Red Eagle Mining Completes Construction of San Ramon Gold Mine During Q3 2016
Red Eagle Mining Corporation (TSX: R /OTCQX: RDEMF) is pleased to announce financial results for the three and nine months ended September 30, 2016 and business highlights to date, including advancements at Red Eagle Mining's San Ramon Gold Mine in Antioquia, Colombia. Highlights include:
- First gold poured at the San Ramon Gold Mine (news release dated November 7, 2016);
- Graduation to the Toronto Stock Exchange and trading begins under symbol "R" (news release dated November 3, 2016);
- CB Gold Inc. stake is increased to 92% (news release dated November 2, 2016);
- Trading begins on the Lima Stock Exchange under symbol "R" (news release dated September 20, 2016);
- Detailed ore production stope delineation drilling at the San Ramon Gold Mine (news releases dated June 1, 2016, August 16, 2016, September 7, 2016, and September 14, 2016);
- Completed private placements of common shares for proceeds of approximately $20,000,000 (news releases dated April 21, 2016 and July 14, 2016); and
- Acquired the high grade Santa Ana historic silver mine through Red Eagle Mining's controlled public subsidiary CB Gold Inc. (news release dated August 10, 2016).
Development and Construction of the San Ramon Gold Mine and Mill
By mid-November 2016, the commissioning process had been completed by the EPCM contractor with minor modifications remaining to be completed by Red Eagle Mining. The processing facility has reached a steady operating throughput capability and has poured a nominal quantity of gold. Commercial production is expected in the first quarter of 2017 as production ramps up. Underground mining is progressing at an increasingly rapid rate as a result of the opening up of numerous ore development headings.
The construction of the San Ramon Gold Mine and Mill remained within budget and on schedule within the 14-month construction period to first gold in November 2016.
- Mine operations have continued to adopt best practices in safety with many awareness programs in place and monitoring occurring on a continuous basis. The results have been demonstrated in the exceptional safety statistics to date;
- The main access and production declines have progressed to over 750 metres in length. Ore development is now focussed on stoping blocks on the 50 metre and 75 metre levels;
- Initially, low grade ore was used to commission the process plant. The current ore feed to the process plant is directly from resource ore from the ore development headings and stopes; and
- Mine staffing has reached planned levels of approximately 160 individuals.
- All concrete pours, platework, steelwork, mechanical equipment installation, piping, electrical and instrumentation works are complete, and the construction contractor has achieved practical completion;
- Commissioning commenced during September and is expected to be completed in December. The processing facility has reached a steady operating throughput capability, with interruptions for stoppages for minor modifications, performance reconciliations and maintenance, which is typical with all similar start-ups;
- Phase 2 earthworks on the dry waste management facility is continuing. Downstream sediment pond embankment and seepage collection pond dyke construction have been completed. This on-going construction is not impeding the deposition of tailings into the facility; and
- Red Eagle Mining achieved its first gold pour in November 2016.
Based on Red Eagle Mining's projections and estimated construction progress made to date, the construction of Red Eagle Mining's San Ramon Gold Mine and Mill is expected to be funded through to full commercial production. Red Eagle Mining has a cash balance of approximately US $11 million and estimates approximately US $4 million of costs left to incur, as of October 31, 2016.
In April 2016, a private placement for gross proceeds of $11,281,476, consisting of 29,688,095 common shares at a price of $0.38 per share, was completed. In July 2016, a second private placement for gross proceeds of $9,223,638, consisting of 13,176,626 common shares at a price of $0.70 per share, was completed. No warrants were issued in either private placement.
Ore Production Stope Delineation Drilling
In June 2016, Red Eagle Mining commenced detailed ore production stope delineation drilling at the San Ramon Gold Mine. Highlights from the first 50 holes (SRD-0001 to SRD-0050) include intercepts:
- SRD-0003 - 4.00m at 10.68 g/t Au from 60.70m down hole (incl. 1.10m at 27.38 g/t Au);
- SRD-0004 - 7.80m at 12.79 g/t Au from 71.40m down hole (incl. 2.80m at 30.44 g/t Au);
- SRD-0005 - 8.15m at 5.71 g/t Au from 96.20m down hole (incl. 1.60m at 15.65 g/t Au);
- SRD-0010 - 11.48m at 7.25 g/t Au from 100.50m down hole (incl. 1.89m at 19.05 g/t Au);
- SRD-0017 - 5.10m at 12.27 g/t Au from 93.90m down hole (incl. 1.46m at 29.94 g/t Au);
- SRD-0018 - 1.35m at 50.11 g/t Au from 71.85m down hole;
- SRD-0020 - 10.60m at 4.22 g/t Au from 36.70m down hole (incl. 3.40m at 6.36 g/t Au);
- SRD-0021 - 0.80m at 168.91 g/t Au from 92.60m down hole;
- SRD-0027 - 10.73m at 8.91 g/t Au from 60.66m down hole (incl. 1.2m at 21.39 g/t Au and 1.1m at 35.37 g/t Au);
- SRD-0029 - 6.70m at 12.69 g/t Au from 69.80m down hole (incl. 1.40m at 45.06 g/t Au);
- SRD-0038 - 8.25m at 5.89 g/t Au from 37.25m down hole (incl. 0.65m at 36.17 g/t Au);
- SRD-0038 - 5.45m at 11.53 g/t Au from 54.55m down hole (incl. 0.92m at 30.81 g/t Au);
- SRD-0043 - 2.70m at 20.56 g/t Au from 81.20m down hole (incl. 0.93m at 49.26 g/t Au);
- SRD-0044 - 4.25m at 20.60 g/t Au from 89.75m down hole (incl. 0.74m at 78.35 g/t Au and 0.45m at 40.21 g/t Au);
- SRD-0046 - 12.56m at 7.66 g/t Au from 67.64m down hole (incl. 1.05m at 48.70 g/t Au);
- SRD-0046 - 9.68m at 7.89 g/t Au from 94.70m down hole (incl. 0.70m at 48.88 g/t Au);
- SRD-0046 - 2.07m at 42.52 g/t Au from 130.70m down hole;
- SRD-0047 - 5.21m at 7.47 g/t Au from 93.15m down hole (incl. 1.41m at 19.18 g/t Au); and
- SRD-0049 - 7.16m at 29.03 g/t Au from 131.82m down hole (incl. 2.31m at 73.96 g/t Au).
Selected financial data
The following selected financial data is derived from the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2016, as prepared in accordance with International Financial Reporting Standards (all amounts in CA $).
|For the three months ended||For the nine months ended|
|September 30, 2016||September 30, 2015||September 30, 2016||September 30, 2015|
|Comprehensive loss (income)||(136,027)||978,149||966,479||4,464,244|
|Basic & diluted loss per share||0.00||0.00||0.00||0.04|
|As at||September 30, 2016||December 31, 2015|
|Cash and cash equivalents||$||22,307,723||$||10,347,916|
For the three and nine months ended September 30, 2016, Red Eagle Mining reported a net loss of $0.7 million (2015: $0.6 million) and $1.6 million (2015: $4.0 million) respectively. The net loss for the nine months ended September 30, 2016 was reduced compared to the nine months ended September 30, 2015 as Red Eagle Mining commenced capitalization of direct costs associated with the development of the San Ramon Gold Mine and has a higher foreign exchange gain. Total assets and shareholders' equity increased in value as a result of the capitalization and the acquisition of a controlling interest in CB Gold Inc. The increase in total liabilities primarily relates to amounts outstanding on the construction credit facility.
This press release should be read in conjunction with the unaudited interim condensed consolidated financial statements and Management's Discussion and Analysis for the three and nine months ended September 30, 2016. These documents can be found on Red Eagle Mining's website or profile at www.sedar.com.
The technical information contained in this news release has been reviewed and approved by Red Eagle Mining's Vice President of Exploration, Jeff Toohey P.Eng., who is a Qualified Person as defined under NI 43-101.
About Red Eagle Mining
Red Eagle Mining is a gold producer with an experienced mine operations and development team. Management is focused on building shareholder value through acquiring and developing gold projects with low costs and low technical risks in Colombia, a jurisdiction with prolific historic production but until recently limited modern exploration. Red Eagle Mining owns 100% of the Santa Rosa Gold Project, where the San Ramon Gold Mine has commenced production. Red Eagle Mining also controls CB Gold which owns 100% of the Vetas Gold and Santa Ana Silver Projects and is actively consolidating additional high grade precious metal deposits in Colombia.
Source: Red Eagle Mining