Shutdown dents St Barbara production

ST BARBARA has posted lower production, lower cash levels and higher costs for the September quarter, citing a maintenance shutdown and expenses related to its Pacific operations.
Shutdown dents St Barbara production Shutdown dents St Barbara production Shutdown dents St Barbara production Shutdown dents St Barbara production Shutdown dents St Barbara production

The company's cash balance dropped 30.9% over the three-month period to $A56 million due to funding requirements for the growing Simberi mine in Papua New Guinea and the shuttered Gold Ridge operation in the Solomon Islands, as well as costs related to a plant shutdown at Western Australia's Leonora complex.

Group production was down 24.8% over the quarter at 68,823 ounces of gold, with Leonora output losing 28.7% to 56,184oz and its flagship Gwalia mine producing 23.6% less gold at 45,391oz.

St Barbara tied the quarterly slump to a two-week shutdown at Leonora last month, primarily to replace a mill motor plinth.

Gwalia milled 13.4% less ore over the quarter at a 11.4% lower grade of 7.8 grams per tonne gold.

However, gold production from the stockpiled ore has been exceeding plan since the shutdown, indicating that the production loss will be recovered by the end of the December quarter.

Group operating costs were up 23.7% during the quarter to $1048/oz, while all-in sustaining costs climbed 16.6% to $1344/oz with consistent average realised gold price of $1388/oz.

Gold was last trading at about $1419/oz.

At Simberi, production was relatively steady at12,639oz gold.

The company emphasised operational improvements over the course of the quarter which led to 5036oz of production in September, the operation's highest monthly output since April 2013.

Ore milled at the mine increased 15.8% over the quarter albeit at an 18.2% lower grade of 0.9gpt gold.

Total ore mined decreased 19% due to fleet availability problems, subsequently addressed by the company through recruitment and equipment purchasing efforts.

Gold Ridge remained on care and maintenance after sustaining severe flood damage earlier this year and recurring security incidents, including vandalism, theft, and aggression from local people against employees.

During the quarter the mine was temporarily overrun by locals and the tailings storage facility was badly damaged as the workforce was reduced from 700 employees to 34 nationals and five expatriates.

The Solomon Islands government has recently appointed advisors to assist in negotiations for the transfer of the property from St Barbara to the government.

Looking forward, the company has called for Leonora to produce 240,000-270,000oz of gold over fiscal 2015 while Simberi ramps up to a run rate of 100,000oz per annum by the June quarter next year, when it is expected to be cash flow positive.


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