Southern Gold Limited (“Southern Gold”) is a precious metals exploration and development company targeting high-grade epithermal gold-silver vein systems in the southern part of South Korea.
(subject to SAU shareholder approval)
Figure 1: Geological Map of South Korea Showing the Location of Southern Gold Projects (source: Southern Gold)
The company is listed on the Australian Securities Exchange (ticker ASX: SAU) and currently has 12 projects consisting 26 tenements with a total area of 70.6km2, located in the southern and central parts of the country. Two of Southern Gold’s projects are currently at development stage and ten targets range from Resource definition drilling through to early exploration stage.
Southern Gold’s two development stage projects, the Gubong Gold Projectand Kochang Gold Project, are both held in a 50/50 joint venture (“JV”) with London AIM listed Bluebird Merchant Ventures Ltd (ticker AIM: BMV.L). Both projects consist former operating gold mines which the JV is aiming to get back into production. The proposed re-opening and development of the Kochang Mine underground workings is currently estimated to entail very modest capital costs to achieve first gold production, with Bluebird current estimate being US$2.2m, of which Southern Gold 50% share is US$1.1m. Southern Gold is currently exploring various funding options that will be non-dilutive to current shareholders.
A ‘Permit to Develop’ approval for both JV development projects was received in 4Q 2019. South Korea uses a streamlined process of application for mine plan approvals. There is a single application made that encompasses all government approvals required to carry out mining activities.
Whilst there is currently no JORC compliant Resource or Reserve statement for the two former mines the JV have a conceptual Exploration Targetof 1.2Mt to 2.3Mt ranging 6g/t – 8g/t Au (230-580Koz Au) for Gubong and an Exploration Targetof 500kt to 700kt ranging 5.0g/t to 7.0 g/t Au and 27g/t to 35 g/t Ag, for Kochang.
The highest priority of Southern Gold’s ten, 100% held, highly prospective epithermal targets consist the Beopseongpo,Deokonm, Weolyuand Neungju projects. These have all returned very high-grade gold and silver values in outcrop sampling and are being prioritised for drill testing. Southern Gold’s exploration team also maintains a dynamic pipeline of new projects.
Southern Gold’s management consists a small but highly professional team of corporate finance executives, exploration geologists and experienced mine operations people.
Further details on the technical summaries and locations of the Southern Gold projects are set out in Table 1 and Figure 1 below.
Table 1: Summaries of Southern Gold Development and Exploration Stage Projects (source: Southern Gold)
Development Projects (50% Southern Gold)
Project | Province | Number of Tenements, Total Area (km2) | Key Results, comments |
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Gubong Mine Development | North Jeolla | 8 tenements, 22.08km2 |
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Kochang Mine Development | North Jeolla | 3 tenements, 8.37km2 |
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Exploration Projects (100% Southern Gold)
Project | Province | Number of Tenements, Total Area (km2) | Key Results, comments |
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Weolyu | Weolyu | 2 tenements, 5.54km2 |
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Beopseongpo | South Jeolla | 2 tenements, 5.60km2 |
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Deokon | North Jeolla | 2 tenements, 5.58km2 |
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Neungju | South Jeolla | 1 tenement, 2.81km2 |
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Early Stage Exploration Projects
Project | Province | Number of Tenements, Total Area (km2) | Key Results, comments |
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Aphae | South Jeolla | 2 tenements, 5.62km2 |
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Hampyeong | South Jeolla | 1 tenement, 2.81km2 |
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Dokcheon | South Jeolla | 1 tenement, 2.82km2 |
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Taechang | Chung-cheong | 2 tenements, 3.98km2 |
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South Korea Overview
South Korea, officially the Republic of Korea, is a stable first-world jurisdiction and industrial powerhouse boasting the 11th largest economy in the world. It has a highly developed transport, power and communications infrastructure with a high degree of economic freedom. South Korea was ranked 5th in the 2018 Ease of Doing Business Indexand 29th in the 2019 Index of Economic Freedoms.
Southern Gold reports they have found South Korea’s mining law to be straightforward and transparent, with no mining royalties, no government free carry, and no licence fees or security bonds. Southern Gold enjoys a good relationship with the relevant authorities.
Investment Overview
On 23 March 2020, Southern Gold announced a revised share subscription offer for 40,000,000 Southern Gold Ltd ordinary shares at A$0.10 to raise A$4 million before costs, of which Metal Tiger subscribed for 22,000,000 shares for A$2.2 million. The revised placement replaced the proposed deal announced 11 February 2020, in light of economic developments associated with the COVID-19 pandemic.
The Metal Tiger investment follows several months of due diligence and negotiations and makes the company a cornerstone investor in Southern Gold. The placement price was at a 16% discount to the 15-day VWAP share price.
As part of the terms of its investment, subject to all necessary approvals, Metal Tiger has a right to appoint a director to the board of the company and on 9 June 2020 Michael McNeilly was appointed as the Company’s representative director. Metal Tiger has the right to nominate one director to the board so long as it holds at least a 10% interest in Southern Gold. Following this investment Metal Tiger will hold a 17.1% interest in Southern Gold. As at 30 March 2020, Metal Tiger held 4.56% but subject to shareholder approval of the second tranche of the Southern Gold placing Metal Tiger will end up holding 17.1% of the issued share capital of Southern Gold.
Post transaction, Southern Gold will have a cash balance of approximately A$5.5M which is sufficient to support a minimum 12 months of exploration work including planned diamond drilling of multiple projects.





















