The St Barbara Ltd (ASX: SBM) share price is starting the week deep in the red.
In afternoon trade, the ASX gold stock is down over 12% to 19.7 cents.
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Why is this ASX gold stock crashing?
Investors have been heading to the exits in their droves today after the gold miner released an update on its production and cost guidance.
According to the release, management expects its Simberi operation to deliver production of 60,000 to 70,000 ounces of gold in FY 2024. This will be down from 78,320 ounces in FY 2023.
The company expects to achieve this with an all-in sustaining cost (AISC) of $2,750 to $3,050 per ounce, which is up from $2,213 per ounce in FY 2023.
Though, it will have to get a wriggle on to achieve its guidance. That's because first-quarter production came in at just 10,379 ounces. This was because the operation undertook two shutdowns to carry out works on the processing plant. Management advised that there has been another in October.
Nevertheless, it appears confident on the operation's future. It said:
Production performance from Simberi is dependent on process plant reliability and fleet availability given the minimal capital investment in recent years, however preparations carried out in the first four months are anticipated to significantly improve reliability and performance.
Over at that Atlantic operation, due to placing the operation on case and maintenance, the company only expects production of 6,000 ounces with an AISC of $3,100 to $3,200 per ounce in FY 2024. As a reminder, St Barbara acquired Atlantic Gold for $780 million back in 2019.
One positive is that the ASX gold stocks' operations are expected to be broadly cashflow neutral in FY 2024 despite the above. Furthermore, at the end of September, the company had a cash balance of $236 million.
