Bluebird Merchant Ventures (EPIC: BMV), the Asian focused resource development group, is pleased to report that, over the past week, mine engineers have entered the Gubong mine through an adit, the main decline shaft, as well as a newly discovered smaller decline shaft to commence the initial evaluation of the project.

Highlights

• In three days the company has opened up 300 metres of horizontal development and 50 metres of shaft
• The tunnels are approximately 1.5-1.7 metres high and 1.5 m wide, which was typical of near surface development
• The team noted a number of unmined narrow veins and took some initials samples for analysis.
• Mine geologists will start work this week on the mapping and sampling phase
• From initial inspection the Company is optimistic for the reopening of the mine
• The company can now begin to gather metallurgical samples to assess the optimum process using today’s technology

 

The first adit (named adit 4) was explored for a total distance of 250 metres in all directions. The area is possibly some of the first workings ever created on the mine. The tunnels are approximately 1.5-1.7 metres high and 1.5 m wide, which was typical of near surface development when hand-held mining was the norm. The team noted a number of unmined narrow veins and took some initial samples for analysis.

Having established that the mine is reasonably accessible, the company has arranged for mine geologists to start work this week on the mapping and sampling phase of the project during which the company will start determining the potential resource available for mining in terms of tonnage and grade. From the team’s initial inspection, the opinion remains positive for the reopening of the mine. The Company can also now begin to gather metallurgical samples to assess the optimum process using today’s technology.

Having completed the inspection of the adit, the team moved to the Main Shaft which is a 60-degree decline shaft that was located the week before. This shaft is approximately 2 metres high by 4 metres wide and is fully concrete lined and in exceptionally good condition. The old infrastructure at the top of the shaft had been previously reclaimed so our team initially entered the barrel by abseiling about 50 metres down the shaft. Lower down, the team found that the rails were still installed.  It is likely that a double drum winder was probably the type of hoist used when the shaft was operational. This shaft is believed to have been a later installation on the mine and was used as the main shaft to deliver ore directly to the adjacent plant crushers which were situated on surface. It appears from the plans that it is approximately 100 metres in length. The 50 metres that has been inspected is potentially a valuable asset worth about USD 500,000 in today’s terms as developing new shafts costs approximately USD 10,000 per metre. The team have also started to excavate another shallow decline which does not appear to be on the old plans of the underground workings.

Re-opening an old mine has many advantages to an exploration project.  Firstly, very few exploration projects ever become mines and require many millions of dollars of investment into the exploration process.  When re-opening an old mine like Gubong there is no exploration stage which represents a huge cost saving.  Another advantage is that an old mine will have existing infrastructure.  The Gubong mine has over 120 kilometres of underground tunnels as well as at least three shafts and has an established tailings area.  The cost to develop new tunnels in today’s terms is approximately USD 3,000 per metre.

Colin Patterson, CEO, commented:

“The potential for re-opening the Gubong mine is proving to meet if not exceed our expectations.  When the mine closed in 1971 the gold price was below $40 per oz. which meant that substantial ore was not economic to mine. Today however at a gold price of $1,275 per oz it will be economic. 

“I am very pleased to see that even in exploring the first 250 metres that unmined veins are evident.  The fact that within three days we have accessed and explored 50 metres of shaft and the first 250 metres of tunnels is a testament to both the skill and experience of our team as well as the condition and stability of the Gubong mine. 

“This rapid gathering of information demonstrates how re-opening dormant mines can generate magnitudes more information and subsequent news flow when compared to an exploration drilling project.  We will now quickly seek to delineate enough ore and resource for the first three years of mining so we can fast track the production process.  This will in turn fund the much larger prize of the full mine and the obvious depth and lateral extensions which have clearly been identified by exceptionally good drilling results previously announced.”

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