- Gold miner St Barbara (SBM) nosedives on the ASX after deferring a final investment decision for the expansion of its Simberi operation in Papua New Guinea
- The company says it is mulling “significant” cost estimate increases for the expansion work and a potential sale of the asset
- As such, St Barbara will carry out a strategic review of Simberi to decide where best to allocate capital across its core projects
- Meanwhile, St Barbara warns investors its Touquoy mine could be placed into care and maintenance by mid-September if the company does not lock in approvals to raise the walls of a tailings dam by early August
- Shares in St Barbara were down 17.08 per cent to $0.94 as of 3:07 pm AEST
Gold miner St Barbara (SBM) has nosedived on the ASX after deferring a final investment decision for the expansion of its Simberi operation in Papua New Guinea.
The company said that though it was progressing key approvals and studies for the expansion, it had made the call to carry out a strategic review of Simberi to decide where best to allocate its capital across its three core projects.
St Barbara said it was facing a “significant” increase in capital cost estimates for the Simberi project in light of global inflationary pressures in the construction market alongside some project scope changes.
Further, the company said it was mulling the potential sale of the asset.
“St Barbara has received unsolicited enquiries from potential investors in Simberi and anticipates the Sulphide Expansion project to proceed either under St Barbara or different ownership,” the company said in a statement to the ASX marked as non-price sensitive.
Touquoy business continuity risk
Meanwhile, St Barbara warned investors its Touquoy mine in Nova Scotia was at risk of being suspended and placed in care and maintenance by mid-September if the company could not lock in approvals to raise the walls of a tailings dam by early August.
The Touquoy open pit mine is approaching the end of its life, and St Barbara said it planned to covert the open pit into a tailings management facility (TMF) upon completion to extend Touquoy operations through to the end of the 2023 financial year.
However, a late request by the Nova Scotia Department of Environment and Climate Change (NSECC) impacted St Barbara’s implementation timeframes for the in-pit tailings solution, placing business continuity at risk.
St Barbara said as an interim solution, it had applied to raise the existing TMF wall while the in-pit deposition matter was progressed to conclusion.
If the company fails to land approval for this TMF wall lift, Touquoy operations will finish up for good in September.
Shares in St Barbara were down 17.08 per cent to $0.94 as of 3:07 pm AEST.