St Barbara ready to restart in PNG

St Barbara, the ASX-listed miner with projects in Western Australia and Papua New Guinea, says it is on schedule to restart its troubled Simberi operations.

IT-assisted work at the St Barbara Gwalia gold mine in Western Australia.

St Barbara, the ASX-listed miner with projects in Western Australia and Papua New Guinea, says it is on schedule to restart its troubled Simberi operations north of Port Moresby.

St Barbara, which operates the flagship Gwalia mine in WA – the deepest underground gold mine in the country – has had repeated problems with Simberi after starting operations in 2008.

A fatal accident in May and a damaged tailings pipeline forced the mine to shut.

The cause of the pipeline failure is not known.

The company recorded sales revenues of $204.75m from the Simberi project in the last financial year.

On Tuesday, St Barbara said it had “completed on schedule the laying of the deep sea tailings placement pipeline over the past weekend”.

“The commissioning of the process plant at Simberi operations was conducted in preparation for the on-schedule commencement of full processing over the coming week,” the company told the ASX.

“Simberi remains on track to meet its (financial year 2022) guidance with production of between 60,000 and 70,000 ounces, with the first gold pour expected this month.”

But RBC Markets equities analyst Alexander Barkley said operational issues remained a concern for St Barbara.

“Any Simberi downgrades would contribute to this,” Mr Barkley told clients.

“At Simberi we expect 50k oz in (the 2022 financial year), missing unchanged guidance of 60-70k oz. We assumed no production in the second quarter.”

Despite the difficulties at the PNG operations, St Barbara has continued to expand, in late December announcing it would acquire Bardoc Gold for $157m.

Bardoc operates a project in Leonora, WA, with St Barbara expected to expand the plant for $30m.

“The ability to mill refractory ore at Bardoc is perhaps a reason St Barbara was able to beat other suitors,” Citi analyst Kate McCutcheon told clients on December 20.

“This would make Leonora the only mill within a 200km radius able to treat refractory ore, boding well for toll treatment or future deals,” she wrote.

“We think there’s upside to add an additional processing train too, given the tonnes available for feed.”

Shares in St Barbara fell 3.75 per cent on Tuesday to close at $1.41.

In its ASX statement on Tuesday, the company said: “While the mill has been shut down, Simberi has established a 130kt oxide ore stockpile on ROM pads and implemented multiple processing plant upgrades.

“These upgrades include the replacement of cyanide mixing and storage tanks, refurbishment of the rope conveyor, installation of downcomers in the carbon in leach circuit to promote slurry mixing, a new lime circuit and several process control enhancements to CIL and thickener circuits.”