Next up, we have Darren Stralow, Managing Director and CEO of Bellevue Gold. Darren is a mining engineer graduate from the WA School of Mines with over 20 years of industry experience, predominantly in hard rock underground mining. He joined Bellevue over four years ago and has overseen the transition from explorer to developer and now to producer with one of West Australia's newest long-life, high-grade underground mining operations. Please welcome to the stage.
Thank you very much. Look, thanks for the kind introduction. It always great to be back on the stage at Diggers presenting the Bellevue story for another year. It's been a really big year for us and has really set up a platform for future growth, which I'll take you through today. Look, starting with the disclaimers, all on the ASX. Look, for those that are new to the Bellevue story, I'll give you the quick overview is that, we're a new mine. We've been built over the last few years up in the Northern Goldfields. It's about a four-hour drive straight up the Goldfields Highway to get to site. We've got about a 3 million ounce resource, over 1 million ounces of reserve. We have spent the last few years building the mine.
Brand new infrastructure, getting to the core operating areas and really setting up our platform now for steady production and a trampoline for growth coming forward. We are in the prolific Agnew-Wiluna greenstone belt, so lots of 5 million- 10 million ounce systems around us. We've mined and defined about 4 million ounces at Bellevue, and we think there's plenty more to come. Look, I guess the core message that we want to deliver today is about delivery of a high-quality project, how de-risked it is right now compared to where it has been at any stage in the past few years at Bellevue. Then the potential for unlocking growth and increasing shareholder returns in future years.
Putting all those three things together, you can really see that the operational delivery that we have worked hard and put our blood, sweat, and tears into over the last few years to deliver to the market has created this really de-risked platform. Created financial strength in the company, and is really going to deliver some strong shareholder returns in the next couple of years. So talk a little bit about the last year's production and where we're going for this year. FY 2026 was a real year of finishing that building of the foundation of the mine. We set a guidance at the start of the year. Midpoint was 140,000 oz. We delivered above that guidance. We spent less money total than we had budgeted to spend over the year. Gladly through that, we delivered some pretty steady operational results.
If you have a look at our mining volumes, our processing volumes, they were quite steady through the year at about 1,000 tons a month or 300,000 tons a quarter. The real difference in the year actually that made it a year of two halves is that we really delivered the grade in the second half of the year. We have a 4.7 g/ton reserve grade, and we were able to deliver two quarters of 4.7 g/ton, then 4.6 g/ton . The asset's just getting started and just in the core mining areas. We think we can continue that over the next 12 months. When you look on the right-hand side at the FY 2027 guidance, midpoint of 160 is just continuing at that run rate for the year. All in sustaining costs is a pretty steady cost base.
I want to talk a bit about CapEx at Bellevue because it is a well-established platform. We are spending AUD 90 million- AUD 100 million of non-sustaining capital this year. But in the first year, we've got about AUD 30 million on a paste plant. We've got about AUD 10 million on a camp expansion, which is going to be for the paste crew plus all the exploration crew to set up for growth. There's about AUD 10 million on all the fixed infrastructure, pumps, jumbo boxes, fans, all that for the contract change-out in Q1. If you normalize for that, our growth CapEx is down to AUD 40 million- AUD 50 million for the year, which for an operating mine of the scale that we have, I'd argue that it's probably the lowest in the sector.
As I said, there's a couple of key projects coming up that we're delivering over the next six months, but once that's done, it's quite steady state and quite good and certainly more de-risked than it has been. Look, I'll give you a bit of an overview, I guess, of where the project is and where it all sits. We essentially have three mining lodes. Sorry, color-wise. I'll do it that way. We have Tribune, Bellevue, and Deacon, that are sort of north-south trending lodes sitting there. Just under these lines that you see here, I'll go to this next slide. You can see about 3 million ounces of defined resource that we have sitting there.
That 3 million ounces of resource has been pretty steady over the past couple of years, just because we have been putting all of our drilling intensity and drilling focus on doing grade control and de-risking that mine ramp-up. We haven't spent a lot of time drilling outside of that resource, just simply because we have a long mine life, but that's certainly the opportunity now that we have production fronts set up underground. Look, this is a key part of when you have a look at where we're mining, and you look at this next year and what you see on here is five separate mining areas. It's quite a large-scale mining operation when you look underground. We have Marceline, Deacon North, Deacon Main, Viago, and Tribune as our five core mining areas that we've worked really hard to set up.
All the different sets of infrastructure, everything ready to go. Look, Bellevue is not a hugely technically complex mine. It is just top-down, meat and potatoes, W.A. underground mining, sub-level open stoping. But it is quite logistically complex because, five working areas means five sets of infrastructure. It takes a while to set up. But now that we have got it all up, we have got all the infrastructure set up, it is just en echelon mining for the next few years. I will skip down to what the next couple of years looks like. You can see three years of mining on that slide right there, and it is all just concentrated in those five main mining areas. So, just en echelon mining , just rinse and repeat, and this sets the baseline for what we can grow off coming forward.
We have got about 10 years worth of mine life out to the mid-2030s that you can see on that page, and that does not include any of the exploration upside that we see, which I will show you in a couple of slides. Look, the key point of what I want to talk about here is just, for an underground mine in Western Australia, typically you will have a two to five- year mine life that you keep extending and maintaining, going forward. We have always had the benefit of having a really long mine life and a really high-quality operation. What we have needed to focus on is just getting it set up and having those five key mining areas all up and running at the same time, which we do right now. The last one of those that we needed to bring online was called Deacon North.
For those that have followed us in the last 12 months, we are in a position now where, Deacon North is in production. It is good thickness. It is the grade that we expect it to be, if anything, with a little bit of upside. We are just at the top of the ore body now, and that is going to be a key contributor of high grade going forward. You see some of the drill hits that are in there. Nice widths, nice thickness. It is a very sort of dependable, vertically dipping ore body that will be nice mining. The question that we have been getting asked a lot this week is about the contract to changeover from Develop to Barminco. I guess the two comments I want to make on it is, look, first of all, thanks to the Develop team.
They have been on site for four years helping us build the platform and build the mine. They have done a great job over time, and their performance over the last few months of the contract have been really professional and really strong. Set up big stockpiles and set up a really good platform to kick off with the Barminco team. We are on day five now of the new contract, so I cannot give you a big view on how it goes. But what I can tell you is that, the professionalism, the work that the Barminco team did to do the transition and, I encourage you, for those that are at the conference, to talk to the Barminco crew that are around.
The time and effort that they spent from the very first contract tender through to the end of it to really plan and de-risk the changeover has been first class. We are starting to see the physicals, the meters and tonnes coming out of the mine, which is exciting. It is a long-term relationship. We have got a 4 + 1 contract, so we are expecting them to be there for a long time. They are a great partner to have because they are a big company, lots of fleet, lots of people and they can be a partner with us throughout the next part of growth. What I can say today, though, is that the changeover went as per schedule, and it was all factored into guidance. There has been no change to what our guidance is, and we are really happy with where we are sitting.
From a processing perspective, it is a new plant, in operation for under three years now. What that has allowed us to do is just work out all the kinks of it. The positive thing is that we are averaging about 96% recovery through the plant. So we are one of the highest recovery plants in W.A. I think that is really important because, you can be really confident that if we find the gold, we can mine it well, we can put it through the processing plant, and you are going to recover it and not put it on the tailings dam. Really good, high performing team in the process plant. They keep that thing spinning pretty well, and it is a pretty hungry plant. There is a bit of latent capacity sitting there, which I will talk about later.
Look, all of that delivery sort of moves to the next stage where I talk about the de-risked platform that we have at Bellevue. This is the work that we have done over the last 12 months to enter FY 2027 in a much, much stronger position than we entered the last 12 months in. As I said, we have just delivered two good quarters of 40,000 oz. We are really confident on being able to deliver a year where we just do that rinse and repeat. Because the developed stopes that we have, the decline stopes that we have, the mining areas that we now have are so much higher than what we had going into FY 2026. The performance underground, I talked about the underground performance before, but we finished the year ahead on development meters, ahead on haulage, ahead on plant recovery.
All of this was done with a really well-established, high-performing team. All I say, I always say to people that ask me about Bellevue, and if I ever want to be cheered up, I just go to site and talk to the high-performing team I have there. Because they are delivering strong results, really good culture and fantastic people. It just helps us enter operationally, this next phase of life in a really strong position. Balance sheet wise, it was pretty well- known that we had a financing facility that was taken out in 2021 to build the project. That was some debt and some hedging. Pretty pleasingly, we are in a very strong position when it comes to that. We have got AUD 100 million of debt remaining. We are down to about 68,000 hedges from over 200,000 hedges a couple of years ago.
We delivered 83,000 oz into the hedge book over the last 12 months. That's rapidly reducing and with that higher ounce production allows us to get rid of that quicker and quicker. I'll look at this slide, and this is some of the key points here because the market rewards free cash flow and the market rewards putting cash in the bank. We have been using our free cash flow to reduce liabilities over time. That's really where we spent the last 12 months.
What you can see is we've got an increasing cash position, reducing hedge book, and I'm encouraged those that are model-minded to model out what the next 12 months looks like because we'll be in a position in this next 12 months where we'll be hedge-free, unencumbered, delivering all of our ounces into the spot market, deliver that free cash flow inflection point. When you look at the power of the asset, we use this underlying free cash flow number. This is how much cash that we would have generated in the last two quarters, had we not had that liability sitting there. We'll be at a similar run rate going forward. You can think about what the free cash flow generation is of the company and see that we'll be in a really strong position, probably at the end of this calendar year.
Now that we have strong balance sheet, we've got steady operations. The next phase is to start looking at what's next and where the growth is going to come from. I'll talk a little bit about this exploration. Remember, I'm a mining engineer, not a geologist, so I'll just draw some pretty lines on here. We have these three good lodes, Tribune, Bellevue, and Deacon, which come down here. Those lodes are all open, particularly to the south. They're shallow, plunging, southerly lodes. So they're our main game on site and where those 3 million ounces sit. We did kick off exploration about 12 months ago, or just under, looking at some additional stuff. We put in a surface drilling program up in the northeast of the project up here.
This is looking for parallel lodes and things in an area where there's no resource, so pure exploration. In our first program, in the first couple of holes, we hit this hole that you see here. To get a 3.5 m hole at 18 g/tonne , importantly, with the rocks looking exactly like the other lodes in Bellevue in your first drill program, certainly put a pep in the step of the exploration team. The view is, for us, that we spent so much time grade control drilling, de-risking the ore body. We haven't spent a lot of time drilling outside of it. There's probably not a bad dollar that we can spend on exploration at Bellevue in the next couple of years.
When you look at those different lines of lodes, this is the Bellevue line of lode and where we are mining. The core focus of our mining at the moment is down here in the Viago area. This Southern Belle and this southern area, you could have a whole bunch of production fronts come on board there. We have the blue plates that you see here is downhole EM plates. Bellevue being a very high sulfide ore body, it lights up when you shoot downhole EM. It is a vector that we use and will continue to use. We are actually going to do a downhole EM program on that northeastern stuff soon. Deacon, which is where Marceline, Deacon North, so Marceline up here, Deacon North here, Deacon Main along here.
There is all this area to the south that is completely untested, have downhole EM plates in essentially what is our best ore body on site that we can look to do. Can we bring these on early and increase our production? Maybe. It is going to be subject to drilling it out soon. Tribune is one that we are very excited about because the Tribune lode starts at surface. This is a brand new mine that we started a couple of years ago. This Tribune mining area that we are looking at at the moment there is a good little productive mine. Being close to surface, the ground conditions are a bit better. The mining is a bit easier. We have done our first sort of extensional exploration program down to the south to really test out that southerly plunge theory and defining this Tribune south area.
You can see hits there like 3.5 m at 45 g/tonne . Very good-looking rocks and if we can hit a zone of Tribune that looks like Bellevue or Deacon, there is potential for a lot of ounces to come out of there. Importantly, with this decline in the background that you see, multiple work areas that we could bring online as we go forward. As I said, this is all defined by downhole EM. We have got this great bit of infrastructure that we are going to be building over the next couple of years, which is this Southern Belle decline that you see on here. Those lines of lodes, Tribune, Bellevue, and Deacon all exist down here.
We can open up multiple kilometers of strike in an ore system that has defined 4 million ounces and has a lot to come just by building that infrastructure over the next year and just by getting the drill rigs in there. Very exciting for us. Now that we have the balance sheet for it, we have the platforms for it, we can do it. Look, I guess that brings me to, I guess, one of the key points is that when you deliver a project, when you have it de-risked and when you have a good balance sheet, you can start to think about what growth looks like. It is not that we have ever not aspired to have higher production or we did not have the drive to get there.
It is that we're just getting the base set so that we could create that platform to jump off in the future. It really is a very deliberate and very disciplined way that we want to look at it. We're not here to put out any big targets of production, but just to say that we're in a position where, I guess first prize is to fill the mill and fill the existing infrastructure. We go from that sort of 1.2 million tons that we're processing now, get the contractor embedded, start to push them and try and fill up that extra 10% to get to 1.35 million tons. Then start to look at what the expansion opportunities are.
That's going to be a real, sort of process between the exploration team drilling, finding, defining those extra areas, the mining team, getting out to them, and then the processing team looking at where the bottlenecks are in the plant and where the next little infrastructure projects are to get up to those higher rates. This is something that we've been thinking about for a long time. We've really just been sticking to our knitting in terms of delivering the project that we wanted it to be. Now we can start lifting our eyes up and doing it. But, with the balance sheet we have, the platform that we have, we think it's something that's going to be really exciting and we're going to push over the next 12 months.
Look, one thing I guess that not a lot of companies are talking about at Diggers as it was the big exciting thing a few years ago, has been the sustainability piece. Building a modern project and starting it a few years ago, sustainability was a really core focus of us as we built Bellevue. We're the highest renewable energy penetration mine in Australia. We're the first net zero gold mine worldwide. We've done all these things just as part of our core business. But what I want to say is that, I think if anything, the last six months have shown that sustainability is not just about feel good things in a sustainability report, it's actually better for business. The stuff that we've put in place with the high renewable energy means low diesel use. We are the lowest diesel user in the gold sector.
We have the lowest cost base related to hydrocarbons out of anyone. As the war in the Middle East and things kick off, people start looking at us and going, "Oh, actually, that was a good idea to put in all of that." I guess the other things that it does for you as a business is get you really good interest from stakeholders and it's a really big push from our employees as well. They really enjoy the sustainability piece and that's one of the reasons they tell us that they work at Bellevue. Look, we also have some really good interest from suppliers. We're starting to sell to some jewelry companies, and we're starting to see some really strong interest in the green gold product that we're producing as well. Better watch this space for some exciting things in the future on that front.
That is the Bellevue story for this year. We think it is a great platform. We have always talked about development. We have always talked about ramp up. Now we are talking about a really steady operation. We are talking about a really strong balance sheet that will continue to get better in the next 12 months. We are finally talking about growth at the asset and beyond. Thank you very much.