Commissioning began late last year, with the first gold pour on October 25, with managing director Darren Stralow telling MNN operations had started up without any major hitches.
Stratlow stressed the company was only at the “end of the beginning” of the story.
Bellevue said this week it is on track to meet its guidance of between 75,000-85,000 ounces for the current half, having had a dream run so far.
“What we have is a stock standard WA gold mine. We’re not reinventing the wheel, the only difference is in the grade,” he said.
Through luck or divine provenance, the rains that have swamped WA gold miners over the past two years held off during construction, the concrete pours were unimpeded, and as the food was laid out for dignitaries yesterday it was against a backdrop of a booming gold price.
Bellevue’s start is in stark contrast to the issues faced by its neighbour, IGO’s now worthless Odyssey nickel operation, but while the two companies have had very different experiences, both are all in on the green economy.
Nickel’s role in the energy transition is well known, but the yellow metal usually doesn’t get mentioned in environmental discussions, something Stralow wants to change.
Stralow calls Bellevue not only an exceptional modern mine operationally, but one of the greenest and cleanest, with one of the most diverse workforces in the land.
Just under half the workforce is female, and together with the green credentials, Stralow hopes Bellevue will be an attractive employer for younger workers.
That’s not the whole story.
Working with Zenith Energy, the mine has been designed with a sector-leading target of 80% renewable power generation.
With solar and wind generation running at capacity Bellevue aims to be a net zero operation by 2026, by which time it hopes to create a premium ‘green gold’ product.
Working with ABC Refiners, it is laying down the groundwork for a new market over the next 12 months.
He can see an emerging market willing to pay a premium for low-carbon gold with a known provenance that he compares to the premium paid to avoid the taint of ‘blood diamonds’.
“If you build it, they will come,” Stralow said.
For the immediate future, Stralow said Bellevue was “all about the grind” of delivering consistent production and cash flow.
“It has been bloody hard work to deliver this on time and budget today and our focus is on improvement and our opportunities here,” he said.
He said the board was focused on getting Bellevue right today, batting away talk of using that cash for acquisitions in the near future.
Production for February was 13,364oz, up 28% on the prior month, with a 5.2 gram per tonne head grade and processing rates hitting its 1Mtpa nameplate over three consecutive months.
Stralow said the stoping grades continues to reconcile well with the model as the amount of development ore declines as underground activities increase.
All five mining areas are now active.
RBC analyst Alexander Barkley said key metrics of production and head grade are trending in the right direction, with the site on a trajectory to reach the reserve grade of 6.1gpt and a steady state processing rate of about 1.2Mtpa over the coming months – above the 1Mtpa nameplate. Recoveries continue to be high.
His estimate for a $96 million free cash flow by mid-year may be conservative.
While costs are set to be released once commerciality is declared in the coming months, Bellevue is already generating free cash – a pretty good condition for a newly minted gold miner to be in during the earliest stages of an operation when problems are usually expected to crop up.
Bellevue aims to ramp up to produce some 200,000ozpa with targeted all-in sustaining costs of $1000-1100/oz over at least 10 years.
The next step in the journey is exploration.
The hope is that the Archean lode-style discovery is a multi-million-ounce camp, similar to Jundee to the north or Agnew to the south.
Exploration since the initial 2017 discovery drilling has all been from surface. Now that the underground workings are established, drilling can start from within the mine.
Whether that helps turn a 3Moz resource into a 5-10Moz resource is a question that will take millions of dollars to answer, but with $20 million spent on grade control so far, the Bellevue team believes it has a good handle on the geology.
It’s that geology that first attracted Bellevue’s Steve Parsons, Mike Naylor and Ray Shorrocks to the area.
In 2017 the-then Draig Resources looked at the historical Bellevue operation, once site of high-grade operations from which Plutonic Resources recovered some 800,000oz at 15gpt between 1987 and 1997.
After the lease was abandoned and became part of Cosmos Nickel, the existing pits were used to store mine water, and Bellevue was largely forgotten.
With support from the WA government, Draig started drilling and found early success.
Within two years resources started taking shape, from 1Moz, to 1.5Moz to today’s 3.1Moz.
“They had the risk appetite you need for exploration, and made something from nothing,” Stralow said.
Some $500 million has been spent to date, and over the next decade, Bellevue expects to generate around $3 billion in revenue at spot prices before any future success.
“We believe there’s much more to find,” Stralow said.
Bellevue has traded between $1.05 and $1.84 over the past year and was up 3.5% today at $1.63, capitalising the new miner at $1.8 billion.
RBC’s Barkley is bullish on the stock, with a price target of $1.80 on Bellevue and an outperform recommendation.
