SBM - St Barbara Limited

VViCKiD · 21 July 2008

Re: SBM - St. Barbara Mines

From a technical perspective, this one looks like it's fallen through support of ~30 cents .. the capital raising really screwed this one up ...

no idea where support will be next as it hasn't been this low in ages ...

Paladin · 21 July 2008

Re: SBM - St. Barbara Mines

Uncle Festivus said:
Not sure either???

SBM made $55million profit before exploration & other expenses last fin year on production of 155koz, and have made a pretty confident guidance of a target of 300koz this fin year. Even discounting the profit margin by assuming the last qtr small increase, due to mill problems, carries over, we are still looking at a company worth more than the current share price.

The exploration potential has been totally discounted before the new issue at 54c, let alone now at 24c this morning. The reserves upgrade has more than made up for the dilution by the issue, in fact on my calc it is more per share than before.

As I understand it (and to repeat, I'm an idiot and getting my advice via my Sudanese taxi driver) $646 is after cost of sales adjustments and does not factor in depreciation etc. So some are pegging real cash costs at around the $800 mark which is close enough to the spot to be uncomfortable. But on the plus side, that's an aberrant result due to the crusher failure etc (how up front was the company about this, though?) and the company is nicely cashed up. Watching the stock today it looks like it's finding some support this afternoon. Bullish on this stock, and wanting to buy in when the price finds genuine support, but unsure where it will go from here. It seems to all hinge on Gwalia. Mac Bank, with its shares in other gold producers, is ideally placed to be sending out the takeover feelers, IMO.

The cashflow statement will be interesting reading. But please, everyone, weight my opinion lightly. I'm a newbie and learning the ropes myself.

Family_Guy · 23 July 2008

Re: SBM - St. Barbara Mines

Well.......6 driectors have topped up, so it can't be all that bad.....could it?
I topped up at .25c, so i'm happy, and the last 2 days have seen a slight rise each day.

Onvil · 24 July 2008

Re: SBM - St. Barbara Mines

Yeap - at 40c, so looks like they took up their entitlement, so they are showing some integrity (and hopefully confidence in SBMs future). Lucky for the holders, imagine what would have happened to the sp if they didn't.

Big drop in gold this week (esp overnight) could eliminate any positives from the announcements.

Ashsaege · 24 July 2008

Re: SBM - St. Barbara Mines

I read in the Financial Review, a couple days ago, that there were a number of loyal shareholders who took up the 40cent offer - which shows good loyalty and confidence.... considering that at one stage you could pick up a few almost 50% cheaper on the market!

I would post the article... but we don't keep the Fin here at work

Uncle Festivus · 24 July 2008

Re: SBM - St. Barbara Mines

I also notice that the bid/ask volume ratio is now back with the bidders 'favour' eg 7.3m bid, 4.4m ask, quit a change from Monday even. If only the gold price came to the party, we would have had a much better 're-rating' of SBM. Fundamentals coming through for the true believers

GoHardHomie · 24 July 2008

Re: SBM - St. Barbara Mines

Anyone able to shed light on a row in Table 5: Cash operating Costs (page 4) in the June Quarterly Report?

The one i don't understand is the 'Cost of Sales Adjustments' for 153? It brings the cash costs down from $799 to $646

Cheers

Ashsaege · 24 July 2008

Re: SBM - St. Barbara Mines

Cost of Sales Adjustments relates (I think) to the costs involve with suppliers, purchases etc for that period. So the Cash that leaves the business, during the period, that is involved with sales.

nioka · 24 July 2008

Re: SBM - St. Barbara Mines

GoHardHomie said:
Anyone able to shed light on a row in Table 5: Cash operating Costs (page 4) in the June Quarterly Report?

The one i don't understand is the 'Cost of Sales Adjustments' for 153? It brings the cash costs down from $799 to $646

Cheers

It is possibly a credit against the costs of mining stockpiled ore not processed to extract the gold and which will be processed in the following financial year. If it's not that then it is a mystery to me.

Uncle Festivus · 24 July 2008

Re: SBM - St. Barbara Mines

GoHardHomie said:
Anyone able to shed light on a row in Table 5: Cash operating Costs (page 4) in the June Quarterly Report?

The one i don't understand is the 'Cost of Sales Adjustments' for 153? It brings the cash costs down from $799 to $646

Cheers

I have made enquires, and the consensus is this is another way to transfer/capitalise some current 'costs' that can't be attributable to the current qtr, to the future ie shows up as Deferred Mining Costs? Spreading current 'common' costs over the life of the mine or against future production?

eddyeagle · 24 July 2008

Re: SBM - St. Barbara Mines

Things are definitely looking a little less glum in the past few days for SBM!
Good to see the directors buying in.
5% rise today despite a $25 fall in gold!
Now I just need SBM to double in price and I'll be back in the black!

Paladin · 24 July 2008

Re: SBM - St. Barbara Mines

eddyeagle said:
Things are definitely looking a little less glum in the past few days for SBM!
Good to see the directors buying in.
5% rise today despite a $25 fall in gold!
Now I just need SBM to double in price and I'll be back in the black!

Well I'm not really factoring these director buys as a positive - though am happy to be corrected. As I understand it, the directors aren't strictly speaking buying in now - they're just taking up their 40c shares from the dismal offering recently. Which means they've all taken big hits (I think Ed lost about $460k as soon as that went through - the diff between the 40c he paid and the current SP). So the director buys, as I read them, reflect the confidence they had in the business a couple of months ago when they took up the offer, and when the SP was much higher than 40c, rather than that they have today (as with Macquarie). Did they have the option NOT to take the shares at 40c if the SP fell? I don't think so.

PS: I hope I'm not in breach of protocol, but seeing as there is so much mixed opinion on what the bl**dy costs of sales adjustments are, I've posted a thread about it in the newbies forum here in case someone not following this stock can shed some light. The guy at the Kebab shop who gives me all my tips in return for me holding him gently told me that I should be counting the actual cash costs as inclusive of that adjustment:

https://www.aussiestockforums.com/forums/showthread.php?p=317935#post317935

dizzy · 25 July 2008

Re: SBM - St. Barbara Mines

Notice of a Director's SALES today

11M shares sold 21, 22, 23rd July

Average price 26cents

Quote from announcement:

"Mr Eshuys informed the Company that he sold 11 million shares on-market on 21, 22 and 23 July 2008 following a rearrangement of his margin
lending facility."

Interesting . . .

Onvil · 25 July 2008

Re: SBM - St. Barbara Mines

Hope the short sellers don't smell blood and attack the stock - ala - Eddie Groves and ABC.

Rise Gold rise

Paladin · 25 July 2008

Re: SBM - St. Barbara Mines

Onvil said:
Hope the short sellers don't smell blood and attack the stock - ala - Eddie Groves and ABC.

Rise Gold rise

As per my previous post, Ed took a hammering on the failed offering. So clearly he's bought on margin (poor guy) and had to dump the shares he paid .40c for at market immediately - which accounts for the much of the high volume on the 21/22/23rd and also the share plummet on those days. So the shorters have probably already missed the boat. Unless the market fails to read the story for what it is.

As I said, the buys on the 21st weren't a sign of confidence at all. The SP has rallied fairly well, all things considered. Let's hope none of the other directors have to sell at well under what they paid to cover themselves.

Still no definite news on the cost of sales adjustments. That, for me, is the sword hanging over the short term potential of this stock. Whatever that 'adjustment' was makes for the difference between a mid and high cost producer.

MRC & Co · 25 July 2008

Re: SBM - St. Barbara Mines

Onvil said:
Hope the short sellers don't smell blood and attack the stock - ala - Eddie Groves and ABC.

Rise Gold rise

Here we go again.

Can you even short sell SBM other than through a synthetic market such as CFDs?

cuttlefish · 25 July 2008

Re: SBM - St. Barbara Mines

As far as I understand it you can short anything you can organise a borrow for (I've not done it I don't play in that league).

In relation to SBM - the forced sell is one thing - and its nice to see the market did absorb it and recover so maybe that sets a good floor - but its a bit of a worry that he had to sell it on market and couldn't find someone to place it with (unless it was sold without his approval or input).

A market like this with the forced selldowns can present great opportunities - I'm not fully convinced that this is one of them yet though.

I did end up picking up a few over the past few days after it seemed to find some support, but not too many - I'm still a bit wary of the leonora startup and would like to see that bedded down, and a clearer picture of operating performance overall, before getting too carried away.

nick2fish · 25 July 2008

Re: SBM - St. Barbara Mines

Paladin said:
Still no definite news on the cost of sales adjustments. That, for me, is the sword hanging over the short term potential of this stock. Whatever that 'adjustment' was makes for the difference between a mid and high cost producer.

With the share price of this company languishing around explorer levels ie: @ sbm reserve potential I really can't see how cost of sales is that important.
I know for a fact that there is not too many producing gold miners who are trading @ less than 0.30. (And I own them both).
SBM is cheap for what it has.
Gawlia decline is almost complete and into the high grade ore which will bring production costs down.
The swords hanging over SBM are Macs holdings, punter sentiment and POG
But then its only going to drop another 0.05 cause any lower would be ridiculous IMO

explod · 26 July 2008

Re: SBM - St. Barbara Mines

nick2fish said:
I know for a fact that there is not too many producing gold miners who are trading @ less than 0.30. (And I own them both).
SBM is cheap for what it has.
Gawlia decline is almost complete and into the high grade ore which will bring production costs down.
The swords hanging over SBM are Macs holdings, punter sentiment and POG
But then its only going to drop another 0.05 cause any lower would be ridiculous IMO

To add, I watch size of buys on market and since Monday buy parcels have been much larger than sells, at times 75%. First time since mid June.

And unless they put the whole of Fort Knox on the market in the next week I dont believe it will go down .05 either. We will marvel at the low of .245 one day soon.

cuttlefish · 26 July 2008

Re: SBM - St. Barbara Mines

Its difficult - it seems like such a good opportunity and I did buy some shares last week but the more closely I look I'm still not convinced. I just had a detailed read through the Dec 07 half yearly report - and the gold operations at the moment are only marginally profitable and the development expenditure has been significant. There is a lot of risk around the startup of a new underground operation - grade in particular is paramount as we've seen in other operations that have started up of late. (If I understand the current quarterly they are doing grade control drilling at the moment?).

Regardless of the size of the operation profitability is obviously crucial to value. Not trying to be deliberately negative - just offering additional input and happy to hear further views.

Excerpt from Dec 07 cashflow report (this is just the operating cashflows I didn't include development and investing cashflows)

Receipts from customers (inclusive of GST) 71,053
Payments to suppliers and employees (inclusive of GST) (62,171)
Interest received 2,492
Interest paid (4,000)
Finance charges – hire purchase agreements (42)
Borrowing costs paid (165)

Net cash flow from operating activities 7,167

SBM - St Barbara Limited

explod

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