Mr. Patrick Balit reports

RED EAGLE MINING REPORTS FULL YEAR 2017 FINANCIAL RESULTS

Red Eagle Mining Corp. has released financial and operating results for the year ending Dec. 31, 2017. The focus for the second half of 2017 was to complete enough underground development to support sustainable production and give access to underground drill pads. This was successfully accomplished with over five kilometres of underground development and 16,000 metres of underground infill drilling being completed during 2017. This development and infill drilling facilitated stope mining to recommence in the fourth quarter of 2017 and the mill to restart on Jan. 2, 2018.

During February, the mine produced over 600 tonnes per day and the mill processed over 750 tonnes per day utilizing stockpiles. With most of the new equipment having arrived at site through February and March and the final scoops due for delivery in April the mine is planned to ramp up to 750 tonnes per day in the second quarter of 2018. The additional underground development and infill drilling will allow consistent production resulting in an estimated 45,000 ounces of gold produced during 2018.

Exploration drilling at the San Ramon mine from underground commenced, intersecting high-grade mineralization including 4.75 metres at 20.3 grams per tonne gold. The drilling was below the mine workings along 300 metres of strike between sections 856,970E and 857,200E extending the vertical extent of known gold mineralization. Mineralization is open to depth in an area with no previous drilling and outside of the mineral resource and mineral reserve (news release dated March 19, 2018).

Regional targets at the Santa Rosa gold project within five kilometres from the completed mill were drill tested for the first time resulting in multiple discoveries of parallel high-grade veins (news release dated July 10, 2017).

                   2018 KEY PRODUCTION METRICS
 
Total                                 January February        Total

Ore mined                    (tonnes)  12,497   17,092       29,589
Ore processed                (tonnes)  17,008   21,138       38,146
Gold grade                   (g/t Au)    2.12     3.19         2.71
Gold produced                (ounces)   1,100    1,974        3,074
Recovery                          (%)     95%      91%          93%
Stockpile at end of period   (tonnes)  23,428   19,382       19,382
Average per day
Ore mined                    (tonnes)     417      610
Ore processed                (tonnes)     567      755

Mine development

During the fourth quarter of 2017, underground development at the mine continued to advance according to plan with 1,233 metres completed in the fourth quarter for a total of 5,288 metres completed in 2017. The mine now has sufficient underground development to support sustainable production. Ore mined from underground development was stockpiled for processing in the first quarter of 2018. Development has been primarily focused on secondary access ramps and advancing 24 attack ramps on levels minus 100, minus 125, minus 150 and minus 175 metres, measured from surface.

Stope mining operations resumed in October and by Dec. 31, Red Eagle Mining had stockpiled 27,939 tonnes of ore, including 18,830 tonnes of high-grade ore at 5.6 grams per tonne gold. Updated ground support, drilling and blasting procedures were successfully implemented during 2017 following the geotechnical study completed in September, 2017, that resulted in greatly improved ground conditions, lower costs and reduced dilution.

During October, 2017, twin primary ventilation fans were commissioned on top of the exhaust shaft providing 120,000 cubic feet per minute to the underground mine. Each fan can deliver 120,000 cubic feet per minute with one operating and one on standby.

Delineation drilling

The 2017 mining stope delineation underground diamond drill program commenced in June, 2017, utilizing increased access to the orebody from the mine development program. As of Feb. 28, 2018, 20,372 metres have been drilled on 10-metre centres in 231 delineation holes. As was observed in the surface stope delineation drilling, the results from the underground stope delineation drilling have returned intercepts with grades significantly higher than the reserve grade of 5.2 g/t Au. For complete underground infill drilling results, refer to the press releases dated Aug. 1, 2017, Sept. 18, 2017, Dec. 6, 2017, and Feb. 13, 2018.

Plant

The mill successfully started up on Jan. 2, 2018, as planned and has been operating continuously to date. Process improvements in flotation and regrinding are expected to lead to sustained higher recoveries from April, 2018.

Design and testing of an add-on paste backfill plant, which will facilitate faster cycle times and increased production, were completed during 2017 and construction of the plant is expected to be completed mid-2018.

Red Eagle Exploration

Red Eagle Mining's controlled public subsidiary Red Eagle Exploration acquired the high-grade California gold project in the first quarter of 2017. Initial sampling from the Machuca zone encountered a higher-grade mineralized zone with a total strike length of 45 metres which is open in all directions. The average composite grades along the two-metre width of the drift were 9.8 grams per tonne gold and 221.1 g/t silver (news release dated June 28, 2017).

Samples from new discoveries at the Los Andes zone at the California gold project averaged 25.32 g/t gold equivalent over 0.39 metre at Mina Los Andes and 8.37 g/t Au, 1,081 g/t Ag (22.38 g/t AuEq) and 0.88 per cent Cu over 0.85 metre at Los Andes Sur (news release dated Sept. 26, 2017).

Red Eagle Mining and Red Eagle Exploration (formerly CB Gold) announced their amalgamation which will result in Red Eagle Mining controlling 100 per cent of four high-grade gold and silver projects in Colombia while also yielding corporate and cost synergies. The amalgamation is subject to a vote of Red Eagle Exploration's shareholders on April 5, 2018.

Selected financial data

The selected financial data are derived from the audited consolidated financial statements for the 12 months ended Dec. 31, 2017, as prepared in accordance with international financial reporting standards (all amounts in thousands of U.S. dollars, except per-share amounts).

For the year ended                   Dec. 31, 2017    Dec. 31, 2016

Net loss                                   $15,739           $6,928
Comprehensive loss                          15,147            6,525
Basic and diluted loss per share              0.05             0.03
Cash and cash equivalents                    1,776            4,202
Total assets                               165,321          122,020
Total liabilities                           89,595           84,591
Shareholder equity                          75,726           37,429
     

For the year ended Dec. 31, 2017, Red Eagle Mining reported a net loss of $15.7-million (2016: $6.9-million). The net loss increased compared with the 2016 period primarily due to increased mine site expenses as less costs were capitalized during 2017, mineral property exploration costs as Santa Rosa regional targets were drilled for the first time and interest expense. Total assets and shareholder equity increased primarily due to increased mine development.

This press release should be read in conjunction with the consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2017. These documents can be found on Red Eagle Mining's website or profile at SEDAR.

The technical information contained in this news release has been reviewed and approved by Red Eagle Mining's vice-president, exploration, David G. Thomas, PGeo, who is a qualified person as defined under National Instrument 43-101.

About Red Eagle Mining Corp.

Red Eagle Mining is a gold producer focused on building shareholder value through acquiring, developing and operating gold and silver projects in Colombia, a jurisdiction with prolific historic production but until recently limited modern exploration. Red Eagle Mining owns 100 per cent of the Santa Rosa gold project and controls Red Eagle Exploration, which owns 100 per cent of the Vetas gold, California gold and Santa Ana silver projects.

We seek Safe Harbor.