Bluestone Resources Inc. (TSXV: BSR) (OTCQB: BBSRF) – Company Profile
Vancouver-based mineral exploration and development company Bluestone Resources Inc. (TSXV: BSR) (OTCQB: BBSRF) was formed in 2017 with the purchase of the Cerro Blanco gold & Mita Geothermal projects, both located in southeastern Guatemala. The Cerro Blanco gold project is a permitted, high-grade underground gold project, and the Mita Geothermal project is an advanced-stage, renewable energy project licensed to produce up to 50 megawatts of power.
Approximately 160 kilometers by road from Guatemala City, and nine kilometers west of the border with El Salvador, the Cerro Blanco gold project is a low sulphidation gold and silver deposit. Veins of colloform chalcedony, adularia, dark grey bands of silver sulphides, and bladed calcite replacement texture are all found in the deposit. These are classic indicators of boiling fluids, the type that deposit gold and silver in contemporary geothermal districts.
The resource footprint is roughly 400 meters by 800 meters and occurs in a 5 km long by 1 km wide corridor, which also offers several other gold targets that are currently being investigated. Approximately 35 percent of the gold resource is dewatered to 417 meters above sea level, while 52 percent of it can be represented by dropping just 30 meters down.
Around $230 million USD was invested into the project by its previous owners to create portals, declines, and multiple Alimak vent rasies. Of that amount, $60 million went towards the nearby Mita Geothermal project
Bluestone Resources is currently examining options to advance the commercialization of the Mita Geothermal project, for which 19 geothermal wells have already been drilled. A possible, two-phase plan could see the company supplement power requirements for the mine, including dewatering and ventilation. Following this, it would develop a larger geothermal power plant which could generate the balance of the power required for project operations.
Beneath the Mita geothermal concession, there is projected to be a deeper geothermal reservoir 2-3,000 meters down. The potential development of this reservoir could provide additional power generation of up to another 50 MW.
Strong Cash Flow Expected from Cerro Blanco
Over the last two year, Bluestone Resources raised more than $100 million CAD to acquire the two projects. It also conducted several high impact exploration campaigns and completed the necessary engineering studies to advance the Cerro Blanco Gold project.
A feasibility study on Cerro Blanco released in February found that Cerro Blanco is as an advanced, high-grade project that requires only a modest capital cost to compliment robust economic returns. Over the first three years of production, the average output of the mine is projected to be 146,000 ounces of gold per year. That amounts to an annual cash flow of $90 million. By the end of the mine’s lifetime, it is expected to provide a total of $538 million in free cash flow.
With an all-in sustaining cost of $579 per ounce, the project is expected to generate more cash flow in the first year of production than its current enterprise value. This is a remarkable accomplishment in the mining industry, and it helps position Bluestone as a leading natural resource company.
Bluestone Resource’s next steps include optimizing the site as well as commencing trade-off studies and engineering work. The company is committed to implementing all necessary financial facilities, technical work, and human resourcing to begin construction activities near the start of 2020. This quick action puts Bluestone Resources on track to commence gold production by the end of 2021.
Meet the Bluestone Resources Management Team
John Robins, Executive Chairman – Mr. Robins has over 30 years of experience as a professional geologist and entrepreneur. He is the founder of one of Canada’s most successful private exploration companies, Hunter Exploration Group, and in 2016 another company that he founded, Kaminak Gold, was purchased by Goldcorp Inc. for $520 million.
Darren Klinck, President, CEO & Director – Mr. Klinck was previously EVP at OceanaGold, where his responsibilities included overseeing the capital markets, the mergers and acquisitions strategy, project teams managing exploration, corporate social responsibility, community engagement programs, and government relations activities.
Peter Hemstead, Chief Financial Officer – Mr. Hemstead is a CPA with more than 20 years of finance experience. His last 10 years were spent in a senior financial executive role at Capstone Mining Corp. While there, he led the finance team through the successful expansion from a development stage mining company to an intermediate producer.
David Cass, Vice President of Exploration – Mr. Cass has spent the majority of his 25-year career focused in Latin America, with 15 years coming with Anglo American plc, where he held multiple positions in jurisdictions around the world. He has also managed junior exploration companies with projects in Peru, Nicaragua, Guatemala, Mexico and Colombia.
David Gunning, Vice President Operations – Mr. Gunning brings more than 35 years of international operational experience in underground mining, processing and exploration. He has spent the last 8 years as COO and Director of Starcore International Mines. During his tenure, he was responsible for all aspects of the San Martin gold mine located in central Mexico.
Jeff Reinson, Vice President Project Development – Mr. Reinson spent 10 years honing his technical expertise as a consulting engineer, and 15 years in senior project and engineering management roles in a number of companies leading or supporting large, multi-disciplined project teams throughout Mexico, Colombia, Chile, Peru, and Canada.