Annual Report 2015
ST BARBARA LIMITED
30 JUNE 2015
St Barbara at a glance
˃ St Barbara was established in 1969 and is an ASX‐300 listed gold mining company
(ASX:SBM).
˃ St Barbara has two mining operations:
˃ Leonora Operations in Western Australia
˃ Simberi Operations in Papua New Guinea.
˃ Leonora Operations comprise the Gwalia underground mine and associated processing
plant. The Gwalia underground mine is St Barbara’s cornerstone asset. The Gwalia deposit
has an Ore Reserve grade of 9.4 g/t Au, an expected mine life of approximately seven years,
and remains open at depth. Gwalia compares favourably against other ASX listed gold
mines on grade, reserve size, production and cost per ounce.
˃ Simberi Operations has an open pit mine and associated, recently expanded, processing
plant. Simberi has operated at its target production run‐rate of 100,000 ounces per year
since March 2015. Oxide and sulphide Ore Reserves provide the potential for Simberi to
become a long‐term cash generating asset.
˃ At 30 June 2015, St Barbara had Mineral Resources of 9.2 million ounces of contained gold,
including Ore Reserves of 4.0 million ounces of contained gold.
˃ Growth initiatives planned for FY16 include:
˃ further deep drilling below the existing Ore Reserve at Gwalia (which remains open at
depth) with the objective of delineating an Indicated Resource, in conjunction with a
shaft pre‐feasibility study
˃ prospective near mine oxide targets to be drilled at Simberi, in addition to a
pre‐feasibility study of processing options regarding the 1.3 Moz sulphide Ore Reserve
˃ exploration at Centenary and Pinjin in Western Australia and the Tabar Island Group in
PNG.
˃ St Barbara’s primary safety measure, total recordable injury frequency rate, was 5.0 for the
year to June 2015, a continued good result for a mixed jurisdiction combination of
underground and open pit operations.
Gold Production
377,387 ounces
Total Recordable Injury
Frequency Rate 5.0
2015
2014
2013
2012
2011
2015
2014
2013
2012
2011
0
100
200
300
400
0
5
10
15
Page ii
ST BARBARA LIMITED
30 JUNE 2015
St Barbara at a glance
Leonora (Gwalia mine)
• Gwalia underground mine
•
FY15 production 248 koz
•
FY16F production
220 ‐ 250 koz
•
•
1.6 Moz Ore Reserve
(open at depth)
Est. mine life 7 years
FY16 Growth initiative
• Drilling under current
Reserve with objective of
delineating an indicated
Resource in combination
with shaft pre‐feasibility
study, together seeking to
extend mine life
PNG
Australia
Leonora
FY16 planned exploration
Simberi
Simberi
• Open pit mine
•
•
FY15 production 80 koz
FY16F production
90 – 110 koz
0.8 Moz oxide Ore Reserve
Est. oxide mine life (without
mining larger pit for
sulphides) 4 years
•
•
FY16 Growth initiative
• Near mine targets for
•
•
exploration
Pre‐feasibility study
investigating potential for
long life sulphide mine
Existing 1.3 Moz sulphide
Reserve (open at depth)
Centenary & Pinjin (WA)
Tabar Island Group (PNG)
2,700 km2 of prospective tenements across Western Australia and Papua New Guinea
FY15 Gold Production 377 koz
@ AISC A$1,007/oz
Gwalia
248 koz
King of the Hills
50 koz
Simberi
80 koz
Ore Reserves as at 30 June 2015
Ore Reserves
Mt g/t Au Moz
Leonora, Western Australia
7.9
7.5
1.90
Simberi, Papua New Guinea 39.0
1.7
2.10
Mineral Resources
(Moz)
Ore Reserves
(Moz)
2.1
3.2
0.9
0.7
Total Reserves all Regions
46.9
2.7
4.00
11.2
10.0
9.2
4.3
4.5
4.0
FY 13
FY 14
FY 15
FY 13 FY 14
FY15
SI (sold FY15)
WA & PNG
SI (sold FY15)
WA & PNG
Notes: All Ore Reserve and Mineral Resource figures are as at 30 June 2015, refer to pages 106 to 110 for details.
Mine lives based on Ore Reserves at 30 June 2015. FY16 guidance figures per June 2015 Quarterly Report released to ASX on 21 July 2015.
Data is rounded as displayed in charts, discrepancies in totals may occur due to rounding.
Page iii
ST BARBARA LIMITED
30 JUNE 2015
Contents
3 Directors’ Report
40 Financial Report
106 Ore Reserves and Mineral Resources Statements
111 Shareholder Information
The Company’s 2015 Corporate Governance Statement was released to the ASX on 20
October 2015 and is available at www.stbarbara.com.au/profile/governance/
Page iv
ST BARBARA LIMITED
30 JUNE 2015
Directors’ Report
and
Financial Report
For Year Ended 30 June 2015
Page 1
ST BARBARA LIMITED
30 JUNE 2015
TABLE OF CONTENTS
DIRECTORS’ REPORT ........................................................................................................................ 3
Directors ...................................................................................................................................... 3
Principal activities ........................................................................................................................ 3
Dividends ..................................................................................................................................... 3
Overview of Results ..................................................................................................................... 3
Business strategy and future prospects .................................................................................... 10
Regulatory environment ........................................................................................................... 15
Information on Directors ........................................................................................................... 16
Meetings of Directors ................................................................................................................ 20
Directors’ Interests .................................................................................................................... 20
Indemnification and insurance of officers ................................................................................. 37
Proceedings on behalf of the company ..................................................................................... 37
Environmental management ..................................................................................................... 37
Non‐audit services ..................................................................................................................... 37
Auditor independence ............................................................................................................... 38
Events occurring after the end of the financial year ................................................................. 38
Rounding of amounts ................................................................................................................ 38
Auditor’s Independence Declaration ........................................................................................ 39
FINANCIAL REPORT ........................................................................................................................ 40
Page 2
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
The Directors present their report on the “St Barbara Group”, consisting of St Barbara Limited and the entities it controlled
at the end of, or during, the financial year ended 30 June 2015.
Directors
T C Netscher
The following persons were Directors of St Barbara Limited at any time during the year and up to the date of this report:
Non‐Executive Chairman (appointed 1 July 2015)
Non‐Executive Director (1 July 2014 to 30 June 2015)
Non‐Executive Chairman (resigned 30 June 2015)
Managing Director & CEO (appointed 1 July 2014)
Non‐Executive Director (resigned 30 June 2015)
Non‐Executive Director (resigned 26 January 2015)
Non‐Executive Director (appointed 18 May 2015)
Non‐Executive Director (appointed 16 March 2015)
S J C Wise
R S Vassie
D W Bailey
I L Scotland
K J Gleeson
D E J Moroney
The qualifications, experience and special responsibilities of the Directors are presented on pages 16 to 20.
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 significant changes in the nature of activities of the Group during the year.
Dividends
There were no dividends paid or declared during the financial year.
Overview of Results
During the 2015 financial year the Group significantly improved its financial performance, with key achievements over the
year being:
•
•
•
Record annual production from the Gwalia mine of 248,142 ounces of gold (2014: 214,319 ounces) generating
significant cash flows during the year of $168,695,000.
Successful turnaround of the Simberi operations in Papua New Guinea, with this operation generating positive cash
flows of $13,907,000 since December 2014.
Divesting the Gold Ridge project leaving the Group with no residual environmental, rehabilitation or other liabilities.
The Group reported a statutory net profit after tax of $39,682,000 (2014: statutory net loss after tax of $500,831,000) for
the year ended 30 June 2015, including Significant Items totalling a net loss after tax of $2,720,000 (2014: net loss of
$467,305,000).
To provide additional clarity into the underlying performance of the operations the underlying measures for the year are
presented in the table below, together with the statutory results. Underlying net profit after tax, before significant items,
was $42,402,000 (2014: net loss of $33,526,000).
Cash on hand (excluding restricted cash) at 30 June 2015 was $76,871,000 (2014: $79,407,000). Total interest bearing
borrowings were $346,961,000 (2014: $339,576,000).
Page 3
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
The consolidated result for the year is summarised as follows:
EBITDA(3)(6) (including significant items)
EBIT(2)(6) (including significant items)
Profit/(Loss) before tax(4)
Statutory profit/(loss) (1) after tax for the year
Total net significant items after tax
EBITDA (6) (excluding significant items)
EBIT (6) (excluding significant items)
Profit/(loss) before tax – excluding significant items
Underlying net profit/(loss) after tax(5)(6) for the year
2015
$’000
167,557
82,486
40,772
39,682
2014
$’000
(331,634)
(440,325)
(483,307)
(500,831)
(2,720)
(467,305)
186,332
101,261
57,921
42,402
114,974
19,354
(22,222)
(33,526)
(1) Statutory profit/(loss) is net profit/(loss) after tax attributable to owners of the parent.
(2) EBIT is earnings before interest revenue, finance costs and income tax expense. It includes revenues and expenses associated with
discontinued operations.
(3) EBITDA is EBIT before depreciation and amortisation. It includes revenues and expenses associated with discontinued operations.
(4) Profit/(loss) before tax is earnings before income tax expense. It includes revenues and expenses associated with discontinued operations.
(5) Underlying net profit/(loss) after income tax is net profit/(loss) after income tax (“Statutory Profit/(Loss)”) less significant items as
described in Note 9 to the financial statements, and excluding profit or loss from discontinued operations.
(6) EBIT, EBITDA and underlying net profit/(loss) after tax are non‐IFRS financial measures, which have not been subject to review or audit by
the Group’s external auditors. These measures are presented to enable understanding of the underlying performance of the Group by users.
Details of significant items included in the Statutory Profit/(Loss) for the year are displayed in the table below. Descriptions
of each item are provided in Note 9 to the financial report.
Asset impairments and write downs
Increase in rehabilitation provision
Redundancy costs
Gain on US notes buy back
Onerous provisions on office leases
Effect of unhedged borrowings
Unrealised foreign exchange gain
Realised foreign exchange loss on buy back of US Notes
2015
$’000
2014*
$’000
(11,425)
(215,290)
(5,896)
(522)
1,626
(1,729)
(47,470)
42,805
(13,066)
‐
(4,349)
‐
‐
‐
‐
‐
Additional proceeds in relation to Southern Cross sale
‐
1,444
Net profit/(loss) from discontinued operation
Significant items before tax
Significant items after tax
*restated to include comparative for discontinued operations.
18,528
(242,890)
(17,149)
(461,085)
(2,720)
(467,305)
Page 4
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Asset impairments and write downs
Due to the cessation of mining at the King of the Hills mine in Leonora during April 2015 and the move to care and
maintenance, the Group reviewed the carrying values of the remaining assets associated with the operations. As a result
capitalised mine development was written off totalling $11,425,000. In the prior year total impairments expensed in
relation to the Simberi and Gold Ridge operations amounted to $410,556,000 after tax.
In addition, a review of the estimate of the rehabilitation provision related to the King of the Hills operations resulted in an
increased cost of $5,896,000, which has been expensed in the income statement and recognised as a significant item.
Overview of Operating Results
Total production for the Group in the 2015 financial year was 377,387 ounces of gold (2014: 374,402 ounces), and gold
sales amounted to 382,104 ounces (2014: 376,160 ounces) at an average gold price of A$1,439 per ounce (2014: A$1,410
per ounce). The prior year included higher production and gold sales from the Gold Ridge mine, which is classified as a
discontinued operation.
Consolidated All‐In Sustaining Cost (AISC) for the Group was $1,007 per ounce in 2015 (2014: $1,340 per ounce), reflecting
the benefits of strong results achieved at Leonora, improved performance at Simberi and removal of the Gold Ridge
operation from the portfolio.
The table below provides a summary of the underlying profit/(loss) before tax from continued operations in Australia and
the Pacific.
Year ended 30 June 2015
$’000
Revenue
Mine operating costs
Gross Profit
Royalties
Depreciation and Amortisation
Underlying profit/(loss) from operations(1)
Australian
Operations(2)
435,685
Pacific
Operations(3)
112,521
Consolidated
548,206
(209,230)
(102,471)
(311,701)
226,455
(17,656)
(69,837)
138,962
10,050
(2,575)
(10,038)
(2,563)
236,505
(20,231)
(79,875)
136,399
(1) Excludes corporate and exploration costs, discontinued operations, impairment losses, interest and tax and is non‐IFRS financial
information, which has not been subject to review or audit by the Group’s external auditors, . This measure is presented to enable
understanding of the underlying performance of the operations.
(2) Comprises the Leonora operations, which includes the Gwalia and King of the Hills underground mines and the Leonora processing
plant.
(3) Comprises only the Simberi operations, with operations at Gold Ridge having been suspended in April 2014.
The table below provides a summary of the cash contribution, after capital expenditure, from continued
operations in Australia and the Pacific.
Year ended 30 June 2015
$’000
Operating cash contribution
Capital expenditure
Cash contribution
Australian
Operations
224,328
(38,332)
185,996
Pacific
Operations
8,490
(8,523)
(33)
Consolidated
232,818
(46,855)
185,963
Page 5
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Analysis of Australian Operations
Total sales revenue from the Leonora operations of $435,685,000 (2014: $401,820,000) was generated from gold sales of
302,094 ounces (2014: 284,067 ounces) in the year at an average achieved gold price of A$1,437 per ounce (2014: A$1,406
per ounce). During the 2015 year revenue benefitted from six percent higher gold sales compared with the prior year and a
marginal increase in the average spot gold price.
In April 2015 mining operations at the King of the Hills mine ceased and processing of stockpiles through the Gwalia mill
continued to the end of June.
A summary of production performance for the year ended 30 June 2015 is provided in the table below.
Details of 2015 Production Performance
Underground Ore Mined
Grade
kt
g/t Au
Ore Milled (including stockpiles)
kt
Grade
Recovery
g/t Au
%
Gold Production
Cash Cost(1)
A$/oz
All‐In Sustaining Cost (AISC) (2) A$/oz
oz
Gwalia
King of the Hills
2014/15
2013/14
2014/15
2013/14
902
8.9
931
8.6
96
811
8.4
851
8.1
96
457
4.1
392
4.2
95
472
4.6
514
4.5
95
248,142
214,319
49,677
70,711
642
841
688
940
1,112
1,103
973
1,263
Gwalia
Gwalia produced a record 248,142 ounces of gold in 2015 (2014: 214,319 ounces). The record performance at Gwalia was
the result of multiple factors, including improvements in productivity, successful implementation of innovations in mining
and higher grade.
Ore tonnes mined from the Gwalia underground mine increased from 811,000 tonnes in 2014 to 902,000 tonnes in 2015,
largely due to excellent productivity improvements achieved during the year, including continued underground storage of
waste.
Ore mined grades increased from 8.4 grams per tonne gold in 2014 to 8.9 grams per tonne gold in 2015 mainly due to
reduced dilution, and high grade shoots present in stopes that cannot be reliably estimated by production drilling. Ore
milled grade increased from 8.1 grams per tonne in 2014 to 8.6 grams per tonne in line with the higher grade of ore mined.
The Gwalia mill continued to perform strongly in 2015 and throughput increased in line with the higher ore production; the
average recovery was consistent with the prior year at 96 percent.
Gwalia unit Cash Operating Costs1 for the year were $642 per ounce (2014: $688 per ounce), reflecting the benefit of
increased production and higher average grade. The unit All‐In Sustaining Cost (AISC)2 for Gwalia was $841 per ounce in
2015 well down on the $940 per ounce reported in the prior year. The lower AISC in 2015 was due mainly to the lower unit
Cash Operating Cost and a reduced corporate and administration cost allocation. Total Cash Operating Costs at Gwalia of
$159,307,000 were higher compared with the prior year (2014: $147,451,000) due to the increase in production volumes.
In 2015 Gwalia generated net cash flows, after capital expenditure, of $168,695,000 (2014: $119,392,000).
1 Cash Operating Costs are mine operating costs including government royalties, and after by‐product credits. This is a non‐IFRS financial measure which
has not been subject to review or audit by the Group’s external auditors. It is presented to provide meaningful information to assist management,
investors and analysts in understanding the results of the operations. Cash Operating Costs are calculated according to common mining industry practice
using The Gold Institute (USA) Production Cost Standard (1999 revision).
2 All‐In Sustaining Cost (AISC) is based on Cash Operating Costs, and adds items relevant to sustaining production. It includes some but not all, of the
components identified in World Gold Council’s Guidance Note on Non‐GAAP Metrics – All‐In Sustaining Costs and All‐In Costs (June 2013), which is a non
IFRS financial measure.
Page 6
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
King of the Hills
Ore tonnes mined from the King of the Hills underground mine was marginally down on 2014 at 457,000 tonnes (2014:
472,000 tonnes). Gold production from King of the Hills was 49,677 ounces (2014: 70,711 ounces). The lower production
in 2015 was as a result of mining operations ceasing in April 2015 and the fact that higher grade Gwalia ore was prioritised
for processing over King of the Hills ore.
The average grade of ore mined was lower than the prior year at 4.1 grams per tonne gold (2014: 4.6 grams per tonne
gold). The King of the Hills unit cash operating costs for 2015 were $1,112 per ounce (2014: $973 per ounce), with the
increase due mainly to the lower production. The unit All‐In Sustaining Cost (AISC) for King of the Hills was $1,103 per
ounce in 2015 (2014: $1,263 per ounce). Total Cash Operating Costs at King of the Hills were $55,241,000 (2014:
$68,802,000), reflecting the lower mining activity and milling volumes in 2015.
In 2015 King of the Hills generated net cash flows, after capital expenditure, of $17,301,000 (2014: net cash outflow
$650,000). As at 30 June 2015 ore containing an estimated 9,410 ounces of gold was stockpiled at King of the Hills for
processing in the first quarter of the 2016 financial year.
Analysis of Pacific Operations
Operations at the Gold Ridge mine in the Solomon Islands were suspended in April 2014 following extreme rainfall and
flooding. Production did not recommence and the Group divested the mine in May 2015. In the 2014 year Gold Ridge
produced 45,121 ounces of gold prior to operations being suspended, with gold sales of 49,410 ounces generating revenue
of $71,058,000. While there was no production from Gold Ridge in the 2015 year, gold sales of $4,345,000 were generated
from gold produced in the prior year. The results of operations at Gold Ridge and the impact of its divestment in 2015 have
been separately disclosed as discontinued operations in the income statement.
During 2015 a successful turnaround was completed at the Simberi operations. The turnaround has been achieved through
optimising the processing plant to sustain throughput of 3.5 million tonnes per annum, improving the mining fleet and
achieving productivity improvements in mining operations, increased focus on the ore delivery system and a commitment
to reduce operating costs.
Total sales revenue from Simberi in 2015 was $112,521,000 (June 2014: $60,950,000) generated from gold sales of 77,236
ounces (June 2014: 42,683 ounces) at an average achieved gold price of A$1,445 per ounce (June 2014: A$1,426 per
ounce).
A summary of production performance at Simberi for the year ended 30 June 2015 is provided in the table below.
Details of 2015 Production Performance
Simberi
Gold Ridge
30 June 2015
30 June 2014
30 June 2015
30 June 2014
Open Pit Ore Mined
Grade
kt
g/t Au
Ore Milled (including stockpiles)
kt
Grade
Recovery
g/t Au
%
Gold Production
Cash Cost(1)
A$/oz
All‐In Sustaining Cost (AISC)(1) A$/oz
oz
(1) Before significant items.
2,070
1.23
2,660
1.1
84
79,568
1,337
1,464
1,886
1.0
1,714
1.0
80
44,251
2,136
2,404
‐
‐
‐
‐
‐
‐
‐
‐
1,425
1.4
1,467
1.4
67
45,121
1,994
2,218
Page 7
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Simberi
Simberi production of 79,568 ounces of gold was the highest since the Group acquired the operations in September 2012
(2014: 44,251 ounces). Simberi’s performance in the second half of 2015 with production of 49,635 ounces confirmed that
the turnaround of the operations has been successful.
Ore tonnes mined and total volume of material moved has increased quarter on quarter during 2015. Total material moved
in 2015 was 6,289,000 tonnes compared to 4,256,000 tonnes for the 2014 year. Ore mined in 2015 totalled 2,070,000
tonnes compared to 1,886,000 tonnes in 2014. The improvement in mining performance in the 2015 financial year was
largely attributable to better equipment reliability and availability, improvement in equipment and introduction of
efficiencies in the mining operations.
Ore mined grades increased from 1.0 gram per tonne gold in 2014 to 1.23 grams per tonne gold in 2015.
Ore milled increased to 2,660,000 tonnes (2014: 1,714,000 tonnes), which reflected the commissioning of the SAG mill and
refurbishment of the ball mill in December 2014, and the processing of ore through both the SAG and ball mills in the
second half of the year.
Simberi unit Cash Operating Costs for the year were $1,337 per ounce (2014: $2,136 per ounce), reflecting the positive
impact of increased production and lower operating costs. The unit All‐In Sustaining Cost (AISC) for Simberi was $1,464 per
ounce in 2015 (2014: $2,404 per ounce). As the performance of Simberi significantly improved during the second half of
the 2015 financial year, the unit cash costs and AISC reduced markedly to $1,107 per ounce and $1,222 per ounce
respectively. Total Cash Operating Costs at Simberi during the 2015 year were higher than the prior year at $106,382,000
(2014: $94,520,000) due to increased production.
In 2015 Simberi generated net negative cash flows, after capital expenditure, of $33,000 (2014: negative $60,381,000). In
the seven month period from December 2014 to 30 June 2015 Simberi generated positive net cash flows of $13,907,000.
Discussion and Analysis of the Income Statement
Revenue
Total revenue (excluding discontinued operations) increased from $462,770,000 in 2014 to $548,206,000 in 2015. Revenue
from Leonora and Simberi was higher than the previous year due to increased production and gold sales, and the benefit of
the higher gold price.
Mine operating costs
Mine operating costs in relation to continuing operations in 2015 were $311,701,000 compared to $297,864,000 in the
prior year. The increase in operating costs was attributable to higher production and mining activity at both the Gwalia and
Simberi mines in 2015.
Other revenue and income
Other revenue of $1,782,000 (2014: $1,904,000) comprised mainly interest earned during the year of $1,586,000 (2014:
$1,718,000). The decrease in interest earned is reflective of lower interest rates applied to excess cash balances in 2015.
Other income for the year of $1,503,000 (2014: $3,169,000) included royalties earned from tenements held in Australia of
$1,053,000 (2014: $1,565,000). In the prior year other income included an amount of $1,444,000 in relation to additional
proceeds from the sale of the Southern Cross operations.
Exploration
Exploration expenditure expensed in the income statement in the year amounted to $7,691,000 (2014: $16,112,000). Total
exploration expenditure incurred during the 2015 year amounted to $9,932,000 (2014: $16,112,000), with an amount of
$2,241,000 (2014: nil) capitalised to exploration and evaluation. Exploration expenditure in the current year was
significantly lower compared to the prior year, with exploration expenditure activities during the year focused on
investigating highly prospective near mine high grade oxide targets at Simberi and undertaking a deep drilling program at
Gwalia.
Corporate and support costs
Corporate and support costs for the year of $20,284,000 (2014: $26,809,000) comprised mainly expenses relating to the
corporate office and compliance costs. Expenditure in 2015 was lower than in the prior year as a result of a cost reduction
program that commenced in 2014.
Page 8
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Royalties
Royalty expenses for the year were $20,231,000 (2014: $17,267,000). Royalties paid in Western Australia are 2.5% of gold
revenues, plus a corporate royalty of 1.5% of gold revenues. Royalties paid in Papua New Guinea are 2.25% of gold
revenues earned from the Simberi mine. The increase in royalty expenses in 2015 was attributable to increased gold
revenue from Leonora and Simberi.
Depreciation and amortisation
Depreciation and amortisation of fixed assets and capitalised mine development amounted to $85,071,000 (2014:
$95,620,000) for the year. Depreciation and amortisation attributable to the Australian Operations was $69,837,000 (2014:
$80,938,000), with the lower charge attributable to reduced amortisation of mine development at King of the Hills. The
expense at Simberi was $10,038,000 (2014: $11,554,000), with the lower charge due to the reduction in the asset base in
the prior year from the impairment write off.
Other expenditure
Other expenditure of $9,705,000 (2014: $1,261,000) included an expense related to recognition of an onerous provision for
surplus office lease space, costs related to a procurement cost reduction initiative and technical and feasibility study costs.
Net finance costs
Finance costs in the year were $43,300,000 (2014: $43,296,000). Finance costs comprised interest paid and payable on
borrowings and finance leases of $36,708,000 (2014: $26,551,000), capitalised borrowing costs relating to the senior
secured notes amortised to the income statement of $4,246,000 (2014: $3,575,000) and the unwinding of the discount on
the rehabilitation provision of $1,875,000 (2014: $1,629,000).
Foreign currency movements
A foreign exchange movement loss of $15,350,000 was recognised for the year (2014: gain of $3,218,000), which included
the foreign currency loss of $13,066,000 on the buy back of the US Notes in June 2015.
Income tax
An income tax expense of $1,090,000 was recognised for the 2015 year (2014: income tax expense of $12,484,000).
Discussion and Analysis of the Cash Flow Statement
Operating activities
Cash flows from operating activities for the year were $113,201,000 (2014: $20,260,000), reflecting the benefit of higher
receipts from customers and significantly lower payments to suppliers and employees compared to the prior year. Receipts
from customers of $555,823,000 (2014: $540,050,000) were marginally higher than the prior year; the prior year receipts
included an amount of $71,058,000 related to Gold Ridge. Payments to suppliers were $407,508,000 (2014: $472,501,000),
with 2014 including payments related to Gold Ridge amounting to $97,818,000. Payments for exploration expensed in the
year amounted to $7,383,000 (2014: $21,297,000, including $5,185,000 relating to discontinued operation). Interest paid
in the year was $28,682,000 (2014: $26,565,000), with the higher expense due mainly to the impact of the weaker
Australian dollar on United States dollar denominated interest payments.
Investing activities
Net cash flows used in investing activities amounted to $50,602,000 (2014: $86,412,000) for the year. Lower expenditure
on property, plant and equipment of $23,762,000 (2014: $49,225,000) was the main reason for reduced investing
expenditure in the year. The lower expenditure on property, plant and equipment in 2015 was due to the completion of
the Simberi SAG Mill in 2014. Lower mine development of $24,705,000 (2014: $39,971,000) was due mainly to reduced
expenditure at King of the Hills. Exploration expenditure capitalised during the year totalled $2,241,000 (2014: $Nil), which
related to the deep drilling program at Gwalia. Investing expenditure during the year was in the following major areas:
Underground mine development and infrastructure at Gwalia – $30,662,000 (2014: $28,921,000);
Underground mine development and infrastructure at King of the Hills – $4,969,000 (2014: $11,050,000);
Simberi oxide expansion and other capital projects – $8,412,000 (2014: $26,973,000); and
Purchase of property, plant and equipment at the operations – $3,073,000 (2014: $19,092,000)
Page 9
ST BARBARA LIMITED
Financing activities
DIRECTORS’ REPORT
30 JUNE 2015
Net cash flows related to financing activities in 2015 were a net outflow of $71,341,000 (2014: net inflow of $18,679,000),
due mainly to the repayment of debt in the 2015 year. The main movements in financing cash flows included:
Partial repayment of the secured notes through a buy back totalling $66,831,000 after a five percent discount.
Repayment of finance leases amounting to $4,003,000 (2014: $4,706,000).
The prior year benefitted from the net additional draw down of debt of $14,921,000 and proceeds from the close out of
gold options of $8,500,000.
Discussion and Analysis of the Statement of Financial Position
Net Assets and Total Equity
St Barbara’s net assets and total equity increased marginally during the year by $8,617,000 to $140,429,000 as a result of
an increase in the deferred tax assets, combined with a reduction in total liabilities, offset by lower mine properties. The
reduction in mine properties was attributable to amortisation in the year and the impairment of King of the Hills.
Trade and other payables decreased to $42,895,000 at 30 June 2015 (2014: $58,951,000), reflecting mainly the impact of
the cessation of activities at King of the Hills and Gold Ridge.
Provisions decreased to $62,597,000 (2014: $84,007,000) due to the de‐recognition of the Gold Ridge rehabilitation
provision.
The deferred tax balance was a net asset of $13,985,000 (2014: net asset of $5,859,000). Deferred tax assets arising from
accumulated tax losses in relation to the Pacific Operations of $79,574,000 (tax effected) have not yet been booked as it is
not probable as at 30 June 2015 that future taxable profits will be generated to utilise these deferred tax assets.
Debt management and liquidity
The available cash balance at 30 June 2015 was $76,871,000 (2014: $79,407,000), with an additional $2,084,000 (2014:
$1,577,000) held on deposit as restricted cash and reported within trade receivables.
Total interest bearing liabilities increased to $346,961,000 at 30 June 2015 (2014: $339,576,000). The significantly weaker
Australian dollar had a materially negative impact on the United States denominated debt as at 30 June 2015, while the buy
back of senior secured notes in June 2015 reduced debt by $70,037,000. The largest components of the year end balance
were:
US$195,980,000 (2014: US$250,000,000) senior secured notes translated at the year end AUD/USD exchange rate
($248,621,000), net of capitalised transaction costs of $5,467,000;
A debt facility of US$75,000,000 (2014: US$75,000,000) drawn down with RK Mine Finance (“Red Kite”) translated
at the year end AUD/USD exchange rate ($93,081,000), net of capitalised transaction costs of $4,157,000; and
Lease liabilities of $5,259,000.
The current portion of total debt as at 30 June 2015 was $52,428,000 (2014: $24,226,000). Scheduled quarterly
repayments of the Red Kite facility commences in September 2015.
The AUD/USD exchange rate as at 30 June 2015 was 0.7713 (30 June 2014: 0.9430).
Business strategy and future prospects
St Barbara’s strategic focus is on mining lower cost gold deposits in Australia and at Simberi in Papua New Guinea.
Currently the Group has a diversified asset portfolio spanning underground and open cut mines, and exploration projects in
Australia and Papua New Guinea. A successful turnaround was completed at the Simberi operations through the
optimisation of the processing plant, improving the mining fleet, and productivity improvements in mining operations.
St Barbara’s strategy is to generate shareholder value through the discovery and development of gold deposits and
production of gold. The Group aligns its decisions and activities to this strategy by focusing on three key value drivers:
relative total shareholder returns, growth in gold ore reserves and return on capital employed.
Strategic drivers for the business include:
Optimising cash flow and reducing the cost base: The Group is focused on optimising cash flow from operations
through maximising production and managing costs at its existing operations, enhancing operating capabilities and
Page 10
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
incorporating new technologies across St Barbara. The Group will continue to identify opportunities to enhance
efficiency and improve operating performance in a volatile gold market.
Improving productivity: The Group is focused on consolidating the turnaround at the Simberi operations to maintain
the increased production rates and reduced operating costs. St Barbara continues to invest to improve infrastructure,
mining fleets and capability to ensure consistent and reliable production.
Growing the ore reserve base through the development of existing Mineral Resources and exploration activities: A
number of potential organic growth opportunities have been identified, which could increase production and extend
the life of the Gwalia and Simberi operations. During 2015 a deep drilling program commenced at Gwalia with the
objective to extend the Gwalia mineral resource and develop the case for mining below the current resource. At
Simberi, a sulphide ore reserve, which has been estimated at 1.3 Moz, provides an opportunity to create a long life
production centre at Simberi. In addition the Group is generating and evaluating exploration targets in the Tabar Island
Group in Papua New Guinea.
Maintaining a conservative financial profile: The Group will continue to maintain prudent financial management
policies with the objective of maintaining liquidity to ensure appropriate investments in the operations. The Group’s
financial management policies are aimed at generating net cash flows from operations to meet financial commitments,
fund exploration and reduce debt to the extent viable and appropriate. The Group’s capital management plan is
reviewed and discussed with the Board on a regular basis.
Continue and strengthen the Group’s commitment to employees and local communities: The Group considers the
capability and wellbeing of its employees as key in delivering the business strategy. Creating and sustaining a safe work
environment and ensuring that operations conform to applicable environmental and sustainability standards is an
important focus for the Group. The Group invests in the training and development of its employees, talent
management, and succession planning, and views such efforts as an important component of instilling St Barbara’s
values throughout the organisation and retaining continuity in the workforce. The Group has implemented a
comprehensive talent management framework to strengthen the capacity to attract, motivate and retain capable
people. The Group also has an ongoing commitment to work with local communities to improve infrastructure,
particularly in health and education, support local businesses, and provide venues for leisure activities, and other
opportunities for developing communities in which the Group operates.
Within Australia, the Gwalia underground mine with ore reserves of 1.6 million ounces remains the flagship asset of the
Group, generating strong cash flows. In parallel with the deep drilling program at Gwalia, studies in relation to ore haulage
options are to occur during the 2016 financial year.
In Papua New Guinea, a prefeasibility study (PFS) for the Simberi sulphide project is being advanced. Current plans indicate
that a phased cut over to sulphide processing, including a period of processing both sulphides and oxides would be optimal
(due to areas of oxide reserves lying within the deeper sulphide pit shells). The PFS is currently focussed on metallurgical
work that indicates a traditional floatation circuit will produce a marketable concentrate for export from Simberi. The
extent of oxide and sulphide reserves indicates at least a 15 year mine life with upside potential. If the sulphide project was
not progressed, the best value plan for oxides would be for approximately 4 years, with possible extension to this from
continuing exploration work.
The Group’s 2016 financial year budget was developed in the context of a volatile gold market and weakening Australian
dollar against the United States dollar. The Group’s priorities in the 2016 financial year are to continue consistent
production from Leonora, further optimise the operations at Simberi, reduce costs and contain capital expenditure. For the
2016 financial year the Group’s operational and financial outlook is as follows:
Gold production is expected to be in the range 319,000 to 369,000 ounces.
All‐In Sustaining Cost is expected to be in the range of $995 per ounce to $1,080 per ounce.
Capital expenditure is expected to be in the range of $38 million to $47 million.
Material business risks
St Barbara prepares its business plan using estimates of production and financial performance based on a business planning
system and a range of assumptions and expectations. There is uncertainty in these assumptions and expectations, and risk
that variation from them could result in actual performance being different to planned outcomes. The uncertainties arise
from a range of factors, including the Group’s international operating scope, nature of the mining industry and economic
factors. The material business risks faced by the Group that may have an impact on the operating and financial prospects
of the Group as at 30 June 2015 are:
Page 11
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Fluctuations in the United States Dollar (“USD”) spot gold price: Volatility in the gold price creates revenue
uncertainty and requires careful management of business performance to ensure that operating cash margins are
maintained despite a fall in the spot gold price.
Declining gold prices can also impact operations by requiring a reassessment of the feasibility of a particular
exploration or development project. Even if a project is ultimately determined to be economically viable, the need
to conduct such a reassessment could cause substantial delays and/or may interrupt operations, which may have a
material adverse effect on the results of operations and financial condition.
In assessing the feasibility of a project for development, the Group may consider whether a hedging instrument
should be put in place in order to guarantee a minimum level of return. For example the Group put in place a gold
collar structure when the King of the Hills project was commissioned.
The Group has a centralised treasury function that monitors the risk of fluctuations in the USD gold price and
impacts on expenditures from movements in local currencies. Where possible, the exposure to movements in the
USD relative to USD denominated expenditure is offset by the exposure to the USD gold price (a natural hedge
position).
Government regulation: The Group’s mining, processing, development and exploration activities are subject to
various laws and statutory regulations governing prospecting, development, production, taxes, royalty payments,
labour standards and occupational health, mine safety, toxic substances, land use, water use, communications,
land claims of local people and other matters.
No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules and
regulations will not be applied in a manner which could have an adverse effect on the Group’s financial position
and results of operations. Any such amendments to current laws, regulations and permits governing operations
and activities of mining and exploration companies, or more stringent implementation thereof, could have a
material adverse impact on the Group. Failure to comply with any applicable laws, regulations or permitting
requirements may result in enforcement actions against the Group, including orders issued by regulatory or
judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring
capital expenditures, installation of additional equipment, or remedial actions.
Operating risks and hazards: The Group’s mining operations, consisting of open pit and underground mines,
generally involve a high degree of risk, and these risks are increased when mining occurs at increased depth. The
Group’s operations are subject to all the hazards and risks normally encountered in the exploration, development
and production of gold. Processing operations are subject to hazards such as equipment failure, toxic chemical
leakage, loss of power, fast‐moving heavy equipment, failure of deep sea tailings disposal pipelines and retaining
dams around tailings containment areas, rain and seismic events which may result in environmental pollution and
consequent liability. The impact of these events could lead to disruptions in production and scheduling, increased
costs and loss of facilities, which may have a material adverse impact on the Group’s results of operations,
financial condition and prospects. These risks are managed by a structured operations risk management
framework.
Reliance on transportation facilities and infrastructure: The Group depends on the availability and affordability of
reliable transportation facilities and infrastructure (e.g. roads, bridges, airports, power sources and water supply)
to deliver consumables to site, and final product to market. Interruption in the provision of such infrastructure
(e.g. due to adverse weather; community or government interference) could adversely affect St Barbara's
operations, financial condition and results of operations. The Group’s operating procedures include business
continuity plans which can be enacted in the event a particular piece of infrastructure is temporarily unavailable.
Production, cost and capital estimates: The Group prepares estimates of future production, cash costs and capital
costs of production for its operations. The ability of the Group to achieve production targets, or meet operating
and capital expenditure estimates on a timely basis cannot be assured. The assets of the Group, as any others, are
subject to uncertainty with ore tonnes, grade, metallurgical recovery, ground conditions, operational environment,
funding for development, regulatory changes, accidents and other unforeseen circumstances such as unplanned
mechanical failure of plant and equipment. Failure to achieve production, cost or capital estimates, or material
increases to costs, could have an adverse impact on the Group’s future cash flows, profitability and financial
condition. The development of estimates is managed by the Group using a rigorous budgeting and forecasting
process. Actual results are compared with forecasts to identify drivers behind discrepancies which may result in
updates to future estimates.
Page 12
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Changes in input costs: Mining operations and facilities are intensive users of electricity, gas and carbon‐based
fuels. Energy prices can be affected by numerous factors beyond the Group's control, including global and regional
supply and demand, carbon taxes, inflation, political and economic conditions, and applicable regulatory regimes.
The prices of various sources of energy may increase significantly from current levels.
The Group's production costs are also affected by the prices of commodities it consumes or uses in its operations,
such as diesel, lime, sodium cyanide and explosives. The prices of such commodities are influenced by supply and
demand trends affecting the mining industry in general and other factors outside the Group's control. Increases in
the price for materials consumed in St Barbara's mining and production activities could materially adversely affect
its results of operations and financial condition.
Certain of the Group's operations use contractors for the bulk of the mining services at those operations, and
some of its construction projects are conducted by contractors. As a result, the Group's operations are subject to
a number of risks, including:
- negotiation and renewal of agreements with contractors on acceptable terms;
-
failure of contractors to perform under their agreements, including failure to comply with safety systems and
standards, contractor insolvency and failure to maintain appropriate insurance;
failure of contractors to comply with applicable legal and regulatory requirements; and
changes in contractors.
-
-
In addition, St Barbara may incur liability to third parties as a result of the actions of its contractors. The
occurrence of one or more of these risks could have a material adverse effect on its results of operations and
financial position.
The Group manages risks associated with input costs through a centralised procurement function which analyses
market trends, supply environment, and operational demand planning, to establish appropriate sourcing strategies
for spend categories.
Exploration and development risk: Although the Group’s activities are primarily directed towards mining
operations and the development of mineral deposits, its activities also include the exploration for mineral deposits
and the possibility of third party arrangements including joint ventures, partnerships, toll treating arrangements or
other third party contracts. An ability to sustain or increase the current level of production in the longer term is in
part dependent on the success of the Group’s exploration activities and development projects, and the expansion
of existing mining operations.
The exploration for and development of mineral deposits involves significant risks that even a combination of
careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in
substantial rewards, few properties that are explored subsequently have economic deposits of gold identified, and
even fewer are ultimately developed into producing mines. Major expenses may be required to locate and
establish mineral reserves, to establish rights to mine the ground, to receive all necessary operating permits, to
develop metallurgical processes and to construct mining and processing facilities at a particular site. It is
impossible to ensure that the exploration or development programs the Group plans will result in a profitable
mining operation.
Whether a mineral deposit will be commercially viable depends on a number of factors.
The Group has a disciplined approach to allocating budget to exploration projects. The Group also has investment
criteria to ensure that development projects are only approved if an adequate return on the investment is
expected.
Ore Reserves and Mineral Resources: The Group's estimates of Ore Reserves and Mineral Resources are based on
different levels of geological confidence and different degrees of technical and economic evaluation, and no
assurance can be given that anticipated tonnages and grades will be achieved, that the indicated level of recovery
will be realised or that Ore Reserves could be mined or processed profitably. The quality of any Ore Reserve or
Mineral Resource estimate is a function of the quantity of available technical data and of the assumptions used in
engineering and geological interpretation, and modifying factors affecting economic extraction. Such estimates
are compiled by experienced and appropriately qualified geoscientists using mapping and sampling data obtained
from bore holes and field observations, and subsequently reported by Competent Persons under the JORC Code.
Fluctuation in gold prices, key input costs to production, as well as the results of additional drilling, and the
evaluation of reconciled production and processing data subsequent to any estimate may require revision of such
estimate.
Page 13
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Actual mineralisation or ore bodies may be different from those predicted, and any material variation in the
estimated Ore Reserves, including metallurgy, grade, dilution, ore loss, or stripping ratio at the Group's properties
may affect the economic viability of its properties, and this may have a material adverse impact on the Group's
results of operations, financial condition and prospects.
There is also a risk that depletion of reserves will not be offset by discoveries or acquisitions or that divestitures of
assets will lead to a lower reserve base. The reserve base of the Group may decline if reserves are mined without
adequate replacement and the Group may not be able to sustain production beyond current mine lives, based on
current production rates.
Political, social and security risks: St Barbara has production and exploration operations in developing countries
that are subject to political, economic and other risks and uncertainties. The formulation and implementation of
government policies in these countries may be unpredictable. Operating in developing countries also involves
managing security risks associated with the areas where the Group has activities. The Group has established
policies and procedures to assist in managing and monitoring various government relations. The Group’s
operating procedures at its mines in the Pacific include detailed security plans.
Restrictions on indebtedness: Under the terms of the US senior secured notes, although there are no operational
covenants, there are certain restrictions on the cumulative amount that can be invested in the Pacific Operations,
and in the amount of additional indebtedness that may be entered into by the Group. A breach of these terms
may lead to a default. At 30 June 2015, based on forward projections, there is adequate headroom under these
restrictions. However the restrictions on investment in the Pacific Operations and new indebtedness may provide
a potential constraint on developing future programs such as expanding production capacity or developing
additional near mine reserves.
Refinancing risk: The Company has debt facilities with external financiers, including a secured loan facility with RK
Mine Finance and senior secured notes. The structure of these facilities has been designed so that the refinancing
obligations of the facilities are staged over a reasonable period. Although the Company currently generates
sufficient cash flows to secure its debt requirements, no assurance can be given that it will be able to refinance the
debt prior to its expiry on acceptable terms to the Company. If the Company is unable to repay or refinance its
external debt in the future, its financial condition and ability to continue operating may be adversely affected.
Foreign exchange: The Group has an Australian dollar functional currency for reporting purposes. However, gold
is sold throughout the world based principally on the U.S. dollar price, and most of the Group's revenues and
interest bearing liabilities are realised in, or linked to, U.S. dollars. The Group is also exposed to U.S. dollars and
Papua New Guinea Kina in respect of operations located in Papua New Guinea as certain of its operating costs are
denominated in these currencies. There is a "natural" (but not perfect) hedge which matches to some degree U.S.
denominated revenue and obligations related to interest bearing liabilities, which may reduce, but does not
eliminate, foreign exchange risk. The Group is therefore exposed to fluctuations in foreign currency exchange
rates. The Group monitors foreign exchange exposure and risk on a monthly basis through the centralised
treasury function and a Management Treasury Risk Committee.
Community relations: A failure to adequately manage community and social expectations within the communities
in which the Group operates may lead to local dissatisfaction which, in turn, could lead to interruptions to
production and exploration operations. The Group has an established stakeholder engagement framework to
guide the management of the Group’s community relations efforts. At each of the operations in the Pacific there
is a dedicated community relations team to work closely with the local communities and government.
Insurance: The Group maintains insurance to protect against certain risks. However, the Group’s insurance will
not cover all the potential risks associated with a mining company’s operations. The Group may also be unable to
maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue
to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as
loss of title to mineral property, environmental pollution, or other hazards as a result of exploration and
production is not generally available to the Group or to other companies in the mining industry on acceptable
terms. The Group might also become subject to liability for pollution or other hazards which may not be insured
against or which it may elect not to insure against because of premium costs or other reasons. Losses from these
events may cause the Group to incur significant costs that could have a material adverse effect upon its financial
performance and results of operations.
Weather and climactic conditions: The effects of changes in rainfall patterns, changing storm patterns and
intensities have from time to time adversely impacted, and may in the future adversely impact, the cost,
production levels and financial performance of the Group's operations. The Group's mining operations have been,
Page 14
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
and may in the future be, subject from time to time to severe storms and high rainfalls leading to flooding and
associated damage, which has resulted, and may result in delays to, or loss of production at its mines. Seismic
activity is of particular concern to mining operations. The Simberi mine in Papua New Guinea is in an area known
to be seismically active and is subject to risks of earthquakes and the related risks of tidal surges and tsunamis.
Also, production at the Gwalia mine has in the past been, on occasion, interrupted due to water ingress and
flooding at the base of the mine. Naturally occurring events, such as earthquakes, volcanic eruptions and tsunamis
are difficult to predict and no assurance can be given that St Barbara's operations will not be adversely affected by
earthquakes and associated tidal surges and tsunamis.
Risk of further impairment: If the gold price continues to decline, or the operations are not expected to meet
future production levels, there may be a potential for future impairment write downs at any of our operations.
Risk management
The Group manages the risks listed above, and other day‐to‐day risks through an established enterprise wide risk
management framework which conforms to Australian and international standards and guidance. The Group’s risk
reporting and control mechanisms are designed to ensure strategic, operational, legal, financial, reputational and other
risks are identified, assessed and appropriately managed.
The financial reporting and control mechanisms are reviewed during the year by management, the Audit and Risk
Committee, the internal audit function and the external auditor.
The Group has policies in place to manage risk in the areas of Health and Safety, Environment and Equal Employment
Opportunity.
Senior management and the Board regularly review the risk portfolio of the business and the effectiveness of the Group’s
management of those risks.
During July 2014, the Company announced that by operation of its internal reporting mechanisms, the provision of benefits
to a foreign public official that may violate its Anti‐Bribery and Anti‐Corruption Policy or applicable laws in Australia or in
foreign jurisdictions were identified. The amount of the benefits provided to the foreign public official was not material to
the Company. The Company self‐reported the matter to relevant authorities, including the Australian Federal Police, and
the matter is being assessed and investigated. To date, there has been no action taken against the Company, consequently,
the range of potential penalties, if any, cannot be reliable estimated. Should there be any prosecution, potential penalties
if any are governed by laws in various jurisdictions including Criminal Code 1995 (Cth) in Australia and/or the UK Bribery
Act.
Regulatory environment
Australia
The Group’s Australian mining activities are in Western Australia and 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 Mining Rehabilitation Fund Act 2012 took effect from 1 July 2013. The Mining Rehabilitation
Fund replaces unconditional environmental performance bonds for companies operating under the Mining Act 1978.
The Group is subject to significant 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 Group is registered pursuant to the National Greenhouse and Energy Reporting Act 2007 under which it is required to
report annually its energy consumption and greenhouse gas emissions. St Barbara also reports to Government pursuant to
both the Energy Efficiency Opportunities Act 2006 and the National Environmental Protection (National Pollutant
Inventory) Measure (subsidiary legislation to the National Environmental Protection Measures (Implementation) Act 1998).
The Group has established data collection systems and processes to meet these reporting obligations. The Group’s
Australian operations are also required to comply with the Australian Federal Government’s Clean Energy Act 2011,
effective from 1 July 2012.
Page 15
ST BARBARA LIMITED
Papua New Guinea
DIRECTORS’ REPORT
30 JUNE 2015
The primary Papua New Guinea mining legislation is the Mining Act 1992, which governs the granting and cessation of
mining rights. Under the Mining Act, all minerals existing on, in or below the surface of any land in Papua New Guinea, are
the property of the State. The Mining Act establishes a regulatory regime for the exploration for, and development and
production of, minerals and is administered by the Minerals Resources Authority. Environmental impact is governed by the
Environment Act 2000, administered by the Department of Environment and Conservation.
Information on Directors
S J Colin Wise, LL.B, FAICD, FAusIMM Non‐Executive Chairman
Appointed as Non‐Executive Chairman 20 July 2004
Resigned as Non‐Executive Chairman and Director 30 June 2015
Mr Wise is an experienced corporate lawyer, consultant and company director with significant expertise in the mining and
exploration industry and resources, energy and corporate sectors. He has extensive practical experience in Australia and
internationally with a wide range of corporate, operational and legal matters.
He was Chairman of St Barbara from July 2004 to 30 June 2015, and is a Fellow of both the Australian Institute of Company
Directors and the Australasian Institute of Mining and Metallurgy. He has been 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 listed company directorships
Nil
Former listed company directorships in last 3 years
Straits Resources Limited
Special responsibilities
Chairman of the Board
Member of the Audit, Remuneration and Health, Safety, Environment and Community Committees
Mr Wise is considered by the Board to have been an independent Director.
Robert S (Bob) Vassie, B. Mineral Technology Hons (Mining), GAICD, MAUSIMM Managing Director and Chief Executive
Officer
Appointed as Managing Director & CEO 1 July 2014
Mr Vassie joined St Barbara as Managing Director and Chief Executive Officer on 1 July 2014. He is a mining engineer with
30 years international mining industry experience. Prior to joining St Barbara, Mr Vassie was the Managing Director and
CEO at Inova Resources Limited (formerly Ivanhoe Australia Limited) and has 18 years’ experience in a range of senior
management roles with Rio Tinto. He has particular experience in operations management, resource development
strategy, mine planning, feasibility studies, business improvement, corporate restructuring and strategic procurement.
Other listed public company directorships
Nil
Former listed company directorships in last 3 years
Inova Resources Limited (formerly Ivanhoe Australia Limited)
Special responsibilities
Member of the Health, Safety, Environment and Community Committee
Page 16
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Douglas W Bailey, BBus (Acc), CPA, ACIS Non‐Executive Director
Appointed as a Director January 2006
Resigned as a Director 30 June 2015
Mr Bailey was the Chief Financial Officer 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 Officer. He
was also a Non‐Executive Director of Aurora Gold Ltd for the period 1993‐2000.
Other current listed company directorships
Tap Oil Limited
Former listed company directorships in last 3 years
Nil
Special responsibilities
Chairman of the Audit & Risk Committee
Member of the Health, Safety, Environment and Community and Remuneration Committees
Mr Bailey is considered by the Board to have been an independent Director.
Tim Netscher, BSc (Eng) (Chemical), BCom, MBA, FIChE, CEng, MAICD Non‐Executive Director
Appointed as a Director 17 February 2014, appointed as Chairman 1 July 2015
Mr Netscher was the Managing Director of Gindalbie Metals Limited from 2011 to 2013, and is currently the Non‐Executive
Chairman of Deep Yellow Limited, a Non‐Executive Director of Gold Road Resources Limited, a Non‐Executive Director of
Aquila Resources Limited, and a Non‐Executive Director of Western Areas Limited. A chemical engineer, he is an
experienced international mining executive with extensive operational, project development, and transactional experience
and expertise in senior executive management roles.
Other current listed company directorships
Deep Yellow Limited
Gold Road Resources Limited
Western Areas Limited
Former listed company directorships in last 3 years
Gindalbie Metals Limited
Bullabulling Gold Limited
Special responsibilities
Chair of the Health, Safety, Environment and Community Committee
Member of the Audit and Risk and Remuneration Committees
Mr Netscher is considered by the Board to be an independent Director.
Page 17
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Ines L Scotland B.Sc Non‐Executive Director
Appointed as a Director 30 September 2013
Resigned as a Director 26 January 2015
Ms Scotland is an experienced director and senior executive in the resources sector, with particular expertise in building
successful projects in developing countries. She was co‐founder in 2007 of Citadel Resource Group Limited. As Managing
Director & CEO, she listed the Company on the ASX through an IPO and managed the successful development of the Jabel
Sayid copper project in Saudi Arabia before the company was acquired by Equinox Minerals in late 2010.
Other current listed company directorships
Chair of MetalBank Limited
Former listed company directorships in last 3 years
Ivanhoe Australia Limited (most recently as interim Managing Director, previously Non‐Executive Director)
Citadel Resource Group Limited
Special responsibilities
Chair of the Remuneration Committee
Member of the Health, Safety, Environment and Community Committee
Ms Scotland is considered by the Board to have been an independent Director.
Kerry J Gleeson LLB (Hons), FAICD Non‐Executive Director
Appointed as a Director 18 May 2015
Ms Gleeson has over 20 years extensive boardroom and senior management experience across Australia, UK and the US, in
a variety of industries including mining, agriculture, chemicals, logistics and manufacturing. Ms Gleeson was admitted to
practice as a lawyer of the Supreme Court of England and Wales in 1991 and in Victoria in 2001. She has significant
expertise in major corporate finance and transactional matters, and in disciplined governance in Australian and
international businesses. She was a member of the Group Executive at Incitec Pivot Limited for 10 years until late 2013,
including as Company Secretary and General Counsel. Previously, she was a corporate finance and transactional partner in
an English law firm, and also practiced as a senior lawyer at the Australian law firm, Ashurst.
Ms Gleeson is currently a Non‐Executive Director of ASX listed McAleese Limited, and a member of its Audit, Business Risk
and Compliance Committee. She is a Fellow of the Australian Institute of Company Directors.
Other current listed company directorships
McAleese Limited
Former listed company directorships in last 3 years
Nil
Special responsibilities
Chair of Remuneration Committee (from 1 July 2015)
Member of the Audit & Risk and Health, Safety, Environment & Community Committees
Ms Gleeson is considered by the Board to be an independent Director.
Page 18
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
David E J Moroney, BCom, FCA, FCPA, GAICD Non‐Executive Director
Appointed as a Director 16 March 2015
Mr Moroney has strong skills in finance, strategic planning, governance, risk management and leadership, with more than
20 years’ experience in senior corporate finance roles, including 15 years in the mining industry, and extensive international
work experience.
Since 2013 he has been an independent non‐executive director of Geraldton Fishermen’s Co‐operative Ltd, (the southern
hemisphere’s largest exporter of lobster) and chair of its Audit & Risk Management Committee, and since 2014, of WA
Super, Western Australia’s largest public offer superannuation fund (and a member of the Compliance & Risk Management,
and Investment Committees).
In his executive career, Mr Moroney was the Chief Financial Officer of Australia’s largest grain exporter Co‐operative Bulk
Handling Ltd (2009‐2014); TSX and LSE listed copper and base metals miner First Quantum Minerals Ltd (2007‐2009);
chemicals and fertiliser producer Wesfarmers CSBP Ltd (2002‐2003); and Indonesian gold and silver miner Aurora Gold Ltd
(1993‐1999).
He was Executive General Manager/Deputy CFO of Australia’s then‐largest gold miner Newmont Australia Ltd (previously
Normandy Mining Ltd) (1999‐2002), and a member of the Executive Management Team of conglomerate Wesfarmers Ltd
(2003‐2006) in its corporate office. A commerce graduate from the University of Melbourne, he is a Fellow of the Chartered
Accountants Australia & New Zealand, a Fellow of CPA Australia, and a Graduate of the Australian Institute of Company
Directors.
Other current listed company directorships
Nil
Former listed company directorships in last 3 years
Nil
Special responsibilities
Chair of the Audit & Risk Committee
Member of the Health, Safety, Environment & Community and Remuneration Committees
Mr Moroney is considered by the Board to be an independent Director.
Qualifications and experience of the Company secretary
Rowan Cole, B.Comm, CA, CIA, MBA, Grad. Dip AGC, Dip Inv Rel Company Secretary
Mr Cole joined St Barbara in 2010 as General Manager Corporate Services and was appointed as Deputy Company
Secretary in 2012 and as Company Secretary in 2014.
He has over 25 years’ experience across chartered accounting, retail banking, private and public companies. Mr Cole's
experience includes external, internal and IT audit, risk management, customer service delivery, marketing, strategy
formulation, execution and measurement, process and business improvement, financial and business reporting in senior
roles including general manager, head of risk and compliance, chief audit executive and most recently prior to joining St
Barbara as chief financial and risk officer of an ASX 300 company.
Page 19
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Information on Executives
Robert S (Bob) Vassie, B. Mineral Technology Hons (Mining), GAICD, MAUSIMM Managing Director and Chief Executive
Officer
Appointed as a Director 1 July 2014
Mr Vassie joined St Barbara as Managing Director and Chief Executive Officer in July 2014. He is a mining engineer with 30
years international mining industry experience. Prior to joining St Barbara, Mr Vassie was the Managing Director and CEO
at Inova Resources Limited (formerly Ivanhoe Australia Limited) and has 18 years’ experience in a range of senior
management roles with Rio Tinto. He has particular experience in operations management, resource development
strategy, mine planning, feasibility studies, business improvement, corporate restructuring and strategic procurement.
Garth Campbell‐Cowan, B.Comm, Dip‐Applied Finance & Investments, FCA Chief Financial Officer
Mr Campbell‐Cowan is a Chartered Accountant with 30 years of experience in senior management and finance positions
across a number of different industries. He was appointed to the position of Chief Financial Officer in September 2006 and
is responsible for the Group’s Finance function, covering financial reporting and accounting, treasury, taxation, business
analysis, internal audit, capital management, procurement and information technology. Prior to joining St Barbara, he was
Director of Corporate Accounting at Telstra and has held senior leadership roles with WMC, Newcrest Mining and ANZ.
Meetings of Directors
The number of meetings of Directors (including meetings of Committees of Directors), and the numbers of meetings
attended by each of the Directors of the Company during the financial year was:
Board
(Scheduled)
H
A
10
10
2
2
4
4
10
10
5
2
10
10
10
10
Board
(Supplementary)
A
5
1
2
6
3
5
6
H
6
1
2
6
6
6
6
Audit & Risk
Committee
H
A
4
4
1
1
1
1
4
4
‐
‐
‐
‐
4
4
Remuneration
Committee
H
A
5
5
2
2
2
2
3
3
2
1
‐
‐
5
5
D Bailey
K Gleeson
D Moroney
T Netscher
I Scotland
B Vassie
C Wise
Health, Safety,
Environment &
Community
Committee
H
A
3
3
1
1
1
1
3
3
1
1
3
3
3
3
A = Number of meetings attended
H = Number of meetings held during the time the Director held office or was a member of the committee during the year
Directors’ Interests
The relevant interest of each Director in the shares and rights over such instruments issued by the companies within the
Group and other related bodies corporate as notified by the Directors to the ASX in accordance with S205G(1) of the
Corporations Act 2001, as the date of this report is as follows:
K Gleeson
D Moroney
T Netscher
R Vassie
Ordinary shares
Rights over ordinary shares
‐
100,000
‐
1,769,053
‐
‐
‐
4,062,500
No Directors have an interest in options over shares issued by companies within the Group.
Page 20
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Remuneration report (Audited)
Introduction
This Remuneration Report describes the remuneration structure that applied for the 2015 financial year. The Report
provides details of remuneration paid for the 2015 financial year to Directors and the senior executives named in this
report with the authority and responsibility for planning, directing and controlling the activities of the Group, directly or
indirectly, collectively referred to as Key Management Personnel.
Overview of contents
1. Remuneration strategy
2. Key changes since 2014 Remuneration Report
3. Decision making authorities for remuneration
4. Remuneration structure
5. Group performance
6. Remuneration paid 2015
1. Remuneration Strategy
The Group’s remuneration strategy recognises that it needs to attract, reward and retain high calibre, high performing, and
team orientated individuals capable of delivering the Group strategy. The remuneration policy and related employment
policies and practices are aligned with this strategy.
The objectives of the Remuneration strategy for the 2015 financial year, consistent with the Group strategy, were to ensure
that:
total remuneration for senior executives and each level of the workforce was market competitive
key employees were retained
total remuneration for senior executives and managers comprised an appropriate proportion of fixed
remuneration and performance linked at risk remuneration
performance linked at risk remuneration encouraged and rewarded high performance aligned with value creation
for shareholders, through an appropriate mix of short and long term incentives
the integrity of the remuneration review processes delivered fair and equitable outcomes
remuneration for Non‐Executive Directors preserved their independence by being in the form of fixed fees.
The remuneration strategy, policy and structure are directly linked to the development of strategies and budgets in the
Group’s annual planning cycle shown in the timetable below.
Annual Planning Timetable
Month
October
January
Strategy & Reporting
Annual strategy update
Remuneration
Review STI & LTI design framework
February
Half Year Financial Report
April
Budget setting framework
Set Remuneration review framework
July
August
October
Measure STI outcomes and determine award
Measure LTI outcomes and action any vested entitlements
Annual Financial Report
Set STI targets for following financial year
Annual Report
November
Annual General Meeting
Shareholder approval of LTI to be issued to MD&CEO
Page 21
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Remuneration report (Audited) ‐ Continued
2. Key changes since 2014 Remuneration Report
Non‐Executive Director Remuneration
Director fees were last increased on 1 July 2012 and were reduced by 10% from 1 March 2014. The quantum of Directors
fees has been constant since 1 March 2014, and the Board has resolved not to change Director fees for FY16.
The number of Non‐Executive Directors as at the time of release of the Remuneration Report has reduced as follows:
2013 Remuneration Report
2014 Remuneration Report
2015 Remuneration Report
5
4
3
Significant Board renewal has occurred in the last year. Of the five Directors in office at 27 August 2014 when the 2014
Remuneration Report was released, only two remain in office at the date of this report.
Directors in office at date of
2014 Remuneration Report
S J C Wise
R S Vassie
Non‐Executive Chairman
Managing Director & CEO
D W Bailey
Non‐Executive Director
T C Netscher
Non‐Executive Director
I L Scotland
Non‐Executive Director
Senior Executive Remuneration
Directors in office at date of
2015 Remuneration Report
T C Netscher
Non‐Executive Chairman
R S Vassie
K J Gleeson
Managing Director & CEO
Non‐Executive Director
D E J Moroney
Non‐Executive Director
The Managing Director and CEO, Mr Bob Vassie, commenced with the Company on 1 July 2014 on a fixed remuneration of
approximately 20% less than his predecessor. The quantum of the allocation of performance rights to the Managing
Director and CEO under the FY15 LTI was reduced by 25% from the prior year.
In addition, there was no increase to senior executive remuneration during the 2015 financial year.
The number of senior executives as at the time of release of the Remuneration Report has reduced as follows:
2013 Remuneration Report
2014 Remuneration Report
2015 Remuneration Report
6
3
2
(MD & CEO, CFO, 4 Executive General Managers)
(MD & CEO, CFO, 1 Executive General Manager)
(MD & CEO, CFO)
3. Decision making authorities for remuneration
Remuneration strategy and policies are approved by the Board. They are aligned with, and underpin, the Group strategy.
On behalf of the Board, the Remuneration Committee oversees and reviews the effectiveness of the remuneration
strategy, policies and practices to ensure that the interests of the Group, shareholders and employees are properly taken
into account. The charter for the Remuneration Committee is approved by the Board and is available on the Group’s
website at www.stbarbara.com.au.
The Remuneration Committee is responsible for making recommendations to the Board on all aspects of remuneration
arrangements for Non‐Executive Directors, the Managing Director and CEO, and the senior executives named in this report
with the authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
collectively referred to as Key Management Personnel.
In addition, the Remuneration Committee oversees and reviews proposed levels of annual organisation remuneration
increases and key employee related policies for the Group. It also receives reports on organisation capability and
effectiveness, skills, training and development and succession planning for key roles.
Page 22
ST BARBARA LIMITED
30 JUNE 2015
Remuneration report (Audited) ‐ Continued
Organisational Capability
and Scenario Planning
DIRECTORS’ REPORT
Key Workforce Policies
‐ equal opportunity
‐ diversity
Remuneration Committee
Oversight and design
Remuneration Design
‐ fixed vs variable
Remuneration levels for
Key Management Personnel
The members of the Remuneration Committee are all independent, Non‐Executive Directors and as at the date of this
report comprised:
K Gleeson
D Moroney
T Netscher
‐
‐
‐
Chair of Committee, Non‐Executive Director
Non‐Executive Director
Non‐Executive Chairman
During the 2015 financial year, Ms Ines Scotland was Chair of the Remuneration Committee until her resignation as a
Director on 26 January 2015. Mr Colin Wise was then Chair of the Remuneration Committee until 23 February 2015 and Mr
Tim Netscher was then Chair of the Remuneration Committee until his appointment as Non‐Executive Chairman on 1 July
2015. Mr Moroney was appointed to the Remuneration Committee on 16 March 2015. Ms Kerry Gleeson was appointed to
the Remuneration Committee on 18 May 2015, and appointed as Chair of the Remuneration Committee on 1 July 2015.
In forming remuneration recommendations, the Remuneration Committee obtains and considers each year industry
specific independent data and professional advice as appropriate. All reports and professional advice relating to the
Managing Director and CEO’s remuneration are commissioned and received directly by the Committee. The Committee
reviews all other contracts with remuneration consultants and directly receives the reports of those consultants.
The Remuneration Committee has delegated authority to the Managing Director and CEO for approving remuneration
recommendations for employees other than Key Management Personnel, within the parameters of approved Group wide
remuneration levels and structures.
4. Remuneration structure
(a) Non‐Executive Directors
Non‐Executive Directors’ fees are reviewed annually by the Board to ensure fees are appropriate to reflect the
responsibilities and time commitments required of Non‐Executive Directors and to ensure that the Group continues to
attract and retain Non‐Executive Directors of a high calibre. The Board seeks the advice of, and is guided by, specialist
independent remuneration consultants in this process. Currently Non‐Executive Directors’ fees are compared with those of
comparatively sized companies.
In order to maintain their independence and impartiality, the fees paid to Non‐Executive Directors are not linked to the
performance of the Group. Non‐Executive Directors are not directly involved in the day to day management of the Group.
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 limits.
Non‐Executive Directors are not entitled to retirement benefits, bonuses or equity based incentives.
The maximum aggregate amount payable to all Non‐Executive Directors is approved by shareholders. This is currently
$1,200,000 per annum in aggregate, approved by shareholders at the Annual General Meeting in November 2012. Within
that amount, the basis and level of fees paid to Non‐Executive Directors is set by the Board, and reported to shareholders
each year, as detailed in Section 6 of this report.
(b) Senior Executive Remuneration
The Group operates a performance based remuneration system through which the remuneration of senior executives is
linked to the financial and non‐financial performance of the Group, including its share price.
Under the remuneration system the amount of performance linked at risk remuneration relative to an employee’s total
remuneration increases in line with the seniority of the role of that employee. This reinforces the linkage between personal
and Group performance and achievement of the Group’s business strategy and creation of shareholder wealth.
The reward structures for the Group’s senior executives are strongly aligned with shareholders’ interests by:
Page 23
ST BARBARA LIMITED
30 JUNE 2015
Remuneration report (Audited) ‐ Continued
DIRECTORS’ REPORT
recognising the contribution of each senior executive to the achievement of the Group’s strategy and business
objectives
rewarding high individual performance
being market competitive to attract and retain high calibre individuals
ensuring that equity based remuneration through the long term incentive plan is based on a number of
outperformance measures over a three year period.
To achieve these objectives, remuneration for senior executives is comprised of fixed remuneration and performance
linked at risk remuneration. The at risk component is comprised of separate short term and long term incentives in which
the former are linked to specific personal and corporate or business unit objectives and the latter are linked to long term
strategic corporate objectives. Both provide a direct connection between achievement of targets which drive Group
performance and shareholder wealth, with personal remuneration. The mix of fixed and at risk remuneration varies
according to the role of each senior executive, with the highest level of at risk remuneration applied to those roles that
have the greatest potential to influence and deliver Group outcomes and drive shareholder wealth.
The mix of fixed and at risk remuneration for senior executives for 2015 is as follows:
Seniority
Level 6 (CEO)
Level 5 (Exec GM)
Fixed
remuneration
45%
50%
At risk remuneration
STI(1)
22%
20%
LTI (2)
33%
30%
Total
remuneration
100%
100%
(1)
The STI value shown is at “target” performance. Target is the mid‐point in a range of 0‐200% for the rated performance of each individual. Less
than target performance will result in less than the target allocation, potentially down to zero, and significant outperformance can theoretically lead
to two times the target allocation.
(2)
The LTI allocation is fixed at grant, but the proportion of the grant that vests, if any, is subject to performance measurement under the relevant LTI
plan. See details in Section 6.
(i) Fixed Remuneration = Base salary + superannuation + benefits
Fixed remuneration for each senior executive role is reflected against prevailing comparable market rates, to ensure that
the Group is able to attract and retain a talented and capable workforce appropriate to meet its current and anticipated
needs.
For senior executives, fixed remuneration = base salary + superannuation + benefits.
The base salary for each senior executive is influenced by the nature and responsibilities of the role, the knowledge, skills
and experience required for the position, and the Group’s need to compete in the market place to attract and retain the
right person for the role.
Each senior executive undergoes an annual performance appraisal as part of the Group’s work performance system, in
which individual and Group performance is assessed in detail against pre‐determined measures. The performance appraisal
for each senior executive is assessed by the Managing Director and CEO and reported to the Remuneration Committee and
subsequently to the Board for review, including recommended remuneration outcomes that flow from that appraisal. The
performance appraisal for the Managing Director and CEO is undertaken by the Chairman, reported to the Remuneration
Committee and subsequently to the Board, for review.
In addition to statutory superannuation contributions, senior executives may elect to contribute additional amounts,
subject to legislative limits.
Senior executives may receive benefits, including car parking and payment for certain professional memberships.
(ii) Performance Linked Remuneration ‐ Short term incentives (STI)
The STI is an annual “at risk” component of remuneration for senior executives. It is payable based on performance against
key performance indicators (KPIs) set at the beginning of the financial year. STIs are structured to remunerate senior
executives for achieving annual Group targets as well as their own individual performance targets designed to favourably
impact the business, which are weighted on an equal (50:50) basis at target. The proportion of the STI earned is calculated
by multiplying the average result of the Group targets with the average result of an individual’s performance targets, where
target performance equals one. Group and individual targets are established by reference to the Group Strategy. The net
amount of any STI after allowing for applicable taxation, is payable in cash.
Page 24
ST BARBARA LIMITED
30 JUNE 2015
Remuneration report (Audited) ‐ Continued
For 2015, the calculation of STI earned can be summarised as follows:
DIRECTORS’ REPORT
STI earned = STI value at risk x (average result of Group STI targets x average result of Individual STI targets), where target
performance = 1.
For each KPI there are defined “threshold”, “target” and “stretch” measures which are capable of objective assessment.
Threshold performance typically requires achievement of the full year budget for quantifiable measures such as safety,
profitability, cash generation, as well as the achievement of criteria set as near term goals linked to the annual strategy
review.
Target performance represents challenging but achievable levels of performance beyond achievement of budget measures.
For example, the 2015 financial year STI target for gold production for Leonora was set at 104% of the corresponding
midpoint of guidance.
Stretch performance requires significant performance above and beyond normal expectations and if achieved is anticipated
to result in a substantial improvement in key strategic outcomes, operational or financial results, and/or the business
performance of the Group.
The Remuneration Committee is responsible for recommending to the Board senior executive STIs and then later assessing
the extent to which the Group STI measures and the individual KPIs of the senior executives have been achieved, and the
amount to be paid to each senior executive. 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 Board retains overall discretion on whether an STI should be paid in any given year.
Details of the FY15 STI are set out in Section 6 of this report.
(iii) Performance Linked Remuneration ‐ Long term incentives (LTI)
LTIs are structured to reward senior executives for the long term performance of the Group relative to its peers. For 2015,
LTIs were granted in the form of Performance Rights according to the St Barbara Performance Rights Plan which was
approved at the 2010 Annual General Meeting.
In considering the LTI awards for the 2015 financial year (“FY15 Performance Rights”), the Board considered the trend
towards deferring a portion of the award. Unlike other industries where matching revenues and expenses may have long
lead times, the gold industry is such that gold produced is sold at arm’s length within a matter of days from production.
Revenue and expenses are then recorded. The industry characteristics supporting a look back testing of prior year
performance awards do not carry, in the opinion of the Board, the same weight in our industry.
Vesting conditions of each tranche of Performance Rights issued are approved by the Board and set out in the relevant
Notice of Annual General Meeting. The vesting conditions of the FY15 Performance Rights comprised measures for:
total shareholder return
return on capital employed in excess of the weighted average cost of capital, as a measure of capital efficiency and
generation of shareholder value.
Performance rights expire on the earliest of their expiry date, immediately upon the effective resignation date of the
relevant senior executive or twelve months from the date of retirement or retrenchment.
Performance rights granted under the plan carry no dividend or voting rights. On vesting each performance right is
convertible into one ordinary share.
Details of the FY15 Performance Rights are set out in Section 6 of this report.
(iv) Summaries of service agreements for senior executives
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
payments, other benefits including allowances, and participation in the St Barbara Limited Performance Rights Plan. 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.
All service agreements with senior executives, including with the Managing Director and CEO comply with the provisions of
Part 2 D.2, Division 2 of the Corporations Act.
Page 25
ST BARBARA LIMITED
30 JUNE 2015
Remuneration report (Audited) ‐ Continued
R S Vassie – Managing Director and CEO (from 1 July 2014)
DIRECTORS’ REPORT
1.
2.
Term of agreement – permanent employee, commenced 1 July 2014.
Other than for serious misconduct or serious breach of duty, the Company or Mr Vassie may terminate employment
at any time with 6 months’ notice.
The other senior executive is a permanent employee, entitled to payment of a termination benefit on early termination by
the Company, other than for gross misconduct or for poor performance as judged by the Company in its absolute
discretion, equal to 6 months total fixed remuneration. Each senior executive may terminate employment at any time with
6 weeks’ notice.
5. Group Performance
The Board has regard to the overall performance of the Company over a number of years in assessing and ensuring proper
alignment of the performance linked “at risk” remuneration framework to deliver fair and proper outcomes consistent with
the Company’s performance.
In assessing the Company’s performance and improvement in shareholder wealth, consideration is given to the following
measures in respect of the current financial year and the previous four financial years.
Earnings
Sales revenue
EBITDA
2011
$’000
2012
$’000
2013
$’000
2014
$’000
2015
$’000
359,575
541,189
568,443
533,828
552,581
125,538
204,034
(150,628)
(331,634)
167,557
Statutory net profit/(loss) after tax
68,629
130,230
(191,854)
(500,831)
39,682
Underlying net profit/(loss) after tax*
54,431
120,920
29,285
(33,526)*
42,402
* restated to exclude discontinued operations.
$M
600
500
400
300
200
100
0
$M
200
100
0
‐100
‐200
‐300
‐400
‐500
‐600
Sales Revenue
EBITDA1
$M
300
200
100
0
‐100
‐200
‐300
‐400
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Statutory Net Profit/(Loss) After Tax
Underlying Net Profit/(Loss) After Tax1
$M
150
100
50
0
‐50
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
1 Underlying net profit after tax is statutory net profit after tax less significant items. EBITDA is earnings before interest revenue, finance costs,
depreciation and amortisation and income tax expense, and includes revenues and expenses associated with discontinued operations. These are non‐
IFRS financial measures which have not been subject to review or audit by the Group’s external auditors. These measures are presented to enable
understanding of the underlying performance of the Group.
Page 26
ST BARBARA LIMITED
30 JUNE 2015
Remuneration report (Audited) ‐ Continued
DIRECTORS’ REPORT
Gold Production
koz
400
300
200
100
0
2011
2012
2013
2014
2015
The table below provides the share price performance of the Company’s shares in the 2015 financial year and the previous
four financial years.
Share price history
2011
2012
2013
2014
2015
Period end share price ($ per share)
Average share price for the year ($ per share)
1.96
2.16
1.77
2.12
0.45
1.35
0.115
0.38
0.57
0.21
During the 2015 financial year, the Company’s daily closing share price ranged between $0.072 to $0.585 per share
(2014: $0.115 to $0.93 per share).
The Company’s primary measure of safety performance is the rolling 12‐month average of the Total Recordable Injury
Frequency Rate. The FY15 result compares favourably with published mining industry TRIFR information.
Total Recordable Injury Frequency Rate
measured on a 12 month rolling basis
15
10
5
0
2011
2012
2013
2014
2015
6. Remuneration paid 2015
Details of the remuneration of Key Management Personnel of the Company during the year ended 30 June 2015 are set out
in the following tables.
Page 27
5
1
0
2
E
N
U
J
0
3
d
e
s
a
b
e
r
a
h
s
l
a
t
o
t
s
a
s
t
n
e
m
y
a
p
e
c
n
a
m
r
o
f
r
e
p
l
a
t
o
t
f
o
%
d
e
t
a
e
r
l
f
o
e
u
a
V
l
f
o
n
o
i
t
r
o
p
o
r
P
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
%
5
0
1
.
%
0
3
3
.
l
a
t
o
T
$
6
4
1
8
4
2
,
1
5
4
6
1
1
,
3
6
6
3
1
,
4
5
8
0
3
,
0
5
1
6
6
,
1
8
6
9
1
1
,
5
4
9
,
4
9
5
,
8
7
7
5
5
3
1
,
%
2
5
.
%
9
8
2
.
‐
‐
‐
‐
2
0
4
3
1
8
,
8
0
9
3
4
3
,
5
8
6
0
8
3
,
3
7
7
,
3
9
8
,
2
‐
‐
‐
‐
‐
‐
‐
‐
‐
2
5
0
6
3
2
,
5
7
1
0
2
2
,
7
2
2
,
6
5
4
n
o
i
t
a
n
m
r
e
T
i
s
t
n
e
m
y
a
p
d
e
s
a
b
‐
e
r
a
h
S
)
2
(
s
t
n
e
m
y
a
p
$
$
)
1
(
e
v
a
e
L
$
‐
r
e
p
u
S
n
o
i
t
a
u
n
n
a
$
r
e
h
t
O
$
s
t
i
f
e
n
e
b
m
r
e
t
‐
g
n
o
L
l
m
y
o
p
m
e
‐
t
s
o
P
s
t
i
f
e
n
e
b
t
n
e
‐
n
o
N
s
t
i
f
e
n
e
b
m
r
e
t
‐
t
r
o
h
S
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
3
8
7
8
1
,
3
0
1
0
1
,
5
8
1
1
,
7
7
6
2
,
9
3
7
5
,
3
8
3
0
1
,
0
7
8
,
8
4
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
6
4
9
,
4
2
)
4
(
6
4
9
4
2
,
‐
‐
‐
‐
‐
‐
‐
7
1
4
4
0
2
,
8
4
3
6
0
1
,
8
7
4
2
1
,
7
7
1
8
2
,
1
1
4
0
6
,
8
9
2
9
0
1
,
9
2
1
,
1
2
5
$
$
$
y
r
a
t
e
n
o
m
)
3
(
s
t
i
f
e
n
e
b
I
T
S
h
s
a
C
t
n
e
m
y
a
p
s
e
e
f
&
y
r
a
a
s
l
7
1
7
1
4
,
8
5
5
2
5
,
3
8
7
8
1
,
)
4
1
(
0
0
0
0
0
1
,
3
0
3
4
6
,
0
0
2
7
4
4
,
7
1
2
1
3
6
,
‐
‐
8
0
9
1
4
,
5
2
6
,
3
8
3
9
4
3
4
,
)
5
1
(
9
7
0
1
1
,
)
5
1
(
3
8
0
7
,
3
1
2
,
4
1
1
6
9
6
4
,
2
9
3
9
,
3
8
7
8
1
,
4
5
6
,
1
5
‐
‐
‐
‐
‐
‐
‐
7
1
4
5
,
9
7
8
4
3
2
,
1
8
0
2
9
,
2
2
9
8
6
4
,
5
3
0
4
4
1
,
0
0
0
,
0
0
1
0
2
7
,
9
6
9
7
0
,
2
8
6
5
5
2
,
6
3
3
,
1
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
‐
n
o
N
)
9
(
)
n
a
m
r
i
a
h
C
(
e
s
i
W
C
J
S
)
6
(
)
0
1
(
)
5
(
)
8
(
y
e
l
i
a
B
W
D
n
o
s
e
e
G
J
K
l
y
e
n
o
r
o
M
J
E
D
)
7
(
r
e
h
c
s
t
e
N
C
T
d
n
a
l
t
o
c
S
L
I
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
‐
n
o
N
l
a
t
o
T
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
)
3
1
(
e
i
s
s
a
V
S
R
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
l
i
a
t
o
T
n
a
w
o
C
‐
l
l
e
b
p
m
a
C
G
)
1
1
(
)
2
1
(
n
y
e
m
o
R
K
y
d
e
n
n
e
K
R
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
i
5
1
0
2
e
m
a
N
T
R
O
P
E
R
’
S
R
O
T
C
E
R
D
I
d
e
u
n
i
t
n
o
C
‐
)
d
e
t
i
d
u
A
(
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
R
D
E
T
I
M
I
L
A
R
A
B
R
A
B
T
S
r
e
b
m
e
t
p
e
S
0
3
t
n
e
m
y
o
p
m
e
l
d
e
s
a
e
c
e
h
d
n
a
4
1
0
2
h
c
r
a
M
8
2
n
o
t
n
a
d
n
u
d
e
r
e
d
a
m
s
a
w
e
o
r
l
s
’
y
d
e
n
n
e
K
r
M
5
1
0
2
y
l
u
J
1
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
‐
n
o
N
s
a
d
e
t
n
o
p
p
a
r
e
h
c
s
t
e
N
r
i
M
5
1
0
2
e
n
u
J
0
3
n
o
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
‐
n
o
N
s
a
d
e
n
g
i
s
e
r
e
s
i
W
r
M
)
0
1
(
)
1
1
(
)
9
(
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
o
e
u
a
v
l
r
i
a
f
e
h
t
f
o
n
o
i
t
r
o
p
e
h
t
s
i
n
o
i
t
a
r
e
n
u
m
e
r
s
a
d
e
s
o
l
c
s
i
d
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
a
v
l
e
h
T
d
o
i
r
e
p
g
n
i
t
r
o
p
e
r
e
h
t
n
i
d
e
s
i
n
g
o
c
e
r
s
t
h
g
i
r
.
s
t
n
e
m
e
l
t
i
t
n
e
e
v
a
e
l
l
a
u
n
n
a
d
n
a
e
v
a
e
l
e
c
i
v
r
e
s
g
n
o
l
s
t
n
e
s
e
r
p
e
r
t
n
u
o
m
a
e
h
t
l
,
s
e
e
y
o
p
m
e
t
n
e
r
r
u
c
r
o
F
)
1
(
)
2
(
n
o
t
n
a
d
n
u
d
e
r
e
d
a
m
s
a
w
s
e
c
i
v
r
e
S
s
s
e
n
i
s
u
B
d
n
a
l
e
p
o
e
P
r
e
g
a
n
a
M
l
a
r
e
n
e
G
e
v
i
t
u
c
e
x
E
s
a
l
e
o
r
s
’
n
y
e
m
o
R
s
M
)
2
1
(
.
s
e
s
n
e
p
x
e
l
e
v
a
r
t
e
m
o
h
m
o
r
f
y
a
w
a
g
n
i
v
i
l
i
d
n
a
s
p
h
s
r
e
b
m
e
m
.
4
1
0
2
l
a
n
o
i
s
s
e
f
o
r
p
,
g
n
i
k
r
a
p
r
a
c
e
s
i
r
p
m
o
c
s
t
i
f
e
n
e
b
y
r
a
t
e
n
o
m
‐
n
o
n
,
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
e
v
i
t
u
c
e
x
e
r
o
F
)
3
(
e
v
a
e
l
i
g
n
d
n
a
t
s
t
u
o
’
s
n
y
e
m
o
R
K
.
d
n
a
y
d
e
n
n
e
K
R
.
,
r
a
e
y
e
h
t
n
i
d
e
u
r
c
c
a
e
s
n
e
p
x
e
e
v
a
e
l
e
h
t
o
t
n
o
i
t
i
d
d
a
n
I
)
4
n
o
i
t
u
o
s
e
r
l
M
G
A
(
4
1
0
2
r
e
b
m
e
c
e
D
8
n
o
O
E
C
d
n
a
r
o
t
c
e
r
i
D
g
n
g
a
n
a
M
e
h
t
o
t
d
e
u
s
s
i
i
s
e
r
a
h
s
3
3
3
3
3
8
,
i
i
n
o
i
t
a
n
m
r
e
t
n
o
d
a
p
e
r
e
w
y
l
e
v
i
t
c
e
p
s
e
r
2
1
7
7
9
$
d
n
a
4
6
1
4
3
1
$
f
o
s
e
c
n
a
a
b
,
,
l
4
1
0
2
y
l
u
J
1
n
o
O
E
C
&
D
M
i
s
a
d
e
t
n
o
p
p
a
e
i
s
s
a
V
r
M
.
4
1
0
2
r
e
b
m
e
v
o
N
8
2
)
3
1
(
)
4
1
(
)
5
1
(
o
t
i
d
a
p
e
b
o
t
s
e
e
f
r
e
h
r
o
f
d
e
t
c
e
r
i
d
s
a
h
d
n
a
l
t
o
c
S
s
M
.
5
1
0
2
y
r
a
u
n
a
J
6
2
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
d
n
a
l
t
o
c
S
s
M
5
1
0
2
h
c
r
a
M
6
1
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
t
n
o
p
p
a
y
e
n
o
r
o
M
i
r
M
s
e
i
t
i
r
a
h
c
d
e
t
a
n
m
o
n
i
5
1
0
2
y
a
M
8
1
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
t
n
o
p
p
a
n
o
s
e
e
G
s
r
i
l
M
i
s
t
i
f
e
n
e
b
e
v
i
t
a
r
t
s
i
n
m
d
a
r
e
h
t
o
d
n
a
,
e
n
o
h
p
e
l
i
b
o
m
,
g
n
i
k
r
a
p
r
a
c
s
t
n
e
s
e
r
p
e
R
5
1
0
2
e
n
u
J
0
3
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
y
e
l
i
a
B
r
M
)
4
(
)
5
(
)
6
(
)
7
(
)
8
(
8
2
e
g
a
P
5
1
0
2
E
N
U
J
0
3
l
a
t
o
t
f
o
%
d
e
t
a
e
r
l
d
e
s
a
b
e
r
a
h
s
l
a
t
o
t
s
a
s
t
n
e
m
y
a
p
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
a
V
l
f
o
n
o
i
t
r
o
p
o
r
P
‐
‐
‐
‐
‐
‐
‐
%
0
5
1
.
%
8
6
1
.
%
9
8
.
%
3
0
1
.
%
1
4
1
.
%
9
6
.
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
l
a
t
o
T
$
6
6
4
2
5
2
,
2
2
8
1
2
1
,
3
7
4
3
9
,
3
2
0
4
8
,
8
7
5
7
8
,
0
0
0
2
4
,
0
0
1
3
1
1
,
2
6
4
,
4
9
7
,
9
4
9
1
6
0
1
,
0
1
4
1
0
6
,
7
5
4
1
2
6
,
2
1
8
3
0
4
,
8
4
9
1
3
4
,
0
1
8
2
4
6
,
6
8
3
,
3
6
7
,
3
s
t
i
f
e
n
e
b
m
r
e
t
‐
g
n
o
L
l
m
y
o
p
m
e
‐
t
s
o
P
s
t
i
f
e
n
e
b
t
n
e
‐
n
o
N
s
t
i
f
e
n
e
b
m
r
e
t
‐
t
r
o
h
S
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
7
2
8
9
9
1
,
2
2
7
2
5
2
,
9
4
5
,
2
5
4
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
5
7
7
7
1
,
4
1
3
0
1
,
4
1
9
7
,
4
1
1
7
,
6
7
5
9
,
5
1
4
7
,
6
5
5
3
,
4
6
6
,
3
6
0
4
9
8
5
1
,
6
3
8
3
1
,
5
7
7
7
1
,
4
5
5
5
5
,
3
9
4
1
4
,
6
9
7
0
6
,
8
8
3
4
4
,
9
9
1
1
0
1
,
3
7
5
0
1
,
4
9
7
4
4
,
0
9
8
9
6
,
7
4
8
9
,
7
2
3
3
9
,
0
7
3
,
2
6
4
7
6
2
,
2
4
2
5
7
7
7
1
,
0
5
8
1
1
,
1
3
3
3
1
,
5
7
7
7
1
,
0
5
8
1
1
,
6
5
3
,
0
9
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
n
o
i
t
a
n
m
r
e
T
i
s
t
n
e
m
y
a
p
d
e
s
a
b
‐
e
r
a
h
S
)
2
(
s
t
n
e
m
y
a
p
$
$
)
1
(
e
v
a
e
L
$
‐
r
e
p
u
S
n
o
i
t
a
u
n
n
a
$
r
e
h
t
O
$
y
r
a
t
e
n
o
m
)
4
(
s
t
i
f
e
n
e
b
I
T
S
h
s
a
C
t
n
e
m
y
a
p
s
e
e
f
&
y
r
a
a
s
l
$
$
$
‐
‐
‐
‐
‐
‐
3
3
7
,
2
1
3
3
9
1
,
3
3
9
1
,
0
2
6
1
,
1
0
1
2
,
‐
9
6
7
1
,
6
5
3
,
9
)
3
(
3
3
7
2
1
,
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
8
5
9
1
2
2
,
8
0
5
1
1
1
,
9
5
5
5
8
,
9
0
9
6
7
,
3
6
1
0
8
,
4
4
4
8
3
,
4
2
5
3
0
1
,
5
6
0
,
8
1
7
5
6
4
9
6
8
,
0
3
9
9
6
4
,
2
1
8
7
0
3
,
7
9
9
6
7
2
,
0
3
5
3
4
3
,
4
5
7
8
3
2
,
8
8
4
,
6
0
5
,
2
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
‐
n
o
N
)
n
a
m
r
i
a
h
C
(
e
s
i
W
C
J
S
4
1
0
2
e
m
a
N
)
7
(
)
5
(
y
e
l
i
a
B
W
D
r
e
y
k
c
o
L
C
P
)
6
(
e
a
R
K
R
y
e
h
g
a
n
o
D
A
E
)
9
(
)
8
(
r
e
h
c
s
t
e
N
C
T
d
n
a
l
t
o
c
S
L
I
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
‐
n
o
N
l
a
t
o
T
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
)
0
1
(
y
n
a
h
e
L
J
T
n
a
w
o
C
‐
l
l
e
b
p
m
a
C
G
)
1
1
(
l
l
o
r
C
A
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
i
y
d
e
n
n
e
K
R
n
y
e
m
o
R
K
)
2
1
(
y
e
l
t
t
U
P
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
l
i
a
t
o
T
T
R
O
P
E
R
’
S
R
O
T
C
E
R
D
I
d
e
u
n
i
t
n
o
C
‐
)
d
e
t
i
d
u
A
(
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
R
D
E
T
I
M
I
L
A
R
A
B
R
A
B
T
S
o
t
s
e
e
f
r
e
h
r
o
f
d
e
t
c
e
r
i
d
s
a
h
d
n
a
l
t
o
c
S
s
M
.
3
1
0
2
r
e
b
m
e
t
p
e
S
0
3
n
o
r
o
t
c
e
r
i
D
a
i
s
a
d
e
t
n
o
p
p
a
d
n
a
l
t
o
c
S
s
M
)
8
(
.
s
t
n
e
m
e
l
t
i
t
n
e
e
v
a
e
l
l
a
u
n
n
a
d
n
a
e
v
a
e
l
e
c
i
v
r
e
s
g
n
o
l
s
t
n
e
s
e
r
p
e
r
t
n
u
o
m
a
e
h
t
l
,
s
e
e
y
o
p
m
e
t
n
e
r
r
u
c
r
o
F
i
n
a
t
r
e
c
o
t
j
t
c
e
b
u
s
,
d
n
a
4
1
0
2
e
n
u
J
0
3
n
o
O
E
C
&
D
M
s
a
d
e
s
a
e
c
d
n
a
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
y
n
a
h
e
L
r
M
e
v
a
e
l
d
e
u
r
c
c
a
y
r
o
t
u
t
a
t
s
s
u
p
l
(
,
2
3
1
5
7
2
$
f
o
t
n
u
o
m
a
t
n
e
m
e
l
t
t
e
s
n
o
i
t
a
n
m
r
e
t
i
a
o
t
d
e
l
t
i
t
n
e
s
i
,
s
n
o
i
t
i
d
n
o
c
4
1
0
2
y
r
a
u
r
b
e
F
7
1
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
t
n
o
p
p
a
r
e
h
c
s
t
e
N
r
i
M
i
s
e
i
t
i
r
a
h
c
d
e
t
a
n
m
o
n
o
t
d
a
p
e
b
i
.
l
4
1
0
2
t
s
u
g
u
A
1
3
n
o
n
o
i
t
e
p
m
o
c
n
o
p
u
e
b
a
y
a
p
)
s
t
n
e
m
e
l
t
i
t
n
e
l
4
1
0
2
y
r
a
u
n
a
J
9
2
n
o
r
e
c
i
f
f
O
n
o
i
t
a
r
e
p
O
i
f
e
h
C
s
a
d
e
s
a
e
c
l
l
o
r
C
r
M
4
1
0
2
y
r
a
u
r
b
e
F
7
n
o
t
n
a
d
n
u
d
e
r
e
d
a
m
s
a
w
e
o
r
l
s
’
y
e
l
t
t
U
r
M
)
0
1
(
)
9
(
)
1
1
(
)
2
1
(
9
2
e
g
a
P
l
a
n
o
i
s
s
e
f
o
r
p
,
g
n
i
k
r
a
p
r
a
c
e
s
i
r
p
m
o
c
s
t
i
f
e
n
e
b
y
r
a
t
e
n
o
m
‐
n
o
n
,
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
e
v
i
t
u
c
e
x
e
r
o
F
4
1
0
2
h
c
r
a
M
1
3
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
r
e
y
k
c
o
L
r
M
4
1
0
2
y
r
a
u
r
b
e
F
8
2
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
e
a
R
r
M
4
1
0
2
e
n
u
J
0
3
n
o
r
o
t
c
e
r
i
D
a
s
a
d
e
n
g
i
s
e
r
y
e
h
g
a
n
o
D
s
M
i
s
p
h
s
r
e
b
m
e
m
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
o
e
u
a
v
l
r
i
a
f
e
h
t
f
o
n
o
i
t
r
o
p
e
h
t
s
i
n
o
i
t
a
r
e
n
u
m
e
r
s
a
d
e
s
o
l
c
s
i
d
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
a
v
l
e
h
T
d
o
i
r
e
p
g
n
i
t
r
o
p
e
r
e
h
t
n
i
d
e
s
i
n
g
o
c
e
r
s
t
h
g
i
r
i
s
t
i
f
e
n
e
b
e
v
i
t
a
r
t
s
i
n
m
d
a
r
e
h
t
o
d
n
a
,
e
n
o
h
p
e
l
i
b
o
m
,
g
n
i
k
r
a
p
r
a
c
s
t
n
e
s
e
r
p
e
R
)
1
(
)
2
(
)
3
(
)
4
(
)
5
(
)
6
(
)
7
(
ST BARBARA LIMITED
30 JUNE 2015
Remuneration Report (Audited) ‐ Continued
DIRECTORS’ REPORT
(a) Non‐Executive Directors Fees
Director fees were last increased effective 1 July 2012. Non‐Executive Director fees for the 2015 financial year were
determined, both as to their composition (for base fees and committee work) and overall level, based on information from
Aon Hewitt McDonald.
As part of Group wide cash management measures, Non‐Executive Directors fees were reduced by 10% effective from 1
March 2014. The increase in statutory superannuation from 1 July 2014 was absorbed within the existing level of Directors
fees.
Directors resolved not to increase individual Director fees for financial year 2016. Director fees comprise:
an allowance for chairing a Board Committee of $15,750
a fee for serving as a member of a Board Committee of $7,650
Director fees of $90,000
Chairman’s fee of $223,200 (inclusive of all Board Committee commitments). The Chairman’s fee was determined
independently, based on roles and responsibilities in the external market for companies comparable with
St Barbara Limited. The Chairman was not present at any discussions relating to the determination of his own
remuneration.
(b) Senior Executive Remuneration
(i)
Fixed Remuneration ‐ Base salary
In considering remuneration for senior executives for the 2015 financial year, the Remuneration Committee considered
reports from Aon Hewitt McDonald, as well as industry trend data and other relevant remuneration information. There
was no increase in fixed remuneration for senior executives in the 2015 financial year.
(ii)
Performance Linked Remuneration Five Year History
Performance Linked Remuneration
2011
2012
2013
2014
2015
% of maximum potential STI earned
% of maximum potential LTI earned
14%
0%
92%
0%
40%
0%
0%
0%
66%
0%
(ii) Performance Linked Remuneration ‐ Short term incentives (STI)
The Board has discretion whether to pay an STI in any given year, irrespective of whether Company and Individual STI
targets have been achieved. In FY14 the Board applied its discretion not to award an STI to senior executives.
The Company STI target measures for the 2015 financial year were equally weighted and comprised:
STI Target
Weighting Result
(a) Achieve Total Recordable Injury Frequency Rate
33%
of 4.5
(b) Achieve gold production from Leonora of
33%
266,000 ounces
(c) Achieve gold production from Simberi of 91,000
33%
ounces
TRIFR of 5.0 achieved,
within target range
297,814 ounces produced,
above upper threshold of target range
79,568 ounces produced,
at lower threshold of target range
(d) Discretionary factor determined by the Board,
into account unexpected
designed to take
events and achievements during the year
Overall Company Performance
‐
Discretion not applied
% of Target
achieved
83%
125%
50%
n/a
86%
Page 30
ST BARBARA LIMITED
30 JUNE 2015
Remuneration Report (Audited) ‐ Continued
DIRECTORS’ REPORT
Individual performance measures varied according to the individual senior executive’s responsibilities, and for the 2015
financial year reflected a range of achievements aligned with the Company strategy. These included measures relating to
improving safety, specific integration activities, increasing production volumes and lowering production costs, achieving
exploration discoveries and implementing business improvement systems. There was also provision for a discretionary
factor for individual performance designed to take into account unexpected events and achievements during the year.
The table below describes the Short Term Incentives available to, and achieved by, executive Key Management Personnel
during the year. Amounts shown as “Actual STI” represent the amounts accrued in relation to the 2015 financial year, based
on achievement of the specified performance criteria. No additional amounts vest in future years in respect of the STI
scheme for the 2015 financial year.
2015
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
$
325,000
195,082
Stretch(1)
$
650,000
390,164
$
447,200
234,879
R S Vassie
G Campbell‐Cowan
(1) Inclusive of STI “Target”
Performance Linked Remuneration ‐ Long term incentives (LTI)
FY 13 Performance Rights ended 30 June 2015
138%
120%
69%
60%
31%
40%
The vesting period for the FY13 Performance Rights ended on 30 June 2015. The criteria for the FY13 Performance Rights
were published in the Notice of 2012 Annual General Meeting, and comprised of three equally weighted performance
measures over the 3 year period from 1 July 2012 to 30 June 2015 being:
Relative Total Shareholder Return
Increase in Ore Reserves
Return on Capital Employed.
The comparator group of companies for the FY13 Performance Rights comprises:
Company
Kingsgate Consolidated Limited
Ramelius Resources Limited
CGA Mining Limited
Saracen Mineral Holdings Limited
Silver Lake Resources Limited
Northern Star Resources Ltd
Focus Minerals Ltd
Kingsrose Mining Limited
Medusa Mining Limited
Evolution Mining Limited
Regis Resources Limited
OceanaGold Corporation
Tanami Gold NL
The result of the Relative TSR of the FY13 Performance Rights for the period 1 July 2012 to 30 June 2015 was:
Relative TSR Performance
Below 50th percentile
50th percentile
Between 50th & 75th percentiles
75th percentile and above
Percentage of Performance
Rights to vest
Result
0%
50%
Pro‐rata between 50% & 100%
100%
St Barbara ranked at the 46th
percentile for the period, below
the 50th percentile RTSR
threshold
Page 31
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Remuneration Report (Audited) ‐ Continued
Increase in Ore Reserves (net of production)
Negative growth
Depletion replaced
20% increase
ROCE
Percentage of Performance
Rights to vest
Result
0%
50%
100%
St Barbara reported negative
growth in Ore Reserves for the
period, below the ‘depletion
replaced’ threshold
Percentage of Performance
Rights to vest
Result
Less than or equal to the average annual
weighted average cost of capital (WACC) over the
three year period commencing on 30 June 2012
0%
WACC (calculated as above) + 5%
WACC (calculated as above) + 10%
50%
100%
St Barbara achieved negative
ROCE for the period, below the
‘WACC +5%’ threshold
None of the remaining FY13 Performance Rights granted in respect of the FY13 year vested as at 30 June 2015, as they did
not meet the minimum performance criteria.
Performance Rights granted as compensation in 2015.
FY15 Performance Rights
Performance rights issued in 2015 (‘FY15 Performance Rights‘) were granted under the St Barbara Limited Performance
Rights Plan approved at the 2010 Annual General Meeting, and details of the performance conditions were set out in the
Notice of 2014 Annual General Meeting. Performance rights issued to Mr Vassie, Managing Director & CEO, were also
approved by shareholders at the 2014 Annual General Meeting.
Key Features of FY15 Performance Rights
Vesting conditions
Performance conditions for the three year period commencing 1 July 2014 to 30 June 2017 as
set out below, relating to:
Relative Total Shareholder Returns (67% weighting); and
Return on capital employed in excess of the weighted average cost of capital (33%
weighting).
Other conditions
Issue price
Vesting date
Include continuing employment
10 day VWAP at start, 30 June 2014, $0.12
30 June 2017
Details of FY15 Performance Rights
The vesting of performance rights granted in respect of the FY15 Performance Rights is subject to continuing employment
as at the vesting date of 30 June 2017, and satisfying performance conditions measured over a three year vesting period
from 1 July 2014 to 30 June 2017 as set out below.
(i)
Performance rights pricing
The issue price of the performance rights is based on the 10 day volume weighted average price (VWAP) on the
ASX of the Company’s share price up to, and including, the last business day of the financial period immediately
preceding the period that the performance rights relate to.
FY15 Performance Rights are priced at $0.12 per right, based on the 10 day VWAP up to and including 30 June
2014.
(ii)
Performance conditions
The performance conditions for FY14 Performance Rights will be measured over a three year vesting period ending
on 30 June 2017. Vesting conditions include continuing employment as at the vesting date of 30 June 2017 and
satisfying conditions relating to:
Page 32
ST BARBARA LIMITED
30 JUNE 2015
Remuneration Report (Audited) ‐ Continued
DIRECTORS’ REPORT
Relative Total Shareholder Returns (67% weighting); and
Return on Capital Employed in excess of the weighted average cost of capital (33% weighting).
(iii)
Percentage of relevant total fixed remuneration offered as LTIs for the 2015 financial year
Managing Director and Chief Executive Officer
Executive General Managers
General Managers
75%
60%
45%
The Board has the discretion to vary the relevant percentage each year, having regard to external advice and / or
relevant market benchmarks.
(iv)
An example of how performance rights are calculated for the 2015 financial year (assuming the maximum award
level) is set out below:
Executive Level 5 Total Fixed Remuneration (TFR)
LTI award value 60% of TFR
Performance rights issue price (10 day VWAP)
Performance rights to be granted ($240,000 ÷ $0.12)
$400,000 (for illustration only)
$240,000 (i.e. 60% of TFR)
$0.12
2,000,000
(v)
Relative TSR
The Relative Total Shareholder Return (Relative TSR) is measured against a defined peer group of companies which
the Board considers compete with the Company for the same investment capital, both in Australia and overseas,
and which by the nature of their business are influenced by commodity prices and other external factors similar to
those that impact on the TSR performance of the Company.
The comparator group of companies for FY15 Performance Rights comprises:
Company
Kingsgate Consolidated Limited
Ramelius Resources Limited
CGA Mining Limited
Saracen Mineral Holdings Limited
Silver Lake Resources Limited
Northern Star Resources Ltd
Focus Minerals Ltd
Kingsrose Mining Limited
Medusa Mining Limited
Evolution Mining Limited
Regis Resources Limited
OceanaGold Corporation
Tanami Gold NL
At the discretion of the Board, the composition of the comparator group may change from time to time.
TSR measures the growth for a financial year in the price of shares plus cash distributions notionally reinvested in
shares. Company and comparator TSR performances are measured using the 10 day VWAP calculation up to, and
including, the last business day of the financial period immediately preceding the period that the performance
rights relate to, and in determining the closing TSR performances at the end of the three year period. Relative TSR
performance is calculated at a single point in time and is not subject to re‐testing. Where a comparator company
ceases to be listed on the ASX during the vesting period, the corresponding TSR is adjusted, taking into account the
period the ceasing company was listed and the average TSR of the remaining comparator companies.
Page 33
ST BARBARA LIMITED
30 JUNE 2015
Remuneration Report (Audited) ‐ Continued
DIRECTORS’ REPORT
The proportion of the FY15 Performance Rights that vest will be influenced by the Company’s TSR relative to the
comparator group over the three year vesting period commencing 1 July 2014 and ending 30 June 2017 as outlined
below:
Relative TSR Performance
Below 50th percentile
50th percentile
% Contribution to the Number of
Performance Rights to Vest
0%
50%
Between 50th & 75th percentiles
Pro‐rata from 50% to 100%
75th percentile and above
100%
(vi)
Return on Capital Employed (ROCE)
The proportion of the FY 15 Performance Rights that vest will be influenced by the ROCE achieved by the Company
over the three year vesting period commencing 1 July 2014 and ending 30 June 2017 as outlined below:
Return on Capital Employed (ROCE)
% Contribution to the Number of
Performance Rights to Vest
Less than or equal to the average annual weighted
average cost of capital (WACC) over the three year
period ending on 30 June 2017
WACC (calculated as above) + 3%
WACC (calculated as above) + 7%
0%
50%
100%
(vii)
Example of calculation of the number of FY15 Performance Rights to vest
Assuming the following measures over the three year vesting period ending 30 June 2017:
Relative TSR:
ROCE
70%
WACC + 4%
then the following proportion of performance rights will vest:
(a)
Relative TSR
Weighting:
Actual score:
Calculation:
67%
70th percentile
50% (for achieving the 50th percentile)
+ ((70% ‐ 50%) (75% ‐ 50%)) x (100% ‐ 50%)
= 90%
(b)
(c)
Return on Capital Employed (ROCE)
Weighting:
Actual ROCE:
Calculation:
33%
WACC + 4%
50% (for achieving the 50th percentile)
+ ((4% ‐ 3%) (7% ‐ 3%)) x (100% ‐ 50%)
= 62.5%
Combined score
(90% + 67%) + (62.5% x 33%) = 80.9%
Using the above example of an senior executive being issued with 2,000,000 performance rights based on the
above 80.9% combined score, 1,618,000 (=80.9% x 2,000,000) performance rights would vest.
Page 34
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Remuneration Report (Audited) ‐ Continued
Performance Rights granted in 2015
Details on performance rights over ordinary shares in the Company that were granted as remuneration to each key
management person and details of performance rights that vested in the 2015 financial year are as follows:
2015
Number of
performance
rights granted
during 2015
Issue price
per
performance
right
Grant date
Expiry date
R S Vassie
G Campbell‐Cowan
4,062,500
2,438,525
$0.12
$0.12
9 Dec 2014
5 Dec 2014
30 Jun 2017
30 Jun 2017
Fair value per
performance
right at grant
date
($ per share)(1)
$0.05
$0.05
Number of
performance
rights vested
during
FY2015
‐
‐
(1) The fair value of performance rights at grant date was determined using a Black‐Scholes valuation to which a Monte Carlo simulation was applied to
determine the probability of the market conditions associated with the rights being met. This methodology complied with the requirements of Australian
Accounting standard AASB 2 Share Based Payments.
Performance Rights On Issue
The number of rights over ordinary shares in the Company held directly, indirectly or beneficially during the financial year
by each key management person, including their related parties, are set out below:
2015
R S Vassie
G Campbell‐Cowan
K Romeyn
Held at
1 July 2014
‐
736,826
543,763
Granted as
compensation
4,062,500
2,438,525
‐
Exercised during
the year
‐
‐
‐
Other changes
during the year
‐
(139,636)
(543,763)
Held at
30 June 2015 (1)
4,062,500
3,035,715
n/a
(1) The vesting of performance rights held at 30 June 2015 is subject to future performance conditions.
(2) Ms Romeyn’s role as EGM People and Business Services was made redundant on 28 November 2014
Valuation of Performance Rights
The assessed fair value at the grant date of performance rights is allocated equally over the period from grant date to
vesting date. Fair values at grant date are based on the prevailing market price on the date the performance right is
granted.
A Monte Carlo simulation is performed to determine the probability of the market conditions associated with the
performance rights being met. The probability estimated by the Monte Carlo simulation is then applied to the fair value.
For performance rights issued during the year ended 30 June 2015 (FY15 Performance Rights), taking into account the
impact of the market condition (as discussed above), the estimated fair value was, for accounting purposes, $0.05.
Further information on performance rights is set out in Note 34 to the Financial Statements.
Page 35
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Remuneration Report (Audited) ‐ Continued
Share holdings
The numbers of shares in the Company held directly, indirectly or beneficially during the year by each key management
person, including their related parties, are set out below. Other than 833,333 shares issued to the Manager Director and
CEO (as approved at the 2014 AGM), there were no shares granted during the year as compensation.
Other
changes
Balance at
the end of the
year
(1,139,389)
(130,247)
‐
(16,000)
‐
‐
n/a
n/a
‐
n/a
100,000
‐
833,333
1,769,053
‐
‐
15,000
n/a
‐
‐
‐
‐
‐
‐
‐
‐
‐
Name
Note
Balance at the start
of the year
Performance
rights vested
Purchased
Sold
Non‐Executive Directors
S J C Wise
D W Bailey
T C Netscher
I L Scotland
D Moroney
K Gleeson
(1)
(2)
(3)
Executive Director
R S Vassie
Senior Executives
G Campbell‐Cowan
K Romeyn
(4)
1,139,389
130,247
‐
16,000
n/a
n/a
n/a
15,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
100,000
‐
935,720
‐
‐
(1) Resigned as a Director 30 June 2015
(2) Resigned as a Director 30 June 2015
(3) Resigned as a Director 26 January 2015
(4) Role as EGM People & Business Services made redundant on 28 November 2014.
Loans to Directors and senior executives
There were no loans to Directors or senior executives during the financial year 2015.
END OF REMUNERATION REPORT
Page 36
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Indemnification and insurance of officers
The Company indemnifies all Directors of the Company named in this report, and a number of former Directors (including
Mr Eduard Eshuys, Ms Barbara Gibson, Mr Richard Knight, Mr Hank Tuten, and Mr Mark Wheatley) and current and former
executive officers 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 officer, unless
the liability relates to conduct involving bad faith. The Company also has a policy to indemnify the Directors and executive
officers 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 Officers’ 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.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Environmental management
St Barbara regards compliance with environmental legislation, regulations and regulatory instruments as the minimum
performance standard for its operations. The Group’s operations in Western Australia are subject to environmental
regulation under both Commonwealth and State legislation. Within the Pacific Operations, the Group ensures compliance
with the relevant National and Provincial legislation for each sovereignty and where appropriate standards or legislation
are not available, the Group reverts to the standard of environmental performance as stipulated in the Western Australian
legislation.
With the sale of Gold Ridge Mining Limited in the Solomon Islands in May 2015 and ongoing rehabilitation work undertaken
at Leonora Operations, the rehabilitation liability of the Group has been substantially reduced in the year ended 30 June
2015. Mining operations at the King of the Hills mine ceased in April 2015, and it is anticipated that further rehabilitation of
this site will occur during the coming months. The Group is committed to the rehabilitation of areas at closed sites
previously disturbed by mining and exploration within its tenements in Western Australia.
A Group‐wide Environmental Management System (EMS) has been implemented to facilitate the effective and responsible
management of environmental issues to the same high standard across all sites in both Australia and Papua New
Guinea. Adoption of the EMS at all operations has contributed to further reductions in the number of minor environmental
incidents, and an improvement in internal compliance rates for environmental audits and inspections. There were no
externally reportable environmental incidents during the year ended 30 June 2015 at any of the Group’s Australian and
Pacific sites
Non‐audit services
During the year and prior year the Company did not employ the auditor on any assignments in addition to their statutory
audit duties. Details of the amounts paid or payable to the auditor, KPMG, for non‐audit services provided during the 2015
financial year are set out in Note 25 to the financial statements.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee,
is satisfied 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 satisfied that the provision of non‐audit services by
the auditor, as set out in Note 25 to the financial statements, did not compromise the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
All non‐audit services were reviewed by the Audit Committee to ensure they do not impact the impartiality and
objectivity of the auditor;
No non‐audit services were performed in the 2015 and 2014 financial years; and
Page 37
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
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 financial year, giving 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.
Auditor independence
A copy of the Auditor’s Independence Declaration required under section 307C of the Corporations Act 2001 is set out on
page 39 and forms part of this Director’s Report.
Events occurring after the end of the financial year
The Directors are not aware of any matter or circumstance that has arisen since the end of the financial year that, in their
opinion, has significantly affected or may significantly affect in future years the Company’s operations, the results of those
operations or the state of affairs, except that on 20 August 2015, the Group announced the sale of its King of the Hills mine
and Kailis resource to Saracen Metals Pty Ltd (a wholly owned subsidiary of Saracen Mineral Holdings Ltd) subject to various
third party consents and Australian government approvals. Consideration for the sale is $3 million, with $0.3 million
payable on completion and the balance due on the earlier of commercial production of ore from Kailis or four years from
completion of the sale. The present value of the deferred settlement of $2.7 million is $2.3 million. Completion of the sale
is expected to occur by the end of October 2015. On completion of the sale the rehabilitation provision of $13.9 million
relating to King of the Hills and Kailis will be reversed to the Income Statement.
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 25th day of August 2015
Bob Vassie
Managing Director and CEO
Page 38
ST BARBARA LIMITED
30 JUNE 2015
DIRECTORS’ REPORT
Auditor’s Independence Declaration
Set text colour to white after inserting the auditor’s independence declaration
Page 39
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Financial Report Table of Contents
CONSOLIDATED INCOME STATEMENT ......................................................................................................................... 41
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................................................................................... 42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................................ 43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................. 44
CONSOLIDATED CASH FLOW STATEMENT .................................................................................................................... 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................................................... 46
DIRECTORS’ DECLARATION ......................................................................................................................................... 103
INDEPENDENT AUDIT REPORT .................................................................................................................................... 104
This financial report covers the St Barbara Group (the Group) consisting of St Barbara Limited and its subsidiaries. The
financial report is presented in the Australian dollar currency.
St Barbara Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office is:
St Barbara Limited
Level 10, 432 St Kilda Rd
Melbourne VIC 3004
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 financial report.
The financial report was authorised for issue by the Directors on 25 August 2015. The Company has the power to amend
and reissue the financial report.
Page 40
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2015
Continuing operations
Revenue
Mine operating costs
Gross profit
Other revenue
Other income
Exploration expensed
Corporate and support costs
Royalties
Depreciation and amortisation
Net loss on disposal of assets
Other expenditure
Rehabilitation provision
Impairment losses and asset write‐downs
Operating profit/(loss)
Finance costs
Foreign exchange(loss)/gain
Net realised gain on derivatives
Profit/(loss) before income tax
Consolidated
2015
2014*
Notes
$'000
$'000
6
6
7
8
9
4,9
8
548,206
(311,701)
236,505
462,770
(297,864)
164,906
1,782
1,503
(7,691)
(20,284)
(20,231)
(85,071)
‐
(9,705)
(5,896)
(11,425)
79,487
(43,300)
(15,350)
1,407
1,904
3,169
(16,112)
(26,809) (1)
(17,267)
(95,620)
(791)
(1,261) (1)
‐
(215,290)
(203,171)
(43,296)
3,218
2,832
22,244
(240,417)
Income tax (expense)/benefit
10
(1,090)
(12,484)
Profit/(loss) from continuing operations (net of tax)
21,154
(252,901)
Profit/(loss) from discontinued operations (net of tax)
35
18,528
(247,930)
Profit/(loss) attributable to equity holders of the Company
39,682
(500,831)
Earnings per share for continuing and discontinued
operations:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Earnings per share for continuing operations:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
*restated to account for discontinued operations in the period.
33
33
33
33
8.05
7.83
(102.61)
(102.61)
4.29
4.18
(51.82)
(51.82)
(1)During the year the Group reclassified expenditure for certain costs from other expenditure to corporate and support costs. This classification better reflects the
nature of the expenditure. Prior year expenditure of $7,148,000 was changed for comparative purposes.
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Page 41
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2015
Profit/(loss) for the year
Other comprehensive income
Items that may be reclassified subsequently to profit/(loss):
Changes in fair value of available for sale financial assets
Changes in fair value of cash flow hedges taken to reserves
Gain/(loss) on closure of cash flow hedge
Income tax on other comprehensive income
Notes
23(a)
23(a)
23(a)
Consolidated
2015
$'000
2014
$'000
39,682
(500,831)
(6)
‐
(1,407)
9,386
18
(4,771)
1,407
722
Foreign currency translation differences ‐ foreign operations
(40,151)
11,342
Other comprehensive income/(loss) net of tax(1)
Total comprehensive income/(loss) attributable to equity holders of the
Company
(32,178)
8,718
7,504
(492,113)
(1) Other comprehensive income comprises items of income and expense that are recognised directly in reserves or equity. These items are not recognised in
the consolidated Income Statement in accordance with the requirements of the relevant accounting standards. Total comprehensive (loss)/ profit
comprises the result for the year adjusted for the other comprehensive income.
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Page 42
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2015
Notes
Consolidated
2015
$'000
2014
$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Available for sale financial assets
Deferred mining costs
Total current assets
Non‐current assets
Property, plant and equipment
Deferred mining costs
Mine properties
Exploration and evaluation
Mineral rights
Deferred tax asset
Total non‐current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Interest bearing borrowings
Provisions
Total current liabilities
Non‐current liabilities
Interest bearing borrowings
Provisions
Total non‐current liabilities
Total liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
11
12
13
14
16
14
17
18
17
10
19
20
21
20
21
76,871
9,924
52,272
66
12,829
151,962
170,045
4,525
211,989
16,969
23,407
13,985
440,920
592,882
42,895
52,428
17,013
112,336
294,533
45,584
340,117
452,453
140,429
79,407
7,878
37,416
105
27,745
152,551
153,893
4,235
257,402
15,036
25,370
5,859
461,795
614,346
58,951
24,226
15,138
98,315
315,350
68,869
384,219
482,534
131,812
22
23(a)
23(b)
887,216
(49,436)
(697,351)
140,429
886,242
(16,988)
(737,442)
131,812
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Page 43
5
1
0
2
E
N
U
J
0
3
D
E
T
I
M
I
L
A
R
A
B
R
A
B
T
S
T
R
O
P
E
R
L
A
I
C
N
A
N
I
F
Y
T
I
U
Q
E
N
I
S
E
G
N
A
H
C
F
O
T
N
E
M
E
T
A
T
S
D
E
T
A
D
I
L
O
S
N
O
C
7
2
2
,
3
2
6
)
3
1
0
,
8
3
2
(
)
4
1
6
,
9
2
(
)
6
5
1
(
7
2
6
,
3
1
4
1
,
1
2
4
2
,
6
8
8
l
a
t
o
T
s
’
0
0
0
i
d
e
n
a
t
e
R
i
s
g
n
n
r
a
E
s
’
0
0
0
n
g
i
e
r
o
F
y
c
n
e
r
r
u
C
n
o
i
t
a
l
s
n
a
r
T
e
v
r
e
s
e
R
s
’
0
0
0
t
n
e
m
t
s
e
v
n
I
l
e
u
a
V
r
i
a
F
e
v
r
e
s
e
R
s
’
0
0
0
h
s
a
C
d
o
G
l
e
g
d
e
H
w
o
l
F
e
v
r
e
s
e
R
s
’
0
0
0
s
t
n
e
m
y
a
P
e
v
r
e
s
e
R
s
’
0
0
0
y
t
i
u
q
E
s
’
0
0
0
d
e
s
a
B
e
r
a
h
S
d
e
t
u
b
i
r
t
n
o
C
e
t
o
N
‐
8
9
6
‐
2
0
4
1
,
8
1
7
8
,
)
1
3
8
0
0
5
(
,
‐
)
1
3
8
0
0
5
(
,
‐
‐
‐
2
4
3
1
1
,
2
1
8
,
1
3
1
)
2
4
4
,
7
3
7
(
)
2
7
2
,
8
1
(
2
1
8
,
1
3
1
)
2
4
4
,
7
3
7
(
)
2
7
2
,
8
1
(
‐
9
3
1
4
7
9
2
8
6
9
3
,
)
8
7
1
2
3
(
,
9
2
4
,
0
4
1
‐
‐
9
0
4
‐
2
8
6
9
3
,
)
1
5
3
,
7
9
6
(
‐
‐
‐
‐
)
7
8
1
1
3
(
,
)
9
5
4
,
9
4
(
)
6
(
)
4
4
1
(
‐
‐
‐
8
1
)
8
3
1
(
)
8
3
1
(
‐
‐
‐
‐
‐
‐
‐
)
2
4
6
2
(
,
5
8
9
5
8
9
‐
‐
‐
‐
‐
)
5
8
9
(
8
9
6
)
2
0
4
1
(
,
‐
‐
7
3
4
7
3
4
‐
‐
‐
9
3
1
)
9
0
4
(
‐
‐
‐
‐
2
4
2
,
6
8
8
2
4
2
,
6
8
8
‐
‐
4
7
9
‐
‐
)
a
(
3
2
)
a
(
3
2
)
a
(
3
2
)
a
(
3
2
7
6
1
6
1
2
,
7
8
8
y
n
a
p
m
o
C
e
h
t
f
o
’
s
r
e
n
w
o
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
T
3
1
0
2
y
l
u
J
1
t
a
e
c
n
a
a
B
l
r
a
e
y
e
h
t
r
o
f
e
m
o
c
n
i
e
v
i
s
n
e
h
e
r
p
m
o
c
l
a
t
o
T
e
s
n
e
p
x
e
s
t
n
e
m
y
a
p
d
e
s
a
b
‐
e
r
a
h
S
:
y
t
i
u
q
e
n
i
y
l
t
c
e
r
i
d
d
e
s
i
n
g
o
c
e
r
d
e
r
i
p
x
e
s
n
o
i
t
p
o
d
e
t
s
i
l
n
U
y
n
a
p
m
o
C
e
h
t
l
f
o
s
r
e
d
o
h
y
t
i
u
q
e
o
t
e
b
a
t
u
b
i
r
t
t
a
l
s
s
o
L
y
n
a
p
m
o
C
e
h
t
f
o
’
s
r
e
n
w
o
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
T
r
a
e
y
e
h
t
r
o
f
e
m
o
c
n
i
e
v
i
s
n
e
h
e
r
p
m
o
c
l
a
t
o
T
)
s
t
s
o
c
n
o
i
t
c
a
s
n
a
r
t
f
o
t
e
n
(
e
u
s
s
I
y
t
i
u
q
E
e
s
n
e
p
x
e
s
t
n
e
m
y
a
p
d
e
s
a
b
‐
e
r
a
h
S
:
y
t
i
u
q
e
n
i
y
l
t
c
e
r
i
d
d
e
s
i
n
g
o
c
e
r
d
e
r
i
p
x
e
s
n
o
i
t
p
o
d
e
t
s
i
l
n
U
s
s
o
l
/
e
m
o
c
n
i
e
v
i
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
4
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B
l
4
1
0
2
y
l
u
J
1
t
a
e
c
n
a
a
B
l
y
n
a
p
m
o
C
e
h
t
l
f
o
s
r
e
d
o
h
y
t
i
u
q
e
o
t
e
b
a
t
u
b
i
r
t
t
a
l
i
n
a
G
)
s
s
o
l
(
/
e
m
o
c
n
i
e
v
i
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
5
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B
l
.
s
e
t
o
n
g
n
i
y
n
a
p
m
o
c
c
a
e
h
t
h
t
i
w
n
o
i
t
c
n
u
n
o
c
n
j
i
d
a
e
r
e
b
d
u
o
h
s
l
y
t
i
u
q
E
n
i
4
4
e
g
a
P
s
e
g
n
a
h
C
f
o
t
n
e
m
e
t
a
t
S
d
e
t
a
d
i
l
o
s
n
o
C
e
v
o
b
a
e
h
T
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2015
Cash Flows From Operating Activities:
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payments for exploration and evaluation
Interest received
Interest paid
Finance charges – finance leases
Borrowing costs paid
Notes
Consolidated
2015
$'000
2014
$'000
555,823
540,050
(407,508)
(472,501)
(7,383)
1,571
(21,297)
1,720
(28,682)
(26,565)
(471)
(149)
(741)
(406)
Net cash inflow from operating activities
31
113,201
20,260
Cash Flows From Investing Activities:
Proceeds from sale of property, plant and equipment
Payments for property, plant and equipment
Payments for development of mining properties
Payments for exploration and evaluation
Proceeds from sale of discontinued operations
Net cash outflow from investing activities
Cash Flows From Financing Activities:
Proceeds from close out of gold options
Movement in restricted cash
Gold prepayment facility repayments
Gold prepayment facility repayment/settlement
Loans from other entities ‐ drawdown
Loans from other entities – transaction and borrowing costs
Secured notes repayments
Principal repayments
‐ finance leases
Net cash (outflow)/inflow from financing activities
‐ insurance premium funding
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net movement in foreign exchange rates
Cash and cash equivalents at the end of the year
11
106
(23,762)
(24,705)
(2,241)
‐
1,340
(49,225)
(39,971)
‐
1,444
(50,602)
(86,412)
‐
(507)
‐
‐
‐
‐
(66,831)
(4,003)
‐
(71,341)
(8,742)
79,407
6,206
76,871
8,500
10,378
(32,399)
(36,132)
83,452
(5,841)
‐
(4,706)
(4,573)
18,679
(47,473)
117,383
9,497
79,407
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
Page 45
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Summary of significant accounting policies ......................................................................................... 47
Note 1
New Standards adopted ....................................................................................................................... 60
Note 2
Financial risk management ................................................................................................................... 62
Note 3
Critical Accounting Estimates and Judgements .................................................................................... 68
Note 4
Segment Information ........................................................................................................................... 72
Note 5
Revenue ................................................................................................................................................ 76
Note 6
Other income ........................................................................................................................................ 76
Note 7
Expenses ............................................................................................................................................... 77
Note 8
Significant items ................................................................................................................................... 78
Note 9
Income tax ............................................................................................................................................ 79
Note 10
Cash and cash equivalents .................................................................................................................... 81
Note 11
Trade and other receivables ................................................................................................................. 81
Note 12
Inventories ............................................................................................................................................ 81
Note 13
Deferred mining costs .......................................................................................................................... 81
Note 14
Financial instruments ........................................................................................................................... 82
Note 15
Note 16
Property, plant and equipment ............................................................................................................ 84
Note 17 Mine properties .................................................................................................................................... 85
Exploration and evaluation ................................................................................................................... 85
Note 18
Trade and other payables ..................................................................................................................... 85
Note 19
Interest bearing borrowings ................................................................................................................. 86
Note 20
Provisions ............................................................................................................................................. 87
Note 21
Contributed equity ............................................................................................................................... 88
Note 22
Reserves and accumulated losses ........................................................................................................ 89
Note 23
Parent Entity disclosures ...................................................................................................................... 91
Note 24
Remuneration of auditors .................................................................................................................... 92
Note 25
Contingencies ....................................................................................................................................... 92
Note 26
Commitments for expenditure ............................................................................................................. 93
Note 27
Related party transactions ................................................................................................................... 94
Note 28
Controlled entities ................................................................................................................................ 95
Note 29
Events occurring after the balance sheet date ..................................................................................... 96
Note 30
Reconciliation of loss after income tax to net cash flows from operating activities ............................ 97
Note 31
Non‐cash investing and financing activities.......................................................................................... 97
Note 32
Earnings per share ................................................................................................................................ 98
Note 33
Share‐based payments ......................................................................................................................... 99
Note 34
Discontinued Operations .................................................................................................................... 101
Note 35
Disposal of subsidiary ......................................................................................................................... 102
Note 36
Page 46
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 1
Summary of significant accounting policies
St Barbara Limited (the “Company” or “Parent Entity”) is a company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Stock Exchange. The consolidated financial statements of the Company as at
and for the year ended 30 June 2015 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 a for‐profit entity primarily involved in the
exploration for, and mining of, gold.
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
The consolidated financial statements have been presented in Australian dollars and all values are rounded to the nearest
thousand dollars ($000) unless otherwise stated.
1.1 Basis of preparation
Statement of compliance
The financial report is a general‐purpose financial 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 figures have been adjusted to
conform to changes in presentation in the current year. The consolidated financial report of the Group complies with
International Financial Reporting Standards (IFRSs) and interpretations issued by the International Accounting Standards
Board.
The Board of Directors approved the financial statements on 25 August 2015.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis, except for the following material
items:
Derivative financial instruments are measured at fair value;
Share based payment arrangements are measured at fair value;
Available for sale assets are measured at fair value;
Rehabilitation provision is measured at net present value;
Long service leave provision is measured at net present value; and
Critical accounting estimates
The preparation of financial statements in conformity with AASB and IFRS 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 significant to the financial statements are disclosed in Note 4.
Page 47
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.2 Principles of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of St Barbara Limited as at 30
June 2015 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, and as a result has an exposure or rights to variable returns, 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. A list of controlled
entities is presented in Note 29.
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.
Investments in subsidiaries are accounted for at cost less any impairment charges within the Parent Entity disclosures at
Note 24.
Non‐controlling interests in the results and equity of the entity that is controlled by the Group is shown separately in the
Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial
Position and Consolidated Statement of Changes in Equity respectively.
(ii)
Associates and jointly controlled entities
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of voting rights. An interest in an associate is accounted for in the consolidated
financial statements using the equity method and is carried at cost by the Parent Entity.
For joint arrangements in which the Group has rights to the assets, and obligations for the liabilities relating to the
arrangements (joint operations), the proportionate interest in assets, liabilities and expenses are incorporated in the
consolidated financial statements under the appropriate headings.
For those joint arrangements in which the Group has rights to the net assets of the arrangement (joint ventures), the Group
accounts for the investment within the consolidated financial statements using the equity method. Within the separate
financial statements of the parent the investment is carried at cost.
Profits 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.
Page 48
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.3 Business combinations and goodwill
Acquisitions of businesses are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred. The consideration transferred in a business combination is measured at fair
value, which is calculated as the sum of the acquisition date fair values of assets transferred to the Group, liabilities
incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group in exchange
for control of the acquiree.
Consideration transferred also includes the fair value of any contingent consideration and share‐based payment awards of
the acquiree that are replaced as part of the business combination. Transaction costs that the Group incurs in connection
with a business combination, other than those associated with the issue of debt or equity securities, are expensed as
incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non‐controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the
net fair value of the acquisition‐date amounts of the identifiable assets acquired and the liabilities assumed. After initial
recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated
to each of the Group’s Cash Generating Units (CGU) that are expected to benefit from the synergies of the combination.
Refer to Note 4(iv) on Impairment.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement periods or additional assets or liabilities are recognised to
reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known,
would have affected the amounts recognised as of that date.
1.4 Segment reporting
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 Executive Leadership Team (“ELT”)
to make decisions about resources to be allocated to the segment and assess its performance, and for which financial
information is available.
Segment results that are reported to the ELT include items directly attributable to a segment and those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and related depreciation, and
corporate expenses.
Segment capital expenditure represents the total cost incurred during the year for mine development and acquisitions of
property, plant and equipment.
1.5 Foreign currency translation
(i)
Functional and presentation currency
Both the functional and presentation currency of St Barbara Limited and its Australian controlled entities is Australian
dollars (AUD). The functional currency of the Group’s foreign operations is US dollars (USD).
(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 flow hedges and qualifying net investment
hedges.
Translation differences on non‐monetary financial assets and liabilities are reported as part of the fair value gain or loss.
Translation differences on non‐monetary financial assets and liabilities, such as equities held at fair value through profit or
loss, are recognised in the income statement as part of the fair value gain or loss. Translation differences on non‐monetary
financial assets, such as equities classified as available for sale financial assets, are included in the fair value reserve in
equity.
Page 49
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
(iii)
Translation of foreign operations
The assets and liabilities of controlled entities incorporated overseas with functional currencies other than Australian
dollars are translated into the presentation currency of St Barbara Limited (Australian dollars) at the year‐end exchange
rate and the income statements are translated at the rates applicable at the transaction date. Exchange differences arising
on translation are taken directly to the foreign currency translation reserve in equity. On consolidation, exchange
differences arising from the translation of net investments in foreign operations and of the borrowings designated as
hedges of the net investment are taken to the foreign currency translation reserve. If the foreign operation is sold, the
proportionate share of exchange differences would be transferred out of equity and recognised in the income statement.
1.6 Revenue recognition
Revenue from the sale of goods in the course of ordinary activities 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 significant risks and rewards of ownership have been transferred to the buyer, the amount of
revenue can be reliably measured and the associated costs can be estimated reliably, and it is probable that future
economic benefits will flow 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 and rewards to a customer and selling
prices are known or can be reasonably estimated.
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 as it accrues, using the effective interest method.
(iii)
Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(iv)
Gains on disposal of available‐for‐sale financial 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.
1.7 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 financial 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. Capitalised costs are deferred until commercial production commences from the relevant area of interest, at which
time they are amortised on a unit of production basis.
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) sufficient 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 1.10). 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 commercially viable to pursue, accumulated
costs in respect of that area are written off in the period the decision is made.
Page 50
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
(ii)
Mines under construction
Mine development expenditure is accumulated separately for each area of interest in which economically recoverable
reserves have been identified. 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
capitalised exploration, evaluation and feasibility expenditure in respect of the area of interest is aggregated with the costs
of construction and classified 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, after the commencement of production, such
expenditure is carried forward as part of the mine development only when substantial future economic benefits are
thereby established, otherwise such expenditure is classified 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.
1.8 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 financial position as deferred mining costs.
(i)
Underground operations
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 recoverable ounce to expense underground costs in the income
statement. Underground mining costs in the period are deferred based on the metres developed for a particular level.
Previously deferred underground mining costs are released to the income statement based on the recoverable ounces
produced in a level multiplied by the life of level cost per recoverable ounce rate.
Grade control drilling is deferred to the statement of financial position on a level‐by‐level basis. These amounts are
released to the income statement as ounces are produced from the related mining levels.
(ii)
Open pit operations
Overburden and other mine waste materials are often removed during the initial development of a mine site in order to
access the mineral deposit. This activity is referred to as Deferred Stripping. Capitalisation of development stripping costs
ceases and the depreciation of costs commences, at the time that saleable materials begin to be extracted from the mine.
Removal of waste material normally continues throughout the life of a mine. This activity is referred to as production
stripping and commences at the time that saleable materials begin to be extracted from the mine.
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.
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.
Page 51
ST BARBARA LIMITED
1.9 Taxes
(i)
Income tax
FINANCIAL REPORT
30 JUNE 2015
Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the income
statement except to the extent that it relates to a business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax
payable also includes any tax liability arising from the declaration of dividends.
Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the
liability to pay the related dividend is recognised. The Group does not distribute non‐cash assets as dividends to its
shareholders.
(ii)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
Temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is
probable that they will not reverse in the foreseeable future; and
Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but
they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date,
are recognised subsequently if new information about facts and circumstances change.
(iii)
Tax exposure
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may
involve a series of judgements about future events. New information may become available that causes the Group to
change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense
in the period that such a determination is made.
(iv)
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 flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from
investing or financing activities, which are recoverable from, or payable to, the taxation authority are classified as part of
operating cash flows.
Page 52
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.10
Impairment of assets
All asset values are reviewed at each reporting date to determine whether there is objective evidence that there have been
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 carrying amount of an asset or a cash generating unit exceeds the recoverable amount. Impairment losses are
recognised in the income statement. Refer to Note 4 (iv).
1.11 Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with
financial institutions, other short term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
1.12 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. Cash
placed on deposit with a financial institution to secure bank guarantee facilities and restricted from use within the business
is disclosed as trade and other receivables.
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 flows, discounted at the effective
interest rate. The amount of the provision is recognised in the income statement.
1.13
Inventories
Raw materials and stores, ore stockpiles, work‐in‐progress and finished 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 fixed 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.
1.14
Investments and other financial assets
The Group classifies its investments and other financial assets in the following categories: financial assets at fair value
through profit or loss, loans and receivables, and available‐for‐sale financial assets. The classification depends on the
purpose for which the investments were acquired. Management determines the classification of its investments at initial
recognition and re‐evaluates this designation at each reporting date.
Investments and other financial assets are recognised initially at fair value plus, for assets not at fair value through profit
and loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition,
investments and other financial assets are measured as described below.
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading, which were acquired principally for
the purpose of selling in the short term with the intention of making a profit. Derivatives are also categorised as held for
trading, unless they are designated as hedges. Financial assets at fair value through profit 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)
Available‐for‐sale financial assets
Available for sale financial assets, comprising principally marketable equity securities, are non‐derivative financial assets
that are either designated in this category or not classified 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 financial 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.
Page 53
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.15 Derivative financial instruments
Derivative financial 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 firm commitment (fair value
hedge); or (2) hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash
flow 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 flows
of hedged items.
Movements in the gold cash flow hedge reserve in shareholders' equity are shown in Note 23.
(i)
Cash flow hedge
The fair value of gold option contracts comprises intrinsic value, that is, the extent to which the components of an option
are in the money due to a gold forward price 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 flow hedges is
recognised in equity in the gold cash flow hedge 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 through the income statement in the periods when the hedged item affects
profit or loss (for instance, when the forecast gold sale that is hedged takes place). The gain or loss relating to the effective
portion of the financial instrument hedging Australian dollar gold sales is recognised in the income statement within ‘net
realised gains on derivatives’.
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.
(iii)
Hedges of Net Investment
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the
net investment, are accounted for in a similar way to cash flow hedges. Gains or losses on the hedging instrument relating
to the effective portion of the hedge are recognised directly in equity in the Foreign Currency Translation Reserve, while
any gains or losses relating to the ineffective portion are recognised in the income statement. On disposal of the foreign
operation, the cumulative value of any gains or losses recognised directly in equity is transferred to the income statement.
1.16 Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement, or for
disclosure purposes.
The fair value of financial 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
financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the
current ask price.
The fair value of financial 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.
Page 54
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their
fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the Group for similar financial instruments.
1.17 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 flow 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 benefits associated with the item will flow 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 financial 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
10 – 15 years
‐ Plant and equipment
3 – 10 years
‐ Fixtures and fittings
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 1.10).
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.
1.18 Mineral rights
Mineral rights comprise identifiable exploration and evaluation assets, mineral resources and ore reserves, which are
acquired as part of a business combination or a joint venture acquisition, and are recognised at fair value at date of
acquisition. Mineral rights are attributable to specific areas of interest and are amortised when commercial production
commences on a unit of production basis over the estimated economic reserve of the mine to which the rights relate.
1.19 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year,
which remain unpaid as at reporting date. The amounts are unsecured and are usually paid within 30 days from the end of
the month of recognition.
1.20 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost except for the gold prepayment facility which is subsequently measured at fair value as its amortisation
profile changes as a result of the embedded derivative. 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.
Borrowings are classified 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.
1.21 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.
1.22 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 outflow of resources will
Page 55
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
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 outflow 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 outflow 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 reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to
the passage of time is recognised as interest expense.
1.23 Employee benefits
(i)
Wages and salaries, and annual leave
Liabilities for wages and salaries, including non‐monetary benefits 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 benefits 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 with reference to market yields on national government
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii)
Share‐based payments
Share‐based compensation benefits are provided to employees through the Performance Rights Plan. Information relating
to this plan is set out in Note 34.
The fair value of rights granted under the Performance Rights Plan is recognised as an employee benefit 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 or rights. The amount recognised on issue date is adjusted to
reflect the actual number of performance rights not expected to vest, based on expectations of performance related
conditions. Adjustments to the amount recognised at each reporting date are taken through the income statement.
The fair value of performance rights at grant date is determined using the market price of the Company’s shares on the
date of grant and taking into account the vesting and performance criteria and probability of market conditions being met
using a Monte Carlo Simulation methodology.
Upon expiry of rights, the balance of the share‐based payments reserve is either transferred directly to retained earnings,
where the expiry is due to market conditions not being met, or through the income statement.
Upon the exercise of rights, the balance of the share‐based payments reserve relating to those rights is transferred to share
capital.
(iv)
Retirement benefit obligations
Contributions to defined 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 defined benefit 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 is provided by the employee.
(vi)
Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility
of withdrawal, to a formal detailed plan to terminate employment.
Page 56
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.24 Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
performance rights 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.
1.25 Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit 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 figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
1.26 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.
Management judgments and estimates in relation to the rehabilitation provision are provided at Note 4(vi). 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 flows. 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 flows are a normal occurrence in light of the significant
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. A large proportion
of the outflows are expected to occur at the time the respective mines are closed.
1.27 Assets classified as held for sale
Individual non‐current assets or disposal groups comprising assets and liabilities are classified as “held for sale” if the
carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and the non‐current asset is available for immediate sale in its
present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a
completed sale within one year from the date of classification. On initial recognition, assets held for sale are measured at
the lower of their carrying amount and fair value less costs to sell and are no longer depreciated (or amortised).
Page 57
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.28 Government royalties
Royalties under existing regimes are payable on sales revenue, or gold ounces produced and sold, and are therefore
recognised as the sale occurs.
1.29 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 financial report. Amounts in the financial report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.
1.30 Leases
Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are
classified as finance 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
finance charges, are included in interest bearing liabilities. Each lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance 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 finance leases are
depreciated over the asset’s useful life, or the lease term if shorter where there is no reasonable certainty that the Group
will obtain ownership by the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified 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.
1.31 New accounting standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are available for early adoption for annual
reporting periods beginning after 1 July 2015, and have not been applied in preparing these consolidated financial
statements. Those new standards, amendments to standards and interpretations which may be relevant to the Group are
set out below. The Group does not plan to adopt these standards early and is in the process of considering the impact of
the changes.
I. AASB 9 Financial Instruments (December 2014) is a new standard which replaces AASB 139. This new version supersedes
AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for
classification and measurements, a single, forward‐looking ‘expected loss’ impairment model and a substantially‐
reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018.
II. AASB 2014‐3 Amendments to Australian Accounting Standards‐Accounting for Acquisitions of interest in Joint Operations
[AASB 1 &AASB 11].
Amends AASB 11 Joint Arrangements to provide guidance on the accounting for acquisitions of interest in joint operations
in which the activity constitutes a business.
AASB 2014‐3 is effective for annual periods beginning on or after 1 January 2018.
Page 58
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
1.31 New accounting standards and interpretations not yet adopted (continued)
III. AASB 2014‐4 Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to AASB 116 and AASB
138).
Clarifies that the use of revenue‐based methods to calculate the depreciation of an asset is not appropriate, and is an
inappropriate method for measuring the consumption of economic benefits embodied in an intangible asset. The
clarification is effective for annual periods beginning on or after 1 January 2016.
IV. AASB 15 Revenue from Contracts with Customers which supersedes AASB 111 Construction contracts, AASB 118 Revenue,
interpretation 12 Customer loyalty programmes, Interpretation 15 Agreements for the construction of Real Estate,
Interpretation 18 Transfer of Assets from Customers, interpretation 131 Revenue‐Barter transactions involving Advertising
services and Interpretation 1042 Subscriber Acquisition Costs in the Telecommunications Industry.
The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those
goods or services.
AASB 15 is effective for annual periods beginning on or after 1 January 2017.
V. AASB 2014‐10 Amendments to Australian Accounting Standards‐Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture.
Amends AASB 10 Consolidated Financial Statements and AASB 1287 to address inconsistency between the requirements
in AASB 10 an those in AASB 128 (August 2011), in dealing with the sale or contribution of assets between an investor and
its associate or joint venture.
AASB 2014‐10 is effective for annual periods beginning on or after 1 January 2016.
VI. AASB 2015‐1 Amendments to Australian Accounting Standards‐Annual improvements to Australian Accounting Standards
2012‐2014 Cycle.
Amends AASB 5 Non‐current Assets Held for Sale and Discontinued Operations clarifying changes in the method of
disposal; AASB 7 Financial Instruments: Disclosures, clarifying the classification of service contracts, and disclosure
requirements for condensed interim financial statements.
Amends AASB 19 Employee Benefits by clarifying the currency of the corporate bonds used in arriving at the discount rate
and AASB 134 Interim Financial Reporting, by clarifying the meaning of disclosure if information ‘elsewhere in the interim
financial report’ and requires the inclusion of a cross‐reference from the interim financial statements to the location of
this information.
AASB 2015‐1 is effective for annual periods on or after 1 January 2016.
VII. AASB 2015‐2 Amendments to Australian Accounting Standards‐Disclosure Initiative: Amendments to AASB 101.
The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure
Initiative project. The amendments are designed to further encourage companies to apply professional judgement in
determining what information to disclose in the financial statements. The amendment will be applicable for annual
periods on or after 1 January 2016.
VIII. AASB 2015‐3 Amendments to Australian Accounting Standard arising from the Withdrawal of AASB 1031 Materiality. The
Standard completes the AASB’s project to remove Australian guidance on materiality from Australian Accounting
Standards. This amendment will be applicable for annual periods on or after 1 July 2015.
Page 59
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 2
The Company has adopted the following new and/or revised Standards, Amendments and Interpretations from 1 July 2014:
New Standards adopted
AASB 2012‐3
Amendments to Australian Accounting Standards‐Offsetting Financial Assets and Financial
Liabilities.
AASB 2012‐3 adds application guidance to AASB 132 Financial Instruments: Presentation to
address inconsistencies identified in applying some of the offsetting criteria of AASB 132.
AASB 2013‐3
Amendments to AASB 136‐Recoverable Amount Disclosures for Non‐Financial Assets
AASB 2013‐3 amends the disclosure requirements in AASB 136 Impairment of Assets. The
amendments include the requirement to disclose additional information about the fair value
measurements when the recoverable amount of impaired assets is based on fair value less
cost of disposal.
AASB 2013‐4
Amendments to Australian Accounting Standards‐Novation of Derivatives and Continuation of
Hedge Accounting [AASB 139].
AASB 2013‐4 amends AASB 139 to permit continuation of hedge accounting in specified
circumstances where a derivative, which has been designated as a hedging instrument, is
novated from one counterparty to a central counterparty as a consequence of laws or
regulations.
AASB 1031
Materiality.
The revised AASB 1031 is an interim standard that cross‐references to other Standards and
the Framework (issued December 2013) that contains guidance on materiality. AASB 1031 will
be withdrawn when references to AASB 1031 in all Standards and Interpretations have been
removed.
Interpretation 21
Levies.
The interpretation confirms that a liability to pay a levy is only recognised when the activity
that triggers the payment occurs.
AASB 2013‐9
Amendments to Australian Accounting Standards‐Conceptual Framework, Materiality and
Financial Instruments..
The Standard contains three main parts and makes amendments to a number of Standards
and Interpretations. Part A of AASB 2013‐9 makes consequential amendments arising from
the issuance of AASB CF 2013‐1. Part B makes amendments to particular Australian
Accounting Standards to delete references to AASB 1031 and also makes minor editorial
amendments to various other standards. Part C makes amendments to a number of
Australian Accounting Standards, including incorporating Chapter 6 Hedge Accounting into
AASB 9 Financial Instruments.
Page 60
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
AASB 2014‐1 Part A Annual
Improvements 2010‐2012
Cycle.
AASB 2014‐1 Part A: This standard sets out amendments to Australian Accounting Standards
arising from the issuance by the International Accounting Standards Board (IASB) of
International Financial Reporting Standards (IFRSs) Annual Improvements to IFRSs 2010–2012
Cycle and Annual Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
AASB 2 ‐ Clarifies the definition of 'vesting conditions' and 'market condition' and
introduces the definition of performance condition' and 'service condition'.
AASB 3 ‐ Clarifies the classification requirements for contingent consideration in a
business combination by removing all references to AASB 137.
AASB 8 ‐ Requires entities to disclose factors used to identify the entity's reportable
segments when operating segments have been aggregated. An entity is also required
to provide a reconciliation of total reportable segment assets to the entity's total
assets.
AASB 116 & AASB 138 ‐ Clarifies that the determination of accumulated depreciation
does not depend on the selection of the valuation technique and that it is calculated
as the difference between the gross and net carrying amounts.
AASB 124 ‐ Defines a management entity providing KMP services as a related party of
the reporting entity. The amendments added an exemption from the detailed
disclosure requirements in paragraph 17 of AASB 124 Related Party Disclosures for
KMP services provided by a management entity. Payments made to a management
entity in respect of KMP services should be separately disclosed.
The Adopted standards have no material impact on the recognition, measurement and disclosure of the year end financial
report.
Page 61
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to withstand significant changes
in cash flow at risk scenarios and still meet all financial commitments as and when they fall due. The Group continually
monitors and tests its forecast financial position and has a detailed planning process that forms the basis of all cash flow
forecasting.
This note presents information about each of the financial risks that the Group is exposed to, the policies and processes for
measuring and managing financial risk, and the management of capital. Further quantitative disclosures are included
throughout this financial report.
The Group's normal business activities expose it to a variety of financial risk, being: market risk (especially gold price and
foreign exchange risk), credit risk and liquidity risk. The Group may use derivative instruments as appropriate to manage
certain risk exposures.
Risk management in relation to financial risk is carried out by a centralised Group Treasury function in accordance with
Board approved directives that underpin Group Treasury policies and processes. The Treasury Risk Management
Committee assists and advises the Group Treasury function, Executive Leadership Team, Audit and Risk Committee and
Board in discharging their responsibilities in relation to forecasted risk profiles, risk issues, risk mitigation strategies and
compliances with Treasury policy. Group Treasury regularly reports the findings to the Treasury Risk Management
Committee and the Board.
(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 financial instruments, cash flows and financial
position. The Group may enter into derivatives, and also incur financial liabilities, in order to manage market risks. All such
transactions are carried out within directives and policies approved by the Board.
(i) Commodity price risk
The Group’s revenue is exposed to spot gold price risk. Based upon sensitivity analysis, a movement in the average spot
price of gold during the year of +AUD$100 per ounce/(‐AUD$100 per ounce), and all other factors remaining constant,
would have increased/(decreased) post tax profit by $13,856,000/($13,856,000) respectively.
The Group has managed commodity price risk from time to time by using a combination of AUD denominated gold put
options and gold call options to create zero‐cost option collar structures and gold forward contracts as described in (b)
below.
(ii) Currency risk
The Group is exposed to currency risk on gold sales and transactions where the AUD spot rate is quoted as a function of
USD and Papua New Guinea Kina (PGK) at the prevailing exchange rate. The USD currency exposure in relation to gold sales
is not hedged and the USD exposure on transactions is managed by selling gold in USD therefore creating a natural hedge.
Currently the PGK is not hedged.
Page 62
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
(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 flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The
Group Treasury will manage the interest rate exposures according to the Board approved Treasury policy. Any decision to
hedge interest rate risk will be assessed in relation to the overall Group exposure, the prevailing interest rate market, and
any funding counterparty requirements. As at 30 June 2015, interest rates on interest bearing liabilities were
predominantly fixed as set out in note 15(b).
Cash flow hedges
(b)
The Group may from time to time be party to derivative financial instruments in the normal course of business to protect
future revenue from gold operations from a significant fall in the price of gold, in accordance with the Group’s financial risk
management policies.
(i) Leonora
In November 2013, the Company entered into a gold forward contract for 240,000 ounces of gold over a twelve‐month
period to manage Australian dollar gold price risk associated with the estimated production from the Leonora mine at a
strike price of A$1,390 per ounce.
In July 2014, the Company entered into another gold forward contract for 153,000 ounces of gold over the nine‐month
period to June 2015 to manage Australian dollar gold price risk associated with the estimated production from the Leonora
mine at a strike price of A$1,415 per ounce.
During financial year 2015, 218,456 ounces of gold were delivered to the gold forward contracts with no further amounts
outstanding.
As physical delivery of gold is used to close out forward contracts, the standard provides an own use exemption under
which the Group is not subject to the requirements of AASB 139 for these contracts.
(ii) Simberi
In April 2015, the Company entered into a gold forward contract for 100,200 ounces of gold over a twelve‐month period to
June 2016 to manage Australian dollar gold price risk associated with the estimated production from the Simberi mine at a
strike price of A$1,600 per ounce.
As physical delivery of gold is used to close out forward contracts, the standard provides an own use exemption under
which the Group is not subject to the requirements of AASB 139 for these contracts.
The maturity profile of the gold forward contracts remaining as at 30 June 2015 is provided in the table below.
Strike Price
Simberi
A$1,600/oz
Total
ounces
6 months or
less
ounces
6 – 12
months
ounces
1 – 2 years
ounces
2 – 5 years
ounces
100,200
50,100
50,100
‐
‐
Page 63
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
(iii) Cash flow hedge sensitivity
The relationship between currencies, spot gold price and volatilities is complex and changes in the spot gold price can
influence volatility, and vice versa.
At 30 June 2015, the Group did not hold any gold options to hedge against movements in the gold price, however this is
reviewed by the Board as part of the risk management framework.
(c)
Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract,
with a maximum exposure equal to the carrying amount of the financial assets as recorded in the financial statements. The
Group is exposed to credit risk from its operating activities (primarily customer receivables) and from its financing activities,
including deposits with banks and financial institutions and derivatives.
Credit risks related to receivables
The Group’s most significant customer accounts for $3,342,000 of the trade receivables carrying amount at 30 June 2015
(2014: $nil), representing receivables owing from gold sales. 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 2015 were past
due.
Credit risks related to cash deposits and derivatives
Credit risk from balances with banks and financial institutions derivative counterparties is managed by the centralised
Group 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 financial limit on funds placed
with any single counterparty.
Derivative transactions are only made with approved counterparties as per the Board approved Treasury Policy. Derivative
transactions cover a major proportion of total Group production with maturities occurring over a period of time (refer Note
3(b)).
(d)
Currency Risk
The Group is exposed to currency risk on gold sales, purchases and borrowings that are denominated in a currency other
than the Company’s functional currency of the AUD. The currencies in which transactions primarily are denominated are
Australian Dollars (AUD), US Dollars (USD) and Papua New Guinea Kina (PGK).
Currency risk relating to the net investment in the foreign operations is hedged against the Group's USD borrowings..
Exchange gains and losses upon subsequent revaluation of the designated USD denominated borrowings from the historical
draw down rate to the reporting period end spot exchange rate are deferred in equity in the Foreign Currency Translation
Reserve, and will be released to the income statement if the foreign operation is disposed of.
Page 64
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
As at 30 June 2015, a portion of the total USD borrowings of US$270,980,000 (2014: US$325,000,000) translated at the year
end USD:AUD foreign exchange rate to $351,326,000 (2014: $344,630,000), excluding capitalised transaction costs of
$9,624,000, were designated as a hedging instrument against the Group’s net investment in foreign operations. Prior to
the impairment write down at 30 June 2014, the total USD borrowings were designated as a hedging instrument.
Interest on borrowings is denominated in the currency of the borrowing. The Group’s USD interest exposure is mitigated
through USD cash flows realised through gold sales, providing a natural currency hedge. In respect of other monetary
assets and liabilities denominated in foreign currencies, the Group buys and sells foreign currencies at spot rates when
necessary.
Exposure to Currency
2015
Cash and cash equivalents
Trade Receivables
Trade payables
Interest bearing liabilities
Net Exposure
Exposure to Currency
2014
Cash and cash equivalents
Trade Receivables
Trade payables
Interest bearing liabilities
Net Exposure
USD
$’000
887
2,205
(4,650)
(270,980)
(272,358)
USD
$’000
25,236
653
(4,673)
(325,000)
(303,784)
PGK
$’000
‐
1,179
(6,025)
‐
(4,846)
PGK
$’000
736
1,054
(8,827)
‐
(7,037)
SBD
$’000
‐
‐
‐
‐
‐
SBD
$’000
335
34
(7,576)
‐
(7,207)
The exchange rates at the close of the period were as follows:
Closing rate as at
30 June 2015
30 June 2014
AUD/USD
0.771
0.943
AUD/PGK
2.065
2.243
AUD/SBD
6.042
6.843
Page 65
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
Sensitivity Analysis:
The following table details the Group's sensitivity to a 10% movement (i.e. increase or decrease) in the Australian dollar
against the US dollar and PNG Kina at the reporting date, with all other variables held constant. The 10% sensitivity is based
on reasonably possible changes, over a financial year, using the observed range of actual historical rates for the preceding
five year period:
Impact on Profit(1) After Tax
(Increase profit)/decrease profit
2015
000's
27,253
(27,254)
484
(485)
‐
‐
2014
000's
(30,377)
30,378
(704)
705
(722)
719
AUD/USD +10%
AUD/USD ‐10%
AUD/PGK +10%
AUD/PGK ‐10%
AUD/SBD +10%
AUD/SBD ‐10%
Note (1): There is no impact on equity as the foreign currency denominated assets and liabilities represent
cash, receivables, payables and borrowings. There are no derivatives.
Significant assumptions used in the foreign currency exposure sensitivity analysis above include:
Reasonably possible movements in foreign exchange rates.
The translation of the net assets in subsidiaries with a functional currency other than the Australian dollar has not been
included in the sensitivity analysis as part of the equity movement.
The net exposure at the reporting date is representative of what the Group is expected to be exposed to in the next 12
months.
The sensitivity analysis only includes the impact on the balance of financial assets and financial liabilities at the
reporting date.
(e)
Capital management
The Group’s total capital is defined as total shareholders’ funds plus net debt. The Group aims to maintain an optimal
capital structure to reduce the cost of capital and maximise shareholder returns. The Group has a capital management plan
that is reviewed by the Board on a regular basis.
Consolidated capital
Total shareholders’ funds
Borrowings
Cash and cash equivalents
Total capital
2015
$’000
140,429
346,961
(76,871)
410,519
2014
$’000
131,812
339,576
(79,407)
391,981
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 financial institutions as security for bank guarantee
facilities totalling $2,084,000 (2014: $1,577,000) at the reporting date.
Page 66
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
Performance bonds with National Australia Bank Limited (NAB) and Commonwealth Bank of Australia (CBA) are
respectively $1,386,000 and $98,000 to provide security for performance obligations incurred in the ordinary course of
business, with security given through cash backing the facility. The Company has also provided cash as security for
$600,000 credit card facility with NAB.
(f)
Liquidity risk
Prudent liquidity risk management requires maintaining sufficient 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 flows, and matching maturity profiles
of financial assets and liabilities. The Group undertakes sensitivity analysis to stress test the operational cash flows, which
are matched with capital commitments to assess liquidity requirements. The capital management plan provides the
analysis and actions required in detail for the next twelve months and longer term. The maturity of non‐current liabilities is
monitored within the cash management plan.
Surplus funds are invested in instruments that are tradeable in highly liquid markets.
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities. The amounts disclosed in the table are the contractual
undiscounted cash flows, which includes interest obligations over the term of the facilities.
$‘000
Senior Secured Notes(1)
Loans from other entities(1)
Finance lease liabilities
Trade and other payables
Maturity of financial liabilities ‐ 2015
Less than
6 months
6 – 12
months
Between 1
and 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
11,275
28,650
2,983
42,895
85,803
11,275
27,458
1,356
‐
40,089
299,189
51,496
1,444
‐
352,129
‐
‐
‐
‐
‐
321,739
107,604
5,783
42,895
478,021
248,621
93,081
5,259
42,895
389,856
(1) Excluding amortisation of capitalised transaction costs and discount.
$‘000
Senior Secured Notes(1)
Loans from other entities(1)
Finance lease liabilities
Trade and other payables
Maturity of financial liabilities ‐ 2014
Less than
6 months
6 – 12
months
Between 1
and 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
11,764
3,787
2,519
58,951
77,021
11,764
23,374
2,356
‐
335,697
64,602
5,492
‐
37,494
405,791
‐
‐
‐
‐
‐
359,225
91,763
10,367
58,951
256,048
73,689
9,839
58,951
520,306
398,527
(1) Excluding amortisation of capitalised transaction costs and discount.
Page 67
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 3
Financial risk management (continued)
(g)
Fair value estimation
On‐Balance Sheet
The fair value of cash and cash equivalents and non‐interest bearing monetary financial assets and financial liabilities of the
Group approximates their carrying value. The fair value of other monetary financial assets and financial liabilities is based
upon market prices.
Fair values
The carrying amounts and the fair values of financial assets and liabilities of the Group at balance date are set out in the
table below:
Financial assets
‐ Cash and cash equivalents
‐ Restricted cash
‐ Receivables
‐ Available for sale financial assets
Financial liabilities
‐
‐
‐
‐
Trade and Other Payables
Senior Secured Notes(1)
Loans from other entities(2)
Lease liabilities
2015
2014
Carrying
Amount
$’000
Fair Value
$’000
Carrying
Amount
$’000
Fair Value
$’000
76,871
2,084
5,900
66
84,921
42,895
254,088
97,238
5,259
399,480
76,871
2,084
5,900
66
84,921
42,895
252,620
94,593
5,259
395,367
79,407
1,577
3,733
105
84,822
58,951
265,100
79,530
9,839
413,420
79,407
1,577
3,733
105
84,822
58,951
219,420
77,573
9,839
365,783
(1) The senior secured note amount excludes $4,920,000 of capitalised transaction costs and $547,000 discount on notes.
(2) Loans from other entities exclude $4,157,000 of capitalised transaction costs.
Note 4
Critical Accounting Estimates and Judgements
The preparation of financial 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 identified the following critical accounting policies under which significant judgements, estimates and
assumptions are made, and where actual results may differ from these estimates under different assumptions and
conditions that could materially affect financial results or financial 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 difficult geological judgements and calculations to
interpret the data.
Page 68
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 4
Critical Accounting Estimates and Judgements (continued)
The Group determines and reports ore reserves under the 2012 edition of the Australian Code for Reporting of Mineral
Resources and Ore Reserves, 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 financial results and financial position in a number of ways, including:
Asset carrying values may be impacted due to changes in estimated future cash flows.
Depreciation and amortisation charged in the income statement may change where such charges are calculated
using the units of production basis.
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 the development amortisation rates and stripping ratios.
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 specific 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. Amortisation of underground operating development
The Group applies the units of production method for amortisation of underground operating development. The
amortisation rates are determined on a level‐by‐level basis. In underground operations an estimate is made of the life of
level average underground mining cost per recoverable ounce to expense underground costs in the income statement.
Underground mining costs in the period are deferred based on the metres developed for a particular level.
Grade control drilling is deferred to the statement of financial position on a level‐by‐level basis. These amounts are
released to the income statement as ounces are produced from the related mining levels.
iv.
Impairment of assets
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to
the particular assets that may lead to impairment. The recoverable amount of each CGU is determined as the higher of
value‐in‐use or fair value less costs to sell (“Fair Value”), in accordance with significant accounting policy 1.10. These
calculations require the use of estimates, which have been outlined in significant accounting policy 1.10.
The identified CGUs of the Group are: Leonora and Simberi. The carrying value of the Leonora CGU is assessed using value‐
in‐use, while the Simberi CGU is valued using Fair Value.
For Simberi fair value less cost to sell was determined to be higher than the value in use based upon internal valuations,
and as mandated by the accounting standards, the basis of measurement has been amended. The cost to dispose in respect
of the updated measurement basis has been estimated based upon prevailing market conditions. The change in basis has
no impact on impairment in current or prior periods.
Value‐in‐use and Fair Value are determined as the net present value of the estimated future cash flows. Future cash flows
are based on life‐of‐mine plans using market based commodity price and exchange assumptions for both Australian Dollar
(AUD) and United States Dollar (USD) gold price, estimated quantities of ore reserves, operating costs and future capital.
Significant judgements and assumptions are required in making estimates of value‐in‐use and fair value. The CGU
valuations are subject to variability in key assumptions including, but not limited to: long‐term gold prices, currency
exchange rates, discount rates, production, operating costs and future capital expenditure. An adverse change in one or
more of the assumptions used to estimate value‐in‐use and fair value could result in a reduction in a CGU’s recoverable
value. This could lead to the recognition of impairment losses in the future. The inter‐relationship of the significant
accounting assumptions upon which estimated future cash flows are based, however, are such that it is impractical to
disclose the extent of the possible effects of a change in a key assumption in isolation.
Page 69
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 4
Critical Accounting Estimates and Judgements (continued)
The table below summarises the key assumptions used in the 30 June 2015 reporting date carrying value assessments:
(a)
Impairment testing
Gold (Real US$ per ounce)
Gold (Real A$ per ounce)
AUD:USD exchange rate
2016‐2020
$1,139/oz ‐ $1,204/oz
$1,531/oz ‐ $1,584/oz
0.76 to 0.71
Post‐tax real discount rate (%) – Australia
Post‐tax real discount rate (%) – Pacific Operations
9.3
11.3
Commodity prices and exchange rates
Long term
2021+
$1,150/oz
$1,475/oz
0.78
9.3
11.3
Commodity prices and foreign exchange rates are estimated with reference to external market forecasts and updated at
least annually. The rates applied for the first five years of the valuation have regard to observable market data, including
spot and forward values. Thereafter the estimate is interpolated to the long‐term assumption, which is made with
reference to market analysis.
Discount rate
In determining the value‐in‐use or Fair Value of CGUs, the future cash flows are discounted using rates based on the
Group’s estimated real post‐tax weighted average cost of capital for each functional currency used in the Group, with an
additional premium applied having regard to the geographic location of the CGU.
Operating and capital costs
Life‐of‐mine operating and capital cost assumptions are based on the Group’s latest life‐of‐mine plans. The projections do
not include expected cost improvements reflecting the Group’s objectives to maximise free cash flow, optimise and reduce
activity, apply technology, improve capital and labour productivity.
Unmined resources and exploration values
Unmined resources may not be included in a CGU’s particular life‐of‐mine plan for a number of reasons, including the need
to constantly re‐assess the economic returns on and timing of specific production options in the current economic
environment. In our determination of value in use, there are no unmined resources and exploration estimates included
within our valuation.
Impairment booked
At 30 June 2015, the Group booked an impairment of $11,425,000 in relation to the King of the Hills mine which ceased
operations during the year. The impairment booked relates to capitalised mine development which remained unamortised
at the date the decision was made to cease operations. As there was no plan generated which would generate future cash
flows to support the carrying value of the unamortised capitalised development, the entire amount was considered
impaired.
v. Exploration and evaluation expenditure
As set out in Note 1.7 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.
Page 70
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 4 Critical Accounting Estimates and Judgements (continued)
vi. Rehabilitation and mine closure provisions
As set out in Note 1.26, the value of these provisions represents the discounted value of the present obligation to restore,
dismantle and rehabilitate each site. Significant 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 reflects a combination of management’s best estimate of the cost of performing the work
required, the timing of the cash flows 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 21). 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 2015, the following assumptions were made:
Timing of rehabilitation outflows was based on the life of mine plan of each operation, with the rehabilitation of
legacy areas of disturbance scheduled accordingly.
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.
Inflation is not applied to cost estimates.
A pre‐tax real discount rate of 5% based on the risks specific to the liability.
vii. Taxes
Estimates of future taxable profits are based on forecast cash flows from operations. At 30 June 2015 losses not recognised
amounted to $79,574,000 (tax effected) relating to Pacific Operations entities in PNG and Australia. These have not been
recognised as it is not probable that the existence of future taxable profits will be available against which they can be
utilised.
viii. Derivative financial instruments
In prior periods, fair value of gold options bought and sold, have been determined using a ‘Level 2’ valuation method
involving the use of a generally accepted option valuation model: inputs were 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 required the use of estimates and
assumptions. Any changes in assumptions in relation to gold prices and volatilities could have had a material impact on the
fair valuation attributable to the gold collar structure in prior periods. When these assumptions change in the future the
differences will impact the gold cash flow hedge reserve and/or income statement in the period in which the change
occurs.
ix. Onerous provision
Following cost and headcount reductions in 2014 the Group no longer required leased premises in Brisbane and half of the
floor space in Melbourne. An onerous provision totalling $1,729,000 was booked in June 2015 as a result which will be
amortised over the outstanding lease period.
x. Share based payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using the assumptions detailed in Note 34.
Where the vesting of share based payments contain market conditions, in estimating the fair value of the equity
instruments issued, the Group assesses the probability of the market conditions being met, and therefore the probability of
fair value vesting, by undertaking a Monte‐Carlo simulation. The simulation performs sensitivity analysis on key
assumptions in order to determine potential compliance with the market performance conditions. The simulation
specifically performs sensitivity analysis on share price volatility based on the historical volatility for St Barbara Limited and
the peer group companies. The results of the Monte‐Carlo simulation are not intended to represent actual results, but are
used as an estimation tool by management to assist in arriving at the judgment of probability.
Page 71
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 5
Segment Information
The Group had three operational business units: Leonora Operations, Gold Ridge Operations and Simberi Operations. The
operational business units are managed separately due to their separate geographic regions.
Gold Ridge Operations was disposed of during the year and therefore was separately disclosed as a discontinued operation.
The Group’s Executive Leadership Team reviews the results of all operations regularly, in particular production, cost per
ounce and capital expenditures.
Information regarding the operations of each reportable segment is included below. Performance is measured based on
segment profit 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.
Page 72
T
R
O
P
E
R
L
A
I
C
N
A
N
I
F
5
1
0
2
E
N
U
J
0
3
D
E
T
I
M
I
L
A
R
A
B
R
A
B
T
S
s
n
o
i
t
a
r
e
p
o
s
n
o
i
t
a
r
e
p
o
d
e
u
n
i
t
n
o
c
s
i
d
m
o
r
f
l
a
t
o
T
i
g
n
u
n
i
t
n
o
c
m
o
r
f
l
a
t
o
T
i
r
e
b
m
i
S
a
r
o
n
o
e
L
*
4
1
0
2
0
0
0
’
$
8
5
0
1
7
,
)
8
1
8
7
9
(
,
)
0
6
7
,
6
2
(
5
1
0
2
0
0
0
’
$
5
7
3
4
,
)
4
8
5
9
1
(
,
)
9
0
2
,
5
1
(
4
1
0
2
0
0
0
’
$
5
1
0
2
0
0
0
’
$
4
1
0
2
0
0
0
’
$
5
1
0
2
0
0
0
’
$
4
1
0
2
0
0
0
’
$
5
1
0
2
0
0
0
’
$
0
7
7
2
6
4
,
)
4
6
8
7
9
2
(
,
6
0
9
,
4
6
1
6
0
2
8
4
5
,
)
1
0
7
1
1
3
(
,
5
0
5
,
6
3
2
0
5
9
0
6
,
)
5
5
0
1
9
(
,
)
5
0
1
,
0
3
(
1
2
5
2
1
1
,
)
1
7
4
2
0
1
(
,
0
5
0
,
0
1
0
2
8
1
0
4
,
)
9
0
8
6
0
2
(
,
1
1
0
,
5
9
1
,
5
8
6
5
3
4
)
0
3
2
9
0
2
(
,
5
5
4
,
6
2
2
‐
)
2
3
9
2
(
,
)
6
6
2
5
9
1
(
,
)
1
6
8
4
(
,
)
1
7
0
3
1
(
,
‐
‐
)
8
7
2
(
‐
4
9
6
3
,
‐
‐
)
7
6
2
7
1
(
,
)
0
9
2
5
1
2
(
,
)
2
9
4
2
9
(
,
)
1
3
2
0
2
(
,
)
5
2
4
1
1
(
,
)
5
7
8
9
7
(
,
‐
)
6
9
8
5
(
,
‐
‐
‐
‐
‐
‐
)
4
6
3
1
(
,
)
4
5
5
1
1
(
,
)
0
9
2
5
1
2
(
,
‐
‐
)
5
7
5
2
(
,
)
3
0
9
5
1
(
,
)
8
3
0
0
1
(
,
)
8
3
9
0
8
(
,
)
0
9
8
,
2
4
2
(
)
3
9
7
,
1
1
(
)
3
4
1
,
0
6
1
(
8
7
0
,
9
1
1
)
3
1
3
,
8
5
2
(
)
3
6
5
,
2
(
0
7
1
,
8
9
‐
)
6
5
6
7
1
(
,
)
5
2
4
1
1
(
,
)
7
3
8
9
6
(
,
)
6
9
8
5
(
,
1
4
6
,
1
2
1
s
p
o
d
e
u
n
i
t
n
o
c
s
i
d
s
e
s
n
e
p
x
e
d
n
a
e
m
o
c
n
i
r
e
h
t
O
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
t
a
i
c
e
r
p
e
D
e
r
o
f
e
b
)
s
s
o
l
(
/
t
i
f
o
r
p
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
R
l
s
e
s
n
e
p
x
e
n
o
i
t
a
t
i
l
i
b
a
h
e
R
x
a
t
e
m
o
c
n
i
s
t
s
o
c
g
n
i
t
a
r
e
p
o
e
n
M
i
t
i
f
o
r
p
s
s
o
r
G
e
u
n
e
v
e
R
s
e
s
s
o
l
t
n
e
m
r
i
a
p
m
I
)
1
(
s
e
i
t
l
a
y
o
R
)
d
e
u
n
i
t
n
o
c
(
n
o
i
t
a
m
r
o
f
n
I
t
n
e
m
g
e
S
5
e
t
o
N
)
3
0
2
8
(
,
‐
2
5
9
6
,
8
1
9
1
3
,
‐
‐
‐
‐
)
5
9
7
7
7
(
,
)
5
8
0
8
4
(
,
)
4
5
2
2
3
(
,
)
1
1
1
9
(
,
)
1
4
5
5
4
(
,
)
4
7
9
8
3
(
,
e
r
u
t
i
d
n
e
p
x
e
l
a
t
i
p
a
C
9
4
7
4
0
5
,
1
1
3
3
4
4
,
9
6
1
7
7
,
9
4
9
5
8
4
,
8
7
6
3
3
4
,
3
1
1
8
5
,
5
7
5
7
8
,
8
0
5
0
4
,
3
6
2
2
0
1
,
2
2
1
9
9
,
4
2
4
0
2
,
4
7
2
9
2
1
,
6
8
4
2
0
4
,
6
3
7
5
5
3
,
1
6
6
6
3
,
5
7
6
6
5
3
,
6
5
5
4
3
3
,
9
8
6
7
3
,
)
2
(
s
t
e
s
s
a
t
n
e
r
r
u
c
‐
n
o
n
‐
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
R
l
)
2
(
s
e
i
t
i
l
i
b
a
i
l
‐
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
R
l
)
2
(
s
t
e
s
s
a
‐
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
R
l
3
7
e
g
a
P
.
s
e
g
r
a
h
c
n
w
o
d
e
t
i
r
w
d
n
a
t
n
e
m
r
i
a
p
m
i
t
e
s
s
a
e
h
t
l
r
e
t
f
a
s
e
c
n
a
a
b
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
r
e
h
t
l
s
t
n
e
s
e
r
p
e
R
)
2
(
s
e
i
t
l
a
y
o
r
e
t
a
r
o
p
r
o
c
d
n
a
s
e
i
t
l
a
y
o
r
t
n
e
m
n
r
e
v
o
g
d
n
a
e
t
a
t
s
e
d
u
l
c
n
i
s
e
i
t
l
a
y
o
R
)
1
(
.
d
o
i
r
e
p
e
h
t
n
i
s
n
o
i
t
a
r
e
p
o
d
e
u
n
i
t
n
o
c
s
i
d
r
o
f
t
n
u
o
c
c
a
o
t
d
e
t
a
t
s
e
r
*
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 5 Segment Information (continued)
Major Customer
Major customers to whom the Group provides goods that are more than 10% of external revenue are as follows:
Customer A
Customer B
Customer C
Customer D
Customer E
Revenue
2015
$’000
‐
‐
‐
306,990
207,478
2014
$’000
60,460
35,279
49,857
264,043
67,665
% of external revenue
2014
2015
%
%
‐
‐
‐
56.0
37.8
11.3
6.6
9.3
49.5
12.7
Reconciliation of reportable segment revenues, profit, assets, and other material items:
Continuing operations
Revenues and other income
Total revenue for reportable segments
Other revenue
Other income
Consolidated revenue and other income – continuing operations
Consolidated
2015
$’000
2014*
$’000
548,206
462,770
1,782
1,503
1,904
3,169
551,491
467,843
Consolidated
2015
$’000
2014*
$’000
Continuing operations
Total profit/(loss) for reportable segments
119,078
(160,143)
Other income and revenue
Exploration expensed
Unallocated depreciation and amortisation
Finance costs
Amortisation of realised gain on settled hedges
Corporate and support costs
Foreign exchange(loss)/gain
Loss on disposal of assets
Other expenses
Consolidated profit/( loss) before income tax – continuing operations
*restated to account for discontinued operations in the period.
3,285
(7,691)
(5,196)
(43,300)
1,407
(20,284)
(15,350)
‐
(9,705)
22,244
5,073
(16,112)
(3,128)
(43,296)
2,832
(26,809)
3,218
(791)
(1,261)
(240,417)
Page 74
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 5 Segment Information (continued)
Consolidated
Assets
Total assets for reportable segments
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Inventories
Property, plant & equipment
Net deferred tax assets
Other assets
Consolidated total assets
Liabilities
Total liabilities for reportable segments
Trade and other payables
Interest bearing liabilities (current)
Provisions (current)
Interest bearing liabilities (non‐current)
Provisions (non‐current)
Consolidated total liabilities
2015
$’000
485,949
76,871
9,924
66
‐
6,087
13,985
‐
2014
$’000
511,701
76,888
7,167
105
3
6,857
5,859
5,766
592,882
614,346
Consolidated
2015
$’000
58,113
28,328
52,428
13,132
294,533
5,919
452,453
2014
$’000
109,087
29,220
24,226
4,106
315,350
545
482,534
Page 75
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 5 Segment Information (continued)
Year ended 30 June 2015
Reportable
segment totals
$’000
Unallocated
$’000
Consolidated
totals
$’000
(79,875)
(5,196)
(85,071)
(48,085)
(1,616)
(49,701)
Year ended 30 June 2014*
Reportable
segment totals
$’000
Unallocated
$’000
Consolidated
totals
$’000
(92,492)
(3,128)
(95,620)
(77,795)
(3,160)
(80,955)
Other material items –
continuing operations
Depreciation and
amortisation
Capital Expenditure
Other material items
Depreciation and
amortisation
Capital Expenditure
Note 6
Revenue
Sales revenue‐continuing operations
Sale of gold
Sale of silver
Other revenue
Interest revenue
Sub‐lease rental
Revenue from continuing operations
Consolidated
2015
$'000
546,404
1,802
548,206
1,586
196
1,782
549,988
2014*
$'000
460,322
2,448
462,770
1,718
186
1,904
464,674
Revenue from discontinued operations (note 35)
4,375
71,058
Note 7
Other income
Consolidated
2015
$'000
106
1,053
‐
344
1,503
3,694
2014*
$'000
49
1,565
1,444
111
3,169
7,109
Profit on sale of assets
Royalties
Contingent consideration received on sale of Southern Cross (Note 9)
Other income
Other income from continuing operations
Other income from discontinued operations (note 35)
*restated to account for discontinued operations in the period.
Page 76
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 8
Expenses
(Loss)/Profit before income tax includes the following specific expenses:
Depreciation
Buildings
Plant and equipment
Amortisation
Mine properties and mine development costs
Deferred waste stripping
Other mineral assets
Capitalised borrowing costs
Plant/equipment finance leases
Total depreciation & amortisation – continuing operations
Finance Costs
Interest paid/payable
Borrowing costs
Finance lease interest
Fair value movement in gold prepayment facility
Provisions: unwinding of discount
Employee related expenses
Wages and salaries
Contributions to defined contribution superannuation funds
Equity settled share‐based payments (note 23(a))
Rental expense relating to operating leases
Lease payments
Expenses from discontinued operations
*restated to account for discontinued operations in the period.
Consolidated
2015
$'000
2014*
$'000
1,829
20,160
21,989
59,167
‐
1,963
1,952
‐
63,082
85,071
36,708
4,246
471
‐
1,875
43,300
59,291
2,067
139
61,497
2,340
16,505
18,845
70,783
33
3,535
233
2,191
76,775
95,620
26,551
3,575
741
10,800
1,629
43,296
66,493
4,967
698
72,158
3,830
2,074
6,018
39,425
Page 77
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 9
Significant items
Significant items are those items where their nature or amount is considered material to the financial report. Such items
included within the consolidated results for the year are detailed below.
Continuing operations
Impairment losses(1)
Increase in rehabilitation provision related to King of the Hills(2)
Included within borrowing costs
Gain on the US notes buy back
Redundancy costs
Within Mine operating costs
Within Exploration expenses
Within Corporate and support costs
Included within other expenditure
Onerous provisions
Included within net foreign exchange (loss)/gain
Effect of unhedged borrowings(3)
Unrealised foreign exchange gain(4)
Foreign exchange loss on the US Notes buy back(5)
Consolidated
2015
$'000
2014*
$'000
(11,425)
(215,290)
(5,896)
1,626
(21)
‐
(501)
(522)
(1,729)
(47,470)
42,805
(13,066)
(17,731)
‐
‐
(755)
(842)
(2,752)
(4,349)
‐
‐
‐
‐
‐
Included within other income
Contingent consideration received on sale of Southern Cross
‐
1,444
Total significant items for continuing operations – pre tax
Total significant items for continuing operations – post tax
Discontinued operations
Profit on sale of Gold Ridge(6)
Foreign exchange gains
Results from Gold Ridge Mining operations
Total significant items for discontinued operations – pre tax
Total significant items for discontinued operations – post tax
Total significant items – pre tax
Total significant items – post tax
*restated to account for discontinued operations in the period.
(1) Impairment losses
(35,677)
(218,195)
(21,248)
(219,375)
29,554
767
‐
‐
(11,793)
(242,890)
18,528
(242,890)
18,528
(247,930)
(17,149)
(461,085)
(2,720)
(467,305)
During the year, mining ceased at King of the Hills. The impairment amount for the year ended 30 June 2015 represents the impairment of capitalised
mine development assets which remained on the balance sheet at the date the decision to cease mining was made.
(2) King of the Hills rehabilitation
During the year, a review was performed on the rehabilitation provision related to the King of the Hills operations. This resulted in an increased cost of
$5,896,000.
Page 78
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 9
Significant items (continued)
(3) Effect of unhedged borrowings
The group hedges the foreign exchange exposure of its US dollar functional currency Pacific assets against its US dollar denominated borrowings. Per
AASB 121 the ineffective component must be recognised in the Consolidated Income Statement. Additionally, the unrealised foreign exchange movement
on the US dollar denominated borrowings not in a hedging relationship is recognised in the Consolidated Income Statement.
(4) Unrealised foreign exchange gains.
The movement represent the unrealised gains on Australian and US denominated intercompany loans and third party balances reflected within the
Consolidated Income Statement per AASB 121.
(5) Foreign exchange loss on the US notes buy back
Represents the foreign exchange loss on the bonds buy back in June 2015 (USD $54,020,000/AUD $70,348,000), previously translated at June 14 year end
(AUD $57,282,000) reflecting the devaluation of the AUD against the US Dollar in the year.
(6) Discontinued operations.
The profit on sale of Gold Ridge includes the reversal of the rehabilitation provision previously held (income: $35M), offset by the reversal of balances held
within the Foreign Currency Translation Reserve (FCTR) (Expense: $2.7M), and ongoing costs of disposal in the year ($2.7M).
Note 10
Income tax
(a)
Income tax expense/ (benefit)
Consolidated
2015
$'000
2014*
$'000
(1,356)
(623)
3,069
(4,923)
705
21,742
1,090
17,524
1,090
‐
12,484
5,040
Consolidated
2015
$'000
2014
$'000
40,772
12,232
(483,307)
(144,992)
77
42
1,987
(1,321)
882
(2,999)
‐
(9,810)
‐
1,090
270
209
(2,116)
‐
‐
(9,183)
126,644
‐
46,692
17,524
Current tax (benefit)/expense
Under/(Over) provision in respect of the prior year
Deferred income tax expense/(benefit)
Total income tax expense/(benefit) for continued and discontinued
operations
Comprising of:
Income tax expense/(benefit) for continued operations
Income tax expense for discontinued operations
(b)
Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable
Profit/(Loss) before income tax benefit
Tax at the Australian tax rate of 30%
Tax effect of amounts not deductible/(taxable) in calculating taxable income:
Legal and other non‐deductible expenditure
Equity settled share based payments
Sundry items
Recognition of previously unbooked deferred tax assets
Permanent differences on taxable income
Research and development incentive (current year)
Non‐recognition of deferred tax assets relating to impairments
Reversal of deferred tax assets relating to Gold Ridge disposal
Current year losses not recognised and prior year deferred tax assets
Income tax expense/(benefit)
Page 79
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 10
Income tax (continued)
(c)
Deferred tax balance
Deferred tax assets
Tax losses
Provisions and accruals
Cash flow reserve
Investments at fair value
Tax assets without a carrying amount
Unrealised foreign exchange losses
Property plant and equipment
Total
Tax effect @ 30%
Deferred tax liabilities
Accrued income
Mine properties – exploration
Mine properties – development
Consumables
Capitalised convertible notes costs
Investments at fair value
Unrealised foreign exchange gains
Total
Tax effect @ 30%
Net deferred tax balance
Comprising of:
Australia – net deferred tax assets/(liabilities)
Deferred tax assets have not been recognised in respect of the
following items:
Tax losses – Pacific Operations
Provisions and accruals
Investments at fair value
Tax assets without a carrying amount
Property, plant and equipment
Consumables
Other
Total
Tax effect @ 30%
Page 80
Consolidated
2015
$'000
2014
$'000
117,988
54,490
‐
257
‐
66,503
9,304
248,542
74,563
295
22,113
108,528
38,804
4,060
‐
28,126
201,926
60,578
13,985
159,518
39,284
1,407
249
835
‐
7,625
208,918
62,675
346
21,187
139,800
21,721
6,296
37
‐
189,387
56,816
5,859
Consolidated
2015
$'000
2014
$'000
13,985
5,859
265,246
‐
6,293
3,709
227,300
‐
‐
502,548
150,764
502,410
33,348
5,147
6,780
315,650
21,537
2,765
887,637
266,291
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 11
Cash and cash equivalents
Cash at bank and on hand
Term deposits
Consolidated
2015
$'000
18,871
58,000
76,871
2014
$'000
68,985
10,422
79,407
(a) Cash at bank and on hand
Cash at bank at 30 June 2015 invested “at call” was earning interest at an average rate of 2.2% per annum (2014: 2.7% per annum).
(b) Term Deposits
The deposits at 30 June 2015 were earning interest at rates of between 2.35% and 2.97% per annum (2014: rates of between 3.5% and 3.6% per annum).
While term deposits are invested for defined periods, all deposits can be immediately accessed at minimal or no penalty cost. At 30 June 2015, the
average time to maturity was 50 days (2014: 69 days), with $nil maturing between 90 to 180 days (2014: $nil) from balance date.
Note 12
Trade and other receivables
Current assets
Trade receivables
Other receivables
Restricted cash(1)
Prepayments
Consolidated
2013
$'000
3,683
2,217
2,084
1,940
9,924
2014
$'000
661
3,072
1,577
2,568
7,878
(1) Cash held on deposit with the Commonwealth Bank of Australia secures $98,000 for bank guarantees as at 30 June 2015 (2014: $98,000) and the
remaining $1,986,000 (2014: $1,479,000) represents security provided to the National Australia Bank for bank guarantees in favour of various
government authorities and service providers.
Information concerning the effective interest rate and credit risk of receivables is set out in Note 3 and Note 15.
Note 13
Inventories
Consumables
Ore stockpiles
Gold in circuit
Bullion on hand
(a)
Lower of cost and net realisable value
Bullion on hand of $3,434,000 was valued at cost (2014: $7,318,000).
Note 14
Deferred mining costs
Current
Deferred operating mine development
Non‐current
Deferred operating mine development
Page 81
Consolidated
2015
$'000
31,952
8,369
8,517
3,434
52,272
2014
$'000
17,716
1,241
11,141
7,318
37,416
Consolidated
2015
$'000
2014
$'000
12,829
27,745
4,525
4,235
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 15
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 applying variable interest rates, as the Group
intends to hold fixed rate assets and liabilities to maturity.
2015
Financial assets
Cash and cash equivalents
Restricted cash and cash equivalents
Receivables
Available for sale financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Finance lease liabilities
Loans from other entities
Senior secured notes
Weighted average interest rate
Net financial assets/(liabilities)
Fixed Interest Maturing in
1 year or
less
$’000
Over 1 to 5
years
$’000
Non‐
interest
bearing
$’000
58,000
2,084
‐
‐
60,084
2.84%
‐
3,809
‐
‐
3,809
6.63%
‐
‐
‐
‐
‐
n/a
‐
1,450
‐
248,621
250,071
8.86%
‐
‐
5,900
66
5,966
n/a
42,895
‐
‐
‐
42,895
n/a
Floating
Interest
rate $’000
18,871
‐
‐
‐
18,871
2.39%
‐
‐
93,081
‐
93,081
8.50%
Total
$’000
76,871
2,084
5,900
66
84,921
42,895
5,259
93,081
248,621
389,856
(74,210)
56,275
(250,071)
(36,929)
(304,935)
Page 82
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 15
Financial instruments (continued)
(b) Interest Rate Risk Exposures (continued)
2014
Financial assets
Cash and cash equivalents
Restricted cash and cash equivalents
Receivables
Available for sale financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Finance lease liabilities
Loans from other entities
Senior secured notes
Weighted average interest rate
Net financial assets/(liabilities)
Floating
Interest
rate $’000
68,985
‐
‐
‐
68,985
1.51%
‐
‐
73,689
‐
73,689
8.50%
(4,704)
Fixed Interest Maturing in
1 year or
less
$’000
Over 1 to 5
years
$’000
Non‐
interest
bearing
$’000
10,422
1,577
‐
‐
11,999
3.55%
‐
4,301
‐
‐
4,301
6.71%
7,698
‐
‐
‐
‐
‐
n/a
‐
5,359
‐
256,048
261,407
8.83%
‐
‐
3,733
105
3,838
n/a
58,951
179
‐
‐
59,130
n/a
Total
$’000
79,407
1,577
3,733
105
84,822
58,951
9,839
73,689
256,048
398,527
(261,407)
(55,292)
(313,705)
The Group determines fair values of various financial assets and financial liabilities as listed below.
a) Fair value of the Group’s financial asset and liabilities that are measured at fair value on a recurring basis:
The Group has financial assets and liabilities measured at fair value at the end of each reporting period. The following table
gives information about how the fair values of these assets are assessed.
Financial
assets/liabilities
Available for
sale financial
assets (shares)
Fair value as at
30/06/15
30/06/14
Fair Value
hierarchy
Valuation technique
and key inputs
Significant
unobservable
input
Relationship of
unobservable
inputs to fair
value
$66,000
$105,000
Level 1
Quoted bid price in
an active market
N/A
N/A
The Group has senior secured notes and other loans valued at amortised cost, the fair values of which would be
determined using models based upon market observable data; a level 2 fair valuation methodology under AASB 13.
Page 83
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 16
Property, plant and equipment
Non‐current – net written down value
Land and buildings
Plant and equipment
Consolidated
2015
$'000
2014
$'000
18,100
151,945
170,045
19,124
134,769
153,893
Reconciliation of the carrying amounts for each class of property, plant and equipment is set out below:
Land and buildings
At the beginning of the year
Additions
Depreciation
Asset impairments and write downs
Effects of movement in foreign exchange rates
At the end of the year
Plant and equipment
At the beginning of the year
Additions
Disposals
Depreciation
Amortisation of leased assets
Asset impairments and write downs
Effects of movement in foreign exchange rates
At the end of the year
Total
(a)
Security
Consolidated
2015
$'000
2014
$'000
19,124
140
(1,829)
‐
665
18,100
134,769
24,179
(617)
(20,160)
‐
‐
13,774
151,945
170,045
33,137
241
(2,632)
(11,450)
(172)
19,124
306,724
50,465
(2,082)
(27,003)
(2,286)
(191,830)
781
134,769
153,893
As at 30 June 2015, plant and equipment with a carrying value of $2,701,000 (2014: $3,141,000) was pledged as security for
finance leases (Note 20). In accordance with the security arrangements the senior secured notes and loans from RK Mine
Finance are secured by the assets of St Barbara Limited; the security does not include the assets of the Pacific operations.
Page 84
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Consolidated
2015
$'000
257,402
24,706
(61,119)
(9,000)
211,989
25,370
‐
(1,963)
‐
23,407
2014
$'000
288,936
39,971
(71,505)
‐
257,402
209,957
547
(5,232)
(179,902)
25,370
Consolidated
2015
$'000
15,036
2,241
(308)
16,969
2014
$'000
15,036
‐
‐
15,036
Consolidated
2015
$'000
41,157
1,738
42,895
2014
$'000
56,597
2,354
58,951
Note 17 Mine properties
Non‐current
Mine Properties ‐ development
At beginning of the year
Direct expenditure
Amortisation for the year
Impairment losses and write downs
At end of the year
Mineral rights
At the beginning of the year
Reallocation of purchase price on business combination
Amortisation
Impairment losses and write downs
At the end of the year
Note 18
Exploration and evaluation
Non‐current
Exploration and evaluation
At beginning of the year
Additions
Disposals
At end of the year
Note 19
Trade and other payables
Current
Trade payables
Other payables
Page 85
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 20
Interest bearing borrowings
Current
Secured
Lease liabilities (Note 27)
Loans from other entities
Total current
Non‐current
Secured
Lease liabilities (Note 27)
Senior secured notes (net of transaction costs)
Loans from other entities
Total non‐current
Total interest bearing liabilities
Interest rate risk exposures
Consolidated
2015
$'000
2014
$'000
3,809
48,619
52,428
4,343
19,883
24,226
1,450
248,621
44,462
294,533
346,961
5,496
256,048
53,806
315,350
339,576
Details of the Group’s exposure to interest rate changes on borrowings are set out in Note 3 and Note 15.
Set‐off of assets and liabilities
The parent entity has established a legal right of set‐off with a financial institution over cash on deposit to secure the issue
of bank guarantees for the purpose of performance bonds. At 30 June 2015, restricted cash for this purpose amounted to
$2,084,000 (2014: $1,577,000).
Senior secured notes
On 27 March 2013, the Group settled an offering of US$250 million senior secured notes issued in the United States Rule
144A bond market and to certain persons outside the United States. The senior secured notes are due 15 April 2018 with a
coupon rate of 8.875% p.a. payable bi‐annually. The notes were issued by St Barbara Limited and are secured by the
Group’s Australian assets; the security does not include the assets of the Pacific Operations. In June 2015, Notes with a
face value of USD 54,020,000 were bought back. The USD value of the notes outstanding at reporting date is converted to
AUD at the AUD/USD exchange rate as at 30 June 2015. The related transaction costs capitalised against the borrowings
amounted to $5,467,059 and are being amortised over the period to 15 April 2018.
AUD/USD exchange rate as at 30 June 2015 was 0.7713 (2014: 0.9430).
Loans from other entities
In March 2014, SBM executed a US$75 million loan facility with RK Mine Finance. The first tranche of US$52,775,000 was
drawn down on 7 March 2014 to settle the Gold Prepayment Facility of US$31,490,000 and to increase the cash position of
the Group. The second tranche of US$22,225,000 was drawn down on 30 May 2014. The facility is to be repaid quarterly
starting in September 2015. The agreed interest rate for the facility is the 3 month London Interbank Offered Rate
(“LIBOR”) plus 7.5% p.a. The LIBOR has a floor of 1%p.a. The facility is secured by the Group’s Australian assets under the
existing senior secured notes security trust structure and has priority payment status. The related transaction costs
capitalised against the loan amounted to $4,156,718 and are being amortised over the period to 30 June 2017.
Page 86
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 21
Provisions
Current
Employee benefits – annual leave
Employee benefits – long service leave
Provision for redundancy payments
Provision for rehabilitation
Other provisions
Non‐current
Provision for rehabilitation
Employee benefits ‐ long service leave
Other provisions
Consolidated
2015
$'000
3,144
2,232
194
2,424
9,019
17,013
2014
$'000
4,153
2,446
1,340
1,015
6,184
15,138
Consolidated
2015
$'000
39,663
1,452
4,469
45,584
2014
$'000
62,857
2,010
4,002
68,869
Consolidated
Movements in Provisions
Rehabilitation
61,096
Balance at start of year
3,021
Unwinding of discount
Reduction in net provisions made during the year (1)
‐
(50)
Provisions used during the year
(195)
Effects of movements in the foreign exchange rate
Balance at end of year
63,872
(1) Represents the elimination of the Gold ridge opening rehabilitation provision ($29.5M), offset by the increase in relation to the King of the Hills
underground mine ($5.9M).
63,872
1,875
(23,584)
(92)
16
42,087
2015
$'000
2014
$'000
Page 87
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 22
Contributed equity
(a)
Share capital
2015
Shares
2014
Shares
2015
$’000
2014
$’000
Ordinary shares ‐ fully paid(1)
495,102,525
488,074,077
887,216
886,242
(2) The Company does not have par value in respect of its issued shares. All issued shares are fully paid.
(b)
Movements in ordinary share capital:
Date
1 July 2014
Details
Opening balance
29 Oct 2014
Issue of shares (as part of the 2014 Short Term Incentives scheme)
8 Dec 2014
Issue of shares (to the Managing Director and CEO on 8 December
2014 (AGM resolution 4)
Number of shares
$’000
488,074,077
886,242
6,195,115
833,333
874
100
30 Jun 2015
Closing balance
495,102,525
887,216
(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)
Performance Rights
Information relating to the St Barbara Performance Rights Plan, including details of rights issued, exercised and lapsed
during the financial year and outstanding at the end of the financial year, is set out in Note 34.
Page 88
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 23
Reserves and accumulated losses
(a)
Reserves
Reserves
Share based payment reserve
Investment fair value reserve
Gold hedge and other cash flow reserves
Foreign currency translation reserve
Share based payments reserve
Balance at start of year
Option/performance rights expense
Option/performance rights expired and transferred to retained earnings
Balance at end of year
Investments fair value reserve
Balance at start of year
Fair value adjustment
Balance at end of year
Gold cash flow hedge reserve
Balance at start of year
Options exercised/expired
Gain/(loss) on settlement of the hedge
Tax effect of fair value and other movements
Balance at end of year
Foreign currency translation reserve
Balance at start of year
Movement during the year
Balance at end of year
(b)
Accumulated losses
Movements in accumulated losses were as follows:
Balance at start of year
Profit/(loss) attributable to members of the Company
Transferred from share based payment reserve
Balance at end of year
Page 89
Consolidated
2015
$'000
167
(144)
‐
(49,459)
(49,436)
2014
$'000
437
(138)
985
(18,272)
(16,988)
Consolidated
2015
$’000
437
139
(409)
167
(138)
(6)
(144)
985
‐
(1,407)
422
‐
2014
$’000
1,141
698
(1,402)
437
(156)
18
(138)
3,627
(4,771)
1,407
722
985
(18,272)
(31,187)
(49,459)
(29,614)
11,342
(18,272)
Consolidated
2015
$'000
(737,442)
39,682
409
(697,351)
2014
$'000
(238,013)
(500,831)
1,402
(737,442)
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 23
Reserves and accumulated losses (continued)
(c)
Share based payments reserve
The share based payments reserve is used to recognise the fair value rights issued to executives and employees but not
exercised. During the year, $409,000 previously recognised in the share based payment reserve for 461,678 performance
rights which expired during the year were transferred as a gain to accumulated losses (2014: gain of $1,402,000 for expired
options). Accounting standards preclude the reversal through the income statement of amounts which have been booked
in the share based payments reserve for options and rights which expire due to not having met a market based vesting
condition.
(d)
Gold cash flow hedge reserves
In the prior year, a mark‐to‐market valuation of the Group’s gold bought put options and sold call options (the “collar
structure”) was performed. Where the hedge was effective, changes in fair value relating to the intrinsic portion of the
valuation were recognised in the gold cash flow hedge reserve. The cashflow reserve balance as at June 2014 represents
the amount of the gain from the close out of the gold option collar unamortised during the year. The collar was closed out
resulting in a gain, which was deferred to an equity reserve and was fully amortised in FY2015 accordance with the original
maturity profile of the collar.
(e)
Investment fair value reserve
Subsequent to initial recognition, available‐for‐sale financial 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.
(f)
Foreign currency translation reserve
The assets and liabilities of controlled entities incorporated overseas with functional currencies other than Australian
dollars are translated into the presentation currency of St Barbara Limited (Australian dollars) at the year‐end exchange
rate and the revenue and expenses are translated at the rates applicable at the transaction date. Exchange differences
arising on translation are taken directly to the foreign currency translation reserve in equity.
Page 90
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 24
Parent Entity disclosures
As at, and throughout, the financial year ended 30 June 2015, the parent company of the Group was St Barbara Limited.
(a)
Financial statements
Results of the parent entity
Loss after tax for the year
Other comprehensive income
Total comprehensive income for the year
Parent Entity
2015
$'000
2014
$'000
(40,650)
(489,261)
(924)
(2,642)
(41,574)
(491,903)
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:
Share capital
Share based payments reserve
Investment fair value reserve
Gold cash flow hedge reserve
Accumulated losses
Total equity
(b)
Parent entity contingencies
Refer to Note 26 for contingent liabilities which may impact the parent entity.
(c)
Parent entity guarantees
Refer Note 26 for details of bank guarantees issued by the parent entity.
Parent Entity
2015
$'000
104,813
537,272
42,815
437,199
2014
$'000
128,833
657,655
77,231
515,729
887,216
886,242
167
(148)
‐
435
(148)
985
(787,162)
(745,588)
100,073
141,926
Page 91
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 25
Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its
related practices:
Assurance services
(a)
Audit and audit related services
KPMG
Audit and review of financial reports
Total remuneration for audit and audit related services
There were no non‐audit services provided by KPMG to the Group during the year.
Note 26
Contingencies
(a)
Contingent liabilities
Consolidated
2015
$
2014
$
508,925
508,925
552,725
552,725
During July 2014, the Company announced that by operation of its internal reporting mechanisms, the provision of benefits
to a foreign public official that may violate its Anti‐Bribery and Anti‐Corruption Policy or applicable laws in Australia or in
foreign jurisdictions were identified. The amount of the benefits provided to the foreign public official was not material to
the Company. The Company self‐reported the matter to relevant authorities, including the Australian Federal Police, and
the matter is being assessed and investigated. To date, there has been no action taken against the Company, consequently,
the range of potential penalties, if any, cannot be reliably estimated. Should there be any prosecution, potential penalties
are governed by laws in various jurisdictions including Criminal Code 1995 (Cth) in Australia and/or the UK Bribery Act.
(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 2015 was $2,084,000 (2014: $1,577,000). Security is provided to the National Australia Bank
Limited (“NAB”) (refer to Note 12) for $1,986,000 of this amount in cash deposits. Cash held on deposit with the
Commonwealth Bank of Australia secures the remaining $98,000 as at 30 June 2015 (refer to Note 12).
Page 92
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 27
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 relevant state government mining departments in Western Australia, New South
Wales and South Australia. This requirement will continue for future years with the
amount dependent upon tenement holdings.
Finance Lease Commitments
Payable not later than one year
Payable later than one year, not later than five years
Payable later than five years
Future finance charges
Total lease liabilities
Current (Note 20)
Non‐current (Note 20)
Consolidated
2015
$’000
2014
$’000
4,984
5,675
Consolidated
2015
$’000
4,476
1,444
‐
5,920
(661)
5,259
3,809
1,450
5,259
2014
$’000
5,054
5,492
‐
10,546
(707)
9,839
4,343
5,496
9,839
These finance lease commitments relate to vehicles and plant and equipment, and are based on the cost of the assets and
are payable over a period of up to 48 months at which point ownership of the assets transfers to the Group.
Consolidated
2015
$’000
837
1,094
‐
1,931
2014
$’000
1,651
4,472
203
6,326
Consolidated
2015
$’000
2014
$’000
170
‐
170
222
171
393
Analysis of Non‐Cancellable Operating Lease Commitments
Payable not later than one year
Payable later than one year, not later than five years
Payable later than five years
Analysis of Non‐Cancellable Operating Sub‐lease receipts
Receivable not later than one year
Receivable later than one year, not later than five years
Page 93
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 28
Related party transactions
a)
Directors and key management personnel
Disclosures relating to Directors and Key Management Personnel are now included within the Remuneration Report, with
the exception of the table below.
Short term employee benefits
Post‐employment benefits
Leave
Share‐based payments
Termination payments
Consolidated
2015
$
2014
$
2,188,054
2,515,844
51,654
114,213
83,625
456,227
90,356
242,267
462,370
452,549
2,893,773
3,763,386
(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. It is the Group’s policy that transactions are at arm’s length.
During the year the Company charged management fees of $8,095,000 (2014: $10,969,000), operating lease rents of
$969,000 (2014: $1,464,000), and interest $15,921,000 (2014: $7,259,000) to entities in the wholly‐owned group.
Net loans payable to the Company amount to a net receivable of $319,914,000 (2014: net receivable $321,282,000).
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation.
(c)
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.
(d)
Terms and conditions
Outstanding balances are unsecured and are repayable in cash on demand.
(e)
Amounts receivable from Director related entities
At 30 June 2015, there were no amounts receivable from Director related entities (2014: $ nil).
(f)
Other Transactions with Directors of the Company and their Director related entities
During the years ended 30 June 2015 and 30 June 2014, there were no other transactions with Directors of the Company
and their Director related entities.
Page 94
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 29
Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy in Note 1 Principles of Consolidation.
Country of
Incorporation
Ownership Interest
June
2015
%
June
2014
%
Carrying value of
Company’s investment
June
2015
$’000
June
2014
$’000
Parent entity
St Barbara Limited
Subsidiaries of St Barbara Limited
Allied Gold Mining Ltd(2)
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
Vafitu Pty Ltd
Zygot Pty Ltd
Subsidiaries of Allied Gold Mining Ltd
Allied Gold Pty Ltd(5)
Subsidiaries of Allied Gold Pty Ltd
Advance R&D Pty Ltd(1)
AGL (ASG) Pty Ltd
AGL (SGC) Pty Ltd
Allied Gold Finance Pty Ltd
Allied Gold Services Pty Ltd
Allied Tabar Exploration Pty Ltd
Aretrend Pty Ltd(1)
Australian Solomons Gold Pty Ltd(6)
Nord Pacific Limited
Australia
Australia
UK
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
UK
100
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
‐(3)
100
100
100
100
100
100
100
100
100
100
100
100
Australia
100
100
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
100
100
100
100
100
100
100
‐(4)
100
100
100
100
100
100
100
100
100
100
78,238
78,238
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
178
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
(1) Non operating.
(2) Converted from Allied Gold Mining Plc to Allied Gold Mining Limited on 30 August 2012.
(3) Deregistered 9 February 2015.
(4) Sold 6 May 2015.
(5) Converted from Allied Gold Ltd to Allied Gold Pty Ltd on 1 August 2014.
(6) Converted from Australian Solomons Gold Ltd to Australian Solomons Gold Pty Ltd on 1 August 2014.
Page 95
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 29
Controlled entities (continued)
Country of
Incorporation
Ownership Interest
June
2015
%
June
2014
%
Carrying value of
company’s investment
June
2015
$’000
June
2014
$’000
Subsidiaries of AGL (SGC) Pty Ltd
Compania Minera Nord Pacific De Mexico, S.A. DE
C.V.(4)
Australia
Mexico
Australia
100
100
Subsidiaries of Allied Tabar Exploration Pty Ltd
Tabar Exploration Company Ltd
PNG
100
100
Subsidiaries of Australian Solomons Gold Pty Limited
JV Mine (Australia) Pty Ltd
Subsidiaries of Nord Pacific Limited
Nord Australex Nominees (PNG) Ltd
Simberi Gold Company Limited
Subsidiaries of JV Mine (Australia) Pty Ltd
Solomon Islands International Pty Ltd
Australia
Australia
Canada
PNG
PNG
Australia
Australia
‐(3)
100
100
100
100
100
‐(3)
100
Subsidiaries of Solomon Islands International Pty Ltd
Australia
ASG Solomon Islands Ltd
Solomon Islands
‐(3)
100(1)
Subsidiaries of ASG Solomon Islands Ltd
Gold Ridge Mining Ltd
Solomon Islands
Solomon Islands
‐(3)
100(2)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
(1) 175,762,501 shares held by Solomon Islands International Pty Ltd. 1 share held by JV Mine (Australia)Pty Ltd.
(2) 175,762,501 shares held by ASG Solomon Island Ltd. 74,443,511 shares held by Australian Solomons Gold Ltd. 1 share held by Solomon Islands
International Pty Ltd.
(3) Sold 6 May 2015.
(4) 49,999 shares held by AGL (SGC) Pty Ltd. 1 share held by AGL (ASG) Pty Ltd. Liquidation pending.
Note 30
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 financial year that, in their
opinion, has significantly affected or may significantly affect in future years the Company’s or the Group’s operations, the
results of those operations or the state of affairs, except as described in this note:
On 20 August 2015, the Group announced the sale of its King of the Hills mine and Kailis resource to Saracen Metals Pty Ltd
(a wholly owned subsidiary of Saracen Mineral Holdings Ltd) subject to various third party consents and Australian
government approvals. Consideration for the sale is $3 million, with $0.3 million payable on completion and the balance
due on the earlier of commercial production of ore from Kailis or four years from completion of the sale. The present value
of the deferred settlement of $2.7 million is $2.3 million. Completion of the sale is expected to occur by the end of October
2015. On completion of the sale the rehabilitation provision of $13.9 million relating to King of the Hills and Kailis will be
reversed to the Income Statement.
Page 96
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 31
Reconciliation of loss after income tax to net cash flows from operating activities
Profit/(loss) after tax for the year
Depreciation and amortisation
Rehabilitation provision
Asset impairments and write downs
Income tax expense/(benefit)
Net loss on sale of property, plant and equipment
Discontinued operations non‐cash expenses
Contingent consideration received on sale of Southern Cross
Fair value movement in gold prepayment facility
Net realised/unrealised gain on gold derivative fair value movements
Unwinding of rehabilitation provision
Onerous provision written back
Net finance costs amortised
Unrealised/realised foreign exchange gain
Equity settled share‐based payments
Change in operating assets and liabilities
Decrease/(increase) in receivables and prepayments
Decrease/(increase) in inventories
(Increase)/decrease in other assets
(Decrease)/increase in trade creditors and payables
Increase/(Decrease) in provisions
Net cash flows from operating activities
Note 32
Non‐cash investing and financing activities
Consolidated
2015
$’000
2014
$’000
39,682
85,071
5,896
11,425
1,090
513
(14,611)
‐
‐
(1,407)
1,875
‐
6,915
15,350
139
(1,539)
(14,856)
14,933
(16,056)
(21,219)
113,201
(500,831)
108,691
‐
410,556
17,524
742
‐
(1,444)
10,800
(2,832)
3,021
(6,840)
3,169
(1,810)
698
4,902
2,237
(1,405)
(29,707)
2,789
20,260
Consolidated
2015
$'000
2014
$'000
Acquisition of vehicles and equipment through finance leases
577
2,474
Page 97
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 33
Earnings per share
(a)
Basic earnings per share
Continued operations
Discontinued operations
Continued and discontinued operations
(b)
Diluted earnings per share
Continued operations
Discontinued operations
Continued and discontinued operations
(c)
Reconciliation of earnings used in calculating earnings per share
Basic and diluted earnings per share:
Profit/(loss) after tax for the year ‐ continuing operations
Consolidated
2015
Cents
2014*
Cents
4.29
3.76
8.05
4.18
3.65
7.83
(51.82)
(50.79)
(102.61)
(51.82)
(50.79)
(102.61)
Consolidated
2015
$'000
2014*
$'000
21,154
(252,901)
Profit/(loss) after tax for the year – including discontinued operations
39,682
(500,831)
(d)
Weighted average number of shares
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
Consolidated
2015
Number
2014
Number
492,700,478
488,074,077
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share(i)
506,563,634
488,074,077
(i) Performance rights
Performance rights granted to employees under the St Barbara Performance Rights Plan are considered to be potential ordinary shares and are included in
the determination of diluted earnings per share to the extent to which they are dilutive. The rights are not included in the determination of basic earnings
per share. Details relating to the rights are set out in Note 34.
*restated to account for discontinued operations in the period.
Page 98
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 34
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 were granted as part of an employee’s total remuneration package. Options were granted for a
three to five year period. Commencing with the 2011 financial year long term incentives were granted in the form of
Performance rights.
During the year ended 30 June 2015 no options (2014: nil) were granted.
(b) Employee Performance Rights
During the year ended 30 June 2015, $409,000 (2014: $1,402,000) previously recognised in the share based payment
reserve for 461,678 (2014: 1,437,646) performance rights, which expired during the year, were transferred as a gain to
accumulated losses. Accounting standards preclude the reversal through the Income Statement for amounts which have
been booked in the share based payments reserve for options which satisfy service conditions but do not vest due to
market conditions.
Set out below are summaries of performance rights granted to employees under the St Barbara Limited Performance Rights
Plan approved by shareholders:
Consolidated and parent entity – 2015
Grant Date Expiry Date
Price on
issue date
19 Dec 12
29 Nov 13
5 Dec 14
Total
30 Jun 15
30 Jun 16
30 Jun 17
$2.09
$0.49
$0.12
Balance at
start of the
year
Number
858,798
4,609,097
‐
5,467,895
Granted
during the
year
Number
‐
‐
18,186,232
18,186,232
Exercised
during
the year
Number
‐
‐
‐
‐
Expired
during the
year
Number(1)
(858,798)
(1,700,628)
(1,035,030)
(3,594,456)
Balance at
end of the
year
Number
‐
2,908,469
17,151,202
20,059,671
Exercisable
at end of
the year
Number
‐
‐
‐
‐
Weighted average exercise price
‐
‐
‐
‐
‐
‐
(1) Includes performance rights, which did not vest due to not meeting performance criteria, or through termination of employment.
Consolidated and parent entity – 2014
Grant Date Expiry Date
Price on
issue date
28 Oct 11
23 Nov 11
15 Mar 12
19 Dec 12
29 Nov 13
4 Dec 13
Total
30 Jun 14
30 Jun 14
30 Jun 14
30 Jun 15
30 Jun 16
30 Jun 16
$2.23
$2.20
$2.09
$2.09
$0.49
$0.49
Balance at
start of the
year
Number
734,529
459,621
243,496
1,573,697
‐
‐
3,011,343
Granted
during the
year
Number
‐
‐
‐
‐
6,092,247
1,871,642
7,963,889
Exercised
during the
year
Number
‐
‐
‐
‐
‐
‐
‐
Expired
during the
year
Number
734,529
459,621(1)
243,496(1)
714,899(2)
Balance at
end of the
year
Number
‐
‐
‐
858,798
1,483,150(2) 4,609,097
1,871,642(2)
‐
5,467,895
5,507,337
Exercisable
at end of
the year
Number
‐
‐
‐
‐
‐
‐
‐
Weighted average exercise price
‐
‐
‐
‐
‐
‐
(1) Includes performance rights, which did not vest due to not meeting performance criteria, or through termination of employment.
(2) Expired due to termination of employment.
Page 99
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 34
Share based payments (continued)
The weighted average remaining contractual life of performance rights outstanding at the end of the year was 1.9 years
(2014: 1.9 years). The model inputs for rights granted during the year ended 30 June 2015 included:
i.
ii.
iii.
iv.
Rights are granted for no consideration. The vesting of rights granted in 2015 is subject to a continuing service
condition as at the vesting date, Return on Capital Employed over a three year period, and relative Total
Shareholder Return over a three year period measured against a peer group.
Performance rights do not have an exercise price.
Any performance right which does not vest will lapse.
Grant date varies with each issue.
The fair value of rights issued was adjusted according to estimates of the likelihood that the market conditions will be met.
A Monte‐Carlo simulation was performed using data at grant date to assist management in estimating the probability of the
rights vesting. Refer Note 4 for further details.
As a result of the Monte‐Carlo simulation results, the assessed fair value of rights issued during the year was $1,637,000.
This outcome was based on the likelihood of the market condition being met as at the date the rights vest.
(c)
Expenses arising from share based payment transactions
Total expenses arising from equity settled share based payment transactions recognised during the year as part of the
employee benefit expenses were as follows:
Consolidated
2015
$
2014
$
Options/performance rights issued under employee option
plan
139,000
698,000
Page 100
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 35
Discontinued Operations
On the 6 May the Group completed the sale of Australian Solomons Gold Limited and its subsidiary companies to a
Solomon Islands company associated with local landowners for a nominal purchase price. Australian Solomons Gold Limited
is the parent entity of Gold Ridge Mining Limited, which holds the Gold Ridge assets.
The parties also signed a Deed of Indemnity and Release as part of the sale in favour of the remaining St Barbara Group
companies in respect of the Gold Ridge project.
Details of the assets and liabilities disposed of are included within Note 36 and the profit on disposal is incorporated with
Note 35.
The results of the discontinued operations included in the prior year amounts in the consolidated income statement are set
out below.
Profit /(Loss) for the period from discontinued operations
Revenue
Other income
Expenses
Operating loss before tax
Foreign exchange gains
Attributable income tax expense
Loss after tax and foreign exchange
Gain on disposal of operations
Profit/(loss) for the year from discontinued operations
(attributable to owners of the company)
Cash flows from discontinued operations
Net cash outflows from operating activities
Net cash outflows from investing activities
Net cash outflows
*restated to account for discontinued operations in the period.
2015
$’000
2014*
$’000
4,375
3,694
(19,862)
(11,793)
767
‐
(11,026)
29,554
29,554
71,058
7,109
(321,057)
(242,890)
‐
(5,040)
(247,930)
‐
‐
18,528
(247,930)
2015
$’000
(13,575)
‐
(13,575)
2014*
$’000
(51,099)
(9,697)
(60,796)
Page 101
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
Note 36
Disposal of subsidiary
Consideration received
Consideration received in cash
Foreign exchange
Costs of disposal
2015
$’000
‐
(2,724)
(2,796)
(5,520)
2014
$’000
‐
‐
‐
‐
During the year, the Company received a nominal amount from a Solomon Islands company associated with local
landowners for the sale of the Australian Solomons Gold Limited and its subsidiary companies.
Analysis of assets and liabilities over which control was lost
Current assets
Inventories
Other assets
Non‐Current assets
Property plant and equipment
Non‐Current liabilities
Provision for rehabilitation
Net liability disposed of
2015
$’000
2014
$’000
‐
‐
‐
(35,074)
(35,074)
‐
‐
‐
‐
‐
The gain on disposal of $29,554,000 is included in the profit from discontinued operations for the financial year ended 30
June 2015.
Page 102
ST BARBARA LIMITED
30 JUNE 2015
FINANCIAL REPORT
DIRECTORS’ DECLARATION
1
In the opinion of the directors of St Barbara Limited (the Company):
(a)
the consolidated financial statements and notes that are contained in pages 40 to 102 and the Remuneration
report in the Directors’ report, set out on pages 21 to 36, are in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance
for the financial year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; 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.
2
3
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief
executive officer and chief financial officer for the financial year ended 30 June 2015.
The directors draw attention to Note 1.1 to the financial statements, which include a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Bob Vassie
Managing Director and CEO
Melbourne
25 August 2015
Page 103
ST BARBARA LIMITED
30 JUNE 2015
INDEPENDENT AUDIT REPORT
Set text colour to white after inserting the audit report
Two pages are required for the audit report
Page 104
ST BARBARA LIMITED
30 JUNE 2015
INDEPENDENT AUDIT REPORT
Set text colour to white after inserting the audit report
Two pages are required for the audit report
Page 105
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
Overview
˃ Ore Reserves at 30 June 2015 were 46.9 Mt @ 2.7 g/t Au for 4.00 million ounces of contained gold.
˃ Ore Reserves decreased by a net 1.16 million ounces (Moz) from the 30 June 2014 estimate to 4.00 Moz at 30 June
2015.
˃
The reduction in Ore Reserves is primarily due to:
˃ divestment of Gold Ridge Operations (0.67 Moz); and
˃ depletion through mining and processing of stockpiles (0.43 Moz).
˃
˃
The Gwalia ore body remains open at depth, particularly South West Branch lode, with potential within the
planned mining interval to add to Mineral Resources in West Lode.
Subsequent to 30 June 2015, the Company announced the sale of its King of the Hills mine and Kailis resource,
subject to various third party consents and Australian government approvals. At 30 June 2015, these items had no
estimated Ore Reserves, and combined estimated mineral resources of 1.9 Mt @ 4.5 g/t Au for 274,000 ounces of
contained gold. Further details are available in the ASX announcement dated 20 August 2015 and Note 30 of the
2015 Financial Report.
Company Summary at 30 June 2015
˃
Total Ore Reserves are estimated at:
46.9 Mt @ 2.7 g/t Au for 4.00 Moz of contained gold, comprising:
˃
˃
Leonora Operations:
Simberi Operations:
7.9 Mt @ 7.5 g/t Au for 1.90 Moz of contained gold
39.0 Mt @ 1.7 g/t Au for 2.10 Moz of contained gold
˃
Total Mineral Resources1 are estimated at: 140.8 Mt @ 2.0 g/t Au for 9.22 Moz of contained gold, comprising:
˃
˃
Leonora Operations:
19.9 Mt @ 6.6 g/t Au for 4.20 Moz of contained gold
Simberi Operations:
120.9 Mt @ 1.3 g/t Au for 5.02 Moz of contained gold
The 30 June 2015 Ore Reserves and Mineral Resources Statements released to the ASX on 25 August 2015 follow.
1 Mineral Resources are reported inclusive of Ore Reserves
Page 106
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
St Barbara's Mineral Resource and Ore Reserve position as at 30 June 2015 is summarised and compared with the 2014
statement in Table 1.
Region
Leonora (WA)
˃ Gwalia
˃ Tower Hill
˃ King of the Hills2
Total Leonora
Simberi, (PNG)
Gold Ridge, (SI)
Grand Total
Region
Leonora, (WA)
˃ Gwalia
˃ Tower Hill
˃ King of the Hills2
˃ Kailis2
Total Leonora
Simberi, (PNG)
Gold Ridge, (SI)
Grand Total
2014 Ore Reserves
2015 Depletion1
2015 Ore Reserves
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
Ounces (‘000)
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
7,277
2,572
449
10,298
44,170
14,617
69,085
8.2
3.7
4.4
6.9
1.6
1.4
2.3
1,914
306
63
2,283
2,209
673
5,165
260
‐
60
320
106
0
426
5,290
2,572
‐
7,862
38,999
0
46,861
9.4
3.7
‐
7.5
1.7
0
2.7
1,594
306
‐
1,900
2,103
0
4,003
2014 Mineral Resource
2015 Mineral Resource
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
14,143
5,093
1,286
1,075
21,597
123,629
64,162
209,390
7.9
3.8
6.7
3.3
6.6
1.4
1.5
2.0
3,589
625
279
114
4,607
5,380
3,175
13,161
12,929
5,093
870
1,027
19,919
120,894
0
140,812
7.9
3.8
6.1
3.1
6.6
1.3
0
2.0
3,304
625
170
104
4,203
5,020
0
9,223
Table 1: St Barbara 2014 and 2015 Ore Reserve and Mineral Resource Summary
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
The reduction in the company’s Ore Reserves of 1,162 koz comprises (Figure 1):
Divestment of the Gold Ridge Operations (‐673 koz);
Depletion through mining and processing of stockpiles (‐426 koz);
Revised geological models for the Gwalia Mine and associated design changes (‐60 koz) ; and
Closure of the King of the Hills Mine2 (‐3 koz).
The reduction in the company’s Mineral Resources of 3,938 koz comprises (Figure 2):
Divestment of the Gold Ridge Operations (‐3,175 koz);
Depletion through mining and processing of stockpiles (‐426 koz);
Sterilisation of non‐recoverable resources at Gwalia and King of the Hills (‐80 koz);
Revised geological models for Leonora Operations (‐4koz) ; and
Revised geological models for Simberi Operations (‐254 koz).
1 Depletion through mining and processing of stockpiles
2
Sale of King of the Hills mine and Kailis resource announced 20 August 2015, refer corresponding ASX announcement for details
Page 107
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
Figure 1: Summary Movement in Ore Reserve between FY14 and FY15
‐673
4,003
‐426
‐60
‐3
5,165
koz
6,000
5,000
4,000
3,000
2,000
1,000
0
June
2014
Divestment of Gold Ridge
Operation
Depletion through mining
and processing of
stockpiles
Design changes
King of the Hills Closure
June
2015
Figure 2: Summary Movement in Mineral Resource between FY14 and FY15
13,161
koz
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
‐3,175
‐426
‐80
‐4
9,223
‐254
June
2014
Divestment of Gold
Ridge Operations
Depletion through
mining and
processing of
stockpiles
Sterilisation of non-
recoverable
resources at Gwalia
and King of the Hills
Revised geological
models for Leonora
Operations
Revised geological
models for Simberi
Operations
June
2015
Note: Closing balance includes 274 koz attributed to King of the Hills and Kailis, which the Company announced on
20 August 2015 were subject to a sale agreement, refer to the corresponding ASX announcement for details
Page 108
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
Mineral Resource Revisions
Gwalia (‐285,000 ounces)
The Gwalia Mineral Resource has been updated with infill grade control and resource definition drilling completed
from a number of levels between 1380 mbs and 1580 mbs. The previous publicly reported Measured, Indicated and
Inferred Mineral Resource Estimate reported at 30 June 2014 was 14,143 kt @ 7.9 g/t Au containing 3,589 koz of gold.
This has reduced by 285 koz of gold to 12,929 kt @ 7.9 g/t Au containing 3,304 koz of gold. Variances between the two
estimates are primarily due to:
Depletion due to mining (‐260,000 ounces),
Sterilisation of non‐recoverable resources (‐23,000 ounces), and
Changes to local geological models as a result of drilling and remodelling (‐2,000 ounces overall).
King of the Hills (‐109,000 ounces)
Mining at King of the Hills ceased in April 2015 and the mine is currently under care and maintenance while strategic
options for the future of the project are evaluated. The previous publicly reported Measured, Indicated and Inferred
Mineral Resource Estimate reported at 30 June 2014 was 1,286,000 t @ 6.7 g/t Au containing 279,000 ounces of gold
resource. This has reduced by 109,000 ounces of gold to 870,000 t @ 6.1 g/t Au containing 170,000 ounces of gold.
Variances between the two estimates are primarily due to:
Depletion due to mining (‐60,000 ounces),
Sterilisation of non‐recoverable resources (‐57,000 ounces), and
Remodelling of existing veins and addition of new veins (8,000 ounces).
The Company announced the sale of the King of the Hills mine and Kailis resource on 20 August 2015, refer to the
corresponding ASX announcement for details.
Kailis (‐10,000 ounces)
The Kailis mineral resource has been updated following the completion of a seven hole diamond drill program. The
previous publicly reported Measured, Indicated and Inferred Mineral Resource Estimate reported at 30 June 2014 was
1,075,000 t @ 3.3 g/t Au containing 114,000 ounces of gold. This has reduced by 10,000 ounces of gold to 1,027,000 t
@ 3.1 g/t Au containing 104,000 ounces of gold. High grade narrow, sub‐vertical lodes included in earlier estimates
were not substantiated by the recent drilling.
The Company announced the sale of the King of the Hills mine and Kailis resource on 20 August 2015, refer to the
corresponding ASX announcement for details.
Simberi Oxide (‐281,000 ounces)
A revised geological model and Mineral Resource estimate was completed for the Sorowar, Pigiput and Pigibo deposits
during 2015 incorporating the results from resource definition drilling completed in 2014 and 2015. The previous
publicly reported Measured, Indicated and Inferred Oxide Mineral Resource Estimate reported at 30 June 2014 was
50,213,000 t @ 1.1 g/t Au containing 1,694,000 ounces of gold resource. This has decreased by 281,000 ounces of gold
to 43,979,000 t @ 1.0 g/t Au containing 1,413,000 ounces of gold. Variances between the two estimates are primarily
due to:
Depletion due to mining (‐83,000 ounces)
Depletion of scats stockpile (‐17,000 ounces)
Changes to local geological model (‐181,000 ounces)
Page 109
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
Simberi Sulphide (‐79,000 ounces)
The previous publicly reported Measured, Indicated and Inferred Sulphide Mineral Resource Estimate reported at
30 June 2014 was 73,416,000 t @ 1.6 g/t Au containing 3,686,000 ounces of gold resource. This has decreased by
79,000 ounces of gold to 76,914,000 t @ 1.5 g/t Au containing 3,607,000 ounces of gold. Variances between the two
estimates are primarily due to:
Depletion due to mining (‐6,000 ounces)
Changes to local geological model (‐73,000 ounces)
Gold Ridge (‐3,175,000 ounces)
The Gold Ridge Project was sold in May 2015 to a Solomon Islands company, Goldridge Comminity (sic) Investment
Limited (GCIL).
Page 110
ST BARBARA LIMITED
30 JUNE 2015
Ore Reserves and Mineral Resources Statement as at 30 June 2015
Ore Reserve Revisions
Gwalia (‐320,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 30 June 2014 was 7,277 kt @
8.2 g/t Au containing 1,914 koz of gold. This has reduced by 320 koz of gold to 5,290 kt @ 9.4 g/t Au containing 1,594
koz of gold. Variances between the two estimates are primarily due to:
Depletion due to mining (‐260,000 ounces),
Local changes to geological models which have in turn impacted local design and modifying factors (‐104,000
ounces), and
Improved confidence in local (stope) estimates of gold grade due to additional drilling which has reduced the
impact of grade softening factors (+45,000 ounces)
King of the Hills (‐63,000 ounces)
Mining at King of the Hills ceased in April 2015 and the mine is currently under care and maintenance while strategic
options for the future of the project are evaluated. The previous publicly reported Probable Ore Reserve Estimate
reported at 30 June 2014 was 449 kt @ 4.4 g/t Au containing 63 koz of gold, which has now been mined out.
The Company announced the sale of the King of the Hills mine and Kailis resource on 20 August 2015, refer to the
corresponding ASX announcement for details.
Simberi (‐106,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 30 June 2014 was 44,170 kt @
1.6 g/t Au containing 2,209 koz of gold. This has reduced by 106 koz of gold to 38,999 kt @ 1.7 g/t Au containing 2,103
koz of gold. Variances between the two estimates are primarily due to depletion through mining and processing of
stockpiles.
Simberi is currently subject to a pre‐feasibility study examining sulphide treatment options and how to better integrate
oxide and sulphide transition. This study is expected to be complete by the end of H1 FY16.
Gold Ridge (‐673,000 ounces)
The Gold Ridge Project was sold in May 2015 to a Solomon Islands company, Goldridge Comminity (sic) Investment
Limited (GCIL).
Page 111
ST BARBARA LIMITED
Ore Reserves Statement as at 30 June 2015
30 JUNE 2015
Project
Proved
Probable
Total
Tonnes (k) Au g/t
koz
Tonnes (k) Au g/t
Gwalia (WA)
Tower Hill (WA)
Simberi Oxide (PNG)
Simberi Sulphide (PNG)
2,100
9.1
614
‐
3,800
704
‐
1.5
1.1
‐
178
24
3,190
2,572
15,317
19,178
9.6
3.7
1.3
2.0
koz
980
306
660
1,261
Tonnes (k) Au g/t
koz
5,290
2,572
19,117
19,882
9.4
3.7
1.3
2.0
1,594
306
818
1,285
Total All Projects
6,604
3.8
816
21,079
17
3,207
46,861
2.7
4,003
Notes
1. Ore Reserves are based on a gold price of A$1,250/oz.
2. Mineral Resources are reported inclusive of Ore Reserves.
3. Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to
rounding.
4. Details relating to each of the estimates are contained in the 2015 Annual Mineral Resource and Ore Reserve
Report at www.stbarbara.com.au/exploration/Ore‐Reserves‐mineral‐resources/
5. The Competent Person, Mr John de Vries was entitled to participate in St Barbara’s long term incentive plan,
details of which are included in the 2014 Annual Report and Notice of 2014 Annual General Meeting released to
the ASX on 17 October 2014. In 2012 and 2013 an increase in Ore Reserves was a performance measure.
JORC Code Compliance Statement
The information in this report that relates to Ore Reserves is based on information compiled by Mr John de Vries, who
is a Member of the Australasian Institute of Mining and Metallurgy. Mr de Vries was a full‐time employee of St Barbara
Ltd at the time this report was compiled and has sufficient experience relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”.
Mr de Vries consents to the inclusion in the statement of the matters based on his information in the form and context
in which it appears.
Page 112
5
1
0
2
E
N
U
J
0
3
D
E
T
I
M
I
L
A
R
A
B
R
A
B
T
S
5
1
0
2
e
n
u
J
0
3
t
a
s
a
t
n
e
m
e
t
a
t
S
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
l
a
t
o
T
d
e
r
r
e
f
n
I
d
e
t
a
c
i
d
n
I
d
e
r
u
s
a
e
M
z
o
k
t
/
g
u
A
)
k
(
s
e
n
n
o
T
z
o
k
t
/
g
u
A
)
k
(
s
e
n
n
o
T
z
o
k
t
/
g
u
A
)
k
(
s
e
n
n
o
T
z
o
k
t
/
g
u
A
)
k
(
s
e
n
n
o
T
t
c
e
j
o
r
P
0
7
1
5
2
6
4
0
1
4
0
3
3
,
3
1
4
1
,
7
0
6
3
,
9
7
.
.
1
6
8
3
.
.
1
3
0
1
.
.
5
1
9
2
9
2
1
,
9
5
3
0
7
8
3
9
0
5
,
7
2
0
1
,
9
7
9
3
4
,
4
1
9
6
7
,
8
2
1
5
5
3
5
2
8
2
0
1
,
5
5
.
.
3
2
1
3
3
.
1
5
.
0
1
.
.
2
1
6
3
0
2
,
3
3
8
1
,
1
7
9
8
4
0
3
9
2
9
7
,
0
1
1
6
2
,
2
4
1
4
7
5
9
9
9
8
8
1
3
5
2
,
3
9
.
5
5
.
9
3
.
1
3
.
0
1
.
6
1
.
9
9
7
2
1
1
6
,
7
9
9
4
0
6
4
,
5
6
0
8
2
,
4
2
4
9
4
,
2
1
1
1
,
2
7
.
1
8
7
4
,
)
A
W
(
a
i
l
a
w
G
‐
‐
‐
1
7
2
8
4
‐
‐
‐
1
1
.
0
1
.
‐
‐
‐
6
8
9
7
,
9
7
3
1
,
)
5
)
A
W
(
s
l
l
i
H
e
h
t
f
o
g
n
K
i
)
G
N
P
(
e
d
i
x
O
i
r
e
b
m
S
i
)
A
W
(
l
l
i
H
r
e
w
o
T
5
)
A
W
(
s
i
l
i
a
K
G
N
P
(
e
d
h
p
u
S
l
i
i
r
e
b
m
S
i
i
e
d
h
p
u
S
l
i
r
e
b
m
S
i
,
)
u
A
t
/
g
4
0
(
e
d
i
x
O
.
i
i
r
e
b
m
S
,
)
u
A
t
/
g
8
.
0
(
s
i
l
i
a
K
,
)
u
A
t
/
g
5
.
2
(
l
l
i
H
r
e
w
o
T
,
)
u
A
t
/
g
0
.
3
(
s
l
l
i
H
e
h
T
f
o
g
n
K
i
,
)
u
A
t
/
g
5
.
2
(
s
p
e
e
D
a
i
l
a
w
G
:
a
r
o
n
o
e
L
s
e
d
a
r
G
f
f
o
‐
t
u
C
)
u
A
t
/
g
6
0
(
.
s
e
v
r
e
s
e
R
e
r
O
f
o
e
v
i
s
u
l
c
n
i
d
e
t
r
o
p
e
r
e
r
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
l
‐
e
r
O
/
n
o
i
t
a
r
o
p
x
e
/
u
a
.
m
o
c
.
a
r
a
b
r
a
b
t
s
.
w
w
w
t
a
t
r
o
p
e
R
e
v
r
e
s
e
R
e
r
O
d
n
a
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
l
a
u
n
n
A
5
1
0
2
e
h
t
n
i
i
d
e
n
a
t
n
o
c
e
r
a
s
e
t
a
m
i
t
s
e
e
h
t
f
o
h
c
a
e
o
t
g
n
i
t
a
e
r
l
s
l
i
a
t
e
D
i
.
g
n
d
n
u
o
r
o
t
e
u
d
r
u
c
c
o
y
a
m
s
l
a
t
o
t
n
i
s
e
i
c
n
a
p
e
r
c
s
i
D
.
s
e
c
n
u
o
f
o
s
d
n
a
s
u
o
h
t
d
n
a
s
e
n
n
o
t
f
o
s
d
n
a
s
u
o
h
t
o
t
d
e
d
n
u
o
r
s
i
a
t
a
D
/
s
e
c
r
u
o
s
e
r
‐
l
a
r
e
n
m
i
‐
s
e
v
r
e
s
e
R
.
s
l
i
a
t
e
d
r
o
f
t
n
e
m
e
c
n
u
o
n
n
a
X
S
A
g
n
d
n
o
p
s
e
r
r
o
c
i
r
e
f
e
r
,
5
1
0
2
t
s
u
g
u
A
0
2
d
e
c
n
u
o
n
n
a
e
c
r
u
o
s
e
r
s
i
l
i
a
K
d
n
a
e
n
m
i
s
l
l
i
H
e
h
t
i
f
o
g
n
K
f
o
e
a
S
l
.
1
.
2
.
3
.
4
.
5
3
2
2
,
9
0
.
2
2
1
8
,
0
4
1
4
2
7
,
1
5
.
1
5
6
6
,
6
3
9
6
0
,
6
1
.
2
2
0
0
,
0
9
0
3
4
,
1
1
.
3
6
4
1
,
4
1
s
t
c
e
j
o
r
P
l
l
A
l
a
t
o
T
s
e
t
o
N
f
o
e
t
u
t
i
t
s
n
I
l
n
a
i
s
a
a
r
t
s
u
A
e
h
t
f
o
r
e
b
m
e
M
a
s
i
o
h
w
,
n
a
m
e
t
a
B
e
n
a
J
s
M
y
b
d
e
l
i
p
m
o
c
n
o
i
t
a
m
r
o
f
n
i
n
o
d
e
s
a
b
s
i
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
o
t
s
e
t
a
e
r
l
t
a
h
t
t
r
o
p
e
r
s
i
h
t
n
i
n
o
i
t
a
m
r
o
f
n
i
e
h
T
t
n
e
m
e
t
a
t
S
e
c
n
a
i
l
p
m
o
C
e
d
o
C
C
R
O
J
t
i
s
o
p
e
d
f
o
e
p
y
t
d
n
a
n
o
i
t
a
s
i
l
a
r
e
n
m
i
f
o
e
l
y
t
s
e
h
t
o
t
t
n
a
v
e
e
r
l
e
c
n
e
i
r
e
p
x
e
t
n
e
i
c
i
f
f
u
s
s
a
h
d
n
a
d
t
L
a
r
a
b
r
a
B
t
S
f
o
e
e
y
o
p
m
e
l
e
m
i
t
‐
l
l
u
f
a
s
i
n
a
m
e
t
a
B
s
M
.
y
g
r
u
l
l
a
t
e
M
d
n
a
i
g
n
n
M
i
g
n
i
t
r
o
p
e
R
r
o
f
e
d
o
C
l
n
a
i
s
a
a
r
t
s
u
A
“
e
h
t
f
o
n
o
i
t
i
d
E
2
1
0
2
e
h
t
n
i
d
e
n
i
f
e
d
s
a
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
a
s
a
y
f
i
l
a
u
q
o
t
g
n
i
k
a
t
r
e
d
n
u
s
i
e
h
s
h
c
i
h
w
y
t
i
v
i
t
c
a
e
h
t
o
t
d
n
a
n
o
i
t
a
r
e
d
i
s
n
o
c
r
e
d
n
u
.
”
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
,
s
t
l
u
s
e
R
n
o
i
t
a
r
o
p
x
E
f
o
l
.
s
r
a
e
p
p
a
t
i
h
c
i
h
w
n
i
t
x
e
t
n
o
c
d
n
a
m
r
o
f
e
h
t
n
i
n
o
i
t
a
m
r
o
f
n
i
r
e
h
n
o
d
e
s
a
b
s
r
e
t
t
a
m
e
h
t
f
o
t
n
e
m
e
t
a
t
s
e
h
t
n
i
n
o
i
s
u
l
c
n
i
e
h
t
o
t
s
t
n
e
s
n
o
c
n
a
m
e
t
a
B
s
M
3
1
1
e
g
a
P
ST BARBARA LIMITED
Shareholder Information
Twenty Largest Shareholders
Ordinary fully paid shares as at 30 September 2015
Rank
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
SANDHURST TRUSTEES LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED ‐ A/C 3
MR PASQUALE BEVILACQUA + MRS MARIA CARMELA BEVILACQUA
BNP PARIBAS NOMS PTY LTD
BRISPOT NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED‐GSCO ECA
NORTHCLIFFE HOLDINGS PTY LTD
CS FOURTH NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
DR JANET DAWN KENCIAN
MR ANTHONY WOOLLEY
KEMBLA NO 20 PTY LTD
COLIN WISE CONSULTING PTY LTD
NAPLA PTY LTD
MRS CAROLINE JOY VASSIE
NORTHWEST ACCOUNTING PTY LTD
30 SEPTEMBER 2015
Units % of Units
141,491,271
115,983,872
57,024,200
34,596,270
4,381,289
4,051,308
4,000,000
3,155,752
2,953,475
2,578,888
2,200,686
1,979,732
1,397,846
1,300,000
1,300,000
1,100,000
1,035,875
976,089
935,720
934,657
28.58
23.43
11.52
6.99
0.88
0.82
0.81
0.64
0.60
0.52
0.44
0.40
0.28
0.26
0.26
0.22
0.21
0.20
0.19
0.19
Total top 20 holders of ordinary fully paid shares
Total remaining holders balance
383,376,930
77.43
111,725,595
22.57
Page 114
ST BARBARA LIMITED
Shareholder Information
Distribution of Shareholdings
Ordinary fully paid shares as at 30 September 2015
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Unmarketable Parcels
Ordinary fully paid shares as at 30 September 2015
Minimum $500.00 parcel at $1.05 per unit
Substantial Shareholders
Ordinary fully paid shares as at 30 September 2015
Name
Hunter Hall Investment Management Ltd
M&G Investment Management Ltd
Franklin Resources Inc
30 SEPTEMBER 2015
Total Holders
3,773
3,580
1,078
1,354
221
Shares
1,557,097
8,945,578
8,185,062
42,102,820
434,311,968
10,006
495,102,525
% of Issued
Capital
0.31
1.81
1.65
8.50
87.72
100.00
Total Holders
2,264
Shares
428,995
Minimum
Parcel Size
477
Shares
% of Shares
74,265,378
56,940,337
32,521,607
15.0%
11.5%
6.6%
Page 115
ABN 36 009 165 066
BOARD OF DIRECTORS
Non‐Executive Chairman
T C Netscher
Managing Director & CEO
R S Vassie
Non‐Executive Director
K J Gleeson
D E J Moroney Non‐Executive Director
COMPANY SECRETARY
R R Cole
REGISTERED OFFICE
Level 10, 432 St Kilda Road
Melbourne Victoria 3004 Australia
Telephone: +61 3 8660 1900
Facsimile: +61 3 8660 1999
Email: info@stbarbara.com.au
Website: www.stbarbara.com.au
SHARE REGISTRY
Computershare Investment Services Pty Ltd
GPO Box 2975
Melbourne Victoria 3001 Australia
Telephone (within Australia): 1300 653 935
Telephone (international): +61 3 9415 4356
Facsimile: +61 3 9473 2500
AUDITOR
KPMG
147 Collins Street
Melbourne Victoria 3000 Australia
STOCK EXCHANGE LISTING
Shares in St Barbara Limited are quoted on the Australian Securities Exchange, Ticker Symbol: SBM