Red Eagle Aims. Shoots. Hits.
Visiting projects is both one of my great pleasures and the greatest bane of my life at the same time. For example, I just came back from a lightening trip to Tanzania. In 10 days I flew about 50 hours on the airlines, took a 2.5-hour bus trip from Heathrow to Stanstead for the adventure of a lifetime on Ryan Air to Spain. I managed to catch a cold on my initial flight of the journey that plagued me the entire trip. And at the end of the trip, in Spain, I got food poisoning.
In Tanzania I saw one of the best-run gold projects I have seen in a long time with really professional management. The next day I talked to a small junior doing placer mining that went off track. Ten hours later I was in London. The next day I was being briefed on a mining project in North Western Spain. After listening to babbling for an hour I asked the chief geologist what the value of the rock was that they were outlining. It was a polymetallic deposit and there wasn’t any easy way for me to determine what a ton of rock was worth.
The PhD geo gave me one of those deer-in-the-headlights looks and explained that it was far too early in the exploration process for them to know the value of the rock. This was just after telling me they had ten years experience on the project. I asked the team doing the briefing just why an investor should consider buying the stock and after looking back and forth for a few minutes, they explained that they were just geologists and had no idea of why someone would want to own them or what the rock was worth. So in 10 days, I got to see both the best and the worst of the industry.
Back in July I was in Medellin Colombia and got a call from Ian Slater of a new junior just then public named Red Eagle Mining. Red Eagle went public at $1.25 on the basis of two interesting gold projects in Colombia. I went to visit the Santa Rosa project. It has a 400-year mining history and no doubt will be mined for a good time in the future, I wrote about what I saw.
Over the past 11 years, I have visited some projects only once, some a time or two and a few three or four times. I love site visits because you see things you can’t possibly get from a web site no matter how well organized.
When I went to visit Red Eagle in July at the Santa Rosa project they had just barely gotten public. The office was brand new. They were out buying vehicles. In short, they were just getting started. They did have a geological staff who were out doing groundwork on the tiniest of budgets.
But Red Eagle did understand the target at Santa Rosa. They wanted to define a bulk mineable large, low-grade target. And according to their latest drill results, they found exactly what they were looking for. On January 17th, Red Eagle announced results of a 15-hole drill program into the San Ramon shear zone. San Ramon extends over 2 km and appears to continue at depth. Results included hole SR-011 with 58.9 meters of 1.00 g/t. The market being the market, these excellent results made the stock go down and in January you could have bought the shares at half the price they were when the company went public in July of 2011.
I visited Santa Rosa again on this trip. Red Eagle is in the midst of a 20,000-meter drill program. I also managed to get down to the companies 2nd major project, Pavo Real.
While Santa Rosa is 100% owned by Red Eagle, Pavo Real is a 70/30 joint venture with Miranda Gold. Red Eagle has commenced a 5000-meter, 8-hole drill program based on results from the surface work and 1040 rock samples already completed. The initial results should be released shortly.
For most companies only 8 months old in the midst of two major drill programs, you would have to accept that it’s a work in progress and success will come when the results are released. But since I saw the company only 7 months ago and just saw them again, I got to see the change in the company.
I was knocked over. Everyone does surface work. Everyone does drilling. Everyone has a bunch of geologists running around quoting technical nonsense. But no company I have visited in 11 years has made as much progress as swiftly as has Red Eagle. I was truly stunned. You would have had to have seen them in July and seen them in February to understand how far they have moved. The company is well cashed up with about $10 million in the till.
At times markets are simply stupid. I can’t say much about Pavo Real, only the drill results will speak. But with 280 adits showing mining over 400 years at Santa Rosa, it’s obvious there is something there. With results of 58.9 meters of 1 g/t material, it’s obvious the marvelous people at Red Eagle are doing a good job of outlining a resource, quickly and that’s nice. Most companies think in geological timeframes. I think the market price for the company is stupid and I think they will go higher.
Red Eagle is an advertiser and we do own shares in the company. As such, I am biased. We remind readers that they alone are responsible for their own investment decisions. The company is highly approachable and does a good job of communication.
Red Eagle Mining