Interview with Darren Klinck, President and CEO of Bluestone Resources (TSXV: BSR) Bluestone Resources is a Guatemala based high-grade gold development company, listed on the TSXV. It is currently focussed on the Cerro Blanco gold project, which is a permitted, high-grade underground gold project located in South-Eastern Guatemala. Over CAD$200M has been invested by previous holders of the asset.
Bluestone Resources also has the potential for green energy production with the Mita Geothermal Project. A Feasibility Study has been conducted, 19 geothermal wells have been drilled, but for now Bluestone Resources is not looking at the options for commercialising the project as it focused on their Gold development.
2019 has been a tumultuous year for Bluestone Resource, ending on high. Starting the year at CAD$1.35, the price fell to a low of CAD$0.90 in May, but has climbed back to CAD$1.47 today. The market cap is CAD$100M, and there are 69.23M shares outstanding.
Bluestone Resources is currently trying to put financing in place for Cerro Blanco. Klinck claims the company has seen interest from private equity and strategic partners, in addition to commercial banks. The advanced nature of the permits, in combination with the infrastructure in place after previous expenditure at the property, has seen the interest from banks become stronger. Klinck is hoping to announce a Bluestone Resources debt package. Interest appears to have been high, so let's keep following and see what happens. Is a short life-of-mine (8yrs) and the risk of a single-asset model putting investors off?
Bluestone Resources appears to have some operational advantages compared to other gold juniors. A world-class AISC below USD$600 is particularly noteworthy.
So, what is Bluestone Resources going to do this year to tell their story to retail investors? The big selling point is the resource itself. The Cerro Blanco project is estimated to contain 3.44Mt of proven and probable ore reserves grading 8.5g/t Au and 32.2 g/t Ag and containing 940,000oz of Gold ore and 3.5Moz of Silver. Now Bluestone Resources needs to give investors the confidence it has the know-how and financing to extract the value from this promising asset.
The next steps involve trying to push the life-of-mine up via further drilling/resource measurements, basic and detailed engineering, optimisation and flowsheet refinement. "130% of their (the company's) time is spent on Cerro Blanco at the moment." Acquisitions won't be looked at until Cerro Blanco is in production. All of their eggs appear to be in this basket.
Bluestone Resources has the Mita Geothermal Project at an advanced stage, and hope an opportunity will arise to commercialise it in the next few years. It is currently parked, though it provides solid optionality, and Klinck hopes it can be incorporated into the mine.
Strangely Klinck avoided our question regarding Bluestone Resources' cash reserves. He did, however, state that equity is an unlikely route; instead, they are looking at a debt package and should have something to tell shareholders in the next few months.
In terms of Guatemala, there has recently been a 5-month transition period, though the new government has now been sworn in, and they appear to be very pro-mining.
What did you make of Darren Klinck? Is Bluestone Resources a high-grade investment opportunity? Will they be able to secure appropriate financing?
Comment below and we will ask your questions.
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1:37 - Company Overview
3:12 - Bluestone Resources: What Have They Achieved in 2019 and What's to Come?
4:54 - Financing: Where, How Long Will it Take and How Much They'll be Raising
11:08 - Great News All-Round, but How Will They Continue to Grow the Company?
17:15 - Cash Position
18:13 - Mitigating Single Asset Risks and an Update on Geothermal Energy Use
21:52 - Telling the Story: What Worked and What Didn't
24:45 - Guatemala, a Mining-Friendly Jurisdiction?
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