ST BARBARA MINES LIMITED

ACN 009 165 066

ASX SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to:

Stephen W. Miller

Executive Chairman Telephone $(08)$ 9476 5555 Overseas +61 8 9476 5555 $\alpha r$ 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.

Attached are the Company's audited financial statements for the year ended 30 June 2003.

Stephen W. Miller Executive Chairman

30 September 2003

ST BARBARA MINES LIMITED

ABN 36 009 165 066

FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2003

DIRECTORS REPORT

Your Directors present their report on the consolidated entity consisting of St Barbara Mines Limited ("Company" or "parent entity") and the entities it controlled at the end of, or during, the financial year ended 30 June 2003 and the Audit Report thereon.

DIRECTORS

The names of Directors who held office during the financial year or up to the date of this report:

Stephen W. Miller (aged 43) - Executive Chairman CA, BBus FAICD

Appointed director on 12 March 1999

Mr Miller is a chartered accountant by profession with over twenty years' experience in the corporate and financial arena. Since 1992. Mr Miller has specialised in the mineral resources sector and has been executive director and founder of a number of resource companies, including Western Metals Limited, East Africa Gold Corporation and Hargraves Resources NL. Mr Miller is also chairman of Strata Mining Corporation Limited. St Barbara's major shareholder. Mr Miller brings valuable management, corporate and financing experience to the board of St Barbara. Mr Miller is also executive chairman of Taipan Resources NL, Defiance Mining Corporation and a board member of the Australian Gold Council.

G. Brian Speechly (aged 70) - Non-Executive Director

FAusIMM Appointed director on 9 July 1997 Member of Remuneration Committee

Mr Speechly is a consultant with over 40 years of experience in the mining industry. He spent more than 24 years spent in technical and managerial roles with major international mining companies. For the past 18 years. Mr Speechly has provided consulting services to a wide range of clients. Over the course of his career. Mr Speechly has been involved in several hundred mining projects and is recognised in Australia and overseas as an expert in both underground and open cut mining and design, equipment selection and practical, workable, low cost mining methods. Mr Speechly is also a director of Centamin Egypt Limited.

Kevin A. Dundo (aged 51) - Non-Executive Director

LLB, B.Com, FCPA Appointed director on 26 March 2002 Chairman of Audit Committee and Remuneration Committee

Mr Dundo is a corporate lawyer and practices in the commercial and corporate areas and has considerable experience in the mining area and the financial services industry. Mr Dundo has played a major role in providing advice in the corporate law area to mining companies and is also a director of Taipan Resources NL, Defiance Mining Corporation and Midas Gold plc.

Henderson (Hank) G. Tuten (aged 55) - Non-Executive Director

B.A. (Econ) Appointed director on 26 March 2002 Member of the Audit Committee

Mr Tuten is actively involved in a consolidated entity of private equity funds as a founding partner. These are the Resource Capital Funds, the e-Century Capital Fund and the CIP Fund. He spent over 15 years with the N.M. Rothschild and Sons Consolidated entity. During that period, he was the chief executive officer of Rothschild Australia Limited, Rothschild North America Inc. and Continuation Investments N.V., the private equity vehicle for Rothschild continuation Holdings A.G. Consolidated entity. Prior to that, he was a commercial banker with the Philadelphia National Bank. Mr Tuten serves on several boards in connection with his investment activities. He graduated from the University of Virginia with B.A. in Economics.

Mr James T. McClements was an alternate director to Mr HG Tuten from the beginning of the financial year until his resignation on 10 July 2003.

PRINCIPAL ACTIVITIES

The principal activities of St Barbara Mines Limited and entities controlled by it (collectively known as the consolidated entity) during the financial year ended 30 June 2003, were gold production, gold, oil and mineral exploration, pastoral activities, and investment.

RESULTS OF OPERATIONS

The consolidated operating loss after tax for the year ended 30 June 2003 attributable to members of the Company was \$32,733,000 (2002: \$17,894,000 loss).

The current year loss includes the impact of a change in accounting policy effective 1 July 2002 to write off a total of \$9,897,000 in current and previous exploration and evaluation expenditure. See Note 1(d) for further details.

Commentary on the operations and the results of those operations are set out below:

Production and Sales Statistics			12 months to 30 June 2003	12 months to 30 June 2002
$\overline{\phantom{a}}$	Ore Mined	tonnes	483.041	1,386,084
$\overline{\phantom{a}}$	Ore Milled	tonnes	2.284.599	1.888.829
$\overline{\phantom{m}}$	Head grade	g/t	1.47	1.84
$\overline{\phantom{m}}$	Recovery	%	89.7	92.2
$\overline{\phantom{a}}$	Gold produced	ounces	96,611	103,217
$\qquad \qquad -$	Gold sold	ounces	98,080	105.844
$\overline{\phantom{m}}$	Cash cost	\$/ounce	465	553

Mining activity at Meekatharra underwent significant transition during the year. Following completion of mining at Caledonian (September 2002). Great Northern Highway (October 2002) and Gibraltar (February 2003), the current focus has turned to evaluation of the underground potential of the Paddys Flat tenement area. Current mill feed is from low grade stockpiles at Paddys Flat.

DIVIDENDS

The Directors do not recommend the payment of a dividend.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:

On 8 July 2002, the Company listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
On 15 July 2002, the Company issued 774,588 options with an average exercise price of \$0.2122 and an expiry date of 15 July 2005 in satisfaction of the Resource Capital Fund II LP ("RCF") monthly facility fee.
On 15 July 2002, the Company issued 1.406.614 fully paid ordinary shares at prices ranging from \$0.2125 to \$0.2263 in satisfaction of the RCF interest and standby fee.
On 15 July 2002, the Company issued 1,846,628 fully paid ordinary shares to Grimwood Davies Pty Ltd at a price of \$0.2143 per share in satisfaction of drilling services provided.
On 13 August 2002, the Company issued 800,408 options with an average exercise price of \$0.2122 and an expiry date of 13 August 2005 in satisfaction of the RCF monthly facility fee.
On 21 August 2002, the Company issued 34,333,332 fully paid ordinary shares at \$0.165 per share to raise \$5.6 million (before issue expenses). In addition one listed option was issued for each new share issued. The options have an exercise price of \$0.30 per option and expire on 29 February 2004.
On 6 September 2002, the Company issued 800,408 options with an average exercise price of \$0.2122 and an expiry date of 6 September 2005 in satisfaction of the RCF monthly facility fee.
On 6 September 2002, the Company issued 5,000,000 options with an exercise price of \$0.30 and an expiry date of 29 February 2004 as a placement facility fee.
On 8 October 2002, the Company announced that it had entered into an agreement to acquire the Paddys Flat mining area from a subsidiary of Barrick Gold for \$4.5 million plus a royalty of \$10 per ounce on production exceeding 50,000 ounces.
On 2 December 2002, the Company announced that the convertible notes due on 30 November 2002 by Taipan Resources NL, were redeemed in full on 29 November 2002. The redemption by Taipan Resources NL was funded by an increase in the existing loan from the Company.
On 9 January 2003, the Company announced a proposed business combination between the Company and Geomague Explorations Ltd (which will include Midas Gold plc) to create a new growth oriented, international gold mining and exploration company to be named Defiance Mining Corporation and incorporated in Canada.
On 31 January 2003, the Company issued 15,000,000 fully paid ordinary shares at a price of \$0.11 per share to raise \$1.65 million (before issue expenses) to assist in the acquisition of the Paddy's Flat area of interest.
On 31 January 2003 the Company made the first payment for \$1.4 million for the Paddy's Flat acquisition.
On 17 February 2003, the Company announced that it had signed a joint venture agreement with Gold Fields Australasia Pty Limited covering the Reedys area. Gold Fields Australasia Pty Limited can earn 51% interest by spending \$3.5 million over 3 years.
On 17 February 2003, the Company issued 5,600,000 fully paid ordinary shares at \$0.11 per share in relation to the Paulsens native title agreement.
On 20 February 2003, the Company issued 1,000,000 unlisted options with an exercise price of \$0.11 and an expiry date of 31 December 2005 to RCF in satisfaction of the corporate debt facility extension fee.
On 27 February 2003, the Company announced that it had entered into 2 agreements with Ocean Resources Capital Holdings Limited ("Ocean") to raise \$8.4 million by way of the Company issuing \$2.8 million of unsecured convertible notes and \$5.6 million through an unsecured convertible loan. The funds raised will be used to fund the Paddys Flat acquisition and general working capital. The repayment date for the convertible notes and the convertible loan is 31 December 2007 and both facilities carry interest at 12%.
On 28 February 2003, the Company announced that Mr Peter McIntyre had resigned as Chief Operating Officer with effect from 31 March 2003.
On 3 April 2003, the Company announced a revision to the proposed business combination between the Company and Geomaque Explorations Ltd. The revised proposal will see a sequential, rather than concurrent process, with Geomaque Explorations Ltd acquiring Midas Gold plc to create Defiance Mining Corporation, followed, subject to agreement on merger terms, by the merger of the Company and Defiance Mining Corporation.
On 27 June 2003, the Company announced the placement of 15,000,000 shares to a UK institution at a price of \$0,0667 to raise a net \$1.0 million. In addition Ocean had exercised early, at a price of \$0.13 per share, 15 million shares pursuant to the convertible note issued February 2003 (and convertible up to 31 December 2007). These shares were transferred by Ocean to the UK institution for no consideration. Shares allotted pursuant to this exercise were approved by shareholders at the 6 June 2003 General Meeting.

LIKELY DEVELOPMENTS

In the opinion of the Directors, likely developments in the operations of the consolidated entity and the expected results of those operations. known at the dates of this report, have been covered in the Review of Operations and Events Subsequent to 30 June 2003 in this report. Likely developments which may prejudice the Company by disclosure have not been disclosed.

EVENTS SUBSEQUENT TO 30 JUNE 2003

Since 30 June 2003 the following has occurred:

On 3 July 2003, the Company sold all of its 44,400,000 shares held in Dioro Exploration NL, receiving $\bullet$ net proceeds of \$4,984,000 resulting in a profit on sale of \$93,000. As a result of the sale of the shares, the proceeds were used to reduce the debt facility with RCF by \$5,000,000.
On 7 July 2003, the Company issued 15,910,922 fully paid ordinary shares at \$0,0374 per share to RCF in satisfaction of interest on the debt facility.
On 7 July 2003, the Company issued the following options with an expiry date of 7 January 2007 to RCF in satisfaction of the monthly facility fee:
$\circ$ 5.834.004 options exercisable at \$0.2125:
594,308 options exercisable at \$0.2086; $\sim$
$\Omega$ . 2,918,376 options exercisable at \$0.2124; and
17,430,243 options exercisable at \$0.1138. $\cap$
On 10 July 2003, the Company announced that the convertible note and convertible loan held by Ocean had been restructured effective 19 June 2003. Under the new arrangement, the existing convertible note and convertible loan are replaced with a convertible loan with a face value of \$7.2 million and a new conversion price of \$0.08 and repayable on 19 December 2005. The financial effect of this transaction has been brought to account at 30 June 2003.
On 10 July 2003, the Company announced that Mr James McClements had resigned as alternate director to Mr Hank Tuten due to other work commitments.
On 22 September 2003, the Company announced that RCF has agreed to convert its remaining debt (\$7.0 million) into equity at \$0.08 per share, thereby extinguishing all secured debt from the Company's balance sheet. The debt to equity swap by RCF, including a modification fee of 4.5 million shares, will result in the issue to RCF of 92 million shares at \$0.08 per share, taking its shareholding from 7.9 percent to approximately 23 percent of an enlarged capital base. The transaction is subject to shareholder approval at the Annual General Meeting. The transaction is also subject to RCF obtaining various approvals including the Foreign Investment Review Board. In addition, the Company will restructure the board to consist of five board members; to include two nominees of RCF and a new non-executive Chairman. Should this transaction be approved by shareholders at the Annual General Meeting, the consolidated entity's current liabilities will reduce by \$7.0 million. Should the transaction not be approved by shareholders the \$7.0 million owing to RCF will be repayable on 30 November 2003.
On 25 September 2003, the Company announced the placement of up to 12 million fully paid ordinary shares at \$0.08 per share for working capital to raise up to \$960,000 before expenses.

Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity, in future financial years.

MEETINGS OF DIRECTORS

The meetings of the Company's board of directors and each board committee held during the year ended 30 June 2003, and the numbers of meetings attended by each director were:

	Board		Audit		Remuneration
		в	∽	в	А	в
S.W. Miller	6	6	₩	Ŵ.	$\mathcal{R}$	$\star$
B.G. Speechly		6	۰Æ	÷.
K.A. Dundo	6	6
H.G. Tuten	6	6		3	w.	$\star$

$A =$ Number of meetings attended
$B =$ Number of meetings held during the time that the director held office or was a member of the committee during the year
$*$ $\equiv$ Not a member of the relevant committee

In addition there were 28 circular resolutions approved by the Board during the year.

DIRECTORS' INTERESTS IN SHARES AND OPTIONS

Particulars of directors' interests and of persons connected with them (within the meaning of section 34b of the Corporations Act 2001) in shares of Company as at the date of this report are as follows:

Directors	No. of Shares
S.W. Miller ⁽¹⁾	Nii
G.B. Speechly	20,000
K.A. Dundo	100,000
H.G. Tuten $(2)$	Nil
Connected Persons:
Strata Mining Corporation Limited ⁽¹⁾	32,200,000
RCF ⁽²⁾	34,057,085

$(1)$ Mr Miller is a director of Strata Mining Corporation Limited

$(2)$ Mr Tuten is the Chairman of RCF Management L.L.C., the management company of RCF

Particulars of directors interests and of persons connected with them (within the meaning of section 34b of the Corporations Act 2001) in options of the Company as at the date of this report are as follows:

Directors	Date of Grant	Shares under option	Exercise Price	Expiry Date
S.W. Miller	23 December 1999	2,500,000	\$0.25	23 December 2004
	23 December 1999	2,500,000	\$0.35	23 December 2004
	23 December 1999	2,500,000	\$0.45	23 December 2004
	30 November 2001	10,000,000	\$0.40	31 December 2004
		17,500,000
G.B. Speechly	30 November 2001	500,000	\$0.40	31 December 2004
K.A. Dundo	Nil	Nil	Nil	Nil
H.G. Tuten $(1)$	Nil	Nil	Nil	Nil
Connected Persons
$RCF$ ⁽¹⁾	12 February 2002	157,938	\$0.2125	7 February 2005
	5 March 2002	373,893	\$0.2125	5 March 2005
	2 April 2002	449,638	\$0.2125	2 April 2005
	17 May 2002	470,589	\$0.2125	20 May 2005
	17 May 2002	36,118	\$0.2086	20 May 2005
	4 June 2002	499.597	\$0.2125	3 June 2005
	4 June 2002	50.894	\$0.2086	3 June 2005
	4 June 2002	88,680	\$0.2124	3 June 2005
	15 July 2002	483,482	\$0.2125	15 July 2005
	15 July 2002	49,252	\$0.2086	15 July 2005
	15 July 2002	241,854	\$0.2124	15 July 2005
	13 August 2002	499,597	\$0.2125	13 August 2005
	13 August 2002	50,894	\$0.2086	13 August 2005
	13 August 2002	249,917	\$0.2124	13 August 2005

Date of Grant	Shares under option	Exercise Price	Expiry Date
6 September 2002	499,597	\$0.2125	6 September 2005
6 September 2002	50,894	\$0.2086	6 September 2005
6 September 2002	249,917	\$0.2124	6 September 2005
15 October 2002	483,482	\$0.2125	15 October 2005
15 October 2002	49,252	\$0.2086	15 October 2005
15 October 2002	241,854	\$0.2124	15 October 2005
20 February 2003	1,000,000	\$0.1100	31 December 2005
7 January 2003	1,482,677	\$0.2125	7 July 2006
7 January 2003	151,040	\$0.2086	7 July 2006
7 January 2003	741,686	\$0.2124	7 July 2006
7 January 2003	3,177,890	\$0.1138	7 July 2006
7 July 2003	5,834,004	\$0.2125	7 January 2007
7 July 2003	594,308	\$0.2086	7 January 2007
7 July 2003	2,918,376	\$0.2124	7 January 2007
7 July 2003	17,430,243	\$0.1138	7 January 2007
	38,607,563

$(1)$ Mr Tuten is the Chairman of RCF Management L.L.C., the management company of RCF

DIRECTORS' AND EXECUTIVES' EMOLUMENTS

Previously the Company has adopted a consultative approach to setting remuneration levels. This process involved the Board being regularly advised of industry remuneration standards through consultation with external agents and senior executives.

Currently, remuneration is based on industry standards and set to attract qualified and experienced directors and senior executives. Recommendations are made to the Board on salary levels, packaging options, employee benefits and conditions.

The Company formed a Remuneration Committee in April 2002 to consider recommendations regarding the overall remuneration structure, packaging strategies, remuneration policy and developed a formal performance based annual review system. This committee meets annually to review directors' fees, senior executive salary packages and salary ranges for the organisation.

Details of the nature and amount of each element of the emoluments of each director of St Barbara Mines Limited and each of the 5 most highly remunerated executive officers of the Company and the consolidated entity receiving the highest emoluments during the year ended 30 June 2003 are set out on the following tables:

Non- executive directors of St Barbara Mines Limited:

	Directors' Fee \$	Superannuation	Total	Options issued S
B.G. Speechly	50,000	4.500	54.500	$\mathbf{m}$
K.A. Dundo $(i)$	94.320	8.488	102,808	$\overline{\phantom{a}}$
H.G. Tuten	$\overline{\phantom{a}}$	ж.	$\overline{\phantom{a}}$	$\bullet$

Mr Dundo's remuneration includes \$50,785 received from Taipan Resources NL. $(i)$

Executive directors of St Barbara Mines Limited:

	Salarv	Motor Vehicle	Superannuation	Other benefits	Total	Options issued

S.W. Miller	400.000	$\omega$	80.000	70.069	550.069	$\mathbf{a}$

	Salary	Motor Vehicle	Superannuation	Retirement benefits	Total	Options issued
	Ŝ	S	\$		S	s
R.T. Calnan	169,000	5,883	62,600	$\overline{\phantom{a}}$	237,483
C.W. Davis	145.391	5.194	21,809	$\bullet$	172.394
P.T. McIntyre	154.596	20.504	33,006	165,506	373.612
P.J. Richardson	149,375	$\overline{\phantom{a}}$	14.938	$\overline{\phantom{a}}$	164.313	$14,824$ ⁽ⁱ⁾
A.D. Rule	190.000	$\overline{\phantom{a}}$	28,500	$\bullet$	218.500	27.796 ⁽ⁱ⁾

Other Executives of St Barbara Mines Limited and group:

$(1)$ The fair value of options issued to Executives during the year is estimated at \$0.037 per option. These options were issued on 17 January 2003 with an expiry date of 15 January 2008 and an exercise price of \$0.35 per share. This value has been calculated using a Black-Scholes option pricing model after considering the following factors, amongst others, the share price on grant date of \$0.12, expiry date of 17 January 2008, exercise price of \$0.35, the term of the option, a risk free interest rate of 5% and using share price volatility of 100%. This value has not been included in the Statement of Financial Performance.

OPTIONS

Options over ordinary shares of St Barbara Mines Limited are as follows:

	As at 30 June 2003	As at the date of this report
Listed share options - see Note 20(b)	44.329.772	44.329.772
Unlisted share options - see Note 20(c)	44,905,632	$71,682,563$ ⁽¹⁾

The following unlisted share options have been issued since the end of the financial year end as follows:

Recipient	Date of Options	Expiry Date	Exercise Price	Number of Options
RCF	7 July 2003	7 January 2007	\$0.2125	5.834.004
RCF	7 July 2003	7 January 2007	\$0,2086	594,308
RCF	7 July 2003	7 January 2007	\$0.2124	2,918,376
RCF	7 July 2003	7 January 2007	\$0.1138	17.430.243
				26.776.931

No options were exercised during or since the end of the financial year.

No options over unissued ordinary shares of St Barbara Mines Limited were granted during or since the end of the financial year to any of the directors of the company and the consolidated entity.

Options over unissued ordinary shares of St Barbara Mines Limited granted during or since the end of the financial year to the 5 most highly remunerated executive officers of the company and the consolidated entity as part of their remuneration were as follows:

	Date Options Granted	Expiry Date	Exercise Price	Number of Options
A.D. Rule	17 January 2003	17 January 2008	\$0.35	750.000
P.J. Richardson	17 January 2003	17 January 2008	\$0.35	400.000

OFFICERS' INDEMNITIES AND INSURANCE

The Company has agreed to indemnify the following current directors and officers of the Company, Mr S. Miller, Mr B. Speechly, Mr K. Dundo, Mr H. Tuten and Mr. A. Rule, against all liabilities to another person and the Company that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a wilful breach of duty. The agreement stipulates that the Company will meet the full amount of such liabilities including costs and expenses.

The Company has paid or agreed to pay a premium in respect of a contract insuring directors and officers of the Company. That contract of insurance prohibits the Company disclosing the nature of the liability insured against and the amount of the premium paid therefore.

ENVIRONMENTAL REGULATIONS AND PERFORMANCE

The Company remains committed to the concept of sustainable development which requires balancing the need for economic growth with good stewardship and the protection of human health and the environment.

Mine site rehabilitation objectives are directed towards ensuring that the physical structures that remain after mine closure do not impose a long term hazard to public safety or the environment and that the mined area achieves the nominated post mining land use. During the past year continued significant progress was made toward fulfilling these rehabilitation objectives. Work was undertaken across a range of sites which included rehabilitation earthworks programs, making safe historic mine workings, waste dump slope profiling, capping with topsoil/oxide material and deep ripping on contour. This program resulted in the rehabilitation of 162 hectares of mine disturbed land during the twelve months.

Drill site rehabilitation standards were also reviewed and are included in all new drilling contracts. Rehabilitation of drill holes resulted in a total of 2.554 holes capped.

In addition to statutory monitoring requirements, regular self-audits were conducted throughout the year to monitor progress and to identify areas which required further management focus. One reportable incident occurred during the year, which resulted from the discharge of approximately 250 kilolitres of near potable quality mine water into an adjoining natural drainage system. No impact on the vegetation in the area of the discharge was expected, and no impact has been observed. In addition, three minor hydrocarbon spillage incidents were reported involving small volumes of diesel fuel or waste oil. Each of these incidents has been remediated by site personnel responsible for the areas concerned.

Environmental management initiatives commenced or completed during the year included:

on going implementation of a Site Waste Management Plan with the initial focus on waste grease disposal. One hundred and sixty drums were collected, redrummed and sent to the DEP Approved disposal facility at Port Hedland;
development of environmental awareness, training requirements and implementation of self audits:
continuing progressive rehabilitation at new mines with the target of completing all rehabilitation works within 3 months of a mine closure: and
seeding in excess of 190 ha of mine disturbed land using local Meekatharra community groups.

OCCUPATIONAL, HEALTH, SAFETY AND WELFARE

This year Meekatharra Gold Operations reported two Lost Time Injuries for the twelve months to 30 June 2003, compared to eleven Lost Time Injuries sustained during the previous year. This significant improvement resulted in the reduction of the Lost Time Injury Frequency Rate (LTIFR) from 16.6 (rolling twelve month average) down to 8.1, while underground mining was still being conducted and a further reduction to 4.7, by the end of June 2003.

Occupational Health and Safety training continued to focus on Risk Assessment. Hazard Identification and Emergency Response Planning.

Training undertaken included:

Accident & Incident Investigation
Hazard Identification
Fitness for Work Awareness
Site Wide Emergency Evacuation
Emergency Response Team Self Contained Breathing Apparatus
Emergency Response First Responder
OH & S for Supervisors

Further work continued to develop the Site Safety Management Plan and Site Hazard Register.

The workforce commitment to safety performance will focus on the continuous review and improvement of safety systems and awareness which will target the maintenance of the LTIFR at or below the industry average

ROUNDING OF AMOUNTS

The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and directors' report have been rounded off to the nearest thousand dollars, unless otherwise stated.

AUDITOR

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

Signed in accordance with a resolution of the Board of Directors.

STEPHEN W. MILLER EXECUTIVE CHAIRMAN

30^th day of September 2003 Dated at Perth this

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2003

		Consolidated		Company
	Notes	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Revenue from sale of gold	3	56,111	54,516	56,111	54,516
Other revenues from outside operating activities	3	1,493	31,977	2,411	22.780
Total revenue from ordinary activities		57,604	86,493	58,522	77,296
Changes in inventories of finished goods		(999)	(278)	(999)	(278)
Raw materials and consumables used		(12, 263)	(13, 425)	(12, 263)	(13, 425)
Cost of investments sold			(17, 506)	u.,	(11,960)
Cost of property, plant and equipment sold		(184)	(1,964)	(184)	(1,964)
Cost of tenements sold			(186)		(186)
Contract mining, cartage, milling, maintenance, labour and consultants		(22, 195)	(19, 744)	(22, 195)	(19, 744)
Tenement rent and rates		(1, 110)	(1,224)	(1, 110)	(1,224)
Royalty		(1,728)	(1,386)	(1,728)	(1,386)
Employee expenses		(8,626)	(10, 788)	(8,576)	(10,650)
Exploration drilling and assay expenditure	1(d)	(1,803)		(1, 319)
Exploration consultant expenditure	1(d)	(1, 447)		(477)
Cumulative effect of exploration write off prior to 1 July 2002	1(d)	(4, 422)		(750)
Shares issued for native title		(616)
AIM admission costs			(1,214)		(1,214)
Provision for diminution in investment in controlled entities				(4,081)
Other expenses from ordinary activities		(8, 391)	(2,666)	(6, 385)	(2,380)
Earnings/(loss) before interest, tax, depreciation and amortisation (EBITDA)		(6, 180)	16,112	(1, 545)	12,885
Amortisation of mining development expenses	4	(15, 641)	(22, 426)	(15, 641)	(22, 426)
Write down of mining development expenses	4		(5,750)		(5,750)
Depreciation and amortisation expenses	4	(2,750)	(2,044)	(2,706)	(1,884)
Earnings/(loss) before interest and tax (EBIT)		(24, 571)	(14, 108)	(19, 892)	(17, 175)
Borrowing costs	4	(5,449)	(3,941)	(5,078)	(3,272)
(Loss) from ordinary activities before income tax		(30, 020)	(18,049)	(24, 970)	(20, 447)
Income tax expense	5	(2,965)		(2,965)
Net (loss) after income tax		(32, 985)	(18,049)	(27, 935)	(20, 447)
Net (loss) attributable to outside equity interests		252	155
Net (loss) attributable to members of the Company	21	(32, 733)	(17, 894)	(27, 935)	(20, 447)
Total changes in equity attributable to members of the Company other than those resulting from transactions with owners as owners		(32, 733)	(17, 894)	(27, 935)	(20, 447)
Basic and diluted (loss) per share (cents per share)	35	(8.00)	(7.83)

The above Statements of Financial Performance should be read in conjunction with the accompanying notes.

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2003

		Consolidated		Company
	Notes	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Assets
Current assets
Cash assets	6	597	9,032	595	9,031
Restricted cash	7	280		280
Receivables	8	3,688	3,287	3,688	2,939
Other financial assets	15	4,891		4,891
Inventories	9	4,264	5,151	4,264	5,151
Assets held for resale	10	4,194	5,409	4,094	5,229
Other	11	1,250	1,505	1,219	1,447
		19,164	24,384	19,031	23,797
Non-current assets
Restricted cash	7	3,293	1,837	3,293	1,837
Receivables	8			18,240	6,229
Other financial assets	15		4,526	16,635	25,239
Property, plant and equipment	12	8,380	9,906	7,253	8,739
Other	11	83	232	83	232
Deferred tax assets	13		2,965		2,965
Mining properties	14	46,372	58,188	19,224	27,370
		58,128	77,654	64,728	72,611
Total Assets		77,292	102,038	83,759	96,408
Liabilities
Current liabilities
Payables	16	10,561	15,905	10,555	15,892
Interest bearing liabilities	17	15,151	12,926	15,151	5,857
Provisions	18	898	1,037	898	1,037
		26,610	29,868	26,604	22,786
Non-current liabilities
Payables	16			11,484	11,513
Interest bearing liabilities Provisions	17 18	8,833	9,393 2,669	8,833	9,393
		3,876 12,709	12,062	3,876 24,193	2,669 23,575
Total Liabilities		39,319	41,930	50,797	46,361

Net Assets		37,973	60,108	32,962	50,047
Equity
Contributed equity	19	127,534	118,213	127,534	118,213
Option reserve	20(a)	1,959	430	1,959	430
Accumulated losses	21	(91, 520)	(58, 787)	(96, 531)	(68, 596)
Parent entity interest Outside equity interest	22	37,973	59,856 252	32,962	50,047
Total Equity		37,973	60,108	32,962	50,047

The above Statements of Financial Position should be read in conjunction with the accompanying notes.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2003

		Consolidated		Company
	Notes	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Cash Flows from Operating Activities
Cash receipts in the course of operations		63,043	59,968	62,802	59,968
(inclusive of goods and services tax)
Payments to suppliers and employees		(63, 256)	(81,280)	(63, 268)	(80,221)
(inclusive of goods and services tax)
Other cash receipts			405		37
Interest received		292	124	292	123
Borrowing costs paid and gold lease fees		(68)	(1, 842)		(1, 842)
Finance charges - finance leases		(340)	(270)	(340)	(270)
hire purchase agreements		(225)	(126)	(225)	(126)
Net cash flows (used in) operating activities	33	(554)	(23, 021)	(739)	(22, 331)
Cash Flows from Investing Activities
Payments in respect of exploration, evaluation and development		(13,050)	(10, 558)	(9,984)	(7,076)
Payments for property, plant and equipment		(205)	(1,749)	(205)	(1,749)
Cash received from investments sold			26,736		17,669
Payments for investment in listed securities		(365)	(4, 526)	(365)	(4,526)
Net funds from controlled entities				(10, 254)	4,894
Cash received from sale of property, plant and equipment		982	4,300	982	4,300
Net cash flows provided by / (used in) investing activities		(12, 638)	14,203	(19, 826)	13,512
Cash Flows from Financing Activities
Principal repayments under secured loans			(12,700)		(12,700)
Repayment of convertible loan		(7, 372)
Restricted cash		(1,736)		(1,736)
Share buy back			(1,066)		(1,066)
Proceeds from borrowings		9,830	9,653	9,830	9,653
Net proceeds from issue of securities		8,493	19,088	8,493	19,088
Principal repayments - finance leases		(1,204)	(1,078)	(1,204)	(1,078)
hire purchase agreements		(1,059)	(517)	(1,059)	(517)
Net cash flows provided by financing activities		4,757	13,380	12,129	13,380
Net increase / (decrease) in cash		(8, 435)	4,562	(8,436)	4,561
Cash at the beginning of the financial year		9,032	4,470	9,031	4,470
Cash at the end of the financial year	6	597	9,032	595	9,031
Non-cash financing and investing activities	33
Financing facilities	34

The above Statements of Cash Flows should be read in conjunction with the accompanying notes.

$\overline{1}$ . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This general purpose financial report has been prepared in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.

It is prepared in accordance with the historical cost convention, except for certain assets which, as noted, are at valuation. Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year.

These consolidated financial statements have been prepared on a going concern basis. At 30 June 2003. the consolidated entity's current liabilities exceeded its current assets by \$7.4 million after recording a loss for the twelve months of \$32.7 million.

Note 36 to these financial statements sets out in more detail the financing arrangements that have been put in place since 30 June 2003.

The Company will be seeking approval from shareholders at the Annual General Meeting to be held in late November 2003 for the following:

conversion of the remaining RCF debt of \$7 million together with the extension fee into 92,000,000 fully paid ordinary shares of the Company at \$0.08 per share; and
conversion of the Ocean \$7.2 million convertible loan into 90,000,000 fully paid ordinary shares at \$0.08 per share as set out in Note 17(4).

Should either or both approvals not be forthcoming from shareholders at the Annual General Meeting, these amounts will become due and payable.

In the short term, given the current operations, the consolidated entity's ability to continue operating and its ability to generate a positive cashflow is dependent on a significant increase in production through development of Paddys Flat and Paulsens which will require additional debt and equity funding and the sale of assets held for resale

The Directors are of the view that shareholders will approve the RCF debt for equity conversion at the Annual General Meeting and, based on past experience, that the consolidated entity will be able to secure such additional debt and equity funding as is necessary; and/or sell such assets as are necessary to provide the required funding to enable the Company and its operations to continue as a going concern. However, should this not occur there is significant uncertainty whether the consolidated entity will be able to continue as a going concern and realise its assets at the amounts stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset and liability amounts that might be necessary should the entity not continue to be a going concern.

The following accounting policies have been used by the consolidated entity for the periods presented:

Principles of Consolidation $(a)$

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by St Barbara Mines Limited as at 30 June 2003 and the results of all controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full. Outside equity interests in the results and equity of controlled entities are shown separately in the consolidated statement of financial performance and statement of financial position respectively.

Where control of an entity is obtained during a financial year, its results are included in the consolidated statement of financial performance from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control existed.

Acquisition of Assets $(b)$

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition the value of the instruments is their market price as at the acquisition date, unless the notional price at which they could be placed in the market is a better indicator of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of the acquisition. The discount rate used is the incremental borrowing rate, being the rate at which similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Recoverable Amount of Non-current Assets $(c)$

The recoverable amount of an asset is the net amount expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in net profit or loss in the reporting period in which the recoverable amount write-down occurs. The expected net cash flows included in determining the recoverable amounts of non current assets are not discounted.

Change in accounting policy for treatment of Mining Properties $(d)$

With effect from 1 July 2002 all exploration and evaluation expenditure incurred by or on behalf of the Company up to the decision by the Board to proceed with development of a mining property, will be expensed as incurred. Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered.

Mining properties now consists only of acquired exploration assets together with related mine development costs and capital assets. The cost of mineral properties includes the cash consideration and/or the fair value of shares issued on the date the property is acquired.

The recoverability of amounts shown for mining properties is dependent upon the existence of economically recoverable reserves; the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain financing to complete the development of the properties where necessary and upon future profitable production; or, alternatively, upon the Company's ability to recover its spent costs through a disposition of its interests.

Mine development costs relating to mineral properties are deferred until the properties are brought into commercial production, at which time they are amortised over the estimated useful life of the related property or on a unit-of-production basis over proven and probable reserves. Pre-production credits, including the value of marketable metals extracted during mine development, are credited against costs incurred.

The above policy was adopted with effect from 1 July 2002 to align the accounting policies of the Company with those of entities involved in the proposed Defiance Mining Corporation business combination with Geomague Explorations Limited (a Canadian listed company).

The following adjustment was made on the statement of financial performance as a result of this change in accounting policy:

	Consolidated \$'000	Company \$'000
Cumulative effect of write off of exploration expenditure incurred prior to 1 July 2002	4.422	750
Current period exploration expenditure written off
Exploration drilling and assay expenditure	1,803	1.319
Exploration consultant expenditure	1,447	477
Other exploration expenditure items	2.225	$\blacksquare$
	9.897	2.546

The previous accounting policy was to carry forward exploration and evaluation expenditure to the extent that such activities in the area of interest had not vet reached a stage which permitted a reasonable assessment of the existence or otherwise of recoverable mineral resources.

The restatements of consolidated and parent entity accumulated losses and non current assets exploration, evaluation and development set out below show the information that would have been disclosed had the new accounting policy always applied.

	Consolidated		Company
	30 June 2003 \$'000 (Restated)	30 June 2002 \$'000 (Restated)	30 June 2003 \$'000 (Restated)	30 June 2002 \$'000 (Restated)
Restatement of consolidated statement of financial performance (extract)
Loss from ordinary activities before income
tax expense	(20, 122)	(18,049)	(22, 424)	(20, 447)
Change in accounting policy	(5, 476)	(4, 422)	(1,796)	(750)
Income tax expense	(2,965)		(2,965)
Net loss after tax	(28, 563)	(22, 471)	(27, 185)	(21, 197)
Restatement of mining properties
Previously reported carrying amount	46,372	58,188	19,224	27.370
Adjustment for change in accounting policy		(4, 422)		(750)
Restated carrying amount	46,372	53,766	19,224	26,620
Restatement of Accumulated Losses
Previously reported carrying amount	(91, 520)	(58, 787)	(92, 450)	(68, 596)
Adjustment for change in accounting policy		(4, 422)		(750)
Restated carrying amount	(91, 520)	(63, 209)	(92, 450)	(69, 346)

Depreciation and Amortisation of Property, Plant and Equipment $(e)$

The Directors have considered the economic life of mine buildings, machinery and equipment with due regard to both the physical life limitations, assessments of economically recoverable reserves of the mine property at which the items are located, and to possible future variations in those assessments. The estimated remaining useful life for all such assets is reviewed regularly with annual reassessments being made for major items.

The majority of mine buildings, plant and equipment (other than freehold land) is written off over its expected economic life.

The total net carrying values of mine buildings, machinery and equipment at the mine property are reviewed regularly and, to the extent by which these values exceed their recoverable amounts, that excess is fully provided against in the financial year in which this is determined.

Profits and losses on disposal of property, plant and equipment are taken into account in determining the result for the year.

Depreciation and Amortisation of Assets Held for Resale $(f)$

Plant and equipment which is currently surplus to requirements and not used is not depreciated. When those assets are used, they are depreciated on an hourly basis. The total carrying value of these assets is not in excess of estimated market value.

$(a)$ Accounting for Income Tax

Income tax has been brought to account using the liability method of tax effect accounting. Future income tax benefits relating to tax losses are only recognised and brought to account to the extent that their realisation is virtually certain.

Income tax on cumulative timing differences is set aside to the deferred income tax or the future income tax benefit accounts at the rates which are expected to apply when those timing differences reverse.

$(h)$ Investments

Investments in listed and unlisted securities, other than controlled entities, are stated at cost unless, in the opinion of the Directors, a provision for diminution in value is considered necessary. Income from investments is brought to account by the consolidated entity when dividends are received. Controlled entities are accounted for as set out in Note 1(a).

$\left( i\right)$ Inventories

Inventories are valued at the lower of cost and net realisable value. The cost of ore stockpiles and gold stocks includes direct material, direct labour, transportation costs, and variable and fixed overhead costs relating to mining activities.

Costs have been assigned to inventory quantities on hand at balance date using the weighted average basis.

Maintenance and Repairs $\ddot{\theta}$

Plant of the consolidated entity is required is required to be overhauled on a reqular basis. This is managed as part of an ongoing major cyclical maintenance program. The costs of this maintenance are charged as expenses as incurred, except where they relate to the replacement of a component of an asset, in which case the costs are capitalised and depreciated in accordance with note 1 (e). Other routine operating maintenance, repair and minor renewal costs are also charged as expenses as incurred.

Emplovee Benefits $(k)$

Wages and salaries, annual leave and sick leave $(i)$

Liabilities for wages and salaries and annual leave are recognised, and measured as the amount unpaid at the reporting date at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or pavable.

$(ii)$ Long service leave

The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provisions for employee entitlements and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provisions for employee entitlements and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to the length of service and the probability of achievement of long service leave anniversary dates.

$(iii)$ Ownership-based remuneration schemes

Ownership-based remuneration is provided to employees via the Employee Option Plan. Information relating to this scheme is set out in Note 30(e).

No accounting entries are made in relation to the Employee Option Plan until options are exercised, at which time the amounts receivable from employees are recognised in the statement of financial position as share capital. The amounts disclosed for remuneration of directors and executives in Notes 24 and 26 do not include the assessed fair values of options at the date they were granted.

$\omega$ Leased Assets

Assets acquired under finance leases are included as property, plant and equipment in the statement of financial position. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of the leased property. Where assets are acquired by means of finance leases, the present value of the minimum lease payments is recognised as an asset at the beginning of the lease term and amortised on a straight line basis over the expected useful life of the leased asset. A corresponding liability is also established and each lease payment is allocated between the liability and finance charge.

Other leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to expense over the year of expected benefit.

$(m)$ Receivables

A provision is raised for any doubtful debts based on a review of all outstanding amounts at year end. Bad debts are written off during the year in which they are identified.

$(n)$ Revenue

Sales revenue represents revenue earned from the sale of gold and is recognised when title passes at the delivery point.

Revenue on sale of investments and tenements is recognised at disposal.

Interest revenue is recognised when it accrues taking into account interest rates applicable to financial assets.

$\overline{O}$ Cash Flows

For the purpose of the statements of cash flows, cash includes cash on hand, deposits held at call which are readily convertible to cash on hand and which are used in the cash management function on a day-to-day basis, net of outstanding bank overdrafts.

Foreian Currency $(D)$

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency receivables and payables at balance date are translated at exchange rates at balance date. Exchange gains and losses are brought to account in determining the statement of financial performance for the year.

Exchange gains and losses and hedging costs arising on forward foreign exchange contracts entered into as hedges of specific commitments are deferred on the statement of financial position and included in the determination of the amounts at which the transactions are brought to account. All exchange gains and losses relating to other hedge transactions are brought to account in the statement of financial performance in the same year as the exchange differences on the items covered by the hedge transactions.

Gains and losses on foreign currency transactions that are not accounted for as specific hedges, if any, are brought to account as they arise and disclosed as speculative gains or losses.

$(a)$ Trade and Other Creditors

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within sixty days of recognition.

$(r)$ Rehabilitation and Restoration Costs

Provision is made on a straight line basis for the consolidated entity's estimated liability under specific legislative requirements and the conditions of its mining leases for future costs expected to be incurred in restoring areas of interest. The estimated liability is based on the restoration work required, using existing technology, as a result of activities to date.

$(s)$ Borrowing Costs

Borrowing costs are recognised as expenses in the year in which they are incurred. Borrowing costs include interest on bank overdrafts, short-term and long-term borrowings, finance lease charges, the fair value of equity securities issued in satisfaction of interest and facility fees and amortisation of establishment costs and facility fees in connection with the arrangement of borrowings.

$(t)$ Interest Bearing Liabilities

Loans are carried at their principal amounts which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the year it becomes due and is recorded as part of other creditors.

Rounding of Amounts $(u)$

The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities & Investments Commission, relating to the "rounding off" of amounts in the financial report. Amounts in

the report have been rounded off in accordance with that Class Order to the nearest thousand dollars. or in certain cases, to the nearest dollar.

Earnings per Share $(v)$

Basic earnings per share $(i)$

Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year. adjusted for bonus elements in ordinary shares issued during the year.

$(ii)$ Diluted earnings per share

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.

$2.$ SEGMENT INFORMATION

The consolidated entity operates predominantly in the gold mining industry in Australia.

The consolidated entity's head office is in Australia.

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
3. REVENUE
Revenue from operating activities
Revenue from sale of gold	56,111	54,516	56,111	54.516
Revenue from non-operating activities
Proceeds on sale of investments	17	26,727		17,669
Proceeds on sale of tenements	35	210		10
Proceeds on sale of property, plant and equipment	982	4,300	982	4,300
Interest received	292	124	1,429	353
Other	167	616		448
Total revenue from ordinary activities	57,604	86,493	58,522	77,296
(LOSS) FROM ORDINARY ACTIVITIES 4.
(Loss) from ordinary activities before income tax expense includes the following specific net gains and expenses:
Net Gains
Net gain on disposal of:
Investments	17	9,221		5,709
Property, plant and equipment	798	2,336	798	2,336
Tenements		24		(176)
Expenses
Cost of gold sales	60,764	59,839	60,764	59,839
Amortisation:
Mining expenses	15,641	22,426	15,641	22,426
Write down of mining development expenses		5,750		5,750
Write-down of exploration tenements		3,381		3,381
Depreciation:
Buildings	178	177	178	177
Plant and equipment	2,572	1,867	2,528	1,707
	2,750	2,044	2,706	1,884
Borrowing cost expensed:
Interest paid	3,547	3,545	3,176	2,876
Convertible Note borrowing cost	1,337		1,337
Finance charges relating to:
finance leases	340	270	340	270
hire purchase	225	126	225	126
	5,449	3,941	5,078	3,272
Rental of premises	418	303	418	261
Royalties	1,728	1,386	1,728	1,386
Provision for:
Employee entitlements	832	772	832	772
Rehabilitation	598	595	598	595
Inventories	96	22	96	22
Cost/adjustments associated with surplus office space	(13)	(283)	(13)	(283)

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
5. INCOME TAX
(a) Tax Expense
The amount of income tax expense for the financial year differs from the amount calculated on the loss. The differences are reconciled as follows:
Loss from ordinary activities before income tax expense	(30,020)	(18,049)	(24, 970)	(20, 447)
Income tax calculated @ 30% (2002 - 30%)	9,006	5,415	7,491	6,134
Tax effect of permanent differences:
Provision for diminution in investments			(1, 224)
Legal and other capital expenditure w	(132)	(370)	(127)	(351)
Sundry items	(20)	(2)	(20)	(2)
	(152)	(372)	(1, 371)	(353)
Income tax adjusted for permanent differences	8,854	5,043	6,120	5,781
Net future income tax benefit not brought to account	(8, 854)	(5,043)	(6, 120)	(5,781)
Future income tax benefits previously recognised, now written off	(2,965)		(2,965)
Income tax (expense)	(2,965)		(2,965)
Unbooked future income tax benefit (b)
Future income tax benefit attributable to operating losses	26,401	16,595	21,617	15,775
Less: offset to provision for deferred income tax	(4,248)	(8,592)	(3, 870)	(8,592)
	22,153	8,003	17,747	7,183
Future income tax benefit attributable to timing differences not brought to account	1,615	1,496	1,615	1,496
Future income tax benefit not brought to account	23,768	9,499	16,132	8,679

These benefits will only be obtained if:

the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the $(i)$ benefit from the deductions for the loss to be realised; or
the consolidated entity continues to comply with the conditions for deductibility imposed by the law; and $(i)$
$(iii)$ no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the deductions for the losses.

Tax consolidation legislation $(c)$

The Company and its wholly-owned Australian subsidiaries have not yet decided to implement the tax consolidation legislation. The decision will be made prior to 30 June 2004. Accordingly the financial effect of the implementation of the legislation has not been recognised in the financial statements for the year ended 30 June 2003.

CASH ASSETS 6.

Current
Current cash on hand
Cash on call	596	9.031	594	9.030
	597	9.032	595	9,031

			Consolidated		Company
		30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
7.	RESTRICTED CASH
Current
	Term deposit ⁽ⁱ⁾	280	$\overline{\phantom{a}}$	280
	Non-Current
	Term deposit ⁽ⁱ⁾	$\mathbf{m}$	280		280
	Term deposit ⁽ⁱⁱ⁾	3,293	1,557	3,293	1,557
		3,293	1,837	3,293	1,837

Funds placed on security deposit for lease rental. The lease expires on 31 December 2003. $\left( i\right)$

Funds placed on security deposit with Macquarie Bank Limited as security for performance bonds issued by Macquarie Bank Limited to Department of Minerals and Petroleum. $(i)$

8. RECEIVABLES

Current
Trade debtors	2,318	3,287	2,318	2,939
Other debtors	1,370		1,370
	3,688	3,287	3,688	2,939
Non-Current
Non-trade receivables from controlled entities			19,600	7,498
Less: provision for non-recovery			(1,360)	(1,269)
			18,240	6,229
9. INVENTORIES
Current
Consumables and spares - at cost	1,749	2,320	1,749	2,320
Less: provision for obsolescence	(334)	(238)	(334)	(238)
	1,415	2,082	1,415	2,082
Ore stockpiles - at cost	1,009	1,336	1,009	1,336
Less: provision for diminution		(826)		(826)
	1,009	510	1,009	510
Gold in circuit - at cost	1,840	2,559	1,840	2,559
	4,264	5,151	4,264	5,151

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
ASSETS HELD FOR RESALE 10.
Current
Plant and equipment
Under finance lease	5,261	5,261	5,261	5,261
Accumulated amortisation	(1,261)	(365)	(1,261)	(365)
	4,000	4,896	4,000	4,896
Plant and equipment owned
At cost	2,342	3,559	2,019	3,235
Accumulated depreciation	(2, 148)	(3,046)	(1,925)	(2,902)
	194	513	94	333
	4,194	5,409	4,094	5,229
OTHER ASSETS 11.
Current
Prepayments	1,101	1,223	1,070	1,222
Unexpired hire purchase charges	149	225	149	225
Other		57
	1,250	1,505	1,219	1,447
Non-Current
Unexpired hire purchase charges	83	232	83	232
12. PROPERTY, PLANT AND EQUIPMENT
Non-Current
Property, plant and equipment - at cost
Land	1,249	1,255	140	146
Buildings Less: Accumulated depreciation	4,683 (4,300)	4,743 (4,204)	4,683 (4,300)	4,743 (4,204)
	383	539	383	539
Plant and equipment	59,319	59,277	59,136	59,094
Less: Accumulated depreciation and provision for
diminution	(52, 571)	(51, 177)	(52, 406)	(51,052)
Assets under construction		12		12
Written down value of plant and equipment	6,748	8,112	6,730	8,054
Reconciliations of the carrying amounts for each class	8,380	9,906	7,253	8,739
of property, plant and equipment are set out below: Land
Carrying amount at the beginning of year	1,255	456	146	216
Disposals	(6)		(6)
Transfer to/(from) land		799		(70)
Carrying amount at the end of the year	1,249	1,255	140	146
Buildings
Carrying amount at the beginning of year	539	739	539	739
Disposals		(6)		(6)

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Depreciation	(178)	(177)	(178)	(177)
Transfer to/(from) buildings	22	(17)	22	(17)
Carrying amount at the end of the year	383	539	383	539
Plant and equipment
Carrying amount at the beginning of year	8,112	7,562	8,054	7,165
Additions	205	5,908	205	5,908
Disposals	(47)	(1,958)	(47)	(2,828)
Depreciation	(1,674)	(1,867)	(1,634)	(1,707)
Under construction		12		12
Transfer to/(from) plant and equipment	152	(1,545)	152	(496)
Carrying amount at the end of the year	6,748	8,112	6,730	8,054
	8,380	9,906	7,253	8,739
13. DEFERRED TAX ASSETS
Future income tax benefit (relating to tax losses)		2,965		2,965
MINING PROPERTIES 14.
Non-Current
Opening balance	58,188	45,071	27,370	17,736
Direct expenditure	10,558	44,511	6,877	41,028
Acquired tenements	3,164		3,164
Tenement disposal		(186)		(186)
Provision for diminution		(3,381)		(3, 381)
Amortisation charge for the year	(15, 641)	(27, 827)	(15, 641)	(27, 827)
Write down due to change in accounting policy (see Note $1(d)$ )	(9, 897)		(2,546)
Closing balance	46,372	58,188	19,224	27,370
Mining properties by area of interest:
Areas of interest in the exploration / evaluation stage:
at cost w	48,734	34,513	14,234	3,695
write down due to change in accounting policy (see Note $1(d)$ )	(7, 352)
	41,382	34,513	14,234	3,695
Areas of interest in the development and production phase
at cost w	109,962	109,538	109,962	109,538
accumulated amortisation $\tilde{\phantom{a}}$	(59,075)	(42, 512)	(59,075)	(42, 512)
write down due to change in accounting policy $\tilde{ }$
(see Note 1(d)) provision for diminution	(2, 546) (43, 351)	(43, 351)	(2, 546) (43, 351)	(43, 351)
	4,990	23,675	4,990	23,675
	46,372	58,188	19,224	27,370

During the year the Company has reclassified \$10.5 million of previously acquired exploration expenditure from
areas of interest in the development and production phase to areas of interest in the exploration phase.

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
OTHER FINANCIAL ASSETS 15.
Current
Investments in other entities:
Listed securities - at cost	4,891		4,891
Non-Current
Investments in other entities:
Listed securities - at cost ⁽¹⁾ J.		4,526		4,526
Investments in controlled entities:
Unlisted securities (at cost) w			179	179
Listed securities (at cost) $(2)$ w			20,537	20,534
Provision for diminution			(4,081)
		4,526	16,635	25,239
Listed securities in other entities - market value
The aggregate market value at balance date of investments in other entities listed on a prescribed stock exchange is:
Current:
Listed securities ⁽¹⁾	4,662		4,662
Non-Current:
Listed securities ⁽¹⁾		5,810		5,810
Listed securities in controlled entities - market value
The aggregate market value at balance date of investments in controlled entities listed on a prescribed stock exchange is:
Non current:
Listed securities ⁽²⁾			4,768	15,450

Due to losses carried forward, the amount of tax that would have been paid if these assets were to be sold at market value at balance date is nil.

At balance date, securities were held in the following listed entities:

$(1)$ Dioro Exploration NL, a gold exploration company. The consolidated entity held 44,400,000 shares in Dioro Exploration NL at 30 June 2003 (2002: 41,500,000). All of the 44,400,000 shares were sold on 3 July 2003 realising net proceeds of \$4,984,000.
$(2)$ Taipan Resources NL. The consolidated entity held 190,719,338 fully paid ordinary shares (2002:190,719,338) and
nil partly paid shares (2002: 196,142,209). All of the partly paid shares in Taipan Resources NL were cancelle February 2003.

$16.$ PAYABLES

Current
Trade creditors and accruals	10.561	15.905	10.555	15.892
Non-Current
Loans from controlled entities - unsecured	$\mathbf{w}$	$\mathbf{u}_\mathrm{c}$	11.484	11.513

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
17. INTEREST BEARING LIABILITIES
Current
Lease liability $-$ secured (1)	2,018	3,072	2,018	3,072
Hire purchase liability - secured	1.133	1,285	1.133	1,285
Convertible notes - secured (2)		7.069
Other loans - secured (3)	12,000	1,500	12,000	1,500
	15,151	12,926	15,151	5,857
Non Current
Hire purchase liability - secured	1,528	2,893	1,528	2,893
Other loans $-$ secured (3)		6,500		6,500
Convertible loan - unsecured (4)	7,305		7,305
	8,833	9,393	8,833	9,393

1) Secured by a fixed charge over the item of plant and equipment purchased by the funds advanced. The lease liability is payable monthly with the last payment due in November 2004, however, the entire liability is disclosed as a current liability as it relates to one of the assets held for resale which is disclosed as a current asset with a carrying value of \$4,000,000 at 30 June 2003.

2) These convertible notes were repaid in full on 30 November 2002.
On 8 January 2002, RCF and the Company, Silkwest Holdings Pty Ltd and St Barbara Pastoral Co. Pty Ltd entered $3V$ into a financing facility of \$20 million ("RCF Facility"). Each of these companies entered into deeds of fixed and floating charges with RCF to secure their obligations under the RCF Facility. In addition, the Company granted RCF a share mortgage. Silkwest Holdings Pty Ltd and St Barbara Pastoral Co. Pty Ltd have entered into deeds of guarantee and indemnity with RCF.

The security provided to RCF constitutes a first ranking security to RCF over any assets of the consolidated entity acquired by utilising funds drawn down under the RCF Facility and a second ranking charge over the consolidated entity assets generally. This second ranking security is subordinated to the existing Macquarie Bank Limited security under a deed of priority.

Interest of 10 percent per annum calculated daily pursuant to the RCF Facility is payable.

The RCF Facility provides that, at the election of the Company, the Company may satisfy a payment obligation for interest by the issue of ordinary shares based on the weighted average sell price on ASX of the Ordinary Shares on the date the payment obligation falls due, pursuant to an agreed formula. The Company elected to pay the interest payment obligation due 30 June 2003 by the issue of Ordinary Shares. 15,910,922 ordinary shares were issued by the Company to RCF on 7 July 2003.

The RCF Facility provides RCF with an entitlement to be issued options. The Company must, at the end of June and December of each period during the term, issue, options to RCF calculated with reference to the funding portion which remains outstanding on each day. The term of each option will be 42 months from the date of issue. The options issued under the RCF Facility are not listed for trading on ASX.

The RCF Facility was modified and extended on 14 February 2003 such that the facility of \$20 million reduced to \$12 million.

\$5 million was repaid to RCF on 9 July 2003 on receipt of the proceeds of the sale of the shares in Dioro Exploration NL. Consequently the RCF Facility was reduced to \$7 million as at that date.

Subject to shareholder approval at a General Meeting, the balance owing of \$7 million will be converted at \$0.08 per share into fully paid ordinary shares in the Company. Note 36 - Events occurring after Balance Date sets out details of the agreement entered into between the Company and RCF on 22 September 2003.

On 27 February 2003, the Company announced that it had entered into an agreement to raise \$2,800,000 by way of St Barbara issuing \$2,800,000 of unsecured convertible notes to Ocean Resources Capital Holdings Limited ("Ocean"). The funds were raised to fund the Paddys Flat acquisition and general working capital. The repayment date for the convertible notes is 31 December 2007 and carried interest at 12%. The convertible note was convertible, at the option of Ocean, into 21,538,462 fully paid ordinary shares in the Company at \$0.13 per share. Shares to be issued pursuant to this convertible note were approved by shareholders at the 6 June 2003 General Meetina.

On 27 June 2003, the Company announced that Ocean had exercised early, at a price of \$0.13 per share, 15,000,000 shares pursuant to the convertible note. These shares were transferred to a UK institution by Ocean for no consideration in conjunction with the placement on 26 June 2003.

On 27 February 2003, the Company announced that it had entered into an agreement to raise \$5,600,000 through an unsecured convertible loan from Ocean. The funds were raised to fund the Paddys Flat acquisition and general working capital. The repayment date for the convertible loan is 31 December 2007 and carries interest at 12%. The convertible note is convertible, at the option of Ocean, into 43,076,923 fully paid ordinary shares in St Barbara at \$0.13 per share. Shares to be issued pursuant to this convertible loan were approved by shareholders at the 6 June 2003 General Meeting.

On 10 July 2003, the Company announced that the existing convertible note and convertible loan dated 27 February 2003 had been cancelled and a new convertible loan had been entered into with Ocean effective 19 June 2003. The face value of the new unsecured convertible toan from Ocean is \$7,200,000, the repayment date is 19 December 2005 and carries interest at 12%. The convertible loan is convertible, at the option of Ocean, into 90,000,000 fully paid ordinary shares in the Company at \$0.08 per share. Any shares to be issued pursuant to this convertible loan will require approval by shareholders at a General Meeting. On seven business days after shareholder approval at a General Meeting, \$2,800,000 of the total face value shall automatically be converted into 35,000,000 fully paid ordinary shares in the Company at \$0.08 per share. The remaining face value owing will then reduce to \$4,400,000. In the event the Company fails to obtain shareholder approval at a General Meeting within twelve months of the Issue Date then Ocean may, on not less than sixty business days' notice, require repayment of the total face value. As at 30 June 2003, \$1,370,000 of the convertible loan had not vet been received (see Note 8) but were received in August 2003.

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Assets pledged as security
The carrying amounts of assets pledged as security are:
First Mortgage
Property, plant and equipment	8,380	10,419	7,253	9,072
Other financial assets	4,891	4,526	25,607	25,239
Finance Lease
Plant and equipment under finance lease ш.	4,000	4,896	4,000	4,896
Floating Charge
Cash and restricted cash	4,170	10,869	4,168	10,868
Receivables	3,688	3,287	3,688	2,939
Total assets pledged as security	25,129	33,997	44,716	53,014
18. PROVISIONS
Current
Employee benefits	771	902	771	902
Directors' retirement benefits	98	98	98	98
Surplus leased space	29	37	29	37
	898	1,037	898	1,037
Non-Current
Employee benefits	180	108	180	108
Rehabilitation	3,696	2,543	3,696	2,543
Surplus leased space		18		18
	3,876	2,669	3,876	2,669

Movements in Provisions

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

	Directors' retirement benefits \$'000	Surplus leased space \$'000	Total \$'000
Consolidated and Company
Current
Carrying amount at start of the year	98	37	135
Payments made	$\overline{\phantom{a}}$	(26)	(26)
Transfer from non-current	$\tilde{\phantom{a}}$	18	18
Carrying amount at end of the year	98	29	127
	Rehabilitation \$'000	Surplus leased space \$'000	Total \$'000
Non-Curront

Non-Current
Carrying amount at start of the year	2.543	18	2.561
Provision acquired	598	$\mathbf{u}$	598
Additional provision made	555	$\overline{\phantom{a}}$	555
Transfer to current	$\overline{\phantom{a}}$	(18)	(18)
Carrying amount at end of the year	3.696	$\bullet$	3.696

		Consolidated		Company
		30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
19.	CONTRIBUTED EQUITY
	Ordinary Share Capital
	Issued and paid up	127.534	118.213	127.534	118.213

These shares have no par value and are fully paid 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.

Movements in Ordinary Share Capital:

Date	Details	Notes	Number of shares	Issue price	\$'000
30 June 01	Opening balance		216,506,706		98,191
	Share buy back	(1)	(4,568,756)		(1,066)
22 Jan 02	Share issue	(2)	2,352,403	\$0.2125	500
13 Feb 02	Placement	(3)	10,909,090	\$0.2200	2,400
	Share issue expenses			$\tilde{\phantom{a}}$	(113)
9 Apr 02	Share issue	(4)	7,058,824	\$0.2125	1,500
27 May 02	Placement	(5)	60,000,000	\$0,2000	12,000
	Share issue expenses				(732)
5 June 02	Placement	(6)	27,500,000	\$0.2100	5,775
	Share issue expenses				(242)
30 June 02	Balance		319,758,267		118,213
15 July 02	Share issue	(7)	1,210,052	\$0.2037	246
15 July 02	Share issue	(7)	196,562	\$0.2263	44
15 July 02	Share issue	(9)	1,846,628	\$0.2143	396
21 Aug 02	Placement	(9)	34,333,332	\$0.1650	5,665
	Share issue expenses				(993)
17 Oct 02	Share issue	(8)	280,140	\$0.1973	55
2 Dec 02	Share issue	(7)	1,562,000	\$0.0960	150
31 Dec 02	Share issue	(7)	1,067,616	\$0.0843	90
31 Dec 02	Share issue	(7)	4,261,200	\$0.1021	435
31 Dec 02	Share issue	(7)	437,006	\$0.1136	50
31 Jan 03	Share issue	(10)	15,000,000	\$0.1100	1,650
	Share issue expenses				(83)
17 Feb 03	Share issue	(11)	5,600,000	\$0.1100	616
14 Mar 03	Correction		500
26 June 03	Share issue	(12)	15,000,000
26 June 03	Share issue	(13)	15,000,000	\$0.0667	1,000
30 June 03	Closing Balance		415,553,303		127,534

$(1)$ During October and November 2001 the company purchased and cancelled all 4,568,756 fully paid shares on-market being 2% of ordinary share capital. The buy-back decision was made by the Company on the Board's belief that the share prices at the time did not reflect the underlying value of the Company's share capital. The total cost of \$1,066,000, was deducted from ordinary share capital. There is no current on-market buy-back.
$(2)$ Share issue to RCF for RCF Facility establishment fee.
$(3)$ Placement to raise working capital.
$(4)$ Share issue to RCF for the balance of the RCF Facility establishment fee.
$(5)$ Placement to raise working capital.
$(6)$ Placement to raise working capital.
$(7)$ Share issue to RCF for Facility interest and fees
$(8)$ Share issue in accordance with an agreement with Grimwood Davies Pty Ltd for conducting a drilling program in the Meekatharra area $(9)$
Placement to raise working capital
$(10)$ Placement to raise working capital
$(11)$ Share issue on finalisation of Paulsens Native Title agreement
$(12)$ Share issue on part conversion of convertible note - see Note 17 (4)
$(13)$ Placement to raise working capital

20. OPTIONS

$(a)$ Option Reserve

		Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Option reserve at the beginning of the financial period	430	w	430
Options issued during the financial period	1.529	430	1.529	430
Option reserve at the end of the financial period	1.959	430	1.959	430

This option reserve arises from 9,703,285 unlisted and 22,166,666 listed options being issued during the course of the year.

The fair value of each option issued has been valued using the Black-Scholes option pricing model after considering factors such as the term of the option, the risk free interest rate and the volatility of the share price.

$(b)$ Listed Share Options

The consolidated entity had the following listed share options on issue at 30 June 2003.

Date	Details	Notes	Number of Options	Exercise Price	Expiry Date
30 June 2002	Balance		22,163,106	\$0.30	29 February 2004
21 Aug 2002	Placement	(1)	17.166,666	\$0.30	29 February 2004
6 Sept 2002	Financing	(2)	5,000,000	\$0.30	29 February 2004
30 June 2003	Balance		44,329,772	\$0.30	29 February 2004

$(1)$ These options were issued pursuant to the placement of 34,333,332 fully paid ordinary shares. These options enable the holder of each option to subscribe for one fully paid ordinary share in the Company for every option held.

These options were issued in satisfaction of a financing fee.

$(c)$ Unlisted Share Options

At 30 June 2003, the consolidated entity had 44,905,632 unlisted share options on issue.

On 20 October 1995, Shareholders at a general meeting approved the Employee Share Option Plan (ESOP). The purpose of the ESOP is to provide an incentive to executive officers on the Company. No new options will be issued in future under this ESOP.

On 28 November 2001, Shareholders at a general meeting approved a new Employee Option Plan.

Each unlisted share option entitles the holder to subscribe for 1 ordinary share on, substantially, the following terms:

each unlisted option entitles the holder to subscribe for 1 ordinary share at the exercise prices set $(i)$ out below:
the unlisted options are exercisable at any time up to 5.00pm Perth, Western Australia time on the $(ii)$ dates set out below by completing an option exercise form and delivering it together with the required payment for the relevant number of ordinary shares in respect of which the unlisted options are exercised to the registered office of the Company. Any unlisted options not exercised by that time will lapse.

The unlisted options are not admitted to the official list of ASX.

Expiry Date	Exercise Price	No. of Unlisted Options	Issue Basis
23 Dec 04	\$0.45	5,000,000	Shareholder Approved
23 Dec 04	\$0.35	5,000,000	Shareholder Approved
23 Dec 04	\$0.25	5,000,000	Shareholder Approved
31 Dec 04	\$0.40	500,000	Shareholder Approved
31 Dec 04	\$0.40	10,000,000	Shareholder Approved
26 Apr 07	\$0.35	6,000,000	Employee Option Plan
17 Jan 08	\$0.35	1,575,000	Employee Option Plan
7 Feb 05	\$0.2125	157,938	RCF Facility and Shareholder ratified
5 Mar 05	\$0.2125	373,893	RCF Facility and Shareholder ratified
2 Apr 05	\$0.2125	449,638	RCF Facility and Shareholder ratified
20 May 05	\$0.2125	470,589	RCF Facility and Shareholder ratified
20 May 05	\$0.2086	36,118	RCF Facility and Shareholder ratified
3 June 05	\$0.2125	499,597	RCF Facility and Shareholder ratified
3 June 05	\$0.2086	50,894	RCF Facility and Shareholder ratified
3 June 05	\$0.2124	88,680	RCF Facility and Shareholder ratified
15 July 05	\$0.2125	483,482	RCF Facility and Shareholder ratified
15 July 05	\$0.2086	49,252	RCF Facility and Shareholder ratified
15 July 05	\$0.2124	241,854	RCF Facility and Shareholder ratified
13 Aug 05	\$0.2125	499,597	RCF Facility and Shareholder ratified
13 Aug 05	\$0.2086	50,894	RCF Facility and Shareholder ratified
13 Aug 05	\$0.2124	249,917	RCF Facility and Shareholder ratified
6 Sept 05	\$0.2125	499,597	RCF Facility and Shareholder ratified
6 Sept 05	\$0.2086	50,894	RCF Facility and Shareholder ratified
6 Sept 05	\$0.2124	249,917	RCF Facility and Shareholder ratified
15 Oct 05	\$0.2125	483,482	RCF Facility and Shareholder ratified
15 Oct 05	\$0.2086	49,252	RCF Facility and Shareholder ratified
15 Oct 05	\$0.2124	241,854	RCF Facility and Shareholder ratified
31 Dec 05	\$0.1100	1,000,000	RCF Facility and Shareholder ratified
7 July 06	\$0.2125	1,482,677	RCF Facility and Shareholder ratified
7 July 06	\$0.2086	151,040	RCF Facility and Shareholder ratified
7 July 06	\$0.2124	741,686	RCF Facility and Shareholder ratified
7 July 06	\$0.1138	3,177,890	RCF Facility and Shareholder ratified
	Total	44,905,632

$21.$ ACCUMULATED LOSSES

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Accumulated losses at the beginning of the financial period	(58, 787)	(40, 893)	(68, 596)	(48, 149)
Net profit attributable to members of the Company	(32,733)	(17, 894)	(27, 935)	(20, 447)
Accumulated losses at the end of the financial period	(91, 520)	(58.787)	(96, 531)	(68, 596)
22. OUTSIDE EQUITY INTEREST
Outside equity interest in:
contributed equity	2,403	2.403
accumulated losses opening balance ă.	(2, 151)	(1,996)
retained loss current period	(252)	(155)
		252

The outside equity interest arises from the Company's 88.3% interest in Taipan Resources NL.

23. FINANCIAL INSTRUMENTS

$(a)$ Commodity Contracts

At the end of each financial period, the consolidated entity had committed to the following gold hedging contracts:

		Consolidated		Company
		30 June 2003	30 June 2002	30 June 2003	30 June 2002
Forwards
$\overline{\phantom{a}}$	ounces hedged	$\bullet$	4.221	$\bullet$	4.221
$\tilde{\phantom{a}}$	average price per ounce	$\blacksquare$	\$518	$\bullet$	\$518
$\Delta$	contract type	٠	Forward	$\mathbf{m}$	Forward

Hedging was historically undertaken in order to avoid or minimise possible adverse financial effects of movements in the price of gold. Gold from production is delivered into forward contracts. The gains and costs of entering these contracts and any realised or unrealised gains and losses are deferred until the underlying cash flow occurs.

The unrealised losses deferred at the reporting date and the year to which they relate are set out below:

		Consolidated Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Less than a year	$\mathbf{u}$	176	$\mathbf{m}_\mathrm{c}$	176

These unrealised losses are measured by comparing the contracted price to the spot gold price at balance date. The amounts disclosed above are only indicative of the amounts which may ultimately be realised.

$(b)$ Credit Risk Exposures

The credit risk on financial assets of the consolidated entity which have been recognised, other than investments in shares, is generally the carrying amount, net of any provisions for doubtful debts.

Interest Rate Risk Exposures $(c)$

The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the following tables. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the consolidated entity intends to hold fixed rate assets and liabilities to maturity.

	Fixed interest maturing in:
	Floating Interest rate \$'000	1 year or less \$'000	Over 1 to $5$ years \$'000	Non- interest bearing \$'000	Total \$'000
30 June 2003
Financial assets
Cash	596			1	597
Restricted cash	3,573				3,573
Receivables				3,688	3,688
Investments				4,891	4,891
	4,169		$\tilde{\phantom{a}}$	8,580	12,749
Weighted average interest rate	4.60%
Financial liabilities
Trade & other creditors				(10, 561)	(10, 561)
Lease liability		(1, 242)	(776)		(2,018)
Other Ioans		(13, 133)	(8, 833)		(21,966)
		(14, 375)	(9,609)	(10, 561)	(34, 545)
Weighted average interest rate		9.93%	11.18%
Net financial assets/(liabilities)	4,169	(14, 375)	(9,609)	(1,981)	(21, 796)
30 June 2002
Financial assets
Cash	9,031			1	9,032
Restricted cash	1,837				1,837
Receivables				3,287	3,287
Investments				4,526	4,526
	10,868			7,814	18,682
Weighted average interest rate	3.88%
Financial liabilities
Trade & other creditors				(15,905)	(15,905)
Lease liability		(1,055)	(2,017)		(3,072)
Other loans		(9, 854)	(9,393)		(19, 247)
	$\blacksquare$	(10, 909)	(11, 410)	(15,905)	(38, 224)
Weighted average interest rate		11.13%	9.94%
Net financial assets/(liabilities)	10,868	(10,909)	(11, 410)	(8,091)	(19, 542)

Reconciliation of Net Financial Assets to Net Assets	2003 \$'000	2002 \$'000
Net financial assets above	(21,796)	(19, 542)
Non-financial assets and liabilities
Inventories $\tilde{\phantom{a}}$	4.264	5,151
Assets held for resale $\tilde{\phantom{a}}$	4,194	5,409
Property, plant and equipment $\blacksquare$	8.380	9.906
Other assets $\tilde{\phantom{a}}$	1,333	1,737
Provisions $\tilde{\phantom{a}}$	(4,774)	(3,706)
Deferred tax assets $\tilde{\phantom{a}}$		2.965
Exploration, evaluation and development $\blacksquare$	46.372	58.188
Net assets per statement of financial position	37.973	60.108

Net Fair Value of Financial Assets and Liabilities $(d)$

$(i)$ On-Balance Sheet

The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities of the consolidated entity approximates their carrying value. The net fair value of other monetary financial assets and financial liabilities is based upon market prices.

Off-Balance Sheet $(ii)$

For forward exchange and commodity contracts, the net fair value is taken to be the unrealised gain or loss at balance date calculated by reference to the current forward rates for contracts with similar maturity profiles.

The consolidated entity has potential financial liabilities that may arise from certain contingencies disclosed in Note 28. As explained in that note, no material losses are anticipated in respect of any of those contingencies and the net fair value disclosed is the Directors' estimate of amounts which would be payable by the consolidated entity as consideration for the assumption of those contingencies by another party.

The carrying amounts and the net fair values of financial assets and liabilities at balance date are:

		2003	2002
	Carrying Amount \$'000	Net Fair Value \$'000	Carrying Amount \$'000	Net Fair Value \$'000
On balance sheet financial instruments Financial assets
Cash and restricted cash	4,170	4,170	10,869	10,869
Receivables	3,688	3,688	3,287	3,287
Traded investments	4,891	4,662	4.526	5,810
	12,749	12,520	18,682	19,966
Financial liabilities
Payables	10,561	10,561	15,905	15,905
Lease liability	2,018	2,018	3,072	3,072
Other Ioans	21,966	21,966	19,247	19,247
	34,545	34,545	38,224	38,224
Off balance sheet financial instruments Financial liabilities
Gold forwards loss				176

REMUNERATION OF DIRECTORS 24.

	Consolidated		Company
	30 June 2003 \$	30 June 2002 S	30 June 2003 S	30 June 2002 \$
Income paid or payable, or otherwise made available, to Directors by entities in the consolidated entity and related parties in connection with the management of affairs of the Company or its controlled entities	719.049	764.269	656.592	601.861

The 2003 consolidated remuneration includes Director remuneration for Directors of Taipan Resources NL totalling \$62,457 (2002: \$162,408).

No options were granted to Directors during the year ended 30 June 2003. The amounts disclosed for remuneration of Directors does not include the assessed fair values of options granted to directors during the year ended 30 June 2002.

The number of the Company's Directors whose total income from the Company or related parties was within the specified bands are as follows:

		30 June 2003 Number	30 June 2002 Number
\$0	$-$ \$9,999	1	1
\$10,000	$- $19,999$	Ł	1
\$50,000	$-$ \$59,999	1	1
\$100,000	$-$ \$109,999		**
\$260,000	$-$ \$269,999	u,	1
\$270,000	$-$ \$279,999	u.	1
\$550,000	$-$ \$559,999

25. RETIREMENT BENEFITS OF DIRECTORS

No benefits have been paid to Directors in connection with their retirement as a Director of St Barbara Mines Limited. The Company has made a provision for Non-Executive Directors' retirement benefits based on the last three years of Directors' fees paid (see Note 18).

26. REMUNERATION OF EXECUTIVES

	Consolidated	Company
	30 June 2003 5	30 June 2002 \$	30 June 2003 \$	30 June 2002 \$
Remuneration received, or due and receivable, from entities in the consolidated entity and related parties by Australian - based executive officers (including executive directors) whose remuneration was at least \$100,000	2.187.084	1.650.263	2.187.084	1.525.655

Executive remuneration for the year ended 30 June 2003 includes executive officers remuneration of Taipan Resources NL totalling \$nil (2002 : \$124,608).

The amounts disclosed for remuneration of executive officers does not include the assessed fair values of options granted to executive officers during the year ended 30 June 2002 or the year ended 30 June 2003. Details of options issued to executives are set out in the Directors' Report.

The number of executive officers of the consolidated entity and related parties included in these figures are shown below in their relevant income bands:

	Consolidated and Company
	30 June 2003	30 June 2002
\$100,000 to \$109,999
\$120,000 to \$129,999
\$140,000 to \$149,999
\$150,000 to \$159,999
\$160,000 to \$169,999	2	2
\$170,000 to \$179,999
\$190,000 to \$199,999
\$210,000 to \$219,999
\$230,000 to \$239,999
\$240,000 to \$249,999
\$260,000 to \$269,999
\$270,000 to \$279,999
\$370,000 to \$379,999
\$550,000 to \$559,999

$27.$ REMUNERATION OF AUDITORS

	Consolidated		Company
	30 June 2003 \$	30 June 2002 \$	30 June 2003 \$	30 June 2002 \$
During the year the auditor of the Company, and its related practices earned the following remuneration:
PricewaterhouseCoopers
Remuneration for audit or review of the financial reports of the Company or any entity in the consolidated entity	82,000	58,000	76,000	52,000
Remuneration for other services:
Taxation service and general advice $\blacksquare$	11.800	65,029	11,800	65,029
AIM Listing		181.150		181,150
	93.800	304.179	87,800	304.179

2R CONTINGENT LIABILITIES

				Consolidated	Company
			30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
		Details and estimated maximum amounts of contingent liabilities, for which no provisions are included in the accounts, are as follows:
(a)		Guarantees and Undertakings
	$\left( i\right)$	The Company has given undertakings to two of its controlled entities that it intends to provide the necessary financial or other support to enable them to meet their obligations as and when they fall due
	(ii)	Indemnity to the Company's bankers in respect of guarantees provided by the bankers to the Western Australian Department of Minerals and Energy - see Note 7	3,262	1.492	3,262	1.492
	(iii)	Security guarantees given to the Western Australian Department of Minerals and Energy	30	333	30	218

$(b)$ Native Title

It is possible that Native Title, as defined in the Native Title Act 1993, may be established over land in which the consolidated entity has an interest. The Consolidated entity has received several claims from interested parties to this effect. It is impossible at this stage to quantify the impact (if any) these, or any future claims, may have on the operations of the Consolidated entity. The outstanding claims remained unresolved at balance date, and negotiations are continuing.

Litigation $(c)$

$(i)$ Westgold

In late September 2000, a demand was made against the Company by Westgold Resources NL ("Westgold") alleging a loss and damage in the sum of \$7,581,768. A Writ of Summons was issued by Westgold against the Company in the Supreme Court of Western Australia in CIV 2427 of 2000 on 20 October 2000.

The alleged claim by Westgold arose from a series of share transactions in the Company shares which took place between May and August 1997 as follows:

On 12 May 1997, Westgold purchased 10.350.000 St Barbara shares at \$0.72 per share from Mr Woss who was a director of the Company at the time ("Woss Shares"). This share purchase took the total shares owned in the Company by Westgold to 23,898,951 (approximately 13 percent of the Company equity at the time) at a total cost of \$18.4 million.
On 9 July 1997. Westgold sold all of its shareholding in the Company (which included the Woss Shares) to Montleigh Investments Pty Ltd, a company associated with Mr Ross Atkins who was a director of the Company at the time. The total sale consideration was \$19.1 million. Approximately \$8.4 million of the sale consideration was due to be paid by 30 June 1998. During 1998, Montleigh Investments Pty Ltd defaulted on payment of the deferred consideration and Westgold recovered \$1.6 million of the deferred consideration.

In these proceedings Westgold has sought to recover the balance of the deferred consideration plus interest from the Company and Mr Woss.

The main components of Westgold's statement of claim against the Company in this Supreme Court Action are as follows:

An alleged breach of section 1001A(2) of the Corporations Act in that the Company allegedly contravened the ASX Listing Rules by failing to notify the ASX of information alleged to have been

known to it on or before 30 April 1997 (being a date prior to Westgold's purchase of the Woss Shares). It is Westgold's contention that certain information, if published, was information that a reasonable person would expect to have a material effect on the price or value of the Company's shares

An alleged contravention of the previous section 995(2) of the Corporations Law (being a misleading or deceptive statement made in relation to securities in the legislation prior to the current Corporations Act) which Westgold allege to have occurred by public releases made on or about 30 April 1997. Westgold allege that these public releases represented that, save for certain matters, the Company's operations were proceeding satisfactorily and with record levels of gold production in the ordinary course of operations and that there was no further adverse factors affecting or likely to affect the Company's operations or financial position. Westgold's contention is that this was misleading and deceptive in that, in its contention:
the Company's operations were not proceeding satisfactorily and the Company had not overcome and was not overcoming operational and financial difficulties from which it had suffered:
there were many adverse factors affecting and likely to affect the Company's operations and financial position;
the record production level in the relevant quarter was the result of an abnormal occurrence;
the Company was aware of a reason or factor which likely would preclude the establishment of a viable mining operation at certain of the Company's tenements and which likely would require revision of the Company's published gold reserves for those tenements.

All of these allegations are denied by St Barbara and the claim is being robustly defended. St Barbara have joined all of the directors who were directors of St Barbara at the time to the action.

An important issue concerns the Company's insurance arrangements. The Company was insured during the relevant period for director's and officers' liability of the nature in respect of which the Westgold proceedings have been issued, however, uncertainties currently exist as to whether or not this insurance cover will be available to the Company in the event that it is unsuccessful in this litigation as the insurer is denving policy liability.

The best case scenario for the Company is to be wholly successful in its defence and thereby have no liability. The maximum possible liability for the Company (without any contribution from former directors, insurers or insurance brokers) would be for the entire loss alleged by Westgold (being approximately \$7.5 million plus interest to the date of judgement calculated at 8 percent, together with legal costs). The Company intends, as part of its defence, to arque that should it be found liable (which it denies) then certain contribution orders should be made in relation to third parties and that, in addition, the Company is of the view that Westgold must, in any event, apportion any loss it incurred as between the sale of the Woss Share and other St Barbara shares held by Westgold which were sold simultaneously with the Woss Shares. An unsuccessful party will usually also be liable for its own and the other party's legal costs.

The matter is vet to be entered for trial.

The Company has incurred legal costs to date in the order of \$600,000. It is possible that the Westgold litigation may not proceed to trial for a further 12 months, in which case, the Company in defending this action may incur further legal costs in the order of \$750,000 to \$1 million, which costs could escalate in the event that costs were awarded against the Company or the trial judge's decision were to be appealed. It should be emphasised that none of the current Directors of the Company were directors of the Company at the time that the above share transactions took place.

$(ii)$ Kingstream

On 2 July 2002, Kingstream Steel Limited (Subject to Deed of Company Arrangement) commenced proceedings in the Supreme Court of Western Australia against the Company and Zygot Ltd. Kingstream alleges it has a claim against the Company and Zygot Ltd arising from the withdrawal of three mining lease applications, which applications are alleged to be part of the subject matter of an Option Deed between the Company and Kingstream dated 26 March 1997 as supplemented by a Deed dated 20 January 1998 and a letter dated 29 January 1999 from the Company's lawyers to Kingstream. Kingstream exercised the option in February 1999.

Kingstream alleges in essence that the Company and Zygot Ltd breached the express or implied terms of the Option Deed by causing or allowing the MLA's to be withdrawn.

The proceedings are at an early stage and have been, and will continue to be, defended. However, on the basis of expert advice received the Company considers its potential exposure in relation to this claim to have a value (including costs) of less than \$200,000.

29. COMMITMENTS FOR EXPENDITURE

			Consolidated	Company
		30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
(a)	Exploration
	In order to maintain rights of tenure to mining tenements, the consolidated entity is required to outlay in 2003/04 for tenement rentals and minimum exploration expenditure requirements of the Western Australian Department of Minerals and Energy. This commitment in 2003/04 will continue for future years with the amount dependent upon tenement holdings	9,361	9,181	8,114	7,855
(b)	Hire Purchase Commitments
	Analysis of hire purchase commitments: Payable not later than 1 year (refer Note 17)	1,133	1,285	1,133	1,285
	Payable later than 1 year, not later than 5 years (refer Note 17)	1,528	2,893	1,528	2,893
		2,661	4,178	2,661	4,178
	These commitments relate to plant and equipment and are based on the cost of the vehicles and are payable over a period of up to 48 months.
(c)	Finance Lease Commitments
	Analysis of finance lease commitments:
	Payable not later than 1 year	1,368	1,395	1,368	1,395
	Payable later than 1 year, not later than 5 years	855	2,299	855	2,299
	Deduct future charges on finance leases	(205)	(622)	(205)	(622)
	Provide for as a liability	2,018	3,702	2.018	3,702
	Representing lease liabilities:
	Current (refer Note 17)	2,018	3,072	2,018	3,072
	Lease payments are based on the cost of the equipment. At 30 June 2003, the Company has the option to purchase the equipment upon a residual payment of \$440,000.
	Analysis of Non-Cancellable Operating Lease Commitments	371		371
	Payable not later than 1 year		408		408
	Payable later than 1 year, not later than 2 years		204		204
	Payable later than 2 years, not later than
	5 years
		371	612	371	612
	The non-cancellable operating lease

commitments are the net rental payments

associated with rental properties. A provision

		Consolidated		Company
		30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
	for excess lease space, refer to Note 18, has been recognised on the statement of financial position.
30.	EMPLOYEES
(a)	Employment Benefit Liabilities
	Provision for employee benefits and Directors' benefits and related on-cost liabilities
	Current (Note 18) $\blacksquare$	869	1,000	869	1,000
	Non-current (Note 18) $\blacksquare$	180	108	180	108
		1,049	1,108	1,049	1,108
		Number 2003	Number 2002	Number 2003	Number 2002
(b)	Number of Employees
	Number of employees at financial year end	66	116	66	116

$(c)$ Superannuation

The Company participates in an "accumulation" superannuation plan under which all employees are entitled to lump sum benefits on retirement, disability or death. The Company contributes various percentages of wages and salaries to the plan. The contributions made are legally enforceable. No actuarial assessment of the plan has been made as such assessments are inappropriate to an "accumulation" plan. The assets of the plan are sufficient to satisfy all benefits that have vested under the plan in the event of its termination, or in the event of voluntary or compulsory termination, of the employment of each employee.

Employee Share Option Plan $(d)$

Shareholders approved an Emplovee Share Option Plan on 20 October 1995 ("ESOP"). This ESOP entitles management who meet incentive objectives to apply for options to purchase shares in the Company. There is no vesting period for these options and accordingly employees can exercise these options at any time after they have been issued. These options are automatically cancelled when the employee leaves the Company. Details of options on issue under this ESOP are set out in Note 20(c) (iii). No new options will be issued under this ESOP.

(e) Employee Option Plan

Shareholders approved an Employee Option Plan on November 2001. A total of 1,775,000 options were issued under this plan on 17 January 2003 to 11 employees. There is no vesting period for these options and accordingly employees can exercise these options at any time after they have been issued. These options are automatically cancelled when the employee leaves the Company. Details of the options on issue at 30 June 2003 under this plan are set out in Note 20 (c) (iii).

$31.$ RELATED PARTIES

$(a)$ Directors

The names of persons who were Directors of the Company at any time during each year are as follows:

S W Miller
G. B. Speechly
H. G. Tuten
K. A. Dundo
Mr J.T. McClements resigned as an alternative director to Mr H.G. Tuten on 10 July 2003.

$(b)$ Remuneration and Retirement Benefits

Information on remuneration and refirement benefits of Directors is disclosed in Notes 24 and 25 respectively.

Loans to Directors and Director-Related Entities $(c)$

There were no loans to Directors of entities in the consolidated entity and their director-related entities during each of the years ended 30 June 2003 (2002: nil)

Other Transactions with Directors of the Company and their Director-Related Entities $(d)$

The aggregate amounts brought to account in respect of the following types of transactions with Directors of entities in the consolidated entities and their Director related entities were:

			Consolidated and Company
Director	Notes	30 June 2003 \$	30 June 2002 \$
S. W. Miller		$\blacksquare$
G.B. Speechly		$\blacksquare$
K.A. Dundo	(1)	212.493	887.227
H.G. Tuten	(2)	3,249,142	2.291.918

$(1)$ Paid to Clayton Utz for legal services. Mr Dundo was a partner of Clayton Utz.
$(2)$ Paid to RCF by way of issuance of shares and options as required under the RCF Facility. Mr Tuten is the Chairman of RCF Management L.L.C. the management company of RCF.

Transactions of Directors and Director-Related Entities Concerning Shares or Share Options $(e)$

Relevant interests in shares and options of the Company held by directors of the Company and consolidated entity or their director-related entities in the Company:

	Consolidated and Company
	30 June 2003 S Number	30 June 2002 s Number
Ordinary Shares - fully paid
Directors:
S. W. Miller ⁽¹⁾	۰
G. B. Speechly	20,000	20,000
K. A. Dundo	100,000	100,000
H. G. Tuten $(2)$	$\overline{\phantom{a}}$
Connected Persons:
Strata Mining Corporation Limited ⁽³⁾	32,200,000	36,200,000
RCF ⁽²⁾	18.146.163	9.411.227

$(1)$ Mr S.W. Miller is a director and shareholder of Strata Mining Corporation NL which holds a relevant interest in the ordinary share capital of St Barbara Mines Limited.

$(2)$ Mr H.G Tuten is the Chairman of RCF Management L.L.C., the management company of RCF.

Options

Directors:	Date of Grant	Shares under Option	Exercise Price (5)	Expiry
S.W. Miller	23 Dec 1999	2,500,000	\$0.25	23 Dec 2004
		2,500,000	\$0.35	23 Dec 2004
		2,500,000	\$0.45	23 Dec 2004
		10,000,000	\$0.40	31 Dec 2004
		17,500,000
G.B. Speechly	30 Nov 2001	500,000	\$0.40	31 Dec 2004
K.A. Dundo
H.G. Tuten ⁽¹⁾
Connected Persons:
RCF ⁽¹⁾	12 Feb 2002	157,938	\$0.2125	7 Feb 2005
	5 Mar 2002	373,893	\$0.2125	5 Mar 2005
	2 April 2002	449,638	\$0.2125	2 April 2005
	17 May 2002	470,589	\$0.2125	20 May 2005
	17 May 2002	36,118	\$0.2086	20 May 2005
	4 June 2002	499,597	\$0.2125	3 June 2005
	4 June 2002	50,894	\$0.2086	3 June 2005
	4 June 2002	88,680	\$0.2124	3 June 2005
	15 July 2002	483,482	\$0.2125	15 July 2005
	15 July 2002	49,252	\$0.2086	15 July 2005
	15 July 2002	241,854	\$0.2124	15 July 2005
	13 Aug 2002	499,597	\$0.2125	13 Aug 2005
	13 Aug 2002	50,894	\$0.2086	13 Aug 2005
	13 Aug 2002	249,917	\$0.2124	13 Aug 2005
	6 Sept 2002	499,597	\$0.2125	6 Sep 2005
	6 Sept 2002	50,894	\$0.2086	6 Sep 2005
	6 Sept 2002	249,917	\$0.2124	6 Sep 2005
	15 Oct 2002	483,482	\$0.2125	15 Oct 2005
	15 Oct 2002	49,252	\$0.2086	15 Oct 2005
	15 Oct 2002	241,854	\$0.2124	15 Oct 2005
	20 Feb 2003	1,000,000	\$0.1100	31 Dec 2005
	7 Jan 2003	1,482,677	\$0.2125	7 July 2006
	7 Jan 2003	151,040	\$0.2086	7 July 2006
	7 Jan 2003	741,686	\$0.2124	7 July 2006
	7 Jan 2003	3,177,890	\$0.1138	7 July 2006
		11,830,632

$(1)$ Mr Tuten is the Chairman of RCF Management L.L.C., the management company of RCF.

The options granted to RCF were in consideration for facility fees. All other options were granted for no consideration by the Company. There are no voting, conversion or dividend rights related to these options.

$(f)$ Transactions with entities in the wholly-owned group

St Barbara Mines Limited is the parent entity in the wholly-owned group comprising the Company and its wholly-owned subsidiaries.

During the year the Company advanced loans of \$229,776 (2002: \$709,530) to entities in the whollyowned group. Repayments and advances were received of 99,000 (2002: \$9,243,788) from entities in the wholly-owned group. The Company provided accounting and administrative assistance free of charge to all its wholly-owned subsidiaries.

Loans payable to and advanced from wholly-owned subsidiaries to the Company are interest free.

Transactions with non-wholly owned entities in the consolidated entity $(q)$

The Company provides funding to Taipan Resources NL, a controlled entity but not wholly owned, as follows:

	30 June 2003 \$'000	30 June 2002 \$'000
Balance at beginning of financial year	4.877
net funding advanced for exploration and all other activities u. on normal commercial terms	2.842	4,647
cost of shares issued by the Company to PKKP for Native $\blacksquare$ Title Agreement	616
funding advanced for repayment of convertible note $\blacksquare$	7.372
interest	1.141	230
	16.848	4.877

The amount owing by Taipan Resources NL is secured, and bears interest at 10% per annum.

$(h)$ Amounts receivable from and payable to entities in the wholly-owned group and controlled entities

	Consolidated
	30 June 2003 \$'000	30 June 2002 \$'000
Aggregate amounts receivable at balance date from: Non-current:
Controlled entities	16,848	4,877
Entities in the wholly-owned group	2.752	2,621
Less provision for doubtful receivables	(1,360)	(1,269)
	18.240	6.229
Aggregate amounts payable at balance date to: Non-current:
Entities in the wholly-owned group	11,484	11,513

Amounts receivable from Director Related entities $(i)$

At 30 June 2003, the Company had a receivable of \$1,067,000 (2002; nil) owing by Defiance Mining Corporation. Mr S. Miller and Mr K Dundo were appointed directors of Defiance Mining Corporation on 25 June 2003. All of these funds were received after 30 June 2003.

$32.$ INVESTMENTS IN CONTROLLED ENTITIES

The consolidated entity consists of the Company and its wholly-owned controlled entities as follows.

			Equity holding	Cost of Company's investment
Name of entity	Class of Shares	June 2003 %	June 2002 %	June 2003 \$'000	June 2002 \$'000
Australian Eagle Oil Co. NL	Ordinary	100	100	179	179
St Barbara Pastoral Co. Pty Ltd	Ordinary	100	100
Capvern Pty Ltd	Ordinary	100	100
Eagle Group Management Pty Ltd	Ordinary	100	100	$\blacksquare$
Murchison Gold Pty Ltd	Ordinary	100	100
Kingkara Pty Ltd	Ordinary	100	100
Oakjade Pty Ltd	Ordinary	100	100
Regalkey Holdings Pty Ltd	Ordinary	100	100
Silkwest Holdings Pty Ltd	Ordinary	100	100
Sixteenth Ossa Pty Ltd	Ordinary	100	100
Vafitu Pty Ltd	Ordinary	100	100
Zygot Limited	Ordinary	100	100
Taipan Resources NL	Ordinary	88.3	88.3	20,537	20,537
Bushsun Pty Ltd*	Ordinary	88.3	88.3
				20,716	20,716

* 100% subsidiary of Taipan Resources NL

Each company in the consolidated entity was incorporated in Australia.

RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH OUTFLOW FROM OPERATING $33.$ ACTIVITIES

	Consolidated		Company
	30 June 2003 \$'000	30 June 2002 \$'000	30 June 2003 \$'000	30 June 2002 \$'000
Operating loss after income tax	(32,985)	(18,049)	(27, 935)	(20, 447)
Write down FITB	2,965		2,965
Depreciation and amortisation	2,750	2,044	2,706	1,884
Development mining expenses		(35, 201)		(35, 401)
Mining properties change in accounting policies	9,897		2,546
Amortisation and write down of mining expenses	15,641	28,176	15,641	28,176
Provision for diminution in investments			(4,081)
Write down of exploration tenements		3,381		3,381
(Profit)/loss on sale of tenements		(24)		176
Write down of feasibility studies		924		924
(Profit) on sale of property, plant and equipment	(798)	(2,336)	(798)	(2,336)
(Profit)/loss on sale of shares		(9,221)		(5,709)
Borrowing expenses paid with shares	1.015	1,000	1,015	1,000
Convertible note borrowing cost	1,337		1,337
Interest on Taipan Loan account			(1, 141)	(230)
Convertible note interest	303	669
Issuance of options in lieu facility fees	1,529	430	1,529	430
Changes in assets and liabilities:
(Increase)/decrease in trade & other debtors	969	(1, 185)	621	(952)
Decrease/(increase) in inventories	887	1,159	887	1.159
Decrease/(increase) in other assets ×	172	377	145	377
Increase in trade & other creditors, $\blacksquare$ employee entitlements and	(4, 236)	4,835	(4, 338)	5,237
provisions
Net cash inflow from operating activities	(554)	(23,021)	(739)	(22, 331)

NON-CASH FINANCING AND INVESTING ACTIVITIES

The following transactions occurred which affected assets and liabilities which are not reflected in the Statements of Cash Flows.

Year ended 30 June 2002

The issue of 9.411.227 fully paid ordinary shares at \$0.2125 per share to RCF in satisfaction of the RCF Facility fee.

Year ended 30 June 2003

The issue of 8,734,436 fully paid ordinary shares at various prices ranging from \$0.2263 to \$0.0843 to RCF in satisfaction of the RCF Facility fee and interest. See Note 21.

$34.$ FINANCING FACILITIES

Other than as set out in Note 17(iii) regarding the RCF Facility, neither the Company nor the consolidated entity have access to lines of credit that were unutilised.

35. EARNINGS PER SHARE

	Consolidated
	30 June 2003 cents/share	30 June 2002 cents/share
Basic and diluted earnings per share	(8.00)	(7.83)
	\$'000	\$'000
Retained (loss) for the year used in the calculation of basic earnings per share	(32, 733)	(17, 894)
	Number	Number
Weighted average number of fully paid ordinary shares on issue during the year used in the calculation of basic earnings per share	409,326,900	228,375,474

36. EVENTS OCCURRING AFTER BALANCE DATE

Since 30 June 2003 the following has occurred:

On 3 July 2003, the Company sold all of its 44,400,000 shares held in Dioro Exploration NL, receiving net proceeds of \$4,984,000 resulting in a profit on sale of \$93,000. As a result of the sale of the shares, the proceeds were used to reduce the debt facility with RCF by \$5,000,000.
On 7 July 2003, the Company issued 15,910,922 fully paid ordinary shares at \$0,0374 per share to RCF in satisfaction of interest on the debt facility.
On 7 July 2003, the Company issued the following options with an expiry date of 7 January 2007 to RCF in satisfaction of the monthly facility fee:
5.834.004 options exercisable at \$0.2125:
594.308 options exercisable at \$0.2086:
2,918,376 options exercisable at \$0.2124; and $\overline{a}$
17,430,243 options exercisable at \$0,1138.
On 10 July 2003, the Company announced that the convertible note and convertible loan held by Ocean Resources Capital Holdings Limited had been restructured effective 19 June 2003. Under the new arrangement, the existing convertible note and convertible loan are replaced with a convertible loan with a face value of \$7.2 million and a new conversion price of \$0.08. The financial effect of this transaction has been brought to account at 30 June 2003.
On 10 July 2003, the Company announced that Mr James McClements had resigned as alternate director to Mr Hank Tuten due to other work commitments.
On 22 September 2003, the Company announced that RCF has agreed to convert its remaining debt (\$7.0 million) into equity at \$0.08 per share, thereby extinguishing all secured debt from the Company's balance sheet. The debt to equity swap by RCF, including a modification fee of 4.5 million shares, will result in the issue to RCF of 92 million shares at \$0.08 per share, taking its shareholding from 7.9 percent to approximately 23 percent of an enlarged capital base. The transaction is subject to shareholder approval at the Annual General Meeting. The transaction is also subject to RCF obtaining various approvals including the Foreign Investment Review Board. In addition, the Company will restructure the board to consist of five board members; to include two nominees of RCF and a new non-executive Chairman. Should this transaction be approved by shareholders at the Annual General Meeting, the consolidated entity's current liabilities will reduce by \$7.0 million. Should the transaction not be approved by shareholders the \$7.0 million owing to RCF will be repayable on 30 November 2003.
On 25 September 2003, the Company announced the placement of up to 12 million fully paid ordinary shares at \$0.08 per share for working capital to raise up to \$960,000 before expenses.

Unless stated otherwise, the financial effects of the above transactions have not been brought to account at 30 June 2003.

$37₁$ RECONCILIATION OF AUSTRALIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO INTERNATIONAL ACCOUNTING STANDARDS

The financial statements are prepared in accordance with Australian Generally Accepted Accounting Principles ("GAAP"), which differs in certain respects from International Accounting Standards ("IAS"). The approximate effect of applying IAS for the two years ended 30 June 2003, where IAS are materially different to GAAP, is set out below.

	Consolidated
	30 June 2003 \$'000	30 June 2002 \$'000
Net (loss) attributable to members of the Company under GAAP	(32, 733)	(17,894)
Adjustments required under IAS	(8, 571)
Net (loss)/profit according to IAS	(41, 304)	(17, 894)

Equity under GAAP	37,973	82.900
Accounting for impairment of assets	(8.571)
Accounting for investments in available for sale securities	(229)	1.284
Accounting for derivative instruments		(200)
Equity under IAS	29,173	83,984

Accounting for impairment of assets

Under IAS 36 "Impairment of Assets" the Consolidated Entity is required to record an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is measured as the higher of the net selling price and value in use. Net selling price is the amount obtainable from the sale of an asset in an arm's length transaction and value in use is the present value of estimated future cash flows expected to arise from continued use and disposal at the end of its useful life. As a result of this treatment the Consolidated Entity is required to take an after tax write down of \$8.6 million for the year ended 30 June 2003.

Accounting for income taxes

Under IAS deferred tax balances are calculated based on the difference between the tax base of the asset and the carrying amount of the asset. As a result of this treatment, at 30 June 2003, a deferred tax liability of \$7.2 million (2002; \$11.4 million) would be recognised in relation to the carrying value of exploration. evaluation and development expenditure acquired in the Taipan acquisition which has no tax base. This would also result in an increase of \$7.2 million (2002; \$11.4 million) in exploration, evaluation and development expenditure acquired. This adjustment has no impact on net profit or net assets of the consolidated entity.

Accounting for investments in available for sale securities

Under IAS 39 "Financial Instruments: Recognition and Measurement" the Consolidated Entity is required to classify investments in securities as "held to maturity", "held for trading" and "available-for-sale". The investments held by the consolidated entity are classified as available-for-sale and carried at fair value with unrealised gains and losses reported in equity and recycled to the Statement of Financial Performance when sold or impaired.

Accounting for derivative instruments

With the adoption of IAS 39 "Financial Instruments: Recognition and Measurement" on 1 July 2001, the Consolidated Entity is required to measure its financial instruments at fair value. As the Consolidated Entity's financial instruments are hedges, the changes in fair value would be deferred through equity until the hedged transaction occurs and subsequently released to the Statement of Financial Performance. There is no impact for the year ended 30 June 2003 for this accounting treatment (2002: \$0.2 million). This adjustment has no impact on the net profit of the Consolidated Entity.

Accounting for rehabilitation and restoration costs

Under IAS rehabilitation and restoration costs incurred during production and after production stops, should be accrued when the liability is incurred. As a result of this treatment no additional provision for rehabilitation would be recognised at 30 June 2003 (2002: \$450,000). In 2003 this would have resulted in a corresponding increase in deferred development expenditure in the production phase. This adjustment has no material impact on net profit or net assets of the Consolidated Entity.

DIRECTORS' DECLARATION

In the opinion of the directors of St Barbara Mines Limited:

1. the financial statements and notes as set out on pages 10 to 46 are in accordance with the Corporations Act 2001, including:
giving a true and fair view of the financial position of the Company and the consolidated $(a)$ entity's financial position as at 30 June 2003 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date; and
$(b)$ complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
1. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made and signed in accordance with a Resolution of Directors and is signed for and on behalf of the Directors by:

STEPHEN W. MILLER EXECUTIVE CHAIRMAN

30^th day of September 2003 Dated at Perth this

Independent audit report to the members of St Barbara Mines Limited

Audit opinion

In our opinion, the financial report of St Barbara Mines Limited:

gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of St Barbara Mines Limited and the St Barbara Mines Limited Group (defined below) as at 30 June 2003, and of their performance for the year ended on that date. and
is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.

Accounting principles generally accepted in Australia vary in certain respects from international accounting standards. An explanation of the major differences between principles generally accepted in Australia and international accounting standards is presented in note 37 on page 46 to the financial statements. The application of the international accounting standards would have affected the determination of consolidated net profit for the year ended 30 June 2002 and consolidated equity as at 30 June 2003 to the extent summarised in note 37.

This opinion must be read in conjunction with the rest of our audit report.

Inherent uncertainty regarding continuation as a going concern

Without qualification to the opinion expressed above, attention is drawn to the following matter. As a result of matters described in note 1, there is significant uncertainty whether St Barbara Mines Limited will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both St Barbara Mines Limited (the company) and the St Barbara Mines Limited Group (the consolidated entity), for the year ended 30 June 2003. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

PricewaterhouseCooners ABN 52 780 433 757

OVI 250 St Georges Terrace PERTH WA 6000 GPO Box D198 PERTH WA 6840 DX 77 Perth Anstralia www.pwc.com/au Telephone +61 8 9238 3000 Facsimile +61 8 9238 3999

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

When this audit report is included in an Annual Report, our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

PricevortenhouseCoopers

PricewaterhouseCoopers

Savid J. Look

David J Smith Partner

Perth 30 September 2003

AI assistant

ST BARBARA LIMITED — Annual Report 2003

65749_rns_2003-09-29_141676d1-62c5-40db-b7a8-f5b1198a013e.pdf

ST BARBARA MINES LIMITED

ASX SHAREHOLDERS REPORT

Stephen W. Miller

ST BARBARA MINES LIMITED

DIRECTORS REPORT

DIRECTORS

G. Brian Speechly (aged 70) - Non-Executive Director

Kevin A. Dundo (aged 51) - Non-Executive Director

Henderson (Hank) G. Tuten (aged 55) - Non-Executive Director

PRINCIPAL ACTIVITIES

RESULTS OF OPERATIONS

DIVIDENDS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

LIKELY DEVELOPMENTS

EVENTS SUBSEQUENT TO 30 JUNE 2003

MEETINGS OF DIRECTORS

DIRECTORS' INTERESTS IN SHARES AND OPTIONS

DIRECTORS' AND EXECUTIVES' EMOLUMENTS

OPTIONS

OFFICERS' INDEMNITIES AND INSURANCE

ENVIRONMENTAL REGULATIONS AND PERFORMANCE

OCCUPATIONAL, HEALTH, SAFETY AND WELFARE

ROUNDING OF AMOUNTS

AUDITOR

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2003

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2003

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2003

$\overline{1}$ . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation $(a)$

Acquisition of Assets $(b)$

Recoverable Amount of Non-current Assets $(c)$

Change in accounting policy for treatment of Mining Properties $(d)$

Depreciation and Amortisation of Property, Plant and Equipment $(e)$

Depreciation and Amortisation of Assets Held for Resale $(f)$

$(a)$ Accounting for Income Tax

$(h)$ Investments

$\left( i\right)$ Inventories

Maintenance and Repairs $\ddot{\theta}$

Emplovee Benefits $(k)$

Wages and salaries, annual leave and sick leave $(i)$

$(ii)$ Long service leave

$(iii)$ Ownership-based remuneration schemes

$\omega$ Leased Assets

$(m)$ Receivables

$(n)$ Revenue

$\overline{O}$ Cash Flows

Foreian Currency $(D)$

$(a)$ Trade and Other Creditors

$(r)$ Rehabilitation and Restoration Costs

$(s)$ Borrowing Costs

$(t)$ Interest Bearing Liabilities

Rounding of Amounts $(u)$

Earnings per Share $(v)$

Basic earnings per share $(i)$

$(ii)$ Diluted earnings per share

$2.$ SEGMENT INFORMATION

Tax consolidation legislation $(c)$

CASH ASSETS 6.

8. RECEIVABLES

$16.$ PAYABLES

Movements in Provisions

Movements in Ordinary Share Capital:

20. OPTIONS

$(a)$ Option Reserve

$(b)$ Listed Share Options

$(c)$ Unlisted Share Options

$21.$ ACCUMULATED LOSSES

23. FINANCIAL INSTRUMENTS

$(a)$ Commodity Contracts

$(b)$ Credit Risk Exposures

Interest Rate Risk Exposures $(c)$

Net Fair Value of Financial Assets and Liabilities $(d)$

$(i)$ On-Balance Sheet

Off-Balance Sheet $(ii)$

REMUNERATION OF DIRECTORS 24.

25. RETIREMENT BENEFITS OF DIRECTORS

26. REMUNERATION OF EXECUTIVES

ST BARBARA LIMITED Annual Report 2003

$37₁$ RECONCILIATION OF AUSTRALIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO INTERNATIONAL ACCOUNTING STANDARDS