The Asia Miner

OCT-DEC 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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the asia miner • volume 15 • issue 4 37 AROUND THE REGION Korea. Tenure is difficult to secure in South Korea and we have now been successful in acquiring four addiঞonal projects over the course of 2018, including Beopseongpo, Deokon, Aphae and now Neungju." GUBONG GOLD PROJECT Mr Mitchell states that the increased acঞvity levels at Gubong over the coming year should see the first major new gold mine open in South Korea in over 15 years. "At Kochang, we anঞcipate the formaঞon of the second Joint Venture to be completed in October and a second potenঞal mining front to advance in 2019. I see the Kochang project as potenঞally complimenঞng the development proposal at Gubong rather than compeঞng with it." Bluebird expects physical acঞvity to ramp up during this pre-development phase, with the emphasis of opening new areas of the Gubong Mine over the December quarter. Suitable sites will also be evaluated for the posiঞoning of the process plant and other infrastructure in consultaঞon with the community. Bluebird is targeঞng the commencement of gold producঞon in the December quarter of 2019, with gold producঞon levels progressively increasing over a 5-year period. Esঞmated capital costs are significantly lower due to most of the development infrastructure being already in place, only requiring progressive dewatering as the mine reacঞvates from the top down. Current early capital cost esঞmates suggest a total of less than US$5 million (on a 100 per cent basis) is required to bring Gubong into producঞon. At Kochang, significant channel sampling and easy access to the old workings have advanced the project more quickly than Gubong but development ঞmeframes are pending the report on feasibility. Part of this process will involve establishing diamond drilling plaorms from underground to enable the esঞmaঞon of Mineral Resources defined in accordance with the 2012 JORC Code and allow a life of mine schedule and mine design to be completed. The Gubong mine closed in 1971 predominantly due to the low gold price at the ঞme combined with the mine geমng deeper, low capex investment in infrastructure and the intensive manual mining method. Gubong, as quoted in Korean Government reports, had a historical producঞon of 430,000 ounces of gold and 110,000 ounces of silver over an intermient producঞon period from 1926-1971. Korean government group, KORES, has sঞpulated a significant residual 'Mining Resource' but this cannot be validated under any code (JORC 2012) and as such has not been reported. DEOKON GOLD PROJECT A first phase of systemaঞc underground channel sampling has been completed at the Deokon Gold Project in the central- southwest of South Korea under Southern Gold's strategy to commence work quickly on newly acquired tenure. The project hosts two historical gold-silver mines with very prospecঞve epithermal gold-silver targets with the potenঞal for a mineralised system much greater in size than what was historically recognised. A total of 79 channel samples were taken across 22 sample lines from two historical drives on the lower 224 Level of the historic Shin adit Au-Ag Mine showing significant intercepts including 0.35m at 12.6 g/t gold and 509 g/t silver, 0.25m at 12.3 g/t gold and 1,290 g/t silver, and 0.4m at 9.26 g/t gold and 1,165 g/t silver. The three sample lines represent a strike length of 15 metres with an average width of 0.33 metres and a weighted average grade of 11.3g/t gold and 966g/t silver. While current sampling did not extend the strike length beyond that which was defined historically, it is currently interpreted that the high-grade mineralisaঞon plunges steeply into the floor and back up into the roof of the drives. Short diamond drilling is planned to test this interpretaঞon and follow-up sampling will assess areas previously inaccessible by the addiঞon of support to make safe. Access discussions with the land-owner were approved and risk assessments conducted within three-weeks of tenement Jeonju 70 being granted. Southern Gold Managing Director, Mr Simon Mitchell believes that Deokon has the potenঞal to advance quickly. "Deokon represents a Tier 1 exploraঞon target for Southern Gold with large footprint, spectacular gold-silver grades and easy drill and development access. It is also part of the early stages of our Project Generaঞon work. "While much more work remains to be done, planning has commenced on drilling proposals with the focus on using suitable drilling equipment capable of drilling within the historical underground workings", he said. "The Shin adit at Deokon is a very small part of a much larger mineralised system but these high-grade results have clearly replicated the tenor of historical results which bodes well for confirming addiঞonal high-grade gold and silver across the project area." The recently acquired sampling results coupled with detailed geological mapping will inform an underground diamond drilling program to test down-dip and along-strike extensions. Drilling from underground will allow drillholes of shallower depths to be drilled, resulঞng in beer targeঞng and more cost-effecঞve exploraঞon. The Shin adit Mine was historically worked starঞng someঞme between 1958 and 1980, with the latest phase occurring between 1997 and 2010. Only the lower 224 level is currently accessible and comprises a 160-metre- long horizontal two by two metre drive with two cross-cuts following lode zones. NEUNGJU GOLD PROJECT Southern Gold has been granted formal tenure over Neungju, which is characterised by large zones of hydrothermal alteraঞon with mulঞple vein corridors up to 30 metres wide and hundreds of metres of strike extent.

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