St Barbara (ASX:SBM) announced a milestone for its operations in Papua New Guinea, confirming the formal completion of Lingbao Gold Group's strategic investment in the New Simberi Gold Project.
The transaction has provided the company with a capital injection of $389 million in cash consideration.
The total includes the base price of $370 million plus an additional $19 million adjustment for working capital and cash holdings.
Following the receipt of these funds, St Barbara’s cash balance has bolstered to $504 million, ensuring the company is fully funded for its 50% share of the upcoming expansion costs.
Coinciding with the transaction's completion, both parties have reached a final investment decision to proceed immediately with the construction of the New Simberi Gold Project.
The total construction cost is estimated at US$333 million, which includes approximately US$13 million already invested as of March 31.
The development is expected to generate an unaudited gain on sale of approximately $0.5 billion to be recorded in the FY26 financial results, notably with no anticipated tax leakage.
While the Lingbao deal is now finalised, St Barbara continues to navigate the final regulatory hurdles for its separate transaction with Kumul Mineral.
Approvals from the Papua New Guinea Independent Consumer and Competition Commission and the National Executive Council are expected imminently.
The company clarified that any delays regarding the Kumul transaction will not impact the progress or funding of the Simberi construction.
At the time of reporting, St Barbara's share price was $0.64.