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Gold miner St Barbara (ASX:SBM) has this week satisfied (or had waived) all conditions for its A$740 million deal with the Lingbao Gold Group regarding the restructuring of the New Simberi Gold Project in Papua New Guinea.
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The biggest hurdles St Barbara and Lingbao had been working on included a starting-point life of mine plan, the program for construction works, and budgeting. Final agreements with Kumul Mineral Holdings had to be sorted out as well. All have now been completed, St Barbara told shareholders today.
After the deal wraps – the completion date is set for April 1 – St Barbara and Lingbao will start working on a Final Investment Decision for New Simberi.
This is a pivotal moment for St Barbara as we unlock significant immediate value for the company, while opening up a new future for our business as we move to execute the New Simberi Gold Project and deliver value to our shareholders and to our stakeholders in PNG,” managing director and CEO Andrew Strelein said.
There are two approvals still needed from the PNG government before that April 1 closing date, but Mr Strelein said any delay with those final approvals “will not impact the timing of the completion of the Lingbao transaction.”
St Barbara expects to receive an unaudited gain on the sale of about A$500M upon completion, with Lingbao to pay A$370M in cash for its stake.
This suggests New Simberi carries a total project of somewhere ~A$740M.
After April 1, China’s Lingbao will carry a 50% stake in St Barbara’s fully owned subsidiary, St Barbara Mining. SMBL holds an 80% interest in the Simberi project.
Kumul Mineral Holdings will wield the other 20% after its deal with St Barbara closes at the same time, after paying A$100M (which has been included in Simberi’s value). Kumul is Papua New Guinea’s national minerals company.
Heading into Thursday open, SBM shares are ~57c each.
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