St Barbara (ASX:SBM) Shares Slip Despite Touquoy Green Light: Is SBM Still Worth Buying?

St Barbara Falls Despite Touquoy Approval

St Barbara (ASX:SBM) delivered two pieces of good news this week. It received approval to restart its long-dormant Touquoy gold mine in Canada, and its Simberi operation in Papua New Guinea posted its best production quarter in some time. So why are shares still falling? After a roughly 150% gain over the past 12 months, the market may simply be running out of patience for news that feels expected rather than surprising.

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Touquoy Restart: A Real Positive, But Not an Instant Fix

The Touquoy approval matters. The mine was shut down in 2023 when the company ran out of permitted tailings capacity and could not get regulators on board fast enough. That was a painful chapter for investors. Getting the green light to restart is a genuine sign that Nova Scotia’s regulatory environment has improved and that St Barbara is moving forward rather than standing still.

The plan itself is simple and low-cost. The company will use its existing processing plant to work through stockpiles of ore that were already mined and left at the site. This is expected to generate around 38,000 ounces of gold over roughly 13 months, with a modest upfront cost of around A$12.4 million. Given that the infrastructure is already in place, this is about as capital-efficient as a restart gets.

With approval now in hand, St Barbara is targeting the restart of ore processing towards the end of 2026, which means cash from Touquoy is still roughly six to eight months away. Investors who were hoping for an immediate production boost may have been disappointed, and that partly explains today’s selloff.

Simberi Bounced Back, But Context Matters

At Simberi, total mine production jumped 49% compared to the previous quarter, which is an encouraging turnaround. New leadership took over operations during the period, and the team processed more ore at a better grade. Gold was also sold at strong prices, reflecting the broader rally in the gold market.

One important point for investors: following the completion of deals with Lingbao Gold Group and Kumul Minerals in early April, St Barbara now holds a 40% attributable share of Simberi’s production. The turnaround is real, but St Barbara only captures its proportional share going forward. Heavy rainfall also hampered mining rates during the quarter, a reminder that Simberi’s performance can still be inconsistent.

Buy the Dip or Wait?

Here is our honest take. The investment case for SBM has genuinely improved, and the balance sheet tells a compelling story. After completing the Lingbao transaction on 2 April 2026, St Barbara holds over A$500 million in cash against a market cap of around A$853 million. That means the enterprise value, which you are actually paying for the underlying business, is only around A$349 million. For value investors, that is a difficult number to ignore.

But after a 150% run, much of the good news is already reflected in the share price. We believe existing holders should consider trimming some exposure after such a strong move. For new investors, the smarter approach is to wait for Touquoy processing to actually begin before adding a position. The cash backing provides a solid floor, but confirmation of the production ramp is worth more than anticipation of it.