Tag Archives: St Barbara

Solomon Islands govt signs agreement to restore mining lease

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo:  Dr Matthew Allen – ANU

Radio NZ | 9 March 2017

The Solomon Islands government has withdrawn last year’s cancellation of the mining licence for Gold Ridge Mining Ltd.

This effectively restarts efforts by landowners and the new majority shareholder, Chinese-owned Australian property developer AXF Group, to re-open the Guadalcanal mine.

In a statement the chairman of the cabinet sub-committee on Gold Ridge said the minister cancelled the mining lease because he felt the previous owner St Barbara’s sudden departure breach of the Mines and Minerals Act, and the Mining Agreement.

The miner’s departure from Gold Ridge followed complications around flash floods in April 2014, which compromised the mine’s tailings dam and impeded access to the mine.

St Barbara however, has repeatedly denied abandoning the mine.

It stands by its transfer of ownership, via the sale at a nominal amount, to local landowning company Gold Ridge Community Investments Ltd.

The Australian miner also denied claims by GCIL following the sale that it had saddled the local landowner company with all the environmental liability of the closed mine.

Following the signing of the agreement with government to restore the mining licence, GCIL’s chairperson, Walton Naezon, said landowners would be working closely with their chosen investor and the government to restore the mine to profitability.

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Solomon Islands mine begins long road back to production

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen - Australian National University

The over-full tailings dam facility at the Gold Ridge Gold Mine on Guadalcanal in Solomon Islands in January 2015. Photo: copyright Dr Matthew Allen – Australian National University

The new owners of the Gold Ridge gold mine in Solomon Islands plan to begin reconstruction of the closed mine within the fortnight.

Radio New Zealand | 27 February 2017

Rehabilitating the mine, which was abandoned by its last owner St Barbara in April 2014 after massive flooding, is a major task which includes the reconstruction of washed out roads and bridges to restore access to the mine.

However, work has been delayed by a falling out between the ministry of mines and the minority shareholding landowners company, Guadalcanal Community Investments Ltd.

Its chairperson, Walter Naezon, said this resulted in the mines minister cancelling their mining lease last year.

“We actually looked at this and [we] understand that the land was held by the land owner, the PE [Perpetual Estate Title] of the land, so how can he cancel the mining lease. You can do that with a foreign company but since the landowners took over 100 percent of the mine I don’t think you can cancel it. So those are the misunderstandings. We have settled that.”

Mr Naezon said it had taken several months but the dispute has now been resolved and the majority shareholder, Chinese-owned Australian company AXF Group is expected to begin rehabilitating the mine within the fortnight.

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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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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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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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“Simberi mine improving” – but for who?

simberi

St Barbara can boast that its Simberi mine “is improving” – but what does that mean and who is reaping the benefits?

Improved production levels and cash earnings are great for foreign shareholders and the Chairman’s fat annual bonus – but does that mean anything for local people, forced to look on as spectators on their own land without decent government services and a ruined environment?

Simberi mine improving: Chairman
Gedion Timothy | The National aka The Loggers Times | December 1 2016
ST Barbara’s Simberi gold mine in New Ireland has seen continued improvement this year, justifying the company’s decision to preserve with what was an under-performing asset in 2014, says chairman Tim Netscher.
Netscher told the company’s annual general meeting in Melbourne, Australia that Simberi “is now demonstrably confirmed as a reliable earner of cash, exceeding its target production rate of 100,000 ounces per annum for six consecutive quarters”.
“With the sensible use of hedging, we have ensured that Simberi will stay cash-positive regardless of gold price conditions for the remainder of this financial year,” Netscher said.
“During the year, we determined that we should conduct a strategic review of our PNG assets, considering the commercial opportunities available from divestment or joint venture or retaining both the operating and extensive exploration assets of Simberi.
“This review has been completed and we announced the results earlier this month.
“The results are:

  • That we will retain Simberi as an operating asset, and all gold oxide and sulphide exploration opportunities in the Tabar Island group;
  • That we will joint-venture with Newcrest the exploration of copper-gold porphyry prospects on Tatau and Tabar Islands;
  • That we will not, based on the existing reserves, resources and feasibility study, invest in sulphide mining and processing on Simberi at this time but will continue with studies of opportunities to improve the economics of this project.

Simberi is the northern most island in the Tabar group of islands in New Ireland.

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St Barbara’s PNG gold fails to lure precious bid

St Barbara CEO Bob Vassie

St Barbara CEO Bob Vassie

Barry Fitzgerald | The Australian | November 15, 2016

St Barbara has pulled the sale of its Papua New Guinea gold assets — including the 100,000 ounce a year Simberi mine — after bids failed to match the company’s expectations.

“While a number of potential buyers expressed interest in the PNG assets, their level of interest did not meet St Barbara’s assessment of the value of these assets,’’ the company said.

Simberi has a mine life of about two years ahead of it, with a possible seven-year life extension if a $135 million development of the operation’s sulphide mineralisation was to proceed.

St Barbara stopped short of making any decision on the sulphide project but has come up with a possible life-extending oxide solution in a joint venture with Newcrest.

Under the deal between the pair Newcrest will explore for copper-gold on St Barbara’s tenements on the nearby Tatau and Big Tabar islands.

Newcrest could earn up to a 75 per cent interest by spending $US25 million ($33m), with St Barbara retaining the rights to oxide and sulphide material capable of being treated back on Simberi, either through the existing oxide plant, or the contemplated sulphide plant.

St Barbara itself will continue to push ahead with its own exploration across the Tabar island group for life-extending ore for Simberi, if not make a stand-alone discovery.

Managing director Bob Vassie said Simberi was now consistently generating good cash flows.

“We’ve tested each strategic option for the future of the PNG assets, and we are now clear about the preferred strategic direction,’’ Mr Vassie said.

Credit Suisse mining analyst Michael Slifirski said the decision to keep Simberi in part reflected St Barbara’s reduced need for cash for debt reduction given the strong cash flows from its Australian operations.

He said the high cost and scarcity of acquiring a replacement asset and the materially improved operating performance of Simberi were also likely to have been factors.

“But reserves (at Simberi) are depleting fast.’’

St Barbara shares were caught in yesterday’s sell-off in gold equities in response to continued gold price weakness, falling 25c or 9.8 per cent to $2.28. Gold has fallen from more than $US1300 an ounce before the US election to $US1223 an ounce late yesterday.

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