Hosting a site visit to its namesake mine in Western Australia’s Yilgarn Craton, Stralow said a recent $150 million capital raising — which will primarily be used to pay down debt — would alleviate some operational pressure and allow the company to develop the mine on several fronts.
“In the growth plan, there’s an investment over these next couple of years … doing that, at the same time as doing exploration, at the same time as paying the debt back, would have put the company under pressure,” Stralow said.
“Right-sizing that debt — we didn’t raise to pay it all back; we raised to pay a portion of it back — puts it at the right level that allows us to go over the macro growth plan, pay off the remaining debt, and keep our exploration targets.”
Exploration-wise, Bellevue has budgeted $30 million for FY25 alongside $145 million of growth capital.
Can Bellevue keep its mill fed?
Stralow said the ground at Bellevue was “very hard”, making getting through the dirt tough, but he said the growth targets over the next five years were based on numbers the company had already achieved at the site.
As part of Bellevue’s growth plan, it aims to upgrade its processing capacity from a current run rate of 1-1.2 million tonnes per annum to 1.35Mtpa in FY25 and eventually 1.6Mtpa in FY26.
Stralow told MNN that as the company had made headway underground at the mine site, it had learned enough about the orebody to know what to do to keep its mill fed.
“There’s always a play-off between the mill side and the mining side,” he explained.
“When we first turned the mill on, we had way more dirt than we knew what to do with. But then when the mill was performing, the mine was catching up.”
He said the mill was now performing as planned and mining was ramping up to meet it, but this was more a case of opening up new work areas than optimising performance.
For example, he said the drill jumbos at the site were already operating at the required rate to meet Bellevue’s growth objectives, so it was simply a matter of getting more rigs to site as new mining areas opened up.
“We’re putting an extra jumbo on when we start the Tribune portal, which will be in a couple of weeks, and then we have one more jumbo coming in to do the accelerated development of Deacon North into Southern Bell,” Stralow said.
“We don’t need any more in terms of development per machine or per operator. We just need to have the machines in the right places at levels we’ve achieved before.”
Some easily accessible, medium-grade gold forms a key part of this plan.
Bellevue’s previous ore reserves sat at 6.8 million tonnes at 6.1 grams per tonne gold with a high-grade section of 4.5Mt at 7.9gpt.
When it announced its $150 million raising and five-year plan, these reserves were updated to 9.3Mt at 5gpt gold with a high-grade section of 6.8Mt at 6.1gpt.
Stralow told MNN the company had optimised its mine design and refined its mining methods to also target peripheral but profitable medium-grade ore without much of a cost increase.
“The high-grade component of that original reserve is still there. But when we came down and mined it, we found some lower-grade stuff around it that we can access from the same infrastructure using the same equipment. We’ll bring that out and put it through [the processing plant], as well,” he said.
“It’s profitable because all of the ventilation systems, power pumping, escape ways … all that stuff is paid for by the high-grade part. So that medium-grade ore, when you mine it, doesn’t actually have as much cost associated with it.”
He said Bellevue could still make “good money” from the medium-grade feed.
“Death by a Thousand Cuts”
Speaking of costs, Bellevue’s new estimates are for all-in sustaining costs of $1750-1850/oz in FY25, set to decreased by circa $250/oz by 2028.
For reference, Bellevue historically cited AISC of A$1000-1100/oz.
Stralow conceded some of the cost rises were due to amendments to its processing plans, but he maintained “we’re in a different world now to even two years ago”.
Inflationary pressures over the past two years have increased the costs of reagents, steel, and other mining equipment.
“Costs have been death by a thousand cuts,” Stralow said.
In any case, with gold at levels around $3700/oz, there’s still some big money to be made even at Bellevue’s higher cost estimates — notwithstanding a hedge book totalling 224,250oz at the end of June with an average price of $2772/oz.
