Lingbao Gold will pay AUD410 million in cash for the remaining 50%-minus-one-share of Tabar Islands Holdings, taking its Simberi gold mine in Papua New Guinea to 100% ownership. Roughly 60% to 70% of the price will be funded by mainland Chinese bank loans, with 30% to 40% from internal resources. Short selling in 03330.HK hit a 15.097% ratio as the shares fell 2.649%.
Lingbao Gold Group will pay AUD410 million (about RMB1.993 billion) in cash to take 100% of Papua New Guinea's Simberi gold mine, buying the remaining 50%-minus-one-share of Tabar Islands Holdings Pty Ltd from ASX-listed St Barbara Ltd. The Hong Kong-listed miner's directly wholly-owned subsidiary signed the agreement, and the deal lands as 03330.HK trades under heavy short-selling pressure.
"The transaction resolves the ownership question at a logical point for Lingbao to take full control of the project," St Barbara managing director Andrew Strelein said. St Barbara's interest in New Simberi "has never been fully reflected in our share price," he said, adding that the company will keep participating in future production through royalties.
The consideration is cash-only, with no scrip component and no premium disclosure because the asset was not separately listed. Lingbao intends to fund roughly 60% to 70% of the purchase through loans from banks in mainland China, with the remaining 30% to 40% drawn from internal resources. The transaction has received clear support from a consortium formed by several mainland Chinese banks, according to the company's filing.
Tabar Islands Holdings owns 100% of Simberi, whose PNG subsidiary holds mining lease ML136 and operates a producing gold mine. It also owns TIG Exploration, which holds exploration licences EL2462 and EL609. A December feasibility study confirmed New Simberi as a low-cost asset forecast to produce 2.2 million ounces of gold over an initial 13-year mine life.
St Barbara is not exiting the asset entirely. Lingbao will grant it a 2.75% net smelter return royalty on 100% of gold and silver produced from New Simberi, plus a 1.5% NSR on all minerals from the Tabar Islands exploration licences. Both royalties start 1 July 2027, and Lingbao is providing a parent company guarantee on the payment obligations.
At a 5% discount rate and a US$4,000 per ounce gold price assumption, the New Simberi royalty carries a net present value of A$212 million for St Barbara and generates cumulative cash flows of A$286 million over the life of mine. At US$4,500/oz the NPV rises to A$239 million; at US$3,000/oz it falls to A$156 million.
For St Barbara, total cash proceeds reach A$453 million, comprising the A$410 million consideration plus about A$43 million representing its share of construction capital funded to Tabar between April 2026 and signing. Lingbao will also fund St Barbara's share of capital requirements from signing through to completion. If the deal collapses because Lingbao fails to meet conditions, that A$43 million converts into a construction loan repayable by St Barbara in a lump sum 24 months after termination.
On completion, St Barbara's pro-forma cash position is expected to reach about A$880 million with no debt or hedging, against a portfolio that retains the 15-Mile Processing Hub, the Touquoy Restart Project in Nova Scotia and the royalty book. The board is weighing an additional fully franked special dividend of about A$0.13 per share on top of the A$0.05 per share fully franked dividend declared 28 August 2026, plus an on-market buyback of up to 100 million shares. Both decisions hinge on the updated 15-Mile pre-feasibility study due at the end of September 2026.
The market's immediate verdict on Lingbao was negative. Short selling in 03330.HK totalled $77.17 million, a 15.097% ratio as at 9 September 2026, while the shares fell 2.649% on the session. That combination of a loan-funded acquisition and a double-digit short ratio puts the financing structure at the centre of the near-term debate.
The leverage math is the crux. If Lingbao draws the midpoint of its stated range, roughly RMB1.2 billion to RMB1.4 billion of the purchase price sits on Chinese bank balance sheets, against a producing PNG asset whose cash generation depends on gold prices holding near the US$4,000/oz level used in the royalty valuation. Gold miners with single-asset, single-jurisdiction exposure in PNG carry elevated sovereign and permitting risk, and Simberi's expansion case rests on the exploration licences rather than the current mine plan alone.
Completion is targeted for the March quarter 2027 and remains subject to conditions precedent including regulatory approvals from the People's Republic of China and Papua New Guinea, plus shareholder approvals from both St Barbara and Lingbao unless the relevant listing rules do not require them. Macquarie Capital advised St Barbara, with Allens providing legal advice.
For Lingbao holders, the next hard data points are the PRC and PNG approval milestones and any disclosure on the final loan syndicate and pricing. For St Barbara holders, the September 15-Mile study determines whether the A$0.13 special dividend and the 100 million-share buyback proceed. Until the approvals clear, the 15.097% short ratio in Lingbao is the market's running estimate of execution risk on a deal that doubles the company's exposure to one PNG mine.
This article is for informational purposes only and does not constitute investment advice.
