February 19, 2018 / 10:08 AM / 7 months ago

Bluebird to inject new life into old South Korean gold veins

LONDON (Reuters) - Asia-focused mine developer Bluebird Ventures (BMV.L), with venture partner Southern Gold (SAU.AX), plans to reopen South Korean gold mines closed decades ago and is aiming for profits of around $100 per tonne, Bluebird’s CEO said.

The mines closed in the late 1960s and 1970s when the gold price was less than $140 an ounce, making them uneconomic, compared with more than $1,300 now. XAU=

Colin Patterson, CEO of Bluebird, said in an interview his focus was on the Gubong and Kochang mines, which are established assets, rather than exploration projects, making them more attractive to risk-averse London investors.

Bluebird’s London share price has risen nearly 9 percent this year as it added Kochang to plans which already included the Gubong mine.

Patterson said the company’s aim was to report on the feasibility of reopening the mines by the end of the second quarter and the joint venture agreement, making it the operator, would then be concluded.

Bluebird will then build a proof-of-concept plant with a view to a net profit of $100 a tonne, scaling up to 200 tonnes per day and eventually 1,000 tonnes per day.

Four years from now, Patterson said production should be 50,000 ounces per year.

“The broader aim is to be the pre-eminent mine developer in South Korea and to bring back to life the towns of Gubong and Kochang,” Patterson said.

Southern Gold this month issued a statement saying it was suspected that “much of the mineralisation that was considered waste in the 1970s is now likely economic”.

Reporting by Barbara Lewis; editing by Jason Neely

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