This ASX 200 gold miner’s value has plunged from $2b to under $700m. Could it be set for some major M&A action?

a man in a business suit looks at a gold phone with his head in an exploding clould of gold dust.a man in a business suit looks at a gold phone with his head in an exploding clould of gold dust.

S&P/ASX 200 Index (ASX: XJO) gold miner St Barbara Ltd (ASX: SBM) has had a rough few years on the ASX. And now it’s rumoured to be considering major sales and mergers.  

At the time of writing, the St Barbara share price is trading just under 87 cents. That’s more than 80% lower than it was near the end of the 2018 financial year.

That financial year, the company’s market capitalisation reached a whopping $2.5 billion. Today, according to the ASX, it stands at around $697 million.

So, what might the future hold for the ASX 200 gold share? Let’s take a look.

Is this ASX 200 gold miner facing M&A activity?

ASX 200 gold miner St Barbara operates in multiple regions around the globe, but that could soon come to an end.

The company holds the Leonora Operations in Western Australia, the Atlantic Operations in Canada’s Nova Scotia region, and the Simberi Operations in Papua New Guinea.

It’s currently in merger talks with gold explorer Genesis Minerals Ltd (ASX: GMD). However, that company’s interest appears to be limited to St Barbara’s Australian activities.

In light of that, the ASX 200 gold miner is considering ditching some of its overseas operations, The Australian reports.

And Simberi will reportedly be the first on the chopping block. According to the publication’s sources, three parties are apparently vying for the operation, which could bolster St Barbara’s coffers by $50 million to $100 million.

Simberi has been plagued by challenges over the past 18 months. A tragic fatality at the mine saw its financial year 2021 production guidance withdrawn as an investigation was conducted.

Meanwhile, a notable failure was recorded at the operation’s deep sea tailing placement pipeline. Prior to that, the company had downgraded the project’s guidance due to ore variability, and COVID-19 took its toll earlier this year.

And tales of sales don’t end there. The company is also reportedly rumoured to be considering spinning out or selling off its Canadian assets – which face permitting challenges.

The last time the market heard word of a Genesis/St Barbara merger was two weeks ago. At the time, the latter stressed merger talks between the pair were “incomplete”.

No doubt, all eyes will be on the ASX 200 gold miner to see what happens in the foreseeable future.

St Barbara share price snapshot

The St Barbara share price has suffered through 2022 so far.

It’s plunged nearly 39% since the start of this year. It’s also currently 54% lower than it was this time last year.

The post This ASX 200 gold miner’s value has plunged from $2b to under $700m. Could it be set for some major M&A action? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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