Thy sin’s not accidental

Rubicon (RMX) (RMX.to) crossing shareholders

The last time the consistently stupid Louis Lobito Little Wolf James of Casey Stansberry Casey Research pumped Rubicon (RMX) (RMX.to) to his band of unsuspecting sheep a few weeks ago, I decided to go beyond my usual harrumphing and checked out the basics on the stock, including the latest financials and corp presentation, just in case he was having one of his stopped clock moments. During the scan overview I was pretty sure that I read RMX was fully funded to production now and…
…yup, on re-checking page 18 of its April 2015 presentation, that was certainly the message. Which begs the question as to why RMX wants to dilute shareholders by taking out a $50m senior secured loan today.

TORONTO, ONTARIO–(Marketwired – May 14, 2015) – Rubicon Minerals Corporation (RMX.TO)(NYSE MKT:RBY) (“Rubicon” or the “Company”) has entered into a financing agreement with CPPIB Credit Investments Inc. (“CPPIB”), a wholly-owned subsidiary of Canada Pension Plan Investment Board, for a US$50 million secured loan facility (the “Loan Facility”). The proceeds from the Loan Facility will be used for the development of the Phoenix Gold Project (the “Project”) and to provide adequate working capital and flexibility to optimize the Project during the ramp-up period to potential commercial production continues here.

And that comes with a bonus prize of 10m warrants at $1.71 (hint: For those of you who believed that pumper Lobito and swallowed his spiel whole, ask around and find out what the word ‘overhang’ means in terms of company stock derivatives). The bottom line is not a new one on these pages, but it’s one that’s served us well as we tiptoe through the junior mining minefield: All any junior has is a story, that’s the base of its whole net value. If the company can’t even keep its story straight, there’s nothing there.

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