Following an unbelievable rebound, shares of St Barbara Ltd (ASX: SBM) are currently trading near their highest level in five years.

Things looked pretty bleak for the gold miner at the beginning of 2015. The shares were languishing at their lowest levels in nearly 10 years, while the company had booked a $94 million underlying net loss for the previous financial year – down from a $29 million profit in 2013.

Gold prices were threatening to continue falling while it had also booked more than $400 million in impairments during the previous year. It had plenty of debt and its shares were worth just 10.5 cents at the beginning of the year, down approximately 98% from their high around $5.90 in early 2008.

Fast forward 15 months however, and those shareholders who held on through thick and thin have been well rewarded. In fact, the shares are currently trading for roughly the same price they were late in 2011 at $2.48 – representing an incredible 2,262% gain in that time.

It was the second-best performing share on the ASX during 2015 and it has risen another 74% so far in 2016, compared to a 2% decline for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO).

A rising gold price and falling Australian dollar are two of the factors that have helped St Barbara climb from its rut. The company has also reported a significant improvement in its financial performance in recent times with cash flows from its Simberi operations in Papua New Guinea and its Gwalia mine also improving considerably.

While St Barbara’s returns have been exceptional over the last 15 months or so, it is by no means the only strong performer from the gold sector during that time. Newcrest Mining Limited (ASX: NCM), for instance, has risen 67% in that time, while EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are up 183% and 169%, respectively. Their returns have far exceeded those of the broader S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

Source: Google Finance

Source: Google Finance

Indeed, St Barbara has certainly turned itself around in recent years, and that has been well and truly reflected in the company’s share price. What’s more, the share price could continue to rise even further if the Australian dollar falls and if the price of gold continues to rise – it’s trading at around US$1,255 an ounce today.

However, there are reasons investors need to be wary of buying into the stock as well. To begin with, gold prices are often driven by fear. The gold price could rise further if volatility picks up again but it could also fall if – or when – the market’s risk appetite picks up again. As it relies on higher gold prices to achieve earnings growth, a falling gold price could have a negative effect on the share prices of miners across the sector.

The other factor to consider is that St Barbara’s shares have run very hard over the last 12 months. That’s not to say the trend can’t continue, but investors do need to be careful not to buy in out of greed for more gains.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

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 Bruce Jackson.