VANCOUVER (CP) -- Stock in Rubicon Minerals Corp. [TSX:RMX] rose almost 40 per cent Monday after former Goldcorp Inc. [TSX:G; NYSE:GG] chairman and CEO Rob McEwen said he would take a major stake in the company and be a strategic adviser to management for at least two years.
Rubicon CEO David Adamson said the company has been active and well supported by the market, but McEwen brings cachet and understanding of investors' goals that will help the company move to the next level.
''We're looking to add adrenaline to that story,''Adamson said in an interview.
Rubicon holds exploration properties in the Red Lake area in Ontario, near Goldcorp's Red Lake mine.
''I think coming back to Red Lake adds a validation factor for what we're about and what we've been doing that probably couldn't be obtained from any other party,'' Adamson said of McEwen.
''Bringing McEwen back in to hopefully move Red Lake forward is going to give us more propulsion.''
Rubicon's stock was up 37 cents at C$1.22 on the Toronto stock market Monday afternoon.
McEwen said in a statement that Rubicon will have a strong cash position that will be used to carry out aggressive exploration.
''I am excited to be back in Red Lake and to be involved in the creation of a new Rubicon, which will have a great combination of properties in the low-risk North American gold districts of Red Lake, Alaska and Nevada,'' he stated.
Under the deal, McEwen will invest C$10 million for a combination of shares and warrants and agreed to sell to Rubicon a 200,000-hectare land package held by Evanachan Ltd., a company he controls, in the area of the Pogo gold mine in Alaska in exchange for more shares.
Rubicon will also acquire a 90,000-hectare land position in northeast Nevada, currently held by Lexam Explorations Inc. [TSXV:LEX] a company in which McEwen holds about a 50% stake, in exchange for shares.
After the deal is completed, Rubicon shareholders will own 58.6% of the company while McEwen's Evanachan Ltd. will hold 34.9% and Lexam will own 6.5%.
McEwen had said in November he was on the lookout for other opportunities after failing to force a shareholder vote to block a merger between Goldcorp and Glamis Gold.
Rubicon now will have large land positions in Red Lake, Ont., the Pogo District in Alaska and Elko County in Nevada.
Its 2007 exploration budget is C$8 million, with C$20 million in cash and no debt.
Rubicon controls 72,000 hectares of exploration ground in the Red Lake gold camp.
U.S. Gold owns the Tonkin Springs property, located in the very heart of the prolific Cortez Trend, encompassing 36 square miles.
US Gold said this week it has filed with securities regulators in the United States and Canada its formal offers to acquire all the outstanding shares of White Knight Resources Ltd. [TSXv:WKR], Nevada Pacific Gold Ltd. [TSXv:NPG] and Tone Resources Limited [TSXv:TNS]. See details.
In early March 2006, McEwen originally announced his intention to buy these companies. But after making only one formal offer to White Knight Resources, the bid was subsequently taken off the table due to regulatory issues.
This time, White Knight, Nevada Pacific and Tone Resources have all received formal offers. The forth member of the original takeover targets, Coral Gold, has been left off the list this time around in view of the SEC requirements that would need to be satisfied by Coral Gold.
(c) The Canadian Press 2006 With Resource Investor