ST BARBARA LIMITED — AGM Information 2003

Nov 24, 2003

ACN 009 165 066

CHAIRMAN'S ADDRESS

Annual General Meeting

25 November 2003

Enquiries regarding this report may be directed to:

Stephen W. Miller

Executive Chairman Telephone $(08)$ 9476 5555 Overseas +61 8 9476 5555

$\alpha$

Colin G. Jackson Investor Relations Telephone 0417 929 107

St Barbara Mines Limited Level 2. 16 Ord Street West Perth Western Australia 6005 Telephone (08) 9476 5555 Overseas +61 8 9476 5555

Dollar values in this report are Australian Dollars unless otherwise stated.

My address today focuses on the key elements of the business, namely:

• the balance sheet:
• our substantial landbank at Meekatharra a real hidden asset:
• current production opportunities;
• two development projects, namely Paddys Flat and Paulsens
• the Defiance merger status; and finally
• corporate governance.

The Balance Sheet

At the 30 June 2003 balance date, working capital was negative $7.4 million. Current liabilities were dominated by $15.2 million in interest bearing debt, of which $12.0 million was a secured loan from RCF, a shareholder and supporter of the group for nearly two years. The balance of current liabilities is normal hire purchase and lease arrangements.

Today our position is markedly improved.

We realised the Dioro investment for $5.0 million. The debt-for-equity swap with RCF and the partial conversion of the Ocean Resource convertible loan both approved by shareholders today have now effectively reduced interest bearing debt by a total of $16.4 million.

Our remaining interest bearing debt is only $4.4 million and is represented by a convertible loan which can, in any case, be exercised into stock at 8 cents per share.

ACN 009 165 066

Meekatharra Landbank

In the period April to July 2003, Gold Fields completed 28,300 metres of drilling on the Tough Go and Turn-of-the-Tide mineralised lines within the Reedys area. Although they withdrew from the joint venture effective this month, having spent $760,000 without earning an interest, they advanced a number of targets to the RC drill testing stage.

This 26 km2 area has now been farmed out to Elara Mining Limited. The terms of the new Reedys joint venture allow Elara to earn a 51% interest over two years by the expenditure of $3.25 million. An additional 14% interest may be earned by a further $2.0 million expenditure.

Exploration will commence in early 2004 with RC drilling of targets along both the Reedys and Tough Go lines of mineralisation.

Elara has also farmed-in to the 120 km2 Polelle area. This is 15 kilometres from the treatment plant, where the Company established an inaugural Inferred resource of 65,000 ounces at Mulla Mulla deposit earlier this year. The terms of the Polelle joint venture allow Elara to earn a 51 percent interest over two years by the expenditure of $3.0 million. An additional 14 percent interest may be earned by a further $2.0 million expenditure. Exploration is about to commence with

RC drilling at the Mulla Mulla deposit and aircore drilling along strike to the south.

St Barbara is manager of the exploration programmes in both the Reedys and Polelle joint ventures, allowing both parties to benefit immediately from established infrastructure and a substantial data base and knowledge base.

The joint venture partner also becomes responsible for nearly $200,000 in property rates and rents this financial year and $300,000 annually during the earn-in phase.

A third joint venture on our ground, the Burnakura joint venture, covers the 7 kilometre long Alliance line of gold mineralisation. The 70 percent farm-out arrangements are subject to a $2 million expenditure commitment over 30 months. The joint venture partner proposes the immediate development of the 53,000 ounce NOA 2 underground resource. Both parties benefit from existing infrastructure, in particular access to the Company's Bluebird treatment plant, 35 kilometres to the north.

In aggregate, these three joint ventures have medium term commitments totalling $8.25 million which represents net potential value to the Company exceeding $9 million after allowance for other costs.

Together with our own activity at Paddys Flat, this will result in exploration and development at Meekatharra returning to a three year high.

Meekatharra Production

Feed to the treatment plant for the four months of this financial year has been predominantly from Paddys Flat No 1, No 2 and No 3 low grade stockpiles with throughput rates close to 3.0 million tonnes per annum.

The average grade at 0.85 $g/t$ and recovery of 82% has resulted in direct mine site costs averaging $469 per ounce against revenue averaging $546 per ounce. Site surplus cashflow of nearly $2 million takes the total to $6.4 million since the commencement of these operations nine months ago. From a profit and loss accounting perspective, 50 percent of the Paddys Flat acquisition cost is amortised against this production.

Whilst the Paddys Flat stockpiles are scheduled to be depleted in February 2004, low grade stockpiles from Bluebird and the development of the Batavia open pit will comprise the balance of planned production for the 2003/2004 financial year end.

ACN 009 165 066

Development Programme - Paddys Flat

Production in the immediate future at Meekatharra will be derived from the development of Paddys Flat higher grade underground Prohibition, Vivian and Consols orebodies.

The current plan envisages Prohibition developed as a 5 metre by 5.2 metre decline. An initial 2,200 metres will be driven to a vertical depth of 300 metres from the base of the pit.

The decline route is designed to allow the upper levels of the high grade Vivians orebody to be accessed six months after commencement. The high grade Consols orebody will be accessed later. The mining rate is projected at 30,000 tonnes per month, recovering approximately 165,000 ounces over a three year period.

Production will be supplemented from the development of the lower grade but larger tonnage Mickey Doolan open pit, commencing approximately three months after commitment to the Prohibition portal. A production rate of up to 60,000 tonnes per month is envisaged.

At Prohibition a four hole geotechnical programme has been completed. Samples were also generated for metallurgical testwork to provide data for the design of a partially refractory flowsheet.

The holes also indicated possible extensions to the orebody and, as a consequence, a 21 hole (7,500 metre) drill programme was commenced to assess the potential of down plunge resource extension.

Eleven holes are complete, with results available on eight. The banded iron formation and ore zones are as predicted by the model, with the deepest completed hole 120 metres down plunge from the resource boundary. Extensions outside the predicted model have also been recorded.

Two rigs are currently on site with drilling anticipated to be complete mid-December 2003. The deepest holes are targeted 300 metres down plunge.

The block model is being progressively updated and following completion of the programme will be subject to external review by Snowdens.

The Notice of Intent for the commencement of mining is essentially complete.

Development Programme - Paulsens Project

You will recall that Paulsens was originally conceived as a large open cut mine. However, the waste-to-ore strip ratio of 17 to 1 resulted in substantial earthmoving activity both pre-production and also during the first two years of operations. The net result was a project that absorbed $58 million in capital prior to achieving positive cashflows.

Whilst a Newmont or Placer Dome could have proceeded on this basis because of their large capital base, the situation required a more innovative approach from St Barbara.

The project has now been re-engineered as a high grade shallow underground mine. The new resource grade of $15.7$ g/t will result in a diluted mill feed grade of 12.2 g/t on average. This high grade low tonnage scenario allows the ore to be trucked to a toll treatment facility thereby substantially reducing initial capital costs.

ACN 009 165 066

Whilst the new resource contains approximately 40 percent less ounces. the financial outcome is markedly superior, with the project absorbing only a net $14 million in capital before reaching a positive cashflow.

The high grade resource and proposed mining methods have each been independently reviewed.

With the project redefined, the next step was recapitalisation of the balance sheet.

Paulsens is owned by St Barbara subsidiary company Taipan Resources. St Barbara has financed Paulsens since the Taipan acquisition in 2001 with St Barbara advancing a total of $17.6 million in funding. Included in this amount is $7.3 million of debt inherited at the time of the acquisition.

To advance the project, St Barbara will accept equity for the debt, and Taipan, to be re-named NuStar Mining Corporation, has received new equity commitments totaling $21 million. This comprises an $18 million institutional placement, which was completed three weeks ago, and a $3 million underwritten Share Purchase Plan which closes on 12 December 2003.

Whilst St Barbara's interest will be diluted from 84 percent to 54 percent, the Paulsens Project, as a consequence, will be fully funded into production at an annualised rate approaching 100,000 ounces per annum within fifteen months of commitment.

To complement the engineering, balance sheet and ownership changes, there will also be a new Board, with three non-executive directors joining myself and Kevin Dundo on the board of NuStar. These new directors are former Normandy/Newmont executives whose involvement and experience with the Callie project - a project which has significant geological similarities to Paulsens $-$ will be invaluable.

The transitions to the project and the Company are subject to shareholder approval at the Taipan Annual General Meeting which is to be held on 12 December 2003.

Two sequential drill programmes will commence as soon as practical after the financial close. One programme will target approximately 125 metres below the surface in an area selected for a 50,000 tonne bulk sample. The second programme will target the projected down plunge orebody extension below 200 metres vertical.

In total, 59 drill holes are programmed in the first four months after project commitment. The expenditure incurred at this point represents less than 10 percent of the funds raised. Together with the mining of the 50,000 tonne bulk sample, these elements are integral to the risk mitigation programme.

The elegance of the strategy is that gold sales from the major sample, estimated at $13 million, partly fund the development.

The projected cashflow in the first full year of operations is estimated at over $20 million, of which St Barbara's share is 54 percent. There are no interest payments because the new company will be debt free, and tax in the early years will be minimal due to the availability of carried forward tax losses.

Overall, an elegant and profitable solution to the development of Paulsens.

ACN 009 165 066

Defiance Merger Status

Shareholders will recall the three way merger proposal between St Barbara, Midas and Geomague Explorations announced in January 2003. Shareholders will also recall the revision announced in April 2003 necessitated by the extremely difficult equity markets that prevailed at the time.

Midas and Geomaque subsequently merged to form Defiance Mining Corporation, which is listed on the Toronto Stock Exchange. One of the original concepts behind the merger, namely access to deeper capital markets, has certainly proven to be accurate with Defiance raising a total of Canadian $36.8 million on four occasions since May 2003. This has occurred in parallel with Defiance recording significant improvements in grade and contained ounces at their Tasiast Project in Mauritania.

More recently two new directors have been appointed to the Board, namely Sir Sam Jonah; the chief executive of Ashanti Goldmines Limited for many years; and George Salamis. Having completed these appointments, Defiance intends to establish an independent committee to review the revised second stage of the Defiance merger proposal.

Whilst the precise terms of reference are still to be set, the philosophy behind the original merger remains intact. The actions taken by St Barbara and described earlier in this address are designed to re-establish the business as one of sustainable growth. The results of these actions are expected to be a positive influence on future discussions on merger terms.

Corporate Governance

Corporate governance is a subject which seems to occupy much of the Australian Financial Review these days.

It is this Company's objective to expand the Board from four members to six, with the appointment of a further two non-executive directors. Importantly, one of these directors is targeted to be non-executive Chairman, thereby allowing me to focus solely on the Managing Director/Chief Executive role. We anticipate confirming both appointments in the immediate future.

In Summary

Whilst 2003 was a difficult year for the Company, the initiatives now in place:

• $16.4 million of debt reduction.
• Paulsens fully funded into a development Ä capable of generating $20 million per annum cash flow
• progress at Paddys Flat, and $\bullet$
• $8.25 million in potential expenditure $\bullet$ by others on Meekatharra tenements

are cause for much optimism.

25 November 2003