Bluebird Merchant Ventures PLC (LON:BMV) has made the required expenditure to farm-in to the Kochang mine in South Korea.
Under the terms of the agreement, Bluebird was required to inject A$250,000 into partner Southern Gold and spend a minimum of US$250,000 on a feasibility report into reopening the mine.
Bluebird said it will present the report to Southern Gold (ASX:SAU) within the next five weeks when metallurgical test work, the final part of the study, has been completed.
READ: Bluebird Merchant Ventures close to completing farm-in requirements at the Kochang gold project
The junior added it has now found the bottom of the old silver mine that was worked at the site until 1975 and an initial assessment indicates accessible open mining areas adjoining the gold workings.
“This is highly encouraging as it is similar to the gold production areas,” said Bluebird.
“Importantly for future mining, two stopes (ore extraction areas) were observed and found to be subvertical (very steep) in dip and still standing open.
“This both demonstrates the highly competent host rock, also observed in the gold mine and allows for mine cleaning after blasting to be mostly by gravity, which is much cheaper than using mechanical scrapers.”
Colin Patterson, chief executive, added: "The company is highly satisfied with the progress made at Kochang
"It appears to us to be a mine with great potential and we look forward to the formation of the joint venture and to publishing some of the very encouraging results from our work in the last year.
"Our latest observations at the Kochang silver workings give us a good indication of conditions we can expect in bringing the mine back into production."