Bellevue Gold Ltd (ASX:BGL) has secured a speculative buy rating and a price target of A$1.25 from Canaccord Genuity Ltd in a report released by analyst Tim McCormack and associate analyst Tyson Kestel.
The analysts said they viewed the company’s historic Bellevue Gold Project in Western Australia, with a current resource of 2.7 million ounces at ~10 g/t, as the highest grade gold development project in Australia.
“We view the project as a likely development prospect and also an increasingly attractive takeover target, with a number of majors operating in the region.
“We maintain a SPECULATIVE BUY rating, and expect the ongoing exploration results to underpin improving project economics as the company moves through iterations of studies towards production.”
Strong grade control drilling results
The company recently released a suite of high-grade results from the first 34 holes of its grade control drill program at the planned Tribune open pit.
The report said: “The drilling, undertaken on 10 metre x 10 metre spacing, demonstrates the strong continuity of high-grade mineralisation at Tribune, in our view.”
Notable intercepts include:
- 5 metres at 76.4 g/t gold from 55 metres (including 2 metres at 176.6 g/t);
- 5 metres at 31.7 g/t from 43 metres;
- 5 metres at 30.5 g/t from 28 metres; and
- 2 metres at 48.9 g/t from 20 metres.
The drilling covers the southern section of the planned open pit with the weighted average grade of reported intercepts ~12 g/t (Tribune Resource 0.25 million ounces at ~7.5 g/ t).
The analysts said: “This serves as a strong reminder that historical production at the mine tended to positively reconcile, in our view.”
Stage Two feasibility plans
The report also noted the company’s main focus of the Stage Two Feasibility Study is bringing open pit material from the Tribune, Vanguard and Hamilton Lode areas into the ore reserve inventory.
“The inclusion of high-grade 'starter pits' in the Stage Two Feasibility Study could, in our view, improve the economics of the project with open pits contributing only ~2% of the ounces in the Stage 1 LOM inventory.”
Underground development continues
Underground development continues ahead of schedule with over 2,000 metres completed towards the primary Deacon and Viago lodes.
The company has now commenced an additional decline towards the Armand and Marceline lodes with the aim of allowing further drilling platforms for grade control and Resource growth drilling.
The Marceline lode hosts a resource of 310,000 ounces at 9.7 g/t gold (130,000 ounces at 10.1 g/t gold in the Indicated category), which was not included in the Stage 1 Feasibility.
The analysts said: “The company has highlighted that drilling at Marceline and Deacon North is being prioritised with up to six surface rigs and two underground rigs targeting the lodes with a view to defining additional resources and reserves.
“We expect a resource/reserve update to be released ahead of, or in parallel with the Stage Two Feasibility Study (expected in the SepQ'21).”
New substantial shareholder
Also displaying confidence in BGL is CI Investments Inc which has become a substantial shareholder.
The Canadian investment fund manager has accumulated a 5.08% holding through a series of purchases from February 23 to June 9, 2021, and now holds 43,214,654 shares.