Red Eagle Mining operations update at Santa Rosa

VANCOUVER, Jan. 23, 2017 /PRNewswire/ - Red Eagle Mining Corporation (TSX: R, BVL: R, OTCQX: RDEMF) is pleased to provide an update on operations at the Santa Rosa Gold Project, Antioquia, Colombia. 

"We are very pleased to have completed commissioning of the plant and producing 1,850 ounces of gold since start-up," comments Bob Bell, Chief Operating Officer.  "Ramp up of the mine continues to progress and we look forward to announcing commercial production by the end of Q1 2017."

Achievements to Date

• Best safety practices adopted with no major incidents to date;
• High voltage transmission line construction complete and energized, connecting the project to the national electrical grid;
• Main and secondary underground ramps have progressed to over 1.4 kilometres in length;
• 60 metre vertical ventilation shaft completed and connected to the underground workings;
• Over 19,000 tonnes of ore mined;
• Crusher operating within design parameters;
• Processing facility commissioning now complete, meeting design throughput, with the mill being run on a campaign basis while mine ore production rates are ramped up;
• Dry waste management facility complete with filtered tailings being dry stacked;
• Gold recoveries have reached 93% - on track to design rate of 96%; and
• 1,850 ounces of gold produced since pre-commercial start-up.

2016 Key Production Metrics

Mine Development

Underground development continues to advance well.  Since Q3 2016 when the decline moved through oxidized material requiring support into competent granodiorite, daily advance rates have substantially increased from 3 metres per day to 22 metres per day.  The main and secondary ramps have advanced a total of 1.4 kilometres from the portal.  Four 100 metre strike length stoping blocks have been opened up on the 50, 75 and 100 metre levels, including 12 ore development headings with 6 main stopes. 

The 10,000 metre stope delineation drill programme completed in December, 2016 (news release dated January 17, 2017) and underground face samples have positively reconciled grade against the resource model. 

Some initial poor ground conditions were encountered, particularly close to the saprolite contact, resulting in slower mining rates and modestly greater dilution than planned in startup.  Accordingly, the mining method has been adjusted to conventional flat back cut and fill stoping, stope lengths have been reduced to 50 metres and ground controls are improving to minimize dilution.  

Outlook

Underground production crews continue to increase their expertise and efficiency.  Production rates are expected to accelerate in February and March as the underground team adjusts to more controlled stoping methods and additional production faces open up.  The mine plan has 10 stopes operating in March, subsequently ramping up to full operations with 14 stopes.  At any given time half the stopes will be in production at an estimated rate of 150 tonnes per day and half will be in support and filling.

Exploration drilling is currently underway testing the eastern extent of the San Ramon Gold Deposit and the Rojo target 3 kilometres to the west of the processing facility.

Commercial production of 750 tonnes per day is anticipated to be achieved by the end of Q1 2017.  As at December 31, 2016, Red Eagle Mining held $4 million in cash and is managing working capital while advancing to positive cash flow in the coming months.

The technical information contained in this news release has been reviewed and approved by Red Eagle Mining's Vice President Exploration, Jeff Toohey P.Eng., who is a "Qualified Person" as defined under National Instrument 43-101. 

About Red Eagle Mining

Red Eagle Mining is a gold producer 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 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.

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

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