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Bluebird Merchant Ventures announces initial scoping study for South Korean gold projects

Published by , Editor
Global Mining Review,

Bluebird Merchant Ventures Ltd, a gold company primarily focused on bringing historic mines back into production, has announced a scoping study for its Kochang and Gubong Gold Projects in South Korea.


  • Results of the study show excellent initial validation of the projects’ economic potential.
  • At US$1750 gold price, for production from two operations with a cumulative approximately 400 000 tpy VAT leach processing delivers:
    • 11% post tax internal rate of return (IRR).
    • US$181 million net present value (NPV) at 10% discount rate.
    • US$50 million/y average free cash flow generation.
    • US$630/oz all in sustaining cost (AISC).
    • Less than US$600/oz average operating cost.
    • Strategy to minimise risk by completing a proof of concept at Kochang to produce a small amount of gold. This relatively inexpensive exercise will provide confidence in the key parameters such as grade, recovery, production and processing, community and government support etc.
    • CAPEX:
      • £1 million for the pre-production proof of concept.
      • Additional US$6 million to progress from proof of concept to 5 000 oz/y gold production at Kochang.
      • A further US$5 million for 12 000 oz/y gold – of which US$3 million will come from production cash surplus.
    • Payback period of less than 2.5 years.
    • Excellent potential to increase mineral resources given vein extensions in unmined areas across both mines.
    • Exploration target of 1.5 million oz + gold from Kochang and Gubong.
    • Discussions with project financiers and streaming partners ongoing.

Bluebird Merchant Ventures CEO, Colin Patterson, said: “The numbers from this scoping study, including a post-tax NPV of US$181 million, free cash of US$50 million/y and an IRR of 111%, give us a huge amount of confidence in the economic potential of our South Korean projects, and highlights the potential of this c.£12 million market cap company. We believe the mines have cumulative estimated target resources of approximately 1.5 million oz gold, garnered from data from the historical operators, Korea Resources Corporation (KORES) and work conducted by the Bluebird team. Due to the geology and metallurgy, we have decided on a simple VAT leach processing route, which positively impacts the CAPEX and OPEX, and the AISC estimated at US$630, one of the lowest on the market today.

“Once the temporary mountain use permits are granted, which we have been told by our representatives in South Korea is imminent, we are all systems go. We have our extraction licences already and there is a significant ore at a viable grade that was classified by the ‘old timers’ some 50 years ago as waste ore, that we can feed the initial plant at Kochang with. The Board is excited about the opportunity in South Korea, especially as we have already personally invested some c.US$2+ million directly and taken in stock in lieu of fees, so have skin in the game.

“Finally, we hope to update the market on our streaming discussion to fund the mine development as well as on progress from our new local partner in the Philippines who are advancing the high grade Batangas Gold Project to a production decision in return for equity. This deal provides us with a free carry and allows us to focus on South Korea where we aim to deliver two high margin and highly profitable mines.”

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