What’s going on with the St Barbara (ASX:SBM) share price today?

The company has performed modestly so far in FY22 under tough operating conditions.

| More on:
Older mine worker in hard hat looks upset

Image source: Getty Images

Key Points

  • St Barbara shares are in the red following the release of the comany’s Q2 FY22 trading update
  • Production levels slightly dropped due to lower grades at its Leonora operation
  • FY22 guidance is on track of up to 335koz at ASIC $1,815 per ounce

The St Barbara Ltd (ASX: SBM) share price has dipped in morning trade amid the company providing a trading update for its second quarter.

At the time of writing, the gold miner’s shares are at $1.355 apiece, a drop of 1.45%.

How did St Barbara perform in Q2 FY22?

The St Barbara share price has edged lower as investors digest the company’s latest performance report.

For the three-month period ending 31 December, St Barbara produced 65,523 ounces of gold at an all-in sustaining cost of $1,587 per attributable ounce. Although production dropped at Leonora in the second quarter, this was largely offset by higher feed grades at Atlantic. In comparison, production levels in the prior period came to 67,000 ounces.

Operating cashflow came in at $49 million for the period. However, after growth capital, corporate costs, and tax payments, net cash contribution stood at $3 million.

St Barbara sold 76,000 ounces of gold at an average price of $2,423 per ounce.

The gold miner recorded a robust balance sheet with cash on hand of $94 million, up from $42 million on 30 September. Total debts included a syndicated facility of C$80 million (A$88.61 million) and $50 million which was recently drawn down.

Management noted that the pandemic is causing issues sourcing required labour and equipment for the Atlantic and Simberi operations. A tightening of the labour market in Western Australia as a result of border closures is also hampering the company’s efforts.

Nonetheless, a contingency plan has been developed to minimise any potential interruptions if the Western Australian border opens.

What did the head of St Barbara say?

St Barbara managing director and CEO Craig Jetson commented:

The end of the December FY22 quarter marks a momentous period for St Barbara.

Through the announcement of our acquisition of Bardoc Gold, we took decisive steps towards securing Leonora’s future as a significant processing hub in the Western Australian goldfields. The acquisition uniquely positions St Barbara to add value to the high quality Bardoc ore bodies by processing the ore at the Leonora processing plant.

We also had some very encouraging drilling results in the Old South Gwalia ore body, which has the potential to add new mining fronts higher up in the mine. By the end of this financial year, we are targeting an updated Mineral Resource for this area.

FY22 outlook

Looking ahead for the full year, St Barbara is expecting FY22 to be broadly in line with previous expectations.

The miner is forecasting consolidated gold production of between 305,000 ounces and 335,000 ounces. This is assumed at an AISC (all-in sustaining cost) of between $1,650 and $1,815 per ounce.

St Barbara is scheduled to release its half-year results to the market on 23 February.

About the St Barbara share price

Over the past 12 months, St Barbara shares have plummeted around 40%, with year-to-date performance also sinking 7%. The company’s share price reached a 52-week high of $2.36 in February last year before treading on a downward path.

Based on today’s price, St Barbara commands a market capitalisation of roughly $964 million, with approximately 709 million shares outstanding.

Should you invest $1,000 in St Barbara right now?

Before you consider St Barbara, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and St Barbara wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

asx share price growth represented by cartoon man flexing biceps in front of charged battery
Resources Shares

Lighting up the market: ASX lithium stocks surge again on Tuesday

Chalk up another green day for lithium stocks...

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Broker Notes

Broker names 3 reasons the South32 share price could be cheap

South32 shares could be great value according to one leading broker...

Read more »

a man in a hard hat and checkered shirt holds paperwork in one hand as he holds his hands upwards in an enquiring manner as though asking a question or exasperated by uncertainty.
Resources Shares

The Poseidon Nickel share price has dumped 24% in a month. What’s happening?

Why is the Poseidon Nickel share price struggling so much?

Read more »

Resources Shares

Why is the Lynas share price powering ahead today?

Shares in the rare earths company are off to a great start this week.

Read more »

A green fully charged battery symbol surrounded by green charge lights representing the surging Vulcan share price today
Resources Shares

Here’s why the Core Lithium share price is racing higher today

This lithium share is having a strong day...

Read more »

Resources Shares

Critical Resources share price leaps 12% on latest lithium project news

Shares in the emerging base metals company are up and away today.

Read more »

Three satisfied Whitehaven coal miners with their arms crossed looking at the camera proudly
Resources Shares

Oz Minerals share price rallies on potential $200m acquisition

Big news for the miner today has pushed the company's shares higher.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Resources Shares

Latin Resources share price races 9% higher on lithium update

The Latin Resources Ltd (ASX: LRS) share price is having a strong day on Tuesday. In morning trade, the lithium…

Read more »