ST BARBARA LIMITED — AGM Information 2005

Nov 15, 2005

St Barbara Mines Limited

ASX -SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to:

Eduard Eshavs Managing Director & CEO $\circ$ or

Ross Kennedy Company Secretary

	St Barbara Mines Limited
	ACN 009 165 066
	Level 2, 16 Ord Street
	West Perth WA 6005
Telephone	$+61894765555$
Facsimile	$-+61894765500$
Email	perth@stbarbara.com.au
Website	www.stbarbara.com.au

2005 Annual General Meeting

Chairman's Address

In the 12 months since our last annual meeting, St Barbara has achieved a high level of success. I will not repeat the details here they have been fully reported in the Company's ASX announcements and the Annual Report.

Suffice it to say that St Barbara's share price has risen from 6.5 cents on 16 November 2004 to 28.5 cents at the close of trade on 15 November 2005, a 339% gain. This compares with a 42% gain in the ASX Resources Index for the same period and a 65% gain in the Intersuisse Resources Index for the period from 30 June 2004 to 30 September 2005, which tracks a cross-section of actively traded resource companies with a market capitalisation of between 10 and 500 million dollars.

The Australian share market continues at very strong levels, supported in the resources sector by the strong commodities cycle and in all sectors, by the substantial level of superannuation and savings money that is available for investment.

The price of gold in Australian dollar terms is currently at its highest level since the late 1980's, and most market analysts and fund managers are anticipating this trend will continue.

However, history has taught us that such strong and receptive market conditions do not and cannot last forever. St Barbara is therefore utilising its cash flows and extensive landbank of exploration potential to consolidate its position and enable the Company to take advantage of any growth opportunities that become available.

The purchase of the Sons of Gwalia gold division was such an opportunity. The assets were in a distressed state in the sense that they were up for sale by a company administrator. The bidding process was open and competitive.

St Barbara paid $2.3 million to buy these assets and took on environmental bond liabilities of $35.7 million. The purchase was not without its risks. Within the confines of availability of data room material, we conducted extensive due diligence on the properties. Our conclusion was that we had a significant opportunity to reinstate St Barbara as a significant gold producer within a short period of time.

In the first six completed months since the purchase of the Sons of Gwalia gold assets, the following headlines summarise the value derived from St Barbara's management of those assets:

• 137,200 ounces of gold sold; $\bullet$
• operational improvements and efficiencies and higher than anticipated grade mined, combined to $\bullet$ reduce the budgeted cash cost of producing each ounce from in excess of $400 to an actual cost of $343:
• the Southern Cross mining operations which were due to close this month have been extended to $\bullet$ June 2008 with a current annual forecast production in the range of 180,000 to 200,000 ounces at $435 per ounce;
• $17 million of net operating cash flow has been generated for use as working capital; ×
• surplus assets have been sold for $3.9 million;
• the South Laverton assets have recently been sold for a consideration of $16.7 million; and
• the fast tracking of additional drilling at Gwalia Deeps and Tarmoola is directed at establishing a new mineral resource and reserve statement by the end of March 2006.

St Barbara's current strategic objective is to develop a mining reserve from Gwalia Deeps and Tarmoola that can produce initially 280,000 ounces of gold per annum commencing in the December quarter 2007.

St Barbara recently announced the sale of all its Meekatharra assets and landholdings to Mercator Gold plc for a consideration of A$18 million plus replacement of A$3 million in bonds. The sale is subject to satisfactory due diligence and Mercator completing a minimum capital raising of around A$19 million to fund future exploration. We believe this consolidation of tenements around the Bluebird plant will optimise future development at Meekatharra. St Barbara's retained investment in Mercator (which is likely to be approximately 20%) will allow us to share in future success by Mercator at Meekatharra.

We will be left with a similar opportunity with our retained investment of 19.9% in Saracen Mineral Holdings Limited when the sale of the South Laverton assets and exploration properties has been completed.

The Meekatharra and South Laverton assets and ground holdings have been sold to allow St Barbara to better allocate its investment and management priorities. The Company's principal objectives for the coming twelve months are to:

• establish and maintain increased production from the Southern Cross areas; ٠
• assess the viability of the Leonora operations at Gwalia and Tarmoola; and $\bullet$
• continue with our focused review of exploration targets and assessment of investment and $\bullet$ acquisition opportunities as they become available.

All at St Barbara are proud of the past year's achievements and are excited about the future. While it is true there has been a strong gold price since we bought the Sons of Gwalia gold division, the fact is -

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.Tribural and the Amazin service and the tribute than a service

St Barbara was able to take advantage of market conditions. It is critical that we continue to work hard at positioning St Barbara to maximise opportunities for success.

The Company will therefore continue with its plans to consolidate and grow in the gold sector and seek to build a resource base in nickel and copper.

Exploration will continue at both grass roots and in the vicinity of historical producing fields. Currently, St Barbara has 8 drilling rigs in operation and an exploration drilling budget of $13.4 million for the current financial year. This expenditure is funded entirely by free cash flow from current operations.

I now invite the Managing Director and CEO, Eduard Eshuys to outline the current position of St Barbara's exploration and operational activities and the program for the rest of this financial year. There will be time at the conclusion of the formal agenda of this meeting for shareholders to ask questions. Copies of this Chairman's address and the Managing Director's presentation have been lodged with the ASX for the benefit of all shareholders and the investing public.

Mr Eduard Eshuys' presentation for the 2005 AGM is being separately released to the market today, 16 November 2005

Thankyou Ed. As I mentioned, there will be an opportunity shortly, for questions from the floor.

On behalf of the Board I would like to record with appreciation, the achievements over the past year of Ed Eshuys, his management team and all St Barbara employees, especially those former Sons of Gwalia personnel who joined the Company last March. The hard work and application shown by all staff and external advisers has enabled St Barbara to have achieved significant success in a short period of time.

I also would like to mention the strong level of shareholder support for St Barbara over the past year. A large number of our shareholders have remained with the Company for many years, especially through difficult times. Their loyalty is appreciated. The past year has seen the Company rationalise the number of shareholders to 5,701, down from the previously high level of 10,434.

In conclusion, the Board is committed to efforts to increase shareholder wealth. The first phase of this process has seen the restoration of financial stability for St Barbara and a significant increase in the share price. This will need to continue as we move to consolidate and strive to build up the resource and reserves base. We look forward to continuing shareholder and investor support.

Colin Wise Chairman

16 November 2005