LONDON (Alliance News) - Bluebird Merchant Ventures Ltd said Tuesday it received "encouraging" results from the underground grab sampling from the Kochang mine in South Korea that it intends to re-open.
The initial program "indicates substantial improvement" of the grade through sorting, up to 5.12 grammes per tonne gold from 1.69 grammes per tonne previously. This could result in an operating profit of USD750 per ounce from the broken rock, according to Bluebird.
The increase in gold indicates that "substantial beneficiation" of the grade can be gained through sorting. The company said it expects to update the market next week with further results from the underground sampling program of the veins at Kochang.
Broken rock is blasted rock that was not taken out of the mine when the mine was initially in use. The rock would not have been taken out due to is being uneconomic at the time.
When the Kochang mine closed in 1975 the price of gold was USD140 per ounce. The current price of gold is USD1,300 per ounce.
The complete sampling program was undertaken over 1,300 metres on two main levels. The mine has three levels with three veins that were historically mined.
Chief Operating Officer Charles Barclay said: "We are delighted with results from this initial programme at Kochang and the grades that we have seen.
"Although the engineers and geologists are yet to accurately determine the tonnes of broken rock/ore that is remaining it is worth noting that for every 1,000 tonnes of sorted rock delivered for metallurgical treatment at a conservative grade of say 4 grammes per tonne gold, recovery of 85% and total operating cost of approximately USD60 per tonne, the company could expect to make an operating profit of around USD750 per ounce of gold recovered at a gold price of USD1300 per ounce.
"The current economic climate for gold mining, combined with our higher than expected grades, provides us with great confidence as we progress further with our underground sampling programme. We look forward to providing further updates in due course."
Shares in Bluebird were up 2.3% on Tuesday at 3.27 pence each.
Bluebird Merchant Venture (BMV)