The Saracen Mineral Holdings Limited (ASX: SAR) share price will be on watch this morning after the gold producer released its fourth quarter update.
How did Saracen perform in the fourth quarter?
During the June quarter the company recorded gold production of 88,096 ounces. This comprised 45,845 ounces from its Carosue Dam operation and 42,251 ounces from its Thunderbox operation.
The latter operation delivered a record quarter with its all-in sustaining cost (AISC) falling to A$897 an ounce thanks to the C Zone open pit mine steadily progressing into higher grade and lower strip ratio ore.
In light of this positive performance, Saracen achieved an AISC of A$1,026 an ounce during the fourth quarter.
For the full year the company's production came in at 355,077 ounces at an AISC of A$1,030 an ounce. This puts its production in the middle of its guidance range of 345,000 ounces to 365,000 ounces and its AISC ahead of its guidance range of A$1,050 to A$1,100 an ounce.
Gold sales for the quarter were 90,230 ounces at an average sale price of A$1,754 an ounce, generating revenue of A$158.3 million.
Saracen finished the period with cash and equivalents of A$154.5 million. This was up from $153.3 million at the end of March, despite spending A$14.1 million on the Box Well acquisition, A$4.7 million on tax payments, and a record A$64.4 million on growth capital and exploration.
Looking ahead, management has lifted its guidance for FY 2020. Production is now expected to be in the range of 350,000 to 370,000 ounces at an AISC of A$1,025 to A$1,075 an ounce.
How does this compare to expectations?
Saracen appears to have fallen short of the market's expectations on its production, but has beaten on costs in FY 2019.
According to a recent note out of Goldman Sachs, it "forecast FY19 production of 359koz at A$1,037/oz, below the guidance range on costs."
Saracen's guidance for FY 2020 looks likely to disappoint the broker. It had "forecast FY20 production/AISC of 369koz at A$1,011/oz; well above the company's prior outlook for 325koz in FY20."
This could potentially put a spot of pressure on its shares this morning, especially given the decline in the gold price on Friday.
Also on watch this morning will be the Resolute Mining Limited (ASX: RSG) share price following the announcement of a major resource and reserve upgrade and the St Barbara Ltd (ASX: SBM) share price following the completion of its Atlantic Gold acquisition.
