St Barbara has signed separate binding deals with Kumul Minerals and Lingbao Gold to help get its Simberi expansion project off the ground in 2026.
The Australian company will give up around 60 per cent of its equity in the already operating gold mine, in return for a combined consideration of $470 million.
Under the agreement with Kumul Minerals will take a 20 per cent interest in the Simberi gold project, which will now be run as a joint venture with a dedicated St Barbara subsidiary, St Barbara Mining Limited (SBML), at the helm as mine manager. Kumul will provide $100 million, which will be held by the subsidiary as development costs for the expansion project.
Lingbao Gold will acquire a 50 per cent stake (plus one share) of SBML, for $370 million in cash consideration, paid to St Barbara (the ASX-listed parent company).
Lingbao Gold is a $US2.8 billion ($A4.2 billion) gold mining and processing company, headquartered in China and listed on the Hong Kong stock exchange.
Following completion of the dual agreements, St Barbara and Lingbao will each hold 50 per cent of SBML, which will own 80 per cent of the Simberi joint venture. The subsidary’s other assets will include the $100m cash from the Kumul deal, and a set of exploratory licences for parts of Tabar Island in New Ireland province.
St Barbara managing director and chief executive officer Andrew Strelein said the investments from both Lingbao and Kumul would help the company accelerate the development of the Simberi expansion project.
“This is a high-quality brownfields project with low capital intensity, a highly competitive operating cost structure, and long-life resource that has potential to grow in the future,” he said. “With Lingbao we have a committed, experienced and a well-funded partner. In addition, we welcome Kumul to the project as a co-investor.
“St Barbara is now fully funded for its expected share of the development costs of the Simberi gold project.”
Lingbao Gold chair Wang Pinran said the company was enthusiastic to be investing in both the Simberi project and Papua New Guinea’s (PNG) mining sector more broadly.
“Ensuring the project is fully funded with St Barbara and Kumul is just the beginning,” he said. “We are enthusiastic about developing the local community and economy, contributing to the environment [and] showing other overseas investors that PNG is a good place to be.”
Alongside details of the equity agreements, St Barbara also released its completed feasibility study for the Simberi expansion project on December 10. The study confirms the economics behind the expansion, with production forecast to ramp up to 220,000 ounces of gold per year from 2028, a 214 per cent increase on current production figures.
Over a 13-year mine life, Simberi is expected to produce 2.2 million ounces of gold at all-in sustaining costs of $US1,200 to $US1,300 per ounce from 2029 to 2036.
Both equity deals remain subject to Chinese and Papua New Guinea regulatory approvals, and the extension of the Simberi mining lease, which is currently awaiting ministerial sign-off. The transactions are expected to be completed in late 2025 or early 2026.
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