Korean Project Generation

Introduction

Southern Gold considers South Korea as highly prospective for new metalliferous deposit discoveries. Limited systematic modern exploration has been done in the Korean Peninsula, in comparison to similar belts of rocks to the northeast (i.e. parts of Japan and Russia) as well as to the southwest (i.e. in China) that both host numerous significant gold deposits.

Southern Gold also has several key people with proven discovery experience globally as well as within South Korea, including Advisor Doug Kirwin (ex-Ivanhoe VP Exploration and discovery of Eunsan/Moisan deposits) and Consulting Geologist Craig Panther (Exploration geologist with extensive experience throughout Asia-Pacific). Southern Gold believes that with the use of modern exploration methodologies and experienced people with proven discovery track records, gives it a significant strategic advantage to develop, recognise strategic assets for acquisition, and explore for deposits in South Korea.

Southern Gold’s portfolio of tenements in South Korea includes a significant number of historical gold mines. Brownfields exploration is done in and around these areas to test for further mineralisation. The Gubong District and the Yengodong District are good examples of near-mine brownfields exploration.

Ongoing Project Generation across the southern half of the Republic of Korea continues to identify numerous exciting prospective epithermal systems, including recently granted tenure, as well as several other projects which are being prepared for application or acquisition. This highly active Project Generation programme is evidence of Southern Gold’s strategic approach to developing a portfolio of high-quality value-adding commercial opportunities within highly prospective rocks in South Korea (Figure 1 and 2).

Detailed mineral system models and an understanding of various epithermal target types have only been developed in the past 25 to 30 years. Little modern exploration for this target type has taken place in South Korea outside the work of Ivanhoe Mines in the 1990’s. However, much of this data is available to Southern Gold through the engagement of Douglas Kirwin as technical advisor.


Figure 1. A schematic of the setting of high-, intermediate-, and low-sulphidation (HS, IS, LS) epithermal systems (modified from Hedenquist et al., 2000). Note: Hishikari 2016 production approximately 193koz Au @ average grade of 30g/t Au.  Grades of more than 5,000g/t Au and 14,000g/t Ag have been recorded from samples at Hishikari.

A schematic of the setting of high-, intermediate-, and low-sulphidation (HS, IS, LS) epithermal systems is illustrated in Figure 1 above. Of note is the key world-class analogues, like Hishikari (LS), Kushikino (IS) and Nansatsu (HS) (all from southern Kyushu in Japan, see inset Figure 1) and their related analogues as evidenced in South Korea, including the historic Tongyeong Mine, and the more recent and still active Eunsan-Moisan gold-silver mines in South Korea. Southern Gold’s portfolio of epithermal targets covers the whole spectrum from high-level low-sulphidation epithermal vein systems, to mineralised low-sulphidation systems (Weolyu, similar to Hishikari), to intermediate-sulphidation systems, to high sulphidation gold-copper systems. Significantly, many of the higher-level epithermal systems Southern Gold has in its portfolio have significant depth potential.

Table 1: Timeline of SAU Korean project acquisition and activity.

Project

Identified

Application

Granted

Drilled

Weolyu

-

Acquired

February 2011

December 2017

Hampyeong

November 2017

December 2017

January 2018

May 2018

Bopsuengpo

December 2017

January 2018

July 2018

September 2019

Deokon

July 2016

-

July 2016

October 2019

Neungju

November 2017

January 2018

July 2018

-

Sonbul

-

Acquired

February 2011

-

Dokcheon

November 2017

December 2017

February 2018

-

Aphae

November 2017

January 2018

March 2018

-

Jeonju

November 2017

January 2018

July 2018

-

Yeongam

November 2017

January 2018

April 2019

-


Southern Gold’s experience and strategy in South Korea over the past few years has identified the need for steady tenement acquisition followed by respectful and measured access negotiations, along with working closely with local communities to advance multiple targets in parallel. This has sometimes necessitated a slower approach in moving from acquisition to drill testing but with a large portfolio, the operational ability to adjust from high priority target to the next, is based upon not just the physical accessibility and drilling logistics, but good social engagement and community support as well as governmental approvals.

Recently granted projects (Sonbul and Dokcheon) are part of the broader strategy by Southern Gold that emanated from a significant greenfields Project Generation campaign, initially started in November 2017 and followed up with a second campaign in May-June 2018. This project generation field work was completed by a very experienced epithermal consulting geologist, as well as Southern Gold’s previous Exploration Manager, Dr Chris Bowden, who completed his Ph.D. (in association with Ivanhoe Mines activity in South Korea) on high- and low-sulphidation epithermal systems of the Seongsan district, including the discovery and development of the now-producing Eunsan and Moisan gold-silver mines, which accounts for approximately 90% of South Korea’s current gold-silver production.

More than 16 targets have been assessed in the Jeolla Province and a further 8 targets in the Gyeongsang Basin, of which a number have been prioritised for follow-up. More than 600 samples from a large number of targets have been collected and analysed, with targets ranked by relative prospectivity for recommended follow-up exploration. It is the systematic evaluation of these targets that provides the confidence and criteria to enable conversion of tenements that will then allow the next stage of exploration as well as social and government engagement.

This Project Generation work represents an ongoing initiative to capitalise on the evaluation and review of numerous commercial opportunities in South Korea. The aim is to constantly refine the portfolio (acquire as well as relinquish assets that do not meet expectations) resulting in an asset base focused on technically and socially de-risked gold-silver epithermal systems, which are typically high grade and have relatively low upfront capital costs, short payback periods, and higher profit margins. This process results in the building of a higher-quality portfolio of gold-silver assets across multiple stages of development which, in combination, represents a significant strategic footprint.

Figure 2: Location of Southern Golds current portfolio in South Korea. Project Generation activities, focussing in southern Korea, including the Jeolla District (left) and the Gyeongsang District (right) highlighted in green boxes.

Recent Project Acquisitions

Sonbul Gold Project

The Sonbul gold project was part of the initial acquisition portfolio made by Southern Gold from Asiatic Gold in 2016. Sonbul is a historic gold mine with several small adits, old workings and historical sampling and drilling on a one kilometre long epithermal vein system. Southern Gold has recently completed desktop-based and follow-up field reviews on the Mangun 23 tenement (Figure 2 and 3).

Historical Korean Government rock sampling at Sonbul (during 2003) returned peak results of (see Table 2) 20.2 g/t Au & 251 g/t Ag.

Table 2: Significant historical rock samples (>1.0 g/t Au).

Sample ID

Sample Type

Grid ID

Easting

Northing

Au g/t

Ag g/t

hs72

Rock - Unknown

WGS84_Z52Nth

268505

3890511

20.20

251.00

sb17

Rock - Unknown

WGS84_Z52Nth

268501

3890510

8.60

404.00

SB20

Rock - Unknown

WGS84_Z52Nth

268647

3889567

3.86

38.10

sb15

Rock - Unknown

WGS84_Z52Nth

268514

3890452

2.50

95.50

sb14

Rock - Unknown

WGS84_Z52Nth

268530

3890300

2.43

8.83

sb11

Rock - Unknown

WGS84_Z52Nth

268551

3890243

2.10

133.00

sb13

Rock - Unknown

WGS84_Z52Nth

268530

3890300

1.93

1.16

sb12

Rock - Unknown

WGS84_Z52Nth

268551

3890243

1.46

67.40


Sixteen (16) historical diamond drillholes are present within the Mangun 23 tenement for a total of 2,430 m drilled. Drilling was conducted by the Korean Government in 2003 and 2004. Peak downhole drill results reported are (see Table 3):

  • SB04-11: 2.1 m @ 5.2 g/t Au & 205 g/t Ag from 163.9 m downhole,
    • including 1.1 m @ 8.6 g/t Au & 355 g/t Ag;
  • SB03-4: 1.0 m @ 7.23 g/t Au & 11.8 g/t Ag from 17.1 m; and
  • SB03-1: 0.6 m @ 7.56 g/t Au & 10.7 g/t Ag from 122.3 m.


Table 3: Significant historical drillhole assay results (>1.0 g/t Au).

Hole ID

Type

Easting

Northing

Grid


From (m)

To 

(m)

Interval (m)

Au g/t

Ag g/t

SB03-1

DDH

268479

3889813

WGS84_Z52Nth


122.3

122.9

0.6

7.56

10.70

SB03-2

DDH

268501

3889810

WGS84_Z52Nth


39.0

41.0

2.0

1.17

2.20






and

54.1

55.8

1.7

5.06

1.50

SB03-4

DDH

268631

3889506

WGS84_Z52Nth


17.1

18.1

1.0

7.23

11.80






and

27.2

28.2

1.0

3.36

65.80

SB04-2

DDH

268469

3890531

WGS84_Z52Nth


68.0

79.3

11.3

1.19

25.50

SB04-10

DDH

268469

3890531

WGS84_Z52Nth


144.6

146.0

1.4

4.40

51.10






and

148.6

152.7

4.1

1.03

2.23

SB04-11

DDH

268469

3890531

WGS84_Z52Nth


163.9

166.0

2.1

5.20

205.00






including

163.9

165.0

1.1

8.60

355.00

Note: interval widths are downhole widths.


Follow-up recent field work by Southern Gold has validated historical results and included visiting the North and South Vein areas and their associated artisanal underground mine workings (Figure 3). Rock samples were primarily taken of surface quartz vein outcrop and float while limited underground rock samples were taken. Peak Southern Gold rock sample assay results returned grades up to (see Table 4):

  • 18.0 g/t Au & 15 g/t Ag, 
  • 6.24 g/t Au & 270 g/t Ag, and 
  • 5.94 g/t Au & 23.2 g/t Ag.


Sonbul Geology

The historic Sonbul gold mine is a Cretaceous rhyolite dyke-related and dyke-hosted, gold-silver mineralised, low-sulfidation epithermal silicified lode and quartz vein system, hosted within basement mica schist and meta-sediments. Higher-tenor gold-silver values are associated with zones of pronounced late-stage dilation and a related low-temperature and higher system level chalcedonic quartz overprint on earlier crystalline to mesocrystalline quartz phases. The through-going nature of the host structure and associated dyking and mineralisation is highly significant, with a traceable strike extent of at least one kilometre (Figure 3).


Sonbul – Planned Activities

Sonbul results to date, including historical mining, drilling and recent Southern Gold sampling, are highly encouraging and already confirm mineralisation on veining striking for 1 km. Follow-up planned activities at Sonbul are likely to include works focusing on delineating the continuity of mineralisation grades along the length of the vein structures and more detailed follow-up works to further test sub-surface extents to mineralisation. This work may be achieved by detailed structural and vein mapping, channel sampling and, if warranted, surface and underground drilling.

Figure 3. Simplified geological map of Sonbul Gold project showing recent Southern Gold rock sample results, historical rock sample results, and historical drillhole results.

Table 5: Significant results from SAU rock samples (>1.0 g/t Au).

Sample ID

Sample Type

Grid ID

Easting

Northing

Au g/t

Ag g/t

KRS203472

Rock - Outcrop

WGS84_Z52Nth

268627

3889559

18.00

15.0

KRS203466

Rock - Outcrop

WGS84_Z52Nth

268515

3890505

6.24

270.0

KRS205016

Rock - Outcrop

WGS84_Z52Nth

268620

3889561

5.94

23.2

KRS203463

Rock - Outcrop

WGS84_Z52Nth

268511

3890517

4.34

156.0

KRS205003

Rock - Float

WGS84_Z52Nth

268527

3890484

3.56

19.6

KRS205005

Rock - Outcrop

WGS84_Z52Nth

268502

3890496

3.52

8.7

KRS203473

Rock - Outcrop

WGS84_Z52Nth

268619

3889578

3.07

2.0

KRS205019

Rock - Outcrop

WGS84_Z52Nth

268625

3889561

2.09

5.9

KRS205018

Rock - Outcrop

WGS84_Z52Nth

268627

3889559

1.99

0.5

KRS205002

Rock - Float

WGS84_Z52Nth

268528

3890604

1.57

0.9

KRS205001

Rock - Float

WGS84_Z52Nth

268502

3890605

1.56

1.1

KRS203477

Rock - Outcrop

WGS84_Z52Nth

268629

3889553

1.07

1.0


Dokcheong Gold Project

The Dokcheon Project is located to the south-east of Gwangju city in the southern Jeolla Province (Figure 2). Field sampling and mapping was completed in June with assay results received in September.

There was a total of 49 rock samples taken and the program was successful in discovering outcrop and float quartz vein boulders along strike from quartz vein boulders sampled as part of the initial Jeolla Project Generation field trip in 2017 at the Dome Prospect. The gold grades received were generally quite low, however, so the focus for the Project will return to Dokcheon West.

Figure 4: Location of Southern Golds Dokcheon Project.


Figure 1 reference: Hedenquist, J. W., Arribas, A. & Gonzalez-Urien, E.  2000. Exploration for Epithermal Gold Deposits.  SEG Reviews.  Vol. 13. P. 245-277.

Future Plans

Southern Gold continues to review projects and ground across South Korea on an annual basis. This highly active Project Generation programme is evidence of Southern Gold’s strategic approach to developing a portfolio of high-quality value-adding commercial opportunities within highly prospective rocks in South Korea.

Southern Gold has developed a regional understanding of mineral systems across South Korea which gives it a huge strategic advantage in the region. The company aims to increase this knowledge base over the coming years to assist with acquisition of ground which will allow Southern Gold to maintain a steady flow of high quality projects to develop into producing mines.