I found the PERFECT Gold Takeover Target

Uncovering a Gold Mining Takeover Gem: Bluestone Resources

Join us as we explore why Bluestone Resources stands out as a prime acquisition target, the strategic advantages it offers, and the likely contenders to seal the deal.

Watch the full interview with Ross Beaty on the @SoarFinancially channel here: https://youtu.be/K7D4sfNvmAE?si=McJLaSp6Yf7OCoaU

🟡 Overview:
Discover the untapped potential of Bluestone Resources, a gold development company poised for a game-changing takeover. We dissect the reasons behind its attractiveness to mid-tier and major gold producers.

🛠️ Permitting Advantage:
Learn why having fully permitted projects is crucial for acquisitions in the gold mining industry. Explore the intricacies of Bluestone Resources’ permitting journey and the significance of their recently approved open-pit mining permit in Guatemala.

💼 Strategic Review and Potential Sale:
Dive into Bluestone’s strategic alternatives, as announced in a July 2023 press release. Understand why the company is exploring options such as the sale of assets, merger, or business combination, and how this aligns with its commitment to value and shareholder protection.

💰 Financial Metrics:
Uncover the financial appeal of Bluestone Resources, boasting a market cap of under $50 million against the backdrop of a project requiring over $500 million in development. Explore the potential impact on a buyer’s production profile and cost efficiency, backed by an impressive 250,000oz annual gold production at low costs.

🔍 Potential Suitors:
Delve into the likely contenders eyeing Bluestone Resources. With Lundin Gold publicly expressing acquisition interest and Equinox Gold’s strategic expansion plans, we assess the top candidates for the takeover and their potential synergies.

🤝 Lundin Gold – Leading Contender:
Explore why Lundin Gold emerges as the leading contender to acquire Bluestone Resources. Uncover the strategic alignment, financial capacity, and historical success of the Lundin family in navigating challenging mining landscapes.

🚀 Equinox Gold – Another Strong Contender:
Discover the potential synergy between Equinox Gold’s expansion goals and Bluestone Resources’ Central American project. Analyze Ross Beaty’s vision for Equinox Gold, and how Bluestone’s assets align with the company’s focus on building a world-class gold producer.

🔒 Disclaimer:
Before we proceed, a quick disclaimer: The creator of this video holds shares in some of the mentioned companies and may sell them or buy more at any time. This content is for informational purposes only, and it should not be considered as investment advice. Always conduct your research and consult with a financial advisor before making any investment decisions.

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I believe that I’ve identified a gold development company that is a huge takeover candidate. In this video, I’m going to share what that company is, why I think they’re such a big takeover candidate and who the most likely companies would be to buy them out.

In order for a mid tier gold producer or a major gold producer to buy out a smaller company, they typically want that company’s permits to be fully in place and have that project fully permitted. Why? Because if they don’t, then they have to start much of the process all over again.

It’s not that they have to resubmit paperwork, however. When a new, bigger company comes in, the local community is like, whoa, what’s going on here? No, we had a deal with this company. We trust those guys. Those guys have been working to build up our community for the last five years.

They’ve been building schools, they’ve been teaching the kids. They’ve been building roads and bridges. No, we trust them. We don’t trust you. So then a lot of the process has to start over, building relationships with that community if the takeover happens before the project is fully permitted. Bluestone Resources is a Lundin company,

Part of the Lundin family. A couple years ago, they had a fully permitted mine. They had a fully permitted project. However, as they did more drilling, as they talked about it more, they’re like, this is going to make a lot more sense as an open pit mine than as an underground mine.

So we can double our resources and we can triple our npv if we change it to an open pit mine instead of an underground mine. However, the problem was Guatemala had only permitted an underground mine, not an open pit mine. So they had to redo their permit applications and

Resubmit their permit applications to get an amendment to that permit to allow the open pit mining. And when they did this, a lot of people were saying, Guatemala will never approve an open pit mine. I mean, haven’t we learned over all these years to never underestimate the Lundin family’s ability

To work in difficult locations and to work with governments to get difficult mines approved? Those who underestimated them were wrong. Once again, we just got notification that that amended permit was approved for an open pit mine. So what makes bluestone resources such a great takeover candidate? Well, I think they’re the perfect

Takeover candidate for a mid tier. I think the mine is a bit too small for someone like a barrack to come in. They’re going to have a 14 year mine life to start, but that will expand over time as they drill more, explore more and expand those resources.

And over that 14 year mine life, the company is going to average almost 250,000oz of gold production. With that heavily weighted towards the front end. So you get a lot of production the first few years. So this would look really, really good to a company that’s currently producing 500,000oz of gold a year,

A million ounces of gold a year, this would make a meaningful difference to their production profile. And you know what? It’s 250,000oz a year at a very low cost. According to the most recent feasibility study, we’re looking at an all in sustaining cost of just $650

An ounce, which is crazy low in today’s environment. Now, we’ve had some inflation since then, so maybe that number will be a bit higher. But I mean, for a feasibility study, a recent feasibility study to show that, well, that is incredible. Another reason why they look like a

Takeover candidate is because they have a market cap of less than $50 million. And this Cerro Blanco mine in Guatemala is going to take more than $500 million to build. So when you see a mine that’s going to take more than ten times the market cap of the company to build,

Usually that needs to be built by a bigger company. But this is a Lundin company. And if any company can arrange financing, it’s going to be one that’s part of the Lundin Group. But the market cap relative to how much it’s going to take to build that mine is definitely a big

Reason why this is a potential takeover candidate. But in addition to that, one huge reason is this. Press release in July of 2023, Bluestone announces strategic Review process Bluestone today announced the company has commenced a process to explore and evaluate potential strategic alternatives to further advance the Cerro Blanco gold project

And the Mita Geothermal project. These alternatives could include, among other things, the sale of part or all of the assets of the company, a sale of the company, a merger or other business combination with another party, or a strategic transaction. Bluestone has successfully advanced the Cerro Blanco

Gold project through several technical studies, unlocking additional value through an open pit development scenario which effectively doubled the gold resource ounces and tripled the projected project returns. As outlined in the 2022 feasibility study, the Cerro Blanco gold project is a robust, rapid payback, high grade operation. However, as a single asset developer with

No operating revenues, safeguarding capital, shareholder dilution and value is a top priority. A larger company or entity with cash flow could be more appropriately suited to maintain and advance the Cerro Blanco gold project and Mita Geothermal project over any future development timeline. The Cerro Blanco gold project is

Currently permitted as an underground mine. Now it’s permitted as an open pit mine as of today as part of the strategic review. Alternatives could include, amongst other things, a sale or part of all of the assets of the company, a sale of the company, a merger or other

Business combination with another party or strategic transaction. The Company has not set a timetable for this process nor hasn’t made any decisions related to any strategic alternatives at this time. There can be no assurance that the exploration of strategic alternatives will result in a transaction. The Company does not intend to provide announcements

Or updates unless or until it determines that further disclosure is appropriate or necessary. During this time, the Company will continue to pursue the approval of the permit amendment for the Cerro Blanco gold project. So right there in that press release, they’re essentially telling us, we intend to sell this company, and we won’t

Give any updates until the process is done. Well, today’s news that the open pit project has been approved and is fully permitted now makes the sale of this project way more likely and very likely for it to happen more quickly as well. So now let’s talk about the potential suitors for Bluestone resources.

I see the most likely company to buy Bluestone to be Lundin gold. Lundin Gold has said publicly that they’re looking for an acquisition. By the way, this is one of the companies in the Lundin group of companies, just like Bluestone is. And they built a huge gold mine in Ecuador that

Nobody thought they were going to be able to build. And now that gold mine is gushing cash. And Londin Gold has been one of the most successful miners in the entire industry, and they’re looking for a great place to put that cash. And who knows Bluestone better? And who knows that Cerro Blanco

Project better than the Lundins? Nobody. Nobody knows it better than the Lundins. And if that isn’t enough, the Lundins actually have a history of taking one of their companies that’s actually mining right now and using that cash flow to buy another one of the companies in the Lundin group of companies.

They did this recently with Lundin Mining and what was it, Jose Maria? In Argentina, Lundin Mining was cash flowing. They have operating mines around the world, and they bought another Lundin company, which is a big copper gold project in Argentina. And now we’re in a similar scenario in

Which Lundin gold is producing significant cash. They’re already operating in Latin America, so it wouldn’t be that big of a stretch to go to another latin american company and build a mine there. And they have the cash that would be needed to build that mine without any dilution at all.

So I think the most likely buyer of Bluestone Resources would be Lundin Gold. But also you have a company like Equinox Gold. Ross Beaty is the founder and chairman of Equinox Gold. And a few months back, in an interview, he said that Equinox is looking to expand, and they’ve been kind

Of held back from doing anything for two years. As their massive greenstone mine in Canada gets built. I certainly know opportunities. We’re always looking for smart deals with Equinox Gold. I’m always thinking that it’s been something that I’ve done all my life. I’ve done a ton of merger

And acquisition work in my career. A ton, like dozens and dozens of deals. Thing about mining that people always have to remember is it is a declining industry every single minute. The actual mining industry depletes its reserves every second. It’s a non renewable industry. So companies must either discover or

Buy in order to maintain their production or even increase their production. So it’s inherently got a lot of M&A work intrinsically in it. And the other reality is scale does matter these days. It matters more than it’s ever mattered. That’s one of the fundamental reasons I did

A lot of M and A to build Equinox gold quickly, because scale is important. You have more liquidity for investors, you have better multiples. You have better access to big capital pools, the etfs, for example, large investors. So there’s all sorts of reasons why it makes sense today.

And that’s what often also drives M and A work is the one and one is three. If you can put two companies together, each of which has high overhead, for example, put them together instantly, you got a better multiple, and you get rid of all those wasteful overhead costs.

You have one instead of two. So it’s really sensible if it’s a true synergistic merger. The problem is, a lot of them aren’t. A lot of them are growth just for growth’s sake, which is stupid. And quite frankly, I made a bad decision in one of our deals to buy a company.

When Equinox combined with Leagold, we got stuck with a mine that was much more difficult than I had ever anticipated in Mexico, the Los Filos mine. And that’s been a real headache. So we’re sorting it out. It’ll get sorted out. But it was definitely not the easy one on one

Is three deal that I hoped it would be. Sometimes things happen. They don’t always work out. But getting bigger is smart by itself. And so I expect you’re going to see some deals. Is that sort of still the plan? Like, let’s up and go before we look at anything else?

Well, I can say that we are so confident Greenstone’s over the hump now. I’ve been frozen out of doing anything for two years. While that’s all happening. We had to make sure that was so important to get right. And we now feel very confident that is now

Right, so we can start looking at other opportunities. There are great opportunities in the space, but of course we have to be constrained by all kinds of things. But I mean, I just want. My ambition with equinox is pretty simple. It’s to build a world class, like senior gold

Producer fast and get those multiples and get that higher valuation and build a really big company that has humongous leverage to higher gold prices. That’s been the mission of the company, pure and simple, since day one. So far so good. We’ve been penalized for two years with all kinds

Of worry about Greenstone, whether we were going to blow our budgets and take longer as soon as the confidence in the market is there, that we have actually met our targets. And it should be like this month or next month right now, I think we’re going to have

A better price and all of a sudden we’re going to have opportunity to do other things. If there’s the right value. Penny drops sort of the price once the penalizes, as you said, they’re over the house this month, next month, soon. I don’t know exactly when it’s going to be,

But definitely if there’s a really good opportunity, we want to see it in the Americas. Yeah. We’re going to stay in the Americas. Yeah. I’m not wild about Africa. Yeah. For example, he said, after that mine is built, we can look to do another transaction again.

And this is an Americas focused gold producer. North America, South America, Central America. And Bluestone Resources has their project in Central America. So that fits perfectly in with that. It would add an average of 250,000oz of gold to Equinox’s already big growth profile, which they’re definitely looking for.

And, you know what, Ross Beaty said after the greenstone mine is built. Well, guess what? The greenstone mine just finished being built. So I think Equinox is another company that could be a potential suitor to take over bluestone resources. If you like videos like this, please subscribe to

The Channel and next click on this playlist. It’s a series of videos I’ve done that are going to make you a better mining stock investor. And I’ll see you over there.