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Bluestone Resources starts flow-test program at Mita geothermal project, Guatemala

Cerro Blanco gold project, Guatamala (source: Bluestone Resources)
Alexander Richter 18 Jan 2018

Bluestone Resources Inc. has initiated flow tests of existing wells at its Mita geothermal project in Guatemala to increse the confidence level of the known geothermal reservoir.

In a release Canadian Bluestone Resources Inc. announces having commenced a flow test program at the Mita Geothermal Project.

The project is located adjacent to Bluestone’s Cerro Blanco Gold project in Guatemala. Bluestone’s Board of Directors has approved a flow test program to further test select geothermal wells with the goal of upgrading the confidence level of the known geothermal reservoir. The data collected will provide the basis for the development strategy going forward. Flow testing is expected to commence in February and be completed by the end of March. In preparation for the testing, construction of the necessary infrastructure has already commenced with the installation of pipelines, pumps, sumps, downhole logging equipment, and monitoring equipment.

Bluestone’s President and CEO, Darren Klinck, commented “We believe there is considerable unrealized value in the Mita Geothermal project as evidenced by more than US$60 million invested in the project in the past, the market value of such geothermal projects once in production, and importantly, the direct alignment with the Guatemalan government’s focus on transferring base load power generation to renewable sources such as geothermal.”

The multi-well flow test program will:

  • Collect fundamental static and dynamic resource data for use in future resource modeling and utilization; and
  • Provide a quantitative and realistic prediction of resource performance for an updated project design (wellhead pressure, flow rates, enthalpy, injection pressure, and duration of sustainable commercial production).

Since 2009 many of the geothermal wells at Mita were flow tested with various short-term, single well flow tests. While there were no four-week, multi-well flow tests completed, the data gathered from those tests was used in selecting the wells for the upcoming test program.

Mita Geothermal Project Overview

The Mita geothermal resource was discovered in the late-1990s during gold exploration in southeastern Guatemala. The geothermal resource is located adjacent to Bluestone’s Cerro Blanco Gold deposit with the Company controlling the necessary surface rights for both projects.

Previous operators spent approximately US$60 million permitting and advancing the Mita Geothermal project. A total of 19 geothermal wells have been drilled up to depths of 1,500 meters to delineate the geothermal resource including nine slim holes and ten standard-diameter wells. An internal Goldcorp pre-feasibility study on the Mita geothermal project was completed in 2011 and later a feasibility study in 2013, both internal studies returned positive economics.

In 2015 a 50-year license was granted to build and operate a 50 MW geothermal power plant. The Mita Geothermal project was part of an integrated dewatering and power generation strategy with the Cerro Blanco gold project before it was put on care and maintenance in 2012.

It is projected that beneath the Mita geothermal concession, a deeper geothermal reservoir exists at depths of 2,000 to 3,000 meters. Geothermometry projects temperatures of 220+°C. The geothermal fluids migrate up a major fault system creating an intermediate geothermal reservoir (600-900 meters) at temperatures up to 200+°C, which has been encountered by existing geothermal exploration wells. The development of a potential deeper geothermal reservoir could provide additional power generation to utilize the permitted capacity of up to 50 MW.

The Guatemalan power grid is located 8 km from the Mita Geothermal project. Over the past few years, electrical infrastructure has been upgraded to this part of the country significantly shortening the distance from the project to the main grid.

The government, through the National Electrical Energy Commission, announced that it is preparing to issue an RFP for 420 megawatts of power, of which 40 megawatts is to be reserved specifically for geothermal energy.

While the Cerro Blanco gold project is not dependent on the Mita Geothermal project, Bluestone’s management believes that there are potential synergies between the two that enhance the economics of the Cerro Blanco gold project beyond what was outlined in the Preliminary Economic Assessment available at www.sedar.com.

Source: Company release via Geology for Investors