New gold mine for St Barbara

Miner St Barbara says it has approved the development of its King of the Hills gold project near Leonora, with gold production planned to start in the June quarter of next year.

The project, formerly known as the Tarmoola underground operation, has a pre-production capital expenditure of between $12.5 million and $14 million, which will be funded from internal cash resources.

Cash payback is anticipated to be by mid-2012.

The operation will have a gold production rate of 65,000 ounces a year over a three-and-a-half year mine life following a 12-month ramp up period.

The project has probable ore reserves of 195,000 ounces of contained gold with potential for further increases.

Cash operating costs for the life of the mine is forecast for between $850 and $880 per ounce.