Southern Gold gets green light to drill Weolyu and Dokcheon gold-silver projects in South Korea

Southern Gold (ASX: SAU) has received regulatory approval for a deep drill program to begin next week at the advanced Weolyu gold-silver project in South Korea.

The drill program will comprise five holes for a total 1,610m to test a 150m strike section of the Surprise-Moonlight Vein trend.

Four holes will drill around 200m lower in elevation level (mRL), 110m vertically below the lowest level of sampled and accessible historical workings at Surprise-Moonlight.

The fifth hole will target a further 100mRL below a projected Mystery Vein high-grade shoot observed in the footwall of the historic underground workings.

As part of the program, the drill pad location will enable a series of vertical fanned holes to test systems at the Summit, Surprise-Moonlight and Mystery Veins with a series of initial pierce points in each from surface to around 200m vertical depth.

The program aims to determine if grade increases with depth as expected, based on high-level epithermal textures observed at surface; and define the scale potential (including strike length and elevation) of known shoots in the underground workings to establish an exploration target framework.

As the drill site is on government acreage, Southern Gold was required to apply for first-time approvals in regard to track works and drilling on forested land.

Aphae assays

Assays from a four-hole maiden drilling program in June at the historic Aphae project in the country’s south-west returned a peak intersection of 0.94m at 5.07 grams per tonne gold and 26g/t silver from 129m downhole within polymetallic sulphidic-silica veining.

A breccia interval intersected further up the hole returned lower-grade mineralisation of 1.38m at 0.22g/t gold and 9g/t silver from 48.62m downhole.

Southern Gold said both intersections “distinctly correlate with low magnetic susceptibility readings”.

“[They are] interpreted to represent magnetite destruction through alteration, which should be able to be mapped along strike with [our] upcoming planned ground magnetic survey,” the company noted.

The Aphae gold deposit was mined during the 1940s, producing more than 115kg of gold from a shallow open cut pit and an adjacent alluvial deposit.

Numerous intersections around the historical workings are believed to represent an “unfolding footprint of mineralisation”, with various styles and orientations yet to be determined.

A second phase of drilling will follow a petrological analysis currently underway.

Dokcheon drilling

Southern Gold said regulatory approvals had also been received for a planned drilling campaign at the Dokcheon project, to begin after or concurrently with the Weolyu program and phase two exploration at Aphae.

Four holes for a total 760m will test the Cheongyong Vein, which was identified in 2018 through reconnaissance rock sampling and first-pass geological mapping.

Follow-up infill drilling, extensional rock sampling and structural measurements were conducted in February, with peak gold assays of 6.89g/t, 2.38g/t and 1.5g/t from outcrop and float vein boulder samples.

The new drill program will target under a zone of outcrop veining measuring more than 2m true thickness with individual veins up to 30cm wide, near to where the peak assays resided.

Busy drill schedule

Southern Gold managing director Simon Mitchell said the company would be kept busy with a heavy drilling schedule across all projects.

“It is great that the drill rig will be turning again at Weolyu, which is one of our main targets,” he said.

“Combined with the unfolding geological story at Aphae and a drill-ready program waiting at Dokcheon, [we have] some high-quality drill targets and a very full program for the balance this year.”

He said the company’s South Korean geological team would conduct follow-up mapping and sampling work with a view to adding new projects to next year’s drill pipeline.

The drilling campaigns will be supported by the recent $10.2 million equity raising, that received strong support from a new North American cornerstone investor, Dr Quinton Hennigh’s Crescat Capital.

Sells two projects, price to be settled

In another development, Southern Gold’s partner in two South Korean gold projects has decided to acquire its 50% interest in the Gubong and Kochang gold projects.

The Adelaide-based company had previously announced that its joint venture partner, London-listed Bluebird Merchant Ventures, had submitted a plan to redevelop both mines, but Southern Gold elected not to vote in favour of either proposal, and so was deemed to have offered its 50% interests for sale.

Now Bluebird has agreed to buy out Southern Gold and move to 100% ownership.

However, Bluebird also proposed a price for Southern Gold’s interests which was not accepted by the Australian company.

Under the joint venture agreement, there is a clear process for an expert now to be appointed and to make a determination of the price that should be paid and accepted for the 50% stakes. The expert has 30 days to make that determination.

Gubong was the largest gold mine in Korea between 1930 and 1943 when what are now North and South Korea were one entity governed by Japan.