Could this Gold company deliver 1000% GAINS?

Could this be the next 10-bagger waiting to be unearthed? This video unpacks Bluestone Resources (BBSRF) and their Cerro Blanco gold project in Guatemala.

Get the lowdown on:

Cerro Blanco’s allure: This gold mine owned by Bluestone Resources is set to become a very low-cost gold mine with solid production estimates (240,000 oz/year)

By investing in Bluestone, I think there are multiple paths to substantial gains: Acquisition by a mid-tier gold producer, strategic partnership, or self-build – each with its own reward potential.

Reality check: Unmasking the risks. In this video I’ll cover some potential risks such as financing hurdles to potential undervaluation and operational challenges.

It’s important to note that this is a high-risk, high-reward opportunity.

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Although I think this is a great investment opportunity for myself given it’s juxtaposition of risk and reward, you should understand that it’s very easy to lose a lot of money in junior mining stocks.

Never make any investment decisions based on my videos. This sector is very risky and this should not be considered investment advice. Always do a lot of your own research before investing your hard earned money.

#mining #goldstocks #miningstocks

In this video, I’m going to tell you about a gold company that I think could be the next ten bagger in the gold mining space. Full disclosure, this isn’t a sponsored video, but I am a shareholder of this company. And I’m a shareholder for what I think are very good reasons.

But I’m no genius. This is just my opinions based on my analysis. So always do lots of your own research before investing any of your hard-earned money. So the company I’m talking about today is Bluestone Resources. They have a gold development project in Guatemala and it’s set to be one of the

Lowest cost gold mines in the world. I first bought a small position in this company back in October when it was trading at $0.20. But then in late November, it had dropped down to $0.14 and that’s when I really backed up the truck. That’s when I really thought it

Was a super great value. Well, in the last few days, we’ve had a big run up in the price, but for good reason, because we got a huge update that greatly derisked the project. Now, as of today, it’s trading at $0.40. And all figures that

I’m going to be talking about in this video are in us dollars, by the way. So when I bought shares in this company, based on my analysis, I thought that if everything went right, it could possibly end up being a $5 stock. Notice I said possibly. Not probably, but possibly.

So a lot of things would have to go right for that to happen, and a series of events would have to happen. And in order to get to the $5 valuation, they would have to build their mine themselves. But I don’t think that’s the most likely scenario.

I think a more likely scenario is they end up selling the company or they form some kind of partnership deal where some partner funds the building expenses and then they keep a portion. Or maybe they sell the company outright, but we’ll see what happens with that. But anyway, let’s get into why I

Think it’s such a great value today. So the company is trading over the counter in the US by the ticker BBSRF, and as of the making of this video, it’s trading at $0.40. But it’s been very volatile the last few days. So it will likely be different than

That when you see this video. And based on trading at 40 cents, that puts the market capitalization at $62 million. However, the company does have a little bit of debt and their net debt is about $13 million. So the market is valuing the company at approximately $75 million today. That is a terrible

M, sorry about my horrible writing. So, in order for us to see a ten bagger from this share price, we would have to see a company valuation of $750,000,000. So let’s take a look at how we could possibly get there. So, first up, the company owns the mita geothermal project.

And I honestly don’t know how to value this, but I know the value is more than zero. And so far, $60 million has been spent on the Mita geothermal project. Now, what this is going to mean is that their Cerro Blanco mine is guaranteed reasonably affordable electricity throughout the life of the mine.

And then they could sell the excess electricity into the grid in Guatemala. And something else this geothermal project does for the company is it gives the gold mine the option to run on clean energy, which may be an important selling point for ESG reasons. Almost all of the company’s value lies

In their Cerro Blanco gold mine. So this had a feasibility study done on it in 2022. And at $1,600 gold, it puts the valuation at over $1 billion. I believe it was 1.047. However, at $2,000 gold, where we’re trading today, it puts the net present value at about $1.7 billion.

Now, remember, to get a ten bagger from here, we need a company valuation of $750,000,000, which is less than this. You may think “Okay, well, that should be easy to get there, right?” Well, not so much, because they haven’t even started to build the mine yet, nor do they have financing.

But a big question is, how is a $60 million market cap company going to get more than $500 million in financing to build this mine? Well, that could be tricky, and that’s where a partner might come in. However, it’s not totally out of the question.

Like, for example, they could sell a silver stream on this to Wheaton precious metals, for example. Wheaton precious metals is very often interested in silver streams, so that’s a possibility. We could see some sort of financing like this. But we also got to keep in mind that Bluestone Resources is a Lundin company.

The Lundin family Trust owns something like 30% of this company. The Lundins have the money to finance this, but they also have the connections, and they’ve made relationships with various banks over the many, many years that they have been successful in their operations. And also, it’s worth keeping in mind

That something will probably have changed in the last two years with this. Like, we’ve had some inflation since then. And something else to consider is that in this feasibility study, with $1,600 gold and $2,000 gold, they were using a 5% discount rate. And in today’s environment, at today’s interest rates,

Who the heck is getting financing at 5%? Especially a small junior minor? No, not a chance. So we can’t really trust these numbers because the discount rate is too low. So maybe we have to look at it as if we have $1,600 gold, even though we do have $2,000 gold.

But maybe because of the low discount rate, we have to use this number of about a billion dollars. I think the only way that we get to a valuation of anywhere near this number with the company is that Bluestone arranges financing on its own and then they build the mine and then they

Start operating the mine successfully. In that case, we could see the company valued at about 1X NAV. Maybe in today’s market, And with today’s sentiment, it’s a bit lower than that. Maybe it trades at 80% of NAV or 90% of NAV. But I think by the time that this mine is built,

Well, then the sentiment in this market will have changed quite a bit, probably for the better, because it couldn’t get much worse than what it is right now, today. And if Bluestone is able and willing to build the mine themselves and get to that valuation, well, then we’re at a ten bagger.

Like, remember, to get to a ten bagger, we need a company valuation of $750,000,000. I don’t think that’s the most likely scenario. In fact, I don’t even think it’s probable that this happens. It’s a possibility, but not a probability. So why do I think it’s not a probability that this will happen?

Well, because Bluestone has said publicly that they think that this company or this mine could be better in the hands of a bigger company that already has cash flow or some sort of strategic partnership to get this thing built. Since Bluestone is a single asset company, well, they have

The mita geothermal project, but for all intents and purposes, they’re a single asset company in the Cerro Blanco gold mine, and they don’t have any cash flow. So what are the possibilities here? Well, one, I think they could sell the company outright. Now, what kind of valuation will they

Get if they sell the company outright? Well, in today’s market, the stock price is super depressed. It’s gone way, way down over the last couple of years as investors have doubted that Bluestone would get that permit that they just recently got. And also, investors were just getting bored of this.

If they were to sell this project, how much could they sell it for? Like, how much could they sell the company for if they wanted to sell the company in today’s market? I don’t know. I think investors (of the acquiring company) would be freaking out if it

Was more than a double from the current valuation. But as a shareholder myself, I think selling this for a double from here is greatly undervaluing this gold mine, this project. I think it’s worth way more than that. So, as a shareholder, I don’t think I could vote in favor of that.

I think I’d have to vote against that transaction. Now, I think a company could buy this for $200 million, $300 million. I’d vote in favor of that transaction. However, to get the shareholders of the other company to agree to that, I don’t know… That might be a tough sell unless it’s

A company that’s in very strong hands. Like, for example, Lundin Gold. Lundin Gold, just like Bluestone Resources, has a significant ownership from the Lundine family Trust. So that’s a possibility. And, like, let’s say Lundine gold buys bluestone Resources for $200 million. In all likelihood, Lundin Gold is still going to make

A lot of money on this, and they can fund the build from their current cash flow of their current mine in Ecuador, their fruit del Norte mine there. So I think that’s a real possibility. But in order to sell this company for $200 million, $300 million to another public company, I think

We’re going to have to get improved sentiment from here and an improved stock price of Bluestone. So the investors in the acquiring company don’t feel like they’re overpaying too much for Bluestone. Now, let’s talk about another possibility, some kind of strategic partnership. So this mine is going to produce

An average of 240,000oz a year. As a matter of fact, near the beginning of the mine, it will produce up to 350,000oz in certain years. So 240,000oz a year, that’s a big number, especially for a mid tier gold producer. So you have a gold company that’s currently producing

400,000, 600,000, even a million ounces a year. Adding this production to their current production profile is going to do a lot for them. But even if this number were divided in two and it was only 120,000oz a year that was going to that mid tier. Bluestone could do some sort of strategic transaction

With another mid tier, where Bluestone says, hey, mid tier company we are going to give you 50% of this project. And in exchange for that, it’s your responsibility to fund 100% of the cost to build this mine. Now you’re going to get this for free. You don’t have to buy us.

You don’t have to buy us out to freak out your shareholders by paying a stupid premium or what they might perceive as a stupid premium. But you’re going to add 120,000oz a year of production to your, let’s say, 500,000 ounce production profile. All you have to do is pay for the construction.

I think they might be able to come to some agreement like that with a mid tier company as well, but we’ll see. So in the case that they sell the company outright, if they did it today, I think we’d struggle to get more than a double from here.

So, forty cents to eighty cents if sentiment improves, like, let’s say, sentiment approves and the share price goes up to they sell the company at that point, well, then I think maybe we could get a quadruple from here. But if we go this route and we

Get an acceptable deal from a mid tier company, everything goes well with the mine build. We get it after a couple of years into operation, into full production, and it’s producing similar to how we thought it would in the feasibility study. Well, then I think we could be looking at

Approximately a 500 million dollar valuation for bluestone. 500 million dollar valuation from here. What is that, a seven x gain from here? So I think one of those is a most likely scenario. So at the end of the day, based on these various scenarios, I certainly don’t think it’s a

Probability that we get a ten bagger. However, I do think it’s a probability that we see substantial gains from here. Now, will that be a two times gain or four times gain if we sell the whole company? Maybe. Or will that be a seven x gain if we

Get an acceptable partnership agreement, and if everything goes well with the mine build, and if we get it operating at full production, and if we get it operating at an all in sustaining cost, close to what it says in the feasibility study, well, then, yeah, I think we

Could have a seven bagger from here. But notice that’s a lot of ifs. If this happens and if this happens and if this happens. So there’s certainly risk involved here. But I do think the potential reward greatly outweighs the potential risks. I wanted to say thank you for watching until the end.

I know you don’t have to watch these videos, but I really appreciate that. You do? If you’re interested in learning more about mining stocks, you can go check out one of these videos right here, and I’ll see you over there.