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Bellevue Gold’s new discoveries show big potential: Macquarie Research

Bellevue is ramping up an already sizeable drill program with a 6th diamond drill rig arriving soon.
drilling
Macquarie has assigned a 12-month price target of 80 cents

Bellevue Gold Ltd (ASX:BGL) is exploring a prospective and seemingly extensive high-grade mineral system at the Bellevue Gold Project in Western Australia.

Macquarie Research expects a resource update before the end of 4QFY19 with the results from two new target areas showing potential to grow the resource in the short to medium-term.

It is worth noting that Bellevue already has a global inferred resource totalling 4 million tonnes at 11.8 g/t for 1.53 million ounces of gold.

Following is an extract from Macquarie’s update on Bellevue after a site visit to the project including a tour of drilling operations and the core shed:

Event

We recently visited BGL’s gold exploration project at the historic Bellevue Gold Mine in the Northern Goldfields of Western Australia.

Impact

• Fresh targets highlight system potential: BGL has recently discovered new targets that display similar characteristics to the known lodes. Importantly, both new targets contain strong sulphide mineralisation which is often associated with gold and is key to effective utilisation of Downhole Electromagnetic (DHEM) surveys. It was noted on the tour that DHEM techniques have been instrumental in targeting the higher-grade plunging shoots (and the larger mineralised shears) that are characteristic of the Bellevue, Tribune and Viago mineral system.

• Serious drill programme ramping up: An already sizeable drill programme is being ramped up with a 6th diamond drill rig arriving soon. With a global inferred resource now totalling 4Mt at 11.8g/t for 1.53Moz of gold, we expect the next steps at Bellevue to include some infill drilling to gain improved confidence in the resource. The additional rig is likely to be tasked with resource drilling allowing other rigs to continue with extensional drilling which remains a priority over the near-term.

Earnings and target price revision

• No change.

Price catalyst

• 12-month price target: A$0.80 based on a DCF methodology.

• Catalyst: We expect a resource update before the end of 4QFY19. Results from the two new target areas also show potential to grow resources in the short to medium-term.

Action and recommendation

• Maintain Outperform. BGL is exploring a prospective and seemingly extensive high-grade mineral system with mineralisation now identified over a strike of ~4kms. Recent drilling has more than doubled the mineralised strike extensions for both the Tribune and Viago lodes over what was estimated in the latest 1.53Moz at 11.8g/t global resource. Importantly, new target areas are continuing to be discovered with the recent “Viago lookalike” structure and potential deeper Bellevue offset showing strong early potential with similar visual mineralisation, DHEM signatures and orientation to other lodes in the Bellevue system.

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