High-flying Bellevue still has much upside, say analysts

Bellevue Gold shares enjoyed a stellar week thanks to some bonanza drilling results, but leading analysts say the price still has a long way to go...
29th May 2020
Resources Rising Stars

Bellevue Gold shares enjoyed a stellar week thanks to some bonanza drilling results, but leading analysts say the price still has a long way to go.

The company said the latest results from infill drilling at its Bellevue gold project in WA, which included hits of up to 1169gpt, would boost the mid-year resource upgrade.

The results came from the Deacon lode, where the inferred resource stands at 410,000oz at 12.3gpt. This is part of the total Bellevue resource of 2.2 million ounces at 11.3gpt.

The new results will feed into the upcoming maiden indicated resource, the company said.

The stock continued its strong run, finishing at 79.5c yesterday - but this is still well short of the $1.35 price target set by Canaccord analyst Tim McCormack.

“Our key takeaway from the update is that the latest Deacon infill results will be included in the maiden Indicated Resource planned for mid-year,” McCormack says.

“We had not assumed any of the Deacon orebody making it into the maiden Indicated Resource, which we believe on inclusion should see the company eclipse our previous estimate of 400-500,000oz at 8-10gpt comfortably.

“As such, we revise our maiden Indicated Resource estimate to 550-650,000oz at 8-10gpt and continue to see good scope for this to grow to ~1Moz by the end of 2020.

“We also note that a number of drill holes outside the existing Resource at Deacon to the north were reported recently (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.”

Argonaut analyst Matthew Keane set a $1.15 price target, saying “Bellevue remains a key pick in the gold developer sector based on high grade, a rapidly growing resource and corporate appeal given its proximity to numerous operating gold mills”.

“Argonaut is predicting a July (Indicated Resource) release with up to 700,000oz gold at a similar grade to the current Inferred Resource (~11g/t),” Keane says.

“In the next update, slated for late 2020, we expect the total resource to reach ~3Moz with the inclusion of greater Deacon Lode.”

Macquarie, which has a price target of 90c, said “results from Bellevue continue to impress with opportunities to fast-track the project’s development becoming apparent”.

“A strong set of drill results from the Bellevue Project which will support the upcoming revised resource estimate and categorisation upgrade,” analyst Ben Crowley said.

“We note that the resource categorisation upgrade is key to underpin a maiden reserve as a result of ongoing mining studies.

“Re-entry of the mine in the September quarter (FY21) will allow drilling to be completed from underground positions which will both accelerate drill rates and reduce exploration costs.”

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