Risks Remain as St Barbara Seals Major Funding Deal Amid Regulatory Hurdles

Strategic Funding Secured for Simberi Expansion

St Barbara Limited (ASX, SBM) has announced a transformative funding and ownership restructure for its Simberi Gold Project, securing A$470 million through partnerships with China’s Lingbao Gold Group and Papua New Guinea’s Kumul Mineral Holdings. Lingbao will acquire a 50% stake in St Barbara Mining Pty Ltd (SBML), the entity holding an 80% interest in Simberi, for A$370 million, while Kumul will take a 20% direct interest in the project for A$100 million.

This injection of capital fully funds St Barbara’s share of the anticipated capital expenditure for the Simberi Expansion Project, significantly de-risking the development and enabling an accelerated timeline to the final investment decision (FID) targeted for late Q3 FY26. The deal also includes the Tabar Island Exploration Licenses and a receivable from Kumul, further strengthening the asset base.

A Premium Valuation and Strategic Partnerships

The transaction values the Simberi Gold Project at approximately A$800 million, representing a 31% premium to St Barbara’s current market capitalization. This premium underscores the market’s recognition of Simberi’s long-life resource, low capital intensity, and competitive operating costs.

Lingbao Gold Group, a top 10 Chinese gold producer with a fully integrated mining and refining operation, brings not only capital but also operational expertise and international experience. Their involvement signals strong confidence in the project’s potential and provides a strategic partner with smelting capabilities and a robust production footprint.

Meanwhile, Kumul’s 20% acquisition demonstrates the Papua New Guinea government’s support for the project, aligning local interests with international investment and fostering community and economic development in the region.

Governance and Conditions Ahead

Post-completion, St Barbara and Lingbao will each hold a 50% interest in SBML, which in turn holds 80% of the Simberi Joint Venture alongside Kumul’s 20%. Governance arrangements include equal board representation and a joint management structure, ensuring balanced oversight and operational collaboration.

The transaction remains subject to several conditions precedent, including regulatory approvals in China and Papua New Guinea, extension of the Simberi Mining Lease to 2038, and shareholder approval where required. The companies are targeting completion to coincide with the FID, aiming to remove uncertainties and expedite project development.

Looking Beyond Simberi

With the Simberi Expansion Project fully funded, St Barbara is also positioned to advance its Atlantic assets in Canada, including the Touquoy mine reopening and the development of the 15 Mile Processing Hub. This diversified growth strategy highlights the company’s broader ambitions beyond Papua New Guinea.

CEO Andrew Strelein emphasized the significance of the partnerships, noting that the combined financial strength and expertise of Lingbao and Kumul will accelerate value delivery to shareholders and stakeholders alike.