Investors fear second equity raising coming for Bellevue Gold

The Bellevue Gold Project is 40km north of Leinster in the Northern Goldfields region of Western Australia.

Bellevue Gold investors are growing increasingly concerned the $1.5bn listed business will be back cap in hand for more equity after it entered a trading halt this week.

The company said the trading halt would last until Friday and related to the gold production outcomes from a review and verification process for the Bellevue Gold Project, which may result in a production guidance downgrade.

It said after the completion of the review it intended to make an announcement regarding production guidance for the 2025 financial year.

But some suspect a production guidance downgrade would be accompanied by an equity raising.

Bellevue Gold does not have high debt levels — it has about $100m of debt and $81m of cash ($19m net debt) but the problem for the miner is it is more than $400m out of the money with its gold hedge book.

The gold was hedged at $2600 to $2800 per ounce and now the gold price is at around $4800.

That arrangement is through its lender Macquarie Group, which may place pressure on the group to raise if it grows concerned gold is not being produced as initially estimated, to back up the hedging arrangements.

Bellevue Gold was supposed to be on a roadshow with Canaccord this week and there were supposed to be meetings held with UBS, but they were cancelled, a move sources believe would be consistent with a production guidance downgrade.

The market had high hopes for the Bellevue Gold Project, 40km north of Leinster in the Northern Goldfields region of Western Australia, which aimed to achieve 250,000 ounces of gold production per year.

A raise would come just under a year after it had already tapped the market, securing over $150m in July last year.

That was after the company had reassured the market an equity raising was not on the agenda.

At the time, Bellevue Gold boss Darren Stralow said the lenders did not apply pressure to raise equity, which was a proactive move, but it caught investors off guard.

The project started production in the fourth quarter of last year on time and on budget.

However, production forecasts for its gold were not as high as expected and at a lower grade than anticipated.

Mr Stralow said the company could have funded the project without the raise, but it was a decision taken to de-risk the company.

The money raised helped Bellevue pay back much of the Macquarie debt in one hit, and the raise was a proactive move.

The raise at $1.55 per share through UBS, Macquarie and Canaccord at the time sent its share price down by at least 20 per cent.

Mr Stralow said if there was the choice to do so, Bellevue Gold would have invested more into project development but it had a limited budget and the group did what it could.

Bellevue earlier this year said it was on track to reach a production rate of at least 200,000 ounces of gold per annum from early in the June 2025 quarter.

It revised lower its production growth forecast to 150,000 to 165,000 ounces compared to earlier forecasts of 165,000 to 180,000 ounces.

A second raise by Bellevue Gold would come after 29Metals also embarked on two equity raisings in the space of 18 months, but that was after flooding at its Capricorn Copper project in Queensland.