Delays results in massive impairment for St Barbara

The company said on Friday that the impairment largely related to the delay in commencement of mining owing to permitting issues, and reflected 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.

The company has previously noted 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 was the primary driver of the delay in first production from these future operations.

A revised environmental impact statement (EIS) for Beaver Dam is currently in progress with the Canadian federal government regulators and is expected to be approved by June 2022. In parallel, the mining licence approval process is underway and is expected to be completed by the end of March 2022.

After the EIS is approved St Barbara will apply for the Nova Scotian provincial government Industrial Approval, which will allow commencement of construction and mining in December 2023, and first ore is expected to be delivered from Beaver Dam in the first half of 2024.

Prior expectations were for first ore to be produced in December 2023.

The EIS for Fifteen Mile Stream is expected to be completed in September 2023, with first production expected to be pushed out from June 2024 to later in 2025.

Initial production from Cochrane Hill was expected to start in January 2023, however, the delays in the permitting process for Beaver Dam and Fifteen Mile Stream, coupled with the pending decision on the suitability of Archibald Lake as a suitable water course, has resulted in first production from Cochrane Hill now expected in 2028.

Furthermore, the incomplete Beaver Dam feasibility study also indicates that capital costs will be higher, the miner warned.