St Barbara rethinks Gold Ridge

Gold miner St Barbara might sell its Gold Ridge operations in the Solomon Islands, where production has been suspended since 3 April due to Tropical Cyclone Ita’s torrential rain and flooding.

Options under consideration include a joint venture, sale, or reduction of mining activities to care and maintenance.

In the company’s quarterly reported, released today, it also said it was considering an impairment in the range of $100 to $200 million of its Simberi mine, and a full impairment of its Gold Ridge mine.

It does not expect production to restart at Golden Ridge until at least next year, whilst the company’s processing plant has been put under care and maintenance.

St Barbara acquired the mine in 2012, after buying Allied Gold for almost $556 million, a 90 per cent premium over its closing price on the day of the offer.

The gold producer has battled with high costs since then, and its employees were banned from re-entering the country for a month while the Solomon Islands Government implemented an immigration ban.

Earlier this month Tim Lehany resigned as managing director and was replaced by Bob Vassie, also significantly reducing the role’s salary at a time when the company was scaling back operations and cutting jobs.

The company also revealed it had reported a foreign public official who breached its bribery and corruption policy to the Australian Federal Police.

Early in 2013, St Barbara sold its Southern Cross mining operation to a Chinese company for $22.5 million.

There was some good news for the miner, as its Leonora operations increased production 19 per cent for the quarter, and the company forecasts up to 270,000 ounces of production this financial year.

It will also increase the life of its King of the Hills underground mine after drilling work, expecting to release information in August.