TIDMBMV
RNS Number : 5355K
Bluebird Merchant Ventures Limited
29 August 2023
Bluebird Merchant Ventures Ltd / EPIC: BMV.L / Market: FTSE /
Sector: Mining
29 August 2023
Bluebird Merchant Ventures Ltd ('Bluebird' or 'the Company')
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.
Overview:
-- 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
submission.
-- 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.
CHAIRMAN'S STATEMENT
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.
Batangas
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%
interest.
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.
Corporate
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
free.
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.
Conclusion
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.
Jonathan Morley-Kirk
Chairman
The Interim Financial Report can be downloaded in PDF format
from the following link:
http://www.rns-pdf.londonstockexchange.com/rns/5355K_1-2023-8-28.pdf
This announcement contains inside information for the purposes
of article 7 of the market abuse regulation EU 596/2014
("MAR").
**ENDS**
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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IR NKFBQABKKAFB
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