St Barbara will invest A$8–$12 million (K19–28 million) on exploration activities in Papua New Guinea this financial year with the aim of extending its Simberi gold mine beyond its current mine life. Managing Director Bob Vassie explains to Business Advantage PNG.

Simberi Island.

The ASX-listed company remains open to expanding its portfolio in the right legislative environment, but its focus for the remainder of the financial year is to define the future direction of its gold mine on Simberi Island, New Ireland Province.

St Barbara Managing Director Bob Vassie, who the company announced will retire in March and be replaced by Craig Jetson, tells Business Advantage PNG that an important part of these activities is finalising the project economics of its potential sulphide project located on Simberi Island.

‘We have just completed a 55,000-metre sulphide drilling campaign and are currently modeling the resource.

‘Studies in design, processing and logistics options are progressing,’ he says.

St Barbara is expected to update the market with a revised ore reserves and mineral resources estimate, plus direction on the sulphide project, in the March quarter of 2020.

‘At this point, we anticipate that we will be able to decide if we want to proceed with the full feasibility study to inform an investment decision,’ Vassie adds.

‘We will look to add to our portfolio with projects that align with our strategy, but we need clarity on the legislative framework for resources projects moving forward.’

With the mine life at Simberi expected to end in the financial year 2021, Vassie says it is critical to unlock the previously modelled one million ounces of sulphide reserves under the Pigiput pit and the addition from drilling under the Sorowar pit.

‘This work has the potential to significantly extend the mine life at the Simberi operation, which is exciting for us.’

Challenges

Operating on a remote island has its challenges, but there is a skilled and willing local workforce for Simberi’s current operations and any potential expansion.

St Barbara’s existing onsite infrastructure is more than sufficient for the next phase at Simberi and potential expansion.

Maintaining constructive relationships with all levels of government is important for the company. Vassie says these relationships will be critical as St Barbara continues to invest in PNG.

‘To continue to invest and build our portfolio in PNG, we seek a clear and supportive legislative environment,’ he says.

While the company continues to evaluate opportunities globally, Vassie explains potential projects in PNG are appealing due to the advantage of building on existing infrastructure and workforce.

‘We will look to add to our portfolio with projects that align with our strategy, but we need clarity on the legislative framework for resources projects moving forward,’ he says.

Expansion

St Barbara’s Bob Vassie

Having acquired Atlantic Gold in July 2019, St Barbara operates across three countries: PNG, Australia and Canada. It provides an opportunity to leverage learning across all sites.

Broadening its production base and reducing reliance on an individual asset through diversification has made the company more resilient, Vassie believes.

‘There are similarities between Simberi and Atlantic in terms of grade, mining method and processing. We expect benefit from sharing best practice between sites.’

St Barbara’s A$780 million (K1.83 billion) acquisition of Atlantic Gold diversified the company’s production base with a low-cost, long life operation and adds a number of projects at various stages of development to its growth pipeline.

Atlantic Gold is a Canadian gold mining company operating in Middle Musquodoboit, Nova Scotia, with three potential mine sites in varying stages of environmental assessment.

‘This acquisition provides exciting growth potential through planned resource and reserve expansion and near-mine exploration.’

‘Diversification of our portfolio builds our assets, while also bringing diversity of perspectives, experience and opportunities across the company, which will be an advantage as we continue to grow,’ Vassie adds.