Australian gold explorer Southern Gold and its development partner in South Korea, Bluebird Merchant, continues to make good progress at both the Gubong and Kochang gold projects in South Korea.

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Sampling underground at the historical Shin adit mine

As reported in The ASIA Miner earlier this year, Bluebird – a 50 per cent partner in the Joint Venture – has completed its report on the feasibility of reopening the Gubong Project in late July as part of its final requirement to the commencement of the Joint Venture.

Bluebird is also anticipating completing the pre-conditions for the formation of the Kochang Joint Venture by the end of October. Metallurgical test work is currently being undertaken with results and a subsequent report on the feasibility of re-starting gold mining at Kochang submitted to Southern Gold by the end of October.

Southern Gold’s experience and strategy in South Korea over the past few years has identified the need for steady tenement acquisition followed by respectful and measured access negotiations, along with working closely with local communities to advance multiple targets in parallel.

This has sometimes necessitated a slower approach in moving from acquisition to drill testing but with a large portfolio, the operational ability to adjust from high priority target to the next, is based upon not just the physical accessibility and drilling logistics, but good social engagement and community support as well as governmental approvals.

Southern Gold Managing Director, Mr. Simon Mitchell says that Southern Gold’s Project Generation strategy aims to a build a quality portfolio of targets with demonstrable mineralisation, and not “land grab for the sake of it”.

“I believe Southern Gold now has the largest tenure position of any foreign exploration company active in South Korea. Tenure is difficult to secure in South Korea and we have now been successful in acquiring four additional projects over the course of 2018, including Beopseongpo, Deokon, Aphae and now Neungju.”

Gubong Gold Project

Mr Mitchell states that the increased activity 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 anticipate the formation of the second Joint Venture to be completed in October and a second potential mining front to advance in 2019. I see the Kochang project as potentially complimenting the development proposal at Gubong rather than competing with it.”

Bluebird expects physical activity 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 positioning of the process plant and other infrastructure in consultation with the community.

Bluebird is targeting the commencement of gold production in the December quarter of 2019, with gold production levels progressively increasing over a 5-year period. Estimated capital costs are significantly lower due to most of the development infrastructure being already in place, only requiring progressive dewatering as the mine reactivates from the top down. Current early capital cost estimates suggest a total of less than US$5 million (on a 100 per cent basis) is required to bring Gubong into production.

At Kochang, significant channel sampling and easy access to the old workings have advanced the project more quickly than Gubong but development timeframes are pending the report on feasibility. Part of this process will involve establishing diamond drilling platforms from underground to enable the estimation 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 time combined with the mine getting deeper, low capex investment in infrastructure and the intensive manual mining method.

Gubong, as quoted in Korean Government reports, had a historical production of 430,000 ounces of gold and 110,000 ounces of silver over an intermittent production period from 1926-1971.

Korean government group, KORES, has stipulated 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

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Neungju 33 assay results from historic and recent SAU rock sampling. Image ©Southern Gold. All rights reserved
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Location of the Deokon Gold Project, South Korea. Image ©Southern Gold. All rights reserved

A first phase of systematic 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 prospective epithermal gold-silver targets with the potential 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 mineralisation plunges steeply into the floor and back up into the roof of the drives. Short diamond drilling is planned to test this interpretation and follow-up sampling will assess areas previously inaccessible by the addition 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 potential to advance quickly.

“Deokon represents a Tier 1 exploration 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 Generation 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 additional 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, resulting in better targeting and more cost-effective exploration.

The Shin adit Mine was historically worked starting sometime 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 alteration with multiple vein corridors up to 30 metres wide and hundreds of metres of strike extent.

The Neungju project is located approximately 25km south-east of Gwangju city in the southern Jeolla Province, in the south west of the country. The region hosts several known gold occurrences including the currently operating Eunsan-Moisan gold-silver mine just 70km to the south-east.

Neungju was originally identified by Ivanhoe Mines in 2001 with no other previously known activities. The project area was recognised by Ivanhoe to be highly prospective, with a number of rock samples returning grades up to 26g/t Au and 139.6 g/t Ag.

Detailed ground assessment work late in 2017 identified Neungju as one of several very prospective epithermal gold-silver targets with no known drilling or mining to date. The area is difficult to explore due to the dense secondary forest and this leads to optimising field work during the post winter thaw when foliage is significantly reduced. Despite this, good field work was undertaken to identify large zones of hydrothermal alteration and multiple vein corridors each of which show wide zones of veining over hundreds of metres along strike length. Several new rock samples returned grades up to 20.30g/t Au and 163g/t Ag.

The conversion of this tenement has taken almost nine months due to the strict process meeting a satisfactory criteria level, combined with the Korean regulatory agency requirement to visit the site as part of the approval process.

Sonbul Gold Project

The Sonbul gold project was part of the initial acquisition portfolio made by Southern Gold from Asiatic Gold in 2016. Sonbul is a historic gold mine with several small adits, old workings and historical sampling and drilling on a one kilometre long epithermal vein system. Southern Gold has recently completed desktop-based and follow-up field reviews on the Mangun 23 tenement.

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