Hi,
«I stood at the bottom of the ancient open mine. Possibly, here was where the raw materials had been mined for the military factory which was at the other end of the tunnel. The entrance to the tunnel was in the south.»
Correct grammar, but wordy.
'in the south' - in the south of what? Where you are standing? Then say 'to the south'.
'Military factory' is an uncommon phrase. It's more common to say what is made there, eg a munitions factory.
Best wishes, Clive