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(Alliance News) - Bluebird Merchant Ventures Ltd said Thursday the permit grant to reopen the Kochang mine in South Korea is still being assessed, despite receiving official confirmation of the drilling grant from state-owned energy firm Korea Resources Corp in May.
Shares in the Korean focused gold mine developer were down 9.5% in London at 1.90 pence each.
When the permit is granted the mine can be re-opened and can start producing gold.
"The delay is due to a change in the Counter Measure Against Natural Disasters Act, which had a section pertaining to mining which potentially allowed for multiple interpretations," Bluebird explained.
The company said it has "lobbied" the Ministry Interior & Safety "for an official favourable interpretation to be given".
"The lobbying was supported by the Ministry of Trade, Industry & Energy, Korea Resource Corporation and Korea Institute of Geoscience & Mineral Resources as well as related law reform think tanks," Bluebird added.
The grant received from Koes in May stated drilling would start by July 1 and be completed by the end of September. Now, Bluebird has pushed that timetable back. The final timetable will be determined once the permits have been granted.
Bluebird also noted that the company would need to raise USD350,000 if the permit was not granted by the end of June. The money will be used to support the project whilst the company awaits the final decision on the permit.
In a statement, Bluebird said: "Management have consistently been the largest investor to date in Bluebird. As such, the company expects to put in place sufficient debt funding provided by management, alongside several significant shareholders, in order to bridge the gap until permits are issued. The company expects to update the market shortly."
Chief Executive Colin Patterson added: "I am pleased the authorities in South Korea continue to be supportive of reviving the mining industry and that our projects are central to that objective. Permitting is always the key milestone in seeking to progress a project beyond the exploration phase to the stage of gold production."
Patterson continued: "The process we have experienced thus far has been so much faster than I have ever seen in four decades in the mining industry. It is also encouraging that the authorities are looking to ensure that the various laws that govern mining are clear for all. To my knowledge, our permit applications when successful will be the first permits to re-open a gold mine in two decades. As such, Bluebird is really a trailblazer in reinvigorating the mining industry. With said confidence management continues to be happy to support the project."