St Barbara : Quarterly Report Q2 FY22

Published: 2022-01-24 16:57:18 ET SBM.AX

Q2 December FY22

3 months to 31 December 2021

Highlights Q2 December FY221

Production summary

Q2 Dec

Q3 Mar

Q4 Jun

Q1 Sep

Q2 Dec

Half Year

FY21

FY22

Group TRIFR3

mhrs

3.3

3.7

3.9

3.6

2.7

Gold Production

koz

133

All-In Sustaining Cost

A$/oz

1,517

1,649

1,623

1,492

1,587

1,539

Gold Sold

koz

134

Realised Gold Price

A$/oz

2,126

2,247

2,336

2,408

2,423

2,417

St Barbara Managing Director and CEO Craig Jetson said, "The end of the December FY22 quarter marks a momentous period for St Barbara. Through the announcement of our acquisition of Bardoc Gold, we took decisive steps towards securing Leonora's future as a significant processing hub in the Western Australian goldfields. The acquisition uniquely positions St Barbara to add value to the high quality Bardoc ore bodies by processing the ore at the Leonora processing plant. We also had some very encouraging drilling results in the Old South Gwalia ore body, which has the potential to add new mining fronts higher up in the mine. By the end of this financial year we are targeting an updated Mineral Resource for this area."

"In conjunction with this, we continue to progress the Pre-Feasibility Study (PFS) on Tower Hill, Harbour Lights and associated processing plant expansion. Mine optimisations and designs were completed. The selection of open pit

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St Barbara Quarterly Report / Q2 December FY22

mining as the preferred development approach for Tower Hill means that we increased the resource base by 600koz. Infill drilling is underway at Tower Hill and Trevor Bore and will start at Harbour Lights this coming quarter."

"The end of the quarter also heralded the completion of laying the DSTP pipeline at Simberi. The success of this project has meant that Simberi has been able to re-commence production in early January 2022."

"Production from Leonora has been stronger than we anticipated which helps offset lower production guidance for the Atlantic operations which has continued to be impacted by delays in obtaining routine waste rock permits."

"Importantly, these significant growth and production achievements were underpinned by strong safety results in the quarter with TRIFR down 25% to 2.7 per million hours worked."

Overview

Group gold production for the December quarter was in line with the prior quarter. Production was slightly lower at Leonora in the second quarter due to lower grade, however the impact of this was largely offset by higher feed grades at Atlantic.

Drilling at Old South Gwalia has identified an area between 600mbs and 1000mbs, which has the potential to add mining fronts at significantly shallower depths. Drilling will continue to test the South Gwalia Series between 600mbs and 750mbs with an updated Mineral Resource expected to be completed in Q4 June FY22.

Completion of the Simberi DSTP pipeline was achieved during the December quarter, enabling the restarting of the process plant in early January 2022.

Group All-In Sustaining Cost for the September quarter was 6.5% higher at A$1,587 per ounce compared to the prior quarter in line with slightly lower production at Leonora.

At 31 December 2021, St Barbara total cash at bank position was A$94 million (up from A$42 million on 30 September 2021). Total debt owing under the Company's syndicated facility on 31 December 2021 was C$80 million and A$50 million. A drawdown of A$50 million on the Australian tranche during the quarter was a prudent measure taken to maintain liquidity in a volatile operating environment due to potential COVID-19 interruptions.

The COVID 19 pandemic is beginning to cause issues sourcing required labour and equipment for the Atlantic and Simberi operations. The company remains proactive and pragmatic in its approach to the management of the pandemic. It notes that there has been tightening of the labour market in Western Australia as a result of border closures. St Barbara has developed contingency plans to minimise any potential interruption which could be caused when the West Australian border does open. With the safety of its people and communities paramount, St Barbara continues to work with and follow the advice of State and Federal governments and health authorities.

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). Due to the reduction in production per ounce AISC guidance 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, Group production guidance range has been narrowed to be between 305koz and 335koz (previously 305koz to 355koz).

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St Barbara Quarterly Report / Q2 December FY22

Consolidated Gold Production & Guidance

Production Summary

Q2 Dec

Q3 Mar

Q4 Jun

Q1 Sep

Q2 Dec

Half Year

Guidance

Consolidated

FY21

FY22

St Barbara's financial year is

Qtr to

6 months to

Year to

1 July to 30 June

31 Dec 2020

31 Mar 2021

30 Jun 2021

30 Sep 2021

31 Dec 2021

30 June 2022

Production

Atlantic

26,693

20,606

26,718

15,243

16,887

32,130

55-65 koz

Leonora

42,198

42,716

45,157

51,757

48,637

100,394

180-200 koz

Simberi

20,779

18,981

10,824

60-70 koz

Consolidated

89,670

82,303

82,698

67,000

65,523

132,522

305-335 koz

Mined Grade

Atlantic

g/t

0.91

0.71

0.91

0.63

0.76

0.7

n/a

Leonora

g/t

8.3

8.0

6.5

8.6

6.8

7.68

n/a

Simberi

g/t

1.49

1.33

1.47

1.41

1.29

1.31

n/a

Total Cash Op. Costs

Atlantic

A$/oz

736

903

769

1,188

1,234

1,213

n/a

Leonora

A$/oz

1,037

1,047

1,274

1,033

1,164

1,096

n/a

Simberi

A$/oz

1,817

2,032

2,835

n/a

Consolidated

A$/oz

1,128

1,237

1,314

1,071

1,184

1,127

n/a

All-In Sustaining Cost

Atlantic

A$/oz

999

1,128

1,011

1,504

1,396

1,447

1,650-1,8501

Leonora

A$/oz

1,573

1,555

1,663

1,488

1,653

1,568

1,605-1,720

Simberi

A$/oz

2,070

2,426

2,964

- 1,600-1,8502

Consolidated

A$/oz

1,517

1,649

1,623

1,492

1,587

1,539

1,650-1,815

1 C$1,500 to C$1,685 per ounce at AUD/CAD of 0.91

2 US$1,150 to US$1,330 per ounce at AUD/USD of 0.72

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St Barbara Quarterly Report / Q2 December FY22

Leonora Operations, Leonora, Western Australia

Production Summary

Q2 Dec FY21

Q3 Mar FY21

Q4 Jun FY21

Q1 Sep FY22

Q2 Dec FY22

H1 FY21

H1 FY22

Ore Mined

157

168

195

179

193

242

372

Waste mined

105

186

147

Mined grade

g/t

8.3

8.0

6.5

8.6

6.8

8.2

7.7

Ore milled1

177

194

281

244

279

274

523

Milled grade1

g/t

7.6

7.1

5.2

6.8

5.6

7.6

6.2

Recovery

Gold production

42,198

42,716

45,157

51,757

48,637

64,823

100,394

Gold sold

47,846

36,864

49,597

45,472

55,600

64,336

101,072

Realised gold price

A$/oz

2,022

2,298

2,348

2,439

2,453

1,994

2,447

All-In Sustaining Cost

A$/oz

1,573

1,555

1,663

1,488

1,653

1,933

1,568

(AISC)

produced

Operations

Leonora's gold production of 48.6koz was 6% lower than the prior quarter, driven by reduced head grade partially offset by increased mill throughput and gold production from purchased ore. During the quarter there was 45kt of ore purchased from the Linden Gold Alliance which contributed 4,732oz of gold in group production, an increase of 38% over the September quarter.

In November 2021 there was a fall of ground event which blocked access to high grade stopes requiring a change to the near-term mine plan. The stopes mined during the quarter were however lower grade and spread over a large area of the mine. Investigations into the cause of the fall of ground needed to be completed before work could be commenced on clearing the blockage. This caused inefficiencies in how the mining fleet had to be utilised to access available stopes. To compensate, it was decided to focus on delivering ore to the surface resulting in an 8% increase in ore mined during the quarter and a drop in waste ore movement.

Three new jumbo development drills have been delivered to site to accelerate the development metres in the next six months.

Offsetting the reduced grade from the mine was a 14% increase in mill throughput. This was driven by increased ore production from the mine, increased third party ore purchases and resumption of the treatment of stockpiled ore.

During the December quarter a continued focus on material movement underground saw the delivery and sustainability of initiatives to increase truck utilisation. Further use of remote equipment operation for the loading of the trucking fleet has sustained a 14% improvement in average daily haulage from 2.1kt per day to 2.4kt per day.

Leonora achieved an AISC of A$1,653 per ounce, an increase of 11% over the September quarter. This was driven by the reduced gold production resulting from the lower head grades.

During the quarter, we continued our focus on safe material movement underground and increasing truck utilisation. Some excellent work by the Macmahon crews and the increased use of remote equipment for stope loading delivered a 14 per cent improvement in average daily haulage from 2.1 kt to 2.4 kt per day in December.

The site commenced the roll out of the infield critical control check process to support the Safety Always leadership and coaching work done during the quarter.

Leonora's strong performance year to date is forecast to continue for the rest of the financial year, therefore gold production for FY22 is expected to be at the top end of the guidance range with AISC to be within current range.

Accelerating the Leonora Province Plan

The combined PFS for Tower Hill and Harbour Lights continued to progress to schedule. During the quarter the resource definition infill and geotechnical drilling campaign commenced, and results are reported under the Exploration section below. Mine design and scheduling was completed with open pit mining selected as the optimal development approach for Tower Hill. Accordingly, St Barbara announced an initial open pit Indicated Mineral

1 Includes Gwalia mineralised waste, stockpile material and third-party ore purchases

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St Barbara Quarterly Report / Q2 December FY22

Resource for Tower Hill of 21Mt at 1.8g/t for 1.2Moz at a 0.4g/t Au cut-off grade1. The Tower Hill open pit is just two kilometres from the existing processing facility and ore production rates of between 1Mtpa and 3Mtpa are being considered in the PFS.

The PFS work has identified cost effective opportunities to expand the Leonora processing plant capacity from 1.4Mtpa to 2.1Mtpa at an estimated cost of ~A$30 million. Expanding the processing plant capacity by 50% will be achieved by upgrading the conveyor drives in the crushing circuit, adding a second ball mill to the grinding circuit and the addition of intertank screens through an expanded carbon-in-leach (CIL) circuit.

Work is also underway in the PFS to plan the incorporation of Glencore's Albion Process™ into the process flow. The proposed plant will be able to efficiently alternate between the treatment of refractory and free-milling ores for an anticipated capital cost of ~A$110 to A$120 million2. The ability to process refractory ore will be unique to the Leonora processing plant within a 200km radius, providing new opportunities for acquisition and discovery.

Infill and geotechnical drilling will commence at Harbour Lights in Q3 March FY22. The infill drilling is being supplemented by a campaign to log and sample diamond drill core recovered from pre-1995 drilling to achieve greater definition on multi-element geological modelling to allow an updated resource for Harbour Lights in early FY23.

At Trevor Bore the planned RC drilling campaign commenced on schedule during the quarter with 27 holes completed of a 57 hole programme. Assay results are pending.

Planned acceleration following Bardoc Gold acquisition

On 20 December 2021 St Barbara announced its intention to acquire Bardoc Gold. Acquisition of Bardoc Gold will give St Barbara access to the advanced Aphrodite and Zoroastrian underground deposits. These deposits lie immediately adjacent to rail and highway infrastructure that connects them to the Leonora processing plant. This convenient road and rail connection provides the opportunity to accelerate the Leonora Province Plan through the rapid development of the Zoroastrian underground deposit as a near-termfree-milling feed source which would then be followed by the development of the refractory Aphrodite underground deposit. Aphrodite is a high margin refractory ore source that will complement the Harbour Lights refractory deposit and accelerates the installation of the Glencore Albion Process™ at the Leonora processing plant.

Construction of the Zoroastrian underground mine is targeted to commence in Q4 June FY23 at an estimated capital cost of ~A$15 million3. This assumes portal access via the existing Zoroastrian pit, with longhole open stoping as the mining method.

Construction of the Aphrodite underground mine is targeted to commence in Q1 September FY24 at an estimated capital cost of ~A$30 million3. This assumes construction of a boxcut portal and the utilisation of a top-down mining method with conventional sub-level longhole open stoping techniques. It is anticipated that the refractory ore produced from the mine will be railed to the Leonora processing plant to coincide with completion of the necessary plant upgrades. Metallurgical test work has already been conducted on Aphrodite ore and has been determined as being amenable to the Albion Process™.

The acquisition of Bardoc Gold remains subject to a scheme of arrangement and Bardoc shareholder approval and all target dates relating to Aphrodite and Zoroastrian are subject to implementation of the Bardoc scheme of arrangement.

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Disclaimer

St. Barbara Limited published this content on 25 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2022 21:56:36 UTC.