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Key Points
- St Barbara shares are in the red following the release of the comany's Q2 FY22 trading update
- Production levels slightly dropped due to lower grades at its Leonora operation
- FY22 guidance is on track of up to 335koz at ASIC $1,815 per ounce
The St Barbara Ltd (ASX: SBM) share price has dipped in morning trade amid the company providing a trading update for its second quarter.
At the time of writing, the gold miner's shares are at $1.355 apiece, a drop of 1.45%.
How did St Barbara perform in Q2 FY22?
The St Barbara share price has edged lower as investors digest the company's latest performance report.
For the three-month period ending 31 December, St Barbara produced 65,523 ounces of gold at an all-in sustaining cost of $1,587 per attributable ounce. Although production dropped at Leonora in the second quarter, this was largely offset by higher feed grades at Atlantic. In comparison, production levels in the prior period came to 67,000 ounces.
Operating cashflow came in at $49 million for the period. However, after growth capital, corporate costs, and tax payments, net cash contribution stood at $3 million.
St Barbara sold 76,000 ounces of gold at an average price of $2,423 per ounce.
The gold miner recorded a robust balance sheet with cash on hand of $94 million, up from $42 million on 30 September. Total debts included a syndicated facility of C$80 million (A$88.61 million) and $50 million which was recently drawn down.
Management noted that the pandemic is causing issues sourcing required labour and equipment for the Atlantic and Simberi operations. A tightening of the labour market in Western Australia as a result of border closures is also hampering the company's efforts.
Nonetheless, a contingency plan has been developed to minimise any potential interruptions if the Western Australian border opens.
What did the head of St Barbara say?
St Barbara managing director and CEO Craig Jetson commented:
The end of the December FY22 quarter marks a momentous period for St Barbara.
Through the announcement of our acquisition of Bardoc Gold, we took decisive steps towards securing Leonora's future as a significant processing hub in the Western Australian goldfields. The acquisition uniquely positions St Barbara to add value to the high quality Bardoc ore bodies by processing the ore at the Leonora processing plant.
We also had some very encouraging drilling results in the Old South Gwalia ore body, which has the potential to add new mining fronts higher up in the mine. By the end of this financial year, we are targeting an updated Mineral Resource for this area.
FY22 outlook
Looking ahead for the full year, St Barbara is expecting FY22 to be broadly in line with previous expectations.
The miner is forecasting consolidated gold production of between 305,000 ounces and 335,000 ounces. This is assumed at an AISC (all-in sustaining cost) of between $1,650 and $1,815 per ounce.
St Barbara is scheduled to release its half-year results to the market on 23 February.
About the St Barbara share price
Over the past 12 months, St Barbara shares have plummeted around 40%, with year-to-date performance also sinking 7%. The company's share price reached a 52-week high of $2.36 in February last year before treading on a downward path.
Based on today's price, St Barbara commands a market capitalisation of roughly $964 million, with approximately 709 million shares outstanding.
