St Barbara Ltd Annual Report 2010

FY2010 Annual Report · St Barbara Ltd
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Positioned to drive value

ANNUAL REPORT 2010

Leonora

Southern Cross

OPERATIONS

The Gwalia mine at Leonora in Western Australia 
is the Company’s cornerstone asset, with 1.8 million 
ounces of gold in reserves and an indicative mine life 
in excess of nine years. Operations at Southern Cross 
in Western Australia are based around the Marvel 
Loch Underground mine and treatment plant.

CONTENTS

Chairman and Chief Executive Ofﬁ cer’s report  2

Chief Financial Ofﬁ cer’s review 

Operations report 

Discovery and Growth 

Environment, safety and social
responsibility 

Board of Directors 

Executives 

Corporate Governance 

Ore Reserves and Mineral 
Resources Statements 

8

9

14

16

18

20

21

25

St Barbara Limited 
ABN 36 009 165 066

Leonora Processing Plant

The ﬁ rst year of our three year strategy to deliver value has been successful.

Since 2009, St Barbara has focused on rejuvenating its operations, reviewing 
its organisational and performance capability and strengthening its ﬁ nancial 
position. With these elements of the strategy almost complete, it is now time 
to transition to the next phase.

With our established platform and strategy for growth, we are targeting 
an annual production rate of 500,000 ounces of gold by 2014. Achieving 
this target is a threshold point for recognition as an international scale 
gold producer.

www.stbarbara.com.au – Annual Report 2010 :: 1

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S REPORT

Positioned to drive value

FINANCIAL YEAR 2010 WAS A YEAR 

OF GETTING OUR HOUSE IN ORDER 

AND ESTABLISHING SOLID 

FOUNDATIONS FOR GROWTH.

A year of transformation and performance delivery

The Company has undergone a comprehensive 
transformation to strengthen its ﬁ nancial and operational 
capabilities. We have delivered to guidance for the past 
ﬁ ve consecutive quarters, have a strong balance sheet, 
have conﬁ rmed a clear growth proﬁ le for Leonora 
Operations, and now have the capability to actively 
pursue value accretive growth opportunities.

Operating reliability established

The successful implementation of business improvement 
programs, strengthening of operational capabilities and 
improved planning systems delivered reliable performance 
for each of the Leonora and Southern Cross Operations 
in Western Australia. Consolidated production for the 
year ending 30 June 2010 was 231,000 ounces of gold. 
Cash operating costs for each site were within guidance. 

Leonora Operations growing and expanding

The Gwalia mine at Leonora is the Company’s cornerstone 
asset and continues to provide opportunities for further 
growth. New mining areas have been identiﬁ ed, Ore 
Reserves and mine life have increased net of depletion, and 
there is an expectation of increasing Ore Reserves at depth.

This long life, high margin gold mine will generate 
signiﬁ cant long term cash ﬂ ows and fund St Barbara’s 
future growth.

2

Colin Wise 
Chairman (L)
Tim Lehany
Managing Director & CEO (R)

The recently announced 195,000 ounce net increase in 
Gwalia’s Probable Ore Reserves to 1.83 million ounces will 
underpin a future mine life of at least nine years, and 
potentially more.

During the year the Company announced the approval of 
the King of the Hills gold project at Leonora. This project 
is expected to commence production in June 2011, produce 
approximately 55,000 to 60,000 ounces of gold per annum 
for ﬁ ve to six years, and will provide an ore source to utilise 
fully available milling capacity in the Gwalia treatment 
plant. Potential exists to further extend the mine life.

Marvel Loch Mine generating positive cash ﬂ ows
The Marvel Loch Mine at Southern Cross continues to 
generate positive cash ﬂ ows, and is expected to continue 
to do so until at least April 2012. We are working to extend 
the life of mine beyond this date, and establish additional 
regional production opportunities.

Strengthening organisational capability and 
developing shared values

A major development program involving St Barbara’s 
employees at every level and location has been 
undertaken, to address gaps in the Company’s business 
processes and bolster overall business capability.

Two senior executive appointments were made during 
the year. David Rose, appointed as Chief Operating Ofﬁ cer 
in September 2009, has extensive mining experience 
across a diverse range of mineral commodities. Phil Uttley, 
appointed as Executive General Manager Discovery 
and Growth in September 2009, has extensive global 
experience in gold exploration and a successful 
discovery track record.

A Leadership Development Program covering all aspects 
of the Company’s operations was conducted during the 
year to set a very clear expectation of how we will conduct 
our business to ensure success. This program, together 
with key appointments to strategic roles, has signiﬁ cantly 
strengthened St Barbara’s organisational capability.

Strengthening the Balance Sheet

St Barbara is now in a strong ﬁ nancial position. 
Convertible Notes with a face value $100 million have 
been repurchased or redeemed. At 30 June 2010, the 
Company had $102.2 million in available cash, and 
borrowings of $15.9 million.

Creating a strong and long-lasting 
competitive position
St Barbara is now well placed to prosper, as we move 
into the growth phase of our Strategy, to drive operational 
excellence and accelerate growth opportunities.

Leonora Operations, with gold production from Gwalia 
and King of the Hills, is expected to deliver 240,000 to 
270,000 ounces of gold per annum commencing in FY12. 
Our strategic target is to achieve an annual production rate 
of 500,000 ounces of gold per annum by calendar year 2014.

Southern Cross Operations is expected to cease production 
in April FY12 unless additional reserves can be identiﬁ ed 
soon. As a consequence and in order to achieve our 
strategic target, additional sources of gold production will 
need to be acquired or developed. We are therefore 
considering the acquisition of one or more value accretive 
advanced exploration and/or gold production projects 
to achieve the 2014 production rate target.

A comprehensive evaluation has been undertaken of 
gold projects in Australia and in south east Asia; each with 
the potential to produce at least 100,000 ounces of gold 
per annum. 

Revitalising the exploration strategy

St Barbara’s new Discovery and Growth team is 
responsible for facilitating growth through successful 
exploration and evaluation of potential acquisition 
opportunities. An annual minimum expenditure of 
$15 million is committed for this work for each of the 
next three years. Additional funds are available to drill 
out discoveries.

During the year the Company’s land holdings were 
assessed for their potential economic exploration value. 
Non-core areas have now been divested, with the 
Company retaining approximately 6,000km2 of priority 
tenements. Conceptual targets have been identiﬁ ed and 
drilling programs are planned or underway in the 2011 
ﬁ scal year on ten prospects Australia-wide.

Focusing on the safety of our workforce

At the core of St Barbara values is our commitment to 
the safety of everyone in our workplaces. During the year 
to 30 June 2010, the 12 month rolling Total Recordable 
Injury Frequency Rate reduced from 14.8 to 11.1.

Although the Company is performing well relative 
to the safety statistics of the Western Australian minerals 
industry, we believe we can do better and have set 
ourselves an ambitious injury reduction target in FY11. 
A senior and experienced safety professional has been 
appointed to the Group Health and Safety role. A number 
of initiatives designed to improve safety awareness are 
gaining traction with employees and contractors alike. 
All levels of the Company are committed to striving 
to further improve the Company’s safety performance.

Engaging with the community 

The Company continues to engage with Government 
at all levels. Local councils are actively consulted on topical 
community issues as well as new projects. The Company 
contributes funds and resources for local community events.

The Company is an active member of industry 
associations, including the Western Australia Chamber 
of Minerals and Energy, Melbourne Mining Club and 
Minerals Council of Australia. We are continuing to 
develop our relationships with indigenous groups with 
land interests in the areas where we operate. 

www.stbarbara.com.au – Annual Report 2010 :: 3

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S REPORT continued

International investor concerns about mining taxes
Australia is now viewed internationally as a country with 
a relatively high cost of discovery and regulatory compliance. 
St Barbara fully supported mining industry actions to 
improve public awareness of the consequences of the 
Federal Government's then proposed Resource Super 
Proﬁ ts Tax.

While the Minerals Resources Rent Tax proposed before the 
recent Federal Government election will not apply to gold 
production, the Company is aware that the international 
investment community remains concerned about excessive 
taxing by governments in Australia.

Although international institutional investors in the 
Australian gold sector have many other global gold 
investment opportunities available to consider, St Barbara 
has managed to retain strong institutional support. 
As at 20 July 2010, more than 79% of the Company’s 
shares were held by institutional investors, including 
46% held by institutions outside of Australia.

St Barbara – Market capitalisation ($ Million)

A$m
800

600

400

200

0

   UP 97%*

30 June 2009

30 June 2010

*$120 million capital raising completed in December 2009

Acknowledging efforts and achievements 

All at St Barbara have worked hard to steer the Company 
through the transformation processes of the past year 
to deliver positive operational results.

Much has been achieved in the past twelve months. 
There is more work to do to execute our growth strategy 
and to drive value for our shareholders, and we are 
dedicating our efforts to these ends.

COLIN WISE  
CHAIRMAN  

TIM LEHANY 
MANAGING DIRECTOR & CEO

30 September 2010

BUILDING VALUE

REVITALISATION – FY10
DELIVERY TO PROMISE

GROWTH – FY11 ONWARDS
DELIVERY OF VALUE

(cid:129)  Review of organisation 

capability and performance 
completed 

(cid:129)  Revitalised operations

(cid:129)  Strengthened ﬁ nancial position

(cid:129)  Strong cash ﬂ ows 

from FY12 onwards

(cid:129)  Growth targets 
being pursued

(cid:129)  Exploration to deliver value

3 Year Plan

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o
H
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a
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4

 
Positioned for growth

FOR THE PAST YEAR, WE HAVE SUCCESSFULLY PURSUED A 
THREE-PRONGED GROWTH STRATEGY FOCUSED ON PRODUCING 
MORE GOLD AND EXPLORING FOR NEW MINE OPPORTUNITIES. 
HERE IS A SUMMARY OF HOW OUR STRATEGY IS PROGRESSING. 

STRATEGY 1

LEVERAGING THE VALUE OF GWALIA – CORNERSTONE ASSET

PROGRESS IN FY10

(i)  Gwalia mine

(cid:129)  Increase in ore haulage from 600,000 tonnes per 

annum to 660,000–700,000 tonnes per annum rate. 

(cid:129)  New areas for mining identiﬁ ed. Upper South West 

Branch extensions identiﬁ ed and development access 
underway through the Adam and Beech declines.

(cid:129)  Increase in Gwalia Probable Ore Reserves 

of 195,000 ounces of gold, net of production in FY10.

(ii)  Leonora Operations generally 

(cid:129)  King of the Hills development approved. This new 
project is expected to deliver 55-60Koz of gold per 
annum for 5 to 6 years, commencing in June 2011.

(cid:129)  Third party ore has been accessed to utilise available 

mill capacity at the Gwalia processing plant.

PRIORITIES IN FY11

(cid:129)  Haulage optimisation study based on the current Gwalia 
Life of Mine plan to be completed – to identify potential 
haulage cost savings and/or production efﬁ ciencies.

(cid:129)  Bring King of the Hills into production on budget 

and on time.

(cid:129)  Continue to access third party ore until June 2011 
when King of the Hills ore production commences.

(cid:129)  Explore cost effective opportunities to increase Gwalia 

processing plant capacity.

www.stbarbara.com.au – Annual Report 2010 :: 5

Positioned for growth

DISCOVERY AND GROWTH HAS BEEN REFRESHED WITH A NEW STRUCTURE 
AND A NEW APPROACH. EXPLORATION EXPENDITURE FOR FY11 IS FORECAST 
AT $15M. FURTHER FUNDS WILL BE MADE AVAILABLE FOR DISCOVERIES, 
AND / OR GROWTH OPPORTUNITIES.

STRATEGY 2

DRIVING GROWTH THROUGH EXPLORATION

PROGRESS IN FY10

PRIORITIES IN FY11

(cid:129)  Economic value assessment of Company land bank, 
undertaken divestment of low priority holdings and 
retention of priority land positions.

(cid:129)  Conduct drilling programs to test targets at:

–   Thunderbox Shear, Jasper Flats,  Sunset Well, 

Malcom and Yerilla at Leonora.

(cid:129)  Development of targets for drilling on high priority 

  –   Copperhead, Corinthian and Fraser’s South 

retained land positions.

at Southern Cross.

(cid:129)  Identiﬁ cation of new land areas prospective for 

discovery and strategies developed to acquire these 
areas should they become available.

(cid:129)  Revitalisation of the Discovery and Growth team, 

including expansion of capabilities.

(cid:129)  Expansion of exploration budget to a minimum 

of $15m p.a. for three years, with additional funds 
available to drill discoveries.

  –  East Lachlan NSW and potentially Gawler Craton SA.

(cid:129)  Gwalia, at depth to extend Mineral Resources 

and potentially Ore Reserves.

(cid:129)  Conduct follow up drilling programs on targets 

of interest.

(cid:129)  Evaluate the geological potential of potential projects 

for acquisition.

6

STRATEGY 3

DRIVING VALUE GROWTH THROUGH ACQUISITION

We have set ourselves the strategic target of producing at the rate of 500,000 ounces of gold per annum by 2014. 
To achieve this we will need to acquire additional production sources for approximately 200,000 to 250,000 ounces 
of gold per annum. A key focus for the executive team in FY11 is evaluating and executing value growth opportunities.

PROGRESS IN FY10

PRIORITIES IN FY11

(cid:129)  Foundations for value growth established

(cid:129)  Complete technical evaluation of gold projects in stable 

regions of South East Asia.

(cid:129)  Assess highly ranked technical projects for capability 

to add value for St Barbara shareholders.

(cid:129)  Execute value growth strategy.

–  Executive team refreshed

–  Operational capability strengthened 

–  Financial position now strong

(cid:129)  Criteria for growth agreed

–  15% IRR for new projects (less if in proximity 

to existing infrastructure)

–  Minimum actual or potential gold production 

of 100,000+ ozs p.a.
–  Minimum ﬁ ve year life
–  Identiﬁ able potential for growth

(cid:129)  Technical evaluation completed for Australian gold projects.

CRITERIA FOR VALUE GROWTH
2010

LOWER CASH OPERATING COSTS

3
Y
G
E
T
A
R
T
S

100Koz+ PROSPECTIVE TO 200Koz PER ANNUM

MINIMUM IRR OF 15%

CONFIDENCE OF DEVELOPMENT CONSENT

RESERVE OF 5+ YEARS; RESOURCE >1Moz POTENTIAL

HIGH PROSPECTS FOR EXPLORATION SUCCESS

AUSTRALASIA AND OVERSEAS

2014

TARGET
500Koz
PER ANNUM

www.stbarbara.com.au – Annual Report 2010 :: 7

 
CHIEF FINANCIAL OFFICER’S REVIEW

Positioned to deliver results

WE ARE NOW IN A STRONG FINANCIAL POSITION

The major ﬁ nancial achievements in FY10 were:

(cid:129)  Restructuring the balance sheet, with the repayment 
of Convertible Notes with face value of $75.9 million, 
funded from the proceeds of the equity offer completed 
in December 2009;

(cid:129)  Funding procured to develop the King of the Hills mine 

at Leonora and provide working capital ﬂ exibility;

(cid:129)  Divesting the Company’s 9.7 per cent holding in Bendigo 

Mining Limited for proceeds of $9.9 million;

(cid:129)  Establishing new banking facilities with National Australia 
Bank Limited (NAB) and Barclays Bank PLC (Barclays). 
NAB provided a $25 million performance bond facility 
secured by assets, replacing a previous cash-backed 
facility. Barclays and NAB provided a 250,000 ounce 
hedge facility to underpin a minimum gold price for 
King of the Hills production; and

(cid:129)  Executing a bought put option and sold call zero cost 
option collar structure to provide price protection for 
future King of the Hills production. The collar structure 
comprises bought put options at a strike price of 
A$1,425 per ounce and sold call options at a strike price 
of A$1,615 per ounce for 250,000 ounces over a ﬁ ve 
year term. At 30 June 2010 the collar structure had a 
negative mark to market value of $38.7 million, which 
is not realised and fully reverses over the maturity of the 
option contracts. The collar structure ensures that King 
of the Hills production will receive a minimum gold price 
of $1,425 per ounce and beneﬁ t from higher spot gold 
prices up to $1,615 per ounce.

St Barbara completed the 2010 ﬁ nancial year in a strong 
ﬁ nancial position, with available cash of $102.2 million 
as at 30 June 2010 and borrowings of only $15.9 million. 
In the past 12 months the Company has worked hard to 
improve operational performance and restructure its balance 
sheet to provide greater ﬂ exibility to pursue growth options.

In the 2010 ﬁ nancial year, the Company improved its 
liquidity position and substantially reduced debt. An equity 
offer, strongly supported by St Barbara shareholders, raised 
a net $119 million to provide funds for the buy back and 
redemption of remaining Convertible Notes.

Financial Highlights

GARTH CAMPBELL-COWAN
GARTH CAMPBELL
CHIEF FINANCIAL OFFICER

Sales revenue

EBITDA (including signiﬁ cant items)

EBIT (including signiﬁ cant items)

Reported net loss after tax for the year

Total net signiﬁ cant items

EBITDA – excluding signiﬁ cant items

EBIT – excluding signiﬁ cant items

Underlying net proﬁ t after tax

8

Year Ended 30 June 2010

Year Ended 30 June 2009

$M

$M

296,760

33,793

(38,081)

(40,188)

(54,735)

73,163

16,654

14,547

281,129

39,701

(70,403)

(76,344)

(76,553)

52,445

6,150

209

 
Operations

WE PRODUCED 231,000 OUNCES OF GOLD 
AND MET GUIDANCE FOR THE YEAR

The Company’s two gold operations, based 
in Western Australia, performed well for 
the year.

Production of 231,000 ounces of gold for 
the year was at the upper end of guidance 
published in July 2009 of 205,000 to 
240,000 ounces of gold and cash operating 
costs of $790 per ounce were comfortably 
within the July 2009 guidance of $745 
to $820 per ounce.

During the year a number of productivity 
improvement measures were successfully 
introduced at both sites. Operating 
capabilities as well as planning and 
processing systems have been strengthened.

The King of the Hills project at Leonora has 
been approved for development with ﬁ rst 
gold production expected in June 2011.

A summary of gold production for the 
year follows:

St Barbara

Production Summary

Leonora 

Southern Cross 

Consolidated 

Total Cash Operating Costs

Leonora 

Southern Cross 

Consolidated 

oz

oz

oz

A$/oz

A$/oz

A$/oz

 FY10

109,148

121,870

231,018

686

883

790

Pit inspection Southern Cross Operations. Barry Arber – Health, Safety & Environmental 
Advisor (left). Stuart Jenner – Manager Health, Safety & Environment (right).

www.stbarbara.com.au – Annual Report 2010 :: 9

Operations
LEONORA

LEONORA OPERATIONS CONTINUE TO GROW

The Gwalia mine is one of Australia’s most richly endowed 
high grade gold projects with more than 6 million ounces 
of gold in historic production plus current ore reserves. 
It is on track to increase gold production to 190,000 
to 210,000 ounces of gold in FY12.

Leonora

Production Summary

Underground ore mined 

Grade 

Ore milled 

Grade 

Recovery 

Gold production 

FY10 total

621,930

5.7

632,573

5.6

95

109,148

t

g/t

t

g/t

%

oz

Development of the mine accelerated to plan with the 
Hoover Decline reaching 1311 metres below surface as 
at 30 June 2010 enabling the South West Branch to be 
accessed at the 1260 level in June 2010.

Ore production for the year was 621,930 tonnes 
@ 5.7 grams per tonne of gold (g/t Au), for 109,148 
recovered ounces of gold.

The primary source of ore for the year was South Gwalia 
Series lode, which was mined between the 1030 
and 1240 levels. Production has reconciled well 
to Ore Reserves.

The South West Branch, which will increase as a proportion 
of plant feed in the next 12 months, accounts for approximately 
87% of the Ore Reserve over the estimated mine life. 

A number of signiﬁ cant productivity improvements have 
been made during the year. Ore production efﬁ ciency 
increased as a result of establishing an in-pit Run of Mine 
(ROM) stockpile, and improving trucking efﬁ ciencies, and 
establishing an additional independent working area in the 
upper extensions to South West Branch. Signiﬁ cantly, these 
upper extensions were targeted, drilled, brought into plan 
and mining commenced, during the ﬁ nancial year.

During the June 2010 Quarter, ore production was 
achieved at an annualised rate of 780,000 tonnes 
per annum; a signiﬁ cant increase on Feasibility Study 
estimates of 600,000 tonnes per annum. Forecast haulage 
for the next three ﬁ scal years is based on haulage of 
660,000 to 700,000 tonnes of ore per annum. There 
is scope for further improvement.

A new mine decline, the Adam Decline, connected to the 
Barden Decline, commenced during the year to access the 
recently identiﬁ ed upper extensions to South West Branch. 
A second additional decline, the Beech Decline, will be 
commenced early in FY11 to access higher grade (but lower 
width) stopes in Main Lode, as well as high grade ore in the 
South West Branch. Both these declines will continue to be 
developed throughout FY11 to access new independent 
working areas and increase mining ﬂ exibility for the future. 
The ventilation system was also extended during the year 
to enable refrigerated air to be delivered to the 1190 level, 
signiﬁ cantly closer to the working areas of the mine. 

10

Excavation for an underground workshop was completed 
and is expected to be commissioned in the ﬁ rst half 
of FY11. Further infrastructure works underground are 
also planned for the coming year.

The processing plant, with production capacity of 
1.2 million tonnes of hard rock per annum, continued 
to perform reliably, achieving gold recoveries of 95% 
and plant availability of 98%. The plant operated on a 
campaign basis for the ﬁ rst half of the 2010 ﬁ nancial year. 

Following an agreement to treat a trial batch of ore from 
a third party and to meet the increased output from 
Gwalia Mine, the plant has returned to full time milling.

The Company plans to continue treatment of third party 
ore sources through most of FY11, until King of the Hills 
gold production commences in June 2011.

Pump maintenance.
Phil Macpherson – Maintenance Fitter.

www.stbarbara.com.au – Annual Report 2010 :: 11

Operations

LEONORA continued

KING OF THE HILLS, LEONORA 
– A NEW FIVE-YEAR PLUS GOLD PROJECT

In March 2010, the Company announced the decision 
to develop the King of the Hills underground gold project, 
located approximately 40kms by road from the Gwalia 
mill, where the ore will be processed.

Pre-development works to date included dewatering the 
Tarmoola open pit where the portal for the underground 
decline will be located, expansion of the Leonora 
accommodation village and re-establishment of site ofﬁ ces.

The Deﬁ nitive Mine Plan was completed in September 2010. 

Drilling during the June 2010 Quarter resulted in an increase 
in Mineral Resources of approximately 40,000 ounces of gold 
to a total Mineral Resource of 2.46 million tonnes at 5.3 g/t Au 
for 418,000 ounces of gold. Ore Reserves as at 30 June 2010 
totalled 1.7 million tonnes at 4.3 g/t Au for 230,000 ounces 
and will underpin an expected mine life of 5.5 years or more.

Underground loader at Gwalia.

Inspecting core samples at Leonora Operations. John Spring – Mine Geologist.

12

Operations
SOUTHERN CROSS

SOUTHERN CROSS OPERATIONS – 
CONTINUING TO MINE EFFICIENTLY, BUT 
LIMITED MINE LIFE FOR MARVEL LOCH 
UNDERGROUND

Marvel Loch Underground was the primary source 
of ore for the 2010 ﬁ nancial year. 

A total of 969,519 tonnes @ 4.0 g/t Au for 125,000 
ounces of contained gold was produced representing 
a record for the Marvel Loch Underground mine.

Supplementary ore sources included high grade 
refractory ore from the Mercury open pit, and existing 
low grade stockpiles. 

Southern Cross

Production Summary

Underground ore mined 

Grade 

Open pit ore mined 

Grade 

Ore milled 

Grade 

Recovery 

Gold production 

June FY10

969,519

4.0

23,413

5.7

1,279,751

3.4

86

121,870

t

g/t

t

g/t

t

g/t

%

oz

The refractory nature of the Mercury ore reduced milling 
recoveries during the year. However, by the June 2010 
Quarter, Mercury stockpiles were depleted and the 
commissioning of an Acacia Reactor in the gravity 
circuit in April 2010 helped to increase recoveries from 
84% to 93%.

A $3.6 million diamond drilling program was undertaken 
during the year with the objective of converting 
further Marvel Loch Underground Mineral Resources 
to Ore Reserves.

The drilling program successfully delineated the O’Brien 
lode in proximity to existing mine development. Whilst 
O’Brien is not high grade (2.3 g/t Au), it will be an 
important source of ore production in FY11. 

The drilling program intersected pegmatites below the 
southern and middle lodes in the Marvel Loch Underground 
system. These pegmatite intrusions displace the ore 
bodies, rendering them in our opinion, uneconomic to 
mine below the pegmatites. The outcome is an expected 
mine life for Marvel Loch Underground of 22 months 
from 1 July 2010.

A range of options to potentially extend the mine life 
remain under consideration.

Underground drilling.

Location map Southern Cross Operations.

www.stbarbara.com.au – Annual Report 2010 :: 13

Discovery and Growth

DISCOVERY AND GROWTH 

During the year the Company’s exploration and business 
development was revitalised. Internal and external growth 
options in the 2011 ﬁ scal year will now be pursued. The 
exploration division was rebranded ‘Discovery and Growth’, 
to align with the Company’s strategic aim of producing 
at the annual rate of 500,000 ounces of gold by 2014.

Expenditure on exploration for the year was $5.8 million, 
reduced from that of previous years, but focused on 
a strategic review of all Company land holdings to 
determine which projects are potentially of most value. 
The economic value of the Company’s portfolio was 
therefore optimised by a detailed technical review with 
the most valuable and highly ranked projects prioritised 
for targeting or drill testing. As a result, the portfolio was 
rationalised and a number of lowly ranked or non-prospective 
prospects were either sold or relinquished. The budget for 
FY11 has increased to over $15 million and will be directed 
to efﬁ cient and effective turn-over of prospects by drill 
testing the highest ranked targets.

Overall, during the year, the focus has been to target 
additional potential ore sources for the Company’s Gwalia 
and Marvel Loch Underground mines. A major initiative 
during the year was the recognition of the higher grade 
underground potential beneath the former Tarmoola open 
pit gold mine to provide additional material to the Gwalia 
processing plant. The underground mine is now known as 
the King of the Hills deposit, to reﬂ ect the name of the ﬁ rst 
historic underground workings at this site in 1898.

Engineers at Southern Cross Operations. 
Nicholas Reed (left) and Joseph Hoang (right).

Tim Canam – Geology Manager at Leonora Operations.

14

DISCOVERY 

In the Leonora, province exploration activities were 
focused on the following projects:

(cid:129)  King of the Hills – was investigated by extensional and 
inﬁ ll drilling on the Eastern and Western Flanks of the 
deposit. 53 holes and 9282 metres of drilling were 
completed and the Mineral Resource estimate was 
completed. A Deﬁ nitive Mining Study conﬁ rmed 
the project’s viability. 

(cid:129)  Tower Hill – the previous mineral resource estimates 
and ore reserve studies were re-examined to provide 
an economic comparison to the King of the Hills deposit 
to determine the preferred project. Detailed structural 
studies on the geological controls on high grade 
mineralisation were investigated as the basis for 
a revised mining plan. These investigations to optimise 
the economic viability of the deposit are continuing.

(cid:129)  Thunderbox Shear Zone – located 80km north 

of Leonora. Several sections of this prospective major 
regional shear zone were tested by geochemical air-core 
drilling, totalling 4543m. This ﬁ rst phase program 
has generated at least two highly anomalous gold 
geochemical targets which will require follow-up 
geochemical drilling. These targets will be tested 
with deeper drilling in FY11.

In the Southern Cross, province exploration activities 
were focused on the following projects:

(cid:129)  Nevoria – located 10km from the Marvel Loch 

Underground mine. Investigations were focused on 
the potential of Nevoria as a higher grade underground 
mine that could potentially supply ore to the Marvel 
Loch treatment plant. Preliminary feasibility studies 
are continuing.

(cid:129)  Others – an economic re-evaluation of the land holding 
portfolio identiﬁ ed signiﬁ cant potential and priority 
target areas at the higher grade underground historic 
mines of Copperhead, Frasers South and Corinthian 
located north of Marvel Loch. Compilation of historic 
data is underway to assess such opportunities and 
associated risks, with special focus on the largely 
unmined ‘Western Series’ lode at Copperhead. Drill 
testing of these targets is expected during the 2011 
ﬁ scal year.

Elsewhere in the Eastern Goldﬁ elds of WA, geochemical 
air-core drilling was completed on the Rocky Dam and 
Malcolm projects, with no signiﬁ cant results to date. 
Geochemical drilling is planned to continue during the 
ﬁ rst half of the current year on the newly acquired Yerilla 
prospect, located 80km south east of Leonora on the 
prospective Keith-Kilkenny structure.

In the East Lachlan mineral province of NSW, the 
Company holds 10 tenements, covering 1635km2 located 
near Nyngan. This area is being investigated for porphyry 
copper-gold style deposits under the cover of younger 
sedimentary rocks. A regional structural and targeting 
study has been completed using available geophysical and 
geological data. This interpretation has potentially indicated

Inspection of rig at Leonora Operations. Linc Downward – 
Manager Health, Safety & Environment.

the presence of a major volcano-intrusive complex. More 
detailed geophysical surveys will be completed during FY11 
and will possibly be followed by drill testing of targets.

Similarly in the Gawler Block located in South Australia, 
regional structural studies are underway using integrated 
data sets to identify prospective targets for drill testing 
and further acquisition.

GROWTH

To complement the Discovery program, the Company 
is also reviewing external growth opportunities. 
Detailed evaluation of a number of potential acquisition 
opportunities is underway, focusing on:

(cid:129)  Production opportunities that meet the Company’s 

corporate criteria, including upside geological potential.

(cid:129)  Advanced exploration projects held by other parties 
in mineral provinces considered highly prospective 
by the Company whereby, through joint-ventures 
or acquisition, the Company can provide and accelerate 
drill-out programs.

www.stbarbara.com.au – Annual Report 2010 :: 15

Environment, safety and 
social responsibility

“At the core of St Barbara values, is 
our commitment to the safety of our 
workforce. Our business has a simple 
message – Start Safe Stay Safe.”

TIM LEHANY, MD & CEO

A number of initiatives designed to improve safety awareness 
are gaining traction with employees and contractors alike. 
A comprehensive Health and Safety Environmental Management 
System (HSEMS) has been developed – a system underpinned 
by 14 key standards and focused on setting targets and reviewing 
performance to ensure continuous improvement of health and 
safety performance within the workplace. 

The HSEMS system roll-out was commenced with the foundational 
Leadership Development Program, in which St Barbara managers and 
supervisors from every area of our business participated. Other focus 
areas throughout the year have included reporting and investigation, 
critical risk controls standards, training competency and behaviour, 
and health and hygiene. Crisis and emergency Management plans 
were also rejuvenated and training undertaken for key participants.

The Company has also implemented the Positive Attitude Safety 
System (PASS™) across the business with a view to strengthening 
safety awareness. Training of all site employees and contractors 
was also completed during the year.

The Company also acknowledges the contribution made by the 
many contractors whose services we use. We hold our contractors 
to the same high standards we demand for ourselves and actively 
exchange workplace safety issues and safety performance data 
with them.

The strengthening of the Company’s safety culture is reﬂ ected 
in our reducing injury frequency rates. Year on year, the Total 
Recordable Injury Frequency Rate has fallen from 14.8 to 11.11; 
an improvement of 25%. Not withstanding our improved safety 
performance, the Company still has a long way to go to achieve 
our ultimate goal of zero injuries.

St Barbara is passionate in its commitment to health and safety 
and believes that a safe workplace, free from harm and supported 
by a culture which ensures safety, is fundamental to the success 
of the Company and the well being of our workforce.

16

Testing the water at Leonora Operations. Karrina Howard – Environmental Ofﬁ cer 
at both Southern Cross and Leonora Operations.

Environment and Sustainability

The Company continues to focus on achieving a high level 
of environmental excellence in all of its work activities. 
Sustainability principles are factored into project planning 
and design. Current mining activities incorporate 
rehabilitation work where practicable. Examples of this 
included recycling Grant’s Patch tailings at Gwalia for 
paste-ﬁ ll, and establishing in-pit mining waste dumps 
in place of reshaping natural land forms.

This strong focus has been reﬂ ected in a signiﬁ cant 
reduction in the number of reportable environmental 
incidents compared to the previous year. 

Continuing progress was made on the development of 
the Environmental Management System, with the system 
expected to be fully implemented and audited against 
ISO 14001 by the end of the 2011 calendar year.

Developing mine closure plans, as required by legislation, 
has also been a high priority during the year. Costed closure 
plans for all operations are scheduled for completion by 
the end of the 2010 calendar year.

Rehabilitation

Much of the environmental effort for the past twelve 
months has been on achieving sustainable rehabilitation 
sites, focusing almost exclusively on legacy sites. 
Work undertaken during the year included 16 hectares 
of primary earthworks undertaken at Tarmoola. Also 
topsoiling, ripping, seeding and fertilising was undertaken 
on a further 85 hectares, to complete the rehabilitation of 
three Tarmoola tailings storage facilities. Local Indigenous 
people were engaged to undertake this rehabilitation work. 
Other minor rehabilitation works were undertaken at Jasper 
Flat (ripping, fertilising and seeding) and Ulysses, at Leonora. 

Rehabilitation priorities during the 2011 ﬁ scal year will 
include legacy sites at Southern Cross Operations as 
well as waste dumps at Kailis and Tarmoola; both at 
Leonora Operations.

Unconditional Environmental Performance Bonds to 
the value of $850,000 for tenements at Southern Cross 
Operations were released during the year which, together 
with the bonds relinquished in early 2009 from Leonora, 
resulted in an overall reduction in environmental performance 
bonds of $2.4 million. 

No new land disturbance is anticipated in the foreseeable 
future. A new tailings storage facility at Gwalia will be 
constructed in an area that has been impacted by historic 
and current operations.

Community and Social Responsibility

The Company continues to conduct regular community 
brieﬁ ngs to keep the Leonora and Southern Cross 
communities informed about our activities and plans, 
and to obtain feedback. 

With the recent arrival of asylum seekers and their school 
age children in Leonora, the local school had difﬁ culty 
in obtaining accommodation for the additional staff 
brought into the town to meet the increased demand 
for teachers. The Company was able to contribute support 
to the community by offering three vacant houses to 
accommodate the additional teachers until Departmental 
accommodation becomes available. 

We continue to recognise the traditional ownership 
of the lands on which we operate, and to this end have 
maintained constructive relationships with the various 
Native Title Claimant Groups associated with these areas. 
The two Indigenous Liaison Committees – one at Leonora 
and one at Southern Cross Operations, meet regularly to 
discuss St Barbara’s activities and plans and any areas of 
concern the Indigenous groups may have. We also engage 
with Indigenous groups to undertake Aboriginal Heritage 
Surveys on land on which the Company plans to carry out 
exploration and/or mining operations.

Leonora Operations group safety meeting.

Working with core. James Crow – 
Mine Geologist at Leonora Operations.

www.stbarbara.com.au – Annual Report 2010 :: 17

Board of Directors

Seated from left

Standing from left

Robert K Rae 
B.Com (Hons), FAICD
Non-Executive Director

Timothy J Lehany 
B.E., MBA, MAusIMM
Managing Director & CEO

S J Colin Wise 
LL.B, FAICD, FAusIMM 
Chairman 
– Non-Executive

Phillip C Lockyer 
M.Sc, AWASM, DipMETALL 
Non-Executive Director

Barbara J Gibson 
B.Sc, FTSE, MAICD 
Non-Executive Director

Douglas W Bailey 
BBus (Acc), CPA, ACIS 
Non-Executive Director

18

S J Colin Wise LL.B, FAICD, FAusIMM 

Barbara J Gibson B.Sc, FTSE, MAICD 

Chairman – Non Executive

Non Executive Director

Mr Wise is an experienced corporate lawyer, consultant 
and Company Director with signiﬁ cant expertise in the 
mining and exploration industry and resources, energy and 
corporate sectors. He spent 24 years with WMC Limited, 
10 of which as General Counsel and subsequently, 4 years 
as Counsel to a New York law ﬁ rm. He has extensive 
practical experience in Australia and internationally with 
a wide range of corporate, operational and legal matters.

Ms Gibson possesses a broad range of business 
Management experience. Ms Gibson was formerly 
the General Manager Chemicals Group of Orica Limited, 
a member of the Orica Group Executive and a Director 
of Incitec Pivot Limited. She is a Fellow of the Australian 
Academy of Technical Sciences and Engineering, and 
is a recipient of the Australian Centenary Medal in 2001 
for service to Australian society in medical technology. 

He has been Chairman of St Barbara since mid 2004, 
and is a Fellow of both the Australian Institute of Company 
Directors and the Australasian Institute of Mining and 
Metallurgy. He is a member of the Advisory Board to the 
Dean of Medicine, Nursing and Health Sciences at Monash 
University and was a non-executive Director for 5 years of 
Southern Health, the largest health care service in Victoria, 
Chair of its Quality Committee, and a member of the 
Audit Committee. 

Timothy J Lehany B.E., MBA, MAusIMM 

Managing Director and Chief Executive Ofﬁ cer

Mr Lehany is a mining engineer with extensive operating 
experience over the past twenty years with a number 
of mining companies, including Newcrest Mining Limited 
and WMC Ltd. His roles covered gold, base metal and 
nickel mines. 

Douglas W Bailey BBus (Acc), CPA, ACIS 

Non Executive Director

Mr Bailey was the Chief Financial Ofﬁ cer of Woodside 
Petroleum Ltd between 2002 and 2004 and previously, 
was an Executive Director of Ashton Mining Limited from 
1990 to 2000, including the last 3 years as Chief Executive 
Ofﬁ cer. He was also a non-executive Director of Aurora 
Gold Ltd for the period 1993-2000.

Phillip C Lockyer M.Sc, AWASM, DipMETALL 

Non Executive Director

Mr Lockyer is an experienced mining engineer and metallurgist 
with over 40 years experience in the mineral industry with 
an emphasis on gold and nickel, in both underground and 
open pit operations. He was employed by WMC Resources 
for 20 years, and as General Manager for WA was 
responsible for that Company’s nickel division and gold 
operations. He also held the position of Director Operations 
for Dominion Mining Limited and Resolute Limited.

Robert K Rae B.Com (Hons), FAICD 

Non Executive Director

Mr Rae is a Director and Partner of McClintock Associates, 
a private investment bank and advisory ﬁ rm and has 
extensive industry and corporate experience. He has held 
previous directorships within the mining industry, including 
Plutonic Resources Limited, Ashton Mining Limited, WA 
Diamond Trust and Centralian Minerals Limited, and is 
currently a member of the Salvation Army Advisory Board.

www.stbarbara.com.au – Annual Report 2010 :: 19

Executives

COMPANY OFFICERS

Tim Lehany

B.E., MBA, MAusIMM
Managing Director and Chief Executive Ofﬁ cer

Tim was appointed on 2 March 2009. He is a Mining 
Executive with extensive operating experience over 
the past 22 years with a number of mining companies, 
including Newcrest Mining Limited and WMC Ltd.

He is a mining engineer, having held operating, 
Management and executive roles in gold, base metal 
and nickel mining. Tim held the position of Executive 
General Manager Operations with Newcrest Mining 
Limited prior to joining St Barbara.

David Rose

B.E. (Mining Eng), BA
Chief Operating Ofﬁ cer

David is an experienced Mining Executive with 25 years of 
industry experience having held senior positions at WMC, 
CRA, Pasminco and Rio Tinto. He is a Mining Engineer 
with a First Class Honours degree from the University 
of Queensland, and has extensive operational and project 
experience in open pit and underground mines, including 
gold, base metals, nickel, coal, diamonds and iron ore. 
He also holds a Bachelor of Arts Degree from the University 
of Oxford where he studied as a Rhodes Scholar. David Rose 
commenced on 7 September 2009.

Garth Campbell-Cowan

B.Com, Dip-Applied Finance & Investments, FCA
Chief Financial Ofﬁ cer

Garth is a Chartered Accountant with 25 years of 
experience in ﬁ nance and Management positions across 
a number of different industries. He was appointed to the 
position of Chief Financial Ofﬁ cer in September 2006 and 

is responsible for the Company’s Finance function, covering 
ﬁ nancial reporting and accounting, treasury, taxation, 
business analysis, capital Management, procurement and 
information technology. He also co-ordinates St Barbara’s 
strategy and planning activities. Prior to joining St Barbara, 
he was Director of Corporate Accounting at Telstra and has 
held senior ﬁ nance leadership roles with WMC, Newcrest 
Mining and ANZ.

Ross Kennedy

B.Com, Grad. Dip-Company Secretarial Practice,
ACA, FTIA, FAICD, M AusIMM, ACIS
Executive General Manager Corporate Services
and Company Secretary

Ross is a Chartered Secretary and has been with St Barbara 
since 2004. He has 24 years of experience in corporate 
administration, including 12 years in the minerals and 
resources sector, and 10 years of experience as a 
Management consultant. 

Ross leads the Corporate Services team. Key responsibilities 
include designing and executing plans for investor relations, 
land Management, legal and compliance, risk Management 
and ensuring that Company Secretariat functions continue 
to develop in line with the Company’s growth.

Phil Uttley

B.Sc. Hons. (Geol. & Mineral.), FAusIMM
Executive General Manager Discovery and Growth

Phil is an experienced Exploration Executive with 35 years 
of industry experience having held senior positions in Sino 
Gold, SRK Consulting and Renison Goldﬁ elds Consolidated 
(formerly Gold Fields). He has a B.Sc Hons. (Geol. & Mineral) 
from University of Queensland and is an experienced 
exploration geologist, with a demonstrated track record 
in gold discoveries and establishment of resources for gold 
production. Phil Uttley commenced on 28 September 2009.

From left: Ross Kennedy; David Rose; Tim Lehany; Garth Campbell-Cowan; Phil Uttley

20

Corporate Governance

Corporate Governance is part of the framework through 
which a Company is directed and managed. Strong corporate 
governance aids effective Management and decision making. 
St Barbara is committed to maintaining and, where possible, 
improving its corporate governance systems. 

During the 2010 ﬁ scal year the Company assessed its 
practices against the ASX Corporate Governance Principles 
and Recommendations and where necessary made appropriate 
modiﬁ cations to ensure that it is in conformance with them. 
St Barbara’s position with respect to each of the relevant 
ASX Recommendations is described below and where 
the Company was not in conformance with them this 
is explained.

St Barbara’s website contains a range of information on 
governance practices and policies including Charters for 
the Board and all Board Committees. The website address 
is www.stbarbara.com.au.

Principle 1: Lay solid foundations for 
Management and oversight

The role of the Board is to act in the best interests of 
shareholders, consider and approve the Company’s strategic 
direction, provide guidance to, and oversight of, Management 
and foster a culture of good governance. In performing 
its role, the Board at all times will endeavour to act:

I.  in a manner designed to create and continue to build 

value for shareholders;

II.  in recognition of its overriding responsibility to act 
honestly, fairly and ethically in serving the interests 
of the Company, its shareholders, employees, and 
other stakeholders; 

III. in accordance with the duties and obligations imposed 
upon Directors by the Company’s Constitution and 
applicable law. 

The speciﬁ c responsibilities of the Board are described 
in the Board Charter. 

Executive manager evaluation 

The Board has established a Remuneration Committee, 
which provides recommendations and direction for the 
Company’s remuneration practices. The Committee 
ensures that a signiﬁ cant proportion of each executive’s 
remuneration is linked to his or her performance through 
short and long-term incentives and the Company’s 
performance relative to its peers. Performance reviews are 
conducted at least annually and were undertaken during 

the 2010 ﬁ nancial year. The performance of the Managing 
Director and CEO and his direct reports is assessed against 
agreed key performance indicators with results for him 
and other senior executives to be approved by the Board. 

Principle 2: Structure the Board to add value

Independence

It is Board policy that a majority of non-executive Directors, 
including the Chairman, should be independent and free 
of any relationship that may conﬂ ict with the interests 
of the Company.

The Board deﬁ nes ‘independence’ in accordance with the 
ASX Recommendations. Each of the current non-executive 
Directors is independent. The Chairman is an independent 
non-executive Director. The Managing Director and Chief 
Executive Ofﬁ cer is the only executive on the Board.

In order to ensure that any personal, professional or other 
conﬂ ict of ‘interest’ of a Director in a matter is made known, 
each Director has contracted with the Company to disclose 
any relationship, duty or interest held that may give rise 
to such a conﬂ ict. Directors who have declared a potential 
or real conﬂ ict of interest on a particular issue may be 
excluded from all relevant Board deliberations and are 
excluded from voting on that issue.

Composition and Nomination to Board

Having regard to the importance and relative infrequency of 
Board changes as well as the small number of Board positions 
there is no nomination committee but rather the Board retains 
the nomination responsibility for itself. The consideration of 
Board composition and appointments is periodically dealt 
with in the Board’s annual programme of work. 

Although there is no speciﬁ c process of Director selection 
detailed in the Board Charter, when a need to appoint 
a Director to the Board arises, the Board evaluates its skill 
sets and needs and engages an independent search ﬁ rm 
to assist and advise the Board on identifying and selecting 
the best candidates for the given vacancy. The assessment 
process includes interviews by at least a majority of, if not 
all, Board members. The Board assesses the nominees 
against a range of speciﬁ c criteria, including their experience, 
professional skills, potential conﬂ icts of interest, the 
requirement for independence and the existing collective 
skill sets of the Board. 

www.stbarbara.com.au – Annual Report 2010 :: 21

Corporate Governance continued

Details of each current Director’s skills, qualiﬁ cations, 
experience, relevant expertise and date of appointment 
are set out in pages 36 and 37. 

As previously foreshadowed the Board undertook a formal 
review of its own performance during the year. This was 
facilitated by the Chairman and included a review of each 
individual Director’s performance. The outcomes of the 
review including opportunities to improve Board, and 
individual Director performance were formally reported 
to and considered by the Board. 

Board structure

The Board has established a number of Board Committees 
to facilitate the execution of its responsibilities. The 
Committees provide a forum for more detailed analyses
of key issues and interaction with Management. Each 
Committee reports its deliberations to the next Board 
meeting. The current Committees are: 

Health and Safety Committee

Members: Phil Lockyer (Chair), Barbara Gibson, Colin Wise.

Function: The Committee assists and advises the Board 
in relation to safety and health issues, including:

(cid:129)  in conjunction with Management, promoting a safety 

conscious culture throughout the Company;

(cid:129)  overseeing the function and effectiveness of the Health 

and Safety Management Committee; and 

(cid:129)  recommending to the Board outcomes on Health and 

Safety policy, plans, compliance and issues.

Details of the number of meetings of the Board and each 
Committee during the year, and each Director’s attendance 
at those meetings, are set out on page 38 of the Financial 
Report. Every Director has a standing invitation to attend 
any Committee meeting and to receive committee papers.

Director participation

Remuneration Committee 

Members: Robert Rae (Chair since August 2010), 
Doug Bailey, Barbara Gibson (Chair for FY10), Colin Wise

Directors visit St Barbara’s operations at least once per 
annum and meet with Management from time to time 
to gain a better understanding of the Company’s business.

Function: The Committee assists and advises the Board 
in relation to the remuneration of the Managing Director 
and CEO, his senior executive direct reports, employees 
of the Company, consultants or contractors who are 
engaged to perform executive responsibilities, and 
non-executive Directors.

Audit Committee 

Members: Doug Bailey (Chair), Phil Lockyer, Robert Rae, 
Colin Wise.

Function: The Committee assists and advises the Board 
in discharging its responsibilities in relation to ﬁ nancial 
reporting, ﬁ nancial risk Management, evaluating the 
effectiveness of the ﬁ nancial control environment, oversight 
of the external audit function and review of Ore Reserve 
estimation processes. Matters relating to the assessment 
and supervision of non-ﬁ nancial business risks and 
compliance are covered directly by the Board.

Independent professional advice and access 
to Company information.

As speciﬁ ed in the Board Charter and individual letters 
of appointment, Directors have a right of access to all 
relevant Company information as well as to the Company’s 
executives and senior Management and, if necessary and 
subject to prior consultation with the Chairman, may seek 
independent advice on any issue of particular concern from 
a suitably qualiﬁ ed adviser at St Barbara’s expense.

Principle 3: Promote ethical and responsible 
decision making

The Board and the Company’s employees are expected 
to uphold the highest levels of integrity and professional 
behaviour in their relationships with all of the Company’s 
stakeholders. As part of a re-statement of its overall vision, 
the Company previously adopted a formal set of behavioural 
values which encompasses the Board, Management, employees 
and other members of the workforce. The vision and those 
values underpinning it are available on the Company website. 
Employees are also made aware of acceptable behaviour 
through on-going training and development and contact 
with senior staff who are encouraged to lead by example.

22

In addition to upholding those values, the Company 
has speciﬁ c policies and procedures that cover trading in 
St Barbara’s securities and conﬂ icts of interest for Directors. 
These include maintaining a register of Director interests. 
Employees are accountable for their conduct under a range 
of Company policies and procedures, including an 
Occupational Health and Safety Policy, an Equal Opportunity 
Policy, an Environment Policy, a policy on the Use of Computer 
Facilities and others. The Company Secretary is responsible 
for investigating any reports of unethical practices and 
reporting outcomes to the Managing Director and CEO 
or the Board, as appropriate.

The Company has not enshrined its values into a formal code 
of ethics at this time as it considers that all matters describing, 
prescribing and underpinning ethical behaviour are contained 
in the values and attendant policies outlined above.

Trading in St Barbara shares 

To safeguard against insider trading, St Barbara’s Dealing 
in Securities Policy prohibits Directors and employees from 
trading in St Barbara securities if they are aware of any 
information not in the public domain that would be 
expected to have a material effect on the price of Company 
securities. Dealing in Company shares by Directors, Ofﬁ cers 
and Employees is governed by a ‘Dealings in Securities’ 
Policy. This policy allows for a 30-day trading window 
commencing twenty four hours following signiﬁ cant public 
announcements, provided the Company is not at any time 
during the 30 days in possession of undisclosed potentially 
price sensitive information. St Barbara discloses to the ASX 
any transaction conducted by any Directors in St Barbara 
securities in accordance with ASX Listing Rules.

Principle 4: Safeguard integrity in ﬁ nancial 
reporting

The Board has established an Audit Committee and its 
Charter is available on the Company’s website. The Audit 
Charter covers the role of the Committee, including the 
principles governing the Company’s relationship with its 
external auditor. The Committee considers that KPMG’s 
process of partner rotation is sufﬁ cient to maintain 
independence of the external auditor.

Principle 5: Make timely and balanced disclosure

St Barbara seeks to provide relevant up-to-date information 
to its shareholders and the broader investment community 
in accordance with the continuous disclosure requirements 
under the ASX Listing Rules. The Board has implemented 
a Continuous Disclosure Policy to ensure that information 
considered material to the share price or its value is lodged 
with the ASX as soon as practicable. Other relevant 
information, including Company presentations, updates 
by senior Management and commentary on ﬁ nancial 
results, are also subject to a process of internal review and 
disclosed to the ASX and through the Company website.

Principle 6: Respect the rights of shareholders

The Company has a formal Shareholder Communications 
Policy which is available on St Barbara’s website. 
Communication to shareholders is facilitated by the 
production of the Annual Report, Quarterly Reports, public 
announcements and the posting of ASX releases on the 
website immediately after their disclosure on the ASX. 
Shareholders can register on the website to receive notice 
of announcements. The Company believes considering the 
size of the shareholder base, the current announcement 
procedures and distribution methods, shareholders have 
the opportunity to be fully informed of Company activities.

In addition, all shareholders are encouraged to attend 
the Annual General Meeting of Shareholders and use the 
opportunity to ask questions and vote on the resolutions. 
The Company makes every endeavour to respond to 
questions from shareholders. The external auditor attends 
the Annual General Meeting and is available to answer 
questions in relation to the audit.

Principle 7: Recognise and manage risk

Risk Management and compliance are fundamental to 
sound Management, and oversight of such matters is an 
important responsibility of the Board. 

The ﬁ nancial reporting and control mechanisms are assessed 
during the year by Management, the Audit Committee 
and the external auditor. The Board has received the 
declaration from the Managing Director and the Chief 
Financial Ofﬁ cer, provided in accordance with section 295A 
of the Corporations Act 2001, that the Company’s ﬁ nancial 
statements are founded on a sound system of risk 
Management and internal control and that the system 
is operating effectively in all material respects in relation 
to ﬁ nancial reporting risks.

www.stbarbara.com.au – Annual Report 2010 :: 23

Corporate Governance continued

This remuneration has both short and long-term components. 
Short Term Incentives are aligned to achievement of speciﬁ c 
annual corporate and individual targets and goals directed 
at creating near term value and/or mitigating business risks. 
Long Term Incentives are aligned to a long term increase 
in shareholder wealth. The Company has in place a formal 
policy prohibiting executives from entering into transactions, 
which hedge or protect the unvested portion of any of their 
equity-based remuneration entitlements.

Key components of senior manager contracts, including 
details of potential termination payments are set out in 
on pages 47. Further details in relation to Director and 
Executive remuneration are set out in the Remuneration 
Report on pages 38 to 47 of the Financial Report.

Diversity

The Company actively pursues diversity in its approach 
to recruitment, selection, training and promotion of staff. 
It is currently detailing and developing those practices into 
a formal policy which will be supplemented with enhanced 
education and training. It will report on the outcomes of this 
development in greater detail in 2011.

The Company also has policies in place dealing with risks 
in the areas of Health and Safety, Environment and 
Employee Relations. Management has regularly informed the 
Board about risks within the business and the effectiveness 
of the Company’s Management of those risks during the 
2010 ﬁ nancial year. 

Utilising external consultants the Company continued 
an enterprise wide risk and opportunity assessment which 
it had commenced during the previous ﬁ nancial year. The 
two year project is expected to deliver enhanced risk and 
opportunity reporting and control mechanisms, which 
are designed to ensure that strategic, operational, legal, 
reputational and ﬁ nancial risks and opportunities are 
identiﬁ ed, assessed and managed. All material business risks 
are being identiﬁ ed and evaluated as part of the Enterprise 
Wide Risk and Opportunity Assessment program. A Risk 
Management Policy, framework and risk evaluation matrix 
have been established.

Principle 8: Remunerate fairly and responsibly

The Remuneration Committee Charter was reviewed 
and updated during the year.

Board Remuneration 

The remuneration of the non-executive Directors is ﬁ xed 
rather than variable. There are no retirement beneﬁ ts 
paid to non-executive Directors. Independent expert 
remuneration advice is considered from time to time in 
determining remuneration for the Chairman, Managing 
Director and CEO and non-executive Directors. The fee scale 
for non-executive Directors for the 2010 ﬁ scal year was 
unchanged from the scale which applied during the 
previous ﬁ scal year.

Executive Remuneration 

The Remuneration Committee provides recommendations 
to the Board which directs the Company’s remuneration 
policies. It utilises independent expert advice and surveys 
as appropriate, to benchmark overall Company and 
executive remuneration, packaging, and remuneration 
practices. The Committee ensures that a signiﬁ cant 
proportion of each executive’s remuneration is linked 
to his or her performance and the Company’s performance. 

24

Ore Reserves and 
Mineral Resources Statements

JUNE 2010

Ore Reserves highlights – signiﬁ cant increase 
in Gwalia ore reserves

Mineral Resources highlights – reduction 
in quantum, increase in quality.

1.  Overall thirteen percent increase in total Company Ore 

1.  Overall Mineral Resources grade of 5.0 g/t Au.

Reserves net of production for FY10.

 Total Company Ore Reserves as at 30 June 2010 increased 
signiﬁ cantly year on year by 332,000 ounces of contained 
gold net of production, to 15 million tonnes at 5.8 grams 
per tonne of gold (g/t Au) for 2.9 million ounces of 
contained gold.

2.  Increase in Gwalia Probable Ore Reserves of 195,000 ounces.

  Gwalia Mine’s Probable Ore Reserves increased by 

195,000 ounces of contained gold, (net of production), 
down to 1600 metres below surface, as a consequence 
of improvements in mining extraction factors, a reduction 
in cut-off grade from 4.5 grams per tonne of gold 
(g/t Au) to 4.2 g/t Au and improved mining stope designs.

3.  Eighteen percent increase in King of the Hills ore reserves.

  King of the Hills Probable Ore Reserves increased by 

35,000 ounces to 230,000 ounces of contained gold, 
as a consequence of reﬁ nements to geotechnical design 
and increases in Indicated Mineral Resources.

4.  Details of total Ore Reserves as at 30 June 2010, together 
with a summary of changes from 30 June 2009, follow 
on pages 26 and 27.

  Total Company Mineral Resources as at 30 June 2010, 
including Measured, Indicated and Inferred categories, 
totalled 47 million tonnes of gold at 5.0 g/t Au for 
7.7 million ounces of contained gold. 

2.  Gwalia Mine Mineral Resources increased. 

  Successful drilling at Gwalia during the year has 

increased Gwalia Mineral Resources by 99,000 ounces 
of contained gold, net of production.

3.  Tarmoola previous open pit Mineral Resources removed.

  The main change to Mineral Resources during the year 
was the recognition of the higher grade underground 
Mineral Resource at the King of the Hills deposit at 
Leonora in Western Australia. The deposit is partly 
contained within, and extends from, the former 
Tarmoola open pit mineral resources.

  As a consequence, at current gold prices, the remaining 

low grade Tarmoola open pit mineral resource of 
1.1 million ounces of contained gold was written 
off during the year.

  Details of Mineral Resources as at 30 June 2010, 

follow on pages 28 and 29. 

www.stbarbara.com.au – Annual Report 2010 :: 25

Ore Reserves and 
Mineral Resources Statements continued

Ore Reserves Statement as at 30 June 2010

St Barbara Limited’s total Ore Reserves as at 30 June 2010 
totalled 15 million tonnes at 5.8 grams per tonne of gold 
(g/t Au) for 2.9 million contained ounces of gold (2009: 
13 million tonnes @ 5.8 g/t Au for 2.6 million contained 
ounces of gold). 

The increase of 332,000 contained ounces from the total 
2009 Ore Reserve estimates is attributable to:

(cid:129)  230,000 contained ounces from the inclusion of the King 
of the Hills Probable Ore Reserve estimate. This increased 
from the previously announced Ore Reserve estimate 
containing 195,000 ounces in March 2010;

The gold price assumed in 2010 Ore Reserve calculations 
was A$1,000 per ounce (2009: A$1,075 per ounce 
FY09 production and A$850 per ounce thereafter).

(cid:129)  309,000 contained ounces increase at Gwalia resulting 
from changes in the mining extraction factors, cut-off 
grade and stope designs;

The 2010 Ore Reserve estimates are based on:

(cid:129)  the Life of Mine design and schedules for Gwalia 

and Marvel Loch Underground mines,

(cid:129)  the Feasibility Study for King of the Hills Underground 

deposit, and 

(cid:129)  no changes to the project design work completed in 
2009 for Tower Hill Underground at Leonora and the 
Nevoria district at Southern Cross. The Nevoria district 
includes Nevoria Underground and Nevoria West Open 
Pit. Studies are continuing on all these deposits.

(cid:129)  ( -5,000) contained ounces reduction at Marvel Loch 

Underground resulting from changes in geology and 
mine design; and 

(cid:129)   (-202,000) contained ounces reduction from mining 
production depletion, (-114,000 contained ounces 
at Gwalia, -74,000 contained ounces at Marvel Loch 
Underground and -12,000 contained ounces in 
stockpile movements).

Table 1 Summary of Proved and Probable Ore Reserves as at 30 June 2010

Region

Category

Project

Southern Cross

Marvel Loch

Nevoria West

Nevoria Underground

Other

Gwalia Deeps

Tower Hill

King of the Hills

Total 
Southern Cross

Leonora

Total Leonora

Total All Regions

Proved

Gold 
grade 
Au g/t

Gold 
k oz

Tonnes 
kT

Probable

Gold 
grade 
Au g/t

2.7

0.0

0.0

1.0

1.3

0.0

0.0

0.0

0.0

1.3

29

1,463

0

0

44

500

1,790

0

73

3,753

0

0

0

6,326

2,240

1,670

0 10,236

73 13,988

3.6

3.0

3.7

0.0

3.5

9.0

4.7

4.3

7.3

6.3

Gold 
k oz

Tonnes 
kT

169

48

210

0

1,790

500

1,790

1,376

427

5,456

1,838

6,326

338

230

2,240

1,670

2,406 10,236

2,833 15,692

Total

Gold 
grade 
Au g/t

3.4

3.0

3.6

1.0

2.8

9.0

4.7

4.3

7.3

5.8

Gold 
k oz

198

48

210

44

500

1,838

338

230

2,406

2,906

Tonnes
kT

328

0

0

1,376

1,703

0

0

0

0

1,703

Notes
1. 
2.  All data is rounded to two signiﬁ cant ﬁ gures. Differences in summations will occur due to rounding.

The Ore Reserve estimates used a gold price of A$1,000/oz.

3. 

The ore reserves estimates have been estimated and compiled under the direction of Mr Peter Fairﬁ eld and Mr Kous Kirsten.

4.  Mr Fairﬁ eld and Mr Kirsten who are Members of The Australasian Institute of Mining and Metallurgy are full time employees of St Barbara Limited.

5. 

 Mr Fairﬁ eld and Mr Kirsten have sufﬁ cient experience relevant to the style of mineralisation, type of deposits under consideration and for 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’.

6.  Mr Fairﬁ eld and Mr Kirsten consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

7.  “Other” relates to surface stockpiles valued at $1,075/oz.

8.  Gwalia and Marvel Loch are operating underground mines.

9.  Gwalia cut-off grade applied of 4.2 g/t Au.

10.  A variable cut-off grade has been applied to each lode to deliver an average (annualised) grade greater than 3.1 g/t to achieve the optimal business case.

26

Table 2: Ore Reserve Changes in contained gold ounces from June 2009 to June 2010 

2009
Au (Koz)

Depletion
Au (Koz)

Addition
Au (Koz)

2010
Au (Koz)

Variance
Au (Koz)

Comment

Southern Cross

Marvel Loch

277

-125

46

198

-79 Mining depletion was partially offset by 51Koz added 
to Ore Reserve and mined during the year. There 
was also a 5Koz reduction in ounces contained within 
the designed Ore Reserve. A variable cut-off grade 
has been applied to each lode to deliver an average 
(annualised) grade greater than 3.1 g/t to achieve 
the optimal business case.

Nevoria West

-51

51

0 51 Koz added to Ore Reserve and mined during 

Nevoria Underground

48

Other

210

0

0

Total Southern Cross

56

-12

the year.

0

0

0

48

0 No change – 2009 estimate carried forward.

Design cut-off grade of 0.8 g/t was used for the 
Ore Reserve calculations.

210

0 No change – 2009 estimate carried forward.

Design cut-off grade of 3.0 g/t was used for the 
ore reserve calculations.

44

-12

Leonora

Gwalia Deeps

1,643

-114

309

1,838

195 Mining depletion was offset by ounces added 

Of which:

14

10

285

to the Ore Reserve during the year and modiﬁ ed 
stope designs to allow for a 42 degree footwall 
to accommodate drilling.

Reduction in planned dilution percentage.

Increase in planned dilution grade.

Increase in mining extraction factors and resource 
increases in upper SWB

Design cut-off grade of 4.2 g/t was used for the 
Ore Reserve calculations.

Tower Hill

338

King of the Hills

0

0

0

0

338

0 No change – 2009 estimate carried forward; 

studies are continuing.

Design cut-off grade of 3.0 g/t was used for the 
Ore Reserve calculations.

230

230

230 Increase of 35 Koz from the March Pre-feasibility 

Study published Ore Reserve estimate of 195 Koz. 

Ounces have been included as a result of reﬁ nement 
of the geotechnical design guidelines and 
improvements to the Mineral Resource model.

Design cut-off grade of 2.8 g/t for Open Stoping 
and 3.0 g/t for Cut and Fill were used for the Ore 
Reserve calculations.

Other

Total Leonora 

Total All Regions 

2

1,980

2,574

-2

-116

-253

0

539

585

0

2,406

2,906

-2 Gwalia surface stockpile depletion.

423

332

www.stbarbara.com.au – Annual Report 2010 :: 27

 
Ore Reserves and 
Mineral Resources Statements continued

Mineral Resource Statement as at 30 June 2010

As at 30 June 2010, total Mineral Resources including 
Measured, Indicated and Inferred categories, comprised 
47,580,000 tonnes at 5.0 grams per tonne of gold (g/t Au) 
for 7,651,000 ounces of contained gold.

Gwalia Mineral Resources increased by 99,000 ounces 
of contained gold, net of depletion, primarily as a result 
of the successful drilling for upper extensions to South 
West Branch lode.

The identiﬁ cation of the higher grade underground Mineral 
Resources at the King of The Hills gold deposit at Leonora 
has had a signiﬁ cant impact on the previously published 
(2009) Tarmoola Mineral Resource, which had been 
estimated as a potential open pit resource. The King of the 
Hills underground resource is partly contained within and 
extends from, the former Tarmoola open pit resource. 

The delineation of the higher grade King of the Hills 
underground resource separately has consequently resulted 
in the remaining Tarmoola open pit resource not being 
viable at current gold prices. Consequently, the Company 
has made the decision to remove the remaining low grade 
Tarmoola Mineral Resource from the Company’s Mineral 
Resource Inventory, resulting in a reduction in Mineral 
Resources of 1.7 million ounces of contained gold.

A review of the Kailis gold deposit was also completed over 
the course of the year. The ﬁ ndings of the review have 
resulted in the removal of Kailis from the Mineral Resource 
Inventory, resulting in a reduction of 450,000 tonnes 
at 3.6g/t Au for 52,000 ounces of contained gold.

As a consequence of these changes, the total Mineral 
Resources Inventory has reduced to 7.7 million ounces 
of contained gold (2009: 9.5 million ounces of contained 
gold), but at a signiﬁ cantly higher grade of 5.0 g/t Au 
(2009: 2.9 g/t Au).

Refer to Table 3 below.

Table 3 Mineral Resources Summary June 2010

Region

Category

Project

Measured

Indicated

Tonnes
kT

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
kT

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
kT

Inferred

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
(kt)

Total

Gold 
grade 
g/t

Contained 
Gold 
(k oz)

Southern 
Cross

Marvel Loch

360

3.9

45

4,420

3.2

456

270

5.2

45

5,050

3.4

Nevoria

Transvaal

Jaccoletti

Axehandle

Cornishman

Edwards 
Find, 
EFN & 
Tamarin

Yilgarn Star

Other (7)

Total Southern Cross

0

0

0

0

0

0

0

40

400

0.0

0.0

0.0

0.0

0.0

0.0

0.0

8.6

4.4

0

0

0

0

0

0

3,520

1,630

0

0

120

20

0

11

56

390

2,940

13,040

3.8

4.8

0.0

0.0

4.4

1.6

6.5

1.8

3.3

426

249

0

0

17

1

560

1,800

720

2,080

0

420

82

173

0

630

1,404

6,480

4.1

4.9

5.4

2.0

0.0

3.8

0.0

4.1

3.8

74

4,080

286

126

131

0

51

3,430

720

2,080

120

440

0

84

390

3,610

797

19,920

3.8

4.9

5.4

2.0

4.4

3.7

6.5

2.3

3.5

546

500

535

126

131

17

52

82

268

2,257

28

Table 3 Mineral Resources Summary June 2010 continued

Region

Leonora

Category

Project

Gwalia 
Deeps

Gwalia Int 
& West Lode

King of 
The Hills

Tower Hill

Harbour 
Lights

Other (6)

Total Leonora

Total All Regions

Measured

Indicated

Inferred

Tonnes
kT

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
kT

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
kT

Gold 
grade 
g/t

Gold 
k oz

Tonnes 
(kt)

Total

Gold 
grade 
g/t

Contained 
Gold 
(k oz)

10,830

8.2

2,844

2,120

11.0

747

12,950

8.6

3,591

0

0

0

0

0

0

0

0

0

0

990

990

1,390

0.0

0.0

0.0

0.0

0.0

1.0

1.0

2.0

10

6.2

2

1,260

6.0

244

1,270

6.0

1,990

5.4

347

470

4.7

71

2,460

5.3

4,750

0

33

33

89

2,280

19,860

32,900

4.7

0.0

0.9

6.2

5.1

716

330

0

2,580

69

50

3,978

6,810

5,382

13,290

4.3

3.3

0.6

6.3

5.1

46

274

5,080

2,580

1

3,320

1,383

27,660

2,180

47,580

4.7

3.3

1.0

6.1

5.0

246

418

762

274

103

5,394

7,651

Notes
1. 

Identiﬁ ed Mineral Resources have been estimated under the direction of Mr Ben Bartlett (MAusIMM, 990986, MAIG) who qualiﬁ es as the Competent Person.

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

 Mr Bartlett has sufﬁ cient experience relevant to the style of mineralisation and type of deposits under consideration and to the activities which were undertaken 
to qualify as Competent Persons as deﬁ ned in the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Ben has consented to the inclusion 
in the report of the matters based on their information in the form and context in which they appear.

 Mineral Resources updated during the ‘09/’10 Financial Year have been estimated using economic cut-off grades and mining optimisations based on an AU$1,500/
oz gold price.

The King of the Hills resource estimate is calculated using a 3.0g/t cut-off below the Tarmoola Open Pit and constrained within mineralisation domains.

 Identiﬁ cation of King of the Hills Mineral Resource (418 Koz contained gold) within the formerly quoted Tarmoola open pit Mineral Resource has resulted in the 
remaining low grade open pit resource being unviable at forecast gold prices. The Company has decided to remove the remaining Tarmoola open pit resource from 
the Company’s Mineral Resource Inventory, (-2.1 Moz contained gold).

The Tower Hill resource estimate is calculated using a 0.8g/t cut-off within an optimised $1,200 pit shell, and a 3.2g/t cut-off below the optimised pit shell.

 The Transvaal mineral resource estimate is calculated using a graduated cut off grade of 0.5 to 0.9g/t in oxide and 0.7 to 1.0g/t in fresh rock within an optimised 
$1,200 pit shell and a 2.6g/t cut-off below the optimised pit shell.

 Mineral Resource variances compared to the June ’09 Mineral Resource Statement are primarily attributed to mining depletion, cut-off grade changes, write down 
of low grade open pit resources and some re-interpretation of the resources. Notable variances to the 2009 Mineral Resource Estimate are Southern Cross: Marvel 
Loch (-125,000 oz) and at Leonora: Tarmoola (-2.1 Moz); Kailis; (-52,000oz), King of The Hills (+418,000oz) and Gwalia (99,000oz).

 Mineral Resources carried over unchanged from June’09 include Southern Cross District: Nevoria (500,000oz); Axehandle (130,000 oz); Jaccoletti (130,000oz); 
Edwards Find, Edwards Find North and Tamarin (52,000oz); Transvaal (530,000oz); Ruapehu (55,000oz); New Zealand Gully (24,000oz); Cornishman (17,000oz); 
GVG – South Burbidge (13,000oz); GVG Lode 1 (98,000oz); Red wing (34,000oz) and Yilgarn Star (82,000 oz). Leonora District: Gwalia Intermediates (238,000 oz); 
Rainbow (37,000oz); Royal Arthur Bore (12,000oz); Tarmoola Stockpile (30,000oz); McGraths (21,000); Tower Hill (760,000oz) and Harbour Lights (270,000 oz). 
Resource reviews for all of these resources along with Nevoria, Transvaal and Edwards Find are planned during the current 2010 ﬁ nancial year. Combined these 
resources total 3.1 Moz or 40% of the Company’s Mineral Resource Inventory.

10.  All numbers have been rounded to tonnes (10,000) and ounces (1,000) and this may result in some normal rounding discrepancies.

11.    Southern Cross Other comprises 7 resources including: Fraser’s South, GVG Lode 1, New Zealand Gully, Ruapehu, GVG South Bronco, Various Stockpiles 

(Measured), and Redwing.

12.    Leonora Other comprises 6 resources including: McGraths, Tarmoola s/pile, Royal Arthur Bore, Rainbow (Measured), Gwalia and Tower Hill ROM s/piles

13.   Mineral Resource updates completed by St Barbara Ltd during the 09/10 ﬁ nancial year include: Gwalia Deeps (Above 1320 mbs), King of The Hills and Marvel Loch 

Underground, All the remaining Mineral Resources remain unchanged to the June 2009 estimates. 

Competent Persons Statement
References to Mineral Resources contained in this report have been compiled under the supervision of Mr Ben Bartlett. Mr Bartlett is a Member of The Australasian 
Institute of Mining and Metallurgy and is a full time employee of the Company. Mr Bartlett has sufﬁ cient experience relevant to the style of mineralisation, type of deposit 
under consideration and to the activity being undertaken to qualify as Competent Person as deﬁ ned in the 2004 edition of the ‘Australasian Code for Reporting of 
Mineral Resources and Ore Reserves’ (JORC Code). Mr Bartlett consents to the inclusion in the report of the matters based on their information in the form and context 
in which they appear. Members of the Company’s team, including external consultants, preparing Mineral Resource estimates under Mr Bartlett’s supervision all qualify 
as Competent Persons.

References to Ore Reserves presented in this document have been produced in accordance with the Australasian Code for Reporting of Mineral Resources and Ore 
Reserves, 2004 edition (JORC Code) under the direction of Mr. Peter Fairﬁ eld and Mr. Kous Kirsten. Mr. Fairﬁ eld and Mr. Kous Kirsten are Members of The Australasian 
Institute of Mining and Metallurgy and are full time employees of St Barbara. Mr. Fairﬁ eld and Mr. Kirsten have sufﬁ cient experience relevant to the style of mineralisation, 
type of deposit under consideration and to the activity being undertaken to qualify as a Competent Persons as deﬁ ned in the JORC Code. Mr. Fairﬁ eld and Mr. Kirsten 
consent to the inclusion in this document of the matters based on their information in the form and context in which it appears. Members of the Company’s team 
preparing Ore Reserves estimates under Mr. Fairﬁ eld’s and Mr. Kirsten’s supervision all qualify as Competent Persons.

www.stbarbara.com.au – Annual Report 2010 :: 29

Financial Statements

30 

Financial Statements

31  Directors’ Report

49  Auditor’s Independence Declaration

50 

Financial Report

51  Consolidated Income Statement

52  Consolidated Statement of Financial Position

53  Consolidated Statement of Comprehensive Income

54  Consolidated Statement of Changes in Equity

55  Consolidated Cash Flow Statement

56  Notes to the Consolidated Financial Statements

102  Directors’ Declaration

103 

Independent Audit Report

105  Shareholder Information

108  Corporate Directory

30

Directors’ Report

The Directors present their report on the Group “St Barbara Group”, consisting of St Barbara Limited and the entities 
it controlled at the end of, or during, the ﬁ nancial year ended 30 June 2010.

Directors

The following persons were Directors of St Barbara Limited at any time during the year and up to the date of this report:

(cid:129)  S J C Wise 
(cid:129)  T J Lehany 
(cid:129)  D W Bailey 
(cid:129)  B J Gibson 
(cid:129)  P C Lockyer 
(cid:129)  R K Rae 

Chairman
Managing Director & CEO
Non-executive director
Non-executive director
Non-executive director
Non-executive director

The qualiﬁ cations, experience and special responsibilities of the directors is presented on pages 36 to 37.

Principal activities

During the year the principal activities of the Group were mining and the sale of gold, mineral exploration and development. 
There were no signiﬁ cant changes in the nature of activities of the Group during the year.

Dividends

There were no dividends paid or declared during the ﬁ nancial year.

Overview of Results

St Barbara completed the 2010 ﬁ nancial year in a strong ﬁ nancial position, reporting an underlying net proﬁ t after tax of 
$14,547,000 (2009: $209,000), cash on hand at 30 June 2010 of $102,157,000 (2009: $53,692,000) and debt of $15,909,000 
(2009: $97,541,000). In the past twelve months the Company achieved signiﬁ cant improvement in operational performance and 
restructured its statement of ﬁ nancial position by repaying a substantial amount of its debt.

The result reported by the Group for the year ended 30 June 2010 was a net loss after tax of $40,188,000 (2009: net loss 
of $76,344,000), which included signiﬁ cant items amounting to a net loss of $54,735,000 (2009: net loss of $76,553,000). 
The consolidated result for the year is summarised as follows:

Sales revenue 

EBITDA (including signiﬁ cant items) 

EBIT (including signiﬁ cant items) 

Reported net loss after tax for the year 

Total net signiﬁ cant items 

EBITDA – excluding signiﬁ cant items 

EBIT – excluding signiﬁ cant items 

Underlying net proﬁ t after tax 

30 June 10 
$’000 

30 June 09
$’000

296,760 

281,129

33,793 

39,701

(38,081) 

(70,403)

(40,188) 

(76,344)

(54,735) 

(76,553)

73,163 

16,654 

14,547 

52,445

6,150

209

www.stbarbara.com.au – Annual Report :: 31

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

The signiﬁ cant items are detailed in the following table.

Signiﬁ cant Items 

Net realised/unrealised (loss)/gain on gold options (1) 

Write down of listed investments to fair value 

Gain on sale of available for sale assets (2) 

Included within corporate and support costs

(cid:129)  Restructuring provision 

(cid:129)  Redundancy payments 

Asset impairment write-downs

(cid:129)  Open pit mine development 

(cid:129)  Marvel Loch underground operating development (3) 

(cid:129)  Southern Cross plant and equipment (3) 

(cid:129)  Marvel Loch capitalised exploration (3) 

30 June 10 
$’000 

30 June 09
$’000

(19,513) 

– 

2,724 

– 

– 

– 

1,515

(6,192)

–

(1,957)

(3,877)

(16,904)

(22,581) 

–

(11,583) 

(40,488)

(3,782) 

(8,650)

(54,735) 

(76,553)

(1)  The gold bought put and sold call options (collar structure) were put in place during the year to manage the Australian dollar gold price risk 
associated with 250,000 ounces of future King of the Hills production. At 30 June 2010 the unrealised mark-to-market value of the collar 
structure was negative $38,674,000. In accordance with accounting standards, the unrealised loss related to time value of the options 
of $19,513,000 was recognised immediately in the income statement. The unrealised loss related to the intrinsic value of the options 
of $19,161,000 was recognised in the hedging reserve in equity. Over time this unrealised mark-to-market loss will reverse either through 
a change to the mark-to-market value of the options or maturity of the contracts.

(2)  At 31 December 2008 an impairment loss of $6,192,000 in relation to the investment in Bendigo Mining Limited was recognised in the 
income statement. A mark-to-market gain as at 30 June 2009 in relation to this investment of $6,687,000, which would ordinarily have 
reversed the impairment loss recognised in the income statement in the period ended 31 December 2008, was recorded in the investment 
fair value reserve in accordance with Australian Interpretation 10. In August 2009 the investment in Bendigo Mining Limited was sold for 
$9,909,000, resulting in the transfer of the amount in the investment fair value reserve to the income statement, giving a net gain on sale 
of $2,724,000 and recognised as “Other Income”.

(3)  Based on an assessment of the Southern Cross operations cash-generating unit at 30 June 2010, an impairment write down was taken 

against assets of the unit. The impairment write down was caused by lower than expected future net cash ﬂ ows from the Southern Cross 
operations as a result of a reduction in the estimated mine life, based on drilling during the year that encountered pegmatite intrusions 
which closed off the resources potential. The revised cash ﬂ ow estimates from the base case mine plan no longer supported full recovery 
of the carrying value of the Southern Cross cash-generating unit assets, including capitalised mine operating development, plant and 
equipment and capitalised exploration.

The major achievements in the year included:

(cid:129)  Restructured the balance sheet, with the repayment of convertible notes worth $75.9 million, funded from proceeds from 

an equity raising completed in November and December 2009;

(cid:129)  Funds in place from the equity raising to develop the King of the Hills mine at Leonora and give working capital ﬂ exibility;

(cid:129)  Divested the Company’s 9.7 per cent holding in Bendigo Mining Limited for proceeds of $9.9 million;

(cid:129)  Established new banking facilities with National Australia Bank Limited (NAB) and Barclays Bank PLC (Barclays) secured 

by assets of the Group. NAB provides a $25 million performance bond facility, replacing a cash-backed facility. Barclays and 
NAB provided a 250,000 ounce hedge facility to underpin the return from the King of the Hills operation; and

(cid:129)  Executed a gold bought put option and sold call option (zero cost collar structure) to provide price protection for King of the 

Hills production. The collar structure comprises gold bought put options at a strike price of $1,425 per ounce and gold sold call 
options at a strike price of $1,615 per ounce over 250,000 ounces. The collar structure means that King of the Hills production 
will receive a minimum gold price of $1,425 per ounce and beneﬁ t from higher spot gold prices up to $1,615 per ounce.

32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

Discussion and Analysis of Operating Results 
and the Income Statement

For the year ended 30 June 2010 St Barbara reported 
an underlying proﬁ t after income tax of $14,547,000 (2009: 
underlying proﬁ t of $209,000), representing a substantial 
improvement on the previous year. The higher underlying 
proﬁ t for the year was attributable to increased production 
at the Gwalia mine and a strong Australia dollar gold price 
in the second half of the year.

The reported result for the year was a net loss after income 
tax of $40,188,000 (2009: net loss of $76,344,000), which 
included signiﬁ cant items amounting to a loss of $54,735,000 
(2009: loss of $76,553,000). The signiﬁ cant items in the year 
comprised the unrealised loss on gold put and call options 
of $19,513,000, asset impairment write offs in relation to the 
Southern Cross operations of $37,946,000 and a gain on the 
disposal of Bendigo Mining Limited shares and other 
available-for-sale assets of $2,724,000.

Total sales revenue of $296,760,000 (2009: $281,129,000) 
was generated from gold sales of 237,264 ounces (2009: 
231,318 ounces) at an average achieved gold price 
of A$1,244 per ounce (2009: A$1,210 per ounce). Production 
at Leonora was 109,148 ounces (2009: 82,795 ounces) for 
the year. Production at Southern Cross was 121,870 ounces 
(2009: 156,105 ounces) for the year. A summary of the 
production performance for the year ended 30 June 2010 
is provided in the table below.

Details of 2010 Production Performance

Southern Cross 

Leonora

2009/10 

2008/09 

2009/10 

2008/09

23,413  1,119,997 

5.7 

1.9 

– 

– 

372,206

1.3

969,519  1,003,202 

621,930 

304,544

4.0 

3.8 

5.7 

6.9

Open Pit
Ore Mined 

Grade 

Underground
Ore Mined 

Grade 

t 

g/t 

t 

g/t 

Ore Milled 

t 

1,279,751  2,233,367 

632,573 

835,843

Grade 

Recovery 

g/t 

% 

3.4 

86 

2.5 

88 

5.6 

95 

3.3

94

Gold
Production 

Cash 
Cost (1) 

oz 

121,870 

156,105 

109,148 

82,795

A$/oz 

883 

888 

Total Cost (1) A$/oz 

1,070 

1,040 

(1)  Before signiﬁ cant items

686 

945 

719

948

Development of the Gwalia mine at Leonora continued during 
the year, with the primary access, the Hoover Decline, 
reaching 1310 metres below surface. The majority of the 
production in the year was sourced from the lower grade 
South Gwalia Series stopes between 1050 and 1220 levels. 
The grades will improve as the proportion of South West 
Branch stopes increases in ﬁ nancial year 2011. The Gwalia 
mine produced 621,930 tonnes in its ﬁ rst full year of 
operation, having commenced production in October 2008, 
for 109,148 ounces. In March 2010 the mill resumed full time 
operation due to the higher tonnage from the Gwalia 
underground and in preparation for the introduction of third 
party ore on a trial basis during the June 2010 quarter. 
The trial treatment of 36,000 tonnes of open pit ore from 
Navigator Resources Limited’s Mertondale operations was 
processed in the June 2010 quarter on a batch basis. The 
process plant performed reliably throughout the year, 
consistently returning 95% recovery from Gwalia ore.

During the year Southern Cross operations successfully 
transitioned to campaign milling and ceased all open pit 
mining. Treatment of open pit stockpiles continued 
throughout the year, and by June 2010 Marvel Loch 
underground mine became the exclusive ore source for 
Southern Cross operations. The Marvel Loch underground 
mine continued to perform well during the year producing 
969,519 tonnes, which was marginally down on the previous 
year. Production for the year was 121,870 ounces (2009: 
156,105 ounces). Treatment of lower grade ore stockpiles, 
mined in the previous year, reduced the average grade of ore 
processed in the year. Treatment of high-grade Mercury open 
pit stockpiles during the year reduced overall recoveries from 
the plant, but by year end with depletion of Mercury 
stockpiles and commissioning of an Acacia Reactor in the 
gravity circuit, recoveries stabilised at 93%.

Other revenue of $6,765,000 (2009: $5,411,000) comprised 
mainly interest earned during the year of $5,210,000 (2009: 
$3,044,000). During the second half of the year the Company 
had substantial cash held on deposit ahead of the repayment 
and redemption of convertible notes. During the year the 
Company earned interest at an average rate of 4.69% 
compared to the average cash rate of 3.74%.

The Leonora cash cost for the year was $686 per ounce 
(2009: $719 per ounce), reﬂ ecting the beneﬁ t of a full year 
of production from Gwalia and of the cessation of high cost 
open pit mining in the previous year. The Southern Cross cash 
cost for the year was $883 per ounce, which was in line with 
the previous year. Total cash operating costs at Leonora 
operations of $74,470,000 were higher in the year compared 
with the prior year (2009: $52,438,000), due mainly to 
increased mining activity for a full twelve months at the 

www.stbarbara.com.au – Annual Report :: 33

 
 
 
 
Directors’ Report  continued

Gwalia underground mine. At Southern Cross operations 
total cash operating costs, before signiﬁ cant items, were 
$110,637,000 (2009: $131,122,000). The lower Southern 
Cross operating costs was due to the cessation of open pit 
mining in the ﬁ rst quarter of the year.

Exploration expensed in the income statement in the year 
was $5,184,000 (2009: $13,442,000), with total exploration 
expenditure amounting to $7,946,000 (2009: $15,990,000). 
The Company policy in relation to accounting for exploration 
permits capitalisation of expenditure where it results in 
an increase in reserves and is likely to be recouped from 
successful development and exploitation of the area 
of interest, or alternatively, by its sale. The Company reduced 
the exploration budget for the year to allow consolidation 
of the exploration efforts and to focus on proof of concept 
work to better delineate drilling targets.

Corporate & support costs for the year amounted to 
$21,382,000 (2009: $27,089,000), which included expenses 
related to the corporate ofﬁ ce, rates and taxes associated 
with the Company’s landholdings, compliance costs and 
operations support and technical services. In the previous 
year corporate & support costs included redundancy and 
restructuring costs and provisions totalling $5,834,000.

The royalties expense for the year of $11,790,000 (2009: 
$11,042,000) comprised the state royalty in Western Australia 
and payments for a corporate royalty on gold revenue.

Depreciation and amortisation of ﬁ xed assets and capitalised 
mine development totalled $71,874,000 (2009: $110,104,000) 
for the year, which included $15,365,000 (2009: $49,138,000) 
in signiﬁ cant items. The higher underlying depreciation and 
amortisation charge in the year was attributable to increased 
mine development at Gwalia and the production for a full 
twelve months. The depreciation and amortisation reported in 
signiﬁ cant items represents the impairment write off of plant 
and equipment and capitalised exploration at Southern Cross.

Finance costs were lower than the previous year at $7,317,000 
(2009: $8,996,000) due mainly to the buy-back of convertible 
notes during the year.

The net loss on derivatives reported in the income statement 
of $19,513,000 represents the unrealised loss related to 
time value of gold put and call options as at 30 June 2010. 
The gold put and call options provide price protection 
over 250,000 ounces of King of the Hills production. The 
mark-to-market value of the gold put and call options 
is calculated at each reporting date and will ﬂ uctuate over 
time to maturity of the contracts.

The realised gain on available for sale assets of $2,724,000 
(2009: unrealised loss of $6,332,000) comprises mainly the 
gain on the sale of Bendigo Mining Limited shares.

Discussion and Analysis of the Cash 
Flow Statement

Operating activities
Cash ﬂ ow from operating activities for the year was 
$81,805,000 (2009: $24,324,000), representing a signiﬁ cant 
increase compared to the prior year. Increased operating cash 
ﬂ ows were attributable to higher receipts from customers, 
reﬂ ecting the beneﬁ t of higher gold production and a strong 
average achieved gold price, and lower payments to suppliers 
and employees. Payments to suppliers and employees were 
signiﬁ cantly lower than the prior year at $209,774,000 (2009: 
$251,928,000) due mainly to the cessation of open pit mining 
at both Leonora and Southern Cross. Interest received of 
$4,575,000 (2009: $2,940,000) was higher than in the prior 
year due to increased level of cash on hand during the second 
half of the year. Interest paid in the year of $4,829,000 
(2009: $7,653,000) was lower than the prior year as a result 
of the buy-back of convertible notes during the year.

Investing activities
Net cash ﬂ ows used in investing activities amounted to 
$93,621,000 (2009: $128,328,000) for the year. The prior year 
included substantial expenditure to complete construction of 
the Gwalia project, which was commissioned in October 2008. 
Investing expenditure incurred during the year was in the 
following major areas:

(cid:129)  Underground mine development and infrastructure 

at Gwalia – $57,739,000;

(cid:129)  Underground mine development and infrastructure 

at Marvel Loch – $27,223,000;

(cid:129)  Pre-commissioning expenditure at King of the Hills 

– $2,125,000;

(cid:129)  Purchase of property, plant and equipment at both 

operations – $10,210,000; and

(cid:129)  Exploration expenditure – $5,821,000.

During the year a decision was taken to develop the King of 
the Hills project as a supplemental ore source for the Leonora 
process plant. Pre-development expenditure incurred in the 
June 2010 quarter included refurbishment of ofﬁ ces at the 
King of the Hills site, dewatering at the Tarmoola open pit 
and expansion at the Leonora accommodation village.

Investing activities included proceeds from the sale of the 
Bendigo Mining shares amounting to $9,907,000.

34

 
Directors’ Report  continued

Financing activities
Net cash ﬂ ows from ﬁ nancing activities were $60,281,000 
(2009: $122,179,000), with major movements in cash 
ﬂ ows including:

(cid:129)  Net proceeds from equity raisings during the year 

of $118,821,000 in November and December 2009;

(cid:129)  Release of cash previously held as security for a bank 

guarantee facility of $23,951,000;

(cid:129)  Payments for the buy-back and redemption of convertible 

notes during the year of $75,588,000; and

(cid:129)  Scheduled repayments of ﬁ nance leasing and equipment 

ﬁ nancing facilities amounting to $7,437,000.

Discussion and Analysis of the Statement 
of Financial Position

Net Assets and Total Equity
St Barbara’s net assets and total equity increased during 
the year by $52,996,000 to $349,468,000, due mainly to 
proceeds from the equity raising completed in November 
and December 2009.

The available cash balance at 30 June 2010 was $102,157,000 
(2009: $53,692,000) reﬂ ecting the beneﬁ t of the proceeds 
from the equity raising and release of cash previously held 
as security for a bank guarantee facility.

Property, plant and equipment, mine properties and 
capitalised exploration had a combined value at 30 June 2010 
of $334,361,000 (2009: $317,660,000), which was after the 
impairment write off of $15,365,000 taken against Southern 
Cross plant and equipment and capitalised exploration. The 
impairment write off at Southern Cross also included deferred 
operating mine development of $22,581,000.

Net debt
Net debt, comprising total borrowings less cash on hand, was 
net cash of $86,248,000 at 30 June 2010 (2009: net debt 
of $43,849,000). During the year proceeds from the equity 
raising was used to repay and redeem convertible notes 
amounting to $75,588,000. The remaining debt reported 
at 30 June 2010 comprised the remaining convertible notes 
and the outstanding balance on ﬁ nance leases and an 
equipment ﬁ nance facility, used to fund the acquisition 
of assets within the mining operations.

Signiﬁ cant changes in the state of affairs

The signiﬁ cant changes in the state of affairs of the Company 
during the ﬁ nancial year are as follows:

a)  Net loss for the year
The Group reported a net loss for the year of $40,188,000, 
which included signiﬁ cant items amounting to a loss 
of $54,735,000. The net loss for the year increased the 
accumulated losses of the Group to $248,852,000 
at 30 June 2010.

b)  Impairment write-off
At 30 June 2010 the Company recognised an impairment 
write-off in relation to plant and equipment, mine 
development expenditure and capitalised exploration 
at Southern Cross operations amounting to $37,946,000.

c)  Derivative ﬁ nancial liabilities
During the year the Company bought gold put options at 
a strike price of A$1,425 per ounce and sold gold call options 
at a strike price of A$1,615 per ounce (zero cost collar 
structure) to provide price protection over 250,000 ounces of 
King of the Hills production. The mark-to-market value of the 
collar structure at 30 June 2010 was negative $38,674,000, 
which is reﬂ ected in current and non-current liabilities.

d)  Repayment and redemption of convertible notes
During the year the Company applied the proceeds from 
an equity raising to repay and redeem convertible notes 
amounting to $75,588,000. At 30 June 2010 the outstanding 
balance in convertible notes was $1,200,000, and this 
outstanding balance was compulsorily redeemed subsequent 
to the balance date in July 2010.

e)  Changes in issued capital
In November 2009 the Company received net proceeds from 
the issue of new shares to institutional shareholders of 
$70,792,000. A total of 274,094,788 new shares were issued 
at an issue price of $0.27 per share.

In December 2009 the Company received net proceeds from 
the issue of new shares to retail shareholders of $48,029,000. 
A total of 184,640,669 new shares were issued at an issue 
price of $0.27 per share.

Likely developments and expected 
results of operations

The Company will continue to focus on achieving proﬁ table 
production with an emphasis on lower cost, higher margin 
gold production in Australia. The Company will complete the 
development of the King of the Hills mine at Leonora 
in ﬁ nancial year 2011 and commence production in the June 
2011 quarter. The future of the Southern Cross operations 
is under review with the base case remaining mine life having 
reduced to twenty two months from 1 July 2010.

www.stbarbara.com.au – Annual Report :: 35

 
Directors’ Report  continued

Further information about anticipated developments in the 
operations of the Company and the anticipated results 
of those operations in future ﬁ nancial years have not been 
included in this report because there is insufﬁ cient certainty 
to warrant disclosure.

Regulatory environment

The Company’s mining activities are all in Western Australia 
and are governed by Western Australian legislation, including 
the Mining Act 1978, the Mines Safety and Inspection Act 
1994, Dangerous Goods Safety Act 2004 and other mining 
related and subsidiary legislation. The Group is subject 
to signiﬁ cant environmental regulation, including, inter alia, 
the Western Australian Environmental Protection Act 1986, 
Contaminated Sites Act 2003, Wildlife Conservation Act 1950, 
Aboriginal Heritage Act 1972 and the Commonwealth 
Environmental Protection and Biodiversity Conservation Act 
1999, as well as safety compliance in respect of its mining 
and exploration activities.

The Company is registered under the National Greenhouse 
and Energy Reporting Act under which it is required to report 
energy consumption and greenhouse gas emissions for its 
operations for the twelve months ending 30 June. The 
Company has established data collection systems and 
processes to meet these reporting obligations.

Information on Directors

S J Colin Wise LL.B, FAICD, FAusIMM
Chairman – Non-Executive
Mr Wise is an experienced corporate lawyer, consultant and 
company director with signiﬁ cant expertise in the mining and 
exploration industry and resources, energy and corporate 
sectors. He spent 24 years with WMC Limited, 10 of which 
as General Counsel and subsequently, 4 years as Counsel 
to a New York law ﬁ rm. He has extensive practical experience 
in Australia and internationally with a wide range 
of corporate, operational and legal matters.

He has been Chairman of St Barbara since mid 2004, and 
is a Fellow of both the Australian Institute of Company 
Directors and the Australasian Institute of Mining and 
Metallurgy. He is a member of the Advisory Board to the 
Dean of Medicine, Nursing and Health Sciences at Monash 
University and was a Non-Executive Director for 5 years 
of Southern Health, the largest health care service in Victoria, 
Chair of its Quality Committee, and a member of the 
Audit Committee.

Other current public company directorships
Nil

Former public company directorships in last 3 years
Nil

36

Special responsibilities
Chairman of the Board
Member of the Remuneration, Audit and Health & 
Safety Committees

Interest in shares and options
Mr Wise has a relevant interest in 6,836,330 fully paid 
ordinary shares of the Company.

Timothy J Lehany B.E., MBA, MAusIMM
Managing Director and Chief Executive Ofﬁ cer
Mr Lehany is a mining engineer with extensive operating 
experience over the past twenty years with a number 
of mining companies, including Newcrest Mining and WMC 
Ltd. His roles covered gold, base metal and nickel mines.

Other current public company directorships
Nil

Former public company directorships in last 3 years
Nil

Special responsibilities
Nil

Interest in shares and options
Mr Lehany has a relevant interest in 1,006,923 fully paid 
ordinary shares and holds 7,366,419 unlisted options 
to acquire fully paid ordinary shares, subject to performance 
hurdles, as detailed later in this Report.

Douglas W Bailey, BBus (Acc), CPA, ACIS 
Non-Executive Director
Mr Bailey was the Chief Financial Ofﬁ cer of Woodside 
Petroleum Ltd between 2002 and 2004 and previously, was 
an Executive Director of Ashton Mining Limited from 1990 
to 2000, including the last 3 years as Chief Executive Ofﬁ cer. 
He was also a Non-Executive Director of Aurora Gold Ltd for 
the period 1993-2000.

Other current public company directorships
Tap Oil Limited

Former public company directorships in last 3 years
Nil

Special responsibilities
Chairman of the Audit Committee
Member of the Remuneration Committee

Interest in shares and options
Mr Bailey has a relevant interest in 181,478 fully paid 
ordinary shares.

 
Directors’ Report  continued

Barbara J Gibson B.Sc, FTSE, MAICD 
Non-Executive Director
Ms Gibson possesses a broad range of business management 
experience. Ms Gibson was formerly the General Manager 
Chemicals Group of Orica Limited, a member of the Orica 
Group Executive and a Director of Incitec Pivot Limited. She 
is a Fellow of the Australian Academy of Technical Sciences 
and Engineering, and is a recipient of the Australian 
Centenary Medal in 2001 for service to Australian society 
in medical technology.

Other current public company directorships
Nuplex Industries Limited
Penrice Soda Holdings Limited

Robert K Rae B.Com (Hons), FAICD 
Non-Executive Director
Mr Rae is a Director and Partner of McClintock Associates, 
a private investment bank and advisory ﬁ rm and has extensive 
industry and corporate experience. Mr Rae has held previous 
directorships within the mining industry, including Plutonic 
Resources Limited, Ashton Mining Limited, WA Diamond Trust 
and Centralian Minerals Limited. Mr Rae is also a member 
of the Salvation Army Advisory Board.

Other current public company directorships
McClintock Associates Securities Limited
SCEGGS Darlinghurst Limited
SHEM Limited

Former public company directorships in last 3 years
Biota Holdings Limited

Former public company directorships in last 3 years
Nil

Special responsibilities
Chair of the Remuneration Committee
Member of the Health & Safety Committee

Special responsibilities
Member of the Remuneration Committee
Member of the Audit Committee

Interest in shares and options
Ms Gibson has a relevant interest in 256,288 fully paid 
ordinary shares of the Company.

Interest in shares and options
Mr Rae has a relevant interest in 253,855 fully paid ordinary 
shares of the Company.

Qualiﬁ cations and experience of the 
company secretary

Ross J Kennedy BComm, Grad.Dip – Company 
Secretarial Practice, ACA, FTIA, MAusIMM, FAICD, ACIS 
Company Secretary
Mr Kennedy has more than 23 years experience as a public 
company secretary and has held a number of public company 
directorships in resources and technology companies. He has 
extensive experience in corporate management, including risk 
management, corporate governance, ﬁ nance, accounting, 
commercial negotiations, takeovers, legal contracts, land 
management, human resources, statutory compliance and 
public reporting.

Phillip C Lockyer M.Sc, AWASM, DipMETALL 
Non-Executive Director
Mr Lockyer is an experienced mining engineer and 
metallurgist with over 40 years experience in the mineral 
industry with an emphasis on gold and nickel, in both 
underground and open pit operations. Mr Lockyer was 
employed by WMC Resources for 20 years, and as General 
Manager for WA was responsible for that Company’s nickel 
division and gold operations. Mr Lockyer also held the 
position of Director Operations for Dominion Mining Limited 
and Resolute Limited.

Other current public company directorships
Focus Minerals Limited
Western Desert Resources Ltd
Swick Mining Services Limited
CGA Mining Limited

Former public company directorships in last 3 years
Ammtec Ltd
Perilya Limited
Jubilee Mines Limited

Special responsibilities
Chairman of the Health & Safety Committee
Member of the Audit Committee

Interest in shares and options
Mr Lockyer has a relevant interest in 63,785 fully paid 
ordinary shares of the Company.

www.stbarbara.com.au – Annual Report :: 37

 
Directors’ Report  continued

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 2010, and the numbers of meetings attended by each Director were:

Board 

Committees 
of the Board 

Audit Committee 

Remuneration 
Committee 

Health
& Safety
Committee

S J C Wise 

T J Lehany 

D W Bailey 

B J Gibson 

P C Lockyer 

R K Rae 

A 

16 

16 

16 

14 

15 

16 

B 

16 

16 

16 

16 

16 

16 

 A = Number of meetings attended

A 

4 

4 

– 

– 

2 

– 

B 

4 

4 

– 

– 

2 

– 

A 

4 

– 

4 

– 

4 

4 

B 

4 

– 

4 

– 

4 

4 

A 

5 

– 

5 

5 

– 

5 

B 

5 

– 

5 

5 

– 

5 

A 

4 

– 

– 

4 

4 

– 

B

4

–

–

4

4

–

 B = Number of meetings held during the time the Director held ofﬁ ce or was a member of the committee during the year

Remuneration report (Audited)

The remuneration report is part of the Directors’ Report 
set out under the following main headings:

The members of the Remuneration Committee as at the date 
of this report are:

A  Principles used to determine the nature and 

amount of remuneration

B  Details of remuneration

C  Share based compensation

D  Service agreements

This report for the year ended 30 June 2010 was prepared 
by the Directors in accordance with the Corporations Act 
2001 for the Company and the Group. Information regarding 
the compensation of individual directors and key management 
personnel is required by Corporations Regulations 2M3.03. 
This information has been audited as required by section 
308(3C) of the Act. Key Management Personnel have the 
authority and responsibility for planning, directing and 
controlling the activities of the Company and the Group. 
The Key Management Personnel, excluding Non-Executive 
Directors, will be collectively referred to as senior executives 
of the Company and the Group for the purposes 
of this report.

The remuneration committee is responsible for making 
recommendations to the Board on the remuneration 
arrangements for non executive directors and 
senior executives.

B J Gibson  –  Chair, Non-Executive Director
D W Bailey  –  Non-Executive Director
R K Rae 
–  Non-Executive Director
S J C Wise  –  Non-Executive Director

The responsibilities of the Remuneration Committee are 
to review and make recommendations to the Board 
as appropriate with respect to:

(cid:129)  The remuneration of Non-Executive Directors, including 

the Chair of the Board;

(cid:129)  Every aspect of remuneration for the Managing Director 

& CEO, including total remuneration, its ﬁ xed and variable 
components, short-term and long-term incentives and the 
determination of Key Performance Indicators (KPIs);

(cid:129)  The Managing Director & CEO’s recommendation 
in relation to the annual salary review, in per cent 
and total amount, for the Company as a whole;

(cid:129)  The recommendations of the Managing Director & CEO 
on the remuneration of the senior executives reporting 
to him, the ﬁ xed and variable components of that 
remuneration, the participation of these executives in short 
and long term incentive schemes and in the determination 
of their Key Performance Indicators (KPIs);

(cid:129)  Managing Director & CEO’s recommendations on the 

appointment or termination of senior executives reporting 
directly to him;

38

 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

(cid:129)  Any matters relating to employment and remuneration 

policies brought forward by the Managing Director & CEO, 
or the Chair of the Remuneration Committee;

(cid:129)  The operation and effectiveness of the Company’s 

Employee Option Plan; and

(cid:129)  The Company’s obligations in relation to employee 
beneﬁ ts (including superannuation) and employee 
entitlements in general.

A   Principles used to determine the nature 

and amount of remuneration

(i)  Summary of principles
The Company’s remuneration policy and strategies are 
overseen by the Remuneration Committee on behalf of 
the Board, in accordance with ASX Corporate Governance 
Principles and Recommendations – Principle 8: Remunerate 
Fairly and Responsibly. The remuneration policy is designed 
to attract, reward and retain high calibre executives capable 
of delivering the business objectives.

Reward structures are transparent and are aligned with 
shareholders’ interests by rewarding individual high 
performance, recognising the contribution of each executive 

to the continued growth and success of the Group, and 
ensuring that long term incentives are based on total 
shareholder return outperformance over a period of 
several years.

Each year, the Remuneration Committee considers the 
appropriate level of remuneration, as well as the mix and 
structure of ﬁ xed and “at risk” remuneration for each senior 
executive level. This is done by reference to independent data, 
independent professional advice where appropriate, and the 
Company’s circumstances. The same processes apply 
in reviewing appropriate remuneration levels for non 
executive directors.

Speciﬁ c remuneration strategies have been developed for 
senior executives to:

(cid:129)  reward performance and delivery against agreed 

business objectives;

(cid:129)  encourage alignment between the interests of employees 

and shareholders;

(cid:129)  attract, motivate and retain high performing 

employees; and

(cid:129)  encourage productive discretionary effort.

Set out in the table below is an overview of the elements of remuneration. A more detailed discussion of each element 
is contained in this report.

Elements of remuneration 

Non-Executive 
Directors 

Senior 
Executives 

Discussion
in Report

Fixed remuneration 

Fees 

Salary 

Superannuation 

Other beneﬁ ts 

At risk remuneration 

Short term incentives 

Long term incentives 

Conclusion of employment 

Termination payments 

✓ 
✗ 
✓ 
✓ 
✗ 
✗ 
✗ 

✗ 
✓ 
✓ 
✓ 
✓ 
✓ 
✓ 

Page 40

Page 40

Page 40

Page 40

Page 40

Page 41

Page 47

Strategically, Total Fixed Remuneration for each role is positioned between the median and the 75th percentile of prevailing 
comparable market rates, to ensure that the Company is able to attract and retain a talented and capable workforce appropriate 
to meet its current and anticipated needs.

The Managing Director & CEO’s remuneration comprises a ﬁ xed component of 40% and a variable component of 60%. 
Senior executive’s remuneration comprises a ﬁ xed component of 55% and variable component of 45%.

www.stbarbara.com.au – Annual Report :: 39

 
 
 
 
 
 
 
 
Directors’ Report  continued

(ii)  Non-Executive Directors’ fees
Non-Executive Directors’ fees are determined within an 
aggregate Directors’ fee pool limit, which is set and varied 
only by approval of a resolution of shareholders at the annual 
general meeting. The fee pool limit from which Non-Executive 
Directors’ fees can be drawn is currently $750,000 per annum 
in aggregate (approved by shareholders in November 2005).

Fees paid to Non-Executive Directors are set at levels which 
reﬂ ect both the responsibilities of, and the time commitments 
required from, each Non-Executive Director to discharge his or 
her duties. Non-Executive Directors’ fees are reviewed annually 
by the Board, guided periodically by the advice of independent 
remuneration consultants to ensure fees are appropriate for 
the duties performed and in line with the market. In order 
to maintain their independence and impartiality, the fees paid 
to Non-Executive Directors are not linked to the performance 
of the Company.

Superannuation contributions, in accordance with legislation, are 
included as part of each director’s total remuneration. Directors 
may elect to increase the proportion of their remuneration taken 
as superannuation subject to legislative requirements.

For the 2010 ﬁ nancial year, with the exception of the Chairman, 
Non-Executive Director fees comprised fees of $80,000 plus 
an allowance for chairing a Board Committee of $15,000, 
plus a fee for serving as a (non-Chair) member of a Board 
Committee of $7,500. The Chairman received a ﬁ xed fee 
of $190,000 as well as beneﬁ ts in the form of a car park, 
mobile telephone allowance and other administrative beneﬁ ts.

The Chairman’s fee is determined independently based 
on comparative roles and responsibilities in the external 
market for companies comparable with St Barbara Limited. 
The Chairman is not present at any discussions relating 
to the determination of his own remuneration.

Non-Executive Directors, including the Chairman, resolved not 
to increase Non-Executive Director fees for the 2010 ﬁ scal year.

(iii)  Retirement allowances for Directors
Non-Executive Directors are not entitled to retirement beneﬁ ts.

(iv)  Senior executive remuneration
Senior executive remuneration comprises both a ﬁ xed 
component and an at risk component, which is intended 
to remunerate senior executives for increasing shareholder 
value, achieving ﬁ nancial targets and effective execution 
of business strategies. It is also designed to attract and retain 
high calibre executives. The remuneration of senior executives 
has three components:

(cid:129)  ﬁ xed remuneration, comprising base salary (which is 

calculated on a total cost basis and includes any fringe 
beneﬁ ts tax charges related to employee beneﬁ ts), 
employer statutory contributions to superannuation 
and other deﬁ ned beneﬁ ts;

(cid:129)  short term incentives; and

(cid:129)  long term incentives.

The aggregate of the three components comprises a senior 
executive’s total remuneration.

(a)  Fixed remuneration – Key Management Personnel
(i)  Base salary
The base salary is inﬂ uenced by the scope of the role and 
the knowledge, skills and experience required for the position. 
External remuneration consultants provide periodic analysis 
and advice to ensure the base salary is competitive for 
a comparable role.

Base salary for senior executives is reviewed annually as part 
of the Company’s overall remuneration review process and 
is assessed against the Company’s and the individual’s 
performance. A senior executive’s salary is also reviewed
on promotion.

(ii)  Superannuation
In addition to statutory superannuation contributions, senior 
executives may elect to contribute additional amounts, 
subject to legislative requirements.

(iii)  Beneﬁ ts
Senior executives may receive beneﬁ ts, including car parking, 
living away from home allowances, and payment for certain 
professional memberships.

(b)  Short term incentives (STI)
The STI is an annual “at risk” component of remuneration for 
the senior executives and the net amount after allowing for 
applicable taxation is payable in cash. The objective of the 
STI is to remunerate senior executives for achieving annual 
Company targets and their own individual performance 
targets. Company and individual performance targets each 
account for 50 percent of the maximum STI. The STI payment 
to senior executives is based on achievements measured 
against key performance indicators (KPIs) set at the beginning 
of the ﬁ nancial year. The maximum STI opportunity varies 
according to the role. KPIs require performance in improving 
operational effectiveness and the achievement of strategic 
ﬁ nancial and non-ﬁ nancial measures, linked to the drivers 
of performance in current and future reporting periods.

40

 
Directors’ Report  continued

The Remuneration Committee is responsible for assessing the 
extent to which the KPIs of the Managing Director & CEO and 
senior executives have been achieved. To assist in making this 
assessment, the Committee receives detailed reports and 
presentations on the performance of the business from the 
Managing Director & CEO and independent remuneration 
consultants as required.

The Remuneration Committee recommends for Board approval 
the STI to be paid to the Managing Director & CEO and 
senior executives.

(c)  Long term incentives (LTI)
LTI’s are structured to reward senior executives for the long 
term performance of the Company and are granted in the 
form of employee options.

All employee options have been issued pursuant to the 
St Barbara Limited Employee Share Option Plan. Vesting 
of options granted during the year is conditional on the 
Company achieving a Total Shareholder Return relative 
to a peer group of companies over a three year period, 
as a minimum at the 50th percentile.

Refer page 45 for further information.

B  Details of remuneration

(i)  Remuneration paid
Details of the remuneration of Directors and the senior 
executives of the Company and the Group are set out in the 
following tables.

The Directors of the Company and the Group during the year 
ended 30 June 2010 were:

(cid:129)  S J C Wise 
(cid:129)  T J Lehany 
(cid:129)  D W Bailey 
(cid:129)  B J Gibson 
(cid:129)  P C Lockyer 
(cid:129)  R K Rae 

Chairman
Managing Director & CEO
Non-executive director
Non-executive director
Non-executive director
Non-executive director

The senior executives with the authority and responsibility 
for planning, directing and controlling the activities of 
the Company and the Group during the year ended 
30 June 2010, were:

(cid:129)  Tim Lehany 
(cid:129)  David Rose 

(cid:129)  Martin Reed 

Managing Director & CEO
 Chief Operating Ofﬁ cer
Appointed 7 September 2009
 Chief Operating Ofﬁ cer
Resigned 11 September 2009

(cid:129)  Garth Campbell-Cowan  Chief Financial Ofﬁ cer
(cid:129)  Ross Kennedy 

(cid:129)  Phil Uttley 

(cid:129)  Adrian McArthur 

 Executive General Manager
Corporate Services/
Company Secretary
 Executive General Manager
Discovery & Growth
Appointed 28 September 2009
 Acting General Manager Exploration
Ceased acting in position 
30 September 2009

www.stbarbara.com.au – Annual Report :: 41

 
Directors’ Report  continued

B  Details of remuneration  cont.

(i)  Remuneration paid  cont.

2010 

Name 

Non-Executive
Directors
S J C Wise
(Chairman) 

D W Bailey 

B J Gibson 

P C Lockyer 

R K Rae 

Total
Non-Executive
Directors 

Executive
Director
T J Lehany 

Short-term beneﬁ ts 

Post-
employment
beneﬁ ts 

Long-term beneﬁ ts

Cash 
salary 
& fees 
$ 

Non- 
STI  monetary 
beneﬁ ts 
$ 

payment 
$ 

Super- 
annuation 
$ 

Other 
$ 

Long 
Service 
Leave (6) 
$ 

Share- 
based 
payments: 

Termination 

options (5)  payments (7) 

$ 

$ 

  Proportion 
Value
of total 
perfor-  of options
as %
mance 
of total
related 

Total 
$ 

175,539 

94,037 

94,037 

94,037 

87,156 

– 

– 

– 

– 

– 

14,945 (8) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

14,461 

8,463 

8,463 

8,463 

7,844 

544,806 

– 

14,945 

– 

47,694 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

204,945 

102,500 

102,500 

102,500 

95,000 

–  607,445

– 

– 

– 

– 

– 

–

–

–

–

–

786,255 

566,500 

5,363 

– 

14,461 

10,652 

447,551 

–  1,830,782 

30.9% 

24.4%

Other key
management
personnel
G Campbell-Cowan  382,539 

228,990 

M Reed (1) 

D Rose (2) 

R Kennedy 

P Uttley (3) 

97,579 

– 

357,124 

175,744 

335,539 

168,354 

255,526 

140,595 

A McArthur (4) 

94,664 

– 

2,681 

1,197 

1,513 

2,681 

– 

– 

– 

– 

14,461 

23,797 

177,384 

– 

829,852 

27.6% 

21.4%

3,613 

– 

– 

133,639 

236,028 

– 

50,000 (9)  11,810 

5,582 

113,700 

715,473 

24.6% 

– 

– 

– 

14,461 

27,037 

148,360 

10,966 

4,301 

88,425 

5,921 

– 

– 

– 

– 

– 

696,432 

24.2% 

499,813 

28.1% 

100,585 

– 

–

15.9%

21.3%

17.7%

–

Total senior
executives 

2,309,226  1,280,183 

13,435 

50,000 

75,693 

71,369 

975,420 

133,639  4,908,965

(1)  Mr Reed resigned as Chief Operating Ofﬁ cer on 11 September 2009.

(2)  Mr Rose was appointed as Chief Operating Ofﬁ cer on 7 September 2009. The STI payment represents the pro-rata amount from 

commencement to 30 June 2010.

(3)  Mr Uttley was appointed Executive General Manager Discovery & Growth on 28 September 2009. The STI represents the pro-rata amount 

from commencement to 30 June 2010.

(4)  Mr McArthur ceased acting as General Manager Exploration on 30 September 2009.

(5)  The value of options disclosed as remuneration is the portion of the fair value of the options recognised in the reporting period.

(6)  For current employees, the amount represents the long service leave expense accrued for the period.

(7)  Termination payments include amounts for accrued annual leave owing at the date of the employee’s resignation, payments in lieu 

of service and other contracted payments.

(8)  Represents carpark, mobile phone, and other administrative beneﬁ ts.

(9)  Represents a sign-on payment.

42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

B  Details of remuneration  cont.

(i)  Remuneration paid  cont.

2009 

Name 

Non-Executive
Directors
S J C Wise
(Chairman) 
D W Bailey 
B J Gibson 
P C Lockyer 
R K Rae 

Total
Non-Executive
Directors 

Executive
Director
T J Lehany (1) 
E Eshuys (2) 

Short-term beneﬁ ts 

Post-
employment
beneﬁ ts 

Long-term beneﬁ ts

Cash 
salary 
& fees 
$ 

Non- 
STI  monetary 
beneﬁ ts 
$ 

payment 
$ 

Super- 
annuation 
$ 

Other 
$ 

Long 

Share- 
based 
Service  payments:  Termination 
Leave (8) 
$ 

options (7)  payments (9) 

$ 

$ 

  Proportion 
Value
of total 
perfor-  of options
as %
mance 
of total
related 

Total 
$ 

176,255 
94,037 
94,037 
96,153 
87,156 

– 
– 
– 
– 
– 

17,068 (12) 
– 
– 
– 
– 

– 
– 
– 
– 
– 

13,745 
8,463 
8,463 
6,348 
7,844 

547,638 

– 

17,068 

– 

44,863 

– 
– 
– 
– 
– 

– 

– 
– 
– 
– 
– 

– 

– 
– 
– 
– 
– 

207,068 
102,500 
102,500 
102,501 
95,000 

– 

609,569

– 
– 
– 
– 
– 

–
–
–
–
–

262,085 
514,740 

120,000 
480,000 

763 
8,819 

– 
– 

4,582 
13,745 

19,715 
89,550 

14,383 
421,528 
11,901  1,578,244  2,696,999 

– 

28.5% 
5.6% 

3.4%
0.4%

Other
key management
personnel
M Reed (3) 
186,527 
I Bird (4) 
5,952 
G Campbell-Cowan  371,255 
G Viska (5) 
180,940 
R Kennedy 
286,255 
P Thompson (4) 
3,644 
A McArthur (6) 
236,255 

42,780 
– 
154,000 
– 
120,000 
– 
85,000 

574 
1,250 
4,804 
2,360 
4,804 
1,250 
– 

– 
– 
– 

6,969 
3,282 
13,745 
23,903 (10)  8,018 
13,745 
2,188 
39,447 (11)  13,745 

– 
– 

9,685 
– 
20,609 
32,485 
23,111 
20,617 
25,178 

– 
– 
50,578 
– 
9,031 
– 
7,265 

– 
385,962 
– 
471,103 
– 
271,592 
– 

246,535 
396,446 
614,991 
718,809 
456,946 
299,291 
406,890 

17.4% 
– 
25.0% 
– 
26.3% 
– 
20.9% 

–
–
8.2%
–
2.0%
–
1.8%

Total senior
executives 

2,047,653  1,001,780 

24,624 

63,350 

80,019 

240,950 

93,158  2,706,901  6,258,435

(1)  Mr Lehany was appointed as Chief Executive Ofﬁ cer on 2 March 2009.

(2)  Mr Eshuys resigned on 2 March 2009.

(3)  Mr Reed was appointed as Chief Operating Ofﬁ cer on 12 January 2009.

(4)  Mr Bird and Mr Thompson resigned on 4 July 2008.

(5)  Mr Viska was made redundant on 30 January 2009.

(6)  Mr McArthur commenced as Acting General Manager Exploration on 4 July 2008.

(7)  The value of options disclosed as remuneration is the portion of the fair value of the options recognised in the reporting period.

(8)  For current employees, the amount represents the long service leave expense accrued for the period. For employees who resigned 
during the year, the amount represents the payment made to them on termination relating to pro-rated long service leave owing.

(9)  Termination payments include amounts for accrued annual leave owing at the date of the employee’s resignation, payments in lieu 

of service and other contracted payments.

(10) Living away from home allowance.

(11)  Stamp duty paid on house purchase upon relocation.

(12)  Represents carpark, mobile phone, and other administrative beneﬁ ts.

www.stbarbara.com.au – Annual Report :: 43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

(ii)  Cash incentives included in remuneration (short term incentive)
The table below provides the percentage of ﬁ xed remuneration earned by senior executives under the short term incentive (STI), 
based on relevant performance measures having been met.

Maximum 
potential STI 

Actual STI 
included in 
remuneration 

% of 
maximum 
‘Target’ STI 
  earned 

% of 
maximum 
potential 
total STI 
earned 

% of
maximum
potential
total STI
 foregone

Target 

Stretch(2) 

$

400,000 

400,000 

566,500 

150,000 (1) 

150,000 (1) 

175,744 

158,800 

158,800 

228,990 

105,000 (1) 

105,000 (1) 

140,595 

140,000 

140,000 

168,354 

100% 

100% 

100% 

100% 

100% 

71% 

59% 

72% 

67% 

60% 

29%

41%

28%

33%

40%

2010 

T J Lehany 

D Rose 

G Campbell-Cowan 

P Uttley 

R Kennedy 

(1)  Applied pro-rata for period of employment.
(2)  Stretch STI’s are in addition to Target STI’s.

Target performance represents challenging but achievable levels of performance. The performance measures are split 50/50 
between Company and individual executive performance measures, and comprise ﬁ nancial and non ﬁ nancial measures. 
The individual performance measures vary depending on the individual executive’s position.

Stretch performance requires signiﬁ cant performance above and beyond normal expectations and if achieved is anticipated 
to result in a substantial improvement in key operational areas, ﬁ nancial results, and/or the ﬁ nancial position of the Company. 
The stretch performance measures are also split 50/50 between Company and individual executive performance measures.

Amounts included in remuneration as actual cash STI for the ﬁ nancial year represent the amounts accrued in relation to the 
2010 ﬁ nancial year, based on achievement of the speciﬁ ed performance criteria. No additional amounts vest in future years 
in respect of the bonus scheme for the 2010 ﬁ nancial year.

Short term incentives paid in respect of the 2010 ﬁ nancial year reﬂ ected achievement of Company and some individual 
performance measures. Achieved Company measures comprised improved safety performance and the achievement 
of signiﬁ cant improvement in underlying proﬁ tability and cash position.

Individual performance measures achieved reﬂ ected value accretive and/or risk mitigation achievements for the beneﬁ t 
of the Company and Shareholders.

(iii)  Performance of St Barbara Limited
In assessing the Group’s performance and improvement in shareholder wealth, consideration is given to the following measures 
in respect of the current ﬁ nancial year and the previous four ﬁ nancial years:

Earnings 

Sales revenue 

EBITDA 

2010 
$ 

2009 
$ 

2008 
$ 

2007 
$ 

2006
$

296,760,000  281,129,000  143,129,000  130,911,000  115,263,000

33,793,000  39,701,000  12,340,000  28,364,000  13,577,000

Reported net proﬁ t/(loss) after tax 

(40,188,000) 

(76,344,000)  (17,333,000) 

(2,894,000) 

6,019,000

Underlying net proﬁ t/(loss) after tax 

14,547,000 

209,000 

(29,291,000)  (20,653,000)  (12,435,000)

The table below provides the share price performance of the Company’s shares in the 2010 ﬁ nancial year and the previous four 
ﬁ nancial years.

Share price history 

2010 

2009 

2008 

2007 

2006

Period end share price (cents per share) 

Average share price for the year (cents per share) 

35 

28 

23 

29 

37 

64 

49 

54 

57

40

During the 2010 ﬁ nancial year, the Company’s daily closing share price traded in a range of 18 to 45 cents per share 
(2009: 19 to 52 cents per share).

44

 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

C  Share based compensation

(i)  Options
Employee options issued to Mr Lehany, Managing Director & CEO, were approved by shareholders at the Extraordinary General 
Meeting held on 5 May 2009. All options were granted under the St Barbara Limited Employee Option Plan, which was approved 
by shareholders at the 2001 Annual General Meeting of shareholders. All full time employees are eligible to participate in the plan.

Details on options over ordinary shares in the Company that were granted as compensation to each senior executive during the 
ﬁ nancial year and details of options that vested in the ﬁ nancial year are as follows:

2010 

T J Lehany 

D Rose 

G Campbell-Cowan 

P Uttley 

R Kennedy 

Number of 
options 
granted 
during 2010 

Exercise 
price 
per option 
 (Cents per share) 

Grant date 

Expiry date 

Fair value 
per option 
at grant date 

Number
of options
vested
 (Cents per share)  during 2010

5,857,320 

1,976,846 

1,744,017 

1,537,547 

1,537,547 

0.287 

0.287 

0.287 

0.287 

0.287 

23 Sept 2009 

23 Sept 2014 

23 Sept 2009 

23 Sept 2014 

23 Sept 2009 

23 Sept 2014 

23 Sept 2009 

23 Sept 2014 

23 Sept 2009 

23 Sept 2014 

0.35 (1) 

0.34 

0.34 

0.34 

0.34 

–

–

–

–

–

(1)  Mr Lehany’s options were issued prior to the equity raising in November 2009 and December 2009. The remaining options were issued 

in June 2010, and the fair value of these options reﬂ ected the effect of this equity raising.

The options were provided to the senior executives as part of their total remuneration package. The vesting of options granted 
in 2010 is subject to a continuing service condition as at each vesting date, and achieving a relative Total Shareholder Return 
for the period from the option pricing date to 30 June 2012. No options have been granted since the end of the ﬁ nancial year.

The Total Shareholder Return is measured against a deﬁ ned peer group of companies and the percentage of options that vest 
is in accordance with the following rules:

Relative TSR Performance Over Measurement Period 

% of Right to Vest

<  50th percentile 

  50th percentile 

>  50th &  < 75th percentiles 

  75th percentile and above 

0%

50%

Pro-rata between 50% & 75%

100%

The peer group against which Total Shareholder Return is measured comprises:

Company

Newcrest Mining Limited 

Lihir Gold Limited 

Saracen Mineral Holdings Limited (1) 

Kingsgate Consolidated Limited 

Avoca Resources Limited 

Independence Group NL

Dominion Mining Limited

Catalpa Resources Limited (1)

Apex Minerals NL

OceanaGold Corporation

(1)  During 2010, Saracen Mineral Holdings Limited and Catalpa Resources Limited replaced Sino Gold Mining Limited and Lion Selection Limited 

as these companies ceased to be listed on the Australian Stock Exchange.

The Board reserves the right to make changes to the peer group to allow for changing circumstances (e.g. takeover) for peer 
group companies.

All options expire on the earlier of their expiry date, thirty days after resignation of the relevant executive or twelve months after 
retirement or retrenchment.

Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one 
ordinary share.

www.stbarbara.com.au – Annual Report :: 45

 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date 
to vesting date, and the amount is included in the remuneration tables in section B. Fair values at grant date are independently 
determined using a Black Scholes option pricing model that takes into account the exercise price (ordinarily linked to the average 
closing market price for the 5 business days immediately preceding the grant date), the term of the option, the performance 
hurdle (relative Total Shareholder Return) the share price at grant date and expected price volatility of the underlying share, 
no expected dividend yield and the risk free interest rate for the term of the option.

Further information on the options is set out in Note 37 to the Financial Statements.

(ii)  Exercise of options granted as compensation
During the reporting period, there were no options exercised.

(iii)  Analysis of movements in the value of options granted and exercised

2010 

T J Lehany 

G Campbell-Cowan 

D Rose 

P Uttley 

R Kennedy 

A 

Granted 
in year 
$ 

1,466,000 

401,300 

454,800 

353,700 

353,700 

B 

Exercised 
in year 
$ 

– 

– 

– 

– 

– 

C

Lapsed
in year
$

–

–

–

–

–

A  The value of options granted in the year is the fair value of the options calculated at grant date using a Black-Scholes 
option-pricing model. The total value of the options granted is included in the table above. This amount is allocated 
to remuneration over the vesting period.

B 

The value of options exercised during the year is calculated as the market price of shares of the Company on the Australian 
Securities Exchange as at close of trading on the day the options were exercised after deducting the price paid to exercise 
the option.

C  The value of the options that lapsed during the year represents the beneﬁ t forgone and is calculated at the date the option 

lapsed using a Black-Scholes option-pricing model.

(iv)  Analysis of options granted as compensation

Options granted 

Value yet to vest

2010 

T J Lehany 

G Campbell-Cowan 

D Rose 

Phil Uttley 

R Kennedy 

Number 

Date 

1,508,099 
5,857,320 

6 May 2009 
19 Nov 2009 

1,744,017 
1,207,160 

23 Sep 2009 
6 May 2009 

1,976,846 

23 Sep 2009 

1,537,547 

23 Sep 2009 

1,537,547 
940,644 

23 Sep 2009 
6 May 2009 

% 
 vested 
 in year 

% 
forfeited 
 in year 

– 
– 

– 
– 

– 

– 

– 
– 

– 
– 

– 
– 

– 

– 

– 
– 

Financial year 
options vest 

30 June 2012 
30 June 2013 

30 June 2013 
30 June 2012 

30 June 2013 

30 June 2013 

30 June 2013 
30 June 2012 

Minimum 
(A) 
$ 

Nil 
Nil 

Nil 
Nil 

Nil 

Nil 

Nil 
Nil 

Maximum
(B)
$

191,165
1,113,900

154,329
300,975

341,000

265,275

120,033
265,275

A  The minimum value of options yet to vest is $nil as the vesting service conditions, which are continuing service conditions 

and relative Total Shareholder Returns over a three year period, are still to be satisﬁ ed.

B 

The maximum value of the options yet to vest represents the amount of the grant date fair value of the options that is still 
to be expensed in the income statement.

46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report  continued

D  Service agreements

Remuneration and other terms of employment for the 
Managing Director and CEO and the senior executives are 
formalised in service agreements. These agreements provide, 
where applicable, for the provision of performance related 
cash bonuses, other beneﬁ ts including allowances, and 
participation in the St Barbara Limited Executive Option and 
Employee Option Plans. Other major provisions of the 
agreements relating to remuneration are set out below.

All contracts with senior executives may be terminated early 
by either party giving the required notice and subject 
to termination payments as detailed below.

T J Lehany – Managing Director & CEO
(cid:129)  Term of agreement – permanent employee 

commencement 2 March 2009

(cid:129)  Payment of a termination beneﬁ t or early termination 
by the Company, other than for serious misconduct 
or serious breach of duty:

a)  Where 6 months notice of termination is given; an 

additional 6 months base salary and superannuation 
payment, and any entitlement to a ‘stretch performance’ 
payment plus an amount equivalent to six months of 
notional ‘target performance’ payment (at the discretion 
of the Board), or

b)  Where notice of immediate termination is given, 
12 months base salary and superannuation, plus 
an amount equivalent to 12 months of a notional ‘target 
performance’ payment (at the discretion of the Board).

D Rose – Chief Operating Ofﬁ cer
(cid:129)  Term of agreement – permanent employee 

commencement 11 September 2009.

(cid:129)  Payment of a termination beneﬁ t on early termination 

by the Company, other than for gross misconduct, equal 
to 8 months base salary and superannuation.

G Campbell-Cowan – Chief Financial Ofﬁ cer
(cid:129)  Term of agreement – permanent employee 

commencement 11 September 2006.

(cid:129)  Payment of a termination beneﬁ t on early termination 

by the Company, other than for gross misconduct, equal 
to 8 months base salary and superannuation.

R Kennedy – Executive General Manager Corporate 
Services/Company Secretary
(cid:129)  Term of agreement – permanent employee 

commencement 29 September 2004.

(cid:129)  Payment of a termination beneﬁ t on early termination 

by the Company, other than for gross misconduct, equal 
to 6 months base salary and superannuation.

P Uttley – Executive General Manager Discovery 
& Growth
(cid:129)  Term of agreement – permanent employee 

commencement 28 September 2009.

(cid:129)  Payment of a termination beneﬁ t on early termination 

by the Company, other than for gross misconduct, equal 
to 6 months base salary and superannuation

Loans to Directors and executives

There were no loans to Directors or executives during the year 
(2009: Nil).

Auditor independence

A copy of the Auditor’s Independence Declaration required 
under section 307C of the Corporations Act 2001 is set out 
on page 49. The Directors are satisﬁ ed that the provision 
of these services did not impair the auditor’s independence.

Indemniﬁ cation and insurance of ofﬁ cers

The Company indemniﬁ es all Directors of the Company 
named in this report, and a number of former Directors 
(including Mr Richard Knight, Mr Hank Tuten, Mr Mark 
Wheatley and Mr Eduard Eshuys) and current and former 
executive ofﬁ cers of the Company and its controlled entities 
against all liabilities to persons (other than the Company 
or a related body corporate) which arise out of the 
performance of their normal duties as Director or executive 
ofﬁ cer, unless the liability relates to conduct involving bad 
faith. The Company also has a policy to indemnify the 
Directors and executive ofﬁ cers against all costs and expenses 
incurred in defending an action that falls within the scope 
of the indemnity and any resulting payments.

During the year the Company paid an insurance premium for 
Directors and Ofﬁ cers Liability and Statutory Liability policies. 
The contract of insurance prohibits disclosure of the amount 
of the premium and the nature of the liabilities insured under 
the policy.

During the year the Company also paid the premium 
on a Personal Accident insurance policy on behalf of directors, 
to insure them for travel while on Company business.

www.stbarbara.com.au – Annual Report :: 47

 
Directors’ Report  continued

Proceedings on behalf of the company

(cid:129)  None of the services undermine the general principles 

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.

Environmental management

The Company regards compliance with environmental 
regulations as the minimum performance standard for its 
operations. The Company’s operations in Western Australia 
are subject to environmental regulation under both 
Commonwealth and State legislation.

There were two non-compliances registered and externally 
reported for the Southern Cross operations during the 2010 
ﬁ nancial year. At Leonora, there were four non-compliances 
registered and externally reported. This was a signiﬁ cant 
decrease in the number of incidents reported from Leonora 
the previous year and reﬂ ects the increased level of 
environmental awareness by mining and process personnel. 
None of the reported incidents were material in that there 
was minimal, if any, adverse impact on the environment. The 
formal reporting of two of the Leonora incidents did however 
generate requests from regulators for additional investigation 
and reporting on measures to be taken to prevent recurrence.

Non-audit services

During the year the Company did employ the auditor 
on assignments additional to their statutory audit duties. 
Details of the amounts paid or payable to the auditor, KPMG, 
for audit and non-audit services provided during the year are 
set out in Note 27 to the ﬁ nancial statements.

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 non-audit 
services during the year 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 
in Note 27 to the ﬁ nancial statements, did not compromise 
the auditor independence requirements of the Corporations 
Act 2001 for the following reasons:

(cid:129)  All non-audit services have been reviewed by the Audit 

Committee to ensure they do not impact the impartiality 
and objectivity of the auditor;

relating to auditor independence as set out in APES 110 
Code of Ethics for Professional Accountants; and

(cid:129)  The Audit Committee annually informs the Board of the 
detail, nature and amount of any non-audit services 
rendered by KPMG during the most recent ﬁ nancial year 
and an explanation of why the provision of these services 
is compatible with auditor independence. If applicable, 
the Audit Committee recommends that the Board take 
appropriate action in response to the Audit Committee’s 
report to satisfy itself of the independence of KPMG.

Events occurring after the end of the 
ﬁ nancial year

The Directors are not aware of any matter or circumstance 
that has arisen since the end of the ﬁ nancial year that, in their 
opinion, has signiﬁ cantly affected or may signiﬁ cantly affect 
in future years the Company’s operations, the results of 
those operations or the state of affairs, except for the 
following items:

(cid:129)  On 4 July 2010 the Company redeemed convertible notes 

with a face value of $1,200,000. There are no more 
convertible notes outstanding.

(cid:129)  On 13 August 2010 the Company signed an asset sale 
agreement for the sale of its Tarmoola process plant, 
which is on care and maintenance and surplus to the 
Company’s requirements, for a cash consideration 
of $3,000,000.

Rounding of amounts

St Barbara Limited is a Company of the kind referred to in 
Class Order 98/100 approved by the Australian Securities 
and Investments Commission and issued pursuant to section 
341(1) of the Corporations Act 2001. As a result, amounts 
in this Directors’ Report and the accompanying Financial 
Report have been rounded to the nearest thousand dollars, 
except where otherwise indicated.

This report is made in accordance with a resolution 
of Directors.

For and on behalf of the Board
Dated at Melbourne this 24th day of August 2010

Timothy J Lehany
Managing Director & CEO

48

 
Auditor’s Independence Declaration

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of St Barbara Limited.

I declare that, to the best of my knowledge and belief, in relation to the audit for the ﬁ nancial year ended 30 June 2010, 
there have been:

i. 

 no contraventions of the auditor independence requirement as set out in the Corporations Act 2001 in relation 
to the audit; and

ii.  no contraventions of any applicable code of professional conduct in relation to the audit

KPMG

Michael Bray
Partner

Melbourne 
24 August 2010

www.stbarbara.com.au – Annual Report :: 49

Financial Report

This ﬁ nancial report covers both St Barbara Limited as an individual entity and the Group consisting of St Barbara Limited 
and its subsidiaries. The ﬁ nancial report is presented in the Australian currency.

St Barbara Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered ofﬁ ce is:

St Barbara Limited
Level 14, 90 Collins St
Melbourne VIC 3000

A description of the nature of the Group’s operations and its principal activities is included in the review of operations 
and activities in the directors’ report, which is not part of this ﬁ nancial report.

The ﬁ nancial report was authorised for issue by the Directors on 24 August 2010. The Company has the power to amend 
and reissue the ﬁ nancial report.

50

Consolidated Income Statement

For the year ended 30 June 2010

Revenue from continuing operations 

Mine operating costs 

Gross proﬁ t 

Other revenue 

Other income 

Exploration expensed 

Corporate and support costs 

Royalties 

Depreciation and amortisation 

Other expenditure 

Operating loss 

Finance costs 

Net realised/unrealised (loss)/gain on derivatives 

Net realised/unrealised gain/(loss) on available for sale assets 

Loss before income tax 

Income tax expense 

Loss after income tax for the year 

Earnings per share for loss attributable to the
ordinary equity holders of the Company:

Basic loss per share (cents per share) 

Diluted loss per share (cents per share) 

Notes 

6 

9 

6 

7 

Consolidated

2010 
$’000 

2009
$’000

296,760 

281,129

(207,688) 

(185,794)

89,072 

95,335

6,765 

939 

5,411

223

(5,184) 

(13,442)

(21,382) 

(27,089)

(11,790) 

(11,042)

8,9 

(71,874) 

(110,104)

(2,628) 

(1,759)

(16,082) 

(62,467)

8 

9 

9 

(7,317) 

(19,513) 

2,724 

(8,996)

1,451

(6,332)

(40,188) 

(76,344)

10 

– 

–

(40,188) 

(76,344)

36 

36 

(2.27) 

(2.27) 

(5.63)

(5.63)

The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

www.stbarbara.com.au – Annual Report :: 51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Financial Position

As at 30 June 2010

Assets

Current assets

Cash and cash equivalents 

Trade and other receivables 

Inventories 

Available for sale ﬁ nancial assets 

Deferred mining costs 

Total current assets 

Non-current assets

Property, plant and equipment 

Deferred mining costs 

Mine properties 

Exploration and evaluation 

Total non-current assets 

Total assets 

Liabilities

Current liabilities

Trade and other payables 

Interest bearing borrowings 

Derivative ﬁ nancial liabilities 

Provisions 

Total current liabilities 

Non-current liabilities

Interest bearing borrowings 

Derivative ﬁ nancial liabilities 

Provisions 

Total non-current liabilities 

Total liabilities 

Net Assets 

Equity

Contributed equity 

Reserves 

Accumulated losses 

Total equity 

Consolidated

2010 
$’000 

2009
$’000

Notes 

11 

12 

13 

15 

14 

17 

14 

18 

19 

20 

21 

22 

23 

21 

22 

23 

102,157 

15,480 

18,055 

– 

9,114 

53,692

34,936

31,058

13,869

16,196

144,806 

149,751

112,096 

117,628

– 

6,472

216,530 

185,341

5,735 

8,219

334,361 

317,660

479,167 

467,411

37,558 

7,116 

338 

6,913 

38,376

83,567

–

5,792

51,925 

127,735

8,793 

13,974

38,336 

30,645 

77,774 

–

29,230

43,204

129,699 

170,939

349,468 

296,472

24 

614,997 

496,176

25(a) 

(16,677) 

8,960

25(b) 

(248,852) 

(208,664)

349,468 

296,472

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

52

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Comprehensive Income

For the year ended 30 June 2010

Loss for the year 

Other comprehensive income

  Changes in fair value of available for sale ﬁ nancial assets 

  Changes in fair value of cash ﬂ ow hedges taken to reserves 

Other comprehensive income net of tax 

Total comprehensive income attributable to equity holders of the company 

Notes 

25(a) 

25(a) 

Consolidated

2010 
$’000 

2009
$’000

(40,188) 

(76,344)

(6,687) 

6,687

(19,161) 

(25,848) 

–

6,687

(66,036) 

(69,657)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

www.stbarbara.com.au – Annual Report :: 53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Changes in Equity

For the year ended 30 June 2010

Balance at 1 July 2009 

496,176 

8,960 

(208,664) 

296,472

Attributable to equity holders of the Company

Contributed 
Equity 
$’000 

Note 

Reserves 
$’000 

Retained
Earnings 
$’000 

Total
$’000

Equity issues (net of transaction costs) 

24 

118,821 

Share-based payments expense 

Unlisted options expired 

Convertible note reserve transferred to income statement 

Comprehensive income for the year 

Balance at 30 June 2010 

Balance at 1 June 2008 

Equity issues (net of transaction costs) 

Convertible notes converted to shares 

Exercise of options 

Share-based payments expense 

Unlisted options expired 

Comprehensive income for the year 

Balance at 30 June 2009 

25(a) 

25(a) 

25(a) 

Note 

24 

24 

24 

25(a) 

25(a) 

– 

1,175 

(532) 

(432) 

– 

– 

– 

– 

118,821

1,175

(532)

(432)

(25,848) 

(40,188) 

(66,036)

– 

– 

– 

– 

614,997 

(16,677) 

(248,852) 

349,468

Attributable to equity holders of the Company

Contributed 
Equity 
$’000 

366,466 

128,507 

400 

803 

– 

– 

– 

496,176 

Reserves 
$’000 

Retained
Earnings 
$’000 

Total
$’000

2,518 

(132,320) 

236,664

– 

– 

(213) 

181 

(213) 

6,687 

8,960 

– 

– 

– 

– 

– 

128,507

400

590

181

(213)

(76,344) 

(69,657)

(208,664) 

296,472

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Cash Flow Statement

For the year ended 30 June 2010

Cash Flows From Operating Activities:

Receipts from customers (inclusive of GST) 

Payments to suppliers and employees (inclusive of GST) 

Interest received 

Interest paid 

Finance charges – ﬁ nance leases 

Borrowing costs 

Net cash inﬂ ow from operating activities 

Cash Flows From Investing Activities:

Proceeds from sale of property, plant and equipment 

Proceeds on sale of available for sale ﬁ nancial assets 

Payments for property, plant and equipment 

Payments for development of mining properties 

Payments in respect of mines under construction 

Payments for tenements and land 

Proceeds on close out of put options 

Exploration and evaluation expenditure 

Net cash outﬂ ow from investing activities 

Cash Flows From Financing Activities:

Proceeds from issue of shares on conversion of options 

Proceeds from borrowings:  – ﬁ nance leases 

   – insurance premium funding 

Proceeds from equipment ﬁ nancing facility 

Equipment ﬁ nancing facility transaction costs 

Buy back and redemption of convertible notes 

Convertible notes buy back transaction costs 

Proceeds from equity raising 

Equity raising transaction costs 

Movement in unclaimed monies 

Movement in restricted cash 

Principal repayments 

  – ﬁ nance leases 

 – equipment ﬁ nancing facility 

 – insurance premium funding 

Net cash inﬂ ow from ﬁ nancing activities 

Net increase in cash and cash equivalents 

Cash and cash equivalents at the beginning of the year 

Cash and cash equivalents at the end of the year 

Consolidated

2010 
$’000 

2009
$’000

Notes 

293,619 

282,380

(209,774) 

(251,928)

4,575 

(4,829) 

(1,232) 

(554) 

2,940

(7,653)

(1,223)

(192)

34 

81,805 

24,324

276 

9,907 

73

428

(10,210) 

(48,567)

(84,962) 

(71,502)

– 

(28,682)

(686) 

(388)

– 

36,300

(7,946) 

(15,990)

(93,621) 

(128,328)

– 

559 

– 

– 

– 

590

1,696

2,632

20,000

(365)

(75,588) 

(20,565)

(25) 

(791)

123,859 

133,861

(5,038) 

(5,354)

– 

23,951 

(989) 

(4,542) 

(1,906) 

(4)

(3,742)

(669)

(2,621)

(2,489)

60,281 

122,179

48,465 

53,692 

11 

102,157 

18,175

35,517

53,692

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

www.stbarbara.com.au – Annual Report :: 55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements

For the year ended 30 June 2010

Note 1  Summary of signiﬁ cant accounting policies

St Barbara Limited (the “Company”) is a company domiciled 
in Australia. The consolidated ﬁ nancial statements of the 
Company as at and for the year ended 30 June 2010 comprise 
the Company and its subsidiaries (together referred to as the 
“Group”), and the Group’s interest in associates and jointly 
controlled entities. The Group is primarily involved in the 
exploration for, and mining of, gold.

(b)  Principles of consolidation
(i)  Subsidiaries
The consolidated ﬁ nancial statements incorporate the assets 
and liabilities of all subsidiaries of St Barbara Limited 
(‘‘Company’’ or ‘‘parent entity’’) as at 30 June 2010 and the 
results of all subsidiaries for the year then ended. St Barbara 
Limited and its subsidiaries together are referred to in this 
ﬁ nancial report as the Group.

The principal accounting policies adopted in the preparation 
of the ﬁ nancial report are set out below. These policies have 
been consistently applied to all the years presented, unless 
otherwise stated.

(a)  Basis of preparation
Statement of compliance
The ﬁ nancial report is a general purpose ﬁ nancial report, 
which has been prepared in accordance with Australian 
Accounting Standards (AASBs) (including Australian 
Interpretations) adopted by the Australian Accounting 
Standards Board (AASB) and the Corporations Act 2001. 
Where required by accounting standards comparative ﬁ gures 
have been adjusted to conform to changes in presentation 
in the current year. The consolidated ﬁ nancial report of the 
Group complies with International Financial Reporting 
Standards (IFRSs) and interpretations issued by the 
International Accounting Standards Board.

Subsidiaries are all those entities (including special purpose 
entities) over which the Group has the power to govern the 
ﬁ nancial and operating policies so as to obtain beneﬁ ts from 
its activities, generally accompanying a shareholding of more 
than one-half of the voting rights. The existence and effect 
of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the 
Group controls another entity.

Subsidiaries are consolidated from the date on which control 
commences until the date control ceases.

Intercompany transactions, balances and unrealised gains 
on transactions between Group companies are eliminated. 
Unrealised losses are also eliminated unless the transaction 
provides evidence of the impairment of the asset transferred. 
Accounting policies of subsidiaries have been changed where 
necessary to ensure consistency with the policies adopted 
by the Group.

The ﬁ nancial statements were approved by the Board 
of Directors on 24 August 2010.

Investments in subsidiaries are accounted for at cost within 
the Parent Entity disclosures at Note 26.

(ii)  Associates and jointly controlled entities
Associates are all entities over which the Group has signiﬁ cant 
inﬂ uence but not control, generally accompanying a 
shareholding of between 20% and 50% of voting rights. 
An interest in an associate and a jointly controlled entity is 
accounted for in the consolidated ﬁ nancial statements using 
the equity method and is carried at cost by the parent entity. 
Under the equity method, the share of the proﬁ ts or losses 
of the partnership is recognised in the income statement, and 
the share of movements in reserves is recognised in reserves 
in the balance sheet.

Proﬁ ts or losses on transactions establishing the joint venture 
entity and transactions with the joint venture are eliminated 
to the extent of the Group’s ownership interest, until such time 
as they are realised by the joint venture entity on consumption 
or sale, unless they relate to an unrealised loss that provides 
evidence of the impairment of an asset transferred.

Basis of measurement
The consolidated ﬁ nancial statements have been prepared 
on the historical cost basis, except for the following 
material items:

(cid:129)  Derivative ﬁ nancial instruments are measured at fair value

(cid:129)  Available-for-sale ﬁ nancial assets are measured at fair value

(cid:129)  Share based payment arrangements are measured 

at fair value

(cid:129)  Rehabilitation provision is measured at net present value

Critical accounting estimates
The preparation of ﬁ nancial statements requires management 
to make judgements, estimates and assumptions that affect 
the application of accounting policies and the reported 
amount of assets, liabilities, income and expenses. Actual 
results may differ from these estimates. The estimates and 
underlying assumptions are reviewed on an ongoing basis. 
Revisions to accounting estimates are recognised in the period 
in which the estimate is revised and in any future periods 
affected. The areas involving a higher degree of judgement 
or complexity, or areas where assumptions and estimates are 
signiﬁ cant to the ﬁ nancial statements, are disclosed in Note 4.

56

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

(iii)  Jointly controlled operations and assets
Details of unincorporated joint ventures and jointly controlled 
assets are set out in Note 32.

Where material, the proportionate interests in the assets, 
liabilities and expenses of a joint venture activity are 
incorporated in the ﬁ nancial statements under the 
appropriate headings.

(c)  Segment reporting
As of 1 July 2009, the Group determines and presents 
reportable segments based on the information that internally 
is provided to the CEO, who is the Group’s chief operating 
decision maker. Refer to Note 2 for further information on 
new standards adopted for the 30 June 2010 ﬁ nancial year. 
Comparative segment information has been re-presented 
in conformity with the transitional requirements of such 
standard. Since the change only impacts presentation and 
disclosure aspects, there is no impact on earnings per share.

A reportable segment is a component of the Group that 
engages in business activities from which it may earn 
revenues or incur expenses, including revenues and expenses 
that relate to transactions with any of the Group’s other 
components. The operating results of all reportable segments 
are regularly reviewed by the Group’s CEO to make decisions 
about resources to be allocated to the segment and assess its 
performance, and for which ﬁ nancial information is available.

Segment results that are reported to the CEO include items 
directly attributable to a segment as well as those that can 
be allocated on a reasonable basis. Unallocated items 
comprise mainly corporate assets and depreciation, and 
corporate expenses.

Segment capital expenditure represent the total cost incurred 
during the period for mine developments and acquisitions 
of property, plant and equipment.

(d)  Foreign currency translation
(i)  Functional and presentation currency
The consolidated ﬁ nancial statements are presented in 
Australian dollars, which is St Barbara Limited’s functional 
and presentation currency.

(ii)  Transactions and balances
Foreign currency transactions are translated into the 
functional currency using the exchange rates prevailing at the 
dates of the transactions. Foreign exchange gains and losses 
resulting from the settlement of such transactions, and from 
the translation at year end exchange rates of monetary assets 
and liabilities denominated in foreign currencies, are 
recognised in the income statement, except when deferred 
in equity as qualifying cash ﬂ ow hedges and qualifying net 
investment hedges.

Translation differences on non monetary ﬁ nancial assets and 
liabilities are reported as part of the fair value gain or loss. 
Translation differences on non monetary ﬁ nancial assets and 
liabilities, such as equities held at fair value through proﬁ t or 
loss, are recognised in the income statement as part of the 
fair value gain or loss. Translation differences on non-
monetary ﬁ nancial assets, such as equities classiﬁ ed as 
available for sale ﬁ nancial assets, are included in the fair 
value reserve in equity.

(e)  Revenue recognition
Revenue is measured at the fair value of the consideration 
received or receivable. Amounts disclosed as revenue are net 
of amounts collected on behalf of third parties. The Group 
recognises revenue when the signiﬁ cant risks and rewards of 
ownership have been transferred to the buyer, the amount of 
revenue can be reliably measured, and the associated costs 
and possible return of goods can be estimated reliably, and it is 
probable that future economic beneﬁ ts will ﬂ ow to the Group.

Revenue is recognised for the major business activities
as follows:

(i)  Product sales
Amounts are recognised as sales revenue when there 
has been a transfer of risk to a customer, and:

(cid:129)  the product is in a form suitable for delivery and no further 

processing is required by, or on behalf of, the Group;

(cid:129)  the quantity, quality and selling price of the product 
can be determined with reasonable accuracy; and

(cid:129)  the product has been despatched to the metals reﬁ nery 

and is no longer under the physical control of the Group, 
or the metals reﬁ nery has formally acknowledged legal 
ownership of the product, including all inherent risks.

Gains and losses, including premiums paid or received, 
in respect of forward sales, options and other deferred 
delivery arrangements, which hedge anticipated revenues 
from future production, are deferred and included in sales 
revenue when the hedged proceeds are received.

(ii)  Interest income
Interest income is recognised on a time proportion basis using 
the effective interest method.

(iii)  Dividends
Dividends are recognised as revenue when the right to receive 
payment is established.

www.stbarbara.com.au – Annual Report :: 57

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 1  Summary of signiﬁ cant accounting 
policies  cont.

(e)  Revenue recognition  cont.
(iv)  Gains on disposal of available-for-sale ﬁ nancial 
assets and property, plant and equipment
Revenue is recognised when the risks and rewards 
of ownership have been transferred, which is usually 
considered to occur on settlement.

(v)  Toll treatment revenue
Toll treatment revenue represents revenue earned for 
processing third party ore through the Group’s processing 
facilities. Revenue is recognised when the third party’s 
product is in a form suitable for delivery, and no further 
processing is required by the Group, and there has been 
a transfer of risk to the third party.

(f)  Exploration and evaluation/mine properties
(i)  Exploration, evaluation and feasibility expenditure
All exploration and evaluation expenditure incurred up to 
establishment of reserves is expensed as incurred. From the 
point in time when reserves are established, exploration and 
evaluation expenditure is capitalised and carried forward in 
the ﬁ nancial statements, in respect of areas of interest for 
which the rights of tenure are current and where such costs 
are expected to be recouped through successful development 
and exploitation of the area of interest, or alternatively, 
by its sale.

Exploration and evaluation expenditure consists of an 
accumulation of acquisition costs and direct exploration 
and evaluation costs incurred, together with an allocation 
of directly related overhead expenditure.

Feasibility expenditure represents costs related to the 
preparation and completion of a feasibility study to enable 
a development decision to be made in relation to that area 
of interest. Feasibility expenditures are expensed as incurred 
until a decision has been made to develop the area of interest.

Exploration and evaluation assets are assessed for impairment 
if (i) sufﬁ cient data exists to determine technical feasibility 
and commercial viability, and (ii) facts and circumstances 
suggest that the carrying amount exceeds the recoverable 
amount (see impairment policy, Note 1(k)). For the purpose 
of impairment testing, exploration and evaluation assets are 
allocated to cash-generating units to which the exploration 
activity relates.

When an area of interest is abandoned, or the Directors 
determine it is not commercial, accumulated costs in respect 
of that area are written off in the period the decision is made.

(ii)  Mines under construction
Mine development expenditure is accumulated separately 
for each area of interest in which economically recoverable 
reserves have been identiﬁ ed. This expenditure includes direct 
costs of construction, an appropriate allocation of overheads 
and borrowing costs capitalised during construction. Once 
a development decision has been taken, all past and future 
capitalised exploration, evaluation and feasibility expenditure 
in respect of the area of interest is aggregated with the costs 
of construction and classiﬁ ed under non-current assets as 
mine development.

(iii)  Mine development
Mine development expenditure represents the acquisition 
cost and/or accumulated exploration, evaluation and 
development expenditure in respect of areas of interest 
in which mining has commenced.

When further development expenditure is incurred in respect 
of a mine development, after the commencement of production, 
such expenditure is carried forward as part of the mine 
development only when substantial future economic beneﬁ ts 
are thereby established, otherwise such expenditure is 
classiﬁ ed as part of production and expensed as incurred.

Mine development costs are deferred until commercial 
production commences, at which time they are amortised 
on a unit-of-production basis over mineable reserves. The 
calculation of amortisation takes into account future costs 
which will be incurred to develop all the mineable reserves. 
Changes to mineable reserves are applied from the beginning 
of the reporting period and the amortisation charge is 
adjusted prospectively from the beginning of the period.

(g)  Deferred mining expenditure
Certain mining costs, principally those that relate to 
the stripping of waste and operating development in 
underground operations, which provide access so that future 
economically recoverable ore can be mined, are deferred 
in the statement of ﬁ nancial position as deferred mining costs.

The amount of mining costs deferred is based on the ratio 
obtained by dividing the waste tonnes mined by the quantity 
of gold ounces contained in the ore. Mining costs incurred in 
the period are deferred to the extent that the current period 
waste to contained gold ounce ratio exceeds the life of mine 
waste to ore ratio.

Deferred mining costs are then charged against reported 
earnings to the extent that, in subsequent periods, the ratio 
falls below the life of mine ratio. The life of mine ratio is 
based on economically recoverable reserves of the operation.

58

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

The life of mine ratio is a function of an individual mine’s design 
and therefore changes to that design will generally result in 
changes to the ratio. Changes in other technical or economic 
parameters may impact reserves, which will then impact the life 
of mine ratio. Changes to the life of mine ratio are accounted 
for prospectively.

In the production stage of some operations further 
development of the mine requires a phase of unusually high 
overburden removal activity that is similar in nature to pre-
production mine development. The costs of such unusually 
high overburden removal are deferred and charged against 
earnings in subsequent periods on a unit-of-production basis.

In underground operations mining occurs progressively on 
a level-by-level basis. In these operations an estimate is made 
of the life of level average underground mining cost per tonne 
of ore mined to expense underground costs in the income 
statement. Underground mining costs in the period are 
deferred to the extent that the actual cost per tonne of ore 
mined on a level in the period exceeds the life of level 
average. Previously deferred underground mining costs are 
released to the income statement to the extent that the actual 
cost per tonne of ore mined in the period is less than the life 
of level average.

(h)  Taxes
(i)  Income tax
The income tax expense for the year is the tax payable on the 
current period’s taxable income using the income tax rate 
applicable at the reporting date, adjusted by changes in 
deferred tax assets and liabilities attributable to temporary 
differences between the tax bases of assets and liabilities and 
their carrying amounts in the ﬁ nancial statements, and by 
changes to unused tax losses.

Deferred tax assets are recognised for deductible temporary 
differences and carry forward unused tax losses only if it is 
probable that future taxable amounts will be available to 
utilise those temporary differences and losses.

Current and deferred tax balances attributable to amounts 
recognised directly in equity are also recognised directly 
in equity.

The Company and its wholly owned Australian entities have 
not yet elected to implement the tax consolidation legislation.

(ii)  Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the 
amount of associated GST, unless the GST incurred is not 
recoverable from the taxation authority. In this case it is 
recognised as part of the cost of acquisition of the asset 
or as part of the expense.

Receivables and payables are stated inclusive of the amount of 
GST receivable or payable. The net amount of GST recoverable 
from, or payable to, the taxation authority is included with 
other receivables or payables in the balance sheet.

Cash ﬂ ows are included in the statement of cash ﬂ ows on 
a gross basis. The GST component of cash ﬂ ows arising from 
investing or ﬁ nancing activities, which are recoverable from, 
or payable to, the taxation authority are classiﬁ ed as part of 
operating cash ﬂ ows.

(i)  Leases
Leases of property, plant and equipment, where the Group 
has substantially all the risks and rewards of ownership, are 
classiﬁ ed as ﬁ nance leases. Finance leases are capitalised at 
inception of the lease at the lower of the fair value of the 
leased property and the present value of the minimum future 
lease payments. The corresponding rental obligations, net of 
ﬁ nance charges, are included in other long term payables. Each 
lease payment is allocated between the liability and ﬁ nance 
charges so as to achieve a constant rate on the ﬁ nance balance 
outstanding. The interest element of the ﬁ nance cost is 
charged to the income statement over the lease period so as 
to produce a constant periodic rate of interest on the remaining 
balance of the liability for each period. The property, plant and 
equipment acquired under ﬁ nance leases are depreciated over 
the shorter of the asset’s useful life and the lease term.

Leases in which a signiﬁ cant portion of the risks and rewards 
of ownership are retained by the lessor are classiﬁ ed as 
operating leases. Payments made under operating leases 
(net of any incentives received from the lessor) are charged 
to the income statement on a straight-line basis over the 
period of the lease.

(j)  Business combinations
The acquisition method of accounting is used to account for 
all business combinations. For every business combination, 
the Group identiﬁ es the acquirer, which is the combining 
entity that obtains control of the other combining entities or 
businesses. Control is the power to govern the ﬁ nancial and 
operating policies of an entity so as to obtain beneﬁ ts from 
its activities. In assessing control, the Group takes into 
consideration potential voting rights that currently are 
exercisable. The acquisition date is the date on which control 
is transferred to the acquirer. Judgement is applied in 
determining the acquisition date and determining whether 
control is transferred from one party to another.

The group measures goodwill as the fair value of the 
consideration transferred including the recognised amount 
of any non-controlling interest in the acquire, less the net 
recognised amount (generally fair value) of the identiﬁ able 
assets acquired and liabilities assumed, all measured as of 
the acquisition date.

www.stbarbara.com.au – Annual Report :: 59

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 1  Summary of signiﬁ cant accounting 
policies  cont.

(j)  Business combinations  cont.
Consideration transferred includes the fair values of the assets 
transferred, liabilities incurred by the Group to the previous 
owners of the acquiree, and equity interests issued by the 
Group. Consideration transferred also includes the fair value 
of any contingent consideration (where its fair value can 
be measured reliably) and share-based payment awards 
of the acquiree that are replaced mandatorily in the business 
combination. If a business combination results in the 
termination of pre-existing relationships between the Group 
and the acquire, then the lower of the termination amount, 
as contained in the agreement, and the value of the off-
market element is deducted from the consideration 
transferred and recognised in other expenses.

Transaction costs that the Group incurs in connection with 
a business combination, such as ﬁ nder’s fees, legal fees, 
due diligence fees, and other professional and consulting 
fees, are expensed as incurred.

(k)  Impairment of assets
All assets values are reviewed at each half year to determine 
whether there have been any events or changes in 
circumstances that indicate that the carrying value may not be 
recoverable. Where an indicator of impairment exists, a formal 
estimate of the recoverable amount is made. An impairment 
loss is recognised for the amount by which the asset’s carrying 
amount exceeds its recoverable amount. The recoverable 
amount is the higher of an asset’s fair value less costs to sell 
and value in use. In assessing value in use, the estimated future 
cash ﬂ ows are discounted to their present value using a pre-tax 
discount rate which reﬂ ects current market assessments of the 
time value of money and the risks speciﬁ c to the asset. For the 
purposes of assessing impairment, assets are grouped at the 
lowest levels for which there are separately identiﬁ able cash 
inﬂ ows, largely independent of the cash inﬂ ows from other 
assets or groups of assets (cash-generating units).

An impairment loss is recognised if the carrying amount of an 
asset or its cash generating unit exceeds the recoverable amount. 
Impairment losses are recognised in the income statement.

(l)  Cash and cash equivalents
For cash ﬂ ow statement presentation purposes, cash and cash 
equivalents include cash on hand, deposits held at call with 
ﬁ nancial institutions, other short term, highly liquid 
investments with original maturities of three months or less 
that are readily convertible to known amounts of cash and 
which are subject to an insigniﬁ cant risk of changes in value, 
and bank overdrafts. Bank overdrafts are shown within 
borrowings in current liabilities on the balance sheet.

(m)  Trade receivables
Trade receivables are recognised initially at fair value and 
subsequently measured at amortised cost, less provision 
for doubtful debts. Trade receivables are usually due for 
settlement no more than 30 days from the date 
of recognition.

Collectability of trade receivables is reviewed on an ongoing 
basis. Debts which are known to be uncollectible are written 
off. A provision for doubtful receivables is established when 
there is objective evidence that the Group will not be able 
to collect all amounts due according to the original terms 
of receivables. The amount of the provision is the difference 
between the asset’s carrying amount and the present value 
of estimated future cash ﬂ ows, discounted at the effective 
interest rate. The amount of the provision is recognised 
in the income statement.

(n)  Inventories
Raw materials and stores, ore stockpiles, work-in-progress 
and ﬁ nished gold stocks are valued at the lower of cost and 
net realisable value.

Cost comprises direct materials, direct labour and an 
appropriate proportion of variable and ﬁ xed overhead 
expenditure relating to mining activities, the latter being 
allocated on the basis of normal operating capacity. Costs 
are assigned to individual items of inventory on the basis of 
weighted average costs. Net realisable value is the estimated 
selling price in the ordinary course of business, less the 
estimated costs of completion and the estimated costs 
necessary to make the sale.

(o)  Non-current assets held for sale
Non-current assets that are classiﬁ ed as held for sale are 
stated at the lower of their carrying amount and fair value, 
less costs to sell, if their carrying amount is to be recovered 
principally through a sale transaction rather than through 
continued use.

An impairment loss is recognised for any initial or subsequent 
write down of the asset to fair value less costs to sell. A gain 
is recognised for any subsequent increases in fair value less 
costs to sell an asset, but not in excess of any cumulative 
impairment loss previously recognised. A gain or loss not 
previously recognised by the date of the sale of the non-
current asset is recognised at the date of de-recognition.

Non-current assets are not depreciated or amortised while 
they are classiﬁ ed as held for sale.

Non-current assets classiﬁ ed as held for sale are presented 
separately from the other assets in the balance sheet.

60

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

(p)  Investments and other ﬁ nancial assets
The Group classiﬁ es its investments and other ﬁ nancial assets 
in the following categories: ﬁ nancial assets at fair value 
through proﬁ t or loss, loans and receivables, and available-
for-sale ﬁ nancial assets. The classiﬁ cation depends on the 
purpose for which the investments were acquired. 
Management determines the classiﬁ cation of its investments 
at initial recognition and re-evaluates this designation at each 
reporting date.

Investments and other ﬁ nancial assets are recognised initially 
at fair value plus, for assets not at fair value through proﬁ t 
and loss, any directly attributable transaction costs, except 
as described below. Subsequent to initial recognition, 
investments and other ﬁ nancial assets are measured 
as described below.

(i)  Financial assets at fair value through proﬁ t or loss
Financial assets at fair value through proﬁ t or loss are ﬁ nancial 
assets held for trading, which were acquired principally for 
the purpose of selling in the short term with the intention 
of making a proﬁ t. Derivatives are also categorised as held for 
trading, unless they are designated as hedges. Financial assets 
at fair value through proﬁ t or loss are measured at fair value 
and changes therein are recognised in the income statement. 
Attributable transaction costs are recognised in the income 
statement when incurred.

(ii)  Loans and receivables
Loans and receivables are non derivative ﬁ nancial assets with 
ﬁ xed or determinable payments that are not quoted in an 
active market. They arise when the Group provides money, 
goods or services directly to a debtor with no intention of 
selling the receivable. They are included in current assets, 
except for those with maturities greater than 12 months after 
the balance sheet date, which are classiﬁ ed as non-current 
assets. Loans and receivables are included in receivables in 
the balance sheet and are shown in Note 12.

Loans and receivables are measured at amortised cost using 
the effective interest method, less any impairment losses.

(iii)  Available-for-sale ﬁ nancial assets
Available for sale ﬁ nancial assets, comprising principally 
marketable equity securities, are non derivative ﬁ nancial 
assets that are either designated in this category or not 
classiﬁ ed in any of the other categories. They are included 
in non current assets, unless management intends to and can 
dispose of the investment within 12 months of the balance 
sheet date.

Subsequent to initial recognition, available-for-sale ﬁ nancial 
assets are measured at fair value and changes therein, other 
than impairment losses, are recognised as a separate 

component of equity net of attributable tax. When an asset 
is derecognised the cumulative gain or loss in equity is 
transferred to the income statement.

(q)  Derivative ﬁ nancial instruments
Derivative ﬁ nancial instruments may be held to protect 
against the Group’s Australian dollar gold price risk 
exposures. Derivatives are initially recognised at fair value 
on the date a derivative contract is entered into and are 
subsequently remeasured to fair value at each reporting date. 
The accounting for subsequent changes in fair value depends 
on whether the derivative is designated as a hedging 
instrument, and if so, the nature of the item being hedged. 
The Group designates certain derivatives as either (1) hedges 
of the fair value of recognised assets or liabilities or a ﬁ rm 
commitment (fair value hedge); or (2) hedges of the cash 
ﬂ ows of recognised assets and liabilities and highly probable 
forecast transactions (cash ﬂ ow hedges).

The Group documents at the inception of the hedging 
transaction the relationship between hedging instruments 
and hedged items, as well as its risk management objective 
and strategy for undertaking various hedge transactions. The 
Group also documents its assessment, both at hedge inception 
and on an ongoing basis, of whether the derivatives that are 
used in hedging transactions have been, and will continue to 
be, highly effective in offsetting changes in fair values or cash 
ﬂ ows of hedged items.

The fair values of various derivative ﬁ nancial instruments used 
for hedging purposes are disclosed in Note 22. Movements 
in the hedging reserve in shareholders’ equity are shown 
in Note 25.

(i)  Cash ﬂ ow hedge
The fair value of option contracts comprises intrinsic value, 
that is, the extent to which the components of an option 
collar are in the money due to spot prices falling below 
or rising above the option strike prices, and time value.

The effective portion of changes in the intrinsic value 
of derivatives that are designated and qualify as cash ﬂ ow 
hedges is recognised in equity in the hedging reserve. The 
gain or loss relating to the ineffective portion and time value 
is recognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income 
statement in the periods when the hedged item will affect 
proﬁ t or loss (for instance, when the forecast sale that 
is hedged takes place). The gain or loss relating to the 
effective portion of the ﬁ nancial instrument hedging 
Australian dollar gold sales is recognised in the income 
statement within ‘gold sales revenue’.

www.stbarbara.com.au – Annual Report :: 61

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 1  Summary of signiﬁ cant accounting 
policies  cont.

(q)  Derivative ﬁ nancial instruments  cont.
When a hedging instrument expires or is sold or terminated, 
or when a hedge no longer meets the criteria for hedge 
accounting, any cumulative gain or loss existing in equity 
at that time remains in equity and is recognised when the 
forecast transaction is ultimately recognised in the income 
statement. When a forecast transaction is no longer expected 
to occur, the cumulative gain or loss that was reported 
in equity is immediately transferred to the income statement.

(ii)  Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge 
accounting. Changes in the fair value of any derivative 
instrument that does not qualify for hedge accounting 
are recognised immediately in the income statement.

(r)  Compound ﬁ nancial instruments
Compound ﬁ nancial instruments issued by the Group 
comprise convertible notes that can be converted to share 
capital at the option of the holder, and the number of shares 
to be issued does not vary with changes in the fair value 
of the notes.

The liability component of a compound ﬁ nancial instrument 
is recognised initially at the fair value of a similar liability that 
does not have an equity conversion option. The equity 
component is recognised initially at the difference between 
the fair value of the compound ﬁ nancial instrument 
as a whole and the fair value of the liability component. 
Any directly attributable transaction costs are allocated 
to the liability and equity components in proportion 
to their initial carrying amounts.

Subsequent to initial recognition, the liability component 
of a compound ﬁ nancial instrument is measured at amortised 
cost using the effective interest method, unless it is designated 
at fair value through proﬁ t and loss. The equity component 
of a compound ﬁ nancial instrument is not remeasured 
subsequent to initial recognition.

(s)  Fair value estimation
The fair value of ﬁ nancial assets and ﬁ nancial liabilities must 
be estimated for recognition and measurement, or for 
disclosure purposes.

The fair value of ﬁ nancial instruments traded in active markets 
(such as publicly traded derivatives, and trading and available 
for sale securities) is based on quoted market prices at the 
balance sheet date. The quoted market price used for 
ﬁ nancial assets held by the Group is the current bid price; 
the appropriate quoted market price for ﬁ nancial liabilities 
is the current ask price.

The fair value of ﬁ nancial instruments that are not traded 
in an active market (for example, over the counter derivatives) 
is determined using generally accepted valuation techniques. 
The Group uses a variety of methods and makes assumptions 
that are based on market conditions existing at each 
balance date.

The nominal value less estimated credit adjustments of trade 
receivables and payables are assumed to approximate their 
fair values. The fair value of ﬁ nancial liabilities for disclosure 
purposes is estimated by discounting the future contractual 
cash ﬂ ows at the current market interest rate that is available 
to the Group for similar ﬁ nancial instruments.

(t)  Property, plant and equipment
Buildings, plant and equipment are stated at historical cost 
less accumulated depreciation. Historical cost includes 
expenditure that is directly attributable to the acquisition 
of the items. Cost may also include transfers from equity 
of any gains/losses on qualifying cash ﬂ ow hedges of foreign 
currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount 
or recognised as a separate asset, as appropriate, only when 
it is probable that future economic beneﬁ ts associated with 
the item will ﬂ ow to the Group and the cost of the item can 
be measured reliably. All other repairs and maintenance are 
charged to the income statement during the ﬁ nancial period 
in which they are incurred.

Depreciation of assets is calculated using the straight line 
method to allocate the cost or revalued amounts, net of 
residual values, over their estimated useful lives, as follows:

– Buildings 
– Plant and equipment 
– Fixtures and ﬁ ttings 

10 – 15 years
3 – 10 years
10 – 15 years

Where the carrying value of an asset is less than its estimated 
residual value, no depreciation is charged. The assets’ residual 
values and useful lives are reviewed, and adjusted if appropriate,
at each balance sheet date.

An asset’s carrying amount is written down immediately to its 
recoverable amount, if the asset’s carrying amount is greater 
than its estimated recoverable amount (Note 1(k)).

Gains and losses on disposal are determined by comparing 
proceeds with carrying amount. These gains and losses are 
included in the income statement when realised.

(u)  Trade and other payables
These amounts represent liabilities for goods and services 
provided to the Group prior to the end of the ﬁ nancial year, 
which remains unpaid as at reporting date. The amounts are 
unsecured and are usually paid within 30 days from the end 
of the month of recognition.

62

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

(v)  Borrowings
Borrowings are initially recognised at fair value, net 
of transaction costs incurred. Borrowings are subsequently 
measured at amortised cost. Any difference between the 
proceeds (net of transaction costs) and the redemption 
amount is recognised in the income statement over the 
period of the borrowings using the effective interest method. 
Fees paid on the establishment of loan facilities, which are 
not incremental costs relating to the actual draw down of 
the facility, are recognised as prepayments and amortised 
on a straight line basis over the term of the facility.

The fair value of the liability portion of convertible debt 
is determined using a market interest rate for an equivalent 
nonconvertible debt. This amount is recorded as a liability 
on an amortised cost basis until extinguished on conversion 
or maturity of the debt. The remainder of the proceeds 
is allocated to the conversion option. This is recognised and 
included in shareholders’ equity, net of income tax effects.

Borrowings are classiﬁ ed as current liabilities unless the Group 
has an unconditional right to defer settlement of the liability 
for at least 12 months after the reporting date.

(w)  Borrowing costs
Borrowing costs incurred for the construction of any qualifying 
asset are capitalised during the period of time it is required 
to complete and prepare the asset for its intended use or sale. 
Other borrowing costs are recognised as expenses in the 
period in which they are incurred.

(x)  Provisions
Provisions, including those for legal claims and rehabilitation 
and restoration costs, are recognised when the Group has 
a present legal or constructive obligation as a result of past 
events, it is more likely than not that an outﬂ ow of resources 
will be required to settle the obligation, and the amount has 
been reliably estimated. Provisions are not recognised for 
future operating losses.

Where there are a number of similar obligations, the 
likelihood that an outﬂ ow will be required in settlement is 
determined by considering the class of obligations as a whole. 
A provision is recognised even if the likelihood of an outﬂ ow 
with respect to any one item included in the same class of 
obligations may be small.

A provision for restructuring is recognised when the Group 
has approved a detailed and formal restructuring plan, and 
the restructuring has commenced or has been announced 
publicly. Future operating costs are not provided for.

Provisions are measured at the present value of management’s 
best estimate of the expenditure required to settle the present 
obligation at the balance sheet date. The discount rate used 
to determine the present value reﬂ ects current market 

assessments of the time value of money and the risks speciﬁ c 
to the liability. The increase in the provision due to the 
passage of time is recognised as interest expense.

(y)  Employee beneﬁ ts
(i)  Wages and salaries, and annual leave
Liabilities for wages and salaries, including non-monetary 
beneﬁ ts and annual leave expected to be paid within 
12 months of the reporting date are recognised in other 
payables in respect of employees’ services up to the reporting 
date and are measured at the amounts expected to be paid, 
including expected on-costs, when the liabilities are settled.

(ii)  Long service leave
The liability for long service leave is recognised in the 
provision for employee beneﬁ ts and measured as the present 
value of expected future payments to be made, plus expected 
on-costs, in respect of services provided by employees up to 
the reporting date. Consideration is given to the expected 
future wage and salary levels, experience of employee 
departures and periods of service. Expected future payments 
are discounted using market yields at the reporting date 
on national government bonds with terms to maturity and 
currency that match, as closely as possible, the estimated 
future cash outﬂ ows.

(iii)  Share-based payments
Share-based compensation beneﬁ ts are provided to employees
via the St Barbara Limited Employees’ Option Plan and 
shareholder approved executive options. Information relating 
to these schemes is set out in Note 37.

The fair value of Executive Options and options granted under 
the St Barbara Limited Employees’ Option Plan is recognised 
as an employee beneﬁ t expense with a corresponding 
increase in equity. The fair value is measured at grant date 
and recognised over the period during which the employees 
become unconditionally entitled to the options. The amount 
recognised is adjusted at each reporting date to reﬂ ect the 
actual number of share options not expected to vest.

The fair value at grant date is independently determined using 
a Black-Scholes option pricing model that takes into account 
the exercise price, the term of the option, the vesting and 
performance criteria, the impact 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.

Upon the exercise of options, the balance of the share-based 
payments reserve relating to those options is transferred to 
share capital.

www.stbarbara.com.au – Annual Report :: 63

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 1  Summary of signiﬁ cant accounting 
policies  cont.

(y)  Employee beneﬁ ts  cont.
(iv)  Retirement beneﬁ t obligations
Contributions to deﬁ ned contribution funds are recognised 
as an expense as they are due and become payable. Prepaid 
contributions are recognised as an asset to the extent that 
a cash refund or a reduction in future payments is available.

The Group has no obligations in respect of deﬁ ned 
beneﬁ t funds.

(v)  Executive incentives
Senior executives may be eligible for Short Term Incentive 
payments (“STI”) subject to achievement of Key Performance 
Indicators, as recommended by the Remuneration Committee 
and approved by the Board of Directors. The Group recognises 
a liability and an expense for STIs in the reporting period 
during which the service was provided by the employee.

(vi)  Termination beneﬁ ts
Termination beneﬁ ts are recognised as an expense when the 
Group is demonstrably committed, without realistic possibility 
of withdrawal, to a formal detailed plan to terminate 
employment before normal retirement date.

(z)  Contributed equity
Ordinary shares are classiﬁ ed as equity. Incremental costs 
directly attributable to the issue of ordinary shares and share 
options are recognised as a deduction from equity, net of any 
tax effects.

If the entity reacquires its own equity instruments, e.g. as the 
result of a share buy-back, those instruments are deducted 
from equity and the associated shares are cancelled. No gain 
or loss is recognised in the income statement and the 
consideration paid including any directly attributable 
incremental costs is recognised directly in equity.

(aa)  Earnings per share
(i)  Basic earnings per share
Basic earnings per share is calculated by dividing the proﬁ t 
attributable to equity holders of the Company, excluding any 
costs of servicing equity other than ordinary shares, by the 
weighted average number of ordinary shares outstanding 
during the reporting period, adjusted for bonus elements 
in ordinary shares issued during the reporting period.

(ii)  Diluted earnings per share
Diluted earnings per share adjusts the ﬁ gures used in the 
determination of basic earnings per share to take into account 
the after income tax effect of interest and other ﬁ nancing 
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.

(ab)  Restricted cash
Funds placed on deposit with ﬁ nancial institutions to secure 
bank guarantees are classiﬁ ed as current receivables.

(ac)  Rehabilitation and mine closure
The Group has obligations to dismantle, remove, restore and 
rehabilitate certain items of property, plant and equipment 
and areas of disturbance during mining operations.

Under AASB 116 Property, Plant and Equipment, the cost 
of an asset must include any estimated costs of dismantling 
and removing the asset and restoring the site on which it is 
located. The capitalised rehabilitation and mine closure costs 
are depreciated (along with the other costs included in the 
asset) over the asset’s useful life.

AASB 137 Provisions, Contingent Liabilities and Contingent 
Assets requires a provision to be made for the estimated cost 
of rehabilitation and restoration of areas disturbed during 
mining operations up to reporting date but not yet 
rehabilitated. Provision has been made in full for all the 
disturbed areas at the reporting date based on current 
estimates of costs to rehabilitate such areas, discounted 
to their present value based on expected future cash ﬂ ows. 
The estimated cost of rehabilitation includes the current cost 
of contouring, topsoiling and revegetation to meet legislative 
requirements. Changes in estimates are dealt with 
on a prospective basis as they arise.

There is some uncertainty as to the amount of rehabilitation 
obligations that will be incurred due to the impact of changes 
in environmental legislation and many other factors, including 
future developments, changes in technology and price increases.

At each reporting date the rehabilitation liability 
is remeasured in line with changes in the timing and /or 
amounts of the costs to be incurred and discount rates. 
The liability is adjusted for changes in estimates. Adjustments 
to the estimated amount and timing of future rehabilitation 
and restoration cash ﬂ ows are a normal occurrence in light 
of the signiﬁ cant judgments and estimates involved.

As the value of the provision represents the discounted value 
of the present obligation to restore, dismantle and rehabilitate,
the increase in the provision due to the passage of time 
is recognised as a borrowing cost.

(ad)  Rounding of amounts
The company is of a kind referred to in Class Order 98/100, 
issued by the Australian Securities and Investments Commission,
relating to the “rounding off” of amounts in the ﬁ nancial 

64

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

report. Amounts in the ﬁ nancial report have been rounded off 
in accordance with that Class Order to the nearest thousand 
dollars, or in certain cases, the nearest dollar.

(ad)  New accounting standards and interpretations
The following standards, amendments to standards and 
interpretations have been identiﬁ ed as those which may 
impact the Group in the period of initial application. They 
are available for early adoption at 30 June 2010, but have 
not been applied in preparing this ﬁ nancial report.

(i)  AASB 9 Financial Instruments includes requirements for 

the classiﬁ cation and measurement of ﬁ nancial assets 
resulting from the ﬁ rst part of Phase 1 of the project to 
replace AASB 139 Financial Instruments: Recognition and 
Measurement. AASB 9 will become mandatory for the 
Group’s 30 June 2014 ﬁ nancial statements. Retrospective 
application is generally required, although there are 
exceptions, particularly if the entity adopts the standard 
for the year ended 30 June 2012 or earlier. The Group has 
not yet determined the potential effect of the standard.

(ii)  AASB 124 Related Party Disclosures (revised December 
2009) simpliﬁ es and clariﬁ es the intended meaning of 
the deﬁ nition of a related party and provides a partial 
exemption from the disclosure requirements for 
government-related entities. The amendments, which 
will become mandatory for Group’s 30 June 2012 
ﬁ nancial statements, are not expected to have any 
impact on the ﬁ nancial statements.

(iii)  AASB 2009-5 Further amendments to Australian 
Accounting Standards arising from the Annual 
Improvements Process impact various AASBs resulting 
in minor changes for presentation, disclosure, recognition 
and measurement purposes. The amendments, which 
become mandatory for the Group’s 30 June 2011 
ﬁ nancial statements, are not expected to have 
a signiﬁ cant impact on the ﬁ nancial statements.

(iv)  AASB 2009-8 Amendments to Australian Accounting 
Standards – Group Cash-settled Share-based Payment 
Transactions resolves diversity in practice regarding the 
attribution of cash-settled share-based payments 
between different entities within a group. As a result 
of the amendments AI 8 Scope of AASB 2 and AI 11 
AASB 2 – Group and Treasury Share Transactions will be 
withdrawn from the application date. The amendments, 
which become mandatory for the Group’s 30 June 2011 
ﬁ nancial statements, are not expected to have a 
signiﬁ cant impact on the ﬁ nancial statements.

(v)  AASB 2009-10 Amendments to Australian Accounting 
Standards – Classiﬁ cation of Rights Issue [AASB 132] 
(October 2010) clariﬁ es that rights, options or warrants 
to acquire a ﬁ xed number of an entity’s own equity 

instruments for a ﬁ xed amount in any currency are equity 
instruments if the entity offers the rights, options or 
warrants pro-rata to all existing owners of the same 
class of its own non-derivative equity instruments. 
The amendments, which will become mandatory for 
the Group’s 30 June 2011 ﬁ nancial statements, are not 
expected to have any impact on the ﬁ nancial statements.

(vi)  IFRIC 19 Extinguishing Financial Liabilities with Equity 

Instruments addresses the accounting by an entity when 
the terms of a ﬁ nancial liability are renegotiated and 
result in the entity issuing equity instruments to a creditor 
of the entity to extinguish all or part of the ﬁ nancial 
liability. IFRIC 19 will become mandatory for the Group’s 
30 June 2011 ﬁ nancial statements, with retrospective 
application required. It is not expected to have any 
impact on the ﬁ nancial statements.

Note 2  New Standards adopted

(i)  Determination and presentation of 
operating segments
The Company has applied the requirements of AASB 8 
Operating Segments for the ﬁ rst time, which became 
effective for the current reporting date. The Company had 
previously reported segments based on the commodity and 
region it had operated in – being ‘gold’ and ‘Australia’. 
AASB 8 requires segments to be identiﬁ ed based on internal 
reports that are reviewed and used by the chief operating 
decision maker in assessing performance and in determining 
the allocation of resources.

The Company has determined that two reportable segments 
exist: Leonora Operations and Southern Cross Operations. 
Discrete information for each of these operating business 
units are reported to the Chief Executive Ofﬁ cer and his 
management team on at least a monthly basis.

Segment information on the reportable segments is disclosed 
in Note 5 to the ﬁ nancial statements. Comparative information
has been re-presented so it is in conformity with the 
new standard.

(ii)  Presentation of ﬁ nancial statements
The Company has applied revised AASB 101 ‘Presentation of 
Financial Statements’ for the ﬁ rst time, which became effective 
for the current reporting period. As a result the Company has 
presented in the consolidated statement of changes of equity 
all owner related changes in equity, whereas all non-owner 
changes in equity are presented in the statement of 
comprehensive income. Comparative information has been 
re-presented so it is in conformity with the revised standard.

www.stbarbara.com.au – Annual Report :: 65

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 2  New Standards adopted  cont.

(iii)  Disclosure of parent entity statements
Amendments to the Corporations Act 2001 contained in the 
Corporations Amendment Bill 2010 received royal assent 
during the year. One of the key amendments was to remove 
the requirement to include full parent entity ﬁ nancial 
statements when preparing consolidated ﬁ nancial statements. 
The Company has applied these changes to these ﬁ nancial 
statements. Parent entity disclosures now required by the 
Corporations Amendment Regulations 2010 are included 
in Note 26.

Note 3  Financial risk management

This note presents information about each of the ﬁ nancial 
risks that the Group is exposed to, the policies and processes 
for measuring and managing ﬁ nancial risk, and the 
management of capital. Further quantitative disclosures 
are included throughout this ﬁ nancial report.

The Group’s activities expose it to a variety of ﬁ nancial risk, 
being: market risk (especially gold price and exchange rate 
risk), credit risk, liquidity risk and cash ﬂ ow interest rate risk. 
The Group’s overall risk management program focuses on the 
unpredictability of commodity markets and seeks to minimise 
potential adverse effects on the ﬁ nancial performance of 
the Group. The Group may use derivative instruments as 
appropriate to manage certain risk exposures.

Risk management is carried out by a centralised treasury 
function in accordance with policies approved by the 
Board of Directors.

(a)  Market risk
Market risk is the risk that changes in market prices, such 
as commodity prices, foreign exchange rates, interest rates 
and equity prices will affect the Group’s income or the value 
of its holdings of ﬁ nancial instruments, cash ﬂ ows and 
ﬁ nancial position. The Group may enter into derivatives, and 
also incur ﬁ nancial liabilities, in order to manage market risks. 
All such transactions are carried out within guidelines set 
by the Board.

(i)  Commodity price risk
The Group is exposed to Australian dollar gold price risk. 
This risk arises through the sale of gold.

The table below shows the effect of the 5 year average annual 
Australian dollar gold price movement on the trade receivables 
balance at year end:

5 year average
annual price 
movement 

Change in
trade receivables

Commodity: gold (AUD) 

21% 

1,759 

2010 
$’000 

2009 
$’000

889

The Group is managing commodity price risk in relation 
to a speciﬁ c future mining operation, still to be developed and 
commissioned, by using a combination of gold put options 
and gold call options to create a zero-cost option collar 
structure as described in (b) below.

(ii)  Currency risk
The Group is exposed to currency risk on gold sales where the 
Australian dollar spot gold price is quoted as a function of US 
dollars and the prevailing exchange rate. The Group may from 
time to time use Australian dollar derivatives to manage the 
commodity and currency rates.

(iii)  Interest rate risk
The Group’s main interest rate risk arises from long-term 
borrowings. Borrowings issued at variable rates expose the 
Group to cash ﬂ ow interest rate risk. Borrowings issued at 
ﬁ xed rates expose the Group to fair value interest rate risk. 
The Group’s interest rate policy does not require a ﬁ xed and 
pre-determined proportion of its interest rate exposure to be 
hedged. Any decision to hedge interest rate risk will be 
assessed at the inception of each ﬂ oating rate debt facility in 
relation to the overall Group exposure, the prevailing interest 
rate market, and any funding counterparty requirements.

(b)  Cash ﬂ ow hedges
The Group may from time to time be party to derivative 
ﬁ nancial instruments in the normal course of business 
to protect future revenue from gold operations from 
a signiﬁ cant fall in the Australian dollar price of gold, 
in accordance with the Group’s ﬁ nancial risk 
management policies.

During June 2010, the Company entered into a hedging 
facility for 250,000 ounces of gold over a ﬁ ve year period to 
manage Australian dollar gold price risk associated with the 
estimated production from the King of the Hills mine. The 
facility was fully drawn down by purchasing put options and 
selling call options over 250,000 ounces of gold (collar 
structure) with the following strikes:

(cid:129)  Bought put options at A$1,425/oz
(cid:129)  Sold call options at A$1,615/oz

66

 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 3  Financial risk management  cont.

The maturity proﬁ le of the put and call option contracts as at 30 June 2010 is provided in the table below.

Strike Price 

Put: A$1,425/oz 

Call: A$1,615/oz 

Total 
ounces 

250,000 

250,000 

6 months 
or less 
ounces 

– 

– 

6 – 12 
months 
ounces 

12,000 

12,000 

1 – 2 
years 
ounces 

2 – 5  More than
5 years
years 
ounces
ounces 

63,000 

175,000 

63,000 

175,000 

–

–

At the date of entering into the collar structure, the net fair value of the put and call options was zero dollars. At 30 June 2010, 
the fair value of all remaining put and call option contracts was negative $38,674,000. $19,513,000 of this negative fair value 
represented an unrealised loss related to time value of the put options, and was recognised immediately in the income statement 
(refer to note 1(q)). The remaining $19,161,000 of the negative fair value represented an unrealised loss related to the intrinsic 
value of the options, and was recognised in the hedging reserve in equity.

The relationship between currencies, spot gold price and volatilities is complex and changes in the spot gold price can inﬂ uence 
volatility, and vice versa.

The following table summarises the impact of a A$50 change in the Australian dollar gold price (all other variables held 
constant) on the valuation of the gold option fair values.

Gold Price Sensitivity 

+A$50 change in AUD spot price 

–A$50 change in AUD spot price 

Impact on 
post-tax result 

Impact on equity
net of tax

2010 
$’000 

(2,460) 

2,460 

2009 
$’000 

– 

– 

2010 
$’000 

(8,752) 

8,752 

2009
$’000

–

–

(c)  Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a ﬁ nancial instrument or customer contract. 
The Group is exposed to credit risk from its operating activities (primarily customer receivables) and from its ﬁ nancing 
activities, including deposits with banks and ﬁ nancial institutions and derivatives.

The maximum exposure to credit risk at the reporting date is the carrying amount of the ﬁ nancial assets, other than 
available-for-sale assets.

Credit risks related to receivables
The Group’s most signiﬁ cant customer accounts for $8,294,000 of the trade receivables carrying amount at 30 June 2010 
(2009: $4,192,000), representing receivables owing from gold sales. Settlement of the receivables relating to gold sales 
occurred on 2 July 2010. Based on historic rates of default, the Group believes that no impairment has occurred with respect 
to trade receivables, and none of the trade receivables at 30 June 2010 were past due.

Credit risks related to cash deposits and derivatives
Credit risk from balances with banks and ﬁ nancial institutions derivative counterparties is managed by the centralised Treasury 
function in accordance with Board approved policy. Investments of surplus funds are only made with approved counterparties 
(minimum Standard & Poor’s credit rating of “AA–”) and there is a ﬁ nancial limit on funds placed with any single counterparty.

Derivative transactions are only made with approved counterparties (minimum Standard & Poor’s credit rating of “AA–“), and 
more than one counterparty is used when tranches of derivatives are entered into. Derivatives transactions cover only a small 
proportion of total Group production with maturities occurring over a period of time (refer Note 3(b)).

www.stbarbara.com.au – Annual Report :: 67

 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 3  Financial risk management  cont.

(d)  Capital management
The Group’s total capital is deﬁ ned as total shareholders’ funds plus net debt.

Total shareholders’ funds 

Borrowings 

Cash and cash equivalents (1) 

Total capital 

Consolidated
Capital

2010 
$’000 

2009
$’000

349,468 

296,472

15,909 

97,541

(15,909) 

(53,692)

349,468 

340,321

(1)  Cash and cash equivalents are included to the extent that the net debt position is nil.

The Group does not have a target debt/equity ratio. There were no changes in the Group’s approach to capital management 
during the year.

The Group is not subject to externally imposed capital requirements other than normal banking requirements.

Cash and cash equivalents does not include cash held on deposit with a ﬁ nancial institution as security for a bank guarantee 
facility totalling $388,000 (2009: $24,339,000) at the reporting date.

Borrowings include $1,200,000 of convertible notes on issue (2009: $77,100,000). During the 2010 ﬁ nancial year, the company 
repaid $75,900,000 of convertibles notes. The remaining $1,200,000 was repaid by the Company in July 2010 (refer Note 33) 
under the terms of the notes, which allowed the Company to compulsorily repay the convertible notes if the outstanding 
balance was less than 10% of the face value of the notes when issued ($100,000,000).

On 13 May 2010, the Company reﬁ nanced its performance bond facility. A $25,000,000 performance bond facility was entered 
into with the National Australia Bank Limited (NAB) to provide security for performance obligations incurred in the ordinary 
course of business. The NAB facility replaced a cash backed facility previously provided by another counterparty. The NAB facility 
does not require cash backing. Security is provided in the form of a ﬁ xed and ﬂ oating charge over the Company’s assets (except 
those held as security for the GE facility and other ﬁ nance leases), and mining tenements held by the Company. Under the terms 
of the NAB facility, there are a number of undertakings related to the performance of the Company, and non-compliance with 
these undertakings could constitute an event of default. Under the terms of the facility the Company has up to 90 days to 
remedy or rectify a non-compliance event in relation to the undertakings.

In November 2009 the Company received net proceeds from the issue of new shares to institutional shareholders of 
$70,792,000. In December 2009 the Company received net proceeds from the issue of new shares to retail shareholders 
of $48,029,000.

On 21 August 2009, the Company entered into a A$50,000,000 Equity Line standby facility from US-based investment fund 
YA Global. Under the terms of the facility St Barbara may, at its discretion, issue ordinary shares to YA Global at any time over 
a 60 month period up to a total of A$50,000,000. There has been no draw down under this facility.

Shares issued to YA Global will be priced at the lowest of the daily volume weighted average prices of the Company’s shares 
traded on each of the 10 trading days following an advance draw down notice by St Barbara. A commission of 4% will be payable 
to YA Global on the proceeds of each issue of shares at the time of the issue. The Company nominates in advance the amount 
in relation to each draw down under the facility. The advance amount for the ﬁ rst and second draw down is limited to $750,000 
and $1,500,000 respectively, and thereafter the advance amount shall not exceed $3,000,000 in any 10-day trading period.

During 2008 the Company signed a $20,000,000 loan facility agreement with GE Commercial Finance to fund the construction 
and purchase of certain infrastructure assets at Gwalia. The facility is secured against the equipment ﬁ nanced and is repayable 
over 48 months. The interest rate is the 90 day bank bill rate plus an interest margin of 2.8%. Under the terms of the GE facility, 
there are a number of undertakings related to the performance of the Company, and non-compliance with these undertakings 
could constitute an event of default. Under the terms of facility the Company has up to 90 days to remedy or rectify a non-
compliance event in relation to the operational undertakings.

68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 3  Financial risk management  cont.

(e)  Liquidity risk
Prudent liquidity risk management requires maintaining sufﬁ cient cash and marketable securities, the availability of funding 
through an adequate amount of committed credit facilities and the ability to close out market positions.

The Group manages liquidity risk by continuously monitoring forecast and actual cash ﬂ ows and matching maturity proﬁ les 
of ﬁ nancial assets and liabilities.

Surplus funds are invested in instruments that are tradeable in highly liquid markets.

Maturities of ﬁ nancial liabilities
The table below analyses the Group’s ﬁ nancial liabilities. The amounts disclosed in the table are the contractual undiscounted 
cash ﬂ ows.

$’000 

Convertible notes 

Finance lease liabilities 

Equipment ﬁ nance facility 

Trade and other payables 

Derivative ﬁ nancial liabilities (1) 

Maturity of ﬁ nancial liabilities – 2010

Less than 
6 months 

6 – 12 
months 

Between 
1 and 5 
years 

Over 
5 years 

Total 
contractual 
cash ﬂ ows 

1,208 

534 

2,957 

37,558 

– 

– 

369 

2,977 

– 

338 

42,257 

3,684 

– 

1,281 

8,090 

– 

38,336 

47,707 

– 

– 

– 

– 

– 

– 

1,208 

2,184 

14,024 

37,558 

38,674 

93,648 

Carrying
amount

1,200

1,994

12,921

37,558

38,674

92,347

(1)  Represents the mark-to-market valuation of the option collar structure, and does not represent a contractual cash ﬂ ow. The mark-to-market 

valuations at 30 June 2010 will change over time as contracts mature, or with changes in the spot gold price and other option 
pricing variables.

Maturity of ﬁ nancial liabilities – 2009

$’000 

Convertible notes 

Finance lease liabilities 

Equipment ﬁ nance facility 

Insurance premium funding liability 

Trade and other payables 

Less than 
6 months 

3,084 

564 

2,833 

1,345 

38,376 

46,202 

6 – 12 
months 

80,184 

466 

2,866 

620 

– 

Between 
1 and 5 
years 

– 

1,671 

13,520 

– 

– 

84,136 

15,191 

Over 
5 years 

Total 
contractual 
cash ﬂ ows 

Carrying
amount

77,100

2,484

17,464

1,906

38,376

83,268 

2,701 

19,219 

1,965 

38,376 

145,529 

137,330

– 

– 

– 

– 

– 

– 

(f)  Fair value estimation
On-Balance Sheet
The net fair value of cash and cash equivalents and non-interest bearing monetary ﬁ nancial assets and ﬁ nancial liabilities of the 
Group approximates their carrying value. The net fair value of other monetary ﬁ nancial assets and ﬁ nancial liabilities is based 
upon market prices.

The fair value of the gold put and call options is as disclosed in Note 4(vii).

www.stbarbara.com.au – Annual Report :: 69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 3  Financial risk management  cont.

(f)  Fair value estimation  cont.
Off-Balance Sheet
The Group has potential ﬁ nancial liabilities that may arise from the contingency disclosed in Note 28. As explained in that note, 
no material losses are anticipated in respect of any of that contingency, subject to the outcome of the judgement and any 
subsequent appeal in the Kingstream matter. Fair values for off-balance sheet assets or liabilities are the Directors’ estimate 
of amounts which would be payable by the Group as consideration for the assumption of those contingencies by another party.

Fair values
The carrying amounts and the net fair values of ﬁ nancial assets and liabilities of the Group at balance date are:

Financial assets

–  Cash and cash equivalents 

–  Restricted cash 

–  Receivables 

–  Prepayments 

2010 

2009

Carrying 
Amount 
$’000 

Net Fair 
Value 
$’000 

Carrying 
Amount 
$’000 

102,157 

101,861 

388 

388 

12,238 

12,238 

2,854 

2,854 

53,692 

24,339 

8,120 

2,477 

Net Fair
Value
$’000

53,692

24,339

8,120

2,477

–  Available for sale ﬁ nancial assets 

– 

– 

13,869 

13,869

Financial liabilities

–  Payables 

–  Convertible notes 

–  Equipment ﬁ nancing facility 

–  Gold put and call options (zero cost collar) 

–  Other loans 

117,637 

117,341 

102,497 

102,497

37,558 

37,558 

1,200 

12,921 

38,674 

1,994 

1,200 

12,902 

38,674 

1,994 

38,376 

77,100 

17,464 

– 

38,376

74,683

16,401

–

4,390 

4,154

92,347 

92,328 

137,330 

133,614

70

 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 4  Critical Accounting Estimates 
and Judgements

The preparation of ﬁ nancial statements requires management 
to make judgements, estimates and assumptions that affect the 
application of accounting policies and the reported amounts 
of assets, liabilities, income and expenses. Actual results may 
differ from these estimates under different assumptions and 
conditions. Estimates and judgements are continually evaluated 
and are based on historical experience and on various other 
factors, including expectations of future events that are 
believed to be reasonable under the circumstances. Revisions 
to accounting estimates are recognised in the period in which 
the estimate is changed and in any future periods affected.

The Group has identiﬁ ed the following critical accounting 
policies under which signiﬁ cant judgements, estimates and 
assumptions are made, and where actual results may differ 
from these estimates under different assumptions and 
conditions that could materially affect ﬁ nancial results 
or ﬁ nancial position reported in future periods.

(i)  Ore reserve estimates
Reserves are estimates of the amount of gold product that 
can be economically extracted from the Group’s properties. 
In order to calculate reserves, estimates and assumptions are 
required about a range of geological, technical and economic 
factors, including quantities, grades, production techniques, 
recovery rates, production costs, future capital requirements, 
short and long term commodity prices and exchange rates.

Estimating the quantity and/or grade of reserves requires the 
size, shape and depth of ore bodies to be determined by 
analysing geological data. This process may require complex 
and difﬁ cult geological judgements and calculations to 
interpret the data.

The Group determines and reports ore reserves under the 
Australian Code for Reporting of Mineral Resources and Ore 
Reserves December 2004, known as the JORC Code. The 
JORC Code requires the use of reasonable investment 
assumptions to calculate reserves. Due to the fact that 
economic assumptions used to estimate reserves change from 
period to period, and geological data is generated during the 
course of operations, estimates of reserves may change from 
period to period.

Changes in reported reserves may affect the Group’s ﬁ nancial 
results and ﬁ nancial position in a number of ways, including:

(cid:129)  Asset carrying values may be impacted due to changes 

in estimated future cash ﬂ ows.

(cid:129)  Depreciation and amortisation charged in the income 

statement may change where such charges are calculated 
using the units of production basis.

(cid:129)  Underground capital development and waste stripping 
costs deferred in the balance sheet or charged in the 
income statement may change due to a revision in 
stripping ratios.

(cid:129)  Decommissioning, site restoration and environmental 
provisions may change where changes in estimated 
reserves affect expectations about the timing or cost 
of these activities.

(ii)  Units of production method of amortisation
The Group applies the units of production method for 
amortisation of its life of mine speciﬁ c assets, which results 
in an amortisation charge proportional to the depletion of 
the anticipated remaining life of mine production. These 
calculations require the use of estimates and assumptions 
in relation to reserves and resources, metallurgy and the 
complexity of future capital development requirements; 
changes to these estimates and assumptions will impact 
the amortisation charge in the income statement and 
asset carrying values.

(iii)  Impairment of assets
The Group assesses impairment of all assets at each reporting 
date by evaluating conditions speciﬁ c to the Group and to the 
particular assets that may lead to impairment. The recoverable 
amount of each Cash Generating Unit (CGU) is determined 
as the higher of value-in-use and fair value less costs to sell, 
in accordance with accounting policy 1(k). These calculations 
require the use of estimates, which have been outlined in 
accounting policy 1(k). Value-in-use is generally determined 
as the present value of the estimated future cash ﬂ ows. 
Present values are determined using a risk adjusted discount 
rate appropriate to the risks inherent in the asset.

Given the nature of the Group’s mining activities, future 
changes in assumptions upon which these estimates are 
based may give rise to a material adjustment to the carrying 
value of the CGU. This could lead to the recognition 
of impairment losses in the future. The inter-relationships 
of the signiﬁ cant assumptions upon which estimated future 
cash ﬂ ows are based, however, are such that it is 
impracticable to disclose the extent of the possible effects 
of a change in a key assumption in isolation.

Future cash ﬂ ow estimates are based on expected production 
volumes, the short and long term forecasts of the Australian 
dollar gold price, ore reserves, operating costs, future capital 
expenditure and restoration and rehabilitation costs. 
Management is required to make these estimates and 
assumptions, which are subject to risk and uncertainty. As a 
result there is a possibility that changes in circumstances will 
alter these projections, which could impact on the recoverable 
amount of the assets. In such circumstances some or all of the 
carrying value of the assets may be impaired, giving rise to an 
impairment charge in the income statement.

www.stbarbara.com.au – Annual Report :: 71

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 4  Critical Accounting Estimates 
and Judgements  cont.

Value in use in relation to the Group’s Leonora and Southern 
Cross cash generating units at 30 June 2010 was determined 
by discounting the future cash ﬂ ows generated from the 
continuing use of each operation and was based on the 
following key assumptions:

(cid:129)  Cash ﬂ ows were projected based on the life of mine plan 
of each operation, which is predominantly based on 
ore reserves.

(cid:129)  Revenue was projected at an average gold price of A$1,300 
per ounce for the ﬁ rst year of the operation, and a long 
term gold price of A$1,250 per ounce.

(cid:129)  Cash operating costs take into consideration an 

estimate of inﬂ ation.

(cid:129)  A pre-tax nominal discount rate of 11.4% based on the 

weighted average cost of capital.

The above estimates are particularly sensitive to a change 
in the gold price.

(iv)  Exploration and evaluation expenditure
As set out in Note 1(f) exploration and evaluation expenditure 
is capitalised where reserves have been established for an area 
of interest and it is considered likely to be recoverable from 
future exploitation or sale. The accounting policy requires 
management to make certain estimates and assumptions as 
to future events and circumstances, in particular whether an 
economically viable extraction operation can be established. 
These estimates and assumptions may change as new 
information becomes available. If, after having capitalised the 
expenditure under the accounting policy, a judgement is made 
that recovery of the expenditure is unlikely, the relevant 
capitalised amount will be written off to the income statement.

(v)  Rehabilitation and mine closure provisions
As set out in Note 1(x), the value of these provisions 
represents the discounted value of the present obligation 
to restore, dismantle and rehabilitate each site. Signiﬁ cant 
judgement is required in determining the provisions for mine 
rehabilitation and closure as there are many transactions and 
other factors that will affect the ultimate costs necessary 
to rehabilitate the mine sites. The discounted value reﬂ ects 
a combination of management’s best estimate of the cost 
of performing the work required, the timing of the cash 
ﬂ ows and the discount rate.

A change in any, or a combination of, the key assumptions used 
to determine the provisions could have a material impact on the 
carrying value of the provisions (refer to Note 23). The provision 
recognised for each site is reviewed at each reporting date and 
updated based on the facts and circumstances available at the 

time. Changes to the estimated future costs for operating sites 
are recognised in the balance sheet by adjusting both the 
restoration and rehabilitation asset and provision.

In estimating the rehabilitation provision at 30 June 2010, 
the following assumptions were made:

(cid:129)  Timing of rehabilitation outﬂ ows were based on the life 
of mine plan of each operation, with the rehabilitation 
of legacy areas of disturbance scheduled accordingly.

(cid:129)  Mine demolition costs are estimated on the basis of the 
expected mine life of each operation. Costs are adjusted 
for potential receipts through the sale of scrap metal.

(cid:129)  Inﬂ ation is not applied to cost estimates.

(cid:129)  A pre-tax real discount rate of 8% based on the weighted 

average cost of capital.

(vi)  Deferred tax
The Group has not recognised a net deferred tax asset 
of $71,626,000 as at 30 June 2010 (2009: $53,247,000) 
on the basis that the ability to utilise the temporary differences 
and tax losses is not probable as at the reporting date.

(vii)  Derivative ﬁ nancial instruments
The Group assesses the fair value of its gold bought put and 
sold call options (the “collar structure”) at each reporting date.

At 30 June 2010, the fair value of the collar structure was 
negative $38,674,000. An amount of $19,513,000 
represented an unrealised loss related to time value of the 
options, and was recognised immediately in the income 
statement (refer to note 1(q)). An unrealised loss related to the 
intrinsic value of the options of $19,161,000 was recognised 
in the gold cash ﬂ ow hedge reserve in equity.

Fair values have been determined using a ‘Level 2’ valuation 
method involving the use of a generally accepted option 
valuation model: inputs are based on market observable data 
for the asset or liability, either directly (i.e. prices) or indirectly 
(i.e. derived from prices), at the reporting date and compared 
with valuations provided by the counterparties to the collar 
structure. These calculations require the use of estimates and 
assumptions. Any changes in assumptions in relation to gold 
prices and volatilities could have a material impact on the fair 
valuation attributable to the gold collar structure at the 
reporting date. When these assumptions change in the future 
the differences will impact the gold cash ﬂ ow hedge reserve 
and/or income statement in the period in which the 
change occurs.

72

Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 5  Segment Information

The Company has two reportable segments, Leonora and Southern Cross Operations, which are also the Company’s operating 
segments. The operational business units are managed separately due to their separate geographic regions.

Information regarding the operations of each reportable segment is included below. Performance is measured based on segment 
proﬁ t before income tax, as this is deemed to be the most relevant in assessing performance after taking into account factors 
such as cost per ounce of production.

Leonora 

Southern Cross 

Total

2010 
$’000 

2009 
$’000 

2010 
$’000 

2009 
$’000 

2010 
$’000 

2009
$’000

Revenue 

138,439 

96,824 

158,321 

184,305 

296,760 

281,129

Mine operating costs 

(74,470) 

(52,438) 

(110,637) 

(131,122) 

(185,107) 

(183,560)

Gross proﬁ t 

Royalties 

63,969 

44,386 

47,684 

53,183 

111,653 

97,569

(5,492) 

(3,812) 

(6,298) 

(7,179) 

(11,790) 

(10,991)

Depreciation and amortisation 

(31,279) 

(26,736) 

(24,515) 

(18,962) 

(55,794) 

(45,698)

Reportable segment proﬁ t
before income tax 

27,198 

13,838 

16,871 

27,042 

44,069 

40,880

Other material non-cash items 

– 

(15,277) 

(37,946) 

(50,765) 

(37,946) 

(66,042)

Capital expenditure 

(53,837) 

(102,420) 

(31,487) 

(32,385) 

(85,324) 

(134,805)

30 June 
2010 
$’000 

30 June 
2009 
$’000 

30 June 
2010 
$’000 

30 June 
2009 
$’000 

30 June 
2010 
$’000 

30 June
2009
$’000

Reportable segment assets 

317,928 

281,773 

32,743 

69,175 

350,671 

352,990

Reconciliation of reportable segment revenues, proﬁ t or loss, assets and liabilities, and other material items:

Revenues

Total revenue for reportable segments 

Other revenue 

Consolidated revenue 

Consolidated

2010 
$’000 

2009
$’000

296,760 

281,129

6,765 

5,411

303,525 

286,540

www.stbarbara.com.au – Annual Report :: 73

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 5  Segment Information  cont.

Proﬁ t or loss

Total proﬁ t for reportable segments 

Other income and revenue 

Exploration expensed 

Unallocated depreciation and amortisation 

Other royalties 

Asset write-downs 

Finance costs 

Net realised/unrealised loss on derivatives 

Net realised/unrealised gain/(loss) on available for sale assets 

Other corporate expenses 

Consolidated loss before income tax 

Assets

Total assets for reportable segments 

Cash and cash equivalents 

Trade and other receivables 

Available for sale ﬁ nancial assets 

Capitalised borrowing costs 

Other assets 

Consolidated total assets 

Other material items

Mine operating costs 

Depreciation and amortisation 

Other material items

Mine operating costs 

Depreciation and amortisation 

74

Consolidated

2010 
$’000 

2009
$’000

44,069 

7,704 

40,880

5,634

(5,184) 

(13,442)

(715) 

– 

(598)

(51)

(37,946) 

(66,042)

(7,317) 

(19,513) 

2,724 

(8,996)

(4,741)

(140)

(24,010) 

(28,848)

(40,188) 

(76,344)

Consolidated

30 June 
2010 
$’000 

30 June
2009
$’000

350,671 

352,990

102,157 

15,480 

– 

8,522 

2,337 

53,692

34,936

13,869

9,122

2,802

479,167 

467,411

Year ended 30 June 2010

Reportable 
segment totals 

Impairments  Unallocated 

  Consolidated
totals

(185,107) 

(22,581) 

– 

(207,688)

(55,794) 

(15,365) 

(715) 

(71,874)

Year ended 30 June 2009

Reportable 
segment totals 

Impairments 

Unallocated 

  Consolidated
totals

(183,560) 

(2,234) 

– 

(185,794)

(45,698) 

(63,808) 

(598) 

(110,104)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 6  Revenue

Sales revenue – continuing operations

Sale of gold 

Sale of silver 

Other revenue

Interest revenue 

Sub-lease rental 

Discount on convertible notes buy back 

Third party revenue 

Royalties 

Total revenue 

Note 7  Other income

Proﬁ t on sale of assets 

Release of convertible note liability reserve 

Other 

Consolidated

2010 
$’000 

2009
$’000

295,238 

279,824

1,522 

1,305

296,760 

281,129

5,210 

347 

312 

896 

– 

3,044

288

1,935

–

144

6,765 

5,411

303,525 

286,540

Consolidated

2010 
$’000 

247 

432 

260 

939 

2009
$’000

110

–

113

223

www.stbarbara.com.au – Annual Report :: 75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 8  Expenses

Proﬁ t/(loss) before income tax includes the following speciﬁ c expenses:

Depreciation

Buildings 

Plant and equipment 

Impairment write-offs 

Amortisation

Mine development costs 

Deferred waste stripping 

Capitalised borrowing costs 

Plant/equipment ﬁ nance leases 

Impairment write-offs 

Total depreciation & amortisation 

Finance Costs

Interest paid/payable 

Interest on convertible notes 

Borrowing costs 

Convertible notes buy back costs 

Finance lease 

Provisions: unwinding of discount 

Interest capitalised 

Employee related expenses

Contributions to deﬁ ned contribution superannuation funds 

Termination payments 

Equity settled share-based payments 

Rental expense relating to operating leases

Lease payments 

76

Consolidated

2010 
$’000 

2009
$’000

752 

8,018 

6,501 

315

5,654

–

15,271 

5,969

45,001 

471 

1,807 

460 

8,864 

34,203

4,736

971

416

63,809

56,603 

104,135

71,874 

110,104

60 

4,359 

553 

25 

1,172 

1,148 

– 

7,317 

2,262 

312 

1,175 

3,749 

89

7,518

219

791

1,219

1,180

(2,020)

8,996

2,637

3,877

(32)

6,482

838 

856

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 9  Signiﬁ cant items

Signiﬁ cant items are those items where their nature or amount is considered material to the ﬁ nancial report. Such items included 
within the consolidated results for the period are detailed below.

Included within net realised/unrealised gains on derivatives

Net realised/unrealised (loss)/gain on gold cash ﬂ ow hedges (1) 

(19,513) 

1,515

Consolidated

2010 
$’000 

2009
$’000

Included within corporate costs

Redundancy payments 

Restructuring provisions 

Impairment write downs included within mine operating costs

Underground deferred operating mine development at Marvel Loch (2) 

Open pit mine development 

Impairment write downs included within depreciation and amortisation

Southern Cross assets (2) 

Marvel Loch capitalised exploration (2) 

Included within realised/unrealised (gain)/loss on available for sale assets

Write down of listed investments to fair value 

Gain on sale of Bendigo Mining Limited (3) 

Total signiﬁ cant items 

– 

– 

– 

(3,877)

(1,957)

(5,834)

(22,581) 

–

– 

(16,904)

(22,581) 

(16,904)

(11,583) 

(40,488)

(3,782) 

(8,650)

(15,365) 

(49,138)

– 

(6,192)

2,724 

2,724 

–

(6,192)

(54,735) 

(76,553)

(1)  Net realised/unrealised (loss)/gain on gold cash ﬂ ow hedges

The gold bought put and sold call options (collar structure) were put in place during the year to manage the Australian dollar gold price risk 
associated with 250,000 ounces of future King of the Hills production. At 30 June 2010 the unrealised mark-to-market value of the collar 
structure was negative $38,674,000. In accordance with accounting standards, the unrealised loss related to time value of the options 
of $19,513,000 was recognised immediately in the income statement. The unrealised loss related to the intrinsic value of the options of 
$19,161,000 was recognised in the hedging reserve in equity (refer note 25(a)). Over time this unrealised mark-to-market loss will reverse 
either through a change to the mark-to-market value of the options or maturity of the contracts.

(2)  Impairment write down of Southern Cross assets

Based on an assessment of the Southern Cross operations cash-generating unit at 30 June 2010, an impairment write down was taken 
against assets of the unit. The impairment write down was caused by lower than expected future net cash ﬂ ows from the Southern Cross 
operations as a result of a reduction in the estimated mine life, based on drilling during the year that encountered pegmatite intrusions 
which closed off the resources potential. The revised cash ﬂ ow estimates from the base case mine plan no longer supported full recovery 
of the carrying value of the Southern Cross cash-generating unit assets, including capitalised mine operating development, plant and 
equipment and capitalised exploration.

(3)  Gain on sale of Bendigo Mining Limited
  At 31 December 2008 an impairment loss of $6,192,000 in relation to the investment in Bendigo Mining Limited was recognised in the 
income statement. A mark-to-market gain as at 30 June 2009 in relation to this investment of $6,687,000, which would ordinarily have 
reversed the impairment loss recognised in the income statement in the period ended 31 December 2008, was recorded in the investment 
fair value reserve in accordance with Australian Interpretation 10. In August 2009 the investment in Bendigo Mining Limited was sold for 
$9,909,000, which gave rise to the transfer of the amount in the investment fair value reserve to the income statement resulting in a net 
gain on sale of $2,724,000 recognised as “Other Income”.

www.stbarbara.com.au – Annual Report :: 77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 10  Income tax expense

(a)  Income tax expense

Deferred income tax (beneﬁ t)/expense 

(b)  Numerical reconciliation of income tax expense/(beneﬁ t) to prima facie tax payable

Loss before income tax expense/(beneﬁ t) 

Tax at the Australian tax rate of 30% 

Tax effect of amounts not deductible/(taxable) in calculating taxable income:

Legal and other capital expenditure 

Equity settled share based payments 

Investment allowance 

Sundry items 

Tax losses not recognised 

Income tax expense/(beneﬁ t) 

Refer to Note 10(c) for details of the deferred tax beneﬁ t.

(c)  Unrecognised deferred tax balance

Deferred tax liabilities

Accrued income 

Mining properties – exploration 

Mining properties – development 

Consumables 

Capitalised convertible notes costs 

Total 

Tax effect @ 30% 

Deferred tax assets

Tax losses 

Provisions and accruals 

Investment fair value reserve 

Tax assets without a carrying amount 

Property, plant and equipment 

Total 

Tax effect @ 30% 

Net deferred tax asset (unbooked) (1) 

Consolidated

2010 
$’000 

– 

2009
$’000

–

Consolidated

2010 
$’000 

(40,188) 

(12,056) 

2009
$’000

(76,344)

(22,903)

159 

193 

– 

8 

538

2

(40)

11

11,696 

22,392

– 

–

Consolidated

2010 
$’000 

2009
$’000

365 

13,007 

117,342 

8,956 

8,522 

446

16,251

77,667

7,690

10,232

148,192 

112,286

44,458 

33,686

332,795 

239,195

38,206 

36,270

53 

10,711 

5,181 

3,401

9,474

1,438

386,946 

289,778

116,084 

71,626 

86,933

53,247

(1)  The net deferred tax asset has not been recognised because it is not yet probable that future taxable proﬁ t will be available against which 

the Group can utilise the beneﬁ ts there from.

78

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 11  Cash and cash equivalents

Cash at bank and on hand 

Term deposits 

Consolidated

2010 
$’000 

50,157 

52,000 

102,157 

2009
$’000

18,692

35,000

53,692

Cash placed on deposit to secure a bank guarantee facility (classiﬁ ed as ‘Restricted Cash’) is reported as current ‘Other Receivables’ 
in Note 12.

(a)  Cash at bank and on hand
Cash at bank at 30 June 2010 invested “at call” was earning interest at an average rate of 6.00% per annum 
(2009: 2.59% per annum).

(b)  Deposits
The deposits at 30 June 2010 were earning interest rates of between 5.45% and 6.25% per annum (2009: between 2.95% 
and 3.80% per annum).

Note 12  Trade and other receivables

Current assets

Trade receivables 

Other receivables 

Restricted cash (1) 

Prepayments 

Consolidated

2010 
$’000 

2009
$’000

8,328 

3,910 

388 

2,854 

15,480 

4,192

3,928

24,339

2,477

34,936

(1)  Restricted cash at 30 June 2010 is cash placed on deposit to secure 23 bank guarantees in respect of obligations entered into for 

environmental performance bonds issued in favour of the Western Australian Department of Industry and Resources. These deposits 
earned interest at an average interest rate of 4.45%.

(a)  Effective interest rates and credit risk
Information concerning the effective interest rate and credit risk of receivables is set out in Note 16.

www.stbarbara.com.au – Annual Report :: 79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 13  Inventories

Consumables 

Ore stockpiles 

Gold in circuit 

Bullion on hand 

(a)  Lower of cost and net realisable value
At 30 June 2010, there were no ore stockpiles valued at net realisable value (2009: $nil).

Note 14  Deferred mining costs

Current

Deferred waste stripping 

Amortisation of deferred waste 

Deferred operating development 

Non-current

Deferred operating development 

Note 15  Available-for-sale ﬁ nancial assets

Current

At beginning of year 

Transferred from non-current 

Additions 

Disposals 

Revaluation gain recognised in the income statement 

Revaluation gain taken to equity 

Non-current

At beginning of year 

Additions 

Disposals 

Revaluation loss recognised in the income statement 

Transferred to current 

80

Consolidated

2010 
$’000 

8,954 

3,043 

4,570 

1,488 

2009
$’000

7,875

9,681

9,217

4,285

18,055 

31,058

Consolidated

2010 
$’000 

2009
$’000

8,867 

28,702

(8,867) 

(28,702)

– 

9,114 

9,114 

–

16,196

16,196

– 

6,472

Consolidated

2010 
$’000 

13,869 

– 

– 

(13,869) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

2009
$’000

–

7,182

–

–

–

6,687

13,869

13,941

–

(567)

(6,192)

(7,182)

–

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 15  Available-for-sale ﬁ nancial assets  cont.

(a)  Listed securities
During the year, the Group sold its investments in listed securities.

Note 16  Financial instruments

(a)  Credit Risk Exposures
Refer Note 3 for the Group’s exposure to credit risk.

(b)  Interest Rate Risk Exposures
The Group’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 Group intends 
to hold ﬁ xed rate assets and liabilities to maturity.

2010 

Financial assets

Cash and cash equivalents 

Restricted cash and cash equivalents 

Receivables 

Prepayments 

Weighted average interest rate 

Financial liabilities

Trade and other creditors 

Finance lease liabilities 

Equipment ﬁ nancing facility 

Convertible notes 

Gold put and call options 

Weighted average interest rate 

Net ﬁ nancial assets/(liabilities) 

Fixed Interest Maturing in

Floating 
Interest 
rate 
$’000 

1 year 
or less 
$’000 

Over 
1 to 5 
years 
$’000 

Non-
interest 
 bearing 
$’000 

50,157 

52,000 

388 

– 

– 

– 

– 

– 

50,545 

6.00% 

52,000 

5.84% 

– 

– 

12,921 

– 

– 

12,921 

7.29% 

37,624 

– 

779 

– 

1,200 

– 

1,979 

8.00% 

50,021 

– 

– 

– 

– 

– 

– 

– 

1,185 

– 

– 

– 

1,185 

7.97% 

Total
$’000

102,157

388

12,238

2,854

– 

– 

12,238 

2,854 

15,092 

117,637

– 

–

37,558 

30 

– 

– 

38,674 

76,262 

– 

37,558

1,994

12,921

1,200

38,674

92,347

–

(1,185) 

(61,170) 

25,290

www.stbarbara.com.au – Annual Report :: 81

 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Fixed Interest Maturing in

Floating 
Interest 
rate 
$’000 

1 year 
or less 
$’000 

Over 
1 to 5 
years 
$’000 

Non-
interest 
 bearing 
$’000 

13,693 

4,339 

39,999 

20,000 

– 

– 

– 

– 

– 

– 

18,032 

2.59% 

59,999 

3.45% 

– 

– 

17,464 

– 

– 

17,464 

5.94% 

– 

877 

– 

77,100 

1,906 

79,883 

7.99% 

– 

– 

– 

– 

– 

– 

– 

– 

1,517 

– 

– 

– 

1,517 

7.76% 

Total
$’000

53,692

24,339

8,120

2,477

– 

– 

8,120 

2,477 

13,869 

13,869

24,466 

102,497

–

38,376 

90 

– 

– 

– 

38,376

2,484

17,464

77,100

1,906

38,466 

137,330

–

568 

(19,884) 

(1,517) 

(14,000) 

(34,833)

Note 16  Financial Instruments  cont.

2009 

Financial assets

Cash and cash equivalents 

Restricted cash and cash equivalents 

Receivables 

Prepayments 

Available for sale ﬁ nancial assets 

Weighted average interest rate 

Financial liabilities

Trade and other creditors 

Finance lease liabilities 

Equipment ﬁ nancing facility 

Convertible notes 

Other loans 

Weighted average interest rate 

Net ﬁ nancial assets/(liabilities) 

82

 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 17  Property, plant and equipment

Non-current

Land 

Housing and site buildings 

Plant and equipment 

Accumulated depreciation/impairment 

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

Land

At the beginning of the year 

Additions 

Disposals 

At the end of the year 

Housing and site buildings

At the beginning of the year 

Additions 

Transfers from Plant and Equipment 

Depreciation 

At the end of the year 

Plant and equipment

At the beginning of the year 

Additions 

Disposals 

Transfer to Housing and Site Buildings 

Assets written off 

Depreciation 

At the end of the year 

Total 

Consolidated

2010 
$’000 

2009
$’000

1,093 

507

17,870 

11,082

119,268 

115,622

(26,135) 

(9,583)

112,096 

117,628

507 

586 

– 

507

–

–

1,093 

507

11,082 

– 

5,900 

(752) 

1,869

9,528

–

(315)

16,230 

11,082

106,039 

9,636 

(24) 

(5,900) 

(6,500) 

(8,478) 

70,412

41,747

(51)

–

–

(6,069)

94,773 

106,039

112,096 

117,628

(a)  Security
As at 30 June 2010, plant and equipment with a carrying value of $30,302,553 (2009: $31,854,000) is pledged as security for 
an equipment ﬁ nance facility and ﬁ nance leases (Note 21).

In accordance with the security arrangements in relation to commercial banking facilities, all remaining assets of the Group have 
been pledged as security to the National Australia Bank Limited and Barclays Bank PLC for a performance bond and hedging 
facilities. During the year, and as at 30 June 2010, there were no events of default or breaches in relation to these facilities.

www.stbarbara.com.au – Annual Report :: 83

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 18  Mine properties

Non-current

Mine Properties – development

At beginning of the year 

Direct expenditure 

Transferred from exploration and evaluation 

Transferred from mines under construction 

Mine development written off 

Adjustment to rehabilitation provision 

Amortisation for the year 

At end of the year 

Mines Under Construction

At beginning of the year 

Direct expenditure 

Capitalised amortisation of convertible notes transaction costs 

Net borrowing costs capitalised 

Transferred to mine properties 

At end of the year 

Total Mine Properties 

Note 19  Exploration and evaluation

Non-current

Exploration and evaluation

At beginning of the year 

Acquired tenements 

Tenements written off 

Expenditure capitalised for the year 

Transferred to mine properties 

Exploration written off 

At end of the year 

Note 20  Trade and other payables

Current

Trade payables 

Other payables 

84

Consolidated

2010 
$’000 

2009
$’000

185,341 

75,437 

1,454 

41,370

62,426

12,079

– 

150,822

(5,082) 

(46,508)

4,381 

(645)

(45,001) 

(34,203)

216,530 

185,341

– 

– 

– 

– 

– 

– 

119,817

28,682

303

2,020

(150,822)

–

216,530 

185,341

Consolidated

2010 
$’000 

2009
$’000

8,219 

25,778

100 

(109) 

2,761 

(1,454) 

(3,782) 

5,735 

388

–

2,549

(12,079)

(8,417)

8,219

Consolidated

2010 
$’000 

2009
$’000

36,180 

1,378 

37,558 

36,372

2,004

38,376

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 21  Interest bearing borrowings

Current

Secured

Lease liabilities (Note 29) 

Equipment ﬁ nance facility (Note 29) 

Transaction costs 

Unsecured

Convertible notes 

Transaction costs 

Insurance premium funding 

Total current 

Non-current

Secured

Lease liabilities (Note 29) 

Equipment ﬁ nance facility (Note 29) 

Transaction costs 

Total non-current 

Consolidated

2010 
$’000 

2009
$’000

779 

5,197 

(60) 

5,916 

937

4,818

(84)

5,671

1,200 

77,100

– 

– 

1,200 

7,116 

(1,110)

1,906

77,896

83,567

1,215 

7,724 

(146) 

1,547

12,646

(219)

8,793 

13,974

(a)  Interest rate risk exposures
Details of the Group’s exposure to interest rate changes on borrowings are set out in Note 16.

(b)  Convertible notes
On 4 December 2009, the Company accepted offers from holders of $15,350,000 of notes to buy back the notes at a discount 
of 2% to the original issue price. The repayment was made in two tranches, with convertible notes with a face value of 
$13,000,000 repaid on 4 December 2009, and convertible notes with a face value of $2,350,000 repaid on 18 January 2010.

On 1 March 2010, $1,750,000 of convertible notes was bought back for 99.7% of face value.

On 12 March 2010, $38,050,000 of convertible notes was bought back at face value.

On 4 June 2010, convertible notes with a total face value of $20,750,000 were redeemed as a consequence of note holders 
exercising their put options on this date.

As an event occurring after balance sheet date, on 4 July 2010, the remaining convertible notes were redeemed for the face 
value of $1,200,000.

(c)  Equipment ﬁ nance facility
During 2008 the Company signed a $20,000,000 loan facility agreement with GE Commercial Finance to fund the construction 
and purchase of certain infrastructure assets at Gwalia. The facility is secured against the equipment ﬁ nanced and is repayable 
over 48 months. The interest rate is the 90 day bank bill rate plus an interest margin of 2.8%. Under the terms of the GE facility 
there are a number of undertakings related to the performance of the Company, and non-compliance with these undertakings 
could constitute an event of default. Under the terms of facility the Company has up to 90 days to remedy or rectify a non-
compliance event in relation to the undertakings. During the year there were no events of default or breaches under this facility.

www.stbarbara.com.au – Annual Report :: 85

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

(d)  Set-off of assets and liabilities
The parent entity has established a legal right of set-off with a ﬁ nancial institution over cash on deposit to secure the issue 
of bank guarantees for the purpose of environmental performance bonds. At 30 June 2010 restricted cash for this purpose 
amounted to $388,000 (2009: $24,339,000).

Note 22  Derivative ﬁ nancial liabilities

Current liabilities

Fair value of gold option collar 

Non-current liabilities

Fair value of gold option collar 

(a)  Instruments used by the Group
Refer to Note 3 ‘Financial Risk Management’ for details on instruments used by the Group.

Note 23  Provisions

Current

Employee beneﬁ ts – annual leave 

Employee beneﬁ ts – long service leave 

Employee beneﬁ ts – other 

Redundancy and restructuring provision 

Provision for rehabilitation 

Other provisions 

Non-current

Provision for rehabilitation 

Employee beneﬁ ts – long service leave 

Movements in Provisions

Non-current

Rehabilitation

Balance at start of year 

Unwinding of discount 

Expenditure incurred 

Adjustment on re-estimation 

Balance at end of year 

86

Consolidated

2010 
$’000 

388 

38,336 

2009
$’000

–

–

Consolidated

2010 
$’000 

1,715 

792 

1,559 

2009
$’000

1,778

544

513

– 

1,957

2,847 

– 

6,913 

–

1,000

5,792

29,627 

28,284

1,018 

946

30,645 

29,230

Consolidated

2010 
$’000 

2009
$’000

28,284 

28,812

1,148 

(1,339) 

4,381 

1,180

(1,063)

(645)

32,474 

28,284

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 24  Contributed equity

(a)  Share capital

Parent entity 

Parent entity

2010 
Shares 

2009 
Shares 

2010 
$’000 

2009
$’000

Ordinary shares – fully paid 

1,952,668,407 

1,493,932,950 

614,997 

496,176

(b)  Movements in ordinary share capital:

Date 

Details 

1 July 2008 

Notes 

Number 
of shares 

Issue price
 (cents/ share) 

1,158,423,891 

$’000

366,466

  Plus 

Entitlement offer 

(i) 

140,312,045 

40 

56,125

Transaction costs on entitlement offer 

  Plus  Convertible notes converted to shares 

  Plus 

Institutional placement 

Transaction costs on institutional placement 

  Plus 

Shares issued on exercise of options 

Transfer of Option Reserve on conversion of options 

(ii) 

(iii) 

(iv) 

597,014 

189,600,000 

5,000,000 

67 

41 

12 

(2,587)

400

77,736

(2,767)

590

213

30 June 2009  

1,493,932,950 

496,176

  Plus 

Institutional rights issue 

(v) 

274,094,788 

27 

74,006

Transaction costs on institutional rights issue 

(3,214)

Retail rights issue 

(vi) 

184,640,669 

27 

49,853

Transaction costs on retails rights issue 

1,952,668,407 

(1,824)

614,997

(i)  Retail component of a renounceable accelerated pro-rata entitlement offer on 17 July 2008

(ii)  Convertible notes converted to shares on 24 November 2008

(iii)  Institutional placement on 27 February 2009

(iv)  Shares issued on exercise of unlisted options held by executives and employees

(v) 

Institutional rights issue completed on 13 November 2009

(vi)  Retail rights issue completed on 10 December 2009

(c)  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.

(d)  Options
Information relating to the St Barbara Employee Option Plan and Executive Options, including details of options issued, exercised 
and lapsed during the ﬁ nancial year and options outstanding at the end of the ﬁ nancial year, is set out in Note 37.

www.stbarbara.com.au – Annual Report :: 87

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 25  Reserves and accumulated losses

(a)  Reserves

Reserves

Share based payment reserve 

Investment fair value reserve 

Gold cash ﬂ ow hedge reserve 

Convertible note liability reserve 

Share based payment reserve

Balance at start of year 

Option expense 

Options exercised 

Options cancelled on termination 

Balance at end of year 

Investments fair value reserve

Balance at start of year 

Transfer to income statement on disposal 

Fair value adjustments 

Tax effect of fair value adjustment @ 30% 

Balance at end of year 

Gold cash ﬂ ow hedge reserve

Balance at start of year 

Fair value adjustments 

Tax effect of fair value adjustment @ 30% 

Balance at end of year 

Convertible note liability reserve

Balance at start of year 

Transfer to income statement 

Balance at end of year 

(b)  Accumulated losses
Movements in accumulated losses were as follows:

Balance at start of year 

Loss attributable to members of the Company 

Balance at end of year 

88

Consolidated

2010 
$’000 

2,484 

– 

(19,161) 

– 

2009
$’000

1,841

6,687

–

432

(16,677) 

8,960

1,841 

1,175 

– 

(532) 

2,484 

6,687 

(6,687) 

– 

– 

– 

– 

(19,161) 

– 

(19,161) 

432 

(432) 

– 

2,086

181

(213)

(213)

1,841

–

–

6,687

–

6,687

–

–

–

–

432

–

432

Consolidated

2010 
$’000 

2009
$’000

(208,664) 

(132,320)

(40,188) 

(76,344)

(248,852) 

(208,664)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 25  Reserves and accumulated losses  cont.

(c)  Investment fair value reserve
Changes in the fair value arising on translation of investments, such as equities, classiﬁ ed as available-for-sale ﬁ nancial assets, 
are taken to the available-for-sale investments revaluation reserve, as described in Note 1(p). Amounts are recognised in the 
income statement when the associated assets are sold or impaired. During the year the cumulative gain recognised in the 
reserve in prior years, together with the movements in fair value for the year, was recognised in the income statement.

(d)  Share based payments reserve
The share based payments reserve is used to recognise the fair value of options issued to executives and employees 
but not exercised.

(e)  Gold cash ﬂ ow hedge reserve
At each balance sheet date, a mark-to-market valuation of the Company’s gold bought put options and sold call options 
(the “collar structure”) is performed. Where the hedge is effective, changes in fair value relating to the intrinsic portion 
of the valuation are recognised in the gold cash ﬂ ow hedge reserve. If the underlying options expire, the reserve relating 
to the expired options reverses against the derivatives liability.

Note 26  Parent Entity disclosures

As at, and throughout, the ﬁ nancial year ended 30 June 2010, the parent company of the Group was St Barbara Limited.

(a)  Financial statements

Results of the parent entity

Proﬁ t for the period 

Other comprehensive income (1) 

Total comprehensive income for the period 

(1)  Other comprehensive income is set out in the Consolidated Statement of Comprehensive Income.

Financial position of the parent entity at year end

Current assets 

Total assets 

Current liabilities 

Total liabilities 

Total equity of the parent entity comprising of:

Share capital 

Share based payment reserve 

Investment fair value reserve 

Convertible note reserve 

Gold cash ﬂ ow hedge reserve 

Accumulated losses 

Total equity 

Company

2010 
$’000 

2009
$’000

(40,188) 

(76,344)

(25,848) 

6,687

(66,036) 

(69,657)

144,808 

149,753

479,347 

467,591

63,326 

139,136

141,100 

182,340

614,997 

496,176

2,484 

– 

– 

(19,161) 

1,841

6,687

432

–

(260,073) 

(219,885)

338,247 

285,251

www.stbarbara.com.au – Annual Report :: 89

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 26  Parent Entity disclosures  cont.

(b)  Parent entity contingencies
Refer Note 28 for details of matters for which the parent entity has contingent liabilities.

(c)  Parent entity guarantees
Refer Note 28 for details of bank guarantees issued by the parent.

(d)  Parent entity capital commitments for acquisition of property, plant and equipment

Contracted but not yet provided for and payable

Within one year 

Note 27  Remuneration of auditors

Company

2010 
$’000 

2009
$’000

– 

–

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:

(a)  Assurance services
Audit services

KPMG Australian ﬁ rm

  Audit and review of ﬁ nancial reports 

Total remuneration for audit services 

(b)  Non-audit services
KPMG Australian ﬁ rm

  Due diligence on rights issue 

  Other services 

Total remuneration for non-audit services 

Note 28  Contingencies

Consolidated

2010 
$’000 

2009
$’000

240 

240 

95 

4 

99 

220

220

–

–

–

(a)  Contingent liabilities and assets
The Company and consolidated entity have a contingent liability at 30 June 2010 in respect of the following legal claim:

Kingstream
On 2 July 2002, Kingstream Steel Limited (now Midwest Corporation Limited) (“Kingstream”) commenced proceedings in the 
Supreme Court of Western Australia against the Company and its 100% owned subsidiary, Zygot Ltd (“Zygot”) (together, 
“St Barbara”). 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, namely Bryan Kevin Hughes and Vincent Anthony Smith. Mr Smith resigned 
as a trustee and Mr Hughes (“Hughes”) has been the sole plaintiff since 30 January 2008.

Hughes’s claim against St Barbara arose from the withdrawal by Zygot of three mining lease applications (“MLAs”) in September 
2001. Hughes alleged that these applications were part of the subject matter of an Option Deed between St Barbara and 
Kingstream dated 26 March 1997 as supplemented by a Deed dated 20 January 1998 and a letter dated 29 January 1999 from 
St Barbara’s lawyers to Kingstream. Kingstream exercised the option in February 1999. Hughes sought damages from St Barbara 
relying upon causes of action based on rectiﬁ cation of the Supplemental Deed, allegations of breach of contract, breach of duty 
of care, estoppel and unilateral mistake.

90

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

The action was heard in the Supreme Court of Western Australia between 2 and 19 June 2009. The Trial Judge delivered his 
Reasons for Decision on 30 June 2010 in which he concluded that Hughes had failed to establish any liability on the part of 
St Barbara or its subsidiary, Zygot. On 30 June 2010 the Court ordered that the action be dismissed. All claims by St Barbara 
for its costs of proceedings have been resolved by Hughes’ litigation funder, IMF (Australia) Limited, agreeing to pay the sum 
of $1,500,000 to St Barbara in full satisfaction thereof. On 21 July 2010 Hughes served a Notice of Appeal, which is not likely 
to be heard before mid-2011.

(b)  Bank guarantees
The Group has negotiated bank guarantees in favour of various government authorities and service providers. The total of these 
guarantees at 30 June 2010 was $21,131,000 (2009: $24,339,000). Security is provided to the National Australia Bank Limited 
(“NAB”) (refer Note 17) for $20,743,000 of this amount through a ﬁ xed and ﬂ oating charge over the Group’s assets. Cash held 
on deposit with the Commonwealth Bank of Australia secures the remaining $388,000 as at 30 June 2010 (refer to Note 12).

Under the terms of the NAB facility, there are a number of undertakings related to the performance of the Company. 
Non-compliance with these undertakings could constitute an event of default. In the year, and as at 30 June 2010, there 
were no events of default or breaches under the facility.

(c)  Gold bought put and sold call options
The Company negotiated a 250,000 ounce hedge facility with National Australia Bank Limited (NAB) and Barclays Bank PLC 
(“Barclays”). During the year this facility was fully drawn down through the purchase of put options over 250,000 ounces 
at a strike price of A$1,425 per ounce, and sale of call options over 250,000 ounces at a strike price of A$1,615 per ounce.

Security is provided to NAB and Barclays through a ﬁ xed and ﬂ oating charge over the assets of the Group, excluding assets 
securing an equipment ﬁ nance facility and ﬁ nance leases.

Under the terms of the hedge facility there are a number of undertakings related to the performance of the Company. 
Non-compliance with these undertakings could constitute an event of default. In the year, and at 30 June 2010, there 
were no events of default or breaches under the facility.

Note 29  Commitments for expenditure

Exploration

In order to maintain rights of tenure to mining tenements, the Group is committed
to tenement rentals and minimum exploration expenditure in terms of the requirements
of the Western Australian Department of Industry and Resources. This requirement will
continue for future years with the amount dependent upon tenement holdings 

Property, Plant and Equipment

Within one year 

Consolidated

2010 
$’000 

2009
$’000

10,727 

11,250

Consolidated

2010 
$’000 

2009
$’000

– 

–

www.stbarbara.com.au – Annual Report :: 91

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 29  Commitments for expenditure  cont.

Finance Lease Commitments

Payable not later than one year 

Payable later than one year, not later than ﬁ ve years 

Future ﬁ nance charges 

Recognised as a liability 

Lease incentives on non-cancellable operating leases included in lease liabilities 

Total lease liabilities 

Current (Note 21) 

Non-current (Note 21) 

Consolidated

2010 
$’000 

2009
$’000

903 

1,281 

2,184 

(220) 

1,964 

30 

1,994 

779 

1,215 

1,994 

1,030

1,671

2,701

(307)

2,394

90

2,484

937

1,547

2,484

These ﬁ nance lease commitments relate to plant and equipment, and are based on the cost of the assets and are payable over 
a period of up to 48 months.

Equipment Finance Facility

Payable not later than one year 

Payable later than one year, not later than ﬁ ve years 

Future ﬁ nance charges 

Total lease liabilities 

Current (Note 21) 

Non-current (Note 21) 

Analysis of Non-Cancellable Operating Lease Commitments

Payable not later than one year 

Payable later than one year, not later than ﬁ ve years 

92

Consolidated

2010 
$’000 

2009
$’000

5,934 

8,090 

14,024 

5,699

13,520

19,219

(1,103) 

(1,755)

12,921 

17,464

5,197 

7,724 

12,921 

4,818

12,646

17,464

Consolidated

2010 
$’000 

755 

61 

816 

2009
$’000

828

816

1,644

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 29  Commitments for expenditure  cont.

Analysis of Non-Cancellable Operating Sub-lease receipts

Receivable not later than one year 

Payable later than one year, not later than ﬁ ve years 

Consolidated

2010 
$’000 

2009
$’000

292 

– 

292 

281

292

573

Note 30  Related party transactions

(a)  Directors and key management personnel
Disclosures relating to Directors and key management personnel are set out in Note 38.

(b)  Transactions with entities in the wholly-owned group
St Barbara Limited is the parent entity in the wholly-owned group comprising the Company and its wholly-owned subsidiaries.

During the year the Company did not transact with any entities in the wholly-owned group (2009: $ Nil). Net receivables from 
subsidiaries amounted to $2,000 (2009: $2,000). The Company provided accounting and administrative assistance free 
of charge to all of its wholly-owned subsidiaries.

Loans payable to and advanced from wholly-owned subsidiaries to the Company are interest free, and payable on demand.

(c)  Amounts receivable from and payable to entities in the wholly-owned group and controlled entities

Aggregate amounts receivable at balance date from:

Entities in the wholly-owned group 

Less provision for doubtful receivables 

Aggregate amounts payable at balance date to:

Entities in the wholly-owned group 

Company

2010 
$’000 

2009
$’000

852 

(850) 

2 

852

(850)

2

11,401 

11,401

(d)  Guarantees
Subsidiary companies have guaranteed the parent entity’s obligations under the bank guarantee facilities provided 
by the National Australia Bank Limited and Commonwealth Bank of Australia.

(e)  Terms and conditions
Outstanding balances are unsecured, interest free and are repayable in cash on demand.

(f)  Amounts receivable from Director related entities
At 30 June 2010, there were no amounts receivable from Director related entities (2009: $ Nil).

(g)  Other Transactions with Directors of the Company and their Director related entities
During the year ended 30 June 2010, there were no other transactions with Directors of the Company and their Director 
related entities.

www.stbarbara.com.au – Annual Report :: 93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 31  Controlled entities

The Group consists of the Company and its wholly-owned controlled entities as follows.

Equity holding 

Carrying value of
 Company’s investment

June 2010 
% 

June 2009 
% 

June 2010 
$’000 

June 2009
$’000

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

178 

178

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

–

–

–

–

–

–

–

–

–

–

178 

178

Name of entity 

Class of Shares 

Australian Eagle Oil 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 

Vaﬁ tu Pty Ltd 

Zygot Pty Ltd 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Ordinary 

Each company in the Group was incorporated in Australia.

Note 32  Interests in joint ventures

(a)  Jointly controlled assets

Joint Venture 

WESTERN AUSTRALIA

Leonora Region

Mount Newman – Victory 

Sandy Soak 

Melita 

Weebo 

McEast/Pipeline (1) 

Mt George (2) 

Black Cat (1) 

Silver Phantom 

South Rankin 

Cheritons Find 

Kalgoorlie Region

Rocky Dam 

June 2010 
Equity % 

June 2009 
Equity % 

Joint Venturers

87% 

91% 

80% 

12.8% 

20% 

Nil 

40% 

70% 

75% 

90% 

87% 

91% 

80% 

20% 

80% 

51% 

100%, 
diluting to 40%

70% 

75% 

90% 

Astro Diamond Mines N.L.

Hunter Resources Pty Ltd

Dalrymple Resources N.L.

Plutonic Operations Limited

Cheperon Gold Partnership

Trevor John Dixon

Terrain Minerals Ltd

Bellriver Pty Ltd

Comet Resources Limited

Audax Resources NL

earning 51% 

earning 51% 

Rubicon Resources Ltd

(1)  Terrain Minerals Limited earned a 60% interest in the Black Cat joint venture, which also resulted in the Company’s interest in the McEast/

Pipeline joint venture reducing to 20%

(2)  The Company withdrew from the Mt George joint venture on 17 February 2010

As at 30 June 2010 there was no joint venture assets recorded in the balance sheet (2009: Nil).

94

 
 
 
 
 
 
 
 
 
 
  
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 33  Events occurring after the balance sheet date

The Directors are not aware of any matter or circumstance that has arisen since the end of the ﬁ nancial year that, in their 
opinion, has signiﬁ cantly affected or may signiﬁ cantly affect in future years the Company’s operations, the results of those 
operations or the state of affairs, except for the following:

(cid:129)  On 4 July 2010 the Company redeemed convertible notes with a face value of $1,200,000. There are no more convertible 

notes outstanding.

(cid:129)  On 13 August 2010 the Company signed an asset sale agreement for the sale of its Tarmoola process plant, which is on care 

and maintenance and surplus to the Company’s requirements, for a cash consideration of $3,000,000.

Note 34  Reconciliation of loss after income tax to net cash ﬂ ows from operating activities

Loss after tax for the year 

Depreciation and amortisation 

Asset impairment write offs 

Proﬁ t on sale of assets 

(Gain)/loss on sale of available for sale assets 

Options revaluation 

Net realised/unrealised loss/(gain) on gold derivatives 

Discount on convertible notes buyback 

Impairment of available for sale ﬁ nancial asset 

Convertible notes buy-back transaction costs 

Exploration expensed 

Convertible note reserve released to income statement 

Tenement write-off 

Equity settled share-based payments 

Change in operating assets and liabilities:

(Increase)/decrease in receivables and prepayments 

(Increase)/decrease in inventories 

(Increase)/decrease in other assets 

Increase/(decrease) in trade creditors and payables 

Increase/(decrease) in non-current provisions 

Increase/(decrease) in other liabilities 

Net cash ﬂ ows from operating activities 

Note 35  Non-cash investing and ﬁ nancing activities

Acquisition of vehicles and equipment through ﬁ nance leases 

Consolidated

2010 
$’000 

2009
$’000

(40,188) 

(76,344)

56,509 

37,946 

(252) 

(2,724) 

– 

19,513 

(312) 

– 

25 

46,294

66,042

(110)

140

64

(1,515)

(1,935)

6,192

791

5,184 

13,442

(432) 

108 

643 

–

–

(32)

(4,495) 

1,091

13,003 

(10,020)

– 

(2,020)

(192) 

(20,256)

1,415 

(3,946) 

81,805 

(293)

2,792

24,324

Consolidated

2010 
$’000 

559 

2009
$’000

21,696

www.stbarbara.com.au – Annual Report :: 95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 36  Earnings per share

(a)  Basic loss per share
Loss attributable to the ordinary equity holders of the Company 

(b)  Diluted loss per share
Loss attributable to the ordinary equity holders of the Company 

(c)  Reconciliation of earnings used in calculating earnings per share

Basic and diluted earnings per share

Loss after tax for the year 

(d)  Weighted average number of shares

Consolidated

2010 
Cents 

2009
Cents

(2.27) 

(5.63)

(2.27) 

(5.63)

Consolidated

2010 
$’000 

2009
$’000

(40,188) 

(76,344)

Consolidated

2010 
Number 

2009
Number

Weighted average number of ordinary shares used as the denominator
in calculating basic earnings per share 

1,768,083,968 

1,356,057,153

Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share 

1,768,083,968 

1,356,057,153

(e)  Information concerning the classiﬁ cation of securities
(i)  Options
Executive Options and Options granted to employees under the St Barbara Limited Executive Option and Employee Option Plans 
are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the 
extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details 
relating to the options are set out in Note 37.

(ii)  Convertible Notes
The outstanding balance of convertible notes on issue at 30 June 2010 was $1,200,000. The convertible notes have not been 
included in the determination of diluted earnings per share for the 2010 year on the basis that the outstanding balance was 
repaid on 4 July 2010.

Note 37  Share-based payments

(a)  Employee Option Plan
The establishment of the St Barbara Limited Employee Option Plan was approved by shareholders at the 2001 Annual General 
Meeting. Options are granted as part of an employee’s total remuneration package. Options are granted for a three to ﬁ ve 
year period.

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

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

96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 37  Share-based payments  cont.

(a)  Employee Option Plan  cont.
Set out below are summaries of options granted to employees under the St Barbara Limited Employee Option Plan 
approved by shareholders:

Grant Date 

Expiry 
Date 

Exercise 
Price 

Consolidated and parent entity – 2010

30 Sep 05 

30 Sep 10 

01 Jul 06 

30 Jun 11 

11 Sep 06 

11 Sep 11 

01 Dec 06 

01 Dec 11 

06 May 09 (1) 

02 Mar 14 

06 May 09 (1) 

03 Apr 14 

23 Sep 09 (1) 

23 Sep 14 

Total 

$0.279 

$0.472 

$0.477 

$0.530 

$0.381 

$0.411 

$0.287 

Balance 
at start of 
the year 
Number 

Granted 
during 
the year 
Number 

Exercised 
during 
the year 
Number 

Expired 
during 
the year 
Number 

Balance 
at end of 
the year 
Number 

Exercisable
at end of
the year
Number

1,000,000 

1,250,000 

2,000,000 

500,000 

1,508,099 

5,361,672 

– 

– 

– 

– 

– 

– 

– 

15,287,917 

11,619,771 

15,287,917 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1,000,000 

1,000,000

750,000 (2) 

500,000 

500,000

– 

– 

– 

2,000,000 

2,000,000

500,000 

500,000

1,508,099 

1,740,192 (2) 

3,621,480 

840,159 (2) 

14,447,758 

3,330,351 

23,577,337 

4,000,000

–

–

–

Weighted average exercise price 

$0.44 

$0.29 

$0.00 

$0.40 

$0.35 

$0.45

(1)  Vesting of options granted in May 2009 and September 2009 is subject to performance criteria as discussed below.

(2)  Expired on termination of employment with the Company.

Grant Date 

Expiry 
Date 

Exercise 
Price 

Consolidated and parent entity – 2009

23 Dec 04 

23 Dec 11 

30 Sep 05 

30 Sep 10 

01 Jul 06 

30 Jun 11 

11 Sep 06 

11 Sep 11 

01 Dec 06 

01 Dec 11 

26 Mar 07 

26 Mar 12 

21 May 07 

21 May 12 

06 May 09 

02 Mar 14 

06 May 09 

03 Apr 14 

$0.118 

$0.298 

$0.491 

$0.496 

$0.549 

$0.490 

$0.512 

$0.400 

$0.430 

Balance 
at start of 
the year 
Number 

Granted 
during 
the year 
Number 

Exercised 
during 
the year 
Number 

Expired 
during 
the year 
Number 

Balance 
at end of 
the year 
Number 

Exercisable
at end of
the year
Number

5,000,000 

1,000,000 

1,750,000 

2,360,000 

500,000 

2,000,000 

1,000,000 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1,508,099 

5,361,672 

5,000,000 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

–

1,000,000 

1,000,000

500,000 

360,000 

1,250,000 

1,250,000

2,000,000 

2,000,000

– 

500,000 

250,000

2,000,000 

1,000,000 

– 

– 

– 

– 

1,508,099 

5,361,672 

–

–

–

–

Total 

13,610,000 

6,869,771 

5,000,000 

3,860,000 

11,619,771 

4,500,000

Weighted average exercise price 

$0.34 

$0.42 

$0.12 

$0.50 

$0.44 

$0.45

The weighted average remaining contractual life of share options outstanding at the end of the year was 3.6 years 
(2009: 3.6 years).

www.stbarbara.com.au – Annual Report :: 97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 37  Share-based payments  cont.

(a)  Employee Option Plan  cont.
Following the 4 for 13 accelerated non-renounceable entitlement offer to shareholders completed in December 2009, which 
raised $124,000,000 (before costs), the exercise price of the unlisted options was adjusted pursuant to the formula contained 
in ASX Listing Rule 6.22.2. The adjustments were as follows:

Grant Date 

30 September 2005 

1 July 2006 

11 September 2006 

1 December 2006 

6 May 2009 

6 May 2009 

23 September 2009 

No. of 
options 

1,000,000 

1,250,000 

2,000,000 

500,000 

1,508,099 

5,361,672 

5,857,320 

Original 
Exercise 
Price 

Adjusted
Exercise
Price

$0.298 

$0.491 

$0.496 

$0.549 

$0.400 

$0.430 

$0.306 

$0.279

$0.472

$0.477

$0.530

$0.381

$0.411

$0.287

Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2010 was calculated for each issue 
of options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into 
account the exercise price, the term of the option, the impact of dilution, 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.

The model inputs for options granted during the year ended 30 June 2010 included:

(a)  Options are granted for no consideration. The vesting of options granted in 2010 is subject to a continuing service condition 
as at each vesting date, and relative Total Shareholder Returns over a three year period. The peer group against which Total 
Shareholder Return is measured is presented in the Directors’ Report (page 45). The percentage of options that vest relative 
to Total Shareholder Returns is set out in the table below.

Relative TSR Performance Over Measurement Period 

% of Option to Vest

<  50th percentile 

  50th percentile 

>  50th &  < 75th percentiles 

  75th percentile and above 

0%

50%

Pro-rata between 50% & 75%

100%

Total Shareholder Return is measured against a peer group of companies.

(b)  Exercise price is ordinarily the closing market price on the grant date.

(c)  Grant date varies with each issue.

(d)  Expiry date is 5 years from grant date.

(e)  Share price varies at grant date with each issue and ranged from $0.287 to $0.306 per share.

(f)  Price volatility of the Company’s shares as at the grant date varied with each issue, and ranged from 81.0% to 86.0%.

(g)  Risk-free interest rate at grant date is based on bond rates for a similar term as for the options.

98

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 37  Share-based payments  cont.

(b)  Expenses arising from share-based payment transactions
Total expenses/(gains) arising from equity settled share-based payment transactions recognised during the year as part of the 
employee beneﬁ t expenses were as follows:

Consolidated

2010 
$’000 

643 

2009
$’000

(32)

Options issued/expired under employee option plan 

Note 38  Key Management Personnel Disclosures

(a)  Directors
The following persons were Directors of St Barbara Limited during the ﬁ nancial year:

(cid:129)  S J C Wise 
(cid:129)  T J Lehany 
(cid:129)  D W Bailey 
(cid:129)  B J Gibson 
(cid:129)  P C Lockyer 
(cid:129)  R K Rae 

Chairman
Managing Director & CEO
Non-executive director
Non-executive director
Non-executive director
Non-executive director

(b)  Key management personnel disclosures
The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, 
directly or indirectly, during the ﬁ nancial year:

(cid:129)  Timothy J Lehany 
(cid:129)  David Rose 
(cid:129)  Martin Reed 
(cid:129)  Garth Campbell-Cowan 
(cid:129)  Ross Kennedy 

(cid:129)  Phil Uttley 

(cid:129)  Adrian McArthur 

Managing Director & CEO
Chief Operating Ofﬁ cer 
Chief Operating Ofﬁ cer 
Chief Financial Ofﬁ cer
Executive General Manager Corporate Services/
Company Secretary
Executive General Manager 
Discovery & Growth
Acting General Manager Exploration 

(c)  Key Management Personnel Compensation

Appointed 7 September 2009
Resigned 11 September 2009

Appointed 28 September 2009

 Ceased acting in position 
30 September 2009

Short term employee beneﬁ ts 

Post employment beneﬁ ts 

Long Service Leave 

Share-based payments 

Termination payments 

Consolidated

2010 

2009

3,652,844 

3,137,407

75,693 

80,019

71,369 

240,950

975,420 

93,158

133,639 

2,706,901

4,908,965 

6,258,435

www.stbarbara.com.au – Annual Report :: 99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 38  Key Management Personnel Disclosures  cont.

(d)  Equity Instrument Disclosures Relating to Key Management Personnel
(i)  Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms 
and conditions of the options, are disclosed in Section C of the remuneration report on pages 45 to 46.

(ii)  Option holdings
The numbers of options over ordinary shares in the Company held during the ﬁ nancial year by each Director of St Barbara 
Limited and key management personnel of the Group, including their related parties, are set out below:

2010 

Name 

Granted 
during 
Balance 
at the start 
the year as 
of the year  compensation 

Exercised 
during 
the year 

Other 
changes 
during 
the year 

Balance 
at the end 
of the year 

Vested and
exercisable
at the end
of the year

Executive Director

T J Lehany 

Key management personnel

David Rose 

G Campbell-Cowan 

R Kennedy 

P Uttley 

2009 

Name 

Executive Director

T J Lehany 

E Eshuys 

Key management personnel

M Reed 

1,508,099 

5,857,320 

– 

3,207,160 

940,644 

– 

1,976,846 

1,744,017 

1,537,547 

1,537,547 

Granted 
during 
Balance 
at the start 
the year as 
of the year  compensation 

– 

1,508,099 

5,000,000 

– 

– 

– 

G Campbell-Cowan 

2,000,000 

1,207,160 

R Kennedy 

A McArthur 

– 

– 

940,644 

738,870 

– 

– 

– 

– 

– 

Exercised 
during 
the year 

– 

5,000,000 

– 

– 

– 

– 

– 

– 

– 

– 

– 

7,365,419 

1,976,846 

4,951,177 

2,478,191 

1,537,547 

–

–

2,000,000

–

–

Other 
changes 
during 
the year 

Balance 
at the end 
of the year 

Vested and
exercisable
at the end
of the year

– 

– 

– 

– 

– 

– 

1,508,099 

– 

– 

–

–

–

3,207,160 

2,000,000

940,644 

738,870 

–

–

100

 
 
 
 
 
 
 
 
 
 
Notes to the Consolidated Financial Statements  continued

For the year ended 30 June 2010

Note 38  Key Management Personnel Disclosures  cont.

(d)  Equity Instrument Disclosures Relating to Key Management Personnel  cont.
(iii)  Share holdings
The numbers of shares in the Company held during the year by each Director of St Barbara Limited and key management 
personnel of the Group, including their related parties, are set out below. There were no shares granted during the 
year as compensation.

Balance 
at the start 
of the year 

Exercise 
of options 

Other 
changes 

Purchased 

Sold 

2010 

Name 

Directors

S J C Wise 

T J Lehany 

D W Bailey (1) 

B J Gibson 

P C Lockyer 

R K Rae 

Key management personnel

D Rose 

G Campbell-Cowan 

R Kennedy 

Phil Uttley 

2009 

Name 

Directors

S J C Wise 

T J Lehany 

E Eshuys (1) 

D W Bailey 

B J Gibson 

P C Lockyer 

R K Rae 

Key management personnel

M Reed 

G Campbell-Cowan 

R Kennedy 

A McArthur 

G Viska 

P Thompson 

Balance
at the end
of the year

6,836,330

1,006,923

181,478

256,288

63,785

253,855

140,000

–

Balance
at the end
of the year

6,463,724

570,000

–

138,777

195,984

48,777

128,572

–

–

6,463,724 

570,000 

138,777 

195,984 

48,777 

128,572 

– 

– 

736,587 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1,988,836 

(1,616,230) 

436,923 

42,701 

60,304 

15,008 

125,283 

140,000 

– 

– 

– 

– 

– 

– 

– 

– 

340,179 

(631,000) 

445,766

– 

– 

–

Balance 
at the start 
of the year 

5,027,340 

– 

Exercise 
of options 

Other 
changes 

Purchased 

Sold 

– 

– 

– 

– 

1,436,384 

570,000 

– 

– 

25,942,403 

5,000,000 

(20,600,103) 

3,925,000 

(14,267,300) 

107,937 

152,431 

37,937 

100,000 

– 

– 

827,937 

– 

500,000 

1,000,000 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(500,000) 

(1,000,000) 

30,840 

43,553 

10,840 

28,572 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(91,350) 

736,587

– 

– 

– 

–

–

–

(1)  Mr Bailey held 850,000 convertible notes issued by the company which were redeemed on 4 June 2010.

(1)  Mr Eshuys resigned on 2 March 2009. Movements in shareholdings (purchases, sales, and exercise of options) have been disclosed up to this 

date. ‘Other Changes’ represents the balance of Mr Eshuys’s shareholdings at the date of his resignation.

www.stbarbara.com.au – Annual Report :: 101

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Declaration

For the year ended 30 June 2010

In the Directors’ opinion:

(a)  the consolidated ﬁ nancial statements and notes set out on pages 50 to 101 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 Group’s ﬁ nancial position as at 30 June 2010 and of their performance, as represented 

by the results of their operations, changes in equity and their cash ﬂ ows, for the ﬁ nancial year ended on that date; and

(b)  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

(c)  the audited remuneration disclosures set out on pages 38 to 47 of the Directors’ report comply with Accounting Standards 

AASB 124 Related Party Disclosures and the Corporations Regulations 2001.

The Directors have been given the declarations by the chief executive ofﬁ cer and chief ﬁ nancial ofﬁ cer for the year ended 
30 June 2010 required by section 295A of the Corporations Act 2001.

The Directors draw attention to Note 1(a) to the ﬁ nancial statements, which include a statement of compliance with 
International Financial Reporting Standards.

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

Timothy J Lehany
Managing Director and CEO

Melbourne
24 August 2010

102

Independent Audit Report

For the year ended 30 June 2010

Independent auditor’s report to the members of St Barbara Limited

Report on the ﬁ nancial report
We have audited the accompanying ﬁ nancial report of the Group comprising St Barbara Limited (the Company) and the entities 
it controlled at the year’s end from time to time during the ﬁ nancial year, which comprises the consolidated statement of 
ﬁ nancial position as at 30 June 2010, and consolidated income statement and consolidated statement of comprehensive income, 
consolidated statement of changes in equity and consolidated statement of cash ﬂ ows for the year ended on that date, 
a description of signiﬁ cant accounting policies and other explanatory notes 1 to 38 and the directors’ declaration.

Directors’ responsibility for the ﬁ nancial report
The directors of the company are responsible for the preparation and fair presentation of the ﬁ nancial report in accordance 
with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. 
This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of 
the ﬁ nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate 
accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the directors also 
state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the ﬁ nancial 
report, comprising the ﬁ nancial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the ﬁ nancial report based on our audit. We conducted our audit in accordance 
with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating 
to audit engagements and plan and perform the audit to obtain reasonable assurance whether the ﬁ nancial report is free from 
material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁ nancial report. 
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement 
of the ﬁ nancial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control 
relevant to the entity’s preparation and fair presentation of the ﬁ nancial report in order to design audit procedures that are 
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal 
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting 
estimates made by the directors, as well as evaluating the overall presentation of the ﬁ nancial report.

We performed the procedures to assess whether in all material respects the ﬁ nancial report presents fairly, in accordance 
with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), 
a view which is consistent with our understanding of the Group’s ﬁ nancial position and of its performance.

We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion.

Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

www.stbarbara.com.au – Annual Report :: 103

Independent Audit Report  continued

For the year ended 30 June 2010

Auditor’s opinion
In our opinion:

(a)  the ﬁ nancial report of the Group is in accordance with the Corporations Act 2001, including:

(i) 

(ii) 

 giving a true and fair view of the Group’s ﬁ nancial position as at 30 June 2010 and of its performance for the year 
ended on that date; and

 complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the 
Corporations Regulations 2001.

(b)  the ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in note 1.

Report on the remuneration report
We have audited the Remuneration Report included in pages 38 to 47 of the directors’ report for the year ended 30 June 2010. 
The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance 
with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based 
on our audit conducted in accordance with auditing standards.

Auditor’s opinion
In our opinion, the remuneration report of St Barbara Limited for the year ended 30 June 2010, complies with Section 300A 
of the Corporations Act 2001.

KPMG

Michael Bray
Partner

Melbourne 
24 August 2010

104

 
 
Shareholder Information

Twenty largest registered shareholders

St Barbara Limited 
Top Holders Snapshot – Ungrouped 

Rank  Name 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

J P Morgan Nominees Australia Limited 

National Nominees Limited 

HSBC Custody Nominees (Australia) Limited 

Cogent Nominees Pty Limited 

ANZ Nominees Limited  

Resource Capital Fund IV LP 

Citicorp Nominees Pty Limited 

HSBC Custody Nominees (Australia) Limited-GSCO ECA 

9.  Queensland Investment Corporation 

10.  UBS Wealth Management Australia Nominees Pty Ltd 

11.  AMP Life Limited 

12.  Citicorp Nominees Pty Limited  

13.  Berne No 132 Nominees Pty Ltd <376804 A/C> 

14.  Share Direct Nominees Pty Ltd <10026 Account> 

15.  Cassa Trading Pty Ltd  

16.  Northwest Accounting Pty Ltd  

17.  ABN AMRO Clearing Sydney Nominees Pty Ltd  

18.  Comsec Nominees Pty Limited 

19.  Nefco Nominees Pty Ltd 

20. 

Invia Custodian Pty Limited  

Totals: Top 20 Holders Of Ordinary Fully Paid Shares (Total) 

Total Remaining Holders Balance 

Substantial Shareholders

Holder 

M&G Investment Mgt 

Franklin Templeton Investments 

Hunter Hall Investment Mgt 

Ordinary Fully Paid Shares (Total) as of 09 Sep 2010
Composition : Ord

Units 

% of Units

497,152,928 

359,983,623 

288,174,934 

123,944,004 

78,548,665 

78,434,933 

43,424,093 

13,400,372 

9,442,468 

9,287,581 

8,318,792 

8,113,002 

7,628,204 

6,449,053 

6,221,557 

5,607,937 

4,421,729 

4,122,324 

3,921,751 

3,624,430 

25.45

18.43

14.75

6.35

4.02

4.02

2.22

0.69

0.48

0.48

0.43

0.42

0.39

0.33

0.32

0.29

0.23

0.21

0.20

0.19

1,560,222,380 

392,946,027 

79.88

20.12

No. of Securities 

% of Total

312,666,542 

131,301,218 

112,341,492 

16.0%

6.7%

5.8%

www.stbarbara.com.au – Annual Report :: 105

Shareholder Information  continued

Distribution of Shareholdings

St Barbara Limited 
Range of Units Snapshot 

Range 

1 – 1,000 

1,001 – 5,000 

5,001 – 10,000 

10,001 – 100,000 

100,001 – 9,999,999,999 

Rounding 

Total 

Unmarketable Parcels

Ordinary Fully Paid Shares (Total) as of 31 Aug 2010
Composition : Ord

Total holders 

952 

2,591 

2,074 

4,842 

712 

Units 

427,448 

7,955,500 

16,775,828 

156,211,222 

1,771,798,409 

11,171 

1,953,168,407 

% of Issued
Capital

0.02

0.41

0.86

8.00

90.71

0.00 

100.00

Minimum $500.00 parcel at $ 0.3250 per unit 

1,539 

Minimum Parcel Size 

Holders 

1,275 

Units

854,567

106

 
 
 
 
 
 
this page has been left blank intentionally

www.stbarbara.com.au – Annual Report :: 107

Banker

National Australia Bank
500 Bourke Street
Melbourne VIC  3000

Auditor

KPMG 147 Collins Street
Melbourne VIC  3000

Solicitor

Freehills
QV1 Building
250 St Georges Terrace
Perth  WA  6000

Stock Exchange Listing

Australian Securities Exchange Limited
Shares in St Barbara Limited are quoted on the Australian 
Securities Exchange
Ticker Symbol: SBM

Corporate Directory

Board of Directors

S J C Wise 

Chairman

T J Lehany  Managing Director & CEO

D W Bailey  Non-Executive Director

B J Gibson 

Non-Executive Director

P C Lockyer  Non-Executive Director

R K Rae 

Non-Executive Director

Company Secretary

R J Kennedy

Registered Ofﬁ ce

Level 14, 90 Collins Street
Melbourne Victoria 3000

Telephone: +61 3 8660 1900
Facsimile: +61 3 8660 1999
Email: melbourne@stbarbara.com.au
Website: www.stbarbara.com.au

Share Registry

Computershare Limited
GPO Box 2975
Melbourne Victoria 3001 

Telephone (within Australia): 1300 653 935
Telephone (international): +61 3 9415 4356
Facsimile: +61 3 9473 2500

108

DESIGN: COLLIER & ASSOCIATES THE STRATEGIC DESIGN COMPANY #14867

This report is printed on Monza Satin produced with 55% recycled ﬁ bre (25% post consumer and 30% pre consumer) and FSC Certiﬁ ed pulp, 
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St Barbara Limited 
ABN 36 009 165 066