Guatemala has approved the alteration of Bluestone Resources' (BBSRF) Cerro Blanco gold project near El Salvador's border.

What Happened: Bluestone's stock spiked from C$0.24 to C$0.59, doubling the market cap to C$87.6 million.

"After dedicating over two years to obtaining the environmental permit amendment, we are pleased," president, CEO and chairman Peter Hemstead stated in a press release.

The goal is to shift the gold project from an underground to an open-pit operation.

"We will continue with our strategic review, and having the environmental permit in hand helps de-risk the project," he added, referring to the review initiated in August 2023, which includes a sale of assets, a merger or even a sale of the entire company.

The approval came as an "anticorruption crusader," Bernardo Arévalo, got sworn in as the new Guatemalan President.

Despite a landslide victory in August, Arévalo faced an assassination plot.

Why It Matters: The Cerro Blanco project, originally acquired from Goldcorp in 2017, is a flagship asset for the company. Bluestone's strategic move to amend its mining method began in Q1 2021, emphasizing improved economics and a safer production profile.

The company's feasibility study forecasts an after-tax net present value of $1.1 billion. It expects an internal rate of return of 30% with an open-pit configuration's yield of 10.2 million ounces of silver and 2.7 million ounces of gold over 14 years.

Environmental Concerns: Hemstead expressed optimism about Cerro Blanco, claiming it can "contribute significant economic growth, infrastructure, training and job opportunities to Guatemala."

However, the proximity of the Güija lagoon and Lempa River are problematic.

Those are essential water sources for San Salvador, the capital of the bordering El Salvador, which already grapples with water pollution.

A 2019 study on Cerro Blanco's impact on water resources showed increased levels of arsenic and other chemicals associated with various diseases.

Cerro Blanco is also located within the Biological Corridor of the Ostua Dry Forest, an area created in 2015 by Guatemala's National Council of Protected Areas to conserve ecosystem services and livelihoods of local populations.

Mining leaders in Davos pledge to halt the negative impact on biodiversity. But projects like Cerro Blanco stand out in stark contrast to those goals, rising tensions in an ever-turbulent Central America.