Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Aura Minerals (TSX: ORA) said on Monday it will acquire troubled Guatemalan gold developer Bluestone Resources (TSXV: BSR) for $74 million.
As part of the deal, Aura will obtain a 100% interest in Bluestone’s Cerro Blanco gold project in southeast Guatemala as well as the adjacent Mita geothermal project.
The Cerro Blanco project has faced challenges from the Guatemalan government, which disputed the January permit amendment allowing its transition to an open-pit mining operation.
Bluestone is 27%-owned by the Lundin family trust and had initially planned the $411 million gold project near the border with El Salvador.
Cerro Blanco aims to yield 2.7 million oz. of gold over 14 years, based on a 2022 feasibility study. It hosts measured and indicated resources of 63.5 million tonnes at 1.5 grams gold and 6.6 grams silver per tonne for 3 million oz. and 13.5 million oz. of the metals, respectively.
Aura stated that upon closing the transaction, it intends to evaluate alternatives for the potential future development of Cerro Blanco.
“Cerro Blanco stands as a world-class deposit that has encountered both social and institutional hurdles. We are confident that, over the next few years, by integrating it with Aura’s 360 vision, we can refine our strategic approach to make Cerro Blanco another flagship project,” said Rodrigo Barbosa, CEO of Aura.
Cerro Blanco is located approximately 230 km from the Minosa operating mine in Honduras, where Aura produced 65,927 ounces of gold in 2023. In addition, Aura has operating mines in Mexico and Brazil.
Over the last 12 months, Aura achieved production of 270,000 gold equivalent ounces (GEOs). With the acquisition of Bluestone, Aura expects its growth pipeline to expand beyond 450,000 GEOs in the coming years.
Shares of Aura Minerals rose 2.35% following the news, bringing the company’s market capitalization to $910 million. Bluestone’s shares fell 1.5% by 12:00 p.m. EDT, for a market capitalization of $37.6 million.
Comments
Peter Ratcliff
It amazes me there is sooo much Gold 🥇 in the world.