“We are explorers not miners” is a phrase often used by juniors looking to prove up a project and sell it on.
So it is unusual, rare even, to come across a team at the helm of an AIM-listed company who say the opposite.
But Colin Patterson and Charles Barclay, respectively chief executive and chief operating officer of Bluebird Merchant Ventures Limited (LON:BMV), insist they are miners through and through and specialist ones at that.
In short, their expertise is re-opening closed mines and at Gubong in South Korea and the nearby Taechang and Kochang, Patterson reckons he has hit the proverbial mother lode.
South Korea is simply the most supportive jurisdiction he has ever worked in, Patterson told Proactive.
No royalties, partial state funding for environmental projects and enthusiastic local governments are worlds away from the backdrop to his previous undertakings, of which there are many, he adds.
Most notably, Patterson points to the rejuvenation of Western Mining’s Emperor gold mine in Fiji.
Having been handed the keys in expectation of an orderly wind-down, within two years production had risen 75% to 140,000oz per year.
Western Mining even sent a team over to the mine to understand where it had gone wrong, he quips.
That project made him (and his backers) a lot of money and it’s clear he sees similar potential in the clutch of projects Bluebird now has on its books in South Korea.
Gubong closed in 1970, but Patterson points out that was at a time when the gold price was just US$40 per oz, whereas most of the mines he had worked struggled to make money at a price of US$1,000 per ounce.
“In those days anything less that 6-7g/t would not have been bothered with.”
But grades of that magnitude are rare now and with the gold price at US$1,350 per oz, what was uneconomic then is looking pretty attractive to Patterson now.
Untouched ore bodies
“At Gubong, we know there are nine stacked ore bodies, only half of which have been mined or partially mined.”
High-grade remnants have already been unearthed in some of the old adits or access tunnels to the worked areas, while Patterson is confident it will find grades of up 3- 6g/t once it gets into the mine in earnest.
“Once when we get into heart of mine, we expect to find virgin ore bodies that are untouched’
“Even in the old high-grade zones, remnants of ore on the ground and grab samples of spillage are up to 20 g/t.”
He adds the reason that no one has gone back to the mine since is that the original explorer made three discoveries straight off, worked those and left when the gold price collapsed.
They were explorers who weren’t interested in complex mining, he adds.
The mining sector, too, dropped off the radar in South Korea as the country went hell-for-leather for technology and IT.
Things have changed now, though, and Bluebird sees the potential for a resource of greater than one million oz of gold at Gubong with a further 300,000 oz in satellite areas.
Admittedly not huge, but the plan is to get into profitable mining at about 30,000oz per year initially and see what the full potential might be as operations go deeper.
Even that might take some time, as the mine has over 120 kilometres of underground tunnels.
Pilot mining will start at 100 tonnes of ore per day, rising to 200tpd at which point Gubong should be self-funding and making around US$10,000 per day.
Partner an explorer not a miner
Southern Gold is the partner in the Gubong venture and also at the two other mines, gold and silver mine Kochang and copper mine Taechang.
Under the arrangement, Bluebird has to pay US$500,000 for a study into re-starting production at each mine along with a A$250,000 placing each time for Southern Gold.
Up to now, Patterson, and his vehicle Management Resources, have been funding the work at Gubong, with the CEO giving a personal guarantee to pay for the re-opening study.
The Gubong report is due in the second quarter and if it is favourable, will likely herald the start of a push across South Korea, once the joint venture is formally cemented.
A fourth mine is reportedly close to being added to the portfolio, though Patterson notes there are over 1,400 abandoned gold mines in South Korea and "many more opportunities.”
Bluebird does have a project elsewhere, at Batangas in the Philippines, though this is on a care and maintenance basis until changes to the country’s mining regime are clarified, which is another reason Patterson perhaps is so keen on the more benign South Korea.
Patterson is confident about the future.
“Narrow vein underground mining is a specialist skill not many people have," he says.
“We go in and systematically mine properly, put in the right systems and mining methods and we have the utmost confidence in our ability to make money where no-one else can.”