Australian gold miner St Barbara is set to raise up to A$110m ($72.1m) through a discounted share offering to expedite the expansion of its Simberi operations in Papua New Guinea.
The company aims to commence sulphide production within the next five months.
The capital raise will consist of a A$100m placement to institutional and sophisticated investors, with the issuance of 263 million new shares priced at A$0.38 each, to be completed in two tranches.
Additionally, St Barbara is offering up to A$10m worth of shares to eligible shareholders through a share purchase plan.
The funds will be allocated to critical components of the Simberi sulphide expansion project.
These include the installation of a new, larger ball mill circuit priced at A$58m, expansion of the wharf to accommodate concentrate vessels at a cost of A$33m, and the establishment of a new run of mine pad and sizer for A$23m.
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By GlobalData
The expansion project will enable the processing of sulphide mineralisation found beneath the current oxide pits. It is set to extend the Simberi operation’s lifespan by at least ten years.
The project is also projected to almost triple the mine’s annual gold production from the current 65,000–75,000oz to approximately 230,000oz per year until 2034.
St Barbara managing director and CEO Andrew Strelein said: “The work we have been doing on the Simberi sulphide expansion project continues to highlight a very attractive project opportunity, and it makes sense to move quickly, especially in the current gold price environment.
“Raising these funds now allows the project team to advance development, which is anticipated to accelerate first production from Simberi sulphide by up to five months.”
In August this year, St Barbara decided to offload its stake in Catalyst Metals, securing cash proceeds of A$25.2m. The move supported the company’s strategy of actively managing its portfolio and avoiding discounted block trades.
