Rubicon Minerals Completes Restructuring Transaction; Shares to Resume Trading on TSX

Rubicon Minerals Corporation (TSX: RMX) has successfully implemented its refinancing and restructuring transaction (the "Restructuring Transaction") pursuant to a plan of compromise and arrangement (the "Plan") under the Companies' Creditors Arrangement Act (Canada)("CCAA").

"I would like to thank the Rubicon team and our advisors for their efforts in the successful implementation of the Restructuring Transaction," stated George Ogilvie, P.Eng., the new President and Chief Executive Officer of the Company. "My vision is to systematically explore the F2 Gold Deposit over the next 18 to 24 months to gain a better understanding of the geology and potentially grow the mineral resources. We have strengthened the Board and management team to provide a fresh perspective on the Company and its assets. We have a strong balance sheet that will allow us to restart activities at the Phoenix Gold Project. We continue to believe in the exploration potential of the Phoenix Gold Project and the land packages in Red Lake, Nevada and Utah."

Implementation of the Restructuring Transaction resulted in:

• The appointment of George Ogilvie, P.Eng., as President and Chief Executive Officer of the Company and the addition of Michael Willett, P.Eng., as Director of Projects;

• The appointments of Peter R. Jones, P.Eng., Dr. David A.S. Palmer, Ph.D., P.Geo., and Mr. Ogilvie to the Rubicon Board of Directors;

• The receipt of C$45,007,200 (gross amount, before fees) from the equity offering for 62.79% of the equity (or 33,840,000 common shares) of the Company, including Mr. Ogilvie's investment of C$500,000 (or approximately 0.70% of the equity) in the Company;

• The reduction in the amounts outstanding under the loan facility (the "CPPIB Credit Loan Facility") with CPPIB Credit Investments Inc. ("CPPIB Credit") to C$12.0 million (from approximately C$68.4 million), the extension of the maturity date to December 31, 2020, and interest payments with an effective annual interest rate of 5.0% paid-in-kind by the Company on maturity. The CPPIB Credit Loan Facility can be voluntarily prepaid at any time without premium or penalty and certain covenants and event of default provisions have been amended;

• In exchange for the reduction of the amounts outstanding under the CPPIB Credit Loan Facility, the receipt by CPPIB Credit of 26.97% of equity (or 14,536,341 common shares) in the Company and a cash payment of C$20.0 million;

• The private sale of 4,536,341 Rubicon common shares by CPPIB Credit to BMO Capital Markets, at a price of C$1.33 per common share for gross proceeds of C$6,033,333.53 to CPPIB Credit, completed immediately following the completion of the Restructuring Transaction. Following the sale to BMO Capital Markets, CPPIB Credit will hold 10,000,000 Rubicon common shares (or 18.56% of equity) in the Company;

• Common shares held by existing shareholders (prior to the Restructuring Transaction) were consolidated based on a ratio of approximately 162.1 pre-consolidation Rubicon common shares to one post-consolidation common share. In aggregate, existing shareholders have retained approximately 4.65% of the equity (or 2,506,265 common shares) in the Company;

• The consolidation of the outstanding common shares and issuance of new common shares of the Company resulting in 53,890,125 common shares outstanding;

• The exchange of the Gold Stream Facility with Royal Gold for:
  • 5.58% equity interest (or 3,007,519 common shares) in the Company;
  • 1.0% Net Smelter Royalty ("NSR") on all of the Company's land holdings in Ontario, including the Phoenix Gold Project, subject to a maximum 4.0% NSR on any one property;
  • 2.5% NSR on the Company's Nevada/Utah properties, subject to a maximum 5.0% NSR on any one property; and
  • an assignment of Rubicon's rights to acquire any portion of an existing NSR that is subject to a buyback provision and a right of first refusal in respect of any royalty, stream, participating interest in production or amount of gold or other minerals based on production, that the Company wishes to offer for sale in relation to the Company's current properties.

• Unsecured creditors with valid claims under the Plan received at their option either (i) the lesser of the amount owed to such creditor or C$5,000, or (ii) 2.5% of the amount owed to such creditor, subject to certain restrictions; and

• Additional adjustments to the Company's assets and liabilities (compared to September 30, 2016) as a result of the implementation of the Restructuring Transaction:
  • A cash balance on closing of approximately C$27 million (including C$3 million of restricted cash that the Company expects to return to cash in 2017), compared to a cash balance of $6.8 million on September 30, 2016;
  • Disposal of approximately C$6 million in property, plant, and equipment (Property, Plant, and Equipment balance of $31.7 million on September 30, 2016) and a reduction of C$5 million in finance lease obligations (finance lease obligation balance of $9.8 million on September 30, 2016) primarily as it relates to leased equipment at the Phoenix Gold Project. The Company eliminated certain finance lease obligations, and corresponding assets, as part of the Restructuring Transaction;
  • Compromise of approximately C$7.7 million in long-term liabilities related to agreements to secure long-term power for the Phoenix Gold Project. The Company eliminated its provision for power agreements as part of the Restructuring Transaction;
  • Elimination of approximately C$98.1 million in liabilities related to the Gold Stream Facility; and
  • The reduction in the CPPIB Credit Loan Facility to C$12.0 million due on December 31, 2020 (from approximately C$68.4 million on September 30, 2016).

Summary of Rubicon Common Share Ownership

Resumption of Trading

The Company has been notified by the TSX that its common shares will remain listed on the TSX under the ticker symbol RMX, and under a new CUSIP #780911509 and ISIN #CA7809115099. Trading of Rubicon common shares is expected to resume on the morning of Thursday, December 22, 2016 at market opening.

Management Changes

With the completion of the Restructuring Transaction and as Rubicon commences its exploration activities on a more streamlined basis, Glenn Kumoi, LL.B., Vice President, General Counsel and Corporate Secretary, has decided to step down from his role and will continue to provide advice to the Company as a consultant on a part-time basis. Howard Bird, P.Geo., Vice President, Exploration, has left Rubicon to pursue other opportunities. Julian Kemp, BBA, CA, C.Dir., remains on the Board of Directors as its Chair.

Mr. Ogilvie commented, "We would like to thank Glenn for his contribution over the past 7 years and his leadership of the legal team on the completion of a complex Restructuring Transaction. He will be missed as an officer of the Company. We would like to thank both Glenn and Howard for their efforts during an exhaustive strategic review process that has led to a successful outcome, putting the Company on a better path forward. We wish them success on their future endeavours." 

Source: Rubicon Minerals