Why is the St Barbara share price crashing 14% to a multi-year low?

A woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall today

A woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall todayThe St Barbara Ltd (ASX: SBM) share price has come under significant pressure on Wednesday.

In morning trade, the gold miner’s shares have tumbled 14% to a multi-year low of 97.5 cents.

Why is the St Barbara share price sinking?

Investors have been selling down the St Barbara share price on Wednesday following the release of an announcement.

According to the release, the company has deferred making a final investment decision on the Simberi sulphide expansion in favour of a strategic review.

The release notes that St Barbara faces capital investments at each of its three operations in the next two years. This strategic review will assess the best allocation of capital for risk and return compared with the company’s other projects.

St Barbara also revealed that it has received unsolicited enquiries from potential investors in Simberi and anticipates the Sulphide expansion project to proceed either under St Barbara or different ownership.

Trouble at Atlantic Gold

St Barbara also advised that there is a near-term risk of disruption to its Touquoy Operation. This is due to potential permitting delays for its tailings management facility after authorities sought further clarification on aspects of the in-pit tailings deposition application.

The company has made an application to raise the existing tailings management facility wall as an interim solution while the in-pit deposition matter is progressed to conclusion.

However, should the application not be successful, St Barbara will be forced to suspend the operation and place it in care and maintenance mode.

Finally, St Barbara revealed that it will undertake a re-design of its operating model, including for the provision of corporate support. This will result in a rationalisation of the corporate workforce including a consolidation of the company’s two corporate offices into one.

The St Barbara share price is now down over 30% in 2022.

The post Why is the St Barbara share price crashing 14% to a multi-year low? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 Scott Phillips.

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