Annual Report 2018
Annual Report
St Barbara at a glance
FY 18 at a glance
ST BARBARA LIMITED 2018
St Barbara was established in 1969 and is an ASX‐200
listed gold mining company (ASX:SBM).
St Barbara has two mining operations:
Leonora Operations in Western Australia, and
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 average Ore Reserve grade of
7.5 g/t Au down to 2,140 metres below surface, a mine
plan to at least FY 31, and remains open at depth.
Gwalia compares favourably against other ASX listed
gold mines on grade, reserve size, mine life, annual
production and cost per ounce.
Simberi Operations has an open pit mine and associated
processing plant. Simberi produced 135 koz of gold in
FY 18 with the remaining oxide project life extended to
FY 21. Existing sulphide reserves and exploration under
the oxide pits and on the neighbouring Tabar Islands
provide the potential for Simberi Operations to extend
mine life.
At 30 June 2018, St Barbara had Mineral Resources of
9.16 million ounces of contained gold, including Ore
Reserves of 3.92 million ounces of contained gold.
Growth initiatives planned and underway for FY 19
include:
Construction of the $100 million Gwalia Extension
Project is expected to be completed by December
2019. The project consists of
two main
components; a ventilation upgrade and paste
aggregate fill.
Gwalia Mass Extraction feasibility study due for
completion by December 2018.
Deep drilling at Gwalia below the existing Ore
Reserves (which remain open at depth) with the
objective of increasing Resources and Reserves.
Exploration of over 300 km2 of tenements in the
Leonora region, near to the Gwalia mine.
Drilling of prospective sulphide‐oxide and copper‐
gold targets on the Tabar Islands, adjacent to
Simberi Operations in PNG, and drilling for oxide‐
sulphide targets on Simberi Island.
Drilling at Pinjin in Western Australia.
Systematic evaluation of sensible, value‐accretive
inorganic growth opportunities.
St Barbara’s primary safety measure for the year to June
2018 is 2.1 total recordable injuries per million hours
worked, an excellent result for a mixed jurisdiction
combination of underground and open pit operations.
Record operational performance
Record production from operations
Exceeded production guidance at both operations
Record low All‐In Sustaining Cost (AISC)
Record financial results
Record profit
Record cash flow from operating activities
Positive growth outcomes
A$100M Gwalia extension project well advanced
Gwalia mine life extended to FY 31
Simberi oxide mine life extended to FY 21
Total $0.12 per share fully franked dividends declared
for year
Record Production from continuing operations
403,089 ounces
2014
2015
2016
2017
2018
Gwalia
Simberi
Record Low All‐in Sustaining Cost
A$891/oz
2014
2015
2016
2017
2018
Low Total Recordable Injury
Frequency Rate 2.1
400,000
300,000
200,000
100,000
0
1,500
1,000
500
0
6
4
2
0
2014
2015
2016
2017
2018
i
Annual Report
St Barbara at a glance
Leonora (Gwalia mine)
• Gwalia underground mine
•
FY 18 production 268 koz
•
FY 19F production
245 – 260 koz
1.9 Moz Ore Reserve
(open at depth)
• Mine plan to FY 31
•
•
Growth initiatives
$100 million Gwalia
Extension Project well
advanced
• Gwalia deep drilling targeting
Reserve and Resource
additions to extend mine life
Leonora regional exploration
•
ST BARBARA LIMITED 2018
Simberi
• Open pit mine
•
•
FY 18 production 135 koz
FY 19F production
105 – 115 koz
0.3 Moz oxide and 1.4 Moz
sulphide Ore Reserve
(sulphide open at depth)
• Mine life extended to FY 21
•
•
•
Growth initiatives
Exploration of near mine
targets and on adjacent
Tatau and Big Tabar
(the “Tabar”) Islands
Copper‐gold porphyry
exploration JV with Newcrest
Strategic investments
FY19 planned exploration
As at the date of this report, St Barbara holds the
following investment in Australian explorers
Catalyst Metals ASX: CYL
Duketon Mining ASX: DKM
ASX: PEX
ASX: PRX
Peel Mining
Prodigy Gold
16%
12%
16%
10%
Over 2,000 km2 of prospective tenements across
Western Australia and Papua New Guinea
Western Australia
Gwalia deep drilling, adjacent and below
existing Reserves
Gwalia and Leonora region exploration
Pinjin drilling
Papua New Guinea
Simberi oxide and sulphide near mine drilling
Tatau and Big Tabar Islands gold and copper‐
gold drilling
Strategy
‘Stronger for Longer’
Diversify production base
Seeking a portfolio of robust operations
Sustainable long life operations
Aiming for above average mine life at bottom‐third AISC
Quality growth pipeline
Actively add, manage and progress assets in all phases
of the pipeline
Talented people who deliver
Support & work with our people to continue to achieve
extraordinary results
Ore Reserves
Mineral Resources
9.6
3.9
9.2
3.7
5.7
5.5
4.3
1.9
2.4
3.9
1.7
2.2
Trusted to operate
FY 17
FY 18
FY 17
FY 18
Our various stakeholders trust us everywhere we choose
to operate
Leonora
Simberi
Moz
Leonora
Simberi
Moz
Notes: All‐in Sustaining Cost (AISC) is a non‐IFRS measure, refer page 5. Total Recordable Injury Frequency Rate is measured for each million hours worked on a 12‐month
rolling basis. All Ore Reserves and Mineral Resources figures are as at 30 June 2018, refer to pages 76 to 80 for details. Mineral Resources are reported inclusive of
Ore Reserves. Mine lives based on Ore Reserves at 30 June 2018. FY19 guidance figures per June 2018 Quarterly Report released to ASX on 26 July 2018. Data is
rounded as displayed in charts, discrepancies in totals may occur due to rounding.
ii
Directors’ Report
Contents
Directors’ Report
Directors
Principal activities
Overview of group results
Overview of operating results
Analysis of Leonora operations
Analysis of Simberi operations
Discussion and analysis of the income statement
Discussion and analysis of the cash flow statement
Discussion and analysis of the balance sheet
Business strategy and future prospects
Material business risks
Risk management
Regulatory environment
Information on Directors
Meetings of Directors
Directors’ Interests
Remuneration report
Indemnification and insurance of officers
Proceedings on behalf of the company
Environmental management
Non‐audit services
Auditor independence
Events occurring after the end of the financial year
Rounding of amounts
Auditor’s independence declaration
Financial Report
Ore Reserves and Mineral Resources Statements
Shareholder Information
Corporate Governance Statement
ST BARBARA LIMITED 2018
Page
Directors’ Report
Directors
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 2018.
The following persons were Directors of St Barbara Limited at any
time during the year and up to the date of this report:
T C Netscher
Non‐Executive Chairman
R S Vassie
Managing Director & CEO
K J Gleeson
Non‐Executive Director
D E J Moroney
Non‐Executive Director
The qualifications, experience and special responsibilities of the
Directors are presented on page 13.
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.
2
2
2
3
4
5
6
7
8
8
9
10
12
12
13
15
15
16
38
38
38
38
38
38
38
39
40
76
81
The Company’s 2018 Corporate Governance Statement was
released to the ASX on 14 September 2018 and is available at
www.stbarbara.com.au/about‐us/governance.
Sustainability Report
The Company’s 2018 Sustainability Report was released to the
at
ASX on 14
www.stbarbara.com.au/sustainability.
September 2018
available
and
is
Annual Report
Integrated suite of
annual reporting
Sustainability
Report
Corporate
Governance
Statement
Page 2
ST BARBARA LIMITED 2018
Directors’ Report
Overview of group results
The consolidated result for the year is summarised as follows:
EBITDA(3)(6)
EBIT(2)(6)
2018
$’000
2017
$’000
345,514
293,302
258,238
207,719
During the 2018 financial year the Group recorded another year of
strong financial performance, with key achievements over the year
being:
• Statutory net profit after
tax of $226,998,000
(2017:
$157,572,000);
Record production at Gwalia and Simberi totalling 403,089
Profit before tax(4)
262,603
189,706
ounces (2017: 381,101 ounces);
Statutory profit (1) after tax
226,998
157,572
Total net significant items after tax
25,106
(2,794)
EBITDA (6) (excluding significant
items)
345,514
320,575
EBIT (6) (excluding significant items)
258,238
234,992
Profit before tax (excluding
significant items)
262,603
216,979
Underlying net profit after tax(5)(6)
201,892
160,366
Details of significant items included in the statutory profit for the
year are reported in the table below. Descriptions of each item are
provided in Note 3 to the Financial Report.
Asset impairments and write
downs
Significant items before tax
Income tax
Significant items after tax
2018
$’000
‐
‐
25,106
25,106
2017
$’000
(27,273)
(27,273)
24,479
(2,794)
(1) Statutory profit is net profit after tax attributable to owners of the
parent.
(2) EBIT is earnings before interest revenue, finance costs and income tax
expense.
(3) EBITDA is EBIT before depreciation and amortisation.
(4) Profit before tax is earnings before income tax expense.
(5) Underlying net profit after income tax is net profit after income tax
(“statutory profit”) excluding significant items as described in Note 3 to
the financial statements.
(6) EBIT, EBITDA and underlying net profit 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.
Cash
flows
from operations of $300,553,000
(2017:
$301,314,000) reflecting the strong performance of both Gwalia
and Simberi; and
• Total 2018 dividends of $51,414,000 (2017: $Nil).
items, was $201,892,000
Underlying net profit after tax, representing net profit excluding
significant
(2017:
$160,366,000). The significant items in the 2018 financial year
represented the recognition of an increase in the deferred tax asset
associated with the Simberi operations.
the year
for
Cash on hand and deposits held to maturity within 12 months at 30
June 2018 was $342,643,000 (2017: $160,909,000). Total interest
bearing borrowings were $39,000 (2017: $547,000).
The key shareholder returns for the year are presented in the table
below.
Basic earnings per share
(cents per share)
Return on equity
Change in closing share price
2018
2017
44.26
31.71
40%
66%
41%
(1)%
Underlying shareholder returns for the year are presented in the
table below.
Basic earnings per share
(cents per share)
2018
39.37
2017
32.27
Return on equity
37%
44%
Page 3
Directors’ Report
Overview of operating results
The tables below provide a summary of the profit before tax from
operations at Leonora and Simberi.
The tables below provide a summary of the cash contribution from
operations at Leonora and Simberi.
Year ended 30 June 2018
Year ended 30 June 2018
ST BARBARA LIMITED 2018
$’000
Revenue
Leonora
Operations
Simberi
Operations
Group
$’000
461,264
217,940
679,204
Leonora
Operations
Simberi
Operations
Group
288,579
87,013
375,592
Operating cash
contribution
Mine operating costs
(157,979)
(117,716)
(275,695)
Gross Profit
303,285
100,224
403,509
Royalties
EBITDA
Depreciation and
amortisation
Profit from
operations(1)
(18,123)
(4,892)
(23,015)
285,162
95,332
380,494
(65,734)
(17,516)
(83,250)
219,428
77,816
297,244
Year ended 30 June 2017
Revenue
441,947
199,755
641,702
Mine operating costs
(143,107)
(124,137)
(267,244)
Gross Profit
298,840
75,618
374,458
Royalties
EBITDA
Depreciation and
amortisation
Profit from
operations(1)
(17,303)
(4,471)
(21,774)
281,537
71,147
352,684
(61,903)
(19,838)
(81,741)
219,634
51,309
270,943
(1) Excludes impairment, corporate costs, exploration expenses, interest
and tax and is non‐IFRS financial information, which has not been
subject to review or audit by the Group’s external auditors.
During the 2018 financial year the Group’s operations continued to
achieve record production and cost performance.
Safety of people working across the Group is of paramount
importance and this focus has been demonstrated maintaining a low
total recordable injury frequency rate (TRIFR) of 2.1 as at 30 June
2018 (2017: 1.2), calculated as a rolling 12 month average.
Total production for the Group in the 2018 financial year was
403,089 ounces of gold (2017: 381,101 ounces), and gold sales
amounted to 400,956 ounces (2017: 380,173 ounces) at an average
gold price of $1,691 per ounce (2017: $1,685 per ounce).
Consolidated All‐In Sustaining Cost (AISC) for the Group was $891
per ounce in 2018 (2017: $907 per ounce), reflecting the benefits of
strong production results achieved at Gwalia and Simberi.
Capital – sustaining
(33,829)
(4,081)
(37,910)
Cash contribution(1)
254,750
82,932
337,682
Capital – Gwalia
Extension Project
Capital – growth(2)
Cash contribution
after growth capital
Year ended 30 June 2017
Operating cash
contribution
(31,773)
(5,020)
‐
(31,773)
(336)
(5,356)
217,957
82,596
300,553
279,040
73,454
352,494
Capital – sustaining
(30,206)
(3,711)
(33,917)
Cash contribution(1)
Capital – Gwalia
Extension Project
Capital – growth(2)
Cash contribution
after growth capital
248,834
69,743
318,577
(7,861)
(9,402)
‐
‐
(7,861)
(9,402)
231,571
69,743
301,314
(1) Cash contribution is non‐IFRS financial information, which has not been
subject to review or audited by the Group’s external auditors. This
measure is provided to enable an understanding of the cash generating
performance of the operations. This amount excludes corporate
royalties paid.
(2) Growth capital represents deep drilling expenditure at Gwalia and
sulphide drilling at Simberi.
Total net cash contribution from the operations was $300,553,000
(2017: $301,314,000) as a result of the record performance from
Gwalia and Simberi, which was after capital expenditure and funding
of growth capital related to the extension project and deep drilling
program at Gwalia.
Page 4
Directors’ Report
Analysis of Leonora operations
Gwalia
ST BARBARA LIMITED 2018
Total sales revenue from the Leonora operations of $461,264,000
(2017: $441,947,000) was generated from gold sales of 271,141
ounces (2017: 260,828 ounces) in the year at an average achieved
gold price of $1,699 per ounce (2017: $1,692 per ounce). The
increase in gold ounces sold was attributable to higher production
mainly due to higher mining grade of 12.5g/t (2017: 10.7g/t).
A summary of production performance for the year ended 30 June
2018 is provided in the table below.
Details of 2018 production performance
Gwalia
Underground ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
2018
679
12.5
711
12.0
98
2017
790
10.7
828
10.3
97
Gold production (oz)
268,428
265,057
Cash cost (1) (A$/oz)
All‐In Sustaining Cost (AISC) (2)
(A$/oz)
613
802
592
785
(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 a non IFRS financial measure which has not
been subject to review or audit by the Group’s external auditors. It is
present to provide a meaningful measure by which to access the total
sustaining cash cost of production. It is calculated in accordance with the
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.
Gwalia produced 268,428 ounces of gold in 2018 (2017: 265,057
ounces). The consistent high performance at Gwalia reflects the
positive impact of improvements in productivity and successful
implementation of innovations in mining achieved since 2015.
Ore tonnes mined from the Gwalia underground mine decreased to
679,000 tonnes in 2018 from 790,000 tonnes in 2017, largely due to
a combination of increasing depth ventilation constraints and
expansion project activities.
Ore mined grades increased from 10.7 grams per tonne in 2017 to
12.5 grams per tonne in 2018, primarily due to the mining sequence
passing through stopes in the high grade areas of the South West
Branch. Ore milled grade increased from 10.3 grams per tonne in
2017 to 12.0 grams per tonne in line with the higher grade of ore
mined. The Gwalia mill continued to perform strongly in 2018, with
the average recovery consistent at 98% (2017: 97%).
Gwalia gold production
(koz)
248
214
185
183
267
265
268
131
109
83
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Gwalia unit cash operating costs(1) for the year were $613 per ounce
(2017: $592 per ounce). The higher unit operating cost in the 2018
financial year was due to the impact of the ventilation constraints
and removal of the ventilation shaft waste. The unit All‐In Sustaining
Cost (AISC)(2) for Gwalia was $802 per ounce in 2018 (2017: $785 per
ounce), with the higher unit cash cost attributable to the increase in
cash operating costs and higher sustaining capital expenditure. Total
cash operating costs at Gwalia were $164,546,000
(2017:
$156,914,000).
In 2018 Gwalia generated net cash flows, after sustaining and growth
capital of $217,957,000 (2017: $231,571,000). The deep drilling
program in 2018 targeted extensions to the Gwalia lode system
below 2,200 metres below surface, with expenditure in the year
totalling $5,020,000 (2017: $9,402,000). Expenditure on the
extension project totalled $31,773,000 (2017: $7,861,000).
During the 2017 financial year, the Board approved the Gwalia
Extension Project. The Project will enable underground mining at
Gwalia to extend to at least 2,000 metres below surface, and provide
the foundation for potential further extensions.
Page 5
Directors’ Report
ST BARBARA LIMITED 2018
Analysis of Simberi operation
Simberi
During 2018 the Simberi operation continued to build on the
successful turnaround achieved in 2016. Total sales revenue from
Simberi in 2018 was $217,940,000 (2017: $199,755,000), generated
from gold sales of 129,815 ounces (2017: 119,345 ounces) at an
average achieved gold price of A$1,673 per ounce (2017: A$1,669
per ounce). As at 30 June 2018 there was 9,521 ounces of gold
inventory (2017: 5,327 ounces).
A summary of production performance at Simberi for the year ended
30 June 2018 is provided in the table below.
Simberi production of 134,661 ounces of gold was the highest since
the Group acquired the operations in September 2012 (2017:
116,044 ounces).
Ore tonnes mined and total volume of material moved has increased
significantly since 2015. Ore mined in 2018 totalled 4,199,000
tonnes, which was an increase of 4% on the prior year. The increase
in mining performance in the 2018 financial year was largely
attributable to continuous improvements introduced during the
prior year and further operating efficiencies across the operations.
Details of 2018 production performance
Simberi
Simberi annual total material moved
(kt)
Open pit ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
2018
4,199
1.25
3,586
1.35
85
2017
4,020
1.13
3,690
1.19
82
14,335
13,610
9,899
6,294
4,151
Gold production (oz)
134,661
116,044
2014
2015
2016
2017
2018
Cash cost(1) (A$/oz)
All‐In Sustaining Cost (AISC)(2)
(A$/oz)
969
1,068
1,092
1,187
(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 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 a meaningful measure by which to assess the
total sustaining cash cost of operation. It is calculated in accordance with
the 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.
Ore mined grades were generally higher than the prior year at 1.25
grams per tonne gold (2017: 1.13 grams per tonne). The overall
performance in 2018 benefited from an intensive strip campaign
during the 2017 financial year, giving access to higher grade zones in
the Pigibo and Sorowar open pits.
Ore milled remained strong at 3,586,000 tonnes (2017: 3,690,000
tonnes), reflecting the benefit of consistent performance of the
processing plant and the ore delivery system. The Simberi mill
continued to perform consistently in the year at an average recovery
of 85 percent (2017: 82 percent), with capital and management
improvements made
financial year assisting
the 2017
performance of the mill.
in
Simberi gold production
(koz)
110
116
135
80
44
2014
2015
2016
2017
2018
Simberi unit cash operating costs for the year were $969 per ounce
(2017: $1,092 per ounce), reflecting the positive impact of increased
production. The unit All‐In Sustaining Cost (AISC) for Simberi for the
year was $1,068 per ounce (2017: $1,187 per ounce). Total cash
operating costs at Simberi during the 2018 year were higher than
prior year at $130,487,000 (2017: $126,720,000) due to the higher
production volumes.
In 2018 Simberi generated positive net cash flows, after capital
expenditure of $82,596,000 (2017: $69,743,000).
Page 6
ST BARBARA LIMITED 2018
Directors’ Report
Discussion and analysis of the income statement
Revenue
Net finance costs
Total revenue increased from $641,702,000 in 2017 to $679,204,000
in 2018. Revenue from Leonora and Simberi was higher than the
previous year due to the higher average gold price and an increase
in ounces sold.
Mine operating costs
Mine operating costs in 2018 were $275,695,000 compared with
$267,244,000 in the prior year. The increase in operating costs was
mainly due to the higher operating costs attributable to Gwalia and
increased production at Simberi.
Finance costs in the year were $918,000 (2017: $19,961,000).
Finance costs comprised interest paid and payable on borrowings
and finance leases of $15,000 (2017: $7,444,000), borrowing costs
relating to the banking facilities and guarantee fees of $50,000
(2017: $10,859,000) and the unwinding of the discount on the
rehabilitation provision of $853,000 (2017: $1,658,000).
Net foreign exchange gain
A net foreign exchange gain of $200,000 was recognised for the year
(2017: net gain of $3,037,000).
Other revenue and income
Income tax
Interest revenue was $5,283,000 (2017: $1,948,000), earned on cash
held.
Other income for the year was $2,053,000 (2017: $86,000),
representing the benefit recognised on the disposal of the Red Kite
sales agreement.
An income tax expense of $35,605,000 was recognised for the 2018
year (2017: income tax expense of $32,134,000). A tax credit of
$25,106,000 (2017: $26,775,000) was booked relating to previously
unrecognised PNG deferred tax assets. This amount has been
booked based on the current life of mine plan for the Simberi
operations.
Exploration
Total exploration expenditure during the 2018 year amounted to
$14,169,000 (2017: $20,083,000), with an amount of $5,020,000
(2017: $9,436,000) capitalised, relating to drilling expenditure at
Gwalia. Exploration expenditure expensed in the income statement
in the year was $9,149,000 (2017: $10,647,000). Exploration
activities during the year related to investigating highly prospective
near mine targets at Simberi and targets on the surrounding islands.
The company continued its extensive deep drilling program at
Gwalia, 3D Seismic programs at Gwalia and regional exploration in
Western Australia.
Corporate costs
Corporate costs for the year of $23,840,000 (2017: $20,977,000)
comprised mainly expenses relating to the corporate office and
compliance related costs. Expenditure in 2018 was higher than in
the prior year mainly as a result of additional compliance costs and
business development activities.
Royalties
for
the year were $23,015,000
Royalty expenses
(2017:
$21,774,000). 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
2018 was attributable to higher gold revenue from Leonora and
Simberi.
Depreciation and amortisation
Depreciation and amortisation of fixed assets and capitalised mine
development amounted to $87,276,000 (2017: $85,583,000) for the
year. Depreciation and amortisation attributable to the Leonora
operations was $65,734,000 (2017: $61,903,000), with the increase
in amortisation mainly associated with higher production at Gwalia.
The expense at Simberi was $17,516,000 (2017: $19,838,000), with
lower depreciation attributable to the reduced asset lives in line with
the current life of mine.
Other expenses
Other expenditure of $4,244,000 (2017: $3,608,000) included
amounts associated with share based payments and charges for
Company projects.
Page 7
Directors’ Report
ST BARBARA LIMITED 2018
Discussion and analysis of the cash flow statement
Discussion and analysis of the balance sheet
Operating activities
Net assets and total equity
Cash flows from operating activities for the year were $315,679,000
(2017: $303,226,000), reflecting the benefit of higher receipts from
customers partially offset by income tax payments.
Receipts from customers of $681,146,000 (2017: $640,354,000)
reflected the higher achieved gold price in 2018 and increased gold
sales from Gwalia and Simberi. Payments to suppliers were
$322,074,000 (2017: $309,097,000), with the increase mainly
attributable to higher production volumes.
Payments for exploration expensed in the year amounted to
$9,149,000 (2017: $10,647,000).
Interest paid in the year was $Nil (2017: $11,304,000), with
borrowing costs of $50,000 in the year (2017: $8,017,000). Both
were significantly lower due to the final repayment of debt in the
prior year.
During the year the Company paid Australian company tax of
$31,250,000 (2017: $Nil) relating to the prior year, and instalment
payments of $8,212,000 for the 2018 financial year.
Investing activities
in
flows used
Net cash
investing activities amounted to
$212,988,000 (2017: $53,108,000) for the year. The significant
increase was due to the investment of $116,200,000 into deposits
held to maturity within 12 months (2017: $Nil).
Higher mine development expenditure of $59,134,000 (2017:
$32,036,000) included expenditure related to the extension project
at Gwalia.
Higher expenditure on property, plant and equipment of
$12,043,000 in 2018 (2017: $9,796,000) was mainly due to higher
expenditure at Gwalia.
Exploration expenditure capitalised during the year totalled
$5,020,000 (2017: $9,436,000), 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 –
$27,361,000 (2017: $24,175,000)
Gwalia extension project – $31,773,000 (2017: $7,861,000)
Purchase of property, plant and equipment at Gwalia –
$6,400,000 (2017: $5,554,000)
St Barbara’s net assets and total equity increased substantially
during the year by $204,743,000 to $665,870,000 as a result of the
strong profit result and significant increase in cash on hand and
deposits.
Non current assets increased during the year by $27,819,000, mainly
due to the increase in financial assets and mine properties, offset
with depreciation and amortisation during the year.
Current trade and other payables increased to $39,878,000 at 30
June 2018 (2017: $36,480,000) due to timing of payments at year
end.
The deferred tax balance was a net asset of $9,904,000 (2017: net
liability of $1,822,000). A current provision for tax payable of
$39,982,000 was recognised at 30 June 2018 (2017: $29,692,000).
Debt management and liquidity
The available cash balance at 30 June 2018 was $226,443,000 (2017:
$160,909,000), with an additional $116,200,000 in deposits held to
maturity (2017: $Nil). A further $1,400,000 was held on deposit as
restricted cash and reported within trade receivables (2017: $Nil).
Total interest bearing liabilities reduced to $39,000 at 30 June 2018
(2017: $547,000) representing lease liabilities.
The AUD/USD exchange rate as at 30 June 2018 was 0.7407 (30 June
2017: 0.7695).
Cash, deposits and debt
(A$M)
116
227
79
77
161
(1)
137
(226)
400
300
200
100
‐
(100)
(200)
Purchase of property, plant and equipment at Simberi –
(300)
(340)
(347)
(400)
2014
2015
2016
2017
2018
Cash
(1)
Debt
Deposits
(1)
Includes restricted cash.
$4,081,000 (2017: $3,711,000)
Further investments in Catalyst Metals Limited and Peel Mining
Limited shares totalling $12,235,000 (2017: $4,540,000)
Investment in Prodigy Gold NL and Duketon Mining Limited
shares totalling $8,356,000 (2017: $Nil)
Financing activities
Net cash flows related to financing activities in 2018 was a net
outflow of $42,843,000 (2017: net outflow of $228,446,000). The
main movements in financing cash flows included:
Dividend payments of $40,997,000 (2017: $Nil).
Repayment of finance leases amounting to $466,000 (2017:
$946,000).
During the year cash backed banking guarantees increased by
$1,400,000 (2017: decrease of $188,000). In the prior year debt
repayments totalled $225,409,000.
Page 8
Directors’ Report
Business strategy and future prospects
St Barbara’s strategic focus is on developing or acquiring gold
deposits in order to diversify the Group’s production base to create
a portfolio of sustainable long life operations at costs in the bottom
third of AISC. In relation to growth by acquisition or development,
St Barbara’s focus is to actively add, manage and progress assets in
all phases of the ‘growth pipeline’ from exploration through
feasibility and construction to production. The Group aligns its
decisions and activities to this strategy by focusing on key value
drivers: relative total shareholder returns, increase in gold ore
reserves, return on capital employed and exploration success.
In relation to current operations, St Barbara’s focus is on maximising
production at the lowest possible cost from Gwalia and Simberi,
both of which achieved record production and cost results in 2018
through operating efficiencies and
consistent
performance.
continuing
During the 2018 financial year the Group achieved a number of
strategic milestones:
Record gold production was achieved at Gwalia and Simberi. At
Gwalia the production performance in 2018 beat the record
established in the prior year. At Simberi performance in 2018
built on the turnaround of the operations completed in 2016,
with record production and cost results achieved.
Safety performance continued to be a key focus area for the
Group, reporting a Total Recordable Injury Frequency Rate
(TRIFR) of 2.1 for the year (2017: 1.2). Health and safety plans
and strategies are continuously reviewed, and developed, to
assist in further reducing the Group’s TRIFR rate.
During the year the Gwalia Extension Project (GEP) made good
progress, is on schedule and approximately fifty percent
complete and within budget. GEP consists of two main
components, a ventilation upgrade and paste aggregate fill,
which involves mixing paste from surface with waste crushed
underground to fill stope cavities.
In February 2018 the Company announced the outcomes of the
Gwalia Mass Extraction (GMX) pre‐feasibility study. GMX
comprises a new mining method and investment in underground
grinding, mixing and hydraulic hoisting to lift mining rates,
maintain margins and potentially increase production as Gwalia
gets deeper. A feasibility study is due to be completed by
December 2018.
During the year the Board paid a final fully franked dividend in
relation to the 2017 financial year of 6 cents per ordinary share,
an interim fully franked dividend of 4 cents per ordinary share,
and has declared a final fully franked dividend in relation to the
2018 financial year of 8 cents per ordinary share.
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 incorporating
new technologies across St Barbara. The Group will continue to
identify opportunities to enhance productivity and improve
operating performance in a volatile gold market.
Improving productivity: The Group is focused on maintaining
consistent operations at Gwalia and Simberi. St Barbara
continues to invest to improve infrastructure, mining fleets and
capability to ensure consistent and reliable production at its
operations.
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
ST BARBARA LIMITED 2018
Gwalia and Simberi operations. During 2018 the deep drilling
program continued at Gwalia with the objective to extend the
Gwalia mineral resource. At Simberi, a sulphide ore reserve,
which has been estimated at 1.4 Moz, provides an opportunity
to create a long life production centre at Simberi, with drilling in
progress under the Sorowar pit aimed at increasing the sulphide
resource. In addition the Group is generating and evaluating
exploration targets in the Tabar Island Group in Papua New
Guinea and on its tenements in regional Western Australia.
Maintaining a conservative financial profile:
in the operations.
The Group
continues to maintain prudent financial management policies
with the objective of maintaining liquidity to ensure appropriate
investments
financial
management policies are aimed at generating net cash flows
from operations to meet financial commitments and fund
exploration to the extent viable and appropriate. The Group’s
capital management plan is reviewed and discussed with the
Board on a regular basis.
The Group’s
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 are an important focus for the
Group. The Group invests in the training and development of its
employees, talent management and succession planning.
The Company 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 in place 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 remains the flagship
asset of the Group, generating strong cash flows. To optimise the
value of the mine using trucking the Gwalia extension project was
approved by the Board in March 2017 with a budget of $100 million.
In February 2018 the Gwalia Mass Extraction pre‐feasibility was
completed, with the feasibility study due in December 2018. GMX is
a highly valuable project that is expected to support profitable mine
life extension.
In Papua New Guinea, a pre‐feasibility study (PFS) for the Simberi
sulphide project was completed during 2016. Drilling beneath the
Sorowar pit that commenced during the year is seeking to identify
further sulphide ore to enhance the sulphide project. In addition the
St Barbara Group entered into an Option and Farm‐in Agreement
with Newcrest PNG Exploration Limited for copper‐gold porphyry
exploration on the tenements on the Tatau and Big Tabar Islands.
The Group’s 2019 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 2019
financial year are to continue consistent production from Gwalia and
Simberi, further advance the growth projects at Gwalia and continue
to drive productivity improvements at both operations. For the 2019
financial year the Group’s operational and financial outlook is as
follows:
Gold production is expected to be in the range 350,000 to
375,000 ounces;
All‐In Sustaining Cost is expected to be in the range of $1,030 per
ounce to $1,100 per ounce;
Page 9
Directors’ Report
Sustaining capital expenditure is expected to be in the range of
$58 million to $65 million;
Growth capital at Gwalia is anticipated to be between $60
million to $64 million; and
Exploration expenditure is anticipated to be between $21 million
and $27 million.
The focus for the exploration program in 2019 will be deep drilling
at Gwalia, exploration in the Greater Gwalia area and in the Leonora
region, continued exploration at Pinjin in Western Australia and to
drill targets on the Tatau and Big Tabar islands in Papua New Guinea.
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 changing 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 2018 are:
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 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 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, and has used gold
forward contracts to secure revenues during the completion of
the turnaround at Simberi and subsequently to ensure a
reasonable margin.
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:
statutory
The Group’s mining, processing,
development and exploration activities are subject to various
regulations governing prospecting,
laws and
labour
development, production, taxes, royalty payments,
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, 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
ST BARBARA LIMITED 2018
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
installation of
measures
additional equipment, or remedial actions.
requiring capital expenditures,
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 increase when mining
occurs at 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, license to operate and prospects.
These risks are managed by a structured operations risk
management framework and formalised procedures.
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 any
particular infrastructure is temporarily unavailable.
Production, cost and capital estimates: The Group prepares
estimates of future production, operating costs and capital
expenditure relating to production at 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 are subject to uncertainty with
regards to ore tonnes, grade, metallurgical recovery, ground
conditions, operational environment, funding for development,
regulatory
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.
accidents
changes,
Gwalia Extension Project: The project to install an underground
paste aggregate fill plant and ventilation upgrade is important to
enabling continuing mining at depth. Any material delays in
completing the project, or material defects in the design or
construction of the project, may have an adverse impact on the
productivity of the mine due to ineffective handling of waste, or
prevent mining at depth due to inadequate ventilation. The
Group is managing these risks through oversight of a dedicated
project team, thorough procurement processes to ensure
appropriate qualified and expert suppliers are engaged to design
and construct each component, and regular reviews by senior
management of project progress on critical path elements.
Changes in input costs: Mining operations and facilities are
intensive users of electricity, gas and carbon‐based fuels. Energy
Page 10
Directors’ Report
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, and increases in
labour rates. 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.
The Group's operations use contractors for 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.
The Group manages risks associated with contractors through a
contractor management system.
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.
ST BARBARA LIMITED 2018
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 economic 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 estimates.
Actual mineralisation of 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 a developing country that is subject to
political, economic and other risks and uncertainties. The
formulation and implementation of government policies in this
country may be unpredictable.
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 government relations. The Group’s operating
procedures at its mine in Papua New Guinea includes detailed
security plans.
Operating
Foreign exchange: The Group has an Australian dollar
presentation 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 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 U.S. dollar expenditure. 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
Page 11
Directors’ Report
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 Simberi 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.
Climate change: Climate change related risks that may impact
the Group include physical as well as regulatory and macro‐
economic impacts. 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, 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 (e.g. due to water ingress and flooding at the base of
the mine at Leonora WA and tropical storms and/or sea level
increases impacting logistics and mining operations at Simberi
PNG). Carbon related regulatory impacts on the groups are
currently low, but may increase adversely in future, for instance
should a carbon trading scheme be introduced. Climate change
related impacts on commodity markets are difficult to predict,
but might include increased energy cost to the Group.
Other natural disasters: 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.
The Gwalia underground mine may be impacted by potential
seismic events associated with operating at depth.
Risk of impairment: If the gold price suffers a significant decline,
or the operations are not expected to meet future production
levels, there may be the potential for future impairment write
downs at any of the operations. The recoverability of the
carrying value of the Group’s assets is assessed on a regular basis
using a range of assumptions and expectations as part of the
business planning system.
Risk management
The Group manages the risks listed above, and other day‐to‐day risks
risk management
through an established enterprise wide
international
framework, which conforms to Australian and
standards and guidance. The Group’s risk reporting and control
mechanisms are designed to ensure strategic, safety, environment,
operational, legal, financial, tax, reputational and other risks are
identified, assessed and appropriately managed.
ST BARBARA LIMITED 2018
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.
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
reliably 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 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.
Papua New Guinea
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. The PNG
government has been reviewing the Mining Act since 2014. There is
no public timeframe for completion of the review.
Page 12
Directors’ Report
Information on Directors
ST BARBARA LIMITED 2018
Tim C Netscher
BSc (Eng) (Chemical), BCom, MBA, FIChE, CEng, MAICD
Robert S (Bob) Vassie
B. Mineral Technology Hons (Mining), GAICD, FAusIMM
Independent Non‐Executive Chairman
Appointed as a Director 17 February 2014
Appointed as Chairman 1 July 2015
Managing Director and Chief Executive Officer
Appointed as Managing Director and CEO 1 July 2014
Special responsibilities:
Special responsibilities:
Nil (attends Board Committee Meetings by invitation)
Mr Vassie is a mining engineer with over 30 years’ international
mining industry experience and has 18 years’ experience in a range
of senior management roles with Rio Tinto, culminating in Global
Practice Leader –Mining Technology and then Managing Director –
Strategic Optimisation. Immediately prior to joining St Barbara he
was MD and CEO of Ivanhoe Australia Ltd. He has particular
experience in operations management, resource development
strategy, mine planning, feasibility studies, business improvement,
corporate restructuring and strategic procurement.
Other current listed public company directorships:
Tawana Resources NL (appointed 1 August 2017)
o Non‐Executive Director
Former listed company directorships in last three years: Nil
Other current relevant experience:
Director of Minerals Council of Australia
Chair of MCA Gold Forum
Chair of the Health, Safety, Environment and Community
Committee
Member of the Audit and Risk Committee
Member of the Remuneration and Nomination Committee
Mr Netscher is an experienced international mining executive with
extensive operational, project development, transactional and
sustainability experience gained in senior executive and board roles
over many years. His key executive positions during the past 25
years included Managing Director and CEO of Gindalbie Metals Ltd,
Senior Vice President Asia Pacific Region of Newmont Inc., Managing
Director of Vale Coal Australia, President of P T Inco and Executive
Director of Refining & New Business at Impala Platinum Ltd.
Mr Netscher’s experience covers a wide range of resources including
nickel, coal, iron ore, uranium and gold in Africa, Asia and Australia.
Other current listed company directorships:
Gold Road Resources Limited
o Non‐Executive Chairman
o Member of Audit & Risk Committee
o Member of Remuneration & Nomination Committee
Western Areas Limited
o Non‐Executive Director
o Member of Audit & Risk Committee
o
Chairman of Remuneration Committee
Former listed company directorships in last three years:
Toro Energy Limited (resigned September 2016)
o Non‐Executive Chairman
o Member of Audit & Risk Committee
o Member of Remuneration Committee
Deep Yellow Limited (resigned December 2015)
o Non‐Executive Chairman
o Member of Audit & Risk Committee
o Member of Remuneration Committee
Other previous relevant experience:
Director of Queensland Resources Council
Director of Minerals Council of Australia
Director of Chamber of Minerals and Energy of Western
Australia
Page 13
Directors’ Report
Kerry J Gleeson
LLB (Hons), FAICD
Independent Non‐Executive Director
Appointed as a Director 18 May 2015
Special responsibilities:
ST BARBARA LIMITED 2018
David E J Moroney
BCom, FCA, FCPA, GAICD
Independent Non‐Executive Director
Appointed as a Director 16 March 2015
Special responsibilities:
Chair of Remuneration & Nomination Committee
Member of the Audit and Risk Committee
Member of the Health, Safety, Environment and Community
Chair of the Audit and Risk Committee
Member of the Health, Safety, Environment and Community
Committee
Committee
Member of the Remuneration & Nomination Committee
Ms Gleeson has over 25 years’ board room and senior management
experience across Europe, North America and Australasia.
A qualified lawyer in both UK and Australia, Ms Gleeson has
significant experience in international governance, strategic mergers
and acquisitions and complex corporate finance transactions, as well
as in risk and crisis management.
involvement across
Ms Gleeson was a member of the Group Executive at Incitec Pivot
Limited for ten years until 2013, including as Company Secretary and
international
General Counsel, with
operations in explosives and chemicals, logistics and mining.
Ms Gleeson led Incitec Pivot’s Corporate Affairs function across
government, media and regulatory affairs as well as leading
international crises responses and major environmental remediation
projects, and the company’s Culture & Values and Diversity
programs.
its
Prior to joining Incitec Pivot, she was a corporate finance and
transactional partner in an English law firm, focussing on mergers
and acquisitions and IPOs and, on relocating to Australia 20 years
ago, was appointed a senior corporate lawyer with Australian law
firm, Blake Dawson Waldron (now Ashurst).
Other current listed company directorships: Nil
Former listed company directorships in last three years:
McAleese Limited (resigned September 2016)
Mr Moroney is an experienced finance executive with more than 30
years’ experience in senior corporate finance roles, including 15
years in the mining industry, and extensive international work
experience with strong skills
in finance, strategic planning,
governance, risk management and leadership. Mr Moroney’s
executive positions included CFO of Co‐Operative Bulk Handling, CFO
of First Quantum Minerals Ltd, General Manager Group Business
Services at Wesfarmers Ltd, CFO of Wesfarmers CSBP Ltd, Deputy
CFO/Executive GM Accounting of Normandy Mining Ltd and CFO at
Aurora Gold Ltd.
Mr Moroney’s experience covers a wide range of resources including
diamonds, copper, cobalt, nickel, silver and gold in Africa, Asia,
Scandinavia and Australia.
Other current listed company directorships: Nil
Former listed company directorships in last three years: Nil
Other current relevant experience:
Non‐Executive Director, Hockey Australia Ltd
o
Chair of Finance, Audit and Risk Management Committee
Non‐Executive Director, WA Super (Western Australia’s largest
public offer superannuation fund)
o
Chair of Risk Committee
o Member of Audit & Compliance Committee
o Member of Human Resources Committee
o Member of Audit, Business Risk and Compliance
Other previous relevant experience:
Committee
Other current relevant experience:
Non‐Executive Director, Trinity College, University of
Chair of the Pathways School Business Committee
Melbourne
o
o Member of the Finance Committee
A member of the Director Advisory Panel of the Australian
Securities and Investments Commission
Non‐Executive Director, Geraldton Fishermen’s Co‐Operative
Ltd (largest exporter of lobster in the southern hemisphere)
National Councillor, Group of 100 Inc.
Page 14
Directors’ Report
Qualifications and experience of the Company Secretary
Meetings of Directors
ST BARBARA LIMITED 2018
Rowan Cole
B.Comm, CA, CIA, MBA, GAICD, FGIA, Dip Inv Rel, Dip Marketing
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. In addition to company
secretarial duties and compliance, Mr Cole is responsible for the in‐
house legal function, investor and external relations, insurance and
risk management and sustainability reporting.
He has over 30 years’ experience across chartered accounting, retail
banking, private and public companies. His executive roles include
five years as Chief Financial and Risk Officer of former diversified IT
company UXC Ltd, General Manager of Australia’s first national
indigenous credit union, First Nations Advantage Credit Union, and
Strategic Development Manager of Advantage Credit Union (now
part of CUA). Mr Cole's experience commenced with accounting
firm KPMG and 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 chief financial and risk officer.
Information on Executives
Robert S (Bob) Vassie
B. Mineral Technology Hons (Mining), GAICD, FAusIMM
Managing Director and Chief Executive Officer
Mr Vassie is a mining engineer with over 30 years’ international
mining industry experience and has 18 years’ experience in a range
of senior management roles with Rio Tinto, culminating in Global
Practice Leader –Mining Technology and then Managing Director –
Strategic Optimisation. Immediately prior to joining St Barbara he
was MD and CEO of Ivanhoe Australia Ltd. 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 over 30 years’
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,
internal audit, capital management, procurement and information
technology. Mr Campbell‐Cowan also has executive responsibility
for business development. Prior to joining the Group, his executive
roles included four years as Director of Corporate Accounting at
Telstra, five years as GM Finance and Tax at Newcrest Mining Ltd and
five years as Manager Group Policy and Special Projects at ANZ Bank.
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 Meetings
Board Committees
l
d
e
u
d
e
h
c
S
y
r
a
t
n
e
m
e
p
p
u
S
l
k
s
i
R
&
t
i
d
u
A
&
n
o
i
t
a
r
e
n
u
m
e
R
n
o
i
t
a
n
m
o
N
i
,
y
t
e
f
a
S
,
h
t
l
a
e
H
&
t
n
e
m
n
o
r
i
v
n
E
y
t
i
n
u
m
m
o
C
A H
7
6
7
7
7
7
7
7
A
3
3
3
3
H
3
3
3
3
A H
A H
A H
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
3
3
K Gleeson
D Moroney
T Netscher
R Vassie
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
8,597
103,173
22,697
1,769,053
‐
‐
‐
1,104,674 (1)
415,456 (2)
(1) These rights were determined by the Board on 22 August 2018 to have
vested as at 30 June 2018 and are pending issue as shares as at the date
of this report.
(2) The vesting of these rights is subject to future performance conditions
as described in the Remuneration Report.
No Directors have an interest in options over shares issued by
companies within the Group.
Page 15
Directors’ Report
Remuneration Report (Audited)
Contents
1.
Introduction and Key Management Personnel
2. Remuneration Summary
3. Executive Remuneration Strategy
4. Remuneration Governance
5. Remuneration Structure
6. Relationship between Group Performance and Remuneration
7. Executive Remuneration Outcomes
8. Non‐Executive Director Remuneration
9. Remuneration Disclosure
10. Additional Statutory Information
Introduction and Key Management Personnel
1.
This Remuneration Report describes the remuneration strategy and
practices that applied for the 2018 financial year. The report
provides details of remuneration paid for the 2018 financial year to
Non‐Executive Directors and the Executives named in this report
with the authority and responsibility for planning, directing and
controlling the activities of the Group, collectively referred to as Key
Management Personnel (KMP). The individuals identified below as
KMP are the same as reported in the 2017 Remuneration Report,
with the inclusion of Mr Cole, appointed as an Executive on 1 July
2017.
Key Management Personnel during 2018
Non‐Executive Directors
Tim Netscher
Kerry Gleeson
David Moroney
Executives
Independent Non‐Executive Chairman
Independent Non‐Executive Director
Independent Non‐Executive Director
Robert (Bob) Vassie
Garth Campbell‐Cowan
Rowan Cole
Managing Director & Chief Executive
Officer
Chief Financial Officer
Company Secretary
2. 2018 Remuneration Summary
The Group’s operational and financial performance for the 2018
financial year is reflected in the STI1 outcomes awarded to
Executives.
The Group’s continued transformation over the last three years is
clearly demonstrated by a corresponding total shareholder return of
890%, which is significantly greater than the return of its comparator
companies and the ASX Gold Index for the same period. During this
time, the Group’s market capitalisation increased from $283 million
to $2.5 billion, and the closing share price increased from $0.57 at
30 June 2015 to $4.83 at 30 June 2018.
1 Short term incentive
2 Long term incentive
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The Board considers that the Executive remuneration structure in
place during this period has been appropriate and aligned with
increasing shareholder wealth, and that Executives have justifiably
earned the at‐risk incentives awarded this year.
2.1 Key remuneration outcomes for the 2018 financial year
STI1 Outcomes
(Section 7.1)
LTI2 Outcomes
(Section 7.2)
Executive
Remuneration
(Section 9)
The STI outcome for each of the Executives was
84% of the maximum potential STI based on an
assessment of Group and individual measures.
This reflects the Group’s continued operating
and financial outperformance during 2018 and
the achievement of the strategic and growth
objectives.
100% of the 3 year LTI performance rights
is
assessed at 30 June 2018 vested. This
consistent with the operational and strategic
turnaround during the corresponding 3 year
period to 30 June 2018 which resulted in total
shareholder returns of 890%, well above the
return of any of its comparator companies and
the ASX Gold Index for the same period.
for
remuneration
As advised in the 2017 Remuneration Report,
fixed
the MD & CEO
increased by 10% effective 1 July 2017
following a review of relevant resource
This was
industry market remuneration.
necessary to maintain commensurate pay with
the market, noting
the market
capitalisation of the Company had increased
over 20 times (at the time of the increase) in
the three years since the MD & CEO was
appointed in 2014, and over 40 times by the
end of 2018. Fixed remuneration of the Chief
Financial Officer increased by 2.5%.
that
NED
Remuneration
(section 8)
Following a review of comparable resource
industry remuneration levels for Non‐Executive
Directors, aggregate Non‐Executive Director
(NED) fees increased by 10% from 2017 to
2018, noting that the aggregate 2018 NED fee
was 33% less than aggregate 2014 NED fee,
following a significant reduction in individual
NED fees in 2014 and a subsequent reduction
in the number of NEDs.
Page 16
Directors’ Report
2.2 Changes in the Executive remuneration framework during the
2018 financial year
STI Composition
(section 5.2)
As advised in the 2017 Remuneration Report
last year, the mix of Group and Individual STI
targets changed weighting from 70% Group
targets and 30% Individual targets in 2017, to
80% Group targets and 20% Individual targets
in 2018.
2.3 Changes to Executive remuneration for the 2019 financial year
ST BARBARA LIMITED 2018
Remuneration Report (audited)
total remuneration for Executives and each level of the
workforce was market competitive;
key employees were retained;
total remuneration for Executives and managers comprised an
appropriate proportion of
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
fixed
LTI
(section 5.3)
Executive fixed
remuneration
(section 5.5)
LTI performance rights
issued after 30
November 2017 will not be retested following
the three‐year measurement period. Any
rights that do not vest at the end of the three‐
year measurement period will lapse.
Following a review of various resource
industry market remuneration data from a
number of sources, for the 2019 financial year
the Board has approved a 3% increase in total
fixed remuneration (TFR) for the MD & CEO,
and a 3.5% increase for the CFO.
The Board has approved a 10% increase in TFR
for the Company Secretary to better align his
salary with relevant market remuneration
data, and recognise the broad nature of the
role that also encompasses head of investor
relations, legal, risk and insurance.
2.4 Changes to Non‐Executive Director Remuneration for the 2019
financial year
Non‐Executive
Directors fees
(section 8)
levels
remuneration
Following a review of comparable resource
industry
for Non‐
Executive Directors, for the 2019 Financial
Year, the Board resolved to increase the
Chairman’s fee and base Non‐Executive
Directors fee by 5% and to increase the fees
paid for committee roles from $20,000 to
$25,000 for a committee chair and from
$10,000 to $15,000 for a committee member.
Anticipated aggregate NED fees for 2019
remain 1.5% below aggregate NED fees for
2015.
The Board actively monitors market practices and recommendations
industry participants on remuneration structure and
from
framework
the
disclosure, and may amend
accordingly at any time. The Board needs to ensure that the
remuneration framework attracts, retains and encourages high
performance by its key employees, whilst remaining aligned with
shareholder experience.
remuneration
3. Executive Remuneration Strategy
The Group’s Executive remuneration strategy is designed to attract,
reward and retain high calibre, high performing, and team
orientated individuals capable of delivering the Group strategy. The
remuneration strategy and related employment policies and
practices are aligned with the Group strategy.
The objectives of the remuneration strategy for the 2018 financial
year were to ensure that:
The Group’s remuneration strategy and practices are influenced by
the Australian gold mining industry and the peer companies with
which it competes for talent.
The gold price is the primary determinant of the share price of gold
companies, including St Barbara. The gold price is volatile, as
illustrated by the chart below. The ASX all ordinaries gold index
(ASX:XGD) was approximately 3 times more volatile (measured by
standard deviation) than the ASX 200 (ASX:XJO) over the previous 5
years.
The nature of the industry and the share price volatility has resulted
in certain key features of the Group’s performance‐linked at‐risk
remuneration, in the form of the annual short term incentive (STI)
and the long term incentive (LTI) which measures performance over
three financial years.
Executive remuneration outcomes are aligned with shareholder
experience, as the STI and LTI link personal remuneration outcomes
with the achievement of targets which drive Group performance and
shareholder return. The mix of fixed and at‐risk remuneration varies
according to the role of each 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 return.
The criteria used to assess the STI include production, costs and
safety ‐ key elements that are within management’s control and
underpin the overall financial result of the Group. The Board is
aware of a trend in some larger ASX companies to partially defer
payment of STI to subsequent years as share rights, notionally to
more closely align the STI with a company’s share price
performance. The Board has determined no deferral of STI is
appropriate as deferral of STI is extremely rare amongst the
resources companies with which St Barbara competes for talent, and
is considered to be a disincentive to current and prospective
employees. In addition, the corresponding LTI is closely aligned with
the Company’s share price performance, and also provides a
significant retention incentive.
The LTI aligns Executive remuneration with shareholder experience.
The vesting conditions for the LTI comprise two measures, relative
total shareholder return (RTSR), and return on capital employed
(ROCE) in excess of thresholds above the weighted average cost of
capital.
RTSR was first adopted as an LTI measure at the 2010 Annual General
Meeting, with ROCE first adopted at the 2012 Annual General
Meeting. These two metrics were selected, and have been retained,
as the most appropriate measures to reflect management’s
influence on shareholder wealth. RTSR eliminates the impact of
fluctuations in gold price to illustrate how effective management
have been in creating value from the Group’s gold assets compared
against industry peers. ROCE measures the efficiency with which
management uses capital in seeking to increase shareholder value.
The LTI performance measures are reviewed annually for their
continued relevance and consistency against general market
practice and peer company LTI metrics.
Page 17
A$ gold vs SBM share price
ASX:SBM
$6
The remuneration strategy and structure are directly linked to the
development of strategies and budgets in the Group’s annual
planning cycle shown in the timetable below.
ST BARBARA LIMITED 2018
Remuneration Report (audited)
Directors’ Report
A$/oz
$1,800
$1,700
$1,600
$1,500
$1,400
$1,300
$5
$4
$3
$2
$1
$0
Jun 2018
Jun 2013
Jun 2014
Jun 2015
Jun 2016
Jun 2017
Gold A$/oz (LHS)
SBM (RHS)
SourceThomson Reuters (3 year weekly data)
Annual Planning Timetable
Month
January
February
March
Strategy & Reporting
Remuneration
Review STI & LTI design framework
Half Year Financial Report
Annual strategy update
April to June
Budget setting framework
Set remuneration review framework
July
August
September
October
Annual Financial Report
Annual Report
Measure STI outcomes and determine award
Measure LTI outcomes (in conjunction with audited financial
report) and action any vested entitlements
Set STI targets for following financial year
Annual General Meeting
Shareholder approval of LTI to be issued to MD & CEO
4. Remuneration Governance ‐ Remuneration & Nomination
Committee
for
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 & Nomination Committee (the
the
“Committee”
effectiveness of the remuneration strategy, policies and practices to
ensure that the interests of the Group, shareholders and employees
are taken into account. The charter for the Committee is approved
is available on the Group’s website at
by the Board and
www.stbarbara.com.au.
this section) oversees and
reviews
The Committee is responsible for making recommendations to the
Board on all aspects of remuneration arrangements for Key
Management Personnel.
In addition, the Committee oversees and reviews proposed levels of
annual remuneration for the Group as a whole as well as other 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.
The members of the Committee are all independent, Non‐Executive
Directors and as at the date of this report comprised:
K Gleeson
Non‐Executive Director
Chair of the Committee since 1 July 2015
Member of the Committee since 18 May 2015
D Moroney Non‐Executive Director
Member of the Committee since 16 March 2015
T Netscher Non‐Executive Chairman
Member of the Committee since 23 February 2015
In
forming remuneration recommendations, each year the
Committee obtains and considers 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 did not engage a remuneration consultant in 2018.
In accordance with the Committee’s charter, where a remuneration
in relation to remuneration of Key
consultant
Management Personnel, the Committee directly engages the
consultant and receives the reports of the consultant.
is appointed
The 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.
Page 18
Directors’ Report
5. Remuneration Structure
Executive remuneration comprises:
Total fixed remuneration (TFR)
A performance‐linked at‐risk short term incentive (STI)
A performance linked at‐risk long‐term incentive (LTI).
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The premise behind the combination of fixed remuneration plus performance‐linked at risk short term and long term incentives is to link the
remuneration of Executives to the success of the Group and thereby align the interests of Executives and shareholders.
Incentive remuneration is based on the principle that a significant part of Executives’ reward should be related firstly to Group performance,
secondly to the performance of the business unit in which the Executive works (if not at Group‐level), and last (and least) to the performance of
the Executive as an individual. Incentive remuneration rewards objective results rather than effort, and needs to be aligned with returns
experienced by shareholders.
Short‐term incentives aim to reward achievement of Board approved annual plans and budgets. Long‐term incentives aim to reward Executives
for delivering growth in shareholder value over the medium to longer term.
The STI and LTI are integral to a competitive total remuneration package in the market, and should not be misinterpreted as ‘bonuses’ paid on
top of the fixed remuneration ‘for doing the job’. An Executive not eligible for incentives would not be fulfilling the minimum requirements of
their role.
Each of these components is considered in more detail below.
Composition of Executive Remuneration
The mix of fixed and at risk remuneration for Executives for 2018 is as follows:
Fixed Remuneration
STI (at risk)
LTI (at risk)
Total
Level 6 (CEO) ‐ at target
53%
27%
20%
Level 6 (CEO) ‐ at maximum
36%
36%
27%
100%
100%
Level 5 ‐ at target
57%
26%
17%
100%
Level 5 ‐ at maximum
0%
40%
20%
36%
60%
24%
100%
80%
100%
40%
Figures are rounded to nearest whole percent and may not add.
(1) STI as a % of Fixed Remuneration at ‘target’ is: Level 6 (CEO) 50%, Level 5 (CFO & Co Sec) 45%. STI at ‘maximum’ = 2 x ‘target’.
‘Target’ is the mid‐point (50%) of the ‘maximum’ (100%) STI available 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 lead to achieving ‘maximum’ (100%) of the STI.
See Section 7.1 for STI earned in 2018.
(2) LTI as a % of Fixed Remuneration at ‘target’ is: Level 6 (CEO) 37.5%, Level 5 (CFO & Co Sec) 30%. LTI at ‘maximum’ = 2 x ‘target’.
‘Target’ is the mid‐point (50%) of the maximum (100%) LTI available. The LTI allocation is fixed at grant, but the proportion of the grant that ultimately vests,
if any, is subject to performance measurement under the relevant LTI plan.
See Section 7.2 for LTI vested during 2018.
The relationship between ‘target’ and ‘maximum’ remuneration of the CEO for 2018 is as follows:
Fixed Remuneration
STI (at risk)
LTI (at risk)
Total
Level 6 (CEO) ‐ at target
Level 6 (CEO) ‐ at maximum
53%
53%
0%
20%
40%
60%
Figures are rounded to nearest whole percent and may not add.
27%
20%
100%
53%
80%
40%
147%
100%
120%
140%
Page 19
Directors’ Report
Payment profile of Executive Remuneration
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The timing of payments of Executive remuneration for 2018 is as follows (illustrated using Level 6 (CEO) at target):
LTI (at‐risk)
STI (at‐risk)
Fixed
remuneration (FR)
20%
27%
53%
FY18 LTI measurement period ‐ 3 yrs from 1 Jul 2017 to 30 Jul 2020
FY18 STI
measurement period
27%
CashCash
20%
Performance
rights
53%
Cash, superannuation,
benefits
Level 6 (CEO) ‐ at target
(for illustration)
FY 2018
(FY18 FR paid)
FY 2019
(FY18 STI paid)
FY 2020
FY 2021
(FY18 LTI vested)
Fixed remuneration for 2018 was paid during 2018.
STI performance for 2018 is assessed as part of this report after the end of the 2018 financial year and is paid in the 2019 financial year.
LTI performance for 2018 is assessed after the end of the 3 year performance period (1 July 2017 to 30 June 2020) and, if determined to have vested, the
corresponding performance rights vest in 2021.
5.1 Fixed Remuneration = Base salary + superannuation + benefits
Fixed remuneration is paid in cash, superannuation and benefits
during the financial year.
The base salary for each 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 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 their respective pre‐
determined measures. The performance appraisal for the Chief
is assessed by the
Financial Officer and Company Secretary
Managing Director and CEO and reported to the Remuneration &
Nomination Committee and subsequently to the Board for review,
including recommended remuneration outcomes that flow from
that appraisal. The performance appraisal for the Managing Director
is undertaken by the Chairman, reported to the
and CEO
Remuneration & Nomination Committee and subsequently to the
Board, for review.
Benefits vary between Executives and include car parking, certain
professional memberships and living away from home and travel
expenses, plus any associated fringe benefits tax.
In considering remuneration for Executives for the 2018 financial
year, the Remuneration & Nomination Committee considered
relevant industry trend data and other relevant remuneration
information,
including Aon Hewitt Gold and General Mining
Industries Remuneration Report (Australasia) April 2017, Aon Hewitt
CEO Remuneration Report (Australasia) June 2017, GRG KMP
Incentives Guide, National Rewards Group HR Practice and
Benchmarking Survey Report June 2017, National Rewards Group
Senior Executive Survey 2017.
5.2 Performance Linked Remuneration – STI
The STI is linked to specific personal and corporate objectives over
the financial year. Performance of the STI objectives is assessed
subsequent to the end of the financial year, with the amount
determined to be achieved paid in cash or shares.
The Remuneration & Nomination Committee is responsible for
recommending to the Board Executive STIs and then later assessing
the extent to which the Group STI measures and the individual KPIs
of the Executives have been achieved, and the amount to be paid to
each 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.
The Board retains overall discretion on whether a STI should be paid
in any given year.
As noted earlier in this report, deferral of STI is extremely rare
amongst the resources companies with which the Group competes
for talent, and is considered to be a disincentive to current and
prospective employees. The current weighting between STI and LTI
is considered to provide appropriate alignment with long term share
price performance and retention of Executives.
The STI is an annual “at risk” component of remuneration for
is payable based on performance against key
Executives. It
performance indicators (KPI) set at the beginning of the financial
year.
For each KPI there are defined “threshold”, “target” and “stretch”
measures which are capable of objective assessment:
Threshold
performance
represents the minimum level of acceptable
performance acknowledging extrinsic risks
assumed in achievement of the full year budget
(where the budget is normally more demanding
year on year) for quantifiable measures which
are within the control of STI participants such as
safety, production and all‐in sustaining cost (as
proxies for profitability and cash generation), as
well as the achievement of near term goals
linked to the annual strategy.
Target
performance
represents challenging but achievable levels of
performance beyond achievement of budget
measures.
Page 20
Directors’ Report
Stretch
(or maximum)
performance
requires significant performance above and
beyond normal expectations and if achieved is
substantial
in a
anticipated
improvement
in key strategic outcomes,
operational or financial results, and/or the
business performance of the Group.
result
to
STIs are structured to remunerate Executives for achieving annual
Group targets as well as their own individual performance targets
designed to favourably impact the business. The proportion of the
STI earned is calculated by adding the average result of the Group
targets with the average result of an individual’s performance
targets, where target performance equals one. For the FY18 STI, the
results are weighted to 80% Group targets and 20% individual
targets. 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.
The Board has absolute discretion to reduce, withhold or cancel any
unpaid STI in relation to overpaid incentive remuneration, fraud,
defalcation or gross misconduct, or a material misstatement in the
Group’s financial statements.
The calculation of STI earned can be summarised as follows:
STI earned = STI value at risk x [(80% x average result of Group STI
targets) plus (20% x average result of Individual STI targets)], where
target performance = 1.
Details of the 2018 financial year STI are set out in Section 7.1 of this
report.
5.3 Performance Linked Remuneration – LTI
LTIs are structured to remunerate Executives for the long term
performance of the Group relative to its peers. The LTIs involve the
granting of rights which only vest upon achievement of performance
measures over a three year period. Performance rights on issue carry
no dividend or voting rights. On vesting each performance right is
convertible into one ordinary share.
As noted earlier, the gold industry is much more volatile than the
economy in general. The primary LTI performance measure of
relative total shareholder return means that LTI awards will not
increase merely due to an increase in gold price, but only on better
than average industry performance.
The Board has absolute discretion to reduce, withhold or cancel all
tranches of unvested LTI Rights in relation to overpaid incentive
remuneration, fraud, defalcation or gross misconduct, or a material
misstatement in the Group’s financial statements.
Further, the Rights Plan also provides for the recovery of damages
from vested Rights in circumstances of fraud, defalcation or gross
misconduct.”
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. Details of the LTI relevant to the 2018 financial
year are set out in Section 7.2 of this report.
5.4 Summaries of service agreements for Executives
Remuneration and other terms of employment for 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.
All service agreements with Executives comply with the provisions of
Part 2 D.2, Division 2 of the Corporations Act.
ST BARBARA LIMITED 2018
Remuneration Report (audited)
These service agreements may be terminated early by either party
giving the required notice and subject to termination payments
detailed
in the agreement. Other major provisions of the
agreements relating to remuneration are set out below.
R S Vassie – Managing Director and CEO
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.
G Campbell‐Cowan – Chief Financial Officer
Term of agreement – permanent employee, commenced
1 September 2006.
Other than for gross misconduct or for poor performance as
judged by the Company in its absolute discretion, the Company
may terminate the employment at any time with payment of a
termination benefit equal to 8 months’ notice. Mr Campbell‐
Cowan may terminate employment at any time with 6 weeks’
notice.
R Cole – Company Secretary
Term of agreement – permanent employee, commenced 10
October 2010.
Other than for gross misconduct or for poor performance as
judged by the Company in its absolute discretion, the Company
may terminate the employment at any time with payment of a
termination benefit equal to 6 months’ notice. Mr Cole may
terminate employment at any time with 6 weeks’ notice.
5.5 Future Developments in Remuneration
The Group continuously monitors its remuneration structure,
practices and disclosure in light of market developments to ensure
that collectively they continue to:
attract, reward and retain high performing, team oriented
individuals capable of delivering the Group strategy;
encourage and reward individual and team performance
aligned with value creation for shareholders;
appropriately inform shareholders of what remuneration is
paid and why.
Almost exclusively, the Group competes with Australian gold
industry peer companies to attract and retain the individuals
necessary to maintain its success. This drives the need to closely
monitor and respond to the remuneration practices of its peers, and
offer a competitive and comparable remuneration packages. This
means the Group’s remuneration practices are consistent with the
Australian gold mining industry and the peer companies with which
it competes for talent, rather than practices that may be used by
broader industrial companies.
There are no planned changes to the remuneration structure for
Executives at the time of this report.
resource
review of various
Following a
industry market
remuneration data from a number of sources, for the 2019 financial
year the Board has approved a 3%
in total fixed
remuneration (TFR) for the MD & CEO and a 3.5% increase for the
CFO. The Board noted that in the four years since the CEO was
appointed on 1 July 2014 the market capitalisation of the Group had
increased over 40 times and the Group had outperformed the Gold
Index by 31 times.
increase
Page 21
Directors’ Report
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The Board has approved a 10% increase in TFR for the Company Secretary to better align his salary with relevant market remuneration data, and
to recognise the broad nature of the role that also encompasses head of investor relations, legal, risk and insurance. The FY19 total fixed
remuneration of the three Executives is between P50 and P75 of the benchmark data, which is consistent with the Company’s remuneration
strategy of targeting 90% of P75.
6. Relationship between Group Performance and Remuneration ‐ past five years
The Board has regard to the overall performance of the Group 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 Group’s performance.
Full details of the Group’s operational and financial performance are set out in the Directors’ Report immediately preceding the Remuneration
Report, and in the Financial Report, immediately following the Remuneration Report. For convenience, a summary of key operating and financial
measures is reproduced in the Remuneration Report.
In assessing the Group’s performance and shareholder return, consideration is given to the following measures in respect of the current financial
year and the previous four financial years.
Earnings
Sales revenue
EBITDA1
2014
$’000
2015
$’000
2016
$’000
2017
$’000
2018
$’000
533,828
552,581
610,115
641,702
679,204
(331,634)
167,557
298,106
293,302
345,514
Statutory net profit/(loss) after tax
(500,831)
39,682
169,388
157,572
226,998
Underlying net profit/(loss) after tax1
(33,526)
41,964
127,357
160,366
201,892
The table below provides the share price performance of the Group’s shares in the current financial year and the previous four financial years.
Share price history
Period end share price ($ per share)
Average share price for the year ($ per share)
2014
0.115
0.38
2015
0.57
0.21
2016
2.95
1.56
2017
2.91
2.71
2018
4.83
3.58
During the 2018 financial year, the Group’s daily closing share price ranged between $2.47 to $4.97 per share (2017: $1.77 to $3.69 per share).
The table below provides the percentage of performance linked remuneration awarded to Executives in the current financial year and the
previous four financial years.
Performance Linked Remuneration
2014
2015
2016
% of maximum potential STI earned
% of maximum potential LTI earned
0%
0%
66%
0%
99%
67%
2017
90%
2018
84%
100%
100%
Executive Performance Linked Remuneration
Five Year History
$3.58
Average share price
$2.71
$1.56
$0.38
$0.21
% STI / LTI
earned
100%
75%
50%
25%
0%
99%
100%
90%
100%
84%
67%
0%
0%
0%
0%
2014
2015
STI
2016
2017
LTI
2018
1 Non‐IFRS financial measures, refer to page 3.
Page 22
$M
800
700
600
500
400
300
200
100
0
$M
300
200
100
0
‐100
‐200
‐300
‐400
‐500
koz
500
400
300
200
100
0
Directors’ Report
5 Year Group Performance
ST BARBARA LIMITED 2018
Remuneration Report (audited)
EBITDA1
Sales Revenue
$M
400
300
200
100
0
‐100
‐200
‐300
‐400
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
Statutory Net Profit/(Loss) After Tax
Underlying Net Profit/(Loss) After Tax1
$M
250
200
150
100
50
0
‐50
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
Gold Production
Total Recordable Injury Frequency Rate2
measured on a 12 month rolling basis
6
5
4
3
2
1
0
2014
2015
2016
2017
2018
Gwalia
KOTH
Simberi
Gold Ridge
2014
2015
2016
2017
2018
1. Underlying net profit after tax is statutory net profit after tax excluding 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.
Total recordable injury frequency rate for each million hours worked on a 12 month rolling basis.
2.
Page 23
Directors’ Report
7. Executive Remuneration Outcomes and Remuneration Disclosure
7.1 Performance Linked Remuneration ‐ STI
The STI was assessed for the financial year ended 30 June 2018.
Highlights of the Group’s achievements in 2018 include:
ST BARBARA LIMITED 2018
Remuneration Report (audited)
Records
Safety and People
Operations
Financial
Strategy
Ore Reserves and
Mineral Resources
Record annual production from continuing operations of 403,089 oz (2017: 381,101 oz)
Record annual production from the Gwalia mine of 268,428 oz (2017: 265,057 oz)
Record annual production from the Simberi mine of 134,661 oz (2017: 116,044 oz)
Record low AISC1 of A$891 per ounce (2017: A$907 per ounce)2
Continued superior safety performance of 2.1 TRIFR3, below the comparable industry rate of safety
performance4
WGEA Employer of Choice for Gender Equality for the 4th consecutive award
Winner of the Excellence in Company Diversity Programs and Performance in the Women in Resources
National Awards
Outperformed original (and subsequently amended) FY18 market guidance for all published metrics:
Production
All‐In Sustaining Cost
Capital expenditure
capex)
achieved 403 koz, initial guidance 350‐375 koz
achieved A$891/oz, initial guidance A$970/oz –A$1,035/oz
achieved A$43 million, initial guidance A$90‐100 million (sustaining and growth
Increase underlying net profit after tax and cash flow from operations
Cash at bank, deposits and restricted cash increased to $344 million (2017: $161 million)
$0.04 per share fully franked divided in respect of half‐ year announced paid in March 2018
$0.08 per share fully franked divided in respect of full financial year announced in August 2018
$100 million Gwalia Expansion Project approved in March 2017 on schedule and within budget for anticipated
completion in the December 2020 quarter. The project consists of two main components, a ventilation
upgrade and paste aggregate fill. At the time, this project extended mining at Gwalia to at least 2,000 mbs in
FY 2024.
$100 million Gwalia Mass Extraction (GMX) Pre‐feasibility Study announced in February 2018 supports a
revised Life of Mine Plan to FY 2031. GMX comprises a new mining method and investment in underground
grinding, mixing and hydraulic hoisting.
Simberi Life of Mine plan extended to FY 2021, with mining to continue throughout FY19 and FY20, with low‐
grade stockpiles accumulated over FY18 to FY20 to be processed in FY21. Drilling continues under Sorowar pit
seeking to identify further sulphide ore to inform the sulphide project.
Continued strategic investments in highly prospective explorers Catalyst Metals Ltd (ASX:CYL), Duketon Mining
Ltd (ASX: DKM), Peel Mining Ltd (ASX:PEX) and Prodigy Gold NL (ASX: PRX)
after year‐end, 2,600 mbs hole (commenced during FY18) at Gwalia intersected mineralisation down to 2,690
mbs5
The STI outcome for each of the Executives was 84% (2017: 90%) of the maximum potential STI based on an assessment of Group and individual
measures, and reflects the Group’s continued operating and financial outperformance during 2018 and the achievement of the strategic and
growth objectives.
The table below describes the STIs available to, and achieved by, Executives during the year. Amounts shown as “Actual STI” represent the
amounts accrued in relation to the 2018 financial year, based on achievement of the specified performance criteria. No additional amounts vest
in future years in respect of the STI plan for the 2018 financial year. The Board has discretion whether to pay the STI in any given year, irrespective
of whether Company and individual STI targets have been achieved. The Board also has discretion to pay the STI in cash or shares. The Board
did not apply discretion to the calculation of the 2018 STI. The Board last applied discretion to the STI calculation in 2014, when it applied its
discretion not to award an STI to Executives due to financial underperformance, even though one of the targets had been achieved at maximum.
1 All‐In Sustaining Cost is a Non‐IFRS financial measure, refer to page 3.
2 AISC for continuing operations.
3 Total Recordable Injury Frequency Rate calculated on a rolling 12 month average.
4 Corresponding LTIFR (lost time injury frequency rate) of 0.5 compares to available gold mining industry average of 2.1 per Department of Mines, Industry
, available at
the Western Australian Mineral
Regulation and Safety
http://www.dmp.wa.gov.au/Documents/Safety/MSH_Stats_Reports_SafetyPerfWA_2016‐17.pdf .
‘Safety Performance
for 2016‐2017
Industry’
report
titled
in
5 Results of GWDD19 released on 26 July 2018 in Q4 June FY18 Quarterly Report.
Page 24
Directors’ Report
2018
Maximum potential STI
ST BARBARA LIMITED 2018
Remuneration Report (audited)
Actual STI included in
remuneration
% of maximum
potential total STI
earned(2)
% of maximum
potential total STI
foregone
R S Vassie
G Campbell‐Cowan
R Cole
Target
$
421,455
230,045
163,800
Stretch(1)
$
842,910
460,090
327,600
$
708,045
386,476
275,184
%
84%
84%
84%
%
16%
16%
16%
(1) Inclusive of STI “Target”.
(2) The total STI % comprises 80% Group STI measures plus 20% Individual STI measures, i.e. 80% x 81% + 20% x 95% = 84%.
The Group’s STI measures for the 2018 financial year are key proxies of the primary objective of the Group, being the safe, profitable production
of gold. The measures are equally weighted and comprised the following:
STI Measure
Target
Weighting
Result
% of max.
achieved
l
d
o
h
s
e
r
h
T
)
%
5
2
(
t
e
g
r
a
T
)
%
0
5
(
m
u
m
i
x
a
M
)
%
0
0
1
(
(a) Total Recordable
Injury Frequency
Rate
7 Recordable
Injuries1 and
no fatalities
(b) Gold production 373,000
ounces
(c) All In Sustaining
A$972/oz
Costs
33⅓% 9 Recordable Injuries
43%
recorded with no fatalities,
between threshold (14)
and target (7)
[corresponding TRIFR of
2.1]
33⅓% 403,089 ounces produced,
outperformed maximum
(388,000 oz)
33⅓% AISC A$891/oz achieved,
outperformed maximum
(A$929/oz)
(d) Board discretion2 n/a
‐
Discretion not applied
Overall Group STI Performance
104%,
assessed as
100%
104%,
assessed as
100%
‐
81%
For 2018, the Board determined to assess the personal component of Executive’s STI by their personal contribution to the Company’s strategy
and growth objectives. All three of the Executives contributed collectively in the execution of the Company’s strategy and growth objectives and
accordingly the Board considered it appropriate to award each Executive the same STI percentage. Some of the detailed measures and outcomes
are commercially sensitive and are described in general terms only.
Summary of Executive individual STI performance assessed by Board
Development and release of ‘stronger for longer’ five‐year strategy
Rigorous, structured evaluation of multiple inorganic growth opportunities worldwide as described in the ‘growth
pipeline’ published during the year, resulting in strategic investments in highly prospective explorers Catalyst Metals Ltd
(ASX:CYL), Duketon Mining Ltd (ASX: DKM), Peel Mining Ltd (ASX:PEX) and Prodigy Gold NL (ASX: PRX)
$100 million Gwalia Expansion Project approved in March 2017 on schedule and within budget at June 2018 for
anticipated completion in the December 2020 quarter, extends mining at Gwalia to at least 2,000 mbs in FY 2024
$100 million Gwalia Mass Extraction (GMX) Pre‐feasibility Study announced in February 2018 supports a revised Life of
Mine Plan to FY 2031
Gwalia prospectivity continued with successful deep drilling which intersected mineralisation at 2,690 mbs shortly after
year end3 and potential seismic targets
Simberi Life of Mine plan extended to FY 2021
Drilling continues under Sorowar pit seeking to identify further oxide and sulphide ore to inform the sulphide project
Independently measured success in advancing values‐based organisational culture and employee engagement
1 Recordable Injury (RI) includes fatalities, lost time injuries, medical treatment injuries. It does not include first aid injury.
2 Discretionary factor determined by the Board, designed to take into account unexpected events and achievements during the year.
3 Results of GWDD19 released on 26 July 2018 in Q4 June FY18 Quarterly Report.
% of
maximum
achieved
95%
Page 25
Directors’ Report
7.2 Performance Linked Remuneration – LTI outcomes
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The three year performance period for the FY16 Performance Rights ended on 30 June 2018.
The last three years continued to be transformational period for the Group, with outstanding performance in share price growth, return on
capital employed and total shareholder returns of 890%. Market capitalisation increased from $282 million to $2.5 billion over the three year
period and the closing share price increased from $0.57 at 30 June 2015 to $4.83 at 30 June 2018.
Consistent with the performance of the Group over the last three years, and an assessment against the performance measures, 100% of the
rights held by Executives under the FY16 LTI that matured on 30 June 2018 were assessed to have vested.
Selected highlights of the Group’s performance during the 3 year performance period from 1 July 2015 to 30 June 2018 are set out below:
Share price (10 day VWAP)
$
$0.57
$4.83
30 June 20151
30 June 2018
Net profit/(loss) after tax (underlying)
(Net debt)/Cash and deposits
Dividend declared for financial year
Safety
$M
$M
cents
TRIFR1
$42M
($270M)
Nil
5.0
$202M
$343M
$0.122
2.1
Change
+$4.26
+$160M
+$613M
+$0.12
‐2.9
Change (%)
+747% increase
(890% TSR inc
dividends)
+381%
100% reduction of
debt
commenced 2017
58% improvement
Additional key highlights of the Group’s achievements during the three year FY16 Performance Rights vesting period (from 1 July 2015 to 30 June
2018) include:
Sustained increased production from the Gwalia mine
Year on year record production from the Simberi mine
Gwalia extension project approved, extended life of mine to 2024
Gwalia mass extraction project pre‐feasibility study announced, further extended life of mine to 2031
Winner of Digger of the year award (2017)
Deep drilling intersected the Gwalia mine sequence at 2600 metres below surface
Simberi strategic review concluded, option and farm‐in agreement established with Newcrest
Total of $0.18 per share dividends paid and announced since reintroduced in August 2017
Early repayment of A$374 million debt in 2015 followed by subsequent accumulation of $344 million cash, deposits and restricted
cash at 30 June 2018
Divestment of the closed King of the Hills mine in Western Australia in FY16
Finalise divestment of the suspended Gold Ridge Project in the Solomon Islands in FY16
1 30 June 2015 figures used to illustrate ‘starting’ balances for the 3 year LTI performance period from 1 July 2015 to 30 June 2018 (e.g. from the corresponding
Notice of 2015 Annual General Meeting, total shareholder return for the period is calculated from ‘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’.
2 Dividend announced 22 August 2018 in respect of the full 2018 financial year.
Page 26
Directors’ Report
ST BARBARA LIMITED 2018
Remuneration Report (audited)
Absolute performance over
FY16 LTI vesting period
Relative performance over
FY16 LTI vesting period
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$‐
6000
5000
4000
3000
2000
1000
0
1,000%
800%
600%
400%
200%
0%
100%
2015
2016
2017
2018
2015
2016
2017
SBM +890%
XGD +213%
A$/oz +111%
2018
ASX:XGD
Gold Price
(A$/oz)
SBM
(10 day VWAP)
SBM
(10 day VWAP)
ASX:XGD
Gold Price
(A$/oz)
Source: IRESS (5 year weekly data)
Source: IRESS (5 year weekly data)
A$M
3,000
2,500
2,000
1,500
1,000
500
0
Market cap over
FY16 LTI vesting period
+$2,232M
ASX: SBM
FY16 LTI vesting period
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2015
2016
2017
2018
M'Cap
increase
2015 to
2018
Jul 2013
Jul 2014
Jul 2015
Jul 2016
Jul 2017
Jul 2018
Source: Thomson Reuters (5 year weekly data)
SBM
Calculation of the number of FY16 Performance Rights vested in 2018
1,967,092 (100%) of the 1,967,092 FY16 Performance Rights available to Executives vested at 30 June 2018. No FY16 Performance Rights lapsed
at 30 June 2018. The Performance Rights vested represent 0.4% of total shares on issue at 30 June 2018, and 0.4% of the increase in market
capitalisation over the corresponding three year measurement period. The FY16 rights were issued in December 2015 at a 10 day VWAP price
calculated under the Rights Plan Rules and Notice of 2015 Annual General Meeting of $0.5092 each.
The FY16 Performance Rights were assessed as follows:
(a)
(b)
Weighting:
Actual score:
Calculation:
Weighting:
Actual ROCE:
Calculation:
(c)
Combined score
RTSR
67%
highest recorded TSR of comparator
group of 890% (100th percentile)
(details below)
100% (for achieving above the 75th
percentile)
ROCE
33%
50.7% (details below)
100% (for achieving above upper
threshold of WACC 6.0% +7.0% = 13.0%
(100% x 67%)
(100% x 33%)
+
= 100%
Proportion of rights to vest
Min
(50%)
Max
(100%)
Page 27
Directors’ Report
ST BARBARA LIMITED 2018
Remuneration Report (audited)
RTSR Calculation for FY16 Performance Rights
The result of the RTSR component of the FY16 Performance Rights for the period 1 July 2015 to 30 June 2018 was:
Relative TSR Performance
Below 50th percentile
50th percentile
Percentage of Performance Rights to vest
0%
50%
Between 50th & 75th percentiles
Pro‐rata from 50% to 100%
75th percentile and above
100%
Result
St Barbara achieved a TSR of 890% for the
period, and ranked at the 100th percentile of
the comparator group of companies for the
period, above the 75th percentile upper
threshold.
As a result, 100% of the Performance Rights
linked to RTSR vested.
TSR over LTI vesting period
ROCE over LTI vesting period
75th
percentile
MTSRQPONMLKJIHGFEDCBA
B
S
1000%
60%
50%
40%
30%
20%
10%
0%
800%
600%
400%
200%
0%
‐200%
45%
51%
15%
FY17
13%
FY18
26%
21%
FY16
ROCE (3 yr)
100% threshold
Chart of TSR results for comparator companies (table below)
Chart of ROCE (calculated on the next page)
The comparator group of companies for FY16 Performance Rights comprised:
Alacer Gold Corp. (ASX: AQG)
Kingsrose Mining Limited (ASX: KRM)1
Regis Resources Limited (ASX: RRL)
Beadell Resources Limited (ASX: BDR)
Medusa Mining Limited (ASX: MML)
Resolute Mining Limited (ASX: RSG)
Evolution Mining Limited (ASX: EVN)
Northern Star Resources Ltd (ASX: NST)
Saracen Mineral Holdings Limited (ASX: SAR)
Focus Minerals Ltd (ASX: FML)
OceanaGold Corporation (ASX: OGC)
Silver Lake Resources Limited (ASX: SLR)
Gryphon Minerals Limited (ASX: GRY)2
Oz Minerals (ASX: OZL)
Tanami Gold NL (ASX: TAM)
Intrepid Mines Limited (ASX: IAU)
Perseus Mining Limited (ASX: PRU)
Troy Resources Limited (ASX: TRY)
Kingsgate Consolidated Limited (ASX: KCN)
Ramelius Resources Limited (ASX: RMS)
ROCE Calculation for FY16 Performance Rights
The result of the ROCE component over the three year vesting period commencing 1 July 2015 and ending on 30 June 2018 was:
ROCE
Percentage of Performance Rights
to vest
Result
Less than or equal to the average annual WACC
over the three year period commencing on 1 July
2015
WACC (calculated as above) + 3%
WACC (calculated as above) + between 3% and 7%
WACC (calculated as above) + 7%
0%
50%
Pro‐rata from 50% to 100%
100%
St Barbara achieved a ROCE for the period of
50.7% (see calculation below), which is above
the upper threshold of WACC for the period
of 6.0% +7.0% = 13.0%.
As a result, 100% of the Performance Rights
linked to ROCE vested
1 Kingsrose Mining Limited went into trading halt on 12 December 2016, was suspended from trading on 13 December 2016, and appointed a voluntary
administrator on 28 December 2016. The RTSR assessment incorporates a pro rata calculation of Kingsrose TSR to the last day of trade, 9 December 2016.
2 Gryphon Minerals Limited was acquired by Teranga Gold Corporation (TSX: TGZ, ASX: TGZ) under a scheme of arrangement and was suspended from quotation
at close of trade on 29 September 2016 and subsequently delisted from the ASX on 13 October 2016. The RTSR assessment incorporates a pro rata calculation
comprising Gryphon TSR to the last day of trade, 29 September 2016, and the arithmetic average of the remaining comparator companies (excluding Kingsrose)
for the remainder of the vesting period.
Page 28
Directors’ Report
ST BARBARA LIMITED 2018
Remuneration Report (audited)
ROCE is calculated as EBIT before significant items expressed as a percentage of average total capital employed (net debt and total equity)1.
Measure
EBIT (excluding significant items)
EBIT (discontinued operations) 3
EBIT (sum of above)
Capital employed – opening balance
Total equity
Net debt4
Capital employed – opening balance
Capital employed– closing balance
Total equity
Net debt6
Capital employed– closing balance
Capital employed – average for period
ROCE (EBIT ÷ average total capital employed) for year
ROCE average of the 3 years in the vesting period
WACC average of the 3 years in the vesting period
20162
204,585
_____ ‐
204,585
140,429
270,090
410,519
300,614
89,629
390,243
400,381
51.1%
25.6%
13.9%
2017
234,992
_____ ‐
234,992
300,614
89,629
390,243
461,127
‐
461,127
425,685
55.2%
45.2%
7.6%
2018
258,238
_____ ‐
258,238
461,127
_____ ‐
461,127
665,870
_____ ‐
665,870
563,499
45.8%
50.7%
6.0%
WACC is calculated using the widely available formula of (relative weight of equity x required rate of return) + (relative weight of debt x cost of
debt)5. In this instance, WACC is calculated on a pre‐tax basis to match the pre‐tax nature of EBIT. The full calculation of WACC is not disclosed
as it is considered to be commercial in confidence, however, the primary variables include:
reported balance sheet figures for debt and equity.
government 10 year bond rate as proxy for risk free premium.
ASX All Ordinaries Index as proxy for market portfolio and to determine relative volatility.
On this basis, average WACC of the 3 years commencing 1 July 2015 and ending on 30 June 2018 is 6.0% (2017: 7.6%). The reason for the
reduction in WACC is primarily due to the lower proportion of debt in FY17 and FY18.
7.3 Rights Vested and On Issue
7.3(a) There are three LTI tranches relevant to the 2018 financial year, which are summarised below:
Grant year /
tranche name
Description
Performance
Conditions & Weighting
Performance
Period
Status
FY16 Performance Rights Granted as LTI remuneration in
RTSR
2016 and disclosed in the
2016 Remuneration Report
ROCE
FY17 Performance Rights Granted as LTI remuneration in
RTSR
2017 and disclosed in the
2017 Remuneration Report
ROCE
FY18 Performance Rights Granted as LTI remuneration in
RTSR
2018 and disclosed in the
2018 Remuneration Report
ROCE
67%
33%
67%
33%
67%
33%
1 July 2015
to 30 June 2018
Assessed as at 30 June 2018
and reported below
1 July 2016
to 30 June 2019
1 July 2017
to 30 June 2020
To be assessed and
reported in the
2019 Remuneration Report
To be assessed and
reported in the
2020 Remuneration Report
1 ROCE is not an IFRS measure and is calculated in the table above.
2 2016 calculation as reported in 2016 Remuneration Report.
3 EBIT for discontinued operations calculated as profit or loss on discontinued operations before tax excluding impairments.
4 Net debt comprises cash and cash equivalents, interest bearing borrowings – current and interest bearing borrowings – non‐current. The minimum net debt
figure applied to the calculation is nil (i.e. where the Company is in a net cash position).
5 WACC is not an IFRS measure. The above parameters can be used to calculate WACC using commonly available formula.
Page 29
Directors’ Report
The three LTI tranches are illustrated on a timeline below:
ST BARBARA LIMITED 2018
Remuneration Report (audited)
FY16
FY17
FY18
FY19
FY20
Financial year
FY16 Performance Rights
Issued in FY16
3 yr vesting period
Tested June 2018
FY17 Performance Rights
Issued in FY17
3 yr vesting period
To be tested June 2019
FY18 Performance Rights
Issued in FY18
3 yr vesting period
To be tested June 2020
7.3(b) Summary of rights on issue
The number of rights over ordinary shares in the Company held directly, indirectly or beneficially during the financial year by each Executive,
including their related parties, and the number of rights that vested, are set out below:
2018
R S Vassie
G Campbell‐Cowan
R Cole
Grant year
/ tranche
name
Grant Date
Price on
issue date
Held at
1 July 2017
Granted as
compen‐
sation
during the
year
Vested
during the
year 1
Forfeited
during the
year
Held at
30 June
2018 2
Financial
year in
which grant
may vest3
FY16
FY17
FY18
FY16
FY17
FY18
FY16
FY17
FY18
10 Dec 15
12 Dec 16
30 Nov 17
10 Dec 15
21 Oct 16
16 Nov 17
10 Dec 15
21 Oct 16
16 Nov 17
$0.51
$2.92
$2.89
$0.51
$2.92
$2.89
$0.51
$2.92
$2.89
1,104,674
196,708
‐
575,291
102,392
‐
287,127
51,621
‐
‐ 1,104,674
‐
‐
218,748 4
‐
575,291
‐
‐
‐
106,133
‐
287,127
‐
‐
‐
‐
75,570
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
196,708
218,748
‐
102,392
106,133
‐
51,621
75,570
2018
2019
2020
2018
2019
2020
2018
2019
2020
7.3(c) Rights granted in 2018
Details on rights over ordinary shares in the Company that were granted as remuneration to each Executive in the 2018 financial year are as
follows:
2018
Grant year /
tranche
identifier
Grant date
Number of
performance
rights granted
during 2018
Issue price per
performance
right
Expiry date
R S Vassie
G Campbell‐Cowan
R Cole
FY18
FY18
FY18
30 Nov 2017
16 Nov 2017
16 Nov 2017
218,7486
106,133
75,570
$2.89
$2.89
$2.89
30 Jun 2020
30 Jun 2020
30 Jun 2020
Fair value per
performance
right at grant
date
($ per share)5
$3.13
$3.13
$3.13
If FY17 rights do not vest at 2019, they may be retested at 2020 and 2021. If FY18 rights do not vest at 2020 respectively, they may be retested at 2021 and 2020.
1 These rights were determined by the Board on 22 August 2018 to have vested as at 30 June 2018 and are pending issue as shares as at the date of this report.
2 The vesting of rights held at 30 June 2018 is subject to future performance conditions.
3
4 Approved by shareholders at the Annual General Meeting held on 29 November 2017.
5 For accounting purposes, the estimated 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. Fair values at grant date are based on the
prevailing market price on the date the performance right is granted. The assessed fair value at the grant date of performance rights is allocated equally over the
period from grant date to vesting date. This methodology complied with the requirements of Australian Accounting standard AASB 2 Share‐based Payments.
6 Approved by shareholders at the Annual General Meeting held on 29 November 2017.
Page 30
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The proportion of the FY17 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 2016 and
ending 30 June 2019 as outlined below:
Relative TSR Performance
% Contribution to the
Number of
Performance Rights to Vest
Below 50th percentile
50th percentile
0%
50%
Between 50th & 75th percentiles
Pro‐rata from 50% to 100%
75th percentile and above
100%
(ii) ROCE
The proportion of FY17 Performance Rights that vest will be
influenced by the ROCE achieved by the Company over the three
year vesting period commencing 1 July 2016 and ending 30 June
2019.
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 commencing on 1 July 2016
0%
WACC (calculated as above) + 3%
50%
WACC (calculated as above) +
between 3% and 7%
Pro‐rata from 50% to
100%
WACC (calculated as above) + 7%
100%
The outcome of FY17 Performance Rights will be reported in the
2019 Remuneration Report. If the FY17 Performance Rights do not
vest at all at 30 June 2019, they may be eligible for retesting at 30
June 2020 and again at 30 June 2021.
Directors’ Report
7.3(d) Details of FY17 Performance Rights granted during 2017
FY17 Performance Rights were granted under the St Barbara Limited
Rights Plan (2015), and details of the performance conditions were
set out in the Notice of 2016 Annual General Meeting. Performance
rights issued to Mr Vassie, Managing Director and CEO, were also
approved by shareholders at the 2016 Annual General Meeting.
Key Features of FY17 Performance Rights
Performance
conditions
Other
conditions
Issue price
Measurement
period
Vesting date
(67%
Relative Total Shareholder Returns
weighting);
Return on capital employed in excess of the
(33%
weighted average cost of capital
weighting).
Continuing employment
10 day VWAP at start, 30 June 2016, $2.92
1 July 2016 to 30 June 2019
30 June 2019
RTSR
(i)
RTSR 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. At the discretion of the Board, the
composition of the comparator group may change from time to
time.
The comparator group of companies for FY17 Performance Rights
comprises:
Alacer Gold Corp
(ASX: AQG)
OceanaGold Corporation
(ASX: OGC)
Beadell Resources Limited
Perseus Mining Limited
(ASX: BDR)
(ASX: PRU)
Evolution Mining Limited
Ramelius Resources Limited
(ASX: EVN)
(ASX: RMS)
Focus Minerals Ltd
Regis Resources Limited
(ASX: FML)
(ASX: RRL)
Gryphon Minerals Limited
Resolute Mining Limited
(ASX: GRY)
(ASX: RSG)
Intrepid Mines Limited
Saracen Mineral Holdings
(ASX: IAU)
Limited (ASX: SAR)
Kingsgate Consolidated
Limited (ASX: KCN)
Kingsrose Mining Limited
(ASX: KRM)
Silver Lake Resources Limited
(ASX: SLR)
Tanami Gold NL
(ASX: TAM)
Medusa Mining Limited
Troy Resources Limited
(ASX: MNL)
(ASX: TRY)
Northern Star Resources
Oz Minerals Limited
Ltd (ASX: NST)
(ASX: OZL)
Page 31
Directors’ Report
7.3(e) Details of FY18 Performance Rights granted during 2018
FY18 Performance Rights were granted under the St Barbara Limited
Rights Plan (2015), and details of the performance conditions were
set out in the Notice of 2017 Annual General Meeting. Performance
rights issued to Mr Vassie, Managing Director and CEO, were also
approved by shareholders at the 2017 Annual General Meeting.
Key Features of FY18 Performance Rights
Performance
conditions
Other
conditions
Issue price
Measurement
period
Vesting date
(67%
Relative Total Shareholder Returns
weighting);
Return on capital employed in excess of the
(33%
weighted average cost of capital
weighting).
Continuing employment
10 day VWAP at start, 30 June 2017, $2.89
1 July 2017 to 30 June 2020
30 June 2020
(iii) RTSR
RTSR 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. At the discretion of the Board, the
composition of the comparator group may change from time to
time.
The comparator group of companies for FY18 Performance Rights
comprises:
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The proportion of the FY18 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 2017 and
ending 30 June 2020 as outlined below:
Relative TSR Performance
% Contribution to the
Number of
Performance Rights to Vest
Below 50th percentile
50th percentile
0%
50%
Between 50th & 75th percentiles
Pro‐rata from 50% to 100%
75th percentile and above
100%
(iv) ROCE
The proportion of FY18 Performance Rights that vest will be
influenced by the ROCE achieved by the Company over the three
year vesting period commencing 1 July 2017 and ending 30 June
2020.
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 commencing on 1 July 2017
0%
WACC (calculated as above) + 3%
50%
Alacer Gold Corp
(ASX: AQG)
Perseus Mining Limited
(ASX: PRU)
WACC (calculated as above) +
between 3% and 7%
Pro‐rata from 50% to
100%
Beadell Resources Limited
Ramelius Resources Limited
WACC (calculated as above) + 7%
100%
(ASX: BDR)
(ASX: RMS)
Evolution Mining Limited
Regis Resources Limited
(ASX: EVN)
(ASX: RRL)
Focus Minerals Ltd
Resolute Mining Limited
(ASX: FML)
(ASX: RSG)
Intrepid Mines Limited
Saracen Mineral Holdings
(ASX: IAU)
Limited (ASX: SAR)
Kingsgate Consolidated
Limited (ASX: KCN)
Medusa Mining Limited
(ASX: MNL)
Silver Lake Resources Limited
(ASX: SLR)
Tanami Gold NL
(ASX: TAM)
Northern Star Resources
Troy Resources Limited
Ltd (ASX: NST)
(ASX: TRY)
OceanaGold Corporation
Oz Minerals Limited
(ASX: OGC)
(ASX: OZL)
The outcome of FY18 Performance Rights will be reported in the
2020 Remuneration Report. If the FY18 Performance Rights do not
vest at all at 30 June 2020, they may be eligible for retesting at 30
June 2021 and again at 30 June 2022.
Page 32
Directors’ Report
ST BARBARA LIMITED 2018
Remuneration Report (audited)
8. Non‐Executive Director Remuneration
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 is consistent
with the market to ensure that the Group continues to attract and
retain Non‐Executive Directors of a high calibre.
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 level of fees paid to Non‐Executive Directors is set by the Board,
within the aggregate pool approved by shareholders (which is
$1,200,000 per annum in aggregate, approved by shareholders at
the Annual General Meeting in November 2012) and reported to
shareholders in this report each year.
The Chairman’s fee was determined independently, based on roles
for companies
and responsibilities
comparable with St Barbara Limited. The Chairman was not present
at any discussions relating to the determination of his own
remuneration.
in the external market
Separate fees are paid for the following roles:
Chair of the Board (this fee is inclusive of all Board Committee
commitments)
Member of the Board
Chair of a Board Committee
Member of a Board Committee
In order to maintain their independence and impartiality, the fees
paid to Non‐Executive Directors are not linked to the performance
of the Group.
The aggregate Non‐Executive Directors’ fees for 2018, and the
estimated aggregate Non‐Executive Directors’ fees for 2019, are well
within the shareholder approved aggregate of $1,200,000 per
annum.
During the year the Remuneration & Nomination Committee
conducted a review of comparable resource industry remuneration
levels for non‐executive directors necessary to attract and retain
quality candidates. The review considered information from
multiple sources, including Aon Hewitt Non‐Executive Directors
Remuneration Report for the Resources Industry January 2018, AON
Non‐Executive Director Benchmarking Report May 2018, McGuirk
2018 Australian Board Remuneration Survey, and direct assessment
of similar ASX listed mid‐cap gold companies from the St Barbara LTI
comparator group. The Board has sought to position fees between
the 50th and 75th Percentile of the comparable market remuneration
levels, and subsequently resolved to
increase Non‐Executive
Directors fees for 2019 as set out in the table below.
Page 33
Directors’ Report
Director fee
Committee Chair
Committee Member
Chairman1
Annual aggregate fees
ST BARBARA LIMITED 2018
Remuneration Report (audited)
July 2012
to Feb 2014
March 2014
to June 2016
2017
2018
2019
$
$
$
$
$
100,000
17,500
8,500
90,000
15,750
7,650
92,000
16,000
10,000
101,200
106,260
20,000
10,000
25,000
15,000
248,800
223,200
228,000
250,800
263,340
2015
2016
2017
2018
2019
594,945
465,800
484,000
533,200
est. 585,860 2
Shareholder approved annual aggregate fees4
$
1,200,000
1,200,000
1,200,000
1,200,000
1,200,000
no. of directors
4 FTE 3
4
4
4
4
The Directors in office and the composition of Board Committees at the date of this report are:
Director
Appointed
Length of service
5
Board
Audit & Risk
Committee
Health, Safety,
Environment &
Community
Committee
Remuneration &
Nomination
Committee
T C Netscher
R S Vassie
D E J Moroney
K J Gleeson
17 Feb 20146
1 Jul 2014
16 Mar 2015
18 May 2015
4 years
4 years
3 years
3 years
Chairman
MD & CEO
Director
Director
Member
‐
Chair
Member
Chair
‐
Member
Member
Member
‐
Member
Chair
In 2018 the Board appointed a world‐wide executive search firm to identify an additional Non‐Executive Director to complement the skills and
experience of the existing Directors and which would increase the number of Directors on the Board from four to five. This process was
continuing at the date of this report.
1 The Chairman’s fee is inclusive of all Board Committee commitments.
2 Aggregate fees for 2019 is estimated on the number of Directors and composition of Board Committees at the date of this report.
3 Full time equivalent 4 non‐executive directors for the financial year (comprised 3 NEDs for full year, plus 3 NEDs resigned or appointed during the financial
year with aggregate term of 12 months).
4 Approved by shareholders at the Annual General Meeting in November 2012.
5 Whole years to 30 June 2018.
6 Appointed as Director 17 February 2014, appointed as Chairman 1 July 2015.
Page 34
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4
Directors’ Report
10. Additional Statutory Information
Key Management Personnel Shareholdings
ST BARBARA LIMITED 2018
Remuneration Report (audited)
The numbers of shares in the Company held directly, indirectly or beneficially during the year by each Key Management Personnel, including
their related parties, are set out below. There were no shares granted during the year as compensation.
Balance at
the start of
the year
Issued upon
exercised of
employee
rights
22,000
100,000
8,333
‐
‐
‐
1,769,053
4,062,500
Name
Non‐Executive Directors
T C Netscher
D E J Moroney
K J Gleeson
Executive Director
R S Vassie
Executives
G Campbell‐Cowan
R Cole
415,117
10,000
2,438,525
1,181,250
Shareholding guidelines for Non‐Executive Directors and Executives
Purchased
Sold
Dividend
Reinvestment
Plan
Other
changes
Balance at
the end of
the year
‐
‐
‐
‐
‐
‐
‐
‐
‐
697
3,173
264
(4,062,500)
‐
(2,838,642)
(1,150,000)
149
1,309
‐
‐
‐
‐
‐
‐
22,697
103,173
8,597
1,769,053 1
15,149 2
42,559 3
The Group encourages Non‐Executive Directors, Executives and employees to own shares (subject to the Group’s Securities Dealing Policy),
however, the Group is not licenced or authorised to provide individuals with financial product advice under the Corporations Act.
The Group does not specify target volumes for such shareholdings, as it does not know the personal preferences and objectives, financial situation
or risk profile of individuals. The Group acknowledges that gold mining equities would normally only comprise a small proportion of an individual’s
balanced investment portfolio, and that gold mining equities are generally considered to be volatile and counter‐cyclical to economic cycles. The
Group has not identified any of its key peers with which it competes for talent to have shareholding guidelines.
Loans to Directors and Executives
There were no loans to Directors or Executives during the financial year 2018.
END OF REMUNERATION REPORT
1
2
3
In addition, 1,104,674 employee rights were determined by the Board on 22 August 2018 to have vested as at 30 June 2018 and are pending issue as shares
as at the date of this report.
In addition, 575,291 employee rights were determined by the Board on 22 August 2018 to have vested as at 30 June 2018 and are pending issue as shares as
at the date of this report.
In addition, 287,127 employee rights were determined by the Board on 22 August 2018 to have vested as at 30 June 2018 and are pending issue as shares as
at the date of this report.
Page 37
Directors’ Report
Indemnification and insurance of officers
Non‐audit services
ST BARBARA LIMITED 2018
The Company’s Constitution provides that, to the extent permitted
by law, the Company must indemnify any person who is, or has
been, an officer of the Company against any liability incurred by
that person including any liability incurred as an officer of the
Company or a subsidiary of the Company and legal costs incurred
by that person in defending an action.
The Constitution further provides that the Company may enter into
an agreement with any person who is, or has been, an officer of the
Company or a subsidiary of the Company to indemnify the person
against such liabilities.
The Company has entered into Deeds of Access, Indemnity and
Insurance with current and former officers. The Deeds address the
matters set out in the Constitution. Pursuant to those deeds, the
Company has paid a premium in respect of a contract insuring
current and former officers of the Company and current and former
officers of its controlled entities against liability for costs and
expenses
in defending civil or criminal
proceedings involving them as such officers, with some exceptions
where the liability relates to conduct involving lack of good faith.
incurred by them
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.
During the year the Company did employ the auditor to provide
services in addition to their statutory audit duties. Details of the
amounts paid or payable to the auditor, PricewaterhouseCoopers,
for non‐audit services provided during the 2018 financial year are
set out in Note 20 to the financial statements.
The Board of Directors has considered the position and, in
accordance with the advice received from the Audit & Risk
Committee, is satisfied that the provision of non‐audit services
during the year as set out in Note 20 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 & Risk
Committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
The Audit & Risk Committee annually informs the Board of the
detail, nature and amount of any non‐audit services rendered
by PricewaterhouseCoopers during the financial year, giving an
explanation of why the provision of these services is compatible
with auditor independence. If applicable, the Audit & Risk
Committee recommends that the Board take appropriate
action in response to the Audit & Risk Committee’s report to
satisfy itself of the independence of PricewaterhouseCoopers.
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 Directors’ Report.
Events occurring after the end of the financial year
Subsequent to year end, the directors have declared a fully franked
final dividend of 8 cents per ordinary share to be paid on the 26
September 2018. A provision for this dividend has not been
recognised in the 30 June 2018 financial statements.
Environmental management
Rounding of amounts
regulatory
instruments as
St Barbara regards compliance with environmental legislation,
regulations and
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. In Papua New Guinea,
the Group ensures compliance with the relevant National and
Provincial
legislation 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.
to
facilitate
the effective and
A Group‐wide Environmental Management System (EMS) has been
responsible
implemented
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
reportable
environmental incidents during the year ended 30 June 2018 at any
of the Group’s Australian and Pacific sites.
inspections. There were no externally
St Barbara Limited is a Company of the kind referred to in ASIC
Corporations (Rounding in Financial/Directors’ Report) Instrument
2016/191 issued by the Australian Securities and Investment
Commission (ASIC). 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 22nd day of August 2018.
Bob Vassie
Managing Director and CEO
Page 38
Directors’ Report
dendence Declaration
ST BARBARA LIMITED 2018
Ars
Page 39
Financial Report
Contents
Financial Statements
Page
About this report
Comprehensive income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
A. Key results
1 Segment information
2 Tax
3 Significant items
4 Earnings per share
5 Dividends
B. Mining operations
6 Property, plant and equipment
7 Deferred mining costs
8 Mine properties and mineral rights
9 Exploration and evaluation
10 Rehabilitation provision
C. Capital and risk
11 Working capital
12 Financial risk management
13 Net debt
14 Contributed equity
D. Business Portfolio
15 Parent entity disclosures
16 Financial assets and fair value of financial assets
17 Controlled entities
E. Remunerating our people
18 Employee benefit expenses and provisions
19 Share‐based payments
F. Other disclosures
20 Remuneration of auditors
21 Events occurring after the balance sheet date
22 Contingencies
23 Basis of preparation
24 Accounting standards
Signed reports
Directors’ declaration
Independent auditor’s report
40
41
42
43
44
45
47
49
49
50
51
52
53
55
56
57
58
62
63
64
64
64
65
66
67
67
67
68
69
70
71
ST BARBARA LIMITED 2018
About this report
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 2018 comprise the Company and its subsidiaries (together
referred to as the “Group”). The Group is a for‐profit entity
primarily involved in mining and sale of gold, mineral exploration
and development.
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
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.
(AASB) and
The consolidated financial statements have been presented in
Australian dollars and all values are rounded to the nearest
thousand dollars ($000) as specified in the ASIC Corporation
Instrument 2016/191 unless otherwise stated.
The Board of Directors approved the financial statements on 22
August 2018.
What’s in this report
St Barbara’s Directors have included information in this report that
they deem to be material and relevant to the understanding of the
financial statements and the Group.
A disclosure has been considered material and relevant where:
the dollar amount is significant in size (quantitative);
the dollar amount is significant in nature (qualitative);
the Group’s result cannot be understood without the specific
disclosure; and
it relates to an aspect of the Group’s operations that is
important to its future performance.
judgements and
Accounting policies and critical accounting
estimates applied to the preparation of the financial statements are
presented where the related accounting balance or financial
statement matter is discussed. To assist in identifying critical
accounting judgements and estimates, we have highlighted them in
the following manner:
Accounting judgements and estimates
Page 40
Financial Report
Comprehensive income statement
for the year ended 30 June 2018
Operations
Revenue
Mine operating costs
Gross profit
Interest revenue
Other income
Exploration expensed
Corporate costs
Royalties
Depreciation and amortisation
Other expenses
Impairment losses and asset write‐downs
Operating profit
Finance costs
Net foreign exchange gain
Profit before income tax
Income tax expense
Net profit after tax
Profit attributable to equity holders of the Company
Other comprehensive income
Items that may be reclassified subsequently to profit:
Changes in fair value of available for sale financial assets
Income tax on other comprehensive income
Foreign currency translation differences ‐ foreign operations
Other comprehensive profit net of tax(1)
ST BARBARA LIMITED 2018
Notes
1
1
1
6
13
CONSOLIDATED
2018
$'000
2017
$'000
679,204
(275,695)
403,509
641,702
(267,244)
374,458
5,283
2,053
(9,149)
(23,840)
(23,015)
(87,276)
(4,244)
‐
263,321
(918)
200
262,603
1,948
86
(10,647)
(20,977)
(21,774)
(85,583)
(3,608)
(27,273)
206,630
(19,961)
3,037
189,706
2
(35,605)
(32,134)
226,998
157,572
226,998
157,572
12,602
(3,731)
6,215
15,086
(8)
‐
904
896
Total comprehensive income attributable to equity holders of the Company
242,084
158,468
Earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
4
4
44.26
43.73
31.71
30.42
(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 income comprises the result for
the year adjusted for the other comprehensive income.
The above income statement should be read in conjunction with the notes to the financial statements.
Page 41
Financial Report
Balance sheet
as at 30 June 2018
Assets
Current assets
Cash and cash equivalents
Deposits held to maturity
Trade and other receivables
Inventories
Deferred mining costs
Total current assets
Non‐current assets
Property, plant and equipment
Financial assets
Deferred mining costs
Mine properties
Exploration and evaluation
Mineral rights
Deferred tax assets
Total non‐current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Interest bearing liabilities
Rehabilitation provision
Other provisions
Current tax liability
Total current liabilities
Non‐current liabilities
Interest bearing liabilities
Rehabilitation provision
Deferred tax liabilities
Other provisions
Total non‐current liabilities
Total liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
The above balance sheet should be read in conjunction with notes to the financial statements.
ST BARBARA LIMITED 2018
CONSOLIDATED
2018
$'000
2017
$'000
Notes
13
13
11
11
7
6
16
7
8
9
8
2
11
13
10
18
2
13
10
2
18
14
226,443
116,200
11,615
64,549
1,974
420,781
112,161
37,872
7,058
175,352
28,182
3,891
35,847
400,363
821,144
39,878
39
610
17,853
39,982
98,362
‐
29,094
25,943
1,875
56,912
160,909
‐
9,270
55,340
5,608
231,127
126,493
4,569
9,253
159,859
35,411
7,560
29,399
372,544
603,671
36,480
507
488
12,154
29,692
79,321
40
27,750
31,221
4,212
63,223
155,274
142,544
665,870
461,127
898,430
(37,753)
(194,807)
887,254
(55,736)
(370,391)
665,870
461,127
Page 42
Financial Report
Statement of changes in equity
for the year ended 30 June 2018
ST BARBARA LIMITED 2018
Balance at 1 July 2016
Transactions with owners of the Company recognised directly
in equity:
Share‐based payments expense
Total comprehensive income for the year
Profit attributable to equity holders of the Company
Other comprehensive gain/(loss)
Balance at 30 June 2017
Contributed
Equity
$'000
Note
887,216
Foreign
Currency
Translation
Reserve
$'000
(59,577)
CONSOLIDATED
Other
Reserves
$'000
Accumulated
Losses
$'000
Total
$'000
938
(527,963)
300,614
19
38
‐
2,007
‐
2,045
‐
‐
887,254
‐
904
(58,673)
‐
(8)
2,937
157,572
‐
(370,391)
157,572
896
461,127
Transactions with owners of the Company recognised directly
in equity:
Share‐based payments expense
Performance rights issued
Dividends paid
Dividends reinvested
Total comprehensive income for the year
Profit attributable to equity holders of the Company
Other comprehensive gain
Balance at 30 June 2018
19
‐
739
‐
10,437
‐
‐
898,430
‐
‐
‐
3,636
(739)
‐
‐
‐
(40,977)
(10,437)
3,636
‐
(40,977)
‐
‐
6,215
(52,458)
‐
8,871
14,705
226,998
‐
(194,807)
226,998
15,086
665,870
The above statement of changes in equity should be read in conjunction with notes to the financial statements.
Page 43
Notes
13
13
Financial Report
Cash flow statement
for the year ended 30 June 2018
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
Income tax payments
Net cash inflow from operating activities
Cash Flows From Investing Activities:
Movement in deposits held to maturity
Proceeds from deferred settlement relating to sale of asset
Payments for property, plant and equipment
Payments for development of mining properties
Payments for exploration and evaluation
Investments in shares
Net cash outflow used in investing activities
Cash Flows From Financing Activities:
Movement in restricted cash
Premium funding repayments
Dividend payments
US senior secured notes repayments
Principal repayments ‐ finance leases
Net cash outflow used in financing activities
Net increase 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
13
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
2017
$'000
681,146
640,354
(322,074)
(309,097)
(9,149)
5,283
‐
(15)
(50)
(39,462)
315,679
(116,200)
‐
(12,043)
(59,134)
(5,020)
(20,591)
(10,647)
1,948
(11,304)
(11)
(8,017)
‐
303,226
‐
2,700
(9,796)
(32,036)
(9,436)
(4,540)
(212,988)
(53,108)
(1,400)
‐
(40,977)
118
(2,209)
‐
‐
(225,409)
(466)
(946)
(42,843)
(228,446)
59,848
160,909
5,686
226,443
21,672
136,689
2,548
160,909
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.
The above cash flow statement should be read in conjunction notes to the financial statements.
Page 44
Notes to the Financial Report
A. Key results
1
Segment information
Gold revenue
Silver revenue
Total Revenue
Mine operating costs
Gross profit
Royalties (1)
Impairment losses and asset write downs
Depreciation and amortisation
Segment profit before income tax
Capital expenditure
Sustaining
Growth(3)
Gwalia Extension Project
Total capital expenditure
Segment assets(2)
Segment non‐current assets(2)
Segment liabilities(2)
ST BARBARA LIMITED 2018
Leonora
2018
$’000
460,765
499
461,264
(157,979)
303,285
2017
$’000
441,394
553
441,947
(143,107)
298,840
Simberi
2018
$’000
217,418
522
217,940
(117,716)
100,224
2017
$’000
199,319
436
199,755
(124,137)
75,618
Total segment
2018
$’000
678,183
1,021
679,204
(275,695)
403,509
2017
$’000
640,713
989
641,702
(267,244)
374,458
(18,123)
‐
(65,734)
219,428
(33,829)
(5,020)
(31,773)
(70,622)
(17,303)
‐
(61,903)
219,634
(30,206)
(9,402)
(7,861)
(47,469)
(4,892)
‐
(17,516)
77,816
(4,081)
(336)
‐
(4,417)
(4,471)
(27,273)
(19,838)
24,036
(3,711)
‐
‐
(3,711)
(23,015)
‐
(83,250)
297,244
(37,910)
(5,356)
(31,773)
(75,039)
(21,774)
(27,273)
(81,741)
243,670
(33,917)
(9,402)
(7,861)
(51,180)
300,171
279,969
31,714
304,904
279,276
26,130
128,420
79,558
27,924
123,963
86,148
29,775
428,591
359,527
59,638
428,867
365,424
55,905
(1) Royalties include state and government royalties and corporate royalties.
(2) Represents the reportable segment balances after impairment and asset write down charges.
(3) Growth capital at Gwalia represents deep drilling expenditure and Simberi Sulphide drilling as part of exploration.
The Group has two operational business units: Leonora Operations
and Simberi Operations. The operational business units are managed
separately due to their separate geographic regions.
A reportable segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses,
including revenues and expenses that relate to
transactions with any of the Group’s other components. The
operating results (including production, cost per ounce and capital
expenditure) 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
performance.
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.
Segment capital expenditure represents the total cost incurred
during the year for mine development and acquisitions of property,
plant and equipment.
Sales revenue
Revenue from the sale of gold and silver in the course of ordinary
activities is measured at the fair value of the consideration received
or receivable. 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.
Royalties
Royalties are payable on gold sales revenue, based on gold ounces
produced and sold, and are therefore recognised as the sale occurs.
Major Customers
Major customers to whom the Group provides goods that are
more than 10% of external revenue are as follows:
Revenue
% of external
revenue
2018
$’000
164,477
247,110
‐
216,576
2017
$’000
217,305
250,736
106,774
‐
2018
%
24.3
36.4
‐
31.9
2017
%
33.9
39.2
16.7
‐
Customer A
Customer B
Customer C
Customer D
Page 45
Notes to the Financial Report
1 Segment information (continued)
ST BARBARA LIMITED 2018
Operations
Consolidated
2018
$’000
2017
$’000
Total profit for reportable segments
297,244
243,670
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, exploration expense, revenue,
finance costs and corporate costs.
Other income and revenue
Exploration expensed
Unallocated depreciation and
amortisation
Finance costs
Corporate costs
Net foreign exchange gain
Other expenses
7,336
2,034
(9,149)
(10,647)
(4,026)
(3,842)
(918)
(19,961)
(23,840)
(20,977)
200
3,037
(4,244)
(3,608)
Consolidated profit before income tax
262,603
189,706
Assets
Total assets for reportable segments
428,591
428,867
Cash and cash equivalents
Deposits held to maturity
Trade and other receivables (current)
Financial assets
Property, plant & equipment
226,318
160,106
116,200
9,199
37,872
2,964
‐
7,578
4,569
2,551
Consolidated total assets
821,144
603,671
Liabilities
Total liabilities for reportable segments
Trade and other payables
Interest bearing liabilities (current)
Provisions (current)
Interest bearing liabilities (non‐current)
Provisions (non‐current)
Current tax liability
Deferred tax liabilities
59,638
17,984
55,905
14,542
11
436
10,296
9,125
‐
11
1,420
1,612
39,982
29,692
25,943
31,221
Consolidated total liabilities
155,274
142,544
Page 46
Notes to the Financial Report
2 Tax
Income tax expense
Current tax expense
Under/(over) provision in respect of the
prior year
Deferred income tax benefit
Total income tax expense
Consolidated
2018
$'000
56,494
158
2017
$'000
47,424
(2,474)
(21,047)
(12,816)
35,605
32,134
Numerical reconciliation of income tax expense to prima facie tax
payable
Profit before income tax
Tax at the Australian tax rate of 30%
Tax effect of amounts not deductible/
(taxable) in calculating taxable income:
Equity settled share based payments
Sundry items
Recognition of previously unbooked
deferred tax assets in PNG
Permanent differences on taxable income
Research and development incentive
Use of tax losses not previously recognised
Interest expense previously treated as non
deductible
Permanent differences arising from foreign
exchange within the tax consolidated
group
Provision for R&D tax credits previously
recognised
Income tax expense
2018
$'000
262,603
2017
$'000
189,706
78,781
56,912
(16,861)
(415)
(25,106)
‐
(415)
‐
613
281
(26,775)
(361)
(580)
(3,341)
‐
(2,289)
(379)
(2,804)
‐
35,605
10,478
32,134
ST BARBARA LIMITED 2018
Income tax
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 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.
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.
Tax consolidation
Entities in the tax consolidated group at 30 June 2018 included:
St Barbara Ltd (head entity), Allied Gold Mining Ltd, Allied Gold Pty
Ltd, and Allied Gold Finance Pty Ltd. Current and deferred tax
amounts are allocated using the “separate taxpayer within group”
method.
A tax sharing and funding agreement has been established between
the entities in the tax consolidated group. The Company recognises
deferred tax assets arising from the unused tax losses of the tax
consolidated group to the extent that it is probable that future
taxable profits of the tax consolidated group will be available against
which the asset can be utilised.
Current tax liability
As at 30 June 2018 the Company recognised a current tax liability of
$39,982,000 (2017: $29,692,000).
Accounting judgements and estimates
A tax credit of $25,106,000 (2017: $26,775,000) has been booked
relating to previously unrecognised PNG deferred tax assets. This
amount has been booked based on the current life of mine plan for
the Simberi operation
Page 47
Notes to the Financial Report
2
Tax (continued)
Deferred tax balances
Deferred tax assets
Tax losses
Provisions and accruals
Property, plant and equipment
Other
Total
Tax effect @ 30%
Deferred tax liabilities
Accrued income
Mine properties – exploration
Mine properties – development
Consumables
Capitalised convertible notes costs
Unrealised foreign exchange gains
Investment at fair value
Total
Tax effect @ 30%
Net deferred tax balance
Consolidated
2018
$'000
2017
$'000
9,001
49,902
133,341
119
192,363
57,709
‐
41,699
113,384
630
155,713
46,714
272
42,168
23,494
58,797
2,554
19,631
12,434
159,350
255
38,595
57,131
46,033
3,347
16,426
‐
161,787
47,805
48,536
9,904
(1,822)
Comprising:
Australia – net deferred tax liabilities
PNG – net deferred tax assets
(25,943)
(31,221)
35,847
29,399
Deferred tax assets have not been
recognised in respect of the
following items:
Tax losses – PNG Operations
Property, plant and equipment – PNG
Operations
Total
Tax effect @ 30%
16,745
‐
53,079
48,159
16,745
101,238
5,024
30,371
ST BARBARA LIMITED 2018
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.
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.
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.
Accounting judgements and estimates
At each reporting date, the Group performs a review of the probable
future taxable profit in each jurisdiction. The assessments are based
on the latest life of mine plans relevant to each jurisdiction and the
application of appropriate economic assumptions such as gold price
and operating costs. Any resulting recognition of deferred tax assets
is categorised by type (e.g. tax losses or temporary differences) and
recognised based on which would be utilised first according to that
particular jurisdiction’s legislation.
At 30 June 2018 tax losses not recognised amounted to $5,024,000
(tax effected) relating to entities associated with Simberi operations
in PNG and Australia. These tax losses have not been recognised as
it is not deemed probable at the reporting date that future taxable
profits will be available against which they can be utilised. Deferred
tax balances recognised are based on taxable profit forecasts from
current life of mine models.
Page 48
Notes to the Financial Report
3
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.
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
2017
$'000
‐
‐
(27,273)
(27,273)
(1) PNG deferred tax asset recognised
Prior to 30 June 2016, there had been no deferred tax asset
recognised in relation to the PNG jurisdiction, as it had been
previously determined that it was not probable that the Simberi
operation would generate future taxable profits. At 30 June 2017,
in
following the successful completion of the turnaround
performance of the Simberi operation, a net deferred tax asset was
recognised of $26,775,000. At 30 June 2018 a further $25,106,000
was recognised as a deferred tax asset based on the further
extension of the current life of mine plan.
Impairment losses
Total significant items – pre tax
Tax Effect
Tax effect of pre‐tax significant items
PNG deferred tax asset recognised(1)
Provision for R&D tax credits
‐
25,106
‐
8,182
26,775
(10,478)
Total significant items – post tax
25,106
(2,794)
4
Earnings per share
Basic earnings per share
Diluted earnings per share
Consolidated
2018
Cents
44.26
43.73
2017
Cents
31.71
30.42
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.
Reconciliation of earnings used in calculating earnings per share
Diluted earnings per share
Consolidated
2018
$'000
2017
$'000
226,998
157,572
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.
Performance rights
Basic and diluted earnings per share:
Profit after tax for the year from
operations
Weighted average number of shares
Weighted average number of ordinary
shares used in calculating basic earnings
per share
Weighted average number of ordinary
shares and potential ordinary shares
used in calculating diluted earnings per
share
Consolidated
2018
Number
2017
Number
512,835,786 496,990,112
519,098,931 517,994,473
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.
Weighted average of number of shares
The calculation of the weighted average number of shares is based
on the number of ordinary shares and performance shares during
the period, including the number of treasury shares held in trust.
Treasury shares are issued shares held by the Company in trust for
employee performance rights.
Page 49
ST BARBARA LIMITED 2018
Dividend Reinvestment Plan
The Company’s Dividend Reinvestment Plan (DRP) continues to be
available to eligible shareholders, whereby holders of ordinary
shares may elect to have all or parts of their dividend entitlements
satisfied by the issue of new ordinary shares instead of receiving
cash.
DRP shares in relation to the 2017 final dividend were issued at a 2%
discount to the 5 day volume weighted average price.
DRP shares in relation to the 2018 interim dividend were issued at a
1.5% discount to the 5 day volume weighted average price.
Final Dividend
Subsequent to the 30 June 2018 full year report date, the Directors
recommended the payment of a final dividend of 8 cents per fully
paid ordinary share fully franked. The aggregate amount of the
proposed dividend is expected to be paid on 26 September 2018 out
of retained earnings at 30 June 2018, and has not been recognised
as a liability at the end of the year.
Notes to the Financial Report
5 Dividends
Consolidated
2018
$'000
2017
$'000
Declared and paid during the year on
ordinary shares (fully‐franked at 30 per cent)
2018 interim dividend: 4 cents (2017: $Nil)
2017 final dividend: 6 cents (2016: $Nil)
Total dividends paid
Dividends paid in cash or satisfied by the issue
of shares under the dividend reinvestment
plan during the year were as follows:
Paid in cash
DRP – satisfied by issue of shares
Total dividends paid
Proposed and not recognised as a liability
(fully‐franked at 30 per cent)
2018 final dividend: 8 cents (2017: 6 cents)
20,617
30,797
51,414
40,977
10,437
51,414
41,641
Franking credit balance
Franking credits available for future years at 30
per cent adjusted for the payment of income
tax and dividends received or payable
Impact on the franking account of dividends
proposed before the financial report was
issued but not recognised as a distribution to
equity holders during the year
18,427
(17,846)
‐
‐
‐
‐
‐
‐
‐
‐
‐
Page 50
Notes to the Financial Report
B. Mining operations
6 Property, plant and equipment
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
2017
$'000
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.
Land and buildings
At the beginning of the year
Additions
Depreciation (average 3‐15 years)
Disposals
Effects of movement
exchange rates
At the end of the year
in
foreign
Plant and equipment
At the beginning of the year
Additions
Disposals
Depreciation (average 3‐10 years)
Asset impairment and write downs
Effects of movement
exchange rates
At the end of the year
Total
in
foreign
13,078
559
(2,013)
‐
100
11,724
113,415
11,647
(163)
(25,704)
‐
1,242
100,437
112,161
17,864
746
(4,899)
(507)
(126)
13,078
144,584
9,557
(342)
(20,180)
(19,750)
(454)
113,415
126,493
Security
As at 30 June 2018, plant and equipment with a carrying value of
$39,000 (2017: $547,000) was pledged as security for finance leases.
In accordance with the security arranges of the gold forward
contracts are secured by the assets of St Barbara Limited; the
security does not include the assets of the Simberi operations
Reconciliation of depreciation and amortisation to income
statement
Depreciation
Land and buildings
Plant and equipment
Amortisation
Mine properties
Mineral rights
Total
Capital commitments
Purchase orders raised for contracted
capital expenditure
Consolidated
2018
$'000
2017
$'000
(2,013)
(25,704)
(4,899)
(20,180)
(55,890)
(3,669)
(87,276)
(52,061)
(8,443)
(85,583)
Consolidated
2018
$’000
2017
$’000
27,053
5,316
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.
Where the carrying value of an asset is less than its estimated
residual value, no depreciation is charged. 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.
Gains and losses on disposal are determined by comparing proceeds
with the carrying amount. These gains and losses are included in the
income statement when realised.
Page 51
Notes to the Financial Report
7 Deferred mining costs
ST BARBARA LIMITED 2018
Current
Deferred operating mine development
Consolidated
2018
$'000
2017
$'000
1,974
5,608
Certain mining costs, principally those that relate to the stripping of
waste in open pit operations and operating development in
underground mines, which provide access so
future
economically recoverable ore can be mined, are deferred in the
balance sheet as deferred mining costs.
that
Non‐current
Deferred operating mine development
7,058
9,253
Underground operations
In underground operations mining occurs progressively on a level‐
by‐level basis. Underground mining costs in the period are deferred
based on the metres developed for a particular level. Previously
deferred underground mining costs are amortised to the income
statement based on the recoverable ounces produced over the life
of mine recoverable ounces. Deferred costs are released to the
income statement as ounces are produced from the related mining
levels.
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 and deferred. This activity is referred to as deferred
stripping.
Removal of waste material normally continues throughout the life of
an open pit mine. This activity is referred to as production stripping.
The Group has no deferred waste costs associated with open pit
operations at 30 June 2018 (2017: $Nil).
Accounting judgements and estimates
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.
Page 52
Notes to the Financial Report
8 Mine properties and mineral rights
Mine properties
At beginning of the year
Direct expenditure
Transfer from exploration
Amortisation for the year
At end of the year
Consolidated
2018
$'000
159,859
59,134
12,249
(55,890)
175,352
2017
$'000
179,884
32,036
‐
(52,061)
159,859
ST BARBARA LIMITED 2018
Mine properties
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 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.
Accounting judgements and estimates
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, 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.
Mineral rights
At the beginning of the year
Amortisation
Impairment losses and write downs
At the end of the year
Consolidated
2018
$'000
7,560
2017
$'000
19,785
(3,669)
‐
3,891
(8,443)
(3,782)
7,560
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 the 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 reserves of the mine to which the
rights relate.
The Group’s mineral rights are associated with the Simberi
operations and PNG interests.
Page 53
ST BARBARA LIMITED 2018
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.
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.
The recognition of deferred tax assets.
Depreciation and amortisation charged in the income statement
may change where such charges are calculated using the units of
production basis.
Underground capital development deferred in the balance sheet
or charged in the income statement may change due to a
revision in the development amortisation rates.
Decommissioning, site restoration and environmental provisions
in estimated reserves affect
may change where changes
expectations about the timing or cost of these activities.
Notes to the Financial Report
8. Mine properties and mineral rights
(continued)
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 (‘CGU’) exceeds the recoverable
amount. Impairment losses are recognised in the income statement.
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 identified CGUs of the Group are: Leonora and Simberi. The
carrying value of the Leonora and Simberi CGUs are assessed using
fair value less costs of disposal (‘Fair Value’) to calculate the
recoverable amount.
Fair Value is 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 rate
assumptions for both Australian Dollar (AUD) and United States
Dollar (USD) gold price, estimated quantities of ore reserves,
operating costs and future capital expenditure. Costs to dispose
have been estimated by management.
Accounting judgements and estimates‐ Impairment
Significant judgements and assumptions are required in making
estimates of 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 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.
At 30 June 2018, the Group determined that there were no
indicators of impairment for either the Leonora or Simberi cash
operating units due to strong spot and forward gold prices at 30 June
2018 and increases in mine life at both operations.
Ore Reserves
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.
Accounting judgements and estimates– Ore Reserves
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
rates,
production costs, future capital requirements, short and long term
commodity prices and exchange rates.
techniques,
recovery
Page 54
Notes to the Financial Report
9
Exploration and evaluation
Non‐current
At beginning of the year
Additions
Transfer to mine properties
Disposals
At end of the year
Commitments for exploration
and minimum
In order to maintain rights of tenure to
mining tenements for the next financial
year, the Group is committed to tenement
rentals
exploration
expenditure in terms of the requirements
of the relevant state government mining
departments in Western Australia. This
requirement will continue for future years
with
the amount dependent upon
tenement holdings.
Consolidated
2018
$'000
35,411
5,020
(12,249)
‐
28,182
2017
$'000
25,975
9,436
‐
‐
35,411
Consolidated
2018
$’000
2017
$’000
5,358
4,779
ST BARBARA LIMITED 2018
All exploration and evaluation expenditure
incurred up to
establishment of resources is expensed as incurred. From the point
in time when reserves are established, or where there is a
reasonable expectation for reserves, 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 expenditures 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. 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.
Accounting judgements and estimates
Exploration and evaluation expenditure is capitalised where reserves
have been established for an area of interest, or where there is a
reasonable expectation for reserves, 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 is likely. 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 55
Notes to the Financial Report
10 Rehabilitation provision
Current
Provision for rehabilitation
Non‐current
Provision for rehabilitation
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
2017
$'000
610
488
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 be required to settle the
obligation, and the amount has been reliably estimated. Provisions
are not recognised for future operating losses.
29,094
29,704
27,750
28,238
The Group has obligations to dismantle, remove, restore and
rehabilitate certain items of property, plant and equipment and
areas of disturbance during mining operations.
Movements in Provisions
Rehabilitation
Balance at start of year
Unwinding of discount
Effects of movements in the foreign
exchange rate
Balance at end of year
28,238
853
613
28,588
1,658
(2,008)
29,704
28,238
A provision is made for the estimated cost of rehabilitation and
restoration of areas disturbed during mining operations up to
reporting date but not yet rehabilitated. The provision also includes
estimated costs of dismantling and removing the assets and
restoring the site on which they are located. The provision is 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.
As 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).The
rehabilitation liability is remeasured at each reporting date 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.
Accounting judgements and estimates
Mine rehabilitation provision requires significant estimates and
assumptions as there are many transactions and other factors that
will ultimately affect the liability to rehabilitate the mine sites.
Factors that will affect this liability include changes in regulations,
prices fluctuations, changes in technology, changes in timing of cash
flows which are based on life of mine plans and changes to discount
rates. When these factors change or are known in the future, such
differences will impact the mine rehabilitation provision in the
period in which it becomes known.
Page 56
Notes to the Financial Report
C. Capital and risk
11 Working capital
Trade and other receivables
Current
Trade receivables
Other receivables
Restricted cash
Prepayments
Total
Inventories
Current
Consumables
Ore stockpiles
Gold in circuit
Bullion on hand
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
2017
$'000
1,880
4,026
1,400
4,309
11,615
3,676
2,119
‐
3,475
9,270
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 (‘restricted cash’) within the business is
disclosed as part of 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 is unlikely to collect all amounts
due according to the original terms of the 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.
Amounts receivable from Director related entities
At 30 June 2018, there were no amounts receivable from Director
related entities (2017: $Nil).
Consolidated
2018
$'000
2017
$'000
Raw materials and consumables, ore stockpiles, gold‐in‐circuit and
bullion on hand are valued at the lower of cost and net realisable
value.
41,429
6,014
7,980
9,126
64,549
37,418
1,467
10,594
5,861
55,340
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.
Accounting judgements and estimates
The calculation of net realisable value (NRV) for ore stockpiles, gold
in circuit and bullion on hand involves significant judgement and
estimate in relation to timing and cost of processing, gold prices,
exchange rates and processing recoveries. A change in any of these
assumptions will alter the estimated NRV and may therefore impact
the carrying value of inventories.
Trade and other payables
Current
Trade payables
Other payables
Consolidated
2018
$'000
2017
$'000
39,348
530
39,878
35,411
1,069
36,480
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.
Page 57
ST BARBARA LIMITED 2018
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 After Tax
(Increase profit)/decrease
profit
2018
$'000
(120)
120
2017
$'000
(487)
487
AUD/USD +10%
AUD/USD ‐10%
PGK against the AUD has been reviewed and considered an immaterial
currency risk.
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.
(c)
Interest rate exposures
The Group Treasury manages the interest rate exposures according
to the Board approved Treasury policy. Any decision to hedge
interest rate risk is assessed in relation to the overall Group
exposure, the prevailing interest rate market, and any funding
counterparty requirements. As at 30 June 2018, interest rates on
interest bearing liabilities were fixed.
Notes to the Financial Report
12 Financial risk management
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
under certain 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.
The Group's normal business activities expose it to a variety of
financial risk, being: market risk (especially gold price and foreign
currency 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 compliance 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.
(b) Currency risk
The Group is exposed to currency risk on gold sales purchases and
cash holdings that are denominated in a currency other than the
Company’s presentation currency of Australian dollars. The
currencies in which transactions primarily are denominated are
Australian Dollars (AUD), US Dollars (USD) and Papua New Guinea
Kina (PGK).
The exchange rates at the year‐end were as follows:
Closing rate as at
30 June 2018
30 June 2017
AUD/USD
0.7407
0.7695
AUD/PGK
2.3740
2.3788
2018
2017
Exposure to currency
USD
$’000
PGK
$’000
USD
$’000
PGK
$’000
Cash and cash equivalents
Trade receivables
Trade payables
Interest bearing liabilities
Net exposure
4,876
709
(6,781)
(21)
(1,217)
(558)
361
(1,775)
‐
(1,972)
8,606
356
(4,095)
(77)
(4,790)
1,637
297
(7,805)
‐
(5,871)
Page 58
ST BARBARA LIMITED 2018
is a financial
there
counterparty.
limit on funds placed with any single
Derivative transactions are only made with approved counterparties
in accordance with the Board approved Treasury Policy. Derivative
transactions do not cover a major proportion of total Group
production, with maturities occurring over a relatively short period
of time.
(f)
Cash flow hedges
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 $100 per ounce and all other factors remaining
constant, would have changed post tax profit by $28,067,000.
In accordance with the Group’s financial risk management policies,
the Group has managed commodity price risk from time to time
using gold forward contracts as described below.
In February 2018, the Company entered into gold forward contracts
for 100,000 ounces of gold at $1,750 per ounce with maturity over a
twelve‐month period from July 2018 to June 2019.
In March 2018, the Company entered into further gold forward
contracts for 50,000 ounces of gold at $1,750 per ounce with
maturity over a twelve‐month period from July 2019 to December
2019. The forward contracts protect Simberi operating margins.
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 2018 is provided in the table below.
Strike
Price
Total
ounces
6
months
or less
ounces
6 – 12
months
ounces
1 – 2
years
ounces
2 – 5
years
ounces
$1,750/oz
100,000
48,000
52,000
‐
$1,750/oz
50,000
‐
‐
50,000
‐
‐
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 2018, 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.
Notes to the Financial Report
12 Financial risk management (continued)
(d) 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
2018
$’000
2017
$’000
461,127
Total shareholders’ funds
547
Borrowings
Cash and cash equivalents(1)
(547)
461,127
Total capital
(1) Cash and cash equivalents are included to the extent that the net debt
665,870
39
(39)
665,870
position is nil.
The Group does not have a target net debt/equity ratio. There were
no changes in the Group’s approach to capital management during
the year, with the focus on maximising the cash position.
The Group is not subject to externally imposed capital requirements
other than normal banking requirements.
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 and
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.
(e)
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 $818,000 of the
trade receivables carrying amount at 30 June 2018 (2017:
$2,586,000), 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 2018 were past due.
Credit risks related to deposits and derivatives
Credit risk from balances with banks, financial institutions and
derivative counterparties is managed by the centralised Group
Treasury function in accordance with the Board approved policy.
Investments of surplus funds are only made with approved
counterparties with a minimum Standard & Poor’s credit rating, and
Page 59
Notes to the Financial Report
12
(g)
Financial risk management (continued)
Fair value estimation
ST BARBARA LIMITED 2018
The fair value of cash and cash equivalents and non‐interest bearing monetary financial assets and financial liabilities of the Group approximates
carrying value. The fair value of other monetary financial assets and financial liabilities is based upon market prices.
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.
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.
Weighted average interest rate
Net financial assets
n/a
15,392
8.00%
328,612
Floating
Interest rate
$’000
1 year or
less
$’000
Over 1 to 5
years
$’000
Non‐
interest
bearing
$’000
‐
‐
‐
5,906
37,872
43,778
Total
$’000
226,443
116,200
1,400
5,906
37,872
387,821
Fair value
226,443
116,200
1,400
5,906
37,872
387,821
211,051
116,200
1,400
‐
‐
328,651
‐
‐
‐
‐
‐
‐
2.62%
n/a
n/a
‐
39
39
120,000
‐
‐
‐
120,000
‐
‐
‐
39,878
‐
39,878
n/a
n/a
39,878
39
39,917
39,878
39
39,917
‐
‐
‐
‐
‐
‐
3,900
347,904
347,904
‐
‐
5,795
4,569
10,364
160,909
‐
5,795
4,569
171,273
160,909
‐
5,795
4,569
171,273
2.48%
n/a
n/a
15,392
‐
‐
‐
‐
15,392
1.74%
‐
‐
‐
40,909
‐
‐
‐
40,909
1.06%
Fixed Interest Maturing in 2018
Financial assets
Cash and cash equivalents
Deposits held to maturity
Restricted cash and cash equivalent
Receivables
Available for sale financial assets(1)
Weighted average interest rate
Financial liabilities
Trade and other payables
Finance lease liabilities
Fixed Interest Maturing in 2017
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
Weighted average interest rate
Net financial assets/(liabilities)
‐
‐
‐
‐
507
507
‐
40
40
36,480
‐
36,480
36,480
547
37,027
36,480
547
37,027
n/a
6.49%
8.00%
n/a
40,909
119,493
(40)
(26,116)
(134,246)
(134,246)
(1) Fair value is determined based on Level 1 inputs as the balance represents investments in listed securities.
Page 60
Notes to the Financial Report
12
Financial risk management (continued)
(h)
Liquidity risk
ST BARBARA LIMITED 2018
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. During the year the Group continued to accumulate a
significant cash balance with minimal debt position.
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.
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.
Maturity of financial liabilities – 2018
Finance lease liabilities
Trade and other payables
Maturity of financial liabilities – 2017
Finance lease liabilities
Trade and other payables
Less than
12 months
$‘000
Between 1
and 5 years
$‘000
Over 5
years
$‘000
Total
contractual
cash flows
$‘000
Carrying
amount
$‘000
40
39,878
39,918
521
36,480
37,001
‐
‐
‐
41
‐
41
‐
‐
‐
‐
‐
‐
40
39,878
39,918
562
36,480
37,042
39
39,878
39,917
547
36,480
37,027
Page 61
Notes to the Financial Report
13 Net debt
Cash and cash equivalents
Cash at bank and on hand
Term deposits
ST BARBARA LIMITED 2018
Consolidated
2018
$'000
15,392
211,051
226,443
2017
$'000
40,909
120,000
160,909
Cash and cash equivalents includes cash on hand, deposits and cash
at call held at 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.
Cash at bank and on hand
Cash at bank at 30 June 2018 was invested “at call” earning interest
at an average rate of 1.74% per annum (2017: 1.06% per annum).
Term deposits
Term deposits maturing within 3 months of the 30 June 2018
reporting date earned interest at rates of between 2.05% and 2.75%
per annum (2017: rates of between 2.22% and 2.80% per annum).
At 30 June 2018, the average time to maturity was 51 days (2017: 46
days) from balance date.
Deposits held to maturity
Term deposits between 3 and 12 months
Consolidated
2018
$'000
116,200
2017
$'000
‐
Term deposits between 3 and 12 months
Term deposits with maturity between 3 to 12 months at 30 June
2018 reporting date are earning interest at rates of between 2.44%
and 2.80% per annum (2017: %Nil). At 30 June 2018, the average
time to maturity was 158 days (2017: Nil days) from reporting date.
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in the income statement
over the period of the borrowings using the effective interest
method. Fees paid on the establishment of loan facilities, which are
not incremental costs relating to the actual draw down of the facility,
are recognised as prepayments and amortised on a straight line basis
over the term of the facility.
Interest bearing liabilities
Current
Secured
Lease liabilities
Total current
Non‐current
Secured
Lease liabilities
Total non‐current
Total interest bearing liabilities
Consolidated
2018
$'000
2017
$'000
39
39
‐
‐
39
507
507
40
40
547
Profit before income tax includes the following specific expenses:
Finance Costs
Interest paid/payable
Borrowing costs
Finance lease interest
Provisions: unwinding of discount
Consolidated
2018
$'000
2017
$'000
‐
50
15
853
918
7,433
10,859
11
1,658
19,961
Rental expense relating to operating leases
Lease payments
578
598
Page 62
Notes to the Financial Report
13 Net debt (continued)
Commitments for leases
The finance lease commitments displayed in the table below relate
to vehicles and plant and equipment, are based on the cost of the
assets and are payable over a period after which ownership of the
assets transfers to the Group.
Finance Lease Commitments
Payable not later than one year
Payable between one year and five years
Future finance charges
Total lease liabilities
Current
Non‐current
Analysis of Non‐Cancellable Operating
Lease Commitments
Payable not later than one year
Payable between one year and five years
Consolidated
2018
$'000
2017
$'000
40
‐
40
(1)
39
39
‐
39
521
41
562
(15)
547
507
40
547
478
175
653
405
846
1,251
Reconciliation of profit from ordinary activities after income tax
to net cash flows from operating activities
Profit after tax for the year
Depreciation and amortisation
Asset impairments and write downs
Difference between income tax expense
and tax payments
Unwinding of rehabilitation provision
Net finance costs amortised
Unrealised/realised foreign exchange gain
Consolidated
2018
$'000
2017
$'000
226,998
157,572
87,276
‐
85,583
27,273
(5,167)
32,134
853
‐
200
1,658
2,842
3,037
2,045
Equity settled share‐based payments
3,636
Change in operating assets and liabilities
Receivables and prepayments
Inventories
Other assets
Trade creditors and payables
Provisions and other liabilities
(945)
(1,436)
(9,209)
(916)
5,277
3,398
3,362
(1,145)
(3,288)
(2,133)
ST BARBARA LIMITED 2018
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
lease payments. The
present value of the minimum future
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 interest 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.
The Group has a cancellable lease relating to the provision of assets,
which include payment obligations for early termination. At 30 June
2018, the termination payment was $2,819,000 (2017: $2,405,000).
The Group had not issued any notice to terminate the leases at 30
June 2018.
14 Contributed equity
Details
Number of
shares
$'000
Opening balance 1 July 2017
497,331,095
887,254
Vested performance rights
15,953,028
739
Shares issued on DRP
3,257,650
10,437
Purchase of treasury shares
3,974,617
4,132
Closing balance 30 June 2018
520,516,390
902,562
Treasury shares held
(3,974,617)
(4,132)
Closing balance 30 June 2018 issued
to the public
516,541,773
898,430
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.
Net cash flows from operating activities
315,679
303,226
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.
Treasury shares
Treasury shares are issued shares held by the Company in trust for
employee performance rights (refer Note 19). The shares are not
included in ordinary shares.
Page 63
Notes to the Financial Report
D. Business portfolio
ST BARBARA LIMITED 2018
15 Parent entity disclosures
16 Financial assets and fair value of financial
378,860
204,213
Parent entity
530,408
423,046
St Barbara Limited
As at, and throughout, the financial year ended 30 June 2018, the
parent company of the Group was St Barbara Limited.
Financial statements
Results of the parent entity
Profit after tax for the year
Other comprehensive profit/(loss)
Total comprehensive income for the
year
Parent Entity
2018
$'000
2017
$'000
133,025
134,430
8,871
(147)
141,896
134,283
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
Reserves
Dividend payments
Accumulated losses
Total equity
Parent Entity
2018
$'000
2017
$'000
86,296
67,051
137,379
122,803
898,429
887,254
(5,884)
2,987
(51,414)
‐
(448,102)
(589,998)
393,029
300,243
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
$4,888,000 (2017: $4,893,000), operating lease rents of $62,000
(2017: $375,000), and interest of $4,240,000 (2017: $14,182,000) to
entities in the wholly‐owned group.
Net loans payable to the Company amount to a net receivable of
$108,159,000 (2017: net receivable $204,781,000).
Balances and transactions between the Company and
its
subsidiaries, which are related parties of the Company, have been
eliminated on consolidation.
assets
Financial assets
Australian listed shares
Consolidated
2018
$'000
37,872
2017
$'000
4,569
At 30 June 2018 year end, the Group’s financial assets of
$37,872,000 (30 June 2017: $4,569,000), represent investments in
shares listed on the Australian Securities Exchange, and are valued
using Level 1 inputs. The accumulated fair value adjustments are
recognised in other comprehensive income as gains or losses.
17 Controlled entities
The consolidated financial statements incorporate the assets,
liabilities and results of the following subsidiaries in accordance with
the accounting policy on consolidation.
All subsidiaries are 100% owned at 30 June 2018 and 30 June 2017.
Country of
Incorporation
Subsidiaries of St Barbara Limited
Allied Gold Mining Ltd
Subsidiaries of Allied Gold Mining Ltd
Allied Gold Pty Ltd
Subsidiaries of Allied Gold Pty Ltd
Advance R&D Pty Ltd
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
Nord Pacific Limited
Subsidiaries of Allied Tabar Exploration Pty Ltd
Tabar Exploration Company Ltd
Subsidiaries of Nord Pacific Limited
Nord Australex Nominees (PNG) Ltd
Simberi Gold Company Limited
Australia
UK
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
PNG
PNG
PNG
Page 64
Notes to the Financial Report
E. Remunerating our people
18 Employee benefit expenses and other
provisions
Expenses
Employee related expenses
Wages and salaries
Contributions to defined contribution
superannuation funds
Equity settled share‐based payments
Consolidated
2018
$'000
2017
$'000
72,544
69,875
5,515
3,636
81,695
5,288
2,045
77,208
Directors and key management personnel
Short term employee benefits
Post‐employment benefits
Leave
Share‐based payments
Other provisions
Current
Employee benefits – annual leave
Employee benefits – long service leave
Other provisions
Non‐current
Employee benefits ‐ long service leave
Other provisions
Consolidated
2018
$'000
3,097
60
236
1,060
4,453
2017
$'000
2,376
39
110
781
3,306
Consolidated
2018
$'000
2017
$'000
4,607
3,712
9,534
17,853
1,875
‐
1,875
4,063
3,014
5,077
12,154
2,010
2,202
4,212
ST BARBARA LIMITED 2018
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.
Retirement benefit obligations
Contributions to defined contribution funds are recognised as an
expense as they are due and become payable. The Group has no
obligations in respect of defined benefit funds.
Equity settled share‐based payments
Performance rights issued to employees are recognised as an
expense by reference to the fair value of the equity instruments at
the date at which they are granted. Refer Note 19 for further
information.
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.
Disclosures relating to Directors and key management personnel are
included within the Remuneration Report, with the exception of the
table opposite.
Employee related and other provisions 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 be required to settle the obligation, and the amount has been
reliably estimated.
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.
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
corporate bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
Page 65
ST BARBARA LIMITED 2018
Notes to the Financial Report
19 Share‐based payments
Employee Performance Rights
During the year ended 30 June 2018, there was no amount transferred as a gain for performance rights that expired during the year (2017: $Nil).
Accounting standards preclude the reversal through the income statement of amounts which have been booked in the share based payments
reserve for performance rights, and 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 2018
Grant Date
Expiry Date
Issue price
10 Dec 2015
30 Jun 2018
21 Oct 2016
30 Jun 2019
30 Jun 2019
12 Dec 2016
31 Mar 2017 30 Jun 2019
16 Nov 2017 30 Jun 2020
Total
$0.51
$2.92
$2.92
$2.92
$2.89
Consolidated and parent entity 2017
5 Dec 2014
30 Jun 2017
10 Dec 2015
30 Jun 2018
21 Oct 2016
30 Jun 2019
30 Jun 2019
12 Dec 2016
31 Mar 2017 30 Jun 2019
Total
$0.12
$0.51
$2.92
$2.92
$2.92
Balance at
start of the
year
Number
3,974,617
837,568
196,708
42,440
‐
5,051,333
15,953,028
3,974,617
‐
‐
‐
19,927,645
Granted
during the
year
Number
‐
‐
‐
‐
1,245,390
1,245,390
‐
‐
837,568
196,708
42,440
1,076,716
Vested during
the year
Number
(3,974,617)
‐
‐
‐
‐
(3,974,617)
(15,953,028)
‐
‐
‐
‐
(15,953,028)
Expired
during the
year
Number
‐
‐
‐
‐
(33,578)
(33,578)
‐
‐
‐
‐
‐
‐
Balance at
end of the
year
Number
‐
837,568
196,708
42,440
1,211,812
2,288,528
‐
3,974,617
837,568
196,708
42,440
5,051,333
Exercisable
at end of the
year
Number
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
The weighted average remaining contractual life of performance
rights outstanding at the end of the year was 1.53 years (2017: 1.2
years). Conditions associated with rights granted during the year
ended 30 June 2018 included:
i.
Rights are granted for no consideration. The vesting of rights
granted in 2018 is subject to a continuing service condition as
at the vesting date, Return on Capital Employed over a three
year period (for hey management personnel only), and relative
Total Shareholder Return over a three year period measured
against a peer group.
ii.
iii.
iv.
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.
As a result of the Monte‐Carlo simulation results, the assessed fair
value of rights issued during the year was $3,898,000. This outcome
was based on the likelihood of the market condition being met as at
the date the rights vest.
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
2018
$
2017
$
Performance rights issued under
performance rights plan
3,636,000
2,045,000
Accounting judgements and estimates
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.
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 66
Notes to the Financial Report
F. Other disclosures
ST BARBARA LIMITED 2018
20 Remuneration of auditors
21 Events occurring after the balance sheet date
During the year the following fees were paid or payable for services
provided by PricewaterhouseCoopers, the auditor of the parent
entity, and its related practices:
Audit and review of financial reports
Non‐audit services
Tax advisory and assurance services(1)
Tax advice in relation to AusIndustry
review(1)
Accounting advice and other assurance
related services
Total remuneration for audit and non
audit related services
Consolidated
2018
$
300,900
2017
$
295,000
31,500
51,500
211,196
337,772
22,484
‐
406,384
843,968
(1) $409,772 of the total tax advisory fees in 2017 related to non‐recurring services
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.
Subsequent to year end, the directors have declared a fully franked
final dividend in relation to the 2018 financial year of 8 cents per
ordinary share, to be paid on 26 September 2018. A provision for this
dividend has not been recognised in the 30 June 2018 financial
statements.
22 Contingencies
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.
As a result of the Australian Taxation Office’s (ATO) program of
routine and regular tax reviews and audits, the Group anticipates
that ATO reviews and audits may occur in the future. The ultimate
outcome of any future reviews and audits cannot be determined
with an acceptable degree of reliability at this time. Nevertheless,
the Group believes it is making adequate provision for its tax
liabilities, including amounts shown as deferred tax liabilities, and
takes reasonable steps to address potentially contentious issues
with the ATO.
Page 67
ST BARBARA LIMITED 2018
Critical accounting judgement and 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.
Notes to the Financial Report
23 Basis of preparation
Basis of measurement
The consolidated financial statements have been prepared on the
historical cost basis, except for the following material items:
Financial assets are measured at fair value;
Share based payment arrangements are measured at fair value;
Rehabilitation provision is measured at net present value;
Long service leave provision is measured at net present value.
Principles of consolidation ‐ Subsidiaries
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of St Barbara Limited as at 30 June 2018
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.
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.
Foreign currency translation
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).
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.
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 68
ST BARBARA ANNUAL REPORT 2018
Notes to financial report
24 Accounting standards
New Standards adopted
The accounting policies applied by the Group in this 30 June 2018 consolidated financial report are consistent with Australian Accounting
Standards. All new and amended Australian Accounting Standards and interpretations mandatory as at 1 July 2017 to the group have been
adopted and have no material impact on the recognition, measurement and disclosure of the financial report.
Accounting policies are applied consistently by each entity in the Group.
New accounting standards not yet adopted
Reference
AASB 9 Financial Instruments (December 2014) and AASB 2009‐11 Amendments to Australian Accounting Standards
arising from AASB 9
AASB 16 Leases
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.
AASB 2014‐10 (2015‐101) Amendments to Australian Accounting Standards‐Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture.
Application of
Standard
1 January 2018
1 January 2019
1 January 2018
1 July 2018
Assessment of the impact on the recognition, measurement and disclosure of the financial report of new accounting standards not adopted:
In relation to AASB 9, the Company determined that investments in equities of listed companies will continue to be accounted for at Fair Value
through Other Comprehensive Income in future periods through an irrevocable election. As a result, future gains or losses on disposal will not
affect the income statement. All other items will continue to be accounted for consistently with the previous standard.
In relation to AASB 15, the Company has assessed the effects of applying the new standard on sales of gold and silver and determined that there
is no material impact on measurement or disclosure of revenue.
AASB 16 was issued in February 2016 with a mandatory application date for the Group of 1 July 2019. Preliminary analysis of AASB 16 indicates
that non‐cancellable operating leases and ‘right‐of‐use‐assets’ incorporated within certain supplier contracts may be recognised on the balance
sheet. The impact of AASB 16 on the income statement will be a reduction in mine operating costs and a related increase in depreciation and
interest expenses.
Due to the potential changing nature of contracts and services provided by suppliers over time, management has not yet quantified the potential
impact of applying AASB 16. In relation to current non‐cancellable operating leases, such as office leases, the impact of AASB 16 is not expected
to be material. The Company does not intend to adopt AASB 16 early, will apply the modified retrospective transition approach and not restate
comparative amounts; the cumulative effect of first adoption of AASB 16 will be recognised as at 1 July 2019.
Page 69
Financial Report
Directors’ declaration
ST BARBARA LIMITED 2018
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 69 and the remuneration report in the
Directors’ report, set out on pages 16 to 37, 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 2018 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 2018.
The directors draw attention to page 40 of the financial statements, which includes 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
22 August 2018
Page 70
Financial Report
ST BARBARA LIMITED 2018
Independent auditor’s report page 1
Page 71
Financial Report
ST BARBARA LIMITED 2018
Independent auditor’s report page 2
Page 72
Financial Report
Independent auditor’s report page 3
ST BARBARA LIMITED 2018
Page 73
Financial Report
ST BARBARA LIMITED 2018
Independent auditor’s report page 4
Page 74
Financial Report
ST BARBARA LIMITED 2018
Independent auditor’s report page 5
Page 75
ST BARBARA LIMITED 2018
Ore Reserves and Mineral Resources Statement as at 30 June 2018
Overview
Gwalia Ore Reserves reduced by mining depletion from 2.13 Moz of contained gold to 1.90 Moz
Simberi Ore Reserves reduced by mining depletion from 1.88 Moz of contained gold to 1.72 Moz
Group Ore Reserves decreased from 4.31 Moz of contained gold to 3.92 Moz, after depletion
Gwalia Mineral Resources and Ore Reserves will be updated following completion of the Gwalia Mass Extraction (GMX) feasibility study.
Company Summary at 30 June 2018
˃
Total Ore Reserves are estimated at:
31.1 Mt @ 3.9 g/t Au for 3.92 Moz of contained gold, comprising:
˃
˃
Leonora Operations:
10.5 Mt @ 6.5 g/t Au for
2.20 Moz of contained gold
Simberi Operations:
20.6 Mt @ 2.6 g/t Au for
1.72 Moz of contained gold
˃
Total Mineral Resources1 are estimated at:
99.1 Mt @ 2.9 g/t Au for 9.16 Moz of contained gold, comprising:
˃
˃
Leonora Operations:
28.2 Mt @ 6.0 g/t Au for 5.45 Moz of contained gold
Simberi Operations:
70.9 Mt @ 1.6 g/t Au for
3.71 Moz of contained gold
The 30 June 2018 Ore Reserves and Mineral Resources Statements released to the ASX on 27 August 2018 follow.
1 Mineral Resources are reported inclusive of Ore Reserves
Page 76
Ore Reserves and Mineral Resources Statement as at 30 June 2018
ST BARBARA LIMITED 2018
Table 1: St Barbara 2018 and 2017 Ore Reserves and Mineral Resources Summary
Project
Gwalia (WA)
Tower Hill (WA)
Total Leonora
Simberi (Oxide)
Simberi (Sulphide)
Simberi Stockpile
Total Simberi
Grand Total
Project
Gwalia (WA)
Tower Hill (WA)
Total Leonora
Simberi (Oxide)
Simberi (Sulphide)
Total Simberi
Grand Total
2017 Ore Reserves
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
2018
Production
Ounces (‘000)
2018 Ore Reserves
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
8,556
2,572
11,128
10,907
12,537
‐
23,444
34,572
7.8
3.7
7.0
1.3
3.5
‐
2.5
3.9
2,133
306
2,439
472
1,402
‐
1,873
4,312
2017 Mineral Resources
Tonnes
(‘000)
23,753
5,093
28,846
21,288
54,517
75,805
104,651
Grade (g/t)
Ounces
(‘000)
6.7
3.8
6.2
1.1
1.8
1.6
2.9
5,087
625
5,712
744
3,179
3,923
9,635
268
‐
268
135
‐
‐
135
403
7,907
2,572
10,479
7,336
12,352
889
20,577
31,055
7.5
3.7
6.5
1.3
3.5
0.8
2.6
3.9
1,899
306
2,205
314
1,382
22
1,718
3,923
2018 Mineral Resources
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
23,102
5,093
28,195
17,117
53,824
70,941
99,136
6.5
3.8
6.0
1.0
1.8
1.6
2.9
4,825
625
5,450
576
3,136
3,712
9,162
The Company’s Ore Reserves and Mineral Resources have reduced as a consequence of mining. Production for the financial year is
provided in the table above for reference, and varies from depletion against previously reported Ore Resources and Mineral Reserves
due to a variety of reasons including positive or negative reconciliation, dilution or loss. For Simberi, depletion includes some sulphide
ore mined adjacent to oxide ore in transitional zones.
Page 77
Ore Reserves and Mineral Resources Statement as at 30 June 2018
ST BARBARA LIMITED 2018
Mineral Resources Revisions
Gwalia (‐262,000 ounces)
The Gwalia Mineral Resources have been depleted for mining. The previous publicly reported Measured, Indicated and Inferred Mineral Resource
Estimate reported at 30 June 2017 was 23,753 kt @ 6.7 g/t Au containing 5,087 koz of gold. This has decreased by 262 koz of gold to 23,102 kt
@ 6.5 g/t Au containing 4,825 koz.
Simberi Oxide (‐168,000 ounces)
The Simberi Oxide Mineral Resources have been depleted for mining. The previous publicly reported Measured, Indicated and Inferred Oxide
Mineral Resource Estimate reported at 30 June 2017 was 21,288 kt @ 1.1 g/t Au containing 744 koz of gold. This has decreased by 168 koz of
gold to 17,117 kt @ 1.0 g/t Au containing 576 koz of gold.
Simberi Sulphide (‐43,000 ounces)
The Simberi Sulphide Mineral Resources have been depleted for mining. The previous publicly reported Measured, Indicated and Inferred
Sulphide Mineral Resource Estimate reported at 30 June 2017 was 54,517 kt @ 1.8 g/t Au containing 3,179 koz of gold. This has decreased by 43
koz of gold to 53,824 kt @ 1.8 g/t Au containing 3,136 koz of gold.
Ore Reserves Revisions
Gwalia (‐234,000 ounces)
The Gwalia Ore Reserves have been depleted for mining. The previous publicly reported Proved and Probable Ore Reserve Estimate reported at
30 June 2017 was 8,556 kt @ 7.8 g/t Au containing 2,133 koz of gold. This has decreased by 234 koz of gold to 7,907 kt @ 7.5 g/t Au containing
1,899 koz of gold.
Simberi Oxide and Sulphide (‐155,000 ounces)
The Simberi Oxide and Sulphide Ore Reserves have been depleted for mining. The previous publicly reported Proved and Probable Ore Reserve
Estimate reported at 30 June 2017 was 23,444 kt @ 2.5 g/t Au containing 1,873 koz of gold. This has reduced by 155 koz of gold to 20,577 kt @
2.6 g/t Au containing 1,718 koz of gold.
Page 78
Ore Reserves and Mineral Resources Statement as at 30 June 2018
ST BARBARA LIMITED 2018
Ore Reserves Statement as at 30 June 2018
Project
Proved
Gold
(g/t)
Tonnes
('000)
Probable
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gwalia, (WA)
Tower Hill, (WA)
Simberi Oxide, (PNG)
Simberi Sulphide, (PNG)
Simberi Stockpiles, (PNG)
1,845
‐
1,644
151
889
9.0
‐
1.5
3.0
0.8
531
‐
77
15
22
6,061
2,572
5,692
12,200
‐
7.0
3.7
1.3
3.5
‐
1,368
306
237
7,907
2,572
7,336
1,367
12,352
‐
889
Total
Gold
(g/t)
Ounces
('000)
7.5
3.7
1.3
3.5
0.8
1,899
306
314
1,382
22
Total All Projects
4,529
4.4
645
26,525
3.8
3,278
31,055
3.9
3,923
Notes
1. Ore Reserves are based on a gold price of: Gwalia (A$1,350/oz), Tower Hill (A$1,250/oz), Simberi (US$1,200/oz).
2. Cut‐off Grades Gwalia (4.0 g/t Au), Tower Hill (2.8 g/t Au), Simberi Oxide (0.5 g/t Au), Simberi Sulphide (1.1 g/t Au).
3. Mineral Resources are reported inclusive of Ore Reserves.
4. Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
JORC Code Compliance Statement
The information in this report that relates to Ore Reserves is based on information compiled by Mr. Glen Carthew and Mr. Tim Richards, who are
Members or Fellows of the Australasian Institute of Mining and Metallurgy. Glen Carthew and Tim Richards are full‐time employees of St Barbara
Ltd and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they
are 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”.
Glen Carthew and Tim Richards consent to the inclusion in the statement of the matters based on their information in the form and context in
which it appears.
Page 79
Ore Reserves and Mineral Resources Statement as at 30 June 2018
ST BARBARA LIMITED 2018
Mineral Resources Statement as at 30 June 2018
Measured
Indicated
Inferred
Project
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gwalia, (WA)
4,581
7.1
1,048
14,690
Tower Hill, (WA)
Simberi Oxide, (PNG)
Simberi Sulphide, (PNG)
‐
2,120
526
‐
1.2
1.7
‐
85
28
4,604
10,163
40,683
6.3
3.9
1.0
1.9
2,997
3,831
574
341
489
4,834
2,454
12,615
6.3
3.3
1.0
1.6
780
23,102
51
5,093
150
17,117
654
53,824
Total
Gold
(g/t)
6.5
3.8
1.0
1.8
Ounces
('000)
4,825
625
576
3,136
Total All Projects
7,227
5.0
1,161
70,140
2.8
6,366
21,769
2.3
1,635
99,136
2.9
9,162
Notes
1. Mineral Resources are reported inclusive of Ore Reserves.
2. Cut‐off Grades Gwalia (2.5 g/t Au), Tower Hill (2.5 g/t Au), Simberi Oxide (0.4 g/t Au), Simberi Sulphide (0.6 g/t Au).
3. Simberi Mineral Resources are reported constrained by a US$1,800/oz pit shell.
4. Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
JORC Code Compliance Statement
The information in this report that relates to Mineral Resources is based on information compiled by Ms. Jane Bateman and Mr. Robert Love
who are Fellows of the Australasian Institute of Mining and Metallurgy. Jane Bateman and Robert Love are full‐time employees of St Barbara Ltd
and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are
undertaking to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”.
Jane Bateman and Robert Love consent to the inclusion in the statement of the matters based on their information in the form and context in
which it appears
Page 80
ST BARBARA LIMITED 2018
Shareholder Information as at 22 August 2018
Information on shareholders required by the ASX Listing Rules and not disclosed elsewhere in this report is set out below.
The information refers to ‘ordinary fully paid shares’ (‘shares’) and is provided as at 22 August 20181.
Twenty Largest Shareholders2
Rank
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CPU SHARE PLANS PTY LTD
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
CS THIRD NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED‐GSCO ECA
SANDHURST TRUSTEES LTD
AMP LIFE LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BRISPOT NOMINEES PTY LTD
MRS CAROLINE JOY VASSIE
NORTHWEST ACCOUNTING PTY LTD
UBS NOMINEES PTY LTD
MR ROBERT SCOTT VASSIE
Total top 20 holders of ordinary fully paid shares
Total remaining holders
Total
Shares
246,862,715
106,798,578
53,984,531
19,801,705
7,486,241
4,541,368
3,974,617
3,753,817
3,059,065
2,149,868
2,032,713
1,771,548
1,657,460
1,595,493
1,500,000
1,209,118
935,720
934,657
880,371
833,333
% of Issued
Capital
47.43
20.52
10.37
3.80
1.44
0.87
0.76
0.72
0.59
0.41
0.39
0.34
0.32
0.31
0.29
0.23
0.18
0.18
0.17
0.16
465,762,918
54,753,472
89.48
10.52
520,516,390
100.00
1 The 2018 Directors’ and Financial Report was signed on 22 August 2018.
2 A number of the 20 largest shareholders shown in the table hold shares as a nominee or custodian. In accordance with the ASX Listing Rules, the table reflects
the legal ownership of shares and not the details of the beneficial holders.
Page 81
ST BARBARA LIMITED 2018
Shareholder Information as at 22 August 2018
Distribution of Shareholdings
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Unmarketable Parcels
Total Holders
4,188
3,367
778
786
99
Shares
1,739,392
8,235,886
5,762,539
21,833,170
482,945,403
9,218
520,516,390
Minimum $500.00 parcel at $4.10 per share1
Total Holders
951
Shares
33,937
% of Issued
Capital
0.33
1.58
1.11
4.19
92.79
100.00
Minimum
Parcel Size
122
Substantial Shareholders2
Name
Van Eck Associates Corporation
Norges Bank
Vinva Investment Management
Date notice
released on ASX
Shares
% of Issued
Capital
17 August 2018
63,765,495
12.25%
17 August 2018
27,428,982
2 September 2016
25,862,522
5.31%
5.20%
End of Annual Report
1 Close price on 22 August 2018
2 As notified by the substantial shareholders to the ASX as at 22 August 2018
Page 82
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ABN 36 009 165 066
BOARD OF DIRECTORS
T C Netscher
R S Vassie
K J Gleeson
D E J Moroney
Non‐Executive Chairman
Managing Director & CEO
Non‐Executive Director
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
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
www.investorcentre.com/au
AUDITOR
PricewaterhouseCoopers
2 Riverside Quay
Southbank Victoria 3006 Australia
EXCHANGE LISTINGS
Shares in St Barbara Limited are quoted on the
Australian Securities Exchange (ASX), Ticker Code: SBM
American Depositary Receipts (ADR), Ticker Code: STBMY