Regis Resources leaves contest to buy Bellevue Gold

Bellevue’s gold production for the June quarter was 38,900 ounces, missing its own fourth quarter guidance of 40,000 to 45,000 ounces. Picture: Bellevue Gold

Regis Resources is understood to have left the contest to buy Bellevue Gold, but there are still parties hovering around the $1.4bn miner, say sources.

Investment bank UBS had run a sale process for Bellevue and the date for final bids for parties interested in buying the business has now passed.

However, there are understood to be parties from both Australia and overseas that remain engaged and want to buy the gold miner.

It is understood that Australian listed gold miner Regis Resources looked at Bellevue but passed on the asset after it earlier put in a low-ball bid for EMR Capital’s Ravenswood gold mine in Queensland that was rejected.

The challenge for any suitor wanting to buy Bellevue Gold is that based on where shares are trading, (they closed down 3c to 89.5c giving the business a $1.36bn market value), a deal does not stack up at such prices.

Buyers would need to place a premium on the current share price and they believe once doing this, it would be too expensive.

Earlier this month, Bellevue Gold released production guidance that was lower than it had earlier flagged, and many take the view that it needs to lower its gold production forecasts.

Such a move would likely see the share price rerate, which could then make a deal stack up for a suitor.

Bellevue is holding a site tour for investors and analysts next week, and many take the view that this would have been cancelled if a buyout was looming.

Another reason that a major premium would be hard to justify for Bellevue is that it has a hedging arrangement in place for the gold price for some of its production, fixed at a price far lower than where gold has been trading this year.

Gold this year has set new records at over $5000 an ounce.

In terms of a deal, Bellevue remains under pressure if it continues to be listed, because it will keep needing to give quarterly updates for its flagship Bellevue Gold Project, 430km north of Kalgoorlie, that delivers variable output, at the same time as trying to hit its ambitious targets.

It is also under pressure from financier Macquarie Group.

While Bellevue Gold’s performance has been improving, analysts at Moelis said in a research note that Bellevue’s gold production for the June quarter was 38,900 ounces, missing its own fourth quarter guidance of 40,000 to 45,000 ounces.

Cash and gold on hand were $152m compared to their own estimates of $177m, and free cash flow was $67m compared to their $81m estimates.

Regis, advised by Greenhill, would have synergies with its existing operations and Bellevue, and the management expertise to run the operations.

It is also in need of more production.

Yet management at Regis is conservative when it comes to doing deals.

Market sources believe the future production of the Bellevue Gold mine is more likely to be 100,000 ounces annually to 120,000 ounces.

The annual guidance for the 2025 financial year for Bellevue has been revised down to 129,000-134,000 ounces compared to more than 150,000 ounces previously.

The production outlook for the 2026 financial year is anticipated to be about 150,000 ounces, with a future expansion of the processing plant on hold.

In the 2027-29 financial years, it is targeting 190,000 ounces a year.

Bellevue downgraded its production guidance in April when it launched its second equity raising in a year to close out part of its hedge book.