Bellevue Gold Ltd (ASX:BGL) has taken another key step on the development path to production at its namesake gold project with the Engineering, Procurement and Construction (EPC) contract for the processing plant awarded to GR Engineering Services Limited.
The total fixed contract price for the 1 million tonnes per annum plant at Bellevue Gold Project in Western Australia is $87.8 million.
Further insulates project
This EPC contract is particularly important for the company because it further insulates Bellevue against rising costs.
It is the last of the large capital expenditure items on BGL’s pathway to production, meaning 90% of the project’s pre-production expenditure is locked in either via contracts or tenders with 79% under contract and 11% under advanced tender.
Another box ticked
Bellevue managing director Steve Parsons said the appointment of GRES ticked another key box on the path to production and cashflow with first gold expected in the second half of 2023.
“The appointment of GRES to build our processing plant means we have yet another tier-one contractor helping ensure we meet all our operating and financial targets,” he said.
BGL securities have been as much as 5.23% higher intra-day to A$0.705 and are up from A$0.62 on July 7 while the market cap is approximately A$716.84 million.
Designed for growth
The design criteria incorporate sufficient headroom to support an increase in annual throughput of the plant to 1.2 million tonnes with no additional capital required across the entire plant and allowing for ongoing organic growth.
Further expansions beyond this can be achieved for a low level of additional capital.
As part of the contract, Bellevue can pay up to $7.5 million of the contract price to GRES in Bellevue shares, aligning GRES with the project and reducing Bellevue’s pre-production cash funding requirement.
“Vote of confidence”
Parsons added: “GRES knows the Bellevue project well, having been involved in the early studies, and they are extremely experienced in designing and building gold plants in WA.
“Their readiness to accept Bellevue shares as part-payment is a strong vote of confidence in our project and the outlook for our company.”
Underground development at the Bellevue Gold Project.
Optimal renewable energy penetration
The design of the crushing circuit has been optimised to maximise renewable energy usage by incorporating higher throughput rates, enabling its use to rise and fall in line with the availability of renewable energy while not restricting overall throughput.
Optimising the power demand curve to better align with key daytime and night-time energy peaks and troughs in the generation of power from renewable energy sources will create the optionality for the crushing circuit to maximise crushing in peak renewable energy generation periods.
This will have the potential to offset more than 1MW in demand on thermal power generation.
Strong GRES track record
GRES managing director Geoff Jones said: “GR Engineering is pleased to continue its involvement on this exciting gold project.
"Our clients are increasingly seeking certainty and a track record of performance and GR Engineering has been able to demonstrate this to Bellevue, including by reference to its strong track record of successful project outcomes in the Western Australian gold sector.”
Approvals pathway
Bellevue has been advised by the WA Environmental Protection Authority that it has successfully completed the environmental review process, ensuring the project remains on track for production in the second half of next year.