SBM - ST BARBARA LIMITED

[ShareCafe]

SBM 6 month graph attached

[Grebmoolb]

St Barbara Mines peaked at 29 cents a few years ago and since then have been driven relentlessly downwards to under 5 cents. From a position of considering paying dividends the company has been borrowing by issuing shares and options at a considerable pace.

 

There is now a clash between the two largest holders of the stock " Resource Capital Funds ( RCF ) " and " Strata Mining ".

 

Resource Capital have called a meeting of shareholders to take place at 10am - 20 July 2004. They basically wish to remove the present directors Messr Miller and Dundo and replace them with Mr Ed Eshuys and Mr Colin Wise as well as support for an additional independent director.

 

Resource Capital management say that Mr Miller's statement that RCF wish to run the business is false and it has no intention of controlling or running St Barbara ( SBM ). The company is an investment entity having interests in 35 companies, but this is the second time they say they've been forced to take such action.

 

Strata Mining are unhappy with the way RCF have built such a large holding in the company by lending backed up by SBM shares and options. They seek, by going to the courts, to prevent RCF voting a large number of their SBM shareholding.

 

Much of the problems started with poor equipment combined with unexpected poor ground conditions at the Meekatharra operations. Paul Richardson - Operations Manager said recently " The adverse impact of additional mine site direct costs ( ground support and monitoring ) and the higher effective unit capital cost due to the recovery of fewer ounces due to reserve sterilisation resulted in significant cash and accounting costs " ( from 2003 Annual Report ).

 

Alan Rule - Chief Financial Officer said " The loss included $9.9 million due to accounting policy changes and $18.4 million non-cash charges included accelerated write-down of underground operations. " ( from 2003 Annual Report )

 

Chris Davis - Project Manager in commenting about the Paulsens Project said " The project has been re-assessed as a smaller tonnage higher grade underground mine ". ( from the 2003 Annual Report )

 

Stephen Miller - Executive Chairman said the Financial year 2003 can only be described as difficult and disappointing for the Company, Directors, management, shareholders and stakeholders alike. " ( from the 2003 Annual Report ).

 

It does appear that the present Directors are having continued difficulties in turning this company round and on balance should resign before the meeting on 20 July 2004 in my view.

[texas4qld]

Nice post Grebmoolb

 

My Uncle owned SBM back in 1994 when she was trading above $2.

He has been in exploration all of his life in W.A. and was at the SBM meeting yesterday.

Unfortunately the price of gold sank and the ore reserves started to dry up and that was the end of his gold empire.

I don't think he was very fond of Miller http://www.ShareScene.com/html/emoticons/wink.gif

He seems to think that SBM has very little life left in it, and that the only reserve that NMC have is Pullsen mine (which has been down graded).

 

Here's a snip from 1997 when there was still some gold and them thar hills !

 

Tex.

 

http://www.pierpont.com.au/eco_Archives/de...article&id=3089

 

 

Hovering along into the next thermal, Pierpont found himself over St Barbara Mines, where the fighting parties over the past year have left a mound of bleeding entrails. Alan Birchmore and Ross Atkins have been conducting a battle for board control with such acrimony that the Montagus and Capulets look like best friends. In the long, bitter fight for St Barbara, Ross won the prize for best quotation when he said: "We have five people on the board and I'm the only bugger who's ever used a pick and shovel."

 

Last week Ross won control by buying 11 per cent of St Barbara from Westgold for $19 million. At the present share price of 45ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ for St Barbara, the 11 per cent is worth roughly $11 million.

 

Ross hasn't paid for it yet. Westgold these days is run by Pierpont's old chum from the 1970s, Danny Hill. Payment for the first half of the 11 per cent tranche has been guaranteed by a financier and is due within 15 days. The second half is due within 18 months.

 

If Ross doesn't pay, Danny will presumably move into repossession mode. As Danny has some mild fame at repossessing, Pierpont hopes Ross can pay.

 

In these circumstances, Ross must be hoping the gold price rises. St Barbara's average cash cost of production last quarter was $A397 an ounce, which is uncomfortably close to the prevailing gold price at $A428. It has forward sales at $A568 but they cover only 76,000 ounces which amounts to nine months production. So if the gold price stays where it is for nine months, St Barbara will be looking marginal and Ross will will have to be asking Danny to take a broad, friendly view of the situation. That may test a friendship.

[kiril]

Hey Tex,

 

You might want to revist your thoughts on their holding in NMC-Nustar.

 

ASX notice on 29/6/04 describes a major upgrade for Paulsens.

 

stating that Paulsens will be one of the highest grade gold mines in Australia, delivering high margin returns based on forcast cash costs, before royalties, of A$300 per ounce.

 

Kiril

 

 

 

[texas4qld]

Sorry kiril

 

That should read (up graded), but there are some in the industry that believe there is FA gold in the hole, and never has been.

Look how long it's taking to develope.

 

Anyway, getting rid of Miller is a step in the right direction.

Good luck with it.

 

P.s when they say "highest grade" they mean "most pure" not "heaps of".

 

Tex.

[kiril]

Thanks Tex,

 

So I gather by your post that you are not a believer in the Paulsens region- Nustar potential?

 

I have held since Taipan days...and yes...it is taking a very long time.

 

Kiril

[saxien]

Hi Kiril,

 

If Paulsens ever opened, it would be the only mine in that area since the 30,s, I think the old battery closed in the 40,s, there was one guy who used to cart his rich stuff 18g/t up there from an old mine just pre war (he went, didn,t come back) We had leases quite a bit south west of Paulsens, mostly similar type of deposits up there that SRI had--small rich lodes, never went to any depth.

[kiril]

Thanks Saxien.

 

What are your thoughts re holding/buying NMC?

 

Thanks inadvance.

 

Kiril

 

 

[texas4qld]

##So I gather by your post that you are not a believer in the Paulsens region- Nustar potential##

 

My advice has been (from some time ago) that there is a very limited reserve at pualsens mine.

SBM tried some time ago, to get further financial backing for exploration of Paulsens from other sources, and failed.

There is a saying that "gold is where you find it" and that could prove to be true, but there is another saying...."that a fool and his money are soon parted" http://www.ShareScene.com/html/emoticons/blink.gif

 

I see they have issued another 86 million shares today, which gives some indication of their cash position.......I feel sorry for the investors caught up in this mess, and I wouldn't be holding my breath to get some sort of return on investment.

 

Tex.

[kiril]

Thanks for your thoughts Tex.

 

But you gotta wonder where the hell all this buying of late has been coming from?

 

Kiril