Very few projects in the world can stand up to the Bellevue mine in Western Australia. This mine was in production for nigh on a hundred years, and produced 800,000 ounces of gold between 1986 and 1997 alone.
But it’s not the amount of gold produced that’s the standout number here. It’s the grade.
That 800,000 ounces came out of the ground in ore grading 15 grams gold per tonne.
And you’d be hard pushed to find grade like that anywhere in the world these days.
As it stands, Bellevue Gold has been able to book a resource of 1.8 million ounces in double quick time. And the grade stands at a salutary 11 grams to come.
There’ll be more to come too, as six drill rigs are on site, still turning, and there’s a good chance of discovering significant satellite deposits too.
What’s more, any churlish potential investors who might be tempted to grouse that the grade of the new resource isn’t quite as good as that of the historically mined ore, would do well to drill down a little further into the numbers.
The current resource includes mineralisation at the Viago Lode, which contains 700,000 ounces grading 16.1 grams per tonne.
Yes, Bellevue truly is world-class when it comes to grade, beating out the likes of Newmont’s Boddington mine and Newcrest’s Telfer mine by a country mile. Indeed, in a list of 22 of Australia’s biggest and best known gold mines, Bellevue comes second in terms of grade, behind only Kirkland Lake’s (TSE:KL) underground Swan Zone operation at Fosterville.
Having said that, the resource base remains relatively small compared to the big-name projects, but that might change too, and soon.
Mineralisation remains open to the north, south and at depth, while additional new lodes have been identified to the east and west.
The six rigs currently at work will initially target the Viago, Bellevue and Tribune Lodes for step-out and extensional drilling, and will also look at the Henderson and Hamilton Lodes.
But in the third and fourth quarters, drill testing will go to below 500 metres to test for depth extensions, while new discovery targeting will focus on the Deacon prospect, which could have a 20 kilometre strike length, and which already shows considerable similarity to Viago.
All told, the foundations are being well laid for a significant high-grade resource that could underpin a substantial production proposition.
But what about the other variables?
First off, as a former mine, much is known about the way the rock works, both in the ground and in processing. Bellevue Gold estimates recoveries are likely to be as high as 98.8%.
As a former producer, there are some legacy infrastructure benefits too. Grid power is in place and there is a paved road to the project.
But perhaps what’s more significant is that the Bellevue mine doesn’t exist in isolation out there in that part of Western Australia. Rather it lies in close proximity to multiple major gold operations, including Emu Goldfield’s Agnew project and St Barbara Mining’s (ASX:SBM) Sons of Gwalia mine.
This is an area well used to mining, and in which mining companies have a long history of successful operations.
Bellevue Gold is still some way yet from adding to the ranks of the local producers, but it’s laid some pretty good groundwork in a short period of time.
There’s A$20 million cash in the bank to see the company through to the end of the year, and with the gold price continuing firm and Bellevue’s own share price 200% higher than it was 12 months ago, further equity raises ought not to present too much of a challenge.
Not when you can bring that sort of grade to the table.
Already the roster of investors looks pretty healthy. Institutions hold 41%, while board and management hold 11%. That’s a nice even mix that aligns management’s interests with shareholders, but which also allows retail some room for manoeuvre.
Newsflow coming into the third and fourth quarters should be very interesting indeed.