St Barbara sells off New Simberi stake for A$453m plus royalties
St Barbara has announced a binding agreement it will sell its remaining interest in the New Simberi gold project, in Papua New Guinea, as well as the Tabar Islands exploration licences to China's Lingbao Gold Group for A$410-million in cash and two net smelter return royalties.
The consideration for the assets includes a A$43-million cash repayment representing St Barbara’s share of construction capital for New Simberi between April and the signing of a binding agreement between the companies, a 2.75% net smelter return royalty on future gold and silver production from the project and a 1.5% net smelter return royalty on future minerals production from the Tabar Islands licences.
The transaction is expected to conclude in the March 2027 quarter, following which St Barbara’s cash position will be A$880-million, allowing a full focus on the 15-Mile Processing Hub project and the Touquoy restart project, while retaining a royalty portfolio on New Simberi and Tabar Islands.
St Barbara says the transaction will crystallise substantial value for shareholders and allows the company to focus on the development of the Novia Scotia gold projects and the attractive exploration portfolio surrounding the 15-Mile Processing Hub.
“Our interest in New Simberi has never been fully reflected in the company’s share price and this transaction resolves that situation at a logical point for Lingbao to take full control of New Simberi. We recognise that New Simberi is an outstanding development project and we look forward to participating in the future benefits through the royalties over New Simberi’s production and through exploration of the Tabar Islands licences,” says St Barbara MD and CEO Andrew Strelein.
Subject to completion of the transaction with Lingbao, St Barbara will consider a fully franked special dividend payment of A$0.13 apiece on top of a fully franked A$0.05 dividend already having been declared. The board will also consider an on-market share buyback of about 100-million shares after the release of an updated prefeasibility study for the 15-Mile Processing Hub project, which is due later this month.
For context, New Simberi is jointly owned by St Barbara (50%), Lingbao (30%) and Papua New Guinea’s Kumul Mineral Holdings (20%).