UBS tapped for Bellevue Gold review after downgrade prompts $156.5m raising

Bellevue Gold’s share trading was suspended last week as it came up with a plan for its mining operations. Picture: David Gray/AFP

Questions are being raised as to whether Bellevue Gold is raising enough equity, as it secures $156.5m from investors to end price contracts it had locked in for the world’s most valuable commodity years ago before it soared far higher than many thought.

The $1bn company broke its silence on Monday about challenges for its Bellevue Gold Project in Western Australia’s Goldfields region.

It downgraded its production guidance, closed out part of its gold mining hedge book, raised equity, flagged changes to the group’s board and executive team and launched a UBS-run strategic view to consider placing itself up for sale after receiving informal “approaches”.

With tariffs creating more global economic uncertainty and expected to push the gold price higher than its current record trading levels, most saw the hedging decision as a non-negotiable for Bellevue.

The gold price at over $5000 is almost double what it was hedged at, and it is understood that the raise will reduce the hedge book by over 40 per cent, with $40m used for working capital to de-risk the balance sheet and execute on its revised mine plan.

Australian peers are now interested in buying Bellevue to secure more production at a time that gold’s price increases show no signs of abating, rather than for synergies.

DataRoom understands that none of the major gold miners had knocked on Bellevue Gold’s door but Australian peers have shown interest.

Parties like Vault Resources, Genesis Minerals and Regis Resources are logical, because they operate around similar geographies, but some believe that Vault has its own gold hedge book and while cashed up, would not want to acquire a troublesome business with its share price trading at a discount.

The Raleigh Finlayson-led Genesis Minerals has internal business to complete before getting back into deal making, say sources, and the management of Regis Resources is conservative and is bidding for the EMR Capital-backed Ravenswood gold mine near-by.

It would have capacity to buy one or the other, but not both.

Northern Star would be one of the only Australian groups with synergies, because it could shut down the Bellevue Gold mill and feed ore into its WA Thunderbox gold facility, which is under-utilised. But is not thought to have reached out to Bellevue Gold.

Northern Star’s challenge is that it is in the process of buying De Grey Mining.

Ultimately, Bellevue’s future now rests in the hands of its major shareholders like Blackrock, Van Eck and State Street.

Bellevue Gold’s placement through UBS, Canaccord and Argonaut at 85c is a 25.8 per cent discount to the last traded price on March 26 of $1.145 per share.

The company’s share price is expected to fall sharply when it resumes trading.

Some fear Bellevue needs to raise more funds, but others say those anxious may change their minds once it generates about $80m of free cash flow this quarter, as expected.

Operations have been plagued with challenges, and when it entered a trading halt last month, investors feared a second equity raising was on the cards.

After telling the market last year that a raise would not be needed, it went cap in hand to investors for up to $175m through Macquarie, Canaccord and UBS at $1.55 per share, sending its share price 20 per cent lower.

Macquarie is Bellevue’s major lender, owed $100m from 2027, and has agreed to waive debt covenants after the group that has $49m of cash and gold on hand came up with a revised mine plan.

The bank is also the provider of gold price hedging, and its absence from the equity raising advisory line up prompts questions on whether it was happy about Bellevue closing out so much of the book.

Bellevue was confident operating changes would ensure better management of any other future issues, as its chief operating officer now departs.

The annual guidance for the 2025 financial year has been revised down to 129,000 to 134,000 ounces compared to over 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 now on hold.

In the 2027 to 2029 financial years is targeting 190,000 ounces per annum compared to 250,000 earlier.