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St Barbara Limited (ASX: SBM), an Australian Securities Exchange-listed gold miner and producer, has notified the market regarding the revised the production guidance for 2019.
The company mentioned that the nature of ore bodies at Gwalia mine requires a sequential mining schedule and the mine is currently ventilation constrained. The sequential mining schedule and delay in the mining of a stope on the 1660 level at the Gwalia mine occurred as a result of temporary blockage in the paste reticulation circuit to the underground workings. An associated delay in resuming paste-filling of open stopes has further added to the delay in the planned sequential mining.
The stope on the 1660 level, which was scheduled for production in June 2019, hosts 56,000 tonnes of ore with an estimated average grade of 8.3g/t of gold, accounting for 14,900 contained ounces of gold.
SBM mentioned that it would commence the paste-fill operations in the current week, and the estimated remediation cost of the process is not material.
Under normal circumstances such an event could be managed within a financial year; however, the ventilation considerations coupled with other activities require a fill construction of the remaining Gwalia Extension Project. As the delay of production is unavoidable, the revenue and cost considerations of mining the above-mentioned stope would be deferred to the financial year 2020 (i.e. July 2019); hence, the company needed to revise the guidance of the financial year 2019.
The estimated production of Gwalia mine now stands at approx. 220,000 ounces of gold for the financial year 2019, downgraded from the previous production guidance of 235,000 to 240,000 ounces of gold.
The revision in the production guidance also marked an increase in All In Sustaining Cost (AISC) for the current quarter amid production loss and lower production volume.
The consolidation production guidance has also been revised to approx. 355,000 ounces from the previous level of 365,000 ounces to 375,000 ounces.
SBM mentioned that the Simberi prospect is well on its way to the production level of approx. 135,000 ounces in the financial year 2019, higher than its previous production guidance of 130,000 ounces to 135,000 ounces of gold.
St Barbara recently acquired the Atlantic gold at an enterprise value of A$854 million for which the company raised an institutional placement of $355 million during stage one.
In a recent presentation , the current Managing Director and CEO, Bob Vassie mentioned that Australia contains significant gold reserves and accounted for 10% of the global gold production in 2017.
Source: Companyâs Report
However, the presentation also suggested that expenditure of Australia in gold exploration is inching up, and Australiaâs share in global gold production are relatively going down.
Source: Companyâs Report
Price actions:
The share prices of the company are moving in a downward direction from the past four months. The shares dropped from the level of A$5.152 (Dayâs high on 20th February 2019) to the current level of A$2.560.
During the trading session today, the shares of the company marked a significant gap-down opening and plunged to the level of A$2.480 (dayâs low) before ending the dayâ session down by 5.882% from its previous close at A$2.560.
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