Troilus Gold brings potential funding from ECAs to $1.3 billion
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Bellevue Gold’s (ASX: BGL) namesake mine in Western Australia’s Goldfields region has been in production for less than a year, but the company is already eyeing an expansion.
The Bellevue gold project has been around for decades, but had been frozen in time.
The asset, in the heart of nickel country, had produced about 800,000 ounces of gold at 15 grams per tonne gold between 1986 and 1997, but closed due to low gold prices.
The project had been largely forgotten since its closure, having been held by nickel companies for 20 years until a recapitalized former Mongolian coal company, Draig Resources, acquired it in late 2016.
The asset was acquired on the basis that there was a high likelihood of finding more gold, particularly with the use of more modern exploration techniques, including electromagnetic surveys.
Under the leadership of former managing director and current non-executive director, geologist Steve Parsons, the company drilled on the other side of the Highway Fault, an area previous explorers had believed was barren.
The first hole in November 2017 hit 5m at 37.5g/t gold. The area, named the Tribune Lode, looked similar to the historically mined Bellevue Lode. Nine months later, a maiden resource of 1.9 million tonnes at 8.2g/t gold for 500,000oz of gold was announced.
Up until 2022, the company’s exploration efforts were adding 50,000oz per month to the resource base, with every metre drilled adding roughly 7oz, at a cost of A$25 ($16)oz.
Today, the project has a JORC resource of 3.2 million ounces of gold at 9g/t and reserves of 1.51 million ounces at 6.1g/t gold.
A final investment decision on a A$300 million underground mine was made in September 2021.
Bellevue poured first gold in October 2023 and the company declared commercial production in May 2024.
“The building and the ramp-up of the mine has been no small feat – this isn’t just some small mine,” Bellevue managing director Darren Stralow said during a site visit ahead of the Diggers & Dealers Mining Forum. “This is a big mine and building big mines takes a lot of people, a lot of time, a lot of capital to get there.”
In the June quarter, the mine produced 42,705oz of gold and generated A$41 million of free cash flow.
Production for the June 2024 half was 80,043oz, above the midpoint of the guidance range of 75,000-85,000oz.
“Everything at an operational level is performing well,” Stralow said.
“When you’re in a ramp-up, there will be times when some things are performing well, some things that aren’t – the job going forward is to have lots of things performing well at the same time and we’re not shying away from that.”
The company has spent A$23 million on grade control drilling.
“Underinvestment in grade control drilling and underinvestment in the knowledge of the geology has been, in my opinion, a key driver of some failures in the past during the ramp-up phase,” Stralow said.
“From when we first turned on the process plant to now, our reconciliation from the geology model – what we’ve actually seen go through the plant – is pretty much bang on, so for a start-up project, that’s actually a pretty cool thing to be able to say and that’s because of that investment in grade control.”
The 1Mt per annum plant is running at a rate of up to 1.2mtpa with recoveries averaging 94% in July.
Guidance for the 2025 financial year has been set at 165,000-180,000oz at all-in sustaining costs of A$1,750-A$1,850 /oz.
On July 25, Bellevue surprised the market by announcing an equity raising of up to A$175 million.
The equity raising also raised concerns with investors that all was not well with the ramp-up, but the company reassured the market the bulk of the proceeds A$120 million, would be used to reduce its Macquarie debt facility to around A$100 million to unlock cashflow to accelerate growth.
The raising is part of a five-year growth plan that will see production increase by 45% between now and the 2028 financial year to 250,000oz per annum while reducing all in sustaining costs by around A$250/oz.
According to Bellevue, it will make the asset one of only seven gold operations in the world with a head grade of more than 5g/t gold in tier one jurisdictions producing more than 200,000oz per annum.
“These assets do not exist of this size, scale and quality outside of the majors and outside of multi-asset companies,” Stralow said.
“There is a big prize at the end because you know, 250,000oz operations are pretty rare. There’s not a lot of them around.”
Bellevue said it will invest A$145 million this financial year, A$110 million in the 2026 financial year and A$65 million in the 2027 financial year to reach its goal.
Growth to be delivered through increased underground ore movement from 1mtpa this financial year to roughly 1.6mtpa in FY27 by accelerating decline development to increase the number of mining fronts from five to seven by FY26.
The first stage of the plant expansion, comprising a A$12 million investment in a gravity screen upgrade, additional gravity concentrator and thickener modifications, will take capacity from 1mtpa to 1.35mtpa this financial year.
Stage two, to take capacity to 1.6mtpa, will cost A$28 million and include the installation of an extra ball mill, three carbon-in-leach tanks, tails pumps and ancillary infrastructure.
An upsized crusher and power station were included in the original build for incremental cost to allow for future expansion.
Bellevue’s run-rate is expected to reach more than 200,000 ounces pa from the June 2025 quarter.
Stralow said the plan was “really solid and really achievable”.
On the environmental, social and governance (ESG) front, Bellevue is currently building an 89.7 megawatt hybrid power station, comprising 24MW of wind, 27MW of solar, 24MW of thermal and a 15MW/29MW hour battery energy storage solution.
The solar farm will be the second largest for a mining project in WA and the seventh-largest overall in the state.
Bellevue is aiming to generate up to 80% of its power from solar and wind.
The company also reports sector-leading gender diversity, with 34.8% of its employees being female, well above the Australian average of about 22%.
“A lot of the workforce here actually was attracted to the site because of that focus on ESG and focus on sustainability, and as a gold mining company, it’s very hard to do that,” Stralow said.
“If you’re a lithium company or a nickel company, all you have to do is put a picture of an electric vehicle on your presentation and say ‘hey, we’re green’, and you can burn as much diesel as you want on site, whereas we actually have to work for it.”
Bellevue sits in the Agnew-Wiluna Greenstone Belt, about 45km north of Gold Fields’ 8.6Moz Agnew mine.
Like Agnew, Bellevue is an Archean lode gold deposit.
“It’s very similar rocks and deposit style to what we have here,” Stralow said.
Agnew has been operating for nearly 40 years but generally operates with only a couple of years of mine life ahead of it, which is typical of Archean lode gold deposits.
Stralow expects it will be the same case at Bellevue, where the resource sits in the top 800m and remains open in all directions.
Bellevue paused exploration drilling over the past two years while it built the mine. As a result, the resource base has been flat.
As part of the five-year plan, the company will spend A$60 million on exploration over the next two years.
“What we’re doing now is five years’ worth of exploration in two years,” Stralow said.
“That’s going to give us a real shot in the arm to be able to go out to hit these targets that you know the geologists have been looking at and wanting to drill for a long time but they simply haven’t had the platform and haven’t had the funding and been focused on something else.”
Investment in the Southern drill drive from Tribune, one of three new drives, will allow the company to drill its top priority target, Southern Belle.
The company has reported an exploration target of 1.5-2.5 million oz at 8-10g/t gold.
“Our team has had a hell of a lot of time to think about what they want to look at and what they want to drill and they are going to be fully funded to do it,” Stralow said.
“I’ve got a lot of confidence that we’re going to be able to drive a lot of resource growth, reserve growth through that reinvestment in exploration going forward.”
