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Highlights
- Gold miner (SBM) faces a significant tax bill in Papua New Guinea.
- The $210 million assessment includes penalties related to past asset claims.
- SBM plans to appeal the decision, disputing allegations of fraud.
Shares of gold miner St Barbara (ASX:SBM) experienced a steep drop following a $210 million tax assessment levied by Papua New Guinea's Internal Revenue Commission (IRC). The tax dispute, which centers on claims of asset depreciation and the recapitalisation of Simberi Gold in 2018, has caused significant concern for the company and its investors.
The tax assessment includes substantial penalties and accuses Simberi Gold, a fully owned subsidiary of St Barbara, of fraudulent conduct in preparing its tax returns. The IRC's claims extend beyond the standard five-year statutory limitation period for amended assessments, adding further complexity to the case.
In response to the tax assessment, St Barbara released a statement on Tuesday rejecting the allegations. The company clarified that Simberi Gold has consistently relied on reputable tax advisors in Papua New Guinea, made full disclosures, and adhered to regulations throughout the relevant periods. St Barbara firmly denies any allegations of dishonest or fraudulent behavior.
The company's CEO, Andrew Strelein, expressed disappointment over the findings. Strelein highlighted the potential miscalculations in the IRC's assessment and called for a swift resolution through discussions and appeals. He stated, "We hope that with discussion and realisation of the miscalculations on top of the erroneous applications of the law in the IRC Amended Assessments, we can resolve this matter quickly."
Simberi Gold, meanwhile, has been granted until February 17, 2025, to lodge its formal appeal under legislative provisions. Strelein emphasized that St Barbara is committed to vigorously defending its position and ensuring a fair outcome in the dispute.
The case has also raised questions about the IRC's ability to extend its reach beyond the standard statutory timeframe. St Barbara asserts that such actions are unwarranted and lacks legal grounding.
This tax controversy has impacted the company's market performance significantly, with shares in (SBM) plunging over 30% in a single day. While the dispute adds uncertainty to its operations, St Barbara has reiterated its dedication to resolving the matter efficiently and upholding its reputation in the region.
As the situation unfolds, St Barbara will work closely with advisors and legal experts to prepare its appeal, aiming for clarity and resolution in this high-stakes dispute.
