Good morning
SBM announcement not good:
Shortage of equipment and workers is 'an area of significant concern' for St Barbara, which has cut guidance and deferred capital expenditure on major projects by 12 months following a slow first quarter.
The group's gold production for the first quarter of FY23 came in at 63,700 ounces, down from the 67,000 ounces in the prior corresponding period.
The group sold 62,726 ounces of gold during the quarter at an average realised price of $2486 per ounce – lower that the previous quarter's 85,650 ounces at $2521 per ounce.
Group all-in sustaining cost (AISC) for the quarter came in at $2490 per ounce, much higher that the $1492 per ounce in the prior corresponding period due to higher fixed costs.
While its Simberi mine in PNG and Atlantic in Canada performed in line with expectations, the group production result came in lower than anticipated due to slower than expected ramp-up in underground mine equipment availability and utilisation at its Leonara operations in WA, which includes the Gwalia mine.
The group has now deferred the expansion of its Leonara processing plant by 12 months to "reduce execution risk with availability of construction contractors and reliability of equipment lead times of significant concern in the current market conditions". Its Simberi plans have also been deferred.
The deferral has also resulted in production guidance for FY23 being cut by 14 per cent because it had been previously underpinned by the delivery of 1.1 million tonnes of Gwalia ore to the processing plant.
"Across the industry there has been intense competition for highly skilled fitters and maintainers and St Barbara, together with Macmahon, has only been able to fill the majority of required positions by the end of September," the group said.
"It has become evident the full year target of 1.1Mt of ore out of Gwalia cannot be achieved in FY23," the group said, calculating a new target of 950,000 tonnes.
"Capital expenditure guidance has been updated to reflect the deferral of the Simberi Sulphide project, the Leonora Processing Plant expansion to 2.1Mtpa, development of the Aphrodite underground mine and refractory ore treatment capability at Leonora," St Barbara said.
The group also updated the underlying currency guidance for the lower Aussie dollar with AISC guidance for Leonora updated to reflect lower gold production.
FY23 production guidance is now for 260,000-290,000 ounces of gold at a higher AISC of $2250-$2500 per ounce with sustaining capital expenditure cut to $70m-90m and growth capex at $53m-$70m.
It compares to the August guidance of consolidated gold production of between 280,000 and 315,000 ounces at an AISC of between $2,050 and $2,150 per ounce with sustaining capex of $75m–$95m and growth capex of $95m–$120m.
St Barbara last traded at $0.537