Bellevue Gold Ltd (ASX:BGL) believes the latest results from infill and extensional drilling could improve the forecast production rate and project economics at its namesake gold play in Western Australia.
The materials stock recently conducted step-out drilling at its wholly-owned Bellevue Gold Project - activity it believes paves the way for a boost in the asset’s gold resources and reserves.
Further drilling activity has identified significant mineralisation extensions at the project’s Deacon North and Marceline lodes, which are expected to add more ounces to the mineral resource at a low level of capital intensity.
Interestingly, the new assays underpin a feasibility study proposal to expand Bellevue’s production plant capacity by 33%, meaning it could churn out one million tonnes of resource per annum at start-up.
Point to “significant scope for growth”
Bellevue managing director Steve Parsons said the drilling results continued to demonstrate the strength of the company’s investment proposition on every level.
“The drilling results provide further evidence of the significant scope to grow the total inventory and upgrade more of the inferred resources to the indicated category while also demonstrating the excellent continuity of the mineralisation.
“These factors are all entirely consistent with the strategic objective of our stage two feasibility study, which is to increase production and mine life for a minimal increase in capital cost.
“Given the strength of these latest results and the fact that we incorporated significant scope for growth in the original costings, we are looking forward to completing the stage two feasibility study.”
The results are in
Promisingly, extensional drilling conducted outside the current reserve at Bellevue’s Deacon North and Marceline areas has defined some of the best intersections to date.
Results include:
- 5.6 metres at 62.7 g/t gold from 496.4 metres during underground drilling;
- 12.5 metres at 18.8 g/t from 704.7 metres;
- 10.1 metres at 9.7 g/t from 412.2 metres during underground drilling; and
- 0.8 metres at 288.2 g/t from 670.2 metres.
Following the high-grade intersections, Bellevue has employed two surface and two underground diamond drill rigs to continue work in the area.
The exploration program will target further resource growth and conversion within the broader Deacon corridor, including the Deacon North and Marceline lodes, where resources remain open.
Earlier this month, Bellevue also embarked on a grade control drilling program. Some of the best intersections from this program 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.
Currently, the Bellevue play boasts 2.7 million ounces of resource, grading 9.9 g/t gold. This estimate includes 1.2 million ounces at 11 g/t of indicated resource and a 690,000-ounce ore reserve, grading 8 g/t.
Assays support upscaled mining operation
Bellevue Gold believes the latest results from its namesake gold play pave the way for a boost in production capacity, which is outlined in its updated feasibility study.
Increasing the Bellevue Project’s processing capacity will see an increase in production and the overall project economics from the stage one study that delivered $1.1 billion of free cash flow (at $2,300 per gold ounce) at the bottom quartile all-in sustaining costs.
Given the potential impact of the latest results on the resource, the cut-off date to include fresh drilling data in the stage two feasibility study has been extended, with the study now expected to be released in the September quarter of 2021.
Diagram indicates the proposed capital works required to boost Bellevue’s production capacity.
Promisingly, the expansion is poised to incur minimal additional capital costs due to growth provisions outlined in the original stage one feasibility study’s underground mine design and upscalable plant layout.
Bellevue has $116 million in cash and equivalents available to complete its existing works and exploration program.
It expects to shortlist potential project lenders within the coming weeks, while long-lead items like a grinder purchase and mine camp construction are slated to kick off in the September quarter.