Construction and development proceeds apace at Bellevue Gold Ltd (ASX:BGL)’s namesake project in WA, with open pit mining contractor, NRW Holdings, now on site, mining in train at the Vanguard open pit and clearing underway at the tailings storage facility (TSF).
Mining to start
NRW is one of Australia’s leading mining contractors and Bellevue believes it has the hard rock open pit mining chops – including the staff and equipment – the project needs.
The $24-million contract, which includes mining of the Tribune boxcut, is in line with the pre-production capital expenditure forecast.
Mining at the Vanguard open pit will allow Bellevue to generate early cash flow through a toll-treating arrangement. The pit is scheduled to provide 10,000 ounces of gold, available for processing in mid-2023, in advance of the forecast completion of the Bellevue processing facility.
NRW fully mobilised to the Bellevue project to commence mining of the Vanguard open pit and clearing of the TSF.
The company is exploring toll treatment options with mining companies in the region and discussions are underway.
Once mined, waste material from Vanguard will form the basis of the TSF.
Critical components in place
Construction of the million-tonnes-per-annum nameplate processing facility continues to advance on schedule and budget with the arrival of the ball mill on site ready for installation, a major milestone.
All critical components are now in Australia, which de-risks the project execution. Secondary and tertiary crushers are installed and there has been progress on the structural steel work for the crushing circuit during March.
The mine administration complex and office facilities are also advancing well with completion expected this month.
Underground development continues to advance well with more than 10 kilometres of development now done, and underground mining contractor Develop Global Limited continuing to maintain full staffing and achieve excellent development rates, with three underground jumbos operating and targeting an average of more than 300 metres of advance per jumbo per month.
Net-zero
Bellevue has ambitions to achieve net-zero greenhouse gas emissions for project by 2026, underpinned by a sector-leading renewable energy power station, targeting a renewable energy penetration rate of up to 80%.
The power station is now being built and earthworks and concrete foundations for the thermal station are complete. Key electrical infrastructure has been secured, including critical long-lead items and the switchroom.
Power purchase deal
The company is securing a power purchase agreement (PPA) for the project with Energy Developments Pty Ltd (EDL).
Bellevue has rights of novation over the contracts for the long-lead items ordered by EDL and intends to exercise those rights as appropriate, while being in discussions with other independent power providers in relation to providing long-term power to the project.
This approach is aimed at ensuring Bellevue secures the most favourable commercial terms available in respect to power supply. It is expected that the successful tenderer will acquire the long-lead items as part of its PPA.
Macquarie provided a bank guarantee to EDL to a total of $38 million to secure early works equipment. This bank guarantee will remain on issue until such time as contract novations are complete, payment of any money due to EDL has been made and the bank guarantee is returned or expires.
As of March 31, Bellevue has cash-backed this bank guarantee and the funds will be released on return or expiry of the bank guarantee.
The PPA tender process is well advanced and is not expected to impact on the production schedule at Bellevue.