It had had to contribute A$250,000 (US$181,282) to the feasibility study of reopening the mine after previously completing a $250,000 placing in Southern Gold in August.

The company is on the verge of competing the farm-in requirements for the JV, with the final step, the submission of the feasibility study report to Southern Gold, expected to take place in the next fortnight.

After the study is submitted, capital expenditure on Kochang will be shared equally with Southern Gold, with Bluebird acting as operator.

During the study, Bluebird said it had located the lowest level of the previously abandoned silver workings and made an initial assessment of the silver mine, with the level above the lowest access point found to be open and the lowest access point requiring a couple of days work to clear the surface subsidence.

"Importantly for future mining, two stopes were observed and found to be subvertical 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," the company said.

Bluebird said it was encouraged finding accessible open mining areas at the silver mine adjoining the gold workings similar in condition to gold production areas already re-established.

CEO Colin Patterson said it appeared the mine had good potential and the company looked forward to forming the JV and publishing some of the "encouraging" results from the past year's work at the Kochang.

Bluebird shares were down 7.31% Friday to 1.90p (US2.48c), while Southern Gold's jumped 17.14% to A20c.