PERTH (miningweekly.com) – Gold miner St Barbara has approved a $13-million initial investment into the sulphide project at its Simberi operation, in Papua New Guinea (PNG), following a positive feasibility study (FS).

The ASX-listed miner said that a final investment decision on the sulphide operation is targeted for March next year.

The sulphide FS has estimated that the project would require an initial capital investment of $170-million, along with expansion capital, to support a life-of-mine average sulphide gold production of 160 000 oz/y and a mine life of around 11 years.

The FS estimated that first sulphide ore would be mined within two years from environmental permitting and Mineral Resource Authority amendment approval, with the sulphide operation expected to have a pay-back period of three years.

The FS estimated a post tax net present value of $220-million for the sulphide operation, and an internal rate of return of around 40%.

“The future of the Simberi sulphide project has been endorsed by the board, with the commitment to pre-investment work that will take place as we update mineral reserves, complete reserve definition with drilling and finalise all pre-investment activities,” said St Barbara MD and CEO Craig Jetson.

“This vote of confidence in the Simberi operations comes as we work closely with the PNG government, agencies and community as part of our ongoing consultation and engagement. The work is continuing despite the current challenges that Covid-19 presents in PNG and is a testament to the relationship we hold in PNG and the vision we have for the Simberi operations.”

Jetson said that the key changes to a prefeasibility study on the sulphide operation undertaken in 2020 included an increase in the nameplate capacity of the sulphide plant from 2.7-million tonnes a year to 3-million tonnes a year, with an option to expand to 3.7-million tonnes a year.

“Extensive marketing studies have also allowed us to establish net smelter returns, while we’ve negotiated draft contracts giving us confidence in the concentrate market. A new wharf will be constructed to enable 11 000 t concentrate shipments to Asian markets, which will result in significant cost savings.

“The fundamentals of this project are robust, with an anticipated mine life of around 11 years and payback period of three years,” said Jetson.