Red Eagle Mining Corp RDEMF

RE:Disapointment

[GuyInPhoenix]

No reason for disappointment. Quite the contrary.

This is not a situation in which a private placement got done at a discount to the market price, in desperation.

It was priced at market and the stock then ran higher before the announcement -- it sometimes happens.

The key is to evaluate what is going to be done with the funds and what that will likely do to the value of this company.

Prior to this funding, it would have been necessary to wait for the onset of production and to then fund the additional exploration out of cash flow.

This funding can now accelerate the additional drilling at Santa Rosa and get work underway at Vetas. IMO, both of those activities are going to add tremendous value to the company (and share price).

Remember that in the case of Santa Rosa, when we talk about exploration drilling we are not praying for a blind discovery.

The current resource is based on just 1/2 of a single shear zone and only to a depth of about 200 meters. However, the same mineralization has already been pulled up from depths of 600+ meters.

The additional drilling that is done is likely to result in significant expansion of the resource and extend the projected life of the mine. This will in turn factor in to a revised Net Present Value and share price.

Any exploration drilling they perform on other highly prospective targets -- so much the better. It will begin to educate the resource investment community about the opportunity that is here.

Then we turn to Vetas -- the project they picked up via their majority control of the CB Gold assets.

They likely picked up this asset for pennies on the dollar -- yet it is not being valued for even .01 cent in their current market cap.

How is that rectified? By getting to work on Vetas and proving to the market that the value is there. The dollars in the private placement will get that work started and allow the market to begin to place a value on Vetas (again, that will now work its way into the share price sooner than would otherwise have happened).

Production is still on the way and with it, the cash flow. Any near term weakness in the share price as a result of the Private Placement, would in my opinion be the last opportunity to buy cheap shares before we enter production (barring some resumption of the bear market in physical gold).

They've got a legitimate chance to turn Red Eagle into a mid-tier producer.

I really don't care how the market values the company on Friday, April 15th. There are very few people who truly understand what this company owns and the extent to which the resource could grow in the next couple of years.

Expect more from management? You must be joking. They are one of the few best management teams in the junior space. And they just engineered a way to accelerate the expansion of the resource AND the market's recognition of its value.

Congratulations Ian and team! I can't wait for the ongoing news flow during calendar '16.

Note: as always, these are my own opinions. I am not a registered investment advisor. Please perform your own due diligence.