Australian mineral mining company St Barbara Limited [ASX:SBM] have seen a shocking 9.8% decrease in their share price today at time of writing.
The company, along with its subsidiaries, is passionately pursuing the exploration, extraction, development and selling of gold in particular.
In the last three months, there have been more shares sold than bought by St Barbara’s insiders. These insiders hold 2.32 million shares, which is equivalent to around 0.45% of the total shares outstanding. 1.22 million of these shares have been divested since March this year. This is emitting quite a bearish signal for the company.
Why are shareholders pulling out?
The FY18 Q4 quarterly report was released on the ASX yesterday, showing potential areas of concern for St Barbara investors.
The quarterly AISC chart shows a 17% decrease from the third to fourth quarter of FY18, where Q3 ended at A$982 per ounce compared to the Q4 figure of just A$812 per ounce. This current figure also sits below the FY18 average of A$891 per ounce.
Additionally, the unaudited expenditure on mineral exploration for FY18 was $13.7 million, with almost a third of this occurring in Q4.
Perhaps these figures are what is scaring investors away from the possible potential of this company.
Does it all look negative for St Barbara?
Despite these somewhat troubling figures, the company remains optimistic about the road ahead.
Their FY19 outlook for the Gwalia project based in Western Australia sees gold production between 245,000 and 260,000 ounces, with an AISC resting anywhere between $920 and $980 per ounce.
For their Simberi mine in Papau New Guinea, they expect production of between 2105,000 and 115,000 ounces of gold, with an AISC of up to $1,375 per ounce for FY18.
There has also been further update on the Extension Project for their Gwalia mine, announced back in March 2017. It is expected to be completed by December 2020.
They are also planning to expand current exploration areas during this financial quarter by gradually increasing drilling depth. However, this has resulted in a forecasted FY19 expenditure of up to $27 million.
What does this mean for St Barbara?
It appears as though all we can give this company is time, in order to let them fulfil their short-term FY19 predictions.
For Money Morning
PS: As the potential for this mining company looks uncertain, so too is the potential for the products these mines are developing. Read this BEFORE you buy gold: Why one resource expert believes the gold price could be headed lower in 2018. Check out this free report on ‘Why You Should Wait To Buy Gold Stocks’.