St Barbara Limited (ASX: SBM) announced that the company completed the Feasibility Study (FS) of its Gwalia Mass Extraction Project in Leonora region. The prefeasibility study taken by the company previously in February 2018 proposed changes in haulage and mining methods to suit the project’s orebody.
The feasibility study of the company incorporates a third-party review, subject matter experts and the inputs from the company. It identified three main alternative haulage methods including the continue trucking (the base case in the prefeasibility study plus two sub-options with additional ventilation and cooling). The other alternative of haulage includes hydraulic hosting using positive displacement pumping and using three chamber pipe feeder.
As per the company, the feasibility study reveals that the preferred option of the haulage method is optimised trucking as compared to either hydraulic hosting using positive displacement pumping or by using three chamber pipe feeder based on the risk and return of the capital assessments.
The hydraulic hosting using chamber pumping has been discounted due to the technical risk and the immaturity of the technology. Albeit, hydraulic hosting using positive displacement is technically feasible as it reduces unit-operating cost and lowers cut-off grade, but reliable sizing material is a vital issue with the method.
Another reason to prefer the optimized trucking for haulage is the high capital expenditure on both the alternatives of hydraulic hosting. The study identified a significant capital requirement with hydraulic hosting. The company estimated that the capital expenditure for the hydraulic hosting would be twice as compared to $100 million estimated in the previously taken prefeasibility study amid changes in design and additional development. Apart, from that, the additional ventilation for the underground processing circuits suggested by the feasibility study was not anticipated under the prefeasibility study.
The continuation of trucking was the base case in the Prefeasibility study (PFS), Feasibility study (FS) and Life of Mine plan modelling. The preferred trucking option’s LoM extends to FY2031, with mining up to 1.1 million tonnes per annum (Mtpa) down to 2,300 metres below the surface using the existing Resources and Reserves. The preferred trucking option includes the expense of additional ventilation and cooling of approx — $ 100 million over the LoM including an additional $30 million ventilation within the Gwalia Extension project.
The current ore reserves of the Gwalia project (as on 30th June 2018) extends to the depth of 2,140 meters below the surface with mineral resources extension to the depth of 2,200 meters below surface including the current identified 4,825Koz mineral resources, anticipated to convert into mineable ore reserves.
The results from the feasibility study suggested that requirement of higher development and the anticipated ore body geometry of the Gwalia deposit does not consistently support the company’s initial 1.4Mtpa production throughput on which the initial study was based.
Gwalia Ahead in FY19:
The Paste Aggregate Fill (PAF) circuit was estimated to be operational in early Q2 December 2019 by the initial production guidance of FY19. However, the PAF is now due to be completed in Q4 June FY19, which will impact the anticipated gold production from the project in FY19. The company reduced the production guidance of FY19 from 245,000 – 255,000 ounces of gold to 235,000 – 240,000 ounces with an increased AISC from A$930 – A$970 per ounces to A$980 – A$1,000 per ounces.
However, the company increased the production guidance in Simberi Operations from 120,000 – 130,000 ounces to 130,00 – 135,000 ounces of gold with a reduced AISC from A$1,275 – A$1,375 per ounces to A$1,245 – A$1,300 per ounces. The company also inked a forward sales contract recently for 2020.
The stock of the company is trading at A$3.355 (as on 22nd March 2019, 03:29 PM), down by 27.85% as compared to its previous close.