Bluebird Merchant Ventures Limited Strategy Update and New Acquisition (5382A)
27 March 2017 - 5:00PM
UK Regulatory
TIDMBMV
RNS Number : 5382A
Bluebird Merchant Ventures Limited
27 March 2017
27 March 2017
Bluebird Merchant Ventures LTD
(the "Company" or "Bluebird")
Strategy Update and New Acquisition
Bluebird Merchant Ventures (EPIC: BMV) is pleased to announce
the Company's new strategic direction.
Highlights:
-- Bluebird enters into an agreement to form a joint venture to
reopen two high-grade gold mines in South Korea
-- New Management Structure
-- Directors offer to take salaries in shares
-- SP Angel become Company Broker
Bluebird is pleased to announce a joint venture with ASX listed
explorer, Southern Gold Ltd (SAU). SAU has acquired a number of
tenements within South Korea. Several old mines are located within
these tenements. As an explorer SAU's business model is to farm out
production to professional mining operators. Bluebird has selected
the Taechang and Gubong mines and will enter into a 50:50 joint
venture upon completion of a feasibility study on each mine.
Bluebird will be the Operator of the mining projects.
In order to achieve a 50:50 joint venture Bluebird has to spend
USD500,000 per mine over an initial 12-month period in order to
produce a feasibility study for restarting production. In addition,
Bluebird is required to invest AUD250,000 into a placing of
Southern Gold shares for each mine. The placings can be made at any
time up until 90 and 120 days after Bluebird is provided access by
SAU to the respective mines.
The Gubong mine was once the second largest gold mine in South
Korea. It operated from 1908 until the early 1970's when the mine
was closed due to a very low gold price. Six veins were mined and
there is extensive infrastructure such as a major adit, two
vertical shafts, incline shafts (all of which have been previously
sealed off to prevent unauthorised access) and a few hundred
kilometres of underground development. The mine area, which is 4
square kilometres in size, is recognised as being in one of the 10
major metallogenic provinces in Korea. Mineralisation is recognised
over 14 square kilometres.
Whilst Taechang has not been developed to anything like the
extent of Gubong, it was a high-grade producer. Accesses to the
underground workings were not previously sealed off and are mostly
open thus making it an ideal target for early production.
Bluebird secured the opportunity for the South Korean mines from
Momentum Resources (MR) who have been engaged with a number of
projects within South East Asia over the past decade. The MR team
are professional mine operators and have many years of experience
in all aspects of mining and are based within East Asia. The team
will join Bluebird and have been incentivised to achieve key
project milestones as described in Appendix 1. Colin Patterson and
Charles Barclay collectively own 23% of MR.
Colin Patterson and Aidan Bishop have both offered to the Board
that they would like to take 100% of their respective salaries over
at least the next 12 month period in stock and for that stock to be
subject to lock-in arrangements to be agreed with the Board.
Given the current uncertainty with Philippine mining policy the
Company has no major expenditure planned in the Philippines this
year. The Company expects to continue its Philippine business when
the operating environment and mining policy becomes clearer.
However the Company will continue to work with its local partner
towards achieving key permitting milestones.
Due to the expectation that the South Korea opportunity will
become a significant one for the Company, the Directors have
elected to terminate discussions in relation to the unsolicited
offer that was first announced on 11 October 2016.
Colin Patterson will become Chief Executive Officer whilst
Charles Barclay will both join the Board as an Executive Director
and become Chief Operating Officer. Stuart Kemp will become the
Chief Financial Officer. These appointments take effect on 31 March
2017. Both Colin Patterson and Charles Barclay have a track record
of bringing old underground gold mines back into production. In
addition they have both taken mines from the exploration stage
through to mine development and operation.
Lastly, the Company is pleased to announce that it has retained
SP Angel Corporate Finance to act as Company Broker.
Colin Patterson, incoming Chief Executive Officer commented:
"The strategic shift towards South Korea represents an exciting
move for Bluebird. The prospect of refurbishing old gold mines in a
large gold district offers the potential to create significant
value for shareholders. Compared to most countries in the World,
Korea is an excellent jurisdiction to rapidly get mines into
operation at a modest cost."
Charles Barclay, incoming Chief Operating Officer stated: "The
opportunities afforded in reopening old gold mines with existing
resource and excellent potential to delineate further resource are
many. Most old mines were never abandoned in an organised manner
with a lot of broken ore never cleaned out. This presents a good
opportunity for cheap production. Apart from this the value of
hundreds of meters of developed infrastructure is enormous."
Appendix 1
Momentum Resources will be issued up to a total of 80 million
shares based on the following project milestones:
8 million shares upon Bluebird executing the agreement with
SAU;
8 million shares upon Bluebird making the first placement in SAU
shares;
8 million shares per project for achieving positive feasibility
to enable the project to enter the production phase;
50% of the remaining balance of shares upon the project funding
the construction phase;
The remaining balance of shares upon the project upon commencing
production i.e. pouring first gold.
Two further milestone payments of USD 1 million each will be
paid in shares once the company achieves a 90 day VWAP share price
of 6p and a 90 day VWAP share price of 10p.
Enquiries:
Bluebird Merchant Ventures
Ltd +44 7797 859986
Jonathan Morley-Kirk,
Non-Exec Chairman
Walbrook PR Limited +44 (0)207 933 8783
Gary Middleton / Nick
Rome
This information is provided by RNS
The company news service from the London Stock Exchange
END
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