How Will St Barbara’s A$58M Placement Accelerate Simberi and 15-Mile Growth?
St Barbara Limited has secured approximately A$58 million through an institutional placement to fund its Simberi Expansion Project and advance the 15-Mile Processing Hub in Nova Scotia. This capital raise supports the company’s growth ambitions amid ongoing regulatory and operational developments.
- A$58 million placement via 126.1 million new shares at A$0.46 each
- Funds allocated to Simberi Expansion Project and 15-Mile Processing Hub feasibility and development
- Simberi Expansion targets 200,000 ounces gold production annually over 13 years
- Pending PNG tax assessment resolution and mining lease renewal critical for final investment decision
- Placement not underwritten; shares to rank equally with existing stock
Capital Raising Details
St Barbara Limited (ASX, SBM) announced a significant institutional placement to raise approximately A$58 million by issuing 126.1 million new shares at a price of A$0.46 each. This represents an 11.6% dilution of the existing share base and was priced at a 9.7% discount to the recent 10-day volume weighted average price. The placement is not underwritten but has secured firm commitments, with new shares to rank equally with existing ordinary shares.
Purpose of the Raise
The proceeds will primarily fund the ongoing Simberi Expansion Project in Papua New Guinea and the advancement of the 15-Mile Processing Hub in Nova Scotia, Canada. Key uses include mobile fleet expansion and conversion at Simberi, finalisation of feasibility studies, geotechnical drilling, construction camp completion, and environmental permitting efforts for the 15-Mile hub. The capital injection aims to maintain momentum towards the final investment decision (FID) targeted for late 2025 or early 2026.
Operational and Project Updates
The Simberi Expansion Project is designed to transition the operation from oxide to sulphide ore processing, targeting an average annual gold production exceeding 200,000 ounces over a 13-year mine life. The project’s initial capital estimate stands at approximately US$235 million, with pre-expansion growth capital between US$40 million and US$60 million. The company is awaiting resolution of a tax assessment dispute with the Papua New Guinea Internal Revenue Commission and the renewal of its mining lease; both critical milestones before progressing full funding arrangements.
In Nova Scotia, the 15-Mile Processing Hub concept study is progressing, incorporating ore from the 15-Mile, Beaver Dam, and Cochrane Hill deposits. The hub aims for over 100,000 ounces of annual gold production over an 11-year mine life, leveraging the relocated Touquoy mill. Permitting conditions have improved markedly, with gold designated as a Provincial Strategic Mineral and streamlined environmental approvals underway.
Resource and Exploration Highlights
St Barbara updated its mineral resource and ore reserve estimates, confirming substantial gold ounces across its asset portfolio. Exploration drilling at Simberi continues, with high-grade intercepts reported below existing pit designs, supporting resource extensions. Assay results for several drill holes remain pending, expected in the first half of fiscal 2026, which could further refine resource estimates.
Risks and Market Considerations
The company outlined key risks including gold price volatility, foreign exchange exposure, regulatory and permitting uncertainties, and the ongoing PNG tax dispute. The placement’s success without underwriting introduces some execution risk, while the timing of the FID depends heavily on regulatory outcomes. Investors should also consider potential dilution impacts and the pending assay results that may influence future resource valuations.
Bottom Line?
St Barbara’s capital raise positions it to advance key growth projects, but upcoming regulatory milestones and exploration results will be pivotal for its next phase.
Questions in the middle?
- How will the PNG tax assessment resolution impact the timing and funding of the Simberi Expansion?
- What are the implications of the 11.6% dilution for existing shareholders and future capital needs?
- Will the pending assay results from Simberi drilling materially alter resource estimates or project economics?
