Bellevue Gold Limited

The Business

Bellevue operates one underground gold mine in Western Australia, nothing more. There are no other assets, no processing tolling business, no royalty streams. What sets it apart is grade: the resource averages 8.6 grams per tonne, well above the 2-4g/t typical of ASX gold peers, which lowers the tonnes needed per ounce, reducing processing cost per ounce and lifting revenue per tonne milled. That grade advantage does not make Bellevue a low-cost producer, however: its all-in sustaining cost of A$2,827 an ounce in FY26 was the highest among its ASX peers, partly because royalties scale with the gold price. The mine runs on an 83.5% renewable power purchase agreement, insulating it from diesel price swings that hit conventional operators. It is a single-asset, single-commodity business with no diversification cushion.

Recent Performance

FY26 revenue reached $576.3 million, but net profit was just $7.1 million because 83,400 ounces were sold into a hedge book at $2,642 an ounce against spot prices near $6,068. That hedge is now unwinding. The stock has re-rated hard as investors look through FY26's suppressed result toward the years ahead, when the hedge disappears and full spot pricing flows through.

Outlook

The hedge elimination is the swing factor for the next two years: as the last hedged ounces roll off, revenue and EBITDA margins are both expected to step up materially, with net profit recovering sharply from the FY26 low. From around FY29, however, we expect production to decline as the mine works through its finite reserve base, and revenue growth is expected to turn negative even at flat gold prices. The near-term recovery story and the longer-term depletion story are two separate questions, and investors need to hold both in mind at once.

Key Risks

Reserves fell 23% year-on-year and now cover only about six years of production at current rates. Without replacement from exploration, the mine plan runs out around FY32 with no fallback asset. Gold has already run to the 73rd percentile of its historical range, and the company will carry no hedge protection once the current book unwinds, so a meaningful price reversion would compress margins toward breakeven with no buffer. Single-mine concentration is the third structural risk: any geotechnical or contractor failure halts all production at once, and there is no second asset to absorb the disruption.

What to Watch

The thesis-defining event is the annual reserve and resource update in March 2027, which will show whether Bellevue's reserves are stabilising or continuing to shrink.

• March 2027 Annual reserve/resource update — confirms whether 2P reserves hold above current levels or keep declining. This is the single most important data point in the thesis.
• February 2027 First half-year result with the hedge book largely unwound — a cleaner look at margins as hedge deliveries taper.

Company Description

Bellevue Gold owns and operates the Bellevue underground gold mine near Leinster, Western Australia. The business has one revenue line: gold sales from ore mined underground and processed on-site. There is no downstream processing business, no other commodity exposure, and no operations outside this single mine. Gold production commenced in October 2023 (commercial production declared May 2024), and the mine is now in its third year of ramp-up. Mining is contracted to Barminco, while processing and site services are run in-house. The entire investment case rests on this one asset.

Where the Growth Is

The near-term growth driver is not new production, it is the removal of an old constraint. Bellevue's remaining hedge book of 68,700 ounces at $3,004 an ounce, the balance of a hedge imposed as a condition of its original mine-financing, rolls off by the end of FY27. Unwinding the hedge adds an estimated $285 million of annual revenue at current spot prices, and is the single reason forecast net profit is expected to step up sharply from its FY26 base over the following two years.

Competitive Position

Bellevue's edge is geological, not commercial. An 8.6 grams-per-tonne resource grade, roughly four times the ASX peer average, means fewer tonnes need to be mined and processed per ounce recovered, which shows up in a lower processing cost per ounce and higher revenue per tonne milled. It does not translate into a low all-in cost: Bellevue's all-in sustaining cost of A$2,827 an ounce in FY26 was the highest among its ASX peers, partly royalty-driven. The 83.5% renewable energy supply locks in power costs for the life of the mine, an advantage that widens as oil prices rise. Neither advantage is permanent. The grade advantage exists only as long as reserves last, and reserves fell 23% over the past year without full replacement. We view this as a narrowing edge: real today, but with a shelf life of perhaps three to five years unless exploration converts more of the resource into mineable reserves.

Management & Capital Discipline

Management has met production and cost guidance in both years since restart, a solid record for a mine still in ramp-up. Capital has gone almost entirely into building and commissioning the mine and plant; there has been no buyback and no dividend to date, with the first payout planned for FY28 at a modest payout ratio. The hedge book that suppressed FY26 earnings was a financing condition imposed by lenders, not a discretionary management decision, and the team has been transparent about the drag it caused. One honest observation: management's language on exploration upside ("immense") sits ahead of the actual spend, a modest $25-30 million a year, which is not yet enough to make reserve replacement a certainty.

Financial Position

Bellevue carries $100 million of project debt against roughly $195 million of cash plus $11 million of gold on hand, putting it in a net cash position once leases are excluded. The company also holds $398 million of accumulated tax losses, which will shelter most cash tax through the next few years. With debt scheduled to repay through 2027 and no near-term refinancing need, the balance sheet can absorb a period of weaker gold prices without covenant stress, though a sustained price collapse would still hit free cash flow hard given the single-mine structure.