REG - Bluebird Merchant - JV model approach for South Korean gold mine

Bluebird Merchant VenturesAnnouncement

02/04/2024 07:00

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RNS Number : 8995I  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."

 

**ENDS**

 

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

Colin Patterson
Bluebird Merchant Ventures Ltd               Email:
colin@bluebirdmv.com (mailto:colin@bluebirdmv.com)

Nick Emmerson                                SI Capital
 
 Tel: 01483413500

 

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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