Tag Archives: Allied Gold

Can the Solomon Islands’ Gold Ridge Mine serve as a new model for resource extraction in the South Pacific?

The coastline view near the capital, Honiara. Photo by Paul Hilton/Greenpeace.

Catherine Wilson | Mongabay | 15 November 2017

  • After 17 years of foreign ownership and a checkered environmental history, the Solomon Islands’ Gold Ridge mine is now being led by a local landowner-driven joint venture.
  • The company saw its first major test in April 2016, when rainfall triggered a spillover from the mine’s tailing dam. However, independent tests found the water quality downstream remained safe.
  • Though concerns still remain, the new ownership structure could be a model for mining operations elsewhere in the region.

In April 2016, thousands of villagers living in the vicinity of the Gold Ridge Mine in the southwest Pacific nation of the Solomon Islands braced themselves for a major disaster as torrential rainfall triggered a spillover of thousands of cubic meters of untreated water from the mine’s tailings dam.

The Ministry of Health issued instructions to people to cease using water from the nearby Kwara, Tinahula and Matepono rivers for drinking, washing or fishing, due to possible risk of chemical contamination.

The gold mine is situated on the country’s main island of Guadalcanal, 40 kilometers (25 miles) from the capital, Honiara.

Stanley Holmes Vutiande, who lives in Navola village, located along the Gold Ridge Road leading to the mine and 2 kilometers (1.2 miles) from the dam, remembered when it happened.

“We fled because there was water overflowing from the dam and we thought it might burst, so people just panicked and took off,” he recounted. “There was general information to look for safety, for higher ground, but no specific instructions as to what to do.”

Joe Horokou, the environment and conservation director at the Ministry of Environment, said the incident “was bad because it took us by surprise,” even though the company had been given approval to discharge tailings from the dam. “The approval was given with conditions like before it is discharged the water has to be treated to acceptable standards.”

Despite the dire warning, the expected disaster didn’t materialize. The dam held, and stakeholders, including Gold Ridge Mining and the ministries of environment and health, commissioned numerous independent tests of nearby rivers and streams.

“Based on the findings of those analyses we were able to determine that, even if the water was discharged untreated at the time, it caused no immediate harm to the downstream communities … the water quality was safe within the dam,” Horokou said.

Vutiande also said that, at the time, he noticed nothing of concern in the water quality of the Tinahula River near Navola.

A palm oil plantation in the Solomon Islands. The land used to be grassland and bush. Photo by Lorette Dorreboom/Greenpeace.

The incident was the first major test for the new landowner-led company, Gold Ridge Community Investment, which had taken ownership of the mine only the year before. After 17 years of foreign ownership and a checkered environmental history, the Gold Ridge mine is now being led by a local landowner-driven joint venture that is emerging as a potential new mine management model in the Pacific Islands region.

In 2015, Gold Ridge was sold for 100 million Australian dollars ($73.8 million at the time) to Gold Ridge Community Investment (now Gold Ridge Mining), by its Australian owner, St. Barbara. The company decided to abandon the mine, which contains an estimated 3.18 million ounces of gold, in the wake of extensive damage caused by Cyclone Ita and flooding the previous year.

The mine hasn’t been operational since, but following the signing of an agreement with Australia-based AXF Resources, which will provide the majority of investment, plans are now in place to resume extraction by the end of next year.

Walton Naezon, chairman of the landowner-led Gold Ridge Mining, said he is now keen to both reduce any risk the tailings facility poses to the surrounding environment and communities, and to increase public transparency of the company’s environmental processes. The top priority, he said, is dewatering, or emptying out the dam to ease pressure on its wall and decrease the chance of any further overflows.

Naezon spoke to Mongabay about implementing his vision of an extractive project where local communities are part of the corporate structure. About 3,000 to 5,000 people live in villages surrounding the mine, and traditional landowners own 30 percent of the company. They have already participated in making key decisions, such as the selection of an independent environmental consultant. They also observe operations at the tailings dam and take part in the company’s environmental testing and monitoring of nearby rivers and streams.

Larger than life in a blue Pacific print shirt, Naezon is bullish in his drive and optimism about the enterprise when we meet in a Honiara hotel. But he also comes across as astute, widely informed about the industry and its issues, and attuned to the sensibility and needs of his own people. No doubt this is a product of his previous career in politics, as well as skills and grasp of the cultural context as a traditional leader. He was minister of mining and energy from 1997 to 2001, minister for state government until 2003, and minister for commerce for another two years.

Naezon is visibly relaxed about the attention given the mining industry worldwide by what he refers to as the “greens” movement, commenting that it “makes the developer and company stronger.”

The revived Gold Ridge venture, at this stage, comes across as more than ticking the right boxes in order to be assessed a responsible corporate citizen. There is evidence of an attitudinal shift, a genuine motivation to alter the structure of power, participation and accountability.

The Gold Ridge Mine tailings dam in Guadalcanal Province, Solomon Islands. Photo by Catherine Wilson for Mongabay.

Community Involvement

As I stood in the water treatment plant at the edge of the vast blue expanse of the dam, reflecting the brilliant tropical sun, Gaheris Porowai, the supervisor, readily answered questions. He said that we were looking at 1 million to 2 million cubic meters (264 million to 528 million gallons) of water, with the water level currently 1.5 meters (5 feet) below the spillway. Treated water was being discharged, as permitted, at 500 cubic meters (132,086 gallons) per hour or 12,000 cubic meters (3.17 million gallons) per day, with water testing conducted twice weekly.

This will be done persistently, Naezon said, until the dam is empty.

“There should be no water there. In the next two years, no water, we don’t want to see water there,” Naezon said emphatically, adding that Golder Associates, the company responsible for the dam’s construction has also been reengaged to review its current state and potential future.

Phil Fairweather, Gold Ridge’s general manager, said that he and many other people had been attracted to the venture by the vision of building an enterprise on greater transparency, community inclusion and social and environmental sustainability.

“Any dewatering that is happening at the moment, for example, involves the communities,” Fairweather said. “It actually involves unqualified community people coming and observing the testing, coming and being involved in community awareness prior to any discharge and during.”

Local village chiefs, landowners and students are all invited to visit the tailings dam to learn about the water treatment process and witness its discharge.

“We want to see the mine open, but the health and safety and environmental responsibility is an utmost priority to us,” said Robert Rafaniello, the company’s deputy CEO. “And that is why as we lower the water, we will do more investigations into the stability of the dam, assess it. Does it need any strengthening to future-proof it for any other unknown event? Do we use the tailings dam in its current form, do we look at alternatives?”

Tropical forest, Vella Lavella, Solomon Islands. Forests cover more than three quarters of the country’s land area, but illegal logging remains a serious problem. Photo by Lorette Dorreboom/Greenpeace.

In hindsight, the lack of continuity in the mine’s foreign corporate ownership since the late 1990s — and intermittent periods of closure resulting in inconsistent environmental practices — can be seen as factors in the problems being experienced today.

The start of mining in 1998, by the Australian company Ross Mining, coincided with the stirrings of civil unrest. The mine was forced to close a mere two years later when the violence escalated. While a peace agreement was achieved in 2003, Gold Ridge didn’t reopen until 2010 after acquisition by Allied Gold. The venture changed hands again in 2012, this time to St. Barbara. Then, in April 2014, calamity struck when a cyclone and torrential rain caused massive flooding that damaged mine infrastructure, raising concerns about the stability of the tailings dam and forcing a second shutdown. Losses and damages at the mine amounted to $27.7 million, 26 percent of the total economic impact of the disaster on the country.

Soon after, St. Barbara decided to exit the country, selling the mine and its legal liability to Gold Ridge Community Investment the following year, while the Solomon Islands government declared the site a disaster zone.

A model for the region?

The Solomon Islands is not the only Pacific Island state to experience environmental problems in the mining industry.

Natural and mineral resource extraction has, over decades, generated major revenues in a number of other countries in the region, such as Papua New Guinea and Nauru, while many more are now considering the lucrative potential of deep-sea mineral extraction. But in both island states the extractive industries have been plagued by environmental disasters. Both have failed to achieve environmental sustainability, and the economic windfalls have not led to substantial improvements in human development.

Glaring examples include the Panguna copper mine in Bougainville, Papua New Guinea, where the fallout from the destruction of land and waterways nearly 30 years ago remains unaddressed; as well as the OK Tedi copper and gold mine in the country’s Western Province, where massive discharge of mine waste into local river systems since the mid-1980s decimated fish and animal species and contaminated water sources and farmland. In the tiny state of Nauru, aggressive phosphate extraction has ravaged 80 percent of the country’s landscape.

In the Solomon Islands, the government is looking to mining as the next big revenue earner as it faces the challenges of post-conflict economic recovery and the exhaustion of commercial forestry after decades of unsustainable logging. The country is known to have significant mineral resources, including gold, silver, nickel and lead.

“The Gold Ridge mine reopening is very important for the government and Solomon Islands as it contributes significantly to the economy,” a spokesperson for the Ministry of Mines, Energy and Rural Electrification told Mongabay.

Nevertheless, the economic, social and environmental success of mining ventures over the next generation depends on not repeating the problems of the past.

A 2013 UNDP symposium on managing extractive industries in Pacific Island states highlighted some of the steps needed to overcome the hurdles. These include conducting better consultations with stakeholders and communities, developing a more complex understanding of customary land tenure, improving the transparency of political processes and revenue management, and achieving greater commitment to environmental protection, over and above the basic requirement of developers producing environmental impact assessments.

Expert observers have also expressed concerns about the influence of corruption and limited capacity of the government to manage the demands of regulating and overseeing mining activities.

Logging road in a deforested area in Vangunu Island. Photo by Paul Hilton/Greenpeace.

“Too close an identification of political leaders with resource extraction companies has not served Solomon Islands well,” Graham Baines of the Bergen Pacific Studies Research Group has written (pdf). “The chance to build an economy based on sustainable timber production has been lost. And just as government institutions have been shown to be ineffective in controlling logging abuses, so, too, their role in guiding and controlling mining is weak and compromised.”

Recently the government has tried to address some of these issues with the launch of a new National Minerals Policy (2017-2021). It aims to guide reformed financial practices, industry oversight, and procedures for tailings management, corporate environmental audits, biodiversity management and the mitigation of deforestation and soil erosion.

“With the policy now launched, the ministry is working closely with the World Bank to begin implementing the policy, and this process is already under way, focusing mainly on the regulatory framework,” the Ministry of Mines spokesperson confirmed. This includes reviewing resource and manpower capacity and rolling out public outreach and awareness of the new policy.

Progress in these areas is vital to turning around the suspension of the Solomon Islands by the Extractive Industries Transparency Initiative (EITI), which in March of this year sanctioned the country due to assessed deficiencies in areas including licensing procedures, monitoring and control of production, and revenue distribution.

The revival of the Gold Ridge mine will bear witness to how much progress the government has been able to make in the short term.

In May, the government and company began consultations with landowners about the mine’s proposed reopening next year, seeking to address issues such as royalties and environmental impact.

There is evidence, though, that not everyone is satisfied and local environmental concerns persist.

Vutiande said that in Navola, “the water system was always a long-term concern since the opening [of the mine] by the previous companies. The water issue is an ongoing issue. There were a few times when there were people who found things that have died in the river, such as fish and frogs.”

Despite the company’s stated commitment to transparency, Gold Ridge Mining remains tight-lipped while it considers the range of options for dealing with mine waste. The decision as to whether the dam will continue to be used is still to be made, and the government is still awaiting the environmental management plan.

The contents of these will be the first step in translating the new Gold Ridge vision into reality and establishing, or debunking, its standing as a model for the rest of the region.

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Solomon Islands mine boss paid for children’s schooling

Mining executive Mark Caruso, involved in Solomon Islands allegations. Source: Supplied

Mining executive Mark Caruso, involved in Solomon Islands allegations. Source: Supplied

Ean Higgins | The Australian

THE mining magnate at the centre of an alleged corruption scandal in Solomon Islands has admitted he arranged to pay for the children of an influential Solomons politician to attend a top Brisbane boarding school.

Mark Caruso, executive chairman of Perth-based Mineral Commodities, denied the schooling was paid for in exchange for politician Matthew Wale greasing wheels in government to get a series of permits for a goldmine.

Mr Caruso, who was the chief executive of Allied Gold, which owned the Gold Ridge mine at the time of the alleged corruption, also attacked the company that took over the mine, St Barbara Ltd.

Mr Caruso implied St Barbara had leaked the report on an ­internal investigation it carried out that alleges corruption on Allied Gold’s watch.

He claimed St Barbara was trying to make him a “scapegoat” to divert attention from the failure of the mine, which is to be transferred to the government.

Speaking for the first time about the allegations, which are under investigation by the Australian Federal Police and Solomon Islands authorities, Mr Caruso said:

“Is this the best ­St Barbara can do after they ­destroyed $1.3 billion of shareholder value … be bothered about two children being educated?”

In October, the Solomon Star newspaper ran an extensive story on the alleged corruption outlined in a report commissioned by St Barbara and conducted by a Melbourne law firm.

The report alleges that in 2010, Mr Caruso got to know Mr Wale, an accountant by ­profession and prominent MP, and asked him to help Allied Gold in its dealings with the ­government.

Mr Wale is alleged to have helped arrange for a “letter of comfort” from the Solomons ­Attorney-General confirming the legality of blasting at the mine site; for the Minister for Mines to grant a special prospecting licence; and for immigration officials to lift visa restrictions on Allied Gold expatriate employees.

St Barbara, which took over the Gold Ridge mine after buying out Allied Gold in 2012, launched the investigation after being invoiced for more than $100,000 for the Wale children’s fees to attend Brisbane’s Anglican Church Grammar School.

The report also alleged that $13,500 was transferred directly into Mr Wale’s account for ­“office set-up expenses”.

Mr Caruso did not remember the payment but said the schooling of Mr Wale’s children was done through a selection process as a benevolent gesture, for which Allied Gold received no special favours.

Mr Caruso was scathing of St Barbara’s inability to reopen the mine after massive rains damaged access roads, and squatters moved in to pan for gold and looted plant, equipment and supplies, events that have contributed to the company’s share price tumbling from about 40c in March to about 10c now.

“They are leaving the country on the grounds it was raining — are you serious?” Mr Caruso said. “You wouldn’t let them manage the Mr Whippy van in the beach carpark. The electricity would go off and the ice cream would melt.”

A spokeswoman for St Bar­bara said:

“St Barbara identified the provision of benefits to a foreign public official that may violate anti-corruption laws. St Barbara reported the matter to relevant authorities. As the matters are under investigation by the AFP, St Barbara does not intend to comment further.”

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Mining companies under investigation for payments to politician

payment of cash

The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP’s investigation.

Solomon Islands payments under investigation

Tess Ingram | Sydney Morning Herald

Payments made by miners Allied Gold and St Barbara to a Solomon Islands’ government official are being investigated by the Australian Federal Police.

Allied Gold, which was acquired by Perth-based St Barbara in 2012,­ ­allegedly provided benefits to the ­Solomon Islands’ outgoing opposition leader Matthew Wale from 2011.

St Barbara then continued to pay the benefits until earlier this year, ­according to a report in the Solomon Star newspaper on Friday.

St Barbara said in a statement to the Australian Securities Exchange late on Friday that through its internal ­mechanisms it became aware of the payments and had reported the issue to authorities including the AFP, the UK Serious Fraud Office and the Solomon Islands Attorney General.

The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP’s investigation. St Barbara declined to comment further on the issue at this time. Documents compiled by St Barbara’s legal counsel and reportedly obtained by the Solomon Star allegedly reveal that numerous executives from both Allied and St Barbara maintained relationships with Mr Wale that were of mutual benefit.

The companies allegedly paid for Mr Wale’s children to attend the Anglican Church Grammar School in Brisbane, with annual fees reportedly as much as $113,000.

They also allegedly arranged employment for a relative of Mr Wale’s and other smaller benefits, including a $13,500 payment to Mr Wale for “office set up expenses”.

Allied Gold was reported to have ­initially benefited from the arrangement, allegedly gaining a letter ­confirming the legality of blasting at its Gold Ridge mine, now owned by St ­Barbara, the issuance of a special prospecting license for a tenement, and the removal of certain travel restrictions.

St Barbara did not confirm or deny any of these allegations in its statement to the ASX, including the involvement of its former managing director and chief executive officer Tim Lehany and then secretary Ross Kennedy.

It did however correct the article’s reference to the “dismissal” of Mr ­Lehany and Mr Kennedy on the grounds of the payments, stating that Mr Lehany left the company this August as part of an “agreed departure” and Mr Kennedy was made redundant in March.

At the time of the Allied Gold transaction, the newly combined group boasted a market capitalisation of roughly $1 billion but a series of ­operational difficulties has seen ­St Barbara’s market cap fall to around $70 million. In the same period, its share price has fallen from $1.75 to 14.5¢.

St Barbara entered the gold ­industry in 2005 via the acquisition of several West Australian gold assets from the liquidators of Sons of Gwalia, before branching out into the Pacific with the $556 million acquisition of Allied Gold in 2012.

The Gold Ridge mine in the Solomon Islands and the Simberi mine in Papua New Guinea promised strong growth opportunities for the miner, but neither operation has performed near ­expectations.

Simberi remains beset with technical issues and mining at Gold Ridge has been suspended since April due to serious flooding and illegal mining.

St Barbara said it does not expect to resume production at Gold Ridge this year and has begun talks to potentially transfer ownership of the mine to the Solomon Islands ­government.

In August, St Barbara reported a $501 million full-year loss for the 2014 financial year, including a $411 million hit for the non-cash impairment of its Pacific operations.

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St Barbara posts K409 million net loss

The National aka The National

GOLD producer St Barbara Ltd, which owns the Simberi mine in New Ireland, has posted a full-year net loss of A$192 million (K409 million).

Business Advantage online reported that the net loss was due primarily to a lower gold price.

However, managing director Tim Lenahy reported an increase in gold production by 8% over the year to 364,601 ounces.

St Barbara’s acquisition of Allied Gold last September brought the Gold Ridge mine in the Solomon Islands and the Simberi operation in Papua New Guinea into the merged company.

The company’s profit before tax for its Australian operations was A$116 million, (K247 million) down from A$154 million (K328 million) last year.

The Pacific operations reported a loss of A$30 million (K64 million).

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St Barbara underwhelmed by Allied assets

Nick Evans, The West Australian

Nearly a year after St Barbara closed its takeover of Allied Gold, the miner remains disappointed about its progress in turning around the performance of the assets it acquired.

Speaking at Kalgoorlie’s Diggers and Dealers conference today, St Barbara chief operating officer Alistair Croll said the former Allied mines, in the Solomon Islands and Papua New Guinea, were still performing below the company’s expectations, despite millions of dollars in capital investment and substantial work on performance issues.

St Barbara was criticised for overpaying for Allied when the bid was launched last year, with the cash and scrip offer putting a more than 90 per cent premium to Allied’s then share price.

The friendly tie-up was to form a miner worth about $1 billion. Now St Barbara is worth about $215 million.

Mr Croll said St Barbara still believed in the long term future of its Solomon and PNG mines, but the company was disappointed with the slow rate of progress in turning them around.

St Barbara shares were down 2.5c to 44c in early trading today.

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Be Wary Of St. Barbara Ltd.

Gary Bourgeault | Seeking Alpha

St. Barbara Ltd. is gold miner based in Melbourne, Australia, which is facing a possible writedown and a stoppage in spending after a terrible performance of its Papua New Guinea and Solomon Islands gold mines in the most recent quarter.

Soaring production costs at Simberi and Gold Ridge mines during the quarter ending in June also generated questions as to whether or not the company should have acquired Allied Gold in 2012. The growing sense is the $556 million price tag was too high.

Since the last time St. Barbara surpassed the $12 per share mark on October 17, 2012, the share price has plunged to under $2 per share in June, and closed at $2.31 per share on Friday, July 26.

With a trailing P/E (TTM) of 1.98, I don’t see that as a positive or that there is little downside risk, but rather it being a reflection of the fact the company is in trouble. It has dropped to as low as $1.68 per share in the last year, and it could definitely fall much further if costs aren’t brought under control.

Price of Gold
Even the rebound in gold prices hasn’t been able to help St. Barbara find support. While it did rise in conjunction with the bottom in gold price on June 28, when it hit $1,192, the share price plunged on the news of the underperformance at some of its projects, along with the high costs.

On June 28, the miner was trading at $2.14, and climbed to as high as $3.02 on July 22. From there it plummeted to $2.31 as of July 26, 2013. The point is its performance was so bad even the upward price movement of gold wasn’t able to help the share price.

Since a higher price in gold can make any company look good, all the weakness associated with St. Barbara will be overcome if the gold price continues to rise. Now that the weakness has been identified, that will weigh on the company even in a strong gold price environment. The share price of the company will move up if gold continues to rise, but not to what it would have before.

Resources
Since St. Barbara flies under the radar of most investors, it could be considered an exploration miner or a company just starting production. That’s not the case, as the firm was launched in 1969.

It has approximately 16 million ounces of gold under its umbrella, with about 5 million ounces in ore reserves.

The changing dynamics of the gold industry no longer rewards resources and production as it has in the past, as the only real factors to consider now are the price of gold and how much the real all-in costs are to produce that gold.

So while St. Barbara is sitting on a nice stash of gold, its cost to produce it has risen, as has all the miners with significant exposure to gold. Increased production is a negative when it is done at a loss.

All of this is obvious, and yet miners like St. Barbara continue to emphasize the quantity of production, while trying to take the focus off of true production costs.

Increasingly it will be the quality of the ore grade that determines the value of resources, not the size of the projects. Astute miners have already started to shed assets with low ore grades while seeking out smaller projects with higher ore grades. Unfortunately, St Barbara hasn’t been one of them.

Production Costs
The takeover of Allied Gold in 2012 is a good example of what miners are trying to stay clear of these days.

When the company reported its first production costs at the Gold Ridge deposit in the Solomon Islands, it was an unbelievable $2,553 an ounce. In the latest quarter it has come down some, but it will be a challenge for St. Barbara for many years to cut costs down to profitable levels.

At its Papua New Guinea Simberi project, costs there were far less, but still a hefty $1,592 an ounce. The only thing that saved the company in the latter half of 2012 was the sales price from its Pacific operations came in at $1,675 an ounce. We’re not going to see those numbers again for some time.

Now after buying an asset for $556 million, St. Barbara will have to focus primarily on cutting expenditures in a major way. The better-managed companies would have seen the heavy risk associated with Allied Gold and passed on it.

Operating costs at the Simberi and Gold Ridge mines for its latest quarter ending June 2013, were still extremely high. While emphasizing the offensive production numbers, St. Barbara is actually in a defensive mode, one it will struggle to overcome for a number of years.

Gwalia Mine
If the company is to have a chance to rebound over the next year or two, it will depend on the performance of its Gwalia mine at Leonora. Being the flagship asset of the miner, it is projected to generate enough cash flow in full year 2014 to cover all costs of the company.
Guidance for 2014 at Gwalia is for 180,000 to 190,000 ounces of gold to be produced. Even at low spot gold prices the company believes it will be enough to support it.
Overall gold production at the company for 2014 is estimated in a range of 395,000 and 445,000 ounces. The fact that St. Barbara is counting on Gwalia reaffirms how high the costs are at its other production sites.

Conclusion
Along with the high costs at some of its projects, other factors are the delay in commissioning the Simberi oxide expansion, and the “lower-than-expected metallurgical recovery at Gold Ridge.”

Even though the company asserts its deal for Allied Gold will pay off in the future, there is no proof that will be the case. Already the costs and low metal recovery have crushed the company, and there is no guarantee Gwalia will be able to carry the company while it attempts to lower prices and boost production.

There is probably a big write-down coming, and that will further hit the share price.
Add to that the increase in production, which at most of its projects is done at a loss, and you can see why ST Barbara is teetering on the brink.

Delays in getting government permits at the Simberi project in Papua New Guinea, as well as in the electrical commissioning of the processing circuit, also continue to be a factor.

As long as the Federal Reserve continues to stimulate, the price of gold will probably continue to go up. I believe it’s going to shoot above the $1,400 an ounce mark, and probably be rangebound between $1,400 an ounce and $1,500 an ounce for a period of time.

That will take some time to achieve, and gold may not surpass the $1,400 an ounce until the latter part of 2013 or early part of 2014. It depends on how long it takes to break the $1,350 an ounce mark. If it does that soon, it could happen quicker than expected.

If the Fed does taper, we will see the price of gold correct for sure. The degree of the correction will be determined by how much stimulus is taken off the table.

Either way, the high cost of gold production by St. Barbara won’t be helped that much by that higher price, although the market usually rewards all miners when the gold price shoots up. The recent plunge in price confirms gold prices along won’t support a company that has multiple problems like St. Barbara has.

It is totally unpredictable as to which way the company will go. If it continues to struggle it could even be a takeover target, although the problems it faces now aren’t of the type most miners would want to inherit. The only positive is the amount of gold the company has under its control. Yet when production is at best about breakeven, along with the high risk of gold prices falling further, this is a company I would stay away from.

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Environment audit report recommends a shutdown of Gold Ridge mining operations

Islands Buisness

An independent environment audit into Solomon Islands Gold Ridge Tailings Dam recommends that the Gold Ridge Mining Limited (GRML) should shut down its operations, install the water treatment plant and discontinue any further extraction of water from Chovohio River.

The audit report compiled by an independent environment auditor for Metapona Downstream Association, Kolobisi Tailings Dam Association and Gold ridge community and landowners council representatives recommends that the retained water is of good quality resembling those of the Tinahulu in terms of trace metal concentration.

The report recommends that GRML shut off pumps 1 and 2 from Chovohio River and pump in ‘return water’ to fill the tanks at the processing plant adding that the untreated water could be pumped to the returning water dam.

In addition, the water collection pond at the processing plant should be cleared off the silts and clay that is accumulated should be discharged. The pond should also be filled to its capacity which means the pumping rate should be increased from the current 234 cubic meters per hour.

It states the ore contains about 20 percent moisture which is a positive addition of water into the processing plant and eventually to the Tailings Storage Facility.

The report says the amount of ore feed into the processing plant should be reduced by 20 percent during the crucial period of 10 weeks from now.

It says if GRML does not implement any of these measures then it should shut down its operations immediately.

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