The St Barbara Ltd (ASX: SBM) share price has slumped to a 52-week low in a disappointing start to the year for the Aussie gold miner.
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The St Barbara Ltd (ASX: SBM) share price has had a tough time in 2021. Shares in the Aussie gold miner have slumped 23.5% lower to a new 52-week low on the back of weakening gold prices and some disappointing results.
Why has the St Barbara share price slumped in 2021?
The big news this week came in the form of St Barbara’s quarterly production update. The Aussie gold miner reported an 8.2% drop in production to 82,303 ounces compared to the December quarter.
St Barbara’s all-in sustaining cost (AISC) also climbed 8.7% higher to $1,649 per ounce on a disappointing note for shareholders. Quarterly gold sales slumped 28.3% against December numbers, albeit at a 5.7% higher average realised price of $2,247 per ounce.
That was enough to send the St Barbara share price tumbling 8% lower on Wednesday. It continued a disappointing run of form for the ASX gold share in 2021.
However, St Barbara is far from the only gold miner to see its valuation slide in 2021. Other big-name miners like Northern Star Resources Ltd (ASX: NST) have also been under pressure.
That’s largely a result of weakening commodity prices in 2021. The global gold price was strong in 2020 as investors turned to the traditional safe-haven asset amid the coronavirus pandemic.
However, renewed optimism and a strengthening US dollar have reversed that trend. Gold prices are down ~10% since the start of the year as a result of changing demand dynamics.
That’s likely to have an impact on forecast revenues for some miners and comes after a flurry of new projects capitalising on higher pricing conditions. The St Barbara share price is under pressure alongside many other miners and trading at a 52-week low right now.
The St Barbara share price has been hammered lower to start the year after a strong run of gains in 2020. The Aussie gold miner still boasts a market capitalisation of $1.3 billion and currently trades at a price-to-earnings (P/E) ratio of 10.5 prior to Friday’s open.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.