Shares in St Barbara Ltd (ASX: SBM) have traded more than 5% higher after the company published a positive prefeasibility study for its 15-Mile processing hub.
The gold miner said in a statement to the ASX that the study “confirms outstanding project economics and optimal environmental and social outcomes”.
It added that the project had a post-tax payback period of less than one year, using a gold price of US$3000 per ounce, and would generate post-tax cash flow over the life of the mine of $2 billion.
The current gold price is sitting well above the figure used for the company’s calculations, with the precious metal currently changing hands for US$4835.45 per ounce.
Long life mining project
St Barbara said the project would have a stable production profile of more than 100,000 ounces of gold per year over more than 11 years, which did not include any potential upside from exploration in the region.
The project would cost about $308 million to build, and would have an all-in sustaining cost of production of US$1188 per ounce, “underpinned by fundamentals of low open pit strip ratios, strong recoveries from conventional free milling ores, proven operating experience from Touquoy and costs shared across three mining areas”.
Touquoy refers to the company’s existing mine, where open-cut mining is proposed to restart soon.
St Barbara said the 15-Mile development was expected to be funded from cash flow from the New Simberi gold project in Papua New Guinea and Touquoy once it had restarted.
The company said further re the project:
The project includes three operating locations, with all ore processing and tailings management occurring at 15-Mile, while Beaver Dam and Cochrane Hill are to operate as satellite mines. The prefeasibility study design leverages the existing Touquoy processing plant equipment. The proposed Touquoy restart would have no adverse impact on the 15-Mile Processing Hub Project development timeline as the remnant surface ore stockpiles are anticipated to be processed before relocation of the Touquoy processing plant to 15-Mile.
St Barbara Managing Director Andrew Strelein said the prefeasibility study showed 15-Mile had “outstanding” economics.
The completion of the prefeasibility study is a key milestone as we continue to de-risk the project. St Barbara is well-positioned to take the project to environmental and social impact assessment processes over FY26 and in parallel with the feasibility study.
Shares in St Barbara have tripled over the past 12 months, up from 19.2 cents to 61.5 cents on Wednesday, up 4.2% on the day.
The company was valued at $713.8 million at the close of trade on Tuesday.
The post Why is this gold miner’s share price heading higher today? appeared first on The Motley Fool Australia.
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