Southern Gold and Bluebird reach agreement for sale of Korean projects

ASX-listed explorer Southern Gold has struck a final agreement with Bluebird Merchant Ventures for the sale of its Gubong and Kochang joint venture projects in the Republic of Korea.

The deal, which will see Southern Gold receive 200 million shares in London-listed Bluebird, brings an end to a period of uncertainty surrounding the two gold projects, which previously had been half-owned by Southern Gold’s wholly-owned Singaporean subsidiary and Bluebird.

Bluebird elected to acquire the 50% it did not own in November last year, but the window to purchase the assets lapsed and the parties have been exploring alternative arrangements since.

“We have effectively agreed to a share swap deal where we will exchange our subsidiary’s 50% interest in the two joint ventures for an approximate 30% interest in BMV [Bluebird] once all shares are issued,” said Southern Gold’s managing director Simon Mitchell.

“The value of this position will be more easily ascertained by investors, given BMV’s listing on the LSE, with a current deal value of approximately A$13.2 million at current exchange rates.

“The BMV shareholding will be a very valuable equity interest and I expect it to significantly increase in value as BMV advances the Kochang and Gubong projects towards their stated near-term objective of gold and silver production.”

@RGNonline