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St Barbara flags issues at its Atlantic gold operations in Canada, revises guidance

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(Kitco News) - Australian gold mining company St Barbara (ASX:SBM) announced today that in December quarter 2021, the company's gold production was 65,523 ounces, in line with the prior quarter and 27% lower than a year ago.

The company said that production was slightly lower at Leonora due to lower grade, however the impact of this was largely offset by higher feed grades at its Atlantic operations, located in Nova Scotia, Canada.

St Barbara added that Atlantic’s gold production increased by 11% in the December quarter compared to the prior quarter. The increase was driven by a 14% increase in gold head grade, partially offset by minor reductions in mill throughput and recovery.

However, the company noted that mining block model at Atlantic underperformed in the September quarter against expectations which necessitated the development of a new block model to better reflect the remaining resources and mining sequence of the pit as it nears the end of its life.

More importantly, according to the company’s statement, Atlantic has continued to experience delays in obtaining routine waste rock storage permits and when combined with significant rainfall events in the December quarter and the updated forecasts from the improved block model and associated mine plan, FY22 production for Atlantic has been revised down to 55koz to 65koz (previously 65koz to 85koz).

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In addition, the company said that due to the reduction in production per ounce AISC guidance at Atlantic is now expected to be between A$1,650 to A$1,850 per ounce (previously A$1,305 to A$1,515 per ounce).

Production guidance for Leonora is expected to be towards the top end of its range while Simberi’s production is expected to be towards the bottom end of its guidance range.

As a result, the company said that its production guidance range has been narrowed to be between 305koz and 335koz (previously 305koz to 355koz).

The company also pointed out that COVID-19 pandemic is beginning to cause issues sourcing required labour and equipment for the Atlantic and Simberi operations, and said that “the company remains proactive and pragmatic in its approach to the management of the pandemic.”

St Barbara is an Australian based, ASX 200 company with gold mining operations in Australia, Canada and Papua New Guinea. The company’s assets include Leonora operations in Western Australia, Atlantic operations in Nova Scotia, Canada, and Simberi operations in Papua New Guinea.

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