Strong drilling results outside the reserve is expected to result in an upgrade to the project’s 1 million ounce reserve this quarter.
New results included a standout 2.1m at 42.8 grams per tonne gold from 411.6m, including 0.6m at 142gpt gold at the Deacon North lode.
The reserve update will also include a project review to take into account favourable results of project optimisation studies and advanced commercial discussions with contractors and suppliers.
Optimisation study work has been focusing on cost and productivity benefits from changes to the mine plan, including mining sequence, level spacing and de-risking opportunities.
Bellevue expects the changes to lower pre-production capital costs and increase efficiencies over the life of the mine.
The efficiencies are set to offset any increase in contract and supply costs.
Key contracts for the project, including the underground mining contract, the processing plant engineering, procurement and construction contract, the power station IPP contract and the non-processing infrastructure contracts are at an advanced stage of negotiation and are forecast to be finalised and awarded in the June quarter.
Bellevue expects its previous forecast of pre-production capital costs of A$254 million to be in line.
The company remains fully funded to production with $173 million in cash and equivalents at the start of January and a fully undrawn $200 million loan facility with Macquarie Bank.
Bellevue managing director Steve Parsons said the company was pleased with how the project was progressing.
“From a resource perspective, we are benefiting from the ability to drill from underground allowing for greater penetration rates, shorter collar lengths and therefore more effective, faster drilling for reserve conversion,” he said.
“The drilling results, the optimisation studies and the contractual discussions are coming together to paint a very bright outlook for the project.
“Given the advanced stage of all these key work streams and the extent to which they interact, we are confident that we will continue to de-risk the project and look forward to providing further firm evidence of how technically and financially robust it is in a broader project update this quarter.”
First gold production is targeted for mid-2023.
Bellevue is forecasting average production of 200,000 ounces per annum for the first five years and average production of 183,000ozpa over an eight-year life from a 1 million tonne per annum plant.
