Politics Creating Investment Uncertainties
The current political environment in Papua New Guinea is creating investment uncertainties.
According to St Barbara Ltd, developer of the Simberi gold mine in New Ireland, proposed changes to the mining legislation would affect project economics in the future of the mine. General Manager of operations Jason Robinson said that the firm is working closely with the PNG Chamber of Mines and has been through engagements with key stakeholders.
“Production commenced in 2008 with the St Barbara acquisition in 2012,” he 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 consists of two parts: uplift one ( maximise oxide resources), and uplift two (change to sulphide ore production).
“With uplift one, we will utilise the building brilliance platform to maximise the value from the remaining oxide resources,” he said. “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.”
He added, “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.”