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.
Still, the company that plans to re-open the Bellevue mine, Bellevue Gold Ltd (ASX:BGL), is coming pretty close with its ongoing exploration program centred around the historic production area.
As it stands, Bellevue Gold has been able to book a resource of 2.2 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 multiple 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.
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.
The company is making strong progress with dewatering of the historical Bellevue underground - this process is on track and within budget.
Dewatering of the Bellevue underground mine will deliver significant benefits, including access to +28,000 metres of existing underground mine development and significantly lower costs for drilling.
Desktop studies have highlighted the potential for multiple starter open pits which could generate early cashflow based on shallow, high-grade mineralisation.
The company raised $26.5 million from a share placement during the March quarter which saw the world’s largest resources fund, Blackrock, emerge with a 10% stake in Bellevue.
There’s A$38 million cash in the bank and with the gold price continuing firm, 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 58%, while board and management hold 7%. That’s a nice even mix that aligns management’s interests with shareholders, but which also allows retail some room for manoeuvre.
News flow for the rest of the year should be very interesting indeed.