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St Barbara says COVID-19 outbreak at Simberi under control, lowers gold production target

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(Kitco News) - Australian gold mining company St Barbara (ASX: SBM) said today that the COVID-19 outbreak at Simberi is under control and released the revised annual production and cost guidance.

The company now expects Simberi will produce between 25-30koz of gold at an AISC of A$3,200-3,600 per ounce in FY22, compared to the previous guidance of 60-70koz of gold at an AISC of A$1,600-1,850 per ounce.

Group FY22 production has been updated to 275-290koz and AISC of A$1,750-1,870 per ounce, compared to the previous guidance of 305-335koz at an AISC of A$1,650-1,815 per ounce.

The company added that a combination of limited operators and maintainers during the outbreak resulted in low truck availability reducing the amount of material mined and hauled, with production for the third quarter now expected to be ~11koz.

Importantly, the company noted that the face position in the pits significantly behind schedule leading to reduced oxide ore being available in Q4. Notwithstanding the restoration of national workforce numbers, St Barbara said it has determined that ramp-up rates will be slower than previously anticipated.

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"The ongoing difficulties with securing expatriate maintenance specialists and operations management is expected to impact Q4 FY22 and the new guidance range reflects that assessment,” the company noted in a statement.

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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