THE future of the Simberi gold mine in New Ireland Province has been underpinned by a proposed merger of the mine’s owner, Allied Gold PLC (Allied Gold), with Australian gold company, St Barbara Ltd (St Barabara).
The merger will create a major diversified gold company, with four mines in operation in the Solomon Islands, PNG and Australia, producing approximately 435,000 ounces of gold per year, and with a sharemarket value of approximately $A1 billion (over K2 billion).
Simberi will be one of the key assets of the merged group, and St Barbara has indicated it intends to invest in the long term growth and expansion of the operation.
“We believe that Simberi is a great operation,” said St Barbara Chief Executive Officer Tim Lehany.
“We can see significant opportunity to grow that operation over time, and we look forward to working closely with the local communities of Simberi, and the PNG government. We are also enthusiastic about the potential for further exploration which may lead to development of other mines within PNG.
“We have an absolute commitment to operating in a highly ethical fashion at all times, as well as to responsible environmental management and community engagement,” he said.
St Barbara and Allied Gold last week announced they had agreed to merge through a Scheme of Arrangement, under which St Barbara will acquire Allied Gold through an offer that values the company at A$560 million (over K1.5 billion).
The merger requires the approval of Allied Gold shareholders at a meeting to be held in the coming weeks, and the merger partners said that 54% of shareholders already had indicated they would agree to the merger. Allied Gold directors have unanimously recommended the merger to shareholders. Allied CEO Frank Terranova said the transaction was good news for Simberi’s 600 employees and for the people of New Ireland and PNG.
“The new company created through this merger will be a bigger, stronger company, with multiple mines producing strong cashflows. Simberi will be a key asset of the new company, and our employees will benefit from being part of that bigger organisation.
“We are satisfied that St Barbara is an excellent company, well managed, a good employer, and with a demonstrated track record of positive engagement with local communities,” he said.
If the merger is approved by Allied Gold shareholders, it then requires court approval before taking effect, so there are unlikely to be any changes made to the operations for some months.
St Barbara is a publicly listed company in Australia. With a sharemarket value of approximately $A700 million (K1.44 billion), it is one of Australia’s larger and more profitable mid-tier gold producers, developers and explorers.