Bluebird Merchant Ventures (EPIC: BMV), the Asian focused resource development group, is delighted to announce that work has started on the opening of the main adit of the historical Gubong mine which is widely recognised as having been the second largest gold mine in South Korea in its day. This significant event was preceded by a speech to the local community given by the mayor of Cheongyang. In his remarks, the mayor noted the strong support of his county for the potential of a rejuvenated Gubong mine.
The Gubong area has been acknowledged to have the potential to develop into a multi-million ounce orogenic gold district. The old mine contains over one hundred kilometres of underground development and more than 6 shafts including 2 verticals. This existing development represents tens of millions of dollars of value in today’s terms. Access to the site is exceptional with tar sealed roads to within 100 metres of the mine area. The power grid is also adjacent to the property.
The Gubong mine closed in 1967 when the gold price was US$35.50/oz. In those days substantial blocks of ore would have been ignored as their grade would have made mining them uneconomic. Many of the areas declared ‘unpayable’ in those days are expected to be economic because of the higher gold price, more efficient mining techniques and better recovery technology. In addition, our information suggests that the mine closed without a systemic program to salvage any of the predeveloped stopes, pillars, remnants, broken ore and vamping. This is highly significant to Bluebird as it means there can be good potential for early, low-cost mining. An added bonus is a tailings dam that could be a retreatable asset.
Once the main entrance to the mine is reopened the team will seek to gain entry and make safe as many old production areas as possible. Extensive sampling will then be done in these areas and the samples then assayed. Following this all information will be collated and the development of a production plan will be initiated. It is also expected that by this time some of the resource estimates will be upgraded to JORC. Following the completion of the initial production plan the team will do an economic assessment on various operation options. When compared to conventional exploration, the time frame and cost is minimal.
After the closure of the mine, the main adit was sealed and actually buried as part of the rehabilitation program. The actual position of the adit is today, almost 50 years ago to the day, not certain so the opening up of the adit is in three phases.
Firstly, the general area has to be cleared to allow the use of ground penetrating radar equipment. This will locate the exact position of the adit and whether or not it is full of water. Once located, the adit will be opened in such a way as to contain the water for testing and treatment prior to release. Whilst any water is not expected to be under pressure, the quantity and necessity to treat will determine the length of time required for entering and exploring the adit, the third phase.
Colin Patterson, CEO, commented “we are thrilled to commence work on opening up the main adit of the historical Gubong mine. Both Charles Barclay and myself have reopened many mines together and from our experience we have seen that mines almost never close due to resources being exhausted. At every mine that we have re-opened we have been able to extend the life of the mine significantly and some of these mines are still producing today. The Gubong mine is a large mine which gives us plenty of scope to re-open and mine multiple areas at one time.”
The Company believes that re-opening the Gubong mine has the potential to add significant shareholder value. Colin Patterson further noted that “I feel strongly that the current share price does not reflect the true value of the Gubong project. As work commences today at Gubong and progress is made towards re-opening the mine I would expect that the market will quickly begin to grasp the true value and huge potential we believe the Gubong project has.”
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 (“MAR”)