Bellevue Gold sets up a higher-value FY27 as hedge exposure falls

Bellevue Gold Limited (ASX:BGL) has reached the more consequential phase of its ramp-up: the mine is producing at record levels, but the financial payoff from that performance is still partly trapped behind its hedge book. Bellevue produced 143,539 ounces in FY26, generated A$62.6 million of free cash flow and ended the year with A$95.4 million of net cash, while reducing forward delivery commitments by 83,350 ounces.

Record production meets a modest statutory profit

Production landed in the top half of the 130,000 to 150,000-ounce guidance range, with 142,000 ounces sold at an average realised price of A$4,058 an ounce. Project all-in sustaining costs came in at A$2,827 an ounce, within the A$2,600 to A$2,900 guidance range, while processing recoveries improved to 95.5% from 93.3% a year earlier.

Yet statutory profit after tax was only A$7.1 million, albeit a sharp improvement from FY25's A$45.9 million loss. The explanation is not hidden in the mine: 83,350 ounces were delivered into the hedge book, including 44,025 ounces brought forward from FY27 commitments, at prices below the year's spot sales. Bellevue says FY26 NPAT would have been approximately A$205 million if those ounces had instead been sold at the year's average realised spot price. That is a company estimate, not an alternative accounting result, but it illustrates the scale of the earnings trade-off created by the hedges.

Hedge reduction increases FY27 price exposure

At 30 June, Bellevue had 68,650 ounces committed forward at an average hedge price of A$3,004 an ounce, down from 152,000 ounces a year earlier. The company is now free of mandatory hedge deliveries until the end of June 2027 and expects to close out the remaining book during FY27, although it has warned that accelerated deliveries or closures may weigh on short-term free cash flow.

The balance sheet nevertheless strengthened. Cash and equivalents rose to A$195.4 million, while total available cash and gold reached A$206.4 million. Drawn project debt remained at A$100 million, with scheduled principal repayments spread across calendar 2027 and the company reporting compliance with its financing covenants. Bellevue also retains A$398.2 million of tax losses, which it says should shelter future taxable income for some time.

Five mining areas underpin higher FY27 guidance

FY27 production guidance remains 150,000 to 170,000 ounces at a Project AISC of A$2,800 to A$3,100 an ounce. The plan rests on five established mining areas - Deacon, Deacon North, Viago, Tribune and Marceline - with Deacon North expected to move from development ore into progressively higher stoping volumes. Non-sustaining capital is guided at A$90 million to A$100 million and exploration spending at A$25 million to A$30 million.

Execution will matter as much as geology. Bellevue is transitioning to Barminco as its mining contractor, expects to commission its 120 cubic-metre-per-hour paste plant in mid-FY27 and says development rates, stockpiles and multiple active fronts should provide greater operating flexibility. The company also expects capital expenditure and AISC to decline in the second half as remaining growth infrastructure is completed, but those outcomes remain dependent on contractor performance, grades, costs and the timing of the paste plant commissioning.

Resource depletion raises the replacement challenge

The renewed exploration program offers the longer-term counterweight. Drilling resumed after more than four years, with the company reporting mineralisation near Marceline and at Tribune South, while underground platforms are being developed to target extensions along the Tribune, Bellevue and Deacon trends.

For now, the inventory has moved in the opposite direction. The Mineral Resource stood at 2.7 million ounces at 8.6 grams per tonne and the Ore Reserve at 1.0 million ounces at 4.5 grams per tonne as at 1 March 2026, down from 3.1 million ounces and 1.3 million ounces respectively a year earlier. Bellevue attributes the reductions mainly to mining depletion and changed economic assumptions. The FY27 drilling budget therefore carries a sharper question than simply whether it can find more gold: can exploration replace what the mine is converting into production while the company simultaneously lifts output and retires its hedges?