Bluestone Resources says it has entered an agreement with G Mining Services covering basic engineering and overall project optimisation efforts for its Cerro Blanco project, in southern Guatemala.

Together, Bluestone and G Mining, a multidisciplinary mining and project management company, will form an integrated project team to manage aspects of the project, covering optimisation of all areas of the design, execution plan, and basic engineering, it said.

It is expected that basic engineering will be completed, and detailed engineering will be initiated, by the December quarter. During this time, the detailed plan for procurement, site early works, construction, and commissioning will be established as part of the next phase of the project, according to Bluestone.

Jack Lundin, CEO of Bluestone, said: “I recently worked alongside the G Mining team at Fruta del Norte, in Ecuador, and we are excited to have them join Bluestone in advancing Cerro Blanco through this important next phase.

“We will be looking to replicate the recent success in Ecuador leveraging key aspects of the execution strategy and team for Cerro Blanco. The Fruta del Norte project was delivered on time and on budget and represents one of the most recent major mining projects to be commissioned in Latin America.”

Key areas of focus in the near term will be optimisation, trade-off, and basic engineering scopes, Bluestone said. The optimisation work will include process and layout trade-off studies, which are currently underway. Further metallurgical test work is nearing completion, which will finalise the flowsheet, allowing equipment selection to be confirmed, according to the company. Basic engineering will be advanced and updated project capital and operating cost estimates will be prepared for the mine, processing facilities, and balance-of-project facilities.

Additionally, Bluestone says it is well advanced on the mine development contract and has been recently building out its recruitment, training plans, and project readiness initiatives. Progress on the project financing package also continues to advance as planned, it noted.

A feasibility study on Cerro Blanco, completed by a consortium of independent consultants led by JDS Energy & Mining, showed an average output of 113,000 oz/y of gold at an all-in sustaining cost of $579/oz and a capital cost of $196 million (including contingency).

Using a base case of $1,250/oz gold and $18/oz silver, the underground project was projected to generate a post-tax net present value (5% discount) of $241 million.