St Barbara Ltd Annual Report 2005

FY2005 Annual Report · St Barbara Ltd

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a n n u a l r e p o r t

2 0 0 5

St Barbara Mines Limited

St Barbara’s key features are:
• Extensive Landbank
• Mineral Resources of 9.3Moz
• Strong Shareholder Support
• Quality Management & Staff
• Financial Strength
• Robust Operations

Table of Contents

Chairman’s Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Managing Director’s Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Exploration Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Reserves & Resources Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Operations Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Heath, Safety & Environmental Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Finance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Corporate Governance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Directors’ Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Declaration of Auditor Independence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Statements of Financial Performance for the year ended 30 June 2005 . . . . . . . . 38

Statements of Financial Position as at 30 June 2005 . . . . . . . . . . . . . . . . . . . . . 39

Statements of Cashﬂows for the year ended 30 June 2005 . . . . . . . . . . . . . . . . . 40

Notes to the Financial Statements for the year ended 30 June 2005 . . . . . . . . . . 41

Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Independent Audit Report to the Members . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Statement of Shareholders as at 19 September 2005 . . . . . . . . . . . . . . . . . . . . 75

Shareholder Information as at 19 September 2005 . . . . . . . . . . . . . . . . . . . . . . 76

Corporate Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Chairman’s Review

During the year ending 30 June 2005 the Company
was rescued from a difﬁ cult ﬁ nancial situation and
re-emerged as a signiﬁ cant exploration and gold
production company, with a sound basis for optimism
about the immediate and long-term future.

There were a number of signiﬁ cant achievements during
the year:
• An increase in gold sales from 40,000oz in 2003/04, to

84,000 ounces;

• A substantial increase in announced Company resources

from 825,000 ounces to 9.4 million ounces;

• A substantial increase in the Company’s landholdings

from 2,000km2 to 15,000km2;

• A dramatic improvement in the cash at bank position
from $1,000 plus $3 million cash backing of bonds at
the end of the 2004 year, to $16 million cash at bank
plus $12 million cash backing of bonds, one year later;
• Exploration expenditure of $3.9 million at Meekatharra
and at various locations previously owned by the Sons
of Gwalia Ltd Gold Division; and

• An increase in the share price from 4.8 cents on

30 June 2004 to 10.5 cents on 30 June 2005.

These outstanding achievements are attributable to four
key factors:
• The ﬁ nancial support of the Company’s

largest
shareholder, Resource Capital Fund II LP following the
shareholders voting to appoint Ed Eshuys and myself as
directors of the Company on 20 July 2004;

• The hard work and technical and commercial prowess

of Ed Eshuys and his management team;

• The Company’s purchase in March 2005 of the assets

owned by Sons of Gwalia Ltd’s Gold Division; and

Left to right | Richard Knight, Mark Wheatley (sitting),

Ross Kennedy, Colin Wise, Hank Tuten, Eduard Eshuys

• An increase in the gold price and more favourable
operating conditions at the purchased mines. This
allowed the Company to generate higher than forecast
gold production at a lower than forecast cost.

The future is exciting for the ‘new’ St Barbara, with drilling
to extend the existing mineral inventory base underway
at four locations - Marvel Loch, Tarmoola, Gwalia Deeps
and Meekatharra, the construction of a new open pit mine
at Hercules near Marvel Loch, and exploration drilling for
nickel at Sullivans, near Leonora, due to commence next
month.

The Company is well placed to continue its growth in the
coming years.

The collective experience and expertise at Board level
and within the management team will be drawn on to seek
to continue to increase shareholder wealth, especially as
other opportunities (such as the acquisition of the Sons of
Gwalia gold assets) become available.

All at St Barbara look forward to the future with excitement
and anticipation.

Colin Wise

Chairman

30 September 2005

Managing Director’s Review

The prime objective at the beginning of the year was to
re-establish the integrity and credibility of the Company
with its shareholders, investors, employees, consultants,
contractors and suppliers and the communities in which
the Company was operating.

For this to occur it became clear that to start the process
the Company’s 54.8% interest in NuStar Mining Corporation
Limited (“NuStar”) and the 5% royalty over NuStar’s
Paulsens gold deposits needed to be sold to reﬁnance
the Company and to repay the substantial debts which
had been previously incurred. The sale of our interest in
NuStar occurred in several stages during November 2004
through to February 2005 and resulted in the Company
becoming debt free.

During this time, the gold division of Sons of Gwalia Ltd
(Administrators Appointed) (“SGWGD”) became available
for possible acquisition. In conjunction with expert
consultants a comprehensive and disciplined assessment
of the assets was undertaken. The thoroughness of our
preparation together with the ﬁnancial support of our
largest shareholder Resource Capital Funds enabled the
Company to bid for the assets and successfully close the
purchase in a short period of time.

The purchase of the SGWGD assets enabled the Company
to re-establish itself as a gold producer and provides the
opportunity to explore the well endowed Southern Cross,
Leonora and South Laverton areas of the Eastern Goldﬁelds,
which will complement the Company’s long held home
base at Meekatharra in the Murchison Goldﬁelds.

Cashﬂow from the operations at Southern Cross, the sale
of surplus assets and the planned divestment of non-core
land holdings will support the planned corporate and
exploration activities of the Company in the year ahead.

Having established a more secure ﬁnancial footing for the
Company, the job ahead is to:
• Extend the mine life of the Southern Cross operations
beyond June 2006 and further explore the region;
• Seek to establish a mining inventory at Tarmoola and
Gwalia Deeps with a production commencement target
of the December 2007 quarter;

• Evaluate

production at Meekatharra;

the possibility of

recommencing gold

• Explore for nickel sulphides particularly in the Leonora

and Southern Cross regions; and

• Identify and seek to acquire other opportunities.

Gold production at Southern Cross for the 2006 year is on
target to achieve our forecast of 150,000 ounces at a cash
cost of $415 per ounce.

Drilling of the high grade shoots at Marvel Loch to deﬁne
a mining inventory down to a vertical depth of 500 metres
below the surface is underway. Earlier drilling has already
established that the gold mineralisation extends to that
depth but is of insufﬁcient density to outline reserves. To
extend the mine life beyond June 2006 it is the conceptual
aim to deﬁne at least 1.2 million tonnes at 6.0g/t for
230,000 ounces from within the current indicated and
inferred resources of 4.2 million tonnes at 4.5g/t of gold
for 610,000 ounces. The reported drilling results since
July 2005 suggest this is achievable. Production to support
the Marvel Loch underground operation is projected to be
sourced from open pit mining at Hercules. The Company
will also seek to reopen Yilgarn Star and pursue discoveries
on the basis of the comprehensive geological reassessment
that has been completed of the Southern Cross region.

The famous Sons of Gwalia Mine which has historically
produced 5 million ounces to a depth of 1,075 metres and
the well known Tarmoola Mine (35 kilometres to the north

Managing Director’s Review
continued

Eduard Eshuys
Managing Director & CEO

Ross Kennedy
Company Secretary & CFO

George Viska
GM Commercial

of Leonora) which has historically produced 1.7 million
ounces still have resources of 7.2 million tonnes at 7.3g/t
of gold for 1.7 million ounces and 56 million tonnes at
1.2g/t of gold for 2.2 million ounces respectively for a
total of 3.9 million ounces. This is a substantial inventory
particularly with a rising gold price.

Deep drilling is underway at Gwalia to complete the drilling
conducted during 2001 to seek to improve the status of
the current inferred resources to indicated resources.

is a very favourable location in the Eastern Goldﬁelds for
hosting substantial mineral deposits.

The Tarmoola pit is two kilometres long and up to
250 metres deep. A wall failure on the northern side of
the pit in February 2004 ultimately led to the closure
of Tarmoola in September 2004. The current drilling is
focusing on the western and south western ﬂanks of the pit
where, previous drilling had intersected gold associated
with fractures in the granite.

The geology of the Gwalia gold mineralisation is well
understood as a result of the mining activity extending
over more than 100 years.

Resource modeling is now in progress and for the ﬁrst time is
treating the entire Tarmoola deposit as one, rather than as
previously consisting of nine separate components.

The Gwalia Deeps inferred resources starts at a vertical
depth of 1,100 metres; thus a number of other issues
need to be addressed in conjunction with drilling. A Task
Force of geologists, resource modelers, mining engineers,
metallurgists and geotechnical specialists has been
established to address the geology, geotechnical, mine
planning, hydrology, metallurgy and project development
schedules with the objective of deﬁning a mining inventory
by March 2006, and a timetable for future development.

Gwalia Deeps ore in concept would be processed at
Tarmoola and be blended with the ore from Tarmoola.

Modern day mining at Tarmoola produced 1.7 million
ounces. There is now an opportunity for the ﬁrst time
in nearly a decade, unhindered by production pressures
and mining equipment movements, to take an overall
view of the gold mineralisation which incurs in granite
and ultramaﬁcs at Tarmoola.

The gold mineralisation is located at a major structural
position adjacent to the Keith Kilkenny lineament which

The Company’s objective is to develop a mining inventory
from Gwalia Deeps and Tarmoola that can produce initially
250,000 ounces per year commencing in the December
2007 quarter, and 400,000 ounces per year when fully
developed by 2011.

A separate Task Force to assess all aspects of the
potential future redevelopment of Tarmoola has also been
established with the objective of outlining a reserve by
March 2006 and a timetable for future development.

Successful drilling at Paddys Flat and Reedys, Meekatharra
has resulted in an increase in 100% owned resources to
1.6 million ounces. A co-venturer has also increased resources
at Bluebird and Surprise to 690,000 ounces subsequent
to the end of the ﬁnancial year, for a total Company
resource at Meekatharra in excess of 2.2 million ounces.
The possibility of recommencing gold production from the
Company’s 100% owned Paddys Flat and Reedys and/or in
conjunction with Mercator Gold plc at Bluebird and Surprise
is to be further investigated. Importantly, the Company
retains full ownership of the Bluebird processing plant and

George Viska

GM Commercial

Martin Reed
GM Operations

Julia Martin
Snr Mining Engineer/
Analyst

Graham Miller
GM Special Projects
& JVs

Peter Thompson
GM Exploration

associated infrastructure such as power station, tailings
dams, water, housing in Meekatharra and ﬂ y-in ﬂ y-out
accommodation.

Nickel sulphide exploration has commenced on the
Company’s tenements particularly in the Leonora region
which is transected by the geologically important Keith
Kilkenny lineament, which has Cosmos, Leinster, and
Mt Keith nickel sulphide mineralisation structurally
associated with it to the north.

The Sullivans nickel sulphide target has an ultramaﬁ c unit
with a strike length of some 8 kilometres.

The ultramaﬁ c occurs under a shallow cover of alluvium,
and thus remains to be explored effectively. New ground
electromagnetic geophysical techniques which have the
ability to identify massive nickel sulphides at depth below
the cover, have identiﬁ ed a number of anomalies at the
basal contact of the ultramaﬁ c unit. This is a typical target
location for massive nickel sulphides. The Company’s
other nickel sulphide opportunities will be progressively
advanced to the drilling stage during the year ahead.

Rehabilitation of the mined areas and management of the
environmental performance bonds is a major focus of the
Company’s efforts. Environmental matters and issues have
been elevated in importance as part of future planning.

In conclusion, to continue to re-establish and maintain
the credibility and integrity of the Company will require
a dedicated effort. A three year plan encompassing
the SGWGD acquisition is being followed while a longer
term ﬁ ve year plan is being developed. The Company
is striving to achieve exploration success at Southern
Cross, Leonora and Meekatharra, and its planned strategy
is to redevelop those assets to enable the conceptual
production of 400,000-500,000 proﬁ table ounces of gold
per annum commencing in the December 2007 quarter,
with production of 150,000-200,000 proﬁ table ounces of
gold per annum in the intervening period.

Nickel sulphide exploration will also be an important
part of the future of the Company. Achievement of these
objectives will require the further recruitment of senior
management, graduates and skilled people to complement
the existing dynamic and energetic management team.

The strategy is to build up a portfolio of nickel sulphide
properties either through conceptual research, joint
venturing into properties held by others or acquisition.
Worldwide demand for nickel remains strong, which is
reﬂ ected in the current prices, and supports the strategy
of an aggressive approach to nickel sulphide exploration.

Finally, I acknowledge the signiﬁ cant contribution made by
senior management and all staff, with a special mention
for the former SGWGD employees who have embraced our
enthusiasm and energy, and for the collective efforts in
helping to turn around the Company’s performance and
create improved value for our shareholders.

To conduct the mining and exploration activities effectively
requires the maintenance of a safe workplace. Management
and staff have achieved an acceptable safety performance
and regime, which will continue to require a dedicated
and disciplined effort to maintain and improve on current
performance levels.

Eduard Eshuys
Eduard Eshuys
Managing Director & CEO
30 September 2005

Exploration Review

The Company has a strong and enviable land position;
a solid foundation upon which to pursue the Company’s
strategic focus on exploring for gold, nickel and copper
in Australia.

The Company will also remain vigilant to identify and take
advantage of new exploration opportunities, as they arise.

Continuing the search with an expanded
data base and healthy budget
The exploration budget for the 2005/06 year is $10 million.

The exploration work will be carried out using the Company’s
vastly expanded database which has been successfully
merged with the datasets acquired from the Sons of Gwalia
Ltd Gold Division .

The database now includes data from an additional 464,818
drill holes.

Southern Cross – attractive exploration targets
Drilling of the high grade shoots at Marvel Loch to deﬁne
a mining inventory down to a vertical depth of 500 metres
below the surface is underway. Earlier drilling has already
established that the gold mineralisation extends to that
depth but is of insufﬁcient density to outline reserves.

Exploration drilling has also commenced with diamond
drilling programs at Yilgarn Star, located 14km south of the
Marvel Loch plant.

exploration. This study has already identiﬁed some attractive
exploration targets which are being investigated.

Leonora – towards realising its potential
A specialist Company taskforce has been established to
consider, coordinate and manage the Leonora region’s
planned development into production.

Tarmoola
An evaluation of the Tarmoola resource (currently 56Mt @
1.2g/t, containing 2.2Moz) geological model and geophysical
data has demonstrated potential for expansion of this mineral
inventory with the conceptual prospect of developing an
enlarged Tarmoola mining operation.

A program of extensional drilling commenced in July 2005.
The targets being drilled are largely hosted by the Tarmoola
granite, to the west of the current pit, where mineralisation
is known to exist, and on the interpreted granite greenstone
contacts to the north and south of the current pit area.

Gwalia Deeps
Drilling commenced in July 2005, in a program designed to
allow the calculation of Indicated Resources.

The Gwalia Deeps Inferred Resource (currently 4.3Mt @
8.2g/t for 1.1Moz) lies between 1,100 metres and 1,680
metres below the surface.

This resource is intact, with down-dip continuity of the lodes
mined historically by shaft and decline.

The resource at Yilgarn Star is currently 1.5Mt @ 4.1g/t
containing 190,000oz, with a decline established to a depth
of 465 metres.

Rather than re-drill from the surface, inﬁll drilling is being
undertaken with ‘daughter’ holes from existing deep holes.

A regional gold targeting exercise was recently initiated,
to identify and prioritise targets in the Southern Cross
land package, and to review the effectiveness of previous

The ‘daughter’ holes commence at depths from 1,100 metres
to 1,400 metres.

This drilling requires careful navigational control and planning
but is expected to save considerable time and cost.

South Laverton
An assessment of gold exploration potential in the South
Laverton project has highlighted some high ranking targets,
some of which lie below salt lake sediments.

Several multi-million-ounce gold deposits, including Granny
Smith, Sunrise Dam and Wallaby are located on the northern
margin of this region, and potential for similar deposits may
exist within this project area.

These targets are being assessed and prioritised, in the same
manner as at Southern Cross.

Meekatharra – more progress
and promising results
Gold exploration recommenced at Meekatharra in late 2004,
with the intention of re-establishing a mining inventory and
production through the Bluebird plant.

Exploration drilling was focused on the Vivian-Consols
(porphyry-hosted mineralisation), Prohibition (banded iron-
hosted mineralisation) and the Mickey Doolan (ultramaﬁc
host) at Paddy’s Flat, and on the Rand deposit at Reedys, all of
which are 100% owned by St Barbara. Drilling was undertaken
with up to three rigs; using deep RC and diamond drill rigs.

This zone is described as the ‘Mudlode’ and is interpreted
to be an extension of the historically mined Mudlode, which
occurs 300 metres further north.

The host for this mineralisation is strong quartz carbonate-
pyrite alteration in high magnesium ultramaﬁc.

No resource estimate has to date been made for the Mudlode.

Construction of a geological model and further drilling are
currently in progress.

Current work at Meekatharra includes ongoing delineation
drilling, as well as mining and metallurgical studies, to
consider the proposed recommencement of processing at
Bluebird.

Wallal, Pardoo, Scorpion & Scorpayle –
more nickel targets
The company’s nickel exploration strategy has seen the
completion during the year of a comprehensive review
of nickel sulphide exploration opportunities in Western
Australia, on both Company and non-Company-held ground.

This has lead to the application for tenements over high-
priority nickel targets on the Wallal, Pardoo, Scorpion and
Scorpayle projects, totalling 3,900km2 in area. These licence
applications are pending.

Many signiﬁcant intersections were reported from this
drilling, indicating extensions to known mineralisation, and
leading to substantial increases in resources.

With the SGWGD acquisition, several strategic exploration
targets became part of the Company’s portfolio and are now
being developed as exploration projects.

Signiﬁcantly, during May 2005, a broad, new zone of
mineralisation, adjacent to and east of the Vivian Consols
deposit was intersected.

The ﬁrst of these to be explored is Sullivans, 35km north
of Leonora, where signiﬁcant copper and nickel enrichment
are present in a poorly drilled ultramaﬁc unit over an 8km
strike length.

Exploration Review
continued

Southern Cross Tenement Map

Opposite page | Drillrigs at Gwalia Deeps

Reserves & Resources Statement

RESERVES AT END OF JUNE 2005

Proved

Probable

Tonnes

Au g/t

Tonnes

Au g/t

Tonnes

Total

Au g/t

240,000

6.0

46,000

240,000

6.0

46,000

170,000

1.8

10,000

520,000

10,000

3,100,000

2,300,000

2.4

1.3

2.5

180,000

2,300,000

22,000

690,000

250,000

3,200,000

2.4

1.4

2.5

180,000

32,000

260,000

Region/Project

Southern Cross

Marvel Loch

Yilgarn Star

Hercules

Other

Total Southern Cross

Leonora

Gwalia

Tarmoola

Other

Total Leonora

South Laverton

All Projects

Total South Laverton

Meekatharra (100% SBM)

Paddys Flat

Reedys

Other

Total Meekatharra (100% SBM)

Meekatharra (JV)

Annean JV

(SBM reducing to 30%)

Polelle JV

(SBM reducing to 35%)

Total Meekatharra (JV)

Total All Regions

170,000

1.8

10,000

3,100,000

2.5

250,000

3,200,000

2.5

260,000

1. The information in this report that relates to Ore Reserves is based on information compiled by Mr Martin Reed (Marvel Loch), Mr Allan Blair (Hercules) and
Mr Michael Bartholomaeus (Southern Cross – Other) who are Members or Fellows of the Australasian Institute of Mining and Metallurgy. Mr Reed and
Mr Bartholomaeus are full-time employees of the company. Mr Blair is employed by Snowden Mining Industry Consultants. Mr Reed, Mr Blair and
Mr Bartholomaeus have sufﬁcient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to
qualify as Competent Persons as deﬁned by the 2004 edition of the ‘ Australasian Code for Reporting of Mineral Resources and Ore Reserves’.

Mr Reed, Mr Blair and Mr Bartholomaeus consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
2. All data is rounded to two signiﬁcant ﬁgures 3. Discrepancies in summations will occur due to rounding

Discussing Southern Cross Exploration Strategies
Left to right | Peter Thompson, David Broomﬁeld, Eduard Eshuys, Michael Bartholomaeus, Alex Hatch

Region / Project

Southern Cross

Marvel Loch

Yilgarn Star

Hercules

Other

Total Southern Cross

Leonora

Gwalia

Tarmoola

Other

Total Leonora

South Laverton

All Projects

Total South Laverton

Meekatharra (100% SBM)

Paddys Flat

Reedys

Other

Meekatharra (JV)

Annean JV

(SBM reducing to 30%)

Polelle JV

(SBM reducing to 35%)

Total Meekatharra (JV)

RESOURCES AT END OF JUNE 2005 (INCLUDES RESERVES)

Measured

Indicated

Inferred

Total

Tonnes

Au g/t

Tonnes

Au g/t

Tonnes

Au g/t

Tonnes

Au g/t

61,000

4.0

7,900

3,000,000

390,000

3,600,000

15,000

3,000,000

3.8

6.6

2.2

3.1

370,000

1,100,000

82,000

1,100,000

250,000

300,000

4,700,000

23,000

10,000,000

3.1

1,000,000

6,900,000

330,000

390,000

1.4

1.8

6.5

3.2

3.0

3.5

7.3

1.2

1.8

230,000

4,200,000

110,000

1,500,000

3,600,000

450,000

7,700,000

4.5

3.9

2.2

3.0

610,000

190,000

250,000

750,000

790,000

17,000,000

3.3

1,800,000

1,700,000

7,200,000

1,400,000

56,000,000

400,000

13,800,000

7.3

1.2

2.0

1,700,000

2,200,000

900,000

7,200,000

400,000

36,000,000

330,000

6,800,000

730,000

50,000,000

2.2

3,500,000

77,000,000

1.9

4,800,000

450,000

3,600,000

450,000

3,600,000

920,000

9,300,000

140,000

15,000

310,000

2.6

1.4

5.0

300,000

9,800,000

300,000

9,800,000

420,000

26,000,000

49,000

1,900,000

150,000

2.4

1.6

4.2

3.1

760,000

1,300,000

260,000

15,000

10,000,000

1,000,000

1.5

1.2

460,000

10,000,000

40,000

7,000,000

11,000,000

1.4

500,000

17,000,000

170,000

0.9

4,900

5,900,000

4,900

5,900,000

840,000

2.7

74,000

17,000,000

800,000

150,000

1.2

1.5

1.3

2.4

1.7

5.5

3.1

Total Meekatharra (100% SBM)

840,000

2.7

74,000

18,000,000

1.9

1,100,000

9,600,000

1.5

470,000

28,000,000

1.8

1,600,000

4,800,000

1.5

230,000

1,600,000

2.2

110,000

6,300,000

1.7

350,000

Total All Regions

12,000,000

1.5

600,000

55,000,000

2.0

3,500,000

72,000,000

4,800,000

1.5

230,000

2,700,000

1,100,000

1.6

2.0

2.3

58,000

1,100,000

170,000

7,400,000

1.6

1.7

58,000

410,000

5,300,000

140,000,000

2.1

9,400,000

1. The information in this report that relates to Mineral Resources is based on information compiled by Mr Michael Bartholomaeus, Ms Jane Bateman, Mr Graham
Miller and Mr Peter Thompson who are Members or Fellows of the Australasian Institute of Mining and Metallurgy. Mr Bartholomaeus, Ms Bateman, Mr Miller and
Mr Thompson are full-time employees of the company. Mr Bartholomaeus, Ms Bateman, Mr Miller and Mr Thompson have sufﬁ cient experience relevant to the
style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons as deﬁ ned by the 2004 edition
of the ‘ Australasian Code for Reporting of Mineral Resources and Ore Reserves’.

Mr Bartholomaeus, Ms Bateman, Mr Miller and Mr Thompson consent to the inclusion in the report of the matters based on their information in the form and

context in which it appears.

2. All data is rounded to two signiﬁ cant ﬁ gures 3. Discrepancies in summations will occur due to rounding

1
1

6
6

2
2

8
8

4
4

1
0
59
1

1
3
52
3
21
5
22
1
11
8
52
0
61
8
91
8
71
8
71
6
71
6
71
6
81
5
0

1
1
81
5
61
8
71
2
62
2
62
5
47
9

1
2
51
2
11
3
57
9

Operations Review

The Company’s strategic focus is build on its core
production strengths and to introduce innovative and
sustainable improvements to achieve measurable lifts in
performance.

Southern Cross Operations
The Southern Cross Operations are centred at Marvel Loch
(30km south of the town of Southern Cross).

Sons of Gwalia Ltd Gold Division (SGWGD)
St Barbara’s purchase of SGWGD included two operating
mines, one at Southern Cross and the other at South
Laverton.

The Company took over management of the SGWGD
operations on 28 March 2005.

Gold sales for 2005 were 83,646ozs at a cash cost of
$341/oz.The forecast at the time of the purchase of SGWGD
was for production of 82,000ozs at a cash cost of $415/oz.

The improved performance of the operations was due to
achieving higher grades than were predicted, successful
cost-reduction measures implemented by the Company,
and improved mining productivity at both Marvel Loch and
Safari Bore.

Operational Health and Safety
The Company’s strong focus on health and safety saw a
uniformly high performance level achieved.

The speciﬁc results are detailed in the Health, Safety and
Environmental Review.

Prior to purchase by St Barbara, gold production had been
derived from open pits at Marvel Loch and Cornishman and
underground mining at Golden Pig and Marvel Loch.

Mining at Cornishman and Golden Pig was concluded during
the year.

In the Marvel Loch Open Pit, a change to the mine plan in
the last quarter resulted in a higher grade tonnage being
extracted and mining was completed in August 2005. There
are no plans to extend the life of this pit.

Two underground areas located at the northern end of the
deposit were mined in the Marvel Loch underground mine in
the Sherwood and Undaunted lodes.

Both Sherwood and Undaunted are being drilled for
extensions which are planned to be mined commencing in
the March 2006 quarter.

Development of a further stoping area at New Lode
commenced towards the end of the ﬁnancial year and stope
production will commence in the December 2005 quarter.

Extension drilling is also underway for this lode and it is
anticipated that additional production stoping will be carried
out in the second half of 2006.

A new open pit is being developed at Hercules, which is
located 12km south of the Marvel Loch Processing Plant,
with activity commencing in August 2005.

Mining operations in the June quarter were concentrated
at the Safari Bore Pit which is located 70km north of the
Carosue Dam plant.

The first stage of this pit comprises 1.1Mt at a grade
of 2.1g/t for 74,000oz within the previously announced
probable reserve of 180,000 ounces of gold for the
whole pit.

A dry-hired mining ﬂeet, managed by the Company, was used
to mine the pit in the last quarter and it achieved better
than expected productivities and costs.

It is planned that further development of this pit would
extend operations at Southern Cross to the end of 2007
and this will be evaluated once production commences at
Hercules.

The processing plant located at Marvel Loch, treated a total
of 2,525,451 tonnes derived from the operating mines and
stockpiled ore for the period of which 663,365 tonnes, at a
grade of 2.94g/t, was processed.

Attributable gold production shipped from Southern Cross
Operations during the June quarter was 53,719oz.

Details of 2005 Production

Open Pit
Grade

Underground
Grade

Stockpiles Processed
Grade

Ore Milled
Grade

Recovery
Gold Shipped

Southern
Cross

Carosue
Dam

Total

t
g/t

%
oz

287,356
2.25

116,944
7.02

259,065
1.32

663,365
2.94

92
53,719

256,848 544,204
3.00

3.84

- 116,944
-
7.02

56,750 315,815
1.22

0.77

313,598 976,963
3.05

3.28

96
29,528

93
83,247

Cash Cost

$/oz

336

349

341

Forecast gold production from Southern Cross for 2006 is
150,000oz at a cash cost of $415/oz.

In addition to gold shipped from operations of 83,247oz,
399oz was generated from other site clean-ups.

South Laverton Operations
Processing was completed at Carosue Dam during the last
quarter of 2005, with the plant now on care and maintenance,
as scheduled.

Care and maintenance activities are being continued at
Meekatharra, Gwalia, Tarmoola and Carosue Dam.

Single-person operated Jumbo at Marvel Loch Underground

Tarmoola overall plan

Health, Safety & Environmental Review

St Barbara appreciates the important connection between
ﬁnancial performance and the safety and welfare of its
workforce. The Company is committed to achieving high
standards and continuous improvement with respect to
health, safety and environment in the work place.

Most importantly, there were no disabling injuries in the
quarter and the operations achieved a rolling Disabling Injury
Frequency Rate of 3.5, compared with the 2003/04 WA Gold
Industry rate of 12.1.

Health and safety
The Company recognises its obligation to provide safe work
places for employees, contractors and the community and is
committed to the principle that all occupational injuries and
illness are preventable.

Encouraging results
There are clear and encouraging indications that the
commitment to achieving health and safety excellence is
reﬂected in reduced injuries.

At the end of the year, Southern Cross operations had
completed 370 days without any time being lost to injury
and Carosue Dam, 276 days.

The rolling 12-month Lost Time Injury Frequency Rate for
the two operations was 0.7, compared with the 2003/04 WA
Gold Industry Rate of 4.3.

During the quarter there were ﬁve medically treated, on-site
injuries resulting in a Medical Treatment Injury Frequency
Rate of 20 for this period.

A shared responsibility for workforce
health and safety
The Company recognises that imposing welfare initiatives
developed in isolation is not ideal.

The approach taken has been to provide all employees
and contractors with the opportunity to contribute to the
development and implementation of safety and welfare
programs and individual initiatives.

Daily on-site meetings are held to facilitate this process.

Environmental management
for generations to come
St Barbara is committed to conducting its activities in a
socially responsibly manner that is designed to protect the
natural environment in which we operate and the local
communities with whom we interact.

The Company also recognises that the application of
thoughtful and
innovative solutions to rehabilitation
programs can result in sustainable environments as well
as commercial beneﬁts for shareholders through the cost
effective reduction of security bonds required by the Western
Australian Government.

Sons of Gwalia acquired sites
As part of the Company’s acquisition of the Sons of Gwalia
Ltd Gold Division, a complete evaluation of the related
rehabilitation programs has been carried out.

Detailed plans are now being developed and will be
progressively implemented over the coming year.

To reduce the disturbance of the land surface at various
sites, rock waste has been disposed of in the existing pits.

Southern Cross
At Southern Cross, rehabilitation trials have commenced at
an historic legacy site.

The trial involves employing a new technique designed
speciﬁcally to beneﬁt sites with a topsoil deﬁciency.

The Hercules Site
The waste rock from a new pit being mined at Hercules
will be used to cap a nearby old tailings dam and secure it
properly for the future.

The Company’s commitment to environmental management is
reﬂected in the appointment of a full time environmental ofﬁcer,
to work with our environmental advisers and site based staff.

Examples of environmental programs already in place include:

• The progressive rehabilitation of newly mined areas,
particularly those likely to be inactive for some time.

• A renewed focus on site-waste management, especially
with regard to the careful and safe disposal of hydrocarbon
products.

• Improved workforce education to empower individual
employees to be better able to ensure their own safety.

Signiﬁcant progress was made during the year at the Carosue
Dam site where several pits and disturbed areas have been
rehabilitated.

As part of the closure plan for this site, further work will be
carried out and completed.

Finance Review

Focus on positive cash ﬂow generation
The focus throughout the year has been on restructuring
business activities through divestment and acquisitions to
generate positive cash ﬂows. During the ﬁrst half of the
year, the key events were the sell down of NuStar Mining
Corporation Limited (“NuStar”) shares and the sale of the
Paulsen’s Royalty to NuStar for $5.1M. During the second
half of the year, gold operations acquired at the end of
the March 2005 quarter contributed strongly to operating
cashﬂows and proﬁtability. The cash position of the chief
entity improved signiﬁcantly to $16.2M as at 30 June 2005,
with a further $11.8M cash backing for environmental
performance bonds.

Financial performance
The net loss for the year of $6.7M represents a substantial
improvement from the net loss reported in the year ended
30 June 2004 of $24.3M.

Gold revenue from operations of $46.6M was signiﬁcantly
higher than gold revenue from operations in the previous
year of $22.0M. The recently acquired gold operations at
Southern Cross and South Laverton generated production
of 83,646ozs at a cash cost of $341/oz for revenue of
$46.4M during the June 2005 quarter. The net cash
cost of $341/oz reﬂected higher grades than forecast,
reduced unit costs and improved mining productivity.
Gold production in ﬁscal year 2004 was derived from the
Meekatharra operations before they were placed on care
and maintenance in June 2004.

The weighted average price realised of $557/oz was up
from $546/oz achieved in 2004.

Earnings before interest, tax, depreciation, amortisation
and write downs improved signiﬁcantly to $6.2M loss (2004:
$11.6M loss).

Other revenue of $20.9M includes $5.1M realised on the
sale of the Paulsen’s Royalty in the December 2004 half
year, $9.7M realised on the sale of shares in NuStar to
third parties and deemed revenue of $3.9M on accepting
a share swap offer from Sedimentary Holdings Limited
(“Sedimentary”) for 69.4M NuStar shares and $0.5M from
the sale of cattle and other items of equipment on the
Company’s pastoral leases which were sub-let to a third
party in the December 2004 quarter.

Interest costs of $0.5M (2004: $4.0M) reduced signiﬁcantly
as a consequence of the Company repaying its secured
debt in October 2004 and remaining debt free up to
29 March 2005 when $7M was drawn down on a facility
provided by Resource Capital Funds III LP to assist with
ﬁnancing the acquisition of the Gold Division of Sons of
Gwalia Ltd (Administrators Appointed) (“SGWGD”).

Cash Flows
Cash at the end of the year for the chief entity was $16.2M
cash at bank plus $11.8M cash backing of environmental
performance bonds. This compares favourably with a
cash balance for the chief entity, excluding NuStar which
was deconsolidated during the year, as at 30 June 2004
of $1,000 plus $3M cash backing of bonds. During the ﬁrst
half of the ﬁnancial year the Company raised $4.1M for
working capital.

Key sources of cash ﬂow included:
• Capital raisings
• Proceeds from the sale of NuStar shares to

30 June 2005

• Sale of Paulsen’s royalty
• Proceeds from borrowing (RCF convertible loan)
• Net operating cash ﬂows from the acquired gold

operation (SGWGD) during the June 2005 quarter 17.4

$’M
4.1

9.7
5.1
7.0

Financial Position
The following illustrates the key events that impacted on the
Company’s shareholders’ equity during the ﬁnancial year:

Loss for the year
Capital reduction (share swap)
Capital raising
Debt to equity conversions
Net impact of deconsolidating NuStar
Total movement in shareholders’ equity

$’000
(6,697)
(8,514)
4,072
5,204
(18,844)
(24,779)

A capital management strategy was implemented to
reduce the number of shares on issue through offering all
shareholders the opportunity to participate in a share buy
back, with NuStar shares being offered as consideration
in the ratio of 1.25 NuStar shares for each St Barbara
share being bought back. A total of 170M St Barbara
shares were bought back and 213M NuStar shares provided
as consideration. As a result, the number of shares on
issue reduced from 737M to 567M and shareholders’ funds
reduced by $8.5M.

Subsequent Events
• Sale of Shares
On 27 July 2005, the Company sold its remaining shares
in NuStar (6.4%) and Sedimentary (5.5%) for a combined
total of $6.0M and net proﬁt on sale of $100,000.

• Capital Management
On 26 July 2005, the Company announced:

An on-market buy-back of up to 10% of its capital over the
next 12 months in accordance with ASX guidelines; and
Sale of unmarketable parcels of shares, unless
holders of unmarketable parcels of shares notify the
Company in writing of their intention to hold their
shares, by 5pm WST 23 September 2005.

A total of 3.2M shares were bought back on-market to
30 September 2005 and 6.2M shares held by holders
of unmarketable parcels have been sold on their
behalf.

Corporate Governance Review

Corporate governance is the process by which companies
are directed and managed. It inﬂuences how the objectives
of the Company are set and achieved, how risk is monitored
and assessed, and how performance is optimised.

Good corporate governance structures encourage companies
to create sustainable value (particularly through the exercise
of integrity at all levels, entrepreneurism, innovation,
development and exploration) and provide accountability
and control systems commensurate with the risks involved.

The ASX Corporate Governance Council, in March 2003,
published Principles of Good Corporate Governance and Best
Practice Recommendations. These principles are summarised
as follows:

Fundamental to any corporate governance structure is
establishing the roles of management and the Board
(Principle 1), with a balance of skills, experience and
independence on the Board appropriate to the nature
and extent of company operations (Principle 2). There is
a basic need for integrity among those who can inﬂuence
a company’s strategy and ﬁnancial performance, together
with responsible and ethical decision-making (Principle 3).

Meeting the information needs of a modern investment
community is also paramount in terms of accountability and
attracting capital. Presenting a company’s ﬁnancial and
non-ﬁnancial position requires processes that safeguard,
both internally and externally, the integrity of company
reporting (Principle 4), and provide a timely and balanced
picture of all material matters (Principle 5). The rights of
company shareholders need to be clearly recognised and
upheld (Principle 6).

Every business decision has an element of uncertainty and
carries a risk that can be managed through effective oversight
and internal control (Principle 7). Keeping pace with the
modern risks of business and other aspects of governance
requires formal mechanisms that encourage enhanced board
and management effectiveness (Principle 8).

Rewards are also needed to attract the skills required
to achieve the performance expected by shareholders
(Principle 9). The impact of company actions and decisions
is increasingly diverse and good governance recognises the
legitimate interest of all stakeholders (Principle 10).

Each principle is of equal importance.

St Barbara is committed to these principles. Key elements of
the Company’s corporate governance principles in place at
the date of this report include:

Structure and Operation of the Board
The Company has a ﬁve member Board, four of whom are
non-executive directors. A majority of the directors are also
independent.

The role of the Board is to provide strategic guidance to the
Company, effective oversight of management and a sound
base for a culture of good corporate governance within the
Company.

The Board has adopted a formal Board Charter which sets
out the principles under which the Board operates.

The following Board committees are operative:
• Audit Committee; and
• Remuneration Committee.

Each of these committees has an independent non-executive
director as chairperson, as well as a Board approved
charter.

The role of the Audit Committee function has recently been
extended to include a review of Company procedures for
reviewing and independently verifying resources and reserves.

None of the directors has a trading relationship with the
Company nor a conﬂict of interest in any business or
relationship which could, or could reasonably be perceived
to, materially interfere with the director’s ability to act in
the best interests of the Company, noting that Mr Tuten is
an ofﬁcer of major shareholder Resource Capital Funds II LP,
and the principal ﬁnancier, Resource Capital Funds III LP and
abstains from voting on any Board matters relating to either
of these entities.

Risk
The Board
is responsible for the establishment and
maintenance of a framework of internal control and policies
and procedures designed to safeguard Company assets and
to maintain the integrity of ﬁnancial reporting. In respect of
safeguarding Company assets, and risk more generally, the
management is charged with the responsibility of identifying
and managing operational, ﬁnancial and corporate risks with
regular reports to the Board.

To assist the Board in managing the integrity of ﬁnancial
reporting, an Audit Committee has been established.

The primary role of the Audit Committee is to monitor and
review, on behalf of the Board, the effectiveness of the
ﬁnancial control environment in the St Barbara Mines Limited
group in the areas of operational and balance sheet risk and
ﬁnancial reporting. For the ﬁrst part of the 2005 ﬁnancial
year this function was performed by the entire Board.

The external auditor, PricewaterhouseCoopers, has engagement
terms refreshed annually and has conﬁrmed its independence
to the Board. The current engagement partner has conducted
the audit since 2001 with rotation due no later than 2006.
The external auditor is required to attend the Annual General
Meeting and be available to respond to speciﬁc questions
from shareholders.

Disclosure of Information
St Barbara has obligations under the Corporations Act, and
ASX and AIM Listing Rules to keep the market fully informed
of information which may have a material effect on the price
or value of St Barbara’s securities and to correct any material
mistake or misinformation in the market.

The Company has adopted a Continuous Disclosure Policy to
provide a disciplined framework for complying with these
requirements.

Ethics
The Board Charter provides that, in performing its role, the
Board should act at all times:
• in recognition of its overriding responsibility to act
honestly, fairly and in accordance with the law in serving
the interests of the Company, its shareholders, employees,
and other stakeholders

• with integrity and objectivity and consistently with the
ethical, professional and other standards set out in the
Company’s corporate governance policies.

Heritage Listed Gwalia State Hotel now owned by the Company

Corporate Governance Review
continued

Dealing in Company shares by directors, ofﬁcers and employees
is governed by a Dealings in Securities Policy. Except for a
closed period imposed by AIM Listing Rules where no trading
in company securities is allowed by Directors, Ofﬁcers and
Employees from balance date until the release of full year
results, and from 31 December until the release of the half
year results, this policy allows for a 30 day trading window
following signiﬁcant public announcements, provided the
company is not in possession of undisclosed potentially price
sensitive information.

Company policies on Occupational Health and Safety and
Environment acknowledge the Company’s fundamental
commitment to providing a safe workplace, and the
Company’s and employee responsibilities to the environment
and local communities with whom we interact.

Remuneration
The Board has established a Remuneration Committee, and
adopted a Remuneration Policy, key principles of which are:

• Remuneration is linked to the creation of value for
• Remuneration will reward ﬁnancial and non-ﬁnancial

shareholders;

performance;

• Remuneration will reﬂect the market in which the

Company operates; and

• Remuneration will recognise the contribution of individuals

and teams.

Details of remuneration of Directors, the Managing Director
and CEO, and senior executives are disclosed in the Directors’
Report.

Issues of substance are considered by the Board with external
advice from its professional advisers as required. The Board’s
individual members can seek independent professional advice
at the Company’s expense in carrying out their duties. Prior
written approval of the Chairman is required, but may not be
unreasonably withheld.

Key elements of remuneration for senior executive employees
comprise:
• Base salary;
• Total possible remuneration at risk, subject to meeting

prescribed key performance indicators; and

• Equity participation through executive and employee

options.

Evolving Practices
The Company recognises that corporate governance practices
will continue to evolve as the Company continues to grow
and develop.

Opposite page | Bill Rose, Peter Thompson, Ian O’Grady, Jane Bateman and Martin Reed at Leonora discussing Tarmoola drilling strategy

Directors Report

Colin Wise
Chairman

Eduard Eshuys
Managing Director & CEO

Hank Tuten
Non Executive Director

This ﬁnancial report covers both St Barbara Mines Limited as
an individual entity and the consolidated entity consisting of
St Barbara Mines Limited and the entities it controlled at the
end of, or during the ﬁnancial year ended 30 June 2005.

Sons of Gwalia Ltd Gold Division (SGWGD)
St Barbara’s purchase of SGWGD included two operating
mines, one at Southern Cross and the other at South
Laverton.

Directors present their report on the consolidated entity
consisting of St Barbara Mines Limited (“St Barbara”) and
the entities it controlled at the end of, or during, the year
ended 30 June 2005.

Directors
The following persons were directors of St Barbara during
the whole of the ﬁnancial year and up to the date of this
report:
H G Tuten
M K Wheatley

S J C Wise and E Eshuys were appointed directors on
20 July 2004 and continue in ofﬁce at the date of this report.

R Knight was appointed a director on 25 May 2005 and
continues in ofﬁce at the date of this report.

S W Miller was a director from the beginning of the
ﬁnancial year until removed as chairman and director on
20 July 2004.

K A Dundo was a director from the beginning of the ﬁnancial
year until his resignation on 18 July 2004.

Principal activities
During the year the principal activities of the consolidated
entity consisted of gold production, gold and mineral
exploration, pastoral activities and investments.

The only signiﬁcant changes in the nature of the activities
of the consolidated entity during the year were the sale of
the majority of the Company’s equity interest in a listed
subsidiary, NuStar Mining Corporation Limited (“NuStar”),
the acquisition of the Gold Division of Sons of Gwalia Ltd
(Administrators Appointed) as of 28 March 2005 and the sale
of cattle and sub-letting of Murchison pastoral lease interests
to a third party, on 4 November 2004.

Dividends
There were no dividends paid to members during the ﬁnancial
year.

Review of operations
The Company’s strategic focus is build on its core production
strengths and to introduce innovative and sustainable
improvements to achieve measurable lifts in performance.

The Company took over management of the SGWGD
operations on 28 March 2005.

Gold sales for 2005 were 83,646oz at a cash cost of
$341/oz.The forecast at the time of the purchase of SGWGD
was for production of 82,000oz at a cash cost of $415/oz.

The improved performance of the operations was due to
achieving higher grades than were predicted, successful
cost-reduction measures implemented by the Company, and
improved mining productivity at both Marvel Loch and Safari
Bore.

Operational Health and Safety
The Company’s strong focus on health and safety saw a
uniformly high performance level achieved.

The speciﬁc results are detailed in the Health, Safety and
Environment Report.

Southern Cross Operations
The Southern Cross Operations are centred at Marvel Loch
(30km south of the town of Southern Cross).

Prior to purchase by St Barbara, gold production had been
derived from open pits at Marvel Loch and Cornishman and
underground mining at Golden Pig and Marvel Loch.

Mining at Cornishman and Golden Pig was concluded during
the year.

Two underground mining areas located at the northern end
of the deposit were mined in the Marvel Loch underground
mine in the Sherwood and Undaunted lodes.

Both Sherwood and Undaunted are being drilled for
extensions which are planned to be mined commencing in
the March 2006 quarter.

Development of a further stoping area at New Lode
commenced towards the end of the ﬁnancial year and stope
production will commence in the December 2005 quarter.

Hank Tuten

Non Executive Director

Mark Wheatley
Non Executive Director

Richard Knight
Non Executive Director

Ross Kennedy
CFO & Company
Secretary

Extension drilling is also underway for this lode and it is
anticipated that additional production stoping will be carried
out in the second half of 2006.

Mining operations in the June quarter were concentrated
at the Safari Bore Pit which is located 70km north of the
Carosue Dam plant.

A new open pit is being developed at Hercules, which is
located 12km south of the Marvel Loch Processing Plant,
with activity commencing in August 2005.

A dry-hired mining ﬂeet, managed by the Company, was used
to mine the pit in the last quarter and it achieved better
than expected productivities and costs.

The ﬁrst stage of this pit comprises 1.1Mt at a grade of
2.1g/t for 74,000oz within the previously announced probable
reserve of 180,000 ounces of gold for the whole pit.

It is planned that further development of this pit would
extend operations at Southern Cross to the end of 2007
and this will be evaluated once production commences at
Hercules.

Attributable gold production shipped from Southern Cross
Operations during the June quarter was 53,719oz.

Forecast gold production from Southern Cross for 2006 is
150,000oz at cash cost of $415/oz.

South Laverton Operations
Processing was completed at Carosue Dam during the last
quarter of 2005, with the plant now on care and maintenance,
as scheduled.

Details of 2005 Production

Open Pit

Grade

Underground

Grade

Stockpiles
Processed

Grade

Ore Milled

Grade

Recovery

Gold Shipped

Southern
Cross

Carosue
Dam

Total

287,356

256,848

544,204

2.25

3.84

3.00

116,944

7.02

116,944

7.02

259,065

56,750

315,815

1.32

0.77

1.22

663,365

313,598

976,963

2.94

3.28

3.05

53,719

29,528

83,247

g/t

ozs

Cash Cost

$/oz

336

349

341

In addition to gold shipped from operations of 83,247oz,
399oz was generated from other site clean-ups.

Care and maintenance activities are being continued at
Meekatharra, Gwalia, Tarmoola and Carosue Dam.

Directors Report
continued

Consolidated revenues and results
Consolidated revenues and results are summarised as follows:

Gold

Share investments

Proceeds on sale of royalty,
property, plant and equipment

Other

Loss from ordinary activities before
related income tax expense

Income tax expense

Loss from ordinary activities after
related income tax expense

Less: Net loss attributable to
outside equity interest

Net loss attributable to members
of St Barbara

2005

$’000

46,553

13,675

2004

$’000

21,972

5,063

6,662

611

3,486

1,911

67,501

32,432

(6,697)

(25,228)

(6,697)

(25,228)

913

(6,697)

(24,315)

a) Changes in Substantial Shareholdings
NuStar Mining Corporation Limited
30 June 2004
Shares held as at:
30 June 2005

542,719,338
63,325,359

54.8%
6.4%

On 30 September 2004, the Company sold 100M shares at
4¢ each in NuStar and as a consequence deconsolidated its
investment for accounting purposes as from that date.

Also on 30 September 2004, the Company granted an option
to Claymore Capital Pty Ltd and its nominees to purchase up
to 100M NuStar shares at 5¢ each. The option agreement
expired on 16 May 2005, and resulted in the sale of 36,674,700
NuStar shares.

On 17 January 2005, the Company completed a share swap
buy-back whereby 212,864,971 NuStar shares were provided
as consideration for buying back 170,291,977 St Barbara
shares. The issued capital of St Barbara reduced from
736,825,329 fully paid ordinary shares to 566,533,352 fully
paid ordinary shares.

On 28 January 2005, the Company accepted an offer for
69,354,367 NuStar shares from Sedimentary Holdings
Limited (“Sedimentary”) and as a result received 15,412,082
Sedimentary shares representing 5.5% of the issued capital
of that company. The shareholding in Sedimentary was sold
on 27 July 2005.

As a result of the transactions in NuStar shares described
above and further on-market share sales, the Company’s
investment in NuStar reduced from 54.8% as at 30 June 2004
to 6.4% as at 30 June 2005 and nil as at 27 July 2005.

b) Changes in Operations
Divestment of NuStar
The Company’s investment in NuStar was deconsolidated as
from 30 September 2004 following the sale of 100M shares as
described above.

Divestment of Paulsens Royalty
On 29 November 2004, shareholders approved the sale of the
Company’s Paulsen’s royalty to NuStar for $5,100,000.

Termination of Reedys Joint Venture
On 9 December 2004, by mutual agreement, Elara Mining
Limited (“Elara”) withdrew from the Reedys Joint Venture
at Meekatharra, and expenditure incurred by Elara of
$593,213 was agreed to be deemed expenditure towards its
expenditure commitments for the Polelle Joint Venture.

Acquisition of Gold Division of Sons of Gwalia Ltd
(Administrators Appointed)
On 20 March 2005, the Company announced the acquisition
of the Gold Division of Sons of Gwalia Ltd (Administrators
Appointed) (“SGWGD”) for a cash payment of $2,285,000,
the replacement of existing bank guaranteed environmental
Performance Bonds totalling $29,960,000 and the assumption
of additional Performance Bonds of up to $5,700,000. The
effective date of acquisition was 28 March 2005.

Through this acquisition the Company acquired:
• Land positions totalling 10,000km2 in the Leonora,
Southern Cross and South Laverton regions of Western
Australia;

• Gold operations in production at Marvel Loch, Southern

Cross, and Carosue Dam, South Laverton; and
• A portfolio of property, plant and equipment.

The results of gold production from these acquired assets
are described in the section titled Operations Review, on
pages 12 to 13.

On 9 August 2005, the Company announced a reserve estimate
upgrade for Hercules, near Marvel Loch, Southern Cross as
at 30 June 2005 using a gold price of A$550/oz and cut-off
grade of 1.1g/t, to Probable Reserves of 2.3Mt @ 2.5g/t for
180,000oz of gold.

Likely developments and
expected results of operations
Likely developments in the operations of the consolidated
entity constituted by St Barbara and the entities it controls
at the date of this report included:
• As a consequence of the extension to operations at Southern
Cross as described above, forecast gold production for the
ﬁnancial year 2005/06 is 150,000 ounces at an estimated
cash cost of $415/oz.

• Exploration activities are planned to continue at Leonora
(both at Tarmoola and Gwalia Deeps), Southern Cross and
Meekatharra.

Regulatory environment
The consolidated entity is subject to signiﬁcant environmental
its mining and exploration
regulation
activities.

in respect of

Mining and exploration
The Company’s mining activities are all in Western Australia,
and are governed by the Mines Act Western Australia, the
Mines Safety and Inspection Act and other mining related
legislation. Exploration activities are also primarily in
Western Australia. Details of mining and exploration
activities during the year are set out in separate reports
included in this Annual Report.

c) Changes in Issued Capital

Issued capital at 30 June 2004

On 15 July 2004, the Company announced
the conversion by Ocean Resources
Capital Holdings plc of the face value
of its convertible note of $4.4M into
55,000,000 ordinary shares at 8¢ each

On 20 July 2004, the Company issued
42,050,000 fully paid ordinary shares
at 4¢ per share to raise $1,682,000 for
working capital

On 20 July 2004, the Company issued
17,480,547 fully paid ordinary shares
to Ocean Resources Capital Holdings
plc at 4.6¢ per share in satisfaction of
interest of $804,105

On 23 July 2004, the Company issued
26,591,453 fully paid ordinary shares to
Resource Capital Funds II LP (“RCFII”)
at 4.6¢ per share to raise $1,223,207
for working capital

On 1 December 2004,
following
shareholder approval, the Company
converted a $1,200,000 loan from RCFII
into 21,554,172 fully paid ordinary shares

On 17 January 2005 the Company
completed a share buy-back (offering
1.25 NuStar shares as consideration for
every 1 St Barbara share bought back) and
as a result cancelled 170,291,977 shares

Shares on Issue

574,149,157

629,149,157

671,199,157

688,679,704

715,271,157

736,825,329

566,533,352

Matters subsequent to the end
of the ﬁnancial year
On 26 July 2005, the Company announced:
• Extension to operations at Southern Cross based on
open pit mining of Hercules and continuing underground
operations at Marvel Loch;

• An on-market share buy-back to buy back up to 10% of the

Company’s issued capital (56,653,335 shares); and

• The proposed sale of unmarketable parcels of shares, on

behalf of holders of unmarketable parcels.

On 27 July 2005, the Company sold its remaining shares in
NuStar (63,325,359 shares) and Sedimentary (15,412,082
shares) for $3,166,268 and $2,851,234 respectively, yielding
total proceeds of $6,108,000.

Directors Report
continued

Information on directors

Special responsibilities
Member of the Remuneration Committee

S J Colin Wise LL.B, FAICD, FAusIMM
Chairman – non-executive Age 59
Experience and expertise
Mr Wise is an experienced corporate lawyer and consultant
with signiﬁcant expertise in the mining and exploration
industry and corporate sector. He spent 24 years with WMC
Limited, 10 of which as General Counsel and subsequently,
4 years as Counsel to the New York law ﬁrm of Howard, Smith
and Levin LLP. He has had extensive practical experience in
Australia and internationally with a wide range of corporate,
operational and legal matters. He is a Fellow of both
the Australian Institute of Company Directors and of the
Australasian Institute of Mining and Metallurgy. He is a non-
executive director of Southern Health, the largest health
care service in Melbourne.

Other current public company directorships
Nil

Former public company directorships in last 3 years
Nil

Special responsibilities
Chairman of the Board
Member of the Audit Committee

Interest in shares and options
Mr Eshuys has a beneﬁcial interest in 1,250,000 fully paid
ordinary shares and holds 35,000,000 executive options to
acquire fully paid ordinary shares as detailed later in this
Report.

Henderson (Hank) G Tuten, B.A. (Econ)
Non Executive Director Age 57
Experience and expertise
Mr Tuten is actively involved in a consolidated entity of
private equity funds as a founding partner. These are the
Resource Capital Funds (“RCF”), the e-Century Capital
Fund and the CIP Fund. Mr Tuten is the Chairman of RCF
Management LLC, the management company of RCF. He
spent over ﬁfteen years with the NM Rothschild and Sons
consolidated entity. During that period, he was the chief
executive ofﬁcer of Rothschild Australia Limited, Rothschild
North America Inc. and Continuation Investments NV, the
private equity vehicle for Rothschild Continuation Holdings
AG consolidated entity. Prior to that, he was a commercial
banker with the Philadelphia National Bank. Mr Tuten
serves on several boards in connection with his investment
activities. He graduated from the University of Virginia with
a BA in Economics.

Interest in shares and options
Mr Wise has a beneﬁcial interest in 3,100,000, fully paid
ordinary shares of the Company.

Other current public company directorships
Nil

Eduard Eshuys B.Sc, FAICD, FAusIMM
Managing Director and Chief Executive Ofﬁcer Age 60
Experience and expertise
Mr Eshuys is a geologist with 36 years of experience in mineral
exploration, development and operation of gold and nickel
mines in Australia. He has a credible record in exploration
having led the exploration teams that discovered several
major gold deposits, including Plutonic, Bronzewing and
Jundee. He brought Bronzewing and Jundee as well as the
Cawse Nickel mine into production. Mr Eshuys was awarded
the Geological Society of Australia’s Joe Harms medal for
distinction in exploration success and project development
in 1996. He is a Fellow of both the Australian Institute of
Company Directors and the Australian Institute of Mining and
Metallurgy.

Other current public company directorships
Nil

Former public company directorships in last 3 years
Nil

Special responsibilities
Member of the Audit Committee

Interest in shares and options
Mr Tuten has a beneﬁcial interest in shares and options held
by Resource Capital Funds II LP of 177,887,642 shares and
52,088,091 options.

Mark K Wheatley B.E.((Chem) Hons 1), MBA
Non Executive Director Age 44
Experience and expertise
Mr Wheatley has 25 years resource industry experience
within Australia and overseas. In his 17 years with BHP until
1996, he was involved in engineering, research, business
development and commercial roles within the steel,
minerals and corporate business groups. He then joined BT
and became a Senior Vice President within the Global Metals
and Mining Group where he was involved in project ﬁnance

and corporate advisory activities over the next 3 years.
He moved to the gold industry in 1999 where, as General
Manager Corporate Development with Goldﬁelds/Aurion
Gold Limited and a period as Acting Managing Director of
Goldﬁelds, he completed a number of successful mergers
and acquisitions before it was taken over by Placer Dome
Inc. in 2002. Mr Wheatley is currently Chairman and CEO of
Southern Cross Resources Inc, a company which is listed on
the Toronto Stock Exchange.

Other current public company directorships
Southern Cross Resources Inc

Mr Knight was responsible for the redesign and reorganisation
of the Goro lateritic nickel project in New Caledonia.

Other current public company directorships
Zinifex Limited and Northern Orion Resources Inc

Former public company directorships in last 3 years
Portman Limited and Asia Paciﬁc Resources Limited

Special responsibilities
Chairman of the Remuneration Committee –
appointed 25 July 2005

Former public company directorships in last 3 years
Nil

Interest in shares and options
None

Special responsibilities
Chairman of the Audit Committee – appointed 25 July 2005
(previously Chairman of the Remuneration Committee)
Member of the Remuneration Committee

Interest in shares and options
Mr Wheatley holds 1,000,000 unlisted options as detailed
later in this Report.

Richard Knight MSc(Eng), DIC, BSc(Eng), ARSM, FAICD, C.Eng
Non Executive Director Age 64
Experience and expertise
Mr Knight is a mining engineer with some forty years
experience, both in Australia and internationally. Mr Knight
is a Director of Zinifex Limited and Northern Orion Resources
Inc, Chairman of Heuris Partners, a Melbourne-based advisory
and strategic planning practice and Senior Advisor to Inco
Limited. He has previously been CEO of Energy Australia
Limited, an Executive Director of North Limited and
Managing Director of Inco Australia Management Pty Ltd. As
the Managing Director of Inco Australia Management Pty Ltd,

Company secretary
Ross Kennedy BComm, Grad.Dip – Company Secretarial
Practice, ACA, FTIA, MAusIMM, FAICD, ACSA
Chief Financial Ofﬁcer and Company Secretary Age 45
Mr Kennedy was appointed to the position of company
secretary in 2004. Mr Kennedy has more than 17 years’
experience as a public company secretary and has held a
number of public company directorships in resources and
technology companies. He has commercial experience in
the acquisition and sale of mineral assets and extensive
corporate experience in public company administration
including treasury, IT, risk management, ethical standards,
capital and ﬁnance raisings, statutory accounting, takeovers,
legal contracts and statutory compliance with a diverse
range of public companies.

Meetings of directors
The number of meetings of the company’s board of directors
and of each board committee held during the year ended
30 June 2005, and the numbers of meetings attended by
each director were:

Full meetings of directors

Meetings of non -
executive directors

Meetings of committees
Audit Remuneration

S J C Wise

E Eshuys

H G Tuten

M K Wheatley

R Knight

S W Miller

K A Dundo

A = Number of meetings attended
B = Number of meetings held during the time the director held
ofﬁce or was a member of the committee during the year

* = Not a non-executive director
** = Not a member of the relevant committee

Directors Report
continued

Retirement, election and continuation
in ofﬁce of directors
R Knight was appointed a director on 25 May 2005. In
accordance with the Constitution, R Knight retires as a
director at the annual general meeting and, being eligible,
offers himself for re-election.

S J C Wise is the director retiring by rotation who, being
eligible, offers himself for re-election.

Remuneration report
The remuneration report is set out under the following main
headings:

A Principles used to determine the nature and amount of

remuneration

B Details of remuneration
C Service agreements
D Share-based compensation
E Managing Director & CEO KPIs
F Valuation of options

A Principles used to determine the nature and amount of

remuneration

The Company’s remuneration policy and practices have been
evolving, with a recently adopted Remuneration Policy. A
summary of key elements of the Remuneration Policy is as
follows:

Overview
The board recognizes that in order to meet and exceed its
business objectives, the Company must be able to attract,
motivate and retain key executives.

Key Principles
The key principles that underlie St Barbara’s Remuneration
Policy are:
• remuneration will be linked to the creation of value for

shareholders;

• remuneration will reward both ﬁnancial and non-ﬁnancial

performance;

• remuneration will reﬂect the market in which the

Company operates; and

• remuneration will recognise the contribution of individuals

and teams.

Executive Remuneration
• Aim of Remuneration Policy
To achieve its goals in relation to executive staff, the

Remuneration Policy is designed to:
o align individual and team reward with business
performance in both the short term and long term;

o encourage executives to align their interest with those

of shareholders;

o encourage executives to perform to their fullest

capacity;

o be business focused and ﬂexible; and
o be competitive and cost effective in each relevant

employment market.

• Content of Remuneration Packages
Remuneration may incorporate ﬁxed and variable pay
performance elements with both a short-term and long-
term focus. Remuneration packages may contain any or
all of the following:
o annual salary – with provision to recognize the value of
the individual’s personal performance and their ability
and experience;

o rewards, bonuses, special payments and other measures
available to reward individuals and teams following a
particular outstanding business contribution;

o share participation – St Barbara has adopted an

Employee Share Option Plan; and

o other beneﬁts, such as holiday leave, sickness beneﬁts,
superannuation payments and long service beneﬁts.

Non executive directors
Fees and payments to non executive directors reﬂect the
demands which are made on, and the responsibilities of, the
directors. Non executive directors’ fees and payments are
reviewed annually by the Board. The Board also considers
the advice of independent remuneration consultants to
ensure non executive directors’ fees and payments are
appropriate and in line with the market. The Chairman’s fees
are determined independently to the fees of non executive
directors based on comparative roles in the external
market. The Chairman is not involved in any discussions
relating to determination of his own remuneration. Non
executive directors do not receive employee share options.
M K Wheatley received 1,000,000 unlisted options as detailed
in note 23 from Resource Capital Fund II LP. Non executive
directors may, commencing 1 October 2005 elect to receive
all or part of their remuneration with a 20% minimum in
St Barbara shares, which would be acquired on-market,
pursuant to a non executive director share plan.

Directors’ fees
The current base remuneration was last reviewed with effect
from 1 July 2005. The Chairman’s remuneration is inclusive
of committee fees while non-executive directors receive
additional yearly fees for their membership on committees
of the Board.

Non executive directors’ fees are determined within an
aggregate directors’ fee pool limit, which is periodically

recommended for approval by shareholders. The maximum
currently stands at $215,000 per annum in aggregate
(approved in 1991), and shareholders will be asked to
consider an increase to $750,000 per annum in aggregate at
the 2005 Annual General Meeting.

Retirement allowances for directors
Non executive directors are not entitled to retirement
allowances.

Executive pay
The executive pay and reward framework has four
components:
• base pay and beneﬁts
• short-term performance incentives
• long-term incentives through participation in Executive
Options or the St Barbara Employee Option Plan, and

• other remuneration such as superannuation.

The combination of these comprises the executive’s total
remuneration.

Base pay
Base pay is structured as a total employment cost package
which may be delivered as a combination of cash and
prescribed beneﬁts at each executive’s discretion.

Executives are offered a competitive base pay. External
remuneration consultants provide analysis and advice to assist
in determining base pay that reﬂects a comparable market
role. Base pay for senior executives is reviewed annually to
ensure the executive’s pay is competitive with the market.
An executive’s pay is also reviewed on promotion.

There are no guaranteed base pay increases included in any
senior executive’s contracts.

Beneﬁts
Executives receive beneﬁts including as appropriate, car
and/or living away from home allowances.

Superannuation
Employees have a choice of superannuation funds and all
beneﬁts accumulate.

Short-term incentives
For the year ended 30 June 2005, KPIs required performance
in improving operational efﬁciencies as well as other key,
strategic ﬁnancial and non-ﬁnancial measures linked to
drivers of performance in future reporting periods.

The Remuneration Committee is responsible for assessing
whether the KPIs are met. To help make this assessment, the
committee receives detailed reports on performance from
management and as appropriate, external remuneration
consultants.

St Barbara Employee Option Plan
Information on the St Barbara Option Plan is set out on
page 63.

B Details of remuneration
Amounts of remuneration
Details of the remuneration of each director of St Barbara
and each of the ﬁve executives of the company and the
consolidated entity who received the highest remuneration
for the year ended 30 June 2005 as reﬂected in the results
of the Company for that year are set out in the following
tables. Remuneration for directors and executives is
reviewed annually. Cash bonuses are directly related to
performance.

Directors Report
continued

Directors of St Barbara
2005

Primary

Post-employment

Cash
salary and
fees
$

Non-
monetary
beneﬁts
$

Cash
bonus
$

Super-
annuation
$

Retirement
beneﬁts
$

87,114

7,840

1 276,178 2 250,000

40,000

8,652

Option
Value
Current
Date
$

Remuner
-ation as
Option
Value
%

Total
$

94,954

3 914,614

1,489,444

61.4

7,543

4 245,616

37,716

4,701

5 73,007

478,716

250,000

40,000

423

6,571

31,029

290,875

5,124

79,578

245,616

914,614

1,959,975

Chairman

S J C Wise

Managing Director & CEO

E Eshuys

Former Executive

Chairman

S W Miller

Non executive directors

R Knight *

H G Tuten **

M K Wheatley

Total

Includes consulting fees paid prior to employment.

1
2 Provision for bonus included in the 2005 ﬁnancial year results, and paid subsequent to balance date.
3 During the 2005 ﬁnancial year, E Eshuys was issued executive options, with the approval of shareholders at the 2004 Annual

General Meeting. Details are as follows:

Grant date

23 Dec 04

Number

5,000,000

Exercise price

0.0472

0.1500

Expiry

23 Dec 09

23 Dec 08

23 Dec 09

23 Dec 10

23 Dec 11

Vesting condition

Continued
employment as
Managing Director
& CEO

Vesting

On grant

21 Jul 05

21 Jul 06

14 Sep 05

14 Sep 06

14 Sep 07

14 Sep 08

For statutory purposes, E Eshuys’ options are valued as at grant date being the date of shareholder approval apportioned
on a pro-rata basis for the period of service to vesting dates. The valuation assumes that all options granted will vest. The
pricing of the exercise terms of these options was agreed at prior dates;
- 21 July 2004 15,000,000 options exercisable at $0.0472 (being the volume weighted average share price for the month

after Mr Eshuys was ﬁrst appointed a Director)

- 14 September 2004 20,000,000 options exercisable at $0.15 (closing market price of $0.044)
4 S W Miller received a termination package comprising accrued leave entitlements and redundancy.
5
* R Knight was appointed a director on 25 May 2005
** H G Tuten has declined to receive directors’ fees

Includes back pay of $27,135 and superannuation thereon of $2,442 relating to the previous ﬁnancial year.

Total remuneration of directors of St Barbara for the year ended 30 June 2004 is set out below. Information is aggregated
except for Directors in ofﬁce during both the current and preceding year.

2004

Primary

Post-employment

Cash
salary and
fees
$

Non-
monetary
beneﬁts
$

Cash
bonus
$

Super-
annuation
$

Retirement
beneﬁts
$

Option
Value
Current
Date
$

Former Executive Chairman

S W Miller

Non executive directors

H G Tuten **

M K Wheatley

KA Dundo

(resigned 18/07/04)

GB Speechly

(resigned 28/11/03)

Total

400,000

27,135

100,000

20,833

547,968

Other executives of St Barbara

11,324

80,000

2,446

9,000

1,875

93,321

Remuner
-ation as
Option
Value
%

Total
$

491,324

29,581

109,000

652,613

2005

Primary

Post-employment

Cash
salary and
fees
$

1 148,292

71,499

227,788

145,000

3 131,500

724,079

R J Kennedy

CFO & Company Secretary

P Thompson

GM – Exploration

M R Reed 3

GM – Operations

G C Miller

GM – Special Projects

G Viska

GM - Commercial

Total

Non-
monetary
beneﬁts
$

Cash
bonus
$

Super-
annuation
$

Retirement
beneﬁts
$

8,333

10,916

6,885

21,750

8,333

39,551

Option
Value
Current
Date
$

Remuner
-ation as
Option
Value
%

Total
$

2 46,276

213,817

21.6

2 47,949

126,333

38.0

227,788

166,750

131,500

94,225

866,188

includes consulting fees paid prior to employment

1
2 employee options issued on commencement of employment valued at grant date in accordance with AASB 1046 Director and

Executive Disclosures

3 executives in receipt of consulting fees
All executives commenced with St Barbara during the 2005 ﬁnancial year save for G C Miller who is a continuing executive.

Directors Report
continued

Total remuneration of executives of St Barbara for the year ended 30 June 2004 is set out below. Information is aggregated
except for executives in ofﬁce during both the current and preceding year.

2004

Primary

Post-employment

Cash
salary and
fees

Cash
bonus
$

Non-
monetary
beneﬁts

Super-
annuation
$

Retirement
beneﬁts
$

Options
$

Total
$

G C Miller

G M – Special Projects

R T Calnan

(Resigned 31/10/04)

145,000

169,000

P J Richardson

150,000

(Resigned 30/11/04)

C W Davis

(Resigned 31/10/04)

E L Boyd

(Resigned 31/12/04)

A D Rule

(Resigned 15/12/03)

Total

142,622

120,698

87,796

815,116

3,320

11,446

21,750

62,600

10,789

15,000

9,048

21,393

214

9,511

3,320

11,875

71,250

38,137

142,129

71,250

$170,070

243,046

175,789

173,063

130,423

174,241

1,066,632

C Service agreements
Remuneration and other terms of employment for the Managing Director and the speciﬁed executives are formalised in service
agreements. Each of these agreements provide for the provision of performance-related cash bonuses, other beneﬁts including
allowances and participation, when eligible, in the St Barbara Employee Option Plan. Other major provisions of the agreements
relating to remuneration are set out below.

All contracts with executives may be terminated early by either party with one month’s notice, subject to termination payments
as detailed below.

E Eshuys, Managing Director & CEO
The Company may terminate the contract by providing three months’ notice and at the end of the notice period paying the
executive nine months’ salary. E Eshuys may terminate the contract by giving four months’ notice.

R J Kennedy, Chief Financial Ofﬁcer & Company Secretary
The notice period for terminating R Kennedy’s contract is three months’ during his ﬁrst year of service, four and a half months
for between one and three years of service and six months after three years. R Kennedy is required to give three month’s
notice of termination.

D Share-based compensation
Options other than those issued to Mr Eshuys (refer Section E) were granted under the St Barbara Employee Option Plan which
was approved by shareholders at the 2001 annual general meeting. Staff eligible to participate in the plan are generally either
of supervisor level and above or employees who have been continuously employed by the consolidated entity for a period of
at least one year.

Options are granted under the plan for no consideration. Options granted during the year had a three year term and vested
on the grant date.

The terms and conditions of each grant of options granted under the St Barbara Employee Option Plan affecting remuneration
in this or future reporting periods are as follows:

Issued to

Grant date

Expiry date

Exercise price

Value per option at grant date

Date exercisable

R Kennedy

2 Dec 04

2 Dec 07

P Thompson

16 Dec 04

2 Dec 07

$0.08

$0.46

$0.48

Anytime from grant date

Options granted under the plan carry no dividend or voting rights.

When exercisable, each option is convertible into one ordinary share.

The exercise price of options is equal to or greater than the closing market price on the Australian Stock Exchange on the day
the options are granted.

E Managing Director & CEO KPIs
In respect of the 2005 ﬁnancial year, E Eshuys achieved 100% of the potential bonus available for that year.

The key performance indicators relevant to determination of the bonus for the 2005 ﬁnancial year encompassed the following
categories:
- Corporate
- Finance and administration
- Investor relations
- Exploration and development
- Business development
- Human resources/environment/community

F Valuation of options
The amounts disclosed for emoluments relating to options above are the assessed fair values at grant date of options granted to
executive directors and other executives. Fair values at grant date are independently determined using a Black-Scholes option
pricing model of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

options are granted for no consideration
exercise price

The model inputs for options granted during the year ended 30 June 2005 included:
i)
ii)
iii) grant date
iv) expiry date
v)
vi) expected price volatility of the company’s shares
vii) expected dividend yield
viii) risk-free interest rate

share price at grant date

Loans to directors and executives
There were no loans to directors or executives during the year.

Directors Report
continued

Share options granted to directors and the most highly remunerated ofﬁcers
Options over unissued ordinary shares of St Barbara granted during or since the end of the ﬁnancial year to any of the directors
or the ﬁve most highly remunerated ofﬁcers of the company and consolidated entity as part of their remuneration were to
E Eshuys, Managing Director and CEO as set out in Section B of this report and otherwise as follows:

Other executives of St Barbara

R J Kennedy, CFO & Company Secretary

P Thompson, General Manager Exploration

G Viska, General Manager Commercial

Options granted

Grant date

1,000,000

2 Dec 04

16 Dec 04

2 Aug 05

Shares under option
Unissued ordinary shares of St Barbara under option at the date of this report are as follows:

Type

RCF II

Expiry

Issue price of shares

Number under option

Between 15 Jul 05 and 24 May 08

Between 11.4¢ and 21.3¢

Executive options

Employee options

Between 31 Dec 05 and 23 Dec 11

Between 4.7¢ and 15¢

Between 31 Aug 05 and 17 Jan 08

Between 8¢ and 35¢

52,862,679

36,000,000

4,750,000

93,612,679

No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.

Shares issued on the exercise of options
There were no ordinary shares of St Barbara issued during the year ended 30 June 2005 on the exercise of options granted under
the St Barbara Employee Option Plan. No other shares have been issued since that date.

Insurance of ofﬁcers
During the ﬁnancial year, St Barbara paid a premium of $172,373 including GST and charges, to insure the directors and ofﬁcers
of the company and its Australian-based controlled entities.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the ofﬁcers in their capacity as ofﬁcers in their capacity as ofﬁcers of entities in the consolidated entity, and any other
payments arising from liabilities incurred by the ofﬁcers in connection with such proceedings, other than where such liabilities
arise out of conduct involving a wilful breach of duty by the ofﬁcers or the improper use by the ofﬁcers of their position or
of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to
apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on
behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the
Corporations Act 2001.

Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the consolidated entity are important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided
during the year are set out below.

The board of directors has considered the position and, in accordance with the advice received from the Audit Committee is
satisﬁ ed that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisﬁ ed that the provision of non-audit services by the auditor, as set
out below, did not comprise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and

objectivity of the auditor

• none of the services undermine the general principles relating to auditor independence as set out in Professional Statement
F1, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the
company, acting as advocate for the company or jointly sharing economic risk and rewards.

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 36.

During the year the following fees were paid or payable for services provided by the auditor of
the parent entity, its related practices and non-related audit ﬁ rms:

Audit services

PricewaterhouseCoopers Australian ﬁ rm:

Audit and review of ﬁ nancial reports and other audit work under the Corporations Act 2001

Total remuneration for audit services

Taxation services

PricewaterhouseCoopers Australian ﬁ rm:

Consolidated

2005

2004

126,632

117,786

Tax compliance services, including review of company income tax returns

Total remuneration for taxation services

108,726

29,200

Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission,
relating to the “rounding off” of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in
accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Auditor
PricewaterhouseCoopers continues in ofﬁ ce in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of the directors.

E Eshuys
E Eshuys
Director

Perth, 30 September 2005

Auditors’ Independence Declaration

Financials

Statements of Financial Performance
for the year ended 30 June 2005

Revenue from sale of gold

Other revenues from outside operating activities

Total revenue from ordinary activities

Changes in inventories of ﬁnished goods

Raw materials and consumables used

Carrying value of net assets and non current
assets sold

Contract mining, cartage, milling, maintenance,
labour and consultants

Tenement rent and rates

Royalty cost expenses

Employee beneﬁts expenses

Exploration drilling and assay expenditure

Loss on subsidiary becoming an associate

Share of net loss of associate

Provision for diminution in value of investments

Provision
controlled entities

for diminution

investment

Write down of mining development expenses

Write down of exploration tenements

Depreciation and amortisation expenses

Other expenses from ordinary activities

Earnings/(loss) before interest and tax (EBIT)

Borrowing cost expense

Loss from ordinary activities before related
income tax expense

Income tax expense

Loss from ordinary activities after related
income tax expense

Consolidated

Company

30 June
2005

$’000

46,553

20,948

67,501

30 June
2004

30 June
2005

$’000

21,972

10,460

32,432

$’000

46,553

20,395

66,948

30 June
2004

$’000

21,972

10,871

32,843

Notes

(687)

(6,640)

(3,691)

(9,359)

(687)

(6,640)

(3,691)

(9,359)

(14,578)

(6,849)

(14,541)

(6,849)

(20,558)

(2,211)

(1,265)

(7,256)

(3,896)

(272)

(577)

(773)

(775)

(8,093)

(6,093)

(6,173)

(524)

(8,685)

(1,329)

(671)

(6,165)

(4,360)

(6,497)

(318)

(2,726)

(2,930)

(21,148)

(4,080)

(20,558)

(2,211)

(1,265)

(7,256)

(3,896)

(773)

(775)

(8,093)

(5,288)

(5,035)

(524)

(8,000)

(1,329)

(671)

(5,876)

(1,566)

(12,348)

(6,497)

(318)

(2,721)

(1,806)

(28,188)

(3,741)

(6,697)

(25,228)

(5,559)

(31,929)

(6,697)

(25,228)

(5,559)

(31,929)

Net loss attributable to outside equity interests

913

loss attributable to members of the

Net
Company

Total changes in equity attributable to members
of the Company other than those resulting from
transactions with owners as owners

(6,697)

(24,315)

(5,559)

(31,929)

(6,697)

(24,315)

(5,559)

(31,929)

Basic and diluted loss per share (cents per share)

(1.04).

(4.70).

The above Statements of Financial Performance should be read in conjunction with the accompanying notes.

Statements of Financial Position
as at 30 June 2005

Assets

Current assets

Cash assets

Receivables

Other ﬁnancial assets

Inventories

Assets held for resale

Other

Non-current assets

Restricted cash

Receivables

Property, plant and equipment

Mining properties

Total Assets

Liabilities

Current liabilities

Payables

Interest bearing liabilities

Provisions

Non-current liabilities

Payables

Interest bearing liabilities

Provisions

Total Liabilities

Net Assets

Equity

Contributed equity

Option reserve

Accumulated losses

Parent entity interest

Outside equity interest

Total Equity

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

Notes

16,273

4,767

4,448

21,072

1,864

48,424

11,801

8,996

14,848

35,645

84,069

16,225

1,541

119

17,885

7,000

39,111

46,111

63,996

12,849

1,512

188

777

630

16,014

3,108

4,947

42,401

50,456

66,470

6,691

9,832

751

17,274

4,269

4,344

16,273

4,767

179

4,448

21,072

1,864

48,603

11,801

595

8,137

14,848

35,381

83,984

16,225

1,541

119

17,885

11,402

7,000

39,111

57,513

21,618

75,398

374

21,888

777

599

23,697

2,765

1,140

3,821

13,538

21,264

44,961

6,067

8,932

751

15,750

11,484

4,269

15,828

31,578

20,073

44,852

8,586

13,383

135,053

2,443

139,400

2,443

135,053

139,400

2,443

(117,423)

(115,835)

(128,910)

(128,460)

20,073

26,008

18,844

44,852

8,586

13,383

8,586

13,383

The above Statements of Financial Position should be read in conjunction with the accompanying notes.

Statements of Cash Flows
for the year ended 30 June 2005

Cash Flows from Operating Activities

Cash receipts in the course of operations

(inclusive of goods and services tax)

Payments to suppliers and employees

(inclusive of goods and services tax)

Interest received

Borrowing costs paid and gold lease fees

Finance charges - ﬁnance leases

- hire purchase agreements

Net cash ﬂows (used in)/provided by operating activities

Cash Flows from Investing Activities

Payments in respect of exploration, evaluation and
development

Payments for property, plant and equipment

Payments for acquisition of business combination,
including associated expenses

Cash received from tenements sold

Cash received from investments sold

Payments for investment in listed securities

Net funds from controlled entities

Cash disposed on sale of controlled entity

Proceeds from sale of royalties, property,
plant and equipment

Net cash ﬂows provided by investing activities

Cash Flows from Financing Activities

Principal repayments under secured loans

Movement in restricted cash

Proceeds from borrowings

Proceeds from issue of shares and other equity
securities

Principal repayments - ﬁnance leases

- hire purchase agreements

- other

Net cash ﬂows (used in)/provided by ﬁnancing activities

Net increase/(decrease) in cash

Cash at the beginning of the ﬁnancial year

Cash at the end of the ﬁnancial year

Non-cash ﬁnancing and investing activities

Financing facilities

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

Notes

44,508

24,684

44,508

24,507

(44,939)

(31,712)

(40,348)

(27,799)

301

(239)

(98)

(467)

(202)

(2,874)

9,862

(458)

(5,168)

4,706

5,908

(3,500)

(10,430)

9,035

4,051

(183)

(990)

(2,017)

3,424

12,849

16,273

1,343

(2,662)

(162)

(133)

301

(239)

(98)

1,056

(1,732)

(162)

(133)

(8,642)

4,124

(4,263)

(40)

(3,327)

(38)

(5,043)

(42)

(2,874)

1,020

4,984

(500)

3,584

4,003

(5,000)

465

4,500

20,017

(2,315)

(776)

16,891

12,252

597

9,862

(458)

545

5,733

12,810

(3,500)

(8,940)

8,853

4,051

(183)

(943)

(662)

16,272

1,000

4,984

490

3,483

6,592

(5,000)

808

3,500

860

(2,315)

(776)

(2,923)

(594)

595

12,849

16,273

The above Statements of Cash Flows should be read in conjunction with the accompanying notes

Notes to the Financial Statement
for the year ended 30 June 2005

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose ﬁnancial report has been prepared in accordance with Accounting Standards, other authoritative pronouncements
of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.
It is prepared in accordance with the historical cost convention, except for certain assets which, as noted, are at valuation.
Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year.
The following accounting policies have been used by the consolidated entity for the periods presented:

a) Principles of Consolidation
The consolidated ﬁnancial statements incorporate the assets and liabilities of all entities controlled by St Barbara Mines Limited
as at 30 June 2005 and the results of all controlled entities for the year then ended. St Barbara Mined Limited and its controlled
entities are together referred to in this ﬁnancial report as the consolidated entity. The effects of all transactions between
entities in the consolidated entity are eliminated in full. Outside equity interests in the results and equity of controlled entities
are shown separately in the consolidated statement of ﬁnancial performance and statement of ﬁnancial position respectively.
Where control of an entity is obtained during a ﬁnancial year, its results are included in the consolidated statement of ﬁnancial
performance from the date on which control commences. Where control of an entity ceases during a ﬁnancial year its results
are included for that part of the year during which control existed.

b) Acquisition of Assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other
assets are acquired. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the
date of acquisition plus incidental costs directly attributable to the acquisition. Where equity instruments are issued in an
acquisition the value of the instruments is their market price as at the acquisition date, unless the notional price at which they
could be placed in the market is a better indicator of fair value. Transaction costs arising from the issue of equity instruments
are charged directly against the equity raised.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of the acquisition. The discount rate used is the incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent ﬁnancier under comparable terms and conditions.

c) Recoverable Amount of Non-Current Assets
The recoverable amount of an asset is the net amount expected to be recovered through the cash inﬂows and outﬂows arising
from its continued use and subsequent disposal.
Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its
recoverable amount. Where net cash inﬂows are derived from a group of assets working together, recoverable amount is
determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense
in net proﬁt or loss in the reporting period in which the recoverable amount write-down occurs. The expected net cash ﬂows
included in determining the recoverable amounts of non current assets are not discounted.

d) Treatment of Mining Properties
All exploration and evaluation expenditure incurred by or on behalf of the Company up to the decision by the Board to proceed
with development of a mining property, is expensed as incurred. Acquired exploration assets are not written down below
acquisition cost until such time as the acquisition cost is not expected to be recovered.
Mining properties consists only of acquired exploration assets together with related mine development costs and capital assets.
The cost of mineral properties includes the cash consideration and/or the fair value of shares issued on the date the property
is acquired.
The recoverability of amounts shown for mining properties is dependent upon the existence of economically recoverable reserves;
the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain ﬁnancing to
complete the development of the properties where necessary and upon future proﬁtable production; or, alternatively, upon the
Company’s ability to recover its spent costs through a disposition of its interests.
Mine development costs relating to mineral properties are deferred until the properties are brought into commercial production,
at which time they are amortised over the estimated useful life of the related property or on a unit-of-production basis
over proven and probable reserves. Pre-production credits, including the value of marketable metals extracted during mine
development, are credited against costs incurred.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
e) Depreciation and Amortisation of Property, Plant and Equipment
The Directors have considered the economic life of mine buildings, machinery and equipment with due regard to both the
physical life limitations, assessments of economically recoverable reserves of the mine property at which the items are located,
and to possible future variations in those assessments. The estimated remaining useful life for all such assets is reviewed
regularly with annual reassessments being made for major items.
The majority of mine buildings, plant and equipment (other than freehold land) are written off over their expected economic
life. The expected useful lives are as follows:
10 years
3 to 131⁄3 years

Buildings
Plant and Equipment

The total net carrying values of mine buildings, machinery and equipment at the mine property are reviewed regularly and, to
the extent by which these values exceed their recoverable amounts, that excess is fully provided against in the ﬁnancial year
in which this is determined.
Proﬁts and losses on disposal of property, plant and equipment are taken into account in determining the result for the year.

f) Depreciation and Amortisation of Assets Held for Resale
Plant and equipment which is currently surplus to requirements and not used is not depreciated if already written down to
residual value. When those assets are used, they are depreciated on an hourly basis. The total carrying value of these assets
is not in excess of estimated market value.

g) Accounting for Income Tax
Income tax has been brought to account using the liability method of tax effect accounting. Future income tax beneﬁts relating
to tax losses are only recognised and brought to account to the extent that their realisation is virtually certain.
Income tax on cumulative timing differences is set aside to the deferred income tax or the future income tax beneﬁt accounts
at the rates which are expected to apply when those timing differences reverse.
Tax consolidation legislation
The Company and its wholly-owned Australian controlled entities have decided not to implement the tax consolidation legislation
as of 1 July 2003. The Australian Taxation Ofﬁce has not yet been notiﬁed of this decision.

h) Investments
Investments in listed and unlisted securities, other than controlled entities, are stated at cost unless, in the opinion of the
Directors, a provision for diminution in value is considered necessary. Income from investments is brought to account by the
consolidated entity when dividends are received. Controlled entities are accounted for as set out in Note 1a.
Investments in associates are accounted for in the consolidated ﬁnancial statements using the equity method. Under this
method, the consolidated entity’s share of the post-acquisition proﬁts or losses of associates is recognised in the consolidated
statement of ﬁnancial performance, and its share of post acquisition movements in reserves is recognised in consolidated
reserves. The cumulative post-acquisition movements are adjusted against the cost of the investment. Associates are those
entities over which the consolidated entity exercises signiﬁcant inﬂuence, but not control.

i) Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of ore stockpiles and gold stocks includes direct
material, direct labour, transportation costs, and variable and ﬁxed overhead costs relating to mining activities.
Costs have been assigned to inventory quantities on hand at balance date using the weighted average basis.

j) Maintenance and Repairs
Plant of the consolidated entity is required to be overhauled on a regular basis. This is managed as part of an ongoing major
cyclical maintenance programme. The costs of this maintenance are charged as expenses as incurred, except where they relate
to the replacement of a component of an asset, in which case the costs are capitalised and depreciated in accordance with note
1e). Other routine operating maintenance, repair and minor renewal costs are also charged as expenses as incurred.

k) Employee Beneﬁts
i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries and annual leave are recognised, and measured as the amount unpaid at the reporting
date at the amounts expected to be paid when the liabilities are settled. Liabilities for non accumulating sick leave are
recognised when the leave is taken and measured at the rates paid or payable.

ii) Long service leave

The liability for long service leave expected to be settled within twelve months of the reporting date is recognised in the
provisions for employee entitlements and is measured in accordance with (i) above. The liability for long service leave
expected to be settled more than twelve months from the reporting date is recognised in the provisions for employee
entitlements and measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date. Consideration is given to the length of service and the probability of achievement
of long service leave anniversary dates.
iii) Ownership-based remuneration schemes

Ownership-based remuneration is provided to employees via the Employee Option Plan. Information relating to this scheme
is set out in Note 27.
No accounting entries are made in relation to the Employee Option Plan until options are exercised, at which time the
amounts receivable from employees are recognised in the statement of ﬁnancial position as share capital. The amounts
disclosed for remuneration of Directors and executives in the Directors Report include the assessed fair values of options
at the date they were granted.

l) Leased Assets
Assets acquired under ﬁnance leases are included as property, plant and equipment in the statement of ﬁnancial position.
Finance leases effectively transfer from the lessor to the lessee substantially all the risks and beneﬁts incidental to ownership
of the leased property. Where assets are acquired by means of ﬁnance leases, the present value of the minimum lease
payments is recognised as an asset at the beginning of the lease term and amortised on a straight line basis over the expected
useful life of the leased asset. A corresponding liability is also established and each lease payment is allocated between the
liability and ﬁnance charge.
Other leases under which all the risks and beneﬁts of ownership are effectively retained by the lessor are classiﬁed as operating
leases. Operating lease payments are charged to expense over the period of expected beneﬁt.

m) Receivables
A provision is raised for any doubtful debts based on a review of all outstanding amounts at year end. Bad debts are written
off during the year in which they are identiﬁed.

n) Revenue
Amounts are recognised as sales revenue when, there has been a passing of risk to a customer, and:
- the product is in a form suitable for delivery and no further processing is required by, or on behalf of, the producer;
- the quantity and quality of the product can be determined with reasonable accuracy;
- the product has been despatched to the customer and is no longer under physical control of the producer (or property in the

product has earlier passed to the customer); and

- the selling price can be determined with reasonable accuracy.
Sales revenue represents gross proceeds from the customer. Certain sales are initially recognised at estimated sales value when
the product is shipped. Adjustments are made for variations in metal price, assay, weight and currency between the time of
shipment and the ﬁnal settlement of sales proceeds.
Revenue on sale of investments and tenements is recognised at disposal.
Interest revenue is recognised when it accrues taking into account interest rates applicable to ﬁnancial assets.

o) Cash Flows
For the purpose of the statements of cash ﬂows, cash includes cash on hand, deposits held at call which are readily convertible to
cash on hand and which are used in the cash management function on a day-to-day basis, net of outstanding bank overdrafts.
Exploration expenditure is treated as an operating cashﬂow in the current year to reﬂect the nature of the Company’s business.
Previously it was classiﬁed as investing.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
p) Foreign Currency
Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign
currency receivables and payables at balance date are translated at exchange rates at balance date. Exchange gains and losses
are brought to account in determining the proﬁt or loss for the year.
Exchange gains and losses and hedging costs arising on forward foreign exchange contracts entered into as hedges of speciﬁc
commitments are deferred on the statement of ﬁnancial position and included in the determination of the amounts at which
the hedged transactions are brought to account. All exchange gains and losses relating to other hedge transactions are brought
to account in the statement of ﬁnancial performance in the same year as the exchange differences on the items covered by
the hedge transactions.
Gains and losses on foreign currency transactions that are not accounted for as speciﬁc hedges, if any, are brought to account
as they arise and disclosed as speculative gains or losses.

q) Trade and Other Creditors
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the ﬁnancial
year and which are unpaid. These amounts are unsecured.

r) Rehabilitation and Restoration Costs
Provision is made on a straight line basis for the consolidated entity’s estimated liability under speciﬁc legislative requirements
and the conditions of its mining leases for future costs expected to be incurred in restoring areas of interest. The estimated
liability is based on the restoration work required, using existing technology, as a result of activities to date.

s) Borrowing Costs
Borrowing costs are recognised as expenses in the year in which they are incurred. Borrowing costs include interest on bank
overdrafts, short-term and long-term borrowings, ﬁnance lease charges, the fair value of equity securities issued in satisfaction
of interest and facility fees and amortisation of establishment costs and facility fees in connection with the arrangement of
borrowings.

t) Interest Bearing Liabilities
Loans are carried at their principal amounts which represent the present value of future cash ﬂows associated with servicing
the debt. Interest is accrued over the period it becomes due and is recorded as part of other creditors.

u) Rounding of Amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission,
relating to the “rounding off” of amounts in the ﬁnancial report. Amounts in the report have been rounded off in accordance
with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

v) Earnings per Share
i)

Basic earnings per share
Basic earnings per share is determined by dividing net proﬁt after income tax attributable to members of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the ﬁnancial year, adjusted for bonus elements in ordinary shares issued during the year.

ii) Diluted earnings per share

Diluted earnings per share adjusts the ﬁgures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other ﬁnancing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Details of the impact of adopting Australian Equivalents to International Financial Reporting Standards are detailed in Note
35 to the ﬁnancial statements.

2) SEGMENT INFORMATION
The Consolidated Entity operates predominantly in the gold mining and exploration industry in Australia.
The Consolidated Entity’s head ofﬁce is in Australia.

3) REVENUE
Revenue from operating activities

Revenue from sale of gold

Revenue from non-operating activities

Proceeds on sale of investments

Proceeds on sale of tenements

Proceeds on sale of royalty, property, plant and equipment

Interest received

Other

Consolidated

Company

30 June
2005

$’000

30 June
2004

30 June
2005

$’000

30 June
2004

$’000

46,553

21,972

46,553

21,972

13,675

6,662

397

164

5,063

1,020

3,486

502

389

13,675

6,109

397

164

4,984

1,000

3,483

1,056

348

Total revenue from ordinary activities

67,501

32,432

66,948

32,843

4) LOSS FROM ORDINARY ACTIVITIES
Loss from ordinary activities before income tax expense
includes the following speciﬁc net gains and expenses:

Net Gains

Net gain on disposal of:

- Investments

- Property, plant and equipment

- Tenements

Expenses

Cost of gold sales

Amortisation:

- Mining expenses

Write down of mining development expenses

Write-down of exploration tenements

Loss on disposal of property, plant and equipment

Depreciation:

- Buildings

- Plant and equipment

Borrowing costs expensed:

- Interest paid

- Convertible Note borrowing cost

- Finance charges relating to:

- ﬁnance leases

- hire purchase

Rental of premises

Royalties

Provision for:

- Rehabilitation

- Inventories

- Diminution of exploration tenements

4,319

1,369

172

1,020

4,319

853

1,000

31,360

21,165

31,360

21,165

7,287

775

736

806

513

524

263

1,265

216

1,200

1,241

318

2,462

102

1,424

1,526

1,523

2,262

162

133

4,080

274

671

495

(204)

5,256

7,287

775

736

806

513

524

263

1,265

216

1,200

1,241

318

2,462

102

1,419

1,521

1,434

2,012

162

133

3,741

274

671

495

(204)

5,256

Notes to the Financial Statement
for the year ended 30 June 2005 continued

5) INCOME TAX
a) Tax Expense

The amount of income tax expense for the ﬁnancial year differs
from the amount calculated on the loss. The differences are
reconciled as follows:

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

Loss from ordinary activities before income tax expense

(6,697)

(25,228)

(5,559)

(31,929)

Income tax calculated at 30% (2004: 30%)

2,009

7,568

1,668

9,579

Tax effect of permanent differences:

- Provision for diminution in investments

- Legal and other capital expenditure

- Sundry items

Income tax adjusted for permanent differences

Net future income tax beneﬁt not brought to account

Income tax (expense)

b) Unbooked future income tax beneﬁt

Future income tax beneﬁt attributable to operating losses

Less: offset to provision for deferred income tax

Future income tax beneﬁt attributable to timing differences
not brought to account

Future income tax beneﬁt not brought to account

These beneﬁts will only be obtained if:

(307)

(448)

(3)

(758)

1,251

(1,251)

1,280

(4,071)

(2,791)

4,545

1,754

(90)

(91)

(3)

(184)

7,384

(7,384)

33,263

(1,357)

31,906

1,674

33,580

(232)

(448)

(3)

(683)

985

(985)

1,280

(4,071)

(2,791)

4,545

1,754

(3,720)

(91)

(3)

(3,814)

5,765

(5,765)

25,809

(834)

24,975

1,602

26,577

the consolidated entity derives future assessable income of a nature and of an amount sufﬁcient to enable the beneﬁt
from the deductions for the loss to be realised; or
the consolidated entity continues to comply with the conditions for deductibility imposed by the law; and

ii)
iii) no changes in tax legislation adversely affect the consolidated entity in realising the beneﬁt from the deductions for the

losses.

c) Tax consolidation legislation
The Company and its wholly-owned Australian subsidiaries have decided not to implement tax consolidation in respect of the
year ended 30 June 2005. The Australian Taxation Ofﬁce has not yet been notiﬁed of this decision.

6) CASH ASSETS
Current

Current cash on hand

Cash on call

7) RESTRICTED CASH
Non-Current

Term deposit i

Term deposit ii iii

Consolidated

Company

30 June
2005

$’000

1,454

14,819

16,273

30 June
2004

$’000

12,848

12,849

11,754

11,801

3,068

3,108

30 June
2005

$’000

30 June
2004

$’000

1,454

14,819

16,273

11,754

11,801

2,725

2,765

i
ii

iii

Funds placed on security deposit for lease rental. The current lease expires on 31 January 2006.
Funds placed on security deposit with Macquarie Bank Limited as security for performance bonds issued by Macquarie Bank
Limited to WA Department of Industry and Resources.
Funds placed on security deposit with Westpac Banking Corporation as security for performance bonds issued by Westpac
Banking Corporation to WA Department of Industry and Resources.

8) RECEIVABLES
Current

Trade debtors

Provision for doubtful debts

Other debtors i

i Other debtors in the consolidated entity includes a
GST receivable of $1,445,005

Non-Current

Non-trade receivables from controlled entities

Less: provision for non-recovery

9) INVENTORIES
Current

Consumables and spares - at cost

Less: provision for obsolescence

Gold in circuit – at cost

2,561

(56)

2,262

4,767

2,635

(130)

2,505

1,943

4,448

576

(222)

1,158

1,512

2,561

(56)

2,262

4,767

382

(222)

214

374

2,225

(1,630)

595

2,770

(1,630)

1,140

870

(130)

740

777

2,635

(130)

2,505

1,943

4,448

870

(130)

740

777

Notes to the Financial Statement
for the year ended 30 June 2005 continued

10) ASSETS HELD FOR RESALE
Current

Investments

- At cost

- Provision for diminution

Property, plant and equipment owned

- At cost

- At fair value

- Accumulated depreciation

11) OTHER ASSETS
Current

Prepayments

12) PROPERTY, PLANT AND EQUIPMENT
Non-Current

Property, plant and equipment – at cost

Land

Buildings

Less: Accumulated depreciation

Plant and equipment

Less: Accumulated depreciation and provision for diminution

Written down value of plant and equipment

Reconciliations of the carrying amounts for each class of
property, plant and equipment are set out below:

Land

Carrying amount at the beginning of year

Disposals

Provision for diminution

Carrying amount at the end of the year

Buildings

Carrying amount at the beginning of year

Disposals

Depreciation

Carrying amount at the end of the year

Consolidated

Company

30 June
2005

$’000

30 June
2004

30 June
2005

$’000

30 June
2004

$’000

9,173

(3,069)

6,104

9,173

(3,069)

6,104

14,968

1,587

14,968

21,072

(1,529)

14,968

21,072

1,587

(1,529)

1,864

630

1,864

599

972

4,069

(3,964)

105

63,167

(55,248)

7,919

8,996

1,244

(21)

(251)

972

196

(21)

(70)

105

1,244

4,434

(4,238)

196

55,457

(51,950)

3,507

4,947

1,249

(5)

1,244

383

(85)

(102)

196

113

4,069

(3,964)

105

63,167

(55,248)

7,919

8,137

135

4,434

(4,238)

196

55,270

(51,780)

3,490

3,821

135

(22)

113

196

(21)

(70)

105

140

(5)

135

383

(85)

(102)

196

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

12) PROPERTY, PLANT AND EQUIPMENT continued
Plant and equipment

Carrying amount at the beginning of year

Additions

Disposals

Depreciation

3,507

20,200

(85)

(736)

6,748

(1,859)

(1,424)

3,490

20,200

(68)

(736)

Transfer from plant and equipment to assets held for resale

(14,967)

Carrying amount at the end of the year

7,919

8,996

3,507

4,947

7,919

8,137

13) MINING PROPERTIES
Non-Current

Opening balance

Direct expenditure

Acquired tenements

Provision for diminution

Deconsolidation adjustment

Amortisation charge for the year

Write down as per Director’s recommendation

Disposal of royalty

Closing balance

Mining properties

Areas of interest in the exploration/evaluation stage

Areas of interest in the development and production phase

42,401

13,068

(775)

(28,863)

(7,287)

(3,696)

14,848

9,067

5,781

14,848

46,372

4,383

13,538

13,068

(6,497)

(1,539)

(318)

42,401

38,705

3,696

42,401

(775)

(7,287)

(3,696)

14,848

9,067

5,781

14,848

6,730

(1,859)

(1,419)

3,490

3,821

19,224

2,668

(6,497)

(1,539)

(318)

13,538

9,842

3,696

13,538

Certain exploration interests are subject to farm-in agreements, which may result in the establishment of joint ventures in the
future.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

14) OTHER FINANCIAL ASSETS
Current

Investments in controlled entities:

- Unlisted securities (at cost)

- Listed securities (at cost)

Provision for diminution

- Market value

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

500

(312)

188

179

38,138

(16,429)

21,709

21,888

On 30 September 2004, the Company sold 100,000,000 shares in NuStar, a Company that was previously controlled. As a result
of this sale, the Company no longer exerted control and ceased to consolidate the results of NuStar from that date.

From 1 October 2004, the investment in NuStar was accounted for in the consolidated ﬁnancial statements using the equity
method of accounting and was carried at cost by the parent entity.
Details of the disposal are set out as follows:

Net assets of controlled entity disposed of:

Cash

Restricted cash

Receivables

Mining properties

Property, plant and equipment

Creditors

Interest bearing liabilities

Outside equity interest in controlled entity

Cash proceeds for sale of shares in controlled entity

Carrying value of equity accounted investment following deconsolidation

Loss on subsidiary becoming an associate

$’000

5,168

1,956

1,585

34,463

172

(896)

(1,082)

41,366

(18,595)

22,771

4,000

18,499

22,499

(272)

On 17 January 2005, the Company’s shareholding in NuStar reduced to 161,254,426 shares, representing 16.3%, and from this
date the Company ceased to account for this investment in NuStar using the equity method. The Company’s investment was
carried at the lower of cost and net realisable value at 30 June 2005.

15) PAYABLES
Current

Trade creditors and accruals

Loans from controlled entities – unsecured

Non-Current

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

16,225

6,691

16,225

6,691

16,225

5,851

216

6,067

Loans from controlled entities – unsecured

11,402

11,484

16) INTEREST BEARING LIABILITIES
Current

Hire purchase liability – secured

Convertible notes – secured 1 2

Insurance premium funding – unsecured

Other loans - secured 3 4

Non Current

Hire purchase liability – secured

Other loans - secured 3

1,465

1,541

7,000

188

6,144

1,465

3,500

9,832

1,541

7,000

188

5,244

3,500

8,932

1 On 15 July 2004, the Company announced the conversion by Ocean Resources Capital Holdings Limited (“Ocean”) of the face
value of its convertible note of $4.4 million into 55 million ordinary shares at $0.08 per share. Interest due on the convertible
note loan of $804,105 was also satisﬁed by the issue of 17,480,547 fully paid ordinary shares at $0.046 per share.

2 A subsidiary at 30 June 2004, NuStar, had a $900,000 unsecured convertible note with Claymore Capital Pty Ltd which was

repaid in October 2004. The Company deconsolidated NuStar with effect as from 30 September 2004.

3 On 29 March 2005, the Company drew down $7,000,000 from a bridge loan facility provided by Resource Capital Funds III LP
(“RCFIII”) to assist in ﬁnancing the acquisition of the gold division of Sons of Gwalia Ltd (Administrators Appointed) (“SGWGD”).
Interest is payable on funds drawn at the rate of 8% per annum, payable 6 monthly in arrears, and with the Company to
absorb withholding taxes (currently 10% of gross interest).

The loan has a maturity date of 31 December 2008 and may, at RCFIII’s election, and subject to prior shareholder approval, be
converted into 100,000,000 shares in the Company at 7¢ each. The Company has the option to repay the loan before maturity,
but if it does so, RCFIII is entitled to be issued 100,000,000 options over unissued shares in the Company’s capital with an exercise
price of 7¢ each, expiring 31 December 2008. The exercise of these options is subject to shareholder approval.
In addition, RCFIII procured ﬁnancial backing for a $21,000,000 bank guarantee facility to assist the Company replacing $30,000,000
in performance bonds with the Department of Industry and Resources WA, attaching to the tenements acquired through SGWGD
acquisition. The bank guarantee facility has an annual cost of approximately 2% per annum and expires 30 April 2007.

The loan and ﬁnancial backing for the performance bond facility are secured by ﬁrst ranking ﬁxed and ﬂoating charges over

the assets of the Company.
In addition, RCFIII has been granted a 1.5% royalty on future gold production from Meekatharra from 1 July 2007 and on the
acquired SGWGD assets from 1 January 2006, for arranging the acquisition of the ﬁnancing facilities.

4 On 8 May 2004, the Company entered into a margin lending facility with Galviston Pty Limited for $3,500,000. The amount

was secured over the investment in NuStar and was repaid in full in October 2004.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

16) INTEREST BEARING LIABILITIES continued
Assets pledged as security

The carrying amounts of assets pledged as security are:

Secured loan

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

- Market value of listed securities

6,104

18,452

6,104

18,452

First Mortgage

- Property, plant and equipment

- Other ﬁnancial assets

- Mining properties

Finance Lease

8,926

14,848

8,067

- Plant and equipment under ﬁnance lease

759

Floating Charge

- Restricted cash

- Inventories

- Receivables

Total assets pledged as security

17) PROVISIONS
Current

Employee beneﬁts

Non-Current

Employee beneﬁts

Rehabilitation

11,801

4,448

4,767

50,964

3,067

22,278

11,801

4,448

4,767

50,105

2,725

21,936

119

751

119

751

39,111

4,191

4,269

39,111

4,191

4,269

Movements in Provisions

Movements in each class of provision during the ﬁnancial year,
other than employee beneﬁts, are set out below:

Non-Current

Carrying amount at start of the year

Additional provision made on acquisition

Carrying amount at end of the year

Rehabilitation

$’000

Total

$’000

4,191

34,920

39,111

4,191

34,920

39,111

18) CONTRIBUTED EQUITY
Ordinary Share Capital

Issued and paid up share capital

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

135,053

139,400

135,053

139,400

These shares have no par value and are fully paid ordinary shares. Ordinary shares entitle the holder to participate in dividends
and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a
show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a
poll each share is entitled to one vote.

Movements in Ordinary Share Capital

Date

Details

Notes

Number of shares

Issue price

1 Jul 04

Opening Balance

15 Jul 04

Debt equity conversion

20 Jul 04

Share issue

20 Jul 04

Share placement

20 Jul 04

Share issue costs

23 Jul 04

Placement

1 Dec 04

Share issue

17 Jan 05

Share swap buy back

30 Jun 05 Closing Balance

574,149,157

55,000,000

17,480,547

42,050,000

26,591,453

21,554,172

(170,291,977)

566,533,352

0.080

0.046

0.040

0.046

0.056

0.050

$’000

139,400

4,400

804

1,682

(33)

1,223

1,200

(13,623)

135,053

1 Ocean Resources Capital Holdings Limited (“Ocean”) converted a convertible note for $4,400,000 into 55,000,000 fully paid

ordinary shares at 8¢ each.

2 Ocean accepted the issue of 17,480,547 fully paid ordinary shares in satisfaction of interest of $804,105 at 4.6¢ per share.
3 Share issue costs of $33,000 were offset against issued capital as allowed by Australian Accounting Standards.
4 Resource Capital Funds II LP (“RCFII”) accepted a placement of 26,591,453 fully paid ordinary shares at 4.6¢ per share to raise

$1,223,207 for working capital.

5 In July 2004, RCFII advanced the Company $1,200,000 which was converted into 21,554,172 fully paid ordinary shares,

following shareholder approval.

6 In the December 2004/January 2005 period the Company conducted a share swap buy back of shares, whereby 1.25 NuStar
shares owned by the Company were offered for every 1 St Barbara share bought back. A total of 170,291,977 St Barbara
shares, representing 23% of share capital at that time, were bought back in exchange for 212,864,971 NuStar shares. As a
result of the buy back, the excess of the market value over book value of NuStar shares of $5,109,000 has been applied to
accumulated losses.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

Consolidated

Company

30 June
2005
$’000

30 June
2004
$’000

30 June
2005
$’000

30 June
2004
$’000

19) OPTIONS
a) Option Reserve

Option reserve at the beginning of the ﬁnancial period

Options issued during the ﬁnancial period

Option reserve at the end of the ﬁnancial period

2,443

1,959

484

2,443

1,959

484

2,443

This option reserve arises from 44,159,394 unlisted options being issued during previous years.

b) Listed Share Options
The consolidated entity had no listed share options on issue at 30 June 2005.

c) Unlisted Share Options
At 30 June 2005, the consolidated entity had 93,612,679 unlisted share options on issue.

Unlisted options are not admitted to the ofﬁcial list of ASX.

On 20 October 1995, shareholders at a general meeting approved the Employee Share Option Plan (“ESOP”). The purpose of
the ESOP is to provide an incentive to executive ofﬁcers on the Company. No new options will be issued in the future under this
ESOP. On 28 November 2001, shareholders at a general meeting approved a new Employee Option Plan.

Each unlisted share option entitles the holder to subscribe for one ordinary share on, substantially, the following terms:

ii)

each unlisted option entitles the holder to subscribe for one ordinary share at the speciﬁed exercise prices set out
below;

the unlisted options are exercisable at any time up to 5.00pm Perth, Western Australia time on the dates set out below
by completing an option exercise form and delivering it together with the required payment for the relevant number
of ordinary shares in respect of which the unlisted options are exercised to the registered ofﬁce of the Company. Any
unlisted options not exercised by that time will lapse.

Movements in Unlisted Options

Date

Details

30 Jun 03

Balance

7 Jul 03

RCF Facility

13 Jul 03

Employee Option Plan 2001 - cancelled

26 Nov 03

RCF Facility

26 Nov 03

RCF Facility

26 Nov 03

RCF Facility

26 Nov 03

RCF Facility

3 Dec 03

Employee Option Plan 2001 – cancelled

Employee Option Plan 2001 - cancelled

B Speechly

29 Feb 04

Employee Option Plan 2001- cancelled

29 Feb 04

Employee Option Plan 2001 - cancelled

15 Jun 04

Employee Option Plan 2001 - adjustment

30 Jun 04

Employee Option Plan 2001 – cancelled

30 Jun 04

Employee Option Plan 2001 – cancelled

30 Jun 04

Closing Balance

Options issued:

2 Dec 04

Employee options

16 Dec 04

Employee options

23 Dec 04

Executive options

23 Dec 04

Executive options

Options expired:

Employee options

Other unlisted options

30 Jun 05

Closing Balance

The closing balance is comprised as follows:

Unlisted options issued in prior years to RCFII

Unlisted options transferred from RCFII to Mr Wheatley

Executive options issued during the year

Employee options issued during the year

Employee options issued in previous years

Number of 0ptions

Exercise Price

Expiry Date

$0.1138

$0.2086

$0.2124

$0.2125

$0.1138

$0.2086

$0.2124

$0.2125

$0.3500

$0.1138

$0.2086

$0.2124

$0.2125

$0.3500

$0.4000

$0.3500

$0.0800

$0.0472

7 Jan 07

26 Apr 07

24 May 08

26 Apr 07

17 Jan 08

31 Dec 04

26 Apr 07

17 Jan 08

26 Apr 07

17 Jan 08

2 Dec 07

16 Dec 07

23 Dec 09

$0.1500

23 Dec 08 to11

Various

44,905,632

11,555,962

394,016

1,934,835

3,867,849

5,874,281

200,292

983,541

1,966,155

(75,000)

14,252,357

485,953

2,386,296

257,857

(1,550,000)

(750,000)

(500,000)

(275,000)

(225,000)

50,000

(775,000)

(125,000)

84,840,026

1,000,000

15,000,000

20,000,000

37,000,000

26,100,000

2,127,347

28,227,347

93,612,679

52,862,679

1,000,000

35,000,000

2,000,000

2,750,000

93,612,679

Notes to the Financial Statement
for the year ended 30 June 2005 continued

20) ACCUMULATED LOSSES
Accumulated losses at the beginning of the ﬁnancial period

Net loss attributable to members of the Company

Share swap/buy-back (refer to Note 18)

Consolidated

Company

30 June
2005
$’000

(115,835)

(6,697)

5,109

30 June
2004
$’000

(91,520)

(24,315)

30 June
2005
$’000

(128,460)

(5,559)

5,109

30 June
2004
$’000

(96,531)

(31,929)

Accumulated losses at the end of the ﬁnancial period

(117,423)

(115,835)

(128,910)

(128,460)

21) OUTSIDE EQUITY INTEREST
Outside equity interest in:

- contributed equity

- accumulated losses opening balance

- retained loss current period

22,160

(2,403)

(913)

18,844

The outside equity interest arose from the Company’s 54.8% interest at 30 June 2004 in NuStar which reduced from 88.3% during
the previous ﬁnancial year. Refer to Note 29 for further details.

22) FINANCIAL INSTRUMENTS
a) Credit Risk Exposures
The credit risk on ﬁnancial assets of the consolidated entity which have been recognised, other than investments in shares, is
generally the carrying amount, net of any provisions for doubtful debts.

b) Interest Rate Risk Exposures
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is
set out in the following tables. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the
consolidated entity intends to hold ﬁxed rate assets and liabilities to maturity.

22) FINANCIAL INSTRUMENTS continued
30 June 2005
Financial assets

Floating
Interest
rate

Cash

Restricted cash

Receivables

Investments

Weighted average interest rate

Financial liabilities

Trade and other creditors

Other loans

Weighted average interest rate

Net ﬁnancial assets/(liabilities)

30 June 2004

Financial assets

Cash

Restricted cash

Receivables

Investments

Weighted average interest rate

Financial liabilities

Trade and other creditors

Lease liability

Other loans

Weighted average interest rate

Net ﬁnancial assets/(liabilities)

Fixed interest maturing in:

1 year or
less

Over 1 to 5
years

$’000

- .

Non-
interest
bearing

$’000

- .

4,767

6,104

10,871

Total

$’000

16,273

11,801

4,767

6,104

38,945

$’000

16,273

11,801

- .

28,074

5.12%

- .

7.00%

- .

(1,541)

8.00%

- .

(16,225)

(7,000)

- .

(16,225)

(8,541)

(24,766)

28,074

(1,541)

(7,000)

(5,354)

14,179

12,849

3,108

- .

15,957

4.72%

- .

12.08%

15,957

- .

(9,832)

7.63%

(9,832)

- .

(75)

- .

1,512

188

1,700

12,849

3,108

1,512

188

17,657

(6,691)

- .

(6,691)

- .

(9,907)

(16,598)

(75)

(4,991)

1,059

c) Net Fair Value of Financial Assets and Liabilities
i) On-Balance Sheet

The net fair value of cash and cash equivalents and non-interest bearing monetary ﬁnancial assets and ﬁnancial liabilities
of the consolidated entity approximates their carrying value. The net fair value of other monetary ﬁnancial assets and
ﬁnancial liabilities is based upon market prices.

ii) Off-Balance Sheet

The consolidated entity has potential ﬁnancial liabilities that may arise from certain contingencies disclosed in Note 25.
As explained in that note, no material losses are anticipated in respect of any of those contingencies and the net fair value
disclosed is the Directors’ estimate of amounts which would be payable by the consolidated entity as consideration for the
assumption of those contingencies by another party.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

22) FINANCIAL INSTRUMENTS continued
The carrying amounts and the net fair values of ﬁnancial assets and liabilities at balance date are:

On balance sheet ﬁnancial instruments

Financial assets

- Cash and restricted cash

- Receivables

- Traded investments

Financial liabilities

- Payables

- Other loans

2005

2004

Carrying
Amount

Net Fair
Value

$’000

Carrying
Amount

$’000

Net Fair
Value

$’000

28,074

4,767

6,104

38,945

16,225

8,541

24,766

28,074

4,767

6,991

39,832

16,225

8,541

24,766

15,957

1,512

188

17,657

10,191

6,407

16,598

15,957

1,512

188

17,657

10,191

6,407

16,598

23) DIRECTORS AND EXECUTIVE DISCLOSURES
Directors
The following persons were directors of St Barbara Mines Limited during the ﬁnancial year.

Executive Directors
- E Eshuys (appointed on 20 July 2004)
- S W Miller (removed as director and chairman on 20 July 2004)

Non-Executive Directors
- H G Tuten
- M K Wheatley
- S J C Wise (appointed Director and Chairman on 20 July 2004)
- R Knight (appointed Director on 25 May 2005)
- K A Dundo (resigned 18 July 2004)

Executives (other than directors) with the greatest authority for strategic direction and management
The following persons were the executives with the greatest authority for the strategic direction and management of the
consolidated entity (“speciﬁed executives”) during the ﬁnancial year.

Name
R Kennedy
P Thompson
G Viska
M Reed

Position
Chief Financial Ofﬁcer & Company Secretary
General Manager Exploration
General Manager Commercial
General Manager Operations

Appointment date
27 October 2004
16 December 2004
20 March 2005
20 March 2005

In accordance with the Company’s constitution, S J C Wise & R Knight are due for re-election at the 2005 Annual General Meeting.

There were no loans to directors of entities in the consolidated entity during the year to 30 June 2005.

Remuneration
Details of Director and Executive Remuneration are set out in the Directors’ Report.

Shareholding
Relevant and beneﬁcial interests in shares of the Company held by directors of the Company and consolidated entity or their
director-related entities in the Company:

Ordinary Shares – fully paid

Balance at start of year Movements during the year

Balance at end of year

Directors

S J C Wise

E Eshuys

R Knight

H G Tuten 1

M K Wheatley

S W Miller 2

K A Dundo

2,800,000

1,250,000

2,800,000

1,250,000

177,887,642

Connected Persons

Strata Mining Corporation Limited 2

RCF 1

32,200,000

129,742,017

(32,000,000)

48,145,625

1 H G Tuten is the Chairman of RCF Management LLC, the management company of RCF
2 S W Miller is a director and shareholder of Strata Mining Corporation Limited which held a relevant interest in the ordinary

share capital of St Barbara at the start of the year

Options
Relevant interests in options of the Company held by directors of the Company and consolidated entity or their director-related
entities in the Company:

Ordinary Shares – fully paid

Balance at start of year Movements during the year

Balance at end of year

S J C Wise

E Eshuys

R Knight

H G Tuten 1

M K Wheatley

S W Miller

K A Dundo

Connected Persons

RCF 1

750,000

17,500,000

35,000,000

250,000

(17,500,000)

35,000,000

1,000,000

55,990,026

(3,127,347)

52,862,679

1 H G Tuten is the Chairman of RCF Management L L C, the management company of RCF. During the year in accordance with a
pre-existing agreement, RCF transferred 1,000,000 unlisted options, exercisable at 11¢ each and expiring 31 December 2005
to M K Wheatley.

The options granted to RCF were in consideration for facility fees. All other options were granted for no consideration by the
Company. There are no voting, conversion or dividend rights related to these options.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

24) REMUNERATION OF AUDITORS
During the year the auditor of the Company, and its
related practices earned the following remuneration:

PricewaterhouseCoopers

Consolidated

Company

30 June
2005

30 June
2004

30 June
2005

30 June
2004

Remuneration for audit or review of the ﬁnancial reports of
the Company or any entity in the consolidated entity

126,632

117,786

126,632

74,486

Remuneration for other services:

- Taxation service and general advice

108,726

235,358

29,200

146,986

108,726

235,358

17,200

91,686

25) CONTINGENT LIABILITIES
Details and estimated maximum amounts of contingent liabilities, for which no provisions are included in the accounts, are as
follows:

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

a) Guarantees and Undertakings

i) The Company has given undertakings to two of its

controlled entities that it intends to provide the
necessary ﬁnancial or other support to enable them to
meet their obligations as and when they fall due

ii) Indemnity to the Company’s ﬁnanciers in respect of
guarantees provided by the bankers to the Western
Australian Department of Industry and Resources – see
Note 7 (cash backing of bonds) and Note 16 (details of
a bank guarantee facility)

32,754

3,068

32,754

2,725

b) Native Title
It is possible that Native Title, as deﬁned in the Native Title Act 1993, may be established over land in which the consolidated
entity has an interest. The Company is not currently engaged in any negotiations.

c) Litigation

i) Westgold

In late September 2000, a demand was made against the Company by Westgold Resources NL (“Westgold”) alleging loss
and damages in the sum of $6,229,921. A Writ of Summons was issued by Westgold against the Company in the Supreme
Court of Western Australia in CIV 2427 of 2000 on 20 October 2000.

The claim by Westgold arises from a series of share transactions in the Company’s shares which took place between May
and August 1997 as follows:
• On 12 May 1997, Westgold purchased 10,350,000 St Barbara shares at $0.72 per share from Mr Woss who was a director
of the Company at the time (“Woss Shares”). This share purchase took the total shares owned in the Company by
Westgold to 23,898,951 (approximately 13% of the Company equity at the time) at a total cost of $18.4 million.

• On 9 July 1997, Westgold sold all of its shareholding in the Company (which included the Woss Shares) to Montleigh
Investments Pty Ltd, a company associated with Mr Ross Atkins who was a director of the Company at the time. The
total sale consideration was $19.1 million. Approximately $8.4 million of the sale consideration was due to be paid by
30 June 1998. During 1998, Montleigh Investments Pty Ltd defaulted on payment of the deferred consideration and
Westgold recovered only $991,931 of the deferred consideration.
In these proceedings Westgold has sought to recover the balance of the deferred consideration plus interest from the
Company and Mr Woss.

The principal causes of action in Westgold’s statement of claim against the Company are as follows:
• An alleged breach of section 1001A(2) of the Corporations Act in that the Company allegedly contravened the ASX
Listing Rules by failing to notify the ASX of information alleged to have been known to it on or before 30 April 1997.
• An alleged contravention of the previous section 995(2) of the Corporations Law (being a misleading or deceptive
statement made in relation to securities in the legislation prior to the current Corporations Act) which Westgold
alleges to have been made in public releases made on or about 30 April 1997. Westgold alleges that the Company
represented that, save for certain matters, the Company’s operations were proceeding satisfactorily and that there
were no further adverse factors affecting or likely to affect the Company’s operations or ﬁnancial position when in
fact such was not the case.

All of these allegations are denied by St Barbara and the claim is being robustly defended. St Barbara has joined one of
the directors who was a director of the Company at the time to the action and in the event that the Company is found
liable (which is denied) it will seek contribution from such director.
The matter has been entered for trial but is not expected to receive a trial date until the ﬁrst quarter of 2006.
The Company has incurred legal costs to date in the order of $900,000 and will incur substantial further costs in relation to
the preparation of the matter for trial and the trial itself. Such costs could escalate in the event that there is an appeal
from the decision at ﬁrst instance. None of the current directors of the Company were directors of the Company at the
time that the above share transactions took place.

ii) Kingstream

On 2 July 2002, Kingstream Steel Limited (Subject to Deed of Company Arrangement) commenced proceedings in the
Supreme Court of Western Australia against the Company and its 100% owned subsidiary, Zygot Ltd. In early 2005,
Kingstream obtained the leave of the Court to substitute the trustees of Kingstream Steel’s Creditors Trust as plaintiffs in
these proceedings.
Kingstream’s claim against the Company and Zygot Ltd arises from the withdrawal by Zygot of three mining lease
applications (“MLA’s”). Kingstream alleges that these applications were part of the subject matter of an Option Deed
between the Company and Kingstream dated 26 March 1997 as supplemented by a Deed dated 20 January 1998 and a letter
dated 29 January 1999 from the Company’s lawyers to Kingstream. Kingstream exercised the option in February 1999.
Kingstream is seeking rectiﬁcation of the supplemental Deed to include the applications on the basis that this was the
common intention of the parties. Kingstream is seeking unquantiﬁed damages from the Company and Zygot.
The company denies that such was the common intention and denies that rectiﬁcation is available. The proceedings are
at an early stage and have been, and will continue to be, defended.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

26) COMMITMENTS FOR EXPENDITURE
a) Exploration

In order to maintain rights of tenure to mining tenements,
the consolidated entity is required to outlay in 2004/05 for
tenement rentals and minimum exploration expenditure
requirements of the Western Australian Department of Industry
and Resources. This requirement in 2004/05 will continue
for future years with the amount dependent upon tenement
holdings

b) Hire Purchase Commitments

Analysis of hire purchase commitments:

- Payable not later than one year (refer Note 16)

- Payable later than one year, not later than ﬁve years
(refer Note 16)

These commitments relate to plant and equipment and are
based on the cost of the vehicles and are payable over a period
of up to 48 months.

c) Analysis of Non-Cancellable Operating Lease Commitments

Payable not later than one year

Payable later than one year, not later than two years

The non-cancellable operating lease commitments are the net
rental payments associated with rental properties

27) EMPLOYEES
a) Employment Beneﬁt Liabilities

Provision for employee beneﬁts and directors’ beneﬁts and
related on-cost liabilities

- Current (Note 17)

- Non-current (Note 17)

Consolidated

Company

30 June
2005

$’000

30 June
2004

$’000

30 June
2005

$’000

30 June
2004

$’000

13,746

2,669

13,746

1,762

154

119

188

263

239

147

386

751

829

154

119

188

263

239

147

386

751

829

b) Number of Employees

Number of employees at ﬁnancial year end

Number
2005

c) Superannuation
The Company participates in an “accumulation” superannuation plan under which all employees are entitled to lump sum
beneﬁts on retirement, disability or death. The Company contributes various percentages of wages and salaries to the plan.
The contributions made are legally enforceable. No actuarial assessment of the plan has been made as such assessments are
inappropriate to an “accumulation” plan. The assets of the plan are sufﬁcient to satisfy all beneﬁts that have vested under
the plan in the event of its termination, or in the event of voluntary or compulsory termination, of the employment of each
employee.

d) Employee Option Plan
Shareholders approved an Employee Option Plan in November 2001. The term of options issued under the plan is ﬁve years and
the vesting period is three years from the date of grant. A total of 2,000,000 options were issued under the plan during the year
to 30 June 2005, with Directors exercising their discretion to issue them with a three year term and no vesting period. These
options are cancelled when the employee leaves the Company. A total of 2,675,000 options previously issued under the plan
were cancelled due to employees leaving the Company. There are no voting rights and no dividend rights attached to these
options. No options issued under this plan were exercised during the year to 30 June 2005. As at 30 June 2005, there were
4,750,000 options on issue under the plan with exercise prices ranging from $0.08 per share to $0.35 per share and with expiry
dates ranging from 31 August 2005 to 16 December 2007.

28) RELATED PARTIES
a) Directors and speciﬁed executives
Disclosures relating to directors and speciﬁed executives are set out in Note 23.

b) Transactions with entities in the wholly-owned group
St Barbara Mines Limited is the parent entity in the wholly-owned group comprising the Company and its wholly-owned
subsidiaries.
During the year the Company advanced loans of $nil (2004: $61,733) to entities in the wholly owned group. Repayments and
advances were received of $545,000 (2004: nil) from entities in the wholly owned group. The Company provided accounting
and administrative assistance free of charge to all its wholly-owned subsidiaries.
Loans payable to and advanced from wholly-owned subsidiaries to the Company are interest free.

c) Transactions with non-wholly owned entities in the consolidated entity
The Company provided funding to NuStar, a controlled entity but not wholly owned, for part of the year as follows:

Balance at beginning of ﬁnancial year

- net funding advanced for exploration and all other activities on normal commercial terms

- shares issued in satisfaction of debt

- administration service fee

- interest

- repayment

30 June
2005

$’000

(216)

(119)

30 June
2004

$’000

16,848

(1,703)

- .

(17,600)

120

- .

215

- .

1,398

841

(216)

The loan was repaid in full during the year. NuStar is no longer a controlled entity, and no further loans will be provided.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

28) RELATED PARTIES continued
d) Amounts receivable from and payable to entities in the
wholly-owned group and controlled entities

Aggregate amounts receivable at balance date from:

Non-current:

Entities in the wholly-owned group

Less provision for doubtful receivables

Aggregate amounts payable at balance date to:

Current:

Controlled entities

Non-current:

Entities in the wholly-owned group

Company

30 June
2005

30 June
2004

$’000

2,225

(1,630)

595

2,770

(1,630)

1,140

- .

216

11,401

11,484

e) Amounts receivable from Director related entities
At 30 June 2005, there were no amounts receivable from Director related entities.

f) Other Transactions with Directors of the Company and their Director related entities
The aggregate amounts brought to account in respect of the following types of transactions with Directors of entities in the
consolidated entities and their Director related entities were:

Director

K A Dundo

H G Tuten

Consolidated and Company

30 June

2005

2,030

30 June
2004

4,243

262,323

8,249,863

Notes

1 K A Dundo was a non-executive director of the Company up to the date of his resignation on 18 July 2004. K A Dundo is also
a partner of the legal ﬁrm, Q Legal. For the month of July 2004, Q Legal invoiced the Company for legal services provided at
normal commercial rates, amounting to $2,030 plus GST and disbursements.

2 Paid to RCF in 2005 in respect of borrowing costs relating to ﬁnance facilities and in 2004 by way of issuance of shares and options

as required under the RCF Facility. H G Tuten is the Chairman of RCF Management LLC the management company of RCF.

29) INVESTMENTS IN CONTROLLED ENTITIES
The consolidated entity consists of the Company and its wholly-owned controlled entities as follows.

Name of entity

Australian Eagle Oil Co Pty Ltd

St Barbara Pastoral Co Pty Ltd

Capvern Pty Ltd

Eagle Group Management Pty Ltd

Murchison Gold Pty Ltd

Kingkara Pty Ltd

Oakjade Pty Ltd

Regalkey Holdings Pty Ltd

Silkwest Holdings Pty Ltd

Sixteenth Ossa Pty Ltd

Vaﬁtu Pty Ltd

Zygot Pty Ltd

NuStar Mining Corporation Limited 1

Bushsun Pty Ltd* 1

* 100% subsidiary of NuStar

Class of
Shares

Ordinary

Equity holding

Cost of Company’s investment

June 2005

June 2004

June 2005

June 2004

100

6.4

100

54.8

$’000

179

$’000

179

38,138

38,317

Each company in the consolidated entity was incorporated in Australia.

1 The Company ceased consolidating NuStar on 30 September 2004 when it reduced its equity position to 44.72%. This equity
position was progressively reduced through the ﬁnancial year and at 30 June 2005 was 6.4%. Subsequent to 30 June 2005
the remaining holding was disposed of. The aggregate loss on the deconsolidation of NuStar was $272,000.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

30) RECONCILIATION OF LOSS AFTER INCOME TAX
TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

Operating loss after income tax

Depreciation and amortisation

Provision for diminution in investments and assets

Write down of exploration tenements

Provision for diminution of exploration tenements

(Proﬁt)/ loss on sale of property, plant and equipment

Proﬁt on sale of shares

Borrowing expenses paid with shares

Convertible note borrowing cost

Interest on NuStar loan account

NuStar administration service fee

Provision for non-recovery of subsidiary loan

Loss on subsidiary becoming an associate

Share of net loss of associate

Provision for doubtful debts

Provision for rehabilitation

Changes in assets and liabilities:

- Decrease in trade and other debtors

- Decrease in inventories

- Decrease in other assets

Consolidated

Company

30 June
2005

30 June
2004

30 June
2005

30 June
2004

(6,697)

(25,228)

(5,559)

(31,929)

2,726

8,093

1,023

775

(2,795)

(2,915)

272

577

(34)

312

318

5,256

2,462

(93)

1,707

739

(3,100)

1,059

(949)

2,676

3,487

620

773

775

(2,279)

(2,915)

(34)

(4,450)

1,059

(980)

2,721

12,348

318

5,256

2,462

(93)

1,707

739

(841)

(182)

270

3,314

3,487

620

Increase in trade and other creditors, employee
entitlements and provisions

Net cash (used in)/provided by operating activities

4,146

(467)

(3,624)

(8,642)

9,563

4,124

(4,460)

(4,263)

Non-Cash Financing and Investing Activities
The following transactions occurred which affected assets and liabilities which are not reﬂected in the Statements of Cash Flows.

Year ended 30 June 2005
During the year, the following transactions occurred which affected assets and liabilities and did not result in cash ﬂows:
- The conversion by Ocean Resources Capital Holdings plc (Ocean) of the face value of its convertible note of $4,400,000 into

55,000,000 ordinary shares on 15 July 2004.

- On 20 July 2004, the Company issued 17,480,547 fully paid ordinary shares to Ocean in satisfaction of interest of $804,105.
- On 1 December 2004, the Company issued 21,554,172 fully paid ordinary shares to Resource Capital Fund to convert an

unsecured advance of $1,200,000 to equity as approved at the 2005 Annual General Meeting.

- On 17 January 2005, the Company completed a share buy-back of 170,291,977 fully paid ordinary shares and in consideration

transferred to accepting shareholders 212,864,971 fully paid NuStar shares.

Year ended 30 June 2004
During the year, the following transactions occurred which affected assets and liabilities and did not result in cash ﬂows:
- The issue of 111,595,854 fully paid ordinary shares to RCF in satisfaction of the RCF interest and facility fees and the debt
for equity swap approved by shareholders at the Annual General Meeting on 25 November 2003. The value ascribed to this
issue is $8,249,863.

- Pursuant to a resolution by shareholders at the NuStar Annual General Meeting held on 12 December 2003, the Company

converted $17.6 million owing by NuStar to the Company into 352,000,000 fully paid ordinary shares in NuStar.

- Pursuant to a resolution by shareholders at the NuStar Annual General Meeting held on 12 December 2003, Claymore Capital
converted $0.1 million owing by NuStar to Claymore Capital by way of a convertible note into 2,000,000 fully paid ordinary
shares in NuStar.

- On 5 December 2003, the Company issued 35 million fully paid ordinary shares at $0.08 per share for $2.8 million to partly

satisfy the convertible note loan. This resulted in the remaining face value owing being reduced to $4.4 million.

31) FINANCING FACILITIES
Other than as set out in Note 16(iii) regarding the RCF Facility, neither the Company nor the consolidated entity have access to
lines of credit that were unutilised.

32) LOSS PER SHARE

Basic and diluted loss per share

Retained loss for the year used in the calculation
of basic earnings per share

Weighted average number of fully paid ordinary shares on issue
during the year used in the calculation of basic loss per share

Weighted average number of fully paid ordinary shares on issue
during the year used in the calculation of diluted loss per share

Consolidated

30 June
2005
cents/share

(1.04)

(4.70)

$’000

(6,697)

(24,315)

Number

644,018,641

517,843,596

644,018,641

517,843,596

33) EVENTS OCCURRING AFTER BALANCE DATE
On 26 July 2005, the Company announced:
- Extension to operations at Southern Cross based on open pit mining of Hercules and continuing underground operations at

Marvel Loch;

- An on-market share buy-back to buy back up to 10% of the Company’s issued capital (56,653,335 shares); and
- The proposed sale of unmarketable parcels of shares.
On 27 July 2005, the Company sold its remaining shares in NuStar (63,325,359 shares) and Sedimentary (15,412,082 shares) for
$3,166,268 and $2,851,234 respectively, yielding total proceeds of $6M.
On 9 August 2005, the Company announced a reserve estimate upgrade for Hercules, near Marvel Loch, Southern Cross as at
30 June 2005 using a gold price of A$550/oz and cut-off grade of 1.1g/t, to Probable Reserves of 2.3Mt at 2.5g/t for 180,000oz
of gold.

Notes to the Financial Statement
for the year ended 30 June 2005 continued

34) BUSINESS COMBINATION
On 28 March 2005, the Company acquired the Gold Division of Sons of Gwalia Ltd (Administrators Appointed) for consideration
consisting of a cash payment of $2,285,000, the replacement of existing bank guaranteed environmental performance bonds
totalling $30,000,000 and the assumption of additional performance bonds of up to $5,700,000. The fair value of net identiﬁable
assets acquired was $2,925,000. Direct transaction costs of $640,000 were also incurred.

Details of the assets and liabilities arising from the acquisition are as follows:

Property, plant and equipment

Inventories

Prepayments

Mining properties

Provision for rehabilitation

Net identiﬁable assets acquired

$’000

19,762

4,730

285

13,068

(34,920)

2,925

35) AUSTRALIAN EQUIVALENTS TO IFRS
The Australian Accounting Standards Board (AASB) has adopted International Financial Reporting Standards (IFRS) for application
to reporting periods beginning on or after 1 January 2005. The AASB has issued Australian equivalents to IFRS, and the Urgent
Issues Group has issued interpretations corresponding to IASB interpretations originated by the International Financial Reporting
Interpretations Committee (IFRIC) or the former Standing Interpretations Committee. These Australian equivalents to IFRS are
referred to hereafter as AIFRS. The adoptions of AIFRS will be ﬁrst reﬂected in the consolidated entity’s ﬁnancial statements
for the half-year ending 31 December 2005 and the year ending 30 June 2006.

Entities complying with AIFRS for the ﬁrst time will be required to restate their comparative ﬁnancial statements to amounts
reﬂecting the application of AIFRS to the comparative period. Most adjustments required on transition to AIFRS will be made,
retrospectively, against opening retained earnings as at 1 July 2004.

To facilitate the transition to AIFRS the consolidated entity has established a project team. The priority of this project team
has been to identify differences between accounting principles generally accepted in Australia (AGAAP) and AIFRS as they are
applied to the group.

The project team has analysed all of the AIFRS and has identiﬁed the accounting policy changes that will be required. In some
cases choices of accounting policies are available; including elective exemptions under Accounting Standards AASB 1 First
Time Adoption of Australian Equivalents to International Financial Reporting Standards. These choices have been analysed to
determine the most appropriate accounting policy for the consolidated entity.

The known or reliably estimable impacts on the ﬁnancial report for the year ended 30 June 2005 had it been prepared using
AIFRS are set out below. The expected ﬁnancial effects of adopting AIFRS are shown below with descriptions of the differences
in the form of reconciliations of equity and proﬁt under AGAAP to that under AIFRS. No material impacts are expected in
relation to the statements of cashﬂows.

Although the descriptions disclosed in the note are based on management’s best knowledge of expected standards and
interpretations, and current facts and circumstances, these may change. For example, ongoing work by the project team may
identify further changes amended or additional standards or interpretations may be issued by the AASB and the IASB. Therefore,
until the company prepares its ﬁrst full AIFRS ﬁnancial statements, the possibility cannot be excluded that the accompanying
disclosures may have to be adjusted.

The Alternative Investment Market of the London Stock Exchange, on which the Company is listed, requires a reconciliation of the
effect of applying IFRS for the year ended 30 June 2005 on net proﬁt and equity where IFRS are considered to be materially different to
Australian Generally Accepted Accounting Principles (“AGAAP”). This requirement has been addressed in the reconciliation below.

Consolidated

Company

30 June

Notes

2005

$000

2004

$000

2005

$000

2004

$000

Adjustments Required on Implementation of
IFRS 30 June 2005

a) Reconciliation of equity as presented under
AGAAP to that under AIFRS

Total equity under AGAAP

20,073

44,852

8,586

13,383

Adjustments to accumulated losses (net of tax)

Share based payment expense

Revaluation of available for sale investments

Accounting for impairment of assets

Proﬁt on deconsolidation of controlled entity

Adjustments to other reserves (net of tax)

Share based payment reserve

Investments fair value reserve

Total equity under AIFRS

b) Reconciliation of net loss as presented under
AGAAP to that under AIFRS

Net loss attributable to members of the
Company as reported under AGAAP

Adjustments to net loss

Share based payment expense

Revaluation of investments available for sale

Proﬁt on deconsolidation of controlled entity

Accounting for impairment of assets

Net loss attributable to outside equity interests

Net loss attributable to members of the
Company under AIFRS

iii

(664)

773

(14,192)

14,192

109

664

113

777

20,959

(14,192)

30,660

(664)

773

109

664

113

777

9,472

- .

13,383

(6,697)

(24,315)

(5,559)

(31,929)

(664)

773

14,192

(5,621)

6,369

(664)

773

- .

7,604

(23,567)

(5,450)

(31,929)

Notes to the Financial Statement
for the year ended 30 June 2005 continued

Notes Explaining the Impact of Adopting AIFRS

Equity-based compensation beneﬁts
Under AASB 2 Share based Payments, the Company would recognise the fair value of options granted to employees as
remuneration as an expense on a pro-rata basis over the vesting period in the income statement with a corresponding
adjustment to equity. Share-based payment costs are not recognised under AGAAP.
AASB 1 states that on initial adoption of AIFRS an entity is encouraged, but not required, to apply AASB 2 to equity
instruments that were granted on or before 7 November 2002. A ﬁrst time adopter is also encouraged, but not required,
to apply AASB 2 to equity instruments that were granted after 7 November 2002 that vested before the later of (a) the
date of transition to AIFRS and (b) 1 January 2005. This guidance has been used in determining the share based payments
recognised in this disclosure.

ii) Non-current assets held for sale

Under AASB 5 Non-current assets held for Sale and Discontinued Operations, a non-current asset will be classiﬁed as held
for sale if its carrying amount is to be recovered principally through a sale transaction rather than through continued
use. The asset will be measured at the lower of carrying amount and fair value, less costs to sell. Under AGAAP such
investments are valued at the lower of cost or realisable value. There is no signiﬁcant impact as at 30 June 2005, as the
measurement of the assets would have remained unchanged.

iii)

Impairment of assets
Under current AGAAP, the carrying amounts of non-current assets valued on a cost basis are reviewed at each reporting
date to determine whether they are in excess of their recoverable amount. If the carrying amount of a non-current asset
exceeds its recoverable amount, the asset is written down to the lower amount, with the write-down recognised in the
statement of ﬁnancial performance in the period in which it occurs. In assessing the recoverable amounts, the relevant
cash ﬂows have not been discounted to their present value.
Under AASB 136 Impairment of Assets, the carrying amount of the consolidated entity’s non-current assets will be reviewed
at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset
will be tested for impairment by comparing its recoverable amount to its carrying amount. If there is any indication that
any asset is impaired, the recoverable amount will be estimated for the individual asset. If it is not possible to estimate
the recoverable amount for the individual asset, the recoverable amount of the cash generating unit to which the asset
belongs will be determined. An impairment loss will be recognised whenever the carrying amount of an asset or its cash-
generating unit exceeds its recoverable amount.
If the policy required under AIFRS had been applied during the year ended 30 June 2005, the consolidated net proﬁt
would have been $14,192,000 higher as a result of the impact from the previous ﬁnancial year’s cumulative impairment
losses that would have been incurred under AIFRS policies. This is due to the deconsolidation of NuStar, for which the
impairment was related.

iv) Revenue disclosures in relation to the sale of non current assets

Under AIFRS, the revenue recognised in relation to the sale of non current assets is the net gain on the sale. This is in contrast to
the current Australian GAAP treatment under which the gross proceeds from the sale are recognised as revenue and the carrying
amount of the assets sold is recognised as an expense. The net impact on the proﬁt or loss of this difference is nil.

v) Financial instruments

AASB 139 is likely to have the following impacts:
Classiﬁcation and measurement of ﬁnancial assets and liabilities
Under AASB 139, ﬁnancial assets held by entities in the consolidated entity will be classiﬁed as either at fair value through
proﬁt or loss, held-to-maturity, available for sale or loans and receivables and, depending upon classiﬁcation, be measured
at fair value or amortised cost.
Under AASB 139:
- Investments in traded equity securities as at 30 June 2005 would be classiﬁed as available for sale and measured at fair

value, with changes in fair value recognised directly in equity until the underlying asset is derecognised.

- Receivables and ﬁnancial liabilities classiﬁcations will remain unchanged. Measurement of these instruments will
initially be at fair value with subsequent measurement at amortised cost, using the effective interest rate method.
This will result in a change of the current accounting policy, under which ﬁnancial assets are carried at the lower of

cost and recoverable amount, with changes recognised in proﬁt or loss.

vi)

Income tax
Under AASB 112 Income taxes, deferred tax balances are determined using the balance sheet method which calculates
temporary differences based on the carrying amounts of an entity’s assets and liabilities in the statement of ﬁnancial
position and their associated tax bases. In addition, current and deferred taxes attributable to amounts recognised
directly in equity are also recognised directly in equity.
This will result in a change to the current accounting policy, under which deferred tax balances are determined using the
income statement method, items are only tax-effected if they are included in the determination of pre tax accounting
proﬁt or loss and/or taxable income or loss and current and deferred taxed cannot be recognised directly in equity.
If the policy required by AASB 112 had been applied during the year ended 30 June 2005 there would not have been any
signiﬁcant differences in deferred tax balances as a result of the application of the balance sheet method.

vii) Exploration and evaluation

The Group’s existing policy for exploration and evaluation activity provides that exploration expenditure is expensed
as it is incurred. Amounts allocated to exploration as part of an acquisition are capitalised. This policy complies
with AIFRS requirements and therefore no difference is expected to result from either the treatment of costs or from
impairment testing.

Directors’ Declaration

In the directors’ opinion:

the ﬁ nancial statements and notes set out on pages 38 to 71 are in accordance with the
Corporations Act 2001, including:
i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting

requirements; and

ii) giving a true and fair view of the company’s and consolidated entity’s ﬁ nancial position as at 30 June 2005 and of their
performance, as represented by the results of their operations and their cashﬂ ows, for the ﬁ nancial year ended on that
date; and

there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and

the remuneration disclosures set out on pages 28 to 34 of the Directors Report comply with Accounting Standard AASB 1046
Director and Executive Disclosures by Disclosing Entities and the Corporations Regulations 2001.

The directors have been given the declarations by the chief executive ofﬁ cer and chief ﬁ nancial ofﬁ cer required by section
295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

Eduard Eshuys
Director

Perth, 30 September 2005

Statement of Shareholders
as at 19 September 2005

Twenty Largest Shareholders

Resource Capital Fund II LP

2 Westpac Custodian Nominees Limited

ANZ Nominees Limited

National Nominees Limited

Saracen Mineral Holdings Limited

Yamatji Marlpa Barna Baba Maaja Aboriginal Corporation

Gee Nominees Pty Ltd

Mr Yoshihito Koguchi

Colin Wise Consulting Pty Ltd

10 HSBC Custody Nominees (Australia) Limited

11 Miroma Investment Inc

Simpson Podiatry Services Pty Ltd

Citicorp Nominees Pty Limited

14 Mr Ritesh Mistry

15 Mr Koichi Sugimura

16 Mr Andrew Podgornik

17 Gull Management Pty Ltd

18 WG Holding Co Pty Ltd

Balcony Developments Pty Ltd

20 Mr Paul Varrone & Mrs Jennifer Viviette Varrone

Substantial Shareholders

Resource Capital Fund II LP

St James’ Place Recovery Trust

Distribution of Shareholdings

Number Held

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 - and over

Shares Held

% of Total

177,887,642

91,142,755

31.40

16.09

9,157,533

7,702,800

6,000,000

5,600,000

5,000,000

3,210,000

3,100,000

3,000,000

2,737,449

2,440,000

2,223,534

2,220,000

2,150,000

2,060,000

2,000,000

1,948,400

1,700,000

1.62

1.36

1.06

0.99

0.88

0.57

0.55

0.53

0.48

0.43

0.39

0.38

0.36

0.35

0.34

0.30

Shares Held

% of Total

177,887,642

40,430,000

31.40

5.65

Number of Shareholders

Number of Shares

3,364

3,343

1,181

2,231

436

10,555

2,017,589

8,603,205

9,861,794

83,457,687

462,593,077

566,533,352

The number of shareholders holding less than a marketable parcel was 4,241.

Directors’ Interests
As at the date of the Directors’ Report, the director or indirect interest of each Director of the Company in the issued securities
of the Company, or in a related corporation, was as follows:

S J C Wise

E Eshuys

R Knight

H G Tuten

Shares Held

3,100,000

1,250,000

177,887,642

M K Wheatley

Shareholder Information
as at 19 September 2005

Share Price
The Company shares were listed on the Australian Stock Exchange during the 2004/05 year. The closing share price on
30 June 2005 and on 19 September 2005 was 10 cents and 33 cents respectively.

Announcements
The Company makes both statutory announcements (activities or quarterly reports, ﬁnancial reports, changes to Directors’
interest) and speciﬁc announcements under Continuous Disclosure provisions on a timely basis. Signiﬁcant announcements
made during the year and subsequently include:

Date
15/09/05
13/09/05
12/09/05
02/09/05
31/08/05
28/08/08
24/08/08
09/08/08
09/08/05
03/08/05
01/08/05
28/07/05
26/07/05
19/07/05
28/06/05
27/05/05
27/05/05
26/05/05
28/04/05
27/04/05
30/03/05
23/03/05
21/03/05
21/03/05
16/03/05
28/02/05
07/02/05
02/02/05
01/02/05
01/02/05
01/02/05
27/01/05
25/01/05
21/01/05
21/01/05
21/01/05
18/01/05
18/01/05

Announcement
Appendix 3E On-Market Share Buy-Back
Appendix 3E On-Market Share Buy-Back
Appendix 3E On-Market Share Buy-Back
Appendix 3Y for Colin Wise
Preliminary Financial Results
Amended Drilling Result
High Grade Drilling Results
Diggers & Dealers Presentation
Hercules Reserve Upgrade
Sale of Unmarketable Parcels
Appendix 3D Changes to Buy-Back
Sale of NuStar & Sedimentary Shareholdings
Hercules, Buy-Back & Unmarketable Parcels
June 2005 Quarterly Report
Corporate File Brieﬁng
Appendix 3X for Richard Knight
Appointment of Richard Knight as Director
Form 604 – St Barbara holding in NuStar Mining Corporation
Sydney Presentation to Investors
March 2005 Quarterly Report
Appendix 3Y for Colin Wise
Melbourne Presentation to Investors
Trading Halt
Acquisition of Sons of Gwalia Gold Division Assets
Response to ASX Query
2004/05 Interim Financial Results
Further High Grade Gold Drill Hole Intersections
Appendix 3Y for Eduard Eshuys
Form 604 – St Barbara holding in NuStar Mining Corporation
Form 604 – St Barbara holding in Sedimentary Holdings
Information Summary
Form 604 – Resource Capital Fund holding in St Barbara
Appendix 3Y for Eduard Eshuys
Sedimentary Offer
Form 604 – St Barbara holding in NuStar Mining Corporation
Conﬁrmation of cancellation of shares
December 2004 Quarterly Report
Results of Buy-Back Offer

Date
22/12/04
15/12/04
10/12/04
10/12/04
07/12/04
06/12/04
06/12/04
03/12/04
03/12/04
02/12/04
02/12/04
29/11/04
29/11/04
29/11/04
26/11/04
24/11/04
19/11/04
27/10/04
27/10/04
27/10/04
25/10/04
21/10/04
07/10/04
01/10/04
30/09/04
27/09/04
20/09/04
31/08/04
26/08/04
12/08/04
03/08/04
30/07/04
27/07/04
26/07/04
23/07/04
23/07/04
23/07/04
20/07/04
20/07/04
19/07/04
15/07/04

Announcement
Shareholders Update
Dispatch of Buy-Back Booklet
Buy-Back Booklet
Appendix 3Y for Colin Wise
Appendix 3Y for Hank Tuten
Appendix 3Y for Colin Wise
Form 604 – Excalibur Mining holding in St Barbara
Form 604 – Resource Capital Fund holding in St Barbara
Form 604 – Ocean Resource Capital holding in St Barbara
Share Buy-Back Offer
Appendix 3B Notice
AGM Results
AGM Presentation
AGM Chairman’s Address
Form 604 – NuStar Mining Corporation holding in St Barbara
Form 604 - NuStar Mining Corporation holding in St Barbara
Form 604 - Ocean Resource Capital holding in St Barbara
September 2004 Quarterly Report
2004 Notice of Meeting and Proxy Form
2004 Annual Report to Shareholders
Appendix 3Y for Colin Wise
Exploration Drilling to Recommence at Meekatharra
Form 603 – NuStar Mining Corporation holding in St Barbara
Conﬁrm sale of NuStar Mining Corporation shares and Paulsen’s Royalty
30 June 2004 Financial Report
Presentation to Tokyo Investors
NuStar Mining Corporation Transaction
June 2004 Preliminary Final Report
Form 604 – Ocean Resource Capital holding in St Barbara
Settlement with Former Executive Chairman
Appendix 3Z for Stephen Miller and Kevin Dundo
June 2004 Quarterly Report
Appendix 3Y for Hank Tuten
Appendix 3Y for Eduard Eshuys and Colin Wise
Appendix 3B – Ocean Resource Capital
Issue and allotment of shares
Changes to St Barbara Board
Results of General Meeting
Issue and allotment of shares
Resignation of Kevin Dundo
Conversion convertible notes

Shareholder Information
as at 19 September 2005 continued

Investor Relations
This Annual report has been produced with the objective of ensuring that shareholders are informed on Company strategy and
performance sufﬁcient to make or retain an investment in the Company.

Announcements, statutory reports and the latest information on the Company’s projects are available on the St Barbara
website: www.stbarbara.com.au.

Financial institutions, stockbrokers and other non-shareholder entities requiring copies of this report, activities reports and
other corporate information should contact the Directors at:

Level 2, 16 Ord Street
West Perth WA 6005
Telephone:
Facsimile:
E-mail:
Web site:

+61 8 9476 5555
+61 8 9476 5500
perth@stbarbara.com.au
www.stbarbara.com.au

Shareholder Enquiries
Enquiries relating to shareholding, tax ﬁle number and notiﬁcation of change of address should be directed to:

Australia
Advanced Share Registry Services
110 Stirling Hwy
Nedlands WA 6009
Telephone:
Facsimile:

+61 8 9389 8033
+61 8 9389 7871

United Kingdom
Computershare Investor Services
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone:
Facsimile:

+44 870 703 6088
+44 870 703 6142

Corporate Directory

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Corporate Directory

Board of Directors
S J Colin Wise (Non Executive Chairman)
Eduard Eshuys (Managing Director and CEO)
Richard Knight (Non Executive Director)
Hank G Tuten (Non Executive Director)
Mark K Wheatley (Non Executive Director)

Company Secretary
Ross J Kennedy

Registered Ofﬁce
Level 2, 16 Ord Street
West Perth WA 6005
Telephone:
Facsimile:
E-mail:
Web site:

+61 8 9476 5555
+61 8 9476 5500
perth@stbarbara.com.au
www.stbarbara.com.au

Share Registry
Australia
Advanced Share Registry Services
110 Stirling Hwy
Nedlands WA 6009
Telephone:
Facsimile:
United Kingdom
Computershare Investor Services
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone:
Facsimile:

+61 8 9389 8033
+61 8 9389 7871

+44 870 703 6088
+44 870 703 6142

Bankers
Commonwealth Bank of Australia
150 St George’s Terrace
Perth WA 6000

Auditors
PricewaterhouseCoopers
QV1 Building
250 St George’s Terrace
Perth WA 6000

Solicitors
Freehills
QV1 Building
250 St George’s Terrace
Perth WA 6000

Stock Exchange Listing
Shares in St Barbara Mines Limited are quoted on both the
Australian Stock Exchange Limited and the AIM (London Stock Exchange).
Ticker symbol: SBM

w w w . s t b a r b a r a . c o m . a u

St Barbara Mines Limited