Rubicon Minerals temporarily suspends mill operations
Rubicon Minerals (TSX:RMX) stock dropped by a third after the Ontario government temporarily suspended mill operations at the company's Phoenix gold project to treat elevated ammonia levels and discharge sufficient water from the tailings management facility.
Shares in Rubicon fell by 31% to 52 cents a share.
The company said underground development still continues despite the closure and mill operations will resume shortly. The order to close was issued by Ontario's Ministry of Environment and Climate Change.
"The Rubicon Management team and the Board of Directors take these matters seriously and are committed to operating at the highest environmental standards," stated Michael Winship, interim President and Chief Executive Officer of Rubicon.
"We have made progress towards treating the elevated ammonia levels in the effluent and have made it a priority to resolve these issues in a timely manner. Our underground operations continue uninterrupted during this time and we hope to resume mill operations shortly once we have met all the requirements outlined by the MOECC."
The company summarized the order as temporarily suspending mill operations and the discharge of mill process wastewater to the tailing management facility until an interim ammonia treatment system can be commissioned and proven effective to the MOECC's satisfaction. Rubicon Mineals says the process should take two-to-four weeks.
The Phoenix Gold Project is located in Red Lake, Ontario. Gold production is slated for this year at an initial production at 1,250 tonnes per day.
Full statement from the company is below.
Rubicon Minerals Temporarily Suspends Mill Operations; Underground Operations Continue During the Trial Stoping Period
TORONTO, ONTARIO–(Marketwired – Oct. 5, 2015) – Rubicon Minerals Corporation (TSX:RMX)(NYSE MKT:RBY) ("Rubicon" or the "Company") has been ordered by the Ministry of Environment and Climate Change ("MOECC") on September 30, 2015 to temporarily suspend mill operations at the Phoenix Gold Project (the "Project") to treat elevated ammonia levels, discharge sufficient water from the tailings management facility ("TMF"), and to upgrade the TMF, under specific timelines. The initial order received on September 8, 2015 ordered Rubicon to commission new interim and permanent ammonia treatment systems for the effluent held in its TMF and discharge a portion of treated effluent. It also ordered Rubicon to undertake other operational and reporting obligations, including construction upgrades to the TMF. The initial order was amended by the MOECC on September 14, September 18, and September 30, 2015 to allow the Company time to upgrade its facilities in order to discharge treated effluent.
The Company has been utilizing alternative technologies to address the ammonia levels in the TMF. Rubicon has made progress with respect to treating the effluent and believes it can resume mill operations in a timely manner. Rubicon discharged an initial volume of treated effluent on September 30, 2015.
At the current time, underground development, construction and trial stoping continue uninterrupted.
"The Rubicon Management team and the Board of Directors take these matters seriously and are committed to operating at the highest environmental standards," stated Michael Winship, interim President and Chief Executive Officer of Rubicon. "We have made progress towards treating the elevated ammonia levels in the effluent and have made it a priority to resolve these issues in a timely manner. Our underground operations continue uninterrupted during this time and we hope to resume mill operations shortly once we have met all the requirements outlined by the MOECC."
Initial Order – September 8, 2015
On September 8, 2015 the MOECC issued a Director's Order to Rubicon (the "September 8, 2015 Order"), the key components of which were to require Rubicon to:
1) Commission and implement a new interim ammonia treatment system so that 140,000 m3 of treated effluent can be discharged from the TMF to the natural environment before November 30, 2015;
2) File an application for the approval of a new permanent ammonia treatment system and have the system installed, commissioned, and operational by April 1, 2016;
3) Construct the North-East Dam, an upgrade to the current TMF, for the Project by November 15, 2015;
4) Undertake other steps to control runoff and ensure that the TMF Maximum Operating Water Level is not exceeded; and
5) Submit a variety of routine monitoring analyses, reports and studies to the MOECC.
The September 8, 2015 Order was amended on two occasions to adjust the date for the commencement of the Item (1) discharge.
Amended Order – September 30, 2015
On September 30, 2015, a third amending order was issued by the Director (the "Director's Order Amendment No. 3"), the key components of which were to amend the September 8, 2015 Order to:
1) Allow Rubicon to commence the discharge of the 140,000 m3 on September 30, 2015;
2) Require submission of a report by October 9, 2015 containing various updates and engineering opinions; and
3) Suspend the discharge of mill process wastewater to the TMF until Rubicon can satisfy the MOECC of its progress towards the implementation of ammonia treatment measures.
Summary Effect of the Orders
The net effect of the orders is to temporarily suspend mill operations and the discharge of mill process wastewater to the TMF until the interim ammonia treatment system can be commissioned and proven effective to the MOECC's satisfaction. Based upon the current advice of our engineering consultants, this process is expected to take two-to-four weeks. The Company's engineering consultants are also reviewing the water balance of the TMF and there is the potential that the required discharge of treated effluent could be significantly lower than 140,000 m3, due to low precipitation during the recent months and other factors. The Company is required to meet its discharge obligations no later than November 30, 2015. Rubicon will provide additional updates with respect to the progress of its activities.
Underground Activities and Trial Stoping Continue Uninterrupted
All underground development, construction, and trial stoping activities are continuing during the suspension of mill operations. Mineralized material from trial stoping will be stockpiled on surface in anticipation of the resumption of mill activities. Underground development and construction activities continue and the Company will provide a Project update, including the results of the trial stoping, within the coming weeks.
RUBICON MINERALS CORPORATION
Michael Winship, Interim President and Chief Executive Officer