Photo by: Reuters
PERTH (miningweekly.com) – Gold miner St Barbara has warned of impairment charges at its gold assets during the year ended June.
The miner has warned shareholders that it was expecting a full asset write-down of A$179-million at its Gold Ridge mine, on the Solomon Islands, given the suspension of the operations and the uncertainty about St Barbara’s ability to resume operations.
Mining at Gold Ridge was suspended in early April following torrential rains and subsequent flooding. A force majeure was declared in April, and remains in place. The company has reduced its workforce numbers at Gold Ridge, saying it would not resume full-scale production for “some time”.
At its Simberi operations, in Papua New Guinea, St Barbara was expected to report an impairment of between A$100-million and A$200-million for the full year, based on the project’s production, operating costs and capital expenditure.
During the three months to June, St Barbara reported a consolidated gold production of 91 565 oz of gold, compared with the 92 522 oz produced in the previous quarter, as its Leonora operations, in Western Australia, exceeded expectations.
The Leonora operations saw a 19% increase in production during the quarter, with the mines delivering 78 810 oz of gold, of which 59 389 oz was sourced from the Gwalia operation and 19 421 oz from the King of the Hills mine.
Looking ahead, St Barbara expected the Gwalia operation to deliver between 180 000 oz and 200 000 oz for the full year, while King of the Hills would deliver between 60 000 oz and 70 000 oz.
The Simberi project also reported an 18% increase in production compared with the previous quarter, with the mine producing 12 755 oz, as ore and waste movement increased by 148% in the quarter with the addition of low engine hour haul trucks and improved maintenance strategies.
However, St Barbara noted that while the mining capability at Simberi had improved, and volumes had increased, the mine continued to underperform. Separate to the debottlenecking required of the processing plant expansion, existing plant infrastructure was also now revealing a maintenance deficit.
An engineering and maintenance programme on the processing plant, to diagnose the issues and implement a preventative asset management approach, was now under way.