Bellevue Gold Ltd (ASX:BGL) has rounded off what it calls a transformational quarter, with plenty of cash on hand and results from exploration drilling highlighting what the company believes to be strong growth potential for its Bellevue Gold Project in Western Australia.
A stage 2 feasibility study was recently completed by Bellevue, upgrading its mineral resource by 34% to 3 million ounces at 9.9 g/t, including an indicated resource of 1.4 million ounces at 11 g/t of gold. The study also forecast Bellevue to become one of the lowest greenhouse gas emitters per ounce in Australia.
Bellevue managing director Steve Parsons said in the latest quarterly report that the company achieved several key milestones in the period, which ensured it was on track to produce 200,000 ounces a year at an all-in sustaining cost (AISC) of just A$922/ounce for the first five years.
“This was a pivotal quarter which locked in Bellevue’s future as a substantial low-cost, high margin Australian gold producer,” he said.
“We are also forecast to generate the lowest carbon emissions per ounce of any major Australian gold miner.
"In addition to our development and production strategy, we are continuing to create significant shareholder value by upgrading and growing our gold inventory through our aggressive drilling programs.
“We have resources of 1.4 million ounces which sit outside the current mine plan and we continue to extend the boundaries of the known mineralisation, paving the way for resource increases.”
Fully funded to production
Bellevue’s namesake gold project is fully funded through to production, underwritten and credit approved with A$200 million in debt facility provided by Macquarie Bank Limited. The project loan facilities were agreed following strong market interest from 13 leading domestic and international financial institutions.
Bellevue believes the speed with which Macquarie locked down the agreement with credit approval and an underwritten offer reflects the highly bankable nature of the project. Key terms include a highly competitive interest rate, minimal mandatory hedging requirement and early repayment flexibility.
Other financing includes a completed A$106 million equity raise and a A$25 million share purchase plan (SPP) to existing shareholders that is yet to be finalised.
The company spent a combined A$26.75 million on operating and investing activities but gained a further A$101 million in financing to finish the quarter with A$168 million cash on hand, a very comfortable 7.6 quarters of cash equivalent.
“Outstanding growth potential”
Bellevue believes its namesake gold mine to have the potential to become a substantial low-cost, high margin and low emission gold producer, partially based on the latest infill and extensions drilling results from testing underground intersections of extensive high-grade mineralisation.
These results are in addition to the stage 2 study, with results from the Deacon North lode including:
- 7.4 metres at 16.9 g/t gold from 485.5 metres;
- 8.9 metres at 12.7 g/t from 454.7 metres, including 4 metres at 22.9 g/t from 454.7 metres;
- 3.1 metres at 31.9 g/t from 518.9 metres;
- 3.8 metres at 24.6 g/t from 503 metres;
- 4.0 metres at 17.0 g/t from 457 metres; and
- 9.0 metres at 7.2 g/t from 492 metres.
On track to be Australia’s greenest gold miner
The stage 2 feasibility study highlighted Bellevue’s low per ounce emissions, forecast to be the lowest in Australia. The study forecast greenhouse gas intensity of 0.202 tonnes of carbon dioxide equivalent per ounce, a decrease of about 30% since feasibility study 1 with the planned integration of renewable energy.
This new study also positions Bellevue to have the lowest Scope 1 emissions among major Australian gold mines, expected to have one of the cleanest power supplies for any gold mine in Australia.
Stage 2 feasibility study complete
The stage 2 study upgraded Bellevue’s mineral resource 34% from the first stage, raising the resource to 3 million ounces at 9.9 g/t, including an indicated resource of 1.4 million ounces at 11 g/t of gold.
The study was based on a 33% increase in throughput to 1 million tonnes per annum. Key findings include:
- 25% increase in forecast production to 200,000 ounces per annum in years 1 to 5;
- AISC costs reduced to A$922/ounce for first 5 years and A$1,014/ounce for Life of Mine (LOM);
- LOM pre-tax undiscounted free cashflow of A$1.8 billion (post-tax A$1.3 billion);
- 8.1-year mine life and LOM earnings before interest, taxes, depreciation (EBITDA) of A$2.4 billion and a sector-leading EBITDA margin of 66% (based on a A$2,400/ounce gold price); rapid payback period post-tax of 1.4 years;
- Annual pre-tax free cashflow averages A$270 million per annum in first five years;
- Pre-production capital requirement of A$252 million;
- Net Present Value (NPV) 5% (pre-tax) of A$1.3 billion and A$943 million (post-tax);
- Pre-tax Internal Rate of Return (IRR) of 72% (post-tax 62%);
- LOM resources increased to 8.1 million tonnes at 6.0 g/t for 1.56 million ounces and reserves increased to 5.3 million tonnes at 6.1 g/t for 1.04 million ounces; and
- Project’s total forecast economic contribution is A$2.3 billion.
On path to production
The Paris and Armand/Marceline declines progressed a further 654 metres during the quarter with more than 3,030 metres of development now completed. Development averaged 264 metres per month during the quarter.
Orders have been placed for the initial components of the new camp infrastructure requirements with expected availability for delivery and construction in the December 2021 quarter.
A 3D viewer of the project and recent discovery is available at: https://inventum3d.com/c/BGL/Bellevue
About the company
Bellevue Gold is advancing the historical Bellevue Gold Mine in Western Australia, a site that was once one of Australia’s highest-grade gold mines, producing 800,000 ounces at 15 g/t gold from 1986 to 1997. The company hopes to begin gold production at the project by 2022.