Bellevue Gold

Thank you, Alex. And look, just want to say thanks to the team at Mining Forum Americas for inviting us back for another year to present the Bellevue story. And I think that differently to other years in the past, you'll see that we've really hit an operational and free cash flow inflection point, something that we're very excited about and hopefully our shareholders are excited about too. So, just cover the disclaimers, available on the ASX.

But look, really to cover the Bellevue project in a high-level way, we have a really high-quality, long-life project that is located in the northern goldfields of Western Australia. So we're located in a district with a whole bunch of the majors around us. We've got Goldfields, Northern Star and others, all situated around us and lots of very large mineralized systems in a very well-endowed greenstone belt. The Bellevue asset itself, we just did a reserve and resource release a week ago, and we now have a million ounces of high-grade ore sitting there, just under three million ounces of mineral resource.

And look, we have a long life and brand-new mine. So we just built this mine over the last few years. It's just in the stage where it's hitting its operational sweet spot, and getting into a spot where the asset's working well, the balance sheet is getting well and truly cleaned up, and we're getting in a position where we have a lot of optionality going forward. Exploration is gonna be a key part of that optionality, and I'll take you through some of the plans for that as we get through the next few years.

We also have a bit of a differentiator in the fact that we have a very high renewable energy power station. So we produce 80% to 90% of our electricity through renewables, which means we're the highest renewable energy penetration mine in Australia. And as I said, there's lots of options coming forward. Over the past few years, it's really been about building the project. A lot of cash flow and a lot of optionality going forward.

Look, to cover the last couple of years of what we've been trying to do, it's been about delivering the high-quality project that we've always thought that Bellevue was going to be. This is in setting up a pretty complex underground mine. It's getting the operating levels up to a stage where we know that they're sustainable and consistent, and creating that stable base in order to grow off. And it's not just about for us doing that for one quarter and then having some ups and downs. It's really been about setting up for consistent production, day in, day out, and that's through that de-risking process.

So that comes through every part of our business from a mining front, from a processing front, but also from a balance sheet front. And I'll take you through in a bit how we've done a lot of work on that over the last, particularly twelve, eighteen months. And then we can start to really talk about the growth side of things. And I think that that's something that over the next couple of years, we'll be able to see some real benefit going into the exploration piece, but also into the capital management, as we start to punch out some significant shareholder returns going forward.

I'll talk a little bit about last financial year to this financial year and show a bit of the comparison. But last year, the midpoint of our guidance was 140,000 ounces, and we delivered above that. The all-in sustaining cost was also within guidance, so it shows just a year of consistent delivery. But I think what's more important is looking forward, where we're actually gonna do a bigger year this year. And when you look at last year, the last two quarters of that year delivered in excess of 40,000 ounces per quarter, which is a pretty strong run rate. If we weren't dealing with the hedge book and the balance sheet, then we would have produced significant free cash flow over that time.

Looking forward to this year with the midpoint of our guidance being circa 160,000 ounces, you can see all that is, is keeping that run rate going forward. We've got the same amount of gear on site, the same amount of physicals that we need to do, which is essentially 100,000 tonne of ore a month mined and processed, so 1.2 million tonnes for the year. The head grade's pretty consistent, and we'll deliver that 160,000 ounces.

Importantly, we've got a couple of capital projects coming up this year, so you can see our gross CapEx there is $90 million to $100 million. But we got a couple of one-offs. One's a $40 million paste plant, and one's about $10 million for a camp. So once you strip out those one-offs, you can see that our sort of ongoing non-sustaining CapEx is actually about that $40 million to $50 million range. That's your vent systems, your declines, your new mining areas, that type of thing. So it's a pretty low ongoing rate, showing that the rest of those dollars will go into the bank.

And even the exploration budget, we want to spend 25 to 30 million bucks this year, and we really wanna maximize the amount of money that we're spending. But just because of, I guess, the physical constraints of where we can get to, the amount of drill rigs that we have, that's gonna be the number for this year. But if we can increase that over the next couple of years, I really don't think there's a bad dollar that we can spend on exploration at Bellevue in the next two years.

And when you look at the ore body, we do have a significant long-life mine ahead of us. We have mine designs going out to the mid 2030s. We've got six or seven years of reserve life ahead of us. And a typical mine in Western Australia will have a two to five-year mine life that just rolls on for decades, particularly the ones in the region that we operate in. We see that being the future for Bellevue, when we get there. But at the moment, we still have a pretty decent resource base, and that's before exploration and hitting a lot of these targets.

I'll just give you a bit of an overview, for those that aren't super familiar with the Bellevue Project, of where we sit, just by showing you it all in 3D. Essentially, we mine sort of three main mining lodes. We got a Tribune Lode through here. We've got the Bellevue Lode here, and the Deakin Lode come here. And all these lodes were defined by surface drilling, from about 2017 was the first discovery hole, through to about 2020. And they defined three million ounces and then decided to go and mine it. There's no drilling to the south here, because of that surface feature that you see, which is the salt lake. That's something that you need to have a look at from underground.

But when you have a look at the ore body, it's quite laterally spread out. It's not super deep, and you've defined those sort of three main lodes to be sort of three million ounces in a different color. So you can see them going there. We've designed a pretty robust mine plan around it. We're just incrementally mining in sort of five separate areas and you can see those areas as we sort of put it on.

All of these areas, importantly, and these are the areas that we're gonna be mining for the next three to five years, being Marcelline, Deakin North, Deakin on the Deakin Lode, Viago on the Bellevue Lode and Tribune on the Tribune Lode. These are all fully established with all infrastructure in place. So that's all ventilation, all pumping, all power. They've all had recent upgrades, and any future upgrades to that are just gonna be little incremental extensions. You don't need to do any significant infrastructure to do it. And as I said, we're designed all the way out to the 2030s and when you have a look at it sort of side on like this, you can see the whole ore body is sort of softly plunging in a southerly direction, and all of that's open and undrilled, so that's the big part of that future.

From an ops perspective, I guess the most significant recent thing that's happened is we've changed over our mining contractor. It has been a point of question from the market about how the contractor transition has gone, and it's always difficult when you change an old contractor to a new one. So we finished up with a company called Develop, who have been there for the last four and a bit years. Did a great job helping us build the mine and transition to an underground contractor called Barminco, who are pretty well known. Tier one mining contractor. Lots of employees, lots of sites, lots of things going on.

Over the contract changeover, if I get you to look at this sort of top graph in the middle here, you can see what has happened during the changeover, which is the last two weeks of Develop. We were sort of under the line that we wanted to be in. And the first four weeks of Barminco we've been in a similar position, just where we've had to use stockpiles, slow the mill down and it'll affect our production a little bit this quarter, not materially. But it's certainly something that we can ramp up and catch up during the year.

Look, we're really happy with the initial days of Barminco. They're a tier one company. They come in with all brand-new gear. A good high-performing workforce. They've brought in some fantastic operators and management there. And it's gonna be a long-term relationship, so it's a four plus one contract, so they'll essentially be around the mine for at least the next four, probably five years. And it's early in the financial year, so any shortfalls during that transition will be made up through the year.

Another really big positive for us that we're quite excited about has been some of the drilling results that have come to us out of our Deakin North ore body. This is the last of the ore bodies to be ramped up. We're just in the top couple of levels now. And all of those holes that you see across the bottom of the page there, that's all new drilling that we've been defined in the last little while. The Deakin main area, if you look at the picture on the left-hand side, that has been a core part of the high-grade feed of Bellevue for a long time.

What we're seeing with some of the high grade that's gonna come out of Deakin North now is that it looks to be replicating and these last two quarters where our head grade has been above four and a half grams per ton, the core high-grade part of that has been from Deakin. Deakin North high grade is not really in the mix now. And you can see that the Deakin North high grade, I mean, this bottom sort of high-grade plan, which doesn't even come into the mine plan until 2029, 2030, 2031. So you can see this ability for just consistent high-grade feed for a long time coming out of the mine.

From a processing perspective, the processing plant is humming. We operate at about 1.2 million ton per annum. It's got capacity of 1.35, so there's a bit of upside there. But it's one of the highest recovery plants, certainly in the WA sector. We do plus 96% recovery on a very consistent basis now. And we're really comfortable with how it's working. It is a pretty unique plant. It's not just your stock standard CIL plant. All of the mill feed goes through a gravity circuit. It is a very high sulfide ore body, so if you were to put this ore through just a standard CIL plant, you'd get low recovery because of those reactive sulfides sucking out all your reagents. Our processing plant is built to deal with all of that and still maintain that high recovery. So it's quite a unique plant in the area that we're in.

So look, from a balance sheet perspective, for those that have followed us for a while, you will have known that we've had that project loan facility from Macquarie. That helped us to build the project. We're still at the tail end of dealing with that. So we have, if you look on this page, a hundred mil in the bank, owing next year. We still have a hedge book with no deliveries required until June 2027. But look, we're looking to deal with that quickly.

If I take you to this graph here, what you can really see is that if you look at the start of last financial year, we had 150,000 ounces in the hedge book. We're down to about 68,000 ounces now and that's a conscious decision by us to just de-risk the company by de-levering the balance sheet. But look, as that hedge book goes down, the cash position, the cash flow goes up. And I think one of the couple of key data points on here to look at is that if we didn't have that hedge book in the March and June quarters, we would have done 160 and 110 million bucks of free cash flow during that time. You annualize that run rate, you can see that this mine is gonna punch out quite a lot next year when we don't have any more hedging.

And, I mean, you can put it all into your models and see where you're at. But that position, if we keep on the track that we're on now, which is what we wanna do, we'll be back to being hedge-free and delivering into the spot market early next year, calendar year, that is. So this puts us in a good position where we've got a good balance sheet, we've got a steady project, and we've just been busy, heads down, building the project for the last couple of years. Now it's time to start to focus on growth and see what we can do.

As I said earlier, I don't think there's a bad dollar we can spend on exploration in the next couple of years and we intend on running a few programs around. We started with two programs, one up in the north here, at an area called West Australia. We've drilled a few early holes there. Our first drill program, we got 3.5 meters at 18.5 grams per tonne. It was high sulfide, looked like normal Bellevue rocks. We've now run downhole EM there and are following up the downhole EM targets we got. That hit was 150 meters from existing development, so certainly something we could run out and grab if we wanted to.

And then Tribune South, down to the south here, we've had some good hits at. And if you look at those sort of three main line of loads that we have, Bellevue, we're mining up here. We've got Southern Bell down here, which is a sort of very prospective resource. A lot of opportunity infill in between. On the Deakin load, this is Deakin Main here, Deakin North up here, Marcelline up the top. There's certainly room for another couple of production areas down to the south, and then the same in Tribune.

And Tribune starts at surface and is sort of a relatively low grade compared to the others part of the ore body. We're starting to see, as we get down to these southern areas, that the grade and the... I think importantly in the mineralogy, we're starting to see a higher intensity of sulfides as we come down to that southern end of Tribune. This potentially could be an area we could put in another decline or two and bring new production areas on and that'll drive some growth in coming years.

So, as I said, the southern part of the ore body is the most underexplored. It has all the downhole EM targets, everything sort of looking there. The reason that we haven't got down there and drilled aggressively is due to access. There's a drill drive that we're looking to put in. We've done the first stub of it. We're doing some drilling off the first stub of it right now, but that'll extend and keep going. But you look to the northern end of the ore body here, there's about four million ounces sitting in that box and who knows what's gonna be down there. But we're not gonna die wondering. We're gonna get down, get that drill drive in and really look to push it in coming forward.

And I think that from a growth perspective, we haven't been in a position as a company where we've had to sort of aggressively push the growth side of things because the highest value thing for us was getting the mine built, getting the mine into steady state operations, and that's something that we're now comfortable we're achieving. It's not that we didn't aspire to do more or we didn't have the drive to get any further. It's more just been about getting the operating platform set.

What we can start to look at now, particularly with a clear balance sheet, is really optimizing the asset. We've got about 10% latent capacity in processing that we can push with a new mining contractor. Putting a little bit of extra gear in perhaps, off a high fixed cost base, that will definitely add a lot of value. But then, looking at anything incremental we can do, new mining areas might mean that we wanna do a plant expansion. Nearby assets that might be stranded and be really well suited to our mill. These are all the opportunities that we can look at, now that we've got the balance sheet for it.

And look, just before I finish, it's probably good to re-touch on the sustainability theme and what sustainability means for us at Bellevue. It's about building a better business. We set on the pathway of creating a sustainable platform many years ago. And the project that we've delivered, we are the lowest diesel user on the street. We've got the lowest exposure cost-wise to diesel price. Certainly in WA, but I'd argue in many other places. It's only 1.5% of our direct costs is diesel. So that non-reliance on hydrocarbons just means that we have a safer, more de-risked asset, we're a lower exposure to inflation.

And I think the one that you almost forget on this is that we're all competing for a highly skilled workforce. And when you look at that next generation of professionals coming through there, our mine being a sustainable one is something that we've seen has really attracted a lot of our workforce and we get good feedback on that's the reason that they like to stay working for us at Bellevue.

So look, that's the Bellevue story. We've had a pretty, really good last twelve months. Delivered a really good project. It's in a really de-risked and positive way right now, with a lot of upside to be unlocked in coming years. Thank you very much.

Got time for, yes, one question. Paul, over there.

Thanks, Darren. Yeah, just a couple of quick ones. Just the approximate value to close out the remaining hedges today?

It’d be in the range of $200 million. But we’ve got a bit of cash on the balance sheet, so we can use some of that. We’ve got some refinancing options which we can pursue. So that’s something we wanna do in the… It’s getting to be at a level now that we’d be able to deal with it pretty quickly.

Yep, sure. And then just, you had a great slide there on the contract to change out. I know you guys had a lot of contingency in place before that, and it looks like maybe it’s still been a little bit more disruptive than you’d expected. I’m curious perhaps more in the broader context of the WA mining space, what did you learn from that? And what perhaps popped up that did cost you those three or four thousand ounces you alluded to in your recent release?

Yeah. Look, it really comes down to bums in seats, Paul, and just keeping it going. Underground mining’s not rocket science, right? It’s just about having the machines available, having people in the machines every shift and being productive when they get down to their work areas. And literally, that was just the issue. Last few weeks of Develup, people didn’t have a job to go to, so they just didn’t turn up or they were busy cleaning the mine up and ramping down and, credit to Develup, they left the mine in a really professional state.

And then Bumoco just getting people in, getting it trained up, getting used to how the emulsion systems work, how charge up was, and learning the nuance of the mine was the first challenges. But within four weeks, they were starting to hit their straps and now we’re really comfortable with where they are.

Thank you very much, Darren and Bellevue Gold.