Red Eagle Mining (RD.V) seems to have all its ducks in a row as the company has just raised C$5M to get through the permitting and feasibility stage. We sat down with CEO Ian Slater to ask him some questions.
– You have recently closed a bought deal raising C$5M. What’s your current cash position and how far will it take you?
We currently have approximately $7M in the bank and expect to be able to fund all our expenses for the next 12 months. The Definitive Feasibility Study should be out in September, and we expect to be fully permitted by the end of this year. The EIA (which is the final stage) was submitted in February, and we have been working closely with Corantioquia (the environmental agency) for over a year and will continue to do so.
– Permitting should be easier for an underground mine. Do you concur with this view?
Absolutely, it will be difficult to permit the first open pit gold mine in Antioquia as it will be a long process of education whereas there are (and have been) many underground gold mines in Antioquia. The locals are familiar with underground mining and it’s a well understood model.
– Will it be easy to increase the capacity of the mill in a later stage should more mineralized zones be found?
We have designed the mill to have the capacity to be doubled in size in the future.
– Looking forward to the financing stage, what kind of Debt/Equity ratio would you be targeting?
At this stage I’d think we will be able to target a 70/30 ratio, as the economics of San Ramon show the payback period is quite short.
– What’s the exploration potential at the San Ramon zone, and where will the additional resources come from?
San Ramon is open at depth and along strike to the east. The resource is only to 250m depth, while the deepest drill hole confirms mineralisation past 600m depth. So there is high potential to increase the 10 year mine life of San Ramon outlined in the PEA.
However, the future increase in the 1,000 tpd going through the mill will come from satellite deposits on the 320km2 broader Santa Rosa project. We are planning on drilling some of these other targets during construction in 2015.
– Can you elaborate a bit more on the Pavo Real zone? What are your exploration plans there?
Pavo Real is a completely different project in the Tolima Department. It also covers an enormous area. Last year we discovered a new mineralised area and are currently conducting an extensive trenching program. It’s an exciting pipeline project for the future but Red Eagle’s focus is currently on building San Ramon.
Disclosure: The author holds a long position in Red Eagle Mining. Please see our disclaimer for current positions.