3rd Quarter Report
30 Abril 2003 - 6:58AM
UK Regulatory
RNS Number:5492K
St. Barbara Mines Limited
30 April 2003
ACTIVITIES
REPORT
Three months to 31 March 2003
Enquiries regarding this report may be directed to:
Stephen W. Miller Executive Chairman
Telephone (08) 9476 5555
Overseas +61 8 9476 5555
or
Colin G. Jackson
Investor Relations
Telephone 0417 929 107
St Barbara Mines Limited
Level 2, 16 Ord Street
West Perth
Western Australia 6005
Telephone (08) 9476 5555
Overseas +61 8 9476 5555
Dollar values in this report are Australian Dollars unless otherwise stated.
St Barbara is a dedicated gold company listed on both the Australian Stock
Exchange and the AIM (London Stock Exchange) - ticker symbol SBM - with nearly
12,000 shareholders.
OVERVIEW
MEEKATHARRA OPERATIONS
* Gold production 17,572 ounces - sourced from Gibraltar underground
and low grade stockpiles
* Inaugural milling of Paddys Flat low grade stockpiles commences
* Detailed planning for the development of high grade Prohibition,
Vivians, Consols and Mickey Doolan orebodies commences
FINANCE
* Meekatharra cash operating surplus $2.0 million
* Hedge position reduced to nil
* Share placement raises $1.65 million
EXPLORATION
* Reedys Joint Venture with Gold Fields signed
PAULSENS PROJECT
* Financing options under review
* Puutu Kunti Kurrama and Pinikura Co-operation Agreement signed
CORPORATE
* Revised merger proposal with Geomaque Explorations (Toronto) to
form Defiance Mining Corporation announced post period end
CHAIRMAN'S REVIEW
Meekatharra operations are in transition with all mining activity having been
completed at the Gibraltar underground mine in mid-February 2003. This was in
line with the previously announced revised timetable following the change to the
mining method.
Current operations comprise the carting and milling of 50,000 to 60,000 tonnes
per week of highly oxidised low grade stockpile material from the Paddys Flat
tenements, just 15 km from the plant.
These stockpiles will be the predominant source of mill feed for the next twelve
months.
Whilst plans for the exploitation of the high grade Vivians, Consols,
Prohibition and Mickey Doolan orebodies are progressing, it is considered that
development ore would not be available for a minimum of six months.
The exploration and development of our large Meekatharra landbank was
accelerated with the Reedys tenements farm-out to Gold Fields Limited.
Our joint venture partner can earn a 51% interest by spending $3.5 million over
three years with a minimum $0.75 million in the first year. The tenements,
located over 50 km from the plant, have identified aggregate resources of
195,200 ounces.
When viewed in conjunction with Paddys Flat, 15 km from the plant, the net
effect is an overall resource inventory increase of over 800,000 ounces located,
on average, closer to the plant.
Very considerable management time was devoted to both communicating and
preparing documentation for the proposed merger of St Barbara Mines Limited,
Midas Gold plc (unlisted London based company) and Geomaque Explorations Ltd
(Toronto listed) to form Defiance Mining Corporation.
The revised proposal announced on 3 April 2003 will see a sequential, rather
than concurrent process, with Geomaque acquiring Midas to create Defiance,
followed by the proposed merger of St Barbara and Defiance.
Geomaque shareholder meetings to approve the first step are scheduled for early
June 2003.
Stephen W. Miller
Executive Chairman
30 April 2003
PRODUCTION
Gold production at 17,572 ounces was in line with forecast.
Mine production at 55,105 tonnes represents the final ore from Gibraltar
underground, with all stockpiles processed by the end of February 2003. Records
indicate a total of 371,201 tonnes was mined for 35,397 recovered ounces over
the fifteen month life. De-mobilisation of all services was complete at the
period end.
The balance of mill feed comprised low grade stockpiles, including remaining
material from Bluebird East, the balance of minor tonnages from North of
Alliance and inaugural tonnages from Paddys Flat.
A new access road, via the old Magazine haul road, was established to allow
triple and quadruple dog road trains (at 50-60,000 tonnes per week) to haul
Paddys Flat stockpiles to the mill.
Overall, mill throughput at 611,492 tonnes was 30 percent higher than the
previous quarter, influenced by the softer low grade stockpiles. In March, when
mill feed was almost exclusively highly oxidised Paddys Flat material, the
throughput reached a 2.8 million tonne annualised rate. With softer ore, the
secondary crusher has been bypassed. Other plant circuitry optimisation
continues.
Net operating cost per ounce remained high, influenced by Gibraltar direct and
mine development capital cost amortisation charges which were incurred for two
months of the period.
Depletion of the North of Alliance stockpile will allow approximately 30 km of
haul road to be decommissioned and site rehabilitation to be completed.
Outlook
Production in the immediate future will be sourced exclusively from Paddys Flat
low grade stockpiles. Despite the lower average mill feed grade, net operating
costs per ounce are expected to be lower, even after acquisition cost
amortisation of $1.50 per tonne.
A Notice of Intent to load and haul from the large 1.5 million tonne Central
stockpile is in preparation.
Detailed evaluation of Vivians, Consols, Prohibition and Mickey Doolan deposits
has progressed. Revised resource estimates are subject only to confirmation
twin hole drilling. Given the partial refractory nature of Prohibition and
Mickey Doolan, drill samples will also be submitted for metallurgical testwork.
The portal location for the Prohibition decline has been selected.
Production and Sales Statistics
Period 3 Months to 9 Months to 31
31 March 2003 March 2003
Ore mined 55,105 483,041
(tonnes).........
Average grade (g/t)...... 3.34 3.65
Ore milled 611,492 1,543,388
(tonnes).........
Head grade (g/ 1.03 1.86
t).............
Recovery 86.8 91.2
(%)..................
Gold produced (ounces).. 17,572 77,966
Gold sold 19,268 79,133
(ounces)............
Production Cost Statement ($/oz)
Modified Gold Institute Standard
Period 3 Months to 9 Months to
31 March 31 March
2003 2003
Mine site cash costs...... 512 462
State royalties................ 21 15
Net Cash Cost................. 533 477
Mine development capital cost 33 129
amortisation...................
Inventory movements. 59 4
Net Operating Cost........ 625 609
Realised Gold Price 592 581
St Barbara calculates cost of production using a modified Gold Institute
Standard. The modification is designed to clearly identify the actual cash cost
incurred, which is then normalised depending upon over or under development
against the life-of-mine plan.
The resultant 'net operating cost' per ounce is equivalent to the GI 'total cash
cost' per ounce.
EXPLORATION
Intersections from the seventy drill hole programme at Mulla Mulla East were re-
sampled and the presence of coarse gold in many confirmed.
A preliminary block model of the 40x40 metre pattern hole results, gave an
inferred, predominantly oxide, resource of 0.68 million tonnes at 1.48 g/t. A
further twenty hole programme has been proposed.
A farm-out and exploration joint venture was signed with Gold Fields Australasia
Pty Limited, a wholly owned subsidiary of the South African group Gold Fields
Limited.
The agreement covers a 206 km2 block of tenements in the Reedys area, 50 km
south south west of Meekatharra. Gold Fields can earn a 51% interest in the
tenements by the expenditure of $3.5 million over three years, with a minimum
commitment of $0.75 million in the first year.
Gold Fields can increase the interest to 65% overall by additional expenditure
of $1.92 million over a further three years or 65% in any tenement by the
completion of a feasibility study.
The tenement block includes the historic mining centre of Reedys where past
production exceeded 500,000 ounces from both open cut and underground
operations. Current indicated and inferred resources total 195,200 ounces in
eight separate positions. Excluded is the Jack Ryan measured resource of 53,700
ounces.
The decision to farm-out the area reflects a number of views including that a
programme 100% funded by the Company would not commence for a minimum of 24
months due to other priorities, the correct exploration approach will require
substantial systematic deep core drilling, and rates and rentals currently
aggregate $270,000 per annum.
Gold Fields has commenced preparations for an initial 20,000 metre RAB and
aircore drill programme to further test the Turn of the Tide and Tough Go
trends.
No exploration was undertaken on the Chesterfield Joint Venture. Our partner
has earned a 51% interest by expending $500,000 and has defined a number of
small high grade positions.
PAULSENS PROJECT
The Company commenced an evaluation of alternatives to re-engineer financing
options for the project (following completion of the bankable feasibility
study), focusing in particular on reducing the amount of equity required for
project start-up.
Upon completion of this evaluation, the Company will look to commence a drilling
programme to extend the resource base below the bottom of the proposed open pit.
A Co-operation Agreement was signed with the Puutu Kunti Kurrama and Pinikura
Peoples.
Ashburton Exploration
Initial mapping, rock chip sampling and soil sampling continued on the new joint
venture farm-in ground to the south and east of Paulsens (St Barbara earning 70
percent through expenditure of $1 million over four years).
Information in this report relating to ore resources conforms to the reporting
requirements of the Australasian Code for Reporting of Identified Mineral
Resources and Ore Reserves (The JORC Code). It is based on information compiled
by Mr Graham Miller, FAusIMM, a Competent Person as defined by the Code. It is
included in this report with his consent.
CORPORATE INFORMATION
Board of Directors and Executive Management Issued Capital Shareholder Enquiries
S. W. Miller Executive Chairman As at the date of this report, Matters related to shares held,
K. A. Dundo Non-Executive Director issued capital is 385,553,303 change
G. B. Speechly Non-Executive Director shares. of address and tax file numbers
H. G. Tuten Non-Executive Director There were 44,329,772 listed should
A. D. Rule Chief Financial Officer options, exercisable at 30 cents be directed to:
and Company Secretary up until 29 February 2004 and Australia:
44,905,634 unlisted options Advanced Share Registry Services
Registered Office exercisable at various prices Level 7, 200 Adelaide Terrace
Level 2, 16 Ord Street between 11 cents and 45 cents up Perth WA 6000
West Perth WA 6005 to 17 January 2008. Telephone: .+61 8 9221 7288
Telephone: +61 8 9476 5555 Facsimile: +61 8 9221 7869
Facsimile: +61 8 9476 5500 United Kingdom:
Email: perth@stbarbara.com.au Major Shareholders Computershare Investor Services
Website: www.stbarbara.com.au National Nominees 12.04% PLC
Strata Mining Corporation PO Box 435, Owen House
Stock Exchange Listings Ltd 8.35% 8 Bankhead Crossway North
Australian Stock Exchange Westpac Custodians 6.77% Edinburgh EH11 4BR
AIM Board of London Stock Exchange ANZ Nominees 5.75% Telephone: +44 870 703 6088
Ticker Symbol: SBM Facsimile: +44 870 703 6142
ADR Depositary
The Bank of New York
Substantial Shareholders ADR Division
Strata Mining Corporation 101 Barclay Street
Ltd 9.39% New York NY10286 USA
GAM International Growth Telephone: +1 212 815 2218
Fund 7.94%
FINANCE
Realised Gold Price
A total of 19,268 ounces was sold at a net realised gold price of $592 per ounce
(against an average spot price of $599 per ounce).
The Company delivered 10,254 ounces into remaining hedge contracts at a realised
price of $588 per ounce, and the balance into spot.
As of 20 February 2003 the Company was unhedged and remains so at the date of
this report (current spot price $538 per ounce).
Financial Performance
Meekatharra Operations generated a $2.0 million cash surplus for the quarter
(includes the sale of 1,696 inventory ounces).
Financial Position
As at 31 March 2003, cash and bullion totaled $1.24 million (plus $3.37 million
in rehabilitation bonds).
Major cash movements during the period included proceeds from a placement of
shares ($1.65 million), advances from an $8.4 million convertible loan and note
package ($1.60 million) and payment of the first and part of a second
acquisition instalment for Paddys Flat (total of $1.65 million).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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