This gold miner has withdrawn its guidance for the Simberi operation…
The post St Barbara (ASX:SBM) share price hit by guidance update appeared first on The Motley Fool Australia. –
This ultimately led to the gold miner’s shares ending the day with a 0.5% decline to $1.88.
What did St Barbara announce?
This afternoon St Barbara provided an update on its Simberi operations in Papua New Guinea following a tragic fatality on 21 May.
According to the release, the Mineral Resources Authority (MRA) investigation into the incident remains ongoing, with the company’s full cooperation.
And while the MRA has advised that specific activities relating to site maintenance, grade control drilling, and drill and blast activities can resume, it has not permitted mining operations to restart.
In addition to this, the company advised that a recent scheduled inspection of Simberi’s deep sea tailings placement (DSTP) pipeline by a remotely operated vehicle observed a failure of the pipeline at an approximate water depth of 54 metres. The cause of the failure is not yet known.
As a result, the Simberi operation has ceased placement of tailings through the DSTP pipeline and the Conservation and Environmental Protection Authority (CEPA) has been notified. The CEPA has now commenced an investigation of its own at the operation.
Positively, no environmental harm has been reported, nor has pluming of tailings been observed. Though, sampling and monitoring activities are ongoing.
Prior to these incidents, the Simberi operation was on track to achieve its downgraded forecast FY 2021 guidance of between 80,000 and 90,000 ounces at an all-in sustaining cost between A$1,790 and A$2,030 per ounce.
However, in light of the uncertain timeframe for MRA approval to restart mining, together with the DSTP pipeline failure, St Barbara has decided to withdraw its FY 2021 guidance for Simberi.
This comes just a few weeks after the company downgraded both its Leonora and Simberi guidance. The former was due to recruitment issues and the latter was caused by ore variability issues.