MINING company St Barbara achieved record gold production at its Simberi mine in Papua New Guinea (PNG), the company said in its June quarterly report.

Simberi gold production was 27,137 ounces for the quarter, comfortably in excess of the targeted 100,000 ounces per annum run rate.

St Barbara said mining, ore transport and processing operations at Simberi all exceeded their targets and achieved record results.

Quarterly production at Simberi more than doubled and unit all-in sustaining cost halved during the 2015 financial year.

St Barbara said this was achieved with lower levels of capital expenditure and has resulted in the mine operating cash positive with a margin of $329 per ounce in the June quarter.

The total volume of material and ore mined increased for the quarter at Simberi, with the group reaching its targeted run rate of 3.5 million tonnes of ore per annum of ore in the June quarter.

St Barbara said operational improvements continue to drive increases in the performance of the Simberi processing plant.

The increased focus on total ore delivery resulted in a 27 per cent increase in tonnes delivered to the mill compared to the previous quarter.

St Barbara said it is confident that Simberi can improve further, with the ore delivery system a key opportunity for reducing costs this quarter and the full effect of this is expected to be seen in the next quarter.

Opportunities to improve automation in the processing plant have been identified by the company and are being addressed.

In addition, St Barbara is trialling a new solution to the issue of ‘carry back’, which is wet sticky ore accumulating at the aerial rope conveyor terminus, this is expected to reduce maintenance costs and increase availability.

During the quarter, the Simberi life of mine plan was updated and the prefeasibility study for the Simberi sulphide project advanced, which is expected to be completed in the December 2015 quarter.

Trenching at Sorowar Southeast on the Simberi mine lease was recently completed.

St Barbara was encouraged by the results, with trenching targeting extensions to mineralisation east of the Sorowar open pit.

During the June quarter, St Barbara commenced creek mapping and channel sampling at Banesa gold-copper porphyry prospect located on Big Tabar Island, PNG.

Cash at bank as at 30 June was $77 million this is after repayment of debt and financing costs of $85 million in the quarter.

A procurement cost reduction project completed during the quarter resulted in savings of about $18 million per year, incorporated into the 2016 financial year plan.

Overall, gold production for the company in the June quarter was 99,359 ounces and full year production was 377,387 ounces.

Consolidated all-in sustaining cost was $979 per ounce for the quarter and $1,007 per ounce for the year, with an average realised gold price for the quarter of $1,478 per ounce.

St Barbara is forecasting Simberi gold production of between 90,000 and 110,000 ounces at an all-in sustaining cost of between $1,275 and $1,400 per ounce.

Capital expenditure was forecast at between $8 million and $12 million and exploration expenditure at $10 million.

Located in the New Ireland province of PNG, Simberi started production in 2008.