VANCOUVER — Red Eagle Mining (TSX: R; US-OTC: RDEMF) announced first gold at its San Ramon underground gold mine in Colombia in late 2016, but ramp-up at the operation hasn’t exactly been going according to plan.
The company has been struggling with “geotechnical issues with ground stability” in the mineralized shear zone that have forced it to suspend mining activities and re-think its methods.
Red Eagle spent nearly US$70 million building a 1,200-t/d operation that it had hoped would be generating free cash flow by the second quarter.
The company declared commercial production in March, but subsequently encountered “poor ground conditions” in the stopes, particularly in proximity to the “saprolite contact and historic workings.” The situation impacted mining rates and increased dilution.
Continue reading at The Northern Miner.