Disappointment is a byproduct of high expectations, and Rubicon Minerals (AMEX: RBY) just fell victim to some of the loftiest expectations in the business.

Ontario's Red Lake district is revered among gold investors as a geological trend that hosts some of the highest-grade gold deposits in the world. Goldcorp's (NYSE: GG) Red Lake mine enjoys steady-state ore grades of 26 grams per ton of gold, surpassing the industry norm by leaps and bounds.

Particularly after Rubicon began encountering ultra-high gold grades with the F2 zone of its Phoenix property in 2008, the stock garnered a broad following among investors eager to watch the deposit develop into the next Red Lake gold bonanza. Ironically, as proof was released of the F2 deposit's economic viability as a stand-alone mine, the company's stock careened to a 23% drop from Tuesday's close.

Rubicon's preliminary economic assessment, or PEA, for the F2 deposit envisions just more than 2 million ounces of gold production over a 12-year mine life, yielding 180,000 ounces annually at an average cost of about $519 per ounce. Using a conservative gold price of $1,100 per ounce, the project would generate an acceptable internal rate of return, or IRR, of 28%; though at current gold prices, a 48% IRR would make it a cash cow.

By any measure, Rubicon's F2 gold system is an exceptionally attractive gold project, with considerable underground development already in place. Importantly, the deposit remains "open in all directions," meaning that additional drilling near the existing resource offers a high probability of expanding the deposit over time. But none of these important attributes were in focus Wednesday after the PEA's release.

Instead, I suspect the noteworthy disparity between the 3.6 million ounces of inferred gold resource estimated within the company's amended report of March 31 and the 2.8 million total ounces estimated within the PEA offered the primary trigger for the market's disappointment. Although the PEA calculated a net present value of $933 million (5% discount rate) for the deposit at current gold prices, the $433 million value assessed for a $1,100-gold-price scenario made it a herculean task to support a $1 billion market cap. Research firm Dundee issued a double downgrade, dropping Rubicon straight from buy to sell and chopping its target price nearly in half to $3.63.

Though it's clear that Rubicon's shares are unlikely to meet the expectations I had when I included the stock among my top 10 for gold or silver in 2011, I intend to hold the stock for the long term. Meanwhile, I continue to target the exciting potential for expanding gold discoveries in Canada by Brigus Gold (AMEX: BRD), Claude Resources (AMEX: CGR), New Gold (AMEX: NGD), Northgate Minerals (AMEX: NXG), and Rainy River Resources (OTC BB: RRFFF).

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Brigus Gold, Claude Resources, Goldcorp, New Gold, Northgate Minerals, Rainy River Resources, and Rubicon Minerals. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.