St Barbara Limited (ASX:SBM) shares have risen 60.19% over the past year, and the gold company is back on income investors' radars after declaring a fully Franked Dividend of 5 cents per share. The shares finished at $0.825, compared with $0.515 a year earlier.

There is one important consideration for anyone hoping to reinvest. St Barbara has a dividend reinvestment plan (DRP), but the company's dividend notice states that the DRP does not apply to this 5 cent dividend, so shareholders will receive it in cash.

Latest developments

St Barbara reported a statutory net profit after tax of about $490 million for FY26, driven largely by a gain of roughly $500 million associated with its transaction with Lingbao Gold Group over the New Simberi project in Papua New Guinea. On an underlying basis, the company recorded a loss. Cash stood at about $475 million, including restricted cash, with no borrowings beyond leases.

St Barbara has also agreed to sell its remaining interest in New Simberi to Lingbao for total cash proceeds of $453 million, comprising $410 million plus $43 million reimbursing construction capital. St Barbara holds a 50% interest in the project, which would fall to 40% once PNG's Kumul Minerals takes its stake. It will retain a 2.75% net smelter return Royalty on New Simberi gold and silver and a 1.5% royalty over the Tabar Islands licences.

The board plans a further fully franked Special Dividend of about 13 cents per share after the sale completes, subject to the transaction proceeding and the board's decision.

Key numbers

St Barbara closed at $0.825, a gain of 60.19% on the $0.515 level a year earlier. The 5 cent dividend is the only one with an ex-date in the past 12 months, giving a trailing Yield of 6.06% and a grossed-up yield of 8.66%.

The grossed-up figure assumes a 30% company tax rate, and its value depends on each investor's tax position. Both yields are historical and reflect a single payment rather than a regular income stream. The dividend is scheduled to be paid according to the company's dividend timetable.

About the company

St Barbara is a Perth-based gold company with development Assets in Canada and interests associated with Papua New Guinea. Its Atlantic Operations in Nova Scotia include the Touquoy Restart Project and the 15-Mile Processing Hub Project. Andrew Strelein is managing director and chief executive.

After the Simberi sale completes, the company expects to hold about $880 million in cash, alongside the 15-Mile and Touquoy projects and its royalty portfolio, with no Debt or hedging. This would leave St Barbara focused on its Canadian development portfolio and royalty interests rather than PNG production.

How the DRP works

St Barbara has a DRP through which shareholders can elect to receive shares instead of cash dividends. However, the Appendix 3A.1 for the 5 cent dividend states that the DRP is not applicable to this payment. There is therefore no DRP price, pricing period or discount to report for the current dividend.

In general, when a DRP operates, shareholders can receive new or existing shares instead of cash, with the applicable pricing methodology and any discount determined under the company's DRP terms. Whether St Barbara activates its plan for the proposed special dividend will be a decision for the board, and shareholders should check the relevant dividend notice at the time.

Why it matters for income investors

The dividend marks a return to Shareholder distributions after several years without a regular dividend. For investors who can use franking credits, the 5 cent payment has a higher grossed-up value than its cash amount, while the proposed special dividend of about 13 cents could provide an additional fully franked distribution if the Simberi sale completes and the board proceeds with it.

However, these payments are linked to asset transactions and the company's Balance Sheet rather than a regular Mining Earnings stream. St Barbara reported an underlying loss in FY26, so future distributions would depend on its financial position, project development and Capital allocation.

With the DRP switched off for the current dividend, investors who want to reinvest the cash payment would need to make a separate purchase of shares on market.

What comes next

Key developments include payment of the 5 cent dividend, the updated pre-feasibility study for the 15-Mile Processing Hub and a decision on a possible on-market buy-back of up to 100 million shares. St Barbara has indicated that the buy-back decision will follow the updated study.

The proposed Simberi sale also remains subject to the required regulatory and shareholder approvals before completion. If the transaction proceeds, the board will consider the proposed special dividend of about 13 cents per share.

Risks and context

The 6.06% trailing yield rests on one payment, so it is not a guide to future income. The special dividend depends on the Simberi sale completing, and transactions can be delayed, renegotiated or terminated. St Barbara recorded an underlying loss in FY26, so ongoing dividends would depend on future production, project development and cash flow.

After a 60.19% rise, the share price may remain sensitive to gold prices, project delays and cost changes in Nova Scotia. The Touquoy Restart and 15-Mile Processing Hub are development projects rather than established sources of recurring production. If a DRP is offered in future, reinvested dividends remain subject to applicable tax treatment and each DRP parcel establishes a new cost base for Capital Gains Tax purposes.

Conclusion

St Barbara (ASX:SBM) has returned to paying fully franked dividends, with a 5 cent payment and a further special dividend of about 13 cents under consideration if the Simberi sale completes. Its DRP is not operating for the current dividend, so the payment will be made in cash, while the company's Nova Scotia projects, asset transaction and future capital returns remain in focus.