St Barbara will sell its remaining New Simberi interest and Tabar Islands exploration exposure to Lingbao for A$453 million in cash, while retaining royalties over future production. The deal could leave the gold developer with about A$880 million in cash, but completion still depends on regulatory and potentially shareholder approvals.
- A$410 million cash consideration plus A$43 million construction capital repayment
- 2.75% New Simberi royalty and 1.5% Tabar Islands royalty retained
- Pro forma cash expected to reach approximately A$880 million with no debt or hedging
- Potential A$0.13 fully franked special dividend remains under consideration
- Completion targeted for the March quarter of 2027
A$453 Million Sale Recasts St Barbara’s Portfolio
St Barbara Limited (ASX:SBM) is exiting New Simberi with A$453 million in cash and a substantially simplified portfolio. The binding agreement with Lingbao Gold Group comprises A$410 million of consideration and about A$43 million reimbursing St Barbara for construction capital funded between April 2026 and signing.
The transaction would transfer St Barbara’s remaining interest in Tabar Islands Holdings to Lingbao. Once the separate sale of a 20% New Simberi interest to Kumul Mineral Holdings completes, St Barbara’s attributable interest in the project is expected to be 40% before this transaction removes its remaining exposure.
Royalties Preserve Long-Dated Simberi Exposure
St Barbara will not leave New Simberi entirely empty-handed. On completion, Lingbao is to grant it a 2.75% net smelter return royalty over 100% of future gold and silver production from New Simberi, plus a 1.5% royalty over all minerals produced from the Tabar Islands exploration licences. Both royalties are backed by a Lingbao parent guarantee and are scheduled to begin on 1 July 2027.
Based on the project’s initial 13-year life-of-mine plan, St Barbara forecasts 2.2 million ounces of total gold production, including 2.0 million payable ounces. At a 5% discount rate and a US$4,000 an ounce gold assumption, the New Simberi royalty is assigned an estimated net present value of A$212 million. That figure is a modelled estimate, not cash already received, and varies from A$156 million to A$267 million in the company’s sensitivity table at the same discount rate across gold price assumptions of US$3,000 to US$5,000 an ounce.
Cash Returns Depend on Completion
St Barbara expects the deal to lift its pro forma cash position to approximately A$880 million, including existing cash and restricted cash at 31 August, the transaction proceeds and the capital repayment. The figure excludes listed investments. The company also expects to have no debt or hedging after completion.
That balance sheet gives the board room to consider an additional fully franked dividend of about A$0.13 a share, on top of the A$0.05 dividend declared on 28 August. A buy-back of up to 100 million shares is also under consideration after the updated 15-Mile Processing Hub pre-feasibility study, due later in September. Neither initiative is committed: St Barbara says any decision will depend on market conditions, its share price and future capital needs.
Nova Scotia Becomes the Core Growth Bet
Management says the sale will allow St Barbara to concentrate on its wholly owned Nova Scotia projects, with the Touquoy Restart planned to begin by December 2026 and the 15-Mile Processing Hub moving towards an updated pre-feasibility study, feasibility study and final investment decision targeted for the end of FY27. The presentation describes 15-Mile as a potential long-term operation producing more than 100,000 ounces of gold a year across an 11-year-plus mine life, though those project milestones remain forward-looking.
Completion is targeted for the March quarter of 2027 and requires, among other conditions, regulatory approvals in China and Papua New Guinea. St Barbara and Lingbao shareholder approvals may also be required. Until completion, Lingbao will fund St Barbara’s share of ongoing capital calls; if the transaction fails in specified circumstances, that funding can become repayable as a construction loan. The immediate test is therefore not the headline cash figure, but whether the approvals and completion pathway hold together while St Barbara prepares to fund its next phase in Nova Scotia.
Bottom Line?
The sale could turn Simberi into a large cash and royalty asset for St Barbara, but the proposed shareholder returns remain conditional on a transaction that still has regulatory and execution hurdles.
Questions in the middle?
- Will the China and Papua New Guinea approval processes allow completion in the targeted March quarter of 2027?
- How will the updated 15-Mile pre-feasibility study influence the proposed dividend and potential 100 million-share buy-back?
- Can Touquoy Restart and the 15-Mile project convert the enlarged cash balance into production and development progress without weakening capital flexibility?