JV model approach for South Korean gold mine

Bluebird Merchant Ventures Limited

02 April 2024

 

Bluebird Merchant Ventures Ltd / EPIC: BMV.L / Market: FTSE / Sector: Mining

2 April 2024

Bluebird Merchant Ventures Ltd

('Bluebird' or 'the Company')

South Korea Update

JV model approach for South Korean gold mine

Bluebird Merchant Ventures Ltd, a gold company primarily focused on bringing historic mines back into production, is pleased to announce that its management has just completed a round of meetings with a South Korean entity regarding a partial farm out and free carry to production for the Company's 100% owned Gubong Gold Mine ('Gubong'). 

Gubong, the larger of the Company's two 100% owned gold mining projects in South Korea, was historically the country's second largest gold mine and where the Korea Resources Corporation estimated a resource of 2.34 million tonnes at c.7.3g/t Au garnered from 57 drill holes over 17,715.3 metres. It is an orogenic deposit, which typically have depths of up to 2km compared to Gubong's current defined depth of only c.500m which translates into significant potential upside. The value of Gubong and the Kochang Gold and Silver mine ('Kochang'), the smaller of the Company's South Korean projects, was highlighted in a Scoping Study published in 2023, which included a post-tax NPV of US$181 million, free cash flow of c.US$50 million per annum, an IRR of 111% and a US$630 per oz All in Sustaining Cost ("AISC"). The study was conducted on a US$1,750 per oz gold price compared to the current price of c. US$2,200 per oz.

The JV model structure has already been implemented at the Company's Batangas Gold Project in the Philippines, where an Environmental Impact Study is presently underway and is fully funded by a local group with decades of experience in mining.

With regards to Kochang, the Board has also consulted with its legal advisors on the Board of Audit and Inspection process and has been informed that the review is still being processed.

Bluebird CEO Colin Patterson said, "The team was on the ground last week and concluded highly positive meetings with the South Korean entity, with whom we have been working informally over the last year, regarding the optimal collaborative structure for the development of Gubong.  Drawing from our successful experience in the Philippines, we are convinced that the discussed JV model, which would secure a free carry for Bluebird to anticipated production, is the optimal structure to unlock value. We remain confident of finalising a comprehensive agreement in the very near future and thereafter delivering hoped for transformative returns to our shareholders."

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For further information please visit https://bluebirdmv.com or contact:

Colin Patterson                                 Bluebird Merchant Ventures Ltd               Email: [e-mail]

Nick Emmerson                                SI Capital                                                        Tel: [phone]

About Bluebird

Bluebird Merchant Ventures Ltd (BMV.L) is a London listed South Korea-focused resources company centred on bringing historically producing gold mines back into production. The Company, led by a team of proven mine rehabilitation experts, currently has two 100% owned licensed high grade narrow vein mining projects, the Kochang Gold and Silver Project ('Kochang') and the Gubong Gold Project ('Gubong'), which each have a defined route to low cost/ low capex production with a cumulative target of producing 100,000 oz + Au per annum. 

The management team has invested cUS$2 million personally into the Company and believe, following analysis of historic production and exploration data, as well as extensive sampling, geological, geophysical, and engineering studies, there is potential for in excess of 1.5 million oz of mineable gold in its Korean projects alone.

Kochang is an epithermal vein deposit with parallel vertical ore bodies covering 8.3 sq km that reportedly produced 110,000 oz of gold and 5.9 million oz of silver between 1961 and 1975.  Consisting of a gold and silver mine, there are currently four main veins and a number of parallel subsidiary veins vein which have been identified, as well as a newly identified cross-cutting vein. Historic drilling indicates the veins continue to depth below the current 150m mine and mapping shows the veins on surface providing potential above and below the old workings. The veins extend to the NE providing a strike length of 2.5km with 600m between the two mines not exploited.  There is potential to expand operations to the southwest/northeast and to depth, as well as exploit the already mined areas. The total resource potential is between 550,000 and 700,000 tonnes, with a range of grades between 5.2 g/t to 6.6 g/t gold, and 27.3 g/t to 34.8 g/t silver.  Following the granting of a Mountain Use permit, there is an estimated 6-to-9-month development time to trial mining.

Gubong, which was historically the second largest gold mine in South Korea has 9 granted tenements covering c.25 sq km.  Gubong is moderately dipping with 9 veins extending 500m below surface and known to extend at least a further 250m. However, the production opportunity for Bluebird prior to looking at deepening the mine is the 25 levels already developed with all the remnants and unmined areas left by the original miners.  The 25 levels extend over 120km in total length which indicates the size of the opportunity. The Korea Resources Corporation ('KORES') estimated 2.34M tonnes at some 7.3g/t Au garnered from 57 drill holes over 17,715.3 metres.  With additional sampling, mapping, pit modelling and grade analysis, plus the fact that Gubong is an orogenic deposit, which typically have a depth of 2km compared to the current depth of 500m, the Board believe it has a geological potential of 1 million + oz Au in-situ, plus an estimated additional 300,000 oz Au from satellite ore bodies.

Additionally, the Company has the highly prospective Batangas Gold Exploration Project in the Philippines, where it has an agreement with a Philippine company, whose owners have decades of experience in mining, to develop the Project.  The JV covers the entire Batangas Project area, which has a current JORC compliant resource of 440,000 ounces, including a maiden ore reserve of 128,000 ounces (including silver credits). Exploration expenditure to the tune of c.$20m has already been invested.  Work is focused on completing exploration and environmental work programmes initially targeting the high-grade Lobo area, although there is excellent exploration potential across the licence with high-grade targets already identified and 14km of identified mineralised structures.  The staged agreement is based on the JV partner achieving defined development goals and provides Bluebird with a free carry on the development of Batangas with a view to advancing to construction. 

 

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