THE Simberi operation in New Ireland will cut 150 jobs after it failed to reach production quarter, gold miner St Barbara Ltd said.
According to its quarterly report, factors impacting the shortfall in production were a combination of lack of access to drill and blast ore, equipment availability and reliability issues.
Higher sulphide content of ore from open pit material also reduced gold recovery and lifted the processing costs.
During first quarter to the end of September, Simberi mine produced 11,741 ounces of gold compared with the 12,927oz in the previous three months.
Its cash position on Sept 30 was A$106 million (K244 million).
The gold miner said yesterday that the fall of gold price by 25% in the past 12 months had significantly reduced its operating margins.
In addition, St Barbara said delays in commissioning the new mill and plant expansion at Simberi had resulted in the operations not achieving its operating targets.
“This has led to a detailed review of the Simberi operations and its cost structures by an expert mining productivity group,” the company said.
“However, it is necessary to significantly reduce the operating cost structure, and regrettably it had been necessary to reduce the on-site workforce by about 135 employees of the current 535.”
As an outcome of the review, St Barbara had confirmed its commitment to invest in the Simberi project and complete the commissioning of the new mill and plant expansion.
Managing director and chief executive Tim Lehany said: “While this has been a difficult decision to make, our focus is to ensure the viability of the business. Improving the performance of Simberi enables us to remain a long term investor and employer in Papua New Guinea”.
St Barbara remains committed to gold mining in the region and we will continue to advance the expansion of the Simberi mine and its production capabilities.” The National