Bluestone Resources (BSR) - New Expansive Strategy Getting Traction

Bluestone Resources is a mineral exploration and development company based out of Vancouver, Canada. The company is listed on the Toronto Stock Exchange (TSX-V: BSR) and OTC Markets (OTCQB: BBSRF). The company was founded in the year 2000. Mohave Resources Inc. and Goldcorp NEG Limited are the company's subsidiaries.

We met with Jack Lundin, President, CEO, and Director, Bluestone Resources, who joined us from Vancouver

Jack has several decades of experience in the natural resource industry. He was involved with several projects at the Ludlin group of companies before joining Bluestone Resources. He has worked on multiple early-stage projects across Canada, Russia, Ireland, and Portugal. He also serves as an advisor to Josemaria Resources

Company overview

Bluestone Resources, formerly known as Indicator Minerals Inc. is a natural resource company focused on advancing the Cerro Blanco gold project and the Mita Geothermal project in southern Guatemala.

The Cerro Blanco Gold and Silver project is the company's flagship project and is under full ownership of Bluestone Resources. The company has uncovered a robust gold deposit in southern Guatemala and is looking for rapid advancement. The company also moved out of the underground operation to open-pit, a move that has garnered support from the major shareholders.

Currently, the company is advancing towards a permit along with carrying out a feasibility study. This site is scheduled to commence production in 2021 and achieve its first gold output by 2024. The company recently reorganised the company to make it better suited for the development concept and de-risking of the Cerro Blanco gold project.

Two board members, namely Darren Klinck, former President and Director, and John Robins, former Chair of the Board, Bluestone Resources. The company moved Willam Lamb into the role of Chairman.

Dave Dicaire was appointed last year as the Director at the company. He also serves as the Vice President of projects at Lundin Gold.

A De-risking Strategy

Bluestone Resources is has postponed the underground targets from the end of 2022 to mid-2024. The current focus on the open pit has allowed the company to double its production.

The shareholders are currently split equally between retail and institutional investors. Lundin family and CD capital are major shareholders at Bluestone Resources. The management team has 5% ownership of the outstanding shares.

The company is working actively towards further de-risking the Cerro Blanco project while preserving the interests of all stakeholders.

Capital Allocation

Bluestone Resources currently has equity of $43M. The company has planned an exploration campaign in 2022 in conjunction with the advancement of the Cerro Blanco project.

Bluestone Resources has a larger project in its portfolio featuring a 13Moz silver resource, offering a potential for a silver stream. Based on the current budget, the expenditure will grow in 2022 and 2023 as the company utilises its finances towards the project CapEx (Capital Expenditure).

The company is currently looking to secure project financing at the lowest capital cost offering the best option for shareholders. They currently have the funding to advance the project.

The monetary resources are currently being utilised towards the feasibility study and gathering data for the social and environmental baseline. The company plans to submit a permit application for an environmental license by the end of 2022.

The company has concluded its drilling program near the surface of the deposit and an updated resource will be published within the next 5 weeks. The company expects to add additional ounces to its existing supply based on the surface drilling results. The project is advancing on both technical and non-technical parameters that include engineering and consulting.

Once the engineering and permitting phase is concluded, the company has plans to place orders on long-lead items. The company has the financial resources to carry out the study and permitting phase of the project. The company is also in talks with a syndicate of banks for project financing.

Permit Acquisition

Bluestone Resources has gathered all the data required for phase 1 of the permitting process. They plan to add the Social Baseline Study to the data along with their application. The company is working in conjunction with the Ministry of Environment in Guatemala to ensure transparency and engagement.

The company has a subsidiary in Guatemala with local hires featuring highly skilled expatriates to advance the project on both technical and non-technical fronts. The executive team is actively providing support to the on-site staff.

Geopolitical Stability

The political landscape in Chile, Peru, Argentina, and Ecuador has stabilised as major elections have ended. The Ludlin group has had a significant presence in the region for the past 30 years, gaining a deep insight into the area's geopolitical stability. The company continues to focus on advancing its project effectively and safely.

Community-driven Programs and CSR

At the Cerro Blanco project, the company has a long-term commitment towards the local communities. Bluestone Resources has commenced an adult education program in the neighbouring area of Cerro Blanco mine.

This program will proceed into a rapid high school advancement course along with a vocational program. These programs will equip the local community with the skills and know-how to train for the construction, training, and operations phase. This approach equips the local community with job skills while also preparing a workforce for the advancement of the project. The company strongly believes in a diverse team and maintaining lasting partnerships.

Another area of focus for the company is the development of a local supply chain, which would keep the mine supplied for years that follow. These initiatives are being carried out in partnership with the Lundin Foundation.

Project Timeline

The Cerro Blanco project is strong on the economic, and technical front with a strong supply of gold and silver near the surface. The site features robust geology along with mineralization. The company has projected the life of the mine at 11-years with a 2.5-year payback, offering a healthy IRR (Internal Rate of Return).

Bluestone Resources' decision to focus on the open pit provides a larger footprint where the pit design can be optimised with minimal surface disturbance. This is done to protect the interests of the local communities and minimising the environmental impact of the overall operation.

Targets 2021 and Beyond

The permit application will be submitted by the end of 2021. Bluestone Resources has a resource update scheduled within the next month which will be utilized towards optimising the overall mine plan. This plan will feed the feasibility study set to finalise in Q1 2022.

In 2022, the company is looking to conclude the feasibility study and advance the project further. The next step is to put together a financial package which upon receive will mark the start of the construction phase. 2023 will be focused on further construction on the site and the company plans to enter production in 2024.

To find out more, go to the Bluestone Resources website