S&P rates St. Barbara notes B

Standard & Poor's said it assigned its B corporate credit rating to St. Barbara Ltd. The outlook is stable.

At the same time, S&P assigned a B issue-level rating and recovery rating of 3 to the company's proposed $250 million senior secured notes. The recovery rating of 3 indicates an expectation of meaningful recovery (50%-70%) in the event of a default.

"The corporate credit rating on St. Barbara reflects our view of the company's 'vulnerable' business risk profile, which is characterized by its relatively small size, exposure to volatile gold prices, and reliance on a few key assets," S&P credit analyst Marie Shmaruk said in a news release.

"Other factors influencing our view of the business risk are St. Barbara's sizable growth plans and high cash costs, as well as the risks associated with integrating its recent acquisition of Allied Gold. In addition, we consider that St. Barbara faces significant operating and country risks in its mines in the Solomon Islands and Papua New Guinea."

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