SBM 1.30% $3.04 st barbara limited

Ann: Gwalia Mass Extraction Feasibility Study, Guidance & webcast, page-3

  1. 10,561 Posts.
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    They are going with the trucking option after all in the GMX project. Cost is around $100m.

    FY 2019 forward guidance for Gwalia (their prime asset) has been reduced from 245-255k ounces by 10-15k ounces (and the revised AISC estimate is a bit higher), and its 200-220k ounces for FY2020, and 230k ounces for 2021 and 2022. LOM at present extends to 2031, but perhaps there is scope for it to be extended down the track.

    The updated FY19 production and cost forecasts for Simberi have been improved a bit.

    Overall given they have been producing at around 260k ounces pa from Gwalia for some years, the reduction in forecast output and increase in AISC will reduce net free cash flow (all else being the same), and hence I expect the market to mark down the share price by around 10-15%, but I could be wrong and it rockets higher given the clearer path for continued production.

    Its usually worthwhile to listen to the webcast associated with major announcements like this one.

    GLA.

    loki (to put it simply, the share price could fall, rise or remain steady on the basis of this announcement - and I just dunno which it will be.)
 
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