Bellevue Gold is the most attractive and well-funded gold development story for Canaccord Genuity

By Deputy Chief EditorMay 8, 2020

152 2 minutes read

Bellevue Gold Ltd (ASX:BGL) increased the total inferred resource at its namesake project in WA by 23% in the March quarter to 6.1 million tonnes at 11.3 g/t for 2.2 million ounces.

The company also raised $26.5 million from a share placement during the quarter which saw the worlds largest resources fund, Blackrock, emerge with a 10% stake in Bellevue.

Canaccord Genuitys $1.30 per share valuation remains unchanged for Bellevue as it continues to screen as the most attractive and well-funded (cash $38 million) gold development story in Canaccords coverage.

Following is an extract from Canaccords research update:

Maiden Resource at Deacon a highlight in a busy MarQ20. BGL increased its total Inferred Resource to 6.1Mt at 11.3g/t for 2.2oz, with the addition of a maiden Resource at the recently discovered Deacon Lode of 1Mt at 12.3g/t for 410koz. The maiden Deacon Resource easily eclipsed our estimate of 250-350koz at 8-10g/t, and with drill hits outside the current Resource part of the ongoing infill drilling program, we believe there is good scope for further Resource growth during 2020. The current Deacon Resource covers the central 900m of a ~2km mineralised strike length, with the mineralisation style, shear geometry, scale and host lithology analogous to the nearby Bellevue Mine (which historically produced ~800koz at 15 g/t gold). As a reminder, Deacon sits ~400m to the east of the Bellevue mine, and was only discovered in 2H 2019. Current drilling is aiming to tighten spacing around a number of drill holes outside the existing Resource to the north (including 3m at 12g/t, 1m at 12.6g/t, 4.5m at 7g/t, 0.4m at 26g/t), which in our view could double the strike length of the defined mineralisation. Down-hole EM continues to be an effective tool to guide drill targeting, and with a significant conductor 200m along strike to the south, and another 250m to the north, Deacon is rapidly emerging as having ~1Moz potential, in our view. Given the growing critical mass of the orebody (and favourable geometry for mining), Deacon will likely become an important part of a production scenario for BGL and a key component of the Economic Studies. We also note that Deacon only sits ~400m from existing underground infrastructure at Bellevue (currently being de-watered), and access via a development drive (assuming a modest gradient) should cost <$3m based on current market rates.

Maiden Indicated Resource expected late in JunQ20. BGL also reiterated that it remains on track to release a maiden Indicated Resource on the Tribune, Viago and Bellevue lodes in the month of June, which is an important catalyst for the company, in our view. During MarQ20, BGL completed its 94,000m diamond drilling infill program, and we see good scope for a maiden Indicated Resource of 400-500koz at 8-11g/t, with grade likely to depend on the ratio of Tribune (8g/t, shallower) and Viago (16g/t, deeper) included in the update. Recent infill results continue to strongly support BGLs geological model, which predicts gently plunging, high-grade shoots within the broader mineralised envelops, an interpretation consistent with the shoots that were mined at the Bellevue underground mine.

BGL expects Mining Studies to get underway in the second half. The Indicated Resource will form the basis of initial Mining Studies, which should begin in earnest in 2H 2020. Interestingly, BGRead More – Source

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