RD closing in on gold production says Norther Miner 2013-10-16
Red Eagle closes in on gold production at San Ramon 2013-10-16
VANCOUVER — Things look to be coming together for Vancouver-based junior Red Eagle Mining (TSXV: RD) at its wholly-owned San Ramon gold deposit in Antioquia, Colombia.
In mid-September the company released a preliminary economic assessment (PEA) on the deposit, which models an underground gold mine that would operate at roughly 1,000 tonnes per day. With a mine plan in hand, Red Eagle looks poised to advance San Ramon through its permitting stages, and potentially hit a construction target in 2015.
According to CEO Ian Slater the decision to take San Ramon underground was determined by two key variables.
First, the company had originally contemplated an open-pit operation that would focus on oxide materials via heap leaching, but 45,000 metres of drilling during the interim outlined a deposit that was much more suited to underground mining.
“Interestingly, the granodiorite is oxidized down to around fifty metres so we were anticipating the shear zone would be oxidized much deeper than that, but our drilling revealed it was actually the opposite,” Slater explains during an interview. “Only the top twenty metres or so of the shear zone was oxidized, and a lot of that had been mined previously.”
As it turns out an underground operation proved to be much more economically viable for Red Eagle. Due to the nature of the ore body at San Ramon, the company found it would be operating at a substantially lower head grade if it pursued an open-pit model.
Underground measured-and-indicated resources at San Ramon total around 2.7 million tonnes grading 5.1 grams gold per tonne for 446,000 contained oz., which is a notably higher grade than global resources of 10.3 million tonnes averaging 1.81 grams gold for 601,000 contained oz.
So the company focused in on a whole-ore, carbon-in-leach (CIL) operation that would make the best use of underground resources that were predominantly housed in fresh rock. Red Eagle's model at San Ramon carries upfront development costs of US$84 million, and would produce roughly 51,000 oz. of gold annually over a 10-year mine life at cash costs of around US$540 per oz.
San Ramon would crank out around 514,000 oz. of gold over its life from 3.6 million tonnes of ore. Red Eagle's CIL plant is slated to produce gold doré with recovery rates pegged at around 93%. Slater points out that the footprint of the plant will be designed to accommodate an expansion to 2,000 tonnes per day in case any of the satellite deposits on Red Eagle's 320-sq.km Santa Rosa property package end up providing suitable mill feed.
The economics of the project appear attractive. Assuming a US$1,300 per oz. gold price, San Ramon will carry a US$113 million net present value (NPV) at a 5% discount rate, as well as a 38% internal rate of return (IRR) and 1.7 year pay-back period. San Ramon's early years will be boosted by higher grades, with run-of-mine grades pegged at an average of 6.5 grams gold over an initial three-year period.
“The second thing I'd like to point out with an underground operation is permitting. Antioquia is unique in Colombia since it is the one department where the central government has delegated the permitting responsibilities regionally, which is due to its long history with underground mining,” Slater continues, explaining that if an operation mines under 2 million tonnes of rock annually — including waste — it can be permitted by regional authorities in Medellin.
“Also from a social license perspective there are no open-pit gold mines in Antioquia, so it would have been a huge education process, and that's ongoing, but we didn't want to be the pioneer on that front. We've built a great relationship with the local community, and they're very supportive of underground mining, while they're quite tentative of open-pit operations because they don't understand them,” he adds.
In terms of financing, Slater says the company will look to raise around US$10 million via equity placements over the winter to fund construction on an underground decline at San Ramon early next year. Red Eagle remains well capitalized after reporting roughly US$9 million in cash and equivalents at the end of June. The company will file San Ramon’s environmental impact statement (EIA) later this year, and expects to have the project permitted in 2014.
“For the development capital we'll definitely do a portion of that via debt financing. We've started those conversations and it's been very positive. There is a large appetite for financing of new gold mines in my experience,” Slater explains. “I've been encountering brand new funds recently that have been put together for just that purpose.”
And the company should have quite a bit of equity room considering its tight share structure. Since acquiring Santa Rosa in 2011, Red Eagle has raised around US$45 million, but only maintains 59 million shares outstanding. In early September financial outfit Appian Natural Resources Fund acquired 3.5 million shares of Red Eagle in the market, bringing its stake in the company to 15.3%.
Red Eagle has traded within a 52-week window of 17¢ and 60¢, and jumped around 30% over the first two weeks of October en route to a 26¢ close at the time of writing.
- See more at: https://www.northernminer.com/news/red-eagle-closes-in-on-gold-production-at-san-ramon/1002659488/#sthash.r9ITiAoS.dpuf
VANCOUVER — Things look to be coming together for Vancouver-based junior Red Eagle Mining (TSXV: RD) at its wholly-owned San Ramon gold deposit in Antioquia, Colombia.
In mid-September the company released a preliminary economic assessment (PEA) on the deposit, which models an underground gold mine that would operate at roughly 1,000 tonnes per day. With a mine plan in hand, Red Eagle looks poised to advance San Ramon through its permitting stages, and potentially hit a construction target in 2015.
According to CEO Ian Slater the decision to take San Ramon underground was determined by two key variables.
First, the company had originally contemplated an open-pit operation that would focus on oxide materials via heap leaching, but 45,000 metres of drilling during the interim outlined a deposit that was much more suited to underground mining.
“Interestingly, the granodiorite is oxidized down to around fifty metres so we were anticipating the shear zone would be oxidized much deeper than that, but our drilling revealed it was actually the opposite,” Slater explains during an interview. “Only the top twenty metres or so of the shear zone was oxidized, and a lot of that had been mined previously.”
As it turns out an underground operation proved to be much more economically viable for Red Eagle. Due to the nature of the ore body at San Ramon, the company found it would be operating at a substantially lower head grade if it pursued an open-pit model.
Underground measured-and-indicated resources at San Ramon total around 2.7 million tonnes grading 5.1 grams gold per tonne for 446,000 contained oz., which is a notably higher grade than global resources of 10.3 million tonnes averaging 1.81 grams gold for 601,000 contained oz.
So the company focused in on a whole-ore, carbon-in-leach (CIL) operation that would make the best use of underground resources that were predominantly housed in fresh rock. Red Eagle's model at San Ramon carries upfront development costs of US$84 million, and would produce roughly 51,000 oz. of gold annually over a 10-year mine life at cash costs of around US$540 per oz.
San Ramon would crank out around 514,000 oz. of gold over its life from 3.6 million tonnes of ore. Red Eagle's CIL plant is slated to produce gold doré with recovery rates pegged at around 93%. Slater points out that the footprint of the plant will be designed to accommodate an expansion to 2,000 tonnes per day in case any of the satellite deposits on Red Eagle's 320-sq.km Santa Rosa property package end up providing suitable mill feed.
The economics of the project appear attractive. Assuming a US$1,300 per oz. gold price, San Ramon will carry a US$113 million net present value (NPV) at a 5% discount rate, as well as a 38% internal rate of return (IRR) and 1.7 year pay-back period. San Ramon's early years will be boosted by higher grades, with run-of-mine grades pegged at an average of 6.5 grams gold over an initial three-year period.
“The second thing I'd like to point out with an underground operation is permitting. Antioquia is unique in Colombia since it is the one department where the central government has delegated the permitting responsibilities regionally, which is due to its long history with underground mining,” Slater continues, explaining that if an operation mines under 2 million tonnes of rock annually — including waste — it can be permitted by regional authorities in Medellin.
“Also from a social license perspective there are no open-pit gold mines in Antioquia, so it would have been a huge education process, and that's ongoing, but we didn't want to be the pioneer on that front. We've built a great relationship with the local community, and they're very supportive of underground mining, while they're quite tentative of open-pit operations because they don't understand them,” he adds.
In terms of financing, Slater says the company will look to raise around US$10 million via equity placements over the winter to fund construction on an underground decline at San Ramon early next year. Red Eagle remains well capitalized after reporting roughly US$9 million in cash and equivalents at the end of June. The company will file San Ramon’s environmental impact statement (EIA) later this year, and expects to have the project permitted in 2014.
“For the development capital we'll definitely do a portion of that via debt financing. We've started those conversations and it's been very positive. There is a large appetite for financing of new gold mines in my experience,” Slater explains. “I've been encountering brand new funds recently that have been put together for just that purpose.”
And the company should have quite a bit of equity room considering its tight share structure. Since acquiring Santa Rosa in 2011, Red Eagle has raised around US$45 million, but only maintains 59 million shares outstanding. In early September financial outfit Appian Natural Resources Fund acquired 3.5 million shares of Red Eagle in the market, bringing its stake in the company to 15.3%.
Red Eagle has traded within a 52-week window of 17¢ and 60¢, and jumped around 30% over the first two weeks of October en route to a 26¢ close at the time of writing.
- See more at: https://www.northernminer.com/news/red-eagle-closes-in-on-gold-production-at-san-ramon/1002659488/#sthash.r9ITiAoS.dpuf
VANCOUVER — Things look to be coming together for Vancouver-based junior Red Eagle Mining (TSXV: RD) at its wholly-owned San Ramon gold deposit in Antioquia, Colombia.
In mid-September the company released a preliminary economic assessment (PEA) on the deposit, which models an underground gold mine that would operate at roughly 1,000 tonnes per day. With a mine plan in hand, Red Eagle looks poised to advance San Ramon through its permitting stages, and potentially hit a construction target in 2015.
According to CEO Ian Slater the decision to take San Ramon underground was determined by two key variables.
First, the company had originally contemplated an open-pit operation that would focus on oxide materials via heap leaching, but 45,000 metres of drilling during the interim outlined a deposit that was much more suited to underground mining.
“Interestingly, the granodiorite is oxidized down to around fifty metres so we were anticipating the shear zone would be oxidized much deeper than that, but our drilling revealed it was actually the opposite,” Slater explains during an interview. “Only the top twenty metres or so of the shear zone was oxidized, and a lot of that had been mined previously.”
As it turns out an underground operation proved to be much more economically viable for Red Eagle. Due to the nature of the ore body at San Ramon, the company found it would be operating at a substantially lower head grade if it pursued an open-pit model.
Underground measured-and-indicated resources at San Ramon total around 2.7 million tonnes grading 5.1 grams gold per tonne for 446,000 contained oz., which is a notably higher grade than global resources of 10.3 million tonnes averaging 1.81 grams gold for 601,000 contained oz.
So the company focused in on a whole-ore, carbon-in-leach (CIL) operation that would make the best use of underground resources that were predominantly housed in fresh rock. Red Eagle's model at San Ramon carries upfront development costs of US$84 million, and would produce roughly 51,000 oz. of gold annually over a 10-year mine life at cash costs of around US$540 per oz.
San Ramon would crank out around 514,000 oz. of gold over its life from 3.6 million tonnes of ore. Red Eagle's CIL plant is slated to produce gold doré with recovery rates pegged at around 93%. Slater points out that the footprint of the plant will be designed to accommodate an expansion to 2,000 tonnes per day in case any of the satellite deposits on Red Eagle's 320-sq.km Santa Rosa property package end up providing suitable mill feed.
The economics of the project appear attractive. Assuming a US$1,300 per oz. gold price, San Ramon will carry a US$113 million net present value (NPV) at a 5% discount rate, as well as a 38% internal rate of return (IRR) and 1.7 year pay-back period. San Ramon's early years will be boosted by higher grades, with run-of-mine grades pegged at an average of 6.5 grams gold over an initial three-year period.
“The second thing I'd like to point out with an underground operation is permitting. Antioquia is unique in Colombia since it is the one department where the central government has delegated the permitting responsibilities regionally, which is due to its long history with underground mining,” Slater continues, explaining that if an operation mines under 2 million tonnes of rock annually — including waste — it can be permitted by regional authorities in Medellin.
“Also from a social license perspective there are no open-pit gold mines in Antioquia, so it would have been a huge education process, and that's ongoing, but we didn't want to be the pioneer on that front. We've built a great relationship with the local community, and they're very supportive of underground mining, while they're quite tentative of open-pit operations because they don't understand them,” he adds.
In terms of financing, Slater says the company will look to raise around US$10 million via equity placements over the winter to fund construction on an underground decline at San Ramon early next year. Red Eagle remains well capitalized after reporting roughly US$9 million in cash and equivalents at the end of June. The company will file San Ramon’s environmental impact statement (EIA) later this year, and expects to have the project permitted in 2014.
“For the development capital we'll definitely do a portion of that via debt financing. We've started those conversations and it's been very positive. There is a large appetite for financing of new gold mines in my experience,” Slater explains. “I've been encountering brand new funds recently that have been put together for just that purpose.”
And the company should have quite a bit of equity room considering its tight share structure. Since acquiring Santa Rosa in 2011, Red Eagle has raised around US$45 million, but only maintains 59 million shares outstanding. In early September financial outfit Appian Natural Resources Fund acquired 3.5 million shares of Red Eagle in the market, bringing its stake in the company to 15.3%.
Red Eagle has traded within a 52-week window of 17¢ and 60¢, and jumped around 30% over the first two weeks of October en route to a 26¢ close at the time of writing.
- See more at: https://www.northernminer.com/news/red-eagle-closes-in-on-gold-production-at-san-ramon/1002659488/#sthash.r9ITiAoS.dpuf
VANCOUVER — Things look to be coming together for Vancouver-based junior Red Eagle Mining (TSXV: RD) at its wholly-owned San Ramon gold deposit in Antioquia, Colombia.
In mid-September the company released a preliminary economic assessment (PEA) on the deposit, which models an underground gold mine that would operate at roughly 1,000 tonnes per day. With a mine plan in hand, Red Eagle looks poised to advance San Ramon through its permitting stages, and potentially hit a construction target in 2015.
According to CEO Ian Slater the decision to take San Ramon underground was determined by two key variables.
First, the company had originally contemplated an open-pit operation that would focus on oxide materials via heap leaching, but 45,000 metres of drilling during the interim outlined a deposit that was much more suited to underground mining.
“Interestingly, the granodiorite is oxidized down to around fifty metres so we were anticipating the shear zone would be oxidized much deeper than that, but our drilling revealed it was actually the opposite,” Slater explains during an interview. “Only the top twenty metres or so of the shear zone was oxidized, and a lot of that had been mined previously.”
As it turns out an underground operation proved to be much more economically viable for Red Eagle. Due to the nature of the ore body at San Ramon, the company found it would be operating at a substantially lower head grade if it pursued an open-pit model.
Underground measured-and-indicated resources at San Ramon total around 2.7 million tonnes grading 5.1 grams gold per tonne for 446,000 contained oz., which is a notably higher grade than global resources of 10.3 million tonnes averaging 1.81 grams gold for 601,000 contained oz.
So the company focused in on a whole-ore, carbon-in-leach (CIL) operation that would make the best use of underground resources that were predominantly housed in fresh rock. Red Eagle's model at San Ramon carries upfront development costs of US$84 million, and would produce roughly 51,000 oz. of gold annually over a 10-year mine life at cash costs of around US$540 per oz.
San Ramon would crank out around 514,000 oz. of gold over its life from 3.6 million tonnes of ore. Red Eagle's CIL plant is slated to produce gold doré with recovery rates pegged at around 93%. Slater points out that the footprint of the plant will be designed to accommodate an expansion to 2,000 tonnes per day in case any of the satellite deposits on Red Eagle's 320-sq.km Santa Rosa property package end up providing suitable mill feed.
The economics of the project appear attractive. Assuming a US$1,300 per oz. gold price, San Ramon will carry a US$113 million net present value (NPV) at a 5% discount rate, as well as a 38% internal rate of return (IRR) and 1.7 year pay-back period. San Ramon's early years will be boosted by higher grades, with run-of-mine grades pegged at an average of 6.5 grams gold over an initial three-year period.
“The second thing I'd like to point out with an underground operation is permitting. Antioquia is unique in Colombia since it is the one department where the central government has delegated the permitting responsibilities regionally, which is due to its long history with underground mining,” Slater continues, explaining that if an operation mines under 2 million tonnes of rock annually — including waste — it can be permitted by regional authorities in Medellin.
“Also from a social license perspective there are no open-pit gold mines in Antioquia, so it would have been a huge education process, and that's ongoing, but we didn't want to be the pioneer on that front. We've built a great relationship with the local community, and they're very supportive of underground mining, while they're quite tentative of open-pit operations because they don't understand them,” he adds.
In terms of financing, Slater says the company will look to raise around US$10 million via equity placements over the winter to fund construction on an underground decline at San Ramon early next year. Red Eagle remains well capitalized after reporting roughly US$9 million in cash and equivalents at the end of June. The company will file San Ramon’s environmental impact statement (EIA) later this year, and expects to have the project permitted in 2014.
“For the development capital we'll definitely do a portion of that via debt financing. We've started those conversations and it's been very positive. There is a large appetite for financing of new gold mines in my experience,” Slater explains. “I've been encountering brand new funds recently that have been put together for just that purpose.”
And the company should have quite a bit of equity room considering its tight share structure. Since acquiring Santa Rosa in 2011, Red Eagle has raised around US$45 million, but only maintains 59 million shares outstanding. In early September financial outfit Appian Natural Resources Fund acquired 3.5 million shares of Red Eagle in the market, bringing its stake in the company to 15.3%.
Red Eagle has traded within a 52-week window of 17¢ and 60¢, and jumped around 30% over the first two weeks of October en route to a 26¢ close at the time of writing.
- See more at: https://www.northernminer.com/news/red-eagle-closes-in-on-gold-production-at-san-ramon/1002659488/#sthash.r9ITiAoS.dpu