Bellevue Gold Ltd (ASX: BGL) shares are back from their suspension and are crashing deep into the red.
In early trade, the ASX gold stock was down as much as 27% to a 52-week low of 84 cents.
Why is this ASX gold stock crashing?
The catalyst for this decline has been the release of a disappointing production update and the completion of a major capital raising.
This morning, the ASX gold stock revealed that it has received firm commitments for a placement to institutional, sophisticated, and professional investors to raise a total of $156.5 million before costs.
According to the release, the placement received strong support from existing and new leading domestic and offshore institutions, with overall demand received for new shares significantly in excess of the placement size.
Placement proceeds will be applied to the closure of hedged ounces through the remainder of 2025, providing the company with improved exposure to the spot gold price through that period, and for general working capital to support ongoing operations.
The ASX gold stock is raising these funds at $0.85 per new share, which represents a 25.8% discount to its last traded price of $1.145.
Production guidance downgrade
Also weighing on the ASX gold stock was its production guidance downgrade.
The gold miner highlights that its FY 2025 annual guidance was heavily weighted to the second half of the year. Unfortunately, despite its underground mining ramp up delivering record tonnes, the overall performance during the March quarter was impacted by mining and uncharacteristic geological factors.
This includes the deferral of high grade mining areas, dilution and the grade performance of three key stopes located on the outer edges of the orebody.
As a result, management has revised its production guidance down to 129,000-134,000 ounces from 150,000-165,000 ounces.
Commenting on today's news, Bellevue Gold's managing director and CEO, Darren Stralow, said:
We are extremely pleased with the very strong support for the Placement, both from existing shareholders and new investors. Alongside the updated mine plan, the strengthened balance sheet and close out of near-term hedge contracts provides Bellevue with increased exposure to record spot gold prices through to the end of 2025. Coupled with the support of our project lender, we are well funded to deliver significantly improved production and generate strong free cash flow for the remainder of the June 2025 quarter and through FY26.
The Bellevue orebody is high grade and long life, and we now have adequate infrastructure in place to deliver on the Company's revised mine plan. Following the full operations review, we are now in a position to deliver a more robust, less capital intensive and lower risk mining and operating plan that focuses on maximising operating cash flow.
