Inside the First Gold Pour: The Transition from Developer to Gold Producer (Guest, Darren Stralow)

Karl Woll: 00:00:00

Hello, and welcome to Rock Talk, where we explore the world of mining through casual and non-technical conversations with industry experts. I'm Karl Woll, Senior Account Executive at VRIFY Technology, and in this episode, I'm joined by Darren Stralow, Managing Director and CEO of Bellevue Gold. Bellevue operates the Bellevue Gold Mine in the Goldfields of Western Australia, and they went into production with their first gold pour late last year.

In this episode, I had a chance to talk to Darren about some of the challenges on either side of that transition. From developer to producer, and also about experience of the first gold pour, and what exactly that moment was like. It's a really interesting conversation. I learned a lot and I hope you enjoy it. If you're new to Rock Talk, please subscribe. You can watch as a video interview series on YouTube. It's also available as an audio only podcast on Spotify, Apple podcasts, and all the podcast platforms. And with that, let's jump into this week's interview with Darren Stralow.

Karl Woll: 00:01:02

Darren, thanks for joining me. How are you today?

Darren Stralow: 00:01:04

I'm great, Karl. and thanks for having me on your podcast.

Karl Woll: 00:01:08

No, I appreciate your time. I was actually just looking a little bit back at the news flow from Bellevue. as I know you guys went into production, I thought it was fairly recently, but it actually turns out almost exactly a year ago the date that you had your first goal pour. I think it was October 25th, 2023.

And we're recording this on October 15th. So I guess it's almost been a year that you've been in production now. wanted to pick your brain on what that transition was like from developer to producer and some of the challenges along the way, and how the last year has gone for you. Before we jump into all that fun stuff, I did want to get to know you a little bit, Darren.

I like to start these conversations off by just going back, in time a little bit, learning, you know, what was it that drew you to mining? How was it that you got into the mining industry? What has your career looked like up until this point? So, going back to, I guess, school or your early days, was it something that you always knew you wanted to get into mining, or how was it that you found yourself in this industry?

Darren Stralow: 00:02:03

Yeah. So my journey to mining was a bit interesting as in, I knew I wanted to be some kind of engineer, I just didn't know what type of engineer and I was trying out a bunch of the different disciplines and thinking about what that might look like. And my family had had some exposure to mining through my dad working in a mining town as a high school teacher when he was a young man, which is when I was born.

They were living in a gold mining town in New South Wales. And he encouraged me to give mining a go and, and to check it out. I tried it and, no, never looked back and I went out to the WA School of Mines in Kalgoorlie, which is a very remote town in the middle of Western Australia.

And, but a very famous, mining school. Studied out there and loved it. But, I'd like to think I was always destined to be a gold miner, Karl. 'cause I've been a 49ers fan since I was 10 years old. So the idea of also being a gold miner really appealed to me.

Karl Woll: 00:03:02

Yeah, I think, well, for people that are watching this on YouTube and not listening to the audio, I think it's no coincidence you've got Fred Warner in the background behind you there. I've got the gold and red flannel on and a couple helmets and hats behind me. We won't bore all the the non 49ers fans with football talk here.

Moving on from, Kalgoorlie then and, moving out of school, what was your first, career like in the, in the industry and getting into the field?

Darren Stralow: 00:03:27

Yeah, so it was funny. I'd never been on a working mine when I signed up to mining engineering. I'd been out to Kalgoorlie and had a look over the side of the big open pit outside of the side of town, which was. you know, generally all you did back in those days. So, you know, it was a case of jumping in feet first.

I'd only ever, really worked at a, at a Burger King, which we call Hungry Jack's over in Australia before I got my first mining job. but yeah, while I was at university, like one of the benefits of the WA School of Mines is it's in mining country. And it gives you the opportunity to do a lot of vacation work.

So, you know, I managed to complete some vacation work, both in open pit mining and underground mining. decided that I really liked the underground mining side of things and I'd wanted to be an underground miner. So, you know, that's, that's always been, you know, my passion in mining was to, is to get underground and be involved in that underground environment.

And, you know, that's where I've ended up 25 odd years later.

Karl Woll: 00:04:23

And you worked with, Northern Star most recently prior to joining Bellevue, is that correct?

Darren Stralow: 00:04:28

Yeah, correct. So I was at Northern Star. for over a decade, you know, I was with the company when it was a very small company with, you know, only bought its first asset. And that was the mine that I was working at. and when I left Northern Star, it was the second largest gold miner on the ASX and is now the largest gold miner on the ASX.

So, I was an excellent period of growth, you know, Northern Star's a great company with great assets and great people, and really gave me a good, you know, jumping board to coming to Bellevue to do my own thing over here.

Karl Woll: 00:05:01

Okay. And for those that aren't familiar with Bellevue, it has a history as a past producing asset, and then more recently a new discovery. And then as we'll dig into, back into production, can you give us the sort of the Bellevue, genesis story?

Darren Stralow: 00:05:16

Yeah, sure. So look, Bellevue is in the northern goldfields of Western Australia. So. You know, it's a very prolific mining district and, you know, the Bellevue asset has been, or the mining area has been known about for over a century. you know, for those, US people that might watch it, Bellevue was owned by a company called the Bellevue Mining Company back in the early 19 hundreds and on the board of the Bellevue mining company was Herbert Hoover, who went on to become, you know, president of the USA, the Hoover Dam, all that fun stuff. So he has history with the Bellevue Project as well. And, and also the Gwalia Project, which is 170 Ks down the road from us. Bellevue was sort of picked out over the years, but, a sort of modern-ish large scale mine was there in the 1980s and 1990s.

that was shut down in about: 1997

you know, from that discovery hole to first production was under six years, which is a really, really rapid, development, right? You know, sometimes it can take 10 to 15 years to build a mining project. If it's a good one, you know, we took six years because Bellevue is a really high-quality deposit.

and no, we really, you know, I've spent the last almost three years, you know, really focused on, delivering the project, getting into production and then, and then building the project up to a consistent, profitable run rate.

Karl Woll: 00:07:01

Yeah. Six years seems incredibly fast. Can you walk us through that journey from like development stage company to full-fledged producer? Like what are some of the key milestones along the way in those six years?

Darren Stralow: 00:07:12

Yeah. So look from, from first discovery through to, through to the build, there's just so many, you know, different milestones that you have to get through and, they're all, you know, once in a project milestones, that aren't typical of you just day to day work that you have to do, you know, you got, you need, to get all your permits, you need your native title agreement so you can get on country.

you need to sign all of your contracts like the power contract to build your power station, the processing plant contract to build that, all your other key infrastructure, you know, tailings, dams, offices, camps, everything built from scratch. we're all quite self-sufficient over here.

we have a large fly-in, fly-out workforce, so we have to set up, you know, Bellevue to be, you know, its own little village, and its own little, little entity. you know, we're off grid. So we have to build all that, that power infrastructure for ourselves. You know, it's in a sensitive mining area, so you have to do a lot of work to comply with your, you know, your social and your environmental leases.

You can get around to actually building the mine and working within all those parameters to get the mine built. But then you have to get in there, get boots on ground and actually do the build itself, which is, you know, no small feat. We built a 340 person camp. Pretty soon after we added an extra 40 rooms onto it, and I don't think there's been a time in the last three years that we haven't had that camp, absolutely chock a block full with people staying elsewhere because of all of the construction crews that come through there and everyone, you know, because by the time you build the village, you've got to build the mine admin complex, and you've got to build the tailings dam, then you've got to build the power station and the power station is a thermal station, plus a solar station, plus a wind station.

So you're getting all these waves of, you know, different people coming through the operation and, you know, we've also built our own workforce from, you know, it was probably 20 people when, when I started three years ago. we're up to 210 people now. So I've had to recruit all those people. They're just the permanent Bellevue people on top of that permanent contractors.

You can, you can double that number very easily. And then all the construction people on top of it. So, you know, a lot, a lot of complexity that goes into it and a lot of moving pieces that you have to manage at the same time. you know, building, building the plant, building the underground mine, building the, and getting to first gold and lining up all of those milestones so that they all happen at the right time, at the right budget is, you know, it's a, it's an art and a science at the same time, probably.

Karl Woll: 00:09:50

Yeah. And what would you say was the biggest challenge in that transition period to first gold? What was the biggest challenge that you faced in that transition?

Darren Stralow: 00:10:00

Yeah. So the biggest challenge is that, you know, knowing what the unknown unknowns are, you can predict as best you can, you know, where your delays are going to come from and where your challenges are going to be. And doing it with a limited budget is, is always, going to be hard. You know, we did it as a single asset producer, a single asset developer.

So we didn't have a cashflow producing asset to be funding the build of Bellevue. So any challenges to timeline, any challenges to you know, cost blowouts, everything basically put, you know, the whole viability of the company at risk. So, you know, needing to do all of these, all of these once off projects and all these once off big chunks of work at the same time that you're managing to a limited budget, you know, the, the analogy that we use was that we were, we felt like we were building the airplane as we were flying it and you just have to do that as you're, you know, when you're, when you're a single asset company.

Karl Woll: 00:10:58

Yeah, I think working at VRIFY I can relate to that analogy a little bit sometimes. When you have that first gold pour, that's not something I've ever experienced, but I can imagine it must be an incredible moment of accomplishment and a big feat, but from your perspective, can you walk us through what, happens in that first gold pour and what is the significance of that?

Darren Stralow: 00:11:25

So look, one thing that blows people away when they come to site and, spend some time, you know, particularly on a gold mine is the fact that you can hold the end product in your hand at the end of the day is something that's unique to gold mining, right? Like you can't hold a, you know, you can certainly put a shovel into a pile of lithium concentrate or you can watch the iron ore get loaded to trucks for processing elsewhere.

th of October,: 2023

So people that were involved in the project for, you the longest time we took the longest serving employees in there, the people that have been involved in the process plant build, our chairman flew down from Canada to be a part of it. And, look, there were a lot of smiles around because what that really, what that point in time really does represent is that transition from just spending money month-in month-out to actually getting some revenue on the other side and seeing some, light at the end of the tunnel on that revenue piece. Because, you know, if you don't make money and you're only spending money month-in month-out you don't have another cashflow producing asset to cover it.

That's when you get under a lot of pressure. So, seeing those gold bars and more importantly, seeing the dollars actually come in the door, was a massive milestone for us.

Karl Woll: 00:13:04

So with that first gold bar that's produced, I guess has just more, you know, one gold bar from the next is really no different, but that first one has some sentimental value to it. Do you do anything special with that very first bar?

Darren Stralow: 00:13:17

Yeah, look, we absolutely did. We, we went to our refiner and we said, can you please, you know, put this gold bar aside and went out to people that were involved in the projects, all our employees, you know, key contractors, you know, people that were involved infeasibility studies and, and the like, and said, are you interested in owning a piece of this gold?

Because we'll sell it in one-ounce and two-ounce ingots. so it's got, you know, we, we get all our gold through a refinery over here called The ABC Refinery. you get a little ingot with an ABC Refinery logo on one side of it, which means it's essentially as good as cash. If you walk into a refinery, you can swap it for the same price as an ounce of gold.

But then it's got a little Bellevue etching on the other side of it. And I, a couple of nice words about, you know, how the hard work of people went into, you know, creating this thing. And, like I bought, you know, a few for myself. I bought one each for my kids just as a little memento of that, because I don't know when it is in my career, I'm going to get the opportunity to build a mine and get to first gold again. It is, it is quite a significant and special moment.

Karl Woll: 00:14:27

Yeah, that's really cool. And, now that you are producing, what have been some of the biggest challenges that, you've seen sort of on the other end, and over the last year?

Darren Stralow: 00:14:37

Yeah, so I guess the, that transition from developer to producer comes with a lot of challenges. Like that being a mining producer, we liken it to just being on a hamster wheel, right? You never have time to stop and smell the rose and say, Hey, look how good we are. Like there's, it's always about what's next.

You're always running, you're always looking at what's going on. You know, you produce one good month. It's all about what you're going to do the next month. You produce one good quarter. They're like, yep, that's great. Pat yourself on the back. But what do you got for me next quarter? So it is a never ending moving beast.

That, you know, you need to keep alive by, you know, putting in the work to get there. So. Look, there's certainly been a, you know, a few challenges over the way. You know, some of our infrastructure has gone in slower than we would have liked. so our raised bores, which is doing the vertical developments, which connect the underground mine to the surface, that's what we use for our ventilation.

That's what we use for our pumping systems, our power systems, and getting that key infrastructure in place actually unlocks and allows you to get productivity and enhance your mining projects. We have very hard ground at Bellevue. So hard ground is good because you want to be standing under hard ground when you're working underground.

You don't want soft ground that can fall on you, but it also means that sometimes you can go a bit slower than you like. So we had a few challenges with that in the first year. it probably slowed down our full ramp up to, you know, full project status, but, you know, we've got a really good, long life ahead of us and, and we'll get there.

Karl Woll: 00:16:17

Darren Stralow: 00:16:24

Yeah. So look, we're really excited about the next couple of years. We put out a five year growth plan a couple of months back, that has us going from, you know, 165 to 180,000 ounces of gold. I mean, the current financial year in FY25. and that'll expand to over 250,000 ounces per year in the next couple of years.

And, you know, it's a, it's a pretty exciting project, like to have a project that's doing over 200,000 ounces at a head gram or a head grade of five grams per ton in a tier one jurisdiction. So, you know, a good, jurisdiction, which is really only a couple of states in Australia, a couple of states in Canada and a couple of states in the US. You know, those assets do not come around very often.

You know, most of them are owned by the global majors. For us to be here as a, as a single asset company, but having a, having an asset that has that quality, you know, it really allows you to, to get maximum value. So, you know, what does that mean? It means operating it for, you know, maximized financial returns for our shareholders, you know, increased, increased cashflow, and it also creates a great base should we want to go out and try and do mergers, acquisitions, purchases, whatever, we've got a really good high-quality asset as the, you know, as the baseload for us.

So it's a, Yeah, it's a good position to be lots of optionality going forward. It just means we have to stay on that hamster wheel, deliver quarter in quarter out, achieve the plan that we put out to the market and really the world's our oyster.

Karl Woll: 00:18:00

One thing that I've admired about Bellevue and your transition into production is that you've always approached this from the beginning with, this goal of having net zero gold production, zero, I guess carbon emissions production by, I believe it's 2026, was the last estimate that I read online.

And, I spoke with Scott Williamson, who's Managing Director of Blackstone Minerals, in an earlier episode of Rock Talk. They have a project in Vietnam, a nickel project, and they have a similar goal of reaching net zero production. Which is admirable just for the environmental impacts, but also there is the potential that these products could, a green quote unquote green premium or a higher price point in the market. So with my conversation with Scott and the nickel market, some of that off take discussions being, you know, car manufacturers or battery manufacturers for vehicles, electric vehicles.

I could see that green premium taking shape. How have you found those discussions? Because I guess the ultimate end consumer of a bar of gold is maybe a little bit different than a car manufacturer who's trying to sell a product to an industry where they're trying to show that they themselves are green and environmentally sustainable.

How has the latest conversations, or how is it looking on your end in terms of those, that green gold, we'll call it, fetching a premium in the market.

Darren Stralow: 00:19:26

Look, it's something that, you know, we pushed the boat out on a few years back and set this target of net zero by 2026. And we kept that target core to us as we built the project. You know, it is a lot to do with the installed infrastructure. So we've got a high renewable energy power station that is two thirds built now.

So, it's essentially a wind, solar, battery, and thermal being natural gas and diesel power station, but it's actually designed to provide the mine with over 80 percent renewable energy when annualized over the world. So, you know, we don't have hydropower grid feeding the mine or anywhere near us. We have to generate all that ourselves.

So we've gone through the process of building that high renewable energy power station, you know, one, because it's the right thing to do, you know, we did make it economically viable as part of the project, but it also allows us to have this net zero target. And how do we talk about net zero? To get to net zero, we go through a hierarchy of control, which means avoiding, eliminating, reducing, and then offsetting carbon. so, or carbon emissions. So, you know, we are conscious that there's going to be a tail that we need to offset. It's essentially your, heavy diesel equipment that, that is technologically, unable to be replaced in the system, but everything that we, we have a solution for, we, we've been able to do a lot of work in the meantime, and the real engine that drives that is the higher renewable energy power station that we're building.

And all we're waiting for now is the wind component of that to be built. And that'll be done by the end of the first quarter of calendar year 25. So no less than six months away. And then that gives us that clear pathway to start producing net zero gold. Now from a customer perspective, you know, gold's a little bit different from, you know, bulk materials in that, you know, you, you've actually got some, you know, what you'd call premium customers in the gold market, you know, whether it's the, you know, jewelry providers, whether it's the people that make high end automobiles, whether it's the, you know, the Apples or the Samsungs of the world that want to make, you know, net zero electronic equipment, like gold does go in there.

There has been a shift towards in recent years, what they call recycled gold, but recycled gold is actually quite unregulated. And, you know, you never know where that original gold product is coming from. It could be, it could be mined by, you know, 14-year-olds elbow deep in mercury in a third-world country.

So what we're looking at is the ability to produce a product from a mine that's well known, that has no carbon emissions and, and try and find a customer that will sit there and go, okay, gold is a component of this product that I'm trying to sell, you know, the incremental costs of paying an extra couple of bucks to Bellevue is not going to be material on the price of the product that I'm trying to sell. But the, you know, the story, the narrative that I can sell of, you know, this is a carbon free, responsibly mined product, is potentially quite powerful. So, we are, you know, we're still working with, some potential customers for it.

alf of next year, which is by: 2026

Karl Woll: 00:23:07

Great, Darren. Thanks so much for your time today. it's been great to watch the company make that transition over this last year and I look forward to watching you continue to, to ramp up and scale up and wish you a lot of luck and success with that in 2025 and beyond. And I know you have ongoing exploration as well, so lots of, exciting stuff on the go.

I will put some links in the show notes of this episode, the Bellevue website, social media and all that good stuff where people can find you. But again, thank you for your time. Really appreciate it today.

Darren Stralow: 00:23:40

I appreciate it, Karl. Thank you very much. Always good to catch up and, go Niners.

Karl Woll: 00:23:45

Okay. I got it. We got to finish on one 49ers question. What's your prediction for what week will we see Christian McCaffrey on the field?

Darren Stralow: 00:23:54

Hopefully by week 10, we get McCaffrey back and he's healthy. I did see George

Kittle made, he made some quotes that he's got a locker next to McCaffrey's and he'll definitely play this season. So, in George, we trust.

Karl Woll: 00:24:13

Okay. And in the Superbowl rematch with the Chiefs for the third time, how many touchdowns will we beat them by this year?

Darren Stralow: 00:24:20

Gee whiz. I think that the Niners are going to get up by 10 points or more because if they're within. If they're within a, if they're within a touchdown in the last 10 minutes, Patrick Mahomes will step up and rip our hearts out and feed them to us again. So, I just hope that we have enough of a buffer that when Mahomes gets up in the last 10 minutes and has a crack, it's not going to be, it's not going to be as hurtful as it was in the Super Bowl at the start of this year.

Karl Woll: 00:24:52

Let's hope. well, it'll be exciting to watch the rest of the season evolve, will be cheering with you from the other side of the world. Thanks again, Darren, really appreciate your time and hope to connect again soon.

Darren Stralow: 00:25:03

Nah, good on you, mate. Cheers.

Karl Woll: 00:25:05

Alright, cheers.