Why the Bellevue Gold (ASX:BGL) share price is crashing 23% lower today

The Bellevue Gold Ltd (ASX:BGL) share price is crashing 23% lower on Thursday following the release of its stage 1 feasibility study…
The post Why the Bellevue Gold (ASX:BGL) share price is crashing 23% lower today appeared first on The Motley Fool Australia. –

Two men react in shock at Evolution share price drop record profit

The Bellevue Gold Ltd (ASX: BGL) share price has been a very poor performer on Thursday.

At one stage today, the gold-focused mineral exploration company’s shares were down as much as 23% to 74 cents.

The Bellevue Gold share price has since recovered slightly but is still down 20% to 77.5 cents.

Why is the Bellevue Gold share price being crushed today?

Investors have been selling Bellevue Gold shares today following the release of the Stage 1 Feasibility Study for its Bellevue Gold Project in Western Australia.

According to the study, the Bellevue Gold Project is on track to become a top 25 Australian gold mine with a production profile of 160kozpa in the first five years and Life of Mine (LOM) production of 151kozp.

It is also expected to have a LOM all in sustaining cost (AISC) of A$1,079 per ounce. This compares favourably to the current gold price of US$1,782.10 (A$2,300) per ounce.

So why the selling?

Although the above is very positive, the net present value (NPV) of the project appears to be spooking investors.

The study shows that the post-tax NPV of the project is estimated to be $562 million based on a gold price of A$2,300 per ounce.

It then reduces to A$444 million with a gold price of A$2,100 per ounce or increases to A$679 million at A$2,500 per ounce.

The problem here is that prior to today, the Bellevue Gold share price implied a market capitalisation of $834 million. That’s 48% higher than the current post-tax NPV of the project.

Though, it is worth noting that the company continues to make new discoveries which could increase its resource in the future. So, depending on how that goes, the Bellevue Gold share price could yet recover from today’s decline.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Bellevue Gold (ASX:BGL) share price is crashing 23% lower today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!