Just three and a half years since St Barbara Ltd bought Atlantic Gold for $722 million, the Australian company is now preparing to hand off all those Nova Scotia operations to a new junior mining company that will be called Phoenician Metals. The new junior will also own St Barbara’s Simberi mine in Papua New Guinea.
It is part of a giant shake-up at St Barbara, which will merge with Genesis Minerals in March 2023, and re-name itself Hoover House Limited. Hoover House will focus entirely on gold mining in Leonora District, Australia.
St Barbara recently replaced its CEO, and it has not had a smooth year.
As the Halifax Examiner reported here, in late August, the company reported an annual net loss of over $144 million, largely because of its assets in Nova Scotia, and following that announcement, its share value dropped 70%.
Reporting on the company’s dismal performance, The Australian Financial Review resources reporter Peter Ker wrote that a “black cat” seemed to have crossed St Barbara’s path after it decided to spend a small fortune to buy Atlantic Gold in 2019.
With a new junior taking over St Barbara’s Nova Scotia properties, it is not clear what will happen to Atlantic Gold and Atlantic Mining Nova Scotia, which operate its mining projects in the province.
Phoenician Metals, which will be headquartered in Perth and be listed on the Australian Securities Exchange (ASX), will own the Touquoy open pit gold mine in Moose River, as well as St Barbara’s three other proposed mine projects at Beaver Dam, Fifteen Mile Stream and Cochrane Hill, as well its many mineral exploration operations in the province.
Reverberations in Nova Scotia
The shake-up in Australia will have huge reverberations in Nova Scotia.
In a press release issued today in Australia, St Barbara announced it has decided to press pause on the ongoing environmental assessment for the Beaver Dam mine, “to provide additional time for further consultations with First Nations Groups, Department of Fisheries and Ocean [sic], and other affected community groups.”
Millbrook First Nation, which has two Reserves near the proposed Beaver Dam mine, has repeatedly told St Barbara it opposes the project because of concerns that the mine and its infrastructure will result in a loss of fishing and hunting areas, and affect resources they depend on for food security.
The Beaver Dam project, about 30 kilometres from St Barbara’s existing open pit Touquoy mine in Moose River, was to have been the second of St Barbara’s four open pit gold mines in eastern Nova Scotia, and it was to have gone into operation just as mining ended at the Touquoy mine. Crushed ore from Beaver Dam was to have been trucked to the Touquoy mine for processing, and the plan was to store those tailings in the exhausted open pit there.
However, according to St Barbara’s announcement today, the pause on the environmental impact assessment for the Beaver Dam project means this will no longer be possible. “As a result the Touquoy plan will enter a period of care and maintenance” in December 2024 when the company will have finished processing the stockpile of ore at the Moose River mine.
According to the Nova Scotia mine security tracker, the province holds $41.20 million as a “reclamation security” for the Touquoy gold mine.
Full steam ahead at Fifteen Mile Stream?
And there are other changes afoot.
St Barbara says it will now “press ahead with the Fifteen Mile Stream permitting and review the opportunity to repurpose the Touquoy mill for Fifteen Mile Stream when stockpile processing concludes.” And, it notes:
The pause of Beaver Dam permitting and the consequent break in business continuity is expected to result in an impairment in the carrying value of the Atlantic assets in the December half-year results.
The company — or rather Phoenician Metals that will inherit these troubled projects from St Barbara — says it is now aiming to start construction of the Fifteen Mile Stream mine in 2026.
As the Halifax Examiner reported last month, the Atlantic Salmon Federation and environmental groups are “extremely concerned” by recent changes made to the Fifteen Mile Stream mine plans. When St Barbara submitted its proposal to the Impact Assessment Agency of Canada in 2018, it was for a single open pit. St Barbara’s Atlantic Mining Nova Scotia recently announced the mine will now comprise four open pits.
In a second announcement today, St Barbara also says it will “advance” its proposed gold mine project for Cochrane Hill “to create an eastern production hub.”
This is an odd turn of events. In August this year the Impact Assessment Agency of Canada terminated the assessment of the Cochrane Hill mine project because St Barbara failed to provide it with “required information or studies within the legislated time limit.”
The Cochrane Hill mine site is on the banks of the St Mary’s River, and it has also met with strong opposition led by the St. Mary’s River Association with its NOPE (No Open Pit Excavation) campaign, the Nova Scotia Salmon Federation, and the Atlantic Salmon Federation.
Meanwhile, trading on St Barbara has been halted until December 14, and Genesis Minerals and St Barbara are hosting a joint investor call today.
Thank you for breaking down all this information into manageable pieces. I was trying to figure out what the implications of all this was when I first heard about it. You’ve done a great job of of breaking this down to make sense for those of us who don’t really understand the gold mining industry or our government’s lack of resposnibility managing and regulating it.
Thank you again Joan for keeping a keen eye on this ever changing shell game!