Interim Results

Bluebird Merchant Ventures Ltd, a gold company primarily focused on bringing historic mines back
into production, announces its Interim Results for the six-month period ended 30 June 2023.

Developments across the gold project portfolio to fulfil strategy to become a producing
entity in both South Korea and the Philippines.
Scoping Study for two Korean projects indicated post-tax NPV of USD181 million, free cash
of USD50 million per annum, an IRR of 111% and a USD630 per oz All in Sustaining Cost
(USD1,750 per oz gold price).
MTUP at Kochang referred to the Board of Audit and Inspection, Korea for adjudication – all
legal and regulatory requirements had been covered in Bluebird’s initial c.800-page
JV partner identified to jointly develop Gubong Gold Project, the larger of Bluebird’s two
South Korean gold projects – estimated to have in excess of 1.3Moz Au.
Local JV partner secured with decades of mining experience in-country to develop the
Batangas Gold Project in the Philippines – recognised the potential of the project and new
mining environment.
Certificate of Approval from the Mines and Geosciences Bureau for its Two-Year Community
Development Plan granted for Batangas.
Raised GBP1,215,000 – this followed the raising of GBP230,000 in December 2022.
Reduced overhang following long term shareholder and supporter Catalyse Capital buying
out Southern Gold’s shareholding.
Company now debt free with all loans paid off and cash at bank – low overheads with JV
model and directors’ salary sacrifice scheme in place until MTUP grants.

The six-month period under review, although not without its challenges, has witnessed significant
developments for your Company both in South Korea and the Philippines as we look to become a
gold producing entity and deliver long term value for all stakeholders.

During the period, the Company published a Scoping Study highlighting the potential of the Gubong
Gold Mine (‘Gubong’) and Kochang Gold and Silver Mine (‘Kochang’) in South Korea, secured a local
JV partner in the Philippines to advance the Batangas Gold Project (‘Batangas’), raised capital and
cleared all corporate debt. However, as shareholders will be aware, the issuance of the Mountain

Temporary Use Permits (‘MTUPs’) for Gubong and Kochang has taken far longer than anticipated,
particularly in light of the fact that both projects have already received extraction licences.

South Korea
The Gubong and Kochang licences remain first class assets and fit our model, being low CAPEX, high
grade opportunities where we believe production can be recommenced quickly and existing
resources can be expanded to facilitate long term, high value returns. In February, the potential of
the two projects was highlighted in the publishing of the Scoping Study, which reported a post-tax
NPV of USD181 million, free cash of USD50 million per annum, an IRR of 111% and a USD630 per oz
All in Sustaining Cost. This was conducted on a USD1,750 per oz gold price against the current gold
price of c. USD1,930 per oz.

However, in order to advance, the Company needs the grant of the MTUPs. Throughout the period,
the Board was focussed on the granting of these, which are the last part of the legal requirements
needed to commence bringing the mines back into production. The Company’s lawyers and
permitting consultants frequently reiterated their confidence in the likely granting of these MTUPs
and emphasised that all legal and regulatory requirements had been covered in Bluebird’s initial
c.800-page submission. Despite the supply of additional information, including community
engagement and clarity on environmental impact, the issuance of the MTUP at Kochang was
referred to the Board of Audit and Inspection, Korea. Its adjudication is mandated to take 60 days, so
is scheduled for September. However, as previously reported, this timeline is not guaranteed and
following advice from our legal advisors, it can often be materially different from what is mandated.
When the Board receives an official response, we will communicate this to the market. It is
extremely frustrating that while the Company has support from the local landowners and
community, and the submission covered all the legal requirements, the granting has not occurred.
The Board remains confident but believe this has become regionally political and therefore we
welcome the audit procedure.

As a result of the above, we paused the submission for a MTUP at Gubong to evaluate all
permutations encountered at Kochang. The politicising of events led us to the conclusion that there
was a need for more South Korean representation and accordingly we identified a local partner to
look to jointly develop the larger of our two projects. It recognises the scale and potential of the
asset, which we estimate to have in excess of 1.3Moz Au and believe that it can both assist in the
securing of the permit and the funding of the development of the mine to production. Notably, a
similar JV model has been successful at Batangas in the Philippines where our partner has been
instrumental in securing the recently announced Certificate of Approval.

We remain extremely positive about the development potential of this high-grade project in the
Philippines. This was our original listing asset, whose development was placed on hold due to a
deterioration of political support for mining in the Philippines. With the election of President

Marcos in June 2022, this situation has ameliorated translating into the project being primed for
development. Accordingly, we signed a JV with a Philippine company, which has decades of mining
experience in-country and recognised the potential of the project.

The JV covers the entire Batangas Project area, which has a total JORC compliant resource of
440,000 ounces, including a maiden ore reserve of 128,000 ounces (including silver credits),
although work will initially focus on the Lobo area, implementing the necessary work with a view to
advancing it to construction. Lobo has a JORC Compliant Ore Reserves of 171,000 tons at 6.6 g/t for
36,000 oz Au, an 82,000 oz Au inferred resource plus multiple epithermal and high-grade targets
identified over 14km of identified mineralised structures. Grades include high-grade surface trench
intersections of 8.35m @ 18.4 g/t Au, 2.6m @ 28.6 g/t Au and 3m @ 22.2 g/t Au.

The JV structure provides Bluebird with a free carry to a production decision at Lobo in return for
60% of the project equity. To provide context in terms of value, on top of the identified ounces and
expansion potential, exploration expenditure to the tune of c.USD20 million has been invested
across the Batangas licence to date. In the initial prospectus, the Company had an option to farm
into 51% of the project and will now have a free carry to construction decision and maintain a 40%

Since signing the JV, we have received the Certificate of Approval from the Mines and Geosciences
Bureau for its Two-Year Community Development Plan. This represents a significant step forward
and underlines the importance of the Company’s local development partner in navigating the
regulatory environment to allow the Lobo underground mine to be advanced to a production
decision. Importantly, the Company already has two 25-year Mineral Production Sharing
Agreements covering this area.

The next steps for the JV partner include a new drilling campaign to increase the resource, the
development of an underground mine plan, and the application for an Environmental Compliance
Certificate. We are working closely with our partners to achieve these objectives, generate
consistent news and advance to a decision to mine as quickly as possible.

Early in the period we raised GBP1,215,000 through SI Capital via a placing and subscription for
60,750,000 New Ordinary Shares at 2 pence per share. This followed the raising of GBP230,000 in
December 2022. The capital raise was to fully fund proof-of-concept production at Kochang but, with
the delays with permitting, we took the decision to pay down our existing loans to become debt

They Directors remain significant shareholders of the business owning a cumulative 166,176,351
shares in the Company.

The Company recognises the importance of cash preservation and being responsible custodians of
our assets, to protect the capital structure of the Company where possible. Accordingly, the Board
has taken measures to reduce spend and again the directors’ renumeration will be taken in equity
which means cash overheads are low. Therefore, with a free carry in the Philippines too, we don’t
envisage having to return to the market anytime soon. Additionally, on granting of licences in South
Korea, multiple financing opportunities should be available; it is just about deciding which is in the
best interest of shareholders.

More recently Catalyse Capital Ltd (‘Catalyse’), a long running and supportive shareholder of
Bluebird, has agreed to acquire Southern Gold Limited’s (‘Southern Gold’) 122.5 million shares in the
Company. The Board believes that the share purchase by Catalyse, that recognises the true
potential of the Company’s South Korean and Filipino gold projects, will remove a significant
perceived ‘overhang’ in the trading of Bluebird’s shares. Southern Gold’s selling, caused by their
strategic shift away from gold and into critical metals, has undoubtedly affected our share price, and
to ameliorate the Southern Gold situation is good news for Bluebird and will allow investors to focus
on the inherent value of our three-project portfolio.

The sum of the parts of the business, three high grade gold projects, an estimated 1.5m oz Au in
South Korea, close to 450,000 oz Au in the Philippines where we have a free carry to a production
decision, defined paths to production, supportive local partners, a heavily invested management,
cash, and no debt, are not reflected in our current price. We await progress on all three projects and
believe that by the time I report next, we will have full clarity on our potential as we look to build
value and reward shareholders for their patience.

Previous Post
Share Purchase Agreement Removes Market Overhang
Next Post
High Grade Lobo Gold Prospect To Be Drilled In The Philippines