Bellevue Gold set to generate strong profits, robust free cashflows with namesake

’s () (OTCMKTS:BELGF) stage one feasibility study has found that its Bellevue Gold Project in Western Australia is expected to be ranked amongst Australia’s top-25 gold mines based upon annual production.

Based on the study, the company is set to generate an annual pre-tax free cash flow of A$190 million over seven years of commercial production with a life-of-mine revenue of A$2.5 billion. 

BGL is also forecast to be one of the most profitable gold companies in Australia based on a life-of-mine (LOM) EBITDA margin of 63%, based on a gold price of A$2,300 per ounce. 

A stage two study, incorporating the impact of the latest discoveries and additional mineralisation on production, profitability and mine life, is on track for completion in June. 

The first gold pour is targeted for the December quarter of 2022.

“Outstanding future, abundant free cashflow”

Bellevue managing director Steve Parsons said the feasibility study showed the project met all the key investment criteria from both a financial and technical perspective.

He said: “This independently-conducted feasibility study demonstrates the exceptional strengths of this project.

“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 cash flow of $190 million a year and standout rates of return.”

One of lowest carbon footprints per ounce

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,” Parsons 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 A$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.”

Preliminary expressions of interest

The company’s debt advisor Orimco’s Nick Harch added: “The Bellevue Gold Stage 1 feasibility study has been compiled by experienced technical consultants in the gold industry.

“The debt funding process is underway, and we have received preliminary expressions of interest from a large number of Australian and global banks and debt providers.”

Key operational findings

The key operational findings of the feasibility study are:

• Average annual production of 160,000 ounces in years 1 to 5 and a LOM average of 151,000 ounces per annum;
• LOM AISC costs of A$1,079 per ounce;
• Maiden probable ore reserve of 2.7 million tonnes at 8.0 g/t gold for 690,000 ounces, based on a gold cut-off grade price of A$1,750 per ounce;
• LOM mineral resources and ore reserves of 5.6 million tonnes at 6.4 g/t for 1.1 million ounces;  
• Nameplate capacity of 750,000 tonnes per annum on-site conventional gravity and CIL processing facility, which has been designed to be readily expandable;
• Conventional mechanised underground mining methods; and
• First gold pour targeted for the December quarter of 2022

Key financial forecasts

The key financial forecasts of the feasibility study, at a gold price of A$2,300 per ounce are:

• LOM project EBITDA of A$1.6 billion;
• LOM pre-tax undiscounted free cashflow of A$1.1 billion (post-tax $0.8 billion);
• Annual pre-tax free cashflow averages A$190…