Today marks a significant achievement for Red Eagle Mining (RD.V) and the entire Colombian gold sector.
The South American nation has a long and storied history of gold mining, but no modern gold mine has been permitted in the country.
This all changed this morning when Red Eagle announced the receipt of their Environmental License, the final permit required for construction and mining of the company’s San Ramon Gold Mine for the life of the mine.
According to Red Eagle, the Environmental License was granted in full and without any conditions.
Red Eagle now intends to complete project financing, with commencement of construction scheduled in mid-2015 and commercial production anticipated during 2016.
Once built, San Ramon will be the largest gold mine in Colombia, and will be the first gold mine to operate under modern environmental permitting legislation.
A Feasibility Study published in September 2014 outlined an average 50,000 ounces of gold production over 8 years with cash costs of $596/oz and a post-tax IRR of 53%, according to a March 2015 corporate presentation. The company expects to be able to find additional ounces through exploration of the San Ramon property. Additionally, the San Ramon plant has been designed to double throughput rates.
The next major hurdle will be to secure the initial CAPEX of $74M to construct the infrastructure to mine the San Ramon deposit. Red Eagle had just over $2.5 M in cash at September 30, 2014 and will look to the market to raise an additional $80-$85M through a combination of debt and equity for construction related activities and additional drilling.
“Congratulations to our entire team in Santa Rosa de Osos and Medellin who have maintained frequent and transparent communications with all stakeholders since we commenced work at Santa Rosa in 2011,” commented Bob Bell, Red Eagle’s Chief Operating Officer. Mr. Bell complimented the professionalism of the local permitting authorities and said he looks forward to partnering with them for years to come.
The news should come as a shot in the arm to all gold explorers and developers in Colombia, as Red Eagle has just proven to everyone, you can permit a gold mine in Colombia.
Here’s a link to the news release: San Ramon Gold Mine Receives Final Approval
Watch: Summer 2014 interview with Red Eagle CEO Ian Slater and COO Bob Bell
Author has a financial interest in Red Eagle Mining. This article includes forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the author believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States or anywhere else. Read the risks outlined in the company’s Annual Information Form outlined on SEDAR, and consult a licensed investment advisor before making an investment decision.