St Barbara boss sees no end in sight for WA labour crunch

St Barbara boss Craig Jetson says he sees no easing of WA’s crippling labour shortage which has forced the gold miner to operate well below capacity at its Gwalia mine.

Speaking after the miner posted an improved June quarter result, Mr Jetson said he could not be optimistic about the skills crunch in WA, despite some other mining bosses reporting shortages had eased in recent months.

“I’m not seeing the labour pressures any different than they were in previous quarters,” he said.

“I’m not seeing an influx of labour from the east to the west now that the borders have opened up.

“What I am seeing is increasing (COVID) cases here in the West creating significant issues for us in our operations in WA.”

His comments come after OZ Minerals boss Andrew Cole suggested this week falling commodity prices and recent project cancellations and postponements had begun to ease the tight market for mining labour.

Liontown Resources boss Tony Ottaviano also said last month his conversations with contractors suggested wage inflation in the sector had peaked in February.

Mr Jetson said while the company had managed labour shortages as best it could, the miner was “certainly not where we need to be”.

“We’re not running the key equipment anywhere near capacity because of that and I don’t see that changing in the very near future as much as we try,” he said.

Mr Jetson also faced questions on Wednesday during analyst and investor conference call from from a dissatisfied shareholder about speculation of proposed merger of equals with Genesis Minerals.

Mr Jetson confirmed talks with the Raleigh Finlayson-led explorer over a possible consolidation of the Leonora gold province were continuing but talked up the value of St Barbara’s existing assets in the area.

“When other business leaders start to see the opportunity that Leo(nora) would provide as a centralised hub, a lot of people start talking, a lot of people want it, a lot of people approach me,” he said.

“It’s great that we are the centre of attention, in terms of value creation.

“We’ve got the right strategy, we’ve certainly got the right endowment, we’re talking to the right people, not just one group of people, we’re talking to multiple groups.

“Which one we land on, not decided, but we’ll certainly do everything we can to support the growth and the value of our share price.”

St Barbara finished a difficult year strongly in the June quarter, achieving full-year production and cost guidance at a site and group level. The company produced 280,746 ounces for the year at costs of $1848 per ounce. However the output was still down 14 per cent on the previous year’s 328,000oz.

Its cash reserves increased 25 per cent quarter-on-quarter to $99 million.

Mr Jetson said the company expected to bring its Zoroastrian project, picked up in the $157m scrip acquisition of Bardoc Gold earlier this year, into production in the next 12 months, six months ahead of schedule.

He said the extra 300,000tpa in ore at 3g/t it would deliver to the Gwalia mill would help justify a planned expansion of the facility’s capacity from 1.4Mtpa to 2.1Mtpa.

The company also on Wednesday declared a maiden 218,000 ounce resource for its Old South Gwalia deposit.

St Barbara shares were up 2¢, or 2 per cent, to 92¢ at 12.10pm.