Bluebird Merchant Ventures Ltd (LON:BMV) has received a permit to develop the Kochang mine in South Korea.
The permit grants the holder the right to develop and operate a mine for a period of 13 years. The only constraint on the permit holder is the requirement to have production within three years. The permit may be extended by a further 20 year period by application 18 months prior to the end of the permit term. There are no government royalties in South Korea.
Production is now expected in 2020, with the potential to grow from an initial rate of 10,000 ounces per year to 30,000 ounces over three years.
The company is currently in discussions about securing some form of non-dilutive funding.
Together with the Gubong permit, received on 8 November 2019, the Kochang permit provides a solid base for the company to advance into production from these two formerly producing mines.
Both mines have geological systems which generally extend to 1,500 metres in depth. Initial production from both of the mines will come from sources which are the result of many years of previous mining. Neither of the mines were cleaned out before they were closed after production ceased so a substantial amount of broken ore remains behind. This is very low cost production.
The cost of the initial production phase is US$2.2mln. The mines are jointly owned with Southern Gold, and Bluebird is actively having discussions with regards to non-dilutive debt funding in order to fund its 50% share of the required funding.
"Despite getting our two permits faster than any other country I know of it has been a lengthier process than we first anticipated,” said chief executive Colin Patterson.
“This is now over and we are excited by the prospect of achieving gold production in the coming year. We trust that our shareholders will enjoy a revaluation of the company as we move forward."