ASX Release / 18 September 2020
2020 Annual Report
The 2020 Annual Report for St Barbara Limited is attached, as distributed to shareholders today.
The Annual Report complements, and should be read in
conjunction with,
the
Company’s corresponding Sustainability Report and
Corporate Governance Statement, both released today
and available at www.stbarbara.com.au.
information contained
in
Annual Report
Integrated suite of
annual reporting
Sustainability
Report
Corporate
Governance
Statement
Investor Relations Mr David Cotterell Manager Investor Relations
Media Relations Mr Ben Wilson
Mr Rowan Cole
Authorised by
Level 10, 432 St Kilda Road, Melbourne VIC 3004
St Barbara Limited
Locked Bag 9, Collins Street East, Melbourne VIC 8003
ACN 009 165 066
GRACosway
Company Secretary
+61 3 8660 1900
+61 407 966 083
ASX: SBM
ADR: STBMY
T +61 3 8660 1900 F +61 3 8660 1999
W www.stbarbara.com.au
ANNUAL
REPORT
2020
St Barbara Limited
ABN 36 009 165 066
OUR
BUSINESS
We are St Barbara – a growing gold company with a global outlook.
An ASX 200 company, our gold mining operations are located in Australia,
Canada and Papua New Guinea.
As we operate our business and care for our people, we are guided
by our five commitments and values-led culture.
At St Barbara, doing the right thing is important to all of us.
Our commitments
SAFETY
ALWAYS
EMPOWERED PEOPLE
DIVERSE TEAMS
STRONGER
COMMUNITIES
RESPECTING THE
ENVIRONMENT
GROWING
SUSTAINABLY
Zero harm is always
our target. Zero harm
to all people as we
responsibly operate
our assets to their full
potential. This focus
on safety guides
everything we do.
We are an employer
of choice committed
to inclusion and
diversity. We provide
a caring work
environment where
our talented people
are happy, thrive,
feel safe and can fulfil
their potential.
We strive to help our
communities thrive,
grow and prosper.
We build meaningful
relationships, investing
time and energy
to ensure local
communities are
enriched by being
our neighbours.
We are committed
to caring for the
environment.
We think differently
to find solutions to
actively manage and
neutralise our impact;
because we care about
the environment and
our planet.
Growing our business
sustainably, where it
makes sense, and with
strong governance
practices, means
we can add value
for everyone:
our shareholders,
our people and
our communities.
More detailed information about our policies, that support these commitments, can be found in the governance section of our website.
Our values
We act with
honesty and
integrity
We treat
people with
respect
We value
working
together
We deliver
to promise
We strive
to do better
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St Barbara Annual Report 2020 | i
LETTER FROM
THE CHAIRMAN
I am proud to report that our unwavering
focus on the safety and wellbeing of
our employees and communities, along
with our robust governance and risk
management practices, have positioned
us well to respond to the people and
operational impacts of this global crisis.
Our response was, and continues to be,
swift and proactive. There is no greater
priority than keeping our people and
communities safe and in good health,
supported by our ability to maintain
production through the difficult
circumstances which prevailed.
Pleasingly, our overall safety performance
improved with a Total Recordable Injury
Frequency Rate (TRIFR) for the year of
3.0, significantly better than many of our
industry peers. It is a source of great pride
to know that safety lies firmly at the heart
of our pursuit of operational excellence.
In terms of our financial performance,
our strong balance sheet reflects our
disciplined culture of prudent cash
management. We finished the year with
a healthy cash position of A$406 million
and debt of A$307 million, of which
A$200 million was repaid on 30 July 2020.
We drew down on this debt in March
2020 as a precautionary measure in
case our operations were impacted by
COVID-19. I am pleased to confirm that
we have maintained a total fully franked
dividend of A$0.08 cents per share for
the 2020 financial year, comprising the
interim dividend and final dividend
of A$0.04 cents per share each.
Looking forward, this solid financial
performance positions us well for the
year to come. Our newly acquired
Atlantic Gold asset has opened up
significant opportunities for us in North
America. The transaction, which was
successfully completed in July 2019, gives
St Barbara a secure foothold in another
key gold mining jurisdiction of the world.
It has established us as a global gold
company with assets now in Australia,
Papua New Guinea and Canada, providing
good geographical and production
diversification. Since acquisition, Atlantic
Gold has already made a substantial
contribution to our business.
In 2020, the Board was also pleased to
approve the advancement of the Simberi
sulphide project to the next stage and
conduct a feasibility study which is due
to be completed this calendar year.
An investment decision is slated for the
March quarter, 2021. In Papua New
Guinea, we are making a real difference
to social outcomes in the New Ireland
province, home to the Simberi Operations.
If successful, the sulphide project will
allow us to continue to do this for
years to come.
Our Gwalia mine is one of Australia’s
oldest and deepest underground gold
mines – Leonora Operations was originally
established in 1896. It was exciting to mark
our 15 years of ownership of Leonora
Operations this year. We respect the
legacy of this asset while recognising
and managing the technical challenges
of a mature operation. Following a
strong final quarter, we look forward
to continuing to build on the success
of this magnificent operation.
As a diverse, global gold mining
company, we are well positioned to
benefit from this year’s strengthening
gold price to deliver positive returns
to our shareholders. With an extremely
competent leadership team in place,
the Board and I are optimistic about
the future of St Barbara. I extend
my thanks to both my fellow Board
members for their valued contribution
and the leadership team for their
tireless commitment.
Thank you for your continued support
and investment in St Barbara. I firmly
believe that our Company has a bright
future and I look forward to keeping
you informed of our progress and
achievements during the current year.
Tim Netscher
Non-Executive Chairman
Dear Shareholder
It is with great pleasure that I present
to you, our 2020 Annual Report.
The 2020 financial year saw many
important and positive changes to our
business. With our acquisition of Atlantic
Gold in Nova Scotia, Canada, we became
a truly global gold company and we
also welcomed Craig Jetson as our new
Managing Director and CEO.
This acquisition, along with our new
leadership, has marked the dawn
of a new era for St Barbara.
On behalf of the Board, I would like to
welcome Craig to St Barbara. Craig joined
us in February 2020 and brings strong
credentials in operational focus, along
with an authentic passion for people
and preserving our values-led culture.
St Barbara is in excellent and capable
hands with Craig.
Bob Vassie’s retirement as Managing
Director and CEO of St Barbara was
announced in December 2019 and he
stepped down in February 2020. Since
July 2014, Bob led the Company through
significant stages of our development,
including life extensions at Leonora
and Simberi and the acquisition of
Atlantic Gold. I thank Bob for his tireless
contribution and his leadership, during
which we restored the Company’s balance
sheet and established a platform for
growth. From these foundations, Craig
is now capably leading us forward.
At the time of writing, the COVID-19
pandemic continues to present the
world, and our business, with significant
challenges. Our response was the first
item on Craig’s agenda as he settled
into his role; a challenge which he is very
capably meeting, with the support of
a seasoned leadership team.
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LETTER FROM
THE MANAGING
DIRECTOR AND CEO
Dear Shareholder
In this, my first Annual Report
as the Managing Director and CEO
of St Barbara, I want to update you
on the year that was and convey my
excitement about the future.
I see great opportunities for St Barbara;
opportunities for added value and
growth. I have no doubt that these
opportunities can, and will, be realised
by the people of St Barbara. It is my
privilege to lead this diverse and talented
team of over 1,300 people, who have
already demonstrated to me their
fortitude and determination to succeed,
even in the face of adversity.
Taking the helm of a business at the
outset of a world crisis has given me
an insight into the mettle of our people.
During COVID-19, I have seen how
our leaders have risen to the challenge.
Everyone moved quickly to protect our
people and communities and worked
flexibly to maintain our operations.
I have witnessed firsthand not only
the strength and determination of the
St Barbara people, but also their sense
of care, flexibility and unwavering
commitment to people’s safety and
wellbeing. I can certainly say that our
inclusive, supportive and values-led
culture is palpable.
A pleasing safety result in 2020
Safety is always our number one priority
and lies at the heart of everything we
do – and every decision we make – at
St Barbara. It is my top priority to ensure
our people remain empowered to always
put safety first with a strong focus on
Visual Leadership, where leaders are in
the field coaching others and ensuring
safe work practices.
Operating our assets to their fullest
potential means nothing if we are not
doing it safely, for our people and for
our communities.
In 2020, we saw a pleasing decrease
in our Total Recordable Injury Frequency
Rate (TRIFR), down from 5.0 in 2019 to
3.0 in 2020, ahead of the mining industry
average (according to the latest report
from Safe Work Australia FY18). Our
recordable injuries also decreased by
30% and the majority of them were
of low severity. Over the past 12 months,
three months were completely injury free.
These figures are very encouraging and
we remain committed to this downward
trend and our goal of zero harm.
Strengthening our communities
and celebrating diversity
Our deep-rooted sense of care extends
to the wellbeing of our communities
and our commitment to diversity.
In Simberi, Papua New Guinea, we
are helping the community to build a
sustainable future. Under the umbrella
of the community-owned Simberi
Mine Services, we empower community
members by providing training and
partnering with them to develop their
own commercial ventures. We help keep
the community healthy by providing free
community vaccinations at our clinic and
also fund anti-malaria efforts in the area.
My own experience in Papua New Guinea
taught me about the power of the
community and the connection of the
people – to each other and their land.
I am passionate about respecting
Indigenous cultures and working in
partnership with the traditional owners
of all the lands on which we operate.
Building stronger communities – which
involves supporting the next generation
of Indigenous leaders – is one of our
five business-wide commitments
to operating in a sustainable way.
At our Leonora Operations, we are helping
to build the next generation of Indigenous
leaders with our support of programs
such as Shooting Stars and the Clontarf
Foundation, which help youth from local
communities continue their education
and achieve their goals. In Canada, our
team is engaging with the First Nations
people, who can teach us so much about
the land on which we are operating
and provide important input to our
future plans.
This commitment to diversity, and the
desire for all people to benefit from
opportunity, is reflected within our own
business. It’s one of St Barbara’s unique
points of difference and a distinct
point of pride.
For the sixth consecutive year, we have
been recognised by the Australian
Workplace Gender Equality Agency
(WGEA) as an Employer of Choice for
Gender Equality. We were also recognised
at the International Mining Journal
Awards for being a Gender Diversity
Leader. We are an active member of the
Business Coalition for Women and are
currently the only gold mining company
conducting regular gender safety audits.
I am absolutely committed to continuing
this momentum and encouraging diversity,
in all its forms, here at St Barbara and
have been appointed as a WGEA Pay
Equity Ambassador. This year the WGEA
strengthened the eligibility criteria
by placing even greater emphasis on
accountability, outcomes, evidence and
internal reporting processes. All the
while, St Barbara remains the only mining
company to receive this citation.
St Barbara Annual Report 2020 | iii
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LETTER FROM THE
MANAGING DIRECTOR
AND CEO
A strong 2020 operational
performance and platform
for growth
Overall, we delivered a strong
operational performance in 2020.
We produced 381,887 ounces of gold
at an All-in Sustaining Cost (AISC)
of A$1,369 per ounce.
Our production profile was tested in the
first half, particularly at our Gwalia mine
in our Leonora Operations. We appointed
technical experts to assist the team from
March 2020, resulting in the highest
mill throughput in the fourth quarter
since 2014. As the year drew to a
close, the team at Leonora produced
171,156 ounces of gold.
St Barbara has owned the Gwalia mine
for 15 years; we celebrated this anniversary
in March 2020. During this time, Gwalia
has safely produced over 2.5 million
ounces of gold, developed its relationship
with the community, and built on its
existing reputation to be the successful,
safe and sustainable operation that
it is today.
As a mature operation, Gwalia is facing
a new chapter. As we go deeper in the
orebody, we will work to maintain a
strong margin profile and need to be
efficient in all we do. With the extension
project complete, the asset has a
foundation in place to plan for consistent
production in the year ahead.
In Papua New Guinea, our proposed
sulphide project is a source of excitement
for our people and community alike,
due to the positive implications for the
future. It was a solid year for the team
at Simberi, with new leadership in place
from mid-year and full-year production
totaling 104,068 ounces of gold.
Of our 747 permanent employees there,
96% are national people. We still want
to increase the number of Papua New
Guinean nationals who work at our
Simberi Operations. To achieve this, we
are working to equip people – particularly
those from the Tabar group of islands and
New Ireland province – with the skills they
need to progress their careers with us and
position them well for the future.
In 2020, Atlantic Gold marked its one-year
anniversary as part of St Barbara with
a record, full year of production from
the Touquoy mine of 106,663 ounces
of gold at an AISC since acquisition
of A$927 per ounce. This reinforces the
credentials of this asset and the value this
acquisition is delivering to the St Barbara
business. Since the acquisition, we had
signaled our intent to purchase Moose
River Resources Inc’s (MRRI), interest
in the Touquoy mine.
In July 2020, we announced that we had
reached an agreement with MRRI, with
the transaction to be concluded in the
first quarter of FY21. Following this
transaction, St Barbara will own 100%
of the Touquoy mine and surrounding
exploration tenements. Assuming full
control of the business will provide
operational efficiencies, deliver financial
benefits and allow us to truly realise the
potential of this valuable asset.
In addition to developing our existing
project pipeline, we are exploring in
the Moose River Corridor and elsewhere
in Nova Scotia to identify further
development opportunities. Collectively,
the opportunity for value creation for
the community of Nova Scotia and
our shareholders is exciting.
Looking forward with confidence
We find ourselves at an exciting point
in time at St Barbara; a new chapter
in our history.
We have our mature operations in Gwalia
and Simberi entering new phases of
development, and we have Atlantic Gold
showing promising growth opportunities,
with its strong project pipeline. We also
have an exciting exploration program
planned for 2021, which includes targeted
activities near to and surrounding each
of our existing operations. All of this,
with the added benefit of a strengthening
gold price, gives us great opportunities
to deliver real value.
Each of our assets has unique opportunities,
and we intend to operate each of them
with excellence to deliver on their potential.
In order to do this, we are reviewing our
operating model to improve productivity
and margins, advance our technical
expertise and enhance the value of each
operation and our business as a whole.
This business improvement will also allow
us to deliver on our growth aspirations.
Our growth agenda includes delivering
on our current brownfield expansion
projects, maintaining a prospective
exploration pipeline, and identifying
suitable assets for potential future
acquisition, where and when it makes
sense and adds shareholder value.
With our values to guide us, I am confident
in our ability to transform our company
and write the next chapter in our history.
St Barbara people know how to dig deep,
even in the face of adversity. This fortitude,
coupled with our values-led culture, is a
real point of difference for us; it’s what
stands us in such great stead to deliver real
and lasting value and leave a positive legacy
for our communities and shareholders.
Thank you for your support.
Craig Jetson
Managing Director and CEO
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FY20 KEY PERFORMANCE
ACHIEVEMENTS
A successful year with the following highlights.
Achieved three months injury free over the past 12 months.
Produced more than 100,000 ounces in a quarter (Q4); last achieved Q4 FY18.
Achieved a record full year in our first year of ownership of Atlantic Gold.
Delivered the highest mill throughput at Leonora in Q4 FY20 since 2014.
Achieved an excellent safety record and strong reliable cash performance at Simberi.
Generated net cash of A$98 million for the Group.
Maintained a total fully franked dividend of A$0.08 cents per share for the
2020 financial year, comprising the interim dividend and final dividend
of A$0.04 cents per share each.
Gold production (ounces)
All-in sustaining cost (A$/oz)
500,000
400,000
300,000
200,000
100,000
0
FY20
381,887ounces
2
5
4
,
7
7
3
1
0
1
,
1
8
3
9
8
0
,
3
0
4
7
8
8
,
1
8
3
6
4
3
,
2
6
3
FY16
FY17
FY18
FY19
FY20
1,500
1,200
900
600
300
0
9
6
3
,
1
FY20
A$1,369/oz
3
3
9
7
0
9
1
9
8
0
8
0
,
1
FY16
FY17
FY18
FY19
FY20
Ore reserves and mineral resources (Moz)
Total recordable injury frequency rate
5.0
3.0
2.1
2.1
1.2
FY16
FY17
FY18
FY19
FY20
St Barbara Group
6
5
4
3
2
1
0
Atlantic Gold
Simberi
Leonora
12
10
8
6
4
2
0
11.6
2.2
4.3
9.6
4.2
5.4
5
6.0
1.7
2.1
2.2
4.1
1.7
2.4
FY19
FY20
Ore reserves
FY19
FY20
Mineral resources
Employee numbers and gender breakdown
Female
254
19%
Male
1,074
81%
Total
employees
1,328
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St Barbara Annual Report 2020 | v
FY20 KEY DIVERSITY
ACHIEVEMENTS
A successful year as we stay focused on being an employer of choice.
Increased the number of women in the Simberi workforce to 15% by upskilling
women in truck, dozer and digger operator roles.
No gender pay gaps for like-for-like roles across the St Barbara Group.
100% of our female Australian employees have returned to work after parental
leave for the last 11 years.
Continued to exceed the percentage of women on ASX 200 Boards with
33% representation.
Closer to achieving our goal for the proportion of women in our Australian operations.
We are establishing new objectives with regard to the proportion of both women
and First Nation employees at our Atlantic Gold Operations.
Objective
Target
By
As at 30
June 2017
As at 30
June 2018
As at 30
June 2019
As at 30
June 2020
1 Increase the proportion of women in the
Australian operations workforce
2 Reduce the Australian operations Overall
Gender Pay Gap
30% 30 June 2022
21%
24%
25%
26%
8% 30 June 2022
14%
14%
12%
12%
3 Increase the proportion of Aboriginal employees
in the Australian operations
5% 30 June 2020
4 Increase the proportion of women
in the workforce at Simberi
15% 30 June 2020
–
–
4%
3%
3%
14%
15%
15%
5 Maintain nil gender pay gap for like-for-like roles
0%
6 Maintain the percentage of women who return
to work after a period of Parental Leave (Australia) 80%
7 Maintain the percentage of women on the Board
33%
–
–
–
0%
0%
0%
0%
100%
100%
100%
100%
25%
25%
40%
33%
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All female mine truck
driving crew
Standing at just 1.5 metres tall, Serah Lawat
(pictured far left) really enjoys being
in control of a 45 tonne haul truck.
Serah, a 23-year-old local Simberi Islander,
has been safely driving a Bell B50D
Articulated Dump Truck (ADT) for one year
now, working alongside fellow women
operators, Roselyn Leto, Olivia Pikene
and Hanshaine Gasoreng.
The women were green hires. They
underwent 400 hours of intensive theory
and practical lessons before qualifying to
operate haul trucks in the pit. Serah is happy
to spend a few years safely meeting her
targets before considering upgrading her
skills to drive other heavy equipment like
her colleague Julie Tokmun. Julie is currently
the only female dozer operator in Simberi.
Our Simberi Operations employs 121 women,
of whom 65% are local Simberi Islanders.
CASE STUDY
CASE STUDY
Outcomes from gender
safety audits making
a difference
Our gender safety audits have given us
helpful insights into how we can make our
female employees feel safer at, and on the
way to and from, work.
In response to the audit at our Simberi
Operations, we have introduced female-only
seating on the work commuter bus, as well as
a private vehicle transfer service, and a system
where women camp cleaners work in pairs.
Since the changes, we have noted an 18%
improvement in women’s happiness about
their safety at work (up from 35% to 53%).
At our Leonora Operations, we found that
women largely felt safe at work, but did
show concern about their safety on the way
to and from work. As a result of the audits
we have improved underground facilities
for women, and introduced revised health
and safety policies to reflect the different
requirements for women, particularly during
pregnancy. We’re continuing to work
on other areas of concern, including the
commute to and from work, making the
mine camp gym more female friendly
and improving camp security.
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St Barbara Annual Report 2020 | vii
ATLANTIC GOLD
OPERATIONS
Becoming part of the St Barbara Group in July 2019, our Atlantic Gold Operations are
located approximately 80km north east of Halifax, Nova Scotia, Canada. Open cut mining
of the current open pit at Touquoy commenced in 2017, with commercial production
commencing in March 2018. With three additional planned pits nearby at Beaver Dam,
Fifteen Mile Stream and Cochrane Hill, Atlantic Gold Operations has an estimated mine
life to 2030, with strong exploration potential in the region. Atlantic Gold prides itself
on providing prosperity and opportunity for families in rural Nova Scotia.
The year’s highlights
FY20 marked Atlantic Gold’s first full
year as part of St Barbara, following
its successful acquisition in July 2019.
The asset achieved a record year with
full year production of 106,663 ounces
of gold. The fourth quarter was the
strongest of the year, with 29,209 ounces
of gold produced at an average milled
grade of 1.41 g/t Au.
Overall safety performance was
encouraging, considering the relatively
new operation at Touquoy. There is
opportunity to improve in 2021 as the
workforce continues to mature and
consistent tracking of indicators becomes
more ingrained and methodical.
Environmental performance was
excellent, with the main reported issue
being run-off of soil from mine roads.
This has been largely addressed with a
number of drainage redesign initiatives.
The tailings management facility and
other environmental risks have been well
managed with a number of procedures
refreshed and improved in 2020.
Heading into FY21, St Barbara will
own 100% of Touquoy mine and its
surrounding tenements. This follows
our acquisition of 100% of the shares
in Moose River Resources Incorporated
(MRRI), which held an interest in Touquoy
mine. Assuming full control of the
business will provide operational
efficiencies, deliver financial benefits
and allow St Barbara to truly realise
the potential of the asset.
Adding future value
Atlantic Gold has a strong project pipeline,
which, coupled with the existing highly
productive Touquoy mine, represents
excellent growth opportunities for
St Barbara and the Nova Scotia community
alike. The pipeline of projects will
collectively create hundreds of new jobs
for the people of Nova Scotia: 220 at
Beaver Dam; 300 at Fifteen Mile Stream
and 272 at Cochrane Hill. Each project
will result in hundreds of construction
roles and a strong revenue stream
for the region.
The Environmental Impact Statements
(EIS) for each of the development projects
are at different stages, supported by
proactive community relations and
government engagement.
Atlantic Gold is committed to developing
resources in a sustainable way. This includes
a focus on relationship building with First
Nations and all its communities. Its history
of project design and implementation
also shows a commitment to incorporating
environmental protection as a priority,
as demonstrated at the Touquoy mine.
2020 HIGHLIGHTS
FY20 gold production
107koz
FY20 All-in sustaining cost*
A$927/oz
319
employees
Workforce composition
20% 80%
Female
Male
Safety performance: TRIFR
4.4
* 19 July 2019 to 30 June 2020
Canada
Atlantic Gold
Operations
(Touquoy mine)
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LEONORA
OPERATIONS
The Gwalia underground mine is located 235 kilometres from Kalgoorlie, Western
Australia. The cornerstone of Leonora Operations, Gwalia is the deepest underground
trucking mine in Australia and has been operating for more than 100 years. The mine
was originally established in 1897 by Herbert Hoover, who later became the 31st
President of the United States. The Leonora Operations includes the Gwalia 1.2 Mtpa
processing plant and underground mine, as well as nearby development opportunities.
2020 HIGHLIGHTS
FY20 gold production
171koz
FY20 All-in sustaining cost
A$1,485/oz
188
employees plus 468 contractors
Workforce composition
17% 83%
Female
Male
The year’s highlights
Adding future value
The final vent shaft of the Gwalia Extension
Project (GEP) has been completed. As the
deepest trucking mine in Australia, this
ventilation project is vital to support
future development, optimal ore
extraction and consistent production.
Beyond this, a dedicated project has
been established to drive the business
improvement opportunities identified
during an operational review conducted
in the fourth quarter of FY20. This will
reinforce Leonora Operations’ position
as a consistent and reliable gold producer
in the West Australian goldfields.
Gwalia produced 171,156 ounces of gold
in FY20. The fourth quarter was its
strongest, evidenced by the highest mill
throughput since 2014. A primary focus
for the year was delivering the ventilation
project at Gwalia to support the
increasingly deeper mining operations.
The prioritisation of safety was evidenced
by TRIFR improving by 38%. This was due
to strong improvements in contractor
management and visual leadership.
An excellent relationship is enjoyed
with the local community of Leonora
(evidenced by a 76% favourability rating
in the 2019 community perception
survey), which has been built over many
years. The team continues to invest
in the Leonora community, growing
relationships and providing support
to local community events as well
as sponsorship and donations.
3%
Aboriginal heritage
Safety performance: TRIFR
6.8 (2019: 11.0)
Australia
Leonora
Operations
(Gwalia mine)
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St Barbara Annual Report 2020 | ix
SIMBERI
OPERATIONS
Simberi Operations is an open cut mining operation situated on the northernmost
island in the Tabar group of islands in the province of New Ireland – the eastern most
province of Papua New Guinea (PNG). Operations commenced in 2008, with the
prospect of the upcoming sulphide project set to extend the life of Simberi. Almost
96% of employees are from Simberi, the nearby Tabar Islands and other parts of PNG,
creating sustainable business opportunities for local families, businesses and suppliers.
The year’s highlights
Adding future value
An investment decision regarding the
Simberi sulphide project is targeted
for Q3 March FY21, which will see
mining operations continue for the
foreseeable future.
In the coming year, further optimisation
and value engineering activities will
be undertaken to support a possible
future investment decision. Technical
considerations will include further
investigation of the optimal balance
between grinding and flotation time
to maximise recovery. Meanwhile, the
operations team will continue to deliver
on the current oxide mine plan, looking
for opportunities to lift performance
wherever possible and continue to thrive
in partnership with the community.
The Simberi Operations continued
to make an important contribution
to St Barbara’s overall production.
With a new leadership team in place,
the fourth quarter set the bar with the
highest quarterly production for the year.
This was despite extended rosters due
to COVID-19 and associated challenges
around people movement.
Simberi’s safety performance continues
to be excellent with only two recordable
injuries for the year and a 58%
improvement in TRIFR.
The production outlook for Simberi is
positive with the prospect of an investment
in additional sulphide processing capability.
The sulphide project was endorsed by the
St Barbara Board in May 2020 to proceed
to feasibility study.
The Simberi Operations are fully integrated
into the community, with high levels
of local employment and ongoing
community support and involvement.
The community business and governance
umbrella organisation Simberi Mine
Services is an ongoing success, being
a valuable business partner as well as
the vehicle for implementing community
business development projects such
as cocoa and other food exports.
2020 HIGHLIGHTS
FY20 gold production
104 koz
FY20 All-in sustaining cost
A$1,631/oz
747
employees plus 428 contractors
Workforce composition
16% 84%
Female
Male
<5%
of the workforce made
up of expats
Safety performance: TRIFR
0.7(2019: 1.7)
Papua New Guinea
Simberi
Operations
x | St Barbara Annual Report 2020
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EXPLORATION
Exploration at St Barbara is coordinated globally, with exploration activities
conducted near to and surrounding each of our existing operations. Drilling
is undertaken in Australia, Canada and Papua New Guinea. The aim is twofold:
to maintain and extend life of mine at each existing operation, and to provide
future growth opportunities.
2020 HIGHLIGHTS
Exploration teams based at
Gwalia mine, Touquoy mine,
Simberi mine and Perth for
regional Australian projects.
1,000 (Diamond, RC and Aircore)
holes drilled for 87,000 metres
completed testing
61targets
95
employees plus 44 contractors
Workforce composition
15% 85%
Female
Male
Safety performance: TRIFR
2.8
The year’s highlights
St Barbara’s annual targeting process
ranks opportunities within our global
exploration portfolio. Exploration is then
focused on the highest geologically and
value-add ranked targets. There is specific
emphasis on more advanced targets in the
near mine environment with the potential
to provide additional ore sources to support
operations in the short and medium term.
At Gwalia mine, the Gwalia Deeps
extension drilling to 2,400 metres below
surface (mbs) was completed in Q2 FY20.
Drilling of other parts of the Gwalia system
included testing northern extensions at
1,100 mbs and commencing drilling of the
Gwalia Shallows target between 600 to
800 mbs in Q4 FY20. The Gwalia near-mine
drilling program included testing the
Gwalia mine sequence further along strike
to the north at Cricket Pitch and to the
south at Rushmore. Further work was
undertaken in the Leonora region.
The company’s first exploration activities
in the Nova Scotia region commenced this
year, following the successful acquisition
of Atlantic Gold in July 2020. Exploration
included drilling of potential extensions
to planned pits, drilling for potential
satellite pits within the Moose River
Corridor (between Touquoy mine and
Fifteen Mile Stream) and Cochrane Hill.
In Southwest Nova Scotia, a large airborne
geophysical survey was completed to
prepare for shallow reverse circulation
drilling in FY21.
During FY20, deep diamond drilling was
completed on all three islands of the
Tabar Island Group (PNG). Aircore drilling
was conducted at four Australian regional
projects testing undercover targets,
including Pinjin and Lake Wells JV
(Western Australia), Back Creek (New
South Wales) and Drummartin (Victoria).
Ground geophysics at the Horn Island
JV (Queensland) highlighted two high
priority anomalies for drill testing in FY21.
Adding future value
Our FY21 exploration program will include
targeted activities near to and surrounding
each of our existing operations. This
includes a focus on drill testing shallow
portions of the Gwalia system (WA),
drill testing for oxide resources at Simberi
(PNG) within ML136 and drill testing
the highest ranked targets within the
Touquoy Camp and Moose River Corridor
(Nova Scotia).
This will be complemented by regional
exploration aimed to discover new deposits
with the potential to support a stand-
alone operation. These activities will build
on the work undertaken in FY20.
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St Barbara Annual Report 2020 | xi
SUSTAINABILITY
STORIES
CASE STUDY
CASE STUDY
Building a sustainable community in Simberi
Under the umbrella of Simberi Mine Services (SMS), a community business coordination
and governance company, we empower the local community by providing them access
to training and helping them to develop commercial ventures.
With our support, local community members and landowners have created mariculture
(seafood) inland fisheries, market gardens and cocoa plantations, a poultry farm,
pizzeria and a bakery.
Helping locals to build on the success of these businesses is a priority for us. A project
to create a sustainable cocoa business is now in its third year, with more than 27,000
disease-resistant cocoa seedlings grown in the company nursery then distributed to local
farmers. There are now three nurseries operating, and plans for a fourth on the nearby
islands, with five hectares currently under cultivation at two company plantations for
this purpose. In early 2020, the first 120 kg shipment of dried cocoa beans was exported
to PNG food manufacturer, Paradise Foods, to be made into Queen Emma premium
Simberi chocolate.
A new venture in 2019-2020, was the construction of an inland fish farm for breeding
Tilapia fingerlings, which are distributed to interested local families who have
constructed their own fishponds, or to nearby creeks.
Underground waste
rock crushing to reduce
greenhouse gas emissions
In 2020, our Leonora Operations completed
construction of underground infrastructure
to allow permanent underground storage
of up to 100% of waste rock. This involves
underground crushing and mixing with
paste-fill, which is piped down from the
surface, then pumped to fill mining voids.
This Paste Aggregate Fill (PAF) and
related infrastructure will reduce Gwalia’s
greenhouse gas emissions by an estimated
2-3% (reducing truck diesel usage by ~18%,
3,000 tons of CO2 pa) because waste rock
will no longer need to be transported to the
surface. This will mean only gold bearing ore
will be transported to the surface, greatly
reducing the use of trucks in the process.
CASE STUDY
Innovative solutions to reducing
our environmental impact
At our Atlantic Gold Operations we’re currently evaluating the
introduction of a sustainable, removable, carbon neutral, non-
polluting mine at Beaver Dam. The sustainable mine would have
no permanent structures, no concrete slab and no on-site water
treatment. The main structure would be inflatable and built
on removable slabs of recycled plastic. It would be powered by
containerised batteries charged from wind turbines. The batteries,
which utilise salt water and are scalable, are currently being tested
on a small scale at our Touquoy mine, charged by solar panels
installed on the administration building.
Cleaning of the sustainable mine will be done with dry ice blasting.
The frozen flakes of oil can then be swept up and used in the oil
burner to assist with heating the structure. This eliminates the need
for water/oil separation, treatment and capture.
xii | St Barbara Annual Report 2020
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DIRECTORS’ AND
FINANCIAL REPORT
Directors’ Report
Contents
Directors’ Report
Directors
Principal activities
Overview of group results
Overview of operating results
Analysis of Leonora operations
Analysis of Simberi operations
Analysis of Atlantic Gold 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 2020
Page
Directors’ Report
2
2
2
3
4
5
6
7
8
9
9
10
11
13
13
15
19
19
20
44
44
44
44
44
44
45
46
47
86
92
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 2020.
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 (resigned 2 February 2020)
Managing Director & CEO
C A Jetson (appointed 3 February 2020)
Managing Director & CEO
S G Dean (appointed 23 July 2019)
Non‐Executive Director
K J Gleeson
Non‐Executive Director
S E Loader
Non‐Executive Director
D E J Moroney
Non‐Executive Director
The qualifications, experience and special responsibilities of the
Directors are presented on page 15.
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 2020 Corporate Governance Statement was
released to the ASX on 18 September 2020 and is available at
www.stbarbara.com.au/about‐us/governance.
Sustainability Report
The Company’s 2020 Sustainability Report was released to the
at
ASX on 18
www.stbarbara.com.au/sustainability.
September 2020
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 results for the year are summarised as follows:
EBITDA(3)(6)
EBIT(2)(6)
Profit before tax(4)
2020
$’000
2019
$’000
338,762
274,810
173,396
195,167
162,447
204,294
Statutory profit (1) after tax
128,230
144,163
Total net significant items after tax
19,758
2,435
EBITDA (6) (excluding significant
items)
338,869
278,675
EBIT (6) (excluding significant items)
173,503
199,032
Profit before tax (excluding
significant items)
162,554
208,159
Underlying net profit after tax(5)(6)
108,472
141,728
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
2020
$’000
2019
$’000
(7,538)
(3,865)
Amortisation of derivative financial
liability
Gold hedge restructure
16,583
11,810
Call option fair value movements
(20,962)
Significant items before tax
Income tax
Corporate income tax change
Significant items after tax
(107)
20
19,845
19,758
‐
‐
‐
(3,865)
6,300
‐
2,435
(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.
ST BARBARA LIMITED 2020
During the 2020 financial year the Group recorded strong financial
performance despite lower production and profit from the Leonora
and Simberi operations. The key results for the year were:
• Statutory net profit after
tax of $128,230,000
(2019:
$144,163,000);
Successful acquisition on 19 July 2019 and integration of Atlantic
Gold Corporation. Atlantic Gold contributed a segment profit
before tax of $84,304,000 for the year from acquisition date;
Production for the Group totalled 381,887 ounces (2019:
362,346 ounces), with lower production from Gwalia and
Simberi compared to the prior year offset by the Atlantic Gold
contribution of 106,663 ounces for the year (including 4,362
ounces produced prior to acquisition);
Cash contribution from operations of $273,190,000 (2019:
$213,209,000) after sustaining and growth capital totalling
$133,025,000 (2019: $129,036,000); and
• Total dividends paid
in the year of $37,510,000 (2019:
$41,634,000).
for
items, was $108,472,000
Underlying net profit after tax, representing net profit excluding
(2019:
significant
$141,728,000). Net significant items in the 2020 financial year
included costs associated with the acquisition of Atlantic Gold
Corporation (Atlantic Gold), mark‐to‐market movements in gold
derivatives and the benefit of a reduction in tax rate in Nova Scotia,
Canada. The result for the year reflects a material increase in
depreciation and amortisation associated with Atlantic Gold.
the year
Cash on hand and deposits held to maturity within 12 months at 30
June 2020 were $405,541,000 (2019: $890,199,000). The significant
reduction in cash in the year was associated with the acquisition of
Atlantic Gold. Total assets reported in the balance sheet as at 30
June 2020 reflected the fair value of Atlantic Gold assets acquired.
Net cash generated during the year, excluding payment for the
acquisition (net of cash acquired) and draw down of the syndicated
facility was $98,796,000 (2019: $159,074,000).
Total interest bearing liabilities at 30 June 2020 were $331,766,000
(2019: $Nil), which included $27,577,000 of leases associated with
‘right‐of‐use’ assets. In March 2020 the Company drew down
A$200,000,000 from the Australian tranche of the syndicated facility
in response to COVID‐19.
The key shareholder returns for the year are presented in the table
below.
Basic earnings per share
(cents per share)
Return on equity
2020
2019
18.33
26.99
10%
15%
Change in closing share price
7%
(39)%
Underlying shareholder returns for the year are presented in the
table below.
Underlying basic earnings per
share(1)(cents per share)
2020
15.51
2019
26.54
Underlying return on equity(1)
8%
15%
(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
ST BARBARA LIMITED 2020
Directors’ Report
Overview of operating results
The table below provides a summary of the profit before tax from St Barbara Group operations.
$’000
Revenue
Mine operating costs
Gross profit
Royalties
EBITDA
Depreciation and amortisation(2)
Profit from operations(1)
Leonora
2020
355,712
(164,515)
191,197
(16,896)
174,301
(65,767)
108,534
2019
392,678
(155,236)
237,442
(15,663)
221,779
(59,763)
162,016
Simberi
2020
238,859
(151,291)
87,568
(5,952)
81,616
(21,398)
60,218
2019
257,643
(143,839)
113,804
(5,778)
108,026
(18,220)
89,806
Atlantic
2020
233,155
(69,014)
164,141
(4,326)
159,815
(75,511)
84,304
Group
2020
827,726
(384,820)
442,906
(27,174)
415,732
(162,676)
253,056
2019
650,321
(299,075)
351,246
(21,441)
329,805
(77,983)
251,822
(1) Excludes impairment, corporate costs, exploration expenses, interest and tax and is non‐IFRS financial information, which has not been subject to review or
audit by the Group’s external auditors.
(2) Depreciation and amortisation for Atlantic Gold includes amortisation of mineral rights from acquisition date to 30 June 2020 of $61,028,000.
The table below provides a summary of the cash contribution from St Barbara Group cash generating units.
$’000
Operating cash contribution
Capital ‐ sustaining
Cash Contribution (1)
Growth capital – Gwalia Extension Project
Other growth capital(2)
Cash contribution after growth capital
Leonora
2020
169,938
(52,559)
117,379
(31,751)
(8,833)
76,795
2019
229,907
(44,161)
185,746
(59,716)
(11,127)
114,903
Simberi
2020
83,409
(5,194)
78,215
‐
(4,147)
74,068
2019
112,338
(9,436)
102,902
‐
(4,596)
98,306
Atlantic
2020
152,868
(15,327)
137,541
‐
(15,214)
122,327
Group
2020
406,215
(73,080)
333,135
(31,751)
(28,194)
273,190
2019
342,245
(53,597)
288,648
(59,716)
(15,723)
213,209
(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 and growth capital.
(2) Growth expenditure represents deep drilling expenditure at Gwalia which is capitalised, Gwalia optimisation studies, expenditure on the sulphides project at
Simberi and capitalised near mine drilling and studies expenditure at Atlantic Gold.
During the 2020 financial year the Group’s operations continued to
achieve strong production results, profitability and cash generation.
Gold with a cash contribution of $122,327,000 for the year from
acquisition date.
Safety of people working across the Group is of paramount
importance, and the focus is to maintain a low total recordable injury
frequency rate (TRIFR) calculated as a rolling 12 month average.
During 2020 the TFIR decreased to 3.0 (2019: 5.0) reflecting the
investment the Group has made in managing safety risk and
improving safety systems. In the year there was a 44 percent
decrease in recordable injuries in respect of ongoing operations. 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 2020 financial year was
381,887 ounces of gold (2019: 362,346 ounces), and gold sales
amounted to 381,105 ounces (2019: 368,444 ounces) at an average
gold price of $2,123 per ounce (2019: $1,762 per ounce). The higher
production was attributed to Atlantic Gold with 106,663 ounces of
gold production and 107,076 ounces of gold sales from the date of
acquisition, partially offset by lower production at Leonora and
Simberi.
Consolidated All‐In Sustaining Cost (AISC) for the Group was $1,369
per ounce in 2020 (2019: $1,080 per ounce), reflecting the impact of
lower production and higher operating costs at Gwalia and Simberi,
together with an increase in sustaining capital expenditure at
Gwalia. The impact of higher unit AISC at Gwalia and Simberi was
partially offset by the inclusion of Atlantic Gold with an AISC for the
year of $928 per ounce.
Total net cash contribution from the operations was $273,190,000
(2019: $213,209,000), reflecting the benefit of including Atlantic
Impact of COVID‐19
The Group was proactive in addressing the risk to the business prior
to COVID‐19 being declared a pandemic by the World Health
Organisation.
As restrictions were put in place at the Group’s various operations
around the world, measures were implemented in line with relevant
local government advice, including screening site workers for COVID‐
19 prior to attending site, cancelling all non‐essential travel, working
from home where practicable, enforcing self‐isolation policies when
appropriate, and encouraging good hygiene practices and physical
distancing across all workplaces.
A detailed review of the Group’s supply base was undertaken to
understand and mitigate any potential disruption to the supply
chain.
As a result of these measures, and the efforts of staff across all sites,
the operations were able to successfully continue operations.
Exploration activities were initially shut down, but fieldwork had
largely resumed by 30 June 2020 following extensive consultation,
planning and risk management prior to restarting.
To mitigate any potential liquidity risk, the Group drew down
A$200,000,000 from the existing syndicated facility in March 2020.
With the operations maintaining production, and the strengthening
of the Group’s cash balance, a decision was made to repay the
A$200,000,000 in July 2020. This amount remains available to be
drawn down until the end of the facility’s term in July 2022.
Page 4
Directors’ Report
Analysis of Leonora operations
Total sales revenue from the Leonora operations of $355,712,000
(2019: $392,678,000) was generated from gold sales of 171,840
ounces (2019: 222,625 ounces) in the year at an average achieved
gold price of $2,068 per ounce (2019: $1,762 per ounce). The
reduction in gold ounces sold was attributable to lower production
driven by lower grade of ore mined.
A summary of production performance for the year ended 30 June
2020 is provided in the table below.
Details of 2020 production performance
Gwalia
Underground ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
Gold production (oz)
Gold sales (oz)
Cash cost (1) (A$/oz)
All‐In Sustaining Cost (AISC) (2)
(A$/oz)
2020
697
7.7
771
7.1
97
171,156
171,840
1,071
1,485
2019
625
11.1
652
10.8
98
220,169
222,625
746
1,027
(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 171,156 ounces of gold in 2020 (2019:
220,169 ounces). The lower gold production was attributable to
lower mined grade in the 2020 year.
Ore tonnes mined from the Gwalia underground mine increased to
697,000 tonnes in 2020 (2019: 625,000 tonnes), mainly as a result of
increased mine tonnes in the last quarter of the year as activities
related to the Gwalia Extension Project reduced. Gwalia Extension
Project development and raise boring activities continued to
compete for ventilation and trucking capacity for most of the year.
ST BARBARA LIMITED 2020
The following figure shows total tonnes moved, including ore,
development waste and raise bore waste over the past eighteen
months.
Gwalia total material moved (kt)
256
32
78
146
262
106
267
0
115
267
3
99
156
152
165
292
17
44
231
249
11
89
149
FY19
Q3 Mar
FY19
Q4 Jun
FY20
Q1 Sep
FY20
Q2 Dec
FY20
Q3 Mar
FY20
Q4 Jun
Ore mined
Raisebore waste
Development waste
Total material moved
Ore mined grade decreased from 11.1 grams per tonne in 2019 to
7.7 grams per tonne in 2020, primarily due to the mining sequence
passing through stopes with lower grade as mining extends deeper.
The Gwalia mill continued to perform consistently in 2020, with the
average recovery at 97% (2019: 98%), with the decrease a direct
attribution of lower grade.
Gwalia gold production
(koz)
267
265
268
220
171
2016
2017
2018
2019
2020
Gwalia unit cash operating cost(1) for the year was $1,071 per ounce
(2019: $746 per ounce). The higher unit operating cost in the 2020
financial year was due mainly to the negative impact of lower
production and grade, and higher mining costs associated with
operating development. The unit All‐In Sustaining Cost (AISC)(2) for
Gwalia was $1,485 per ounce in 2020 (2019: $1,027 per ounce), with
the higher unit cost attributable to the increase in the unit cash
operating cost and higher sustaining capital expenditure. Total cash
operating costs at Gwalia were $183,308,000 (2019: $164,246,000).
Gwalia generated net cash flows in 2020 of $76,795,000 (2019:
$114,903,000), after sustaining and growth capital. The lower cash
contribution from Gwalia in 2020 was due to lower production and
increased operating costs. Sustaining capital in 2020 increased to
$52,559,000 (2019: $44,161,000) mainly due to higher capital mine
development. Growth capital in 2020 of $40,584,000 (2019:
$70,843,000) consisted mainly of remaining expenditure on the
Gwalia Extension Project, continued deep drilling targeting
extensions to the Gwalia lode system and feasibility study costs. The
lower growth capital in 2020 was due to reduced expenditure
related to the Gwalia Extension project.
Page 5
Directors’ Report
Analysis of Simberi operations
During 2020 the Simberi operations continued to generate a strong
positive cash contribution. Total sales revenue from Simberi in 2020
was $238,859,000 (2019: $257,643,000), generated from gold sales
of 102,189 ounces (2019: 145,819 ounces) at an average achieved
gold price of A$2,323 per ounce (2019: A$1,761 per ounce). As at 30
June 2020 there were 6,130 ounces of gold inventory (2019: 3,876
ounces).
Gold production in 2020 of 104,068 ounces (2019: 142,177 ounces)
was down on the prior year due to reduced mined volumes and
lower grade. The lower head grade reflected mining in lower grade
zones in the Botlu and Pigiput pit mine sequence.
A summary of production performance at Simberi for the year
ended 30 June 2020 is provided in the table below.
Details of 2020 production performance
Simberi
Open pit ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
Gold production (oz)
Gold sales (oz)
Cash cost(1) (A$/oz)
All‐In Sustaining Cost (AISC)(2)
(A$/oz)
2020
2,963
1.06
3,314
1.17
83
104,068
102,189
1,482
1,631
2019
3,396
1.43
3,072
1.64
87
142,177
145,819
1,016
1,162
(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.
ST BARBARA LIMITED 2020
Ore mined in 2020 totalled 2,963,000 tonnes (2019: 3,396,000
tonnes), which was a decrease of 13% on the prior year. The
decrease in mining performance in 2020 was largely attributable to
low productivity from the Pigibo pit, extended haul distances from
the Pigiput and Sorowar North pits and reduced availability of some
units in the mining fleet. Waste material moved in 2020 was
8,638,000 tonnes (2019: 8,949,000 tonnes).
Simberi annual total material moved
(kt)
14,335
13,610
12,345
11,601
9,899
2016
2017
2018
2019
2020
Ore milled during the year totalled 3,314,000 tonnes (2019:
3,072,000 tonnes), with the higher throughput attributable to
remaining stockpiles. The recovery performance of the Simberi mill
for the year was an average of 83% (2019: 87%), with the decrease
directly attributable to lower grade.
Simberi gold production
(koz)
135
142
110
116
104
2016
2017
2018
2019
2020
Simberi unit cash operating cost for the year was $1,482 per ounce
(2019: $1,016 per ounce). The unit All‐In Sustaining Cost (AISC) for
Simberi for the year was $1,631 per ounce (2019: $1,162 per ounce),
which mainly reflected the impact of lower production. Total cash
operating costs at Simberi during 2020 were higher than the prior
year at $154,229,000 (2019: $144,452,000) due mainly to the impact
of a weaker AUD/USD exchange rate; Simberi operations has a US
dollar functional currency.
In 2020 Simberi generated positive net cash flows of $74,068,000
(2019: $98,306,000), after
sustaining and growth capital
expenditure. Sustaining capital expenditure of $5,194,000 (2019:
$9,436,000) was mainly to refresh the mining fleet. Growth capital
of $4,147,000 (2019: $4,596,000) comprised sulphide drilling
expenditure beneath the Sorowar pit to improve the potential for a
sulphide gold processing project and feasibility study costs.
Page 6
ST BARBARA LIMITED 2020
Directors’ Report
Analysis of Atlantic Gold operations
Total gold sales revenue from Atlantic Gold in the year from
acquisition date was $233,155,000, generated from gold sales of
107,076 ounces at an average achieved gold price of A$2,020 per
ounce. Revenue recognised for Atlantic Gold includes $16,583,000
relating to the amortisation of the fair value of the gold forward
contracts acquired (refer Note 3).
Total material moved in the year was 7,609,000 tonnes, which
included total ore mined of 4,388,000 tonnes at an average grade of
0.92 grams per tonne.
Atlantic Gold quarterly total material
moved (kt)
A summary of production performance at Atlantic Gold for the year
from acquisition date to 30 June 2020 is provided in the table below.
1,743
2,099
Details of production performance
2,033
1,734
19 July 2019 to 30 June 2020
Open pit ore mined (kt)
Grade (g/t)
Ore milled (kt)
Grade (g/t)
Recovery (%)
Gold production (oz)
Gold sales (oz)
Cash cost(1) (A$/oz)
All‐In Sustaining Cost (AISC)(2) (A$/oz)
Atlantic
2020
4,388
0.92
2,457
1.38
94
102,301
107,076
711
927
(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) AISC is a non‐IFRS financial measure which has not been subject to
review or audit by the Group’s external auditors. It is presented to
provide a meaningful measure by which to assess the total sustaining
cash cost of operation. It is calculated in accordance with the World Gold
Council’s Guidance Note on Non‐GAAP Metrics – All‐In Sustaining Costs
and All‐In Costs (June 2013).
The Touquoy mine has integrated well into the St Barbara portfolio
and performed strongly since the acquisition of Atlantic Gold in July
2019. The acquisition of Atlantic Gold has delivered low‐cost
production in 2020 complemented by a strong future project
pipeline.
Atlantic Gold production for the year of 102,301 ounces was a record
for the operation. The strong result for the year was attributable to
improved head grade and continuous improvements in weather
proofing the operations.
454
FY20
Q1 Sep
FY20
Q2 Dec
FY20
Q3 Mar
FY20
Q4 Jun
SBM attributable
Pre‐acquisition
Ore milled was 2,457,000 tonnes in the year at a grade of 1.38 grams
per tonne and recovery of 94%, with capital and management
improvements made in the year increasing mill throughput.
The mill improvements made over the past year include:
New crusher screen panel designs and larger grinding material;
Installation of concrete slabs below the conveyors to assist
clean‐up
Use of larger grinding media in the ball mill
Daily production meetings
maintenance and plan of action based on weather forecasts
to maximise opportunity
Atlantic Gold quarterly production
(koz)
29
29
26
23
18
4
FY20
Q1 Sep
FY19
Q4 Jun
FY20
Q2 Dec
FY20
Q3 Mar
FY20
Q4 Jun
SBM attributable
Pre‐acquisition
Atlantic Gold unit cash operating cost for the year was $711 per
ounce, reflecting the benefits of an established local work force and
infrastructure to support mining operations. The unit AISC was $927
per ounce for the year, which reflected the low unit cash cost and
sustaining capital to achieve improvements mainly in processing.
Total cash operating costs for the year were $72,736,000.
In the year, Atlantic Gold generated net cash flows of $122,327,000,
after sustaining capital of $15,327,000 and growth capital
expenditure of $15,214,000, which focussed on exploration drilling
in the Moose River Corridor and project permitting and feasibility
costs for the Beaver Dam, Fifteen Mile Stream and Cochrane Hill
projects.
Atlantic Gold has 21 exploration projects in Nova Scotia, with
>1,900km2 of exploration tenements. Exploration has been focussed
on the Moose River Corridor and near mine targets to extend mine
life and provide ore for the Touquoy mill while the projects are
permitted and developed.
Page 7
Directors’ Report
Discussion and analysis of the consolidated income statement
Revenue
Total revenue increased from $650,321,000 in 2019 to $827,726,000
in 2020 mainly due to a higher average realised gold price of A$2,123
per ounce (2019: A$1,762 per ounce) and the inclusion of Atlantic
Gold’s operations from 19 July 2019. Total revenue from Atlantic
Gold from the date of acquisition amounted to $233,155,000, which
offset the impact of lower revenue from Gwalia and Simberi.
Mine operating costs
Mine operating costs in 2020 were $384,820,000 compared with
$299,075,000 in the prior year. The higher operating costs were
mainly attributable to Gwalia and the addition of Atlantic Gold’s
operating costs. Operating costs associated with Atlantic Gold for
the year from acquisition date amounted to $69,014,000.
ST BARBARA LIMITED 2020
$21,398,000 (2019: $18,220,000), including $2,591,000 relating to
‘right‐of‐use’ assets. Atlantic Gold expensed an amount of
$75,511,000, including $61,028,000 relating to amortisation of
mineral rights acquired, and $756,000 relating to ‘right‐of‐use’
assets. The Atlantic Gold depreciation and amortisation is based on
the fair value of the assets acquired.
Expenses associated with acquisition
Expenses associated with the acquisition of Atlantic Gold totalled
$7,538,000 (2019: $3,865,000), including advisory and integration
expenses.
Share based payments
Share based payments of $2,472,000 (2019: $3,099,000) relate to
employee benefits under the performance rights plan (refer to Note
19)
Other revenue and income
Other expenses
Interest revenue was $2,306,000 in 2020 (2019: $10,073,000),
earned on cash held during the year. The lower interest revenue was
due to the reduction in the cash balance following the acquisition of
Atlantic Gold in July 2019.
Exploration
Total exploration expenditure during the 2020 year amounted to
$45,738,000 (2019: $31,401,000), with an amount of $22,142,000
(2019: $12,676,000) capitalised. Capitalised exploration related to
deep drilling expenditure at Gwalia, sulphide drilling at Simberi and
drilling and project related costs at Atlantic Gold. Exploration
expenditure expensed in the income statement in the year was
$23,596,000
The higher exploration
expenditure included activities in Nova Scotia following the Atlantic
Gold acquisition.
(2019: $18,725,000).
Exploration activities during the year focused on investigating highly
prospective near mine targets at Simberi and targets on the
surrounding islands, continuing the deep drilling program at Gwalia
and regional exploration in Australia. Atlantic Gold exploration
focussed on resource drilling near mine areas in the Moose River
Corridor and surrounding areas, as well as the highly prospective
south west region of Nova Scotia.
Corporate costs
Corporate costs for the year of $27,156,000 (2019: $21,859,000)
comprised mainly expenses relating to the corporate office,
compliance costs and business development activities. The increase
in corporate costs in 2020 was partly as a result of incorporating
Atlantic Gold into the Group.
Royalties
for
the year were $27,174,000
(2019:
Royalty expenses
$21,441,000). 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 2.5% of gold revenues
earned from the Simberi mine. Royalties paid in Canada (Nova
Scotia) are 1% of gold revenues due to the Province plus a 1% royalty
on gold revenues to third parties. The increase in the royalties
expense is due to the inclusion of Atlantic Gold and the higher gold
price in 2020.
Depreciation and amortisation
Depreciation and amortisation of fixed assets and capitalised mine
development amounted to $165,366,000 (2019: $79,643,000) for
the year. Depreciation and amortisation attributable to the Leonora
(2019: $59,763,000); higher
operations was $65,767,000
depreciation included $7,357,000 relating to the depreciation of
‘right‐of‐use’ assets recognised on 1 July 2019 in accordance with
the application of AASB 16 Leases. The expense at Simberi was
Other expenditure of $4,735,000 (2019: $3,855,000) included
amounts associated with business development activities and
studies related to mine optimisation at all sites.
Finance costs
Finance costs in the year were $13,255,000 (2019: $946,000).
Finance costs comprised interest on the syndicated facility of
$5,971,000,
leases of
interest paid and payable on finance
$2,262,000 (2019: $1,000), ‘right‐of‐use’ assets lease expense of
$1,033,000, borrowing costs relating to banking facilities and
guarantee fees of $2,036,000 (2019: $60,000) and the unwinding of
the discount on the rehabilitation provision of $1,953,000 (2019:
$885,000). The increase in finance costs in 2020 was associated
mainly with the syndicated facility.
Net foreign exchange loss
A net foreign exchange loss of $2,377,000 was recognised for the
year (2019: net loss of $3,707,000). The foreign exchange loss
related to movements in exchange rates associated with US dollar
and Canadian dollar bank accounts and intercompany balances.
Gold instrument fair value adjustments
A net movement of $9,152,000 (2019: $Nil) was booked in relation
to gold forward and call option contracts associated with the Atlantic
Gold operations. This included a net credit of $11,810,000 relating
to the restructure of the acquired gold forward contracts, offset by
an expense of $20,962,000 relating to the fair value movement on
the gold call options sold to facilitate the restructure of forward gold
contracts (refer Note 3).
Income tax
An income tax expense of $34,217,000 was recognised for the 2020
year (2019: income tax expense of $60,131,000), which comprised
an income tax expense of $17,975,000 in relation to Australia (2019:
$42,109,000) reflecting the lower profitability of Leonora compared
with prior year, and additional corporate expenses associated with
the Atlantic Gold acquisition. A tax expense of $18,703,000 was
recognised for the PNG operations (2019: $18,022,000). In relation
to the Canadian operations a tax credit of $2,461,000 was
recognised, which included a credit of $19,845,000 relating to a 2%
reduction in tax rate applied in Nova Scotia during the year.
The effective tax rate on Australian earnings was 30% (2019: 33%),
with the rate applicable to PNG earnings being 41% (2019: 23%),
which included an expense related to an under provision for the
FY19 tax payment caused by the impact of the depreciation of the
Papua New Guinea kina against the US dollar on the deferred tax
asset. Excluding the impact of the change in tax rate, the effective
tax rate in Canada was 30%.
Page 8
Directors’ Report
Discussion and analysis of the consolidated cash flow statement
Financing activities
ST BARBARA LIMITED 2020
Operating activities
Cash flows from operating activities for the year were $279,533,000
(2019: $240,774,000), reflecting the benefit of the higher average
gold price in 2020 and inclusion of Atlantic Gold operating cash flows
of $152,868,000. Cash flows from Gwalia and Simberi were lower in
2020 mainly as a result of reduced gold production.
Receipts from customers in the year were $831,788,000 (2019:
included receipts for Atlantic Gold of
$647,566,000), which
$233,155,000.
Payments to suppliers and employees were $477,135,000 (2019:
$336,717,000), with the higher expenditure due to increased
expenditure at Gwalia and the addition of Atlantic Gold.
Payments for exploration expensed in the year amounted to
$23,596,000 (2019: $18,725,000), which related to exploration
activities in Western Australia, Simberi and its neighbouring islands,
together with Atlantic Gold expenditure.
Net interest paid was $8,244,000 (2019: $10,073,000 received),
reflecting the interest paid on debt drawn down in the year. In the
prior year interest was earned on a significant cash surplus ahead of
the acquisition of Atlantic Gold. Borrowing costs of $2,036,000
(2019: $Nil) were incurred in relation to the syndicated facility.
Income tax payments totalled $41,244,000 (2019: $61,423,000).
Income tax payments in the year included PAYG instalments of
$19,253,000 and an amount of $21,991,000 relating to the prior
financial year tax provision.
Investing activities
in
flows used
Net cash
investing activities amounted to
$896,885,000 (2019: $28,254,000) for the year. Investing activities
in the year included the acquisition of Atlantic Gold for $779,857,000
minus $4,065,000 of cash acquired. Mine development expenditure
was $85,881,000 (2019: $97,333,000), which included continuing
expenditure related to the Gwalia Extension Project.
Higher expenditure on property, plant and equipment of
$26,331,000 in 2020 (2019: $20,651,000) was due to higher
expenditure at Gwalia and capital expenditure at Atlantic Gold.
Exploration expenditure capitalised during the year totalled
$22,142,000 (2019: $12,676,000), which related to the deep drilling
program at Gwalia to extend the orebody at depth, sulphide drilling
at Simberi and Atlantic Gold resource development drilling and
project expenditure.
Investing expenditure during the year was in the following major
areas:
Underground mine development and infrastructure at Gwalia:
$47,573,000 (2019: $36,075,000)
Gwalia Extension Project: $31,751,000 (2019: $59,716,000).
Gwalia Optimisation Project: $6,054,000 (2019: $2,657,000).
Gwalia deep drilling: $2,779,000 (2019: $8,469,000)
Purchase of property, plant and equipment at Gwalia of
$4,986,000 (2019: $9,907,000), Simberi of $5,158,000 (2019:
$9,384,000) and Atlantic Gold of $15,327,000.
Simberi growth: $4,147,000 (2019: $4,596,000).
Atlantic Gold growth expenditure: $15,214,000.
During the year the Company disposed of its investment in Prodigy
Gold NL for proceeds of $3,261,000 (2019: new investments of
$3,794,000).
Net cash flows related to financing activities in 2020 was a net inflow
of $147,370,000 (2019: net inflow of $436,885,000). The financing
activities in 2020 included $207,014,000 drawn down under the
syndicate facility and dividend payments totalling $37,510,000
(2019: $41,634,000). Repayments under ‘right‐of‐use’ asset leases
amounted to $13,899,000 (2019: $39,000), with a further
$10,635,000 to fully repay the Atlantic Gold lease facilities during the
year.
During the year cash backed banking guarantees decreased by
$2,400,000
(2019:
$2,400,000).
increase of $1,000,000) to $Nil
(2019:
Discussion and analysis of the consolidated balance sheet
Net assets and total equity
St Barbara’s net assets and total equity increased during the year by
$91,954,000 to $1,348,977,000 mainly as a result of net profit after
tax reported for the year.
Current assets decreased to $512,205,000 (2019: $971,469,000) due
mainly to the reduction in cash related to the acquisition of Atlantic
Gold in July 2019.
Non‐current assets increased during the year by $1,224,544,000 to
$1,662,808,000 (2019: $438,264,000), mainly due to assets acquired
through the acquisition of Atlantic Gold, with a balance of
$921,364,000 at 30 June 2020 relating to the fair value of Atlantic
Gold mineral rights acquired net of amortisation.
Current trade and other payables increased to $66,970,000 at 30
June 2020 (2019: $56,549,000) due to the timing of payments at year
end, and an increase in payables associated with Atlantic Gold.
Current interest bearing liabilities of $12,199,000 (2019: $Nil) relates
to ‘right‐of‐use’ asset lease liabilities recognised under AASB 16
Leases. A current provision for tax payable of $10,893,000 was
recognised at 30 June 2020 (2019: $23,171,000).
liabilities
increased
to $709,938,000
Non‐current
(2019:
$56,218,000) as a result of interest bearing liabilities totalling
$319,567,000 and an increase in deferred tax liabilities associated
with Atlantic Gold. The deferred tax balance was a net liability of
$289,914,000 (2019: net liability of $2,071,000), with $280,221,000
relating to the deferred tax liability associated with the fair values
assigned to Atlantic Gold’s assets and liabilities at acquisition. The
non‐current rehabilitation provision
increased to $53,162,000
(2019: $30,846,000) with the acquisition of Atlantic Gold and change
in the discount rate applied to the Group’s rehabilitation provisions
in 2020.
Debt management and liquidity
The available cash balance at 30 June 2020 was $405,541,000 (2019:
$880,199,000), with no deposits held
(2019:
$10,000,000).
to maturity
Total interest bearing liabilities were $331,766,000 at 30 June 2020
(2019: $Nil), represented by $304,189,000 drawn down under the
syndicated facility, and $27,577,000 (2019: $Nil) of lease liabilities
relating to ‘right‐of‐use’ assets.
The AUD/USD exchange rate as at 30 June 2020 was 0.6904 (30 June
2019: 0.7021).
The AUD/CAD exchange rate as at 30 June 2020 was 0.9351 (19 July
2019 acquisition date: 0.9270).
Page 9
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, Simberi and
Atlantic Gold, and to extend mine life through drilling and capital
development where the Group’s investment criteria are met.
During the 2020 financial year the Group achieved a number of
strategic milestones:
On 19 July 2019 the Company acquired Atlantic Gold
Corporation, a TSX listed low cost gold producer in Nova Scotia,
Canada, with the operations successfully integrated into the
Group during the year. The acquisition provides St Barbara with
another operating mine together with a number of organic
growth projects and exploration opportunities.
Continued strong operating margins from Gwalia and Simberi.
Safety performance continued to be a key focus area for the
Group, with the Total Recordable Injury Frequency Rate (TRIFR)
decreasing to 3.0 for the year (2019: 5.0). Health and safety
plans and strategies are continuously reviewed and developed
to assist in reducing the Group’s TRIFR.
During the year the Gwalia Extension Project (GEP) made good
progress with the final ventilation shaft completed in August
2020. GEP consisted 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.
During the June quarter an operational review was undertaken
at each operation. With external technical assistance the
Company‐wide project
identified a range of productivity
improvements and cost reduction initiatives to maximise the
value from the assets.
During the year the Company paid a final fully franked dividend
in relation to the 2019 financial year of 4 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 2020 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, Simberi and Atlantic Gold. St
Barbara continues to invest to improve infrastructure, mining
fleets and capability to ensure consistent and reliable production
at its operations and to maintain operating costs at levels that
protect profit margins and ensure an adequate return on capital
invested. The operational review conducted in the June 2020
quarter identified a range of productivity improvements to
inform the Company’s operational agenda to maximise the value
from the assets.
ST BARBARA LIMITED 2020
the Gwalia mineral
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, Simberi and Atlantic Gold operations. During 2020 the
deep drilling program continued at Gwalia with the objective of
extending
together with
exploration at targets in the greater Leonora region. At Simberi,
a sulphide ore reserve, which has been measured at 1.4 Moz,
provides an opportunity to create a long life production centre
at Simberi, with a feasibility study in progress. In Canada,
exploration commenced in highly prospective ground in south‐
west Nova Scotia, as well as continued exploration in the Moose
River Corridor. With the Canadian exploration program
incorporated within the Company’s global portfolio the
objective is to prioritise targets to extend mine life and enhance
future projects.
resource,
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 2019‐2020. 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.
The Group’s priorities in the 2021 financial year are:
Atlantic Gold: progressing the various Environmental Impact
Statements (EIS) for each of the development projects, despite
COVID‐19 restrictions slowing some stakeholder engagement. Work
continues on the optimal sequencing of the suite of Atlantic Gold
projects.
Leonora Operations: completing the final vent shaft of the Gwalia
Extension Project (GEP) and capitalising on the increased ventilation.
With GEP complete, the operations will optimise development,
maximise ore extraction and production and ultimately reduce
operating costs for future operations. A dedicated project has been
improvement opportunities
established to drive the business
already identified during the operational review.
Page 10
Directors’ Report
Simberi Operations: progressing the Simberi sulphide project
feasibility study. This
involves further optimising the work
completed in the pre‐feasibility study, while the operations team
continues to deliver on the current oxide mine plan.
Focussed exploration and business development activity will
continue within COVID‐19 restrictions.
For the 2021 financial year the Group’s operational and financial
outlook is as follows:
Gold production is expected to be in the range 370,000 to
410,000 ounces;
All‐In Sustaining Cost is expected to be in the range of $1,360 per
ounce to $1,510 per ounce for the Group;
Sustaining capital expenditure is expected to be in the range of
$97 million to $115 million;
Growth capital is anticipated to be between $49 million to $57
million; and
Exploration expenditure of between $30 million and $35 million.
The focus for the exploration program in 2021 will be 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; drilling oxide epithermal structures on Simberi, and an
extensive Canadian program in the Moose River Corridor and south‐
west Nova Scotia.
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 2020 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).
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
ST BARBARA LIMITED 2020
its hedging
deliver the amount of gold required under
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.
Government regulation: The Group’s current and future mining,
processing, development and exploration activities are subject
to various laws and statutory regulations governing prospecting,
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, and to obtaining and
maintaining the necessary titles, authorisations, permits and
licences.
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,
or on the success of development projects. Any such
amendments to current laws, regulations and permits governing
operations and activities of mining, exploration and
implementation
development projects, or more stringent
thereof, could have a material adverse impact on the Group’s
result of operations, financial condition and prospects. Failure
to comply with any applicable laws, regulations or permitting
requirements may result in enforcement actions against the
judicial
Group,
authorities causing operations to cease or be curtailed, and may
include corrective measures requiring capital expenditures,
installation of additional equipment, or remedial actions.
issued by regulatory or
including orders
Operating risks and hazards: The Group’s mining operations,
consisting of open pit and underground mines, generally involve
a high degree of risk, and these risks increase when mining
occurs at depth. The Group’s operations are subject to all the
hazards and risks normally encountered in the exploration,
development and production of gold. Processing operations are
subject to hazards such as equipment failure, toxic chemical
leakage, loss of power, fast‐moving heavy equipment, failure of
deep sea tailings disposal pipelines and retaining dams around
tailings containment areas, rain and seismic events which may
result in environmental pollution and consequent liability. The
impact of these events could lead to disruptions in production
and scheduling, increased costs and loss of facilities, which may
have a material adverse impact on the Group’s results of
operations, financial condition, license to operate and prospects.
These risks are managed by a structured operations risk
management framework and formalised procedures.
Reliance on transportation facilities and infrastructure: The
Group depends on the availability and affordability of reliable
transportation facilities and infrastructure (e.g. roads, bridges,
airports, power sources and water supply)
to deliver
consumables to site, and final product to market. Interruption
in the provision of such infrastructure (e.g. due to adverse
weather, community or government
interference) could
adversely affect St Barbara's operations, financial condition and
results of operations. The Group’s operating procedures include
business continuity plans which can be enacted in the event any
particular infrastructure is temporarily unavailable.
Information technology and cyber risk: The Group’s operations
are supported by information technology systems, consisting of
infrastructure, networks, applications and service providers. The
Group could be subject to network and systems interference or
disruptions from a number of sources, including security
breaches, cyber‐attacks and system failures. The impact of
Page 11
Directors’ Report
information technology systems interferences or disruption
could
include production downtime, operational delays,
destruction or corruption of data, disclosure of sensitive
information and data breaches, any of which could have a
material impact on the Group’s business, operations, financial
condition and performance. Disaster recovery plans are in place
for all of the Group’s major sites and critical information
technology systems, together with a well‐developed cyber‐
security monitoring system.
Production, cost and capital estimates: The Group prepares
estimates of future production, operating costs and capital
expenditure relating to production at its operations. The ability
of the Group to achieve production targets, or meet operating
and capital expenditure estimates on a timely basis cannot be
assured. The assets of the Group are subject to uncertainty with
regards to ore tonnes, grade, metallurgical recovery, ground
conditions, operational environment, funding for development,
regulatory
and other unforeseen
circumstances such as unplanned mechanical failure of plant and
equipment. Failure to achieve production, cost or capital
estimates, or material increases to costs, could have an adverse
impact on the Group’s future cash flows, profitability and
financial condition. The development of estimates is managed
by the Group using a rigorous budgeting and forecasting process.
Actual results are compared with forecasts to identify drivers
behind discrepancies which may result in updates to future
estimates.
accidents
changes,
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.
ST BARBARA LIMITED 2020
The Group manages risks associated with contractors through a
contractor management system.
Exploration and development risk: Although the Group’s
activities are primarily directed towards mining operations and
the development of mineral deposits, its activities also include
the exploration for mineral deposits and the possibility of third
party arrangements including joint ventures, partnerships, toll
treating arrangements or other third party contracts. An ability
to sustain or increase the current level of production in the
longer term is in part dependent on the success of the Group’s
exploration activities and development projects, and the
expansion of existing mining operations.
The exploration for and development of mineral deposits
involves significant risks that even a combination of careful
evaluation, experience and knowledge may not eliminate. While
the discovery of an ore body may result in substantial rewards,
few properties that are explored subsequently have economic
deposits of gold identified, and even fewer are ultimately
developed into producing mines. Major expenses may be
required to locate and establish mineral reserves, to establish
rights to mine the ground, to receive all necessary operating
permits, to develop metallurgical processes and to construct
mining and processing facilities at a particular site. It is
impossible to ensure that the exploration or development
programs the Group plans will result in a profitable mining
operation.
Whether a mineral deposit will be commercially viable depends
on a number of factors.
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
Page 12
Directors’ Report
the Group may not be able to sustain production beyond current
mine lives, based on current production rates.
Political, social and security risks: St Barbara has production and
exploration operations in a developing country that is subject to
political, economic and other risks and uncertainties. The
formulation and implementation of government policies in this
country may be unpredictable.
in developing
countries also involves managing security risks associated with
the areas where the Group has activities. The Group has
established policies and procedures to assist in managing and
monitoring government relations. The Group’s operating
procedures at its mine in Papua New Guinea includes detailed
security plans.
Operating
Foreign exchange: The Group has an Australian dollar
presentation currency for reporting purposes. However, gold is
sold throughout the world based principally on the U.S. dollar
price, and most of the Group's revenues are realised in, or linked
to, U.S. dollars. The Group is also exposed to U.S. dollars and
Papua New Guinea Kina in respect of operations located in
Papua New Guinea and Canadian dollars in respect of the
Atlantic Gold operations as the 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 (similarly with
Canadian dollar denominated revenues and expenses). The
Group is therefore exposed to fluctuations in foreign currency
exchange rates. The Group monitors foreign exchange exposure
and risk on a monthly basis through the centralised treasury
function and a Management Treasury Risk Committee.
Community relations:
A failure to adequately manage
community and social expectations within the communities in
which the Group operates may lead to local dissatisfaction
which, in turn, could lead to interruptions to production and
exploration operations.
The Group has an established
stakeholder engagement framework to guide the management
of the Group’s community relations efforts. At 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
ST BARBARA LIMITED 2020
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; sea level increases
impacting logistics and mining operations at Simberi PNG;
and/or snow storms preventing access to the mining operations
at Touquoy in Nova Scotia). Carbon related regulatory impacts
on the Group’s operations 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. At Atlantic Gold a significant
portion of the value ascribed to the acquisition is in Mineral
Rights. The value of mineral rights is to be realised through
profitable production from the Touquoy operation, the
development of projects at Beaver Dam, Fifteen Mile Stream and
Cochrane Hill and an
increase to ore reserves through
exploration. Any delay in the development of the Atlantic Gold
projects and in achieving positive exploration results in Canada
could give rise to the impairment of assets acquired. 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.
COVID‐19: While St Barbara has implemented extensive
procedures to manage the risk of COVID‐19 spreading through
an operation, there is a risk that if broader community
transmission of COVID‐19 increases in a particular region, there
is a risk that the local government (state, provincial or federal)
may place restrictions that could ultimately result in closing the
site and running in care and maintenance until restrictions are
lifted. The closure of a site will have a material impact on cash
flows. Additionally, while COVID‐19 related restrictions may not
directly impact the operations, there is a risk that suppliers of
key consumables, parts and equipment could be negatively
impacted, resulting in interruption of supply to the operations.
Risk management
The Group manages the risks listed above, and other day‐to‐day risks
risk management
through an established enterprise wide
international
framework, which conforms to Australian and
standards and guidance. The Group’s risk reporting and control
mechanisms are designed to ensure strategic, safety, environment,
operational, legal, financial, tax, reputational and other risks are
identified, assessed and appropriately managed.
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.
Regulatory environment
Australia
The Group’s Australian mining activities are in Western Australia and
governed by Western Australian legislation, including the Mining Act
Page 13
Directors’ Report
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.
Canada
The Group’s Canadian mining activities, located in Nova Scotia, are
subject to both Provincial and Federal legislation. Atlantic Gold is
subject to the Canadian Environmental Protect Act, 1999 (CEPA)
under Environment and Climate Change Canada (ECCC). Atlantic
Gold is also required to comply with the Canadian Federal
Government’s Department of Fisheries and Oceans (Fisheries Act),
the Transportation of Dangerous Goods Act and the Migratory Birds
Convention Act 1994. In Canada, Provincial governments are
responsible for regulating mining within their jurisdictions.
Atlantic Gold
is registered with ECCC to report under the
Environmental Emergency Regulations (E2 Propane Emergency
Response Plan), Greenhouse Gas Reporting Program (Greenhouse
Gas emissions), and the National Pollutant Release Inventory.
Atlantic Gold also reports to ECCC pursuant to the Metal and
Diamond Mining Effluent Regulations.
Provincially, Atlantic Gold
is governed by the Nova Scotia
Environment Act 1994‐1995 and the Mineral Resources Act 2018.
Nova Scotia Environment has established a set of regulatory
conditions for the construction, operation and reclamation of the
Facility through the facility’s operating permits. Atlantic Gold also
reports to the Department of Energy and Mines through mineral
lease requirements and the Department of Lands and Forestry
through the Crown lease agreement.
ST BARBARA LIMITED 2020
Page 14
Directors’ Report
Information on Directors
ST BARBARA LIMITED 2020
Timothy C (Tim) Netscher
BSc (Eng) (Chemical), BCom, MBA, FIChE, CEng, FAICD
Craig A Jetson
Accredited Mechanical Engineer
Independent Non‐Executive Chairman
Appointed as a Director 17 February 2014
Appointed as Chairman 1 July 2015
Special responsibilities:
Member of Audit and Risk Committee
Member of Growth and Business Development Committee
Member of Health, Safety, Environment and Community
Committee (Chair until 12 February 2019)
Member of 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 a 25 year
executive career 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.
Managing Director and Chief Executive Officer
Appointed as Managing Director and CEO 3 February 2020
Special responsibilities:
Nil (attends Board Committee Meetings by invitation)
Mr Jetson is a highly experienced international career mining
executive, having most recently served as Executive General
Manager Cadia, Lihir and Global Technical Services at Newcrest
Mining Limited. Previously, he was GM Lihir and prior to that held
long‐term senior operating roles in Australia, USA, Canada and
Europe. His career began
in Comalco (majority‐owned and
subsequently fully acquired by Rio Tinto) in operations, engineering
and asset management which led him to senior management and
in their zinc smelting
leadership roles with Nyrstar/Zinifex
businesses.
Mr Jetson has experience in successfully leading challenging
businesses in complex operating environments, together with deep
technical knowledge. He was awarded the 2019 Victorian Women
in Resources Gender Diversity Champion.
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 public company directorships: Nil
Former listed company directorships in last three years: Nil
Other current listed company directorships:
Other current relevant experience:
Professional Society of Engineers
Member of Strategic Industry Research Foundation Australia
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: Nil
Other previous relevant experience:
Non‐Executive Chairman of Deep Yellow Limited
Non‐Executive Chairman of Toro Energy Limited
Director of Queensland Resources Council
Director of Minerals Council of Australia
Director of Chamber of Minerals and Energy of Western
Australia
Page 15
Directors’ Report
Steven G Dean
FCA, AusIMM, CIMMP
Independent Non‐Executive Director
Appointed as a Director 23 July 2019
Special responsibilities:
Chair of Growth and Business Development Committee
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 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.
joining Teck, Steven was a founding member of
Prior to
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).
Steven is a recipient of the Viola R MacMillan Award from the
Prospectors and Developers Association of Canada (PDAC) for
individuals demonstrating leadership in management and financing
for the exploration and development of mineral resources.
Other current listed company directorships:
Chairman and CEO of Artemis Gold Inc (CanadaTSX‐V:ARTG)
Chairman of Oceanic Iron Ore Corp. (TSX‐V:FEO)
Non‐Executive Director of Sierra Metals Inc. (TSX:SMT)
Director of Velocity Minerals Ltd. (TSX‐V:VLC)
Former listed company directorships in last three years:
Chairman, CEO and Director of Atlantic Gold Corporation
(TSX‐V:AGB) (Resigned July 2019)
Other previous relevant experience:
Chairman of Sierra Metals Inc
Co‐founder and Chairman of Amerigo Resources Ltd
Co‐founder of PacMin Mining Corporation
Executive roles, Normandy Poseidon Group
President of Teck Cominco Limited
ST BARBARA LIMITED 2020
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 Audit and Risk Committee
Member of Health, Safety, Environment and Community
Committee
Ms Gleeson is an experienced non‐executive director following a 30‐
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
General Counsel, with
international
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 practised as a corporate lawyer,
with Blake Dawson Waldron (now Ashurst) in Melbourne after a 10
year legal career in the UK, including as a corporate finance and
transactional partner in an English law firm, focusing on mergers and
acquisitions and initial public offerings.
Other current listed company directorships: Nil
Former listed company directorships in last three years: Nil
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 Corporate Governance Consultative Panel of
the Australian Securities and Investments Commission
Other previous relevant experience:
Non‐Executive Director of McAleese Limited
Page 16
ST BARBARA LIMITED 2020
Directors’ Report
Stefanie (Stef) E Loader
BSc Hons (Geology), GAICD
Independent Non‐Executive Director
Appointed as a Director 1 November 2018
Special responsibilities:
David E J Moroney
BCom, FCA, FCPA, GAICD
Independent Non‐Executive Director
Appointed as a Director 16 March 2015
Special responsibilities:
Chair of Health, Safety, Environment and Community
Committee (appointed Chair 13 Feb 2019, Member prior to this
date)
Member of Audit and Risk Committee
Member of Growth and Business Development Committee
Ms 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.
Chair of Audit and Risk Committee
Member of Health, Safety, Environment and Community
Committee
Member of Remuneration & Nomination Committee
Mr Moroney is an experienced finance executive with more than 30
years’ experience in senior corporate finance roles, including 20
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:
Other current listed company directorships:
Non‐Executive Independent Director, WA Super (Western
Non‐executive director of Clean TeQ Holdings
Ltd
(ASX TSX:CLQ)
Former listed company directorships in last three years: Nil
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 current relevant experience:
Other previous relevant experience:
Independent Chair of Port Waratah Coal Services Limited
Deputy chair of CatholicCare Wilcannia‐Forbes Ltd
Other previous relevant experience:
Chair of the NSW Minerals Council from 2015 to 2017.
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 17
Directors’ Report
Information on Director and Executive
Information on Executives
ST BARBARA LIMITED 2020
Robert S (Bob) Vassie
B. Mineral Technology Hons (Mining), GAICD, FAusIMM
Managing Director and Chief Executive Officer
Appointed as Managing Director and CEO 1 July 2014
Resigned as a Director 2 February 2020
Retired as an Executive Officer 31 March 2020
Special responsibilities:
Nil (attended 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: Nil
Former listed company directorships in last three years:
Alita Resources Limited (formerly Alliance Mineral Assets
Limited) (ceased December 2019)
o Non‐Executive Director
Tawana Resources NL (ceased December 2018 per scheme of
arrangement with Alliance Mineral Assets Limited)
o Non‐Executive Director
Other current relevant experience during tenure as a Director:
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
Craig Jetson
Accredited Mechanical Engineer
Managing Director and Chief Executive Officer
Appointed 3 February 2020
Mr Jetson is a highly experienced career mining executive, having
most recently served as Executive General Manager Cadia, Lihir and
Global Technical Services at Newcrest Mining Limited. Previously,
he was GM Lihir and prior to that held long‐term senior operating
roles at Nyrstar and Zinifex in Australia, USA, Canada and Europe. Mr
Jetson has experience in successfully leading challenging businesses
in complex operating environments, together with deep technical
knowledge.
Garth Campbell‐Cowan
B.Comm, Dip‐Applied Finance & Investments, FCA
Chief Financial Officer
Mr Campbell‐Cowan is a Chartered Accountant with over 36 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. 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 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.
Page 18
Directors’ Report
Meetings of Directors
The number of meetings of Directors (including meetings of Committees of Directors), and the numbers of meetings attended by each of the
Directors of the Company during the financial year was:
ST BARBARA LIMITED 2020
Board Meeting
Scheduled
Supplementary
Audit & Risk
Committee
H
7
7
7
7
7
3
4
Table 1: Meetings of Directors
S Dean
K Gleeson
S Loader
D Moroney
T Netscher
C Jetson1
B Vassie2
A
7
7
7
7
7
3
4
A
7
7
7
7
7
4
3
H
7
7
7
7
7
4
3
A
‐
4
4
4
4
2
2
H
‐ 3
4
4
4
4
2
2
Remuneration &
Nomination
Committee ‐
Scheduled
H
A
3
4
1
4
4
2
2
4
1
4
4
2
2
Board Committees
Remuneration &
Nomination
Committee ‐
Supplementary
A
3
3
‐
3
3
‐
1
H
3
3
‐
3
3
‐
1
Health, Safety,
Environment &
Community
Committee
H
A
‐
‐
4
4
4
4
4
4
4
4
2
2
2
2
Growth and
Business
Development
Committee
B
A
3
3
‐
‐
3
3
‐
‐
3
3
2
2
1
1
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 in consideration of 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 Dean
K Gleeson
S Loader
D Moroney
T Netscher
C Jetson
Ordinary shares
Rights over
ordinary shares
‐
28,213
30,000
105,438
87,290
‐
‐
‐
‐
‐
‐
‐
Table 2: Directors’ Interests
No Directors have an interest in options over shares issued by companies within the Group.
1 Appointed as a Director 3 February 2020
2 Ceased as a Director 2 February 2020
Page 19
Directors’ Report
Remuneration Report (Audited)
2. 2020 Remuneration Summary
ST BARBARA LIMITED 2020
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 2020 financial year. The report
provides details of remuneration paid for the 2020 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 2019 Remuneration Report,
with the inclusion of Mr Jetson, appointed as a Managing Director
and Chief Executive Officer on 3 February 2020, following the
retirement of Mr Vassie.
Key Management Personnel during 2020
Non‐Executive Directors
Tim Netscher
Steven Dean
Kerry Gleeson
Stef Loader
David Moroney
Executives
Robert (Bob) Vassie
Craig Jetson
Garth Campbell‐Cowan
Rowan Cole
Independent Non‐Executive Chairman
Independent Non‐Executive Director
(appointed 23 July 2019)
Independent Non‐Executive Director
Independent Non‐Executive Director
Independent Non‐Executive Director
Managing Director & Chief Executive
Officer (ceased as MD & CEO 2 February
2020, ceased as a KMP 31 March 2020)
Managing Director & Chief Executive
Officer (appointed 3 February 2020)
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 annual Corporate
Governance Statement and Sustainability Report, both available at
www.stbarbara.com.au
1 Net cash inflow from operating activities less cash outflow from
investing activities (excluding cash flows associated with the Atlantic
Gold acquisition)
The outcomes described in this Remuneration Report reflect the
Group’s operational, financial and strategic achievements over the
three‐year period to 30 June 2020, which are described more fully
later in the report.
Key achievements during the 2020 financial year include:
completion of the acquisition and successful integration of
Atlantic Gold Corporation in Nova Scotia, Canada, diversifying
the Group’s production with a low cost, cash generating mine
with a mine life to 2031 with upside potential, which reported
record production this financial year
the $112 million Gwalia Extension Project (GEP), first
announced in March 2017, and substantially completed in the
financial year (with reaming of the final raise bore completed in
August 2020). GEP provides dual benefits of increasing
ventilation and keeping the majority of waste underground
Simberi Reserves increased by 0.5 Moz of contained gold as a
result of the resource definition drill program, and which
informed the sulphide project feasibility study announced in
May 2020.
Additional achievements over the three‐year period to 30 June 2020
include:
generated a total NPAT of $499 million, and net operating cash
flow1 of $474 million
paid and declared fully‐franked dividends of $0.34 per share
(including the $0.04 FY20 final fully‐franked dividend declared
today)
increased mine life at Gwalia from 2024 to 2031, with the
Gwalia deposit still open at depth
increased oxide mine life at Simberi from 2017 to 2023, with
the potential for the sulphide study to extend this operation
further.
The impact of COVID‐19 on the Group’s performance was carefully
considered in determining the award of this year’s at‐risk incentives,
and setting of future at‐risk incentives. The Board, Executive and the
entire organisation invested significant extra time and effort to
maintain safe operations during COVID‐19. As a result, COVID‐19 has
had limited impact on the operational and financial performance of
the Group this financial year. There were no known cases of COVID‐
19 at the Group’s operations or offices during the financial year. No
additional payments related to the COVID‐19 pandemic were made
to any Non‐Executive Directors or Executive KMP in the 2020
financial year.
Whilst COVID‐19 slowed exploration and business development for
a period, it did not:
adversely impact production outcomes
materially impact cost outcomes
impact safety performance
adversely impact shareholder return.
The Group did not reduce its workforce during the 2020 financial
year as a result of COVID‐19, and has not sought any COVID‐19
related government financial assistance, such as the Australian
Government ‘JobKeeper’ scheme.
The Group’s operational, financial and strategic performance for the
2020 financial year is reflected in the short‐term incentive (STI)
outcomes awarded
the corresponding
to Executives, with
performance for the three‐year period from 1 July 2017 to 30 June
Page 20
Directors’ Report
2020 (i.e. financial years 2018, 2019 and 2020) reflected in the long‐
term incentive (LTI) outcomes awarded to Executives.
(Details in
Section 8)
The Board considers that the Executive remuneration structure in
place during this period has been appropriate and aligned with the
achievements of the Group.
2.1 Key remuneration outcomes for the 2020 financial year
STI1 Outcomes
(Details in
Section 7.1)
LTI2 Outcomes
(Details in
Section 7.2)
Executive
Remuneration
(Details in
Section 9)
The STI outcome for Executives ranged between
28% and 43% (overall average 34%) of the
maximum potential STI based on an assessment of
Group and individual measures. This reflects the
Group’s operating and financial performance
during 2020 and the achievement of the strategic
and growth objectives. No discretion was applied
to the determination of the STI.
33% of the FY18 Performance Rights in respect of
the three‐year LTI held by Executives were
assessed at 30 June 2020 to have vested. This is
consistent with the operational and strategic
performance during the corresponding three‐year
period to 30 June 2020 outlined in the summary
above and set out in detail in this report. Th e
remaining un‐vested FY18 Performance Rights
lapsed.
No discretion was applied to the
determination of the LTI, and no Performance
Rights have been deferred for retesting in a
subsequent financial year.
For the 2020 financial year, following a review of
relevant resource industry market remuneration
assisted by HR Ascent Pty Ltd, and noting the
significant increase in size and complexity of the
Group resulting from the acquisition of Atlantic
Gold, effective 1 July 2019, fixed remuneration
increased by 2% for the former MD & CEO and for
the Chief Financial Officer, and 7.5% for the
Company Secretary, to better reflect the breadth
of this role with relevant market remuneration
data, which also encompasses head of investor
relations, legal, risk and insurance.
The appointment of Mr Jetson, MD & CEO, was
announced on 6 December 2019. A summary of
Mr Jetson’s executive employment contract is set
out in section 5.4.
Mr Vassie received accrued annual leave and long
service leave entitlements upon his retirement in
March 2020. Mr Vassie received a pro‐rata
entitlement of his STI, determined in conjunction
with that for the other Executives, after the end
of the financial year.
In respect of his
participation in the Company’s LTI plan, a pro‐
rata amount of his FY20 performance rights
lapsed on his retirement. Under the LTI Plan
rules, Mr Vassie continues to hold FY21 and FY22
performance rights, which will be tested at the
end of the relevant financial years.
NED
Remuneration
Following a review of comparable resource
industry remuneration levels for Non‐Executive
Directors, the Board resolved to maintain existing
for the 2020
Non‐Executive Director
fees
ST BARBARA LIMITED 2020
financial year. Mr Dean was appointed as an
additional Non‐Executive Director on 23 July
2019.
2.2 Changes in the Executive remuneration framework during the
2020 financial year
STI Outcomes
(Details in
Section 7.1)
As reported in the 2019 Remuneration Report, for
the 2020 financial year only, an enhanced STI
(where target is 75% of TFR rather than the
standard 50%) will apply to each of the Executives
in office at that time (i.e. the former MD & CEO,
the CFO and Company Secretary) to underpin the
focus on key
including
the Atlantic Gold
maximising value
acquisition.
strategic projects,
from
2.3 Changes to Executive remuneration for the 2021 financial year
Executive
fixed
remuneration
(Details in
Section 5.5)
A review of total fixed remuneration (TFR) for
Executives is underway as part of the review of
Group strategy and structure, with reference to
relevant resource industry market remuneration
data.
2.4 Changes to Non‐Executive Director Remuneration for the 2021
financial year
Non‐Executive
Directors fees
(Details in
Section 8)
resource
comparable
Following a review, considering a range of factors
including
industry
remuneration levels for Non‐Executive Directors,
the overall performance of the Group and the
global economic
landscape, the Board has
resolved to maintain the existing Non‐Executive
Director fees for the 2021 financial year.
The Board actively monitors market practices and recommendations
industry participants on remuneration structure and
from
disclosure, and may amend
framework
the
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. At its 2019 annual
general meeting, the Group received a 97.25% ‘for’ vote on its
remuneration report for the 2019 financial year (2018: 98.35%).
remuneration
The Board seeks to ensure that the remuneration framework
attracts, retains and encourages high performance by its key
employees, whilst remaining aligned with shareholder experience.
The competition for employees in general and executives in
particular is primarily against other Australian domiciled gold mining
companies, and close attention is paid to their remuneration
practices.
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 2020 financial
year were to ensure that:
total remuneration for Executives and each level of the
workforce was market competitive;
1 Short term incentive
2 Long term incentive
Page 21
Directors’ Report
fixed
remuneration
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.
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 three 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 strategy
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 safety, production and key
strategic objectives‐ key elements that are within management’s
control and underpin the overall financial result of the Group. The
Board is aware that some stakeholders support the partial deferral
ST BARBARA LIMITED 2020
of an 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 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 as the most appropriate
measures to reflect management’s influence on shareholder wealth,
and have been reviewed and retained in each subsequent year.
RTSR eliminates the impact of fluctuations in gold price to illustrate
how effective management have been in creating value from the
Group’s gold assets compared against industry peers. ROCE
measures the efficiency with which management uses capital in
seeking to increase shareholder value. The LTI performance
measures are reviewed annually for their continued relevance and
consistency against general market practice and peer company LTI
metrics.
A$ gold vs SBM share price
ASX:SBM
A$/oz
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$5
$4
$3
$2
$1
$0
Jun 2020
$0
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Jun 2019
Gold A$/oz (LHS)
SBM (RHS)
Figure 1: A$ gold vs SBM share price
Source: Eikon, NASDAQ
Page 22
ST BARBARA LIMITED 2020
Directors’ Report
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
Month
January
February
March
Strategy & Reporting
Remuneration
Review STI & LTI design framework
Half Year Financial Report
Primary 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 grant to be issued to MD & CEO
Table 3: Annual Planning Timetable
4. Remuneration Governance ‐ Remuneration & Nomination
Committee
for
Remuneration strategy and policies are approved by the Board.
They are aligned with, and underpin, the Group strategy. On behalf
of the Board, the Remuneration & Nomination Committee (the
“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.
The members of the Committee are all independent, Non‐Executive
Directors and as at the date of this report comprised:
K Gleeson
Non‐Executive Director
Chair of the Committee since 1 July 2015
Member of the Committee since 18 May 2015
T Netscher Non‐Executive Chairman
Member of the Committee since 23 February 2015
D Moroney Non‐Executive Director
Member of the Committee since 16 March 2015
S Dean
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
advice relating to the Managing Director and CEO’s remuneration
are commissioned and received directly by the Committee.
In financial year 2020, Godfrey Remuneration Group Pty Ltd was paid
less than $4,000 (excluding GST) for assistance and advice on equity
plans for employees generally and a proposed ‘fee‐substitution’
equity plan for Non‐Executive Directors referred to later in this
report. In financial year 2020, HR Ascent Pty Ltd was paid $15,000
(excluding GST) to prepare a report benchmarking the remuneration
of Executives following the acquisition of Atlantic Gold. The advice
from Godfrey Remuneration Group Pty Ltd and HR Ascent Pty Ltd did
not constitute remuneration recommendations. The Board is
satisfied that the information provided was free from undue
influence from any Key Management Personnel.
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).
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.
Page 23
ST BARBARA LIMITED 2020
Remuneration Report (audited)
Directors’ Report
Short‐term incentives aim to incentivise achievement of Board
approved annual plans and budgets. Long‐term incentives aim to
reward Executives for delivering growth in shareholder value over
the medium to longer term.
The STI and LTI are integral to a competitive total remuneration
package in the market, and should not be misinterpreted as
‘bonuses’ paid on top of fixed remuneration ‘for doing the job’. An
Executive not eligible for incentives would not be fulfilling the
minimum requirements of their role.
Each of these components is considered in more detail below.
Composition of Executive Remuneration
The mix of fixed and at risk remuneration for Executives for 2020 is as follows:
Fixed Remuneration
STI (at risk)
LTI (at risk)
Total
Current CEO ‐ at target
53%
27%
20%
100%
Current CEO ‐ at maximum
36%
36%
27%
100%
Executive KMP ‐ at target
49%
37%
Executive KMP ‐ at maximum
32%
48%
15%
19%
100%
100%
0%
20%
40%
60%
80%
100%
In this Figure, Executive KMP = former CEO, CFO and Co Sec (excludes current CEO)
Figure 2: Composition of Executive Remuneration
In the above Figure, numbers are rounded to nearest whole percent and may not add.
(1) STI as a % of Fixed Remuneration at ‘target’ is: Level 6 (former CEO) and Level 5 (CFO & Co Sec) 75%, current CEO 50%. 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 2020.
(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 2020.
The relationship between ‘target’ and ‘maximum’ remuneration of the current CEO for 2020 is as follows:
Fixed Remuneration
STI (at risk)
LTI (at risk)
Total
Level 6 (CEO) ‐ at target
Level 6 (CEO) ‐ at maximum
53%
53%
27%
20%
100%
0%
20%
40%
60%
Figure 3 Relationship of STI and LTI at target and maximum for CEO remuneration
Figures are rounded to nearest whole percent and may not add.
53%
80%
40%
147%
100%
120%
140%
Page 24
Directors’ Report
Payment profile of Executive Remuneration
ST BARBARA LIMITED 2020
Remuneration Report (audited)
The timing of payments of Executive remuneration for 2020 is as follows (illustrated using current CEO at target):
LTI (at‐risk)
STI (at‐risk)
Fixed
remuneration (FR)
20%
27%
FY20 LTI measurement period ‐ 3 yrs from 1 Jul 2019 to 30 Jul 2022
FY20 STI
measurement period
27%
Cash
20%
Performance
rights
53%
53%
Cash, superannuation, benefits
Level 6 (CEO) ‐ at target
(for illustration)
FY 2020
(FY20 FR paid)
FY 2021
(FY20 STI paid)
FY 2022
FY 2023
(FY20 LTI vested)
Figure 4 Payment profile of Executive Remuneration
Fixed remuneration for 2020 was paid during 2020.
STI performance for 2020 is assessed as part of this report after the end of the 2020 financial year and is paid in the 2021 financial year.
LTI performance for 2020 is assessed after the end of the 3 year performance period (1 July 2019 to 30 June 2022) and, if determined to have vested, the
corresponding performance rights vest in the 2023 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
is undertaken by the Chairman, reported to the
and CEO
Remuneration & Nomination Committee and subsequently to the
Board, for review.
Benefits vary between Executives and include car parking, certain
professional memberships and living away from home and travel
expenses, plus any associated fringe benefits tax.
In considering remuneration for Executives, 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, HR Ascent Pty Ltd Market
Benchmarking 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 Committee members also have access to, and take into
consideration, information provided to the Board and each of the
other Board Committees, on a range of matters including culture,
diversity, safety and environmental performance, governance,
financial and risk management and stakeholder engagement.
The Board retains overall discretion on whether an STI should be
paid or the amount varied in any given year. The Board also has
absolute discretion to reduce, withhold or cancel any unpaid STI in
relation to fraud, defalcation or gross misconduct, or a material
misstatement in the Group’s financial statements.
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
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:
Page 25
Directors’ Report
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
anticipated
substantial
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 incentivise 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. The overall STI for
each KMP comprises 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 normally payable in cash, however, the Board
retains discretion to pay some or all of the STI in shares.
ST BARBARA LIMITED 2020
Remuneration Report (audited)
absolute discretion to reduce, withhold or cancel all tranches of
unvested LTI Rights in relation to 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 2020 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.
C Jetson – Managing Director and CEO
Term of agreement – permanent employee, commenced
3 February 2020.
A summary of the material terms of Mr Jetson’s executive
employment contract was released on 6 December 2020. Key
components of the contract include:
o
TFR of $1,000,000 to be reviewed annually, inclusive of
superannuation and salary sacrifice benefits
The calculation of STI earned can be summarised as follows:
o One‐off on‐boarding payment of:
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.
As reported in the 2019 Remuneration Report, for the 2020 financial
year only, an enhanced STI (where target is 75% of TFR rather than
the standard 50%) applies to each of the Executives in office at that
time (i.e. the former MD & CEO, the CFO and Company Secretary) to
underpin the focus on key strategic projects, including maximising
value from the Atlantic Gold acquisition.
Details of the 2020 financial year STI are set out in Section 7.1 of this
report.
5.3 Performance Linked Remuneration – LTI
LTIs are structured to remunerate Executives for the long‐term
performance of the Group relative to its peers. The LTIs involve the
granting of rights, which only vest upon achievement of
performance measures over a three‐year period. Performance
rights on issue carry no dividend or voting rights. On vesting, each
performance right is convertible into one ordinary share.
As noted earlier, the gold industry is much more volatile than the
economy in general. The primary LTI performance measure of
relative total shareholder return means that LTI awards will not
increase merely due to an increase in gold price, but only on better
than average industry performance.
The Board retains overall discretion on whether an LTI should be
paid or the amount varied in any given year. The Board also has
100,000 shares six months from the commencement
date (issued on 3 August 2020)
100,000 shares 18 months from the commencement
date (anticipated to be issued on 3 August 2021)
o
STI of up to 100% of TFR and LTI of up to 75% of TFR as
described earlier in Section 5 above, both pro‐rata for the
2020 financial year.
Mr Jetson’s overall remuneration package was determined at
the time of his appointment by the competitive market demand
necessary to secure a candidate with the desired credentials
and experience. The one‐off on‐boarding shares provided a
non‐cash,
retention and shareholder‐aligned
performance incentive until such time as performance rights
associated with the LTI can be issued.
immediate
Other than for serious misconduct or serious breach of duty,
the Company or Mr Jetson 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‐
Page 26
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
Cowan may terminate employment at any time with 6 weeks’
notice.
6. Relationship between Group Performance and Remuneration ‐
past five years
R Cole – Company Secretary
Term of agreement – permanent employee, commenced
10 October 2010.
Other than for gross misconduct or for poor performance as
judged by the Company in its absolute discretion, the Company
may terminate the employment at any time with payment of a
termination benefit equal to 6 months’ notice. Mr Cole may
terminate employment at any time with 6 weeks’ notice.
5.5 Future Developments in Remuneration
The Group continuously monitors its remuneration structure,
practices and disclosure in light of market developments to ensure
that collectively they continue to:
attract, reward and retain high performing, team oriented
individuals capable of delivering the Group strategy;
encourage and reward individual and team performance
aligned with value creation for shareholders;
appropriately inform shareholders of what remuneration is
paid and why.
The Chair of the Remuneration and Nomination 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 as part of the review of Group strategy and structure, with
reference to relevant resource industry market remuneration data.
In FY20, total fixed remuneration of the Executives was between P50
and P75 of the benchmark data, which is consistent with the
Company’s remuneration strategy of targeting 90% of P75.
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 27
Directors’ Report
ST BARBARA LIMITED 2020
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
Statutory net profit/(loss) after tax
Underlying net profit/(loss) after tax1
Table 4: Five‐year financial performance
2016
$’000
2017
$’000
2018
$’000
2019
$’000
2020
$’000
610,115
298,106
169,388
127,357
641,702
293,302
157,572
160,366
679,204
345,514
226,998
201,892
650,321
274,810
144,163
141,728
827,726
338,762
128,230
108,472
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
2016
2017
2018
2019
2020
$ / 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
Dividends paid and declared for financial year3
2.95
2.92
‐
2.91
2.89
4.83
4.92
2.94
2.91
3.15
3.15 2
0.06
(fully‐franked)
0.12
(fully‐franked)
0.08
(fully‐franked)
0.08
(fully‐franked)
Average share price for the year
1.56
2.71
3.58
4.01
2.83
Market capitalisation
$1.46 B
$1.45 B
$2.51 B
$2.05 B
$2.20 B
Table 5: Five‐year share price history
During the 2020 financial year, the Group’s daily closing share price ranged between $1.67 to $3.96 per share (2019: $2.51 to $5.24 per share).
The table below provides the percentage of performance linked remuneration awarded to Executives in the current financial year and the
previous four financial years.
Performance Linked Remuneration
% of maximum potential STI earned
% of maximum potential LTI earned
2016
99%
67%
2017
90%
100%
2018
84%
100%
2019
60%
33%
2020
34%4
33%
Table 6: Five‐year performance‐linked remuneration history
Executive Performance Linked Remuneration
Five Year History
Market Cap ($B)
2.5
1.5
1.5
2.1
2.2
90%
100%
100%
84%
67%
60%
33%
34%
33%
% STI / LTI
earned
100%
99%
75%
50%
25%
0%
2016
2017
STI
2018
2019
LTI
2020
1 Non‐IFRS financial measures, refer to page 3.
2 10‐day VWAP coincidentally equalled close price on 30 June 2020. 10 day close price ranged between $2.99 and $3.31.
3
4 Average STI earned by KMP, ranging between 28% and 43%.
Interim and final dividend allocated to relevant financial year (e.g.: FY20 interim and final dividends allocated to 2020 (i.e. FY20)).
Page 28
$M
900
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 2020
Remuneration Report (audited)
EBITDA1
2016
2017
2018
2019
2020
Underlying Net Profit/(Loss) After Tax1
Directors’ Report
5 Year Group Performance
Sales Revenue
2016
2017
2018
2019
2020
Statutory Net Profit/(Loss) After Tax
$M
400
350
300
250
200
150
100
50
0
$M
250
200
150
100
50
0
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Gold Production
Total Recordable Injury Frequency Rate2
measured on a 12 month rolling basis
6
5
4
3
2
1
0
2016
2017
2018
2019
2020
Gwalia
King of the Hills
Simberi
Atlantic
2016
2017
2018
2019
2020
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 29
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 2020.
Highlights of the Group’s achievements in 2020 include:
ST BARBARA LIMITED 2020
Remuneration Report (audited)
Safety and People
Safety performance (measured by LTIFR of 0.4) significantly better than industry peers1
Safely maintained operations through COVID‐19 pandemic with no reported cases of COVID‐19 on site or in
offices
Increased psychological health and wellbeing support for all employees and families during COVID‐19
WGEA2 Employer of Choice for Gender Equality for the 6th consecutive year
Organisational culture monitored monthly using a range of measures, including:
Strategy & Growth
Operations
Financial
Exploration,
Ore Reserves and
Mineral Resources
Periodic, independent employee engagement ‘net promoter’ score by operation
Employee turnover 7.5% (2019: 7.2%)
o
o
Preparation of a revised strategy is well progressed, collectively seeking to maximise the operational and growth
potential at each operation, and maximise the value of the Group overall
A$780 million acquisition of Atlantic Gold Corporation completed in July 2019 and integration completed during
the year. Atlantic Gold acquisition achieved all five strategic objectives in place at the time of acquisition3, and
in particular adds a low cost, cash generating operation with a mine life to 2031 in a favourable mining
jurisdiction
Agreement to acquire shares in Moose River Resources Inc. to own 100% of Touquoy Mine and surrounding
exploration tenements
Simberi sulphide feasibility study announced in May 2020, following independent validation of pre‐feasibility
study
Operations safely maintained through COVID‐19 pandemic with no impact on production
Atlantic Gold had an outstanding first year under St Barbara ownership, achieving increased year‐on‐year
production and generating $122 million free cash flow.
A$112 million Gwalia Extension Project (GEP) approved in March 2017 and completed in August 2020. At the
time of approval, this project extended mining at Gwalia to at least 2,000 mbs in FY 2024. The Life of Mine Plan
was subsequently extended to FY 2031 based on an optimised trucking solution.
Simberi oxide mine life extended from FY 2021 to FY 2023.
Net profit after tax of $128 million (2019: $144 million) and cash flow from operating activities of $283 million
(2019: $241 million)
Cash at bank and deposits has increased from operations during the year by $136 million (net of $37 million in
dividends paid), and excluding the net $776 million consideration for the Atlantic acquisition in July 2019 and
$207 million of debt drawn down from the Company syndicated facility.
C$100 million credit facility and hedging acquired as part of Atlantic Gold renegotiated on favourable terms
A$200 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 drawdown early in
COVID‐19 restrictions as a precaution at to bolster cash reserves, and repaid in full in July 2020
$0.04 per share fully franked divided in respect of half‐ year paid in March 2020
$0.04 per share fully franked divided in respect of full financial year announced in August 2020
Successful $46 million exploration program across Australia, Canada and PNG
Acquisition of Atlantic Gold increased Reserves by 1.9 Moz and Resources by 2.3 Moz4 respectively of contained
gold at the time of acquisition, plus extensive regional exploration program
Simberi Reserves increased by 0.5 Moz as a result of resource definition drill program5
Gwalia drilling program has continued to test for extensions of the Gwalia deposit
The STI outcome for Executives ranged between 28% and 43% (average 34%) (2019: 60% for all Executives) 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 2020 and
the achievement of the strategic and growth objectives.
1 LTIFR = Lost Time Injury Frequency Rate (12 month avg.), the number of lost time injuries per million hours worked. Most recent peer performance: 1.5 (WA
gold industry, Safety performance in the Western Australian mineral industry 2018‐19)
2 Australian Government Workplace Gender Equality Agency www.wgea.gov.au
3 Diversify production base, sustainable long life operations, quality growth pipeline, talented people who deliver, trusted to operate
4 Atlantic Gold TSX announcements 13 and 25 March 2019
5 Ore Reserves and Mineral Resources Statements for Simberi Gold Mine as at 31 December 2019 released to ASX 2 March 2020
Page 30
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
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 2020 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 2020 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.
2020
Pro‐
rata
months
Type
Maximum potential STI
Actual STI
included in
remun‐
eration
Group
STI
awarded
(80% of
total STI)
Individual
STI
awarded
(20% of
total STI)
% of
maximum
potential
total STI
earned1
% of
maximum
potential
total STI
foregone
Target
$
208,333
498,129
404,765
322,823
Stretch2
$
416,667
996,257
809,529
645,645
$
177,642
274,967
297,097
236,952
%
28%
28%
28%
28%
%
100%
25%
70%
70%
%
43%
28%
37%
37%
%
57%
72%
63%
63%
C Jetson
R Vassie
G Campbell‐Cowan
R Cole
Table 7: 2020 STI
5 3
9 4
12
12
Standard
Enhanced
Enhanced
Enhanced
The STI for Messrs Vassie and Jetson are pro‐rata for the period of their appointment as MD and CEO, up to 2 February 2020 and from 3 February
2020 respectively. The average percentage of maximum potential total STI earned for the KMP was 34%5.
As reported in the 2019 Remuneration Report, for the 2020 financial year only, an ‘enhanced STI’ (where target is 75% of TFR rather than the
standard 50%) applied to each of the Executives in office at that time (i.e. the former MD & CEO, the CFO and Company Secretary) to underpin
the focus on key strategic projects, including maximising value from the Atlantic Gold acquisition.
The Group’s STI measures for the 2020 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
(a) Total
Recordable
Injury
Frequency
Rate
18 Recordable
Injuries6 and no
fatalities
33⅓%
(b) Gold
431,000 ounces
33⅓%
production
16 Recordable
Injuries recorded
with no fatalities,
between target
(18) and maximum
(8)
381,887 ounces
produced,
below threshold
(385,000 oz)
33⅓%
Board assessment
against objectives,
at threshold
(c) Atlantic Gold
Integration
Achievement of Board
approved integration
plan, advancement of
strategic projects and
value delivered from
acquisition
Overall Group STI Performance
Table 8: 2020 Group STI Performance
Threshold
Target
Max
0%
25%
50%
75%
100%
% of max.
achieved
60%
0%
25%
28%
For 2020, the Board determined to assess the personal component of Executive’s STI by their individual contribution during their time employed
to the Group’s strategy and growth objectives. The outcome of the assessment is included in Table 7 above. Some of the detailed measures and
outcomes assessed are commercially sensitive and are described below in general terms only.
Inclusive of STI “Target”.
1 The total STI % comprises 80% Group STI measures plus 20% Individual STI measures, e.g for Mr Jetson80% x 28% + 20% x 100% = 43%.
2
3 Pro‐rata five months from 3 February 2020.
4 Pro‐rata nine months to 31 March 2020.
5 Calculated as Aggregate Actual STI included in Remuneration divided by Aggregate Maximum Potential STI at Stretch.
6 Recordable Injury (RI) includes fatalities, lost time injuries, medical treatment injuries. It does not include first aid injury.
Page 31
Directors’ Report
Summary of Executive individual STI performance assessed by Board
ST BARBARA LIMITED 2020
Remuneration Report (audited)
Review and renewal of longer‐term Group strategy
Leadership and oversight through the ongoing evolving COVID‐19 Pandemic, responding to the various Government restrictions, and
development and management of the Group’s COVID‐19 Management framework
Leadership and oversight of successful integration of Atlantic Gold, establishment of a robust governance framework through adoption
of group wide standards, policies and processes, including with regards to health, safety, community and environment
Continued, structured evaluation of multiple inorganic growth opportunities worldwide, following the acquisition of Atlantic Gold
Corporation in July 2019 as described previously. This is an ongoing process, which evaluated several potential acquisitions that failed
to satisfy strict criteria
Leadership and oversight of organic growth projects including completion of the Gwalia Extension Project (GEP), substantial increase in
Simberi Reserves leading to the progression of the Simberi sulphide project to feasibility study and review and sequencing of Atlantic
Gold growth projects
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 FY18 Performance Rights was 1 July 2017 to 30 June 2020.
Key highlights of the Group’s achievements during the three‐year FY18 Performance Rights vesting period include:
Total NPAT of $499 million
Paid and declared dividends of $0.34 per share (including the $0.04 FY20 final dividend declared today)
Acquired Atlantic Gold Corporation, providing a low cost, cash generating operation with a mine life to 2031, which increased Reserves by
1.9 Moz and Resources by 2.3 Moz1 respectively of contained gold
Increased mine life at Gwalia from 2024 to 2031, in part due to the Gwalia Extension Project (approved in March 2017) completed in July
2020
Increased oxide mine life at Simberi from 2019 to 2023, with the potential for the sulphide project feasibility study to extend this further
Simberi Reserves increased by 0.5 Moz of contained gold as a result of resource definition drill program2
Selected highlights of the Group’s performance during the three‐year performance period from 1 July 2017 to 30 June 2020 are set out below:
Share price (10 day VWAP)
$
$2.89
$3.15
30 June 20173
30 June 2020
Dividend declared for financial year
cents
Market Cap
EBITDA
Cash and deposits
Net cash6
Safety
Reserves
Resources
$B
$M
$M
$M
TRIFR1
Moz
Moz
$0.06
$1.45 B
$293 M
$161 M
$160 M
1.2
4.3
9.6
$0.085
$2.20 B
$339 M
$406 M
$74 M
3.0
6.0
11.6
Change
+$0.26
+$0.02
$0.75 B
+$46 M
+$245 M
‐$86 M
+1.8
+1.7
+2.0
Change (%)
+19% TSR inc
$0.30 dividends
paid during period4
+33%
+52%
+16%
+52%
‐54%
150% decline
+40%
+21%
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 FY18 LTI that matured on 30 June 2020 were assessed to have vested.
1 Atlantic Gold TSX announcements 13 and 25 March 2019
2 Ore Reserves and Mineral Resources Statements for Simberi Gold Mine as at 31 December 2019 released to ASX 2 March 2020
3 30 June 2017 figures used as ‘starting’ balances for the three year LTI performance period from 1 July 2017 to 30 June 2020 (i.e. the corresponding Notice of
2017 Annual General Meeting notes total shareholder return for the period to be 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’.
4 Excludes $0.04 final fully‐franked dividend announced 24 August 2020 in respect of the 2020 financial year
5
Includes $0.04 final fully‐franked dividend announced 24 August 2020 in respect of the 2020 financial year.
6 Net cash is cash and cash equivalents less interest bearing liabilities.
Page 32
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
SBM
$5.00
$4.00
$3.00
$2.00
$1.00
$‐
Absolute performance over
FY18 LTI 3 year vesting period
Relative performance over
FY18 LTI 3 year vesting period
190%
160%
109%
XGD
A$ gold
10,000
8,000
6,000
4,000
2,000
0
200%
150%
100%
50%
2017
2018
2019
2020
2017
2018
2019
2020
ASX:XGD
Gold Price
(A$/oz)
SBM
(10 day VWAP)
SBM
(10 day VWAP)
ASX:XGD
Source: IRESS, Eikon
Excludes dividends
Source: IRESS, Eikon
Gold Price
(A$/oz)
Excludes dividends
A$M
3,000
2,500
2,000
1,500
1,000
500
0
Market cap over
FY18 LTI 3 year vesting period
2017
2018
2019
2020
M'Cap
+$768M
increase
2017 to
2020
ASX: SBM
FY18 LTI vesting period
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Jun 2019
Jun 2020
Source: Refinitive Eikon, NASDAQ
SBM
Calculation of the number of FY18 Performance Rights vested in 2020
132,149 (33%) of the 400,451 FY18 Performance Rights available to Executives vested at 30 June 2020, and 67% FY18 Performance Rights lapsed
at 30 June 2020. The Performance Rights vested represent less than 0.02% of total shares on issue at 30 June 2020. The FY18 rights were issued
in November 2017 at a 10 day VWAP price calculated under the Rights Plan Rules and Notice of 2017 Annual General Meeting of $2.89 each.
The Board has not applied discretion to the assessment of Performance Rights. No Performance Rights have been deferred for retesting in a
subsequent financial year.
The FY18 Performance Rights were assessed as follows:
(a)
(b)
Weighting:
Actual score:
Calculation:
Weighting:
Actual ROCE:
Calculation:
RTSR
67%
TSR of 19%, 35th percentile of
comparator group (details below)
0% (for achieving below 50th percentile)
ROCE
33%
26.6% (details below)
100% (for achieving above upper
threshold of WACC 4.3% +7.0% =
11.3%)
(c)
Combined score:
(0% x 67%)
+ (100% x 33%)
= 33%
Table 9 FY18 Performance Rights Assessment
Proportion of rights to vest
Nil
(0%)
Min
(50%)
Max
(100%)
Page 33
Directors’ Report
RTSR Calculation for FY18 Performance Rights
ST BARBARA LIMITED 2020
Remuneration Report (audited)
The result of the RTSR component of the FY18 Performance Rights for the period 1 July 2017 to 30 June 2020 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 19% for the
period, and ranked at the 35th percentile of
the comparator group of companies for the
period. As a result, 0% of the Performance
Rights linked to RTSR vested.
TSR over LTI vesting period
350%
60%
ROCE over LTI vesting period
51%
50th
percentile
MFEDCBA
B
S
RQPONMLKJIHG
Figure 5 Chart of TSR results for comparator companies
(table below)
50%
40%
30%
20%
10%
0%
300%
250%
200%
150%
100%
50%
0%
‐50%
41%
13%
2019
28%
11%
2020
13%
2018
ROCE (3 yr)
100% threshold
Figure 6 Chart of ROCE (calculated on the next page)
The comparator group of companies for FY18 Performance Rights comprised:
Alacer Gold Corp. (ASX: AQG)
Medusa Mining Limited (ASX: MML)
Regis Resources Limited (ASX: RRL)
Beadell Resources Limited (ASX: BDR)1
Northern Star Resources Ltd (ASX: NST)
Resolute Mining Limited (ASX: RSG)
Evolution Mining Limited (ASX: EVN)
OceanaGold Corporation (ASX: OGC)
Saracen Mineral Holdings Limited (ASX: SAR)
Focus Minerals Ltd (ASX: FML)
Oz Minerals (ASX: OZL)
Silver Lake Resources Limited (ASX: SLR)
Intrepid Mines Limited (ASX: IAU)2
Perseus Mining Limited (ASX: PRU)
Tanami Gold NL (ASX: TAM)
Kingsgate Consolidated Limited (ASX: KCN)
Ramelius Resources Limited (ASX: RMS)
Troy Resources Limited (ASX: TRY)
ROCE Calculation for FY18 Performance Rights
The result of the ROCE component over the three‐year vesting period commencing 1 July 2017 and ending on 30 June 2020 was:
ROCE
Percentage of Performance
Rights to vest
Result
Less than or equal to the average annual
WACC over
year period
three
commencing on 1 July 2016
the
0%
WACC (calculated as above):
+ 3%
50%
+ between 3% and 7%
Pro‐rata from 50% to 100%
+ 7%
100%
St Barbara achieved a ROCE for the period of
26.6% (see calculation below), which is
above the upper threshold of WACC for the
period of 4.3% +7.0% = 11.3%.
As a result, 100% of the Performance Rights
linked to ROCE vested
1 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. Beadell is represented as the arithmetic average of the remaining comparator
companies over the vesting period. This does not impact the result of St Barbara being below the P50 threshold.
Intrepid Mines Limited (ASX: IAU), merged with AIC Resources Ltd (ASX:A1C) and changed name to AIC Resources Ltd (ASX:A1M) in 2019.
2
Page 34
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
ROCE is calculated as EBIT before significant items expressed as a percentage of average total capital employed (net debt and total equity)1.
Measure
EBIT (excluding significant items)
EBIT (discontinued operations) 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
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%
2020
173,503
_____ ‐
173,503
1,257,023
_____ ‐
1,257,023
1,348,977
_____ ‐
1,348,977
1,303,000
13.3%
26.6%
4.3%
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 three‐year measurement period commencing 1 July 2017 and ending on 30 June 2020 is 4.3% (2019: 5.6%).
7.3 Rights Vested and On Issue
7.3 (a) There are three LTI tranches relevant to the 2020 financial year, which are summarised below:
Grant year /
tranche name
Description
Performance
Conditions & Weighting
Performance
Period
Status
FY18 Performance Rights Granted as LTI remuneration in
RTSR
2018 and disclosed in the
2017 Notice of AGM and
2018 Remuneration Report
ROCE
FY19 Performance Rights Granted as LTI remuneration in
RTSR
2019 and disclosed in the
2018 Notice of AGM and
2019 Remuneration Report
ROCE
FY20 Performance Rights Granted as LTI remuneration in
RTSR
2020 and disclosed in the
2019 Notice of AGM and
2020 Remuneration Report
ROCE
Table 11 LTI tranches relevant to 2020 financial year
67%
33%
67%
33%
67%
33%
1 July 2017
to 30 June 2020
Assessed as at 30 June 2020
and reported above
1 July 2018
to 30 June 2021
To be assessed and
reported in the
2021 Remuneration Report
1 July 2019
to 30 June 2022
To be assessed and
reported in the
2022 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 35
Directors’ Report
The three LTI tranches are illustrated on a timeline below:
ST BARBARA LIMITED 2020
Remuneration Report (audited)
2018
2019
2020
2021
2022
Financial year
FY18 Performance Rights
Issued in FY18
3 yr vesting period
Tested June 2020
FY19 Performance Rights
Issued in FY19
3 yr vesting period
To be tested June 2021
FY20 Performance Rights
Issued in FY20
3 yr vesting period
To be tested June 2022
Figure 7 Current LTI Tranche Timeline
7.3 (b) Summary of rights on issue and vested in 2020
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:
2020
Grant
year /
tranche
name
Grant Date
Price on
issue date
Held at
1 July 2019
G Campbell‐Cowan
C Jetson
R Vassie
FY20
FY18
FY19
FY20
FY18
FY19
FY20
FY18
FY19
FY20
Table 12 Summary of rights on issue and vested in 2020
‐
30 Nov 2017
24 Oct 2018
27 Nov 2019
16 Nov 2017
24 Oct 2018
27 Nov 2019
16 Nov 2017
24 Oct 2018
27 Nov 2019
$2.91
$2.89
$4.92
$2.91
$2.89
$4.92
$2.91
$2.89
$4.92
$2.91
R Cole
‐
218,748
132,347
‐
106,133
64,524
‐
75,570
48,829
‐
Granted as
compen‐
sation
during the
year
‐4
‐
‐
223,762 5
‐
‐
111,275
‐
88,748
Vested
during the
year 1
Forfeited
during the
year
Held at
30 June
2020 2
Financial
year in
which grant
may vest3
‐
72,187
‐
‐
35,024
‐
‐
24,938
‐
‐
‐
(146,561)
‐
(55,635) 6
(71,109)
‐
‐
(50,632)
‐
‐
‐
‐
132,347
168,127
‐
64,524
111,275
‐
48,829
88,748
2022
2020
2021
2022
2020
2021
2022
2020
2021
2022
7.3 (c) Rights granted in 2020
Details on rights over ordinary shares in the Company that were granted as remuneration to each Executive in the 2020 financial year are as
follows:
2020
Grant year /
tranche
identifier
Grant date
C Jetson
R Vassie
G Campbell‐Cowan
R Cole
FY20
FY20
FY20
FY20
Table 13 Rights granted in 2020
‐
27 Nov 2019
27 Nov 2019
27 Nov 2019
Number of
performance
rights granted
during 2020
‐8
223,762 9
111,275
88,748
Issue price per
performance
right
$2.91
$2.91
$2.91
$2.91
Expiry date
30 Jun 2022
30 Jun 2022
30 Jun 2022
30 Jun 2022
Fair value per
performance right
at grant date
($ per share)7
‐
$2.57
$2.57
$2.57
1 These rights were determined by the Board on 24 August 2020 to have vested as at 30 June 2020 and are pending issue as shares as at the date of this report. The
value of the shares at time of issue will be disclosed in an ASX release as the five‐day volume weighted average price up to and including the day prior to issue. The
five‐day volume weighted average price for shares issued on 21 August 2019 to satisfy FY17 rights exercised on 21 August 2019 was $3.68 per share.
2 The vesting of rights held at 30 June 2019 is subject to future performance conditions.
3
4 Mr Jetson appointed 3 February 2020. Pro‐rata issue of rights for FY20 subject to approval by shareholders at 2020 annual General Meeting scheduled for 28 October
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.
2020.
5 Approved by shareholders at the Annual General Meeting held on 23 October 2019.
6 Pro‐rata lapse per Rights Plan Rules (from retirement 31 March 2020).
7 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.
8 Mr Jetson appointed 3 February 2020. Pro‐rata issue of rights for FY20 subject to approval by shareholders at 2020 annual General Meeting scheduled for 28 October
2020.
9 Approved by shareholders at the Annual General Meeting held on 23 October 2019.
Page 36
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
7.3 (d) 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 2018
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
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.
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.
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
(ASX: NCM)
Limited
(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%
(ii) ROCE
The proportion of FY19 Performance Rights that vest will be
influenced by the ROCE achieved by the Company over the three‐
year vesting period commencing 1 July 2018 and ending 30 June
2021.
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
2018
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.
7.3 (e) Details of FY20 Performance Rights granted during 2020
FY20 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 2019 Annual General
Meeting. Performance rights issued to Mr Vassie, Managing
Director and CEO, were also approved by shareholders at the 2020
Annual General Meeting.
Key Features of FY20 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 2019, $2.91
1 July 2019 to 30 June 2022
30 June 2022
(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
Page 37
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
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 FY20 Performance Rights will be reported in the
2022 Remuneration Report.
other external factors similar to those that influence the TSR
performance of the Company.
The comparator group of companies for FY20 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.
The comparator group of companies for FY20 Performance Rights
comprises:
Alacer Gold Corp
(ASX: AQG)
Perseus Mining Limited
(ASX: PRU)
AngloGold Ashanti Limited
Ramelius Resources Limited
(ASX: AGG)
(ASX: RMS)
Bellevue Gold Limited
Regis Resources Limited
(ASX:BGL)
(ASX: RRL)
Evolution Mining Limited
Resolute Mining Limited
(ASX: EVN)
(ASX: RSG)
Gold Road Resources
Limited (ASX: GOR)
Newcrest Mining Limited
(ASX: NCM)
Saracen Mineral Holdings
Limited (ASX: SAR)
Silver Lake Resources Limited
(ASX: SLR)
Northern Star Resources Ltd
Tribune Resources Limited
(ASX: NST)
(ASX: TBR)
OceanaGold Corporation
Westgold Resources Limited
(ASX: OGC)
(ASX: WGX)
The proportion of the FY20 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 2019 and
ending 30 June 2022 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 FY20 Performance Rights that vest will be
influenced by the ROCE achieved by the Company over the three‐
year vesting period commencing 1 July 2019 and ending 30 June
2022.
Page 38
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
financial year 2021 as set out in the table below, which have not
changed since financial year 2019.
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.
Non‐Executive Director Remuneration (continued)
The skills and experience of the Board will be reported in the annual
Corporate Governance Statement, due to be published on
18 September 2020 and available at www.stbarbara.com.au/
about‐us/governance/.
8. Non‐Executive Director Remuneration
Non‐Executive Directors’ fees are reviewed annually by the Board
with reference to the following:
individual’s responsibilities and time commitment
The
relevant to the role of Director, Committee memberships and
corresponding Chair roles;
The Group’s remuneration policies and a variety of external
survey data sourced from specialists;
Fees paid by comparable companies and the
level of
remuneration required to attract and retain Directors with the
appropriate skills, experience and proven ability, and in this
respect, the fees are positioned between the 50th and 75th
percentile of comparable market remuneration levels;
Consistent with Australian corporate governance practice,
Non‐Executive Directors do not receive performance‐based
remuneration to maintain their independence.
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 is determined independently, based on roles
and responsibilities
in the external market for companies
comparable with St Barbara Limited. The Chairman was not
present at any discussions relating to the determination of his own
remuneration.
The aggregate Non‐Executive Directors’ fees for 2020, and the
estimated aggregate Non‐Executive Directors’ fees for 2021, are
well within the shareholder approved aggregate pool of $1,200,000
per annum.
Following the completion of the acquisition of Atlantic Gold in July
2019, the Remuneration & Nomination Committee conducted a
comprehensive
industry
remuneration levels for non‐executive directors, including for the
newly appointed Canadian resident director and to determine the
fees for the newly established Growth and Business Development
Committee.
comparable
review of
resource
Based on this review, the Board determined to set the fees for the
new committee at a level commensurate to the existing fee
structure for other committees, and resolved to maintain Non‐
Executive Director fees at the same levels for financial year 2020.
The Board recently conducted a further comprehensive review of
available data, and also considered the impact of COVID‐19 on the
Group and its employees and the broader economy. The Board has
resolved to maintain existing Non‐Executive Directors fees for
Page 39
Directors’ Report
ST BARBARA LIMITED 2020
Remuneration Report (audited)
The Directors in office and the composition of Board Committees at the date of this report are:
Director
Appointed
Length of
service 1
Board
Audit & Risk
Committee
Growth &
Business
Development
Committee
Health, Safety,
Environment &
Community
Committee
Remuneration
& Nomination
Committee
T C Netscher
17 Feb 20142
C A Jetson
3 Feb 2020
D E J Moroney
16 Mar 2015
K J Gleeson
18 May 2015
S E Loader
S G Dean
1 Nov 2018
23 July 2019
Table 14 Directors in office
6 years
<1 year
5 years
5 years
1 year
<1 year
Chairman
Member
Member
Member
Member
MD & CEO
Director
Director
Director
Director
‐
Chair
Member
Member
‐
‐
‐
‐
Member
Chair
‐
Member
Member
Chair
‐
‐
Member
Chair
‐
Member
Director fee
Committee Chair
Committee Member
Chairman3
Annual aggregate fees
2017
92,000
16,000
10,000
228,000
484,000
$
$
$
$
$
2018
2019
2020
2021
101,200
106,260
106,260
106,260
20,000
10,000
25,000
15,000
25,000
15,000
25,000
15,000
250,800
263,340
263,340
263,340
533,200
690,033
879,959
est. 893,380 4
no. of non‐executive directors
3
3
45
56
5
Shareholder approved annual aggregate fees7
$
1,200,000
1,200,000
1,200,000
1,200,000
1,200,000
Table 15 Non‐Executive Director fees
1 Whole years to 30 June 2020.
2 Appointed as Director 17 February 2014, appointed as Chairman 1 July 2015.
3 The Chairman’s fee is inclusive of all Board Committee commitments.
4 Aggregate fees for 2020 is estimated on the number of Directors and composition of Board Committees at the date of this report.
5 Stef Loader appointed as Non‐Executive Director 1 November 2018.
6 Steven Dean appointed as Non‐Executive Director 23 July 2019
7 Approved by shareholders at the Annual General Meeting in November 2012.
Page 40
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Directors’ Report
10. Additional Statutory Information
Key Management Personnel Shareholdings
ST BARBARA LIMITED 2020
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.
Name
Non‐Executive Directors
S G Dean
K J Gleeson
S E Loader
D E J Moroney
T C Netscher
Executive Director
R S Vassie1
C A Jetson2
Executives
G Campbell‐Cowan
R Cole
Balance at
the start of
the year
Issued upon
exercised of
employee
rights
Purchased
Sold
Dividend
Reinvestment
Plan
Other
changes
Balance at
the end of
the year
‐
27,858
30,000
105,438
60,967
1,869,053
‐
21,929
64,419
‐
‐
‐
‐
‐
64,914
‐
33,789
17,035
‐
‐
‐
‐
24,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
355
‐
‐
2,323
‐
‐
‐
‐
‐
‐
28,213
30,000
105,438
87,290
‐
‐
(1,933,967)
‐
‐
‐
(55,718)
(63,244)
300
550
‐
‐
300 3
18,760 4
Table 18 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.
Shareholding guidelines are uncommon amongst key peers with which the Group competes for talent, and would be a disincentive in attracting
executives.
The Board has adopted a Non‐Executive Director equity plan with the primary objective to facilitate the acquisition of shares by the Group’s Non‐
Executive Directors. The fee‐substitution plan enables Non‐Executive Directors to nominate a fixed amount of their total Director’s fee to acquire
shares on an ongoing basis, in compliance with the Corporations Law and Securities Dealing Policy restrictions on Director share trading. The
plan operates on a financial year basis, with the number of shares acquired by a Non‐Executive Director determined by the volume‐weighted
average price of shares traded on the ASX for the period 1 July to 30 April within each financial year. Shares are acquired on market by an
externally administered independent share trust.
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 2020 financial year.
END OF REMUNERATION REPORT
1 Resigned as a Director 2 February 2020 and ceased as an Executive Officer and KMP 31 March 2020
2 Appointed as a Director 3 February 2020
3
In addition, 35,024 employee rights were determined by the Board on 24 August 2020 to have vested as at 30 June 2020 and are pending issue as shares as
at the date of this report.
In addition, 24,938 employee rights were determined by the Board on 24 August 2020 to have vested as at 30 June 2020 and are pending issue as shares as
at the date of this report.
4
Page 43
Directors’ Report
Indemnification and insurance of officers
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
in defending civil or criminal
expenses
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.
The Company has agreed to indemnify their external auditors,
PricewaterhouseCoopers, to the extent permitted by law, against
any claim by a third party arising from the Company’s breach of
their agreement. The indemnity stipulates that the Company will
meet the full amount of any such liabilities including a reasonable
amount of legal costs.
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. In Canada, the Group is subject to both Federal and
Provincial legislation.
to
facilitate
the effective and
A Group‐wide Environmental Management System (EMS) has been
implemented
responsible
management of environmental issues to the same high standard
across all sites in both Australia and Papua New Guinea. Adoption
of the EMS at all operations has contributed to further reductions
in the number of minor environmental
incidents, and an
improvement in internal compliance rates for environmental audits
reportable
and
inspections. There were no externally
ST BARBARA LIMITED 2020
environmental incidents during the year ended 30 June 2020 at any
of the Group’s Australian and Pacific sites.
Non‐audit services
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 2020 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 46 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 2020 financial year of 4 cents per
ordinary share, to be paid on 29 September 2019. A provision for
this dividend has not been recognised in the 30 June 2020
consolidated financial statements.
On 27 July 2020, the Group announced the acquisition of Moose
River Resources Incorporated (MRRI) to consolidate ownership of
the Touquoy Mine and surrounding exploration tenements for a
total cash value of $64,582,000, subject to working capital
adjustments. The acquisition is subject to MRRI shareholder and
court approval, which is expected to be completed in September
2020. This acquisition will be funded from the Group’s existing cash
balance.
On 30 July 2020 the Group repaid in full the A$200,000,000 drawn
down on 31 March 2020 from the Australian tranche of the
syndicated facility. The full A$200,000,000 limit under the facility
remains available to be redrawn for the remaining term of the
facility, which expires in July 2022.
Page 44
Directors’ Report
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 24th day of August 2020.
Craig Jetson
Managing Director and CEO
ST BARBARA LIMITED 2020
Page 45
Directors’ Report
Auditors Independence Declaration
ST BARBARA LIMITED 2020
Page 46
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 Business combinations
24 Basis of preparation
25 Accounting standards
Signed reports
Directors’ declaration
Independent auditor’s report
47
48
49
50
51
52
54
56
57
58
60
61
63
64
65
66
70
71
72
72
73
74
75
76
76
76
77
78
79
80
81
ST BARBARA LIMITED 2020
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 2020 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
the
Australian Accounting Standards Board
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 24 August 2020.
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.
Accounting policies and critical accounting
judgements and
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 47
Financial Report
Consolidated comprehensive income statement
for the year ended 30 June 2020
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
Gold instrument fair value adjustments
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 (loss)/income
Items that may be reclassified to profit or loss:
Foreign currency translation differences ‐ foreign operations
Other comprehensive (loss)/profit net of tax(1)
Total comprehensive income attributable to equity holders of the Company
Notes
1
1
1
6
3
13
3
2
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
2019
$'000
827,726
(384,820)
442,906
650,321
(299,075)
351,246
2,306
56
(23,596)
(27,156)
(27,174)
(165,366)
(7,538)
(2,472)
(4,735)
187,231
(13,255)
(2,377)
(9,152)
162,447
10,073
115
(18,725)
(21,859)
(21,441)
(79,643)
(3,865)
(3,099)
(3,855)
208,947
(946)
(3,707)
‐
204,294
(34,217)
128,230
(60,131)
144,163
128,230
144,163
8,763
(1,171)
(2,482)
351
(7,347)
(1,066)
6,787
5,967
127,164
150,130
Earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
4
4
18.33
18.24
26.99
26.84
(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 48
Financial Report
Consolidated balance sheet
as at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Deposits held to maturity
Financial assets
Trade and other receivables
Inventories
Deferred mining costs
Total current assets
Non‐current assets
Inventories
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
Derivative financial liabilities
Current tax liability
Total current liabilities
Non‐current liabilities
Interest bearing liabilities
Rehabilitation provision
Deferred tax liabilities
Derivative financial liabilities
Other provisions
Total non‐current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
2019
$'000
Notes
13
16
11
11
7
11
6
16
7
8
9
8
2
11
13
10
18
12
2
13
10
2
12
18
14
405,541
‐
5,999
11,225
87,401
2,039
512,205
33,335
324,279
42,906
4,386
172,165
149,949
922,118
13,670
1,662,808
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
2,175,013
1,409,733
66,970
12,199
354
19,922
5,760
10,893
116,098
319,567
53,162
303,584
31,688
1,937
709,938
56,549
‐
244
16,528
‐
23,171
96,492
‐
30,846
23,391
‐
1,981
56,218
826,036
152,710
1,348,977
1,257,023
1,422,290
(35,091)
(38,222)
1,402,675
(33,593)
(112,059)
1,348,977
1,257,023
Page 49
The above consolidated balance sheet should be read in conjunction with the notes to the consolidated financial statements.
Financial Report
Consolidated statement of changes in equity
for the year ended 30 June 2020
ST BARBARA LIMITED 2020
Balance at 1 July 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
Transactions with owners of the Company recognised directly
in equity:
Share‐based payments expense
Performance rights issued/(expired)
Dividends paid
Dividends reinvested
Sale of shares in financial asset
Total comprehensive income for the year
Profit attributable to equity holders of the Company
Other comprehensive gain/(loss)
Balance at 30 June 2020
Note
19
Contributed
Equity
$'000
898,430
‐
3,709
‐
20,978
479,558
Foreign
Currency
Translation
Reserve
$'000
(52,458)
Consolidated
Other
Reserves
$'000
Accumulated
Losses
$'000
Total
$'000
14,705
(194,807)
665,870
‐
‐
‐
‐
3,099
(4,906)
‐
‐
‐
1,197
(41,634)
(20,978)
3,099
‐
(41,634)
‐
479,558
‐
‐
1,402,675
‐
6,787
(45,671)
‐
(820)
12,078
144,163
‐
(112,059)
144,163
5,967
1,257,023
19
‐
1,310
‐
18,305
‐
‐
‐
‐
‐
‐
‐
‐
1,422,290
‐
(7,347)
(53,018)
2,472
(3,849)
‐
‐
945
‐
6,281
17,927
2,367
‐
(37,510)
(18,305)
(945)
4,839
(2,539)
(37,510)
‐
‐
128,230
‐
(38,222)
128,230
(1,066)
1,348,977
The above consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements.
Page 50
Notes
13
13
Financial Report
Consolidated cash flow statement
for the year ended 30 June 2020
Cash Flows From Operating Activities:
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payments for exploration and evaluation
Interest received
Interest paid
Borrowing cost
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
Divestment/(investments) in shares
Atlantic Gold Corporation acquisition
Cash acquired
Net cash outflow from investing activities
Cash Flows From Financing Activities:
Movement in restricted cash
Equity raised
Equity raising transaction cost
Dividend payments
Principal elements of lease (2019 – finance lease) payments
Repayment of lease facility
Syndicate facility drawn
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net movement in foreign exchange rates
Cash and cash equivalents at the end of the year
13
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
2019
$'000
831,788
647,566
(477,135)
(336,717)
(23,596)
2,306
(10,550)
(2,036)
(41,244)
279,533
10,000
(26,331)
(85,881)
(22,142)
3,261
(779,857)
4,065
(18,725)
10,073
‐
‐
(61,423)
240,774
106,200
(20,651)
(97,333)
(12,676)
(3,794)
‐
‐
(896,885)
(28,254)
2,400
‐
‐
(37,510)
(13,899)
(10,635)
207,014
147,370
(469,982)
880,199
(4,676)
405,541
(1,000)
490,331
(10,773)
(41,634)
(39)
‐
‐
436,885
649,405
226,443
4,351
880,199
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 51
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 (3)
Segment profit before income tax
Capital expenditure
Sustaining
Growth(2)
Gwalia Extension Project
Total capital expenditure
Segment assets
Segment non‐current assets
Segment liabilities
ST BARBARA LIMITED 2020
Leonora
2020
$’000
355,319
393
355,712
(164,515)
191,197
2019
$’000
392,292
386
392,678
(155,236)
237,442
Simberi
2020
$’000
237,340
1,519
238,859
(151,291)
87,568
2019
$’000
256,807
836
257,643
(143,839)
113,804
Atlantic(4)
2020
$’000
232,903
252
233,155
(69,014)
164,141
Total segments
2020
$’000
825,562
2,164
827,726
(384,820)
442,906
2019
$’000
649,099
1,222
650,321
(299,075)
351,246
(16,896)
(65,767)
108,534
(15,663)
(59,763)
162,016
(5,952)
(21,398)
60,218
(5,778)
(18,220)
89,806
(4,326)
(75,511)
84,304
(27,174)
(162,676)
253,056
(21,441)
(77,983)
251,822
(52,559)
(8,833)
(31,751)
(93,143)
(44,161)
(11,127)
(59,716)
(115,004)
(5,194)
(4,147)
‐
(9,341)
(9,436)
(4,596)
‐
(14,032)
(15,327)
(15,214)
‐
(30,541)
(73,080)
(28,194)
(31,751)
(133,025)
(53,597)
(15,723)
(59,716)
(129,036)
414,370
389,474
62,847
350,687
332,648
31,035
146,409
49,877
49,164
158,412
62,380
39,888
1,286,081
1,176,685
455,578
1,846,860
1,616,036
567,589
509,099
395,028
70,923
(1) Royalties include state and government royalties for each operation, and corporate royalties in relation to Atlantic Gold and Gwalia gold sales.
(2) Growth capital at Gwalia represents the Gwalia optimisation studies and deep drilling expenditure reported as part of exploration. At Simberi growth
capital represents expenditure associated with the sulphides project. At Atlantic Gold growth capital represents expenditure associated with capitalised
exploration and studies.
(3) Depreciation and amortisation in relation to Atlantic Gold includes $61,028,000 of mineral rights amortisation for the year since acquisition date.
(4) Atlantic Gold contribution was from 19 July 2019 to 30 June 2020.
The Group has three operational business units:
Leonora
Operations, Simberi Operations, and Atlantic 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
2020
$’000
462,501
104,707
87,183
148,699
2019
$’000
309,035
87,548
243,464
‐
2020
%
57.1
12.9
10.8
18.3
2019
%
47.6
13.5
37.5
‐
Customer A
Customer B
Customer C
Customer D
Page 52
ST BARBARA LIMITED 2020
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
2020
$’000
2019
$’000
Total profit for reportable segments
253,056
251,822
Interest revenue
Other income
Exploration expensed
Corporate depreciation and
amortisation
Finance costs
Corporate costs
Net foreign exchange (loss)/gain
Expenses associated with acquisition
Net derivative movement
Share based payments
Other expenses
2,306
10,073
56
115
(23,596)
(18,725)
(2,690)
(1,660)
(13,255)
(946)
(27,156)
(21,859)
(2,377)
(7,538)
(9,152)
(2,472)
(4,735)
(3,707)
(3,865)
‐
(3,099)
(3,855)
Consolidated profit before income tax
162,447
204,294
Assets
Total assets for reportable segments
1,846,860
509,099
Cash and cash equivalents
277,140
837,424
Deposits held to maturity
‐
10,000
Trade and other receivables (current)
4,243
9,973
Financial assets
42,906
40,495
Corporate property, plant & equipment
3,864
2,742
Consolidated total assets
2,175,013
1,409,733
Liabilities
Total liabilities for reportable segments
Trade and other payables
Interest bearing liabilities (current)
Interest bearing liabilities (non‐current)
Provisions (current)
Provisions (non‐current)
Current tax liability
Deferred tax liabilities
567,589
18,410
455
200,968
11,522
1,307
2,422
23,363
70,923
26,117
‐
‐
9,596
1,376
21,307
23,391
Consolidated total liabilities
826,036
152,710
Page 53
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
2020
$'000
55,043
3,811
(24,637)
2019
$'000
53,376
966
5,789
34,217
60,131
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:
Difference in overseas tax rates
Equity settled share based payments
Sundry items
Recognition of previously unbooked
deferred tax assets in PNG
Research and development incentive
Permanent differences arising from foreign
exchange within the tax consolidated
group
Change in tax rate in Nova Scotia(1)
Income tax expense
2020
$'000
162,447
48,734
2019
$'000
204,294
61,288
272
240
773
‐
(198)
4,241
‐
930
2,292
(5,140)
(178)
939
(19,845)
‐
34,217
60,131
(1) During the year, the Nova Scotia provincial government reduced the
provincial tax rate from 16% to 14%, representing an overall reduction,
including the Canadian federal tax rate, from 31% to 29%. The amount of
$19,845,000 represents the impact of the lower tax rate on Canadian related
deferred tax balances.
ST BARBARA LIMITED 2020
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 Australian tax consolidated group at 30 June 2020
included: St Barbara Ltd (head entity) 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 2020, the Australian tax
consolidated group did not have any unused tax losses.
Current tax liability
As at 30 June 2020, the Company recognised a current tax liability of
$10,893,000 (2019: $23,171,000), consisting of Australian and Papua
New Guinea tax payable relating to the year ended 30 June 2020.
Accounting judgements and estimates
At 30 June 2020, tax losses not recognised relating to entities
associated with Atlantic operations in Canada of $2,528,000 (tax
effected) were not booked.
Page 54
Notes to the Financial Report
2
Tax (continued)
Deferred tax balances
Deferred tax assets
Tax losses
Provisions and accruals
Property, plant and equipment
Derivative financial liabilities
Other
Total
Tax effect
Deferred tax liabilities
Accrued income
Mine properties – exploration
Mine properties – development
Consumables
Capitalised convertible notes costs
Unrealised foreign exchange gains
Property, plant & equipment
Investment at fair value
Total
Tax effect
Net deferred tax balance
Consolidated
2020
$'000
2019
$'000
19,663
71,969
67,333
37,448
9,494
205,907
60,952
‐
50,007
95,066
‐
1,367
146,440
43,932
349
72,197
921,593
78,050
1,399
23,759
85,100
22,035
1,204,482
260
48,517
12,443
61,311
1,904
17,642
‐
11,265
153,342
350,866
46,003
(289,914)
(2,071)
Comprising:
Australia – net deferred tax liabilities
PNG – net deferred tax assets
(23,363)
(23,391)
13,670
21,320
Canada – net deferred tax liabilities
(280,221)
‐
Net deferred tax balance
(289,914)
(2,071)
ST BARBARA LIMITED 2020
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 55
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.
Atlantic Gold Corporation acquisition
costs(1)
Amortisation of derivative financial
liability(2)
Gold hedge restructure(3)
Call option fair value movements(4)
Consolidated
2020
$'000
2019
$'000
(7,538)
(3,865)
16,583
11,810
(20,962)
‐
‐
‐
ST BARBARA LIMITED 2020
(1) Atlantic Gold Corporation acquisition costs
Costs relating to the acquisition of Atlantic Gold Corporation
included due diligence costs, share registry charges, and integration
costs.
(2) Amortisation of derivative financial liability
As part of the acquisition of Atlantic Gold, a derivative financial
liability of $44,992,000 was recognised representing the “out‐of‐the‐
money” position of the gold forward contracts acquired. This liability
is amortised as a credit to revenue as the forward contracts mature.
Following from the restructure of the hedge program in February
2020 (see note 3), the acquired forward contracts were cancelled
and the remaining amortisation was accelerated, with the amount
recognised in revenue for the year totalling $16,583,000. Therefore,
there will be no further amortisation of credits to revenue.
Total significant items – pre tax
(107)
(3,865)
(3) Gold hedge restructure
Tax Effect
Nova Scotia tax rate change(5)
Tax effect of pre‐tax significant items
PNG deferred tax asset recognised
19,845
20
‐
‐
1,160
5,140
Total significant items – post tax
19,758
2,435
In February 2020, the acquired Atlantic gold forwards were
restructured with the effect of lifting the strike price on the
remaining 78koz of forward contracts from C$1,549/oz to
C$1,759/oz. This was achieved by selling 78koz of call options at a
strike price of C$2,050/oz. The net impact of accelerating the
remaining unamortised balance of the acquired forward contracts
and recognising the fair value of the call options at the date of
restructure was $11,810,000.
(4) Call option fair value movements
The call option program entered into as part of the hedge
restructure (see note 3 above) does not qualify for hedge accounting
on the basis the sold call options do not protect against downside
risk. Therefore, movements in the fair value of the call options are
recognised in the income statement. The amount of $20,962,000
represents the movement in fair value from the date of the
restructure in February 2020 to 30 June 2020. The net amount of the
gold hedge restructure and call option fair value movements
recognised as gold instrument fair value adjustments in the income
statement was $9,152,000.
(5) Canada province tax rate change
On 1 April 2020, the tax rate in Nova Scotia, the province in which
the Atlantic Mining operations reside, was reduced from 16% to
14%. When added to the Canadian federal rate of 15%, the total tax
rate reduced from 31% to 29%. The credit of $19,845,000 in the
income tax expense represents the benefit derived from the
reduction of the net deferred tax liability balance.
Page 56
Notes to the Financial Report
4
Earnings per share
Basic earnings per share
Diluted earnings per share
ST BARBARA LIMITED 2020
Consolidated
2020
Cents
18.33
18.24
2019
Cents
26.99
26.84
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
Basic and diluted earnings per share:
Profit after tax for the year
Consolidated
2020
$'000
2019
$'000
128,230
144,163
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.
Weighted average number of shares
Performance rights
Consolidated
2020
Number
2019
Number
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.
699,442,910 534,106,859
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.
702,895,987 537,075,948
Treasury shares are issued shares held by the company in trust for
employee performance rights.
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
5 Dividends
Declared and paid during the year on
ordinary shares (fully‐franked at 30 per cent)
2020 interim dividend: 4 cents (2019: 4 cents)
2019 final dividend: 4 cents (2018: 8 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
Proposed and not recognised as a liability
(fully‐franked at 30 per cent)
2020 final dividend: 4 cents (2019: 4 cents)
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
Consolidated
2020
$'000
2019
$'000
27,848
27,967
55,815
20,971
41,641
62,612
37,510
18,305
55,815
41,634
20,978
62,612
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 2020 interim dividend and the 2019
final dividend were issued at a 1% discount to the 5 day volume
weighted average price.
Final Dividend
Subsequent to the 30 June 2020 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 29 September 2020 out of
retained earnings at 30 June 2020, and has not been recognised as a
liability at the end of the year.
28,124
27,826
DRP shares in relation to the 2020 final dividend will be issued at a
1% discount to the 5 day volume weighted average price.
68,314
50,680
(12,053)
(11,926)
Page 57
Notes to the Financial Report
B. Mining operations
6 Property, plant and equipment
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
2019
$'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
Recognition of right‐of‐use assets
Acquired fixed assets (Atlantic Gold)
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
Recognition of right‐of‐use assets
Acquired fixed assets (Atlantic Gold)
Additions
Disposals
Depreciation (range 3‐15 years)
Effects of movement in FX rates
At the end of the year
Total(1)
11,610
1,860
1,038
434
(2,721)
(61)
46
12,206
90,124
35,634
116,808
137,782
(80)
(66,215)
(1,980)
312,073
324,279
11,724
‐
‐
1,977
(2,163)
(72)
144
11,610
100,437
‐
‐
18,674
(1,895)
(29,106)
2,014
90,124
101,734
(1) The above PP&E table includes right‐of‐use assets and associated
accumulated depreciation.
Security
In accordance with security arrangements the syndicated facility and
gold forward contracts are secured by the assets of the Group,
excluding the assets of the Simberi operations.
Reconciliation of depreciation and amortisation to the
consolidated income statement
Depreciation
Land and buildings
Plant and equipment
Capitalised depreciation
Amortisation
Mine properties
Mineral rights
Total(2)
Consolidated
2020
$'000
2019
$'000
(2,721)
(66,215)
6,775
(2,163)
(29,106)
‐
(41,059)
(62,146)
(165,366)
(46,355)
(2,019)
(79,643)
(2) The above depreciation table includes right‐of‐use asset depreciation
Capital commitments
Purchase orders raised for contracted
capital expenditure
Consolidated
2020
$’000
2019
$’000
9,870
14,003
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 58
Notes to the Financial Report
6. Plant, property and equipment
(continued)
Right‐of‐use assets (leases)
This note provides information for right‐of‐use of asset where the
group is a lessee
Right‐of‐use assets
Land and buildings
At the beginning of the year
Additions
Depreciation (range 1‐5 years)
Disposals
At the end of the year
Consolidated
2020
$'000
1,860
‐
(465)
‐
1,395
Plant and equipment
At the beginning of the year
Acquired right‐of‐use assets
Additions
Disposals
Depreciation (range 1‐5 years) (1)
At the end of the year
Total
35,634
1,425
2,557
‐
(13,680)
25,936
27,331
(1) Depreciation of right‐of‐use assets which are used in mine development
are capitalised.
Lease liabilities(2)
Current
Non‐current
Total
Consolidated
2020
$'000
12,199
15,378
27,577
(2) The Group only has lease liabilities relating to right‐of‐use assets
ST BARBARA LIMITED 2020
The Group’s leasing activities
The Group leases offices, warehouses, equipment and vehicles as
part of its operational requirements. Contracts are typically made
for fixed periods of 6 months to 8 years, but may have extension
options as described below.
Contracts may contain both lease and non‐lease components. The
group allocates the consideration in the contract to the lease and
non‐lease components based on their relative stand‐alone value. As
a Lessee the Group will individually access single lease components.
Lease terms are negotiated on individual operational requirements
and contain a wide range of different terms and conditions. The
lease agreements do not impose any covenants other than the
security interests in the leased assets that are held by the lessor.
Leased assets are not used as security for borrowing purposes.
The Group has applied AASB 16 Leases from 1 July 2019 (refer to
Note 25). All finance and operating leases are recognised as right‐
of‐use assets with a corresponding liability at the date at which each
leased asset is available for use by the group.
Accounting judgements and estimates
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of
the following lease payments:
fixed payments, less any lease incentives receivable
the exercise price of a purchase option if the Group is reasonably
certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term
reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension
options under management’s assessment are also included in the
measurement of the liability.
The lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be readily determined, the lessee’s
incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain
the asset.
Lease payments are allocated between principal and finance cost.
The finance cost is charged to profit or loss over the lease period so
as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Management has applied judgement in determining whether assets
used by a supplier in providing services to the Group qualify as right‐
of‐use assets.
Right‐of‐use assets are depreciated over the shorter of the asset's
useful life or the lease term on a straight‐line basis. If the group is
reasonably certain to exercise a purchase option, the right‐of‐use
asset is depreciated over the underlying asset’s useful life. The
Group has chosen not to do so for the right‐of‐use assets held by the
Group.
The lease term is reassessed if an option is actually exercised (or not
exercised) or the Group becomes obliged to exercise (or not
exercise) it. The assessment of reasonable certainty is only revised
if a significant event or a significant change in circumstances occurs,
which affects this assessment, and that is within the control of the
lessee. During the current financial year, the financial effect of
remeasuring lease terms to reflect the effect of exercising extension
and termination options was an increase in recognised lease
liabilities and right‐of‐use assets of $2,557,000.
Page 59
Notes to the Financial Report
7 Deferred mining costs
Current
Deferred operating mine development
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
2019
$'000
2,039
1,614
Certain mining costs, principally those that relate to the stripping of
waste in open pit operations and operating development in
future
underground mines, which provide access so
economically recoverable ore can be mined, are deferred in the
balance sheet as deferred mining costs.
that
Underground operations
Non‐current
Deferred operating mine development
4,386
5,655
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 2020 (2019: $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 60
Notes to the Financial Report
8 Mine properties and mineral rights
Mine properties
At beginning of the year
Direct expenditure
Rehabilitation asset(1)
Transfer to PP&E(2)
Amortisation for the year
Study costs written off(3)
At end of the year
Consolidated
2020
$'000
226,330
89,690
7,372
(109,329)
(41,059)
(839)
172,165
2019
$'000
175,352
97,333
‐
‐
(46,355)
‐
226,330
(1) Rehabilitation asset generated as a result of the reduction in discount rate
applied to the rehabilitation provision (refer Note 10).
(2) Relates to the Gwalia Extension Project where the majority of costs incurred
were in respect of the purchase and construction of PP&E.
(3) Study costs relating to the Gwalia Mass Extraction program which were
previously capitalised, now written off to the Income Statement within ‘other
expenses’.
Mineral rights
At the beginning of the year
Acquired mineral rights (Atlantic Gold)
Amortisation
Effects of movements in FX rates
At the end of the year
Consolidated
2020
$'000
1,872
2019
$'000
3,891
988,709
(62,146)
(6,317)
922,118
‐
(2,019)
‐
1,872
ST BARBARA LIMITED 2020
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
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 and
Atlantic Gold operations and interests.
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, resources and
metallurgical recovery, changes to these estimates and assumptions
could impact the amortisation charge in the consolidated income
statement and asset carrying values.
Page 61
ST BARBARA LIMITED 2020
production costs, future capital requirements, short and long term
commodity prices and exchange rates.
Estimating the quantity and/or grade of reserves requires the size,
shape and depth of ore bodies to be determined by analysing
geological data. This process may require complex and difficult
geological judgements and calculations to interpret the data.
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.
The identified CGUs of the Group are: Leonora, Simberi and Atlantic
Gold. The carrying value of all CGUs are assessed when an indicator
of impairment is identified using fair value less costs of disposal (‘Fair
Value’) to calculate the recoverable amount.
When required by an indicator of impairment, 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
Australian Dollar (AUD), United States Dollar (USD) and Canadian
Dollar (CAD) gold price, estimated quantities of ore reserves,
operating costs and future capital expenditure. Costs to dispose
have been estimated by management.
Accounting judgements and estimates ‐ Impairment
Significant judgements and assumptions are required in making
estimates of Fair Value. The CGU valuations are subject to variability
in key assumptions including, but not limited to: long‐term gold
prices, currency exchange rates, discount rates, production,
operating costs, future capital expenditure and permitting of new
mines. 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 2020, the Group determined that there were no
indicators of impairment for the Leonora, Simberi or Atlantic Gold
cash generating units due to strong spot gold and consensus forecast
prices at 30 June 2020, long mine life in the case of Leonora and
Atlantic, together with the relatively low carrying value to recover at
Simberi.
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
rates,
quantities, grades, production
techniques,
recovery
Page 62
Notes to the Financial Report
9
Exploration and evaluation
Non‐current
At beginning of the year
Acquired exploration (Atlantic Gold)
Additions
Effects of movement in FX rates
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
relevant government mining
the
of
departments
in Australia, Papua New
Guinea and Canada. This requirement will
continue for future years with the amount
dependent upon tenement holdings.
Consolidated
2020
$'000
40,858
87,712
22,142
(763)
149,949
2019
$'000
28,182
‐
12,676
‐
40,858
Consolidated
2020
$’000
2019
$’000
14,155
7,299
ST BARBARA LIMITED 2020
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 represent 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. Pre‐
feasibility expenditures are expensed as incurred until a decision has
been made to proceed to feasibility at which time the costs are
capitalised.
Exploration and evaluation assets not relating to operating 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 63
Notes to the Financial Report
10 Rehabilitation provision
Current
Provision for rehabilitation
Non‐current
Provision for rehabilitation
ST BARBARA LIMITED 2020
Consolidated
2019
$'000
2019
$'000
354
244
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.
53,162
53,516
30,846
31,090
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
Acquired rehabilitation (Atlantic Gold)
Change in discount rate(1)
Unwinding of discount
Provision used during the year
Effects of movements in FX rates
Balance at end of year
31,090
12,951
7,372
1,953
(58)
208
53,516
29,704
‐
‐
885
(563)
1,064
31,090
(1) Represents a reduction in real discount rate to 0% applied to the
rehabilitation provision at all operations (June 2019: 3.0%). This reduction is
reflective of the reduction in the long term government bond rates.
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
is remeasured at each
increases). The rehabilitation
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 64
Notes to the Financial Report
C. Capital and risk
11 Working capital
Trade and other receivables
Consolidated
2020
$'000
2019
$'000
Current
Trade receivables
Other receivables(1)
Restricted cash
Prepayments
Total
1,660
7,116
2,400
1,860
13,036
(1) Consist mainly of goods and service tax and harmonized sales tax refunds
due to the Company at the end of the year.
630
8,070
‐
2,525
11,225
ST BARBARA LIMITED 2020
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 2020, there were no amounts receivable from Director
related entities (2019: $Nil).
Inventories
Current
Consumables
Ore stockpiles
Gold in circuit
Bullion on hand
Non‐current
Ore stockpiles
Total
Consolidated
2020
$'000
2019
$'000
Raw materials and consumables, ore stockpiles, gold‐in‐circuit and
bullion on hand are valued at the lower of cost and net realisable
value.
58,862
4,432
12,720
11,387
87,401
47,391
6,369
9,368
3,492
66,620
33,335
‐
120,736
66,620
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, future gold
prices, exchange rates and processing recoveries. A change in any of
these assumptions will alter the estimated NRV and may therefore
impact the carrying value of inventories.
Trade and other payables
Current
Trade payables
Other payables
Total
Consolidated
2020
$'000
2019
$'000
63,550
3,420
66,970
54,894
1,655
56,549
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 65
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 AUD against the USD,
PGK and CAD 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 2020
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.
Impact on Profit After Tax
(Increase profit)/decrease
profit
2020
$'000
(3,435)
3,435
3,491
(3,491)
2019
$'000
(349)
349
‐
‐
AUD/USD +10%
AUD/USD ‐10%
AUD/CAD +10%
AUD/CAD ‐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.
(b) Currency risk
(c)
Interest rate exposures
The Group is exposed to currency risk on gold sales, purchases, cash
holdings and interest bearing liabilities 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), Papua New Guinea Kina (PGK) and Canadian Dollars (CAD).
The exchange rates at the reporting date were as follows:
Closing rate as at
AUD/USD
AUD/PGK
AUD/CAD
30 June 2020
0.6904
2.3364
0.9351
30 June 2019
0.7021
2.4378
0.9190
Exposure to currency
USD
Cash and cash equivalents
Trade receivables
Trade payables
PGK
Cash and cash equivalents
Trade receivables
Trade payables
CAD
Cash and cash equivalents
Trade receivables
Trade payables
Interest bearing liabilities
2020
2019
39,330
291
(5,269)
6,321
133
(2,322)
82,314
1,415
(1,668)
(105,966)
12,255
377
(9,143)
548
305
(3,870)
‐
‐
‐
‐
Net exposure
3,579
3,489
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.
Page 66
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
2020
$’000
2019
$’000
1,257,023
Total shareholders’ funds
‐
Borrowings
Cash and cash equivalents(1)
‐
1,257,023
Total capital
(1) Cash and cash equivalents are included to the extent that the net debt
1,348,977
(331,766)
331,766
1,348,977
position is nil.
The Group does not have a target net debt/equity ratio. In July 2019
the Group established an A$200,000,000 syndicated facility to
support the Group following the acquisition of Atlantic Gold. This
facility was restructured in December 2019 to combine the
A$200,000,000 facility with the C$100,000,000 debt facility acquired
as part of the acquisition of Atlantic Gold. The syndicated facility has
a term that expires on 23 July 2022.
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
investments at fair value through other
comprehensive income.
Investments and other financial assets are recognised initially at fair
value plus, for assets not at fair value through profit and loss, any
directly attributable transaction costs.
(e)
Credit risk
Credit risk is the risk that a counter party 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 $62,000 of the
trade receivables carrying amount at 30 June 2020 (2019: $996,000),
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 2020 were past due.
Credit risks related to deposits and derivatives
Credit risk from balances with banks, financial institutions and
derivative counterparties is managed by the centralised Group
Treasury function in accordance with the Board approved policy.
Investments of surplus funds are only made with approved
counterparties with a minimum Standard & Poor’s credit rating, and
ST BARBARA LIMITED 2020
is a financial
there
counterparty.
limit on funds placed with any single
Derivative transactions are only made with approved counterparties
in accordance with the Board approved Treasury Policy. Derivative
transactions do not cover a major proportion of total Group
production, with maturities occurring over a relatively short period
of time.
(f)
Cash flow hedges
The Group’s revenue is exposed to spot gold price risk. Based upon
sensitivity analysis, a movement in the average spot price of gold
during the year of $100 per ounce and all other factors remaining
constant, would have changed after tax profit by $26,677,000.
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 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. The US$1,300 per
ounce forward contract was later swapped to A$1,961 per ounce as
part of a foreign exchange trade.
Forward contracts acquired from Atlantic Gold with a forward price
of C$1,549 per ounce were restructured with the effect of lifting the
forward price to C$1, 759 per ounce. This was achieved by selling
gold call options with delivery dates from March 2021 to December
2022 at a strike price of C$2,050 per ounce.
As physical delivery of gold is used to close out forward contracts,
the standard provides an “own use” exemption under which the
Group is not subject to the requirements of AASB 9 for these
contracts.
The maturity profile of the gold contracts remaining as at 30 June
2020 is provided in the table below.
Strike Price
Total
ounces
6
months
or less
ounces
6 – 12
months
ounces
1 – 2
years
ounces
2 – 5
years
ounces
Forward contracts
A$1,809/oz
26,000
26,000
A$1,961/oz
26,000
26,000
‐
‐
C$1,759/oz
52,489
35,648
16,841
‐
‐
‐
‐
‐
‐
Call options
C$2,050/oz
78,010
‐
12,000
41,000
25,010
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 2020, the Group did not hold any gold options to hedge
against the risk of negative movements in the gold price, however
this is reviewed by the Board as part of the risk management
framework.
As noted above, 78,010 ounces of gold call options were sold to
restructure the acquired Atlantic Gold forward contracts. The call
options have a strike price of C$2,050 per ounce. Changes in the fair
value of the call options are recognised in the income statement.
Page 67
Notes to the Financial Report
12
(g)
Financial risk management (continued)
Fair value estimation
ST BARBARA LIMITED 2020
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 2020
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
Right‐of‐use assets lease liability
Loans from other entities(2)
Derivative financial liabilities
Weighted average interest rate
Net financial assets
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
Lease liabilities
Floating
Interest rate
$’000
1 year or
less
$’000
Over 1 to 5
years
$’000
Non‐
interest
bearing
$’000
‐
‐
‐
8,700
48,905
57,605
227,503
‐
‐
‐
‐
227,503
‐
‐
‐
‐
‐
‐
0.86%
n/a
n/a
‐
12,199
‐
‐
12,199
4.14%
‐
15,378
307,404
‐
322,782
66,970
‐
‐
37,448
104,418
2.76%
n/a
178,038
‐
‐
‐
‐
178,038
0.26%
‐
‐
‐
‐
‐
n/a
Total
$’000
Fair value
$’000
405,541
‐
‐
8,700
48,905
463,146
66,970
27,577
307,404
37,448
439,399
405,541
‐
‐
8,700
48,905
463,146
66,970
27,577
308,707
37,448
440,702
178,038
215,304
(322,782)
(46,813)
23,747
22,444
212,199
‐
‐
‐
‐
212,199
1.96%
668,000
10,000
2,400
‐
‐
680,400
‐
‐
‐
‐
‐
‐
‐
‐
‐
8,776
40,495
49,271
880,199
10,000
2,400
8,776
40,495
941,870
880,199
10,000
2,400
8,776
40,495
941,870
2.10%
n/a
n/a
‐
‐
‐
‐
‐
‐
‐
‐
‐
56,549
‐
56,549
56,549
‐
56,549
56,549
‐
56,549
Weighted average interest rate
n/a
n/a
n/a
n/a
Net financial assets
212,199
680,400
‐
(7,278)
885,321
885,321
(1) Fair value is determined based on Level 1 and 3 inputs as the balance represents investments (refer to Note 16).
(2) Excludes capitalised borrowing costs of $3,215,000.
Page 68
Notes to the Financial Report
12
Financial risk management (continued)
(h)
Liquidity risk
ST BARBARA LIMITED 2020
Prudent liquidity risk management requires maintaining sufficient cash and marketable securities, the availability of funding through an adequate
amount of committed credit facilities and the ability to close out market positions.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows, and matching maturity profiles of financial assets
and liabilities. The Group undertakes sensitivity analysis to stress test the operational cash flows, which are matched with capital commitments
to assess liquidity requirements. The capital management plan provides the analysis and actions required in detail for the next twelve months
and longer term.
To manage the risk of the impact of COVID‐19 may have on operations, and therefore the liquidity of the Group, the Group drew down 100% of
the A$200,000,000 Australian tranche of the syndicated facility in March 2020. This tranche of the facility was repaid in July 2020, with the
amount able to be redrawn within the remaining term of the facility.
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 – 2020
Trade and other payables
Right‐of‐use assets lease liabilities
Syndicated facility(1)
Call options
Maturity of financial liabilities – 2019
Trade and other payables
Lease liabilities
(1) Excludes capitalised borrowing costs of $3,215,000.
Less than
12 months
$‘000
Between 1
and 5 years
$‘000
Over 5
years
$‘000
Total
contractual
cash flows
$‘000
Carrying
amount
$‘000
66,970
13,025
8,571
5,760
94,326
56,549
‐
56,549
‐
16,100
316,640
31,688
364,428
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
66,970
29,125
325,211
37,448
458,754
66,970
27,577
307,404
37,448
439,399
56,549
‐
56,549
56,549
‐
56,549
Page 69
Notes to the Financial Report
13 Net debt
Cash and cash equivalents
Cash at bank and on hand
Term deposits
ST BARBARA LIMITED 2020
Consolidated
2020
$'000
178,038
227,503
405,541
2019
$'000
212,199
668,000
880,199
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 2020 was invested “at call” earning interest
at an average rate of 0.26% per annum (2019: 1.96% per annum).
Term deposits
Term deposits maturing within 3 months of the 30 June 2020
reporting date earned interest at rates of between 0.49% and 1.50%
per annum (2019: rates of between 1.21% and 2.77% per annum).
At 30 June 2020, the average time to maturity was 52 days (2019: 17
days) from balance date.
Deposits held to maturity
Term deposits between 3 and 12 months
Term deposits between 3 and 12 months
Consolidated
2020
$'000
‐
2019
$'000
10,000
Term deposits with maturity between 3 to 12 months at 30 June
2020 reporting date was $Nil (2019: $10,000,000) and interest at
rates $Nil (2019: rate of 2.55% per annum). At 30 June 2020, the
average time to maturity was Nil days (2019: 205 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
Right‐of‐use assets lease liabilities
Total current
Non‐current
Secured
Right‐of‐use assets lease liabilities
Syndicated facility
Capitalised borrowing costs
Total non‐current
Total interest bearing liabilities
Consolidated
2020
$'000
2019
$'000
12,199
12,199
15,378
307,404
(3,215)
319,567
331,766
‐
‐
‐
‐
‐
‐
‐
Profit before income tax includes the following specific expenses:
Finance Costs
Interest paid/payable
Bank fees and borrowing costs
Finance lease interest
Provisions: unwinding of discount
Consolidated
2020
$'000
2019
$'000
5,971
2,036
3,295
1,953
13,255
‐
60
1
885
946
Page 70
Notes to the Financial Report
13 Net debt (continued)
14 Contributed equity
ST BARBARA LIMITED 2020
Reconciliation of profit from ordinary activities after income tax
to net cash flows from operating activities
Details
Number of
shares
$'000
Consolidated
2020
$'000
2019
$'000
Opening balance 1 July 2019
695,653,732
1,402,675
Vested performance rights
551,245
1,484
Profit after tax for the year
128,230
144,163
Shares issued on DRP
6,889,639
18,305
Depreciation and amortisation
165,366
79,643
Share issue fees
‐
(174)
Net derivative movement
9,152
‐
Closing balance 30 June 2020
703,094,616
1,422,290
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
(7,027)
(1,292)
Contributed equity
1,953
2,377
2,472
885
3,707
3,099
3,338
(421)
(7,813)
(2,071)
(5,673)
(1,462)
(2,691)
16,671
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.
Provisions and other liabilities
(10,151)
(2,148)
Net cash flows from operating activities
279,533
240,774
Page 71
Notes to the Financial Report
D. Business portfolio
ST BARBARA LIMITED 2020
15 Parent entity disclosures
16 Financial assets and fair value of financial
As at, and throughout, the financial year ended 30 June 2020, 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
2020
$'000
2019
$'000
38,732
89,716
6,281
(820)
‐
(106,533)
45,013
(17,637)
assets
Current
Investment in private company
Consolidated
2020
$'000
2019
$'000
5,999
‐
Non‐current
Australian listed shares and equity
42,906
40,495
At the 30 June 2020 reporting date, the Group’s non‐current
financial assets of $42,906,000 (30 June 2019: $40,495,000)
represent investments in shares listed on the Australian Securities
Exchange, which are valued using Level 1 inputs.
These financial assets relate to the Company’s investment in the
following Australian Securities Exchange listed companies:
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.
Peel Mining Limited (PEX)
Catalyst Metals Limited (CYL)
Duketon Mining Limited (DKM)
Other comprehensive income is set out in the Consolidated
statement of comprehensive income.
Financial position of the parent entity
at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity
comprising:
Share capital
Reserves
Dividend payments
Accumulated losses
Total equity
Parent Entity
2020
$'000
2019
$'000
310,468
880,981
1,264,445
992,111
65,331
74,517
330,041
122,851
1,422,290
1,402,675
(11,345)
(5,064)
(55,815)
(62,612)
(420,726)
(465,739)
934,404
869,260
Current financial asset of $5,999,000 represents an investment in
Moose River Resources Inc (MRRI), acquired as part of the
acquisition of Atlantic Gold. This investment is valued using Level 3
inputs. The accumulated fair value adjustments are recognised in
other comprehensive income as gains or losses. This amount
includes a deposit paid in relation to the acquisition of MRRI
announced after year end (refer Note 21).
The Group recognised Level 1, 2 and 3 financial assets on a recurring
fair value basis as at 30 June 2020 as follows:
Level 1: The fair value of financial instruments traded in active
markets is based on quoted market prices at the end of the reporting
period. The quoted marked price used for financial assets held by the
group is the close price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in
an active market is determined using valuation techniques, which
maximise the use of observable market data and rely as little as
possible on entity‐specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3. This is
the case for unlisted equity securities.
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
$7,019,000 (2019: $5,019,000), operating lease rents of $Nil (2019:
$Nil), and interest of $546,000 (2019: $86,000) to entities in the
wholly‐owned group.
Net loans payable to the Company amount to a net payable of
$53,011,000 (2019: net receivable $41,606,000).
its
Balances and transactions between the Company and
subsidiaries, which are related parties of the Company, have been
eliminated on consolidation.
Page 72
Notes to the Financial Report
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 2020.
Parent entity
St Barbara Limited
Subsidiaries of St Barbara Limited
Allied Gold Mining Ltd(1)
Allied Gold Pty Ltd
Subsidiaries of Allied Gold Pty Ltd
Nord Pacific Limited
Subsidiaries of Nord Pacific Limited
Nord Australex Nominees (PNG) Ltd
Simberi Gold Company Limited
Atlantic Mining NS Inc.(2)
Country of
Incorporation
Australia
UK
Australia
Canada
PNG
PNG
Canada
(1) Non‐operating entity deregistered during the 2020 financial year.
(2) On 19 July 2019, the Group acquired Atlantic Gold Corporation (AGC).
During the year, AGC and other subsidiaries of AGC, were amalgamated into
a single entity, Atlantic Mining NS Inc. The purpose of the amalgamation was
to streamline the legal entity structure to derive administrative benefits
without compromising permitting or licencing for current projects.
ST BARBARA LIMITED 2020
Page 73
Notes to the Financial Report
E. Remunerating our people
18 Employee benefit expenses and other
provisions
Expenses
Employee related expenses
Wages and salaries
Retirement benefit obligations
Equity settled share‐based payments
Consolidated
2020
$'000
2019
$'000
100,005
7,436
2,472
109,913
73,546
5,985
3,099
82,630
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
2020
$'000
3,193
81
248
144
3,666
2019
$'000
2,838
75
201
291
3,405
Consolidated
2020
$'000
2019
$'000
5,665
4,512
9,745
19,922
4,951
3,869
7,708
16,528
1,937
1,937
1,981
1,981
ST BARBARA LIMITED 2020
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.
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 74
ST BARBARA LIMITED 2020
Notes to the Financial Report
19 Share‐based payments
Employee Performance Rights
During the year ended 30 June 2020, $2,367,000 (2019: $1,197,000) previously recognised in the share based payment reserve for 821,523 (2019:
483,621) performance rights, which expired during the year, were transferred as a gain to accumulated losses. 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 2020
Grant Date
Expiry Date
Issue price
16 Nov 2017 30 Jun 2020
24 Oct 2018
30 Jun 2021
21‐Dec 2018 30 Jun 2021
27 Nov 2019 30 Jun 2020
27 Nov 2019 30 Jun 2021
27 Nov 2019 30 Jun 2022
03 Feb 2020
30 Jun 2022
03 Feb 2020(1) 30 Jun 2022
Total
$2.89
$4.92
$4.92
$2.91
$2.91
$2.91
$2.91
$3.15
Consolidated and parent entity 2019
30 Jun 2019
21 Oct 2016
30 Jun 2019
12 Dec 2016
31 Mar 2017 30 Jun 2019
16 Nov 2017 30 Jun 2020
30 Jun 2021
24 Oct 2018
30 Jun 2021
21 Dec 2018
Total
$2.92
$2.92
$2.92
$2.89
$4.92
$4.92
Balance at
start of the
year
Number
1,175,059
711,080
54,523
‐
‐
‐
‐
‐
1,940,662
837,568
196,708
42,440
1,211,812
‐
‐
2,288,528
Granted
during the
year
Number
‐
‐
‐
56,544
56,544
1,505,276
86,664
107,388
1,812,416
‐
‐
‐
‐
718,262
54,523
772,785
Vested during
the year
Number
(341,277)
‐
‐
(16,824)
‐
‐
‐
‐
(358,101)
(472,228)
(64,914)
(14,103)
‐
‐
‐
(551,245)
Expired
during the
year
Number
(833,782)
(28,042)
‐
(39,720)
(5,562)
(123,884)
‐
‐
(1,030,990)
(365,340)
(131,794)
(28,337)
(36,753)
(7,182)
‐
(569,406)
Balance at
end of the
year
Number
‐
683,038
54,523
‐
50,982
1,381,392
86,664
107,388
2,363,987
‐
‐
‐
1,175,059
711,080
54,523
1,940,662
Exercisable
at end of the
year
Number
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
(1) 107,388 of the performance rights issued on 3 February 2020 are subject to shareholder approval at the annual general meeting set for 28 October 2020.
The weighted average remaining contractual life of performance
rights outstanding at the end of the year was 1.08 years (2019: 1.40
years). Conditions associated with rights granted during the year
ended 30 June 2020 included:
i.
Rights are granted for no consideration. The vesting of rights
granted in 2020 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 $4,500,000. 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
2020
$
2019
$
Performance rights issued under
performance rights plan
2,472,000
3,099,000
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 75
Notes to the Financial Report
F. Further disclosures
ST BARBARA LIMITED 2020
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 Australia Non‐
audit services
Accounting advice and other assurance
related services
PricewaterhouseCoopers Canada Non‐
audit services
Taxation consulting services
Total remuneration for audit and non‐
audit related services
Consolidated
2020
$
407,820
2019
$
276,020
24,969
24,969
‐
39,200
32,950
465,739
‐
340,189
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 2020 financial year of 4 cents per
ordinary share, to be paid on 23 September 2019. A provision for
this dividend has not been recognised in the 30 June 2020
consolidated financial statements.
On 27 July 2020, the Group announced the acquisition of Moose
River Resources Incorporated (MRRI) to consolidate ownership of
the Touquoy Mine and surrounding exploration tenements for a
total cash value of $64,582,000, subject to working capital
adjustments. The acquisition is subject to MRRI shareholder
approval and court approval which is expected to be completed in
September 2020. This acquisition will be funded from the Group’s
existing cash balance.
On 30 July 2020 the Group repaid in full the A$200,000,000 debt
drawn on 31 March 2020 from the syndicated facility. The full
A$200,000,000 limit under the facility remains available to be
redrawn for the remaining term of the facility which expires in July
2022.
22 Contingencies
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 by tax authorities 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 76
Notes to the Financial Report
23 Business combinations
On 19 July 2019, the Group, through its subsidiary Nord Pacific
Limited, acquired 100% of the issued shares of Atlantic Gold
Corporation (“Atlantic Gold”), a gold mining, development and
exploration company with operations in Nova Scotia, Canada.
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 through development of additional
mining areas and planned resource and reserve expansion
The accounting for the acquisition of Atlantic Gold has been finalised
at 30 June 2020.
Consolidated
2020
$'000
2019
$'000
Consideration transferred
Cash and cash equivalents
Total Consideration
Goodwill arising on acquisition
Consideration transferred
Less: Fair value of identifiable net
assets acquired
Total goodwill arising on acquisition
Consideration paid in cash
Less: Cash and cash equivalents
balance acquired
Net cash out flow on acquisition of
subsidiaries
779,857
779,857
779,857
(779,857)
‐
779,857
(4,065)
775,792
‐
‐
‐
‐
‐
‐
‐
‐
Expenses associated with acquisition
Acquisition and integration related costs of $7,538,000 incurred
during the year that were not directly attributable to the issue of
shares are included in expenses associated with acquisition in the
income statement and in operating cash flows in the statement of
cash flows.
ST BARBARA LIMITED 2020
The assets and liabilities recognised as a result of the acquisition are
as follows:
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Total current assets
Non‐current assets
Inventories
Property, plant and equipment
Mineral rights
Exploration and evaluation
Other assets
Total non‐current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Interest bearing borrowings
Provisions
Derivative financial liabilities
Total current liabilities
Non‐current liabilities
Interest bearing borrowings
Rehabilitation provision
Deferred tax liabilities
Derivative financial liabilities
Total non‐current liabilities
Total liabilities
Net identifiable assets acquired
Net assets acquired
Fair value
$’000
4,065
3,927
17,673
3,021
28,686
20,735
117,846
988,709
87,712
964
1,215,966
1,244,652
13,112
10,635
301
25,969
50,017
98,519
12,951
284,285
19,023
414,778
464,795
779,857
779,857
Impact of acquisition on the Group’s result
Included in the net profit after tax is $59,330,000 attributable to
Atlantic Gold. Revenue for the year was $233,155,000 from 107,076
ounces of gold sold with 106,663 ounces of gold produced.
Depreciation and amortisation for the year comprised:
Depreciation of property, plant & equipment: $14,483,000
Amortisation of mineral rights: $61,028,000
If Atlantic Gold had been acquired on 1 July 2019, the Group’s
revenue would have increased by $8,000, and net profit after tax
would have decreased by $463,000.
Page 77
Notes to the Financial Report
24 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 2020
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 Simberi Operations is US dollars (USD),
and the functional currency of the Atlantic Operations is Canadian
dollars (CAD).
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.
ST BARBARA LIMITED 2020
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.
Page 78
Notes to the Financial Report
25 Accounting standards
New Standards adopted
The accounting policies applied by the Group in this 30 June 2020
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 except for the changes arising from adopting AASB 16
Leases, which were effective as at 1 July 2019 for the Group without
restatement of prior years.
The Group has adopted all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations
and effective for the current full year report, with no material
impacts to the financial statements except for the changes arising
from adopting AASB 16 Leases. Accounting policies are applied
consistently by each entity in the Group.
The Group implemented AASB 16 Leases as at 1 July 2019, which
replaces AASB 117 Leases. Under the new standard most of the
Group’s non‐cancellable operating
incorporated within
certain supplier contracts currently engaged have been recognised
on the balance sheet.
leases
The right of use lease items are recorded as an asset with
corresponding lease liability to pay the lease recognised. The lease
liability is measured at present value of the lease payments that are
not paid at the balance date, and is unwound over time using the
interest rate implicit in the lease repayments where available, or the
Group's
incremental borrowing rate. The right‐of‐use asset
comprises the initial lease liability amount, initial direct costs
incurred when entering into the lease, less any lease incentives
received. The asset is depreciated over the term of the lease. The
new standard replaces the Group’s operating lease expense with an
interest and depreciation expense.
The Group applied the modified retrospective approach to existing
operating leases, which are capitalised under the new standard and
has not restated comparative amounts. 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 the reporting.
Operating cash flows increased under AASB 16 as the element of
cash paid attributable to the repayment of principal is included in
financing cash flows. The net increase/decrease in cash and cash
equivalents remains unchanged.
The weighted average incremental borrowing rate applied to the
Group’s lease liabilities recognised on the balance sheet at 1 July
2019 is 4.14%.
The most significant differences between the Group’s undiscounted
non‐cancellable operating lease commitments at 30 June 2019 and
lease liabilities at 30 June 2020 upon transition to AASB 16 are as
follows:
Operating leases disclosed as at 30 June 2019
Lease liabilities recognised as at 1 July 2019
Gross lease commitments as at 1 July 2019
Effect of discounting on payments included in
calculating lease liabilities
Lease liabilities recognised as at 1 July 2019
Additions
Acquired right‐of‐use assets
Lease principal payments
Lease liabilities as at 30 Jun 2020
Consolidated
$’000
37,494
2,795
40,289
(2,795)
37,494
2,557
1,425
(13,899)
27,577
ST BARBARA LIMITED 2020
The right of use asset’s property, plant and equipment categories
are as follow as at 1 Jul 2019:
Land and buildings
Plant and equipment
Total right of use asset
Lease liability as at 1 July 2019:
Current
Non‐current
Total lease liability
Consolidated
$’000
1,860
35,634
37,494
Consolidated
$’000
12,906
24,588
37,494
The following amounts were recorded in the full year financial
statements ended 30 June 2020:
Income Statement(1)
Depreciation and amortisation
Lease interest
Statement of cash flows
Lease principal payments
Lease interest paid
Balance sheet
Right of use assets:
‐ carrying value
Liabilities:
‐ current
Included with in
$’000
operating
Net
costs
Finance cost
(11,168)
(1,033)
Cash flows from
financing
activities
Net interest paid
(13,899)
(1,322)
Property, plant
and equipment
lease
27,331
Interest bearing
borrowings
(12,199)
‐ non‐current
(15,378)
(1) Depreciation of $2,977,000 and interest of $290,000 relating to right‐
of‐use assets which are used in mine development was capitalised during
the year.
Accounting judgement and estimates
The preparation of consolidated financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
Page 79
Financial Report
Directors’ declaration
ST BARBARA LIMITED 2020
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 47 to 79 and the remuneration report in the
Directors’ report, set out on pages 20 to 43, 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 2020 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 2020.
The directors draw attention to page 47 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:
Craig Jetson
Managing Director and CEO
Melbourne
24 August 2020
Page 80
Financial Report
Independent auditor’s report page 1
ST BARBARA LIMITED 2020
Page 81
Financial Report
Independent auditor’s report page 2
ST BARBARA LIMITED 2020
Page 82
Financial Report
ST BARBARA LIMITED 2020
Page 83
Financial Report
Independent auditor’s report page 3
ST BARBARA LIMITED 2020
Page 84
ST BARBARA LIMITED 2020
Financial Report
Independent auditor’s report page 4
Independent auditor’s report page 5
Page 85
ORE RESERVE AND
MINERAL RESOURCES
STATEMENTS
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
Ore Reserves and Mineral Resources Statement as at 30 June 2020
Overview
As at 30 June 2020, Group Ore Reserves increased year on year from 4.1 Moz of contained gold to 6.0 Moz, and Group Mineral
Resources increased from 9.6 Moz of contained gold to 11.6 Moz.
The increase in Resources and Reserves is due to the Atlantic Gold acquisition concluded in July 2019 and Simberi sulphide drilling
completed in December 2019.
Company Summary at 30 June 2020
Total Ore Reserves are estimated at:
93.6 Mt @ 2.0 g/t Au for 6.0 Moz of contained gold, comprising:
o Atlantic Gold Operations
50.5 Mt @ 1.1 g/t Au for 1.7 Moz of contained gold
o
o
Leonora Operations
Simberi Operations
12.0 Mt @ 5.7 g/t Au for 2.2 Moz of contained gold
31.1 Mt @ 2.1 g/t Au for 2.1 Moz of contained gold
Total Mineral Resources1 are estimated at:
182.8 Mt @ 2.0 g/t Au for 11.6 Moz of contained gold, comprising:
o Atlantic Gold Operations
63.9 Mt @ 1.1 g/t Au for 2.2 Moz of contained gold
o
o
Leonora Operations
Simberi Operations
27.7 Mt @ 5.6 g/t Au for 5.0 Moz of contained gold
91.3 Mt @ 1.4 g/t Au for 4.3 Moz of contained gold
The 30 June 2020 Ore Reserves and Mineral Resources Statements released to the ASX on 24 August 20209 follow.
1 Mineral Resources are reported inclusive of Ore Reserves
Page 86
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
Overview
St Barbara's Mineral Resources and Ore Reserves position as at 30 June 2020 is summarised and compared with the 2019
statement below.
2019 Ore Reserves
Grade
(g/t)
Ounces
(‘000)
Tonnes
(‘000)
2020 Ore Reserves
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
10,135
2,572
12,707
6,893
18,135
1,058
26,086
‐
‐
‐
6.4
3.7
5.8
1.3
2.4
0.7
2.0
‐
‐
‐
2,073
306
2,379
288
1,375
24
1,687
‐
‐
‐
Grand Total
38,793
3.3
4,066
Project
Gwalia (WA)
Tower Hill (WA)
Total Leonora
Simberi (Oxide)
Simberi (Sulphide)
Simberi Stockpile
Total Simberi
Atlantic Gold (NS)
Atlantic Stockpile (NS)
Total Atlantic Gold
Project
Gwalia (WA)
Tower Hill (WA)
Total Leonora
Simberi (Oxide)
Simberi (Sulphide)
Total Simberi
Atlantic Gold (NS)
Total Atlantic Gold
2019 Mineral Resources
Grade
(g/t)
Ounces
(‘000)
Tonnes
(‘000)
23,690
5,093
28,783
25,862
64,938
90,800
‐
‐
6.3
3.8
5.8
1.0
1.6
1.4
‐
‐
4,775
625
5,400
862
3,335
4,197
‐
‐
22,595
5,093
27,688
18,801
72,459
91,260
63,883
63,883
9,407
2,572
11,979
7,737
22,638
678
31,053
45,070
5,450
50,520
93,552
6.3
3.7
5.7
1.2
2.4
0.6
2.1
1.1
0.5
1.1
2.0
1,892
306
2,198
293
1,765
12
2,070
1,647
89
1,737
6,005
2020 Mineral Resources
Tonnes
(‘000)
Grade (g/t)
Ounces
(‘000)
6.0
3.8
5.6
1.0
1.6
1.4
1.1
1.1
2.0
4,386
625
5,011
630
3,687
4,318
2,227
2,227
11,555
Grand Total
2.5
Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
119,583
9,597
182,832
The Company’s Ore Reserves and Mineral Resources have increased since 30 June 2019 above net mining depletion as a consequence of:
the completion of resource definition drilling at Simberi and subsequent update of Mineral Resources and Ore Reserves (refer ASX
Release 2 March 2020 ‐ ‘Ore Reserves and Mineral Resources Statements for Simberi Gold Mine as at 31 December 2019’).
Corresponding depletion from production for Simberi is therefore for the six‐month period from 1 January to 30 June 2020.
the acquisition of Nova Scotian based Atlantic Gold Corporation in July 2019. The Atlantic Gold Ore Reserves and Mineral Resources
at the time of acquisition was updated as at 31 December 2018 as reported in a March 2019 NI43‐101 Technical Report.
Corresponding depletion from production for Atlantic Gold is therefore for an eighteen month period from 1 January 2019 to 30 June
2020.
the reassessment of Atlantic Gold Mineral Resources at a higher gold price, up from US$1,400/oz at 31 December 2018 to
US$1,800/oz at 30 June 2020.
Page 87
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
Ore Reserves Revisions
Gwalia (‐181,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 30 June 2019 was 10,135,000 t @ 6.4 g/t Au containing
2,073,000 ounces of gold. This has reduced by 181,000 ounces of gold to 9,407,000 t @ 6.3 g/t Au containing 1,892,000 ounces of gold. The
decrease in the Ore Reserve is driven by mining depletion as there was no update to the underlying resource model during the year.
Simberi Oxide and Sulphide (‐103,000 ounces)
The previous publicly reported Proved and Probable Ore Reserve Estimate reported at 31 December 2019 was 34,321,000 t @ 2.0 g/t Au
containing 2,173,000 ounces of gold. This has reduced since 31 December 2019 by 103,000 ounces of gold to 30,376,000 t @ 2.1 g/t Au
containing 2,070,000 ounces of gold. The decrease in the Ore Reserve is driven by mining depletion as there was no update to the underlying
resource model since 31 December 2019.
Atlantic Gold (‐138,000 ounces)
Atlantic Gold Corporation was acquired by St Barbara in July 2019 and Ore Reserves were initially reported in August 2019 based on a March
2019 NI43‐101 Technical Report (with an effective date of 31 December 2018) compiled by Atlantic Gold. The previous publicly reported
Proved and Probable Ore Reserve Estimate reported at 13 March 2019 was 51,950,000 t @ 1.12 g/t Au containing 1,875,000 ounces of gold.
This has reduced since 31 December 2018 by 138,000 ounces of gold to 50,250,000 t @ 1.07 g/t Au containing 1,737,000 ounces of gold. The
decrease in the Ore Reserve is driven by mining depletion for the 18 month period 1 January 2019 to 30 June 2020 as there was no update to
the underlying resource model since March 2019.
Major variance to Ore Reserves 30 June 2019 to 30 June 2020
+1878
‐181
‐103
+46
‐187
6,005
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
)
0
0
0
'
(
s
e
c
n
u
O
+486
4,066
June 2019
Simberi Dec 2019
Reserve Update
Atlantic
Acquisition
Gwalia Depletion Simberi Depletion Atlantic Depletion
Stockpile
Additions
June 2020
Notes on selected movements from left to right (as noted in text above):
1. Atlantic Gold acquisition in July 2019, increase represents Ore Reserve as at 31 December 2018.
2. Simberi depletion from production is for the six month period from 1 January to 30 June 2020.
3. Atlantic Gold depletion from production is for the 18 month period 1 January 2019 to 30 June 2020.Atlantic
Page 88
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
Mineral Resources Revisions
Gwalia (‐389,000 ounces)
The Gwalia Mineral Resources have been depleted for mining and sterilisation. The previous publicly reported Measured, Indicated and
Inferred Mineral Resource Estimate reported at 30 June 2019 was 23,690,000 t @ 6.3 g/t Au containing 4,775,000 ounces of gold. This has
decreased by 389,000 ounces of gold to 22,595,000 t @ 6.0 g/t Au containing 4,386,000 ounces of gold. The depletion figure includes 143,000
ounces of gold that should have been depleted in 2018 and 2019 but was overlooked. Depletion processes have been reviewed to prevent a
recurrence of this oversight.
Simberi Oxide (‐62,000 ounces)
The Simberi Oxide Mineral Resources have been depleted for mining. The previous publicly reported Measured, Indicated and Inferred Oxide
Mineral Resource Estimate reported at 31 December 2019 was 20,551,000 t @ 1.0 g/t Au containing 692,000 ounces of gold (refer ASX Release
2 March 2020 ‐ ‘Ore Reserves and Mineral Resources Statements for Simberi Gold Mine as at 31 December 2019’). This has decreased since 31
December 2019 by 62,000 ounces of gold to 18,801,000 t @ 1.0 g/t Au containing 630,000 ounces of gold.
Simberi Sulphide (‐23,000 ounces)
The Simberi Sulphide Mineral Resources have been depleted for mining. The previous publicly reported Measured, Indicated and Inferred
Sulphide Mineral Resource Estimate reported at 31 December 2019 was 72,985,824,000 t @ 1.6 g/t Au containing 3,710,000 ounces (refer ASX
Release 2 March 2020 ‐ ‘Ore Reserves and Mineral Resources Statements for Simberi Gold Mine as at 31 December 2019’). This has decreased
since 31 December 2019 by 23,000 ounces of gold to 72,459,000 t @ 1.6 g/t Au containing 3,687,000 ounces of gold.
Atlantic Gold (‐144,000 ounces)
Atlantic Gold Corporation was acquired by St Barbara in July 2019 and Mineral Resources were initially reported in August 2019 based on a
March 2019 NI43‐101 Technical Report (with an effective date of 31 December 2018) compiled by Atlantic Gold. The previous publicly reported
Measured, Indicated and Inferred Mineral Resource Estimate reported at 13 March 2019 was 63,470,000 t @ 1.2 g/t Au containing 2,371,000
ounces of gold. This has reduced by 144,000 ounces of gold to 63,883,000 t @ 1.1 g/t Au containing 2,227,000 ounces of gold. The resource has
been depleted for mining for the 18 month period 1 January 2019 to 30 June 2020 at the Touquoy pit (‐207,000 ounces) and reported at a
higher gold price of US$1,800/oz, up from US$1,400/oz. The higher gold price has contributed an additional 63,000 ounces to resources.
Major variance to Mineral Resources 30 June 2019 to 30 June 2020
+2371
+63
‐389
‐161
‐207
11,555
+281
9,597
13,000
12,500
12,000
11,500
11,000
10,500
10,000
9,500
9,000
8,500
8,000
)
0
0
0
'
(
s
e
c
n
u
O
June 2019
Simberi Dec 19
Resource Update
Atlantic
Acquisition
US$1800 Gold
Price Atlantic
Mining Depletion
Gwalia
Mining Depletion
Simberi
Mining Depletion
Atlantic
June 2020
Notes on selected movements from left to right (as noted in text):
1. Atlantic Gold acquisition in July 2019, represents Mineral Resource as at 31 December 2018.
2. Simberi depletion from production is for the six month period from 1 January to 30 June 2020.
3. Atlantic Gold depletion from production is for the 18 month period 1 January 2019 to 30 June 2020.
Page 89
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
Ore Reserves Statement as at 30 June 2020
Project
Gwalia, (WA)
Tower Hill, (WA)
Simberi Oxide, (PNG)
Simberi Sulphide, (PNG)
Simberi Stockpiles, (PNG)
Atlantic Gold (NS)
Atlantic Stockpile (NS)
Proved
Gold
(g/t)
8.0
‐
1.33
2.6
0.57
1.2
0.5
Tonnes
('000)
1,583
‐
1,702
1,386
678
21,370
5,450
Probable
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
409
‐
73
114
12
796
89
7,824
2,572
6,035
21,253
‐
23,700
‐
5.9
3.7
1.13
2.42
‐
1.1
‐
1,483
306
220
9,407
2,572
7,737
1,651
22,638
‐
678
851
45,070
‐
5,450
Total
Gold
(g/t)
Ounces
('000)
6.3
3.7
1.2
2.4
0.57
1.1
0.5
1,892
306
293
1,765
12
1,647
89
Total All Projects
32,168
1.4
1,493
61,384
2.3
4,511
93,552
2.0
6,005
Notes
1. Ore Reserves are based on a gold price of: Gwalia (AU$1,600/oz), Tower Hill (AU$1,250/oz), Simberi and Atlantic Gold
(US$1,300/oz).
2. Cut‐off Grades Gwalia (4.7 g/t Au), Tower Hill (2.8 g/t Au), Simberi Oxide (0.5 g/t Au), Atlantic Gold (0.3 g/t Au – 0.5 g/t Au).
3. Mineral Resources are reported inclusive of Ore Reserves.
4. Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
Mineral Resources Statement as at 30 June 2020
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)
3,991
6.4
819
17,403
Tower Hill, (WA)
‐
Simberi Oxide, (PNG)
2,197
Simberi Sulphide, (PNG)
3,119
Atlantic Gold (NS)
24,281
‐
1.2
1.5
1.1
‐
90
168
868
4,604
8,062
52,642
32,399
6.0
3.9
1.1
1.6
1.1
3,353
1,201
574
280
489
8,542
2,772
16,699
1,102
7,203
5.5
3.3
0.9
1.4
1.1
214
22,595
6
4,386
51
260
747
256
5,093
18,801
72,459
63,883
3.8
1.0
1.6
1.1
625
630
3,687
2,227
Total All Projects
33,587
1.8
1,945 115,110
2.2
8,081
34,134
1.4
1,529 182,832
2.0
11,555
Notes
1. Mineral Resources are reported inclusive of Ore Reserves.
2. Cut‐off Grades Gwalia (2.5 g/t Au), Tower Hill (2.5 g/t Au), Simberi Oxide (0.4 g/t Au), Simberi Transitional and Sulphide
(0.6 g/t Au), Atlantic Gold (0.3 g/t Au)
3. Simberi and Atlantic Gold Mineral Resources are reported constrained by a US$1,800/oz pit shell.
4. Data is rounded to thousands of tonnes and thousands of ounces. Discrepancies in totals may occur due to rounding.
Page 90
Ore Reserves and Mineral Resources Statement as at 30 June 2020
ST BARBARA LIMITED 2020
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. 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 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. Ross Halatchev who is a Member
of the Australasian Institute of Mining and Metallurgy. Ross Halatchev 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”. Ross Halatchev 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 91
SHAREHOLDER
INFORMATION
ST BARBARA LIMITED 2020
Shareholder Information as at 24 August 2020
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 24 August 20201.
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
BNP PARIBAS NOMINEES PTY LTD
MR COLIN PETROULAS
BNP PARIBAS NOMS PTY LTD
ROVER INVESTMENTS PTY LTD
CS THIRD NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED‐GSCO ECA
AMP LIFE LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR ROBERT SCOTT VASSIE
SANDHURST TRUSTEES LTD
CRANFIELD PROPERTIES PTY LTD
MR TRUNG VAN LY
Total top 20 holders of ordinary fully paid shares
Total remaining holders
Total
Shares
293,644,074
147,140,677
73,311,732
24,971,620
13,147,979
7,440,000
7,210,408
7,190,000
6,899,073
4,981,978
3,351,892
2,253,851
2,188,972
2,061,498
1,587,766
1,157,693
948,247
846,311
805,033
762,583
% of Issued
Capital
41.74
20.91
10.42
3.55
1.87
1.06
1.02
1.02
0.98
0.71
0.48
0.32
0.31
0.29
0.23
0.16
0.13
0.12
0.11
0.11
601,901,387
101,631,526
703,532,913
85.55
14.45
100.00
1 The 2020 Directors’ and Financial Report was signed on 24 August 2020.
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 92
Shareholder Information as at 24 August 2020
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 $3.41 per share1
Substantial Shareholders2
Name
Van Eck Associates Corporation
Vanguard
ST BARBARA LIMITED 2020
Total Holders
Shares
% of Issued
Capital
6,431
6,111
1,926
1,638
2,927,777
15,755,950
14,686,429
42,997,638
133
627,165,119
16,239
703,532,913
0.42
2.24
2.09
6.11
89.15
100.00
Total Holders
1,155
Shares
56,728
Minimum
Parcel Size
147
Date notice
released on ASX
Shares
% of Issued
Capital
22 April 2020
69,638,836
13 November 2019
34,989,266
9.90%
5.00%
End of Annual Report
1 Close price on 24 August 2020
2 As notified by the substantial shareholders to the ASX as at 24 August 2020
Page 93
BOARD OF DIRECTORS
T C Netscher
C A Jetson
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
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
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
stbarbara.com.au