St Barbara share price tumbles lower on Q4 update and FY 2021 guidance

The St Barbara Ltd (ASX:SBM) share price is tumbling lower following the release of its fourth quarter update…

| More on:

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

The St Barbara Ltd (ASX: SBM) share price has come under pressure following the release of its fourth quarter update.

The gold miner's shares are down 2.5% to $3.70 at the time of writing.

How did St Barbara perform in the fourth quarter?

During the fourth quarter of FY 2020, St Barbara delivered an 18.6% quarter on quarter increase in gold production to 108,612 ounces. This was achieved at an all-in sustaining cost (AISC) of A$1,301 per ounce, which was a reduction from A$1,405 per ounce during the third quarter.

This led to the gold miner reporting a big lift in its quarterly operational cash contribution to A$126 million, up from A$86 million in the third quarter.

As a result of this strong finish to the financial year, St Barbara's full year consolidated gold production came to 381,887 ounces. This was in line with its guidance of 370,000 to 400,000 ounces.

Also in line with guidance was its costs. St Barbara reported an AISC of A$1,369 per ounce in FY 2020, compared to its guidance range of A$1,330 to A$1,420 per ounce.

And with an average realised gold price of A$2,127 per ounce for FY 2020 (up 20.7% from A$1,762 in FY 2019), St Barbara's cash balance is growing nicely.

At the end of the financial year the company had cash at the bank and term deposits of A$405 million. Total debt stood at A$316 million, with A$200 million to be repaid at the end of July.

What to expect in FY 2021.

Management expects its FY 2021 production to be broadly in line with what it achieved in FY 2020.

It has provided consolidated gold production guidance of between 370,000 to 410,000 ounces with an AISC of between A$1,360 and A$1,510 per ounce.

It also revealed that its sustaining capex is expected to be between A$97 million and A$115 million, with growth capex of between A$49 million and A$57 million. It also intends to spend between A$30 million and A$35 million on exploration activities.

St Barbara's Managing Director and CEO, Craig Jetson, notes that FY 2021 will be an important year for the company.

He explained: "The year ahead is an important one for our business. Our mature operations, Leonora and Simberi, are entering new phases and Atlantic Gold has a strong project pipeline that we intend to realise."

"We are reviewing our operating model to improve productivity and margins, supported by an enhanced technical expertise. For us, that means being in command of our value chain, optimising operations and, all the while, prioritising safety and ensuring the wellbeing of our people and communities."

The chief executive also revealed that it is looking at expansion projects and acquisition opportunities.

"We will improve our business and how we work so we can embark on our growth agenda. This includes delivering on current brownfield expansion projects, maintaining a prospective exploration pipeline and identifying suitable assets for future acquisition where it adds shareholder value," he concluded.

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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »