Tag Archives: Gold Ridge mine

St Barbara and PNG Industry News airbrush history

St Barbara may be repaying its debts to the bank, but what about its debts to the people of the Solomon Islands, who have been abandoned by St Barbara and left with an environmental disaster on their doorstep – a decision condemned as ‘immoral’ by the Solomon Islands Environment Ministry – Australian real estate investor circles Solomons ‘disaster’ gold mine

St Barbara repays last of debt

Simberi Gold Mine

Simberi Gold Mine

DIVIDENDS and acquisitions are well and truly likely for St Barbara after the gold miner repaid the last of its $US20 million debt.

PNG Industry News | 15 February 2017

The company will repurchase the final $20 million in aggregate principal of its US senior secured notes next months at a 3.3% premium to par value.

The repurchase will reduce future interest expense by around $A2.4 million per annum.

The repurchase, to amount to $US21 million, will be repaid from cash reserves.

St Barbara, which operates the Simberi gold mine in Papua New Guinea’s New Ireland Province, expects cash after the repurchase to be around $A70 million.

In the past 18 months, St Barbara has repaid $436 million in debt and will have only equipment leases of less than $1 million outstanding after the final note repurchase.

St Barbara managing director and CEO Bob Vassie said the repayment of the debt would inform the board’s consideration of future dividends in conjunction with growth options.

The company plans to internally fund the $85-95 million Gwalia extension project.

“We can afford our future at Gwalia,” Vassie told the Sydney Mining Club earlier this month.

While he described Gwalia as the “gift that goes on giving”, he noted that the company was very reliant on the Leonora operation.

Vassie said the company was keen to add another 250,000 ounce per annum, long-life mine, and would now be able to take advantage of value-accretive opportunities as they arose.

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Filed under Environmental impact, Financial returns, Papua New Guinea, Solomon Islands

Solomon Islands Government pushes for controversial Gold Ridge mine to reopen

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands' capital, Honiara. (Concrete Evidence, file)

The mine, on Guadalcanal, is about 40 kilometres from the Solomon Islands’ capital, Honiara. (Concrete Evidence, file)

Richard Ewart, Bindi Bryce | ABC News | 31 January 2017

The Solomon Islands Government says it is planning to reopen the gold mine that was sold to local landowners by an Australian miner in 2015 for $100.

Key points:

  • The only gold mine in Solomon Islands has been closed since 2014 amid environmental concerns
  • Gold Ridge mine is owned by a local landholder group which supports its rehabilitation
  • A Chinese property investment company says it has invested in the mine

Mining company St Barbara controversially sold its legal liability in the mine to local landowner company Goldridge Community Investment.

The Solomon Islands Government said it was now negotiating with landowners and an investor — Australian-based Chinese property developer AXF Group.

A statement on the company’s website said AXF had partnered with Goldridge Community Investment, “and aims to repair, refurbish and upgrade the Gold Ridge plant to bring it back into operation”.

The mine on central Guadalcanal, south-east of the capital Honiara, was closed after severe flooding in 2014.

Since then, there have been constant concerns over the risk posed to public safety by the threat of toxic water overflowing from the tailings dam.

Shortly after St Barbara sold the mine, the Solomon Islands Government declared it a disaster area when a tropical cyclone filled the dam to capacity.

In 2016, after an “uncontrolled release” of untreated water from the mine’s tailings dam, Solomon Islands health authorities warned villagers living downstream not to use river water because it could be contaminated by arsenic.

Plans to reopen ‘as soon as practically possible’

PHOTO: Gold Ridge gold mine in Solomon Islands has had a chequered history.

Gold Ridge gold mine in Solomon Islands has had a chequered history.

The Government said in a statement it now hoped the mine would be reopened “as soon as is practically possible”.

Prime Minister Manasseh Sogavare’s chief of staff, Robson Djokovic, told the ABC’s Pacific Beat program there were still risks associated with the mine reopening, but they were being addressed.

“There are procedures and systems that have been developed … to ensure the highest standards of safety are met to avoid any potential hazards or risks,” Mr Djokovic said.

“Of course, not everybody is going to agree. We understand the reality of those who might object.

“But the Government is ensuring that thorough consultation is being carried out and we are listening to the various stakeholders, particularly those that are located in the area of the mine site.”

PHOTO: Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

Mothers wash their children in a river bed near the Gold Ridge mine. (Reuters: James Regan, file)

The chairman of the landowner company, Walton Naezon, said local landholders did not oppose the Government’s push to reopen the mine.

But he told Pacific Beat it would take time.

“We’re trying to restructure and rehabilitate an old mine which has gone, run down almost 100 per cent,” he said.

“We are going to look at all the aspects of environment issues [and] we are going to make sure that our foreign partners are listening to us.

“We want to do everything right according to law. We must make sure everyone likes the operation and the benefits of the operation.”

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Filed under Mine construction, Solomon Islands

Solomon Islands govt reinstates Gold Ridge mining lease


Radio New Zealand | 24 January 2017

The mining lease for a closed gold mine in Solomon Islands is being reinstated by the government after having been cancelled by the mines minister last year.

A government statement said the relevant framework for the Gold Ridge mine to reopen was being finalised.

But the chairperson of the customary land-owning company, Gold Ridge Community Investments Ltd, which is the minority shareholder in the mine, said this basically referred to cancelled mining lease.

Walton Naezon said the majority shareholder, the Chinese-owned AXF Group, wanted to begin reconstruction of the mine in early February provided the lease has been reinstated.

“There is two things, one is to start the mine, doing the roads, rehabilitating the mill, doing constructions and doing explorations and assessing the tailings dam. Those are mining activities that can be taking place quickly from February upward. The actual production was look at end of 2018.”

He said it was projected that the cost of bringing the mine back into production would be between $US80 and 90 million.

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St Barbara considers dividend payment

Abandoned Gold Ridge mine processing plant. (Stefan Armbruster SBS)

St Barbara shareholders set to cash in after abandoning Solomon Islands mine – funny how The Australian manages to leave out the whole Gold Ridge saga from its story…

The Australian newspaper airbrushes history and completely ignores the fact St Barbara was condemned as ‘immoral’ by the Solomon Islands Environment Ministry for selling its abandoned ‘disaster’ mine to traditional landowners for A$100.

Read More: Australian real estate investor circles Solomons ‘disaster’ gold mine

The West Australian via The National aka The Loggers Times | January 20, 2017

ST BARBARA is weighing the potential for dividend payments as the cashed-up gold miner closes in on an end to its debt nightmares, according to the mine.
St Barbara’s assets include the Leonora operations in Western Australia and the Simberi operation in New Ireland.
Managing director Bob Vassie admitted in an analyst conference call yesterday that the St Barbara’s board was facing pressure from shareholders to outline a dividend policy as the company built its cash war-chest and eyed debt-free status.
Its position is a far cry from 2014, when St Barbara owed about AU$320 million and was on corporate death row as the gold price weakened.
It produced 99,000 ounces of gold from its Leonora and PNG operations in the December quarter, spitting out AU$76 million in free cash flow and repaying AU$121 million of debt.
It will pay another AU$20 million before the month’s end and says lenders will be fully repaid in March.
St Barbara had AU$87 million cash at the end of December and 14,500oz of unsold gold worth about AU$23 million.
It plans to spend AU$85m to $95m on a ventilation and waste infill project that will take the miner to the bottom of its Gwalia mine’s known reserve – 2000m below the surface.
Vassie said St Barbara was looking at growth options, including acquisitions and AU$22 million of exploration.

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Filed under Environmental impact, Financial returns, Papua New Guinea, Solomon Islands

Politics said to be hampering Solomons gold mine

Solomon Islands coat of arms on Parliament buildings in Honiara Photo: RNZI / Koroi Hawkins

Solomon Islands coat of arms on Parliament buildings in Honiara Photo: RNZI / Koroi Hawkins

Radio New Zealand | 9 November 2016

A minority shareholder says political interference has set back the reopening of the Solomon Islands Gold Ridge gold mine.

The director of the customary landowning company, Gold Ridge Community Investments, said it’s been delayed by several months.

Walton Naezon would not give any specifics but said the political interference was to do with opinions on how the mine should be run.

Mr Naezon said a proposal to re-open the mine at the end of 2018 had been delivered to the government earlier this year.

“But there are some political issues that have been arising in the last one to two months.

“That has delayed that, so our new timetable that after GR engineering services finalise their report we might lodge to the government and I am hopeful that the new timetable will be for the first quarter or second quarter of 2019.”

Mr Naezon said resurrecting the mine will cost almost $US85 million.

He said the majority shareholder, AXF Group which is Chinese-owned, has already raised more than two thirds of that cost.

Mr Naezon said a separate Chinese engineering firm had completed a design for a new mine site and this is being looked over by the mine’s original designer, GR Engineering Services Ltd, from Australia.

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Filed under Mine construction, Solomon Islands

Solomon Islands Gold Ridge Mine Stori


Ol mine trak long Goldridge mine long Guadalcanal, long Solomon Islands

Caroline Tiriman | ABC Radio Australia |13 September 2016

Wanpla land owna grup emi papa blong Gold Ridge Community Investment Limited (GCIL) long Solomon Islands itok oli hamamas olsem oli nap painim moni na halvim tu ikonomi blong kantri taem Gold Ridge mine bai stat wok ken.

Gold Ridge Community Investment Limited ibin baem despla mine long A$100 long  St Barbara wanpla mining kampani blong Australia long 2015.

Gavman itok  olsem emi no bin wanbel long pasin em St Barbara mine ibin mekim long lusim wok blong en long kantri.

Oli bin sutim tok long despla mine olsem emi no bin lukautim gut tailings dam we emi save putim ol posin pipia blong mine.

Taem despla dam ibin pulap emi save kapsaet na bagarapim ol wara na environment na despla isave bin kamapim planti wari long ol pipal.

Nau wanpla, Chinese-Australian property developer AXF i tingting long baem na wok wantem ol papa graon long ronim despla mine.

Walton Naezon, chairman blong Gold Ridge Community Investment Limited itokim  Radio Australia olsem bai oli givim mining plan igo long gavman long despla tupla wik ikam.

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Filed under Environmental impact, Financial returns, Solomon Islands

Australian real estate investor circles Solomons ‘disaster’ gold mine

Children play in the Tinahulu River downstream from the Gold Ridge mine. (Stefan Armbruster SBS)

Children play in the Tinahulu River downstream from the Gold Ridge mine. (Stefan Armbruster SBS)

The Solomon Islands environment ministry has condemned the ‘immoral’ behaviour of an Australian miner for selling an abandoned gold mine to traditional landowners for A$100.

Stefan Armbruster | SBS World News| 3 September 2016

In the latest twist of the saga involving the troubled, 20-year-old operation, Chinese-Australian property developer AXF is now preparing to buy the mine. Sixteen months after the sale of Gold Ridge, the country is struggling to deal with its toxic tailings dam and is considering legal action.

St Barbara last year sold the site, with all legal liability, to a local traditional landowner company, Gold Ridge Community Investment Limited (GCIL).

The government declared the tailings dam a ‘disaster’ zone shortly afterwards over fears it would overflow, possibly undermining the dam wall, and cause a collapse releasing millions of tonnes of toxic sludge.

Earlier this year after heavy weather, the tailings dam full of sediments containing high levels of arsenic and cyanide, overflowed for the first time, sending millions of litres of untreated water into the local river systems.

Thousands of subsistence farming villagers live along the Tinahulu river and use it to wash, fish, cook, drink and swim.

“We are so worried because if the mining operations come again, we don’t know what is going to happen,” said John Kera, chief of New Rere village downstream from the dam.

However, the river diluted the tailings water and tests showed contamination was below World Health Organisation thresholds.

“Our immediate focus is on securing the tailings storage facility, knowing full well what the impacts would be on the downstream people,” said Dr Melchior Metaki, permanent secretary of the Department of Environment.

“The major pollutants (in the dam), arsenic and cyanide, are really high.”

The Solomons government is now relying on help from the UNDP, funded by the Australian government, to assess what the landowners have bought from St Barbara.

“Knowing full well the recipient (GCIL) doesn’t have requisite capacity and resources to adequately manage the tailings storage facility, in my view it’s not morally correct to do. It’s not morally right to do that,” said Dr Metaki.

“Common sense tells me it would not be accepted in Australia.

“Of course, legal recourse is something we’d need to be advised on how to properly take that forward.”

He added the landowners also bear some blame as: “it takes two people to put it down on paper”.

St Barbara in a statement said it: “does not comment on baseless speculation”, adding the “Solomon Islands Government was aware of the sale process and the sale outcome”.

“Many of the shareholders and directors of GCIL had personal associations with and concerns for the success of the Gold Ridge Project since it was first established in the mid-1990’s, with the GCIL chairman (Walton Naezon) being a former Minister of Mines and Energy.

Gold Ridge tailings dam spills untreated water in April 2016. (Stefan Armbruster SBS)

Gold Ridge tailings dam spills untreated water in April 2016. (Stefan Armbruster SBS)

“St Barbara has no liabilities or commitments in relation to Gold Ridge.”

St Barbara sold up after a year-long dispute with the Solomon Islands government that prevented dewatering of the full tailings dam.

Heavy flash flooding in 2014 shut the site down and it was looted until Australian Federal Police were flown in to protect the mine.

St Barbara lost about $300m while operating the mine and its share price jumped on news of the sale.

The Gold Ridge landowners say they have no regrets buying the mine.

“It’s time that my people had some ownership over the project,” said Walton Neazon.

“We took the liability on from St Barbara with the confidence we can handle this liability.”

“We have dewatered untreated water during height of bad weather at the beginning of this year (but) we have dewatered 1.3 million cubic meters of treated water,” Mr Neazon said describing it as being like “mineral water”.

The water level in the dam is now about two meters below the spillway.

At the height of the tailings spill, the health department issued a press release warning people not to use the river water and added, “finally if the dam wall breaks, there may be a risk of drowning or injury due to the increase water flow”.

The Australian-funded UNDP study will test the dam wall and “look at contingency planning should there be an extreme case,” said Mr Mataki.

“We cannot say it is safe because there hasn’t really been any structural integrity assessment done on the dam wall itself.”

Abandoned Gold Ridge mine processing plant. (Stefan Armbruster SBS)

Abandoned Gold Ridge mine processing plant. (Stefan Armbruster SBS)

As the Solomon Islands grapples with this man-made ‘disaster’, Gold Ridge landowners have been negotiating to sell the mine to a subsidiary of major Chinese-Australian property developer AFX, headed by Richard Gu.

“We had people in Australia check AFX, and we checked ourselves. Yes, we know it’s a property developer,” said Walton Naezon.

“AXF, regardless of their lack of knowledge of the mining industry, we want to partner with them because they’ve got the money to redevelop the mine.”

Landowners hope to sell a 90 per cent stake for an undisclosed amount.

The three-year-old AXF Resources has limited investments in gold and oil shale projects in Western Australia, New South Wales and Queensland.

Managing director Dr Shaung Ren has decades of experience in the mining industry and heads up a small team.

“We are working with consultants and other industry experts, some who have previous experience at Gold Ridge, to complete due diligence work with a view to repair, refurbish and upgrade the Gold Ridge plant to bring it back in to operation,” he said in a statement.

The sale has not been completed and conditions include “that the historic legal liability is either fixed or stays with the original owner”.

“Although this is the responsibility of the original owner, AXF has extended a credit facility to fund the management and operation of the water treatment plant to reduce water levels in the tailings storage facility.”

The department of environment’s ‘disaster’ declaration still stands and no mining can commence until it is lifted.

“This is a man-made, potential disaster, a new type of risk for us,” said Dr Metaki.

“The order made by the minister has not been lifted yet. Until we are satisfied that the measures that are in place can really reduce the risks associate with tailings storage facility, the minister will not be able to lift that state of disaster.”

There is no official estimate for the clean-up cost or remediation of the site.

“We will have to look at people who caused it in the first place,” Dr Metaki said.

“It is something the government cannot do because of the resource implications it has and because there has been negligence along the way.”


Filed under Environmental impact, Solomon Islands