VANCOUVER, Aug. 30, 2016 /CNW/ - Red Eagle Mining
Corporation (TSX-V: RD, OTCQX: RDEMF, SSE-V: RDCL) is pleased
to announce financial results for the three and six months ended
June 30, 2016 and business highlights
to date, including advancements at Red Eagle Mining's San Ramon
Gold Mine in Antioquia, Colombia. Highlights include:
- Completed private placements of common shares for approximately
$20,000,000 (news releases dated
April 21, 2016 and July 14, 2016);
- Commenced detailed ore production stope delineation drilling at
the San Ramon Gold Mine (news releases dated June 1, 2016 and August
16, 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).
Construction of the San Ramon Gold Mine and
Mill
The overall construction of the mill is approximately 90%
complete, and remains within budget and on schedule. Initial
gold production is currently scheduled for October, ramping up to
commercial production by the end of 2016.
Mine Highlights:
- The main access and production decline has progressed to 370m
in length and the first ore production level has been established
approximately 300m from the decline surface collar;
- The initial production level is under development to mine ore
ahead of mill commissioning. High grade ore is being
stockpiled from this development, along with lower grade ore for
the commencement of commissioning;
- The decline encountered difficult ground conditions through the
saprolite and transitional ground for longer than anticipated, but
development is now in competent granodiorite and progressing
well;
Mill Highlights:
- All steelwork and platework construction is complete. All
equipment has been delivered and installed. Remaining work now
comprises completion of piping and electrical works;
- All HV equipment and electrical sub-stations have been
inspected and approved by the Colombian electrical inspectorate.
The 44KV overhead powerline and supply substation (which is located
approximately 12km from site), are functional and approved. Full
"live" HV connection is scheduled for September 2016. Cold commissioning of
sectors of the mill are being undertaken using the two 750 KVA
standby generators; and
- Water supply is established, and wet commissioning of all
tankage is underway.
Project Financing
Construction of the 100% owned San Ramon Gold Mine and Mill is
forecast to be fully funded through to full production. As at
July 31, 2016, Red Eagle Mining has
approximately US $29 million in cash
with approximately US $14 million of
project costs left to incur.
Equity Financing
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.
Delineation drilling at San Ramon
In June 2016, detailed ore
production stope delineation drilling commenced at the San Ramon
Gold Mine and will continue for the life of the mine. The
initial results from the in-fill drill programme have exceeded
expectations with intercepts significantly longer than the planned
average mining width of 3m and grades significantly higher than the
reserve grade of 5.2 g/t Au. Highlights from the first 23
holes (SRD-0001 to SRD-0023) 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
Acquisition of Santa Ana
In August 2016, Red Eagle Mining's
controlled public subsidiary, CB Gold Inc., acquired 100% of the
Santa Ana Silver Project which covers the core of the historic
Mariquita Silver District, one of Colombia's most prolific colonial silver
mining camps with production dating back to the sixteenth century.
The property is located approximately 190 kilometres ENE of
Bogota in Tolima, Colombia.
The polymetallic silver-gold veins are characteristic of an
intrusion related silver rich system later overprinted by a low
sulphidation epithermal system in a thrust and fold setting. They
are comprised of variable amounts of pyrite, sphalerite, galena,
silver sulphosalts, native silver and gold in a gangue of quartz
and adularia.
A 2012 drill programme tested the down-dip extension of vein
mineralization below the historic Santa Ana mine tunnels. The
results highlighted the potential for bonanza-type silver-gold
veins, with drill intercepts including:
- CP-1203 – 3.04m at 1,751 g/t (51 oz/t) AgEq from 83.82m down
hole
- CP-1203 – 1.82m at 1,465 g/t (43 oz/t) AgEq from 100.58m down
hole
- CP-1208 – 1.34m at 2,545 g/t (75 oz/t) AgEq from 164.00m down
hole
Selected financial data
The following selected financial data is derived from the
unaudited interim condensed consolidated financial statements for
the three and six months ended June 30,
2016, as prepared in accordance with International Financial
Reporting Standards (all amounts in CA $).
|
|
|
|
For the three
months ended
|
For the six months
ended
|
|
June 30,
2016
|
June 30,
2015
|
June
30, 2016
|
June 30,
2015
|
Net loss
|
$
|
632,618
|
$
|
580,654
|
$
|
831,440
|
$
|
3,386,408
|
Comprehensive
loss
|
790,223
|
691,020
|
1,102,506
|
3,486,095
|
Basic & diluted
loss per share
|
0.00
|
0.01
|
0.00
|
0.04
|
As
at
|
|
|
June 30,
2016
|
December 31, 2015
|
Cash and cash
equivalents
|
|
|
$
|
18,963,164
|
$
|
10,347,916
|
Total
assets
|
|
|
121,085,132
|
62,582,686
|
Total
liabilities
|
|
|
79,675,283
|
33,573,430
|
Shareholders'
equity
|
|
|
41,409,849
|
29,009,256
|
For the three and six months ended June
30, 2016, Red Eagle Mining reported a net loss of
$0.7 million (2015: $0.6 million) and $0.9
million (2015: $3.4 million)
respectively. The net loss for the six months ended
June 30, 2016 was reduced compared to
the six months ended June 30, 2015 as
Red Eagle Mining commenced capitalization of direct costs
associated with the development of the San Ramon Gold Mine.
Total assets and shareholders' equity increased in value as a
result of the capitalization and the acquisition of a controlling
interest in CB Gold. The increase in total liabilities
primarily relates to amounts outstanding on the construction credit
facility and the recognition of a reclamation provision for the San
Ramon Gold Mine and Vetas Gold Project.
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 six months
ended June 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 well-financed gold and silver exploration
and development corporation with an experienced mine development
team. Management is focused on building shareholder value
through discovering and developing 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 construction is underway at the
fully permitted and fully financed San Ramon Gold Mine with
production expected to commence in the second half of 2016.
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.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This news release includes
forward-looking statements that are subject to risks and
uncertainties. All statements within, other than statements
of historical fact, are to be considered forward looking.
Although Red Eagle Mining believes the expectations expressed
in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future
performance and actual results or developments may differ
materially from those in forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include market prices, exploitation and
exploration successes, continued availability of capital and
financing, and general economic, market or business conditions.
There can be no assurances that such statements will prove
accurate and, therefore, readers are advised to rely on their own
evaluation of such uncertainties. We do not assume any
obligation to update any forward-looking statements. This news
release does not constitute an offer to sell or a solicitation of
an offer to sell any securities in the United States. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
SOURCE Red Eagle Mining Corporation