The Bellevue Gold Ltd (ASX: BGL) share price opened 8.47% lower to 86.5 cents on Friday after the company completed a $106 million institutional placement.
At the time of writing, the Bellevue share price is still firmly in the red, trading down 8.25% at 87 cents.
Bellevue on track to become significant gold producer
Bellevue announced that it received "firm commitments" for a $106 million institutional placement at 85 cents per share. This represents a 9.9% discount on its last closing price of 94.5 cents on Wednesday, 1 September.
The company said it would use the proceeds, together with its $200 million debt facility, to fund the development of the Bellevue Gold Project in Western Australia.
According to Bellevue's current development timetable, the company is targeting its first gold production in the June quarter of 2023.
Despite today's sharp decline, the Bellevue Gold share price has managed to bounce off intraday lows of 85 cents on significant volume. At the time of writing, 6.1 million shares have traded hands, compared to its 10-day average volume of 1.9 million.
Management commentary
Bellevue managing director Steve Parsons commented on demand for the placement, saying:
The strong demand from institutions around the world reflects the quality of the Bellevue Gold Project, the exceptional free cash flow generation forecast and the immense potential for further growth.
With the project fully-funded to production, we will proceed full-steam ahead with development while maintaining a strong emphasis on further growth by increasing and upgrading the mineral resources and ore reserves.
Parsons said ongoing exploration activities would unlock further value and scale to the project.
The stage two feasibility study is based on a resource of 1.5Moz, which represents just half of the total 3Moz resource base at Bellevue. We have already announced a host of high-grade drilling results outside that resource, we have another 14,000 samples awaiting assay and there are now two rigs drilling from underground.
This multi-pronged approach to expanding the resource is aimed at growing the mine life, which will increase the already-strong financial results forecast in this Study
Bellevue Gold share price snapshot
The Bellevue Gold share price is down 26.5% year-to-date.
This performance is in line with the broader ASX gold sector, with high profile names such as Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN) down 26.9% and 26.3% year-to-date respectively.
