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San Ramon Gold Deposit Continues to Advance in Q3 2014

Vancouver, BC, December 2, 2014 - Red Eagle Mining Corporation (TSX-V: RD, OTCQX: RDEMF) is pleased to announce financial results for the nine months ended September 30, 2014 and business highlights to date, including advancements at Red Eagle Mining's San Ramon Gold Deposit in Antioquia, Colombia. 2014 highlights include:

  • Commencement of detailed engineering and construction-level design work for the proposed processing facility and related infrastructure. The detailed engineering is being led by Lycopodium, the leading international project management and engineering firm which also prepared the Feasibility Study. This work includes mechanical specifications and tender documentation for the key long lead items (SAG mill, tower mill and filter press) and design and tender documentation for the bulk earthworks and civils design;
  • Completion of a Feasibility Study for the San Ramon Gold Deposit. The Feasibility Study is based on San Ramon being a 1,000 tonnes per day underground mining operation using conventional shrinkage stoping mining methods with delayed backfill. The ore will be processed incorporating single-stage crushing, SAG milling and flotation with concentrate re-grinding followed by conventional carbon-in-leach processing of the combined flotation tails and reground concentrate to produce gold doré. Expected metallurgical recovery is 96%.  

    Initial capital costs are $74 million (all amounts in US$). Cash costs average $596/ounce while all-in sustaining costs average $763/ounce. Production in the first two years will average 71,000 ounces of gold per year at an average grade of 6.48 grams gold per tonne. 

Table 1 - Summary of San Ramon Post-Tax Economic Results by Gold Price

Post-Tax Alternative Case Base Case Alternative Case
Gold Price (ounce) $1,100 $1,300 $1,500
Net Cash Flow $70 million $132 million $205 million
Net Present Value (5%) $52 million $104 million $165 million
Internal Rate of Return 32% 53% 74%
Payback 1.7 years 1.3 years 1.1 years

The Feasibility Study was prepared by Lycopodium with the participation of Mine Development Associates (resource and reserve estimation and mine design)  and Golder Associates (tailings management and geotechnical) (news release dated October 6, 2014); 
  • The Secretary of Mines of Antioquia formally approved the Mining Technical Work Plan (Programa de Trabajo y Obras or "PTO"), which was submitted in November 2013, in Resolution 121146, dated August 12, 2014. This is the final approval required subject to receiving the Environmental License (news release dated September 3, 2014);
  • Acquisition of contiguous Mineral Concessions totaling 1,673 hectares within the Santa Rosa Gold Project from AngloGold Ashanti. The acquisition includes a one kilometre extension directly on strike to the east of the two kilometre long San Ramon Gold Deposit (news release dated June 3, 2014);
  • Completed CDN$5,000,000 equity financing including a CDN$4,000,000 bought deal financing underwritten by a syndicate of underwriters led by Haywood Securities Inc. and a CDN$1,000,000 private placement with Liberty Metals & Mining Holdings LLC who exercised their participation rights to maintain a pro rata 19.9% interest in Red Eagle Mining (news release dated April 9, 2014);
  • Completion and filing of a comprehensive Environmental Impact Assessment ("EIA") including an Environmental Management Plan ("EMP") on February 20, 2014 with Corantioquia (Department of Antioquia Environmental Agency). The EIA was prepared by Tetra Tech, a leading international engineering firm. Approval of the EIA and EMP by Corantioquia, which grants the Environmental License, is the final permit required for construction and mining of the San Ramon Gold Deposit (news release dated February 24, 2014).
Selected financial data:

The following selected financial data is derived from Red Eagle Mining's unaudited interim condensed consolidated financial statements for the nine month period ended September 30, 2014, as prepared in accordance with International Financial Reporting Standards (all amounts in CDN$).
   For the three months ended  For the nine months ended
  Sept 30, 2014 Sept 30, 2013 Sept 30,2014 Sept 30, 2013
 Net loss  $       2,135,629  $     2,042,632  $  6,376,591  $       8,954,355
 Comprehensive loss          2,172,457         2,075,283      6,407,343           9,010,118
 Basic and diluted loss per share                  0.03                  0.03             0.09                    0.15
   For the three months ended  For the nine months ended
  Sept 30, 2014 Sept 30, 2013 Sept 30,2014 Sept 30, 2013
 Net loss  $       2,135,629  $     2,042,632  $   6,376,591  $       8,954,355
 Comprehensive loss          2,172,457         2,075,283       6,407,343           9,010,118
 Basic and diluted loss per  share                  0.03                  0.03                0.09                    0.15

For the three and nine month period ended September 30, 2014 Red Eagle Mining reported a net loss of $2.1 million and $6.4 million respectively, compared to net losses of $2.1 million and $9.0 million for the three and nine months ended September 30, 2013. The most significant contributions to the loss for the three and nine months ended September 30, 2014 was the cost of ongoing exploration and studies of $1.7 million and $4.6 million respectively (2013: $1.8 million and $7.6 million).

This press release should be read in conjunction with the condensed consolidated Financial Statements and Management's Discussion and Analysis for the nine months ended September 30, 2014. These documents can be found on Red Eagle Mining's website or profile

The technical information contained in this news release has been reviewed and approved by Red Eagle Mining's Vice President of Exploration, Jeff Toohey P.Eng., who is a Qualified Person as defined under NI 43-101.

About Red Eagle Mining

Red Eagle Mining is a well-financed gold exploration and development company with an experienced mine-development team. Management is focused on building shareholder value through discovering and developing gold projects with low costs and low technical risks in Colombia, a jurisdiction with prolific historic production but until recently limited modern exploration. Red Eagle Mining is developing the 330 km² historic Santa Rosa Gold Project located in the Antioquia Batholith. Development will initially commence with the San Ramon Gold Deposit where a positive Feasibility Study supports project development. Detailed engineering, project financing and permitting are currently underway.

For further information on Red Eagle Mining contact:

Ian Slater
Chief Executive Officer

Red Eagle Mining Corporation
Suite 920 - 1030 West Georgia Street
Vancouver, BC, V6E 2Y3
+1 604 638 2545
[email protected]

James Beesley
Investor Relations
[email protected]
+1 604 682 4600
+1 855 682 4600 toll free
+1 778 389 7715 mobile

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release 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 Company 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. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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