It has been a day to forget for the St Barbara Ltd (ASX: SBM) share price.
On Tuesday afternoon, the gold miner's shares are down a disappointing 22% to 52.2 cents.
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Why is the St Barbara share price crashing?
Investors have been selling down the St Barbara share price on Tuesday after the gold miner released its first quarter update.
According to the release, St Barbara produced 63,700 ounces of gold during the quarter at an all-in sustaining cost (AISC) of $2,490 an ounce.
Compared to the fourth quarter, this means that St Barbara's production was down almost 26% and its costs were up a massive 34.8%.
And with St Barbara commanding an average gold price of $2,486 per ounce, it was costing the company $4 per ounce more to produce the precious metal than it received for it. Ouch!
What happened?
Management advised that although the company's Simberi and Atlantic operations performed in line with expectations, a slower than anticipated ramp up in underground mine equipment availability and utilisation impacted production at the Leonora operation (Gwalia mine).
In light of the above, St Barbara has been forced to downgrade its guidance for FY 2023.
The release reveals that the company now expects consolidated gold production of 260,000 to 290,000 ounces at an AISC of $2,250 to $2,500 per ounce.
This compares to its previous guidance of 280,000 to 315,000 ounce at an AISC of $2,050 to $2,150 per ounce.
In addition, management has decided to defer some of its capital expenditure plans for at least 12 months. This includes the planned Leonora Processing Plant expansion to 2.1Mtpa, refractory ore circuit upgrade at the Leonora Processing Plant, and the construction of the Aphrodite mine.
The Firetrail Australian Small Companies Fund recently described St Barbara as "one of the cheapest gold stocks globally." It seems it was cheap for a reason.
