LONDON (ShareCast) - (Sharecast News) - Gold explorer Bluebird Merchant Ventures has seen "encouraging results" from its underground grab sampling at its Kochang project in South Korea.
Bluebird's initial sampling program, undertaken over 1,300 metres on the two main levels, indicated a "substantial improvement" to the grade of the site through sorting, bumping its estimates for the gold project from 1.69 grams per tonne to 5.12.

Bluebird examined a number of potential products when determining the viability of reopening the mine, one of which is "broken rock", blasted rock that has not been taken out of the mine due to it being deemed uneconomic to do so at the time.

The previous operators of Kochang, which was closed in 1975 when the gold price was $140 per ounce, left behind an amount of gold that would now be considered economically viable at the current gold price of more than $1,300 per ounce.

Each of Kochang's three levels has three veins and where broken rock was found, systematic sampling was undertaken at equal distances for assay.

Charles Barclay, chief operating officer, said, "Although the engineers and geologists are yet to accurately determine the tonnes of broken rock/ore that is remaining it is worth noting that for every 1,000 tonnes of sorted rock delivered for metallurgical treatment at a conservative grade of say 4 grams of gold per tonne, recovery of 85% and total operating cost of approximately $60 per tonne, the company could expect to make an operating profit of around $750 per ounce of gold recovered at a gold price of $1300 ounce."

"The current economic climate for gold mining, combined with our higher than expected grades, provides us with great confidence as we progress further with our underground sampling programme. We look forward to providing further updates in due course," Barclay added.

Kochang is part of a 50/50 joint venture project between Bluebird and Australian firm Southern Gold.

As of 0830 BST, Bluebird shares had collected 2.81% to 3.29p.

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