Bluebird said Wednesday the 90% gold recovery had been indicated from leaching test work, with recoveries of up to 97% reported from some tests.

The test work was conducted at the Mines and Geoscience Bureau and Intertek in Manila, Philippines to determine the best method to recover gold and silver from Gubong's ore. 

Bluebird said initial diagnostic test work had also shown that the ore could be responsive to gravity separation, with further investigations on this well advanced.

"These excellent results from the samples evaluated to date indicate that the ore is not problematic and does not require complicated or expensive extraction techniques", the Bluebird said.

"These results will allow the company to commence financial evaluation of different options for the design and construction of its process plant."

Bluebird said it would use the capital cost of each option and weigh it up against operating costs and cash flow.  

The company was also carrying out further test work on a second sample to verify the initial sample's results and to evaluate gravity separation, as well as some alternative processes.

On a separate note, Bluebird said it had received assay results from the recent Kochang underground sampling programme and would provide an update after the results were evaluated.

Bluebird is earning into 50/50 joint venture with Southern Gold at the Gubong and Kochang brownfield gold mines. It will spend at least US$1 million on a feasibility study and two lots of $190,000 on Southern Gold share placements to reach the 50% share.  

Broker SP Angel said the metallurgical test result was a good one for Gubiong, as it "appears to verify statements that gold was simple to extract historically from the mined ore."  

Southern Gold is presenting at ResourceStocks Sydney next week. For more information, or to register for a free investor pass, click here.