Southern Gold Ltd (ASX: SAU) reports that that the key permit to develop the Kochang Gold Mine in South Korea has been approved by local authorities.
The approval from the South Gyeonsang Provincial Government is subject to several conditions largely in relation to physical development requirements regarding safety and environmental management.
Southern Gold said its Kochang project partner, London-listed Bluebird Merchant Ventures Ltd, will now seek approval from the local County government prior to initiating any site works.
The approval is now in hand and allows for the next stage of development works to begin, subject to presentation of these activities to local community members.
Southern Gold and Bluebird each hold a 50% equity interest in Singaporean company Kochang Project JV Co Ltd which in turn holds 100% of South Korean company Geochang Project Co Ltd which holds the Kochang gold development project.
Joint Venture costs are currently shared 50/50 while Bluebird is responsible for day to day operations.
Because the proposed development at Kochang is essentially the re-opening of an historical mine with substantial underground workings already in place, the next stage of work at Kochang will entail very modest capital costs, with Bluebird current estimates at being approximately US$2.2 million to achieve first gold production.
Southern Gold is currently exploring various funding options for its share of capital costs.