Bluebird Merchant Ventures - Update

Potentially industry leading gold producer in South Korea, which is now on the cusp of a 100,000oz pa low-cost production profile

Bluebird Merchant Ventures is a South Korea-focused resources company which is bringing old gold mines back to life. It is far quicker and cheaper to rehabilitate old gold mines than fund exploration; and these mines saw production cease a couple of decades ago due to a low gold price (under US$140/oz). The management team sees the production economics at the current gold price to be highly attractive and is fast tracking the reopening of two gold mines in a great jurisdiction.

  • Compelling path to production in Korea – with first gold by year-end

    Bluebird is focused on proof-of-concept gold production in 2022 at Kochang, which is fully funded, and well-planned for once the mountain permit is received. This is designed to set the scene for ramping up gold production at Kochang before emulating the same strategy at Gubong, with a swift trajectory to 100,000oz per annum by 2028. At reasonably low operating and capital costs, these Korean projects could be a big money spinner.

  • Batangas Gold Project in the Philippines coming back into play

    Once BMV’s flagship asset, this was put on hold due to anti-mining government policy. Improving sentiment to mining in the Philippines sees BMV looking to restart work on the project which has a Mining Licence, JORC resource & a PFS that made for good reading based on a US$1,250 gold price. The project could be rapidly moved up the valuation curve.

  • Proven model to smartly move gold projects up the valuation curve

    Colin Patterson (CEO) and Charles Barclay (COO) have developed a cracking business model. In 2010, the Apex Mine (Philippines) was acquired for $7m, reinvigorated by the team and 2 years later received an offer for $180m from a major. We believe Bluebird bears all the hallmarks of being Apex Mark II.

  • 50% Risked NPV at a 12% discount rate suggests upside of 280%

    We believe our NPV valuation is very conservative and update coverage of Bluebird with a target price of 9.58p and a Conviction Buy stance. 


    Bluebird Merchant Ventures (BMV) is a research client of Align Research. Align Research & its Director own shares in BMV. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research. No international codes have been used in the preparation of this report and as such the report should not be relied upon as an indication of present or future valuation

Table: financial overview
Year to end Dec 2020E¹ 2021E 2022E 2023E
Revenue (US$’000) - - - 9,250
PTP (US$’000) (900) 7,466 (1,300) 3,015
EPS (cents) (0.0023) 1.86 (0.32) 0.48
Source: Company accounts & Align Research ¹18 month period