Bellevue Gold’s (ASX:BGL) search for debt funding is off to a strong start with multiple financiers throwing their hat into the ring to fund the high-grade, high-margin Bellevue Gold Project in WA.
So far, 12 financial suitors have submitted indicative debt financing proposals via debt advisor Orimco Pty Ltd, outlining ways they intend to fund the ASX-lister’s namesake gold play, with the response described by BGL as being "overwhelmingly strong".
Non-binding offers have ranged between $170 million and $289 million, while Bellevue already has $94 million in cash on hand.
Given the number of highly competitive offers, Bellevue has set out to short-list the financing contenders.
In the meantime, the company is working to finalise a stage two feasibility study, which should complete in the current quarter.
On track to join Aussie producers in 2022
Bellevue managing director Steve Parsons said the indicative offers were a testament to the project’s technical and financial strengths.
“The quality of the institutions which have lodged proposals and the highly attractive terms they contain reflects Bellevue’s outlook as a high-grade, high-margin project in a tier-one location.
“Given these offers and our cash position of $94 million at the end of June 2021, we are on track to develop the project and join the ranks of Australian gold producers in 2022.”
Orimco managing director Nick Harch said: "The expressions of interest received have exceeded our expectations.
“The project has the advantage of being high-margin with strong growth prospects. These responses provide Bellevue with the opportunity to finalise an attractive debt package that is best suited to the company's needs.”
Shortlisting the contenders
With multiple indicative offers in tow, Bellevue is determined to land on the financing deal that best fits its WA gold project.
The overwhelming support comes just weeks after financial services company Canaccord Genuity and analyst Macquarie Research updated their advice on the mid-tier gold explorer.
Cannacord kept Bellevue at a ‘Speculative Buy’ with a $1.25 price target, while Macquarie Research upgraded the stock to $1.30 after a round of drilling results in late June.
Today shares have been as much as 3.5% higher to $1.045 while BGL's market cap pre-open was approximately $867.4 million.
While it prepares to nominate a debt financing beau, Bellevue is considering whether it should expand its planned 750,000 tonnes per annum processing plant to 1 million tonnes.
This option is the basis of Bellevue’s upgraded stage two feasibility study, which is due to be completed this quarter.
Once this has been finalised, the company will devise a shortlist of preferred financiers and move to the second stage of the debt financing process, which is expected to involve site visits, the completion of legal and technical due diligence and facility documentation.
Of course, all offers received to date are indicative in nature and non-binding, with no guarantee any will lead to binding financing agreements on par with Bellevue’s standards.
Bellevue will keep the market informed as it progresses the next chapter of its feasibility study and develops a financier shortlist.