Why are shares in ASX 200 gold miner St Barbara crashing 22% today?

This gold miner certainly isn't glittering on Tuesday…

| More on:
a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the Pilbara Minerals share price continue to fall

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It has been a day to forget for the St Barbara Ltd (ASX: SBM) share price.

On Tuesday afternoon, the gold miner's shares are down a disappointing 22% to 52.2 cents.

Why is the St Barbara share price crashing?

Investors have been selling down the St Barbara share price on Tuesday after the gold miner released its first quarter update.

According to the release, St Barbara produced 63,700 ounces of gold during the quarter at an all-in sustaining cost (AISC) of $2,490 an ounce.

Compared to the fourth quarter, this means that St Barbara's production was down almost 26% and its costs were up a massive 34.8%.

And with St Barbara commanding an average gold price of $2,486 per ounce, it was costing the company $4 per ounce more to produce the precious metal than it received for it. Ouch!

What happened?

Management advised that although the company's Simberi and Atlantic operations performed in line with expectations, a slower than anticipated ramp up in underground mine equipment availability and utilisation impacted production at the Leonora operation (Gwalia mine).

In light of the above, St Barbara has been forced to downgrade its guidance for FY 2023.

The release reveals that the company now expects consolidated gold production of 260,000 to 290,000 ounces at an AISC of $2,250 to $2,500 per ounce.

This compares to its previous guidance of 280,000 to 315,000 ounce at an AISC of $2,050 to $2,150 per ounce.

In addition, management has decided to defer some of its capital expenditure plans for at least 12 months. This includes the planned Leonora Processing Plant expansion to 2.1Mtpa, refractory ore circuit upgrade at the Leonora Processing Plant, and the construction of the Aphrodite mine.

The Firetrail Australian Small Companies Fund recently described St Barbara as "one of the cheapest gold stocks globally." It seems it was cheap for a reason.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Gold

Miner looking at a tablet.
Gold

2 ASX All Ords gold stocks making moves on big news today

The ASX All Ords gold stocks are catching investor interest today. But why?

Read more »

A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.
Gold

One ASX 200 gold stock to buy now…and one to sell

Some ASX 200 gold stocks stand to gain more from the surging gold price than others.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Gold

Guess which ASX gold stock is crashing 20% on permit blow

This gold miner is having a day to forget. But why?

Read more »

Gold bars and Australian dollar notes.
ETFs

$10,000 invested in GDX ETF a year ago is now worth…

Has this ASX gold ETF delivered for investors amid the recent gold price bonanza?

Read more »

Gold bars on top of gold coins.
Gold

Why did Citi Group just raise its gold price target?

One ASX broker thinks gold's recent run is all out of steam, at least for now.

Read more »

Woman holding gold bar and cheering.
Gold

Up 200% in 2025, guess which ASX gold stock is surging 11% again today

Investors are sending the ASX gold stock soaring again today. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Gold

Guess which ASX gold stock just rocketed 167% on big news!

Investors are sending the ASX gold stock flying higher on Monday. Let’s find out why.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

Up 72% in 2025, why is this ASX 200 gold stock racing ahead of the benchmark again today?

Investors are bidding up this high-flying ASX 200 gold stock again on Thursday. But why?

Read more »