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Pacific operations a downer for St Barbara

Pacific operations a downer for St Barbara

Photo by Bloomberg

27th August 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Gold miner St Barbara has reported a 161% decline in its net profit for the 2014 financial year, with the miner reporting a net loss of A$501-million on the back of a A$411-million impairment charge.

The net loss during the 2014 financial year compared with a net loss of A$191.8-million in the previous financial year.

The impairment charges reflected the indefinite suspension of mining operations at the Gold Ridge mine, in the Solomon Islands, as well as the slower-than-expected improvement in operational performances and a write-down of mineral rights at the Simberi project, in Papua New Guinea.

Gold production during the full year increased by 3%, to 374 402 oz, despite the suspension of operations at the Gold Ridge mine in early April.

During the year under review, St Barbara sold 284 067 oz of gold from its Australian operations, compared with the 239 667 oz sold in the previous financial year, while the Pacific operations sold 92 093 oz of gold.

Group revenue for the full year increased from A$511.8-million in 2013, to A$533.8-million in 2014, despite the lower average spot price for gold adversely impacting on Australian revenue.

All-in sustaining costs for the full year reached A$1 338/oz, compared with the A$1 070/oz reported in 2013.

The underlying net loss after tax, before the significant items, was recorded at A$94-million, compared with a profit of A$29-million reported in 2013, while earnings before interest, taxes, depreciation and amortisation reached A$73-million, compared with the A$141-million in the previous financial year.

“The extent of the loss is disappointing and the impairment write-downs of our Pacific operations is large,” said St Barbara MD and CEO Bob Vassie.

“The impairments comprise a total write-down of Gold Ridge operations, where we will not be continuing to operate, and a significant write-down at Simberi, where we will vigorously pursue a turnaround of that operation.”

Vassie said that the Western Australian operations had performed well, and would continue with this trend into the future.

“This, combined with the focus on turning Simberi into a cash generating operation, and a programme to significantly reduce costs across the company, will be the platform for St Barbara moving forward,” Vassie added.

The gold miner earlier this week confirmed that it was discussing the divestment of its Gold Ridge operation with the Solomon Island government.

Edited by Creamer Media Reporter

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