The key issue with BGL, page-104

Ora Banda's down update last Friday of its production and costs expectations for Q4 has me thinking of the match up between the gold outfits ramping up production that are run by two of WA gold mining's princelings or etonians (with Northern Star being considered the factory for high performing mining execs). Bellevue's MD, Darren Stralow, had a stint as Northern Star's Chief Development Officer and Ora Banda's MD, Luke Creagh, was previously Northern Star's Chief Operating Officer. Someone on hc has likely done a comparison of the two before but I did not come up with anything when I trawled back through recent Bellevue threads. So here's my shot at it.

As of Friday's update, Ora Banda is expected to produce 95koz in FY25 at a AISC of $2,600/oz while Bellevue's latest FY25 target is between 129-134koz at an AISC of $2,425-$2,525/oz. Ora Banda is saying it wants to get to 150kozpa in the medium term while Bellevue's scaled back target is to get to 150kozpa in FY26 and 190kozpa from FY27. I give Bellevue the points on these metrics.

Ora Banda has a 1.2mtpa mill, an MRE of 1.95moz @ 2.6g/t and a reserve of 190moz @ 2.7g/t while Bellevue uses a 1.34mtpa mill and has a resource of 3.2moz @9.0g/t and a reserve of 1.5moz @ 5.0g/t. On these metrics Bellevue is the makings of something special, Ora Banda not so much.

Ora Banda has about $80m in the bank, it has set a small $50m revolving credit facility with a 2+1 year duration and has a debt of about $4m to one of its major shareholders. It has some put options with an exercise cost of about $14m. Of course this is Bellevue's Achilles heel. After the remedial efforts they have removed the hedging for much of this year to give them time to build up production and cashflow for next year when the hedging weighs in again. They say they have pro forma about $89m cash but still suffer the yoke of $100m in Macquarie debt. And then there's Bellevue's hedging...



Of course Ora Banda wins when it comes to capital structure, hands down.

As for quality of management, lots on hc seem to equate managerial skill with the share price - hence why there is a move over on the SPR threads for the canonisation of Spartan's Simon Lawson ... St Simon? ... - but let's see how LC and DS dig themselves out of the holes they both find themselves in. I'm not willing to call this one either way.

When it comes to market caps, even after its share price dropped 14% on Friday Ora Banda's mc is close enough to $2.0b while Bellevue's market cap drags along the bottom, at $1.34b. Does anyone seriously believe that Ora Banda has 50% better prospects to those of Bellevue (which is what the respective market caps are indicating)? Maybe lots of people do, but I don't. Only one of these projects has the potential to develop into a tier one mining operation and it ain't Ora Banda's Davyhurst operation. Another related factor is that the data room is open and Bellevue is on the market and as far as I know Ora Banda is not but there is not yet much of a premium built into the BGL share price to recognise that.

Anyway, I know that this is a fairly shallow effort but it is good enough for me to confirm my interest in Bellevue.