Just as the gold bull market is hitting its stride, a serially successful mining entrepreneur is bringing a massive, high-grade mine into production.
Amazingly, it seems few investors are even aware of it.
The opportunity: Bluestone Resources (BSR.V; BBSRF.OTCQB) is still selling for less than its first-year cash flow.
If all goes as planned, a legendary mineral explorer will soon sit at the helm of a wildly profitable gold mining company.
So profitable that the free cash flow it’s projected to spin out — in just its first year — is more than the entire company is selling for right now!
Amazingly, it seems very few investors are yet aware of this remarkable opportunity with Bluestone Resources (BSR.V; BBSRF.OTCQB).
You see, as Bluestone’s mine approaches production, the market will begin to assign the company an earnings multiple commensurate with its gold-mining peer group…
…Re-rating it to a price level that could be a considerable multiple of its current value.
Again, few people realize this. But the story is destined to get out in the days just ahead, however, because…
Where John Robins Goes Successes Seem To Follow
Bluestone’s founding Chairman is John Robins, a man who has been drawn to mineral exploration by a sense of adventure.
And what an adventure it has been. While most explorers pray to find one “mine of a lifetime,” Robins has found no less than three.
Until today, his remarkable legacy of success has been one of mining’s great untold stories.
Compared to the swashbuckling legends attached to John Robins’ other huge mining successes, the story of how he came by Bluestone’s Cerro Blanco project is, well, downright boring.
There was no trudging through the Yukon. No traversing the edge of the Arctic Circle. The only danger he faced in acquiring the Cerro Blanco gold mine was paper cuts. It was just a straight-forward business traction.
A huge multinational focusing elsewhere with a new management direction. Robins and his company were happy to oblige — to the tune of $18 million.
An Extraordinarily Rich — And Profitable — Gold Deposit
Bluestone Resources’ (BSR.V; BBSRF.OTCQB) Cerro Blanco mine has a rich history behind it, and what could be a history making potential ahead of it.
This opportunity began to unfold in 2016 when Kaminak Gold’s founder and CEO, John Robins, sold this junior exploration company to Goldcorp for $520 million.
Investors who bought into Kaminak in late 2013, in the 45-cents to 50-cents per share range, made four times their money or more when Kaminak sold for $2.07 per share in July 2016.
Now they have a chance to follow Robins again because, as the Goldcorp deal closed, Robins told the gold major to give him a call should it ever look to divest any of its assets.
In short order, Goldcorp announced plans to divest two projects in southeastern Guatemala — a gold project called Cerro Blanco and an adjacent geothermal energy project.
Goldcorp’s Chairman, Ian Telfer, said he wanted a leaner, more-manageable company. It had already poured $230 million into developing the Cerro Blanco mine. But the company’s new CEO wanted to build up his cash reserves and diversify out of Central America and focus in places like the Yukon (Kaminak), Chile etc. So, Robins hopped a flight to Guatemala.
And there he found a golden opportunity.
That’s because Goldcorp and Glamis Gold, Cerro Blanco’s previous owners, spent $170 million developing the fully permitted project. In addition, Goldcorp spent $60 million on a geothermal power project as well.
Their work included two underground declines, two miles of underground development, a fully functional water treatment plant, maintenance shops, a warehouse, office facilities…
…And 580 drill holes that had already outlined a world-class, high-grade gold deposit.
It was an absolute gift, and all due to a big company’s bureaucratic change in direction.
A Mining Billionaire Climbs Aboard
Lukas Lundin is a Swiss-based billionaire and one of the world’s top mining investors. He immediately saw the tremendous value in Bluestone’s acquisition, and quickly invested $37 million into the company.
In mining circles, there is no greater seal of approval.
You see, Lukas Lundin is Chairman at Lundin Mining, Lucara Diamond, NGEx Resources, Lundin Gold, Filo Mining, International Petroleum and the Lundin Foundation.
He started building his reputation for success back in 1982, when he headed International Petroleum Corporation’s oil and gas operations in Dubai, U.A.E.
Lundin was also responsible for Argentina Gold and the discovery of the multi-million ounce Veladero gold deposit, the subject of a $300 million takeover by Homestake in 1999.
While it’s no guarantee of success, a junior mining company backed by Lundin money and led by John Robins is about the best pedigree an investor could dream for.
Ready To Accelerate Up The Price Curve
For investors looking for an opportunity to leverage the gains in gold, there will likely never be a better time than now to make their move in BluestoneResources.
It’s a time-tested fact that a company developing a gold mine is generally re-rated as it approaches production.
That’s where Bluestone Resources (BSR.V; BBSRF.OTCQB) comes in, with one of the world’s highest-grade gold projects fully permitted for production, with a tremendous degree of development already in place.
Consider that Bluestone’s Cerro Blanco mine features a world-class measured and indicated resource of 1.2 million ounces of gold…at an incredible average grade of 10.1 g/t gold.
There are extremely profitable underground mines in production around the world with only half the gold grade that Cerro Blanco boasts.
That grade, plus all of the costly development that was already paid for by the previous owners, contributes to remarkably profitable projections for this mine.
A recent feasibility study locked down those economics for all the world to see. Based on a gold price of $1,250, the study shows the mine will produce an average of 113,000 ounces per year…at an all-in cost of just $579/ounce.
That’s a tremendous profit margin! In fact, the entire project will pay for itself in just 2.1 years.
But there are two other factors — that virtually no one appreciates just yet — that are now taking this already richly profitable project and launching it to another level.
The Money Multipliers
The profitability of Bluestone’s (BSR.V; BBSRF.OTCQB) Cerro Blanco project is set to soar, thanks to a clever strategy…and plain old luck.
First, the strategy:
In addition to the closely defined 1.2 million ounces of “measured and indicated” gold resources at Cerro Blanco, there are also about 350,000 ounces of high-grade, but less-defined, “inferred” ounces.
Bluestone’s management team realized that much of this inferred resource was already within the mine plan — the only reason they weren’t in the M&I resource was because the drill holes weren’t spaced closely enough.
So they’ve been focusing on drilling the inferred resource to upgrade it into the measured and indicated confidence levels.
This stands to put hundreds of thousands of additional high-grade ounces into the mine plan, increasing the mine life from the current eight years to well over 10.
In the process, the economics of the project will be turbo-charged. But there’s another factor that’s impacting the profitability at this very moment…
And involves the luck:
Just as Bluestone is progressing through the final resource development stages and negotiating the financing for Cerro Blanco…
…The price of gold is exploding higher. Bluestone’s management couldn’t plan for this, but they and their shareholders are sure glad it’s happening. Here’s why….
Note that all of the economic projections above were based on a $1,250/ounce gold price. With the price of gold nearly $300 higher today, the project’s already-fat margins are growing even fatter.
The pay-back period is shrinking and the rate of return — which was already rich at 34% — is now over 50% at the current price of gold!
Again, very few investors realize this. But you can bet that they’ll know about it soon. This story is too hot to keep under wraps.
The Opportunity…While It Lasts
Cerro Blanco is destined to become a world-class gold mine. As Bluestoneadvances the project over the weeks ahead, it seems assured to be re-rated to a much higher valuation as it approaches production.
That’s all fine and dandy…and represents an exceptional opportunity in itself.
But here’s what the market doesn’t fully realize, and what will become plain to see in the days just ahead:
1) In-fill drilling is expanding the project’s size and mine life.
2) The rise in the gold price has just exploded this mine’s profitability. Every number — every analyst’s projection — has to be upgraded.
And right now, despite the fact that all the data is out there, it’s like it’s a big secret.
In fact, here’s the extraordinary fact that few realize:
Bluestone Resources (BSR.V; BBSRF.OTCQB) is so cheap right now, the cash flow from just the first year of Cerro Blanco’s production could buy the entire company today!
Obviously, this kind of miss-evaluation can’t last long.
Smart investors — those who want to not only leverage the gains in gold but hop aboard a steep value-creation curve — will seriously consider buying Bluestone Resources (BSR.V; BBSRF.OTCQB) today.
Click on the link below for more of this fascinating story…but don’t let it get away from you.