ST BARBARA LIMITED — Annual Report 2004

Aug 30, 2004

ACN 009 165 066

ASX SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to:

Eduard Eshnys

Managing Director Telephone $(08)$ 9476 5555 Overseas $+61894765555$

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

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

Comparatives are twelve months to 30 June 2004.

St Barbara is a dedicated gold company listed on both the Australian Stock Exchange and the AIM (London Stock Exchange) - ticker symbol SBM $-$ with over 11,000 shareholders.

Preliminary Final Result 2003/04 and Outlook

Preliminary Final Result

• Loss before interest, tax, depreciation and amortisation $10.4 million
• Gold sales totalled 40,232 ounces
  • realised gold price $546 per ounce
  • net cash cost $559 per ounce
• Loss after tax $24.5 million after charging:
  • non-cash charges of $23.6 million (including $5.6 million in development and exploration write-downs)

Outlook

Financial Position

The financial position improved post year end by $8.1 million with a placement of shares which raised $3.7 million and the conversion of a $4.4 million interest-bearing Convertible Note to shares at a strike price of 8 cents per share.

Investment of 54.8% holding in NuStar Mining Corporation Limited

NuStar reports that it is currently at an advanced stage of completing bank finance for construction of the Paulsens treatment plant and remains on schedule for a first gold pour May 2005.

Meekatharra operations

The Bluebird 3Mtpa treatment plant is on care and maintenance. The development and exploration strategy for Paddys Flat is being reviewed.

Eduard Eshuvs

Managing Director and CEO

31 August 2004 Financial details in the form of Appendix 4E are attached. ACN 009 165 066

The Company recorded a consolidated net loss of $24.5 million. Lower gold sales revenue and write-downs largely associated with the operations and the exploration portfolio were the dominant elements.

Financial Performance

Gold revenue from operations at $21.9 million was lower as a consequence of lower throughput (campaign milling and cessation of operations) in the second half of the year), and lower grade due to processing of low grade stockpiles. The average realised price of $546 per ounce reflects the average spot price, as all production was sold into spot.

The net operating cost of production (equivalent to the Gold Institute total cash cost) at $606 per ounce reflected the lower throughput, grade and recovery.

Production and Sales Statistics
Period 12 months to 30 June	2004	2003
Ore mined (tonnes)	nil	483,041
Ore milled (tonnes)	1.711.300	2.284.599
Grade milled $(g/t)$	0.84	1.47
Recovery (%)	82.2	89.7
Gold produced (ounces)	37.985	96.611
Gold sold (ounces)	40.232	98,080

Production Cost Statement ($/oz)Modified Gold Institute Standard
Period 12 months to 30 June	2004	2003
Mine site cash costs	539	448
State royalties	20	17
Net Cash Cost	559	465
Mine development capital cost
amortisation	Ω	103
Inventory movements	47	7
Net Operating Cost	606	575
Realised Gold Price	546	572

St Barbara calculates cost of production using a modified Gold Institute Standard. The modification is designed to clearly identify the actual cash cost incurred, which is then normalised depending upon over or under development against the life-of-mine plan. The resultant 'net operating cost' per ounce is equivalent to the GI 'total cash cost' per ounce.

($'000)
for the year ended 30 June	2004	2003
Gold revenue from operations	21,972	56,111
Other revenue	10,871	1,493
Earnings before interest, tax,
depreciation and amortisation and
change in accounting policy	(10,403)	3,717
Change in accounting policy		(9,897)
Earnings before interest, tax,
depreciation and amortisation	(10, 403)	(6,180)
Depreciation	(1,566)	(2,750)
Amortisation and write-down of mine
development	(6.824)	(15,641)
Earning/(loss) before interest and tax	(18,793)	(24, 571)
Interest (expense)/income	(4.385)	(5,499)
Income tax expense		(2,965)
Outside equity interests	(1,368)	(252)
Net profit/(loss)	(24, 546)	(32,733)

Simplified Statement of Financial Performance

A loss before interest, tax, depreciation and amortisation of $24.5 million was determined after close to breakeven operations, after state royalties ($0.5 million), all exploration costs ($5.7 million), a loss on plant/ equipment sales ($2.3 million-principally the Komatsu face shovel), mine development and exploration IV and tenement write-downs ($5.6 million) and diminution in value of investment held by the subsidiary company ($0.3 million).

Other revenue includes the sale of the Dioro investment at $4.98 million and the Burnakura tenements for $1.0 million.

Interest costs were lower reflecting the conversion of the RCF loan to equity mid-year.

The net loss attributable to outside equity interest in 2003 was limited to the net assets of NuStar Mining Corporation Limited. With the completion of the capital raising in December 2003, the net assets of the underlying entity have increased sufficiently so as not to restrict the loss attributable to the outside equity interest for the year ended 30 June 2004.

ACN 009 165 066

Management Discussion and Analysis Financial Result 2003/04 and Outlook

Cash Flow Statement

On a consolidated basis, cash at the period end increased to $12.9 million, largely due to the re-financing of 54.8% subsidiary NuStar Mining Corporation Limited, which completed a $21.0 million equity raising and a $1.0 million Convertible Note issue during the year and had a cash balance of $12.9 million at year end.

During the year the Company also completed a placement which raised $0.96 million, realised $6.0 million in plant and investment sales, and received $0.5 million in released environment bonds.

Furthermore, loan and finance repayments included the RCF loan of $5.0 million in cash while the balance of $7.65 million, including fees, was satisfied by an issue of shares at 8 cents. Part of the Ocean Capital Convertible Note ($2.8 million) was also converted into shares at 8 cents.

Financial Position

The Company's equity decreased by $12 million, largely reflecting the mine development and exploration write-downs.

Lower current assets reflected the sale of the Dioro investment, the Komatsu sale, consumption and obsolescent charge on consumable inventories offset by increased cash balances.

Consolidated working capital improved from negative $7.4 million to negative $1.3 million.

Interest bearing debt at balance date was $6.4 million, a significant reduction ($17.6 million) through the year. The major outstanding component was the Ocean Resource $4.4 million Convertible Note at 12% interest (since converted to shares), $0.9 million Convertible Note at 13.5% interest in the subsidiary and the balance, lease and hire purchase liabilities.

Simplified Cash Flow Statement
(5'000)
for the year ended 30 fune	2004	2003
Operating Activities
Cash receipts	24.507	63,043
Payments - suppliers/employees	(27.878)	(63,256)
Other (net)	(1.437)	(1,678)
Net cash flow	(4,808)	(1, 891)
Investing Activities
Payments -
exploration/evaluation/development	(5.043)	(13,050)
Payments - listed investments	(500)	(365)
lnvestment sold	4.984
Sale-property/plant/equipment (net)	4,479	777
Net cash flow	3,920	(12, 638)
Financing Activities
Loan and finance repayments	(8,092)	(2,263)
Repayment of convertible loan		(7,372)
Restricted cash (bonds)	465	(1,736)
Proceeds from borrowings	750	8.493
lssue of securities	20,017	7.635
Net cash flow	13.140	6.094
Cash - beginning of period	597	9,032
Net change in cash	12,252	(8, 435)
Cash - end of period	12,849	597

Simplified Statement of Financial Position $($'000)$ 2004 As at 30 fune 2004

Assets
Current	15.782	19.164
Non-eurrent	50.717	58.128
Total	66.499	77.292
Liabilities
Current	17.134	26.610
Non-current	4.456	12.709
Total	21.590	39.319
Net assets	44.909	37.973
Contributed equity & option reserve	141.843	129.493
Accumulated losses	(116.066)	(91, 520)
Outside equity interests	19,132
Total shareholders' equity	44.909	37.973

2003

ACN 009 165 066

Management Discussion and Analysis Financial Result 2003/04 and Outlook

OUTLOOK Financial Position

The financial position improved post the year end by $8.1 million with a $3.7 million placement of shares (to RCF Capital Fund, Ocean Resource Capital Holdings and other investors) and the conversion of an outstanding $4.4 million of interest-bearing Convertible Note to shares at a strike price of 8 cents per share by Ocean Resource Capital Holdings on 15 July 2004.

Meekatharra Production

The treatment plant operations at Meekatharra are suspended following depletion of remaining Paddys Flat low grade stockpiles. A review of the underground project and a re-assessment of the exploration potential on the large prospective landbank is in progress.

Investment of 54.8% holding in NuStar Mining Corporation Limited

Management of NuStar has reported that the company is at an advanced stage to secure bank finance for construction of the on-site treatment plant and associated working capital. The first gold pour remains on schedule for May 2005.

CORPORATE INFORMATION

Directors and Executive Management

D'ILLLUID MAIN D'ALLWILLE FRANCHEURILLE
S. J. C. Wise
E. EshuysManaging Director
M. K. Wheatley Non-Executive Director
H. G. Tuten Non-Executive Director
E. L. Boyd

Registered Office

Level 2, 16 Ord Street Was Dough WA 20

westrerin wa outo
	Telephone: +61 8 9476 5555
	Facsimile: +61 8 9476 5500
	Email:
	Website

Stock Exchange Listings

Australian Stock Exchange AIM Board of London Stock Exchange Ticker Symbol: SBM

Issued Capital

As at the date of this report, issued capital is 715,271,157 shares.

There are 84,840,026 unlisted options exercisable at various prices between 11 cents and 40 cents up to 24 May 2008.

Substantial Shareholders

Resource Capital Fund II LP.............. 21.86% Ocean Resource Capital Holdings.... 15.03% RAB Europe Fund Ltd............................. 6.29% St James's Place Recovery Trust.......... 5.65%

ADR Depositary

The Bank of New York ADR Division 101 Barclay Street New York NY10286 USA Telephone: ............................ +1 212 815 2218

Shareholder Enquiries

Matters related to shares held, change
of address and tax file numbers should
be directed to:
Advanced Share Registry Services
Level 7, 200 Adelaide Terrace
Perth WA 6000
Telephone:
Facsimile:
ÖĽ
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone: +44 870 703 6088
Facsimile:

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

This preliminary final report presents consolidated financial information relating to St Barbara Mines Limited and its controlled entities for the year ended 30 June 2004. The comparative information is for the year ended 30 June 2003.

Results for announcement to the market
		%		5000
Revenues from ordinary activities	down	43	tο	32,843
Loss from ordinary activities after tax attributableto membersNet loss for the period attributable to members	downdown	2525	toto.	24,54624,546
Dividends	Amount per security		Franked amount per security
Final dividend	Nil		Nil
Previous corresponding period	Nil		Nil
Record date for determining entitlements to the dividend			Not applicable

Summary of Significant Accounting Policies

The consolidated financial statements have been prepared on a going concern basis. At 30 June 2004 the consolidated entity's current liabilities exceeded its current assets by $1.4 million. A significant portion of cash was raised during December 2003 by the 54% owned NuStar Mining Corporation Limited ("NuStar") (formerly Taipan Resources NL) specifically to develop the Paulsens project and is not readily available to meet the debts of other members of the consolidated entity. At 30 June 2004 the wholly owned group's (being the consolidated entity excluding NuStar Mining Corporation Limited) current liabilities exceeded its current assets by $13.7 million.

In the short term the ability of the wholly owned group to continue as a going concern is dependent upon its ability to:

• $\triangleright$ continue with its restructuring of the group's debt facilities.
• $\ddot{\triangleright}$ continue its disposal of identified non core assets.
• $\geq$ raise funding for and successfully develop the Paddy's Flat project.

Subsequent to year end, the financial position has improved by $8.1 million with the placement of 86,122,000 shares raising $3.7 million and the conversion of a $4.4 million interest bearing convertible note to shares at a strike price of $0.08 per share. The directors are of the view that, based on past experience and the plans which are currently in place, St Barbara Mines Limited and its 100% owned subsidiary companies ("wholly owned group") will be able to continue to restructure its debt facilities, sell such assets as are necessary and secure funding for further exploration and development of Paddys Flat which will enable the wholly owned group to continue as a going concern. Should these events not occur there is uncertainty as to whether the wholly owned group will be able to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded net asset and liability amounts that might be necessary should the entity not continue as a going concern.

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

The Australian Accounting Standards Board (AASB) is adopting International Financial Reporting Standards (IFRS) for application to reporting periods beginning on or after 1 January 2005. The AASB has issued Australian equivalents to IFRS, and the Urgent Issues Group has issued interpretations corresponding to IASB interpretations originated by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee. The adoption of Australian equivalents to IFRS will be first reflected in the consolidated entity's financial statements for the half-year ending 31 December 2005 and the year ending 30 June 2006.

The Company has conducted a high level review and identified certain differences requiring further attention in the transition to IFRS. This will be addressed in more detail in the coming year.

Major changes identified to date that will be required to the consolidated entity's existing accounting policies include the following (references to new AASB standards below are to the Australian equivalents to IFRS issued in July 2004):

Accounting for income taxes

Under the new AASB 112 Income Taxes, deferred tax balances are determined using the balance sheet method which calculates temporary differences based on the carrying amounts of an entity's assets and liabilities in the statement of financial position and their associated tax bases. In addition, current and deferred taxes attributable to amounts recognised directly in equity are also recognised directly in equity.

This will result in a change to the current accounting policy, under which deferred tax balances are determined using the income statement method, items are only tax-effected if they are included in the determination of pre-tax accounting profit or loss and/or taxable income or loss and current and deferred taxes cannot be recognised directly in equity. As the Company does not currently recognise any future income tax benefit for losses, it is unlikely this will have a material impact.

Accounting for investments in available for sale securities

Under AASB 132 "Financial Instruments: Disclosure and Presentation" 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 may be 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. Current practice is to recognise realised and unrealised gains or losses in the Statement of Financial Performance.

Accounting for rehabilitation and restoration costs

Under the new AASB 137 "Provisions, Contingent Liabilities and Contingent Assets", the 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 an additional provision for rehabilitation may be required. This would result 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. Under the current accounting policy, the rehabilitation provision is accrued on a straight line basis over the life of the mine.

The above should not be regarded as a complete list of changes in accounting policies that will result from the transition to Australian equivalents to IFRS, as not all standards have been analysed as yet, and some decisions have not yet been made where choices of accounting policies are available. For these reasons, it is not yet possible to quantify the impact of the transition to Australian equivalents to IFRS on the consolidated entity's financial position and reported results.

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

STATEMENT OF FINANCIAL PERFORMANCE

	30 June 2004A$'000	30 June 2003A$'000
Revenue from sale of gold	21,972	56,111
Other revenues from outside operating activities	10,871	1,493
Total revenue from ordinary activities	32,843	57,604
Changes in inventories of finished goods	(2, 849)	(2, 453)
Raw materials and consumables used	(9, 412)	(11, 543)
Cost of investments sold	(4,891)
Cost of property, plant and equipment sold	(1,958)	(184)
Contract mining expense	(738)	(11, 442)
Contract cartage	(4,337)	(4,845)
Contract milling	(1,616)	(2,616)
Contract maintenance	(581)	(1, 163)
Contract labour and consultants	(1,810)	(1,396)
Tenement rent and rates	(1,329)	(1, 110)
Royalty	(671)	(1,728)
Employee expenses	(5,877)	(8,626)
Exploration drilling and assay expenditure	(5,667)	(3,250)
Cumulative effect of exploration write off prior to 1 July 2002		(4, 422)
Shares issued for native title		(616)
Other expenses from ordinary activities	(1,510)	(8,390)
Earnings/(loss) before interest, tax, depreciation and amortisation(EBITDA)	(10, 403)	(6,180)
Amortisation of mining development expenses	(1,200)	(15,641)
Write down of mining development expenses	(5,624)
Depreciation and amortisation expenses	(1,566)	(2,750)
Earnings/(loss) before interest and tax (EBIT)	(18,793)	(24, 571)
Borrowing costs	(4,385)	(5, 449)
(Loss) from ordinary activities before income tax	(23, 178)	(30,020)
Income tax expense		(2,965)
Net (loss) after income tax	(23, 178)	(32,985)
Net (loss) attributable to outside equity interests	(1,368)	252
Net (loss) attributable to members of the Company	(24, 546)	(32, 733)

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

STATEMENT OF FINANCIAL POSITION

	30 June 2004A$'000	30 June 2003A$'000
Assets
Current assets
Cash assets	12,848	597
Restricted cash		280
Receivables	1,474	3,688
Other financial assets		4,891
Inventories	790	4,264
Assets held for resale		4,194
Other	670	1,250
	15,782	19,164
Non-current assets
Restricted cash	3,109	3,293
Other financial assets	188
Property, plant and equipment	5,069	8,380
Other		83
Mining properties	42,351	46,372
	50,717	58,128
Total Assets	66,499	77,292
Liabilities
Current liabilities
Payables	10,159	10,561
Interest bearing liabilities	6,332	15,151
Provisions	643	898
	17,134	26,610
Non-current liabilities
Interest bearing liabilities	75	8,833
Provisions	4,381	3,876
	4,456	12,709
Total Liabilities	21,590	39,319
Net Assets	44,909	37,973
Equity
Contributed equity	139,400	127,534
Option reserve	2,443	1,959
Accumulated losses	(116,066)	(91, 520)
Parent entity interest	25,777	37,973
Outside equity interest	19,132
Total Equity	44,909	37,973

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

STATEMENT OF CASH FLOWS

	30 June 2004A$'000	30 June 2003A$'000
Cash Flows from Operating Activities
Cash receipts in the course of operations	24,507	63,043
(inclusive of goods and services tax where relevant)
Payments to suppliers and employees	(27, 878)	(64, 593)
(inclusive of goods and services tax)
Other cash receipts	177
Interest received	1,343	292.
Borrowing costs paid and gold lease fees	(2,957)	(633)
Net cash flows (used in) operating activities operating	(4,808)	(1,891)
Cash Flows from Investing Activities
Payments in respect of exploration, evaluation and development	(5,043)	(13,050)
Payments for property, plant and equipment	(4)	(205)
Cash received from tenements sold	1,000
Cash received from investments sold	4,984
Payments for investment in listed securities	(500)	(365)
Cash received from sale of property, plant and equipment	3,483	982
Net cash flows provided by / (used in) investing activities	3,920	(12, 638)
Cash Flows from Financing Activities
Principal repayments under secured loans	(5,000)
Repayment of convertible loan		(7, 372)
Restricted cash	465	(1,736)
Proceeds from borrowings	750	9,830
Net proceeds from issue of securities	20,017	7,635
Repayment of Borrowings	(3092)	(2,263)
Net cash flows provided by financing activities	13,140	6,094
Net increase / (decrease) in cash	12,252	(8, 435)
Cash at the beginning of the financial year	597	9,032
Cash at the end of the financial year	12,849	597

DIVIDENDS

No dividend has been declared.

ABN 36 009 165 066

Preliminary Final Report - Appendix 4E

Financial year ended 30 June 2004

STATEMENT OF ACCUMULATED LOSSES

	30 June 2004A$'000	30 June 2003A$'000
Accumulated losses at the beginning of the financial period	(91.520)	(58, 787)
Net profit attributable to members of the Company	(24.546)	(32,733)
Accumulated losses at the end of the financial period	(116.066)	(91.520)

NET TANGIBLE ASSETS PER SHARE

		30 June 2004	30 June 2003
Net tangible assets	A$'000	66.499	77.292
Fully paid ordinary shares on issues		574.149.157	415.553.303
Net tangible asset per share	AS	0.0116	0.186

CONTROLLED ENTITIES

No controlled entities were acquired or disposed of during the period.

COMMENTARY ON RESULTS

The commentary on the results and activities is set out on the attached announcement.

EARNINGS PER SHARE

	30 June2004cents/share	30 June2003cents/share
Basic and diluted earnings per share	(0.05)	(0.08)
	A$'000	A$'000
Retained (loss) for the year used in the calculation of basic earnings pershare	(24, 546)	(32,733)
	Number	Number
Weighted average number of fully paid ordinary shares on issue duringthe year used in the calculation of basic earnings per share	517,843,596	409,326,900

SEGMENT REPORTING

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

The consolidated entity's head office is in Australia.

AUDIT REPORT

This report is based on accounts which are in the process of being audited.