New Kochang Announcement, page-2

Highlights:

• Early production feedstock has been identified
• Initial Program indicates substantial improvement of the grade through sorting – 1.69 g/t to 5.12 g/t Au
• Potential operating profit of USD 750/oz from broken rock

Bluebird examines a number of potential products when determining the viability of reopening a mine. One of those products is ‘broken rock’ (blasted rock that has not been taken out of the mine). The methodology employed in evaluating the rock is called ‘grab sampling’. One reason that broken rock is left behind is due to it being deemed uneconomic at the time. The Kochang mine closed in 1975 when the gold price was USD140/oz. Much of the ore that was left behind that was once uneconomic would now be considered economically viable. The current gold price is currently over USD 1,300/oz.
The complete sampling program was undertaken over 1,300 metres on the two main levels. The Kochang mine has three levels and two have been accessed thus far. Each level has three veins which were historically mined. Where broken rock was found, systematic sampling was undertaken at equal distances by taking a 3-5kg bag of the rock, at each position, for assay. There was no selectivity involved.
After these samples were analysed nine of the sample positions were resampled with the instruction to the samplers to selectively ‘pick’ ore. The results can be found in the second column of Table 2.
As can be seen in Table 2 below, the picked ore was at an average grade of 5.12 g/t Au compared to the original 1.69 g/t Au. This indicates that substantial beneficiation of the grade can be gained through sorting. Whilst this simple test was done by hand sorting, there are many sorting technologies available for this type of work and they can be set up to sort ore using a number of parameters.
Broken rock is cheap because the costly work of drilling and blasting has already been carried out. The only task left is to take it to a process plant. By utilising sorting techniques, the cost of recovering this gold source can be substantially reduced. This broken rock is likely to be the initial production feedstock.
The Company expects to update the market next week with further results from the underground sampling program of the veins at Kochang.
Charles Barclay, COO, commented:
“We are delighted with results from this initial programme at Kochang and the grades that we have seen.
“Although the engineers and geologists are yet to accurately determine the tonnes of broken rock/ore that is remaining it is worth noting that for every 1,000 tonnes of sorted rock delivered for metallurgical treatment at a conservative grade of say 4g/t Au, recovery of 85% and total operating cost of approximately $60/t, 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.
“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. We look forward to providing further updates in due course.”
The table below shows the significant results (>1.0 g/t) of that sampling.
Table 1 – Grab Sampling with no selectivity

Table 2 – Grab Samples with selectivity