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Highlights
- St Barbara anticipates 25 to 30 thousand ounces of production at Simberi operations with all-in sustaining cost of AU$3,000 – 3,600 per ounce.
- On 18 February 2022, the company withdrew the guidance for Simberi operations.
- The company has not changed the production guidance for the Atlantic and Leonora operations.
Australian gold miner, St Barbara Limited (ASX:SBM), has cut down its production guidance for the financial year 2022 (FY22). The announcement might have a significant impact on St Barbara’s share prices today (28 March 2022). Since morning the shares have been buzzing in the red territory.
On the ASX, at 1:00 PM AEDT, the shares of St Barbara were spotted trading 3.619% lower at AU$1.465 per share.
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What is the updated FY22 guidance?
St Barbara expects to produce 25-30 thousand ounces at Simberi operations at an all-in sustaining cost (AISC) of AU$3,000 – 3,600 per ounce in FY22. The expected group production has also been upgraded to 275 to 290 thousand ounces. The group AISC is anticipated in the range of AU$1,750 to 1,870 per ounce.
On 18 February 2022, the company informed the shareholders that the Covid-19 infection rate had increased significantly across the Tabar island group, and the company was facing difficulty in meeting the targets of the operation. At the Simberi operation, around 270 people were isolated during the peak of the coronavirus outbreak. Moreover, the operations were affected by the reduction in commercial flights across PNG, as the aviation industry was also affected by the omicron outbreak. Due to this, the capability to rotate the senior staff and source additional supplies was impacted. Now the outbreak is under control, and only 12 people are under isolation, informed St Barbara.
Image source: © Milslav78 | Megapixl.com
The gold explorer and producer said that the guidance for Atlantic and Leonora operations remains the same. 55 to 65 thousand ounces is the expected production at Atlantic operations with an AISC of AU$1650 to 1850 per ounce. 180 to 200 thousand ounces is the expected production at Leonora operations at AISC of AU$1605 to 1720 per ounce.
What is Mining ?
Furthermore, St Barbara said that the expected production during the third quarter is around 11 thousand ounces only as the material mined and hauled remains low. The reason cited by the company for the reduction in material mining is low truck availability because of limited maintainers and operators during the Covid-19 outbreak.
How did St Barbara perform during the first half of FY22?
In six months, the company generated an underlying profit of AU$15 million (a 63% decline within a year) and a statutory profit of AU$14 million (a 62% decline within a year). The group gold production stood at 132,524 ounces at an AISC of AU$1539 per ounce. The group revenue declined by 9%, and the group EBITDA reduced by 2%. Furthermore, the cash from the operating activities declined by 80% on prior corresponding period.
Does St Barbara distribute dividends?
In the 1HFY22, the company has not declared any dividend because of the operational issues at Simberi operations. St Barbara said that it would reassess its operations and decide whether it will distribute any dividend or not at the end of the financial year 2022.
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