Weakness in the spot gold price this morning has weighed on the St Barbara Ltd (ASX: SBM) share price and the rest of the gold miners.
In morning trade St Barbara’s shares fell almost 3.5% to $2.57 despite the release of a positive announcement.
What did St Barbara announce?
This morning St Barbara provided an update on its acquisition of Atlantic Gold and its current operations.
According to the release, St Barbara is pushing ahead with the customary closing conditions of its $768 million acquisition of Canadian gold miner Atlantic Gold after the completion of its $490 million entitlement offer last week.
The release explains that the Supreme Court of British Columbia has issued an interim order in connection with the transaction which authorises Atlantic Gold to convene a special meeting of securityholders on July 15 to vote on the transaction.
If all else goes to plan, the transaction is expected to complete on July 20.
The release also explained that things have been going better for its Gwalia and Simberi operations since its last update.
Management revealed that the blocked paste reticulation circuit at its Gwalia operation has been resolved and paste fill operations resumed in the subsequent week as anticipated.
As a result, full year production guidance for Gwalia is maintained at approximately 220,000 ounces of gold.
Over at Simberi things have been better than expected. Due to the higher than anticipated grade of ore processed to date in June, late last week Simberi exceeded the previous annual production record of 134,661 ounces of gold.
This means it is now expected to produce close to 140,000 ounces in FY 2019, which is above its previously announced target of 135,000 ounces.
Elsewhere in the sector today, the aforementioned weakness in the spot gold price has put pressure on gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST). This has left the S&P/ASX All Ords Gold index trading 1% lower in late morning trade.
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Motley Fool contributor James Mickleboro 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.