St Barbara resilient despite volatile year

GOLD producer St Barbara has moved to reassure shareholders following a year of highly volatile market conditions that led the company to cut jobs and forward-sell gold.
St Barbara resilient despite volatile year
St Barbara resilient despite volatile year
St Barbara resilient despite volatile year
St Barbara resilient despite volatile year
St Barbara resilient despite volatile year

Despite the write down of St Barbara's Pacific operations' assets after a substantial fall in the gold price, the company's view of the long-term value has not changed.

Addressing the annual general meeting of shareholders in Melbourne yesterday, chairman Colin Wise said the 2013 financial year had been one of strategic transformation for St Barbara.

He noted the purchase of operations in PNG and the Solomon Islands to ensure St Barbara was not a ‘one mine' company, and flagged the issue of $US250 ($A274) million worth of five-year senior secured notes to refinance bank debt and provide working capital.

Earlier this month St Barbara announced it would cut 135 jobs at its Simberi operation in PNG after the project failed to meet performance targets for the quarter.

This was swiftly followed by the installation of short-term gold price protection measures to shield its margins while it attempted to turn around its Pacific operations.

Wise said the board and executive management were aware of the financial hardship shareholders had experienced over the past 12 months with the drop in St Barbara's share price.

He said the company was focussed on rebuilding the conditions for its success and financial re-rating.

"The past 12 months have been particularly challenging for all concerned at St Barbara," Wise said.

"While we remain confident about the long-term value of the company's assets, including the Pacific operations, no one can provide any reassurance that the gold price or the company's share price will not fall further.

"We will therefore continue to expect the heavy cloud pattern that seems to have settled above the gold sector world-wide, to remain in the near-term.

"This will require us to drive the need for continued maximum flexibility, a resilience of approach and a capacity to successfully adapt to change."

He said while the board and management were committed to completing the turnaround of the Pacific operations, "this will not be at any cost".

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