St Barbara’s Simberi exit opens a cash-rich path to Nova Scotia growth

Simberi Exit Could Leave St Barbara With A$880m Cash

St Barbara Limited (ASX:SBM) is preparing to emerge from the proposed sale of its remaining New Simberi interest with roughly A$880 million in pro forma cash, no debt and no hedging, according to an investor presentation prepared for the Mining Forum Americas. The figure combines A$427 million of unaudited cash at 31 August with A$410 million payable at completion and A$43 million to reimburse funding provided to New Simberi between April and signing.

The total transaction consideration is A$453 million in cash plus royalties. St Barbara would retain a 2.75% net smelter return royalty over future gold and silver production from New Simberi, alongside a 1.5% royalty over future minerals from the Tabar Islands exploration licences. Completion is targeted for the March quarter of FY27, but remains subject to PRC and PNG regulatory approvals, shareholder approvals where required, Lingbao shareholder approval and other conditions.

Shareholder Returns Remain Under Consideration

The balance sheet windfall creates room for capital returns, although the presentation stops short of making them commitments. The board has declared a fully franked A$0.05 per share dividend and will consider a further fully franked A$0.13 per share payment after the Simberi transaction completes. Together, the proposed distributions could represent about A$221 million to shareholders.

St Barbara has also reconfirmed that it is considering an on-market buy-back of up to 100 million shares. The timing matters: the company says the buy-back will be considered after the 15-Mile Processing Hub pre-feasibility study, while the special dividend depends on transaction completion. The potential returns therefore sit alongside, rather than replace, the funding requirements of the Nova Scotia development strategy.

15-Mile Study Lifts Reserve And Economic Metrics

With Simberi being sold, St Barbara plans to focus on its Nova Scotia assets. The updated 15-Mile Processing Hub pre-feasibility study lifts Ore Reserves by 17% to 1.44 million ounces and sets out a 13-year mine life with 1.377 million ounces of recovered gold. Average production is forecast at 106,000 ounces a year, including more than 120,000 ounces in FY31 and FY32, with life-of-mine all-in sustaining costs of US$1,098 an ounce.

At an assumed gold price of US$3,000 an ounce, the study reports a post-tax NPV5 of A$1.705 billion and an 81.6% post-tax IRR. At US$4,000 an ounce, those figures rise to A$2.721 billion and 121.4%, respectively. The study also estimates initial capital of C$289 million, equivalent to A$315 million in the presentation's stated exchange-rate assumptions. These are pre-feasibility estimates, not operating results, and depend on the assumed gold price, exchange rate, permitting, construction and mine performance.

Touquoy Restart Sets Near-Term Test

The nearer-term operational test is Touquoy, where St Barbara says preparation for an in-pit tailings deposition system and movement of ore and waste stockpiles are under way. The restart study forecasts 38,000 ounces of recovered gold over a 13-month operating period at an average all-in sustaining cost of US$1,598 an ounce, based on initial capital of C$11.4 million. Ore processing is expected to resume by the end of calendar 2026.

Beyond the restart, the company is targeting completion of a 15-Mile feasibility study and a final investment decision by the end of FY27, with production targeted to begin in FY30. The next test for the strategy is whether the cash released by Simberi can be converted into a permitted, financed and operating Nova Scotia business before the study economics are asked to carry the valuation.