The St Barbara Ltd (ASX: SBM) share price is under pressure on Tuesday morning.
At the time of writing, the gold miner's shares are down 10% to $1.84.
Why is the St Barbara share price crashing lower?
Investors have been selling the company's shares this morning following the release of an update on its guidance for FY 2021.
As you might have guessed from the St Barbara share price reaction, the company's update has not been a good one.
According to the release, St Barbara's Leonara and Simberi operations are not performing in line with expectations.
What is happening?
In respect to the Leonara operation, a change in mining contractor to Macmahon Holdings Limited (ASX: MAH) on 5 May has not gone as smoothly as hoped. This has been driven by issues with the recruitment of critical roles and experienced operators.
This means the Leonara operation is now forecast to produce 150,000 to 160,000 ounces of gold with an all-in sustaining cost (AISC) of between A$1,815 to A$1,950 per ounce.
As a comparison, its previous guidance was for 175,000 ounces with an AISC of A$1,590 to A$1,630 per ounce.
Things weren't much better for its Simberi operation which continues to be impacted by ore variability, which is ultimately affecting gold recoveries. In addition to this, COVID-19 is impacting workforce availability and weighing on its operations.
As a result, it now expects Simberi production of 80,000 to 90,000 ounces in FY 2021 with an AISC of A$1,790 to A$2,030 per ounce. This compares to its previous guidance of 95,000 ounces with an AISC of A$1,720 to A$1,810 per ounce.
One positive is that its Atlantic Gold operation is performing in line with expectations and is on course to achieve its guidance.
FY 2021 consolidated guidance
The sum of the above, is consolidated production of between 330,000 and 360,000 ounces with an AISC of A$1,547 and A$1,695 per ounce in FY 2021. This compares to its previous guidance of 370,000 to 380,000 ounces with an AISC of between A$1,440 and A$1,520 per ounce.
The St Barbara share price is now down 25% since the start of the year.
