Here are some excerpts pertinent to SFMI from an interesting article... See the link for the complete article... Thanks to HonestArnie over at the IV Precious Metals board... My highlights...

Rubicon (from seeking Alpha)

http://seekingalpha.com/article/229349-rubicon-s-tipping-point?source=feed

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There is a high probability that many investors in Rubicon Minerals (RBY) (“Rubicon”) are making Rubicon buy/sell investment decisions on the basis of incorrect information; namely, the number of contained ounces of gold in the company’s F2 Gold system. A current equilibrium in the Rubicon stock price exists although at least some market participants are using wrong information regarding gold resources. Based on Rubicon’s exploration and development plans, several tipping points affecting the Rubicon stock price have a reasonable probability of occurring between October 12, 2010 and the end of Q1 2011. The tipping point event will necessarily trigger a rapid adjustment in the Rubicon stock price -- in my opinion; the odds strongly favor a rapid rise in stock price.

There are a few ways for investors to take advantage of the current mispricing of Rubicon shares. Let me explain.

Background

Rubicon Minerals is the 100% owner of the Phoenix project in the Red Lake gold camp in Ontario, Canada. The Red Lake camp is also the location of Goldcorp’s (GG) Red Lake mine which has a long history of high grade gold production as well as being one of Goldcorp’s lowest cost producing mines.

The Phoenix project is located approximately 6 kilometers from the Goldcorp mine and hosts the F2 Gold system Rubicon discovered in 2008 the geology and chemistry of which closely mirrors that of the Goldcorp Red Lake mine complex. As of October, 2010, Rubicon has not provided a NI43-101 compliant resource estimate for the F2 Gold system although earlier NI43-101 reports on the Phoenix project indicated fewer than 100K ounces of Inferred resource. Somehow, presumably on the basis of the F2 Gold system discovery, Rubicon has attained a market capitalization on the order of C$1,000 million.

The September 2010 Technical Report Update on Exploration Activities (to July 31, 2010) for The Phoenix Gold Project (NTS 52N/04), by Peter T. George (Geoex Limited) states:

Based on GEOEX’s review of the available information for the F2 Gold System, the Author [Peter George] concludes the following:

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Rubicon stated at its 2010 AGM (May 31, 2010, here .pdf ) that it is working towards a Q1 2011 go-forward decision to start mining the F2 Gold system in 2012. To this end, Rubicon has a 335m shaft built and is in the process of completing a 450m drift from the 305m level of the shaft into the F2 Core zone which, according to a September, 2010 Rubicon presentation (here .pdf), is expected to be complete in October 2010.

Bear in mind that because the F2 Gold system outcrops under a lake, the drift into the F2 Core zone will be the first in situ inspection of the F2 Gold deposit. Rubicon is also planning to complete bulk samples of the F2 Core in the December / January timeframe. By the end of Q1 2011, Rubicon expects to have completed a total of 240,000 meters of F2 drilling. As well, the company is targeting completion of the permitting required to support 2012 production by Q1 2011. Per the 2010 AGM, grid power availability on site is planned for Q3 2011. The necessary road access to the mine site already exists.

As of September 2010, Rubicon had C$89M in cash - not enough to start production in 2012, but certainly enough to support a 2012 production go forward decision in Q1 2011 as well as delivery options on the production equipment. Given the infrastructure already in place at Phoenix, which includes good road access from the nearby town, a tailing pond, shaft, hoist, drift into the F2 Core zone (expected October, 2010) as well as planned grid power access by Q3 2011, capital expenditures required to start production are expected to be modest and the risks correspondingly low as well.

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Market Disconnect

During a September 29, 2010 interview, on the BBN program Market Draw (here), Charles Oliver, senior portfolio manager at Sprott Asset Management, responded to a listener’s question regarding the possibility of a Rubicon takeover bid (approximately 13:10 minutes into the video segment). Mr. Oliver’s comments strongly suggest that there are significant differences among analysts as to the amount of gold contained in the F2 Gold system. Because of this uncertainty, Mr. Oliver’s fund had sold its investment in Rubicon - Sprott Asset Management’s investment was above SEC’s reporting threshold in 2008 - locking in a significant profit in the process.

If we apply Rubicon’s current stock price, and assuming a fully diluted share count of 221.6M shares, as well as a share price of US$4.00, and a conservative market capitalization of US$300 per ounce of gold in situ, we see market expectation in the Phoenix project of roughly 3M ounces of gold. However, given the prices paid in recent acquisitions by Kinross (KGC) and Goldcorp, plus the expected high grade ore in the F2 Gold system, a market capitalization of US$450 per ounce of gold in situ would not be unreasonable, which in turn suggests a market expectation of a deposit size of roughly 2M ounces.

Non-conventional analysis based on Rubicon disclosures and general knowledge of Red Lake type gold deposits suggests a much higher estimate of in situ gold ounces. One such estimate is available from this author, (see the GoldMinerPulse Rubicon Minerals Report here), and still others at the popular Yahoo Rubicon board suggest the gold content is more than 10M ounces.

Analysts are uncomfortable with unconventional analysis no doubt because there are so few Rubicon precedents for a company with a billion dollar market capitalization, with drill results approaching 240,000 meters with many high grade intercepts and all without a supporting NI43-101 complaint resource disclosure. Interestingly enough, the Goldcorp’s multi billion dollar take over of the Gold Eagle Bruce Channel deposit, which is less than 15 kilometers from the Phoenix deposit, is one such example - Gold Eagle did not have a NI43-101 compliant resource disclosure and to this day Goldcorp has not issued a resource estimate on the Brue Channel deposit. The differences between Gold Eagle and Rubicon are in Rubicon’s favor - Rubicon has more drill results, better infrastructure, and is more advanced in development. Analysts unlike gold mining companies are not good gamblers, it seems. The trigger for Goldcorp’s takeover of Gold Eagle is widely believed to be a result of Agnico-Eagle's (AEM) taking a greater than 10% stake in Gold Eagle.

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Rubicon Stock Price Tipping Points

A future tipping point in Rubicon stock price will occur when a more definitive or a traditional resource estimate is disclosed. When this happens analysts and investors will adjust their expectations according to the company’s in situ gold ounces, triggering a rapid stock price adjustment either down or, more likely in my view, up. Although Rubicon has not announced any plans to release such an estimate, it would not be unreasonable to expect one at the end of Q1 2011 to support their go-forward decision on 2012 production.

A tipping point may also be triggered by an expert opinion similar to the one described in the 2008 Gold Eagle Mines news release, “Bruce Channel Exploration Target Potential”, which contains the following quote:

In Mr. George’s opinion, the exploration target potential of the Bruce Channel, based on the drilling completed to the end of 2007, is 14.1 million tonnes to 16.5 million tonnes grading between 20 grams gold per tonne to 25 grams gold per tonne, yielding an in-situ potential of between 9.0 million to 13.3 million ounces of gold.

Coincidentally, the Gold Eagle Mines opinion was prepared by the same Mr. George who wrote the September, 2010 Rubicon Technical Report in support of the secondary share offering prompted by the sale of Mr. McEwen’s 21% holdings.

Another tipping point might occur in Q1 2011 when the results from the December / January bulk samples of the F2 Core zone are expected to be released. Mr. Oliver, the Sprott Asset Management senior portfolio manager, feels that ore grade is the biggest uncertainty. Mr. George, with 40 years of continuous experience in the mining industry, also believes a bulk sample is a critical requirement for producing a reliable deposit grade estimating of for an F2 type system. Results of an F2 Core zone bulk sample will reduce uncertainty. According to Mr. Oliver, the current grade expectations of analysts range from 1/3 to ½ ounce per ton.

A takeover bid could also be a tipping point trigger with Goldcorp, given its existing infrastructure at Red Lake, a most likely candidate although, as Mr. Oliver noted, Goldcorp is already very busy with its recent acquisitions, including Gold Eagle Mines and Andean Resources (ANDPF.PK). The gold mining industry has been very active in terms of acquisitions in 2010 as high grade deposits in mining friendly environments are becoming harder to find.

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