ASX listed gold producer Southern Gold has provided an insight into the initial potential of its Kochang underground project in South Korea, outlining an exploration target of between 500,000 and 700,000 tonnes with a grade range between 5g/t and 7g/t gold and 27g/t to 35g/t silver.
3D modelling of the mineralised vein systems at the historic mothballed mine has highlighted multiple quartz vein sets with a continuity of more than 900 metres of strike.
The old mine is being redeveloped under a farm-in and JV agreement with UK-listed Bluebird Merchant Ventures Ltd who has now completed its funding commitments under the agreement.
Bluebird is currently finalising a feasibility report on the reopening of the Kochang mine as part of its final requirement to commence a formal JV, at which point ongoing costs will be shared equally with Southern Gold.
The JV partners will then work towards the development of the Kochang mine and the Gubong mine – located 140km to the northwest – with Bluebird acting as the operator at both mines.
The larger Gubong mine project is already under a 50/50 JV agreement between the partners and it is also an historical, abandoned underground gold and silver mine.
The last time both mines were seriously operated, the prevailing gold price was sitting around USD$140 per ounce.
Back in May this year, Southern Gold reported significant gold and silver assays had been returned from a due diligence underground channel sampling program over at least 1.3km of quartz veining and breccias at Kochang.
The best channel samples returned gold grades at more than 2 ounces to the tonne, including 0.24m @ 65.8g/t gold and 170g/t silver and 0.18m @ 69.2g/t gold and 80g/t silver.
That program also included assays of 100 grab samples of in-situ ore stockpiles left behind when mining ceased in 1975.
Some of those assays were going up to 17.4g/t gold and 165g/t silver.
Southern Gold Managing Director Simon Mitchell said: “This recently defined geological potential at Kochang is a good base to build on. It is important to remember that the (exploration target) is based on data in or near the underground mine environment and does not constitute an estimate of the total mineralised system.”
“We expect to identify new veins with drilling in due course and also define some higher-grade pods that are evident from the historical data. Kochang represents a straight forward project to move into production relatively quickly, subject to regulatory approvals and further detailed assessment of the mineral potential.”
The generation of the new exploration target comes after a comprehensive review of historical plans, mine production statistics and sample and drilling data by Bluebird.
Recent surface exploration and geological mapping programs, underground surveying, grab and channel sampling were then incorporated into a 3D model to help tweak the exploration target.
According to Southern Gold management, the recent 3D modelling exercise has thrown up a plethora of underground and surface drilling targets for the JV partners to consider.
The main ore system is still open along strike, with the location of mapped veins often just closed off at the extremities of existing underground workings.
The mine workings only extend a short distance underground and there is plenty of blue sky potential at further depth the company said.
By Matt Birney
