While it may be hard to pinpoint a single watershed moment at which a gold exploration project converts to a virtual guarantee of future mine production, this one has clearly passed the point of no return. Yes, Rubicon has crossed the Rubicon.
One could argue that the F2 deposit at Rubicon Minerals'
Another key milestone occurred just recently when the company issued a preliminary economic assessment for the project. Although the results were positive-- and therefore supportive of the project's path to production -- they did fall short of expectations. The stock pulled back violently in response, though my great expectations for Rubicon's long-term outlook remained undaunted.
After Wednesday, however, all of that disappointment and creeping uncertainty was erased in the blink of an eye. Mid-tier producer Agnico-Eagle Mines
After completing one of the industry's fastest production expansions on record, Agnico-Eagle's shares could use the injection of excitement that a stake in the Phoenix project will ultimately provide. Agnico reported lower gold production at higher costs for the second quarter than it had in the prior-year period, and saw its cash flow remain flat despite a 25% increase in the realized price of gold. Under the very capable direction of CEO Sean Boyd, the miner already possesses a slew of enticing equity investments in junior exploration companies, in addition to a high-quality pipeline of its own development projects that Boyd expects will be fully funded by existing cash and projected cash flow. Like the relatively stagnant stocks of fellow mid-tier miners Yamana Gold
For Rubicon, Agnico's investment comes as a tangible pat on the back for a job well done thus far, and significantly raises the outlook for a fast-track path to production. Long-standing speculation that Goldcorp
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 Agnico-Eagle Mines, AuRico Gold, Goldcorp, Rubicon Miunerals, and Yamana Gold. 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.