AAP | The Australian
Troubled gold miner St Barbara has risked collapse but says its fortunes are improving after lifting production in the December quarter.
St Barbara was already suffering from a range of operational and financial problems before the gold price plunged in 2013.
The miner’s high cost assets in Papua New Guinea and Solomon Islands have drained cash generated from its West Australian mines, putting the group at real risk of default, according to ratings agency Moody’s.
The now suspended Solomon Islands project has been a major problem, due to a dispute with the government and acts of vandalism at the mine by locals.
St Barbara appointed former Rio Tinto executive Bob Vassie as chief executive six months to rescue the business.
In the three months to December, the company achieved record production in WA, and the highest monthly and quarterly production from its PNG mine since acquiring it in 2012.
December was also the first month of net positive cash flow at the PNG mine under St Barbara’s control, the company said.
St Barbara’s shares were up half a cent to 14.5 cents at 2.40pm (AEDT).
St Barbara produced 80,622 ounces of gold in WA in the December quarter, and 17,295 ounces in PNG.
The company’s cash balance of $69.6 million at the end of December was up from $56.4 million in the previous quarter.
It suffered a $501m loss in the 2013/14 financial year.