First Deacon resource takes Bellevue through 2Moz
28th February 2020
Resources Rising Stars
Bellevue Gold has reported a maiden resource for the Deacon Lode, which has taken the total resource for its namesake project to 2.2 million ounces of gold (reports MiningNews).
Deacon has a maiden resource of 410,000 ounces at 12.3 grams per tonne gold.
The resource beat Canaccord Genuity analyst Tim McCormack's estimate of 250,000-350,000oz at 8-10gpt.
The resource only covers 900m of the identified 2000m strike length.
Mineralisation remains open in all directions with high-grade hits of up to 23gpt gold already received from outside the resource.
"As drilling continues, we see good scope for Deacon/Mavis to support 500,000oz to 1Moz within 12 months," McCormack said last week.
The total resource for the Bellevue project is up by 23% to 2.2 million ounces at 11.3gpt gold, using a 3.5gpt cut-off.
At a 2gpt cut-off, the resource rises to 2.4Moz.
Bellevue managing director Steve Parsons said the increased resource further strengthened the outlook for the maiden indicated resource, which is due in the June quarter.
"It also highlights the immense scope for ongoing growth in the inventory at Bellevue, as shown by the numerous high-grade intersections which remain outside the resource at Deacon," he said.
"Bellevue now has genuine scale. It is in the backyard of Western Australia, it is growing rapidly and it is open in every direction.
"We have eight rigs drilling on site to both increase and upgrade the resource. In parallel with this aggressive program, we are about to start technical and economic studies as part of our countdown to becoming a substantial Australian gold producer."
McCormack has predicted a maiden indicated resource of 350,000-500,000oz at 8-11gpt.
"With an aggressive infill drilling program ongoing and potential access to underground the 2H 2020, we expect the indicated resource to be plus-1Moz in less than 12 months and form the basis for economic studies," he said.
Bellevue is planning 100,000m of infill diamond drilling and 30,000m of step-out drilling this year.
The company is well-funded with just over A$20 million in cash.
"We see our base case assumption that at the time of final investment decision (CG estimate mid-2021), circa 50% of a 2.75Moz inferred resource (mid-point of expectations) converts to a mining inventory, as increasingly conservative," McCormack said.
"As a reminder, we assume capex to build the project of $110 million (including $30 million underground development), which supports a circa 160,000ozpa production profile at an AISC of circa $1000/oz.
"With first production assumed by mid-2022, Bellevue could emerge as one of the highest margin producers in Australia."
McCormack retained a speculative buy rating and $1.10 price target last week, prior to the release of today's resource update.
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