Despite a strong rise in gold prices this year, Bluestone Resources (OTCQB:BBSRF) is trading at the same levels as it was in February. The company is advancing the development-stage Cerro Blanco gold-silver project in Guatemala, and this high-risk jurisdiction is the likely reason for investors’ hesitation to back the stock.
Who does back the stock, however, is the legendary Lundin family who has been building and selling mines in difficult jurisdictions for decades. We view the family’s involvement as the key reason that the project will get financed and built, with initial production on the near horizon. As a high-grade, low cost operation with 1.4 million ounces of gold, we see the current valuation as compelling from a risk/reward perspective.
Over the past year, Bluestone is up 40% and is trading roughly in line with the junior gold miners index (GDXJ). The company lags its peer group of near-term developers