Australian gold miner St Barbara has agreed to sell its remaining interest in Papua New Guinea’s New Simberi Gold Project to Lingbao Gold Group for A$410 million in cash, plus a further A$43 million repayment of construction capital.
St Barbara said on 10 September it had signed a binding agreement with Lingbao under which the Chinese gold company will acquire St Barbara’s remaining ownership in Tabar Islands Holdings, which currently owns New Simberi and the Tabar Islands exploration licences.
The transaction is expected to deliver A$453 million in cash to St Barbara, comprising the A$410 million purchase consideration and approximately A$43 million representing St Barbara’s funding of construction capital for New Simberi between April 2026 and the signing of the agreement. Lingbao will also fund St Barbara’s share of capital requirements through to completion.
St Barbara will retain exposure to the project through a 2.75% net smelter return (NSR) royalty on 100% of future gold and silver production from New Simberi, as well as a 1.5% NSR royalty on 100% of future minerals production from the Tabar Islands exploration licences. The royalties are due to commence on 1 July 2027, with Lingbao providing a parent company guarantee for its royalty payment obligations.
Simberi ownership transition
The sale follows St Barbara’s agreement announced in December 2025 to sell a 20% interest in New Simberi to Eda Minerals, a wholly owned subsidiary of Kumul Mineral Holdings, for A$100 million.
That transaction is intended to establish the New Simberi Gold Joint Venture. Once completed, St Barbara’s attributable interest in New Simberi would fall from its current 50% to 40%, while the A$100 million purchase price and Kumul’s share of capital expenditure would be repaid from future sales by the joint venture.
The latest agreement would see Lingbao acquire St Barbara’s remaining ownership in Tabar Islands Holdings, consolidating Lingbao’s position in the project alongside Kumul’s 20% interest once the earlier transaction is completed.
Completion of the Lingbao transaction is targeted for the March quarter of 2027 and remains subject to conditions including regulatory approvals in Papua New Guinea and China, as well as shareholder approvals by St Barbara and Lingbao where required.
New Simberi royalty valued at A$212m
St Barbara said the retained royalty provides continuing exposure to what it considers a significant development project.
Under the New Simberi Initial Life of Mine Plan, the project is forecast to produce 2.2 million ounces of gold, including 2.0Moz payable, over an initial 13-year mine life.
Using a gold price assumption of US$4,000 an ounce and a 5% discount rate, St Barbara estimates the New Simberi NSR royalty has a net present value of A$212 million. The company's sensitivity analysis puts the royalty's NPV at between A$156 million and A$267 million at a 5% discount rate, depending on a gold price ranging from US$3,000/oz to US$5,000/oz.
The royalty cash-flow table on page 4 of St Barbara's announcement estimates annual royalty receipts beginning at A$11.1 million in 2027, rising to A$34.1 million in 2032 under the company's assumptions. The forecast assumes a gold price of US$4,000/oz and silver at US$35/oz.
St Barbara to focus on other projects
St Barbara managing director and chief executive Andrew Strelein said the transaction would crystallise value for shareholders while allowing the company to concentrate on its other assets.
“This transaction will crystallise substantial value for St Barbara shareholders and allows the Company to focus on the development of the Nova Scotia gold projects and the attractive exploration portfolio surrounding the 15-Mile Processing Hub,” Strelein said.
He said St Barbara recognised New Simberi as “an outstanding development project” and would continue to participate in its future through the royalties and exploration interests in the Tabar Islands.
The company said the divestment would simplify its portfolio, with the Touquoy Restart planned to commence by December 2026, while allowing St Barbara to focus on its Nova Scotia Gold Projects.
Subject to completion, St Barbara's pro-forma assets are expected to include approximately A$880 million in cash, the 15-Mile Processing Hub Project and exploration portfolio, the Touquoy Restart Project and its royalty portfolio, with no debt or hedging.
The company is also considering an additional fully franked special dividend of approximately A$0.13 per share following completion of the transaction. This would be in addition to the A$0.05 per share fully franked dividend declared on 28 August.
St Barbara has separately reaffirmed that it is considering an on-market share buy-back of up to 100 million shares, with a decision expected after the updated Pre-Feasibility Study for the 15-Mile Processing Hub Project, due at the end of September.
The proposed dividend and buy-back remain subject to future decisions by the board, market conditions, St Barbara's share price and capital requirements, and are not guaranteed.
The transaction is subject to satisfaction or waiver of the agreed conditions precedent, with completion targeted for the March quarter of 2027.
