St Barbara (ASX:SBM) share price falls 3% on $177 million loss

The St Barbara Ltd (ASX: SBM) share price is slipping today following the release of the company’s financial year 2021 (FY21) results.

Right now, the St Barbara share price is trading at $1.54, 2.53% lower than yesterday’s close.

St Barbara share price slumps on 26% drop in profits

Here are the key points from the gold mining company’s performance through FY21:

• Statutory loss of $177 million, down from FY20’s $128 million profit.
• Revenue of $740 million, down 14% on that of FY20.
• Underlying profit of $81 million, 26% less than that of FY20.
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $63 million, down from EBITDA of $338 million in FY20.
• $227 million cash flow from operating activities, down 19%.
• 2 cent final dividend.

St Barbara’s drop in revenue was a result of lower production at its Leonora and Simberi projects.

Its Atlantic operations experienced a $248 million impairment loss.

Over FY21, St Barbara’s total production dropped to 327,662 ounces of gold, that’s down from FY20’s production of 381,887 ounces.

The company’s gold sales amounted to 332,786 ounces, down from FY20’s 381,105 ounces.

St Barbara’s realised average gold price was $2,215 per ounce, 2.2% higher than that of FY20.

The company’s all-in sustaining cost (AISC) was $1,616 per ounce, 18% less than the previous financial year.

The miner ended the period with $133.3 million in cash and $109.2 million of interest-bearing liabilities.

What happened in FY21 for St Barbara?

Here’s some of what impacted the St Barbara share price in FY21:

Production from Leonora was lower following difficulties with ore delivery in the September quarter. Additionally, a seismic event at Leonora’s Gwalia underground mine caused a fall in ground which ultimately resulted in lower production for FY21.

The Leonora operations brought in $329 million of sales revenue in FY20, down from $355 million in FY20. Gold sales of 150,797 ounces were attributable to the mine.

Production at St Barbara’s Simberi operation was suspended in the final quarter after a fatality at the site. On 21 May, a truck driver at Simberi was killed when their truck travelled over a safety berm and fell around 40 metres.

St Barbara is providing assistance to the employee’s family and counselling support for the Simberi team.

Simberi brought in $204 million of sales revenue, down from $238 million in FY20. The operation saw 82,013,000 ounces of gold sold.

Finally, total gold sales revenue from St Barbara’s Atlantic operations was $205 million from 99,976 ounces.

St Barbara also released increased ore reserves and mineral resource statements this morning.

The company stated its ore reserves increased by around 4% to 6.2 million ounces of contained gold, net after depletion. Its mineral resources increased by around 13% to 13.1 million ounces of contained gold, net after depletion.

Resource extension drilling resulted in an increase to Gwalia’s mineral resources and ore reserves, while a review of material type models resulted in an increase in Simberi’s reserves.

What did management say?

St Barbara’s managing director and CEO Craig Jetson commented on some of the news:

Today St Barbara announces increases in both our group ore reserves and mineral resources as we focus on ensuring mine lives are extended beyond the next 10 years at each of our three operations.

What’s next for St Barbara?

Investors will be keeping an eye on the St Barbara share price moving forward after the company provided some guidance for FY22.

St Barbara forecasts its FY22 gold production will be between 305,000 and 355,000 ounces at an AISC of between $1,710 and $1,860 per ounce.

That guidance includes the latest mine plan at the Atlantic operations, which forecast lower-than-expected ore grades. It also includes the disruption to production at the Simberi operations and 10,000 ounces of production at Leonora operations from ore purchased from Linden Gold Alliance.

As Simberi’s processing facility is expected to restart in the second quarter of FY22, St Barbara has forecast its consolidated gold production will be marginally higher in the second half of FY22.

St Barbara share price snapshot

The St Barbara share price has slipped by around 37% year to date. It is also around 53% lower than it was this time last year.

The post St Barbara (ASX:SBM) share price falls 3% on $177 million loss appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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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