Bluebird Merchant Ventures

Rejuvenating gold mines in South Korea, where there is tremendous potential and a highly supportive government

Bluebird Merchant Ventures joined the LSE in April 2016 as a Philippine focused resources company. Within months, a general election ushered in an anti-mining government and so Bluebird begun to look for other opportunities elsewhere in East Asia. March 2017 saw the company enter an agreement to form a joint venture with ASX-listed Southern Gold to reopen two high-grade gold mines in South Korea.

  • Compelling economics in rehabilitating old gold mines vs exploration

    Bluebird’s strategy has big advantages over the conventional exploration model. Not only is the timeline to production far shorter, there is also no need for costly exploration as that was done by the old miners. It is much cheaper to refurbish than to develop. The company and its joint venture partner are targeting 100,000 oz of gold production annually within 5 years.

  • Big opportunities in S Korea as gold mining has become insignificant

    South Korea was once a substantial gold producer. The country’s shift to technology has been at the detriment of some traditional industries, with gold mines closing in the 1970s due to a low gold price (under $50/oz). The government is now actively seeking to reinvigorate the mining sector.

  • Successful strategy has been perfected by the team over many years

    Colin Patterson (CEO) and Charles Barclay (COO) have developed a cracking business model. In 2010, the Apex Mine (Philippines) was acquired for $7 million, reinvigorated by the team and in just over 2 years received an offer from a major mining company for $180 million.

  • NPV at a 12% discount rate suggests upside of 316%

    We believe our NPV valuation is conservative and initiate coverage of Bluebird with a target price of 11.85p and a Conviction Buy stance.


    Bluebird Merchant Ventures (BMV) is a research client of Align Research. Align Research holds an interest in the shares of 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.

Table: financial overview
Year to June 2016A 2017A 2018E 2019E
Revenue (US$'000) - - - -
Pre-tax (US$'000) (921) 1,843 (1,933( (1,750)
EPS (cents) (0.47) 0.90 (0.93) (0.57)
Source: Company accounts & Align Research