THE current Papua New Guinea political environment, particularly surrounding the proposed changes to the mining legislation, is creating significant uncertainty in the investment community, according to a developer.
St Barbara Ltd, developer of the Simberi gold mine in New Ireland said in an investor briefing recently that proposed changes in mining legislations would impact project economics of the mine in the future.
General-manager of operations Jason Robinson said the company had undertaken engagement with key stakeholders in the Government and was working closely with the PNG Chamber of Mines to highlight the impacts to its operations.
“Production commenced in 2008 with the St Barbara acquisition in 2012,” Robinson said.
“Simberi underwent an operations transition in oxide expansion in 2014, with production ramping up to over a hundred thousand ounces which is where we sit today.
“All-in sustaining cost fits in a range of AU$16.65 (K44.24) to AU$18.40 (K48.89) an ounce.
“With our current oxide reserves, we see mining continue until 2024 when we transition to software production with a further 10 years of mine life.”
Robinson said the future of Simberi was in two parts which included uplift one (maximise oxide resources) and uplift two (transition to sulphide ore production).
“With uplift one, we will utilise the building brilliance platform to maximise the value from the remaining oxide resources.
“We’ll be aiming for best practice at Simberi despite the investment uncertainty with the Mining Act.
“We will act with an owner’s mindset with a view we’ll be operating the asset for a further 10 years.
“In uplift two, the long-term future of Simberi is to transition to sulphide ore processing.
“This will lift gold production above our current rates.
“The production and cost profile remains relatively consistent over the coming years as we continue with oxide production.
“When we transition to sulphides, the production profile will increase as we target higher-grade sulphide ore, as our open pits increase with depth.
“It is time to build on that platform for the next phase of growth with sulphides.
“For the sulphide feasibility study, over the past six months, significant effort has been put in to understand and map out earning timeframes in detail with key milestone dates.
“It is worth noting that the sulphide expansion is a brownfield project extension of the existing operations.”
Statement/TheNational/PacificMiningWatch
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