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Bluebird Merchant Ventures – Kochang “higher than expected grades”, still a buy

By HotStockRockets | Wednesday 16 May 2018

Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Previously writing on Bluebird Merchant Ventures (BMV) last week, we noted there looks news flow aplenty to potentially spark the shares – and now there’s an announcement of Kochang Underground Grab Sample Results...

This sampling saw a 3-5kg bag of the rock taken at equal distances for assay and, following this, some selectively 'picked' ore - the picked ore was at an average grade of 5.12 g/t Au compared to an original 1.69 g/t Au. Indicating that substantial beneficiation of the grade can be gained through sorting, it is stated that “the company could expect to make an operating profit of around USD 750 per ounce of gold recovered at a gold price of $1300/oz”.

This is with the broken rock likely to be the initial production feedstock and it significantly left behind due to it being deemed uneconomic at the time - the Kochang mine closed in 1975 when the gold price was $140/oz.

It is added that “the company expects to update the market next week with further results from the underground sampling program of the veins at Kochang”, with “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”.

The shares have currently responded slightly higher towards 3.3p, but this still only capitalises this company making rapid progress towards two possible mine re-starts at around £7 million. Recommended at 2.5p last year, we target 4.5p+ to sell as the operational progress continues and thus, at around current levels, remain happy to say buy.

This article first appeared on HotStockRockets - to catch the next red hot share tip from the HotStockRockets team for just £5 click HERE

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