Red Eagle Mining Corp has announced financial results for the year ending December 31, 2016 and business highlights to date including:
- Declared Commercial Production at the San Ramon gold mine on March 31, 2017
- Acquired the high grade California gold project through Red Eagle Mining’s controlled public subsidiary Red Eagle Exploration
- Closed bought deal equity financing of common shares with the BMO Capital Markets for gross proceeds of $17,250,000
- Brian Peer was appointed General Manager of the Santa Rosa project on February 18, 2017. He has 31 years of mining experience including 19 years in senior management. Most recently, he was Country Manager – Mexico for Alamos Gold, responsible for the safe and efficient operations of two mines and the development of an additional two mines. Previously, Peer worked for Coeur Mining and for 10 years at Barrick Gold
- Robert Bell retired from day to day operations and the position of Chief Operating Officer of Red Eagle Mining. However, he remains an active member of the Board of Directors and the Technical and Sustainability Committee of both Red Eagle Mining and Red Eagle Exploration
- Completed 2016 detailed ore production stope delineation drilling at the San Ramon mine. Results from the delineation drilling exceeded expectations with many intercept grades significantly higher than the reserve grade of 5.2 g/t Au
- First gold poured at the San Ramon mine
- Acquired the high-grade Santa Ana historic silver mine through Red Eagle Mining’s controlled public subsidiary Red Eagle Exploration.
During the fourth quarter of 2016, construction and commissioning of the mill was completed with first gold pour in November 2016. The processing facility has reached a steady operating throughput capability and underground mining is progressing at an increasing rate with the opening up of additional ore development headings.
Underground development continues to advance well. Since Q3 2016 when the decline moved through oxidized material, requiring additional support, into competent granodiorite, daily advance rates have substantially increased from 3 m/d up to 27 m/d. The main and secondary ramps have advanced 2.4 km from the portal. A 57 m vertical ventilation shaft has been completed and connected to the underground workings
Initial poor ground conditions were encountered, particularly close to the saprolite contact and historic workings, resulting in slower mining rates and greater dilution than planned in startup. Accordingly, the mining method has been adjusted to conventional mechanized cut and fill stoping, stope lengths have been reduced to 40 m and ground controls are improving to minimize dilution. The -100 and -125 m levels are currently being mined with seven ore development headings.
The processing facility commissioning is complete and exceeding design throughput with the capability to process up to 1,200 t/d. The high voltage transmission line construction is complete and energized, connecting the project to the national electrical grid. The dry waste management facility is complete with filtered tailings being dry stacked. Gold recoveries have reached 93% and are on track to the design rate of 96%.
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 safety statistics to date.
Red Eagle Mining continues to maintain positive relationships with and be involved with the local communities. Continuous information flow has been maintained with all stakeholders regarding the advances of the operations. Red Eagle Mining is committed to maximizing local employment and is proud to have already employed 56% of its workforce from the local municipality of Santa Rosa de Osos. Red Eagle Mining continues to strictly adhere to the terms of its Environmental License and the associated Environmental Management Plan. The Environmental Agency, along with local committees, has maintained a strict monitoring program as the project has progressed with visits at least monthly. Red Eagle Mining has received positive inspection reports from all inspections.
23,666 t of ore were processed during March (760 t/der day). Higher grade ore was blended with lower grade stockpiles to ensure operating efficiency throughout the month. 1,758 oz of gold were produced during March.
Underground production crews continue to build on their expertise and efficiency. Production rates and grade continue to increase as the underground team adjusts to more controlled stoping methods and additional production faces open up. The blending of lower grade stockpiles will cease as production rates increase.
Red Eagle Mining declared commercial production at the end of Q1 2017 and expects to advance to positive cash flows from operations in Q2. Production guidance is 35,000 to 40,000 oz of gold for 2017 and 60,000 to 70,000 oz of gold for 2018.