Pacific operations drag down St Barbara performance

ST BARBARA has posted a drop in gold production for the December quarter, with problems at its Pacific operations dragging down a good performance in Australia.
Pacific operations drag down St Barbara performance Pacific operations drag down St Barbara performance Pacific operations drag down St Barbara performance Pacific operations drag down St Barbara performance Pacific operations drag down St Barbara performance

The company produced 93,577 ounces of gold for the quarter, down from the 96,739oz posted in the previous quarter.

Year-to-date production was 190,316oz.

The company said its Australian operations continued to perform well, producing 69,757oz, slightly below the 70,479oz produced in the September quarter.

The Gwalia and King of the Hills operations, near Leonora, produced 52,552oz and 17,205oz, respectively.

Total operating costs came in at $A1,189/oz, slightly higher than the $1102 for the previous quarter.

The company said guidance for the rest of the financial year had been maintained, and it was examining a number of options to reduce expenditure.

Cost cutting moves included the halt of exploration in Australia, and shift toward near mine targets at the pacific operations.

Exploration spending in the second half will be reduced by $6 million and the company said its corporate cost structure was also under review.

At the pacific operations, St Barbara said the December quarter had seen it complete capital works at the Gold Ridge mine in the Solomon Islands and the Simberi operation in Papua New Guinea.

The works were designed to increase processing plant performance and throughput volumes.

St Barbara said Simberi gold production was significantly lower at 8908oz, down from 11,741oz in the previous quarter.

The company said the losses were due to delays in commissioning at the new processing plant and poor reliability of the old grinding circuit.

"With processing volume and gold production expected to lift through the March quarter, at current gold prices Simberi is expected to be cash flow positive from April 2014," it said.

A 3.5-million-tonne-per-annum oxide expansion circuit was commissioned at Simberi in December, and a tailings thickener and detoxification unit was expected to be commissioned this month.

The PNG Department of Environment and Conservation has also granted a change in the operation's licence to enable processing volume to expand to 3.5Mtpa.

An application to vary mining lease conditions to 3.5Mtpa is also pending, and is necessary to achieve the increased volumes.

Elsewhere, a significant plant upgrade at Gold Ridge was completed in November, and the company said the upgrade saw improvements at the operation in December.

Production at Gold Ridge for the quarter was 14,912oz, up from 14,519 in the September quarter.

St Barbara shares were last trading at 34c.

Meanwhile, China's weaker-than-expected manufacturing data weighed on stocks overnight but was good for gold, pushing the precious metal to a more than two-month high.

The HSBC flash China manufacturing purchasing managers' index fell to 49.6 in January, a six-month low, down from 50.5 in December.

On Wall Street, the Dow Jones Industrial Average dropped nearly 1.1%, while the S&P 500 lost 0.9%, though all major global indices fell into the red.

Gold futures jumped 2%, or $US24.90, to $1263.50 per ounce, its highest price since November.

Singapore Tapis crude closed at $115.72 a barrel overnight, compared to $113.57 at the end of last week.

London Metal Exchange cash copper closed at $7230 a tonne overnight, compared to the price of $7373 at the end of last week.

By the same comparison, LME spot nickel's overnight price was $14,620/t, down from last week's price of $14,645.


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