Lingbao Gold (03330) has announced that on September 10, 2026, its wholly-owned subsidiary, Lingbao Gold International Limited, entered into a share sale agreement with St Barbara Limited to acquire 50% minus one share of Tabar Islands Holdings Pty Ltd. The transaction is valued at an initial purchase price of A$410 million, approximately RMB 1.993 billion based on an exchange rate of A$1 to RMB 4.8610. Upon completion, Tabar Islands Holdings will become an indirect wholly-owned subsidiary of the company, with Lingbao Gold holding 100% equity interest.
The total consideration also includes a royalty obligation under which the target company will grant the seller a 2.75% Simberi Royalty, calculated on net smelter returns (NSR) of gold and silver products from the Simberi gold mine, and a 1.5% Tabar Islands Royalty, based on NSR from mineral production on exploration licenses EL2462 and EL609 held by TIG Exploration. These royalties take effect from July 1, 2027, and will be paid in accordance with the terms of the royalty deed. The initial purchase price will be paid in cash at completion using immediately available funds.
The target company, incorporated in Australia, focuses on gold mining, exploration, production, and sales. Its primary project is the Simberi open-pit oxide mine and the sulfide ore expansion project in New Ireland Province, Papua New Guinea. Additionally, through TIG Exploration, a Papua New Guinea-based gold exploration firm, the target holds 100% interests in two adjacent exploration licenses currently under renewal.
The board has outlined several key reasons and expected benefits of this acquisition:
Full control and enhanced project leadership: Post-completion, the group will hold 100% of the target company through the buyer, eliminating minority shareholder coordination costs in the joint venture and strengthening control and decision-making efficiency over the gold project.
Significant profitability improvement and economic benefits: The target company turned profitable in the fiscal year ending June 30, 2026, reporting pre-tax profit of approximately A$49.8 million and after-tax profit of approximately A$41.27 million from continuing operations. Once the sulfide ore expansion project is operational from 2028, annual production is expected to exceed 200,000 ounces. Feasibility study economics indicate a project after-tax net present value of approximately US$1.023 billion, assuming a gold price of US$3,000 per ounce, underscoring strong returns.
Substantial resource reserves aligned with long-term growth: The Simberi project boasts a robust total resource base that can effectively support the group's future business expansion.
Enhanced international competitiveness and overseas footprint: This transaction will boost the group's gold resource reserves and overseas production scale, aiding in expanding its international business presence and strengthening its industry standing in the global gold market. The target is expected to provide the group with a stable and recurring income stream, while also enhancing the group's asset base to explore and grow business prospects overseas.
Where to begin: Investors should monitor the completion of this acquisition, which positions Lingbao Gold for greater control and profitability in the Pacific region's gold sector.