ASX 200 gold share St Barbara returns with a bang, up 25%

The St Barbara Ltd (ASX: SBM) share price has returned from its trading halt with a bang.

At one stage today, the gold miner’s shares were up over 25% to 81.7 cents.

The St Barbara share price has since pulled back a touch but remains up 18% at 76.7 cents.

The company’s long-suffering shareholders will certainly be pleased with this given the dreadful year they have had.

You only need to look at the chart below to see how poor the St Barbara share price has performed in 2022.

Why is the St Barbara share price racing higher today?

Investors have been scrambling to buy shares today in response to the announcement of plans to merge with Genesis Minerals Ltd (ASX: GMD).

As covered here, the two gold miners plan to merge their operations in the Leonara District of Western Australia to form Hoover House.

Hoover House will comprise:

• 7Moz mineral resources
• 2Moz ore reserves
• Fully funded “capital-light” base case production target +300koz per annum (almost double St Barbara’s Leonara production target)

Demerger plans

St Barbara also revealed that it plans to spin off its non-Leonara assets and list them separately on the Australian share market as Phoenician Metals.

Management advised that Phoenician Metals will be focused on realising the long-term value of a portfolio including the Atlantic (Canada) and Simberi (Papua New Guinea) operations, which have 6.2Moz mineral resources and 3.7Moz ore reserves.

Phoenician Metals will also have a portfolio of St Barbara royalties, $34 million in listed ASX investments, and $85 million cash.

If everything goes to plan, St Barbara shareholders will receive an in-specie distribution of shares in Phoenician Metals.

The gold miner’s chair, Tim Netscher, is “confident that this unique transaction will deliver significant value for all shareholders.” Based on the St Barbara share price performance today, the market appears to agree with this view.

The post ASX 200 gold share St Barbara returns with a bang, up 25% appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 300 gold shares just upgraded by brokers
• St Barbara share price halted amid major gold merger plans with Genesis Minerals
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• 3 ASX gold shares rocketing higher on Thursday

Motley Fool contributor James Mickleboro 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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