Channel Sampling Results of In-situ Ore At Kochang

May 23, 2018

Bluebird Merchant Ventures (EPIC: BMV), the Asian focused resource development group is pleased to announce further encouraging results from underground channel sampling at Kochang on in-situ ore left behind by the original miners.

Highlights:

  • 1,330 metres of vein sampled at 5 metre intervals
  • Average channel sample of 5.92 g/t Au and 31.54 g/t Ag
  • Potential operating profit of USD 500/oz from in-situ ore
  • Orogenic deposits typically extend over 1 kilometre in depth and Kochang has only been developed to a depth of 150 metres

The initial sampling programme concentrated on two of the potential gold sources available when reopening old workings; namely broken ore and remnant mining. Remnants are areas of in-situ ore left behind by the original miners predominantly because the grade was considered too low to mine profitably. This is known as selective mining and Bluebird will follow the same principal when returning to production.

Approximately 2,000 metres of underground workings are currently open and this represents roughly 50% of the total historic gold mine workings.  The workings were surveyed using the latest 3D laser technology to generate a 3D representation of the workings. 1,330 metres of vein was sampled at nominal 5 metre intervals in a number of drives on two levels of the mine.

Of this 1,330 metres, a total of 589 metres (44%) were found to have significant channel samples (>3g/t of gold) with an average channel sample value of 5.92 g/t Au and 31.54 g/t Ag and average channel widths of 0.42m. Channel width simply refers to the width of the vein. Any width of vein can be economically viable for mining if the grade of gold is high enough and it is appropriately mined.

As we advance the project, further sampling of this nature will enhance our understanding of the deposit.  Over the coming weeks the Company will carry out the first round of metallurgical test work specifically for Kochang.

The Company will also complete the modelling of the ore veins with a view to connecting the surface expression, (the known position of the veins on surface), some 150 metres above and projecting them to fill the gap of 600 metres between the gold and silver mines. The result of this work will indicate the work to be carried out for the longer term production for the mine and the potential high-grade trends. These type of orogenic gold deposits are typically over a kilometre in depth and, as the mine is currently only 150 metres in vertical extent and recent drilling intersecting three veins with the lowest at a depth of some 90 metres below the current exposed depth, the potential is very good.

Charles Barclay, COO, commented:

“We are pleased with the recent results obtained from the underground channel sampling programme as well as the significant rate of progress that is being achieved at Kochang. The samples show positive indications of high average gold and silver grades.

“It is important to note that when the mine closed in 1975, the gold price was around US$140 per ounce. From a financial perspective, we are delighted by the results as the capital and primary development is already completed and stoping, the final step in mining the vein, and processing are the main cost parameters. Initial estimate of the cash cost per ounce from this product would yield a margin of US$500 per ounce assuming a gold price of US$1,300 per ounce. It also assumes, at this stage, that the metallurgical recovery will be similar to that achieved in the Gubong tests that were announced on 9 May 2018.

“Bluebird maintains a firm approach to selective mining which further enhances our low operational costs. This was highlighted in the Company’s grab sample results, announced on 15 May 2018, where we identified how sorting broken rock could further enhance the grade.

“We look forward to providing further updates in due course.” 

Table showing Significant Results (>3g/t Au) from the Channel Sampling Program.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 (“MAR”)