The St Barbara Ltd (ASX: SBM) share price has come under pressure on Friday following the release of its first quarter production update.
The gold miner's shares fell as much as 6% to $2.66 at one stage before recovering slightly.
What was in St Barbara's update?
According to its update, for the three months ended September 30, consolidated production for the quarter was 87,569 ounces. This was a 1.6% increase on the fourth quarter of FY 2019.
Its Gwalia operation produced 38,153 ounces of gold during the quarter, with 164 kt of ore milled at an average grade of 7.4 g/t Au. It advised that this result reflects ongoing management of competing activities in a constrained ventilation environment whilst the Gwalia Extension Project (GEP) is nearing completion.
As the company previously forecast, lower grade stoping areas are currently being mined as part of the Gwalia centre-out mining sequence. The mine sequence is also in a generally lower grade area at the current depth, resulting in the lower the normal grades.
However, this is necessary as the completion of GEP for both ventilation and Paste Aggregate Fill (PAF) is key to increasing tonnage production at lower grades to maintain its planned ounce production profiles.
The Simberi operation continued its solid performance and produced 27,061 ounces of gold during the quarter. Whilst areas mined this quarter were lower in grade than the remaining oxide reserve grade, management advised that the mine, rope conveyor, and plant continue to perform very well.
And finally, the recently acquired Atlantic Gold business achieved production of 22,355 ounces during the quarter. Its production was impacted by power outages related to Hurricane Dorian and maintenance of the detox tanks, which interrupted processing for approximately one week.
Overall, this was not the strongest quarter from St Barbara to say the least. So I can't say I'm surprised by its share price weakness today. But with its shares trading within sight of their 52-week low, it could be worth a look. Especially given how the issues impacting its performance appear to be transitory.
Elsewhere in the industry today, the shares of Resolute Mining Limited (ASX: RSG) and Saracen Mineral Holdings Limited (ASX: SAR) have pushed higher after a small gain by the gold price overnight.
