Is this the final reset for Bellevue?

Who's going to be running Bellevue in FY20? 7? That's good, mum. Is it cheating if I say the same? Do I have to go different? Righto buddy, miners buddy. I've figured out five day conference takes five days to get the voice back. I'm I'm in day four of voice recovery. Day. Four. What a bloody week. Sounds like your voice is about 70%. 70% I'm nearly there one more day but you don't mind. The had a haircut and a different hat so I think my face looks chubbier but anyway.

Going for a new look, Maddie. Thanks Oz, I meant for a bloody great work. Sounds like a rising stars. Good times, boys. Sounded wicked. Bellevue the news has coming up today, so that is probably going to take up the whole show. I, I think we may as well just talk about it. It feels like, it feels like they kept everyone in suspense for, for, for a while not being in, in voluntary suspension and, and we finally get used today that there's an equity race to go with it.

Yes, one of the best sealed suspensions going around. Most of them are like that. But it was, yeah, it didn't like there was a lot of speculations. But no, no, like very rigid rumours during that period I think. I would say like my prediction last week was based on nothing was I, I wouldn't have been surprised if they didn't come out of suspension at all and it was just going to be a a sale. I was sort of surprised it got to this stage.

That'd be brave, yeah. Yeah. So because I assume there probably would have been a bit of interest during the suspension which we'll go into, which was mentioned. So yeah, a lot to cover. So let's take it away. I guess, I guess first and foremost guidance first thing, right. So FY25 redone at 1:29 to 1:34 at a midpoint of just under 2500

Aussie all in sustaining. So kind of like we touched on Maddie, that puts it at kind of 40 to 45,000 oz needed for the final quarter of the financial year. Yeah. And then obviously you've got the the five year plan being wiped 150,000 oz marked for next financial year and then a kind of three-year period where they do 190,000 oz. So that's a kind of basic five

year ish plan, right? Yeah. So essentially looks like for the moment, the whole 200,000 oz numbers being what like doing the doing the calcs for 190,000 oz, that's sounded about 1.2 million ton per annum at the reserve grade of 5 grams a ton. They did say on the call they were talking about 1.35, but then they were saying the reserve wasn't going to be changed.

Well, one thing is probably surprising that the reserve guard wasn't dropped, but it's these were like not gardens numbers that 190. There's like a indicative prediction for FY20 6. So yeah, it was. It's a fairway off where where they'd last signal when they raised money right like that was they've raised their last equity and and sort of talked about it at 250,000 oz per annum kind of. Yeah, yeah, we and efficient those, Yeah.

So those they're probably the numbers that aren't sort of adding up saying 1.6 million tonne was going to get them 250,000 oz, but now they're indicating maybe 1.21 point 3 is going to get them 190,000 oz. So which makes me think I don't can't say it being it, it potentially just might not be a 5 grand, might it might be a 4 1/2, but I haven't yet said they are down grading the reserve. Yeah, exactly.

To that point, Maddie, there was the question kind of asked and they were kind of prying into that. That sort of 60,000 oz per annum reduction that we're seeing, is that purely a result of instead of doing 1.6 million ton per annum doing 1.35 or have you worked in a bit of buffer by being a bit conservative in your reserve?

And the signalling from management was that it's mainly a factor of just those through that throughput number coming down and not actually conservatism in in the reserve grade, which we've of course sort of seen kind of trimmed last year or so. So yeah, I think you're, you're on the right track there. I was kind of expecting that a bit as well when you see that they're they're going a bit more cautiously at the overall output of the mine.

Yeah. And you look at like you look at the photos here, like in terms of, you know, trying to figure out what the reserve grade is from a geological estimation point of view. And you look at like, you know, this top picture here, you see, see a lot of like bits of this is just in the drive itself. Who knows what's in between the

levels and everything. But like you see bits of internal waste there, like in a, in a couple of spots, like you see in one picture down the bottom, it's like pretty wide in the drive. And then you see it pinch up at the top. So I think there's a lot of pinching, swelling, bit of internal waste here and there. So trying to wrap a accurate number around the reserve is probably a bit challenging whether I don't know if 5 grams is what they consider conservative or not.

But maybe there's a lot of factors that contribute to they talked about in the the blind Stopes that I'll say they're talking about 3 blind Stopes they took at the end of quarter had a lot the fault cut it off at a point. So they took a lot of waste. So by the sounds, there's a lot of cross cutting like faults that can shift the ore around like that's that's on the extremities.

Look, I'm not sure. I think there might be also faults within the drives that can sort of jump it around a bit and you can follow it in the drive, but there might be a fault up in the middle of the stope that you don't know is there until you mine it in the grades lower. So there's a lot of, yeah, it sounds like they they do point to geological complexities. I think they worded it or for parts of the quarter. So I think that's probably going

to be a a thing going forward. You could, you could kind of infer that that degree of, you know, confidence or lack thereof. When they talked about they said the June, the June quarter mine plan is, is 90% delineated with great control and they said the next two quarters. So in September and December quarters are 75% delineated with greater control. So yeah, there's, there's, there's, there's confidence to be to be had through through all of that. But but no, no reserve downgrade

yet. Yeah, just just a change in change in guidance and. Yeah, I I think they'll get it by tonnes. Like it looks like with the upgrades they've done in the middle, they've shown that they can get 1.35 million tonne through on an annualised rate.

So I think if you do the maths, 1.3 million tonne at 4 1/2 grams is 190,000 oz, whereas I think it's 1.187 at 5 grams is 190,000 oz. So I think it's like, I think they've got the capacity to get the tons through extra to compensate if there is a bit lower grade than expected. But who will own it? That's that's the other thing. But 190,000 oz at 2 1/2 thousand all in sustaining cost. Yeah, bloody take it any day of the week in this pricing

environment. So it is dressed up as, you know, something that will be appealing. But we'll get to that. A. 100% what? About what about the raise, JD? Yeah, let's let's talk about the

raise before we jump the gun and get into to who's going to be the owner of the mine in in due course or have a brainstorm about how that plays out. But 156 bucks at $0.85 is the raise. So 26% discount to the last close or 30% discount to the five day V what before they went into halt, you know, just chatting with people and hearing rumours and stuff. Some some rumours were that it would be at a bit of a steeper discount.

I mean it is what it is at the end of the day, it's a it's a fairly common money after they raised not all that long ago in terms of the the use of funds about 110 million is going towards closing at hedges which we'll speak to as well and 40 million just going in, in the bank for, for working capital. That kind of leaves them with about 90 million bucks to see them through over the the next few quarters.

And then of course that 100 million dollars in debt that they've got which is payable in in sort of four lots over the the calendar year 27 period. Yeah, 'cause you would have thought with that suspension it was going to be 75 like 30 plus percent discount. Well, that was the sort of the thoughts which which indicates there's to get a 26% discount after being in suspension that long is like somewhat some fund or something has probably come in pretty big and set that price

I would assume what do you. What do you reckon the the raise price would have been if they didn't, didn't allude to a strategic review and, and corporate bids? That's an interesting question, right? Like if they didn't say that, I reckon they would have that raise would have been a, you know, that's the carrot. Maybe even $0.10 lower, Like who knows? Like it's, yeah. I think they, I think whether they raised or not, it would have opened at exactly the same

price. It was, it was actually trading. They got an OTC listing which was which you know, you can't couldn't hold that. So that thing was trading at 50 US cents I think I saw. So I don't know how much liquidity there is on that, but that's that's to some degree a bit of a price barometer and install of everything that's going on. Yeah. And it looks like it looks like the the March, the March quarter was obviously the catalyst to this whole event.

Like, you know, 25,000 oz at all in sustaining costs of 3125. Like they've talked about, you say in the comments talking to like localized geology, geological complexity, some sub optimal mining practices, which indicate and it's what we've

said all along. I think there's there's always been a bit from column a bit from column BA bit from column C. So there's geological stuff, probably some dilution or like there, there's just been a bit of everything that bloody is causing to fall short. So. Yeah, to your point, Maddie, on the on the faults as well at Fiago specifically delaying access, they said to a, to a high grade Stoke hits it because I think the head grade came in at 3.1g per ton.

And obviously, you know, there's a few factors playing into that one, but not being able to get into some higher grade spots is not advantageous, right? And as well as that, mate, the Viagra decline was delayed. So that's sort of been been pushed out a bit. And to, to kind of give the market and give investors a bit of confidence. I think they spoke to April's head grade coming in line with expectations, IE sort of better than what we've seen over the,

the March period. As well as that, you've got the, the review of the resource model, which I think everyone's pretty, you know, was pretty eager to to sort of see and they, they reiterate confidence. They kind of speak to how little of the the near term answers are coming from inferred. And you know, I mean, there's only so far out. You can kind of do that before it gets cost prohibitive, but I think that's certainly things people wanted to see.

Yeah. And like the new, the new mind plan they put out, we went over the physicals before. But look, they've pretty much it's a bit of a scale back. They're going from what 6 jumbos back down to 5. They're going to sort of, they're obviously wiping all, a lot of the CapEx to go out to these new areas. It says that like they've the Viago mining area. I think they're delaying going out there. So they've put ground conditions as the cause of it.

So that might be just passed on to someone else to go Chuck a upgraded ground support regime in because it's like they've sort of, I think it's pretty good ground everywhere there with, you know, the standard split sets of mesh. So it sounds like that area would probably need a bit extra. So that's probably a good thing to leave someone else to call Sandvik for a bloody ground. Some ground support products that absolutely might be used there, which I got to see in

underground operators. It would have been shining colours. Look at me standing with the billion dollar man here. I have a look at him. Derek an A man heard. I'd say he looks $1,000,000, but he looks a billion. Dollars. He is a bloody billion dollars. Did I say million before billion dollar million? Yeah, that's what they call in him. And so mate should have seen on showcase this could be good for the Viago.

Actually. It's like a it's a self drilling posi mix bolt with a like a hollow centre with the there's new resin injection technology that they're gonna bloody bolt onto the Sandvik jumbos, squirt it up the whole encapsulate around the posi mix bolt and absolutely revolutionize the installation of posi mix bolts. All because of the billion dollar man. Unbelievable, mate. Good move, Sandvik. I can't there's bloody that there was bloody mate. Resin injection was the feel of

the conference. That is interesting. I'm. Glad they're all about green energy. I can tell you that that that that wasn't even to be seen at the conference. She's all about resin injection. So mate, good to see the billion dollar man so. Go, Sandvik. Go. Sandvik ground support. So what else? JD, you got some other go through the update. We can just, yeah, we'll just fly through the rest of the mine plan update, right?

Because I think it's kind of important in how the narratives kind of change because when they came out last year with the capital raise, we, we all kind of knew it was to address underlying issues, but they kind of had to wrap this big growth narrative around it. And obviously they've, they've backtracked on, on a few of those.

So they've kind of spoken to reducing reliance on the Marceline mining area, a bit of a reduction in the Deacon main average Oz delivery also, as well as Viago delayed access to Deacon N. So that's been pushed out by 6 months. And then Maddie, you'll, you'll speak to this point a bit better, but they speak about increasing in the, the lower mind pillar sizes by 60%. So from memory below the the 550 sort of level, they're changing how they're going about things down there.

Yeah, it sounds like I didn't find, I didn't write enough on that, but I assume they're either making the pillars bigger or putting more pillars in and reducing the strike length of the stipes. So they're obviously identifying as they go to depth, they might have some increased stress and they need more pillars left between the stipes.

So I'm not sure if they're just making the pillars bigger or they're putting more pillars in, which is 6 essentially 60% more pillars being left in the ground. So yeah. Yeah.

And to to wrap numbers, cost numbers around that they speak to 35 to $42 million per month being the the all in, you know corporate exploration, the all-encompassing cost base that they're going to experience through FY20 6 and FY20 7. So doing a bit of Bush maths on those numbers. If you take them, I'll have some Bush maths, JD.

I did it just for you mate. So if you take the midpoint and analyze those numbers over FY20 6 where we're talking about 150,000 ounces of output, you're talking about unit costs of a bit over 3000 Aussie an ounce. Now remember, not all in sustaining costs. This is, this is kind of everything or most of everything in it. Now if, if my numbers are, are right, hopefully they are,

that's a cash flow of a bit over $300 million Aussie in FY20. 6 back of the envelope after they pay out the hedges like they've said there is a $110 million liability that still needs to be paid over FY20 6 So I just net that off against the cash flow and you're getting about 200 million ish in, in free cash over that. That period.

Again, might be a bit of interest and and other things they need to pay on the fringes there over FY20 7 when they move up to that 190,000 oz per annum profile, the unit cost pull down because the the total costs are the same. Just using that midpoint again and you get a unit cost of a bit under 2 1/2 thousand Aussie an ounce. So at these gold prices, super healthy margin, that's 2700 bucks an ounce or cash flow of a bit over 500 million.

Again, of course, big hedge liability, 130 million over that period. That's the kind of delta at the moment we're seeing there. And as well as that you'll have 50 million bucks that needs to be paid in the first half of calendar year 27 in debt. So that leaves about 330 million bucks for the owners. So not, not too bad. And I think that's going to tie in well with our our conversation on who wants to own this or who might be interested, especially when it comes to tomorrow.

And we see where the thing starts trading at. But that gets you a bit of a a ballpark for a company that if they come out at $0.85, it's a market cap of around about $1.25 billion. So you know, you, it'll, we, I think it'll be enticing for some people, but I think we'll, we'll talk through a few more different aspects before we, we get to that point. Yeah, I know.

I think it like the interesting thing about that we're just talking about it before is once it'd be interesting to say now that they're they've slowed down a bit, they're going to, as you said, focus, focus on quality a bit more like like the really focus on the OR extraction and the like de risking and like risk profiling each area to make sure it's drilled. They know where the faults are and everything.

It's like whether they're going to be always struggling to hit guidance, it's always going to be a push or there's some potential upside where they can freaking have a 60 like a high grade month and a 60,000 oz month. Like it's yet to be seen if like there is that potential outperformance in the ore body or not. Once they really iron in on everything or it's going to be one that they're going to, it's just going to really struggle to hit, you know, 45,000 oz each quarter.

When they get to that point, who will know? But it, it sounds like when they're talking about delaying, was it delaying the Deacon NI think? So it sounds like that one, which which obviously means, right. We we could go there now because I assume that's one of the bloody deacons, the high grade area or we can delayed save the CapEx and then make 27/28/29 a much smoother period. So it's good. It's just I think this and to be honest, I think this is what

everyone wanted. They just wanted to like a, a, a realistic something that they're like, yeah, no, that sounds, that sounds achievable. It's not over ambitious. It's not like we're like a bit of belief that like, yeah, we're like 190 a 190,000 oz. Yeah, we feel that could be achieved. And at a not at $1500 all in sustaining. So yeah, it's this is this is what I think the big dogs have been wanting for a while. Yeah, for sure. And you got Trav.

Yeah, it's kind of symptomatic of like a like expectations have been set too, too large for what's doable here. And that's that's kind of why the Bellevue's been like a big underperformer amidst every other kind of gold name just really, you know, benefiting from this, this gold price

environment. Yeah, it's it's you don't want, you don't want expectations to be beyond what's achievable because then, you know, you actually want to, you actually want to be able to outperform market expectations consistently. And that's, that's how you, that's how you, you know, become a market darling. That's how the market loves you. But this unfortunately Bobby was a market darling before it could prove itself because the

expectations are so big. So it's, yeah, it's unfortunate, but hopefully that recalibrating of expectations of what's actually like doable and then constantly setting them realistic and then over delivering will well, will you know, help it help. Navigate the next period.

Ahead as well as as well as like market expectations Macquarie has to have their their expectations sort of regauged right because you've got these these covenants and all these other sort of bits and pieces that are based around the original my plan. So they, Macquarie sort of said that they've waived their review event kind of rights and this was triggered by the, the quarterly production test at the back end of the, the March quarter.

In simple terms that the output over the March period is just not close enough to the mine plan. I would guess. I mean, there's a few other ways of, of assessing them, but to quarry the lender, they want to be, they want to be safe, they want to reassess their risk and they have rights when these things are sort of breached. So you need to go and present the new mine plan to them, get their permission. And with their permission as well, close out, close out the hedges.

And of course, all of this stuff, they, they're going to get paid as well, right? Sort of in the fine print, they're getting eight and a half million shares just to to restructure and for the privilege of paying out the the hedges. For zero, for 0 cash, eight and a half million shares. You have to squint your eyes at the footnotes on page 12 to, to read that. But, but that's $7.3 million at $0.85 a share.

That's a, that's an enormous fee in, in the banking world for, yeah, for a kind of a restructure of, of, of hedge obligations. Yeah, I think there sure is. There is a bit of a cost associated with doing it, plus I assume a margin on top for for that, absolutely.

It's a. Giant fair. Yeah. I mean, let's talk more about the the hedge book. Trevor, I know you, you jumped into it. Maybe maybe pull up your notes on that one. I did, I did have a good, yeah, had a look at it. I mean you can see part of that restructure involved rolling some hedges beyond the previous latest date of that hedge period. So you know, March quarter of 2028 now has some hedge dances

which it didn't before. And while rolling of those hedges alleviates near term kind of, you know, cash flow and you can maximize your free cash flow in the in the in the near term, it does kick the can down the road to an extent, right? And it has to be addressed at a later date and for a longer period of time than you'd previously envisioned.

And unfortunately, there are examples and precedents in gold miners in our in our state where if you roll hedges in, you kick the can down the road, that liability can, can grow substantially more in value. If if the gold price kind of goes much, much higher than you thought. And all of a sudden, you know, you thought you'd keep the can down the road, but it was at a reasonable gold price.

All of a sudden it can look pretty, pretty daunting, as you know, depending on what that gold backdrop looks like. And yeah, I just, I just think that's worth, it's worth considering the implications of of all of that, despite the the Macquarie, like, you know, fee there. I, I was kind of interested in plugging in the the hedge book into an excel workbook and just having a bit of a play with it.

And if you just Chuck in, you know, spot price right now, if, if 5200 Aussie for a gold price, then then what they're actually the value of the out of the money value of the hedge book, they're actually going to close out. Is, is only about, it's like less than 30% of, of what the, you know, the total hedge liability would be if they, if they didn't close that, that, that amount out. So this raises like 15% dilution to the equity capital structure.

And you're, and you're making a, you know, it's a modest dent in the, in the overall picture of that hedge liability, which is subject to getting bigger if gold brass goes, goes higher as well. It's still about, you know, $350.00 and 5200 store price right now that would would still be there in, in, in hedges which can and, and there's a, there's a period there, I think it's the back end of 2027 where the, the quantity of hedge dances kind of shoots quite a bit higher.

So just managing that with your mind plan and all that sort of stuff is going to be, it's going to be interesting. I think they they alleviate the near term stress with this, which is good. They can have some near term like good cash flow, but I don't think investors should ignore what what remains at the at the end of it, which is is still

still a substantial edge book. Yeah, because you say those those two you're Speaking of, it looks like like if they have a 45,000 oz month or even below like that's you know half their production is hedged at what's that 2900? Yeah, 2906. Yeah, so and as you said, Rob, when the principal starts being repaid for the debt as well. Exactly. Yeah, there's that, that 100 million I think is yeah, payable Cy 27.

So you've got, you've got a a bit of extra cash flow pressure that comes in calendar you're 27. Of course it's not. It's not today. But it it is. It is sooner than we all think. You know, it's like, yeah. Like probably the the thing that'll help with in, in the in the shorter term for delivery of those answers and probably 27 as well. This is like a a back end problem is like because I didn't, it sounds like that paste plant isn't happening anymore because I'm talking about it now.

I've searched paste can't find anything. So it doesn't, it sounds like it's just going to be a pillar operation so that, that, that will speed up the mining rights because you're not relying on paste or everything, but it is you're affected and we're there. It was in the study, I think in the study was calculated, I think 82% recovery of the oil, which takes into account the pillars that are being left.

They're obviously looking at putting a pace, planning to get 100% extraction or close to 100% extraction of the oil without to which elongates the life of the assets. So bad news for Quattro because that's probably looking like 1 pace plant that is not being built. But someone else's problem is someone else's opportunity. Someone else might might, that is. Just like that means you can get them working on your pace plant when they would have been working on this one.

They, they somebody, the pace, somebody would be on the ground out there. Oh look at look at how excited you 2 are like. Just excited just thinking about it. Just going at it, but you would have been excited if you'd come and seen the QD too underground operators. But have a look at it. The Quattro diverter version 3.9. Unbelievable. Like this thing just I had lunch next to it each day that I was at the conference at lunch. Might have flipped on the night shift from bloody Wednesday

onwards. But mate, these these diverter valves, they've just got even better. 50% increase in the pressure rating like 15 MPA pressure rating right now on those things, buddy, like man manless hanging system to put these things up so manless manless like you're just same as the fan hanging system that they've got like just Chuck it up there, keep everyone safe, right? The automation that goes in with these QD twos.

So if there's a bloody pressurized detected in the retic line, the system will automatically flick it over to the dump line, which will drop it in a sump, protect your ray tick and you don't block the whole line. All because of Jeremy Palmer. That is, that is amazing pace. So if you want to protect your ray tick line, go buy a shit load of QD twos or QD fours with the increased pressure rating and just keep your ray tick line safe. It's just a beautiful pace of engineering by Quattro.

And thanks for the lunch table. Pay for itself? Go. Contracts.

Anyway, now the strategic review, it's do you. Sometimes you'll want to hear it. A lot of times you don't want to hear it. Yeah, it's usually kind of the I reckon you're. Wanting it right? I reckon you'll want to hear it. Yeah, when when a company with multiple assets says for strategic review, it's not normally a a great sign, but there's a bit of nuance to it in in this case. So they flag looking at internal and external options and then they sort of mentioned control changes.

So a direct snippet was that Bellevue's confirmed it has recently received unsolicited approaches relating to a potential control transaction. So they say no formal proposals or offers were received. Of course, that's, that's not a big surprise, but people are, people are having a bit of a

peek. They're looking around, they're seeing what they can sort of do with management, where they can kind of get to. And it was interesting to hear the question asked, like how many of these, you know, if you can put a number to it or if any of them came in the last two? Weeks. Can I, can I play that question on the call? I'll play, I'll play, play it. But but before you do, you should have seen how many unsolicited approaches I've seen between mining companies late at

night at underground operators. That's right, it's so good. Oh, what a place to be, right in the heart of it. Where business gets done. Hey, Maddie, All righty. On the the question was asked previously and I won't draw you on more detail around the approaches from third parties other than to ask about timing when they might have been.

And the question for that is, I'm curious to know whether a third party is approached during the last two weeks, you know, in, in opportunistically in what's potentially a position of weakness or whether there were there have potentially been approaches prior to this, I guess the last couple of weeks of, of uncertainty. Yeah, Look, I, I think we've said what we wanted to say in the statement that's in the the announcements, Paul. So I think we'll just decline to

comment. It's no upside in discussing M&A and, and speculation on that front. So we've said what we want to say on it. And if there's, you know, room for a future update, we'll provide it to the market. As appropriate. Got interesting, right? That's a lot the anti magnetic response. What was the bloody some? Runs in the data room, some runs in it. Was someone doing their washing up while they were answering

that question? No. It was 'cause I was, I was recording, oh, speaker into a microphone and tapping, tapping the desk. Yeah, but not. Not gonna lie, I did, I did have it on like 100 trying to just, I can put my ear to it to, to listen to it. But it's interesting 'cause we all, we all got kind of attracted to the same snippet. Really, really interesting to see. I I found, I found it interesting because, yeah, because not like, like Strallow responded by knocking back the,

the, the, the question. But here's, here's one view on the response to that question. If there was an inbound NBIO before the trading halt, for example, that's that's worth a bit more then after the trading halt, in my opinion, it's, it's a letter that possibly is anchored to a price that's sort of much higher than the cap raise and higher than it was when it went into went into halt and all that sort of stuff. But if the interest has only come after the trading halt,

it's not as promising. You know, lots of miners would be a bit opportunistic when you're you're in a three-week, you know, suspension and and yet, of course you're pinging out a letter depend. You don't know how dire it is, but you ask for access to a data room and you know, give me, give me DDD and maybe I can, you know, give you a proposal and firm it up and all that sort of stuff. So I wouldn't be surprised to see a lot of people kind of

opportunistic in that situation. But if, but it's a different, it's a different level of firmness and, and, and, and seriousness. If, if it came before versus after. And what if it was if it if they came before the trading halt? And what would have prevented Darren Stralow from just just saying no, we had some before. So maybe, maybe the inference you could have is they could have all come after. Yeah, yeah.

And lying, to my knowledge, I don't think any strategics are being let into this cap raise either to try and get a foot on it either because competitive tension is their best friend at the moment. Totally. And for this. And this, this signalling to the to the to the market that they are exploring the options to

maximise value, right? They list 3 advisors that they've now got in their court to, to, to help them maximize values at the inferences, you know, at at the right price that they are, they would consider, you know, the a corporate change of control. It just how real the interest is from third parties, I think remains to be seen still. And yeah, I like, I do wonder what, what price they would have to raise if they didn't reveal that, that they had corporate

interest. But I'm very curious to know what you guys think of in terms of what the potential corporate interest is. Who, who would be interested in and yeah, who like who, who come who you know, do you think, do you think Bellevue will, will, will kind of get engulfed by a larger, larger minor with the, the the more thorough balance sheet to, to absorb some of their funding stuff?

Interesting. What you say is like, will there be like with, you know, the mark to mark on the hedge book and everything like will it be competitive or like will it be a larger minor or will it be a smaller minor that might be able to take a swing of this mate like between? It caps could, yeah. Yeah, like between and some of them aren't that small like like catalysts, like on the smaller end, like. Yeah, Mark, it'd be.

A huge, huge, but that's the thing, like if there's not heaps of interest, like might provide a opportunity for them like, but then and then you got all the, you know, outrageous. You know, they haven't got really the geographical synergies, but they're, you know. If they're if they're looking at.

Printing a bit of cash they're. Looking at Ravenswood, which, which has a lower production profile, it has a worse hedge book, a worse debt, debt situation and even and more operational kind of, you know, question marks over it and, and that and Ravenswood wants 2 billion. Yeah. Like if you're Regis, you're thinking I could spend, I could pay less than that and close out all the hedges and yada, yada, and have this thing.

So I, I think like if you were to look at the two options side by side, you go Bellevue. But so I wouldn't rule. I wouldn't rule Regis out at all. No, no. Before I go on the other ones, when you reference 2 billion like so after this there's going to be 1 1/2 billion shares on issue. So that means I if it got done at a dollar, $1.30 would mean essentially $2 billion plus the hedge book and the debt out of

the money. So it's about a $2.4 billion deal equivalent to Spartan for a a walk up start to potentially 190,000 oz or 150 to 190,000 ounces for a 3,000,000 oz resource. So that's the price like could it get done at $1.10, which would be a bit below the two like about 2 billion once you clear everything out. So that's the sort of share process you're looking at for what you know, potentially a deal could be done depending on where it trades on open tomorrow.

But we've, we've went, went through the previous ones as well, like gold fields could flick it over to Agnew. I think, I think it's only a 1.1 million tonne mill. I'm not sure if it's expanded, but I'll assume that it's bigger. It must be bigger. The with the yeah, chat check definitely be down the other way. It must be bigger.

Like the, the big ones are obviously vault with they're expanding to 6,000,000 tonne and they've just, I think approved the $80 million expansion to put the regrant the ball mill in for that. Because it's just, I think it's just one big sag at the moment. So that could take it. But they've obviously got their own hedge book to deal with. But you know, you'd think that just cleared this out anyway, or they might just keep it there. They love keeping cash.

Thunderbox, Northern Star. That's a very logical one. And the degrade deal's about to be signed off on anyway. My my two things. Very is imminent. Yeah. And I did have a look through that and it looked like Northern Star could they could do anything. It was degrade that couldn't do

a deal. There there was a materiality threshold and it was basically I think, I think the threshold was like anything more than a billion dollars would it would be yeah, like like game to to to, to, to material to to do another deal it. Could degrade approve it but. It wasn't even a consent thing. It got messy. It got messy on that front. Yeah, yeah. I did. I did some control I. Think, yeah. But the I mean like it's kind of irrelevant because the deal is going to complete soon anyway.

I do think, I do think that it's hard to pay more than the companies that have synergies. So the synergies are Gold Fields and and Northern Star and you might think synergies. Is weird. Vault and are. A good time, yeah, yeah, less balance sheet to, to maybe you know, splurge with, but certainly synergies.

And then because the synergies exist because you've got high grade stuff that you're processing costs much lower than putting it through the, you know, 1.2 or whatever million tonne per random plant that Bellevue has. If you're, if you're sending it to your much larger economies of scale mill that you've got, you know, 50-60 KS down the road. Yeah, and they could go. They could probably bloody with other stuff in the region. They could turn that into a toll

trading mill up there. You could sell it to someone. Vivian comes back online ever. Like there's plenty of plenty of options, but yeah, they're the lot. I don't, I don't think Genesis, geez, you never know. But like, considering what they paid $140 million for Daisy and to set up that whole area up, doesn't strike me as a company that'll be paying 2 billion for something like this. I think they're kind of cyclical. Investing is complete Evo's. Are they in harvest mode?

I'm pretty sure I don't think I. Don't think they will. I don't think they'd go at it. Not their MO isn't. It Nah, Nah. So like yeah, for Northern Star lot, they'd probably be able to get it all script. They they, yeah, yeah, they could they. Probably. I think they'd if they were to do it, I think it'd be script, right? Yeah, similar to what they did with. Pretty, and it's a pretty safe bet to take the script. You'd think liquid. Very, very potential.

There's certain people that'll be, you know, still at these prices having a bit of a win. So cash might lead to a tax liability. You can potentially get rolled if you're still bullish. The broader gold narrative, you know, rollover relief, if it's, if it's script, I mean on the margins that that ties into it. Yeah, I think that's pretty much everyone. I think lower than. One, yeah, I agree with you on Genesis.

Yeah, yeah, by the way, I think I think if a deal happens, I think it's going to be lower than 130. That's why like just got intuition on sort of how, yeah, I do think there is there are definitely some like kind of like I use the word desperate mid caps who need need to do a deal and a hungry and yadda, yadda, yadda. And and there's a very realistic chance that something happens with that the cohort, you know, but the but the price matters. You know, how much you pay does matter.

And even though we anchor to the share price or the share price has come down so much, so a deal must be more attractive. There's a bunch of dilution you still got to pay more shares to. So the quantum you're paying can still be quite onerous even though the share price looks lower. So, you know, companies are are constantly thinking about what the total amount they're paying is here and, and even though the the share price has come lower, it's still it's.

Still a big it's a big price tag you want to be very confident that the cash flow is going to come from from that investment. Would Macquarie have like, because Macquarie are holding obviously the debt, but the bigger quantum is the amount, the out of the money hedge book liability. Would they have a say at all on offers?

Because you know, it's it might be in their best interest that a $1.10 deal gets done to take away the risk from them to potentially not getting that gold in the future is a risk to them. They wouldn't have a say on on

offers. They do like any deal it'd be it'd be subject to, you know, certain consents per whatever contracts you have in place for for a project finance, it depend what the buyer wants to do. Do they want to clean out the the hedge book on the acquisition or are they keeping it in place? Either one does does need a certain consent. But it's it's, you know, it's assigning rights to a larger than a minor or something, you know, aquarium and say yes to every day of the week.

And they're not. Yeah. Yeah. And and it looks like they're, they're obviously they've signalled that they are very amenable to selling it. I think that's pretty clear. Like which is positive if if if true. And good from inquiry. What about the oh so and it was a good question on the investor call and it was probably the thoughts are why have they cleared the hedge book, cleared 150 a hundred odd out of the hedge book and left the debt,

which would have you done? Because the question on the call was why? Why didn't you clear out the debt? Because then you don't have, you know, Macquarie doesn't have security on the assets. And Darren responded saying, look, that's because we've still got the marked mark on the on the hedge book. They still, which is what did you say it was? After they paid back, they also left 350 million at 5200 Yeah prices. Which means they've still got

security on the asset. So look, because I have, I told just me what the analogy for hedging that I've known for ages tell me. I've known this for ages. I can't believe I haven't mentioned it yet. 100% have not talked to. So like I enlighten us, these Ford contracts are the dead set equivalent of short selling effectively. So Macquarie are short selling gold and to Bellevue for these contracts.

So all, all that hedge book that's in place, Macquarie have borrowed it from Central bank or bloody friggin Fort Knox or, or somewhere, borrowed it, sold it into the spot market, got a heap of cash for it, put that on deposit, which is earning interest. And then those contracts are what Bellevue has to the gold that has to be given back to Macquarie so they can give it back to the bank.

So when they say like they're obviously not making money on the gold price, but it's like when that is why they've got security on the asset because if you know, very obviously like if Bellevue stops producing, Macquarie have to go into the market and buy all that gold themselves. That's on the asset side of their Ledger. On the liability side is their obligation to return the gold at those predefined points in time which they require Bellevue to deliver. Yeah, those obligations.

And hence the decision for because clear in the debt is like whatever you've cleared the debt, the debt isn't going to grow that much. But as you said before, that hedge book liability, if the gold price keeps going up could keep growing and growing and growing. Hence, keeping the debt, removing the hedge liability for this year, for the remainder of this year means they've got more of a runway to get free cash, keep the operation sustainable, deliver the gold into the hedge book.

Less risk of the worst thing happening of going into VI or like going into receivership or something where Macquarie have to go into the market, use the security of the asset to buy all that gold back to give it to the central bank. So that's why they've done it. Yeah. And I think. All my own idea. We talk about, we talk about hedges, right heaps, but the gold price going up is still good for for Bellevue it's still much more if they can obviously deliver the answers it's.

Great. If they can. Yeah, yeah. Deliver the answers. But it obviously increases the risk to Macquarie if they don't deliver the answers Exactly, exactly. For sure, for sure. Now I like that, Maddie. Yeah, no worries. I'm here all week boys, buddy. Just a wealth of knowledge. Yeah. I've been, I've been bloody years in everyone else's ideas for the last two years. I'm not going to stop now.

Quickest way to learn mate, to to frame your question as well, but going roughly a year back or I guess nine months or so back to when they did the last raise and they they cleared out debt, they would have had to be paying on average 15,000,000 bucks a quarter. You know, they paid out $100 million of the 200 million in debt. So that kind of would have, would have stung them a bit at the time. They had the same decision last year and they went the debt route.

Well, I suppose it's been a perfect storm, hasn't it? So when not an unperfect storm from when they've when they took that debt to OK, we're going to go down the debt route, we're going to have the least amount of dilution. We're going to get a great earnings per share. We're going to have a bloody this great rated company on an EBITDA multiple gold was, you know, those $2800 hedges, they were above the gold price at that time. So everyone just forgets. It's like, oh shit, why'd you

hedge at that price? That's what the bloody gold price was. It was bloody lower and it was in a lower interest rate environment, which mean obviously the hedges were at not as much of A markup to the spot price because because they hold the money on on account, higher interest rates means they could give higher Ford contract prices. But now gold prices going up shit loads and interest rates have gone up shit loads, which means it's more impactful on the debt as well.

So it's just really snowballed into what we see today, unfortunately for them. Yeah, it's fascinating to think that the the, the, the hedge liability that will even be remaining after this is, is, you know, multiples of what the initial project finance facility was like. Yeah, it's remarkable how that all that kind of works. Yeah. And that's the, well, that's the, the unfortunate thing like because this could have been as we're like we're talking about it getting sold at $1.10 dollar

30 or or whatever. Like, but like it's just, yeah, it's just, it's unfortunate to see if like if they did execute, did buy off the debt without rising like delivered into that hedge book over a longer term. Like this could have been a freaking cute. Like this could have been a three $4.00 stock with that management like a management premium and delivery and everything. It just unfortunately didn't happen.

So I can really go either way. Like so, yeah, I'm sure the shareholders were wishing that too. For sure, we'll see what the future holds for the the new shareholders sort of be interesting with those sort of carrots they've dangled. So do you reckon this is the final reset? This is this is the biggest reset? Well, no, I hope so. No, sorry, I don't think it is because this is the reset that should have happened when they raised last year instead of

releasing that 250,000 oz plan. This should have been it should have. This should have happened at diggers before diggers. Like when they said that we're just revising. It's going to be 190,000 oz mine. It's not a 200,000 oz mine. It's 150 next year. Like this is what should have happened then. So it's but it's a bigger reset compared to what they said they were going to do, which was much higher. But is it the final one still 40 what, 47 1/2 thousand ounces a year?

1/4 from FY20 7 onwards. It's tricky. It's tricky to have confidence and say yes, because you do want to believe like the the revisions every time, but then you like there are there seems to be just, you know, misses that that weren't foreseen and things like that. So you want you want to you want to think the operational kind of question marks are are in the background now. You really do want to believe that I'm, I think like because of that they've alleviated the short term.

The short term looks, looks reasonable. You know, like I do worry a little bit about that 2027 period when you've got more hedging and and the debt repayments kind of kick in. I think it all depends. I think it depends if Bellevue kind of keep persisting on on their own or if, or if they get taken over. If they get taken over, it's the last reset. If they assist on their own, there might be some some some some more kind of things to face as the the cash flow looks

compressed in that year. And when if they get taken over, no one's looking at it as much. Exactly. It's mixed in with seven other fucking assets. It's all, yeah, it's all good sticking along. But I I like how it's 150 next year. Like that's that indicates to me, right? They're probably going to know they're dropping a jumbo off and everything, but it's like hopefully they get a bit ahead. Sounds like a lot of the critical infrastructure is

probably in just cut it comes. It's going to come down to like obviously they they've alluded to the mining practices. Once they tidy that up, then it's up to the ore body. It's got to be up to how that ore body behaves. If like the if there's many irregularities, like as long as your body stay on the ore top level, top level and bottom level, what happens in the middle is out of your control.

So as long as all that is done spot on and slowed down, which sounds like they're gonna like it's up to the gold gods. Then sounds like they've got the process and plant sort of the upgrades and everything like the oxygen circuit that they talked about a lot that talks about the increased sulfides and the need for the oxygen circuit to alleviate the higher use of cyanide, which is copper. They don't say copper, they say sulfides, but it is because of copper in the sulfides it

caused. So that's what the oxygen circuits trying to. So it sounds like they've gotten, it's manageable. The recoveries are going to be hopefully maintained it a lot higher and then the recovery issues before a lot of it was because of this fucking rush, rush, rush trying to get the quarterly numbers out, throwing a shit load of in cases, throwing a shit load high grade in at once. And then you you know, you're pissing a lot out to the tailings because you're trying

to get the gold quickly. So yeah, I, yeah, I reckon I don't know, I'm saying 180,000 sustainably. Seems like a good spot to leave it. Nothing like. That, yeah, I think, I think we'll, we'll see how they go against that. Who do you reckon is going to come with it, themselves or which other? Come on, we're going to come on years. We've got to start throwing some darts as well, boys. I. Who's going to be the final buyer? Who's going to be running Bellevue in FY20 7?

Northern Star. That's a good one. Is it cheating if I say the same? Do I have to go different? Northern Star seems the most logical. Oh, Chuck in Goldfield's just to just to spice it up, but I think that's a rough probability. But Ruffy would be Regis. I'm gonna arcane I'm. Gonna throw. That's the hardest thing though.

Like the reason I'm going against vault is the whole succession plan of that business probably relying on maybe Genesis, which take over from Luke Tonkin, unless Luke has a swing at this and then maybe makes himself more amenable to Genesis or they he might he might just go forever. I think vaults the dark horse on this and make a lot of sense for that to go down to their mill. I didn't need some upgrades and

everything. I don't know if it's got an oxygen circuit or Yeah Vault, but I reckon Northern stuff all righty. All righty, let's thank our awesome partners, I reckon. Get your tickets. Remilius hasn't even got a mention. Yeah, they got a great project they've. Got their hands full. God that could be a real dark horse. Righto. Let's take the partners. What mate? Bloody the all underground operators is finished. GRX conference is coming up. Brisbane May 20 to 22nd.

Oh God, I should be recovered by then. Can't wait. The centre of tech and innovation discount code on LinkedIn on in the show notes. Make sure you grab on it. There are other partners I haven't said these guys for a week of being devoured. Mineral mining services grounded sandy ground sports ARA insurance K drill WA waterboards quattro kci black diamond drilling services cross boundary energy O doro boys O doro.

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