St Barbara (ASX:SBM) has announced the formal completion of the strategic transaction with Lingbao Gold Group (HK:3330), receiving $389 million from Lingbao for their investment in the New Simberi Gold Project in Papua New Guinea.
In line with the completion of the strategic investment, both St Barbara and Lingbao have approved the final investment decision (FID) to move forward with the US$333 million ($483.4 million) construction of the New Simberi Gold Project.
The construction total includes the US$13 million already spent on the project to this point.
With the receipt of the $389 million from Lingbao, St Barbara’s cash balance now stands at $504 million at the time of announcement, with the company noting they are fully funded for their 50% share of the construction costs for the project.
St Barbara Managing Director Andrew Strelein says that the completion of the transaction and FID approval are major milestones for the company.
“The New Simberi Gold Project is a long-life, low-cost operation fully funded for development and will increase production to over 200,000 ounces per annum,” Strelein says.
“This transaction along with the FID approval significantly de-risks the development of the project and unlocks long-term value for the company and shareholders.”
Lingbao Chairman Wang Pinran also commented that the company is “delighted” with the completion of the transaction.
“Lingbao, St Barbara, and Kumul will work together to deliver great value to our shareholders, as well as significant benefit to the local community and PNG stakeholders,” Wang says.
“The cooperation and synergy between Lingbao and St Barbara has been proved along the journey to our completion and will be the foundation for the future success of our New Simberi Gold Project.”
The New Simberi Gold Project is expected to increase to production rates over 200,000 ounces per annum, at an all-in sustaining cost of between US$1,100 – US$1,400 per ounce, with a mine life extending to 13 years based on ore reserves alone.
St Barbara is an Australian development company with projects in Papua New Guinea and Nova Scotia, Canada.
Write to Amy Rotman at Mining.com.au
Images: St Barbara
