St Barbara buys into explorer

SIMBERI gold mine owner St Barbara has paid $A25.3 million cash for a 19.8% stake in Australian exploration company Kin Mining.
St Barbara buys into explorer St Barbara buys into explorer St Barbara buys into explorer St Barbara buys into explorer St Barbara buys into explorer

The Cardinia gold project in Western Australia

The acquisition of 158.1 million shares was made this week at an average price of 16c per share, a premium to Kin's closing price of 14c yesterday. Kin closed at just 11.5c on Tuesday.
St Barbara has been working on a Leonora province plan centred around its 1.4 million tonne per annum Gwalia mill in Western Australia.
Kin's Cardinia project has a resource of 30 million tonnes grading 1.28 grams per tonnes for 1.23 million ounces and is about 35km from the Gwalia mill.
St Barbara has been relying on about 200,000t per annum of third-party ore to fill the mill.
The company has recently lifted Leonora gold resources by 28% to 6.4Moz and has launched a prefeasibility study on two satellite deposits, as well as the potential expansion of the mill to 1.7Mtpa, or even a new 2-4Mtpa plant.
Late last year, the company outlined a two-stage plan to grow production sustainably at Gwalia.
The first uplift will see Gwalia get back to annual production of 210,000-230,000oz per annum by financial year 2023 at all-in sustaining costs of $1100-1200 an ounce.
Uplift two is aimed at getting production back to 215,000-240,000ozpa by financial year 2025 via production options in the Leonora province, including Gwalia Shallows, historical pits and stockpiles and replace toll milling with St Barbara's own ore.
FY21 guidance for Gwalia was recently downgraded to 150,000-160,000oz at AISC of $1815-1950/oz from 175,000oz at AISC of $1590-1630/oz due to workforce availability as a result of a change of contractor. Gwalia's original FY21 guidance was 175,000-190,000oz at AISC of $1435-1560/oz.
"St Barbara is aiming to supply ore to its Gwalia mill without relying on toll treating arrangements by financial year 2023," Argonaut Securities analyst Royce Haese said.
"Other regional players including Genesis Minerals and Saturn Metals will be looking on with interest."
Genesis is finalising a feasibility study on its 1.6Moz Ulysses deposit this quarter, while Saturn's Apollo Hill project has resources of 944,000oz.
Shares in Kin jumped by 7.1% to 15c, a six-month high, valuing the company at just below $115 million.
St Barbara shares were at a two-month high of $1.925, up 4% and valuing the company at $1.35 billion.