ST BARBARA has commissioned the 3.5 million tonne/annum oxide expansion circuit at Simberi Gold Project which it says is a vital step towards establishing a profitable and sustainable operation. The tailings thickener and detoxification unit was expected to be commissioned by the end of January.

Processing facilities have been expanded at St Barbara’s Simberi Gold Project on Simberi Island.
Processing facilities have been expanded at St Barbara’s Simberi Gold Project on Simberi Island.

With processing volume and gold production expected to lift through the March quarter, at current gold prices the Simberi project is expected to be cash flow positive from April 2014.

Simberi is operating within existing permits allowing for annual production of 2 million tonnes. The PNG Department of Environment and Conservation has, however granted a variation to licence conditions enabling processing volume to be increased to 3.5 million tonnes, and an application to vary Mining Lease conditions is with the Mineral Resources Authority.

Gold production of 8908 ounces for December quarter was significantly lower than expected as a result of delays in commissioning the new processing plant and poor reliability of the old grinding circuit. Achieving economies of scale through operating at the higher volume is critical to the viability of the Simberi operations at current prices.

Mining efficiency did improve in the December quarter benefitting from improved maintenance procedures. Total material moved increased by 43% to 1.24 million tonnes. The procurement of additional trucks will increase and then sustain mining rates to feed the expanded processing facility. Capital is allocated to commence rebuilding a number of haul trucks.

There was a significant increase in cash operating costs due mainly to the lower production volume while the new processing plant was commissioned. Low grade stockpiles including scats have been blended with ore as part of the commissioning process, resulting in lower overall grade, lower recoveries and higher processing costs. Higher grade ore sources are expected to be accessed in the next two quarters.

St Barbara’s exploration results continue to be highly encouraging with down hole intersections including 17 metres from 1 metre @ 1.9 grams/tonne gold, 26 metres from 2 metres @ 1.1 grams/tonne and 17 metres from 21 metres @ 2.3 grams/tonne recorded at Pigicow prospect at Simberi.

Simberi Island exploration is focused on identifying additional near-mine oxide resources as potential ore feed sources to extend mine life. Diamond drilling and trenching is focused on delineating higher grade gold oxide targets in the Botlu-Pigicow-Bekou area, 2.5km southwest of the Sorowar oxide open pit mine.

Drilling for higher grade oxide and epithermal vein deposits continues on the Nepewo and Mt Siro targets, in the Mt Tiro area on Tatau Island, as well as continuing trench sampling program on shallow oxide targets. Best result has been 7 metres from 68 metres @ 54.2 grams/tonne at Nepewo.

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