Why is the St Barbara share price crashing 14% to a multi-year low?

St Barbara isn’t glittering on Wednesday. Here’s why this gold share is sinking…

| More on:
an older man wearing thick gold chains and a baseball cap on the side looks glumly at the camera.

Image source: Getty Images

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

Key points

  • St Barbara shares have dropped to a multi-year low on Wednesday
  • The gold miner is considering selling its Simberi operation
  • Management also warned of near-term risks at its Touquoy operation

The St Barbara Ltd (ASX: SBM) share price has come under significant pressure on Wednesday.

In morning trade, the gold miner’s shares have tumbled 14% to a multi-year low of 97.5 cents.

Why is the St Barbara share price sinking?

Investors have been selling down the St Barbara share price on Wednesday following the release of an announcement.

According to the release, the company has deferred making a final investment decision on the Simberi sulphide expansion in favour of a strategic review.

The release notes that St Barbara faces capital investments at each of its three operations in the next two years. This strategic review will assess the best allocation of capital for risk and return compared with the company’s other projects.

St Barbara also revealed that it has received unsolicited enquiries from potential investors in Simberi and anticipates the Sulphide expansion project to proceed either under St Barbara or different ownership.

Trouble at Atlantic Gold

St Barbara also advised that there is a near-term risk of disruption to its Touquoy Operation. This is due to potential permitting delays for its tailings management facility after authorities sought further clarification on aspects of the in-pit tailings deposition application.

The company has made an application to raise the existing tailings management facility wall as an interim solution while the in-pit deposition matter is progressed to conclusion.

However, should the application not be successful, St Barbara will be forced to suspend the operation and place it in care and maintenance mode.

Finally, St Barbara revealed that it will undertake a re-design of its operating model, including for the provision of corporate support. This will result in a rationalisation of the corporate workforce including a consolidation of the company’s two corporate offices into one.

The St Barbara share price is now down over 30% in 2022.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

More on Gold

rising gold share price represented by a green arrow on piles of gold block
Gold

Why is the Evolution share price up 13% in a month?

Evolution Mining shares have been continuing to tread higher in August.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Gold

Why is ASX 200 gold share St Barbara sliding 10% today?

St Barbara is currently the worst performer among ASX 200 shares today.

Read more »

A woman blowing gold glitter out of her hands with a joyous smile on her face.
Share Gainers

Guess which ASX mining share is rocketing 30% on a ‘significant new discovery’

Meeka Metals has set off in vertical fashion today.

Read more »

Gold nuggets with a share price chart.
Gold

Down 20% so far in 2022, is the Newcrest share price a bargain buy or a falling knife?

Newcrest may or may not be at a turning point.

Read more »

gold, gold miner, gold discovery, gold nugget, gold price,
Gold

3 ASX gold shares surging ahead on Friday

It's a good day on the ASX for gold shares.

Read more »

rising gold share price represented by a green arrow on piles of gold block
Gold

ASX gold share Peregrine explodes 60% on ‘spectacular’ new find

Gold shares are in the money on Friday.

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.
Gold

When will Firefinch shares resume trading?

Firefinch shares won't be back online until the company finalises its funding proposal. Here's how long the gold miner thinks…

Read more »

A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.
Gold

What’s the outlook for the gold price in FY23?

We check what's impacting gold prices in the current climate.

Read more »