SBM - St Barbara Limited

[Uncle Festivus]

Re: SBM - St. Barbara Mines

Gents, we're all well above calling sp's as an indication of valuation, and in comparison to other stocks. Perhaps you might like to spalsh up a market cap? Before the offer they had about 800m on issue at @ .40 = $330m ish. How many more shares are they issuing in total which will dilute this value to ?? One thing is for certain though, their MC to oz au is getting pretty compelling. On the above figures (no raising) it's about $39 an oz, which for a producer is very low. Can you adjust the figures for a current MC to oz au at the projective shares on issue to current sp to current jorc? What's the value look like then?

Kennas, some quick calcs shows that the equivalent share price dilution, all things being equal, should be around 43c, if you compare the data when the share price was at 56c to the SP now @38c ie anything lower than 43c is discounting the MC/ounces more than the dilution effects. (Do Your Own Calcs to confirm )

Other notes - underwriter 'out' clauses - if spot price falls below $804 or S&P/ASX300 Resources falls more than 15% from date of underwriting agreement.

 

[nioka]

Re: SBM - St. Barbara Mines

Kennas, some quick calcs shows that the equivalent share price dilution, all things being equal, should be around 43c, if you compare the data when the share price was at 56c to the SP now @38c ie anything lower than 43c is discounting the MC/ounces more than the dilution effects. (Do Your Own Calcs to confirm )

Those calculations make no allowance for the extra cash raised. If the company intends to use the cash to increase production and that increase was not possible without the extra cash then the SP value need not be less than it was before the issue. The question is "will the new issue result in a profit increase proportional to the funds raised". On the information available I believe that will be the case and my target price is the 56c.

 

[Uncle Festivus]

Re: SBM - St. Barbara Mines

Those calculations make no allowance for the extra cash raised. If the company intends to use the cash to increase production and that increase was not possible without the extra cash then the SP value need not be less than it was before the issue. The question is "will the new issue result in a profit increase proportional to the funds raised". On the information available I believe that will be the case and my target price is the 56c.

I think that's correct as I see it too - there is currently no 'premium' in the SP for upgrades or benefits of increased production? A sizable discount actually if the forecasts are correct.

 

[Go Nuke]

Re: SBM - St. Barbara Mines

Does this give anyone a comparison?

Sorry I'm hopeless at this numbers thing.

IAU Mkt cap $134Mil
EPS -12.0, 1.2, 3.9, 14.0
P/E Ratio for sector 2.01
Total Debt18.467Mil

Producing approx 80,000 oz/yr at the Paulson gold Mine.
(Not taking into account the exploration in Argentina which is expected to hold 404,000 oz of gold equivalent {which includes 7.6 million ounces of silver} )

VS

SBM Mkt cap $557Mil
EPS 0.4, 0.6, 9.1, 15.1
P/E Ratio for sector 14.2 (<-- This is good right?)
Total Debt 99.811 Mil

Though it does look as though SBM are producing a heap more gold than IAU.

The Southern cross mine produced 171,000 oz for 2007 with a operating cost of between $525 and $550.
And Gwalia prospect to produce about 100,000 oz per year with a projected cost of about $405 per year.

Anyway, Im probably comparing Lemons with watermelons..lol.

 

[nioka]

Re: SBM - St. Barbara Mines

A report from my contact in the area.
" St barbara took over a lot of the old Sons of Gwalia operations which had accumulated a considerable enviromental liability over the years. However they do have a good underground development project near Leanora with a good orebody at depth ( 1 km down). They have been pumping money into the decline to allow access to the ore. Not sure how far off planned completion is. I wouldn't mind betting that a larger organisation will take them over if this project proves as profitable as is thought. Apart from that I don't know much."

 

[jman2007]

Re: SBM - St. Barbara Mines

I was lucky enough to have some spare time passing through Leonora today, so I poked my head into the Gwalia pit (there is a viewing platform). It is definitely one of the larger pits in the area, their new 800m primary vertical ventilation system was blasting happily away across the other side.

Pretty shocked to see this get a pounding in the market today...perhaps a bit of overreaction? I don't know much about their operations, but their cash costs per ounce from their last quaterly were fairly decent from their other underground operation, approx $530 or so.

They're predicting 5-6 g/t from Gwalia undergound once production commences, and they would need at least this to justify the enormous cost in constructing the decline over this distance, but at least they have some kind of track record for running an underground op successfully.

Definitely a terrible day for Oz Au miners though

jman (dnh)

 

[explod]

Re: SBM - St. Barbara Mines

Explod, the Offer is fully underwritten by Macquarie Capital Advisers Limited.

going for 38c today? Is there a more compelling gold story going round? Subject to the POG of course .​

Could not agree more, just wanted to draw some full discussion. Had to be out today but backing my truck ASAP also.

 

[VViCKiD]

Re: SBM - St. Barbara Mines

hopefully the pog tonight will lift the sp tommorow ....
i bought 20000 @ $0.65
only if i was 3 weeks late... damn !

 

[56gsa]

Re: SBM - St. Barbara Mines

attached spreadsheet with numbers for new shares issued and new monies raised - suggests if you add cash to mkt cap the price should be 0.52

however there's no announcement to say these additional funds will increase production (infact they announced a slight decrease and slight increase in cash cost) - thus you get what one broker suggested was a 22% dilution... giving a price of 0.44. Also you get .43 if you divide mkt cap b4 placement with new number of shares (ie not taking into account extra cash) -- so overall a range between 43-52.

This is all based on a pre-placement mkt cap @ 56 cents/share... but i suspect the sell down before announcement was because those in the know knew... before the sell down the sp was 70 cents. So this gives a different range of 54 to 63 cents after the placements.

i seem to recall that SBM were announcing a new resource statement this month

also gold is going bezzurk atm

trouble is i'm going away next monday - what if i don't get my offer sheet - thinking i may as well buy on market??

 

[explod]

Re: SBM - St. Barbara Mines

hopefully the pog tonight will lift the sp tommorow ....
i bought 20000 @ $0.65
only if i was 3 weeks late... damn !

Well I had a dip in to seek for the longer term at .71 back a bit, so dont' feel too bad. But got a good parcel today at .385 I think (imho) that we will be pleased with SBM by the start of 2009.

 

[Ashsaege]

Re: SBM - St. Barbara Mines

Well I had a dip in to seek for the longer term at .71 back a bit, so dont' feel too bad. But got a good parcel today at .385 I think (imho) that we will be pleased with SBM by the start of 2009.

I remember buying in at 82 cents thinking 'you beauty!'... then it hit 96cents and i thought 'You BEAUTY!'...

 

[VViCKiD]

Re: SBM - St. Barbara Mines

I remember buying in at 82 cents thinking 'you beauty!'... then it hit 96cents and i thought 'You BEAUTY!'...

I guess u will all be taking up the rights ? Does anyone know when we will be receiving our forms ? I want to pay by bpay but couldn't find the bill code on the prospectus

 

[Ashsaege]

Re: SBM - St. Barbara Mines

I guess u will all be taking up the rights ? Does anyone know when we will be receiving our forms ? I want to pay by bpay but couldn't find the bill code on the prospectus

I would take up the rights, but my capital has dwindled away into other stocks. Im not sure where the bill code is either, sorry.

 

[56gsa]

Re: SBM - St. Barbara Mines

forms were sent to eligible retailers on Thursday - bpay code will be on that

i'm going to be OS and won't see my form - asked them to fax, email, give me the bpay number of the phone... sorry can't do that... bloody SBM

anyway can always stock up on the market for less than 40c so not a big hassle

 

[eddyeagle]

Re: SBM - St. Barbara Mines

SBM share price really in the dog house at the moment.

Two positives though include Barclays becoming a substantial holder on 17 June and also the MD Ed Eshuys buying 5 million shares on 18 June... So I'm hanging in there...

 

[Undertow]

Re: SBM - St. Barbara Mines

I once had shares in SBM.

What reasons are there to explain the recent price fall?

I know the general market conditions are not good but there must be something else to cause to shares to almost halve in a few months or so.

 

[Uncle Festivus]

Re: SBM - St. Barbara Mines

SBM share price really in the dog house at the moment.

Two positives though include Barclays becoming a substantial holder on 17 June and also the MD Ed Eshuys buying 5 million shares on 18 June... So I'm hanging in there...

Mmmm..... so you think there might be a convenient upgrade announcement due to get the placement over 40c and in the money???

 

[shaunm]

Re: SBM - St. Barbara Mines

SBM share price really in the dog house at the moment.

Two positives though include Barclays becoming a substantial holder on 17 June and also the MD Ed Eshuys buying 5 million shares on 18 June... So I'm hanging in there...

I hear you Eddy. I have to hang in there as I bought in the high 80's
I'm so tempted to buy now to try and average down but I don't know how much lower she'll go.

 

[explod]

Re: SBM - St. Barbara Mines

At peak gold $US1030 SBM was at .95 It then drifted down with the Gold price to .55 (a drop of .40) prior to the announcement. In the same time Lihir Gold went from a high of 4.45 to 2.90. Has now gone up with gold to 3.08

A look at most other gold stocks will show the same. A couple of exceptions who have some upgrade reports.

So hit with the volatile movements of markets we have a lot of nervousness. The mickey trigger is stickey. After the SBM drop of .40 cents we then have dilution of share value for the new issue and a consequential drop of a further 18.5 cents as of last close.

The two drops have made the overall effect monumental. Stops would have been taken out everywhere and huge fear also involved as the value of the moment in charge of all senses.

We may go lower today with a drop in gold overnight. But I see value in this company, and that appears to have improved (by all reports) since the peak of gold on March 3. So even if we were to drift to .30cents, just add back the 40cents which again IMHO will be there (gold in my take will return above the previous high by September) then you have a value of .70cents.

And that is just my

 

[explod]

Re: SBM - St. Barbara Mines

And I have no doubt that some shorts in the know would have had a field day also as well as some end of financial year unloading.

From early July , after offer close, we should see some turn around.