Mining News
St Barbara impairs its Canadian gold operations due to permitting delay
(Kitco News) - Australian gold mining company St Barbara (ASX: SBM) today announced that it expects to incur a non-cash impairment in the range of A$250 million (~US$178 million) to A$300 million (~US$214 million) in its financial results for the year ended 30 June 2021 due for release on 26 August 2021.
According to the company’s statement, the non-cash impairment relates to the Atlantic Operations, located in Nova Scotia, Canada, and is expected to reduce the carrying value of Atlantic Operations to align with current market consensus estimates.
The company said that the impairment largely relates to the delay in commencement of mining due to permitting issues. It reflects an assessment based on best effort estimates relying on an incomplete Beaver Dam Feasibility Study for capital estimates and best effort estimates on the timing of permits required for each of the three satellite operations: Beaver Dam, Fifteen Mile Stream and Cochrane Hill.
St Barbara noted that there has been a delay in the issuing of permits by the Nova Scotia provincial government regulators and Canadian federal government regulators for all three satellite operations, which is the primary driver of the delay in first production from these future operations.
The company added that the assessment of carrying values is in progress and includes estimates of the quantities of recoverable gold, future production rates, operating costs, capital requirements and economic assumptions used in valuations. The incomplete Beaver Dam Feasibility Study also indicates that capital costs will be higher.
St Barbara reiterated that it is committed to working with the Nova Scotian provincial and Canadian federal government regulators to expedite the permit approval process.
In addition, St Barbara said it has promoted Meryl Jones, St Barbara's Head of Business Development, to the role of President Americas to lead efforts in North America to accelerate permitting and construction of future operations. Meryl will be relocating to Nova Scotia in the near future.
St Barbara is an Australian based, ASX 200 company with gold mining operations in Australia, Canada and Papua New Guinea.
