Bluestone Resources (BSR.V) continues to pull high-grade assay results out of its Cerro Blanco underground project in Guatemala. The company recently reopened a cross cut that was sealed off in 2015 and restored the initial 50 meters of the tunnel while taking channel samples on both sides of the tunnel walls. Both sides yield exceptional results with the south wall revealing 16.7 meters (true width, versus the 20.4 meters reported width) containing 18.9 g/t gold and 33 g/t silver while the north wall contained an 16.9 meters (again TW) of 17.1 g/t gold and 23 g/t silver).

Reopening the exploration drive was a solid move by the Bluestone team as it helps the company to further increase the credibility of the resource as the current channel sampling results confirm the assays encountered last year when the same vein was sampled at a lower level.

All this bodes well to further increase the NPV of the project which would very likely get close to US$400M at the current gold price (unfortunately Bluestone Resources used a 5% discount rate which we feel is way too low for a project in Guatemala).

With an excellent feasibility study completed and additional exploration results backing up the geological model, one could wonder what else Lundin would like to see before making a move to acquire full ownership of the company.

Disclosure: The author has a small long position in Bluestone Resources.

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