The second stage feasibility study of () on its Bellevue gold project in Western Australia established the company as a member of the exclusive club of global gold miners with world-class technical and financial characteristics.

It will rank among the world’s leading gold projects based on key criteria of grade, production, location and free cash flow generation.

Bellevue is on track to become Australia’s next new high-grade gold mine, with first production targeted in the June 2023 quarter.

The project is now funded for production with a guaranteed A $ 200 million loan, an ongoing A $ 106 million fundraising and a A $ 25 million stock purchase plan.

Exclusive Club of Global Gold Projects

The second stage study shows that Bellevue will be a member of the exclusive club of global gold projects characterized by a Tier 1 location, a reserve grade of +5 g / t and an expected production of +180,000 ounces per year.

Only seven other assets in the world meet these criteria.

Bellevue chief executive Steve Parsons said the study established Bellevue as a member of the exclusive club of global gold miners with top notch technical and financial characteristics.

“There is a key point of differentiation between this exclusive group of which Bellevue is now a member and other industry rankings.

“Superior financial performance”

“This point is superior financial performance.

“Only seven other assets in the world are grading more than 5 g / t and annual production of +180,000 ounces at a prime location.

“This study shows that Bellevue has reserves of 1 million ounces at 6.1 g / t. This underpins annual production of 200,000 ounces at an AISC of just A $ 1,014 / ounce, which in turn generates a pre-tax cash flow of A $ 270 million per year.

Growth potential

Parsons said it was possible to continue to increase the production rate and the life of the mine. “Only 50% of the 3.0 million ounce resource is in the mine plan. And since we completed the current resource estimate in July, we’ve announced a number of strong drill results outside of this inventory.

“These results demonstrate the potential for further increases in annual production rate and mine life.

“With this in mind, we designed the processing plant so that it can be expanded quickly and cost effectively. “

Drilling continues targeting further resource / reserve upgrades with two rigs operating underground and a third underground rig is expected to begin drilling during the December quarter.

Its underground drilling benefits from a reduced drilling cost compared to surface drilling, with increased production and reduced hole depth.

Resources remain open in all directions.

High grade drilling results outside of the Stage 2 feasibility study include:

• 7.5 meters at 53.3 g / t gold in DRDD720W1;
• 0.8 meter at 288.1 g / t gold in DRDD654W2; and
• 2.0 meters at 26.6 g / t gold in DRDD476.

Assays are pending for a number of extension drill holes, including a significant amount of assays targeting an increase in indicated resources.

It has a peak discovery cost of $ 18 per ounce.

There is significant potential to continue to extend project reserves and mine life with ongoing drilling.

The processing plant was designed to be easily scalable from the current processing rate of 1 million tonnes per year.

Fully funded by production

Bellevue is now fully funded for production.

It has a guaranteed and approved project loan of A $ 200 million from leading resource bank Macquarie Bank Limited following strong market interest from 13 major national and international financial institutions.

Macquarie chose to take most of its upfront costs in Bellevue shares.

The speed with which Macquarie provided an approved and underwritten credit offering reflects the highly bankable nature of the project.

Key terms include a very competitive interest rate, a minimum mandatory hedging requirement, and early repayment flexibility.

In addition to the A $ 200 million project loan facility, Bellevue is undertaking a guaranteed placement to raise A $ 106 million at 85 cents per share with a share purchase plan to raise up to $ 25 million. additional Australian dollars at the same price.

Parsons believes that Bellevue’s technical and economic strengths made it possible to secure the loan for the project on very attractive terms.

“We are delighted to accept Macquarie Bank’s very competitive and comprehensive support through its fully subscribed A $ 200 million long-term debt facilities to help Bellevue transition from explorer to producer.

“The large size and timing of Macquarie’s engagement and its choice to take costs in equities is indicative of Macquarie’s long-term confidence in the Bellevue gold project. “

Green and gold miner

Bellevue Gold is on track to become Australia’s green and gold miner with an industry leading “E” in environmental, social and governance (ESG).

The second stage feasibility study predicts that Bellevue will become Australia’s lowest emitter per ounce with a greenhouse gas intensity forecast of 0.202 t CO2e / oz, which has improved by approximately 30 % since the feasibility study 1 with the planned integration of renewable energies.

This new study also positions Bellevue to have the lowest total Scope 1 emissions of Australia’s major gold mines.

Bellevue is expected to have one of the cleanest power supplies of any gold mine in Australia, producing 3.6 ounces for the same emissions as an ounce produced for the average Australian gold mine.

Study details

The highly successful exploration program increased the indicated resource from 1 million ounces in the first stage feasibility study to 1.4 million ounces in the second stage of the study, reserves. of ore from 690,000 ounces to 1.04 million ounces.

This increased inventory allowed Bellevue to increase the planned throughput from 750,000 tonnes per year to 1.0 million tonnes.

Planned production in the first five years will now drop from an annual average of 160,000 ounces to 200,000 ounces with minimal increase in capital cost.

AISC over the life of the project goes from A $ 1,079 per ounce to only A $ 1,014 per ounce, and to only A $ 922 per ounce for the first five years.

Pre-tax free cash flow averages A $ 270 million in the first five years.

The average mine life (LOM) is 183,000 ounces per year, compared to 160,000 ounces per year for Phase 1 of years 1 through 5 and the LOM average of 151,000 ounces per year.

The Bellevue mine design and project have been optimized in terms of profitability and free cash flow.

It has a lifetime of 8.1 years and an EBITDA LOM of AU $ 2.4 billion versus AU $ 1.6 billion for phase 1 and an EBITDA margin of 66%, based on a gold price of AU $ 2,400 per ounce; and a quick after-tax payback of 1.4 years compared to 1.7 years in stage 1.

The capital required for pre-production is A $ 252 million, compared to A $ 255 million for Stage 1.

It has a net present value (NPV) of 5% (before tax) of A $ 1,311 million and A $ 943 million (after tax) compared to phase 1 figures of A $ 876 million before tax and A $ 562 million after tax.

The internal rate of return (IRR) before tax is 72% and the after tax rate is 62% against 58% before tax and 35% after tax for step 1.

The second stage study will add a total economic contribution of A $ 2.3 billion to the economy.