Annual Report 2019
Annual Report
ST BARBARA LIMITED 2019
St Barbara at a glance
FY19 was a year of transformation, including:
St Barbara was established in 1969 and is an ASX-200
listed gold mining company (ASX:SBM).
•
The acquisition of Atlantic Gold Corporation in Nova
Scotia, Canada
St Barbara has three mining operations:
• Record production and cash flow from Simberi
•
•
•
•
•
•
Leonora Operations in Western Australia,
Simberi Operations in Papua New Guinea, and
• Atlantic Gold Operations in Nova Scotia, Canada.
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
6.4 g/t Au down to 2,140 metres below surface, a mine
plan to at least FY 31, and remains open at depth.
Simberi Operations has an open pit mine and associated
processing plant. Simberi produced 142 koz of gold in
FY 19 with the remaining oxide project life 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.
• Atlantic Gold Operations comprise the Touquoy open
pit mine and associated processing plant, with planned
expansion of three additional pits nearby.
•
Following the acquisition of Atlantic Gold in July 2019,
St Barbara had:
• Mineral Resources of 11.97 million ounces of
contained gold, including Ore Reserves of 5.94
million ounces of contained gold;
• Cash at bank of A$110 million;
• Debt of A$112 million; and
• Available debt facility of A$200 million.
Operations
•
Exceeded
Operations
production
guidance
at
Simberi
• Achieved All-In Sustaining Cost (AISC) guidance
• A$112M Gwalia extension project on schedule for
completion in 2019
•
Significant drilling results at Gwalia Deeps and
regionally
• Continued positive Simberi Sulphide drilling results
•
Total $0.08 per share fully franked dividends
declared for year
The Company enters FY20 well positioned, with:
• A diversified portfolio of gold operations
• A number of near mine prospective targets at each
operation that are planned to be drilled this year
• A strong balance sheet sufficient to finance the
Company’s strategy and with flexibility to adapt to
different gold price environments
Gold Production
362,346 ounces
All-in Sustaining Cost
A$1,080/oz
400,000
300,000
200,000
100,000
0
1,200
1,000
800
600
400
200
0
2015
2016
Gwalia
2017
2018
2019
Simberi
2015
2016
2017
2018
2019
i
Annual Report
St Barbara at a glance
ST BARBARA LIMITED 2019
Leonora (Gwalia mine)
Simberi
Atlantic Gold
• Gwalia underground mine
FY 19 production 220 koz
•
FY 20F production 200 – 210 koz
•
2.1 Moz Ore Reserve (open at depth)
•
• Mine plan to FY 31
• Open pit mine
•
•
•
FY 19 production 142 koz
FY 20F production 110 – 125 koz
0.3 Moz oxide and 1.4 Moz sulphide Ore
Reserve (sulphide open at depth)
• Mine plan to FY 21
• Open pit mine
•
•
•
FY 19 production 93 koz
1.9 Moz Ore Reserve (open at depth)
Four open pits planned to FY 30
FY20 planned exploration
Over 4,000 km2 of prospective tenements across Western Australia, Papua New Guinea and Nova Scotia
Western Australia
Papua New Guinea
Nova Scotia
• Gwalia deep drilling, adjacent and
below existing Reserves
• Gwalia and Leonora regional
exploration
Pinjin and Lake Wells drilling
•
•
•
Simberi oxide and sulphide near
mine drilling
Tatau and Big Tabar Islands gold
and copper-gold drilling
• Near mine drilling at Touquoy
• Continued exploration along
∼45km of the host structure
Strategy
‘Stronger for Longer’
Ore Reserves
Mineral Resources
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 and work with our people to continue to achieve
extraordinary results
Trusted to operate
Our various stakeholders trust us everywhere we choose
to operate
12.0
2.4
4.2
9.2
3.7
5.5
5.4
5.9
1.9
1.7
2.4
3.9
1.7
2.2
FY 18
FY 19
FY 19
Leonora Simberi Atlantic Gold
FY 18
Moz
Moz
Notes: All-in Sustaining Cost (AISC) is a non-IFRS measure, refer page 5. Leonora and Simberi Ore Reserves and Mineral Resources figures are as at 30 June 2019, Atlantic
Gold Ore Reserves and Mineral Resources figures are as at 25 March 2019, refer to pages 79 to 86 for details. Mineral Resources are reported inclusive of Ore
Reserves. FY20 guidance figures per June 2019 Quarterly Report released to ASX on 24 July 2019. Data is rounded as displayed in charts, discrepancies in totals may
occur due to rounding. Cash following acquisition of Atlantic Gold calculated as $890 million at 30 June 2019 less $780 million acquisition consideration paid in July
2019. Debt of A$112 million (C$100 million) acquired with Atlantic Gold on 19 July 2019.
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 consolidated income
statement
Discussion and analysis of the consolidated cash flow
statement
Discussion and analysis of the consolidated 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 2019
Page
Directors’ Report
2
2
2
3
4
5
6
7
8
8
9
10
12
13
14
17
17
18
40
40
40
40
40
40
40
41
42
79
87
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 2019.
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
• S G Dean (appointed 23 July 2019)
Non-Executive Director
• K J Gleeson
Non-Executive Director
• S E Loader (appointed 1 November 2018)
Non-Executive Director
• D E J Moroney
Non-Executive Director
The qualifications, experience and special responsibilities of the
Directors are presented on page 14.
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.
The Company’s 2019 Corporate Governance Statement was
released to the ASX on 13 September 2019 and is available at
www.stbarbara.com.au/about-us/governance.
Sustainability Report
The Company’s 2019 Sustainability Report was released to the
ASX on 13
at
www.stbarbara.com.au/sustainability.
September 2019
available
and
is
Annual Report
Integrated suite of
annual reporting
Sustainability
Report
Corporate
Governance
Statement
Page 2
Directors’ Report
Overview of group results
The consolidated result for the year is summarised as follows:
EBITDA(3)(6)
EBIT(2)(6)
Profit before tax(4)
2019
$’000
2018
$’000
274,810
345,514
195,167
258,238
204,294
262,603
Statutory profit (1) after tax
144,163
226,998
Total net significant items after tax
2,435
25,106
EBITDA (6) (excluding significant
items)
278,675
345,514
EBIT (6) (excluding significant items)
199,032
258,238
ST BARBARA LIMITED 2019
During the 2019 financial year the Group recorded strong financial
performance despite lower production and profit from the Leonora
operations. The key results for the year were:
• Statutory net profit after
tax of $144,163,000
(2018:
$226,998,000);
Production at Gwalia and Simberi totalling 362,346 ounces
(2018: 403,089 ounces), with lower production from Gwalia
compared to the prior year partially offset by record production
from Simberi;
Cash
flows
from operations of $213,209,000
(2018:
$300,553,000), which reflected an increase in sustaining capital
expenditure in 2019 at Gwalia and Simberi, and was after growth
capital of $75,439,000 (2018: $37,129,000); and
208,159
262,603
• Total 2019 dividends of $62,612,000 (2018: $51,414,000).
Profit before tax (excluding
significant items)
Underlying net profit after tax(5)(6)
141,728
201,892
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.
Atlantic Gold Corporation
acquisition costs
Significant items before tax
Income tax
Significant items after tax
2019
$’000
(3,865)
(3,865)
6,300
2,435
2018
$’000
‐
‐
25,106
25,106
(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 consolidated 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.
items, was $141,728,000
Underlying net profit after tax, representing net profit excluding
(2018:
significant
$201,892,000). Net significant items in the 2019 financial year
included the benefit from an increase in deferred tax assets
associated with the Simberi operations, and costs associated with
the acquisition of Atlantic Gold Corporation (Atlantic Gold).
the year
for
Cash on hand and deposits held to maturity within 12 months at 30
June 2019 was $890,199,000 (2018: $342,643,000). The significant
increase in cash during the year was attributable to net proceeds
from new shares issued to fund the acquisition of Atlantic Gold of
$479,558,000. Net cash generated during the year, excluding the net
proceeds from the equity issue and movements in deposits held to
maturity, was $63,647,000 (2018: $176,048,000).
Total interest bearing borrowings at 30 June 2019 were $Nil (2018:
$39,000).
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
2019
2018
26.99
44.26
15%
(39)%
40%
66%
Underlying shareholder returns for the year are presented in the
table below.
Underlying basic earnings per
share(1)(cents per share)
2019
26.54
2018
39.37
Underlying return on equity(1)
15%
37%
(1) Underlying basic earnings per share and return on equity 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.
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 2019
Year ended 30 June 2019
ST BARBARA LIMITED 2019
$’000
Revenue
Leonora
Operations
Simberi
Operations
Group
$’000
392,678
257,643
650,321
Leonora
Operations
Simberi
Operations
Group
229,907
112,338
342,245
Operating cash
contribution
Mine operating costs
(155,236)
(143,839)
(299,075)
Gross Profit
237,442
113,804
351,246
Royalties
EBITDA
Depreciation and
amortisation
Profit from
operations(1)
(15,663)
(5,778)
(21,441)
221,779
108,026
329,805
(59,763)
(18,220)
(77,983)
162,016
89,806
251,822
Year ended 30 June 2018
Revenue
461,264
217,940
679,204
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
(1) Excludes 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 2019 financial year the Group’s operations continued to
achieve strong production and cost performance.
Safety of people working across the Group is of paramount
importance and the focus has been to maintain a low total
recordable injury frequency rate (TRIFR) calculated as a rolling 12
month average. During 2019 the TFIR increased to 5.0 (2018: 2.1)
due to 23 low severity recordable injuries, with 15 of these injuries
in the most minor category involving no lost time or reduced duties.
Nearly all the injuries were hand or forearm laceration or finger
injuries. The Group continues to work in an urgent and focused way
on preventing future injuries through training programs and
improved supervision of employees and contractors. Investigating
and learning from incidents to prevent reoccurrence is a key
consideration in developing training and supervision programs.
Total production for the Group in the 2019 financial year was
362,346 ounces of gold (2018: 403,089 ounces), and gold sales
amounted to 368,444 ounces (2018: 400,956 ounces) at an average
gold price of $1,762 per ounce (2018: $1,691 per ounce). The impact
of lower production at Gwalia of 220,169 ounces (2018: 268,428
ounces) was partially offset by a new production record at Simberi
of 142,177 ounces (2018: 134,661 ounces).
Consolidated All‐In Sustaining Cost (AISC) for the Group was $1,080
per ounce in 2019 (2018: $891 per ounce), reflecting the impact of
lower production and higher operating costs at Gwalia, and
increased sustaining capital expenditure at both Gwalia and Simberi.
.Capital – sustaining
(44,161)
(9,436)
(53,597)
Cash contribution(1)
185,746
102,902
288,648
Capital – Gwalia
Extension Project
Capital – growth(2)
Cash contribution
after growth capital
Year ended 30 June 2018
Operating cash
contribution
(59,716)
(11,127)
‐
(59,716)
(4,596)
(15,723)
114,903
98,306
213,209
288,579
87,013
375,592
Capital – sustaining
(33,829)
(4,081)
(37,910)
Cash contribution(1)
Capital – Gwalia
Extension Project
Capital – growth(2)
Cash contribution
after growth capital
254,750
82,932
337,682
(31,773)
(5,020)
‐
(31,773)
(336)
(5,356)
217,957
82,596
300,553
(1) Cash contribution is non‐IFRS financial information, which has not been
subject to review or audit 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, Gwalia
feasibility studies and sulphide drilling at Simberi.
Total net cash contribution from the operations was $213,209,000
(2018: $300,553,000), reflecting the impact of lower production
from Gwalia and significant increase in capital expenditure at both
operations. Simberi generated record cash flows from operations
despite an increase in capital expenditure, mainly to refresh the
mining fleet.
Page 4
Directors’ Report
Analysis of Leonora operations
Total sales revenue from the Leonora operations of $392,678,000
(2018: $461,264,000) was generated from gold sales of 222,625
ounces (2018: 271,141 ounces) in the year at an average achieved
gold price of $1,762 per ounce (2018: $1,699 per ounce). The
reduction in gold ounces sold was attributable to lower production.
A summary of production performance for the year ended 30 June
2019 is provided in the table below.
Details of 2019 production performance
Gwalia
Underground ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
2019
625
11.1
652
10.8
98
2018
679
12.5
711
12.0
98
Gold production (oz)
220,169
268,428
Cash cost (1) (A$/oz)
All‐In Sustaining Cost (AISC) (2)
(A$/oz)
746
1,027
613
802
(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. AISC is
based on cash operating costs and adds items relevant to sustaining
production. It includes some, but not all, of the components identified in
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.
The Gwalia mine produced 220,169 ounces of gold in 2019 (2018:
268,428 ounces). The lower gold production was attributable to
lower ore tonnes mined and lower grade in the 2019 year.
Ore tonnes mined from the Gwalia underground mine decreased to
625,000 tonnes in 2019 (2018: 679,000 tonnes), largely due to a
combination of ventilation constraints
limiting parallel work
activities in the underground and Gwalia Extension Project activities.
Gwalia Extension Project development and raise boring activities
continued to compete for ventilation and trucking capacity during
the year. The following figure shows total tonnes moved, including
ore, development waste and raise bore waste over the past eighteen
months.
ST BARBARA LIMITED 2019
Gwalia total material moved (kt)
267
26
41
201
192
16
57
119
252
19
69
260
20
82
256
32
78
262
106
164
158
146
156
FY18
Q3 Mar
FY18
Q4 Jun
FY19
Q1 Sep
FY19
Q2 Dec
FY19
Q3 Mar
FY19
Q4 Jun
Ore mined
Raisebore waste
Development waste
Total material moved
Ore mined grade decreased from 12.5 grams per tonne in 2018 to
11.1 grams per tonne in 2019, primarily due to the mining sequence
passing through stopes with lower grade compared to the prior year.
The Gwalia mill continued to perform consistently in 2019, with the
average recovery at 98% (2018: 98%).
Gwalia gold production
(koz)
267
265
268
248
220
2015
2016
2017
2018
2019
Gwalia unit cash operating costs(1) for the year were $746 per ounce
(2018: $613 per ounce). The higher unit operating cost in the 2019
financial year was due mainly to the impact of lower production and
grade. The unit All‐In Sustaining Cost (AISC)(2) for Gwalia was $1,027
per ounce in 2019 (2018: $802 per ounce), with the higher unit cost
attributable to the increase in unit cash operating cost and higher
sustaining capital expenditure. Total cash operating costs at Gwalia
were $164,246,000 (2018: $164,546,000).
Gwalia generated net cash flows in 2019 of $114,903,000 (2018:
$217,957,000), after sustaining and growth capital. The reduced
cash contribution from Gwalia in 2019 was due to lower production
and a significant increase in capital expenditure. Sustaining capital in
2019 increased to $44,161,000 (2018: $33,829,000) mainly due to
higher mine development to prepare the mine for a new mining
method to lift mining rates. Growth capital in 2019 of $70,843,000
(2018: $36,793,000) consisted of expenditure on the Gwalia
Extension Project, continued deep drilling targeting extensions to
the Gwalia lode system and feasibility study costs.
Page 5
Directors’ Report
Analysis of Simberi operations
the Simberi operations continued
During 2019
its strong
performance, setting a new production and cash generation record.
Total sales revenue from Simberi in 2019 was $257,643,000 (2018:
$217,940,000), generated from gold sales of 145,819 ounces (2018:
129,815 ounces) at an average achieved gold price of A$1,761 per
ounce (2018: A$1,673 per ounce). As at 30 June 2019 there were
3,876 ounces of gold inventory (2018: 9,521 ounces).
A summary of production performance at Simberi for the year ended
30 June 2019 is provided in the table below.
Details of 2019 production performance
Simberi
Open pit ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
2019
3,396
1.43
3,072
1.64
87
2018
4,199
1.25
3,586
1.35
85
Gold production (oz)
142,177
134,661
Cash cost(1) (A$/oz)
All‐In Sustaining Cost (AISC)(2)
(A$/oz)
1,016
1,162
969
1,068
(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. AISC is
based on cash operating costs and adds items relevant to sustaining
production. It includes some, but not all, of the components identified in
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.
Simberi production of 142,177 ounces of gold was the highest since
the Group acquired the operations in September 2012 (2018:
134,661 ounces). The production result was driven by significantly
higher grade as a result of mining higher‐grade zones in the Sorowar
pit, and improved recovery in the mill.
ST BARBARA LIMITED 2019
Ore mined in 2019 totalled 3,396,000 tonnes (2018: 4,199,000),
which was a decrease of 19% on the prior year. The decrease in
mining performance in 2019 was largely attributable to low
productivity from the Pigibo pit, extended haul distances from the
Pigiput and Sorowar North pits and reduced availability with some
units in the mining fleet. Waste material moved in 2019 was
8,949,000 tonnes (2018: 9,411,000 tonnes).
Simberi annual total material moved
(kt)
14,335
13,610
12,345
9,899
6,294
2015
2016
2017
2018
2019
Ore mined grade was higher than the prior year at 1.43 grams per
tonne gold (2018: 1.25 grams per tonne). The higher grade in 2019
was as a result of mining in higher‐grade zones at the base of mining
stages in the Sorowar and Pigibo pits.
Ore milled during the year totalled 3,072,000 tonnes (2018:
3,586,000 tonnes), with the lower throughput attributable to harder
ore types being processed through the SAG mill and inconsistent
performance from the Ball Mill circuit in the first half of the year.
The recovery performance of the Simberi mill for the year was an
average of 87% (2018: 85%).
Simberi gold production
(koz)
135
142
110
116
80
2015
2016
2017
2018
2019
Simberi unit cash operating costs for the year were $1,016 per ounce
(2018: $969 per ounce). The unit All‐In Sustaining Cost (AISC) for
Simberi for the year was $1,162 per ounce (2018: $1,068 per ounce),
which reflected the impact of higher sustaining capital expenditure
in 2019. Total cash operating costs at Simberi during 2019 were
higher than prior year at $144,452,000 (2018: $130,487,000) due
mainly to the impact of a weaker AUD/USD exchange rate.
In 2019 Simberi generated positive net cash flows of $98,306,000
(2018: $82,596,000), after
sustaining and growth capital
expenditure. Sustaining capital expenditure of $9,436,000 (2018:
$4,081,000) was higher in 2019 due to the refresh of the mining
fleet. Growth capital of $4,596,000 (2018: $336,000) comprised
sulphide drilling expenditure beneath the Sorowar pit to improve the
potential for a sulphide gold processing project and feasibility study
costs.
Page 6
Directors’ Report
Discussion and analysis of the consolidated income statement
Share based payments
ST BARBARA LIMITED 2019
Revenue
revenue decreased
Total
to
$650,321,000 in 2019. The lower total revenue was due to the
reduced production for the Group, partially offset by the higher
average gold price of $1,762 per ounce (2018: $1,691 per ounce).
from $679,204,000
in 2018
Mine operating costs
Mine operating costs in 2019 were $299,075,000 compared with
$275,695,000 in the prior year. The increase in operating costs was
mainly attributable to Simberi as a result of higher processing costs,
the release of costs associated with gold in safe inventory and the
impact of a weaker AUD/USD exchange rate on conversion of
Simberi USD denominated results. In addition, prior year operating
costs relating to ore stockpiles on hand were deferred to the balance
sheet.
Other revenue and income
Share based payments of $3,099,000 (2018: $3,636,000) relate to
employee benefits under the performance rights plan (refer to Note
19)
Other expenses
included
Other expenditure of $3,855,000 (2018: $608,000)
amounts associated with business development activities and
studies.
Net finance costs
Finance costs in the year were $946,000 (2018: $918,000). Finance
costs comprised interest paid and payable on finance leases of
$1,000 (2018: $15,000), borrowing costs relating to banking facilities
and guarantee fees of $60,000 (2018: $50,000) and the unwinding
of the discount on the rehabilitation provision of $885,000 (2018:
$853,000).
Net foreign exchange gain
Interest revenue was $10,073,000 in 2019 (2018: $5,283,000),
earned on cash held during the year.
Other income for the year was $115,000 (2018: $2,053,000),
representing minor asset sales.
A net foreign exchange loss of $3,707,000 was recognised for the
year (2018: net gain of $200,000). The foreign exchange loss related
to movements in exchange rates associated with US dollar bank
accounts and intercompany balances.
Exploration
Income tax
An income tax expense of $60,131,000 was recognised for the 2019
year (2018: income tax expense of $35,605,000). A tax credit of
$5,140,000 (2018: $25,106,000) was booked relating to previously
unrecognised PNG deferred tax assets.
The effective tax rate on Australian earnings was 33% (2018: 27%),
with the rate applicable to PNG earnings being 23% (2018: negative
5%, representing an income tax credit).
Total exploration expenditure during the 2019 year amounted to
$31,401,000 (2018: $14,169,000), with an amount of $12,676,000
(2018: $5,020,000) capitalised, relating to deep drilling expenditure
at Gwalia and sulphide drilling at Simberi. Exploration expenditure
expensed in the income statement in the year was $18,725,000
(2018: $9,149,000). Exploration activities during the year related to
investigating highly prospective near mine targets at Simberi and
targets on the surrounding islands. The Group continued its 3D
Seismic programs at Gwalia and in the Leonora area and regional
exploration in Australia.
Corporate costs
Corporate costs for the year of $21,859,000 (2018: $23,840,000)
comprised mainly expenses relating to the corporate office and
compliance related costs.
Royalties
for
the year were $21,441,000
(2018:
Royalty expenses
$23,015,000). 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 decrease in royalty expenses in
2019 was attributable to lower gold revenue from Gwalia.
Depreciation and amortisation
Depreciation and amortisation of fixed assets and capitalised mine
development amounted to $79,643,000 (2018: $87,276,000) for the
year. Depreciation and amortisation attributable to the Leonora
operations was $59,763,000 (2018: $65,734,000), with the decrease
associated mainly with lower amortisation as a result of reduced
production. The expense at Simberi was $18,220,000 (2018:
$17,516,000), with higher depreciation attributable to increased
production.
Expenses associated with acquisition
Expenses associated with acquisition of $3,865,000 (2018: $Nil)
relates mainly to advisory fees for the Atlantic Gold acquisition.
Page 7
Directors’ Report
ST BARBARA LIMITED 2019
Discussion and analysis of the consolidated cash flow statement
Discussion and analysis of the consolidated balance sheet
Operating activities
Net assets and total equity
Cash flows from operating activities for the year were $240,774,000
(2018: $315,679,000), reflecting the impact of lower receipts from
customers and significantly higher income tax payments.
Receipts from customers of $647,566,000 (2018: $681,146,000)
reflected the impact of lower gold sales from Gwalia. Payments to
suppliers were $336,717,000 (2018: $322,139,000), with the
increase mainly attributable to higher production volumes at
Simberi.
Payments for exploration expensed in the year amounted to
$18,725,000 (2018: $9,149,000). The higher charge in 2019 was
related to increased expenditure in Australia and at Simberi and the
neighbouring islands.
During the year the Company paid Australian company tax of
$61,423,000 (2018: $39,462,000), comprising an amount of
$40,933,000 relating to the prior year and instalment payments of
$20,490,000 for the 2019 financial year.
Investing activities
Net cash flows used in investing activities amounted to $28,254,000
(2018: $212,988,000) for the year, which included the benefit of cash
transferred from deposits held to maturity of $106,200,000 (2018:
transfer to deposits held to maturity of $116,200,000).
Higher mine development expenditure of $97,333,000 (2018:
$59,134,000) included expenditure related to the Gwalia Extension
Project.
Higher expenditure on property, plant and equipment of
$20,651,000 in 2019 (2018: $12,043,000) was due to higher
expenditure at Gwalia and Simberi.
Exploration expenditure capitalised during the year totalled
$12,676,000 (2018: $5,020,000), which related to the deep drilling
program at Gwalia to extend the orebody at depth, and sulphide
drilling at Simberi.
Investing expenditure during the year was in the following major
areas:
Underground mine development and infrastructure at Gwalia –
$36,075,000 (2018: $27,361,000)
Gwalia Extension Project – $59,716,000 (2018: $31,773,000)
Purchase of property, plant and equipment at Gwalia –
$9,907,000 (2018: $6,400,000)
Purchase of property, plant and equipment at Simberi –
$9,384,000 (2018: $4,081,000)
Further investment in Prodigy Gold NL and Duketon Mining
Limited shares totalling $3,794,000 (2018: $20,591,000).
Financing activities
Net cash flows related to financing activities in 2019 was a net inflow
of $436,885,000 (2018: net outflow of $42,843,000). The financing
activities in 2019 included the issue of new equity giving proceeds of
$479,558,000 net of transaction fees to assist in funding the
acquisition of Atlantic Gold. Financing activities also included the
payment of dividends during the year totalling $41,634,000 (2018:
$40,997,000).
During the year cash backed banking guarantees increased by
$1,000,000 (2018: $1,400,000) to $2,400,000 (2018: $1,400,000).
St Barbara’s net assets and total equity increased substantially
during the year by $591,153,000 to $1,257,023,000 as a result of the
new equity raised of $479,558,000 to fund the acquisition of Atlantic
Gold, together with the profit for the year.
Current assets increased to $971,469,000 (2018: $420,781,000) due
to the significant increase in cash and cash equivalents.
Non‐current assets increased during the year by $37,901,000 to
$438,264,000 (2018: $400,363,000), mainly due to the increase in
mine properties, reflecting the capital expenditure related to the
Gwalia Extension Project.
Current trade and other payables increased to $56,549,000 at 30
June 2019 (2018: $39,878,000) due to the timing of payments at year
end, and an increase in payables associated with capital project
expenditure.
The deferred tax balance was a net liability of $2,071,000 (2018: net
asset of $9,904,000). A current provision for tax payable of
$23,171,000 was recognised at 30 June 2019 (2018: $39,982,000).
Debt management and liquidity
The available cash balance at 30 June 2019 was $880,199,000 (2018:
$226,443,000) including $479,558,000 from equity raised, with an
additional $10,000,000
in deposits held to maturity (2018:
$116,200,000). A further $2,400,000 was held on deposit as
restricted cash and reported within trade receivables (2018:
$1,400,000).
Total interest bearing liabilities reduced to $Nil at 30 June 2019
(2018: $39,000).
The AUD/USD exchange rate as at 30 June 2019 was 0.7021 (30 June
2018: 0.7407).
Cash, deposits and debt (1)
(A$M)
10
883
116
227
77
(347)
137
(226)
161
(1)
1,000
800
600
400
200
‐
(200)
(400)
(600)
2015
2016
2017
2018
2019
Cash
Debt
Deposits
(1) Amounts include restricted cash.
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, and
to extend mine life through drilling and capital development where
the Group’s investment criteria are met.
During the 2019 financial year the Group achieved a number of
strategic milestones:
On 15 May 2019 the Company announced that it had entered
into a Canadian Plan of Arrangement Agreement with Atlantic
Gold Corporation, a TSX listed low cost gold producer in Nova
Scotia, Canada, to acquire 100% of the company.
The
transaction completed on 19 July 2019. The acquisition provides
St Barbara with another operating mine together with a number
of organic growth projects and exploration opportunities.
Continued strong gold production from Gwalia and Simberi. At
Simberi performance in 2019 was a new record and was the fifth
consecutive record year for the operation.
Safety performance continued to be a key focus area for the
Group, however the Total Recordable Injury Frequency Rate
(TRIFR) increased to 5.0 for the year (2018: 2.1). Health and
safety plans and strategies are continuously reviewed, and
developed, to assist in reducing the Group’s TRIFR rate.
During the year the Gwalia Extension Project (GEP) made good
progress and is on schedule to complete in the March 2020
quarter. 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 March 2019 the Company announced the outcomes of the
Gwalia Mass Extraction (GMX) feasibility study. GMX comprised
a new mining method and consideration of investment in
underground grinding, mixing and hydraulic hoisting to lift
mining rates. Based on the feasibility study an optimised
trucking case was selected as the preferred long term haulage
method over the hydraulic hoisting options. Work is continuing
to optimise and refine all operational aspects of future
operations in line with this methodology.
During the year the Board paid a final fully franked dividend in
relation to the 2018 financial year of 8 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
2019 financial year of 4 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
ST BARBARA LIMITED 2019
operations and to maintain operating costs at levels that protect
profit margins and ensure an adequate return on capital
invested.
Growing the ore reserve base through the development of
existing Mineral Resources and exploration activities: A number
of potential organic growth opportunities have been identified,
which could increase production and extend the life of the
Gwalia and Simberi operations. During 2019 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
continuing 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 Australia.
Maintaining a conservative financial profile:
The Group
continues to maintain prudent financial management policies
with the objective of ensuring adequate liquidity to pursue
appropriate investments in the operations and exploration. The
Group’s 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.
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. St
Barbara places significant importance on gender diversity and is
certified by the Workplace Gender Equality Agency (WEGA) as
an Employer of Choice for Gender Equality, the only mining
company to be certified in 2018‐2019. The Group also has an
ongoing commitment to work with local communities to
improve infrastructure, particularly in health and education,
support
leisure
local businesses, and provide venues for
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 $112 million.
In March 2019 the Gwalia Mass Extraction (GMX) feasibility study
was completed, which confirmed the life of mine operation using
existing trucking operational methodology is the preferred haulage
method for the future.
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 2020 financial year budget was developed in the
context of a volatile gold market and weakening Australian dollar
Page 9
Directors’ Report
against the United States dollar. The Group’s priorities in the 2020
year are to continue consistent production from Gwalia and Simberi,
successfully integrate Atlantic Gold within the St Barbara Group, and
further advance organic growth opportunities at these operations.
For the 2020 financial year the Group’s operational and financial
outlook (representing Leonora and Simberi) is as follows:
Gold production is expected to be in the range 310,000 to
335,000 ounces from Gwalia and Simberi;
All‐In Sustaining Cost is expected to be in the range of $1,250 per
ounce to $1,350 per ounce for the Group;
Sustaining capital expenditure is expected to be in the range of
$59 million to $70 million;
Growth capital at Gwalia is anticipated to be between $30
million to $35 million; and
Exploration expenditure is anticipated to be between $20 million
and $28 million.
Guidance for the Atlantic Gold operations in 2020 will be determined
after due consideration following completion of the acquisition.
The focus for the exploration program in 2020 will be continued
deep drilling at Gwalia, exploration in the Greater Gwalia area and
in the Leonora region, continued exploration at Pinjin in Western
Australia and Back Creek in New South Wales, and to drill targets on
the Tatau and Big Tabar islands in Papua New Guinea. The
exploration program for Atlantic Gold will be finalised as part of
integration within the Group.
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 2019 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. The Group
has also 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).
ST BARBARA LIMITED 2019
Hedging risk: The Group has hedging agreements in place for
the forward sale of fixed quantities of gold production from its
operations. There is a risk that the Group may not be able to
deliver the amount of gold required under
its hedging
arrangements if, for example, there is a production shortage. In
this event the Group’s financial performance may be adversely
affected. Under the hedging agreements, rising gold prices could
result in part of the Group’s gold production being sold at less
than the prevailing spot gold prices at the time of sale.
statutory
Government regulation: 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
result in enforcement actions against the Group, including
orders issued by regulatory or judicial authorities causing
operations to cease or be curtailed, and may include corrective
measures
installation of
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,
to deliver
airports, power sources and water supply)
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
Page 10
Directors’ Report
changes,
accidents
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.
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
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.
ST BARBARA LIMITED 2019
Exploration and development risk: Although the Group’s
activities are primarily directed towards mining operations and
the development of mineral deposits, its activities also include
the exploration for mineral deposits and the possibility of third
party arrangements including joint ventures, partnerships, toll
treating arrangements or other third party contracts. An ability
to sustain or increase the current level of production in the
longer term is in part dependent on the success of the Group’s
exploration activities and development projects, and the
expansion of existing mining operations.
The exploration for and development of mineral deposits
involves significant risks that even a combination of careful
evaluation, experience and knowledge may not eliminate. While
the discovery of an ore body may result in substantial rewards,
few properties that are explored subsequently have economic
deposits of gold identified, and even fewer are ultimately
developed into producing mines. Major expenses may be
required to locate and establish mineral reserves, to establish
rights to mine the ground, to receive all necessary operating
permits, to develop metallurgical processes and to construct
mining and processing facilities at a particular site. It is
impossible to ensure that the exploration or development
programs the Group plans will result in a profitable mining
operation.
Whether a mineral deposit will be commercially viable depends
on a number of factors.
The Group has a disciplined approach to allocating budget to
exploration projects. The Group also has investment criteria to
ensure that development projects are only approved if an
adequate 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.
Page 11
Directors’ Report
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
which, in turn, could lead to interruptions to production and
The Group has an established
exploration operations.
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
ST BARBARA LIMITED 2019
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.
Atlantic acquisition: St Barbara undertook a detailed due
diligence investigation process in relation to the Atlantic Gold
acquisition, and was provided extensive information for review
by Atlantic Gold. While St Barbara considers that the review was
adequate, the information was largely provided by Atlantic Gold
and verification of the accuracy, reliability and completeness of
all of the information against independent data was not possible.
There is no assurance that the due diligence conducted was
conclusive and that all material issues and risks in respect of the
Atlantic Gold acquisition were identified. An important factor
that may impact the long term success of St Barbara is the
successful integration of the business of Atlantic Gold into the
Group. While a formal integration process has been established
with oversight from a management Steering Committee,
difficulties may be encountered
in connection with the
integration process, which could result in the failure of St
Barbara realising some of the anticipated benefits of the
acquisition, or these benefits being realised later than expected.
Risk management
The Group manages the risks listed above, and other day‐to‐day risks
risk management
through an established enterprise wide
framework, which conforms to Australian and
international
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.
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. During the year the Australian Federal Police advised
that it had concluded its investigation and determined there is no
action to be taken against the Company or its current and former
employees.
Page 12
Directors’ Report
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.
ST BARBARA LIMITED 2019
Page 13
Directors’ Report
Information on Directors
ST BARBARA LIMITED 2019
Timothy C (Tim) 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:
Member of the Health, Safety, Environment and Community
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:
Alita Resources Limited (formerly Alliance Mineral Assets
Limited) (appointed December 2018)
o Non‐Executive Director
Former listed company directorships in last three years:
Tawana Resources NL (ceased December 2018 per scheme of
arrangement with Alliance Mineral Assets Limited)
o Non‐Executive Director
Other current relevant experience:
Director of Minerals Council of Australia (MCA)
Chair of MCA Gold Forum
WGEA Pay Equity Ambassador
Member of the Australasian Institute of Mining and Metallurgy
(AusIMM) Council for Diversity and Inclusion
Committee (Chair until 12 February 2019)
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
platinum group metals, nickel, coal, iron ore, uranium and gold in
Africa, Asia, USA 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
Other previous relevant experience:
Non‐Executive Chairman of Deep Yellow Limited
Director of Queensland Resources Council
Director of Minerals Council of Australia
Director of Chamber of Minerals and Energy of Western
Australia
Page 14
Directors’ Report
Steven G Dean
FCA, AusIMM, CIMMP
Independent Non‐Executive Director1
Appointed as a Director 23 July 2019
Special responsibilities:
Member of the Remuneration & Nomination Committee
Following the successful completion of the acquisition of Atlantic
Gold Corporation on 19 July 2019, Steven Dean, former Chairman,
Chief Executive Officer and co‐founder of Atlantic Gold, was
appointed to the Board of St Barbara Limited as an Non‐Executive
Director effective 23 July 2019.
Steven has extensive experience internationally in mining, including
as President of Teck Cominco Limited (now Teck Resources Ltd, (TSX:
TECK.A and TECK.B, NYSE: TECK). Teck is Canada's largest diversified
resource company, is the largest producer of metallurgical coal in
North America and a major producer of copper, zinc, and energy
from 13 mines in Canada, United States, Chile and Peru.
Prior to
joining Teck, Steven was a founding member of
management of the Normandy Poseidon Group, (which became
Normandy Mining) which was the largest Australian gold producer
and a significant producer of base metals and industrial minerals
until its acquisition by Newmont Mining in 2002, as well as co‐
founder of PacMin Mining Corporation which became a subsidiary
of Teck Corporation in 1999. He was also a co‐founder and former
chairman of Amerigo Resources Ltd, and is the former Chairman and
a director of Sierra Metals Inc. (TSX:SMT), and Chairman of Oceanic
Iron Ore Corp. (TSX‐V:FEO).
ST BARBARA LIMITED 2019
Kerry J Gleeson
LLB (Hons), FAICD
Independent Non‐Executive Director
Appointed as a Director 18 May 2015
Special responsibilities:
Chair of Remuneration & Nomination Committee
Member of the Audit and Risk Committee
Member of the Health, Safety, Environment and Community
Committee
Ms Gleeson is an experienced non‐executive director following a 25‐
year career as a senior executive and as a lawyer in both UK and
Australia. She has significant experience in international governance,
strategic mergers and acquisitions and complex corporate finance
transactions, as well as in risk and crisis management.
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, mining, transport and
logistics. 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 Group’s Culture & Values and Diversity programs.
involvement across
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 initial public offerings (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:
Other current listed company directorships: Nil
Non‐Executive Director of Sierra Metals Inc. (TSX:SMT)
Chairman of Oceanic Iron Ore Corp. (TSX‐V:FEO)
Chairman of Artemis Gold Inc (Canada)
Former listed company directorships in last three years:
McAleese Limited (resigned September 2016)
o Member of Audit, Business Risk and Compliance
Former listed company directorships in last three years:
Committee
Chairman, CEO & Director of Atlantic Gold Corporation
(TSX‐V:AGB) (Resigned July 2019)
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
1 Mr Dean was formerly the President and CEO of Atlantic Gold
Corporation, acquired by St Barbara Ltd on 19 July 2019, and under ASX
Corporate Governance Council Principles and Recommendations may
not be considered independent. Due to the all‐cash nature of the
acquisition, and the absence of performance‐based remuneration for Mr
Dean, the Board does not consider that his former role will interfere with
his capacity to bring an independent judgement to bear on issues before
the Board or act in the best interests if the Group as a whole.
Page 15
Directors’ Report
Stefanie (Stef) E Loader
BSc Hons (Geology), GAICD
Independent Non‐Executive Director
Appointed as a Director 1 November 2018
Special responsibilities:
Chair of the Health, Safety, Environment and Community
Committee (appointed Chair 13 Feb 2019, Member prior to this
date)
Member of the Audit and Risk Committee
Member of the Remuneration & Nomination Committee
Ms Stefanie (Stef) Loader is a company director, geologist and
former mining executive with experience in mining operations,
mineral exploration and project development. In her extensive
executive career, Stef has worked in seven countries across four
continents.
Ms Loader’s experience covers a wide range of commodities and
regions including copper and gold in Australia, Laos, Chile and Peru,
and diamonds in Canada and India. Ms Loader held the role of
Managing Director of Northparkes copper and gold mine for CMOC
International and Rio Tinto from 2012 to 2017 and Chair of the NSW
Minerals Council from 2015 to 2017. Ms Loader has also served in
the office of the CEO for Rio Tinto supporting the Executive
Committee and as Exploration Executive.
Ms Loader advises organisations, as a director and consultant, in the
areas of leadership, strategy and regional economic development
and was recognised as one of the Australian Financial Review 100
Women of Influence in 2013.
Other current listed company directorships:
Non‐executive director of Clean TeQ Holdings
Ltd
(ASX TSX:CLQ)
Former listed company directorships in last three years: Nil
Other current relevant experience:
Deputy chair of CatholicCare Wilcannia‐Forbes Ltd
Other previous relevant experience:
Chair of the NSW Minerals Council from 2015 to 2017.
ST BARBARA LIMITED 2019
David E J Moroney
BCom, FCA, FCPA, GAICD
Independent Non‐Executive Director
Appointed as a Director 16 March 2015
Special responsibilities:
Chair of the Audit and Risk Committee
Member of the Health, Safety, Environment and Community
Committee
Member of the Remuneration & Nomination Committee
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
in finance, strategic planning,
experience with strong skills
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 Independent Director, WA Super (Western
Chair of Risk Committee
Australia’s largest public offer superannuation fund)
o
o Member of Audit & Compliance Committee
o Member of Human Resources Committee
Other previous relevant experience:
Non‐Executive Director, Hockey Australia Ltd (National Sporting
Organisation for Hockey enabling Australian national hockey
teams the Kookaburras and Hockeyroos)
Non‐Executive Director, Geraldton Fishermen’s Co‐Operative
Ltd (largest exporter of lobster in the southern hemisphere)
National Councillor, Group of 100 Inc.
Non‐Executive Director, CPA Australia Ltd
Page 16
Directors’ Report
Information on Executives
Meetings of Directors
Robert S (Bob) Vassie
B. Mineral Technology Hons (Mining), GAICD, FAusIMM
Managing Director and Chief Executive Officer
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:
ST BARBARA LIMITED 2019
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.
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.
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
A
H
A H
A H
A H
K Gleeson
S Loader
D Moroney
T Netscher
R Vassie
7
5
7
7
7
7
5
7
7
7
18 19 4
13 13 3
19 19 4
17 17 4
19 19 4
4
3
4
4
4
4
2
4
4
4
4
2
4
4
4
4
3
4
4
4
4
3
4
4
4
Table 1: Meetings of Directors
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 and
was eligible to attend
In addition to the meetings of Directors, Directors attended
additional meetings with Management associated with the
acquisition of Atlantic Gold Corporation and in consideration of
other potential acquisitions.
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:
S Dean1
K Gleeson
S Loader
D Moroney
T Netscher
R Vassie
Ordinary shares
Rights over
ordinary shares
‐
27,858
30,000
105,438
60,967
1,869,053
‐
‐
‐
‐
‐
64,914 2
351,095 3
Table 2: Directors’ Interests
No Directors have an interest in options over shares issued by
companies within the Group.
1 Appointed 23 July 2019
2 These rights were determined by the Board on 21 August 2019 to have
vested as at 30 June 2019 and are pending issue as shares as at the date
of this report.
3 The vesting of these rights is subject to future performance conditions
as described in the Remuneration Report.
Page 17
Directors’ Report
Remuneration Report (Audited)
2. 2019 Remuneration Summary
ST BARBARA LIMITED 2019
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
1.
Introduction and Key Management Personnel
This Remuneration Report describes the remuneration strategy and
practices that applied for the 2019 financial year. The report
provides details of remuneration paid for the 2019 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 2018 Remuneration Report,
with the inclusion of Ms Loader, appointed as a Non‐Executive
Director on 1 November 2018.
Following completion of the Atlantic Gold acquisition after the end
of the 2019 financial year, Mr Dean was appointed as a Non‐
Executive Director on 23 July 2019, and will be a KMP in respect of
the 2020 financial year.
Key Management Personnel during 2019
Non‐Executive Directors
Tim Netscher
Kerry Gleeson
David Moroney
Stef Loader
Executives
Robert (Bob) Vassie
Garth Campbell‐Cowan
Rowan Cole
Independent Non‐Executive Chairman
Independent Non‐Executive Director
Independent Non‐Executive Director
Independent Non‐Executive Director
(appointed 1 November 2018)
Managing Director & Chief Executive
Officer
Chief Financial Officer
Company Secretary
The Remuneration Report (as part of the Annual Report)
complements, and should be read in conjunction with, information
contained in the Company’s corresponding Corporate Governance
Sustainability Report, both available at
Statement and
www.stbarbara.com.au
The outcomes described in this Remuneration Report reflect the
Group’s operational, financial and strategic achievements over the
three‐year period to 30 June 2019, which are described more fully
later in the report.
Key achievements during the 2019 financial year include:
the acquisition of Atlantic Gold Limited in Nova Scotia, Canada,
which completed
in July 2019, diversifying the Group’s
production with a low cost, cash generating mine with a mine
life to 2031 with upside potential
the $112 million Gwalia Extension Project (GEP), first
announced in March 2017, progressed and is on schedule for
completion in December 2019. GEP provides dual benefits of
increasing ventilation and keeps the majority of waste
underground
in addition, the feasibility study for the Gwalia Mass Extraction
Project concluded during the year, and indicated that an
optimised trucking case was the preferred option to the
hydraulic options considered by the study, based on risk and
return on capital assessments
Simberi achieved its fifth annual record gold production, and
continued successful drilling to inform an updated study of the
potential sulphide project.
Additional achievements over the three‐year period to 30 June 2019
include:
Generated a total NPAT of $529 million, and net operating cash
flow1 of $575 million
Paid and declared fully‐franked dividends of $0.26 per share
(including the $0.04 FY19 final fully‐franked dividend declared
today)
Increased mine life at Gwalia from 2024 to 2031, with the
Gwalia deposit still open at depth
Increased mine life at Simberi from 2018 to 2021, with the
potential for the sulphide study to extend this further.
The Group’s operational, financial and strategic performance for the
2019 financial year is reflected in the STI2 outcomes awarded to
Executives, with the corresponding performance for the three‐year
period from 1 July 2016 to 30 June 2019 (i.e. financial years 2017,
2018 and 2019) reflected in the LTI3 outcomes awarded to
Executives.
The Board considers that the Executive remuneration structure in
place during this period has been appropriate and aligned with the
achievements of the Group, and that Executives have justifiably
earned the at‐risk incentives awarded this year.
2.1 Key remuneration outcomes for the 2019 financial year
STI4 Outcomes
(Section 7.1)
The STI outcome for each of the Executives was
60% of the maximum potential STI based on an
assessment of Group and individual measures.
This reflects the Group’s operating and financial
performance during 2019 and the achievement
of the strategic and growth objectives.
LTI5 Outcomes
(Section 7.2)
33% of the FY17 Performance Rights in respect
of the 3‐year LTI held by Executives were
assessed at 30 June 2019 to have vested. This is
consistent with the operational and strategic
performance during the corresponding 3‐year
1 Net cash inflow from operating activities less cash outflow from
investing activities
2 Short term incentive
3 Long term incentive
4 Short term incentive
5 Long term incentive
Page 18
Directors’ Report
Executive
Remuneration
(Section 9)
NED
Remuneration
(section 8)
period to 30 June 2019 outlined in the summary
above and set out in detail in this report. The
remaining un‐vested FY17 Performance Rights
lapsed. No Performance Rights have been
deferred for retesting in a subsequent financial
year.
As advised in the 2018 Remuneration Report,
following a review of relevant resource
industry market remuneration, effective 1 July
2018 fixed remuneration increased by 3% for
the MD & CEO, 3.5% for the Chief Financial
Officer, and 10% for the Company Secretary, to
better align his salary with relevant market
remuneration data, and to recognise the broad
nature of the role which also encompasses
head of investor relations, legal, risk and
insurance.
Following a review of comparable resource
industry remuneration levels for Non‐Executive
Directors, aggregate Non‐Executive Director
(NED) fees increased by approximately 10%
from 2018 to 2019 on a like‐for‐like basis. An
additional Non‐Executive Director was
appointed on 1 November 2018.
2.2 Changes in the Executive remuneration framework during the
2019 financial year
There were no changes to the Executive
remuneration framework during the 2019
financial year.
2.3 Changes to Executive remuneration for the 2020 financial year
Executive fixed
remuneration
(section 5.5)
A review of total fixed remuneration (TFR) for
Executives is underway, with reference to
industry market
relevant
remuneration data, noting the significant
increase in size and complexity of the Group
resulting from acquisition of Atlantic Gold.
resource
For the 2020 financial year only, an enhanced
STI (where target is 75% of TFR rather than
50%) will apply to each of the Executives to
underpin the focus on key strategic projects,
including maximising value from the Atlantic
Gold acquisition.
2.4 Changes to Non‐Executive Director Remuneration for the 2020
financial year
Non‐Executive
Directors fees
(section 8)
remuneration
Following a review of comparable resource
industry
for Non‐
Executive Directors, the Board has resolved to
maintain the existing Non‐Executive Director
fees for the 2020 Financial Year.
levels
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 Chair of the Remuneration and
Nomination Committee actively meets with proxy advisors to discuss
and seek feedback on remuneration practices.
remuneration
ST BARBARA LIMITED 2019
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.
One aspect receiving increased attention by some stakeholders is
the potential deferral of STI into subsequent years, including by way
of deferred equity. This is being monitored closely, and is explored
further in the next section of this report.
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 2019 financial
year were to ensure that:
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 sustainable 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
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 over four times more volatile (measured by standard
deviation divided by average) than the ASX 200 (ASX:XJO) over the
previous five 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.
In setting the remuneration strategy, the Board is cognisant of the
link between remuneration and setting and maintaining a positive
company culture. In this regard, St Barbara’s remuneration plan
allows for the claw‐back of executive incentives in the event of poor
executive or organisational behaviour.
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 at this time as deferral of STI is extremely rare amongst
Page 19
A$/oz
$2,000
$1,500
$1,000
$500
Directors’ Report
the resources companies with which St Barbara competes for talent,
and is considered a disincentive to current and prospective
employees. In addition, the corresponding LTI is closely aligned with
the Company’s share price performance, and provides a significant
retention incentive.
The LTI aligns Executive remuneration with shareholder experience.
The vesting conditions for the LTI comprise two measures, relative
total shareholder return (RTSR) where total shareholder return (TSR)
is positive, and return on capital employed (ROCE) in excess of
thresholds above the weighted average cost of capital.
RTSR was first adopted as an LTI measure at the 2010 Annual General
Meeting, with ROCE first adopted at the 2012 Annual General
Meeting. These two metrics were selected, and have been retained,
as the most appropriate measures to reflect management’s
influence on shareholder wealth. RTSR eliminates the impact of
fluctuations in gold price to illustrate how effective management
have been in creating value from the Group’s gold assets compared
against industry peers. ROCE measures the efficiency with which
management uses capital in seeking to increase shareholder value.
The LTI performance measures are reviewed annually for their
The remuneration strategy and structure are directly linked to the
development of strategies and budgets in the Group’s annual
planning cycle shown in the timetable below.
Annual Planning Timetable
ST BARBARA LIMITED 2019
continued relevance and consistency against general market
practice and peer company LTI metrics.
A$ gold vs SBM share price
ASX:SBM
$5
$4
$3
$2
$1
$0
Jun 2019
$0
Jun 2014
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Gold A$/oz (LHS)
SBM (RHS)
Figure 1: A$ gold vs SBM share price
Source: Eikon, NASDAQ
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
Table 3: Annual Planning Timetable
4. Remuneration Governance ‐ Remuneration & Nomination
Committee
The members of the Committee are all independent, Non‐Executive
Directors and as at the date of this report comprised:
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
“Committee”
the
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
by the Board and
is available on the Group’s website at
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.
K Gleeson
Non‐Executive Director
Chair of the Committee since 1 July 2015
Member of the Committee since 18 May 2015
T Netscher Non‐Executive Chairman
Member of the Committee since 23 February 2015
D Moroney Non‐Executive Director
S Loader
S Dean
Member of the Committee since 16 March 2015
Non‐Executive Director
Member of the Committee since 1 November 2018
Non‐Executive Director
Member of the Committee since 23 July 2019
In
forming remuneration recommendations, each year the
Committee obtains and considers industry specific independent data
and professional advice as appropriate. All reports and professional
Page 20
Directors’ Report
advice relating to the Managing Director and CEO’s remuneration
are commissioned and received directly by the Committee.
financial year 2019,
the Committee engaged Godfrey
In
Remuneration Group Pty Ltd for assistance and advice totalling less
than $15,000 (excluding GST) on equity plans for employees
generally and a proposed ‘fee‐sacrifice’ equity plan for Non‐
Executive Directors. In August 2019, the Committee engaged
HRascent to review the remuneration of Executives following the
acquisition of Atlantic Gold.
In accordance with the Committee’s charter, where a remuneration
consultant
in relation to remuneration of Key
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.
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).
Composition of Executive Remuneration
ST BARBARA LIMITED 2019
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.
incentives aim to reward achievement of Board
Short‐term
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 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.
The mix of fixed and at risk remuneration for Executives for 2019 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%
Figure 2: Composition of Executive Remuneration
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 2019.
(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 2019.
Page 21
Directors’ Report
The relationship between ‘target’ and ‘maximum’ remuneration of the CEO for 2019 is as follows:
ST BARBARA LIMITED 2019
Remuneration Report (audited)
Fixed Remuneration
STI (at risk)
LTI (at risk)
Total
Level 6 (CEO) ‐ at target
Level 6 (CEO) ‐ at maximum
53%
53%
Figure 3 Relationship of STI and LTI at target and maximum for CEO remuneration
0%
20%
40%
60%
Figures are rounded to nearest whole percent and may not add.
Payment profile of Executive Remuneration
27%
20%
100%
53%
80%
40%
147%
100%
120%
140%
The timing of payments of Executive remuneration for 2019 is as follows (illustrated using Level 6 (CEO) at target):
LTI (at‐risk)
STI (at‐risk)
Fixed
remuneration (FR)
20%
27%
53%
FY19 LTI measurement period ‐ 3 yrs from 1 Jul 2018 to 30 Jul 2021
FY19 STI
measurement period
27%
Cash
Cash
20%
Performance
rights
53%
Cash, superannuation,
benefits
Level 6 (CEO) ‐ at target
(for illustration)
FY 2019
(FY19 FR paid)
FY 2020
(FY19 STI paid)
FY 2021
FY 2022
(FY19 LTI vested)
Figure 4 Payment profile of Executive Remuneration
Fixed remuneration for 2019 was paid during 2019.
STI performance for 2019 is assessed as part of this report after the end of the 2019 financial year and is paid in the 2020 financial year.
LTI performance for 2019 is assessed after the end of the 3 year performance period (1 July 2018 to 30 June 2021) and, if determined to have vested, the
corresponding performance rights vest in the 2022 financial year.
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
Financial Officer and Company Secretary
is assessed by the
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
and CEO
is undertaken by the Chairman, reported to the
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, the Remuneration &
Nomination Committee considers relevant industry trend data and
other relevant remuneration information, which in recent years has
included Aon Hewitt Gold and General Mining
Industries
Remuneration Report (Australasia), Aon Hewitt CEO Remuneration
Report (Australasia), National Rewards Group HR Practice and
Benchmarking Survey Report, and National Rewards Group Senior
Executive Survey.
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
or the amount varied 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 a disincentive to current and
prospective employees. The current weighting between STI and LTI
Page 22
Directors’ Report
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
Executives. It is payable based on performance against key
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.
Stretch
(or maximum)
performance
requires significant performance above and
beyond normal expectations and if achieved is
substantial
anticipated
in a
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 FY19 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 2019 financial year STI are set out in Section 7.1 of this
report.
For the 2020 financial year only, an enhanced STI (where target is
75% of TFR rather than 50%) will apply to each of the Executives to
underpin the focus on key strategic projects, including maximising
value from the Atlantic Gold acquisition.
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
ST BARBARA LIMITED 2019
Remuneration Report (audited)
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 2019 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.
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.
Page 23
Directors’ Report
ST BARBARA LIMITED 2019
Remuneration Report (audited)
5.5 Future Developments in Remuneration
6. Relationship between Group Performance and 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.
The Chair of the Remuneration Committee actively meets with proxy
advisors to discuss and seek feedback on remuneration practices.
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.
A review of total fixed remuneration (TFR) for Executives is
underway, with reference to relevant resource industry market
remuneration data, noting the significant increase in size and
complexity of the Group resulting from acquisition of Atlantic Gold.
In FY19, total fixed remuneration of the three Executives was
between P50 and P75 of the benchmark data, which is consistent
with the Company’s remuneration strategy of targeting 90% of P75.
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.
in the Directors’ Report
Full details of the Group’s operational and financial performance are
set out
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
in the
Remuneration Report.
is reproduced
The Group’s ongoing environmental, social and governance (‘ESG’)
performance is critical to maintaining its licence to operate, which in
turn is fundamental to its ongoing financial performance. Details of
the Group’s environmental and social performance are set out in the
annual Sustainability Report and details of the Group’s governance
framework and compliance are set out in the annual Corporate
Governance Statement, both available at stbarbara.com.au.
Remuneration
Report (within
Annual Report)
Integrated suite of
annual reporting
Sustainability
Report
Corporate
Governance
Statement
Page 24
Directors’ Report
ST BARBARA LIMITED 2019
Remuneration Report (audited)
6. Relationship between Group Performance and Remuneration ‐ past five years [continued]
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
2015
$’000
2016
$’000
2017
$’000
2018
$’000
2019
$’000
552,581
610,115
641,702
679,204
650,321
167,557
298,106
293,302
345,514
274,810
Statutory net profit/(loss) after tax
39,682
169,388
157,572
226,998
144,163
Underlying net profit/(loss) after tax1
41,964
127,357
160,366
201,892
141,728
Table 4: Five‐year financial performance
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
2015
2016
2017
2018
2019
$ / share
$ / share
$ / share
$ / share
$ / share
Period end share price
Closing price on last trading day
10‐day VWAP used for RTSR and Employee
Rights pricing
0.57
0.51
Dividends paid and declared for financial year2
‐
2.95
2.92
‐
2.91
2.89
4.83
4.92
2.94
2.91
0.06
(fully‐franked)
0.12
(fully‐franked)
0.08
(fully‐franked)
Average share price for the year
0.21
1.56
2.71
3.58
4.01
Market capitalisation
$0.28 B
$1.46 B
$1.45 B
$2.51 B
$2.05 B
Table 5: Five‐year share price history
During the 2019 financial year, the Group’s daily closing share price ranged between $2.51 to $5.24 per share (2018: $2.47 to $4.97 per share).
The table below provides the percentage of performance linked remuneration awarded to Executives in the current financial year and the
previous four financial years.
Performance Linked Remuneration
% of maximum potential STI earned
% of maximum potential LTI earned
2015
66%
0%
2016
99%
67%
2017
90%
100%
2018
84%
100%
2019
60%
33%
Table 6: Five‐year performance‐linked remuneration history
Executive Performance Linked Remuneration
Five Year History
Market Cap ($B)
0.28
1.46
1.45
2.51
2.05
% STI / LTI
earned
100%
75%
50%
25%
0%
0%
0%
2015
99%
90%
100%
100%
84%
67%
60%
33%
2016
STI
2017
2018
LTI
2019
1 Non‐IFRS financial measures, refer to page 3.
2
Interim and final dividend allocated to relevant financial year (eg: FY19 interim and final dividends allocated to 2019 (i.e. FY19)).
Page 25
$M
800
700
600
500
400
300
200
100
0
$M
250
200
150
100
50
0
koz
400
300
200
100
0
ST BARBARA LIMITED 2019
Remuneration Report (audited)
EBITDA1
2015
2016
2017
2018
2019
Underlying Net Profit/(Loss) After Tax1
Directors’ Report
5 Year Group Performance
Sales Revenue
2015
2016
2017
2018
2019
Statutory Net Profit/(Loss) After Tax
$M
400
350
300
250
200
150
100
50
0
$M
250
200
150
100
50
0
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Gold Production
Total Recordable Injury Frequency Rate2
measured on a 12 month rolling basis
6
5
4
3
2
1
0
2015
2016
Gwalia
2017
King of the Hills
2018
2019
Simberi
2015
2016
2017
2018
2019
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 26
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 2019.
Highlights of the Group’s achievements in 2019 include:
ST BARBARA LIMITED 2019
Remuneration Report (audited)
Safety and People
WGEA Employer of Choice for Gender Equality for the 5th consecutive award
Organisational culture monitored monthly using a range of measures, including:
Strategy & Growth
Operations
Financial
Exploration, Ore
Reserves and Mineral
Resources
Employee engagement score 73% (2018: 83%)1
Employee turnover 7.2% (2018: 7.0%)
o
o
Safety performance (measured by LTIFR of 1.1) significantly better than industry peers2
Structured and disciplined approach to strategy and growth, evaluated several potential acquisitions that failed
to satisfy strict criteria
A$780 million acquisition of Atlantic Gold Corporation announced on 15 May 2019 and completed on 19 July
2019, which achieved all five strategic objectives, and in particular adds a low cost, cash generating operation
with a mine life to 2031 in a favourable mining jurisdiction. Comprehensive integration programme underway.
$112 million Gwalia Extension Project (GEP) approved in March 2017 on schedule and within revised budget for
anticipated completion in December 2019. The project consists of two main components, a ventilation upgrade
and paste aggregate fill. At the time of approval, this project extended mining at Gwalia to at least 2,000 mbs in
FY 2024.
Gwalia Mass Extraction (GMX) Feasibility Study results released on schedule in March 2019, indicating that
optimised trucking was the preferred option compared to the hydraulic hoisting options considered, based on
risk and capital assessments. GMX supports a Life of Mine Plan to FY 2031.
Fifth record annual production from the Simberi mine of 142,177 oz (2018: 134,661 oz)
Simberi to continue mining into FY21, with low‐grade stockpiles accumulated until then to be processed in FY21.
Net profit after tax of $144 million (2018: $227 million) and cash flow from operating activities of $241 million
(2018: $316 million)
Cash at bank and deposits increased to $410 million (2018: $343 million), excluding $480 million net proceeds
raised in May 2019 Entitlement Offer to partially fund Atlantic Gold acquisition
$490 million accelerated non‐renounceable rights offer successfully completed with proceeds used towards
acquisition of Atlantic Gold
$200 million credit facility established to ensure ‘safety net’ associated with possible capital requirements for
all three operations (Gwalia, Simberi and Atlantic Gold) following the acquisition of Atlantic Gold
$0.04 per share fully franked divided in respect of half‐ year paid in March 2019
$0.04 per share fully franked divided in respect of full financial year announced in August 2019
Gwalia deep drilling program has continued to achieve success at depth and providing a better interpretation of
the Gwalia orebody, including new mineralisation identified at southern extensions of Gwalia lode system at
approximately 2,100 to 2,200 metres below surface
Exploration in Gwalia region has been successful at Jesse Alma, Cricket Pitch and Horse‐Paddock Well
Drilling continues to identify mineralisation under Sorowar pit seeking to identify further sulphide ore to inform
the sulphide project at Simberi
Joint venture agreements negotiated in relation to Lake Wells (ASX: APC) and Horn Island (ASX: AQX)
The STI outcome for each of the Executives was 60% (2018: 84%) of the maximum potential STI based on an assessment of Group and individual
measures, and reflects the Group’s continued operating and financial performance during 2019 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 2019 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 2019 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.
1 % favourable responses to New Provident (external provider) employee engagement survey
2 LTIFR = Lost Time Injury Frequency Rate (12 month avg.) , the number of lost time injuries per million hours worked. Most recent peer performance: 1.9
(WA gold industry, Safety performance in the Western Australian mineral industry 2017‐18), 2.9 (WA underground, Safety performance in the Western
Australian mineral industry 2016‐2017)
Page 27
Directors’ Report
2019
Maximum potential STI
ST BARBARA LIMITED 2019
Remuneration Report (audited)
Actual STI included in
remuneration
% of maximum
potential total STI
earned1
% of maximum
potential total STI
foregone
R S Vassie
G Campbell‐Cowan
R Cole
Table 7: 2019 STI
Target
$
434,099
238,097
180,180
Stretch2
$
868,198
476,194
360,360
$
520,919
285,716
216,216
%
60%
60%
60%
%
40%
40%
40%
The Group’s STI measures for the 2019 financial year are key proxies of the primary objective of the Group, being the safe, profitable production
of gold and execution of strategy. 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
Injuries3 and
no fatalities
(b) Gold production 368,000
ounces
25%
25%
(c) All In Sustaining
A$1,088/oz
25%
Costs
23 Recordable Injuries
recorded with no fatalities,
below threshold (14)
362,346 ounces produced,
between threshold
(340,000 oz) and
target (368,000 oz)
AISC A$1,080/oz achieved,
between target
(A$1,088/oz) and
maximum (A$997/oz)
(d) Execution of
Strategy
Major
acquisition
identified
25%
Acquisition of Atlantic
Gold and associated
entitlement offer
successfully achieved
Overall Group STI Performance
Table 8: 2019 STI Performance
0%
45%
55%
100%
50%
For 2019, 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
Validation, renewal and pursuit of ‘stronger for longer’ five‐year strategy
Leadership and oversight of successful acquisition strategy and associated capital raising and debt facility
Rigorous, structured evaluation of multiple inorganic growth opportunities worldwide, culminating in the acquisition of
Atlantic Gold Corporation in July 2019 as described previously. A noted by the Chairman at the 2018 Annual General
Meeting, “We have a valuation driven approach which has examined a number (i.e. several) of opportunities over the last
12 months, but we have yet to uncover a merger of acquisition that has survived our due diligence and made sense for
shareholders. Going forward we will continue to apply the same disciplined approach. Having the discipline to walk away
from a potentially value destructive transaction is at least as important as completing a good, value accretive transaction”.
Structured and disciplined approach to strategy and growth, evaluated several potential acquisitions that failed to satisfy
strict criteria
Leadership and oversight of organic growth projects including Gwalia Extension Project (GEP), Simberi sulphide drilling
and broader exploration described previously. Gwalia Mass Extraction (GMX) Feasibility Study results released on
schedule in March 2019, indicated that optimised trucking was the preferred option compared to the hydraulic hoisting
options considered, based on risk and capital assessments. This decision avoided uneconomic use of capital and increased
risk of pumping option under evaluation.
1 The total STI % comprises 80% Group STI measures plus 20% Individual STI measures, i.e. 80% x 50% + 20% x 100% = 60%.
2
3 Recordable Injury (RI) includes fatalities, lost time injuries, medical treatment injuries. It does not include first aid injury.
Inclusive of STI “Target”.
% of
maximum
achieved
100%
Page 28
Directors’ Report
Summary of Executive individual STI performance assessed by Board
ST BARBARA LIMITED 2019
Remuneration Report (audited)
% of
maximum
achieved
Drilling continues to identify mineralisation 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
7.2 Performance Linked Remuneration – LTI outcomes
The three‐year performance period for the FY17 Performance Rights ended on 30 June 2019.
Over the three‐year performance measurement period of the FY17 Performance Rights commencing on 1 July 2016, the Group:
Has generated a total NPAT of $533 million
Paid off $226 million in debt and increased cash and deposits by $263 million from operations (excludes proceeds from equity raising)
Paid and declared dividends of $0.26 per share (including the $0.04 FY19 final dividend declared today)
Increased mine life at Gwalia from 2024 to 2031
Increased mine life at Simberi from 2018 to 2021, with the potential for the sulphide study to extend this further
Acquired Atlantic Gold Corporation, providing a low cost, cash generating operation with a mine life to 2031, which increases Reserves by
1.9 Moz and Resources by 2.3 Moz1 respectively of contained gold.
Consistent with the performance of the Group over the last three years, and an assessment against the performance measures, 33% of the rights
held by Executives under the FY17 LTI that matured on 30 June 2019 were assessed to have vested.
Selected highlights of the Group’s performance during the 3‐year performance period from 1 July 2016 to 30 June 2019 are set out below:
Share price (10 day VWAP)
$
$2.92
$2.91
30 June 20162
30 June 2019
Dividend declared for financial year
cents
Market Cap
Net profit after tax (underlying)
Cash and deposits
Interest bearing borrowings
Safety
$B
$M
$M
$M
TRIFR1
Nil
$1.46 B
$127 M
$137 M
$226 M
2.1
$0.084
$2.05 B
$142 M
$410 M5
Nil
5.0
Change
‐$0.01
+$0.08
$0.59 B
+$15 M
+$273 M
‐$226 M
+2.9
Change (%)
+8% TSR inc $0.22
dividends paid
during period3
commenced 2017
+40%
+12%
+199%
‐100%
138% decline
Additional key highlights of the Group’s achievements during the three year FY17 Performance Rights vesting period (from 1 July 2016 to 30 June
2019) include:
Year on year record production from the Simberi mine
Gwalia extension project approved in March 2017, extended life of mine to 2024, due for completion December 2019
Gwalia mass extraction project pre‐feasibility study announced in 2018, further extended life of mine to 2031, life extension
maintained with continued trucking validated and to be further optimised
Deep drilling at Gwalia mine continues to intersect mineralisation and better inform the deposit6
Simberi strategic review concluded in 2016, over $220 million cash contribution since decision to retain, option and farm‐in
agreement established with Newcrest
Winner of ‘Digger of the Year’ award (2017)
2 million ounces of St Barbara production at Gwalia 2008‐2018
Cash balance including deposits held to maturity increased from $137 M to $410 M (excluding capital raising)
Total of $0.26 per share dividends paid and announced since dividends reintroduced in August 2017
1 Atlantic Gold TSX announcements 13 and 25 March 2019
2 30 June 2016 figures used to illustrate ‘starting’ balances for the 3 year LTI performance period from 1 July 2016 to 30 June 2019 (e.g. from the corresponding
Notice of 2016 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’.
3 Excludes $0.04 final fully‐franked dividend announced 21 August 2019 in respect of the 2019 financial year
Includes $0.04 final fully‐franked dividend announced 21 August 2019 in respect of the 2019 financial year.
4
5
Total $890 M less $480 M net proceeds from equity raising
6 For results, refer to ASX release 24 July 2019 ‘Quarterly Report Q4 June FY19’.
Page 29
Absolute performance over
FY17 LTI vesting period
Directors’ Report
SBM
$5.00
$4.00
$3.00
$2.00
$1.00
$‐
ST BARBARA LIMITED 2019
Remuneration Report (audited)
Relative performance over
FY17 LTI vesting period
147%
113%
100%
XGD
A$ gold
8000
6000
4000
2000
0
200%
150%
100%
50%
2016
2017
2018
2019
2016
2017
2018
2019
ASX:XGD
Gold Price
(A$/oz)
SBM
(10 day VWAP)
SBM
(10 day VWAP)
ASX:XGD
Gold Price
(A$/oz)
Source: IRESS, Eikon
Source: IRESS, Eikon
A$M
3,000
2,500
2,000
1,500
1,000
500
0
Market cap over
FY17 LTI vesting period
2016
2017
2018
2019
M'Cap
+$592M
increase
2016 to
2019
ASX: SBM
FY17 LTI vesting period
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Jun 2014
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Jun 2019
Source: Refinitive Eikon, NASDAQ
SBM
Calculation of the number of FY17 Performance Rights vested in 2019
115,738 (33%) of the 350,721 FY17 Performance Rights available to Executives vested at 30 June 2019, and 67% FY17 Performance Rights lapsed
at 30 June 2019. The Performance Rights vested represent less than 0.02% of total shares on issue at 30 June 2019. The FY17 rights were issued
in December 2016 at a 10 day VWAP price calculated under the Rights Plan Rules and Notice of 2016 Annual General Meeting of $2.92 each.
The FY17 Performance Rights were assessed as follows:
(a)
(b)
Weighting:
Actual score:
Calculation:
Weighting:
Actual ROCE:
Calculation:
RTSR
67%
TSR of 7%, 45th percentile of
comparator group (details below)
0% (for achieving 45th percentile)
ROCE
33%
40.9% (details below)
100% (for achieving above upper
threshold of WACC 5.6% +7.0% = 12.6%
(c)
Combined score:
(0% x 67%)
+ (100% x 33%)
= 33%
Table 9 FY17 Performance Rights Assessment
Proportion of rights to vest
Nil
(0%)
Min
(50%)
Max
(100%)
Page 30
Directors’ Report
RTSR Calculation for FY17 Performance Rights
ST BARBARA LIMITED 2019
Remuneration Report (audited)
The result of the RTSR component of the FY17 Performance Rights for the period 1 July 2016 to 30 June 2019 was:
Relative TSR Performance
Below 50th percentile
50th percentile
Between 50th & 75th percentiles
75th percentile and above
Percentage of Performance Rights to vest
0%
50%
Pro‐rata from 50% to 100%
100%
Result
St Barbara achieved a TSR of 7% for the
period, and ranked at the 45th percentile of
the comparator group of companies for the
period. As a result, 0% of the Performance
Rights linked to RTSR vested.
The 50th percentile threshold represented a TSR of 9%. St Barbara would have achieved the P50 TSR with a closing 10‐day VWAP of $2.98, $0.07
(2.4%) higher than the closing VWAP of $2.91. The entitlement offer announced on 15 May 2019 associated with the acquisition of Atlantic Gold
Corporation offered shares at $2.89, which represented a 13% discount to the previous closing price of $3.32 on 14 May 2019, and a 10% discount
to the theoretical ex‐rights price1 of $3.22 on 14 May 2019. To maintain alignment with shareholder experience, no discretion has been applied
to the RTSR outcome to seek to reflect the impact of the entitlement offer.
TSR over LTI vesting period
ROCE over LTI vesting period
50th
percentile
MIHGFEDCBA
B
S
TSRQPONMLKJ
Figure 5 Chart of TSR results for comparator companies
(table below)
60%
50%
40%
30%
20%
10%
0%
200%
150%
100%
50%
0%
‐50%
‐100%
45%
15%
FY17
51%
13%
FY18
41%
13%
FY19
ROCE (3 yr)
100% threshold
Figure 6 Chart of ROCE (calculated on the next page)
The comparator group of companies for FY17 Performance Rights comprised:
Alacer Gold Corp. (ASX: AQG)
Kingsrose Mining Limited (ASX: KRM)2
Regis Resources Limited (ASX: RRL)
Beadell Resources Limited (ASX: BDR)3
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)4
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)
1 The Theoretical Ex‐Rights Price (“TERP”) was the theoretical price at which St Barbara shares should have traded after the ex‐date for the Entitlement Offer.
TERP is a theoretical calculation only based on St Barbara share price of A$3.32 as at market close on 14 May 2019 and the actual price at which St Barbara
shares trade immediately after the ex‐date for the Entitlement Offer will depend on many factors and may not be equal to TERP.
2 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.
3 Beadell Resources Limited was acquired by Great Panther (TSX: GPR) under a scheme of arrangement and was suspended from quotation at close of trade on
18 February 2019 and subsequently delisted from the ASX on 19 February 2019. The RTSR assessment incorporates a pro rata calculation comprising Beadell
TSR to the last day of trade, 18 February 2019, and the arithmetic average of the remaining comparator companies (excluding Kingsrose & Gryphon) for the
remainder of the vesting period.
4 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 31
Directors’ Report
ROCE Calculation for FY17 Performance Rights
ST BARBARA LIMITED 2019
Remuneration Report (audited)
The result of the ROCE component over the three‐year vesting period commencing 1 July 2016 and ending on 30 June 2019 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 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%
St Barbara achieved a ROCE for the period
of 40.9% (see calculation below), which is
above the upper threshold of WACC for the
period of 5.6% +7.0% = 12.6%.
As a result, 100% of the Performance Rights
linked to ROCE vested
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) 2
EBIT (sum of above)
Capital employed – opening balance
Total equity
Net debt3
Capital employed – opening balance
Capital employed– closing balance
Total equity
Net debt3
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
Table 10 ROCE calculation
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%
2019
199,032
_____ ‐
199,032
665,870
_____ ‐
665,870
1,257,023
_____ ‐
1,257,023
961,447
20.7%
40.6%
5.6%
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)4. 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 2016 and ending on 30 June 2019 is 5.6% (2018: 6.0%).
7.3 Rights Vested and On Issue
7.3 (a) There are three LTI tranches relevant to the 2019 financial year, which are summarised below:
Grant year /
tranche name
Description
Performance
Conditions & Weighting
Performance
Period
Status
FY17 Performance Rights Granted as LTI remuneration in
RTSR
2017 and disclosed in the
2016 Notice of AGM and
2017 Remuneration Report
ROCE
FY18 Performance Rights Granted as LTI remuneration in
RTSR
2018 and disclosed in the
2017 Notice of AGM and
2018 Remuneration Report
ROCE
67%
33%
67%
33%
1 July 2016
to 30 June 2019
Assessed as at 30 June 2019
and reported above
1 July 2017
to 30 June 2020
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 EBIT for discontinued operations calculated as profit or loss on discontinued operations before tax excluding impairments.
3 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).
4 WACC is not an IFRS measure. The above parameters can be used to calculate WACC using commonly available formula.
Page 32
Directors’ Report
Grant year /
tranche name
Description
Performance
Conditions & Weighting
Performance
Period
Status
ST BARBARA LIMITED 2019
Remuneration Report (audited)
FY19 Performance Rights Granted as LTI remuneration in
RTSR
2019 and disclosed in the
2018 Notice of AGM and
2019 Remuneration Report
ROCE
67%
33%
1 July 2018
to 30 June 2021
To be assessed and
reported in the
2021 Remuneration Report
Table 11 LTI tranches relevant to 2019 financial year
The three LTI tranches are illustrated on a timeline below:
FY17
FY18
FY19
FY20
FY21
Financial year
FY17 Performance Rights
Issued in FY17
3 yr vesting period
Tested June 2019
FY18 Performance Rights
Issued in FY18
3 yr vesting period
To be tested June 2020
FY19 Performance Rights
Issued in FY19
3 yr vesting period
To be tested June 2021
Figure 7 Current LTI Tranche Timeline
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:
2019
R S Vassie
G Campbell‐Cowan
R Cole
Grant
year /
tranche
name
FY17
FY18
FY19
FY17
FY18
FY19
FY17
FY18
FY19
Grant Date
Price on
issue date
Held at
1 July 2018
12 Dec 2016
30 Nov 2017
24 Oct 2018
21 Oct 2016
16 Nov 2017
24 Oct 2018
21 Oct 2016
16 Nov 2017
24 Oct 2018
$2.92
$2.89
$4.92
$2.92
$2.89
$4.92
$2.92
$2.89
$4.92
196,708
218,748
‐
102,392
106,133
‐
51,621
75,570
‐
Granted as
compen‐
sation
during the
year
‐
‐
132,347 4
‐
‐
64,524
‐
‐
48,829
Vested
during the
year 1
Forfeited
during the
year
Held at
30 June
2019 2
Financial
year in
which grant
may vest3
64,914
‐
‐
33,789
‐
‐
17,035
‐
‐
131,794
‐
‐
68,603
‐
‐
34,586
‐
‐
‐
218,748
132,347
‐
106,133
64,524
‐
75,570
48,829
2019
2020
2021
2019
2020
2021
2019
2020
2021
Table 12 Summary of rights on issue
7.3 (c) Rights granted in 2019
Details on rights over ordinary shares in the Company that were granted as remuneration to each Executive in the 2019 financial year are as
follows:
2019
Grant year /
tranche
identifier
R S Vassie
G Campbell‐Cowan
R Cole
FY19
FY19
FY19
Table 13 Rights granted in 2019
Grant date
24 Oct 2018
24 Oct 2018
24 Oct 2018
Number of
performance
rights granted
during 2019
132,347 6
64,524
48,829
Issue price per
performance
right
Expiry date
$4.92
$4.92
$4.92
30 Jun 2021
30 Jun 2021
30 Jun 2021
Fair value per
performance right
at grant date
($ per share)5
$4.29
$4.29
$4.29
If FY17 rights do not vest at 2019, they may be retested at 2020 and 2021. If FY18 rights do not vest at 2020, they may be retested at 2021 and 2020.
1 These rights were determined by the Board on 21 August 2019 to have vested as at 30 June 2019 and are pending issue as shares as at the date of this report.
2 The vesting of rights held at 30 June 2019 is subject to future performance conditions.
3
4 Approved by shareholders at the Annual General Meeting held on 24 October2018.
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 24 October2018.
Page 33
Directors’ Report
7.3 (d) 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
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 influence 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:
Alacer Gold Corp
(ASX: AQG)
Perseus Mining Limited
(ASX: PRU)
Beadell Resources Limited
Ramelius Resources Limited
(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 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%
ST BARBARA LIMITED 2019
Remuneration Report (audited)
(ii) 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%
WACC (calculated as above) +
between 3% and 7%
Pro‐rata from 50% to
100%
WACC (calculated as above) + 7%
100%
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. The FY18 Performance
Rights are the last rights issued to be eligible for retesting.
7.3 (e) Details of FY19 Performance Rights granted during 2019
FY19 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 2018 Annual General Meeting. Performance
rights issued to Mr Vassie, Managing Director and CEO, were also
approved by shareholders at the 2019 Annual General Meeting.
Key Features of FY19 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
weighted average cost of capital
(33%
weighting).
Continuing employment
10 day VWAP at start, 30 June 2018, $4.92
1 July 2018 to 30 June 2021
30 June 2021
(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 influence the TSR
performance of the Company.
The comparator group of companies for FY19 Performance Rights
comprises companies in the S&P ASX All Ordinaries Gold Index (ASX:
XGD) with a market capitalisation of at least A$300 million at the
start of the performance period and is set out in the table below. At
the discretion of the Board, the composition of the comparator
group may change from time to time.
Page 34
Directors’ Report
The comparator group of companies for FY19 Performance Rights
comprises:
Alacer Gold Corp
(ASX: AQG)
AngloGold Ashanti
Limited (ASX: AGG)
Dacian Gold Limited
(ASX: DCN)
Perseus Mining Limited
(ASX: PRU)
Ramelius Resources Limited
(ASX: RMS)
Regis Resources Limited
(ASX: RRL)
Evolution Mining Limited
Resolute Mining Limited
(ASX: EVN)
(ASX: RSG)
Gold Road Resources
Limited (ASX: GOR)
Newcrest Mining Limited
Saracen Mineral Holdings
Limited (ASX: SAR)
Silver Lake Resources Limited
(ASX: NCM)
(ASX: SLR)
Northern Star Resources
Tribune Resources Limited
Ltd (ASX: NST)
(ASX: TBR)
OceanaGold Corporation
Westgold Resources Limited
(ASX: OGC)
(ASX: WGX)
The proportion of the FY19 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 2018 and
ending 30 June 2021 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%
WACC (calculated as above) +
between 3% and 7%
Pro‐rata from 50% to
100%
WACC (calculated as above) + 7%
100%
The outcome of FY19 Performance Rights will be reported in the
2021 Remuneration Report.
ST BARBARA LIMITED 2019
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.
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.
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.
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 Chairman’s fee was determined independently, based on roles
and responsibilities
for companies
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
The aggregate Non‐Executive Directors’ fees for 2019, and the
estimated aggregate Non‐Executive Directors’ fees for 2020, 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 2019, AON
Non‐Executive Director Benchmarking Report May 2019, McGuirk
2019 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 resolved to maintain existing Non‐Executive Directors
fees for 2020 as set out in the table below.
In 2018, the Board appointed a worldwide 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 culminated
in the appointment of Stef Loader on
1 November 2018.
Following the successful completion of the acquisition of Atlantic
Gold Corporation on 19 July 2019, Steven Dean, former Chairman,
Chief Executive Officer and co‐founder of Atlantic Gold, was
appointed as an independent Non‐Executive Director effective 23
July 2019.
Page 35
Directors’ Report
Non‐Executive Director Remuneration (continued)
ST BARBARA LIMITED 2019
Remuneration Report (audited)
The skills and experience of the Board will be reported in the annual
Corporate Governance Statement, due to be published on
13 September
at
2019
www.stbarbara.com.au/about‐us/governance/.
available
and
Director fee
Committee Chair
Committee Member
Chairman1
Annual aggregate fees
March 2014
to June 2016
90,000
15,750
7,650
2017
2018
2019
2020
92,000
16,000
10,000
101,200
106,260
106,260
20,000
10,000
25,000
15,000
25,000
15,000
223,200
228,000
250,800
263,340
263,340
2016
2017
2018
2019
2019
465,800
484,000
533,200
690,033
est. 868,380 2
$
$
$
$
$
no. of non‐executive directors
3
3
3
43
54
Shareholder approved annual aggregate fees5
$
1,200,000
1,200,000
1,200,000
1,200,000
1,200,000
The Directors in office and the composition of Board Committees at the date of this report are:
Director
Appointed
Length of service
6
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
S E Loader
S G Dean
17 Feb 20147
1 Jul 2014
16 Mar 2015
18 May 2015
1 Nov 2018
23 July 2019
5 years
5 years
4 years
4 years
<1 year
<1 year
Chairman
MD & CEO
Director
Director
Director
Director
Member
Chair / Member
Member
‐
Chair
Member
Member
‐
‐
Member
Member
Member / Chair8
‐
‐
Member
Chair
Member
Member
1 The Chairman’s fee is inclusive of all Board Committee commitments.
2 Aggregate fees for 2020 is estimated on the number of Directors and composition of Board Committees at the date of this report.
3 Stef Loader appointed as Non‐Executive Director 1 November 2018.
4 Steven Dean appointed as Non‐Executive Director 23 July 2019
5 Approved by shareholders at the Annual General Meeting in November 2012.
6 Whole years to 30 June 2019.
7 Appointed as Director 17 February 2014, appointed as Chairman 1 July 2015.
8 Stef Loader appointed as Chair HSEC Committee effective 13 Feb 2019
Page 36
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1,869,053 1
21,9292
64,4193
Directors’ Report
10. Additional Statutory Information
Key Management Personnel Shareholdings
ST BARBARA LIMITED 2019
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
Purchased
(inc. Retail
Ent. Offer)
Sold
Dividend
Reinvestment
Plan
Other
changes
Balance at
the end of
the year
Name
Non‐Executive Directors
T C Netscher
D E J Moroney
K J Gleeson
S E Loader
Executive Director
R S Vassie
Executives
22,697
103,173
8,597
‐
‐
‐
‐
‐
37,553
‐
18,990
30,000
‐
‐
‐
‐
717
2,265
271
0
1,769,053
1,104,674
100,000
(1,104,674)
0
G Campbell‐Cowan
R Cole
15,149
42,559
575,291
287,127
6,302
18,390
(575,291)
(285,000)
478
1,343
Table 16 Key Management Personnel Shareholding
Shareholding guidelines for Non‐Executive Directors and Executives
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.
The Group is proposing to introduce a salary‐sacrifice style share plan, to enable Non‐Executive Directors to acquire shares on an ongoing basis,
in compliance with the Corporations Law and Securities Dealing Policy restrictions on Director share trading.
The Group acknowledges that, in the absence of share trading prohibitions, KMP generally incur an income tax liability of 47% of the market value of
shares issued upon vesting of employee rights under the LTI, and will generally need to sell at least half of their entitlement to cover their income tax
obligations, in compliance with the Securities Dealing Policy.
Loans to Directors and Executives
There were no loans to Directors or Executives during the 2019 financial year.
END OF REMUNERATION REPORT
1
2
3
In addition, 64,914 employee rights were determined by the Board on 21 August 2019 to have vested as at 30 June 2019 and are pending issue as shares as at
the date of this report.
In addition, 33,789 employee rights were determined by the Board on 21 August 2019 to have vested as at 30 June 2019 and are pending issue as shares as at
the date of this report.
In addition, 17,035 employee rights were determined by the Board on 21 August 2019 to have vested as at 30 June 2019 and are pending issue as shares as
at the date of this report.
Page 39
Directors’ Report
Indemnification and insurance of officers
Non‐audit services
ST BARBARA LIMITED 2019
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.
Environmental management
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 2019 at any
of the Group’s Australian and Pacific sites.
inspections. There were no externally
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 2019 financial year are
set out in Note 20 to the consolidated 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 41 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 in relation to the 2019 financial year of 4 cents per
ordinary share, to be paid on 25 September 2019. A provision for
this dividend has not been recognised in the 30 June 2019
consolidated financial statements.
On 19 July 2019, the Group successfully acquired Atlantic Gold
Corporation (a Canadian listed Corporation) for a total cash value of
$780,117,000. This acquisition is to be funded from the net
proceeds of the equity raising during the 2019 financial year of
$479,558,000 and available cash on hand.
In July 2019 the Group executed a three year $200,000,000
syndicate revolving corporate debt facility.
Rounding of amounts
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 21st day of August 2019.
Bob Vassie
Managing Director and CEO
Page 40
Directors’ Report
Auditors Independence Declaration
ST BARBARA LIMITED 2019
Page 41
Financial Report
Contents
Consolidated Financial Statements
Page
About this report
Consolidated comprehensive income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated 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. Further disclosures
20 Remuneration of auditors
21 Events occurring after the balance sheet date
22 Contingencies
23 Basis of preparation
24 Accounting standards
25 Business combinations
Signed reports
Directors’ declaration
Independent auditor’s report
42
43
44
45
46
47
49
51
51
52
53
54
55
57
58
59
60
64
65
66
66
66
67
68
69
69
69
70
71
72
73
74
ST BARBARA LIMITED 2019
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 2019 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 consolidated financial
statements on 21 August 2019.
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 consolidated financial
statements are presented where the related accounting balance or
consolidated 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 42
Financial Report
Consolidated comprehensive income statement
for the year ended 30 June 2019
ST BARBARA LIMITED 2019
Operations
Revenue
Mine operating costs
Gross profit
Interest revenue
Other income
Exploration expensed
Corporate costs
Royalties
Depreciation and amortisation
Expenses associated with acquisition
Share based payments
Other expenses
Operating profit
Finance costs
Net foreign exchange (loss)/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 will not be reclassified to profit or loss:
Changes in fair value of financial assets
Income tax on other comprehensive income
Items that may be reclassified to profit or loss:
Foreign currency translation differences ‐ foreign operations
Other comprehensive profit net of tax(1)
Total comprehensive income attributable to equity holders of the Company
Notes
1
1
1
6
3
13
Consolidated
2019
$'000
2018
$'000
650,321
(299,075)
351,246
679,204
(275,695)
403,509
10,073
115
(18,725)
(21,859)
(21,441)
(79,643)
(3,865)
(3,099)
(3,855)
208,947
(946)
(3,707)
204,294
5,283
2,053
(9,149)
(23,840)
(23,015)
(87,276)
‐
(3,636)
(608)
263,321
(918)
200
262,603
2
(60,131)
(35,605)
144,163
226,998
144,163
226,998
(1,171)
12,602
351
(3,731)
6,787
5,967
6,215
15,086
150,130
242,084
Earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
4
4
26.99
26.84
44.26
43.73
(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 consolidated comprehensive income statement should be read in conjunction with the notes to the consolidated financial statements.
Page 43
Financial Report
Consolidated balance sheet
as at 30 June 2019
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
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 consolidated balance sheet should be read in conjunction with the notes to the consolidated financial statements.
ST BARBARA LIMITED 2019
Consolidated
2019
$'000
2018
$'000
Notes
13
13
11
11
7
6
16
7
8
9
8
2
11
13
10
18
2
10
2
18
14
880,199
10,000
13,036
66,620
1,614
971,469
101,734
40,495
5,655
226,330
40,858
1,872
21,320
438,264
1,409,733
56,549
‐
244
16,528
23,171
96,492
30,846
23,391
1,981
56,218
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
152,710
155,274
1,257,023
665,870
1,402,675
(33,593)
(112,059)
898,430
(37,753)
(194,807)
1,257,023
665,870
Page 44
Financial Report
Consolidated statement of changes in equity
for the year ended 30 June 2019
ST BARBARA LIMITED 2019
Balance at 1 July 2017
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
Transactions with owners of the Company recognised directly
in equity:
Share‐based payments expense
Performance rights issued/(expired)
Dividends paid
Dividends reinvested
Equity issued (net of transaction costs)
Total comprehensive income for the year
Profit attributable to equity holders of the Company
Other comprehensive gain/(loss)
Balance at 30 June 2019
Note
19
19
Contributed
Equity
$'000
887,254
‐
739
‐
10,437
‐
‐
898,430
‐
3,709
‐
20,978
479,558
Foreign
Currency
Translation
Reserve
$'000
(58,673)
‐
‐
‐
‐
‐
6,215
(52,458)
‐
‐
‐
‐
‐
‐
‐
1,402,675
‐
6,787
(45,671)
Consolidated
Other
Reserves
$'000
Accumulated
Losses
$'000
Total
$'000
2,937
(370,391)
461,127
3,636
(739)
‐
‐
‐
8,871
14,705
3,099
(4,906)
‐
‐
‐
‐
(820)
12,078
‐
‐
(40,977)
(10,437)
3,636
‐
(40,977)
‐
226,998
‐
(194,807)
226,998
15,086
665,870
‐
1,197
(41,634)
(20,978)
‐
3,099
‐
(41,634)
‐
479,558
144,163
‐
(112,059)
144,163
5,967
1,257,023
The above consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements.
Page 45
Financial Report
Consolidated cash flow statement
for the year ended 30 June 2019
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
Income tax payments
Net cash inflow from operating activities
Cash Flows From Investing Activities:
Movement in deposits held to maturity
Payments for property, plant and equipment
Payments for development of mining properties
Payments for exploration and evaluation
Investments in shares
Net cash outflow from investing activities
Cash Flows From Financing Activities:
Movement in restricted cash
Equity raised
Equity raising transaction cost
Dividend payments
Principal repayments ‐ finance leases
Net cash outflow used in financing activities
Notes
13
13
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 2019
Consolidated
2019
$'000
2018
$'000
647,566
681,146
(336,717)
(322,139)
(18,725)
10,073
(61,423)
240,774
(9,149)
5,283
(39,462)
315,679
106,200
(116,200)
(20,651)
(97,333)
(12,676)
(3,794)
(12,043)
(59,134)
(5,020)
(20,591)
(28,254)
(212,988)
(1,000)
490,331
(10,773)
(41,634)
(39)
436,885
649,405
226,443
4,351
880,199
(1,400)
‐
‐
(40,977)
(466)
(42,843)
59,848
160,909
5,686
226,443
Cash flows are included in the consolidated 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 consolidated cash flow statement should be read in conjunction the notes to the consolidated financial statements.
Page 46
Notes to the Financial Report
A. Key results
1
Segment information
Gold revenue
Silver revenue
Total revenue
Mine operating costs
Gross profit
Royalties (1)
Depreciation and amortisation
Segment profit before income tax
Capital expenditure
Sustaining
Growth exploration(2)
Gwalia extension project
Gwalia feasibility studies(3)
Total capital expenditure
Segment assets(4)
Segment non‐current assets(4)
Segment liabilities(4)
ST BARBARA LIMITED 2019
Leonora
2019
$’000
392,292
386
392,678
(155,236)
237,442
2018
$’000
460,765
499
461,264
(157,979)
303,285
Simberi
2019
$’000
256,807
836
257,643
(143,839)
113,804
2018
$’000
217,418
522
217,940
(117,716)
100,224
Total segment
2019
$’000
649,099
1,222
650,321
(299,075)
351,246
2018
$’000
678,183
1,021
679,204
(275,695)
403,509
(15,663)
(59,763)
162,016
(18,123)
(65,734)
219,428
(44,161)
(8,469)
(59,716)
(2,658)
(115,004)
(33,829)
(5,020)
(31,773)
‐
(70,622)
(5,778)
(18,220)
89,806
(9,436)
(4,596)
‐
‐
(14,032)
(4,892)
(17,516)
77,816
(21,441)
(77,983)
251,822
(23,015)
(83,250)
297,244
(4,081)
(336)
‐
‐
(4,417)
(53,597)
(13,065)
(59,716)
(2,658)
(129,036)
(37,910)
(5,356)
(31,773)
‐
(75,039)
350,687
332,648
31,035
300,171
279,969
31,714
158,412
62,380
39,888
128,420
79,558
27,924
509,099
395,028
70,923
428,591
359,527
59,638
(1) Royalties include state and government royalties and corporate royalties.
(2) Growth exploration comprises deep drilling expenditure at Gwalia and Simberi sulphide drilling reported as part of exploration.
(3) Gwalia feasibility studies incorporated reviews of alternative haulage methods.
(4) Represents the reportable segment balances after impairment and asset write down charges.
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, acquisitions of property,
plant and equipment and growth projects. Growth projects are
focussed on extending mine life, and in the case of exploration
increasing mineral resources and ore reserves.
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 at a point in time when
control (physical or contractual) is 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
2019
$’000
9,052
309,035
87,548
243,464
2018
$’000
164,477
247,110
13,875
216,576
2019
%
1.4
47.6
13.5
37.5
2018
%
24.3
36.4
2.0
31.9
Customer A
Customer B
Customer C
Customer D
Page 47
ST BARBARA LIMITED 2019
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.
Notes to the Financial Report
1 Segment information (continued)
Operations
Consolidated
2019
$’000
2018
$’000
Total profit for reportable segments
251,822
297,244
Interest revenue
Other income
Exploration expensed
10,073
115
5,283
2,053
(18,725)
(9,149)
Corporate depreciation and amortisation
(1,660)
(4,026)
Finance costs
Corporate costs
Net foreign exchange (loss)/gain
Expenses associated with acquisition
Share based payments
Other expenses
(946)
(918)
(21,859)
(23,840)
(3,707)
(3,865)
(3,099)
200
‐
‐
(3,855)
(4,244)
Consolidated profit before income tax
204,294
262,603
Assets
Total assets for reportable segments
509,099
428,591
Cash and cash equivalents
Deposits held to maturity
837,424
226,318
10,000
116,200
Trade and other receivables (current)
9,973
9,199
Financial assets
40,495
37,872
Corporate property, plant & equipment
2,742
2,964
Consolidated total assets
1,409,733
821,144
Liabilities
Total liabilities for reportable segments
Trade and other payables
Interest bearing liabilities (current)
Provisions (current)
Provisions (non‐current)
Current tax liability
Deferred tax liabilities
70,923
26,117
59,638
17,984
‐
11
9,596
10,296
1,376
1,420
21,307
39,982
23,391
25,943
Consolidated total liabilities
152,710
155,274
Page 48
Notes to the Financial Report
2 Tax
Income tax expense
Current tax expense
Under provision in respect of the prior year
Deferred income tax cost/(benefit)
Total income tax expense
Consolidated
2019
$'000
53,376
966
5,789
2018
$'000
56,494
158
(21,047)
60,131
35,605
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
Permanent differences arising from foreign
exchange within the tax consolidated
group
Income tax expense
2019
$'000
204,294
2018
$'000
262,603
61,288
78,781
930
1,659
(16,861)
(415)
(5,140)
633
(178)
(25,106)
‐
(415)
939
60,131
(379)
35,605
ST BARBARA LIMITED 2019
Income tax
Income tax expense comprises current and deferred tax. Current tax
and deferred tax are recognised in the consolidated 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 may impact
tax expense in the period that such a determination is made.
Tax consolidation
Entities in the tax consolidated group at 30 June 2019 included:
St Barbara Ltd (head entity), Allied Gold Mining Ltd and Allied Gold
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. At 30 June 2019, the tax consolidated
group did not have any unused tax losses.
Current tax liability
As at 30 June 2019, the Company recognised a current tax liability of
$23,171,000 (2018: $39,982,000), consisting mainly of Australian tax
relating to 2019 year income tax payable.
Accounting judgements and estimates
A tax effect credit of $5,140,000 (2018: $25,106,000) has been
booked relating to previously unrecognised PNG deferred tax assets.
This amount has been booked based on expected taxable profit
arising from the current life of mine plan for the Simberi operations.
At 30 June 2019, tax losses not recognised (tax effected) relating to
entities associated with Simberi operations in PNG and Australia
were reduced to $Nil (2018: $5,024,000).
Page 49
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
2019
$'000
2018
$'000
‐
50,007
95,066
1,367
146,440
43,932
9,001
49,902
133,341
119
192,363
57,709
260
48,517
12,443
61,311
1,904
17,642
11,265
153,342
272
42,168
23,494
58,797
2,554
19,631
12,434
159,350
46,003
47,805
(2,071)
9,904
Comprising:
Australia – net deferred tax liabilities
PNG – net deferred tax assets
(23,391)
(25,943)
21,320
35,847
Deferred tax assets have not been
recognised in respect of the
following items:
Tax losses – PNG Operations
Total
Tax effect @ 30%
‐
‐
‐
16,745
16,745
5,024
ST BARBARA LIMITED 2019
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.
Page 50
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.
Consolidated
2019
$'000
2018
$'000
Atlantic Gold Corporation acquisition
costs(1)
(3,865)
Total significant items – pre tax
(3,865)
‐
‐
Tax Effect
Tax effect of pre‐tax significant items
PNG deferred tax asset recognised(2)
1,160
5,140
‐
25,106
Total significant items – post tax
2,435
25,106
ST BARBARA LIMITED 2019
(1) Atlantic Gold Corporation acquisition costs
Costs relating to the acquisition of Atlantic Gold Corporation
included due diligence costs, share registry charges, and legal and
consulting fees.
(2) PNG deferred tax asset recognised
At 30 June 2019, based on the continued strong operating
performance of the Simberi operation, an additional net deferred tax
asset was recognised of $5,140,000.
4
Earnings per share
Basic earnings per share
Diluted earnings per share
Consolidated
2019
Cents
26.99
26.84
2018
Cents
44.26
43.73
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
2019
$'000
2018
$'000
144,163
226,998
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
2019
Number
2018
Number
534,106,859 512,835,786
537,075,948 519,098,931
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 51
ST BARBARA LIMITED 2019
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 2018 final dividend were issued at a
1.5% discount to the 5 day volume weighted average price.
DRP shares in relation to the 2019 interim dividend were issued at a
1% discount to the 5 day volume weighted average price.
Final Dividend
Subsequent to the 30 June 2019 full year report date, the Directors
declared the payment of a final dividend of 4 cents per fully paid
ordinary share fully franked. The aggregate amount of the proposed
dividend is expected to be paid on 25 September 2019 out of
retained earnings at 30 June 2019, and has not been recognised as a
liability at the end of the year.
DRP shares in relation to the 2019 final dividend will be issued at a
1% discount to the 5 day volume weighted average price.
Notes to the Financial Report
5 Dividends
Declared and paid during the year on
ordinary shares (fully‐franked at 30 per cent)
2019 interim dividend: 4 cents (2018: 4 cents)
2018 final dividend: 8 cents (2017: 6 cents)
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
Consolidated
2019
$'000
2018
$'000
20,971
41,641
62,612
20,617
30,797
51,414
41,634
20,978
62,612
40,977
10,437
51,414
Proposed and not recognised as a liability
(fully‐franked at 30 per cent)
2019 final dividend: 4 cents (2018: 8 cents)
27,826
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
50,680
18,427
(11,926)
(17,846)
Page 52
Notes to the Financial Report
B. Mining operations
6 Property, plant and equipment
ST BARBARA LIMITED 2019
Consolidated
2019
$'000
2018
$'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 (range 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 (range 3‐10 years)
Effects of movement
exchange rates
At the end of the year
Total
in
foreign
11,724
1,977
(2,163)
(72)
144
11,610
100,437
18,674
(1,895)
(29,106)
2,014
90,124
101,734
13,078
559
(2,013)
‐
100
11,724
113,415
11,647
(163)
(25,704)
1,242
100,437
112,161
Security
As at 30 June 2019, plant and equipment with a carrying value of $Nil
(2018: $39,000) was pledged as security for finance leases. In
accordance with security arrangements 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 the
consolidated 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
2019
$'000
2018
$'000
(2,163)
(29,106)
(2,013)
(25,704)
(46,355)
(2,019)
(79,643)
(55,890)
(3,669)
(87,276)
Consolidated
2019
$’000
2018
$’000
14,003
27,053
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 consolidated
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
consolidated income statement when realised.
Page 53
Notes to the Financial Report
7 Deferred mining costs
ST BARBARA LIMITED 2019
Current
Deferred operating mine development
Consolidated
2019
$'000
2018
$'000
1,614
1,974
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
5,655
7,058
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.
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 2019 (2018: $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
consolidated income statement. Underground mining costs in the
period are deferred based on the metres developed for a particular
level.
Page 54
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
2019
$'000
175,352
97,333
‐
(46,355)
226,330
2018
$'000
159,859
59,134
12,249
(55,890)
175,352
ST BARBARA LIMITED 2019
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 consolidated income statement and asset
carrying values.
Mineral rights
At the beginning of the year
Amortisation
At the end of the year
Consolidated
2019
$'000
3,891
2018
$'000
7,560
(2,019)
1,872
(3,669)
3,891
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 55
ST BARBARA LIMITED 2019
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 consolidated
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 consolidated 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 consolidated
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.
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 2019, 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
2019, long mine life in the case of Leonora and relatively low carrying
value to recover at Simberi.
The identified CGUs of the Group are: Leonora and Simberi. The
carrying value of the Leonora and Simberi CGUs are assessed when
an indicator of impairment is identified 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.
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 56
Notes to the Financial Report
9
Exploration and evaluation
Non‐current
At beginning of the year
Additions
Transfer to mine properties
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
relevant government mining
departments in Australia and Papau New
Guinea. This requirement will continue for
future years with the amount dependent
upon tenement holdings.
the
Consolidated
2019
$'000
28,182
12,676
‐
40,858
2018
$'000
35,411
5,020
(12,249)
28,182
Consolidated
2019
$’000
2018
$’000
7,299
5,358
ST BARBARA LIMITED 2019
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 consolidated
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 consolidated income statement.
Page 57
Notes to the Financial Report
10 Rehabilitation provision
Current
Provision for rehabilitation
Non‐current
Provision for rehabilitation
ST BARBARA LIMITED 2019
Consolidated
2019
$'000
2018
$'000
244
610
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.
30,846
31,090
29,094
29,704
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
Provision used during the year
Effects of movements in the foreign
exchange rate
Balance at end of year
29,704
885
(563)
1,064
28,238
853
‐
613
31,090
29,704
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.
There is some uncertainty as to the extent of rehabilitation
obligations that will be incurred due to the impact of potential
changes in environmental legislation and many other factors
(including future developments, changes in technology and price
increases). The rehabilitation
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.
liability
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 58
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
Consolidated
2019
$'000
2018
$'000
1,660
7,116
2,400
1,860
13,036
1,880
4,026
1,400
4,309
11,615
Consolidated
2019
$'000
2018
$'000
47,391
6,369
9,368
3,492
66,620
41,429
6,014
7,980
9,126
64,549
Trade and other payables
Current
Trade payables
Other payables
Consolidated
2019
$'000
2018
$'000
54,894
1,655
56,549
39,348
530
39,878
ST BARBARA LIMITED 2019
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. The
amount of the provision for doubtful receivables 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 Group does not have material trade receivables for which there
is an expected credit
income
statement. It only sells to reputable banks, refiners and commodity
traders.
loss though the consolidated
Amounts receivable from Director related entities
At 30 June 2019, there were no amounts receivable from Director
related entities (2018: $Nil).
Raw materials and consumables, ore stockpiles, gold‐in‐circuit and
bullion on hand are valued at the lower of cost and net realisable
value.
Cost comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure relating to
mining activities, the latter being allocated on the basis of normal
operating capacity. Costs are assigned to individual items of
inventory on the basis of weighted average costs. Net realisable
value is the estimated selling price in the ordinary course of business,
less the estimated costs of completion and the estimated costs
necessary to make the sale.
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
estimation 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.
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 59
Notes to the Financial Report
12 Financial risk management
Financial risk management
Sensitivity analysis:
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 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:
ST BARBARA LIMITED 2019
Impact on Profit After Tax
(Increase profit)/decrease
profit
2019
$'000
(349)
349
2018
$'000
(120)
120
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 function 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.
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), United States Dollars (USD) and Papua New
Guinea Kina (PGK).
The exchange rates at the reporting date were as follows:
Closing rate as at
30 June 2019
30 June 2018
AUD/USD
0.7021
0.7407
AUD/PGK
2.4378
2.3740
2019
2018
Exposure to currency
USD
$’000
PGK
$’000
USD
$’000
PGK
$’000
Cash and cash equivalents
Trade receivables
Trade payables
Interest bearing liabilities
Net exposure
12,255
377
(9,143)
‐
3,489
548
305
(3,870)
‐
(3,017)
4,876
709
(6,781)
(21)
(1,217)
(558)
361
(1,775)
‐
(1,972)
Page 60
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
2019
$’000
2018
$’000
665,870
Total shareholders’ funds
39
Borrowings
Cash and cash equivalents(1)
(39)
665,870
Total capital
(1) Cash and cash equivalents are included to the extent that the net debt
1,257,023
‐
‐
1,257,023
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. As
described in Note 21, a three year $200,000,000 Syndicate revolving
corporate debt facility was executed post 30 June 2019 to support
the Group following the acquisition of Atlantic Gold.
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 the
consolidated income statement or other comprehensive income,
and assets measured at amortised cost. The classification depends
on the purpose for which the investments were acquired and are
determined at initial recognition. The Group has made an
irrevocable election at the time of initial recognition to account for
the current equity
investment at fair value through other
comprehensive income.
ST BARBARA LIMITED 2019
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
limit on funds placed with any single
there
counterparty.
is a financial
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 after tax profit by $25,791,000.
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 March 2018, the Company entered into 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.
In October 2018, the Company entered into gold forward contracts
for 50,000 ounces of gold at A$1,809 per ounce and 50,000 ounces
of gold at US$1,300 per ounce with maturity over a twelve‐month
period from January 2020 to December 2020.
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 9 for these
contracts.
The maturity profile of the gold forward contracts remaining as at 30
June 2019 is provided in the table below.
6
months
or less
ounces
6 – 12
months
ounces
1 – 2
years
ounces
2 – 5
years
ounces
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.
Strike Price
Total
ounces
(e)
Credit risk
Credit risk is the risk that a counter party does 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 consolidated 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 $996,000 of the
trade receivables carrying amount at 30 June 2019 (2018: $818,000),
representing receivables owing from ore processing services. 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 2019 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
A$1,750/oz
50,000
50,000
‐
‐
A$1,809/oz
50,000
US$1,300/oz
50,000
‐
‐
24,000
26,000
24,000
26,000
‐
‐
‐
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 2019, 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.
Page 61
Notes to the Financial Report
12
(g)
Financial risk management (continued)
Fair value estimation
ST BARBARA LIMITED 2019
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 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.
Fixed Interest Maturing in 2019
Financial assets
Cash and cash equivalents
Deposits held to maturity
Restricted cash and cash equivalent
Receivables
Financial assets(1)
Weighted average interest rate
Financial liabilities
Trade and other payables
Weighted average interest rate
Net financial assets
Fixed Interest Maturing in 2018
Financial assets
Cash and cash equivalents
Deposits held to maturity
Restricted cash and cash equivalent
Receivables
Financial assets(1)
Weighted average interest rate
Financial liabilities
Trade and other payables
Finance lease liabilities
Floating
Interest rate
$’000
1 year or
less
$’000
Over 1 to 5
years
$’000
212,199
‐
‐
‐
‐
212,199
1.96%
668,000
10,000
2,400
‐
‐
680,400
‐
‐
‐
‐
‐
‐
2.10%
n/a
n/a
Non‐
interest
bearing
$’000
‐
‐
‐
8,776
40,495
49,271
Total
$’000
Fair value
$’000
880,199
10,000
2,400
8,776
40,495
941,870
880,199
10,000
2,400
8,776
40,495
941,870
‐
‐
n/a
‐
‐
n/a
212,199
680,400
15,392
‐
‐
‐
‐
15,392
1.74%
‐
‐
‐
211,051
116,200
1,400
‐
‐
328,651
‐
39
39
‐
‐
56,549
56,549
n/a
n/a
56,549
56,549
56,549
56,549
‐
‐
‐
‐
‐
‐
‐
(7,278)
885,321
885,321
‐
‐
‐
5,906
37,872
43,778
226,443
116,200
1,400
5,906
37,872
387,821
226,443
116,200
1,400
5,906
37,872
387,821
‐
‐
‐
39,878
‐
39,878
n/a
n/a
39,878
39
39,917
39,878
39
39,917
‐
3,900
347,904
347,904
2.62%
n/a
n/a
Weighted average interest rate
Net financial assets
n/a
15,392
8.00%
328,612
(1) Fair value is determined based on Level 1 inputs as the balance represents investments in listed securities.
Page 62
Notes to the Financial Report
12
Financial risk management (continued)
(h)
Liquidity risk
ST BARBARA LIMITED 2019
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 – 2019
Trade and other payables
Maturity of financial liabilities – 2018
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
56,549
56,549
40
39,878
39,918
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
56,549
56,549
56,549
56,549
40
39,878
39,918
39
39,878
39,917
Page 63
Notes to the Financial Report
13 Net debt
Cash and cash equivalents
Cash at bank and on hand
Term deposits
Consolidated
2019
$'000
212,199
668,000
880,199
2018
$'000
15,392
211,051
226,443
ST BARBARA LIMITED 2019
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 2019 was invested “at call” earning interest
at an average rate of 1.96% per annum (2018: 1.74% per annum).
Term deposits
Term deposits maturing within 3 months of the 30 June 2019
reporting date earned interest at rates of between 1.21% and 2.77%
per annum (2018: rates of between 2.05% and 2.75% per annum).
At 30 June 2019, the average time to maturity was 17 days (2018: 51
days) from balance date.
Term deposit maturing within 3 months reflected the significant
increase in cash and cash equivalents, recognising the commitment
to settle the acquisition of Atlantic Gold Corporation in July 2019.
Deposits held to maturity
Term deposits between 3 and 12 months
Term deposits between 3 and 12 months
Consolidated
2019
$'000
10,000
2018
$'000
116,200
Term deposits with maturity between 3 to 12 months at 30 June
2019 reporting date are earning interest at rates of 2.55% per annum
(2018: rates of between 2.44% and 2.80% per annum). At 30 June
2019, the average time to maturity was 205 days (2018: 158 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 consolidated
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
Total non‐current
Total interest bearing liabilities
Consolidated
2019
$'000
2018
$'000
‐
‐
‐
‐
39
39
‐
39
Profit before income tax includes the following specific expenses:
Finance Costs
Bank fees and borrowing costs
Finance lease interest
Provisions: unwinding of discount
Consolidated
2019
$'000
2018
$'000
60
1
885
946
50
15
853
918
Page 64
Notes to the Financial Report
13 Net debt (continued)
Commitments for leases
The finance lease commitments displayed in the table below relate
to 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 within 1 year
Payable between 1 and 5 years
Payable after 5 years
Future finance charges
Total finance lease liabilities
Current
Non‐current
Analysis of Non‐Cancellable Operating
Lease Commitments
Payable within 1 year
Payable between 1 and 5 years
Payable after 5 years
Total operating lease
Current
Non‐current
Consolidated
2019
$'000
2018
$'000
‐
‐
‐
‐
‐
‐
‐
‐
‐
40
‐
‐
40
(1)
39
39
‐
39
12,906
24,452
136
37,494
12,906
24,588
37,494
13,339
25,095
814
39,248
13,339
25,909
39,248
ST BARBARA LIMITED 2019
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 consolidated
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. The terms of lease payments vary, with a significant
proportion being fixed rate and including renewal options. Payments
made under operating leases (net of any incentives received from
the lessor) are charged to the consolidated income statement on a
straight‐line basis over the period of the lease. The Group will
implement AASB 16 Leases as at 1 July 2019. As part of the
implementation process certain contracts not previously included
have been identified and the non‐cancellable operating lease
commitments table has been updated accordingly.
14 Contributed equity
Details
Number of
shares
$'000
Reconciliation of profit from ordinary activities after income tax
to net cash flows from operating activities
Opening balance 1 July 2018
516,541,773
898,430
Vested performance rights
3,974,617
3,709
Profit after tax for the year
Depreciation and amortisation
Difference between income tax expenses
and tax payments
Unwinding of rehabilitation provision
Unrealised/realised foreign exchange loss
Equity settled share‐based payments
Change in operating assets and liabilities
Receivables and prepayments
Inventories
Other assets
Trade creditors and payables
Provisions and other liabilities
Consolidated
2019
$'000
2018
$'000
144,163
226,998
79,643
87,276
(1,292)
(5,167)
885
3,707
3,099
853
(200)
3,636
(421)
(945)
(2,071)
(9,209)
(1,462)
16,671
(2,148)
5,677
3,398
3,362
Net cash flows from operating activities
240,774
315,679
Shares on DRP
Shares issued
5,472,704
20,978
169,664,638
479,558
Closing balance 30 June 2019
695,653,732
1,402,675
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.
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.
Shares Issued
Issue of shares upon capital raising for the acquisition of Atlantic
Gold Corporation (refer to Note 21).
Page 65
Notes to the Financial Report
D. Business portfolio
ST BARBARA LIMITED 2019
15 Parent entity disclosures
16 Financial assets and fair value of financial
As at, and throughout, the financial year ended 30 June 2019, 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 (loss)/profit
Significant item – intercompany debt
forgiveness(1)
Total comprehensive (loss)/income for
the year
Parent Entity
2019
$'000
2018
$'000
89,716
133,025
(820)
8,871
(106,533)
‐
(17,637)
141,896
Note (1): Represents debts forgiven between companies within the Group to
enable non‐operating and dormant companies to be deregistered to
streamline the Group’s legal structure. Amount forgiven was non‐cash, and
did not represent any economic loss to the consolidated Group.
Other comprehensive income is set out in the Consolidated
statement of comprehensive income.
assets
Financial assets
Consolidated
2019
$'000
2018
$'000
Australian listed shares
40,495
37,872
At the 30 June 2019 reporting date, the Group’s financial assets of
$40,495,000 (30 June 2018: $37,872,000) 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.
Except as noted below, all subsidiaries are 100% owned at 30 June
2019 and 30 June 2018.
Parent Entity
2019
$'000
2018
$'000
Parent entity
St Barbara Limited
Country of
Incorporation
Australia
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
880,981
378,860
992,111
530,408
74,517
86,296
122,851
137,379
1,402,675
898,429
(5,064)
(5,884)
(62,612)
(51,414)
(465,739)
(448,102)
869,260
393,029
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
$5,019,000 (2018: $4,888,000), operating lease rents of $Nil (2018:
$62,000), and interest of $86,000 (2018: $4,240,000) to entities in
the wholly‐owned group.
Net loans payable to the Company amount to a net payable of
$41,606,000 (2018: net receivable $108,159,000).
Balances and transactions between the Company and
its
subsidiaries, which are related parties of the Company, have been
eliminated on consolidation.
Subsidiaries of St Barbara Limited
Allied Gold Mining Ltd**
UK
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
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
PNG
PNG
PNG
* Non‐operating entities deregistered during the 2019 financial year.
** Non‐operating entities undergoing deregistration during the 2019
financial year.
Page 66
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
2019
$'000
2018
$'000
73,546
72,544
5,985
3,099
82,630
5,515
3,636
81,695
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
Consolidated
2019
$'000
2,838
75
201
291
3,405
2018
$'000
3,097
60
236
1,060
4,453
Consolidated
2019
$'000
2018
$'000
4,951
3,869
7,708
16,528
4,607
3,712
9,534
17,853
ST BARBARA LIMITED 2019
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 to 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.
1,981
1,981
1,875
1,875
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 67
ST BARBARA LIMITED 2019
Notes to the Financial Report
19 Share‐based payments
Employee Performance Rights
During the year ended 30 June 2019, there was no amount transferred as a gain for performance rights that expired during the year (2018: $Nil).
Accounting standards preclude the reversal through the consolidated 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 2019
Grant Date
Expiry Date
Issue price
30 Jun 2019
21 Oct 2016
12 Dec 2016
30 Jun 2019
31 Mar 2017 30 Jun 2019
16 Nov 2017 30 Jun 2020
30 Jun 2021
24 Oct 2018
21 Dec 2018
30 Jun 2021
Total
$2.92
$2.92
$2.92
$2.89
$4.92
$4.92
Consolidated and parent entity 2018
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
Balance at
start of the
year
Number
837,568
196,708
42,440
1,211,812
‐
‐
2,288,528
Granted
during the
year
Number
‐
‐
‐
‐
718,262
54,523
772,785
3,974,617
837,568
196,708
42,440
‐
5,051,333
‐
‐
‐
‐
1,245,390
1,245,390
Vested during
the year
Number
(472,228)
(64,914)
(14,103)
‐
‐
‐
(551,245)
(3,974,617)
‐
‐
‐
‐
(3,974,617)
Expired
during the
year
Number
(365,340)
(131,794)
(28,337)
(36,753)
(7,182)
‐
(569,406)
Balance at
end of the
year
Number
‐
‐
‐
1,175,059
711,080
54,523
1,940,662
‐
‐
‐
‐
(33,578)
(33,578)
‐
837,568
196,708
42,440
1,211,812
2,288,528
Exercisable
at end of the
year
Number
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
The weighted average remaining contractual life of performance
rights outstanding at the end of the year was 1.40 years (2018: 1.53
years). Conditions associated with rights granted during the year
ended 30 June 2019 included:
i.
Rights are granted for no consideration. The vesting of rights
granted in 2019 is subject to a continuing service condition as
at the vesting date, Return on Capital Employed over a three
year period (for the 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 $3,081,000. 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
2019
$
2018
$
Performance rights issued under
performance rights plan
3,099,000
3,636,000
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 68
Notes to the Financial Report
F. Further disclosures
ST BARBARA LIMITED 2019
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 Australia, the auditor of the
parent entity, and its related practices:
PricewaterhouseCoopers Australia audit
and review of financial reports
PricewaterhouseCoopers Papua New
Guinea audit and review of financial
reports
PricewaterhouseCoopers United Kingdom
audit and review of financial reports
PricewaterhouseCoopers Australia Non‐
audit services
Tax advisory and assurance services
Tax advice in relation to AusIndustry
review
Accounting advice and other assurance
related services
Total remuneration for audit and non‐
audit related services
Consolidated
2019
$
276,020
2018
$
252,960
24,969
30,600
‐
17,340
‐
‐
31,500
51,500
39,200
22,484
340,189
406,384
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 2019 financial year of 4 cents per
ordinary share, to be paid on 25 September 2019. A provision for
this dividend has not been recognised in the 30 June 2019
consolidated financial statements.
On 19 July 2019, the Group successfully acquired Atlantic Gold
Corporation (a Canadian listed Corporation) for a total cash value of
$780,117,000. This acquisition is to be funded from the net proceeds
of the equity raising during the 2019 financial year of $479,558,000
and available cash on hand.
In July 2019 the Group executed a three year $200,000,000
syndicate revolving corporate debt facility.
22 Contingencies
In 2014, the Company announced that its internal reporting
mechanisms had identified 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. 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.
During the reporting period the Australian Federal Police advised the
Company that it had concluded its investigation and determined
there is no action to be taken against the Company or its current or
former employees.
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 69
ST BARBARA LIMITED 2019
Critical accounting judgement and estimates
The preparation of consolidated 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 2019
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 consolidated 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 consolidated income statement as part of the
fair value gain or loss. Translation differences on non‐monetary
financial assets, such as equities classified as level 1 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 70
Notes to the Financial Report
24 Accounting standards
New Standards adopted
The accounting policies applied by the Group in this 30 June 2019
consolidated financial report are consistent with Australian
Accounting Standards. All new and amended Australian Accounting
Standards and interpretations mandatory as at 1 July 2019 to the
group have been adopted and have no material impact on the
recognition, measurement and disclosure of the financial report.
AASB 9 Financial instruments: the Company determined that
investments in equities of listed companies will continue to be
accounted for at Fair Value in Other Comprehensive Income in future
periods through an irrevocable election. As a result, future gains or
losses on disposal will not affect the consolidated income statement.
All other items will continue to be accounted for consistently with
the previous accounting standards. The Group does not have
material financial assets for which there is an expected credit loss
though the consolidated income statement. It only sells to reputable
banks, refiners and commodity traders
AASB 15 Revenue for contracts with customers: the Group
recognises sales revenue related to the transfer of promised goods
and services when control of the goods and services passes to the
customer. The amount of revenue recognised reflects the
consideration to which the Group is entitled to in exchange of those
goods and services.
Accounting policies are applied consistently by each entity in the
Group.
ST BARBARA LIMITED 2019
New accounting standards not yet adopted
Reference
AASB 16 Leases
*Applicable to the Group as of 1 July 2019
Application of
Standard
1 January 2019*
Assessment of the impact on the recognition, measurement and
disclosure of the financial report of new accounting standards not
adopted:
AASB 16 Leases introduces a single, on balance sheet lease
accounting model for lessees. The lessee requirements based on
AASB 16 are:
The Group is required to adopt AASB 16 Leases from 1 July 2019. The
Group has assessed the estimated impact that initial application of
AASB 16 will have on its consolidated financial statements as
described below. The actual impact of adopting the standard on 1
July 2019 may change because the new accounting policies are
subject to change until the Group presents its first consolidated
financial statements that include initial application of the standard.
The Group’s assessment of non‐cancellable operating
leases
incorporated within certain supplier contracts currently engaged by
the Group is that there will be a material impact to the consolidated
financial statements upon adoption of the new standard. The impact
on the consolidated income statement for the 2020 financial year is
a reduction in mine operating costs of approximately $14,674,000
and a related increase in depreciation and interest expenses.
The Group expects to recognise right of use assets from supplier
contracts and lease liabilities of approximately $37,494,000 from 1
July 2019.
The Group 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. Since the
Group recognises the right of use assets at the amount equal to the
lease liabilities, there is no impact on retained earnings and no
material impact on net profit after tax for 2020.
Page 71
Notes to the Financial Report
25
Business combinations
On 19 July 2019, St Barbara Limited, through its subsidiary Nord
Pacific Limited, acquired 100% of the issued shares of Atlantic Gold
Corporation (“Atlantic Gold”), a gold mining and exploration
company with operations in Nova Scotia, Canada. Consideration of
$780,117,000 to acquire Atlantic Gold was paid in cash using the
Company’s existing cash reserves.
The acquisition of Atlantic Gold achieves all of the Group’s strategic
objectives, including:
Diversification of the Group’s production base by adding a low
cost asset in a favourable jurisdiction;
Addition of a sustainable long life operation; and
Significant growth potential at Atlantic Gold through planned
resource and reserve expansion as well as near mine
exploration.
Due to the time between the acquisition date of 19 July 2019 and
the date of this report, it was impractical for the Group to provide a
provisional estimate of the fair value of assets and liabilities acquired
(and therefore any potential goodwill on acquisition).
ST BARBARA LIMITED 2019
Page 72
Financial Report
Directors’ declaration
ST BARBARA LIMITED 2019
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 42 to 72 and the remuneration report in the
Directors’ report, set out on pages 18 to 39, 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 2019 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 2019.
The directors draw attention to page 42 of the consolidated 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
21 August 2019
Page 73
Financial Report
Independent auditor’s report page 1
ST BARBARA LIMITED 2019
Page 74
Financial Report
Independent auditor’s report page 2
ST BARBARA LIMITED 2019
Page 75
Financial Report
Independent auditor’s report page 3
ST BARBARA LIMITED 2019
Page 76
Financial Report
Independent auditor’s report page 4
ST BARBARA LIMITED 2019
Page 77
Financial Report
Independent auditor’s report page 5
ST BARBARA LIMITED 2019
Page 78
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Ore Reserves and Mineral Resources Statement as at 30 June 2019
Overview
•
•
As at 30 June 2019, Group Ore Reserves increased from 3.9 Moz of contained gold to 4.1 Moz, and Group Mineral Resources increased
from 9.2 Moz of contained gold to 9.6 Moz.
Following the acquisition of Atlantic Gold Corporation on 19 July 2019, Group Ore Reserves are 5.9 Moz of contained gold and Group
Mineral Resources are 12.0 Moz of contained gold.
Company Summary at 30 June 2019
•
Total Ore Reserves are estimated at:
90.7 Mt @ 2.0 g/t Au for 5.9 Moz of contained gold, comprising:
Leonora Operations
o
o
o Atlantic Gold Operations1
Simberi Operations
12.7 Mt @ 5.8 g/t Au for 2.4 Moz of contained gold
26.1 Mt @ 2.0 g/t Au for 1.7 Moz of contained gold
52.0 Mt @ 1.1 g/t Au for 1.9 Moz of contained gold
•
Total Mineral Resources2 are estimated at:
183.1 Mt @ 2.0 g/t Au for 12.0 Moz of contained gold, comprising:
Leonora Operations
o
o
o Atlantic Gold Operations1
Simberi Operations
28.8 Mt @ 5.8 g/t Au for 5.4 Moz of contained gold
90.8 Mt @ 1.4 g/t Au for 4.2 Moz of contained gold
63.5 Mt @ 1.2 g/t Au for 2.4 Moz of contained gold
The 30 June 2019 Ore Reserves and Mineral Resources Statements released to the ASX on 21 August 2019 follow.
1 Atlantic Gold Corporation acquired 19 July 2019
2 Mineral Resources are reported inclusive of Ore Reserves
Page 79
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Company Summary inclusive of Atlantic Gold1
Ore Reserves
Project
Tonnes
('000)
Proved
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Probable
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Total
Gold
(g/t)
Ounces
('000)
Gwalia, (WA)
Tower Hill, (WA)
Simberi Oxide, (PNG)
Simberi Sulphide, (PNG)
Simberi Stockpile,(PNG)
2,220
-
1,547
1,615
1,058
8.0
-
1.5
2.0
0.7
568
-
75
105
24
7,915
2,572
5,346
16,520
-
5.9
3.7
1.2
2.4
-
1,506
10,135
306
213
2,572
6,893
1,270
18,135
-
1,058
6.4
3.7
1.3
2.4
0.7
2,073
306
288
1,375
24
Total (30 June 2019)
6,440
3.7
772
32,353
3.2
3,295
38,793
3.3
4,066
Atlantic Gold, (NS)
25,400
1.1
902
26,550
1.1
973
51,950
1.1
1,875
Total All Projects
31,840
1.6
1,674
58,903
2.3
4,268
90,743
2.0
5,941
Mineral Resources
Project
Measured
Gold
(g/t)
Tonnes
('000)
Ounces
('000)
Tonnes
('000)
Indicated
Gold
(g/t)
Gwalia, (WA)
5,034
7.3
1,183 17,527
Tower Hill, (WA)
-
Simberi Oxide, (PNG)
2,414
Simberi Sulphide, (PNG)
2,897
-
1.3
1.6
-
4,604
103 10,562
150 43,450
6.0
3.9
1.1
1.7
Ounces
('000)
Tonnes
('000)
3,393
1,129
574
489
376 12,886
2,375 18,591
Inferred
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Total
Gold
(g/t)
5.5
3.3
0.9
1.4
199 23,690
51
5,093
383 25,862
810 64,938
6.3
3.8
1.0
1.6
Ounces
('000)
4,775
625
862
3,335
Total (30 June 2019)
10,345
4.3
1,436 76,143
2.7
6,718 33,095
1.4
1,443 119,583
2.5
9,597
Atlantic Gold, (NS)
25,180
1.2
936 32,230
1.1
1,183
6,060
1.3
252 63,470
1.2
2,371
Total All Projects
35,525
2.1
2,372 108,373
2.3
7,901 39,155
1.3
1,695 183,053
2.0 11,968
_____________________________
1 Atlantic Gold Corporation acquired 19 July 2019. The information for the Atlantic Gold Mineral Resources or Ore Reserves is extracted from the report entitled
‘Moose River Consolidated Mine, Nova Scotia, Canada, NI 43-101 Technical Report’ created on 25 March 2019 and is available to view at www.stbarbara.com.au.
The company confirms that it is not aware of any new information or data that materially affects the estimates of Mineral Resources or Ore Reserves, that all
material technical assumptions and technical parameters underpinning the estimates in the market announcement continue to apply and have not materially
changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the
original market announcement.
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
Page 80
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Overview
St Barbara's Mineral Resources and Ore Reserves position as at 30th June 2019 is summarised and compared with the 2018 statement below.
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
2018 Ore Reserves
Grade
(g/t)
Ounces
(‘000)
Tonnes
(‘000)
2019 Production
2019 Ore Reserves
Ounces (‘000)
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
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
225
-
225
142
142
367
10,135
2,572
12,707
6,893
18,135
1,058
26,086
38,793
6.4
3.7
5.8
1.3
2.4
0.7
2.0
3.3
2,073
306
2,379
288
1,375
24
1,687
4,066
2018 Mineral Resources
Grade
(g/t)
Ounces
(‘000)
Tonnes
(‘000)
2019 Mineral Resources
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
23,102
5,093
28,195
17,117
53,824
70,941
6.5
3.8
6.0
1.0
1.8
1.6
4,825
625
5,450
576
3,136
3,712
23,690
5,093
28,783
25,862
64,938
90,800
6.3
3.8
5.8
1.0
1.6
1.4
2.5
4,775
625
5,400
862
3,335
4,197
9,597
Grand Total
2.9
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
99,136
9,162
119,583
The Company’s Ore Reserves have increased above net depletion primarily as a consequence of the resource extension drilling at Gwalia. At
Simberi, Ore Reserves have been reduced after mining depletion, however a higher gold price and revised pit design has helped to offset losses
due to mining. A review of the Simberi geology model has resulted in an overall increase of Mineral Resources of Oxides for this operation.
The Simberi Sulphide Mineral Resources have been updated inclusive of Sorowar Sulphide drilling and a revised geological model. The Sorowar
drilling included results of the incomplete 60 metre x 60 metre drill program up until the data cut off on 30 April 2019. As the current 30 metre
x 30 metre drilling program is not complete and was not included, there has been no addition to Sulphide reserves at the date of reporting.
Following completion of the Sorowar drilling program an update will be provided
Page 81
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Ore Reserves Revisions
Gwalia (+174,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 30th June 2018 was 7,907,000 t @ 7.5 g/t Au containing
1,899,000 ounces of gold. This has increased by 174,000 ounces of gold to 10,135,000 t @ 6.4 g/t Au containing 2,073,000 ounces of gold. The
increase in the Ore Reserve above mining depletion is primarily driven by surface and underground drilling defining strike extensions to lodes
and the inclusion of opportunistic lower grade stopes that can be mined with no additional development requirements.
Simberi Oxide and Sulphide (-31,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 30th June 2018 was 20,577,000 t @ 2.6 g/t Au containing
1,718,000 ounces of gold. This has reduced by 31,000 ounces of gold to 26,086,000 t @ 2.0 g/t Au containing 1,687,000 ounces of gold. Losses
through mining depletion have been offset by a higher gold price and updated pit designs. Re-estimation at Pigiput added approx. 6.4 million
reserve tonnes at near cut-off grade of 1.2 g/t, increasing overall ounces, but lowering the average grade for that deposit to 2.8 g/t. Remodelling
based on experience of the high grade sulphides encountered by grade control and mining led to an overall grade of 2.4 g/t for Sulphide reserves.
The infill drilling at Sorowar had not commenced in time for reporting at 30 June 2019. Drilling results will be included in the next ore reserve
estimate.
Page 82
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Mineral Resources Revisions
Gwalia (-50,000 ounces)
The Gwalia Mineral Resources have been updated to include drilling from the 1540 Level targeting South West Branch, Main Lode and South
Gwalia Series below 1,580 mbs and surface infill drilling on all lodes between 2,000 mbs and 2,300 mbs. The previous publicly reported Measured,
Indicated and Inferred Mineral Resource Estimate reported at 30 June 2018 was 23,102 kt @ 6.5 g/t Au containing 4,825,000 ounces of gold.
This has decreased by 50,000 ounces of gold to 23,690 kt @ 6.3 g/t Au containing 4,775,000 ounces of gold.
Simberi Oxide (+268,000 ounces)
The Mineral Resource estimate for Simberi Oxide was updated incorporating grade control drilling and a revised geological model. The previous
publicly reported Measured, Indicated and Inferred Oxide Mineral Resource Estimate reported at 30 June 2018 was 17,117,000 t @ 1.0 g/t Au
containing 576,000 ounces of gold. This has increased by 268,000 ounces of gold to 25,862,000 t @ 1.0 g/t Au containing 862,000 ounces of
gold.
Simberi Sulphide (+199,000 ounces)
The Simberi Sulphide Mineral Resources have been updated inclusive of Sorowar Sulphide drilling and a revised geological model. The Sorowar
drilling included results of the 60 metre x 60 metre drill program up until 30 April 2019, with additional drilling results post this period to be
included in subsequent mineral resource updates.
The previous publicly reported Measured, Indicated and Inferred Sulphide Mineral Resource Estimate reported at 30 June 2018 was
53,824,000 t @ 1.8 g/t Au containing 3,136,000 ounces. This has increased by 199,000 ounces of gold to 64,938,000 t @ 1.6 g/t Au containing
3,335,000 ounces of gold.
Page 83
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Ore Reserves Statement as at 30 June 2019
Project
Gwalia, (WA)
Tower Hill, (WA)
Simberi Oxide, (PNG)
Simberi Sulphide, (PNG)
Simberi Stockpiles, (PNG)
Proved
Gold
(g/t)
Tonnes
('000)
Probable
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
2,220
-
1,547
1,615
1,058
8.0
-
1.5
2.0
0.7
568
-
75
105
24
7,915
2,572
5,346
16,520
-
5.9
3.7
1.2
2.4
-
1,506
10,135
306
213
2,572
6,893
1,270
18,135
-
1,058
Total
Gold
(g/t)
Ounces
('000)
6.4
3.7
1.3
2.4
0.7
2,073
306
288
1,375
24
Total All Projects
6,440
3.7
772
32,353
3.2
3,295
38,793
3.3
4,066
Notes
1.
2.
3.
4.
Ore Reserves are based on a gold price of: Gwalia (AU$1,600/oz), Tower Hill (AU$1,250/oz), Simberi (US$1,250/oz).
Cut-off Grades Gwalia (4.7 g/t Au), Tower Hill (2.8 g/t Au), Simberi Oxide (0.5 g/t Au).
Mineral Resources are reported inclusive of Ore Reserves.
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
Page 84
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
Mineral Resources Statement as at 30 June 2019
Project
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Measured
Indicated
Inferred
Total
Gwalia, (WA)
5,034
7.3
1,183
17,527
Tower Hill, (WA)
-
Simberi Oxide, (PNG)
2,414
Simberi Sulphide, (PNG)
2,897
-
1.3
1.6
-
4,604
103
10,562
150
43,450
6.0
3.9
1.1
1.7
3,393
1,129
574
489
376
12,886
2,375
18,591
5.5
3.3
0.9
1.4
199
23,690
51
383
810
5,093
25,862
64,938
6.3
3.8
1.0
1.6
4,775
625
862
3,335
Total All Projects
10,345
4.3
1,436
76,143
2.7
6,718
33,095
1.4
1,443 119,583
2.5
9,597
Notes
1.
2.
3.
4.
Mineral Resources are reported inclusive of Ore Reserves.
Cut-off Grades Gwalia (2.5 g/t Au), Tower Hill (2.5 g/t Au), Simberi Oxide (0.4 g/t Au), Simberi Transitional and Sulphide
(0.6 g/t Au).
Simberi Mineral Resources are reported constrained by a US$1,800/oz pit shell.
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
Page 85
Ore Reserves and Mineral Resources Statement as at 30 June 2019
ST BARBARA LIMITED 2019
JORC Code Compliance Statements
The information in this report that relates to Mineral Resources at Gwalia is based on information compiled by Mr. Robert Love who is a Fellow
of the Australasian Institute of Mining and Metallurgy. Robert Love is a full-time employee of St Barbara Ltd and has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Robert Love consents to the inclusion in the statement of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Tower Hill is based on information compiled by Ms. Jane Bateman who is a
Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Jane Bateman is a full-
time employee of St Barbara Ltd and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration
and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Jane Bateman consents to the inclusion in the statement of the matters
based on her information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Simberi is based on information compiled by Mr. Chris De-Vitry who is a
Member of the Australasian Institute of Mining and Metallurgy. Chris De-Vitry is a full-time employee of Manna Hill Geoconsulting and has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves”. Chris De-Vitry consents to the inclusion in the statement of the matters based on his information in the form and context in
which it appears.
The information in this report that relates to Mineral Resources at Moose River Consolidated is based on information compiled by Mr. Neil
Schofield who is a Member of the Australasian Institute of Geoscientists. Neil Schofield is a full-time employee of FSSI Consultants (Australia) Pty
Ltd and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Neil Schofield consents to the inclusion in the statement of the matters based on his information in the
form and context in which it appears.
The information in this report that relates to Ore Reserves at Gwalia is based on information compiled by Mr. Marius Smith who is a Member of
the Australasian Institute of Mining and Metallurgy. Marius Smith is a full-time employee of St Barbara Ltd and has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Marius Smith consents to the inclusion in the statement of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Ore Reserves at Tower Hill is based on information compiled by Mr. Glen Carthew who is a Member
of the Australasian Institute of Mining and Metallurgy. Glen Carthew is a full-time employee of St Barbara Ltd and has sufficient experience
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Glen Carthew consents to the inclusion in the statement of the matters based on his information in the form and context in which it
appears.
The information in this report that relates to Ore Reserves at Simberi is based on information compiled by Mr. Tim Richards who is a Fellow of
the Australasian Institute of Mining and Metallurgy. Tim Richards is a full-time employee of St Barbara Ltd and has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Tim
Richards consents to the inclusion in the statement of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Ore Reserves at Moose River Consolidated is based on information compiled by Mr. Marc Schulte
who is a Member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta. Marc Schulte is a full-time employee of
Moose Mountain Technical Services and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves”. Marc Schulte consents to the inclusion in the statement of the matters based on
his information in the form and context in which it appears.
Page 86
ST BARBARA LIMITED 2019
Shareholder Information as at 21 August 2019
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 21 August 20191.
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 PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BRISPOT NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
SANDHURST TRUSTEES LTD
CS THIRD NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
AMP LIFE LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
MRS CAROLINE JOY VASSIE
Total top 20 holders of ordinary fully paid shares
Total remaining holders
Total
Shares
280,785,060
153,979,177
93,121,680
20,772,211
9,933,423
8,345,239
6,949,829
6,946,608
6,803,000
5,165,714
2,989,541
2,053,007
1,544,923
1,471,984
1,421,568
1,412,423
1,403,957
1,223,444
1,162,466
985,720
% of Issued
Capital
40.33
22.12
13.38
2.98
1.43
1.20
1.00
1.00
0.98
0.74
0.43
0.29
0.22
0.21
0.20
0.20
0.20
0.18
0.17
0.14
608,470,974
87,734,003
696,204,977
87.40
12.60
100.00
1 The 2019 Directors’ and Financial Report was signed on 21 August 2019.
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 87
Shareholder Information as at 21 August 2019
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
Minimum $500.00 parcel at $3.53 per share1
Substantial Shareholders2
Name
ST BARBARA LIMITED 2019
Total Holders
Shares
% of Issued
Capital
5,894
5,446
1,550
1,352
2,663,006
13,717,955
11,680,513
36,194,258
120
631,949,245
14,362
696,204,977
0.38
1.97
1.68
5.20
90.77
100.00
Total Holders
1,085
Shares
52,144
Minimum
Parcel Size
142
Date notice
released on ASX
Shares
% of Issued
Capital
Van Eck Associates Corporation
25 June 2019
85,033,166
12.22%
End of Annual Report
1 Close price on 21 August 2019
2 As notified by the substantial shareholders to the ASX as at 21 August 2019
Page 88
ABN 36 009 165 066
BOARD OF DIRECTORS
T C Netscher
R S Vassie
S G Dean
K J Gleeson
S E Loader
D E J Moroney
Non-Executive Chairman
Managing Director & CEO
Non-Executive Director
Non-Executive Director
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 Investor 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