals. The Company’s current portfolio is balanced with a mix of high reward, higher risk projects together with Goldfields projects with known gold mineralisation. The Company’s key projects consist of large contiguous holdings in well mineralised provinces. The three major projects comprise Warburton and the Desdemona and Yindarlgooda projects (3,000 km²) located in the Kalgoorlie Goldfields. Rubicon is aggressively exploring its project areas, focusing in 2007 on the Figure 1 Rubicon Project Locations Yindarlgooda and Desdemona projects. Rubicon has a Board and management team with strong track records and extensive experience in exploration, international project acquisition, resource development and mine management. At completion of the share issue to Vale, Rubicon will have 80 million shares on issue and cash reserves of approximately $7.2 million. Rubicon has an exploration budget of up to $4 million for the 2007/08 year. Warburton Project The Warburton Project is located at the Warburton Community in the far western Musgrave province, approximately 750 kilometres northeast of Kalgoorlie in Western Australia. The Project comprises 12 exploration licence applications totalling approximately 3,200km2 that are subject to the option and joint venture agreements. The Project is sub-divided into the Warburton Copper area, the Gunbarrel area and the Caesar Hill area (Figure 2). The project area was identified as being prospective for Iron Oxide Copper-Gold-Uranium (IOCGU) mineralisation (e.g. Olympic Dam, Ernest Henry, and Prominent Hill) and sediment-hosted, stratabound copper mineralisation (eg. Mt Isa and the White Pine deposits in Michigan, USA). The Caesar Hill tenement is also prospective for magmatic nickel-copper-PGM mineralisation (eg. BHP Billiton's Babel-Nebo deposits). The West Musgrave area is considered by Rubicon as highly prospective based on the following: • The host rocks are mid-Proterozoic, continental rift-related sequences, which typically host many of the world's large base metal deposits, with volcano-sedimentary sequences prospective for base metals and gold. • The Giles mafic-ultramafic intrusive Complex hosts nickel-copper-platinum group elements (PGEs) mineralisation at Babel and Nebo and copper mineralisation is known at Warburton and the Tollu prospect to the east. • Previous exploration has displayed positive indications of alteration and copper mineralisation styles consistent with IOCGU deposits (eg. Olympic Dam). • The area is genuinely under-explored due to its remoteness, large tracts of covered terranec
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