Red Eagle Mining R Santa Rosa

Red Eagle Mining (R.TO) is in the final stages of commissioning the San Ramon gold mine in Colombia, after completing a first gold pour in November. Commercial production is expected in the first quarter of 2017, but Red eagle is currently working on an extensive ore delineation drill program to make sure it knows exactly where the gold-rich ore in the underground veins is.

Red Eagle has now released the assay results of almost 100 holes to the market, and the results are actually exceeding the expectations as the intercepts are both longer and higher grade compared to the mine plan in the feasibility study.

Red Eagle Mining R Santa Rosa 2

That’s positive news, as a higher average grade will provide an additional margin of safety and could boost the NPV which is estimated at C$148M on an after-tax basis at $1300 gold (versus the current market capitalization of approximately C$157M). This indicates the market is already taking a resource expansion into consideration, whilst the cheap Colombian Peso will also boost the economics and the NPV of the project.

2017 will be an important year for Red Eagle Mining, as it will be joining the ranks of South American gold producers.

Go to Red Eagle’s website
The author has a small long position in Red Eagle Mining. Please read the disclaimer

Leave a comment