REG - Bluebird Merchant - South Korean Update

Bluebird Merchant VenturesAnnouncement

10/07/2023 07:00

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RNS Number : 4745F  Bluebird Merchant Ventures Limited  10 July 2023

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

10 July 2023

Bluebird Merchant Ventures Ltd ('Bluebird' or 'the Company')

South Korean Update

 

Bluebird Merchant Ventures Ltd, a gold company primarily focused on bringing
historic mines back into production, is pleased to provide an update on the
Gubong Gold Mine ("Gubong") and Kochang Gold and Silver Mine ("Kochang") in
South Korea.

 

As shareholders will be aware, the issuance of the Mountain Temporary Use
Permits ("MTUPs"), small parcels of land needed to allow commencement of
surface work at the two historic mines to stockpile ore, store equipment and
machinery and for general logistic, are the last part of the legal
requirements needed to commence bringing the historic high grade Gubong and
Kochang mines back into production.  The grant of these has taken far longer
than anticipated, particularly in light of the fact that both projects have
already received extraction licences.  However, the Board, in tandem with its
lawyers and planning consultants, remain positive that these will be granted,
and the Company will be able to bring both Gubong and Kochang back into
production.

 

The potential value of the two projects is clear, as highlighted in the
Scoping Study. This was conducted on a USD 1,750 per oz gold price, and
reported a post-tax NPV of USD 181 million, free cash of USD 50 million per
annum, an IRR of 111% and a USD 630 per oz All in Sustaining Cost. The Board
remains totally committed to achieving the grant of the respective licences.

 

Kochang:

The issuance of the MTUP at Kochang has been referred to the Board of Audit
and Inspection, Korea ('BAI Korea'). The BAI, which is a constitutional agency
established under the President, but retains an independent status in terms of
its duties and functions, inspects the work performed by local government to
ensure that they followed the correct processes and law. Their adjudication is
mandated to take 60 days but this is not guaranteed.  Since the Kochang
licence has already been awarded an extraction licence by the Ministry of
Mines, has the support from the local landowners and community and the
submission covered all the legal requirements, the Company remains in a strong
position. The Company's lawyers and permitting consultants have again
emphasized that all legal and regulatory requirements had been covered in
Bluebird's initial c.800-page submission and that the additional actions
requested re community engagement have been successfully completed, and the
requested measures to reduce the risk of environmental impact of the
development of Kochang, submitted.  The Company believes that the issue of
the MTUP has become regionally political and therefore welcomes the audit
procedure.

 

Gubong:

 

On receiving the further questions from the local government at Kochang, the
Board decided that the best course of action re the advancement of Gubong, was
to pause the submission and identify a local partner to jointly develop the
larger of its two projects.  This has been successful in regard to the
Company's high grade Batangas gold project in the Philippines, where its local
joint venture partner has been instrumental in securing the recently announced
Certificate of Approval from the Mines and Geosciences Bureau (MGB) for its
Two-Year Community Development Plan.  The Company is pleased to announce that
it is in advanced negotiations with a local Korean entity to form a Joint
Venture to advance Gubong.  As part of the JV, where each party will be net
contributors to the project, Bluebird's team will supply technical know-how
and the Korean partner, permitting and in-country expertise.

 

Gubong was historically the second largest gold mine in South Korea estimated
2.34M tonnes at some 7.3g/t Au garnered from 57 drill holes over 17,715.3
metres.  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.
The initial production opportunity 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.

 

Bluebird CEO Colin Patterson said, "We are progressing on both fronts in
Korea.  The Joint Venture model has worked for us in the Philippines, and we
believe that this is the best option to secure the MTUP for Gubong and advance
the project.  The potential local JV partner has recognised the scale and
potential of the asset, which we estimate to have in excess of 1.3m oz Au and
believe that they can both assist in the securing of the permit and the
funding of the development of the mine to production.

 

"While we are frustrated with the delays at Kochang, we welcome the Audit by
the Board of Audit and Inspection, Korea, as we have submitted and complied
with all the necessary regulations and submission requirements for the grant
of the MTUP, which is concurred by our lawyers and planning consultants.

 

"We are not taking our eyes of the prize and remain 100% dedicated to
achieving our objectives and bringing the two Korean high-grade mines back
into production. They are geologically sound with simple metallurgy, have a
cumulative 1.5 million oz Au and indicative economics suggest a post-tax NPV
of USD 181 million, free cash of USD 50 million per annum, an IRR of 111% and
a USD 630 per oz Au All in Sustaining Cost.  These are excellent numbers.

 

"I understand the frustrations and would like to thank shareholders for their
continued patience.  We have cash from our recent fund raising, are debt free
and the Board again is not taking cash renumeration until the MTUPs are
granted.  We have invested heavily in the Company, so we are fully aligned
with shareholders and therefore look forward to announcing progress."

 

This announcement contains inside information for the purposes of article 7 of
the market abuse regulation EU 596/2014 ("MAR").

 

**ENDS**

 

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

Colin
Patterson
Bluebird Merchant Ventures Ltd               Email:
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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