Bluestone Resources acquired Cerro Blanco from fellow Canadian miner Goldcorp in 2017 for 18 million dollars plus shares valued at about 9.9% of Bluestone’s capital. However, the mine has not started operations as it was decided that underground extraction should be switched to open-pit.
The change in mining method responded to the results of advanced engineering and optimization work that revealed an opportunity to capitalize on the project’s near-surface, high-grade mineralization through an open-pit development scenario. In fact, the assessment showed a doubling of the gold resource ounces and production profile, which effectively tripled the NPV5% of the project to $907 million.
But the fact that an open-pit operation would require the use of cyanide set off the alarms of environmental groups both in Guatemala and El Salvador, who expressed concern over the potential contamination of shared freshwater bodies such as the Güija lagoon and the Lempa river. The latter is the main water source for San Salvador, the Salvadoran capital.
The Lempa River, which originates in Guatemala, also serves dozens of Guatemalan and Salvadoran farming communities, while hundreds of fishers fear potential negative impacts on the Güija lagoon fish populations.
Despite these concerns, Bluestone – who completed the technical, environmental, and social due diligence work in 2020 – has said it will employ treatment plants to eliminate toxic waste before discharging effluents into the Ostúa river, a tributary of the Güija lagoon and the Lempa river.
If Cerro Blanco is allowed to go ahead, management expects a peak production of 334,000 ounces and an average annual production of 231,000 ounces of gold over the life of the mine. Total life of mine production is expected to be approximately 2.4 million ounces of gold and 10.3 million ounces of silver over an initial 11-year mine life.
(With files from AFP).