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Highlights
- St Barbara Ltd raises funds to expand the Simberi mine in Papua New Guinea.
- Capital supports faster production and infrastructure upgrades.
- Expansion seeks to extend mine life by a decade.
St Barbara Ltd (ASX:SBM) has announced a major capital raise totaling $110 million to accelerate the expansion of its Simberi gold mine in Papua New Guinea. The fundraising effort includes a $100 million institutional placement and a $10 million share purchase plan (SPP), with strong backing from existing institutional shareholders as well as new investors across Australia and internationally.
The capital raise is structured as a two-tranche placement of approximately 263 million shares, each priced at 38 cents, designed to attract both institutional and sophisticated investors. The SPP, also at 38 cents per share, is available to shareholders, providing an opportunity to contribute to this significant expansion effort.
Funds from this capital raise will be dedicated to advancing the Simberi Sulphide Expansion Project, a major undertaking aimed at increasing production capabilities at the mine. One of the primary focuses of this project is to expedite production timelines, with St Barbara planning to accelerate first production from the expansion by five months. The funds will be used to support essential infrastructure upgrades, such as the installation of a larger ball mill circuit and the construction of an expanded wharf to facilitate the loading of concentrate vessels. Additionally, plans include building a new run-of-mine (ROM) pad and sizer installation to further enhance operational efficiency.
This expansion holds strategic importance for St Barbara as it targets an extension of the Simberi mine’s life by approximately ten years. The Simberi mine, which has been operating since 2008 and relies on open-pit mining methods, is expected to see continued operational longevity thanks to these upgrades. The project, which centers on the sulphide resource of Simberi, underscores St Barbara’s commitment to long-term growth in the region.
Andrew Strelein, managing director and CEO of St Barbara, expressed appreciation for the support received for this capital raise. “We are extremely pleased with the support for the placement from our existing institutional shareholders and welcome a number of new domestic and international institutional investors,” he said. Strelein noted that the funding would enable the project team to fast-track development, aligning with favorable market conditions and the current gold price environment.
Following the announcement, St Barbara’s shares experienced a decline, with shares trading at 37.5 cents, reflecting an 18.48% drop by mid-morning AEDT. This fluctuation comes as the company focuses on strengthening its infrastructure and enhancing production capacity, which may position St Barbara for long-term success in the dynamic gold sector.
