St Barbara Ltd has started a corrective program of work aimed at addressing poor mining performance and delays in ramping up the new processing circuit at the Simberi Gold Project on Simberi Island. Only minimal additional capital is required.
The program was designed as part of a review of Simberi operations undertaken by the company’s managing director and CEO Tim Lehany and recently appointed Simberi general manager Tim Richards
The company advised in February that performance at Simberi in the March quarter had been hampered by poor mining performance and delays in ramping up the new processing circuit. The technical issues at Simberi are well understood and a corrective program of work is under way.
Additional low-hour used haul trucks are being procured to lift fleet reliability. The first three trucks arrived at the mine last week, with approval to source a further nine for a total investment of Aus$2 million. A number of rebuilds of key mining equipment are also scheduled.
The recently completed processing plant expansion, designed to lift annual ore throughput from 2 million to 3.5 million tonnes, requires significant debottlenecking and optimization work to achieve nameplate performance. A scope of work has been clearly defined and a punch list of rectification work is being closely managed.
The focus areas are: stockpile reclaim apron feeder; SAG mill trash screen; SAG mill cyclone cluster; and adsorption circuit inter-tank screens.
Gold production for the March 2014 quarter will be modest at around 11,000 ounces, with production for the 2014 financial year estimated to be between 45,000 and 50,000 ounces. Simberi is now expected to be cash positive by December 2014. An annualized production rate of 90,000 to 100,000 ounces is anticipated to be achieved by March 2015. Unit cash operating costs for FY14 are expected to be between Aus$1850 and Aus$1950 per ounce.
Tim Lehany says, “The delay at Simberi is very disappointing, but the ramp up to 3.5 million tonnes will be achieved. The substantial capital spend is behind us at Simberi and, once this rectification work is completed, I am confident that Simberi will be a valuable long-term asset.”
Meantime, the strategic review of Gold Ridge in the Solomon Islands is continuing with the key objective of containing the cash investment required from St Barbara. A number of strategic options continue to be assessed.
A key focus to improving the viability of Gold Ridge operations is to lift the metallurgical recovery of gold from refractory ore. Metallurgical test work continues and is due to be completed by June 2014. This work will better define refractory ore processing solutions and costs.
Constructive discussions with the Solomon Islands Government in relation to potential areas for government support are continuing.