Farm In and Joint Venture agreement with Bluebird Merchant Ventures on the Kochang Project, South Korea
- London listed Bluebird Merchant Ventures (‘BMV’) to invest a further US$0.5 million and expand BMV activity to 3 historical gold mines: Gubong, Taechang and now Kochang.
- BMV are experienced narrow vein underground gold miners and will evaluate which of these historical mines has the most potential for the re-start of gold mine operations.
- All three mines were closed in the 1970’s when the gold price was less than US$140/oz.
- BMV (or its associates) to also complete a placement of A$0.25 million at A$0.386/ share before 31 May 2018.
- BMV has already dewatered and gained safe access to the Kochang gold mine and is assessing options to rapidly re-start gold mining operations.
Kochang to move forward under Farm-In and Joint Venture
Australian gold producer, Southern Gold Limited (ASX: SAU) is pleased to announce the Company has extended its Farm In and Joint Venture arrangement with London listed Bluebird Merchant Ventures (‘BMV’) to include the Kochang project in South Korea (Figure 1). The terms for the Kochang gold project are broadly in line with what was previously agreed for the Gubong and Taechang gold projects:
- A farm-in stage where BMV invest US$0.5 million in compiling a high level report on project feasibility targeting capital expenditure of no more than US$10 million, or less than US$5 million each;
- The report may or may not provide for several projects to be developed in parallel or potentially as stand-alone operations but Kochang’s relatively high gold and silver grades may enable transport of ore over distance; and
- BMV (or one of its associates) is to complete a placement in Southern Gold shares to the value of A$0.25 million and at the same price agreed for the other projects, or A$0.386/share, by 31 May 2018.
In effect this takes the potential investment by BMV to US$1.5 million across 3 projects (Gubong, Taechang and now Kochang) should they take all of them through the farm-in and joint venture process. It also potentially means a total equity investment in Southern Gold of A$0.75 million at A$0.386/share, with A$0.25 million having already been completed.
After the completion of the farm-in investment, the share placement and the report on project feasibility, a contributing Joint Venture will be formed with BMV as the operator. This is expected to occur within approximately 12 months.
To read the full announcement please down load the pdf below: