This report is the updated version of the report uploaded on 30 November 2022 at 5:47 PM (GMT +11)

Bellevue Gold Limited

Bellevue Gold Limited (ASX: BGL) is engaged in the exploration and evaluation of minerals in Western Australia. The Company's projects include Bellevue Gold Project, Yandal Project, and Kathleen Valley Project.

September 2022 Quarterly Report

• The company has highlighted that EPC contract for the 1Mtpa processing plant has been signed with GR Engineering Services Limited.
• With respect to the Underground Activities, BGL stated that development continues on track with the project development timeline now 69% complete from the commencement of development phase which started in July 2020.
• Notably, net cash used in operating activities in the September 2022 quarter stood at AUD3.17 Mn.

Key Updates

The company has released 2022 Macquarie Western Australia Forum presentation. As per the presentation, resource growth, production growth, etc. are some of the investment highlights. Notably, project mine life grew 25% to +10 years in the 10 months ended June 2022.

Outlook

It has been recently highlighted that BGL is fully funded to production with $277.3 Mn of liquidity (as on 30^th September 2022). Notably, the production is on track for H2 CY 2023.

Key Risks

The company is exposed to the climatic risk. Any extreme change in the climate could lead to temporary suspension of operations.

Fundamental Valuation

Price/BVPS Multiple Based Relative Valuation

Stock Recommendation

Over the last 6 months, the stock rose by ~40.1%. It has made a 52-week low and high of AUD0.620 and AUD1.105, respectively.

The stock has been valued using Price/BVPS based relative valuation (on an illustrative basis), and the target price so arrived reflects a decline of low double-digit (in % terms). A slight discount has been applied to Price/BVPS Multiple (NTM) (Peer Average) considering the risks associated with the business. It is also exposed to the risk arising from the adverse movement in the spot prices of gold.  

Considering the resistance and target level achievement, current trading levels and risks associated, it is prudent to book profits at the current levels.

Hence, a 'Sell’ recommendation is given on the stock at the closing market price of AUD 1.1, up by 8.91% as on 30^th November 2022

BGL Daily Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for share price chart and stock valuation is based on November 30, 2022, and all other data such as stock price performance as of December 1, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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