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The Blair Witch Project co-creator Daniel Myrick spoke with Sci-Fi Wire recently on the possibility of another addition to the series. Although rumblings of a prequel detailing the mythology behind the Blair Witch folklore have been around for several years, it seems that they're still no step closer to it happening, but they're still not giving up.
Whether or not the film happens is entirely up to Lionsgate, who owns the rights, saying "we're developing some ideas and exploring some storylines that we like, and checking out some locations and seeing if something can get some tracks in with Lionsgate. But we'd like to do one. It would be great."
He then added... "We're still debating on whether or not you'll see the witch. It's hard to make something like that literal and ultimately have it realized in any form."
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More details on a Blair Witch prequel can be found here.