The St Barbara Ltd (ASX: SBM) share price could be one to watch on Thursday after the gold miner released a big update before market open.
St Barbara shares finished flat at 73 cents apiece yesterday, but investors could have plenty to think about when trading gets underway this morning.
So, what has St Barbara announced?
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St Barbara cashes in
According to the release, St Barbara has agreed to sell its remaining interest in the New Simberi Gold Project in Papua New Guinea to China's Lingbao Gold Group.
Under the deal, the company will receive $410 million in cash when the transaction completes.
It will also receive another $43 million to repay its share of construction spending on New Simberi between April and signing.
However, St Barbara will still retain some exposure to the project.
The company will keep a 2.75% net smelter return royalty on future gold and silver production from New Simberi, along with a 1.5% royalty over minerals produced from the Tabar Islands exploration licences.
The transaction is expected to complete in the March quarter of 2027, subject to regulatory and shareholder approvals.
Could shareholders get another big dividend?
There could be a pretty big payday coming for shareholders.
St Barbara had $427 million in cash at the end of August. After the sale completes, it expects to have around $880 million in cash and no debt.
The board is considering paying shareholders another fully-franked special dividend of around 13 cents per share after completion.
That would come on top of the fully-franked 5-cent dividend already declared in August, taking potential dividend returns to 18 cents per share.
Based on Wednesday's 73-cent closing price, that is equal to almost 25% of the current share price.
The company is also considering an on-market share buyback of up to 100 million shares. A decision is expected after the 15-Mile Processing Hub pre-feasibility study update due around the end of September.
What does St Barbara look like after the sale?
Once Simberi is sold, St Barbara will be left with its Nova Scotia gold projects and the royalties from Simberi.
From there, the focus will be on restarting production at Touquoy by the end of 2026 and moving the 15-Mile Processing Hub towards a final investment decision (FID) by the end of FY27.
The Simberi royalty could still bring in plenty of cash too, with St Barbara estimating around $286 million over the current mine plan.
I think St Barbara is one to keep a close eye on in the coming weeks.
