Bluebird Merchant Ventures (EPIC: BMV), the Asian focused resource development group, is pleased to announce that it has signed an agreement with Southern Gold Ltd. to develop and reopen the Kochang gold and silver mine in South Korea. Under the terms of the agreement a 50:50 joint venture will be formed once Bluebird has spent USD 500,000 to complete a report on the feasibility to reopen the mine as well as completed a Placing of AUD 250,000 in Southern Gold by 31 May 2018. Bluebird will be the operator of the project.
- The Kochang mine operated from 1928 until 1975
- A 1991 KORES reports state that the mine produced 110,000 oz gold and 5.9 Moz silver between 1961 and 1975
- Bluebird has already dewatered the mine and gained access to the lowest levels of production
- The mine has parallel vertical dipping ore bodies which are both faster and cheaper to develop
- Very encouraging gold rock-chip results seen at the Main Vein
- The project is funded
The Kochang mine is some 130 kilometres south east of the Company’s Gubong project and access to the main entrance is via sealed roads. The mine covers an area of 3.2 square miles.
The Kochang gold and silver mine was worked from 1928 until 1975. In 1991, a report by the state owned enterprise, Korea Resources Corporation (KORES), states that the mine produced 110,000 oz of gold and 5.9 million oz of silver between 1961 and 1975. The Kochang deposit is an epithermal vein deposit. The mine has parallel vertical ore bodies which are both easier and cheaper to mine. The mine closed when the gold price was USD 140/oz which would indicate that ore that was uneconomic then would now be economic.
Historically, the Main Vein was mined at the “gold mine” and the South Vein was mined at the “silver mine”. However, from surface chip sample assay maps and from more recent surface mapping, it can be seen that there are a number of separate veins associated with the main vein that have not been exploited in the past. Additionally, the “silver mine” shows significant gold assays and a number of additional veins have been found during surface mapping and sampling that were not accessed during the time when the mine was in production.
More recent mapping has also identified mineralisation of the highly prospective “Main Vein” trend over 2.5 kilometres of strike length. The Main Vein, over a strike length of 2 kilometres, has the highest gold grade structure identified at surface to date with highly significant and very encouraging rock-chip results of 8.2 g/t, 15.3 g/t, 3.61 g/t, 10.5 g/t, 6.35 g/t and 23.9 g/t. A further 500 metres of additional Main Vein strike has been identified to the south of known workings. Assays from rock-chip sampling confirm high tenor, gold mineralisation along the entire strike of the newly mapped Main Vein trend. This is now visually confirmed on surface from a newly located and significant open stope that was historically developed on high grade.
Prior to deciding to enter into the agreement announced today, Bluebird has, in addition to its due diligence work, substantially dewatered the mine and effected entrance at the lowest production level. The Company previously published a Competent Persons Report on 26 January 2018 which included the Kochang project.
The Kochang project will be funded as part of the funding that was announced on 19 December 2017. Bluebird has sufficient funding to complete the feasibility reports on both the Gubong and Kochang projects.
Charles Barclay, COO, commented:
“The Kochang mine has many benefits from a mining perspective. Accessing new ore can be achieved within six months of a decision to mine. The vertical ore bodies make for cheaper mining and development costs. The size of the old mine is smaller than Gubong and it is highly likely that Kochang could come into production ahead of Gubong.”
Colin Patterson, CEO, commented:
“We are delighted to add this exciting project to our portfolio which will help the Company establish itself as the major gold/silver mine developer in South Korea. The Kochang mine compliments the huge Gubong mine well and establishes Bluebird on a path to having multiple production sites in South Korea.”
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 (“MAR”)