Here's why the St Barbara share price is trailing the ASX 200 today

What's weighing down the St Barbara share price?

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Key points
  • St Barbara shares down 2.61% to $1.305 
  • The company reported a trading update for Q3 FY22, which failed to match the performance of the prior quarter 
  • Nonetheless, management remains positive that it can achieve its full year guidance production 

The St Barbara Ltd (ASX: SBM) share price is heading south today despite the S&P/ASX 200 Index (ASX: XJO) tracking higher.

The gold miner released a trading update for the third quarter, but has failed to appease investors.

At the time of writing, St Barbara shares are down 2.61% to $1.305 apiece.

For context, the benchmark index is up 1.06% to 7,338.1 points following a rebound on Wall Street overnight.

Let's take a look below and see how St Barbara performed for the March quarter.

A woman wearing a gold top and carrying a gold bar gives the thumbs down signal as she leans against a wall with a sombre look on her face as the Kingsgate share price goes lower

Image source: Getty Images

How did St Barbara perform in Q3 FY22?

For the three months ending 31 March, St Barbara produced 61,819 ounces of gold at an all-in sustaining cost (ASIC) of $2,290 per attributable ounce. This was 6% lower than the 65,523 ounces of gold achieved at an ASIC of $1,587 in the prior quarter.

Management attributed the fall in group gold production to its subpar performance at Atlantic and Leonora.

The former was hindered by lower grades from the Touquoy pit and more severe than usual winter weather conditions. Leonora, on the other hand, was impacted by lower grade and lower third-party ore volumes.

Although production dropped at both sites, this was largely offset by the resumption of production at Simberi.

Operating cash flow stood at $2 million for the period. However, after growth capital, corporate costs and tax payments, net cash contribution was negative $18 million.

St Barbara sold 56,303 ounces of gold at an average price of $2,475 per ounce. This was noticeably lower than the 76,546 ounces sold at A$2,423 per ounce in Q2 FY22.

The gold miner ended the quarter with cash on hand of $79 million, down from $94 million on 31 December. Total debts remained unchanged which included a syndicated facility of C$80 million (A$88.61 million) and $50 million.

While the report failed to match the performance of the prior quarter, investors have headed for the exits. This has sent the St Barbara share price into negative territory, with now four days of consecutive losses.

What did the head of St Barbara say?

St Barbara managing director and CEO, Craig Jetson commented:

St Barbara remains positioned to deliver on our updated full year guidance and growth opportunities, despite marginally lower quarter on quarter production achieved in the March period.

Our Leonora Operations were impacted by ongoing skilled labour shortages in Western Australia which the team has done a great job managing but we remain conscious that it is an evolving landscape which requires constant management.

At Simberi our return to operations were interrupted by a COVID-19 outbreak on the island which temporarily raised operating costs and lowered production.

FY22 outlook

Looking ahead, St Barbara is expecting to achieve its updated production guidance for FY22.

Management is forecasting consolidated gold production of between 275,000 ounces and 290,000 ounces. This is assumed at an AISC of between $1,750 and $1,870 per ounce.

About the St Barbara share price

Since the start of September 2021, St Barbara shares have moved in circles despite the price of gold accelerating.

Its shares are down 30% over the past 12 months, with losses of 10% so far in 2022.

The company's share price reached a multi-year low of $1.208 in late January.

Based on valuation metrics, St Barbara commands a market capitalisation of roughly $1.06 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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