TIDMBMV
RNS Number : 4745F
Bluebird Merchant Ventures Limited
10 July 2023
Bluebird Merchant Ventures Ltd / EPIC: BMV.L / Market: FTSE /
Sector: Mining
10 July 2023
Bluebird Merchant Ventures Ltd ('Bluebird' or 'the Company')
South Korean Update
Bluebird Merchant Ventures Ltd, a gold company primarily focused
on bringing historic mines back into production, is pleased to
provide an update on the Gubong Gold Mine ("Gubong") and Kochang
Gold and Silver Mine ("Kochang") in South Korea.
As shareholders will be aware, the issuance of the Mountain
Temporary Use Permits ("MTUPs"), small parcels of land needed to
allow commencement of surface work at the two historic mines to
stockpile ore, store equipment and machinery and for general
logistic, are the last part of the legal requirements needed to
commence bringing the historic high grade Gubong and Kochang mines
back into production. The grant of these has taken far longer than
anticipated, particularly in light of the fact that both projects
have already received extraction licences. However, the Board, in
tandem with its lawyers and planning consultants, remain positive
that these will be granted, and the Company will be able to bring
both Gubong and Kochang back into production.
The potential value of the two projects is clear, as highlighted
in the Scoping Study. This was conducted on a USD 1,750 per oz gold
price, and reported a post-tax NPV of USD 181 million, free cash of
USD 50 million per annum, an IRR of 111% and a USD 630 per oz All
in Sustaining Cost. The Board remains totally committed to
achieving the grant of the respective licences.
Kochang:
The issuance of the MTUP at Kochang has been referred to the
Board of Audit and Inspection, Korea ('BAI Korea'). The BAI, which
is a constitutional agency established under the President, but
retains an independent status in terms of its duties and functions,
inspects the work performed by local government to ensure that they
followed the correct processes and law. Their adjudication is
mandated to take 60 days but this is not guaranteed. Since the
Kochang licence has already been awarded an extraction licence by
the Ministry of Mines, has the support from the local landowners
and community and the submission covered all the legal
requirements, the Company remains in a strong position. The
Company's lawyers and permitting consultants have again emphasized
that all legal and regulatory requirements had been covered in
Bluebird's initial c.800-page submission and that the additional
actions requested re community engagement have been successfully
completed, and the requested measures to reduce the risk of
environmental impact of the development of Kochang, submitted. The
Company believes that the issue of the MTUP has become regionally
political and therefore welcomes the audit procedure.
Gubong:
On receiving the further questions from the local government at
Kochang, the Board decided that the best course of action re the
advancement of Gubong, was to pause the submission and identify a
local partner to jointly develop the larger of its two projects.
This has been successful in regard to the Company's high grade
Batangas gold project in the Philippines, where its local joint
venture partner has been instrumental in securing the recently
announced Certificate of Approval from the Mines and Geosciences
Bureau (MGB) for its Two-Year Community Development Plan. The
Company is pleased to announce that it is in advanced negotiations
with a local Korean entity to form a Joint Venture to advance
Gubong. As part of the JV, where each party will be net
contributors to the project, Bluebird's team will supply technical
know-how and the Korean partner, permitting and in-country
expertise.
Gubong was historically the second largest gold mine in South
Korea estimated 2.34M tonnes at some 7.3g/t Au garnered from 57
drill holes over 17,715.3 metres. The Board believe it has a
geological potential of 1 million + oz Au in-situ, plus an
estimated additional 300,000 oz Au from satellite ore bodies. The
initial production opportunity is the 25 levels already developed
with all the remnants and unmined areas left by the original
miners. The 25 levels extend over 120km in total length which
indicates the size of the opportunity.
Bluebird CEO Colin Patterson said, "We are progressing on both
fronts in Korea. The Joint Venture model has worked for us in the
Philippines, and we believe that this is the best option to secure
the MTUP for Gubong and advance the project. The potential local JV
partner has recognised the scale and potential of the asset, which
we estimate to have in excess of 1.3m oz Au and believe that they
can both assist in the securing of the permit and the funding of
the development of the mine to production.
"While we are frustrated with the delays at Kochang, we welcome
the Audit by the Board of Audit and Inspection, Korea, as we have
submitted and complied with all the necessary regulations and
submission requirements for the grant of the MTUP, which is
concurred by our lawyers and planning consultants.
"We are not taking our eyes of the prize and remain 100%
dedicated to achieving our objectives and bringing the two Korean
high-grade mines back into production. They are geologically sound
with simple metallurgy, have a cumulative 1.5 million oz Au and
indicative economics suggest a post-tax NPV of USD 181 million,
free cash of USD 50 million per annum, an IRR of 111% and a USD 630
per oz Au All in Sustaining Cost. These are excellent numbers.
"I understand the frustrations and would like to thank
shareholders for their continued patience. We have cash from our
recent fund raising, are debt free and the Board again is not
taking cash renumeration until the MTUPs are granted. We have
invested heavily in the Company, so we are fully aligned with
shareholders and therefore look forward to announcing
progress."
This announcement contains inside information for the purposes
of article 7 of the market abuse regulation EU 596/2014
("MAR").
**S**
For further information please visit https://bluebirdmv.com or
contact:
Colin Patterson Bluebird Merchant Ventures Ltd Email: colin@bluebirdmv.com
Nick Emmerson SI Capital Tel: 01483413500
About Bluebird:
Bluebird Merchant Ventures Ltd (BMV.L) is a London listed South
Korea-focused resources company centred on bringing historically
producing gold mines back into production. The Company, led by a
team of proven mine rehabilitation experts, currently has two 100%
owned licensed high grade narrow vein mining projects, the Kochang
Gold and Silver Project ('Kochang') and the Gubong Gold Project
('Gubong'), which each have a defined route to low cost/ low capex
production with a cumulative target of producing 100,000 oz + Au
per annum.
The management team has invested cUS$2 million personally into
the Company and believe, following analysis of historic production
and exploration data, as well as extensive sampling, geological,
geophysical, and engineering studies, there is potential for in
excess of 1.5 million oz of mineable gold in its Korean projects
alone.
Kochang is an epithermal vein deposit with parallel vertical ore
bodies covering 8.3 sq km that reportedly produced 110,000 oz of
gold and 5.9 million oz of silver between 1961 and 1975. Consisting
of a gold and silver mine, there are currently four main veins and
a number of parallel subsidiary veins vein which have been
identified, as well as a newly identified cross-cutting vein.
Historic drilling indicates the veins continue to depth below the
current 150m mine and mapping shows the veins on surface providing
potential above and below the old workings. The veins extend to the
NE providing a strike length of 2.5km with 600m between the two
mines not exploited. There is potential to expand operations to the
southwest/northeast and to depth, as well as exploit the already
mined areas. The total resource potential is between 550,000 and
700,000 tonnes, with a range of grades between 5.2 g/t to 6.6 g/t
gold, and 27.3 g/t to 34.8 g/t silver. Following the granting of a
Mountain Use permit, there is an estimated 6-to-9-month development
time to trial mining.
Gubong, which was historically the second largest gold mine in
South Korea has 9 granted tenements covering c.25 sq km. Gubong is
moderately dipping with 9 veins extending 500m below surface and
known to extend at least a further 250m. However, the production
opportunity for Bluebird prior to looking at deepening the mine is
the 25 levels already developed with all the remnants and unmined
areas left by the original miners. The 25 levels extend over 120km
in total length which indicates the size of the opportunity. The
Korea Resources Corporation ('KORES') estimated 2.34M tonnes at
some 7.3g/t Au garnered from 57 drill holes over 17,715.3 metres.
With additional sampling, mapping, pit modelling and grade
analysis, plus the fact that Gubong is an orogenic deposit, which
typically have a depth of 2km compared to the current depth of
500m, the Board believe it has a geological potential of 1 million
+ oz Au in-situ, plus an estimated additional 300,000 oz Au from
satellite ore bodies.
Additionally, the Company has the highly prospective Batangas
Gold Exploration Project in the Philippines, where it has an
agreement with a Philippine company, whose owners have decades of
experience in mining, to develop the Project. The JV covers the
entire Batangas Project area, which has a current JORC compliant
resource of 440,000 ounces, including a maiden ore reserve of
128,000 ounces (including silver credits). Exploration expenditure
to the tune of c.$20m has already been invested. Work is focused on
completing Exploration and Environmental Work Programmes initially
targeting the high-grade Lobo area, although there is excellent
exploration potential across the licence with high-grade targets
already identified and 14km of identified mineralised structures.
The staged agreement is based on the JV partner achieving defined
development goals and provides Bluebird with a free carry on the
development of Batangas with a view to advancing to
construction.
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