St Barbara’s Simberi deal funds its next gold development phase

Simberi transaction drives headline profit

St Barbara Limited (ASX:SBM) finished FY26 with the sort of profit number that demands a footnote: $489.7 million after tax, against a $93.8 million loss in the restated prior year. The main driver was a $499.3 million gain recognised when Lingbao Gold Group acquired majority ownership of the entity holding the New Simberi Gold operation and St Barbara lost control.

That accounting gain transformed the statutory result, but it did not turn the continuing business into a profitable operator. Underlying net loss after tax was $27.8 million, while continuing operations generated a $12.9 million operating cash outflow. The distinction matters as St Barbara moves towards becoming a more focused Nova Scotia developer rather than a conventional multi-asset producer.

The report formalises the financial architecture behind the $453 million Simberi exit, announced in September and targeted for completion in the March quarter of 2027. That transaction is expected to deliver $410 million in cash consideration and repay $43 million of construction funding, while St Barbara retains royalties over future New Simberi Gold and Tabar Island production. Completion remains subject to conditions precedent.

Cash supports dividend and project spending

At 30 June, St Barbara held $393.4 million in unrestricted cash, plus $81.4 million restricted as security for Touquoy reclamation obligations. Interest-bearing liabilities were just $2.0 million, consisting of lease liabilities, and the company reported no debt facility and no gold-price hedging.

The board approved a fully franked dividend of 5 cents per share, to be paid on 16 October. It transferred $354.6 million of FY26 statutory profit into a distributable reserve, while retaining funding capacity for the projects that now define the investment case. The report says $78 million was invested in growth capital, exploration, evaluation and feasibility work during the year.

The balance sheet is therefore strong in headline terms, although the cash figure should not be confused with recurring cash generation. FY26’s large inflow was dominated by the Lingbao transaction, while the company’s continuing operations remained loss-making after care and maintenance, exploration, corporate costs and project expenditure.

Touquoy restart becomes the nearest operating catalyst

In Nova Scotia, the Touquoy Restart has moved from permitting into execution. Approval of amended Industrial Approval conditions allows St Barbara to process remaining low- and medium-grade stockpiles, with processing targeted to recommence by the end of calendar 2026.

The planned 13-month restart is expected to produce 38,000 ounces of gold and generate C$118 million of operating cash flow at a gold price assumption of US$4,000 an ounce. Those are estimates rather than reported outcomes, and the project still carries the ordinary execution risks of refurbishing an existing plant and moving material at scale.

Further out, the 15-Mile Processing Hub pre-feasibility study outlined average production above 100,000 ounces a year for more than 11 years, at average all-in sustaining costs of about US$1,188 an ounce. St Barbara has submitted an initial project description and is targeting a final investment decision by the end of FY27, with an environmental assessment planned for early calendar 2027.

Simberi construction continues without control

New Simberi Gold produced 48,395 ounces on a 100% basis in FY26 at an all-in sustaining cost of A$4,829 an ounce. St Barbara’s attributable production was 41,066 ounces, reflecting its change in ownership during the year. The operation generated A$19.9 million of operating cash contribution before growth capital, while A$38.6 million was invested in expansion work before deconsolidation.

Construction of the US$333 million New Simberi Gold Expansion Project is described as well underway, with the project designed to lift production above 200,000 ounces a year and extend mine life by more than 10 years. St Barbara now holds an associate interest rather than control, making construction progress, commissioning and the eventual value of retained royalties more important than the former consolidated production line.

PNG tax dispute remains an unresolved liability question

The report repeats the unresolved PNG Internal Revenue Commission assessment against Simberi Gold Company, totalling PGK523 million, or approximately A$173 million. St Barbara disputes the assessment in full and has not recognised a provision, while acknowledging contingent indemnity exposure to Lingbao for specified components involving dividend withholding tax, interest, penalties and related objection costs.

That position is consistent with management’s view that a material payment is not expected, but the matter remains a live uncertainty around the Simberi transaction. Against that, St Barbara enters FY27 with its immediate operational test in Nova Scotia: turning Touquoy’s permitted restart into production and cash flow while advancing 15-Mile through the next layer of permitting.