St Barbara Limited (ASX: SBM) has announced its intention to separate its Atlantic Gold Operations in Nova Scotia, Canada. The move follows a detailed portfolio review, concluding that a standalone structure for Atlantic will unlock greater shareholder value and better align with the project’s development needs.
Why the Separation?
The decision to spin off Atlantic stems from its unique characteristics and growth potential. With 1.4 Moz in Ore Reserves and 2.0 Moz in Mineral Resources, along with production-ready infrastructure, Atlantic presents an attractive opportunity for investors. St Barbara believes the best way to maximise its value is by placing it under a Canadian-listed entity with local leadership—ensuring proximity to regulators, stakeholders, and capital markets.
This strategic shift will allow St Barbara to concentrate on its core asset, the Simberi Gold Operations in Papua New Guinea, particularly the development of the Simberi Sulphide Expansion Project, which boasts 5.0 Moz in Mineral Resources.
What’s Next for Atlantic?
The Atlantic Gold Operations include the 15-Mile, Beaver Dam, and Cochrane Hill projects, as well as the Touquoy processing plant. A recently announced study indicates the potential to expand processing capacity at 15-Mile to 3.0 Mtpa from the previously proposed 2.1 Mtpa, allowing Cochrane Hill ore to be added to the mine plan.
St Barbara is currently evaluating three potential separation options:
- Sale to a third party
- Vend-in to another company
- Demerger into a separate, Canadian-listed company
Any chosen path will be subject to shareholder, ASX, and regulatory approvals.
A Closer Look at Atlantic
Atlantic is well-positioned, located just 80km northeast of Halifax, Nova Scotia, and benefits from proximity to key transportation infrastructure. The Pre-Feasibility Study (PFS) highlights the strong financial potential of the project:
- NPV5% of C$411 million and 37% IRR at a long-term gold price of US$2,000/oz
- Average annual production of 74 koz over an 11-year mine life
- Life-of-mine All-In Sustaining Cost (AISC) of US$1,025/oz
- Potential for 100 koz per annum production with mill expansion to 3.0 Mtpa
- One-year construction period post-permitting
- Significant exploration upside in Nova Scotia’s emerging gold province
The Future of St Barbara
Post-separation, St Barbara will focus on becoming a dedicated Papua New Guinea gold producer, prioritising the Simberi Sulphide Expansion Project. Simberi’s oxide mine life has been extended through FY27, and the company is progressing plans for a transition to a high-production, low-cost sulphide operation targeting over 200 koz per annum from FY28 to FY34.
The Separation Process
The separation is expected to be completed in H1 FY26. If a sale proceeds, St Barbara may return proceeds to shareholders through an in-specie distribution or apply funds towards the Simberi Sulphide Expansion. Macquarie Capital has been appointed as financial adviser, with King & Wood Mallesons providing legal counsel.
St Barbara’s CEO Andrew Strelein commented, “This decision allows both Atlantic and Simberi to flourish independently. Atlantic is an exciting project with strong financial potential, and we believe its future is best served under a Canadian-listed company with local leadership. Meanwhile, this move enables St Barbara to sharpen its focus on the Simberi Sulphide Expansion, which will drive long-term value for shareholders.”
The company will provide further updates as the separation process progresses.
