GOLDS: The stronger US dollar stemming from the delay in the...

GOLDS:

The stronger US dollar stemming from the delay in the timing of the first US interest rate cuts took its toll on the gold price and ASX gold stocks during the week.
But there were a couple of notable exceptions that were able to swim against the tide – Bellevue (BGL) and Spartan (SPR).
Leading gold stocks like Northern Star (NST) and Newmont (NEM) were off 3.5% and 1.6% respectively on Thursday from Monday’s close in response to gold’s subsequent fall below $US2000/oz.
But Bellevue was 4.6% higher at $1.33 over the same timeframe while Spartan lifted its chiton to race ahead 18% higher to 51c.
The price strength for Bellevue was due to the revelation that the ramp-up of its new namesake mine had reached the point where it was generating free cash flow after a 30% increase in month-on-month production.
It was holding $48.5m on December 31 before it started building cash and now has minimal remaining capex spend, and a comfortable debt repayment schedule ahead.
There is still a way to go before the mine reaches annual output of 200,000oz-plus of low-cost gold but all of the key metrics in the month of January were looking good.
RBC has a $1.80 price target on the stock and reckons that a contributing factor to Bellevue’s recent share price underperformance has been the potential need for a capital raise.
“This risk now seems to have somewhat abated. Halfway through the quarter, Bellevue has not required a raise, and the company is now free cash flow positive,” RBC said.​

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