Atlantic Gold Holds 1.4 Moz Reserves as St Barbara Eyes Separation by H1 FY26

Strategic Shift to Unlock Value

St Barbara Limited (ASX: SBM) has revealed plans to separate its Atlantic Gold Operations located in Nova Scotia, Canada, marking a significant strategic pivot. This move follows a comprehensive portfolio review that identified the separation as a pathway to maximise shareholder value by enabling Atlantic to progress under a Canadian company with local leadership. The decision underscores St Barbara’s intent to sharpen its operational focus and capital allocation on its Papua New Guinea assets.

Atlantic Gold Operations encompass the 15-Mile, Beaver Dam, and Cochrane Hill projects, collectively boasting 1.4 million ounces in Ore Reserves and 2.0 million ounces in Mineral Resources. The assets include the Touquoy processing plant, currently on care and maintenance, and benefit from production-ready infrastructure and promising exploration upside.

Operational and Financial Highlights

Recent evaluations have highlighted the potential to increase the 15-Mile processing plant capacity from 2.1 million tonnes per annum (Mtpa) to 3.0 Mtpa, facilitating the inclusion of Cochrane Hill ore into the feed schedule. This expansion could elevate annual gold production to 100,000 ounces or more, a significant step up from the current pre-feasibility study projections.

Financial metrics from the pre-feasibility study are compelling, with an estimated net present value (NPV) of C$411 million and an internal rate of return (IRR) of 37%, based on a long-term gold price of US$2,000 per ounce. The project’s life-of-mine all-in sustaining cost (AISC) is forecast at US$1,025 per ounce, positioning Atlantic as a financially robust and attractive asset.

Separation Options and Timeline

St Barbara is exploring multiple pathways for the separation, including a sale, vend-in, or a demerger into a standalone Canadian-listed entity. Each option remains contingent on securing shareholder, ASX, and regulatory approvals. The company has engaged Macquarie Capital as financial adviser and King & Wood Mallesons for legal counsel to navigate the process.

The separation is anticipated to complete in the first half of fiscal year 2026, with proceeds from any sale potentially distributed to shareholders or reinvested into the Simberi Sulphide Expansion Project. This timeline aligns with St Barbara’s broader strategic objectives and capital management plans.

Refocusing on Papua New Guinea

Post-separation, St Barbara will concentrate exclusively on its Simberi Gold Operations in Papua New Guinea, home to 5.0 million ounces in Mineral Resources and 2.8 million ounces in Ore Reserves. The company aims to advance the Simberi Sulphide Expansion Project, which is expected to boost annual production beyond 200,000 ounces and extend mine life by over a decade.

CEO Andrew Strelein emphasized that the separation allows both Atlantic and St Barbara to pursue tailored development strategies suited to their distinct geographies and regulatory environments. For St Barbara, this means dedicating resources and management focus to unlocking Simberi’s full potential.

Looking Ahead

The separation of Atlantic Gold Operations represents a pivotal moment for St Barbara, potentially unlocking latent value and attracting investor interest aligned with each asset’s risk profile and development stage. As the company navigates approvals and finalises separation details, market participants will be watching closely to assess the impact on shareholder returns and operational momentum.