Southern Gold Limited (ASX:SAU) has plotted out a strategic direction for 2022 and beyond, which includes consolidating its activities on the home front, continuing exploration in South Korea and recruiting a new CEO.
South Korea will continue to be SAU’s primary focus, with a major campaign of field work underway.
South Korean focus
The company’s technical team believes prospecting in South Korea continues to be a promising pursuit given its geology and historical gold production.
Stable government, minimum regulation and an English-speaking workforce don’t hurt, providing a positive environment for modern exploration techniques.
An exploration manager has been based in-country since October 2021 and additional senior geological staff and contractor resources have been engaged for ongoing exploration campaigns.
Project generation programs are planned for the next five months in the Haenam, Kaldam-Jinan, South Gyeongsang and Yeongdong basins.
The company has 65 tenement applications in progress for a total area of 181.6 square kilometres.
COVID-19 has made a dent in plans, with contractors unable to travel to the country for field work, but the company remains focused on assessing existing areas under application and progressing the discovery of new areas of interest for application.
The number of personnel on the ground in South Korea is 15, which is the largest exploration team in the country.
Home front pivot
SAU also intends to turn its attention to the home front, following successful discovery and production activities at the Cannon Gold Project in Western Australia. It plans to use its management and exploration expertise to seek new strategic investments and outright project acquisitions or joint ventures in gold, silver or copper tenements in Australia.
The board believes the company is in a good cash position to take up opportunities in Australia, and expects the identification of these opportunities to take two to three months.
Southern Gold’s Australian exploration assets previously included the Bulong South, Glandore and Cowarna gold projects.
Bluebird Merchant Ventures holding
The company is exploring options relating to 200 million shares it owns in Bluebird Merchant Ventures Ltd (LSE:BMV) for the purchase of its joint venture interest in the Kochang and Gubong mines in South Korea.
At the closing price on February 7, the BMV shares are marked to market at $7.6 million.
The holding represents 32.1% of the issued capital of BMV, with 75 million of the shares subject to escrow until June 21, 2022.
As the largest shareholder in BMV, SAU believes it has clear alignment with the BMV board to have funding in place and people on the ground in South Korea to develop the Kochang and Gubong mines.
Recruitment of CEO
An executive search firm has been appointed to identify an experienced leader CEO to drive the company’s strategic vision in 2022.
SAU chair Greg Boulton said: “With our cash reserves of $6.5 million and the ability to reduce our holding in BMV as appropriate, we are well positioned to not only increase our exploration focus on South Korea but also to search for and evaluate strategic investments and project interests in gold and copper exploration and development assets in Australia.
“Our directors have significant skills in exploration, investment evaluation and deal structuring, and these skills will be used to develop a short list of gold, silver and copper exploration projects for the board to consider."