Canaccord says Bellevue Gold ‘ticking all the boxes’ as it lifts price target to $1.45

Leading broking firm Canaccord Genuity has upped its price target for gold developer Bellevue Gold (ASX: BGL)
26th June 2020
Resources Rising Stars

Leading broking firm Canaccord Genuity has upped its price target for gold developer Bellevue Gold (ASX: BGL) once again to $1.45-a-share (from $1.35 previously) following further positive news this week from the Company’s namesake WA gold project.

According to Canaccord’s Perth-based resource analyst Tim McCormack, Bellevue is “ticking all the boxes” at its high-grade Bellevue project with the latest update continuing to “validate the project as an exciting, low capex development proposition in our view.”

Bellevue this week announced strong metallurgical test results, confirming that recoveries of 97.8% could be achieved via conventional processing with the gravity-only component recovery from all lodes ranging from an exceptional 73.6% to 91.7%.

“Given the operating history of the mine, metallurgical outcomes were always low risk, in our view, but confirming such high recoveries across all newly discovered lodes is a pleasing result,” McCormack wrote.

Dewatering of the old Bellevue mine is continuing and geotechnical, visual inspections and ground support test work programs have been completed in preparation for re-entry to the underground network, Canaccord says.

The broker also notes that a maiden Indicated Resource for the project is expected shortly.

“BGL’s maiden Indicated Resource is on track for release in the ‘coming weeks’,” McCormack writes.

“As a reminder, we are conservatively expecting the maiden Indicated Resource estimate to be 550-650koz at 8-10g/t, and we continue to see good scope for this to grow to ~1Moz by the end of 2020 (total current Inferred Resource of 2.2Moz at 11.3g/t).”

Canaccord says the Indicated Resource will form the basis of initial mining studies that will build momentum over the second half of 2020.

BGL has appointed respected mining industry consultants Entech as Independent Study Manager.

“As a reminder, we model the project on a 100% underground basis (supporting ~150kozpa at AISC of A$1,000/oz) and see the potential for high-grade open cut ore as a valuable development which could improve the project payback period, introduces flexibility during the mine start-up phase and could improve our ounce and cost profile assumptions,” McCormack adds.

“In our view, BGL continues to screen as the most attractive and well-funded (cash A$38 million) gold development story in our coverage universe, and we retain a SPEC BUY recommendation,” he said.

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