Tag Archives: Solomon islands

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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Filed under Mine construction, Solomon Islands

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

Solomon Islands PM defends leaked texts


Manasseh Sogavare Photo: RNZI

Radio New Zealand | 17 January, 2017

Solomon Islands prime minister Manasseh Sogavare has defended a leaked sms conversation he had with an official of a bauxite mining company about tax exemptions.

The leaked texts which were published in the Sunday Star reportedly were sent on the 15th and 16th of November.

In the published parts of the sms conversation Mr Sogavare reassured an official of Bintan Mining SI Ltd that cabinet was preparing to remove all export duty on bauxite.

Bintan is the mining firm contracted by Asia Pacific Investment Development (APID) to mine bauxite on Rennell Island in the Rennel and Bellona Province.

The prime minister yesterday told the newspaper, The Island Sun, the conversation was completely above board and had been taken out of context.

He said the public was mistaken if it thought a prime minister should not be speaking with investors about matters of government policy.

Mr Sogavare said it related to an earlier government decision to impose a 20 percent tax penalty on illegally mined bauxite stocks which he says has been implemented.

Mr Sogavare said he was simply informing the investor of a cabinet decision that the 20 percent tax was not be applied to legally mined bauxite stocks and that this would be backdated to cover legally mined bauxite that had been exported before the cabinet decision.

The prime minister also said he was offended at insinuations that he had been bribed to remove the 20 percent tax penalty and pointed out that there has never any export duty on bauxite to begin with.

The sms leak and the later posting of a word for word conversation between the prime minister and Island Sun reporters about the issue could result in an official investigation into a possible security breach within the Prime Minister’s office and telecommunications.

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Filed under Corruption, 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

Download: Solomon Islands draft National Minerals Policy


Download the draft National Minerals Policy: nmp-draft-v2-2-for-public-distribution [1.3mb pdf]


While Solomon Islands has, at the time of writing, no active mines, it is nonetheless currently experiencing unprecedented levels of mineral exploration. This exploration is taking place in many parts of the country both onshore and offshore, and these exploration efforts may result in the discovery of commercially valuable minerals. While there is no doubt an abundance of minerals, our limited land mass and the scattered islands mean that the impacts of mining are heavily felt. There is little room for error and we have few opportunities to get the sector right. For this reason, it is more vital than ever that the country attracts reputable investors who are able to work alongside the Government, building responsible practices and ensuring that there is a good balance between commercial gain, local benefits, and environmental and social risk.

The recent closure of Gold Ridge mine (and its continued declaration as a disaster zone), the lengthy court case involving the Isabel nickel deposit, and the explosion of bauxite mining – most significantly felt in Rennell Island – have left a mark on the mining sector in Solomon Islands. It has highlighted the urgent need for the sector to have a vision, and for changes to be made to mining legislation left largely untouched since 1990. Above all, mining must avoid the malign outcomes experienced in both the logging industry and elsewhere in the Pacific.

Mining by its basic nature is not sustainable over the long run. Minerals are a non-renewable resource, and we must plan wisely for minerals-led sustained development even after our minerals have been depleted. Implementing a holistic minerals policy that takes into account both the short and long-term aspirations of our nation and its people in fundamental to making the most of these resources. To do this, the development of the sector must look beyond the mere payment of landowner compensation and collection of taxes to ensure that future generations will continue to enjoy a healthy environment and bettered circumstances. Traditional values need to be respected in the pursuit of a better life for our people, and it is important that as we move forward, the respective rights and roles of government, impacted communities, mining companies and others be carefully defined and integrated.

Our present system of mineral sector regulation is far from perfect. Experience has demonstrated that we are faced with numerous challenges that must be addressed. First and foremost is the need to situate mining within a Solomon Islands specific climate. This is necessary to understand and negotiate the social and cultural issues that underpin the viability of many mining activities. In addition, and critical to our ability to secure sustainable benefits from the mining sector, is the need to manage volatility in revenue due to shifting commodity prices and sector productivity. This is contingent on our ability to regulate and tax the sector in a manner beneficial to all and by embracing efforts to improve approaches to mineral sector regulation and economic diversification. This National Mineral Policy (NMP) provides a vision and objectives for the mineral sector and additionally outlines the steps that can be taken to achieve this vision.

This document is a long time arriving. This policy builds on work that is the result of an intensive year long collaborative process. The MMERE has headed this effort and has sought the insight of: national, provincial and traditional leaders; landowners and communities, non-governmental organisations; industry stakeholders; technical experts; multilateral institutions; and other parties. We will continue to learn from our mistakes and successes, and it is intended that this NMP, including its objectives and approaches, will evolve over time. This NMP sets out an ambitious agenda. Our work is cut out for us, but by working hard together, I believe that our emerging mineral industry can flourish in a way that is mutually beneficial to both investors and the people of our country.

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Filed under Environmental impact, Financial returns, Human rights, Solomon Islands