Rubicon Minerals stock price plunges following news of major equity financing

TORONTO – Rubicon Minerals shares (TSX:RMX) lost nearly a fifth of their value Thursday in the first trading since the Vancouver-based company announced a equity financing for its Ontario gold project.

The company’s stock closed down 35 cents or 19.23 per cent at $1.47 as more than 5.8 million shares traded hands.

Rubicon announced late Wednesday a deal with a group of underwriters to raise $100 million by issuing 64.6 million units at a price of $1.55 per unit.

Each unit includes one share and half a warrant. Each whole warrant entitles the holder to buy one share of the company for $2 for up to 12 months following the closing of the financing

The underwriters also have the option to buy an additional 9.69 million units.

If the underwriters exercise all their options, the number of Rubicon shares outstanding will increase by about 74.3 million, not counting those purchased through the warrants.

Prior to the financing announcement Rubicon had about 288.8 million shares outstanding.

Rubicon says the money raised will be used for its Phoenix gold project in Red Lake, Ont.