- 01SBM sells New Simberi stake to Lingbao (A$453m).
- 02A$410m cash + A$43m loan; approvals.
- 03New Simberi: ~2.2Moz over 13y.
- 04Royalties: 2.75% NSR; 1.5% lics from 2027.
St Barbara (ASX: SBM) has signed a $453 million binding agreement to sell its remaining interest in the New Simberi gold project in Papua New Guinea to Chinese state-owned mining enterprise Lingbao Gold Group.
Under the terms, Lingbao will acquire St Barbara’s remaining ownership in Tabar Islands Holdings — which owns New Simberi and the Tabar Islands exploration licences — for $410m plus a cash repayment of $43m, representing St Barbara’s funding of construction capital to Tabar from April until completion.
Conditions precedent to the deal include regulatory approval from the People’s Republic of China and PNG, along with majority approvals by the shareholders of St Barbara and Lingbao.
In the event that the acquisition does not go ahead due to Lingbao not meeting all of the specified conditions, the $43m funding will become a construction loan repayable by St Barbara in a lump sum 24 months after the deal is terminated.
A December feasibility study confirmed New Simberi as a high-quality, low-cost asset forecast to produce a total of 2.2 million ounces (2Moz payable) of gold over an initial 13-year mine life.
Royalties and Dividends
Lingbao has agreed to grant St Barbara a 2.75% net smelter royalty on all gold and silver produced from New Simberi, as well as a 1.5% royalty on minerals produced from the exploration licences.
Both royalties will commence in July 2027 and Lingbao has provided a parent company guarantee in respect of payment obligations.
At a discount rate of 5% and gold price assumption of US$4,000 per ounce, the New Simberi royalty would have a net present value of $212m for St Barbara and produce cumulative cash flows of $286m over the life of mine.
St Barbara’s board will consider declaring a special $0.13 per share fully franked dividend at completion of the acquisition, on top of a $0.05 per share fully franked dividend announced in August.
Nova Scotia Focus
St Barbara managing director Andrew Strelein said the New Simberi sale would crystallise substantial value for shareholders and allow the company to shift its focus to the planned December restart of the Touquoy mine to support development activities at the 15-Mile processing hub project in Nova Scotia.
“St Barbara’s interest in New Simberi has never been fully reflected in our share price, and this transaction resolves that situation at a logical point for Lingbao to take full control of the project,” he said.
“New Simberi is an outstanding development and we look forward to participating in the future benefits via production royalties and through exploration of the Tabar Islands licences, with the option to consider opportunities to realise the value of the royalty portfolio.”
On top of the dividend payment, the company is also considering an on-market buy-back of up to 100 million shares, to be decided on release of an updated pre-feasibility study for 15-Mile at the end of September.
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