Market Movers: Bluestone Resources Nearly Doubles Following Permit Amendment Approval
Bluestone Resources (TSXV: BSR) is moving mountains today, with the equity initially jumping 100.0% on the Venture with over 1.37 million shares traded early in the session.
The strong market move follows the company receiving approval from Guatemala’s Ministry of Environment and Natural Resources to amend its mining permit for the Cerro Blanco gold project. The company has seen the Ministry approve its request to change from an underground development to a surface mining development.
The approval follows several years of work by Bluestone to modify the operations at Cerro Blanco. Back in Q1 2021, the company elected to pivot the project from an underground model to a surface development to improve economics and the production profile. A feasibility study conducted in 2021 outlined an after-tax NPV(5%) of $1.05 billion, and an after-tax IRR of 30%.
The proposed mine will see total life of mine production of 2.6 million ounces of gold, with peak production approaching 347,000 ounces per year. Total CapEx for the project meanwhile is expected to come in at $750 million over the life of the mine, with an average all in sustaining cost of $629 per ounce.
The Cerro Blanco project is estimated to have 3,089,000 ounces of gold in the measured and indicated category, along with 13,445,000 ounces of silver. Proven and probable resources meanwhile consist of 2,846,000 ounces of gold and 12,062,000 ounces of silver, based on a reserve statement from November 1, 2021.
“After dedicating over two years to obtaining the environmental permit amendment, we are pleased with the Ministry of Environment and Natural Resources’ decision to approve the permit for the Cerro Blanco project as a surface mining operation. The design for Cerro Blanco reflects safe and responsible mining practices and sustainable socio-environmental management that can contribute significant economic growth, infrastructure, training, and job opportunities to Guatemala,” commented Peter Hemstead, CEO and Chair of Bluestone.
The approval follows an amendment that was initially submitted in November 2021. The submittal is said to have been comprehensive in nature, while utilizing an environmental permit initially issued in 2007.
Bluestone meanwhile is undergoing a strategic review to determine potential strategic alternatives for Cerro Blanco as well as its Mita Geothermal project. Potential alternatives are said to include the potential sale of part or all of the assets of Bluestone, a merger, or other business combination or strategic transaction.
Bluestone Resources last traded at $0.43 on the TSX Venture.
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