Tag Archives: Cerro Blanco

Bluestone widens production plans with Cerro Blanco open-pit mining PEA

Bluestone Resources has come out with a new open-pit mining plan for its Cerro Blanco project in south-eastern Guatemala that effectively doubles production and triples the potential investor returns from the gold-silver asset.

The preliminary economic assessment on Cerro Blanco, which comes just under 11 months after entering into an agreement with G Mining Services covering basic engineering and overall project optimisation efforts for the project, outlines a project able to produce 231,000 oz of gold at an all-in sustaining cost of $642/oz Au over the 11-year life of mine. This is based on a 15,000 t/d operation with a $548 million initial capital expenditure bill.

Using a base case gold price of $1,550/oz and silver price of $20/oz, an after-tax net present value (5% discount) of $907 million was calculated.

The numbers are significantly different from what the company outlined in a previous feasibility study on Cerro Blanco, completed by a consortium of independent consultants led by JDS Energy & Mining. This 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, this underground project was estimated to generate a post-tax net present value (5% discount) of $241 million.

Bluestone said on the PEA publication: “The recent completion of advanced engineering and optimisation work has significantly enhanced the understanding of the project and presented an opportunity to capitalise 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.”

David Cass, Vice President of Exploration, added: “The pivot to surface mining is a culmination of our increased understanding of the geology and grade distribution that will realise the full potential of the Cerro Blanco low-sulphidation mineralisation. The inverted wedge shape of the deposit with its upper half forming the Cerro Blanco hill lends itself to surface mining with a low strip ratio.”

The project currently hosts 3 Moz of gold in the measured and indicated resource category and 250,000 oz of gold in the inferred mineral resource category.

The open-pit mining scenario envisages an owner-operated mining fleet using 65-t trucks matched with 7 cu.m hydraulic shovels supported by 8.2 cu.m wheel loaders. Mill feed will be trucked to a primary crusher located to the east of the main pit. Waste totalling 123.5 Mt will be placed in a waste storage facility.

In terms of processing, the PEA looks at treating 5.04 Mt/y of mineralised material at an average feed grade of 1.6 g/t Au and 7.26 g/t Ag through a conventional cyanide leach process plant to produce doré. The flowsheet is very similar to the previous underground mine option and includes primary crushing, single train SAG mill and ball mill to produce a target grind size of 80% passing 53 microns, atmospheric pre-oxidation, 48-hour cyanide leach, carbon-in-pulp carousel adsorption circuit, Zadra elution circuit, gold room and filtered tailings. Based on PEA metallurgical test work, the expected recoveries are 91% for gold and 85% for silver.

Filtered tailings will be configured in a dry-stack facility and eliminate the need for the construction and operation of a traditional tailings impoundment, the company says.

“The adoption of this technology (dry stacking) puts the Cerro Blanco project at the forefront of responsible mining practices being adopted for the future of sustainable mining globally,” it added.

Bluestone and G Mining to optimise Cerro Blanco project

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.

Bluestone releases Cerro Blanco feasibility study, weighs up ore sorting

The feasibility study on Bluestone Resources Cerro Blanco gold asset in Guatemala has indicated the project has, at least, an eight-year mine life ahead of it.

The study, completed by a consortium of independent consultants led by JDS Energy & Mining, shows average output of 113,000 oz/y 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 is projected to generate a post-tax net present value (5% discount) of $241 million.

The deposit is expected to be accessed by the existing 3.2 km of underground development. The current decline will serve as the primary access to the mine for personnel, materials, and haulage of mineralised material to the plant site, according to Bluestone, with annual ore production of up to 460,000 t planned from a combination of long-hole stoping and cut and fill mining.

While the 1,250 t/d operation looks profitable at today’s commodity prices, the company has already identified several potential enhancements that could increase its value, which will be factored into a revised feasibility study later this year.

Darren Klinck, President and CEO, said: “The feasibility study outlines a robust development-ready, underground gold mine with a modest capital expenditure demonstrating superior economics. The mine plan supports the original conviction that the project can be developed into a small footprint, low impact operation that will provide significant opportunities for local stakeholders and generate attractive returns for investors.

“Furthermore, over the next six months as we optimise the project and work to establish adequate project financing, we will see significant opportunity to continue with our objective to upgrade inferred resource ounces and then update the mine plan to incorporate potential meaningful mine life extension, further enhancing project economics.”

In addition to the inferred resource upgrades and potential mine life extensions the company is evaluating over the next six months, there is a possibility of including ore sorting technology in the flowsheet, Bluestone said.

“Preliminary test work in evaluating the potential of using ore sorting technologies was very successful and highlighted an opportunity as a cost-effective method to help reduce potential dilution and enhance the production profile by allowing new areas of the orebody to be economically mined,” the company said.

Bluestone acquired the Cerro Blanco project, which has an indicated resource base of 1.24 Moz of gold and 4.5 Moz of silver at grades of 10.2 g/t Au and 36.5 g/t Ag, respectively, from Goldcorp in 2017. Prior to Bluestone’s acquisition, former owners of Cerro Blanco had invested around $230 million into the project.