ST BARBARA LIMITED — AGM Information 2004

Nov 28, 2004

ST BARBARA MINES LIMITED

ACN 009 165 066

ASX SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to:

Eduard Eshuys

Managing Director Telephone $(08)$ 9476 5555 Overseas +61 8 9476 5555

St Barbara Mines Limited ACN 009 165 066 Level 2, 16 Ord Street West Perth Western Australia 6005 Telephone $(08)$ 9476 5555 Overseas +61 8 9476 5555

2004 Annual General Meeting Chairman's Address

When the reconstituted St Barbara Board took office last July, a number of key strategic decisions were required. Funds had to be raised to enable pressing debts to be met in an orderly The Annual Report and recent stock exchange manner. announcements have described the outcome of these decisions.

The Board concluded that the essential longer term assets of St Barbara were its 100% owned Bluebird treatment plant and Paddy's Flat tenements at Meekatharra. It was decided that after discharging debts, the remaining proceeds from realisation of assets should be immediately dedicated to unlocking the inherent value in the presently unused plant, and outlining reserves at Paddy's Flat.

The treatment plant has been well maintained and is ready to return to productive use. Exploration success by St Barbara and its co-ventures in the Meekatharra area would therefore allow a rapid return to operational cash flows. Negotiations to lease the plant short term are almost finalised. This will assist in maintaining the plant in operational mode.

After discharging all company debt, the proceeds from the recent sales of St Barbara's available shares in NuStar and from the sale of the Paulsens royalty, will be applied to the cost of exploring the Company's 100% owned properties for the balance of this financial year and investigating opportunities.

The divestment of St Barbara's interest in NuStar and Paulsens is described in detail in the notice of today's meeting. Two aspects are required to be voted on by shareholders - the sale of St Barbara's royalty entitlement over future Paulsens' production, and the share swap of up to 240 million NuStar shares owned by St Barbara in exchange for St Barbara shares owned by shareholders who have a particular reason to want a direct interest in NuStar

Implementation of the share swap and subsequent cancellation of shares would facilitate a reduction of St Barbara's share capital from 715 million shares to 523 million This will help stabilise the share shares. register and facilitate a managed programme of capital reduction, both of which are designed to better support future fund raising and share capital appreciation.

secondary benefit will be the A rationalisation of the Company's share register. St Barbara has approximately 11,000 shareholders of whom more than 7,800 held unmarketable parcels and over 2,000 have changed address without notifying the share registrar of a new address.

An immediate consequence is the continuing substantial cost of maintaining such an inefficient share register, including the significant expense of sending information to shareholders. The postage costs alone for mailing today's AGM materials exceeded $100,000.

I turn now, to the future.

St Barbara is in a strong position to re-emerge as a gold producer through successful exploration:

• We will shortly be entirely debt free;

• We have cash in the bank to fund all corporate and exploration activities;

• We either own or have an interest in some of the most prospective ground at Meekatharra, with access to our own treatment facilities. Confirmation of economic reserves at Paddy's Flat should unlock significant value for St Barbara shareholders;

• We have a carried interest in 6.5 million dollars worth $\alpha$ exploration on highly prospective areas in the Meekatharra region. This funding is to be provided by interest earning parties before next July under farm-out arrangements concluded earlier this year;

• We are being presented with some significant opportunities to either joint venture highly purchase or prospective exploration properties which have the potential to form a significant building block $for$ company growth. Some of these areas include gold production activities;

• We are fortunate to have RCF as a substantial shareholder. $RCF$ is supportive of our management's exploration and operating expertise, and growth strategies;

• The Board believes that Ed Eshuys and his new management team have the expertise and experience to help return St Barbara to the list of exploration and mining companies which will be in demand on the ASX and the AIM market in London.

• Ed's impressive track record οf success is well known $to$ the investment community. He led the exploration teams that discovered several major gold deposits in Western Australia, including Plutonic, Bronzewing and Jundee. All are in areas which St Barbara has targeted for further exploration. Ed also brought Bronzewing, Jundee and the Cawse nickel mine into production. He has the credentials this Company

needs most of all. He has a true explorationist's vision and drive, he has achieved technical and operating success, and he brings the benefit of all this to St Barbara.

• The current climate in the exploration sector in Australia is attractive and dynamic. The gold price and key base metal prices continue to be strong and, in the case of gold, has reached a 16 year high in US dollar terms. It is unfortunate that such increase does not translate as well in Australian dollar terms. The impact of the future price scenario on the Australian gold industry is very much dependant on the future strength of the US dollar;
• Finally, indications are that the current positive resources cycle in Australia and worldwide will continue for some time yet.

At the end of the formal business segment of this meeting, Ed will more fully describe the present position of the Company and our There will be time for future strategy. shareholders to ask questions. Details of this presentation will be lodged with the ASX for the benefit of all shareholders and the investing public.

In conclusion, I need $\mathbf{t}$ note with appreciation the significant contribution over the past 4 months of the new St Barbara management team and staff led by Ed Eshuys and Ross Kennedy, the newly appointed CFO and Company Secretary. They have all worked hard in difficult circumstances.

The Board looks forward to continuing shareholder support in its efforts to restore St Barbara's reputation and return the Company to a growth position where value is added and wealth enjoyed $bv$ all shareholders.

We want the name of this Company to be once again favourably associated with its namesake St Barbara, the acknowledged patron saint of miners.

Colin Wise Non-Executive Chairman

29 November 2004