ST BARBARA LIMITED - ASX: SBM

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Description

St Barbara is an Australian gold producer and mineral explorer. St Barbara's key assets include its Leonora and Sothern Cross Operations, both of which are located in Western Australia. It has Mineral Resources of 7.7 million ounces of gold including Ore Reserves of 2.9 million ounces of gold as at 30 June 2010, as well as an extensive landholding comprising granted tenements and tenement applications of approximately 6,000 square kilometres.

Gwalia Mine

The Gwalia mine is the cornerstone of Leonora operations with 1.8 million ounces of gold in reserves at a grade of 9 gram per tonne and indicative mine life in excess of nine years. After two years of redevelopment, the first gold pour from the operations occurred in October 2008 and a year later, the first 100,000 oz milestone was reached.

Development is currently focused on extending the main decline, called the Hoover Decline, to enable the ramp up to full production in financial year 2012. Production from Gwalia comes from a number of lodes with the production in financial year 2010 reaching 1260 metres below surface. By financial year 2012 production is almost solely from the higher grade South West Branch lode which contains 87% of the total reserve ounces. To date the geotechnical environment has been well within design parametres.

The processing plant is a conventional CIP circuit and has a nominal capacity of 1.2 million tonnes per year of hard rock and up to 1.8 million tonnes per year, when softer material is blended. Other surface infrastructure includes a gas-fired power station, a paste fill plant, and a refrigeration plant to cool the underground environment. Central to the mine ventilation system is a 5.5 metre ventilation shaft, which at 800 metres long is the largest raise bored shaft ever drilled in Australia. The accommodation village was significantly upgraded and expanded, incorporating a number of energy efficient and environmentally friendly initiatives. The Camp recently received a certificate of merit in the 2009 Golden Gekko Awards.

Production at the operation is forecast to grow from 109,000 ounces in financial year 2010 to 305,000 to 350,000 ounces in financial year 2012.

King of the Hills

In March 2010, approval was given for the development of the King of the Hills, which is 42 kilometres by road from Gwalia mill. Gold production is planned at the rate of 65,000 ounces per annum over 5 to 6 years following a 12 month ramp up period, and is expected to commence in the June quarter of 2011.

Like Gwalia, the project has a long history dating back to 1897 when high-grade underground mining first commenced at this location. Between 1985 and 2004, previous operators focussed on extraction of high volume, low-grade mineralisation through open pit mining, taking total production to 1.6 million ounces.

Tower Hill

Tower Hill, which is two kilometres from the Gwalia plant, has been identified as a potential underground opportunity with a reserve of 338,000 ounces, which includes several higher grade areas. Further work is being undertaken to better understand the geological controls over the high gold grade domains and the potential for extending the mineralisation at Tower Hill.

Southern Cross Operations

St Barbara's Southern Cross Operations are centred at Marvel Loch, 30km south of the town of Southern Cross and 360km east of Perth, Western Australia. Current operations are based at the Marvel Loch Underground mine. Southern Cross Operations produced 156,105 ounces of gold for the 2009 financial year. The immediate strategic focus is to reliably deliver to the plan through to financial year 2012, while extending the life of the Southern Cross Operations through expansion of reserves.

Marvel Loch Underground

The Marvel Loch Underground mine is the mainstay of St Barbara's Southern Cross Operations. Gold mineralisation extends over a 1.3 km strike length and has been identified to depths of over 700 metres below surface. The ore body comprises multiple lodes. Those currently being mined include Sherwood and Undaunted at the North; Exhibition at the centre; and East and New at the South. Mining methods include uphole benching and open stoping with rock fill, where necessary. Ore production from Marvel Loch Underground mine for the 2010 financial year was 969,519 tonnes at an average grade of 4.0 g/t.

Extensional work to expand reserves outside of currently mined lodes is being undertaken to include targets lateral to and down plunge of existing resources. The potential of areas immediately north along strike of Marvel Loch remains to be reviewed.

The plant has been in operation for more than 15 years and has a production capacity of 2.4 Mtpa based on a conventional carbon in leach circuit. The plant is currently running on a campaign basis as utlitisation is matched to Marvel Loch Underground production. Gold recovery rates from the plant are normally above 86%. Capital expenditure for 2010 will include refurbishment of the Marvel Loch processing plant, with an emphasis on the crushing circuit, the tailings storage facility and the leach and absorption tanks.

Other Mines

Currently there are no other mining operations at Southern Cross. Nevoria is currently subject to a resource model and mining study. Elsewhere in the area, the company is seeking to leverage off projects with a significant amount of drilling and a track record of past production. The Frasers, Corinthian and Copperhead mines are yet to be fully evaluated following the St Barbara’s acquisition of the Southern Cross land-holding. Extensive refractory mineralisation is present at Transvaal, which is undergoing further metallurgical testwork to assess its viability.

Discovery

St Barbara is committed to growing through discovery and is working to optimise the economic value of our exploration portfolio. This is being achieved by implementing an "Expected Value" methodology to ensure exploration programs focus on high-value targets. This approach ensures that vectors to gold systems are clearly understood and programs are staged to defined milestones. The Expected Value methodology takes into consideration the probability of success, the value of the target, and the cost of exploration to ensure only those projects with a positive expected value are pursued with the aim of drill testing and turning over ground efficiently and effectively as possible.

Maximising gold production through the existing processing plants at the Leonora and Southern Cross Operations in Western Australia remains a priority. A key outcome over the last twelve months has been the decision to develop the King of the Hills gold project at Leonora, which is expected to produce at the rate of 65,000 ounces per annum over 3.5 years from the June quarter of 2011. Mineralisation at the King of th Hills project remains open down-plunge. The Tower Hill deposit near Leonora and the Nevoria deposit near Southern Cross are also being evaluated as future ore sources to both operations.

The land holding around existing operations is an important strategic asset for near-mine exploration, covering over ~2,800km2 of highly endowed granite-greenstone terrain in the Eastern Goldfields, the premier gold province of Western Australia. This landbank includes a number of historical high-grade mines which are being carefully evaluated for potential depth and strike extensions. Opportunities also remain to test conceptual targets in a favourable geological setting under cover in these districts.

St Barbara continues to evaluate opportunities in a range of belts throughout Australia, and has established land-holdings in the Gawler Block of South Australia and the East Lachlan Belt in New South Wales. These provinces host world-class iron-oxide copper-gold and porphyry copper gold deposits respectively, both of which extend into poorly exposed areas under cover. Targeting studies are continuing on these projects to assess their potential to advance to drill testing.

St Barbara's project generation activities will ensure a pipeline of quality of projects is delivered for drill testing, as well as actively maintaining an acquistion search for new opportunities.

Mine For

gold, copper, zinc, silver

Location of operation(s)

Western Australia, South Australia, New South Wales

Address

Level 14, 90 Collins St
MELBOURNE, VIC, AUSTRALIA

Phone

(61 3) 8660 1900

Email

Website

http://www.stbarbara.com.au/

Last Updated

04/02/2011