Join our daily newsletter At The Bell to receive exclusive market insights
- Bellevue Gold (BGL) says its namesake Bellevue Gold Project is fully funded to production with the help of an upcoming $131 million capital raise
- The capital raise comes in tandem with a $200 million loan from Macquarie Bank (MGQ) to help develop the project
- The fresh funding boost follows a second-stage feasibility study for the Bellevue project that improves some key economic metrics
- Managing Director Steve Parsons says the new study places the Bellevue project among some of the world’s leading gold mines
- Shares in Bellevue Gold are in a trading halt until after the weekend but last traded at 94 cents each on Wednesday, September 1
Bellevue Gold (BGL) has told investors today its namesake Bellevue Gold Project is fully funded to production with the help of an upcoming $131 million capital raise.
The company called a trading halt until after the weekend as it gets ready to raise $106 million through a share placement and an extra $25 million through a share purchase plan.
This funding plan will complement a $200 million loan secured with Macquarie Bank (MGQ) to fund the WA gold project.
The funding announcement comes in tandem with a second-stage feasibility study that Bellevue said places its flagship project among some of the world’s leading gold mines.
Higher production, lower costs
The new feasibility study shows some improved metrics over the previous feasibility study released in February this year.
Perhaps most notable is a reduction in life-of-mine all-in sustaining costs (AISC) to $1014 per ounce compared to the previously reported $1079 per ounce. For the first five years of production, Bellevue predicts AISC of $922 per tonne.
This cost reduction comes alongside a proposed 25 per cent increase in gold production from 160,000 ounces to 200,000 ounces per year for the first five years of the Bellevue project’s life.
All up, Bellevue plans to recover 1.5 million ounces of gold from the project over its 8.1-year mine life.
At a projected gold price of $2400 per ounce, this translates to just over $3.55 billion in revenue from the Bellevue mine.
Moreover, at the projected rate of production, Bellevue expects to pay back the mine’s development costs in just 1.4 years, with a pre-tax internal rate of return (IRR) for the project at 72 per cent.
Bellevue Managing Director Steve Parsons said it’s the “superior financial performance” of the Bellevue project that places it among the top gold producers globally.
“Only seven other assets in the world boast a grade of more than five grams of gold per tonne (g/t) and annual production of over 180,000 ounces in a tier-one location,” Mr Parsons said.
“This study shows Bellevue has reserves of one million ounces at 6.1 g/t. That underpins annual production of 200,000 ounces at an AISC of just A$1,014/oz, which in turn generates pre-tax cash flow of A$270 million a year.”
What’s more, the Bellevue resources are still open in all directions — meaning the project has “outstanding growth potential”, according to the company.
Major funding locked in
Macquarie has backed the project by providing the $200 million loan to help develop the project and by pocketing most of its upfront fee in Bellevue shares instead of cash.
Bellevue said Macquarie was one of 13 global and international financial institutions showing a “very strong” interest in the project. As such, the company said the Macquarie loan came with a highly competitive interest rate, minimal mandatory heading requirements and early repayment flexibility.
On top of the loan, Bellevue plans to issue just shy of 125 million shares at 85 cents a pop to raise the extra $106 million in a share placement.
The accompanying $25 million share purchase plan will offer shares at the same price.
More details about the capital raise are slated to be announced on Monday, September 6, when Bellevue comes out of its trading halt.
Bellevue said it currently has roughly $71 million in existing cash reserves before all the upcoming funding.
Shares in Bellevue Gold last traded at 94 cents each on Wednesday, September 1. The company has an $807.5 million market cap.
