Acquisition of 100% of Batangas Gold Project

December 2, 2016

Bluebird Merchant Ventures (EPIC: BMV), the Philippine focused natural resources development company is pleased to announce the acquisition of the Batangas Gold Project (the “Project”) for a consideration of 1.25 million Bluebird shares. Having previously held a 25% stake, the acquisition will give Bluebird sole ownership of the Project which has an established JORC resource of 445,000 oz of gold.  

·     Acquires 100% for consideration of 1% royalty and issuance of 1.25m Bluebird shares 

·     Pre-Feasibility Study announced on 21st June 2016 

·     Maiden Ore Reserve declared on 21st June 2016 of 128,000oz of Gold (including gold equivalent) including 100,000oz at 4.2 g/t Au 

·     Available 320,000 oz of majority JORC Inferred Resources remains available for future conversion 

·     Bluebird also acquires over $20million of tax losses 

The Company previously owned a 25% stake in Red Mountain Mining Singapore Ltd (RMMS) which in turn owned 100% of Philippine registered MRL Gold Inc.  Bluebird will return its 25% stake in RMMS to ASX listed Red Mountain Mining (RMX) and RMMS will transfer its 100% stake in MRL Gold Inc to Bluebird. As acknowledged by RMX it is extremely challenging for foreign-based explorers to develop their projects. As a Philippine based company Bluebird is confident that it is uniquely positioned to develop the Project.  

In consideration for the acquisition, ASX listed Red Mountain Mining (RMX) will be issued 1.25million Bluebird shares and will also be entitled to receive a 1% net smelter royalty upon commencement of production. 

The acquisition represents a significant improvement in terms as previously the Company had the Option to increase its 25% stake to 50.1% in RMMS by making further project investments of US$1.7million. 

On 21 June 2016 RMX declared a Maiden Ore Reserve of 128,000 oz of Gold (including silver credits) which included 100,000 oz at 4.2g/t Au along with a Pre-Feasibility Study that showed the project would produce a free cash flow (after capital costs) of A$46million based on the Maiden Ore Reserve.  The project has an additional 320,000oz of majority JORC Inferred Resources that are available for future conversion.  The total historical spend on the Batangas Gold Project has been more than USD 20million, which can be applied as tax losses to the project. 

Whilst there has been uncertainty in the mining industry in the Philippines over the past six months which has seen a mining audit undertaken of operating mines that resulted in the recommendation for the suspension of over 20 mines the Company is not aware of any mines that have ceased production.  The Company is in dialogue with prospective local partners that would manage the permitting process and expects to update the market in due course. 

The Company believes that the outlook for Philippine mining projects is a lot brighter than it was six months ago. Bluebird’s key management are all located in the Philippines having experience of both bringing gold projects into production and operating gold mines in Asia including in the Philippines, making it uniquely positioned to understand the local culture and environment.   

The Company plans to undertake a thorough review of the Project in the short term and in particular will give careful attention to the environmental aspects. We fully support the Philippines Chamber of Mine’s drive for Responsible Mining for both the local communities and the environment.   

Bluebird CEO, Charles Barclay commented: 

 “We are delighted to announce the acquisition of the whole of the Batangas project. Notwithstanding the current mining climate in the Philippines, we believe that we will be able to progress the project through to production with the assistance of local partners who understand the opportunities that the establishment of a mine will have for all stakeholders. Whilst the agreement to proceed with construction may still take some time, the asset will continue to represent considerable value to our shareholders.”