By The Gold Report
Commercial production was declared at Red Eagle Resources’ San Ramon mine in Colombia, nearly five months after announcing the first gold pour.
On April 10, Red Eagle Mining Corp. (R:TSX; RDEMF:OTCQX; R:BVL) announced that it declared commercial production at its San Ramon mine in Antioquia, Colombia, on March 31. The company reported that “the processing facility has reached a steady operating throughput capability and underground mining is progressing at an increasing rate with the opening up of additional ore development headings.”
The company is advancing the decline at the rate of up to 27 meters a day, an increase from an earlier rate of 3 meters a day when the decline was going through less-stable oxidized rock. The decline is now 2.4 kilometers long.
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Gwen Preston of Resource Maven noted on April 12 that “the mine and mill are regularly achieving design rates, something that takes a lot more engineering, ingenuity, and dedication that most might realize.”
Preston observed that a “few ground conditions concerns have arisen, enough to slow mining and prompt a switch to mechanized cut and fill instead of long hole stoping. That’s not ideal from a speed and cost perspective, which is why Red Eagle is forecasting 35,000 to 40,000 oz. gold this year, down from earlier expectations. . .the company expects to ramp up the pace and produce the targeted 70,000 oz. in 2018.”
“At this point Red Eagle thinks San Ramon will be cash flow positive in the second quarter. One of the main reasons I invested in this mine is because of its cost structure: San Ramon is supposed to be able to produce an ounce of gold at an all-in sustaining cost of just US$671. That is the other key metric to watch,” wrote Preston.
Preston concluded that she remains “very interested in San Ramon’s potential to produce cash and Red Eagle’s ability to find more gold right around the mine.”
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