Bluestone-Aura Merger: Unlocking Value in Guatemala's Gold and Geothermal Sectors
Friday, Nov 22, 2024 9:59 pm ET
2min read The mining industry has witnessed significant mergers and acquisitions (M&A) in recent years, with companies aiming to consolidate their positions and gain access to new resources. One such noteworthy transaction is the proposed acquisition of Bluestone Resources Inc. ("Bluestone" or the "Company") by Aura Minerals Inc. ("Aura"). This strategic move is set to unlock potential value in Guatemala's gold and geothermal sectors, presenting attractive opportunities for both companies and their shareholders.
Bluestone Resources, a Vancouver-based natural resource company, is engaged in exploring mineral resource properties. Its primary assets include the Cerro Blanco Gold Project and the Mita Geothermal Project, both located in Guatemala. The acquisition by Aura Minerals, an established Latin American producer with a strong track record of development, is expected to bring significant benefits to both parties.
The Cerro Blanco Gold Project, Bluestone's flagship project, is a near-surface, high-grade gold deposit in Jutiapa, Guatemala. With an average grade of 5.5 g/t Au, it significantly surpasses the global average of 1 g/t Au (World Gold Council, 2021). This high grade, coupled with a shallow depth, presents a lower cost of extraction, making Cerro Blanco an attractive investment opportunity.
The Mita Geothermal Project, an advanced-stage, renewable energy project licensed to produce up to 50 megawatts of power, complements the Cerro Blanco gold project by providing a clean, renewable energy source. This aligns with the growing trend of tech companies investing in nuclear power to meet their energy demands and achieve carbon-free energy goals.
Aura Minerals' acquisition of Bluestone Resources aligns with its 360 vision, focusing on environmental, social, and governance (ESG) factors. Aura's CEO, Rodrigo Barbosa, stated that integrating Cerro Blanco with its 360 vision will refine the strategic approach, respecting social and environmental responsibilities while delivering value to stakeholders. By acquiring a 100% interest in Cerro Blanco and the adjacent Mita Geothermal project, Aura gains access to a near-surface, high-grade gold deposit and a renewable energy source. This aligns with Aura's commitment to high ESG standards, as it expands its portfolio of gold and copper projects, with about 25% of its production from copper.
The acquisition presents Bluestone shareholders with a choice to maintain exposure to Cerro Blanco through a proven Latin American mine developer, Aura, or elect cash. The upfront consideration consists of either a cash payment of C$0.287, 0.0179 of an Aura common share, subject to proration, or a combination of both. The upfront consideration will be subject to a maximum aggregate Aura shares issuable of 1,363,272 (representing 50% of the upfront consideration). Bluestone shareholders will also receive a contingent value right (CVR) providing the potential to receive a cash payment of up to an aggregate amount of C$0.2120, for each Bluestone share, payable in three equal annual installments upon Cerro Blanco achieving commercial production.
In conclusion, the acquisition of Bluestone Resources by Aura Minerals is a strategic move that enhances the position of both companies. Aura gains access to a high-grade gold deposit and a renewable energy source, while Bluestone shareholders benefit from a premium on the 25-day VWAP of Bluestone shares and the option to maintain exposure to Cerro Blanco through Aura's strong balance sheet and proven track record. This acquisition aligns with Aura's 360 vision and contributes to its ESG standards, positioning the company to unlock potential value from Cerro Blanco and further its strategic goals.
Bluestone Resources, a Vancouver-based natural resource company, is engaged in exploring mineral resource properties. Its primary assets include the Cerro Blanco Gold Project and the Mita Geothermal Project, both located in Guatemala. The acquisition by Aura Minerals, an established Latin American producer with a strong track record of development, is expected to bring significant benefits to both parties.
The Cerro Blanco Gold Project, Bluestone's flagship project, is a near-surface, high-grade gold deposit in Jutiapa, Guatemala. With an average grade of 5.5 g/t Au, it significantly surpasses the global average of 1 g/t Au (World Gold Council, 2021). This high grade, coupled with a shallow depth, presents a lower cost of extraction, making Cerro Blanco an attractive investment opportunity.
The Mita Geothermal Project, an advanced-stage, renewable energy project licensed to produce up to 50 megawatts of power, complements the Cerro Blanco gold project by providing a clean, renewable energy source. This aligns with the growing trend of tech companies investing in nuclear power to meet their energy demands and achieve carbon-free energy goals.
Aura Minerals' acquisition of Bluestone Resources aligns with its 360 vision, focusing on environmental, social, and governance (ESG) factors. Aura's CEO, Rodrigo Barbosa, stated that integrating Cerro Blanco with its 360 vision will refine the strategic approach, respecting social and environmental responsibilities while delivering value to stakeholders. By acquiring a 100% interest in Cerro Blanco and the adjacent Mita Geothermal project, Aura gains access to a near-surface, high-grade gold deposit and a renewable energy source. This aligns with Aura's commitment to high ESG standards, as it expands its portfolio of gold and copper projects, with about 25% of its production from copper.
The acquisition presents Bluestone shareholders with a choice to maintain exposure to Cerro Blanco through a proven Latin American mine developer, Aura, or elect cash. The upfront consideration consists of either a cash payment of C$0.287, 0.0179 of an Aura common share, subject to proration, or a combination of both. The upfront consideration will be subject to a maximum aggregate Aura shares issuable of 1,363,272 (representing 50% of the upfront consideration). Bluestone shareholders will also receive a contingent value right (CVR) providing the potential to receive a cash payment of up to an aggregate amount of C$0.2120, for each Bluestone share, payable in three equal annual installments upon Cerro Blanco achieving commercial production.
In conclusion, the acquisition of Bluestone Resources by Aura Minerals is a strategic move that enhances the position of both companies. Aura gains access to a high-grade gold deposit and a renewable energy source, while Bluestone shareholders benefit from a premium on the 25-day VWAP of Bluestone shares and the option to maintain exposure to Cerro Blanco through Aura's strong balance sheet and proven track record. This acquisition aligns with Aura's 360 vision and contributes to its ESG standards, positioning the company to unlock potential value from Cerro Blanco and further its strategic goals.
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