KEY POINTS
- Aura Minerals secures Bluestone’s Cerro Blanco project in a $74M acquisition.
- The acquisition adds significant gold resources in Guatemala to Aura’s assets.
- The company anticipates boosting production capacity with this strategic addition.
In a $74 million deal, Aura Minerals (TSX: ORA) will acquire Bluestone Resources (TSXV: BSR), gaining full ownership of Bluestone’s Cerro Blanco gold property in Guatemala and the nearby Mita geothermal project.
Aura’s long-term growth strategy will be strengthened by this acquisition, which also improves its presence in Latin America and is anticipated to increase its gold production pipeline.
Strategic expansion through Cerro Blanco
Obstacles have been faced by the Cerro Blanco gold project in southeast Guatemala, especially because of regulatory issues related to its switch from underground to open-pit mining.
The permission amendment permitting this change has been challenged by the Guatemalan government, which has caused delays and issues in the project’s progress. According to a 2022 feasibility study by Bluestone, the project, which was initially valued at $411 million, is expected to produce 2.7 million ounces of gold over its 14-year mine life.
The measured and indicated resources of Cerro Blanco are estimated to be roughly 3 million ounces of gold and 13.5 million ounces of silver, indicating the size of the deposits.
Aura’s acquisition aims to mitigate previous setbacks, with Aura CEO Rodrigo Barbosa stating, “Cerro Blanco is a world-class deposit that aligns with our growth vision. We believe integrating it into Aura’s strategy can realize its full potential as a flagship project.”
Enhancing Aura’s production pipeline
Cerro Blanco’s accession fits perfectly with Aura’s plan to grow throughout Latin America. Cerro Blanco, located roughly 230 kilometers away from Aura’s active Minosa mine in Honduras, which generated 65,927 ounces of gold in 2023, is anticipated to increase the company’s capacity for production.
Given that Aura has produced 270,000 gold equivalent ounces (GEOs) from its holdings in Mexico, Brazil, and Honduras in the last year, the deal puts the firm in a position to benefit from the deposit’s long-term potential.
According to Mining.com, Aura hopes to expand its production pipeline beyond 450,000 GEOs in the upcoming years with this acquisition.
Barbosa underlined the importance of the acquisition, pointing out that the company’s goal is to maximize Cerro Blanco’s output potential within Aura’s operating portfolio in addition to project integration.
Market impact and future outlook
Aura’s shares increased 2.35 percent after the acquisition was announced, increasing the company’s market capitalization to $910 million. Bluestone’s shares, on the other hand, dropped 1.5 percent, bringing its market capitalization down to $37.6 million.
Moreover, Aura intends to carry out a thorough evaluation of Cerro Blanco’s development possibilities, looking into ways to smoothly integrate the location into its Latin American business activities.
Aura’s goal to diversify its production and strengthen its position as a major player in the mining industry in Latin America is reflected in this acquisition.
Aura wants to use Cerro Blanco’s precious resources to promote sustainable growth, enhancing its production capacity and providing value to all parties involved.
