Peak Gold Production Climbs To Over 300,000 Ozs PA
Bluestone Resources Inc.(TSXV: BSR) has released positive findings of a Preliminary Economic Assessment (PEA) for the Cerro Blanco Gold Project in south-eastern Guatemala.
The optimised project assessment doubles the gold resource ounces and production profile which effectively triples the NPV of the project to US$907 million.
CEO, Jack Lundin, said the recent completion of advanced engineering and optimisation work has significantly enhanced the understanding of the project and presented an opportunity to capitalize on its near-surface, high-grade mineralisation through an open pit development scenario.
“This is a major change to Bluestone’s corporate strategy that will fully maximise the value of the Cerro Blanco gold project for all stakeholders.
“This new development scenario outlines a great project which is capable of producing over 300,000 ounces of gold per year at first decile AISC,” Mr Lundin said.
“With the onboarding of key project personnel and completion of a successful drill campaign, 2020 presented us with the opportunity to dig deep into the technical and social elements of the project and evaluate all aspects.
“Following an initial review of the viability for a surface mining operation, discussions were held with key national stakeholders and authorities to confirm the endorsement for a project of this scale in Guatemala. Bluestone is committed to adopting world class responsible mining practices for the future of sustainable mining.”
The base case for the PEA was completed at a gold price of US$1,550/oz and a silver price of $20/oz.
- Peak production of 334,000 ounces and average annual production of 231,000 ounces gold over the life of mine (LOM).
- Average life of mine all-in sustaining costs (“AISC”) of US$642/oz (net credits).
- Average annual free cash flow of US$186 million per year and LOM total free cash flow of US$2 billion.
- Net present value (NPV5%) of US$907 million after-tax.
- After-tax internal rate of return (IRR) of 28.5%.
- Initial capital of US$548 million with an after-tax payback period of 2.6 years.
- Life of mine production of approximately 2.4 million ounces of gold and 10.3 million ounces of silver over an initial 11-year mine life.
- Measured & Indicated Resources of 3.0 million ounces of gold and 13.2 million ounces of silver (61.5 million tonnes at 1.5 g/t Au and 6.7 g/t Ag).
- At US$1,800/oz gold, the NPV5% increases to US$1.3 billion and the IRR to 36% with a payback of 2.2 years.