Jump to content

SBM - ST BARBARA LIMITED


ShareCafe

Recommended Posts

  • 11 months later...
  • Replies 2.3k
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

St Barbara (ASX: SBM) might have seen a small improvement in 4th quarter gold production but the full year performance fell short of the 2020-21 level while costs nudged higher.

The company is in the sights of a consolidation going on in the WA gold industry that has seen Genesis Minerals stalking and winning struggling Dacian Gold.

Once that deal is bedded down, the new company is expected to chat to St Barbara about a merger of their operations in the Leonora region on WA’s northern goldfields.

The St Barbara quarterly report confirms that like so many of its peers in the resource sector, it has had to battle cost inflation on key inputs as well as Covid impacts on labour availability as well as associated travel restrictions.

On top of that the company is cutting costs, staff, and looking at perhaps getting rid of the expansion planned for its Simberi mine in PNG.

At the same time its operations in Eastern Canada (in Nova Scotia) are facing pressures from local regulators, though the company had good news on that topic in this week’s statement.

St Barbara said group gold production for the June quarter was 86,403 ounces up 40% quarter on quarter and 5% above the 82,098 ounces mined in the final quarter of 2020-21.

Full year production was 280,746 ounces which was sharply lower than the 327,662 ounces reported for 2020-21. But that shortfall was mostly due to wet weather in Canada and the restrictions and labour shortages caused by Covid.

Group gold production for the June quarter was up 40%, with all operations delivering significant quarter on quarter production improvement. Leonora’s production increased due to improved grade after regaining access to higher grade stopes.

Production at Simberi improved as it recovered from the COVID-19 outbreak in the third quarter. Atlantic recovered from the difficult weather conditions of the March quarter and accessed higher grade mining zones after the completion of in-pit waste relocation work.

Group All In Sustaining Cost (AISC) for the June quarter was $A2,007 an ounce and full year $A1,848 an ounce which was just under guidance of $A1,710 to $A1,860 an ounce.

Cash in bank increased 25% quarter on quarter to $99 million at June 30, but that was down from $133 million at the end of June, 2021.

On the problems in eastern Canada, St Barbara said that senior executive relationships were established with the Nova Scotian Government “which has improved permitting pathways for (the) Atlantic Operations.”

The tussle is over the handling of mine tailings, their disposal and storage in a dam that needs expanding otherwise the mine will be forced to close and with it the mine and expansion plans.

That had seen two permits issued during quarter and multiple permits will be able to be processed concurrently. That should help clear the way for the Atlantic mining operations to continue.

The company also released an inaugural ore resource for its Old South Gwalia prospect in WA of 1.9 million tonnes at 3.7 grams to the tonne of gold for a total resource of 200,000 ounces.

And the corporate cost cutting has identified savings of $5 million identified with hopes of doubling that in first year by consolidating offices into Perth in 2023. A further $10 million in cost savings will be sought in 2024.

Barbara CEO Craig Jetson said the company has finished the year strongly, achieving both our production and cost guidance at a site and group level for FY22. Against the headwinds of cost inflation and COVID-19 impacts on our workforce availability as well as associated travel restrictions this is a rewarding result.

Today we announce a further increase to our extensive mineral resource base in the Leonora province with the release of our inaugural Mineral Resource for Old South Gwalia. This initial Mineral Resource is the first instalment from Old South Gwalia from between 600 metres below surface down to 1000 metres below surface. Further resource extension drilling is planned for the coming year to grow a productive new mining front at Gwalia.

Management focus on Gwalia and the Leonora province plan is generating early rewards with expansion of Mineral Resources and Ore Reserves and our expanded footprint across the region. We continue to execute our Leonora Province Plan.

St Barbara is central to any regional consolidation with the largest Mineral Resource and Ore Reserve base in the Leonora region, a host of near term growth options, growing production from the new Zoroastrian underground mine and a cash generating processing facility which is expected to increase its processing capacity by 50% to 2.1mtpa. Following our acquisition of Bardoc, the assets have been promptly assimilated with Zoroastrian on track for first ore at the start of FY24”

That sounds like the company is waving a flag at Genesis/Dacian and reminding them that they are there to talk to about a possible deal.

On the company’s Atlantic Province projects in Nova Scotia, the company said that with travel restrictions lifted, “we have strengthened our relationships with the Government and First Nations people in Nova Scotia.”

“In collaboration with the Government, a new permitting approach has commenced and has already yielded promising results with two permits already granted.

“These results provide encouragement that outstanding permitting issues can be addressed and the potential of Atlantic can be realised. Furthermore, our decision to place Simberi Operations under strategic review is aligned with our clear focus on leveraging the highest value options for the St Barbara Group.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...