St Barbara Ltd (ASX:SBM) has completed a strategic transaction with China’s Lingbao Gold Group, marking a major milestone for the company which has secured A$389 million in cash and a final investment decision (FID) to proceed with development of the New Simberi Gold Project in Papua New Guinea.
The cash consideration comprises the previously agreed A$370 million, along with a A$19 million adjustment for working capital and cash holdings. Following receipt, St Barbara’s cash balance has increased to A$504 million, excluding A$26 million retained as the starting cash position of the jointly owned project subsidiary.
Alongside completion, both parties approved the FID for the US$333 million (approximately A$500 million) construction of the New Simberi Gold Project. This figure includes around US$13 million already spent as at 31 March 2026. St Barbara confirmed it is fully funded for its 50% share of the development costs, with construction set to commence immediately.
Project moves into development
The company expects to record an unaudited gain on sale of approximately A$0.5 billion in its FY26 financial results, with no tax leakage anticipated from the transaction.
St Barbara managing director and CEO Andrew Strelein described the completion and FID approval as a “major milestone” for the company, noting the project is now de-risked and fully funded.
“The New Simberi Gold Project is a long-life, low-cost operation fully funded for development and will increase production to over 200 kozpa,” Strelein said.
The project involves expanding the existing Simberi operation to process higher-grade sulphide ore, with mining rates expected to double to around 20Mtpa from the current 10Mtpa. Production is forecast to exceed 200,000 ounces per annum at an all-in sustaining cost of US$1,100–US$1,400 per ounce.
Based on current ore reserves, the operation is expected to have a mine life of approximately 13 years, excluding any potential upside from resource conversion or further exploration.
Lingbao chairman Wang Pinran said the transaction positions the project for accelerated development.
“Following the approval of the Final Investment Decision, the New Simberi Gold Project is fully funded and will be fast-tracked into development to achieve over the 200 kozpa target,” he said.
Completion of a separate transaction with Kumul Mineral Holdings Limited remains subject to regulatory approvals from Papua New Guinea’s Independent Consumer and Competition Commission and National Executive Council. St Barbara said any delay in that process would not affect the Lingbao transaction or the approved development timeline.
Macquarie Capital (Australia) Limited acted as financial adviser to St Barbara, with King & Wood Mallesons serving as legal adviser.