VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 10/06/14 — Red Eagle Mining Corporation (TSX VENTURE: RD)(OTCQX: RDEMF) is pleased to announce that the complete NI 43-101 Technical Report pertaining to the positive Feasibility Study for the San Ramon deposit on its 100% owned Santa Rosa Gold Project located in Antioquia, Colombia, has been filed. The Technical Report is available on and –s website. Highlights include (all amounts in US$):
Table 1 – Summary of San Ramon Pre-Tax Economic Results by Gold Price
Table 2 – Summary of San Ramon Post-Tax Economic Results by Gold Price
The Feasibility Study („FS“) was prepared by Lycopodium Minerals Canada Ltd. („Lycopodium“) in accordance with the definitions in Canadian National Instrument 43-101 („NI 43-101“). is an international engineering and project management consultancy headquartered in Australia, which has completed feasibility studies and provided Engineering, Procurement and Construction Management („EPCM“) services to a large number of successful gold projects globally. The economic results of the Technical Report, as reflected in this news release, have been slightly refined from the September 9, 2014 news release.
Project Mineral Reserves
The reserves outlined in the Feasibility Study are shown in Table 3 below and use an average cut-off of 2.00 grams gold per tonne and a minimum mining width of 2.5 metres. The average mining width is 3.0 metres. Proven and Probable reserves include dilution by Measured and Indicated resources below the mining cutoff grade inside of mineable areas with an average grade of 1.60 grams gold per tonne.
Table 3 -San Ramon Reserves Estimate
Mining and Processing
The Feasibility Study is based on San Ramon being an underground mining operation using conventional shrinkage stoping mining methods with delayed backfill using dry filtercake process tailings and development waste. Colombian mining contractors will be utilised and mining costs are based on contractor proposals.
The ore will be processed incorporating single-stage crushing, SAG milling and flotation with concentrate re-grinding followed by conventional carbon-in-leach („CIL“) processing of the combined flotation tails and reground concentrate to produce gold dore on site. The leached tailings will be detoxified and filtered for use as mine backfill and dry stacking on surface. Expected metallurgical gold recovery is 96% with a total estimated 388,000 ounces of recoverable gold to be produced.
The total ore mined includes 2,425,000 tonnes of Proven and Probable reserves and an additional 334,000 tonnes of internal dilution material that is included at zero grade. Total volume/tonnage dilution of 23% is included in the mineable material. The plant is designed to operate at a processing rate of 1,000 tonnes per day and a total of 2,759,000 tonnes of material will be mined over eight years at an average run of mine („ROM“) diluted mill feed grade of 4.57 grams gold per tonne. San Ramon–s projected annual gold production is summarised below:
Table 4 -San Ramon Projected Eight Year Annual Gold Production
Capital and Operating Costs
The estimated capital and operating costs for San Ramon are summarised below. Indirect costs include EPCM and owner–s costs. Sustaining capital for ongoing underground development has been budgeted at $33 million throughout the eight year mine life.
Table 5 -San Ramon Initial Capital Costs
Table 6 -San Ramon Operating Costs
Opportunities for enhanced economics
Dore produced will contain silver which has not been included in reserves or the Feasibility Study economic analysis. Based on metallurgical tests and studies, silver grades are approximately 1.85 times gold grades with recoveries of approximately 69%.
High-grade, relatively narrow, veins are known to exist across a number of areas on the Santa Rosa Gold Project outside of the current reserves. Over 1,700 historic adits have been mapped. These veins could potentially be mined as separate small-scale operations to provide high-grade feedstock to supplement mill feed grade and production.
The San Ramon deposit is open at depth (with the bulk of the current reserves within 200 metres of the surface) and on strike, plunging to the east onto concessions recently acquired from AngloGold Ashanti (news release dated ). Drilling at depth and down-plunge to the east is planned for 2015.
A number of separate exploration targets have been identified on the 330 km2 Santa Rosa Gold Project and are ready for drill testing. These targets have similar characteristics to the San Ramon deposit with anomalous gold geochemistry, potassic alteration and extensive historic underground and surface workings. In providing for potential exploration success in delineating additional reserves, current major equipment and layout has been designed with built-in capacity to accommodate an expansion to double the throughput rates without disrupting production. Such an expansion would include an additional ball mill, tower mill, filter press and three leach tanks at an estimated total cost of under $15 million.
Comparison to September 2013 Preliminary Economic Assessment
The Feasibility Study results are compared in Table 7, below, with the figures reported in the September 2013 Preliminary Economic Assessment („PEA“). While there has been a $9 million reduction in the Net Present Value (5%), the Internal Rate of Return has escalated from 38% to 53%. This has predominately been driven by a 19% reduction in initial capital costs and a 35% reduction in sustaining capital. As expected, life of mine recoverable ounces has declined reflecting the fact that inferred resources, while included in the PEA, are excluded from the Feasibility Study mine plan. As average annual production is broadly unchanged the exclusion of the inferred ounces has expectedly reduced mine life from ten to eight years. Metallurgical recoveries have improved from 93% to 96%. Cash costs and all-in sustaining costs have decreased by $24/ounce and $55/ounce respectively.
Table 7 -San Ramon PEA/FS Comparison
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.
The following Qualified Persons as defined under NI 43-101 are independent of Red Eagle Mining and responsible for the Technical Report and Feasibility Study for the San Ramon deposit development:
About Red Eagle Mining
Red Eagle Mining is a well-financed gold exploration and development company with an experienced mine-development team. Management is focused on building shareholder value through discovering 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 is developing the 330 km2 historic Santa Rosa Gold Project located in the Antioquia Batholith. Development will initially commence with the San Ramon deposit where the positive Feasibility Study supports project development. Project finance and permitting are well advanced.
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 the Company 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.
Contacts: Ian Slater Chief Executive Officer
Red Eagle Mining Corporation Suite 920 – 1030 West Georgia Street Vancouver, BC, V6E 2Y3 +1 604 638 2545
James Beesley Investor Relations
+1 604 682 4600 +1 855 682 4600 toll free +1 778 389 7715 mobile
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