The Saracen Minerals Ltd (ASX: SAR) share price is lower this morning after the company's solid March quarter 2019 (MQ19) results release this morning.
What did Saracen announce to the market?
The company reported gold production of 49,038 ounces at an all-in sustaining cost (AISC) of $1,097 per ounce from its Carosue Dam operations.
Mine operating cash flow came in at $37.4 million with net mine cash flow of $10.9 million after growth capital of $26.5 million during the quarter.
Increases in Karari underground gold mined and ore production were big positives for the Aussie gold miner while its Thunderbox operations posted record gold production of 40,170 ounces at an AISC of $972 per ounce.
Overall, I see the quarterly results as reasonably positive given the conditions for gold miners at the moment despite lower cash and liquids of $153.3 million after spending $58.3 million on growth capital/exploration and no debt.
Management expects the $60 million exploration budget to continue to ramp up with encouraging results, while the company's growth projects appear to be humming along nicely.
Should you buy Saracen shares?
The Saracen Mineral Holdings Ltd (ASX: SAR) share price is down 10% so far this year but is far from the worst performing gold stock in the S&P/ASX200 Index (ASX: XJO).
The St Barbara Ltd (ASX: SBM) share price fell 28.6% in less than a week following its own quarterly results update as investors headed for the exit on the basis of a higher AISC trend.
Global gold prices have been volatile to start the year amid a tug-of-war between risk-on moves in equity markets and a flight to safety following recent yield curve inversions and concerns over global economic growth.
Saracen is currently trading on an earnings multiple of 28.4x which is in line with the likes of Northern Star (28.6x), but well above St Barbara's 7.4x P/E ratio.
For those who are similarly bearish on infant formula companies, this top-rated stock could boost portfolio gains as looks to seize a sizeable part of a growing $22 billion industry.
