St Barbara shares fell sharply this morning, after the Perth headquartered goldminer revealed lower than expected production from its Simberi mine in Papua New Guinea.
St Barbara shares fell sharply this morning, after the Perth headquartered goldminer revealed lower than expected production from its Simberi mine in Papua New Guinea.
St Barbara produced 10,262 ounces of gold in the December quarter, against production guidance of 65,000-to-75,000 ounces for the financial year.
The figure was well short of the 14,000-16,000oz forecast from the company’s flagship Simberi project, with the company attributing the shortfall to challenges associated with dewatering, contract truck fleet availability and lower than expected processing throughput rates.
It warned of higher production costs as a result of lower output, but an exact figure will not be published until late January.
St Barbara is transporting a new crusher and two excavators to site, and said its fleet contractor – beset by chassis repairs – had completed the bulk of that work and would also be bringing in new trucks during the half year.
The company delayed the mining processing of higher grade ore during the quarter while it waited for the new crusher, and expects to begin that work in February.
As a result, it expects to hit the lower end of its full-year production guidance from Simberi.
In a bonus for the company, an additional 1,256 ounces were recovered and sold from clean-up work at the Touquoy processing facility in Canada, where St Barbara is no longer mining.
An unhedged producer, St Barbara sold its gold at an average of $4,116 per ounce during the quarter and ended the period with $249 million of cash, gold and investments on hand.
Its share price fell 9.8 per cent today to 25c, giving it a market capitalisation just over $300 million.
St Barbara also revealed a new gold oxide discovery between the Pigibo North and Southwest Sorowar pits at Simberi, where it hopes to begin mining in the third quarter of 2025.
“The identification of this new oxide mineralisation between Pigibo North and Sorowar is a real boost for the current Simberi oxide operations,” managing director Andrew Strelein said.
St Barbara intends to continue mining oxide ore at Simberi until 2027, when it plans to transition to production from sulphides as part of a broader strategic focus shift.
The company previously mined gold in Western Australia but sold its Leonora assets including the historic Gwalia goldmine to Genesis Minerals in 2023.
It acquired Touquoy in a $780 million deal for Atlantic Gold in 2019 but ceased operations at the mine in 2023, and is exploring the potential of a pumped hydro project on the Nova Scotia site.
St Barbara posted a $54 million loss in the 2023/24 financial year.
