Momentum Public Relations
Press Release: November 6, 2019
Bluestone Resources Inc. (TSXV: BSR) (OTCQB: BBSRF) (“Bluestone” or the “Company”) is pleased to announce a new high-grade mineral resource estimate for the Cerro Blanco Gold project in Guatemala. Over the last nine months Bluestone has completed an infill drill program focused on converting Inferred Resources identified in the Feasibility Study into Measured and Indicated categories. The Cerro Blanco Feasibility Study (see press release January 29th, 2019) highlighted some 357,000 ounces of Inferred Resources (1.4 Mt grading 8.1 g/t Au) that could be potentially converted to Measured and Indicated Resources. The Feasibility Study was based on an initial eight-year mine life, demonstrating robust economics with an average LOM AISC of US$579/oz.
Highlights of the Resource Estimate (3.5 g/t Au cut-off)
- Measured category resources increased by 134%, totalling 607,714 tonnes grading 11.5 g/t Au, containing 225,118 ounces of gold
- Measured and Indicated Resources increased by 18% to 1.41 Moz averaging 10.3 g/t Au
- Majority of the 66 infill holes were drilled in the North Zone of the deposit, a similar program of infill drilling in the South Zone is now underway
Darren Klinck, President & CEO commented, “Cerro Blanco remains one of the highest-grade undeveloped gold projects amongst its peers. Our infill drill program which was primarily focused on converting Inferred Resources was highly successful and exceeded expectations. Overall the program added approximately 208,000 additional ounces of gold into Measured and Indicated Resource categories that will contribute to the reserve base, and potentially extend mine life. Two key outcomes of the resource conversion drill program were: the identification of five new veins in the North Zone, and an increase in Measured Resources to 225,000 gold ounces. We believe this recent infill drill program which was focussed in the North zone and the drilling currently underway in the South Zone have the potential to contribute additional mine life based on previous mine plan conversion rates. Every additional year of mine life has the potential to add approximately US$60 to US$80 million in free cash flow using a gold price of US$1,250 per oz Au.”
Table 1. Cerro Blanco High-Grade Resource Estimate at a 3.5 g/t Au cut-off
Resource Category | Tonnes | Au Grade g/t |
Ag Grade g/t |
Contained Gold (Oz) |
Contained Silver (Oz) |
Measured | 607,714 | 11.5 | 44.2 | 225,118 | 864,281 |
Indicated | 3,661,507 | 10.1 | 35.6 | 1,188,194 | 4,193,343 |
Measured & Indicated | 4,269,221 | 10.3 | 36.8 | 1,413,312 | 5,057,624 |
Inferred | 466,218 | 7.1 | 16.6 | 107,215 | 248,488 |
- Effective date: November 1, 2019. All Mineral Resources have been estimated in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under NI 43-101. Mineral Resource Statement prepared by Garth Kirkham (Kirkham Geosystems Ltd.) in accordance with NI 43-101.
- Measured Resources include 29,726t of stockpiled material grading 5.35 g/t Au and 22.6 g/t Ag.
- Mineral Resources reported demonstrate reasonable prospect of eventual economic extraction, as required under NI 43-101. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. The Mineral Resources may be materially affected by environmental, permitting, legal, marketing, and other relevant issues.
- Underground Mineral Resources are reported at a cut-off grade of 3.5 g/t Au. Cut-off grades are based on a price of US$1,250/oz gold, US$16/oz silver, and a number of operating cost and recovery assumptions, including a reasonable contingency factor.
- Density used was 2.53 t/m3 for mineralized material.
- Ounce (troy) = metric tonnes x grade / 31.10348. All numbers have been rounded to reflect the relative accuracy of the estimate. Inferred Mineral Resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. However, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Resources.
David Cass, Vice President Exploration commented, “The successful completion of this infill drilling program has further enhanced our geological understanding of the Cerro Blanco mineralization and our confidence in the resource continues to improve. Throughout the drilling we have continued to be impressed by the continuity and predictability of the veins, most of which require further detailed drilling to define their lateral and depth extensions. Furthermore, our confidence in the model is further enhanced by trial stoping along veins in the Cerro Blanco underground workings which continues to improve orebody knowledge (see press release dated September 4, 2019).”
The updated Mineral Resource estimate is the result of an additional 8,567 meters of drilling (66 drill holes) drilled as part of Bluestone’s infill drill program that commenced in November 2018 and was focused in the North Zone underground workings. The estimate is based on an increasingly better understanding of the geological model, supported by over 3 kilometers of underground infrastructure and 526 underground channel samples. To date, over 138,000 meters in 646 holes have been drilled at the property by Bluestone and previous workers.
Table 2: Cerro Blanco High-Grade Resource Estimate* at Various Gold Cut-off Grades
Resource Category | Cut-off | Tonnes | Grade (Au g/t) |
Grade (Ag g/t) |
Contained Gold (oz.) |
Contained Silver (oz) |
Measured | 2.5 | 654,166 | 10.8 | 41.7 | 227,266 | 876,176 |
3 | 611,140 | 11.4 | 43.7 | 223,467 | 858,015 | |
3.5 | 577,988 | 11.8 | 45.3 | 220,004 | 842,691 | |
4 | 545,381 | 12.3 | 47.1 | 216,073 | 825,733 | |
4.5 | 508,370 | 12.9 | 49.2 | 211,012 | 803,851 | |
Indicated | 2.5 | 4,503,842 | 8.8 | 31.4 | 1,268,927 | 4,552,459 |
3 | 4,061,302 | 9.4 | 33.5 | 1,229,917 | 4,370,821 | |
3.5 | 3,661,507 | 10.1 | 35.6 | 1,188,194 | 4,193,343 | |
4 | 3,293,700 | 10.8 | 37.9 | 1,143,887 | 4,008,172 | |
4.5 | 2,935,960 | 11.6 | 40.2 | 1,094,990 | 3,795,334 | |
Measured & Indicated | 2.5 | 5,158,008 | 9.0 | 32.7 | 1,496,193 | 5,428,635 |
3 | 4,672,442 | 9.7 | 34.8 | 1,453,384 | 5,228,836 | |
3.5 | 4,239,495 | 10.3 | 36.9 | 1,408,199 | 5,036,034 | |
4 | 3,839,082 | 11.0 | 39.2 | 1,359,959 | 4,833,905 | |
4.5 | 3,444,330 | 11.8 | 41.5 | 1,306,002 | 4,599,186 | |
Inferred | 2.5 | 613,434 | 6.1 | 15.4 | 121,161 | 303,819 |
3 | 526,930 | 6.7 | 15.9 | 113,542 | 269,554 | |
3.5 | 466,218 | 7.2 | 16.6 | 107,215 | 248,488 | |
4 | 404,649 | 7.7 | 17.1 | 99,786 | 222,956 | |
4.5 | 349,422 | 8.2 | 17.5 | 92,259 | 196,705 |
- Base Case cut-off grade in Bold.
- Measured Resources exclude Stockpile – 29,726t grading 5.35 g/t Au and 22.6 g/t Ag.
Cerro Blanco is a classic hot springs-related, low sulphidation epithermal gold-silver deposit comprising a system of moderate to steeply dipping quartz-adularia-calcite veins. The above Resource has a footprint of 800 x 400 meters between elevations of 525 meters and 200 meters above sea level. The bulk of the high-grade veins occurs as two upward-flared vein arrays (North and South Zones) that converge at depth into master feeder veins that appear to define a positive flower structure, defining mineralization over a vertical distance of approximately 300 meters. Most of the veins are hosted in a gently dipping sequence of siltstones, limestones, conglomerates, and andesitic tuffs (Mita Unit) that are overlain by approximately 100 meters of silicified conglomerates and sinter beds (Salinas Unit) representing a silica cap that forms the low-lying hill at Cerro Blanco.
Mineral Resource Estimation
The Mineral Resource estimate for Cerro Blanco was prepared to industry standards and best practices using commercial mine modelling and geostatistical software. Garth Kirkham, P.Geo., is the Independent Qualified Person responsible for the Mineral Resource estimates for the purposes of NI 43-101. The geologic models and domains were completed under the supervision of Bluestone’s Vice President of Exploration, David Cass, P.Geo., and Geology Manager, Carlos Chiquin. The deposit was segregated into multiple estimation domains for the vein domains based on geologic and structural models with the Mineral Resources estimated by inverse distance interpolation of capped composites.
Bluestone and its consultants conducted extensive structural studies and analyses to assess the quality of the pre-Bluestone legacy drill hole data in preparation of the Mineral Resource estimates. Confirmatory drilling by Bluestone has shown the data to be of high quality, increasing confidence and understanding of the Cerro Blanco deposit. The improved constraints on mineralization provided by this updated geological model at Cerro Blanco have reduced the variance of resource sensitivities.
The Mineral Resource estimates employed state of the art commercial modelling and mine planning systems (LeapFrog and MineSight R v15.50). The block model has a parent block size of 5 x 5 x 1 meters with a sub-block size of 1 x 1 x 0.1 meters. Assays were composited to 1.5 meters to insure regularized, common sample support. The methodology employed was inverse distance in a single pass using capped gold and silver composites which were limited to selected thresholds based on analysis of cumulative frequency plots and commonalities of veins. Cut grade thresholds ranged from 18 g/t to 110 g/t Au and 100 g/t Ag to 300 g/t Ag. Hard boundaries were used for each vein with a minimum of 2 composites per block and a maximum of 9 per block, 3 maximum composites per drill hole or channel sample.
Mineral Resources are classified under the categories of Measured, Indicated, and Inferred according to CIM guidelines. Mineral Resource classification for gold was based primarily on drill hole spacing and on continuity of mineralization. Measured Resources were defined as blocks within a distance lateral to the ramp and along veins within 15 meters. Indicated Resources were defined as those within a distance to three drill holes of less than 40 meters. Inferred Resources were defined as those with a drill hole spacing of less than ~75 meters and meeting additional requirements. All Resources are constrained by the continuous vein solids. Final Resource classification shells were manually constructed on sections. Mined out ramp material was extracted from the Measured Resources. Silver was not classified separately and is reported based on gold classification.
Qualified Persons
The Mineral Resource Estimate in this release has an effective date of November 1, 2019 and was prepared in accordance with NI 43-101 by Garth Kirkham, P.Geo., a Qualified Person for NI 43-101. Mr. Kirkham is an employee of Kirkham Geosystems Ltd., and is an independent Qualified Person as defined by National Instrument 43-101. The scientific information in this release was reviewed by David Cass, P.Geo., Vice President Exploration for Bluestone. Both Qualified Persons have read and approved the information contained in this press release.
About Bluestone Resources
Bluestone Resources is a mineral exploration and development company that is focused on advancing its 100%-owned high-grade Cerro Blanco Gold project located in Guatemala. A Feasibility Study on Cerro Blanco returned robust economics with a quick pay back. The average annual production is projected to be 146,000 ounces per year over the first three years of production with all-in sustaining costs of $579/oz (as defined per World Gold Council guidelines, less corporate general and administration costs). The Company trades under the symbol “BSR” on the TSX Venture Exchange and “BBSRF” on the OTCQB.
On Behalf of Bluestone Resources Inc.
“Darren Klinck”
Darren Klinck | President, Chief Executive Officer & Director
For further information, please contact:
Bluestone Resources Inc.
Stephen Williams | VP Corporate Development & Investor Relations
Phone: +1 604 646 4534
info@bluestoneresources.ca
www.bluestoneresources.ca