St Barbara rallies as gold sector comes under pressure

By Trevor Hoey. Published at Jan 20, 2017, in Features

As the S&P/ASX 200 gold index (XGD) shed 2% on the back of a decline in the gold price, shares in multi-mine gold producer, St Barbara (ASX: SBM) rallied more than 2%, perhaps spurred on by a positive review of the company’s operations by analysts at Macquarie.

The broker was impressed with the group’s performance from its Gwalia and Simberi gold projects where December quarter production of circa 70,900 ounces and 28,000 ounces respectively compared favourably with the broker’s estimates of 63,900 ounces and 23,000 ounces.

It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

The Gwalia mine is in Western Australia, while Simberi is located in New Ireland, Papua New Guinea.

In providing its quarterly update St Barbara lifted the lower end of its full-year production guidance for Gwalia by 10,000 ounces to 255,000 ounces, and the group is expecting annual production from Simberi to be in a range between 95,000 ounces and 105,000 ounces.

Macquarie’s production forecasts at top end of guidance

Macquarie’s production forecasts for fiscal 2017 sits at the top end of guidance with the broker’s projections based on combined output of 364,700 ounces.

Apart from the exceeding Macquarie’s production guidance, the broker also said that the company had outperformed on the costs front with Simberi approximately 10% below expectations.

This prompted the broker to upgrade its fiscal 2017 earnings forecast by 6%, resulting in a 12% increase in its price target which now stands at $2.90 per share.

This implies further upside from Thursday’s high of $2.41. However, Macquarie also sees St Barbara as a possible takeover target, or perhaps a suitor given it is expected to generate annual free cash flow in a range between $150 million and $200 million over the next five years.

Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why is Australia’s leading small cap publication

Founded seven years ago, is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise. provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more. is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!