Under the deal, Bluebird is required to complete a report on the feasibility to reopen the mine with an investment of $500,000, as well as complete a placing of A$250,000 ($195,853) in Southern Gold by 31 May before the JV is established.
Covering an area of 8.2km², the Kochang mine is located around 130km south-east of Bluebird’s Gubong project and is set to be operated by the company.
Operations on the mine were carried out from 1928 until 1975.
Based on a report released by Korea Resources, the mine produced 110,000oz of gold and 5.9 million ounces of silver between 1961 and 1975.
Bluebird Merchant Ventures COO Charles Barclay said: “The vertical ore bodies make for cheaper mining and development costs. The size of the old mine is smaller than Gubong and it is highly likely that Kochang could come into production ahead of Gubong.”
The Kochang deposit is an epithermal vein deposit with parallel vertical ore bodies.
Bluebird Merchant Ventures CEO Colin Patterson said: “We are delighted to add this exciting project to our portfolio, which will help the company establish itself as the major gold/silver mine developer in South Korea.
“The Kochang mine complements the huge Gubong mine well and establishes Bluebird on a path to having multiple production sites in South Korea.”
The mine closed after operations were deemed uneconomic as gold prices hit $140/oz.
Results from surface chip sample assay maps and more recent surface mapping indicated the presence of several separate veins associated with the main vein that have not previously been exploited.
The surface mapping and sampling also determined significant gold assays as showcased by the ‘silver mine’, in addition to multiple additional veins that were not accessed historically.