A Stage One Feasibility Study (FS) completed over Bellevue Gold Ltd (ASX:BGL) namesake gold project in Western Australia has projected it will be ranked amongst Australia’s Top-25 gold mines based upon annual production.
The study also forecast Bellevue Gold will be one of the most profitable gold companies in Australia based on a Life of Mine (LOM) EBITDA Margin of 63% (based on gold price of A$2,300/oz).
The current Stage 1 Feasibility Study forecasts that the Project will generate $1.6 billion of EBITDA over the LOM and an average free cashflow of $190 million a year. This projected cashflow underpins an outstanding internal rate of return of 58% and payback period of just 1.4 years (pre-tax).
Bellevue’s forecast strong financial performance is based upon an annual LOM production rate of 151,000oz a year and a LOM all-in sustaining cost (AISC) of $1,079/oz. The maiden Probable Ore Reserve is 2.7Mt at 8.0 g/t for 690,000oz gold.
The Project also has significant growth potential, with new discoveries and additional high-grade mineralisation identified subsequent to the Feasibility Study cut-off of November 2020.
This recent exploration success is expected to be incorporated into a Stage Two Feasibility Study, which is already well-advanced and on track for completion in the June quarter this year.
Bellevue Managing Director Steve Parsons said the Feasibility Study shows the project meets all the key investment criteria from both a financial and technical perspective.
This independently-conducted Feasibility Study demonstrates the exceptional strengths of this project,” Mr Parsons said.
“The independent experts have confirmed that Bellevue has an outstanding future underpinned by high-grade mineralisation and the need for nothing more than conventional mining and processing methods.”
“This combination is expected to lead to low production costs, strong margins, abundant free cashflow of $190 million a year and stand-out rates of return.”
Mr Parsons noted that the Feasibility Study also demonstrates that in addition to being on track to be a sector leader based on all the key financial and technical benchmarks, Bellevue is forecast to have extremely strong ESG credentials on a carbon, water and energy per ounce perspective.
“Bellevue is forecast to have one of the lowest carbon footprints per ounce of production in the Australian gold industry,” he said.
“And at the same time, the Project will make a huge contribution to the community, with a total projected economic value-add of approximately $1.8 billion over the life of mine.
“To be on track to meet all these objectives in such strong fashion shows the exceptional quality of our asset.”
Underground development and early site works are progressing rapidly, with more than 1,000m of development completed to date. Early works are planned to accelerate development, with village construction scheduled to commence in mid-2021. The Company had a cash balance of $127.6M as of 31 December 2020 and has already commenced the debt funding process with Orimco appointed as debt advisors.
There are currently six drill rigs operating at the Bellevue Gold Project targeting further exploration success and further Resource conversion, including the exciting Armand and Marceline discoveries.
The Stage Two Feasibility Study is expected to include results of drilling undertaken since the September quarter 2020 that has not been included in the current Mineral Resource.