Why the St Barbara share price is under pressure this morning

The St Barbara Ltd (ASX: SBM) share price has been hammered in early trade after an FY 2020 production guidance downgrade this morning.

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The St Barbara Ltd (ASX: SBM) share price slumped nearly 5% in early trade after a disappointing quarterly update from the ASX gold miner. It has since picked up slightly, with St Barbara shares trading 2.82% down at $2.92 per share at the time of writing.

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Why did the St Barbara share price fall lower?

St Barbara reported second quarter production of 94.159 ounces of gold for the quarter ended 31 December 2019.

The group's all-in sustaining cost (AISC) came in at $1,364 per ounce, down from $1,421 per ounce in September 2019.

Investors have sold down, sending the St Barbara share price tumbling nearly 5% at market open.

The group's Gwalia gold production totalled 42,022 ounces at an AISC of $1,471 per ounce in a solid result. Similarly, St Barbara's Canadian Atlantic Gold operations produced 29,067 ounces or 30% more than in September 2019.

However, the Aussie miner's Simberi operations in Papua New Guinea produced just 23,070 ounces down from 27,061 ounces in the prior quarter. This also came at an AISC of $1,851 per ounce – 15.47% higher than in September.

The St Barbara share price is under pressure in early trade as the miner also downgraded its FY20 outlook.

Gwalia production is forecast between 170,000 and 180,000 ounces, down from previous guidance of 175,000 to 190,000 ounces. The group's expected AISC has also increased by 5% to 6%, up to a $1,470 to $1,540 per ounce range.

It was a similar story with St Barbara's Simberi production forecast, while the Atlantic Gold guidance remains unchanged.

What about the other ASX gold miners?

The St Barbara share price is far from the only ASX gold mining stock falling lower this morning.

The Regis Resources Ltd (ASX: RRL) share price fell nearly 1% lower at market open after its own quarterly production update, before regaining its footing during early trade.

However, Newcrest Mining Limited (ASX: NCM) shares have edged 0.22% higher at the time of writing to $32.58 per share.

Foolish takeaway

The early part of 2020 has been headlined by some major geopolitical events, particularly the tension between the United States and Iran.

While some brokers are calling to overweight gold this year, these latest quarterly results haven't been all good news for the ASX gold miners.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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