Bellevue Gold lifts gold resource to 3 million ounces at 9.9 g/t, set for expanded feasibility study

Bellevue Gold Ltd (ASX:BGL) (OTCMKTS:BELGF) has expanded total resources to 3 million ounces at 9.9 g/t, further enhancing the already strong viability of its namesake project in Western Australia.

This 11% increase also bolsters the company’s strategy to increase its forecast annual production rate at Bellevue Gold Project.

Bellevue has come a long way since its maiden 500,000 ounces tally in August 2018, with the resource growing at a compound annual growth rate of 84%.

Promisingly, the total resource has increased by 25% since Bellevue’s stage 1 feasibility study completed in February 2021.

Indicated resources have also grown by 34% to 1.4 million ounces at 11.0 g/t in that period, up from 1 million ounces.

“De-risking project”

Bellevue managing director Steve Parsons said the project was making outstanding progress on every front. “We are advancing, growing and de-risking the project at the same time.”

“This substantial resource increase means we have ticked an important box in our strategy to grow the forecast production rate by expanding mill throughput to 1 million tonnes per annum.”

The increased inventory will form the basis of the Stage 2 Feasibility Study which is scheduled for release later this quarter.

New study

Bellvue’s new feasibility study will consider the option of increasing production plant capacity from 750,000 tonnes per annum to 1 million tonnes.

This expansion is expected to incur minimal additional capital expenditure but will have a material impact on the project’s economics.

Parsons said: “Given the surplus capacity built into the Stage 1 Feasibility Study, we believe we can achieve this expanded throughput rate for minimal additional cost.

“This means we stand to generate increased free cashflow from the higher production rate and greater economies of scale, which in turn should increase the overall project economics significantly.”

The increased resources and work on the expanded feasibility study come as Bellevue prepares to compile a shortlist of the project debt funding proposals it has received from several lenders.

“The strong outlook for the project is also demonstrated by the highly favourable indicative proposals we have received from lenders,” Parsons said.

“We expect to compile a shortlist of lenders in coming weeks.”

Resource upgrade

Bellevue Gold Project’s resource has been updated to include drilling completed between the cut-off date for the feasibility study in November 2020 and mid-June 2021.

The revised estimate reflects the upgraded Marceline/Deacon North and Deacon Lodes which have been the subject of extensive surface and underground diamond drilling programs during the first half of 2021.

Significantly, the combined areas of Marceline and Deacon North now total 800,000 ounces at 8.8 g/t including 400,000 ounces at 9.9 g/t in the indicated resource category.

Refurbishment continues

Bellevue’s preliminary engineering studies indicate the area will be accessed by a new northern decline which will allow mining to progress simultaneously from both ends of the Deacon lodes over 2.2 kilometres of strike.

In addition, the company has started the development access to the Marceline Area with a second heading being developed to the north to provide access to the Marceline and Armand area.

More than 120 metres of decline development has been as the southern decline refurbishment continues.

Notably, more than 2,300 metres of underground development has been completed to a vertical depth of 200 metres below the surface.

With the resource upgrade to Marceline and Deacon North, the Deacon structure now hosts 1.28 million ounces at 10.0 g/t including 690,000 ounces at 11.6 g/t of indicated resources.

Further drilling in progress

Bellevue is continuing drilling along the Deacon structure from the surface and underground targeting further resource growth and reserve conversion.

Since the cut-off for the Stage 1 Feasibility Study in November 2020, the company has continued to grow the resource at about 75,000 ounces per month.

Currently, drilling is ongoing with five surface diamond rigs continuing with an additional two underground rigs operating with another underground rig scheduled to arrive on site later this year.

Substantial shareholder lifts stake

Recognising the strong progress made by Bellevue Gold, substantial shareholder BlackRock Group has increased its holding to more than 122.7 million shares, which represents a 14.28% stake.

This was reached on July 6 and follows a series of on-market purchases.

- Ephrems Joseph

Story by ProactiveInvestors