St Barbara Limited ACN 009 165 066 Level 10, 432 St Kilda Road, Melbourne VIC 3004 Locked Bag 9, Collins Street East, Melbourne VIC 8003 Tel +61 3 8660 1900 Fax +61 3 8660 1999 www.stbarbara.com.au

Net Profit after Tax increases to $130 million

Net profit after tax for the year ended 30 June 2012 increased to $130.2 million, a 90% increase over net profit after tax for the previous year of $68.6 million.

Underlying net profit after tax increased by 140% to $130.8 million due to increased gold production and higher gold prices.

Cash flow from operations more than doubled to $221.8 million (2011: $103.1 million). The company is in a strong financial position with cash available at balance date of $185.2 million and total interest bearing debt of only $4.2 million. St Barbara had a very good year to 30 June 2012 with notable achievements including:

EPS growth from $0.21 in 2011 to $0.40 in 2012;
Return on equity of 26%;
Gold production increased by 31% to 338,879 ounces;
King of the Hills gold mine completed its first full year of production;
The Total Recordable Injury Frequency Rate, calculated as a rolling 12 month average, decreased to 9.0 at 30 June 2012.

Significant items included in the reported net profit after tax totalled a net loss of $0.6 million (2011: net profit of $14.2 million) and comprised an income tax benefit, net unrealised loss on gold options, a reduction in the carrying value of Southern Cross Operations reflecting the end of planned mining operations, and expenses associated with acquisitions.

Subsequent to the year end, the acquisition of Allied Gold Mining Plc by St Barbara Limited was approved by Allied Gold shareholders. Completion of the acquisition is subject to UK Court sanction scheduled for 30 August 2012. The combination will create a leading gold producer, with combined forecast production for FY 13 of approximately 435,000 ounces of gold, and the largest gold reserves and resources portfolio in the mid-tier ASX listed gold sector.

Details of the results for the financial year ended 30 June 2012 are set out in the attached Appendix 4E and financial statements.

Tim Lehany Managing Director and CEO 23 August 2012

ST BARBARA LIMITED

ABN 36 009 165 066

APPENDIX 4E

FOR YEAR ENDED 30 JUNE 2012

Preliminary Final Report

Financial year ended 30 June 2012

This information should be read in conjunction with the St Barbara Limited 2012 Financial Report attached.

Name of entity

St Barbara Limited

ABN or equivalent company reference

36 009 165 066

Results for announcement to the market

		% Change		A$'000
Revenue and other income	up	47%	to	548,890
Profit after tax from ordinary activities (before significantitems) attributable to members(Prior year underlying profit: $54,431,000)	up	140%	to	130,782
Net profit attributable to members of the parent entity(Prior year profit: $68,629,000)	up	90%	to	130,230

During the year there were a number of significant items that had a material impact on the income statement of the consolidated entity as set out in the table below:

	Year ended30 June 2012A$'000	Year ended30 June 2011A$'000
Net profit after tax as reported – Statutory Profit	130,230	68,629
Significant Items After Tax
Net fair value losses/(gains) on gold options	5,400	(13,471)
Expenses associated with acquisitions	5,664	-
Asset impairment write down	10,219	-
Income tax benefit	(20,731)	-
Profit on sale of Tarmoola processing plant	-	(1,164)
Proceeds from sale of tenement rights	-	(1,963)
Native Title accrual	-	2,400
Underlying net profit after tax	130,782	54,431

Dividends

The Company did not declare or pay any dividends during the year or in the prior year.

Any other significant information needed by an investor to make an informed assessment of the entity's financial performance and financial position.

St Barbara completed the 2012 financial year in a strong financial position, reporting a Statutory Profit of $130,230,000 (2011: $68,629,000) for the year ended 30 June 2012, which included significant items amounting to a net loss of $552,000 (2011: net gain of $14,198,000), cash on hand at 30 June 2012 of $185,242,000 (2011: $79,485,000) and total interest bearing borrowings of $4,256,000 (2011: $12,072,000).

The underlying net profit after tax for the year was $130,782,000 (2011: $54,431,000). The consolidated result for the year is summarised as follows:

	30 June 12$'000	30 June 11$'000
Sales revenue	541,189	359,575
EBITDA3(including significant items)	204,034	125,538
EBIT2(including significant items)	106,811	67,058
Statutory Profit1after tax for the year	130,230	68,629
Total net significant items	(552)	14,198
EBITDA3– excluding significant items	218,963	111,340
EBIT2– excluding significant items	128,094	52,860
Underlying net profit after tax4for the year	130,782	54,431

1 Statutory Profit is net profit after tax attributable to owners of the parent.

2 EBIT is earnings before interest revenue, finance costs and income tax expense.

3 EBITDA is EBIT before depreciation and amortisation.

4 Underlying net profit after tax is net profit after income tax ("Statutory Profit") excluding significant items.

5 EBIT, EBITDA and underlying net profit after tax are non-IFRS financial measures, which have not been subject to review or audit by the Group's external auditors. These measures are presented to enable understanding of the underlying performance of the Group.

The significant items in the year ended 30 June 2012 comprised a net realised/unrealised loss on gold put and call options of $5,400,000, expenses associated with the Allied Gold acquisition of $5,664,000, an impairment write off of Southern Cross assets of $10,219,000, and an income tax benefit of $20,731,000.

Details of significant items included in the Statutory Profit for the year are as follows:

	30 June 12$'000	30 June 11$'000
Unrealised (loss)/gain on gold options(1)	(6,102)	12,946
Realised gain on gold options(1)	702	525
associated with acquisitions(2)Expenses	(5,664)	-
Asset impairment write-down(3)	(10,219)	-
Profit on sale of Tarmoola processing plant	-	1,164
Proceeds from sale of tenement rights	-	1,963
Native Title accrual	-	(2,400)
Significant items before tax	(21,283)	14,198
Income tax benefit(4)	20,731	-
Total significant items –net (loss)/profit after tax	(552)	14,198

(1) At 30 June 2012 the mark-to-market value of the Company's gold put and call options (collar structure) was negative $16,290,000 (June 2011: negative $8,101,000). The put and call options at 30 June 2012 represent price protection for 175,000 ounces of King of the Hills production, and 20,000 ounces for Southern Cross production (June 2011: King of the Hills: 238,000 ounces; Southern Cross: nil ounces). In accordance with accounting standards the net unrealised loss, representing the movement in the time value of the gold options during the year, amounting to $6,102,000, was recognised in the income statement (2011: unrealised gain of $12,946,000). The net realised gain of $702,000 represents the unwinding of the unrealised mark-to-market loss previously recognised for gold options that were exercised or expired during the year (2011: realised gain of $525,000). The unrealised loss related to the movement in the intrinsic value of the gold options in the year of $3,054,000 (2011: gain of $17,102,000) was recognised in the gold cash flow hedge reserve in equity, with a realised gain of $264,000 recognised in the reserve for options that were exercised or expired during the year. Over time, unrealised losses on the gold options recognised in the income statement will reverse either through a change in the mark-to-market value of the options or maturity of the contracts.

(2) During the year, the Company engaged various consultants to assist with completing the due diligence and in making an offer for Allied Gold (refer Note 33 of the Financial Statements for further details of the Allied Gold transaction).

(3) Based on an assessment of the Southern Cross operations cash generating unit ("CGU") at 30 June 2012, an impairment write down was taken against assets of the CGU. While the Southern Cross operations are expected to generate positive net cash flows in the remaining period to closure, the cash flow estimates no longer support the full recovery of the carrying value of the Southern Cross CGU assets, including deferred mine operating development expenditure ($3,865,000), capitalised mine development ($1,723,000), plant and equipment ($3,901,000) and capitalised exploration and evaluation expenditure ($730,000).

(4) At 30 June 2011, the Group had unbooked tax losses of $182,258,000 (before tax effect) – these losses were not booked as it was not probable at that time that future taxable profits would be generated to utilise these losses. At 30 June 2012, based on current operational forecasts, it is now probable that future taxable profits will be generated to utilise the Group's tax losses. The credit of $20,731,000 recognised as an income tax benefit represents the booking of the tax effect of remaining losses at 30 June 2012 which were not previously booked.

Discussion and Analysis of Operating Results and the Income Statement

For the year ended 30 June 2012 St Barbara reported an underlying profit after income tax of $130,782,000 (2011: $54,431,000), representing a substantial improvement on the previous year. The significant improvement compared with the prior year was the result of increased gold sales from Gwalia and King of the Hills, with 2012 being the first full year of operations at King of the Hills, and a stronger gold price.

The Group's focus during the year continued to be increasing production at the Gwalia and King of the Hills underground mines at Leonora, achievement of profitable production at the Southern Cross operations and exploration for gold close to existing operations at Leonora and Southern Cross.

Financial performance

Total sales revenue of $541,189,000 (2011: $359,575,000) was generated from gold sales of 335,787 ounces (2011: 257,653 ounces) at an average achieved gold price of A$1,603 per ounce (2011: A$1,387 per ounce). Total production for the period was 338,879 ounces (2011: 258,474 ounces), with Leonora operations contributing 241,487 ounces (2011: 138,199 ounces) and Southern Cross operations 97,392 ounces (2011: 120,275 ounces). A summary of the production performance for the year ended 30 June 2012 is provided in the table below.

		Southern Cross			Gwalia		King of the Hills
		2011/12	2010/11	2011/12	2010/11	2011/12	2010/11
Underground Ore Mined	t	892,365	1,161,078	662,300	647,546	457,375	65,819
Grade	g/t	2.9	3.2	8.8	6.3	4.1	4.5
Ore Milled	t	1,842,820	1,199,627	716,640	648,212	452,941	50,105
Grade	g/t	1.9	3.4	8.3	6.3	4.1	4.6
Recovery	%	89	92	97	96	94	95
Gold Production	oz	97,392	120,275	184,534	131,133	56,953	7,066
Cash Cost(1)	A$/oz	1,199	890	646	765	753	699
Total Cost(1)	A$/oz	1,482	1,060	882	1,020	1,051	997

Details of 2012 Production Performance

(1) Before significant items

Gwalia

Gold production from the Gwalia underground mine in the year was 187,023 ounces (2011: 131,133 ounces), which was a significant increase on the prior year. As the mine reached its long term sustainable production rate, the higher production was due mainly to an increase in the average grade of ore mined as ore sources moved into the higher grade South West Branch. The South West Branch is expected to be the principal ore source for the foreseeable future. The Leonora processing plant continued to perform well during the year and achieved average recoveries of 97%. A small quantity of low grade ore from Tower Hill stockpiles and Gwalia mineralised waste were treated during the year to capitalise on plant capacity. Gwalia unit cash costs for the year were $646 per ounce (2011: $765 per ounce), reflecting the benefit of higher production. Total Cash Operating Costs1 at Gwalia of $119,158,000 were higher compared with the prior year (2011: $100,373,000), due mainly to increased mining activity and higher production.

King of the Hills

After commencing production in April 2011, the King of the Hills mine produced 60,235 contained ounces in the year ended 30 June 2012. During the year, 452,941 tonnes of King of the Hills ore was processed through the Gwalia processing plant producing 56,953 ounces. The King of the Hills unit cash costs for the year were $753 per ounce, which was in line with expectations. Total Cash Operating Costs at King of the Hills were $42,870,000 (2011: $4,941,000), reflecting the fact that the 2012 financial year was the first full year of production.

Southern Cross

Southern Cross operations generated positive cash flows as the Marvel Loch mine approaches the end of its mine life. For the year ended 30 June 2012, Southern Cross operations generated positive net cash flows of $22,852,000. The Marvel Loch underground mine produced 82,346 ounces (2011: 120,275 ounces) in the year. The lower production compared with the prior year was due to lower tonnes mined from Marvel Loch at a lower grade. To offset the lower production from Marvel Loch underground the operations processed 944,237 tonnes of existing low grade stockpiles from satellite mine sites, which reduced the overall milled grade to 1.9 grams per tonne for the year (2011: 3.4 grams per tonne). The Southern Cross Operations unit cash costs for the year were $1,199 per ounce before significant items (2011: $890 per ounce), reflecting the impact of the lower production and grade. Total Cash Operating Costs were $116,819,000 (2011: $107,081,000) for the year, with the higher costs compared with prior year attributable to the increase in ore milled.

As at 30 June 2012 an impairment write off of $10,219,000 (before income tax) was taken against the assets of the Southern Cross operations cash generating unit ("CGU"). The remaining life of the Marvel Loch underground mine is expected to end in October 2012 and the processing plant will be placed on care and maintenance in November 2012. While the operations are expected to generate positive net cash flows in the remaining period to closure, the cash flow estimates no longer support the full recovery of the carrying value of the assets.

Corporate and Discovery & Growth

Exploration and evaluation expenditure in the year amounted to $20,821,000 (2011: $22,147,000), of which $16,246,000 (2011: $13,284,000) was expensed in the income statement. Capitalised exploration in the year was in relation to the deep drilling program at the Gwalia mine.

During the year, the Company incurred $5,664,000 in costs associated with the Allied Gold acquisition. The majority of the expenditure in the year relates to legal, financial and technical consultants engaged to assist with due diligence.

Corporate administration costs for the year of $13,732,000 (2011: $13,819,000) comprised mainly expenses relating to the corporate office and compliance costs.

Royalty expenses for the year were $22,078,000 (2011: $13,693,000), reflecting the impact of higher gold sales revenue from increased production and a higher average achieved gold price. This expense

1 Cash Operating Costs are mine operating costs including government royalties, and after by-product credits. This non-IFRS financial information is presented to provide meaningful information to assist management, investors and analysts in understanding the results of the operations. Cash Operating Costs are calculated according to common mining industry practice using The Gold Institute (USA) Production Cost Standard (1999 revision).

represents gold royalties paid to the Western Australian Government and a third party corporate royalty, which equated to a charge of $66 per ounce sold.

Other revenue of $6,779,000 (2011: $9,382,000) comprised mainly interest earned during the year of $6,442,000 (2011: $5,611,000). The prior year included third party toll treatment revenue of $3,422,000.

Other income for the year of $922,000 (2011: $4,449,000) included $550,000 representing the recovery of legal costs in relation to the Eshuys litigation. Other income in the prior year included the sale of the Tarmoola plant; the sale of excess tenements in the Leonora region; and the recovery of legal costs in relation to the Kingstream litigation.

Depreciation and amortisation of fixed assets and capitalised mine development and exploration amounted to $97,223,000 (2011: $58,480,000) for the year. Depreciation and amortisation attributable to Gwalia was $45,200,000 (2011: $35,092,000), King of the Hills was $17,168,000 (2011: $2,107,000), and Southern Cross was $33,824,000 (2011: $20,443,000), with the balance associated with corporate and exploration activities. The higher depreciation and amortisation charge in the year at Gwalia and King of the Hills was attributable to the higher production compared with the prior year. Included within the Southern Cross depreciation and amortisation expense was an impairment write off of $6,354,000. The remaining increase in the Southern Cross depreciation and amortisation expense reflected the increase in mine development amortisation as the mine nears the end of its life.

Net finance costs in the year were $3,754,000 (2011: $4,040,000), representing the unwinding of the discount on the rehabilitation provision of $2,890,000, and interest expenses on finance leases and the bank guarantee facility for environmental bonds.

A net realised/unrealised loss of $5,400,000 (2011: gain of $13,471,000) was recognised in the income statement for the year, representing the movement in the mark-to-market valuation of the Company's gold put and call options (collar structure). The collar structure is a cash flow hedge, which as at 30 June 2012 provides price protection for 175,000 ounces of King of the Hills production to June 2015 and 20,000 ounces of Southern Cross production to September 2012. Accounting standards require movements in the time value of the collar structure to be recognised in the income statement at each reporting date.

Discussion and Analysis of the Cash Flow Statement

Operating activities

Cash flows from operating activities for the year were $221,827,000 (2011: $103,073,000), representing a significant increase compared to the prior year. Increased operating cash flows were attributable to higher receipts from customers, reflecting the benefit of higher gold sales. Payments to suppliers and employees were higher than the prior year at $320,465,000 (2011: $241,716,000) due mainly to increased production at Gwalia and a full year of production at King of the Hills. Payments for exploration expensed in the year amounted to $16,246,000 (2011: $13,284,000), with the higher amount expensed attributable to a lower level of capitalised expenditure compared with the prior year. Interest received of $5,555,000 (2011: $5,122,000) was higher than in the prior year due to the increased level of cash on hand during the year. Interest paid in the year was $65,000 (2011: $37,000).

Investing activities

Net cash flows used in investing activities amounted to $104,971,000 (2011: $122,382,000) for the year. Lower expenditure in the year was attributable to the reduction in development expenditure at Gwalia and Southern Cross, and the fact that the King of the Hills mine was developed and commissioned in the prior year. Exploration and evaluation expenditure capitalised of $4,575,000 (2011: $8,863,000) largely represented drilling to extend resources at the Gwalia mine. Investing expenditure during the year was in the following major areas:

Underground mine development and infrastructure at Gwalia $44,059,000 (2011: $49,302,000);
Underground mine development and infrastructure at Marvel Loch $13,987,000 (2011: $23,383,000);
Underground mine development and infrastructure at King of the Hills $22,711,000 (2011: $33,598,000);
Purchase of property, plant and equipment at the operations $19,457,000 (2011: $12,207,000); and
Exploration and evaluation capitalised $4,575,000 (2011: $8,863,000).

Financing activities

Net cash flows from financing activities were an outflow of $11,099,000 (2011: outflow of $3,363,000), with major movements in cash flows including:

Payments for share buy-backs in February and March 2012 of $2,239,000 (2011: Nil);
Scheduled repayments of insurance premiums, leasing and equipment financing facilities amounting to $4,452,000 (2011: $7,005,000);
Repayment of the outstanding balance of an asset financing facility of $6,963,000 (2011: Nil); and
Proceeds for funding asset purchases and insurance premiums totalling $3,227,000 (2011: $4,299,000).

Discussion and Analysis of the Statement of Financial Position

Net Assets and Total Equity

St Barbara's net assets and total equity increased during the year by $127,486,000 to $563,833,000, due mainly to the net profit after tax earned in the year of $130,230,000.

The available cash balance at 30 June 2012 was $185,242,000 (2011: $79,485,000).

A net deferred tax asset of $22,215,000 was recognised at 30 June 2012 (2011: Nil). The recognition of the net deferred tax asset is largely attributable to the booking of previously unrecognised tax losses. These losses have been booked on the basis that current operational forecasts indicate that is it probable that future taxable losses will be generated to utilise the tax losses booked.

Property, plant and equipment, mine properties and capitalised exploration had a combined value at 30 June 2012 of $409,049,000 (2011: $401,370,000). The increase of $7,679,000 was due mainly to mine development expenditure at Leonora and capitalised exploration.

Trade and other payables increased to $55,542,000 at 30 June 2012 (2011: $49,366,000) reflecting the higher level of expenditure, mainly at Leonora.

Derivative financial liabilities increased to $16,377,000 at 30 June 2012 (2011: $10,468,000) reflecting the change in the net fair value of the gold put and call options. These derivative financial liabilities will reverse over time as the options mature.

Net debt

Net debt, comprising total borrowings less cash on hand, was net cash of $180,986,000 at 30 June 2012 (2011: net cash of $67,413,000). As at 30 June 2012 total interest bearing borrowings amounted to $4,256,000 (30 June 2011: $12,072,000), including lease facilities of $2,016,000 and insurance premium funding of $1,976,000. The decrease in interest bearing borrowings in the 2012 financial year represents the repayment of the GE asset financing facility in August 2011.

Subsequent Events

No significant events have occurred after balance date for the year ended 30 June 2012, except for the following:

On 29 June 2012, the Company announced a proposal to acquire all the share of Allied Gold Mining Plc ("Allied Gold") via a scheme of arrangement. Under the terms of the recommended offer, St Barbara will acquire the entire issued and to be issued ordinary share capital of Allied Gold for A$1.025 in cash and 0.8 St Barbara shares for each Allied Gold share (the "Offer"). Based on the closing price of St Barbara shares on the Australian Securities Exchange on 28 June 2012, being the last trading day before the announcement, the offer values Allied Gold at $556 million.

The cash consideration payable under the terms of the Offer will be funded from St Barbara's existing cash resources and additionally by using a A$120 million term loan facility. Following implementation of the Offer, Allied Gold will become a wholly owned subsidiary of St Barbara.

On 14 August 2012, the shareholders of Allied Gold voted in favour of the scheme of arrangement. The court hearing in the UK to sanction the scheme is to be held on 30 August 2012. The effective date of the combination, subject to court approval, is expected to be by 7 September 2012.

Net tangible asset backing

	Current period	Previouscorrespondingperiod
Net tangible assets per ordinary security*	$1.74	$1.34

* Calculated as the Company's net assets (representing net tangible assets) at period end divided by ordinary shares on issue at period end

Statement about the audit status

This preliminary final report is based on the St Barbara Limited and controlled entities financial report as at 30 June 2012, which has been audited by KPMG. The 30 June 2012 financial report contains the independent audit report to the members of St Barbara Limited.

Dated: 23 August 2012

Timothy J Lehany Managing Director and CEO

ST BARBARA LIMITED

ABN 36 009 165 066

DIRECTORS' REPORT and FINANCIAL REPORT

FOR YEAR ENDED 30 JUNE 2012

Directors3

Principal activities3
Dividends3
Overview of Results3
Significant changes in the state of affairs9
Likely developments and expected results of operations9
Regulatory environment10
Information on Directors10
Meetings of Directors13
Remuneration report (Audited)14
Indemnification and insurance of officers33
Proceedings on behalf of the company33
Environmental management33
Non-audit services33
Auditor independence34
Events occurring after the end of the financial year34
Rounding of amounts35
Auditor's Independence Declaration36
FINANCIAL REPORT37

The Directors present their report on the Group "St Barbara Group", consisting of St Barbara Limited and the entities it controlled at the end of, or during, the financial year ended 30 June 2012.

Directors

The following persons were Directors of St Barbara Limited at any time during the year and up to the date of this report:

S J C Wise Chairman
T J Lehany Managing Director & CEO
D W Bailey Non-executive director
E A Donaghey Non-executive director
P C Lockyer Non-executive director
R K Rae Non-executive director

The qualifications, experience and special responsibilities of the Directors are presented on pages 10 to 13.

Principal activities

During the year the principal activities of the Group were mining and the sale of gold, mineral exploration and development. There were no significant changes in the nature of activities of the Group during the year.

Dividends

There were no dividends paid or declared during the financial year.

Overview of Results

The underlying net profit after tax for the year was $130,782,000 (2011: $54,431,000). The consolidated result for the year is summarised as follows:

	30 June 12$'000	30 June 11$'000
Sales revenue	541,189	359,575
EBITDA3(including significant items)	204,034	125,538
EBIT2(including significant items)	106,811	67,058
Statutory Profit1after tax for the year	130,230	68,629
Total net significant items	(552)	14,198
EBITDA3– excluding significant items	218,963	111,340
EBIT2– excluding significant items	128,094	52,860
Underlying net profit after tax4for the year	130,782	54,431

1 Statutory Profit is net profit after tax attributable to owners of the parent.

2 EBIT is earnings before interest revenue, finance costs and income tax expense.

3 EBITDA is EBIT before depreciation and amortisation.

4 Underlying net profit after tax is net profit after income tax ("Statutory Profit") excluding significant items.

Details of significant items included in the Statutory Profit for the year are as follows:

	30 June 12	30 June 11
	$'000	$'000
Unrealised (loss)/gain on gold options(1)	(6,102)	12,946
Realised gain on gold options(1)	702	525
associated with acquisitions(2)Expenses	(5,664)	-
Asset impairment write-down(3)	(10,219)	-
Profit on sale of Tarmoola processing plant	-	1,164
Proceeds from sale of tenement rights	-	1,963
Native Title accrual	-	(2,400)
Significant items before tax	(21,283)	14,198
Income tax benefit(4)	20,731	-
Total significant items–net (loss)/profitafter tax	(552)	14,198

Discussion and Analysis of Operating Results and the Income Statement

For the year ended 30 June 2012 St Barbara reported an underlying profit after income tax of $130,782,000 (2011: $54,431,000), representing a substantial improvement on the previous year. The

significant improvement compared with the prior year was the result of increased gold sales from Gwalia and King of the Hills, with 2012 being the first full year of operations at King of the Hills, and a stronger gold price.

Financial performance

		Southern Cross		Gwalia		King of the Hills
		2011/12	2010/11	2011/12	2010/11	2011/12	2010/11
Underground Ore Mined	t	892,365	1,161,078	662,300	647,546	457,375	65,819
Grade	g/t	2.9	3.2	8.8	6.3	4.1	4.5
Ore Milled	t	1,842,820	1,199,627	716,640	648,212	452,941	50,105
Grade	g/t	1.9	3.4	8.3	6.3	4.1	4.6
Recovery	%	89	92	97	96	94	95
Gold Production	oz	97,392	120,275	184,534	131,133	56,953	7,066
Cash Cost(1)	A$/oz	1,199	890	646	765	753	699
Total Cost(1)	A$/oz	1,482	1,060	882	1,020	1,051	997

Details of 2012 Production Performance

(1) Before significant items

Gwalia

King of the Hills

Southern Cross

Corporate and Discovery & Growth

Corporate administration costs for the year of $13,732,000 (2011: $13,819,000) comprised mainly expenses relating to the corporate office and compliance costs.

Royalty expenses for the year were $22,078,000 (2011: $13,693,000), reflecting the impact of higher gold sales revenue from increased production and a higher average achieved gold price. This expense represents gold royalties paid to the Western Australian Government and a third party corporate royalty, which equated to a charge of $66 per ounce sold.

Other income for the year of $922,000 (2011: $4,449,000) included $550,000 representing the recovery of legal costs in relation to the Eshuys litigation. Other income in the prior year included the

sale of the Tarmoola plant; the sale of excess tenements in the Leonora region; and the recovery of legal costs in relation to the Kingstream litigation.

Discussion and Analysis of the Cash Flow Statement

Operating activities

Investing activities

Underground mine development and infrastructure at Gwalia $44,059,000 (2011: $49,302,000);
Underground mine development and infrastructure at Marvel Loch $13,987,000 (2011: $23,383,000);
Underground mine development and infrastructure at King of the Hills $22,711,000 (2011: $33,598,000);
Purchase of property, plant and equipment at the operations $19,457,000 (2011: $12,207,000); and
Exploration and evaluation capitalised $4,575,000 (2011: $8,863,000).

Financing activities

Net cash flows from financing activities were an outflow of $11,099,000 (2011: outflow of $3,363,000), with major movements in cash flows including:

Payments for share buy-backs in February and March 2012 of $2,239,000 (2011: Nil);
Scheduled repayments of insurance premiums, leasing and equipment financing facilities amounting to $4,452,000 (2011: $7,005,000);
Repayment of the outstanding balance of an asset financing facility of $6,963,000 (2011: Nil); and
Proceeds for funding asset purchases and insurance premiums totalling $3,227,000 (2011: $4,299,000).

Discussion and Analysis of the Statement of Financial Position

Net Assets and Total Equity

St Barbara's net assets and total equity increased during the year by $127,486,000 to $563,833,000, due mainly to the net profit after tax earned in the year of $130,230,000.

The available cash balance at 30 June 2012 was $185,242,000 (2011: $79,485,000).

Trade and other payables increased to $55,542,000 at 30 June 2012 (2011: $49,366,000) reflecting the higher level of expenditure, mainly at Leonora.

Net debt

Significant changes in the state of affairs

The significant changes in the state of affairs of the Company during the financial year are as follows:

a) Net profit for the year

The Group reported a net profit after tax for the year of $130,230,000, which reduced the accumulated losses of the Group to $48,977,000 at 30 June 2012.

b) Impairment write off

At 30 June 2012 the Group recognised an impairment write off in relation to plant and equipment, deferred mine operating development expenditure, capitalised mine development expenditure and capitalised exploration and evaluation expenditure at Southern Cross amounting to $10,219,000 before income tax.

c) Increase in net assets

The Group's net assets increased by $127,486,000 during the year due mainly to net profit after tax and a reduction in the gold cash flow hedge reserve. At 30 June 2012, the Company booked a net deferred tax asset of $22,215,000 relating to tax losses which had previously not been recognised.

d) Changes in issued capital During February and March 2012, the Company bought back 995,000 shares at an average price of $2.25 per share, reducing share capital by $2,239,000.

Likely developments and expected results of operations

The Company will continue to focus on achieving profitable production with an emphasis on value adding growth. The current remaining mine life of the Southern Cross operations is four months with the processing plant expected to be placed on care and maintenance in November 2012. The Leonora operations will continue as a high margin, long life production centre for the Company.

On 29 June 2012, it was announced that St Barbara and Allied Gold Mining Plc ("Allied Gold") had reached agreement to combine the two companies through a scheme of arrangement. Under the terms of the offer, St Barbara will acquire the entire issued and to be issued ordinary share capital of Allied Gold for $1.025 in cash, and 0.8 St Barbara shares for each Allied Gold share. Based on the closing price of St Barbara shares on the Australian Securities Exchange on 28 June 2012, being the last trading day before the announcement, the offer values Allied Gold at $556 million.

Funding the cash component of the offer, amounting to approximately $209 million, will be from St Barbara's existing available cash reserves and a $120 million four year term facility from National Australia Bank and Barclays Bank Plc.

Management will review the Allied Gold operations after the combination is approved to determine the expected financial results of the operations and likely developments.

Further information about anticipated developments in the operations of St Barbara and the anticipated results of those operations in future financial years have not been included in this report because there is insufficient certainty to warrant disclosure.

Regulatory environment

The Company's mining activities are all in Western Australia and are governed by Western Australian legislation, including the Mining Act 1978, the Mines Safety and Inspection Act 1994, Dangerous Goods Safety Act 2004 and other mining related and subsidiary legislation. The Group is subject to significant environmental regulation, including, inter alia, the Western Australian Environmental Protection Act 1986, Contaminated Sites Act 2003, Wildlife Conservation Act 1950, Aboriginal Heritage Act 1972 and the Commonwealth Environmental Protection and Biodiversity Conservation Act 1999, as well as safety compliance in respect of its mining and exploration activities.

The Company is registered pursuant to the National Greenhouse and Energy Reporting Act 2007 under which it is required to report energy consumption and greenhouse gas emissions for its operations for the twelve months ending 30 June. St Barbara also reports to Government pursuant to both the Energy Efficiency Opportunities Act 2006 and the National Environmental Protection (National Pollutant Inventory) Measure (subsidiary legislation to the National Environmental Protection Measures (Implementation) Act 1998). The Company has established data collection systems and processes to meet these reporting obligations.

In addition, the Company's Australian operations will be required to comply with the Australian Federal Government's Clean Energy Act 2011, which has been enacted as at the date of this report to apply from 1 July 2012.

Information on Directors

S J Colin Wise LL.B, FAICD, FAusIMM Chairman – Non Executive

Mr Wise is an experienced corporate lawyer, consultant and company director with significant expertise in the mining and exploration industry and resources, energy and corporate sectors. He spent 24 years with WMC Limited, 10 of which as General Counsel and subsequently, 4 years as Counsel to a New York law firm. He has extensive practical experience in Australia and internationally with a wide range of corporate, operational and legal matters.

He has been Chairman of St Barbara since mid 2004, and is a Fellow of both the Australian Institute of Company Directors and the Australasian Institute of Mining and Metallurgy. Until recently he was a member of the Advisory Board to the Dean of Medicine, Nursing and Health Sciences at Monash University and was a Non Executive Director for 5 years of Southern Health, the largest health care service in Victoria, Chair of its Quality Committee, and a member of the Audit Committee.

Other current public company directorships Straits Resources Limited

Former public company directorships in last 3 years Nil

Special responsibilities Chairman of the Board Member of the Remuneration, Audit and Health & Safety Committees

Interest in shares and options

Mr Wise has a relevant interest in 1,139,389 fully paid ordinary shares of the Company.

Timothy J Lehany B.E., MBA, MAusIMM Managing Director and Chief Executive Officer

Mr Lehany is a mining engineer with extensive operating experience over the past twenty years with a number of mining companies, including Newcrest Mining Ltd and WMC Ltd. His roles covered gold, base metal and nickel mines.

Other current public company directorships Nil Former public company directorships in last 3 years Nil Special responsibilities Nil

Interest in shares and options

Mr Lehany has a relevant interest in 167,822 fully paid ordinary shares and holds 976,220 unlisted options to acquire fully paid ordinary shares, subject to performance hurdles, and holds 1,217,440 performance rights that will convert into shares subject to performance hurdles. The details of the unlisted options and performance rights are provided later in this Report.

Douglas W Bailey, BBus (Acc), CPA, ACIS Non Executive Director

Mr Bailey was the Chief Financial Officer of Woodside Petroleum Ltd between 2002 and 2004 and previously, was an Executive Director of Ashton Mining Limited from 1990 to 2000, including the last 3 years as Chief Executive Officer. He was also a Non Executive Director of Aurora Gold Ltd for the period 1993-2000.

Other current public company directorships Tap Oil Limited

Former public company directorships in last 3 years Nil

Special responsibilities Chairman of the Audit Committee Member of the Remuneration Committee

Interest in shares and options Mr Bailey has a relevant interest in 30,247 fully paid ordinary shares.

Elizabeth A (Betsy) Donaghey B.Sc(Eng) M.S Non Executive Director

Ms Donaghey is a civil engineer with extensive oil & gas industry and corporate experience. This included roles with BHP Billiton for 19 years in gas marketing, reservoir engineering and business planning and analysis.

Ms Donaghey also spent 9 years with Woodside Energy in various senior gas business and strategic planning roles, culminating in Ms Donaghey's executive leadership of Woodside Energy's Australian business unit, with assets generating annual revenue exceeding $1 billion and new projects with $1.5 billion capital investment and, subsequently, the business unit developing the Browse LNG project.

Ms Donaghey is a member of the Board of the Australian Renewable Energy Agency, an independent statutory authority established by the Commonwealth Government.

Other current public company directorships Imdex Limited

Former public company directorships in last 3 years Nil

Special responsibilities Member of the Remuneration and Health & Safety Committees

Interest in shares and options

Ms Donaghey has a relevant interest in 40,000 fully paid ordinary shares of the Company.

Phillip C Lockyer M.Sc, AWASM, DipMETALL Non Executive Director

Mr Lockyer is an experienced mining engineer and metallurgist with over 40 years experience in the mineral industry with an emphasis on gold and nickel, in both underground and open pit operations. Mr Lockyer was employed by WMC Resources for 20 years, and as General Manager for WA was responsible for that Company's nickel division and gold operations. Mr Lockyer also held the position of Director Operations for Dominion Mining Limited and Resolute Limited.

Other current public company directorships Focus Minerals Limited Western Desert Resources Limited Swick Mining Services Limited CGA Mining Limited

Former public company directorships in last 3 years Nil

Special responsibilities Chairman of the Health & Safety Committee Member of the Audit Committee

Interest in shares and options Mr Lockyer has a relevant interest in 20,631 fully paid ordinary shares of the Company.

Robert K Rae B.Com (Hons), FAICD Non Executive Director

Mr Rae is a Director and Partner of McClintock Associates, a private investment bank and advisory firm and has extensive industry and corporate experience. Mr Rae has held previous directorships within the mining industry, including Plutonic Resources Limited, Ashton Mining Limited, WA Diamond Trust and Centralian Minerals Limited. Mr Rae is also a member of the Salvation Army Advisory Board.

Other current public company directorships McClintock Associates Securities Limited SCEGGS Darlinghurst Limited SHEM Limited

Former public company directorships in last 3 years Nil

Special responsibilities Chairman of the Remuneration Committee Member of the Audit Committee

Interest in shares and options Mr Rae has a relevant interest in 48,976 fully paid ordinary shares of the Company.

Qualifications and experience of the company secretary

Ross J Kennedy BComm, Grad.Dip – Company Secretarial Practice, ACA, FTIA, MAusIMM, FAICD, ACIS Company Secretary

Mr Kennedy has more than 25 years experience as a public company secretary and has held a number of public company directorships in resources and technology companies. He has extensive experience in corporate management, including risk management, corporate governance, finance, accounting, commercial negotiations, takeovers, legal contracts, land management, human resources, statutory compliance and public reporting.

Meetings of Directors

The number of meetings of Directors (including meetings of Committees of Directors), and the numbers of meetings attended by each of the Directors of the Company during the financial year was:

						Remuneration		Health & Safety
	Board		Audit Committee		Committee		Committee
	A	B	A	B	A	B	A	B
S J C Wise	10	11	3	3	5	5	3	3
T J Lehany	11	11	-	-	-	-	-	-
D W Bailey	11	11	3	3	5	5	-	-
P C Lockyer	11	11	3	3	-	-	3	3
R Rae	11	11	3	3	5	5	-	-
E A Donaghey	11	11	-	-	5	5	3	3

A = Number of meetings attended

B = Number of meetings held during the time the Director held office or was a member of the committee during the year

Remuneration report (Audited)

Introduction

This Remuneration Report forms part of the Directors Report for the year ended 30 June 2012. It describes the alignment of remuneration strategies with Company strategies for value creation, remuneration related decision making authorities within the Company and the remuneration principles that applied for the 2012 financial year. The Report also provides details of remuneration paid for the 2012 financial year to Directors and senior executives; collectively referred to as Key Management Personnel.

Overview of contents

1. Strategy and industry context;
1. Decision making authorities for remuneration at St Barbara;
1. Principles applied in determining the structure and amount of remuneration;
1. Company performance;
1. Details of remuneration paid; and
1. Summaries of service agreements for Executive Key Management Personnel.

1. Strategy and Industry Context

Company Strategy

The Company's strategies for the 2012 financial year have been to build on existing organisational capabilities and business systems to reliably underpin sustained long term profitability and cash generation from the Company's existing gold assets, and to create opportunities for further growing value per share. In particular:

Delivering consistent and reliable operational performance;
Creating and sustaining a safe working environment;
Maintaining effective community relations;
Delivering superior returns on assets;
Optimising cash flow from operations including driving Gwalia cash operating costs lower to improve margins;
Pursuing organic growth through mine life extension for the Gwalia mine;
Pursuing growth through acquisition of value accretive gold mineral resources, ore reserves, prospective exploration land prospects, and/or production capacity in the Australasian region;
Pursuing exploration discoveries with potential for more than 1 million ounces of gold; and
Continuing to develop organisation capability as a core competency for competitive advantage.

Remuneration Report (Audited) – continued

Industry context

The Company is a gold producer with revenue for the 2012 financial year of $541,189,000 and operates predominantly in Western Australia with three operating underground mines and two processing plants. As at 30 June 2012, the Company workforce was comprised of 275 employees and 644 contractors. The Company competes for labour within the broader Australian resources sector and benchmarks its remuneration systems and levels against comparable companies in Australia.

Remuneration Strategy

The objectives of the Remuneration strategy for the 2012 financial year, consistent with the Company Strategy, were to ensure that:

total remuneration for senior executives and each level of the workforce was market competitive;
key employees were retained;
total remuneration for executives and managers comprised an appropriate proportion of fixed remuneration and remuneration at risk;
remuneration "at risk" encouraged and rewarded high performance aligned with value creation for shareholders, through an appropriate mix of short and long term incentives;
the integrity of the remuneration review processes delivered fair and equitable outcomes; and
remuneration for Non Executive Directors preserved their independence by being in the form of fixed fees.

The remuneration strategy, policy and structure are essentially unchanged from the previous reporting period and are directly linked to the development of strategies and budgets in the Company's annual planning cycle:

Month	Financial / Strategy	Remuneration
October	Annual strategy update
January		Review STI & LTI design framework
February	Half Year Financial Report
April	Budget setting framework	Agree Remuneration Review FrameworkAgree STI Targets for following financial year
July		Measure STI outcomes and determine awardAward LTI grants
August	Annual Financial Report
October	Annual Report
November	Annual General Meeting	Shareholder approval of LTI Grant

Key developments

On 29 June 2012, the Company announced that agreement had been reached with Allied Gold Mining Plc to combine the two companies through a scheme of arrangement on terms considered to be value enhancing for shareholders of both companies. Under the terms of the Offer, St Barbara will acquire

Remuneration Report (Audited) – continued

the issued capital of Allied Gold Mining Plc for consideration of 0.8 St Barbara shares plus A$1.025 cash for each Allied Gold Mining Plc share.

On 14 August 2012, the shareholders of Allied Gold Mining Plc voted in favour of the scheme of arrangement. The scheme is due to be sanctioned by a UK court on 30 August 2012. Subject to this approval, St Barbara anticipates the combination will be effective by 7 September 2012. Further information is available on the Company's website at www.stbarbara.com.au.

The King of the Hills mine at Leonora, which commenced gold production in May 2011, achieved sustainable long term gold production rates in the 2012 financial year. The Gwalia mine, also at Leonora, achieved a significant increase in the grade of ore mined, as production was sourced entirely from the higher grade South West Branch lode. This resulted in lower unit costs per ounce of gold produced, increased margins and increased cash flow from operations.

Further details are set out in the discussion and analysis of operating results on page 4.

2. Decision making authorities for remuneration at St Barbara

Remuneration strategy and policies are approved by the Board. They are aligned with, and underpin, the corporate strategy as set out in Section 1 of this Remuneration Report. On behalf of the Board, the Remuneration Committee oversees and reviews the effectiveness of the remuneration strategy, policies and practices to ensure that the interests of the Company, shareholders and employees are properly taken into account. The charter for the Remuneration Committee is approved by the Board and is available on the Company's web site at www.stbarbara.com.au.

The Remuneration Committee is responsible for making recommendations to the Board on all aspects of remuneration arrangements for the five Non Executive Directors, the Managing Director and CEO, and the Executive General Managers with the authority and responsibility for planning, directing and controlling the activities of the Company; collectively referred to as the Key Management Personnel.

In addition, the Remuneration Committee oversees and reviews proposed levels of annual organisation remuneration increases and key employee related policies. It also receives reports on organisation capability and effectiveness, skills, training and development and succession planning for key roles.

Remuneration Report (Audited) – continued

The members of the Remuneration Committee are all independent, Non Executive Directors and as at the date of this report comprised:

R K Rae Chair, Non Executive Director
D W Bailey Non Executive Director
E A Donaghey Non Executive Director
S J C Wise Non Executive Director

In forming remuneration recommendations, the Remuneration Committee obtains and considers each year industry specific independent data and professional advice as appropriate. All reports and professional advice relating to the Managing Director and CEO's remuneration are commissioned and received directly by the Committee. The Committee reviews all other contracts with remuneration consultants and directly receives the reports of those consultants.

The Remuneration Committee has delegated authority to the Managing Director and CEO for approving remuneration recommendations for employees other than Executive Key Management Personnel, within the parameters of approved Companywide remuneration levels and structures.

3. Principles applied in determining the structure and amount of remuneration

The Company's remuneration strategy recognises that it needs to attract, reward and retain high calibre, high performing, and team orientated individuals capable of delivering and being incentivised to deliver the Company Strategy. The remuneration policy and related employment policies and practices are aligned with this strategy.

The Company operates a performance based remuneration system through which the remuneration of Executive Key Management Personnel is linked to the financial and non-financial performance of the Company and its share price.

Under the remuneration system the amount of at risk remuneration relative to an employee's total remuneration increases in line with the seniority of the role of that employee. This reinforces the linkage between personal and company performance and achievement of the Company's business strategy and creation of shareholder wealth.

(a) Non Executive Directors' fees

Non Executive Directors' fees are reviewed annually by the Board to ensure fees are appropriate to reflect the responsibilities and time commitments required of Non Executive Directors and to ensure that the Company continues to attract and retain Non Executive Directors of a high calibre. The Board seeks the advice of, and is guided by, specialist independent remuneration consultants in this process. Currently Non Executive Directors' fees are targeted between the median and the 75th percentile of comparatively sized companies.

In order to maintain their independence and impartiality, the fees paid to Non Executive Directors are not linked to the performance of the Company. Non Executive Directors have no involvement in the day to day management of the Company.

Superannuation contributions, in accordance with legislation, are included as part of each Director's total remuneration. Directors may elect to increase the proportion of their remuneration taken as

Remuneration Report (Audited) – continued

superannuation subject to legislative limits. Non Executive Directors are not entitled to retirement benefits, bonuses or equity based incentives.

The total amount that can be paid to all Non Executive Directors is set by shareholders. This is currently $750,000 per annum in aggregate (approved by shareholders in November 2005). Within that amount, the basis and level of fees paid to Non Executive Directors is set by the Board, and reported to shareholders each year, as detailed in Section 5 of this Remuneration Report.

(b) Executive Remuneration

The reward structures for the Company's executives are strongly aligned with shareholders' interests by:

recognising the contribution of each senior executive to the achievement of the Company's strategy and business objectives;
rewarding high individual performance;
being market competitive to attract and retain high calibre individuals;
ensuring that equity based remuneration through the long term incentive plan is based on achieving superior total shareholder return over a three year period.

To achieve these objectives, remuneration for executives is comprised of fixed remuneration and variable or at risk remuneration. The at risk component is comprised of separate short term and long term incentives in which the former are linked to specific personal and corporate / business unit objectives and the latter are linked to medium term strategic corporate objectives. Both provide a direct connection between achievement of targets which drive Company performance and shareholder wealth, with personal remuneration. The mix of fixed and at risk remuneration varies according to the role of each executive, with the highest level of at risk remuneration applied to those roles that have the greatest potential to influence and deliver Company outcomes and drive shareholder wealth.

Seniority	Fixedremuneration	STI(1)	LTI (2)	Totalremuneration
Level 6 (CEO)	40%	20%	40%	100%
Level 5 (Exec GM)	50%	20%	30%	100%
Level 4 (GM)	57%	17%	26%	100%

The mix of fixed and at risk remuneration for executives is as follows:

(1) The STI value shown is at "target" performance. Target is the mid-point in a range of 0-200% for the rated performance of each individual. Less than target performance will result in less than the target allocation, potentially down to zero, and out performance can theoretically lead to two times the target allocation

(2) The LTI allocation is fixed at grant, but the proportion of the grant that vests, if any, is subject to performance measurement under the relevant LTI plan. See details below.

Remuneration Report (Audited) – continued

(i) Fixed Remuneration

(a) Base salary

Total Fixed Remuneration = Base Salary + Superannuation + Benefits

The base salary for each executive is influenced by the nature and responsibilities of the role, the knowledge, skills and experience required for the position, and the Company's need to compete in the market place to attract and retain the right person for the role.

Each senior executive undergoes an annual performance review as part of the Company's work performance system, in which individual and company performance is assessed in detail against predetermined measures. The performance appraisal for each senior executive is assessed by the Managing Director and CEO and reported to the Remuneration Committee and later, the Board for review, including recommended remuneration outcomes that flow from that appraisal. For the Managing Director and CEO the performance appraisal is undertaken by the Chairman, is also reported to the Remuneration Committee and later, the Board, for review.

(ii) Fixed Remuneration - Superannuation

In addition to statutory superannuation contributions, senior executives may elect to contribute additional amounts, subject to legislative limits.

(iii) Fixed Remuneration - Benefits

Executives may receive benefits, including car parking and payment for certain professional memberships.

Total Fixed Remuneration for each executive role is benchmarked against the 75th percentile of prevailing comparable market rates, to ensure that the Company is able to attract and retain a talented and capable workforce appropriate to meet its current and anticipated needs*.*

(iv) Variable Remuneration - Short term incentives (STI)

The STI is an annual "at risk" component of remuneration for executives. It is payable based on performance against key performance indicators (KPIs) set at the beginning of the financial year. STIs are structured to remunerate senior executives for achieving annual Company targets as well as their own individual performance targets designed to favourably impact the business, which are weighted on an equal (50:50) basis at Target. Company and individual targets are established by reference to the Company Strategy (refer Section 1). The net amount of any STI after allowing for applicable taxation, is payable in cash.

For each KPI there are defined "threshold", "target" and "stretch" measures which are capable of objective assessment.

Threshold performance typically requires achievement of the full year budget for quantifiable measures such as safety, profitability, cash generation, as well as the achievement of criteria set as near term goals linked to the annual strategy review.

Target performance represents challenging but achievable levels of performance beyond achievement of budget measures.

For example, the Corporate NPAT STI at Target was set at 10% above budget NPAT for the year. Stretch performance requires significant performance above and beyond normal expectations and if achieved is anticipated to result in a substantial improvement in key strategic outcomes, operational or financial results, and/or the business performance of the Company.

Remuneration Report (Audited) – continued

The Remuneration Committee is responsible for recommending to the Board executive STIs and then later assessing the extent to which the Company STI measures and the individual KPIs of the senior executives have been achieved, and the amount to be paid to each executive. To assist in making this assessment, the Committee receives detailed reports and presentations on the performance of the business from the Managing Director & CEO and independent remuneration consultants as required.

(v) Variable Remuneration - Long term incentives (LTI)

LTIs are structured to reward executives for the long term performance of the Company relative to its peers and, commencing with the 2011 financial year, were granted in the form of Performance Rights. Previously, LTIs were granted in the form of unlisted employee options.

In considering the LTI awards for the 2012 financial year, the Board considered the trend towards deferring a portion of the award. Unlike other industries where matching revenues and expenses may have long lead times, the gold industry is such that gold produced is sold at arm's length within a matter of days from production. Revenue and expenses are then recorded. The industry characteristics supporting a look back testing of prior year performance awards do not carry the same weight in our industry.

Vesting conditions

The vesting of performance rights granted in respect of the 2012 financial year is subject to continuing employment as at the vesting date, and the Company achieving a Relative Total Shareholder Return ("TSR") at the 50th percentile or better, for the period from the performance rights pricing date to 30 June 2014.

In view of the elevated levels of corporate takeovers and mergers over the last two years involving ASX listed gold companies, and the difficulty in maintaining a stable TSR comparator group, for performance rights to be issued in respect of future years, it is envisaged that multiple performance vesting conditions will apply, linked to the Company's strategic plan.

For FY13 performance rights the vesting performance conditions will comprise:

Relative Total Shareholder Returns;
A measure of net growth in Ore Reserves as a proxy for increasing mine life; and
Return on assets as a measure of capital efficiency and generation of shareholder value.

No performance rights have been granted since the end of the 2012 financial year.

The Relative Total Shareholder Return (Relative TSR) is measured against a defined peer group of companies which the Board considers compete with the Company for the same investment capital, both in Australia and overseas, and which by the nature of their business are influenced by commodity prices and other external factors similar to those that impact on the TSR performance of the Company.

The LTI measurement methodology for Total Shareholder Returns for comparator companies is as follows:

a. The TSR performance is calculated for each of the comparator companies that continue to be listed on ASX for the duration of the vesting period ("continuing company"); and
b. The TSR performance of a comparator company that ceases to be listed on ASX during the vesting period as a consequence of a takeover or merger ("exiting company") is measured:

Remuneration Report (Audited) – continued

i. up to the date of that Company ceasing to be listed on ASX adjusted pro rata for the remainder of the vesting period; plus
ii. the pro-rata arithmetic average TSR of the continuing companies (excluding St Barbara) for the remainder of the vesting period,
c. The TSR performance of a comparator company that ceased to be listed on ASX during the vesting period (for any reason other than as a consequence of a takeover or merger) is measured as the percentage change divided by the period.

Example 1: Company A ceases to exist at end of year 2 on account of a takeover with 90% TSR and for year 3 the arithmetic average of the continuing companies is 30%, the deemed TSR for Company A is (2/3 x 90%) + (1/3 x 30%) = 70%.

Example 2: Company A fails as a company at the end of year 1 and ceases to be listed (whatever the actual TSR) the deemed TSR for Company A is -33% (being -100% divided by 3 years).

At the discretion of the Board, the composition of the comparator group of companies may vary from time to time. The composition of the comparator group pertaining to an LTI issued in a financial year is listed in the corresponding annual report. The peer group for the 2012 financial year comprised the following ASX listed, mid tier gold companies.

Company
Intrepid Mines Limited	Resolute Mining Limited
Ramelius Resources Limited	Silver Lake Resources Limited
Saracen Mineral Holdings Limited	Catalpa Resources Limited(1)
Kingsgate Consolidated Limited	Unity Mining Limited
Regis Resources Limited	Oceana Gold Corporation

(1) On 14 October 2011 Catalpa Resources Ltd combined with Conquest Mining Ltd to form Evolution Mining Ltd.

Under the Plan Rules that apply for FY12 performance rights, which rely upon a single performance measure of Relative TSR, the percentage of rights that can vest is in accordance with the following rules:

"Pro rata" means the TSR of the exiting company, multiplied by the number of days from the first day of the LTI measurement period until the date on which the company ceases to be listed on the ASX, divided by the total number of days in the vesting period.

Remuneration Report (Audited) – continued

Relative TSR Performance OverMeasurement Period	% of Right to Vest
< 50th percentile	0%
50th percentile	50%
>50th & < 75th percentiles	Pro-rata between 50% & 100%
75th percentile and above	100%

In the event that St Barbara does not achieve the 50th percentile or better for the vesting period ending 30 June 2014, no performance rights will vest.

Expiry and other conditions

All performance rights expire on the earlier of their expiry date, immediately upon the effective resignation date of the relevant executive or twelve months from the date of retirement or retrenchment.

Performance rights granted under the plan carry no dividend or voting rights. On vesting each performance right is convertible into one ordinary share.

The assessed fair value at the grant date of performance rights is allocated equally over the period from grant date to vesting date, and the amount is included in the following table. Fair values at grant date are based on the prevailing market price on the date the right is granted.

KeyFeaturesofLTI	Vesting conditions	Exercise Price	10 day VWAPat start
Performance Rights at aglance	"Other conditions"	Vesting Date	30 June 2014

A Monte Carlo simulation is then performed to determine the probability of the market conditions associated with the rights being met. The probability estimated by the Monte Carlo simulation is then applied to the fair value. For rights issued during the year ended 30 June 2012, taking into account the impact of the market condition (as discussed above), the estimated fair value was, for accounting purposes, $2,073,000.

Further information on performance rights is set out in Notes 37 and 38 to the Financial Statements*.*

Remuneration Report (Audited) – continued

Illustrative example of performance rights calculation

Executive Total Fixed Remuneration (TFR)	$400,000
LTI award value (60% of TFR)	$240,000
10 day VWAP performance rights price	$1.845 per performance right
Performance Rights to be granted ($240,000 ÷ $1.845)	130,082

4. Company Performance

In assessing the Company's performance and improvement in shareholder wealth, consideration is given to the following measures in respect of the current financial year and the previous four financial years. Company revenues have grown strongly each year since 2008, with a significant improvement in profitability.

Earnings	2008$'000	2009$'000	2010$'000	2011$'000	2012$'000
Sales revenue	143,129	281,129	296,760	359,575	541,189
EBITDA1	12,340	39,701	33,793	125,538	204,034
Statutory Profit/(loss) after tax1	(17,333)	(76,344)	(40,188)	68,629	130,230
Underlying net profit/(loss) after tax1	(29,291)	209	14,547	54,431	130,782

Refer definitions on page 3.

Remuneration Report (Audited) – continued

Refer definitions on page 3.

The table below provides the share price performance of the Company's shares in the 2012 financial year and the previous four financial years.

Share price history	2008	2009	2010	2011	2012
Period end share price ($ per share)	2.22	1.38	2.10	1.96	1.77
Average share price for the year ($ per share)	3.84	1.74	1.68	2.16	2.12

During the 2012 financial year, the Company's daily closing share price traded in a range of $1.77 to $2.52 per share (2011: $1.74 to $3.00 per share)

Remuneration Report (Audited) – continued

Return on Equity ("ROE") is Statutory Profit divided by average Total Equity (calculated as the average of the opening and closing balances). ROE is a non-IFRS financial measure.

The Board has regard to the overall performance of the Company over a number of years in assessing and ensuring proper alignment of the "at risk" remuneration framework to deliver fair and proper outcomes consistent with the Company's performance.

5. Remuneration paid

Details of the remuneration of Directors and the senior executives of the Company during the year ended 30 June 2012 are set out in the following tables.

Remuneration Report (Audited) - continued

2012			Short-term benefits		Post		Long-term benefits
					employment
					benefits
										Proportion of	Value of
			Non			Long				total	share based
	Cash	STI	monetarybenefits(6)		Super	ServiceLeave(3)	Share-basedpayments(4)	Termination		performance	payments as
Name	salary & fees$	payment$	$	Other$	annuation$	$	$	payments$	Total$	related	% of total
Non Executive Directors
S J C Wise (Chairman)	219,225	-	15,577(5)	-	15,775	-	-	-	250,577	-	-
D W Bailey	107,798	-	-	-	9,702	-	-	-	117,500	-	-
P C Lockyer	107,798	-	-	-	9,702	-	-	-	117,500	-	-
R K Rae	107,798	-	-	-	9,702	-	-	-	117,500	-	-
E A Donaghey	100,000	-	-	-	9,000	-	-	-	109,000	-	-

Total Non Executive
Directors	642,619	-	15,577	-	53,881	-	-	-	712,077
Executive Director
T J Lehany	832,225	675,220	5,810	-	15,775	72,407	639,020	-	2,240,457	30.1%	28.5%

Other key management
personnel
G Campbell-Cowan	434,625	297,151	2,905	-	15,775	20,328	177,468	-	948,252	31.3%	18.7%
A Croll (1)	224,680	128,503	549	50,000(7)	6,220	2,612	36,233	-	448,797	28.6%	8.1%
D Rose (2)	264,965	85,763	2,572	-	9,202	-	-	330,716	693,218	12.4%	-
R Kennedy	348,225	236,009	2,905	-	15,775	7,957	153,966	-	764,837	30.9%	20.1%
P Uttley	373,625	239,189	2,905	-	15,775	912	155,855	-	788,261	30.3%	19.8%

Total Senior Executives	2,478,345	1,661,835	17,646	50,000	78,522	104,216	1,162,542	330,716	5,883,822

(1) A Croll commenced employment as Chief Operating Officer on 16 January 2012.

(2) D Rose resigned with effect on 31 January 2012.

(3) For current employees, the amount represents the long service leave expense accrued for the period.

(4) The value of options/performance rights disclosed as remuneration is the portion of the fair value of the options/performance rights recognised in the reporting period.

(5) Represents car parking, mobile phone, and other administrative benefits.

(6) For the Senior Executives, non monetary benefits comprise car parking and professional memberships.

(7) Represents a sign-on payment.

Remuneration Report (Audited) - continued

2011			Short-term benefits		Post		Long-term benefits
					employment
					benefits
										Proportion of	Value of
			Non			Long				total	share based
	Cash	STI	monetarybenefits(6)		Super	ServiceLeave(3)	Share-basedpayments(4)	Termination		performance	payments as
Name	salary & fees$	payment$	$	Other$	annuation$	$	$	payments$	Total$	related	% of total
Non Executive Directors
S J C Wise (Chairman)	184,801	-	16,469(5)	-	15,199	-	-	-	216,469	-	-
D W Bailey	100,000	-	-	-	9,000	-	-	-	109,000	-	-
B J Gibson(1)	39,716	-	-	-	3,574	-	-	-	43,290	-	-
P C Lockyer	100,000	-	-	-	9,000	-	-	-	109,000	-	-
R K Rae	98,893	-	-	-	8,900	-	-	-	107,793	-	-
Donaghey (2)E A	22,392	-	-	-	2,015	-	-	-	24,407	-	-

Total Non Executive
Directors	545,802	-	16,469	-	47,688	-	-	-	609,959
Executive Director
T J Lehany	832,801	110,416	7,594	-	15,199	22,878	242,048	-	1,230,936	9.0%	19.7%

Other key management
personnel
G Campbell-Cowan	405,801	60,519	3,797	-	15,199	18,771	48,987	-	553,074	10.9%	8.9%
D Rose	454,801	40,392	1,509	-	15,199	6,090	85,133	-	603,124	6.7%	14.1%
R Kennedy	348,801	40,950	3,797	-	15,199	12,696	45,883	-	467,326	8.8%	9.8%
P Uttley	348,801	50,050	3,797	-	15,199	4,651	66,208	-	488,706	10.2%	13.5%

Total Senior Executives	2,391,005	302,327	20,494	-	75,995	65,086	488,259	-	3,343,166

(1) B J Gibson retired on 18 November 2010

(2) E A Donaghey was appointed on 4 April 2011.

(3) For current employees, the amount represents the long service leave expense accrued for the period.

(4) The value of options/performance rights disclosed as remuneration is the portion of the fair value of the options/performance rights recognised in the reporting period.

(5) Represents car parking, mobile phone, and other administrative benefits.

(6) For the Senior Executives, non monetary benefits comprise car parking and professional memberships.

Remuneration Report (Audited) - Continued

(a) Non Executive Directors Fees

Non Executive Director fees for the 2012 financial year were determined, both as to their composition (for base fees and committee work) and overall level, based on advice from Ernst & Young as well as remuneration reports published by McDonald and Company.

They comprised:

Director fees of $92,000;
an allowance for chairing a Board Committee of $17,000; and
a fee for serving as a member of a Board Committee of $8,500.

The Chairman's fee for the 2012 financial year was set at $235,000 (inclusive of all Board Committee commitments), as well as benefits in the form of a car park, mobile telephone allowance and other administrative benefits.

This was determined independently, based on roles and responsibilities in the external market for companies comparable with St Barbara Limited. The Chairman was not present at any discussions relating to the determination of his own remuneration.

(b) Executive Key Management Personnel remuneration

As set out in Section 4 of this Remuneration Report, in respect of the 2012 financial year the Company generated a 26% return on shareholder funds, which is materially above the Company's weighted average cost of capital.

For the year, Key Management Personnel received market competitive fixed remuneration, and an STI award based on exceeding the Corporate and Individual targets set by the Board. The LTI performance hurdles applicable to 2009 LTIs issued in the form of employee options were not met as at 30 June 2012, resulting in no LTIs vesting as at 30 June 2012.

Further details are set out below.

(i) Fixed Remuneration- Base salary

In considering remuneration for Executive Key Management Personnel for the 2012 financial year, the Remuneration Committee retained Ernst & Young and considered reports from McDonald and Company, as well as industry trend data and other relevant remuneration information.

(ii) Variable Remuneration - Short term incentives (STI)

The Company STI measures that applied for the 2012 financial year comprised:

improved safety performance measured in the form of a specified reduction in the Total Recordable Injury Frequency Rate by 30 June 2012;
the achievement of defined benchmarks:
- o in excess of the budgeted underlying net profit after tax for the 2012 financial year; and
- o in excess of the budgeted cash position as at 30 June 2012
  - (in each case, "target" performance was defined as at least 10% above budget.)
a discretionary factor determined by the Board designed to take into account unexpected events and achievements during the year.

The actual gold revenue for determination of STI awards is normalised back to the gold price assumption contained in the budget. In calculating STI awards, Management does not receive the

Remuneration Report (Audited) - Continued

benefit, nor are they penalised for actual gold price movements away from the budget underlying assumptions.

For the 2012 financial year, the underlying net profit after tax, adjusted to budgeted gold price assumptions, exceeded STI "target" levels.

The individual performance measures varied according to the individual executive's responsibilities, and for the 2012 financial year reflected a range of value accretive and / or risk mitigation achievements aligned with the Company strategy. These included measures relating to improving safety, lifting production volumes and lowering production costs, achieving exploration discoveries and implementing business improvement systems. They also included a discretionary factor determined by the Board designed to take into account unexpected events and achievements during the year.

The tables below describe the Short Term Incentives available to, and achieved by, senior executives during the year.

2012	Maximum potential STI		Actual STI	% of maximum	% of maximum	% of maximum
			included in	'Target' STI	potential total	potential total
			remuneration	earned	STI earned	STI foregone
	Target	Stretch(1)
	$	$	$
T J Lehany	424,000	848,000	675,220	100%	80%	20%
G Campbell-Cowan	180,160	360,320	297,151	100%	82%	18%
D Rose	109,667(2)	219,333(2)	85,763	78%	39%	61%
A Croll	95,333(2)	190,667(2)	128,503	100%	67%	33%
P Uttley	155,760	311,520	239,189	100%	77%	23%
R Kennedy	145,600	291,200	236,009	100%	81%	19%

(1) Inclusive of STI "Target"

(2) Applied pro-rata for period of employment

Amounts shown as "Actual STI" represent the amounts accrued in relation to the 2012 financial year, based on achievement of the specified performance criteria. No additional amounts vest in future years in respect of the STI scheme for the 2012 financial year.

(v) Variable Remuneration - Long term incentives (LTI)

None of the LTI options granted in respect of the FY09 year vested as at 30 June 2012, as they did not meet the Relative Total Shareholder Return criteria. As a result, the following options did not vest and are no longer exercisable:

T J Lehany	251,350
G Campbell-Cowan	201,192
R Kennedy	156,774

Details on options currently issued to Key Management Personnel are set out in Notes 37 and 38 of the Financial Report.

Remuneration Report (Audited) - Continued

2012	Options granted				Value yet to vest
	Number	Date	% vested	% forfeitedFinancial year		Minimum	Maximum
			in year	in year	options vest	(A)	(B)
						$	$
T J Lehany	976,220	19 Nov 2009	-	-	30 Jun 2013	Nil	114,928
	251,350	6 May 2009	-	100	30 Jun 2012	Nil	-
G Campbell-Cowan	290,670	23 Sep 2009	-	-	30 Jun 2013	Nil	31,460
	201,192	6 May 2009	-	100	30 Jun 2012	Nil	-
D Rose(1)	329,474	23 Sep 2009	-	100	30 Jun 2013	Nil	-
P Uttley	256,258	23 Sep 2009	-	-	30 Jun 2013	Nil	27,729
R Kennedy	256,258	23 Sep 2009	-	-	30 Jun 2013	Nil	27,729
	156,774	6 May 2009	-	100	30 Jun 2012	Nil	-

(A) Analysis of options granted as compensation

(1) D Rose resigned as Chief Operating Officer on 31 January 2012.

A The minimum value of options yet to vest is $nil as the vesting service conditions, which are continuing service conditions and relative Total Shareholder Returns over a three year period, are still to be satisfied.

B The maximum value of the options yet to vest represents the amount of the grant date fair value of the options that is still to be expensed in the income statement.

(B) Analysis of movements in the value of options granted and exercised

During the reporting period, no new options were issued and no options vested. 329,474 options issued to D Rose expired thirty days following the date of his resignation from the Company. In addition, the following options in respect of the FY09 did not vest as at 30 June 2012 and are no longer exercisable:

T J Lehany	251,350
G Campbell-Cowan	201,192
R Kennedy	156,774

Remuneration Report (Audited) - Continued

(C) Performance Rights issued in the 2012 fiscal year.

Performance Rights Plan

All performance rights were granted under the previously approved St Barbara Limited Performance Rights Plan. Performance rights issued to Mr Lehany, Managing Director & CEO, were also approved by shareholders at the 2011 Annual General Meeting.

Performance Rights granted

Details on performance rights over ordinary shares in the Company that were granted as remuneration to each senior executive and details of performance rights that vested in the 2012 financial year are as follows:

2012	Number of	Issue price	Grant date	Expiry date	Fair value per	Number of
	performance	per			performance	performance
	rights granted	performance			right at grant	rights vested
	during 2012	right			date	during
					($ per share)(1)	FY2012
T J Lehany	459,621	-	23 Nov 2011	30 Jun 2014	1.10	-
D Rose (2)	152,846	-	28 Oct 2011	30 Jun 2014	1.12	-
G Campbell-Cowan	146,472	-	28 Oct 2011	30 Jun 2014	1.12	-
R Kennedy	118,374	-	28 Oct 2011	30 Jun 2014	1.12	-
P Uttley	126,634	-	28 Oct 2011	30 Jun 2014	1.12	-
A Croll(3)	169,106	-	15 Mar 2012	30 Jun 2014	1.05	-

(1) The fair value of performance rights at grant date was determined using a Black-Scholes valuation to which a Monte Carlo simulation was applied to determine the probability of the market conditions associated with the rights being met. This methodology complied with the requirements of Australian Accounting standard AASB 2 Share Based Payments.

(2) D Rose resigned as Chief Operating Officer on 31 January 2012.

(3) A Croll commenced employment as Chief Operating Office on 16 January 2012.

Remuneration Report (Audited) - Continued

6. Summaries of service agreements for Executive Key Management Personnel

Remuneration and other terms of employment for the Managing Director and CEO and the senior executives are formalised in service agreements. These agreements provide, where applicable, for the provision of performance related cash bonuses, other benefits including allowances, and participation in the St Barbara Limited Executive Option and Performance Rights Plans. Other major provisions of the agreements relating to remuneration are set out below.

All contracts with senior executives may be terminated early by either party giving the required notice and subject to termination payments as detailed below.

All service agreements with senior executives, including with the Managing Director and CEO comply with the provisions of Part 2 D.2, Division 2 of the Corporations Act 2001.

T J Lehany – Managing Director and CEO

Term of agreement permanent employee, commencement 2 March 2009.
Payment of a termination benefit for early termination by the Company, other than for serious misconduct or serious breach of duty:
- a) Where 6 months notice of termination is given; an additional 6 months base salary and superannuation payment, and (at the discretion of the Board), any entitlement to a 'stretch performance' payment plus an amount equivalent to six months of notional 'target performance' payment; or
- b) Where notice of immediate termination is given, 12 months base salary and superannuation, plus (at the discretion of the Board) an amount equivalent to 12 months of a notional 'target performance' payment.

The other Executive Key Management Personnel are all permanent employees, entitled to payment of a termination benefit on early termination by the Company, other than for gross misconduct or for poor performance as judged by the Company in its absolute discretion, equal to between 6 and 8 months base salary and superannuation.

Loans to Directors and executives

There were no loans to Directors or executives during the financial year 2012.

Indemnification and insurance of officers

The Company indemnifies all Directors of the Company named in this report, and a number of former Directors (including Mr Eduard Eshuys, Ms Barbara Gibson, Mr Richard Knight, Mr Hank Tuten, and Mr Mark Wheatley) and current and former executive officers of the Company and its controlled entities against all liabilities to persons (other than the Company or a related body corporate) which arise out of the performance of their normal duties as Director or executive officer, unless the liability relates to conduct involving bad faith. The Company also has a policy to indemnify the Directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any resulting payments.

During the year the Company paid an insurance premium for Directors and Officers Liability and Statutory Liability policies. The contract of insurance prohibits disclosure of the amount of the premium and the nature of the liabilities insured under the policy.

During the year the Company also paid the premium on a Personal Accident insurance policy on behalf of Directors, to insure them for travel while on Company business.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Environmental management

The Company regards compliance with environmental regulations as the minimum performance standard for its operations. The Company's operations in Western Australia are subject to environmental regulation under both Commonwealth and State legislation.

Overall, there was a 55% reduction in the number of externally reportable environmental incidents during the year ended 30 June 2012 compared with the previous year. There were two noncompliances registered and externally reported for the Southern Cross operations during the year. At Leonora, there were eight non-compliances registered and externally reported, which was a significant decrease in the number of incidents reported in the previous year. The decrease in incidents reported was largely due to the work commenced during the year on capping of the old Tarmoola tailings dam, which reduced the number of wind generated dust incidents in the second half of the year. None of the reported incidents were material in that there was minimal, if any, adverse impact on the environment. No formal notices relating to any of the environmental incidents were issued by regulators.

Non-audit services

During the year the Company employed the auditor on assignments additional to their statutory audit duties. The Company engaged KPMG to perform financial due diligence as part of the Company's processes for assessing the Allied Gold acquisition. Details of the amounts paid or payable to the auditor, KPMG, for non-audit services provided during the 2012 financial year are set out in Note 27 to the financial statements.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out in Note 27 to the financial statements, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

All non-audit services were reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor;
None of the non-audit services performed in the 2012 financial year undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants; and
The Audit Committee annually informs the Board of the detail, nature and amount of any nonaudit services rendered by KPMG during the most recent financial year, giving an explanation of why the provision of these services is compatible with auditor independence. If applicable, the Audit Committee recommends that the Board take appropriate action in response to the Audit Committee's report to satisfy itself of the independence of KPMG.

Auditor independence

A copy of the Auditor's Independence Declaration required under section 307C of the Corporations Act 2001 is set out on page 36 and forms part of this Director's Report. The Directors are satisfied that the provision of these services did not impair the auditor's independence.

Events occurring after the end of the financial year

The Directors are not aware of any matter or circumstance that has arisen since the end of the financial year that, in their opinion, has significantly affected or may significantly affect in future years the Company's operations, the results of those operations or the state of affairs, except for the following:

Rounding of amounts

St Barbara Limited is a Company of the kind referred to in Class Order 98/100 approved by the Australian Securities and Investments Commission and issued pursuant to section 341(1) of the Corporations Act 2001. As a result, amounts in this Directors' Report and the accompanying Financial Report have been rounded to the nearest thousand dollars, except where otherwise indicated.

This report is made in accordance with a resolution of Directors.

For and on behalf of the Board Dated at Melbourne this 23rd day of August 2012

Timothy J Lehany Managing Director and CEO

Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of St Barbara Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2012 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Tony Romeo Partner

Melbourne

23 August 2012

Financial Report Table of Contents

38
39
40
41
CONSOLIDATED CASH FLOW STATEMENT42
43
DIRECTORS' DECLARATION101
INDEPENDENT AUDIT REPORT102

This financial report covers St Barbara Limited (the Group) consisting of St Barbara Limited and its subsidiaries. The financial report is presented in the Australian currency.

St Barbara Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office is:

St Barbara Limited Level 10, 432 St Kilda Rd Melbourne VIC 3004

A description of the nature of the Group's operations and its principal activities is included in the review of operations and activities in the directors' report, which is not part of this financial report.

The financial report was authorised for issue by the Directors on 23 August 2012. The Company has the power to amend and reissue the financial report.

CONSOLIDATED INCOME STATEMENT For the year ended 30 June 2012

		Consolidated
		2012	2011
	Notes	$'000	$'000

Revenue from continuing operations	6	541,189	359,575
Mine operating costs	9	(268,877)	(208,021)
Gross profit		272,312	151,554

Other revenue	6	6,779	9,382
Other income	7	922	4,449
Exploration expensed		(16,246)	(13,284)
Corporate and support costs		(13,732)	(13,819)
Royalties		(22,078)	(13,693)
Depreciation and amortisation	8,9	(97,223)	(58,480)
Expenses associated with acquisitions	9	(5,664)	(681)
Other expenditure		(6,417)	(6,230)
Operating profit		118,653	59,198

Finance costs	8	(3,754)	(4,040)
Net realised/unrealised (losses)/gains on derivatives	9	(5,400)	13,471
Profit before income tax		109,499	68,629

Income tax benefit	9, 10	20,731	-
Profit after income tax for the year		130,230	68,629


Earnings per share for profit attributable to the
ordinary equity holders of the Company:
Basic earnings per share (cents per share)	36	40.04	21.05
Diluted earnings per share (cents per share)	36	39.60	20.94

The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2012

		Consolidated
	Notes	2012$'000	2011$'000
Profit for the year		130,230	68,629
Other comprehensive income
Changes in fair value of available for sale financial assets	25(a)	(96)	-
Changes in fair value of cash flow hedges taken to reserves	25(a)	(2,790)	17,102
Income tax on other comprehensive income		1,484	-
Other comprehensive (loss)/income net of tax(1)		(1,402)	17,102
Total comprehensive profit attributable to equity holders of the
company		128,828	85,731

(1) Other comprehensive income comprises items of income and expense that are recognised directly in reserves or equity. These items are not recognised in the Income Statement in accordance with the requirements of the relevant accounting standards. Total comprehensive profit comprises the result for the year adjusted for the other comprehensive income.

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2012

		Consolidated
		2012	2011
	Notes	$'000	$'000
Assets
Current assets
Cash and cash equivalents	11	185,242	79,485
Trade and other receivables	12	13,795	24,140
Inventories	13	21,867	17,858
Derivative financial assets	22	87	2,085
Available for sale financial assets	15	154	-
Deferred mining costs	14	23,789	12,934
Total current assets		244,934	136,502
Non-current assets
Property, plant and equipment	17	103,928	105,750
Deferred mining costs	14	5,917	10,230
Mine properties	18	289,647	283,991
Exploration and evaluation	19	15,474	11,629
Derivative financial assets	22	-	282
Net deferred tax asset	10	22,215	-
Total non-current assets		437,181	411,882
Total assets		682,115	548,384

Liabilities
Current liabilities
Trade and other payables	20	55,542	49,366
Interest bearing borrowings	21	3,043	10,491
Derivative financial liabilities	22	2,830	-
Provisions	23	10,824	7,982
Total current liabilities		72,239	67,839
Non-current liabilities
Interest bearing borrowings	21	1,213	1,581
Derivative financial liabilities	22	13,547	10,468
Provisions	23	31,283	32,149
Total non-current liabilities		46,043	44,198
Total liabilities		118,282	112,037
Net Assets		563,833	436,347

Equity
Contributed equity	24	613,275	615,521
Reserves	25(a)	(465)	1,049
Accumulated losses	25(b)	(48,977)	(180,223)
Total equity		563,833	436,347

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2012

	Note	ContributedEquity$'000	Share BasedPaymentsReserve$'000	Gold CashFlow HedgeReserve$'000	InvestmentFair ValueReserve$'000	RetainedEarnings$'000	Total$'000
Balance at 1 July 2011		615,521	3,108	(2,059)	-	(180,223)	436,347
Share buy back	24	(2,246)	-	-	-	-	(2,246)
Share-based payments expense	25(a)	-	1,828	-	-	-	1,828
Unlisted options not vested	25(a)	-	(924)	-	-	-	(924)
Unlisted options expired	25(a)	-	(1,016)	-	-	1,016	-
Comprehensive income for the year		-	-	(1,335)	(67)	130,230	128,828
Balance at 30 June 2012		613,275	2,996	(3,394)	(67)	(48,977)	563,833

	Note	ContributedEquity$'000	Share BasedPaymentsReserve$'000	Gold CashFlow HedgeReserve$'000	InvestmentFair ValueReserve$'000	RetainedEarnings$'000	Total$'000
Balance at 1 July 2010		614,997	2,484	(19,161)	-	(248,852)	349,468
Share-based payments expenseUnlisted options expiredUnlisted options exercisedComprehensive income for the year	25(a)25(a)24(b)	--524-	973(104)(245)-	---17,102	----	---68,629	973(104)27985,731
Balance at 30 June2011		615,521	3,108	(2,059)	-	(180,223)	436,347

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONSOLIDATED CASH FLOW STATEMENT For the year ended 30 June 2012

	Notes	Consolidated
		2012	2011
		$'000	$'000
			Restated
Cash Flows From Operating Activities:
Receipts from customers (inclusive of GST)		553,847	354,397
Payments to suppliers and employees (inclusive of GST)		(320,465)	1(241,716)
Interest received		5,555	5,122
Interest paid		(65)	(37)
Payments for exploration		(16,246)	(13,284)
Finance charges – finance leases		(278)	(962)
Borrowing costs		(521)	(447)
Net cash inflow from operating activities	34	221,827	103,073
Cash Flows From Investing Activities:
Proceeds from sale of property, plant and equipment		68	3,016
Transaction costs on sale of property, plant and equipment		-	(45)
Proceeds from sale of tenements		-	2,000
Payments for available for sale financial assets		(250)	-
Payments for property, plant and equipment		(19,457)	(12,207)
Payments for development of mining properties		(80,757)	1(106,283)
Exploration and evaluation expenditure - capitalised		(4,575)	(8,863)
Net cash outflow from investing activities		(104,971)	(122,382)
Cash Flows From Financing Activities:
Proceeds from issue of shares on conversion of options		-	279
Proceeds from borrowings:- finance leases		491	1,552
- insurance premium funding		2,736	2,747
Buy back and redemption of convertible notes		-	(1,200)
Payments for share buy backs		(2,239)	-
Share buy back transaction costs		(7)	-
Movement in restricted cash		-	264
Movement in unclaimed monies		(665)	-
Principal repayments- finance leases		(1,011)	(982)
- equipment financing facility		(7,860)	(5,061)
- insurance premium funding		(2,544)	(962)
Net cash outflow from financing activities		(11,099)	(3,363)
Net increase/(decrease) in cash and cash equivalents		105,757	(22,672)
Cash and cash equivalents at the beginning of the year		79,485	102,157
Cash and cash equivalents at the end of the year	11	185,242	79,485

During the year, the Group reclassified expenditures relating to deferred mining from investing to operating cash flows. This classification better reflects the nature of this expenditure which is amortised to operating costs on a level by level basis.

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

Note 1	Summary of significant accounting policies44
Note 2	New Standards adopted 57
Note 3	Financial risk management58
Note 4	Critical Accounting Estimates and Judgements64
Note 5	Segment Information67
Note 6	Revenue 70
Note 7	Other income70
Note 8	Expenses 71
Note 9	Significant items72
Note 10	Income tax expense 73
Note 11	Cash and cash equivalents74
Note 12	Trade and other receivables75
Note 13	Inventories75
Note 14	Deferred mining costs75
Note 15	Available-for-sale financial assets76
Note 16	Financial instruments76
Note 17	Property, plant and equipment 78
Note 18	Mine properties79
Note 19	Exploration and evaluation79
Note 20	Trade and other payables79
Note 21	Interest bearing borrowings80
Note 22	Derivative financial assets and liabilities81
Note 23	Provisions82
Note 24	Contributed equity83
Note 25	Reserves and accumulated losses 84
Note 26	Parent Entity disclosures 85
Note 27	Remuneration of auditors86
Note 28	Contingencies87
Note 29	Commitments for expenditure 87
Note 30	Related party transactions89
Note 31	Controlled entities90
Note 32	Interests in jointly controlled assets91
Note 33	Events occurring after the balance sheet date91
Note 34	Reconciliation of profit after income tax to net cash flows from operating activities92
Note 35	Non-cash investing and financing activities92
Note 36	Earnings per share 93
Note 37	Share-based payments 94
Note 38	Key Management Personnel Disclosures97

Note 1 Summary of significant accounting policies

St Barbara Limited (the "Company") is a company domiciled in Australia. The consolidated financial statements of the Company as at and for the year ended 30 June 2012 comprise the Company and its subsidiaries (together referred to as the "Group"), and the Group's interest in associates and jointly controlled entities. The Group is a for-profit entity primarily involved in the exploration for, and mining of, gold.

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

Statement of compliance

The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Where required by accounting standards comparative figures have been adjusted to conform to changes in presentation in the current year. The consolidated financial report of the Group complies with International Financial Reporting Standards (IFRSs) and interpretations issued by the International Accounting Standards Board.

The financial statements were approved by the Board of Directors on 23 August 2012.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items:

Derivative financial instruments are measured at fair value
Share based payment arrangements are measured at fair value
Available for sale assets are measured at fair value
Rehabilitation provision is measured at net present value
Long service leave provision is measured at net present value

Critical accounting estimates

The preparation of financial statements in conformity with AASB and IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

(b) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of St Barbara Limited (''Company'' or ''parent entity'') as at 30 June 2012 and the results of all subsidiaries for the year then ended. St Barbara Limited and its subsidiaries together are referred to in this financial report as the Group.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are consolidated from the date on which control commences until the date control ceases.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost within the Parent Entity disclosures at Note 26.

(ii) Associates and jointly controlled entities

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of voting rights. An interest in an associate and a jointly controlled entity is accounted for in the consolidated financial statements using the equity method and is carried at cost by the parent entity.

Profits or losses on transactions establishing the joint venture entity and transactions with the joint venture are eliminated to the extent of the Group's ownership interest, until such time as they are realised by the joint venture entity on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of an asset transferred.

(iii) Jointly controlled operations and assets

Details of unincorporated joint ventures and jointly controlled assets are set out in Note 32.

Where material, the proportionate interests in the assets, liabilities and expenses of a joint venture activity are incorporated in the financial statements under the appropriate headings.

(c) Segment reporting

A reportable segment is a component of the Group that engages in business activities from which it may earn revenues or incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. The operating results of all reportable segments are regularly reviewed by the Group's Executive Leadership Team ("ELT") to make decisions about resources to be allocated to the segment and assess its performance, and for which financial information is available.

Segment results that are reported to the ELT include items directly attributable to a segment and those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and related depreciation, and corporate expenses.

Segment capital expenditure represents the total cost incurred during the year for mine development and acquisitions of property, plant and equipment.

(d) Foreign currency translation

(i) Functional and presentation currency

The consolidated financial statements are presented in Australian dollars, which is also St Barbara Limited's functional currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non monetary financial assets and liabilities, such as equities held at fair value through profit or loss, are recognised in the income statement as part of the fair value gain or loss. Translation differences on non monetary financial assets, such as equities classified as available for sale financial assets, are included in the fair value reserve in equity.

(e) Revenue recognition

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of amounts collected on behalf of third parties. The Group recognises revenue when the significant risks and rewards of ownership have been transferred to the buyer, the amount of revenue can be reliably measured and the associated costs can be estimated reliably, and it is probable that future economic benefits will flow to the Group.

Revenue is recognised for the major business activities as follows:

(i) Product sales

Amounts are recognised as sales revenue when there has been a transfer of risk and rewards to a customer and selling prices are known or can be reasonably estimated.

Gains and losses, including premiums paid or received, in respect of forward sales, options and other deferred delivery arrangements, which hedge anticipated revenues from future production, are deferred and included in sales revenue when the hedged proceeds are received.

(ii) Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

(iii) Dividends

Dividends are recognised as revenue when the right to receive payment is established.

(iv) Gains on disposal of available-for-sale financial assets and property, plant and equipment

Revenue is recognised when the risks and rewards of ownership have been transferred, which is usually considered to occur on settlement.

(v) Third party toll treatment revenue

Toll treatment revenue represents revenue earned for processing third party ore through the Group's processing facilities. Revenue is recognised when the third party's product is in a form suitable for delivery, and no further processing is required by the Group, and there has been a transfer of risk to the third party.

(f) Exploration and evaluation/mine properties

(i) Exploration, evaluation and feasibility expenditure

All exploration and evaluation expenditure incurred up to establishment of reserves is expensed as incurred. From the point in time when reserves are established, exploration and evaluation expenditure is capitalised and carried forward in the financial statements, in respect of areas of interest for which the rights of tenure are current and where such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale.

Exploration and evaluation expenditure consists of an accumulation of acquisition costs and direct exploration and evaluation costs incurred, together with an allocation of directly related overhead expenditure.

Feasibility expenditure represents costs related to the preparation and completion of a feasibility study to enable a development decision to be made in relation to that area of interest. Feasibility expenditures are expensed as incurred until a decision has been made to develop the area of interest.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment policy, Note 1(j)). For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates.

When an area of interest is abandoned, or the Directors determine it is not commercial, accumulated costs in respect of that area are written off in the period the decision is made.

(ii) Mines under construction

Mine development expenditure is accumulated separately for each area of interest in which economically recoverable reserves have been identified. This expenditure includes direct costs of construction, an appropriate allocation of overheads and borrowing costs capitalised during construction. Once a development decision has been taken, all capitalised exploration, evaluation and feasibility expenditure in respect of the area of interest is aggregated with the costs of construction and classified under non-current assets as mine development.

(iii) Mine development

Mine development expenditure represents the acquisition cost and/or accumulated exploration, evaluation and development expenditure in respect of areas of interest in which mining has commenced.

When further development expenditure is incurred in respect of a mine, after the commencement of production, such expenditure is carried forward as part of the mine development only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of production and expensed as incurred.

Mine development costs are deferred until commercial production commences, at which time they are amortised on a unit-of-production basis over mineable reserves. The calculation of amortisation takes into account future costs which will be incurred to develop all the mineable reserves. Changes to mineable reserves are applied from the beginning of the reporting period and the amortisation charge is adjusted prospectively from the beginning of the period.

(g) Deferred mining expenditure

Certain mining costs, principally those that relate to the stripping of waste and operating development in underground operations, which provide access so that future economically recoverable ore can be mined, are deferred in the statement of financial position as deferred mining costs.

(i) Underground operations

In underground operations mining occurs progressively on a level-by-level basis. In these operations an estimate is made of the life of level average underground mining cost per recoverable ounce to expense underground costs in the income statement. Underground mining costs in the period are deferred based on the metres developed for a particular level. Previously deferred underground mining costs are released to the income statement based on the recoverable ounces produced in a level multiplied by the life of level cost per recoverable ounce rate.

Grade control drilling is deferred to the statement of financial position on a level-by-level basis. These amounts are released to the income statement as ounces are produced from the related mining levels.

(ii) Open pit operations

The amount of mining costs deferred is based on the ratio obtained by dividing the waste tonnes mined by the quantity of gold ounces contained in the ore. Mining costs incurred in the period are deferred to the extent that the current period waste to contained gold ounce ratio exceeds the life of mine waste to ore ratio.

Deferred mining costs are then charged against reported earnings to the extent that, in subsequent periods, the ratio falls below the life of mine ratio. The life of mine ratio is based on economically recoverable reserves of the operation.

The life of mine ratio is a function of an individual mine's design and therefore changes to that design will generally result in changes to the ratio. Changes in other technical or economic parameters may impact reserves, which will then impact the life of mine ratio. Changes to the life of mine ratio are accounted for prospectively.

In the production stage of some operations further development of the mine requires a phase of unusually high overburden removal activity that is similar in nature to pre-production mine development. The costs of such unusually high overburden removal are deferred and charged against earnings in subsequent periods on a unit-of-production basis.

(h) Taxes

(i) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the income statement except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
Temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future;
Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted of substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income tax expenses that arise from the distribution of cash dividends are recognised at the same time that the liability to pay the related dividend is recognised. The Group does not distribute non-cash assets as dividends to its shareholders.

(ii) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing or financing activities, which are recoverable from, or payable to, the taxation authority are classified as part of operating cash flows.

(i) Leases

Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at inception of the lease at the lower of the fair value of the leased property and the present value of the minimum future lease payments. The corresponding rental obligations, net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset's useful life and the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

(j) Impairment of assets

All asset values are reviewed at each reporting date to determine whether there have been any events or changes in circumstances that indicate that the carrying value may not be recoverable. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate which reflects current market assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

An impairment loss is recognised for the amount by which the carrying amount of an asset or a cash generating unit exceeds the recoverable amount. Impairment losses are recognised in the income statement.

(k) Cash and cash equivalents

For cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(l) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are usually due for settlement no more than 30 days from the date of recognition. Cash placed on deposit with a financial institution to secure bank guarantee facilities and restricted from use within the business is disclosed as trade and other receivables.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

(m) Inventories

Raw materials and stores, ore stockpiles, work-in-progress and finished gold stocks are valued at the lower of cost and net realisable value.

Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure relating to mining activities, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(n) Investments and other financial assets

The Group classifies its investments and other financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

Investments and other financial assets are recognised initially at fair value plus, for assets not at fair value through profit and loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition, investments and other financial assets are measured as described below.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading, which were acquired principally for the purpose of selling in the short term with the intention of making a profit. Derivatives are also categorised as held for trading, unless they are designated as hedges. Financial assets at fair value through profit or loss are measured at fair value and changes therein are recognised in the income statement. Attributable transaction costs are recognised in the income statement when incurred.

(ii) Available-for-sale financial assets

Available for sale financial assets, comprising principally marketable equity securities, are non derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in non current assets, unless management intends to and can dispose of the investment within 12 months of the balance sheet date.

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value and changes therein, other than impairment losses, are recognised as a separate component of equity net of attributable tax. When an asset is derecognised the cumulative gain or loss in equity is transferred to the income statement.

(o) Derivative financial instruments

Derivative financial instruments may be held to protect against the Group's Australian dollar gold price risk exposures. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been, and will continue to be, highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of various derivative financial instruments used for hedging purposes are disclosed in Note 22. Movements in the gold cash flow hedge reserve in shareholders' equity are shown in Note 25.

(i) Cash flow hedge

The fair value of gold option contracts comprises intrinsic value, that is, the extent to which the components of an option collar are in the money due to a gold forward price falling below or rising above the option strike prices, and time value.

The effective portion of changes in the intrinsic value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the gold cash flow hedge reserve. The gain or loss relating to the ineffective portion and time value is recognised immediately in the income statement.

Amounts accumulated in equity are recycled through the income statement in the periods when the hedged item affects profit or loss (for instance, when the forecast gold sale that is hedged takes place). The gain or loss relating to the effective portion of the financial instrument hedging Australian dollar gold sales is recognised in the income statement within 'net realised gains on derivatives'.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

(ii) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement.

(p) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement, or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available for sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined using generally accepted valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

(q) Property, plant and equipment

Buildings, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation of assets is calculated using the straight line method to allocate the cost or revalued amounts, net of residual values, over their estimated useful lives, as follows:

-	10 –
Buildings	15 years
-	3 –
Plant and equipment	10 years
-	10 –
Fixtures and fittings	15 years

Where the carrying value of an asset is less than its estimated residual value, no depreciation is charged. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount, if the asset's carrying amount is greater than its estimated recoverable amount (Note 1(j)).

Gains and losses on disposal are determined by comparing proceeds with carrying amount. These gains and losses are included in the income statement when realised.

(r) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year, which remains unpaid as at reporting date. The amounts are unsecured and are usually paid within 30 days from the end of the month of recognition.

(s) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not incremental costs relating to the actual draw down of the facility, are recognised as prepayments and amortised on a straight line basis over the term of the facility.

The fair value of the liability portion of convertible debt is determined using a market interest rate for an equivalent nonconvertible debt. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the debt. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(t) Borrowing costs

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time it is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are recognised as expenses in the period in which they are incurred.

(u) Provisions

Provisions, including those for legal claims and rehabilitation and restoration costs, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has commenced or has been announced publicly. Future operating costs are not provided for.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

(v) Employee benefits

(i) Wages and salaries, and annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be paid within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid, including expected on-costs, when the liabilities are settled.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made, plus expected on-costs, in respect of services provided by employees up to the reporting date. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted with reference to market yields on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Share-based payments

Share-based compensation benefits are provided to employees via the St Barbara Limited Employees' Option Plan and the Performance Rights Plan. Information relating to these schemes is set out in Note 37.

The fair value of options granted under the St Barbara Limited Employees' Option Plan or rights granted under the Performance Rights Plan is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options or rights. The amount recognised is adjusted to reflect the actual number of share options not expected to vest, based on expectations of performance related conditions. Adjustments to the amount recognised at each reporting date are taken through the Income Statement.

The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

Upon the exercise of options or rights, the balance of the share-based payments reserve relating to those options is transferred to share capital.

(iv) Retirement benefit obligations

Contributions to defined contribution funds are recognised as an expense as they are due and become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

The Group has no obligations in respect of defined benefit funds.

(v) Executive incentives

Senior executives may be eligible for Short Term Incentive payments ("STI") subject to achievement of Key Performance Indicators, as recommended by the Remuneration Committee and approved by the Board of Directors. The Group recognises a liability and an expense for STIs in the reporting period during which the service is provided by the employee.

(vi) Termination benefits

Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment.

(w) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

If the entity reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the income statement and the consideration paid, including any directly attributable incremental costs, is recognised directly in equity.

(x) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for bonus elements in ordinary shares issued during the reporting period.

(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.

(y) Rehabilitation and mine closure

The Group has obligations to dismantle, remove, restore and rehabilitate certain items of property, plant and equipment and areas of disturbance during mining operations.

Under AASB 116 Property, Plant and Equipment, the cost of an asset must include any estimated costs of dismantling and removing the asset and restoring the site on which it is located. The capitalised rehabilitation and mine closure costs are depreciated (along with the other costs included in the asset) over the asset's useful life.

AASB 137 Provisions, Contingent Liabilities and Contingent Assets requires a provision to be made for the estimated cost of rehabilitation and restoration of areas disturbed during mining operations up to reporting date but not yet rehabilitated. Management judgments and estimates in relation to the rehabilitation provision are provided at Note 4(v). Provision has been made in full for all the disturbed areas at the reporting date based on current estimates of costs to rehabilitate such areas, discounted to their present value based on expected future cash flows. The estimated cost of rehabilitation includes the current cost of contouring, topsoiling and revegetation to meet legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise.

There is some uncertainty as to the amount of rehabilitation obligations that will be incurred due to the impact of changes in environmental legislation and many other factors, including future developments, changes in technology and price increases.

At each reporting date the rehabilitation liability is remeasured in line with changes in the timing and /or amounts of the costs to be incurred and discount rates. The liability is adjusted for changes in estimates. Adjustments to the estimated amount and timing of future rehabilitation and restoration cash flows are a normal occurrence in light of the significant judgments and estimates involved.

As the value of the provision represents the discounted value of the present obligation to restore, dismantle and rehabilitate, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(z) Rounding of amounts

The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

(aa) New accounting standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are available for early adoption for annual periods beginning after 1 July 2011, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group.

Note 2 New Standards adopted

The Company has adopted the following new and/or revised Standards, Amendments and Interpretations from 1 July 2011:

AASB 2010-4: Amendments to Australian Accounting Standards – Annual Improvements Project (2010)
AASB 2011-1: Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project
AASB 1054: Australian Additional Disclosures
AASB 124: Related Party Disclosures
AASB 2010-6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets

Adoption of the above Standards, Amendments and Interpretations did not have any effect on the financial position or performance of the Group.

Note 3 Financial risk management

This note presents information about each of the financial risks that the Group is exposed to, the policies and processes for measuring and managing financial risk, and the management of capital. Further quantitative disclosures are included throughout this financial report.

The Group's activities expose it to a variety of financial risk, being: market risk (especially gold price and exchange rate risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management program focuses on the unpredictability of commodity markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group may use derivative instruments as appropriate to manage certain risk exposures.

Risk management in relation to financial risk is carried out by a centralised treasury function in accordance with policies approved by the Board of Directors.

(a) Market risk

Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments, cash flows and financial position. The Group may enter into derivatives, and also incur financial liabilities, in order to manage market risks. All such transactions are carried out within guidelines set by the Board.

(i) Commodity price risk

The Group is exposed to Australian dollar gold price risk. This risk arises through the sale of gold.

The Group is managing commodity price risk in relation to the King of the Hills and Southern Cross operations by using a combination of gold put options and gold call options to create zero-cost option collar structures as described in (b) below.

(ii) Currency risk

The Group is exposed to currency risk on gold sales where the Australian dollar spot gold price is quoted as a function of US dollars and the prevailing exchange rate. The Group may from time to time use Australian dollar derivatives to manage the risks associated with the gold price and currency rates.

(iii) Interest rate risk

The Group's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's interest rate policy does not require a fixed and predetermined proportion of its interest rate exposure to be hedged. Any decision to hedge interest rate risk will be assessed at the inception of each floating rate debt facility in relation to the overall Group exposure, the prevailing interest rate market, and any funding counterparty requirements.

(b) Cash flow hedges

The Group may from time to time be party to derivative financial instruments in the normal course of business to protect future revenue from gold operations from a significant fall in the Australian dollar price of gold, in accordance with the Group's financial risk management policies.

(i) King of the Hills

During June 2010, the Company entered into a zero cost collar hedging facility for 250,000 ounces of gold over a five year period to manage Australian dollar gold price risk associated with the estimated production from the King of the Hills mine. The facility was fully drawn down by purchasing put options and selling call options over 250,000 ounces of gold (collar structure) with the following strikes:

Bought put options at A$1,425/oz
Sold call options at A$1,615/oz

During financial year 2012, 30,000 ounces of call options and 4,000 ounces of put options were exercised (2011: Call options - Nil exercised; Put options - 12,000 ounces exercised). 33,000 ounces of call options and 59,000 ounces of put options expired.

(ii) Southern Cross

In September 2011, the Company entered into a zero cost collar hedging facility for 100,000 ounces of gold over a twelve month period to manage Australian dollar gold price risk associated with the estimated production from the Southern Cross mine. The facility was fully drawn down by purchasing put options and selling call options over 100,000 ounces of gold (collar structure) with the following strikes:

Bought put options at A$1,550/oz
Sold call options at A$1,610/oz

During financial year 2012, 48,000 ounces of call options were exercised (2011: Nil). 80,000 ounces of put options and 32,000 ounces of call options expired.

The maturity profile of the put and call option contracts remaining as at 30 June 2012 is provided in the table below.

Strike Price	Totalounces	6 months orlessounces	6 – 12monthsounces	1 – 2 yearsounces	2 – 5 yearsounces
King of the Hills
Put: A$1,425/oz	175,000	31,750	32,502	75,999	34,749
Call: A$1,615/oz	175,000	31,750	32,502	75,999	34,749
Southern Cross
Put: A$1,550/oz	20,000	20,000	-	-	-
Call: A$1,610/oz	20,000	20,000	-	-	-

At the date of entering into each of the collar structures, the net fair value of the put and call options was zero dollars. At 30 June 2012, the fair value of all remaining put and call option contracts was negative $16,290,000 (June 2011: negative $8,101,000). $11,442,000 (June 2011: $6,042,000) of this negative fair value represents an unrealised loss related to time value of the 195,000 ounces outstanding at 30 June 2012 (June 2011: 238,000 ounces). A loss of $5,400,000 for the year ended 30 June 2012 was recognised in the income statement (2011: gain of $13,471,000). Included in this loss was a net realised gain of $702,000 (2011: gain of $525,000) which represented the unwinding of the unrealised mark-to-market loss previously recognised for options that were exercised or expired during the year (refer to note 1(o)). Unrealised losses of $3,054,000 relating to the intrinsic value of the options was recognised in the gold cash flow hedge reserve in equity during the year (2011: gains of $17,102,000), with a realised gain of $264,000 recognised in the reserve for options that were exercised or expired during the year.

(ii) Cash flow hedge sensitivity

The relationship between currencies, spot gold price and volatilities is complex and changes in the spot gold price can influence volatility, and vice versa.

The following table summarises the impact of a A$100 change in the Australian dollar gold price (all other variables held constant) on the valuation of the gold option fair values.

Gold Price Sensitivity	Impact on post-taxresult(1)		Impact on gold cashflow hedge reservenet of tax(2)
	2012$'000	2011$'000	2012$'000	2011$'000
+A$100 change in AUD spot price	2,018	(9,074)	(11,532)	(8,966)
-A$100 change in AUD spot price	5,060	9,074	4,453	8,966

(1) Represents the movement in time value (a positive movement represents a gain).

(2) Represents the movement in intrinsic value (a positive movement represents a gain).

(c) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract. The Group is exposed to credit risk from its operating activities (primarily customer receivables) and from its financing activities, including deposits with banks and financial institutions and derivatives.

The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets, other than available for sale assets.

Credit risks related to receivables

The Group's most significant customer accounts for $3,599,000 of the trade receivables carrying amount at 30 June 2012 (2011: $13,770,000), representing receivables owing from gold sales. Settlement of the receivables relating to gold sales occurred on 3 July 2012. Based on historic rates of default, the Group believes that no impairment has occurred with respect to trade receivables, and none of the trade receivables at 30 June 2012 were past due.

Credit risks related to cash deposits and derivatives

Credit risk from balances with banks and financial institutions derivative counterparties is managed by the centralised Treasury function in accordance with Board approved policy. Investments of surplus funds are only made with approved counterparties (minimum Standard & Poor's credit rating of "AA-") and there is a financial limit on funds placed with any single counterparty.

Derivative transactions are only made with approved counterparties (minimum Standard & Poor's credit rating of "AA-"), and more than one counterparty is used when tranches of derivatives are entered into. Derivatives transactions cover only a small proportion of total Group production with maturities occurring over a period of time (refer Note 3(b)).

(d) Capital management

The Group's total capital is defined as total shareholders' funds plus net debt.

Consolidated capital	2012$'000	2011$'000
Total shareholders' funds	563,833	436,347
Borrowings	4,256	12,072
Cash and cash equivalents(1)	(4,256)	(12,072)
Total capital	563,833	436,347

(1) Cash and cash equivalents are included to the extent that the net debt position is nil.

The Group does not have a target debt/equity ratio. There were no changes in the Group's approach to capital management during the year.

The Group is not subject to externally imposed capital requirements other than normal banking requirements.

Cash and cash equivalents does not include cash held on deposit with a financial institution as security for a bank guarantee facility totalling $123,000 (2011: $123,000) at the reporting date.

The Company has a $25,000,000 performance bond facility with the National Australia Bank Limited (NAB) to provide security for performance obligations incurred in the ordinary course of business. The NAB facility does not require cash backing. Security is provided in the form of a fixed and floating charge over the Company's assets and mining tenements held by the Company. Under the terms of the NAB facility, there are a number of undertakings related to the performance of the Company, and non-compliance with these undertakings could constitute an event of default. Under the terms of the facility the Company has up to 90 days to remedy or rectify a non-compliance event in relation to the undertakings. In the year, and as at 30 June 2012, there were no events of default under the facility.

On 21 August 2009, the Company entered into a A$50,000,000 Equity Line standby facility from USbased investment fund YA Global. Under the terms of the facility St Barbara may, at its discretion, issue ordinary shares to YA Global at any time over a 60 month period up to a total of A$50,000,000. There has been no draw down under this facility.

(e) Liquidity risk

Prudent liquidity risk management requires maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.

Surplus funds are invested in instruments that are tradeable in highly liquid markets.

Maturities of financial liabilities

The table below analyses the Group's financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Maturity of financial liabilities -2012
$'000	Less than6 months	6 – 12months	Between 1and 5years	Over 5years	Totalcontractualcash flows	Carryingamount

Finance lease liabilities	597	549	1,065	-	2,211	2,280
Insurance funding liability	1,409	604	-	-	2,013	1,976
Trade and other payables	55,542	-	-	-	55,542	55,542
Derivative financial liabilities(1)	729	2,101	13,547	-	16,377	16,377
	58,277	3,254	14,612	-	76,143	76,175

(1) Represents the mark-to-market valuation of the option collar structure, and does not represent a contractual cash flow. The mark-tomarket valuations at 30 June 2012 will change over time as contracts mature, or with changes in the spot gold price and other option pricing variables.

	Maturity of financial liabilities - 2011
$'000	Less than6 months	6 – 12months	Between 1and 5years	Over 5years	Totalcontractualcash flows	Carryingamount

Finance lease liabilities	575	550	1,722	-	2,847	2,541
Equipment finance facility	8,023	-	-	-	8,023	7,860
Insurance funding liability	1,215	608	-	-	1,823	1,785
Trade and other payables	49,366	-	-	-	49,366	49,366
Derivative financial liabilities(1)	-	-	10,468	-	10,468	10,468
	59,179	1,158	12,190	-	72,527	72,020

(1) Represents the mark-to-market valuation of the option collar structure, and does not represent a contractual cash flow. The mark-tomarket valuations at 30 June 2011 will change over time as contracts mature, or with changes in the spot gold price and other option pricing variables.

(f) Fair value estimation

On-Balance Sheet

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

The fair value of the gold put and call options is as disclosed in Note 4(vii).

Fair values

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

	2012		2011
	CarryingAmount$'000	Net FairValue$'000	CarryingAmount$'000	Net FairValue$'000
Financial assets
-Cash and cash equivalents	185,242	187,448	79,485	81,083
-Restricted cash	123	123	123	123
-Receivables	9,967	9,967	20,454	20,454
-Available for sale financial assets	154	154	-	-
-Gold put and call options (zero cost collar)	87	87	2,367	2,367
	195,573	197,779	102,429	104,027
Financial liabilities
-Payables	55,542	55,542	49,366	49,366
-Equipment financing facility	-	-	7,860	7,847
-Gold put and call options (zero cost collar)	16,377	16,377	10,468	10,468
-Other loans	4,256	4,256	4,326	4,326
	76,175	76,175	72,020	72,007

Note 4 Critical Accounting Estimates and Judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates under different assumptions and conditions. Estimates and judgements are continually evaluated and are based on historical experience and on various other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimate is changed and in any future periods affected.

The Group has identified the following critical accounting policies under which significant judgements, estimates and assumptions are made, and where actual results may differ from these estimates under different assumptions and conditions that could materially affect financial results or financial position reported in future periods.

(i) Ore reserve estimates

Reserves are estimates of the amount of gold product that can be economically extracted from the Group's properties. In order to calculate reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, future capital requirements, short and long term commodity prices and exchange rates.

Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies to be determined by analysing geological data. This process may require complex and difficult geological judgements and calculations to interpret the data.

The Group determines and reports ore reserves under the Australian Code for Reporting of Mineral Resources and Ore Reserves December 2004, known as the JORC Code. The JORC Code requires the use of reasonable investment assumptions to calculate reserves. Due to the fact that economic assumptions used to estimate reserves change from period to period, and geological data is generated during the course of operations, estimates of reserves may change from period to period.

Changes in reported reserves may affect the Group's financial results and financial position in a number of ways, including:

Asset carrying values may be impacted due to changes in estimated future cash flows.
Depreciation and amortisation charged in the income statement may change where such charges are calculated using the units of production basis.
Underground capital development and waste stripping costs deferred in the balance sheet or charged in the income statement may change due to a revision in the development amortisation rates and stripping ratios.
Decommissioning, site restoration and environmental provisions may change where changes in estimated reserves affect expectations about the timing or cost of these activities.

(ii) Units of production method of amortisation

The Group applies the units of production method for amortisation of its life of mine specific assets, which results in an amortisation charge proportional to the depletion of the anticipated remaining life of mine production. These calculations require the use of estimates and assumptions in relation to reserves and resources, metallurgy and the complexity of future capital development requirements; changes to these estimates and assumptions will impact the amortisation charge in the income statement and asset carrying values.

(ii) Amortisation of underground operating development

The Group applies the units of production method for amortisation of underground operating development. The amortisation rates are determined on a level-by-level basis. In underground operations an estimate is made of the life of level average underground mining cost per recoverable ounce to expense underground costs in the income statement. Underground mining costs in the period are deferred based on the metres developed for a particular level. Previously deferred underground mining costs are released to the income statement based on the recoverable ounces produced in a level multiplied by the life of level cost per recoverable ounce rate.

(iii) Impairment of assets

The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular assets that may lead to impairment. The recoverable amount of each Cash Generating Unit (CGU) is determined as the higher of value-in-use and fair value less costs to sell, in accordance with accounting policy 1(j). These calculations require the use of estimates, which have been outlined in accounting policy 1(j). Value-in-use is generally determined as the present value of the estimated future cash flows. Present values are determined using a risk adjusted discount rate appropriate to the risks inherent in the asset.

Given the nature of the Group's mining activities, future changes in assumptions upon which these estimates are based may give rise to a material adjustment to the carrying value of the CGU. This could lead to the recognition of impairment losses in the future. The inter-relationships of the significant assumptions upon which estimated future cash flows are based, however, are such that it is impracticable to disclose the extent of the possible effects of a change in a key assumption in isolation.

Future cash flow estimates are based on expected production volumes, the short and long term forecasts of the Australian dollar gold price, ore reserves, operating costs, future capital expenditure and restoration and rehabilitation costs. Management is required to make these estimates and assumptions, which are subject to risk and uncertainty. As a result there is a possibility that changes in circumstances will alter these projections, which could impact on the recoverable amount of the assets. In such circumstances some or all of the carrying value of the assets may be impaired, giving rise to an impairment charge in the income statement.

With respect to the impairment write off taken against the Group's Southern Cross CGU at 30 June 2012, value in use in relation to this CGU was determined by discounting the future cash flows generated from the continuing use of the operation and was based on the following key assumptions:

Cash flows were projected based on the life of mine plan, which is predominantly based on ore reserves.
Revenue was projected using a forecast gold price, which takes into consideration the prevailing spot price, and forward projections as at 30 June 2012.
A pre-tax nominal discount rate of 11.26% based on the weighted average cost of capital.

The above estimates are particularly sensitive to a change in the gold price.

(iv) Exploration and evaluation expenditure

As set out in Note 1(f) exploration and evaluation expenditure is capitalised where reserves have been established for an area of interest and it is considered likely to be recoverable from future exploitation or sale. The accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. These estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the accounting policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the income statement.

(v) Rehabilitation and mine closure provisions

As set out in Note 1(y), the value of these provisions represents the discounted value of the present obligation to restore, dismantle and rehabilitate each site. Significant judgement is required in determining the provisions for mine rehabilitation and closure as there are many transactions and other factors that will affect the ultimate costs necessary to rehabilitate the mine sites. The discounted value reflects a combination of management's best estimate of the cost of performing the work required, the timing of the cash flows and the discount rate.

A change in any, or a combination of, the key assumptions used to determine the provisions could have a material impact on the carrying value of the provisions (refer to Note 23). The provision recognised for each site is reviewed at each reporting date and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the balance sheet by adjusting both the restoration and rehabilitation asset and provision.

In estimating the rehabilitation provision at 30 June 2012, the following assumptions were made:

Timing of rehabilitation outflows was based on the life of mine plan of each operation, with the rehabilitation of legacy areas of disturbance scheduled accordingly.
Mine demolition costs are estimated on the basis of the expected mine life of each operation. Costs are adjusted for potential receipts through the sale of scrap metal.
Inflation is not applied to cost estimates.
A pre-tax real discount rate of 8.25% based on the risks specific to the liability.

(vi) Deferred tax

During the year, $35,432,000 of previously unbooked tax losses were utilised against taxable profit for the year. At 30 June 2012 the Group recognised $20,731,000 of previously unbooked tax losses on the basis that it is probable that future taxable profits will be available against which these losses will be generated. Estimates of future taxable profits are based on forecast cash flows from operations.

(vii) Derivative financial instruments

The Group assesses the fair value of its gold bought put and sold call options (the "collar structure") at each reporting date.

At 30 June 2012, the fair value of the collar structure was negative $16,290,000. Refer to Note 3(b) for details of the impact fair value movements have on the financial statements.

Fair values have been determined using a 'Level 2' valuation method involving the use of a generally accepted option valuation model: inputs are based on market observable data for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices), at the reporting date and compared with valuations provided by the counterparties to the collar structure. These calculations require the use of estimates and assumptions. Any changes in assumptions in relation to gold prices and volatilities could have a material impact on the fair valuation attributable to the gold collar structure at the reporting date. When these assumptions change in the future the differences will impact the gold cash flow hedge reserve and/or income statement in the period in which the change occurs.

(viii) Share based payments

The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using an option pricing model, using the assumptions detailed in Note 37.

Where the vesting of share based payments contain market conditions, in estimating the fair value of the equity instruments issued, the Group assesses the probability of the market conditions being met, and therefore the probability of fair value vesting, by undertaking a Monte-Carlo simulation. The simulation performs sensitivity analysis on key assumptions in order to determine potential compliance with the market performance conditions. The simulation specifically performs sensitivity analysis on share price volatility based on the historical volatility for St Barbara Limited and the peer group companies. The results of the Monte-Carlo simulation are not intended to represent actual results, but are used as an estimation tool by management to assist in arriving at the judgment of probability.

Note 5 Segment Information

The Group has two operational business units: Leonora Operations and Southern Cross Operations. The operational business units are managed separately due to their separate geographic regions.

The Leonora Operations comprise two reportable segments: the Gwalia and King of the Hills underground mines. The results of both mines are reviewed regularly by the Group's Executive Leadership Team, in particular production, cost per ounce and capital expenditures. Additionally, the revenue earned by each reportable segment exceeds 10 per cent of the Group's consolidated revenue. The ore mined at the King of the Hills underground mine is processed through the Gwalia processing plant. The mine operating costs reported for King of the Hills includes an allocation of processing costs based on the tonnes of ore processed.

The King of the Hills mine was added as a reportable segment in the year to 30 June 2012 as the Executive Leadership Team commenced reviewing this as a standalone segment from 1 July 2011 following commencement of production at King of the Hills.

Information regarding the operations of each reportable segment is included below. Performance is measured based on segment profit before income tax, as this is deemed to be the most relevant in assessing performance after taking into account factors such as cost per ounce of production.

Note 5 Segment Information (continued)

	Gwalia		King of the Hills		Southern Cross		Total
	2012$'000	2011$'000	2012$'000	2011$'000	2012$'000	2011$'000	2012$'000	2011$'000
Revenue	292,197	184,996	92,199	10,207	156,793	167,794	541,189	362,997
Mine operating costs	(110,542)	(98,999)	(41,562)	(4,874)	(116,773)	(104,148)	(268,877)	(208,021)
Gross profit	181,655	85,997	50,637	5,333	40,020	63,646	272,312	154,976
RoyaltiesDepreciation andamortisation	(11,841)(45,200)	(7,075)(35,092)	(3,684)(17,168)	(312)(2,107)	(6,553)(33,824)	(6,306)(20,443)	(22,078)(96,192)	(13,693)(57,642)
Reportable segmentprofit/(loss) beforeincome tax	124,614	43,830	29,785	2,914	(357)	36,897	154,042	83,641
Capital expenditure	(54,355)	(54,489)	(28,245)	(33,760)	(14,185)	(29,577)	(96,785)	(117,826)
Reportable segmentassets	375,238	352,344	50,699	35,958	22,877	43,664	448,814	431,966

Major Customer

Major customers to whom the Group provides goods that are more than 10% of external revenue are as follows:

	Revenue		% of external revenue
	2012$'000	2011$'000	2012%	2011%
Customer A	176,794	151,692	32.6	42.2
Customer B	137,243	76,729	25.4	21.3
Customer C	104,529	92,009	19.3	25.6
Customer D	101,607	-	18.8	-
Customer E	21,016	39,145	3.9	10.9

Reconciliation of reportable segment revenues, profit, assets, and other material items:

	Consolidated
	2012$'000	2011$'000
Revenues
Total revenue for reportable segments	541,189	362,997
Other revenue	6,779	5,960
Consolidated revenue	547,968	368,957

Note 5 Segment Information (continued)

	Consolidated
	2012	2011
	$'000	$'000

Profit
Total profit for reportable segments	154,042	83,641
Other income and revenue	7,701	8,446
Exploration expensed	(16,246)	(13,284)
Unallocated depreciation and amortisation	(1,031)	(838)
Finance costs	(3,754)	(4,040)
Net fair value movements on gold options	(5,400)	13,471
Net proceeds from sale of tenement rights	-	1,963
Corporate and support costs	(13,732)	(13,819)
Expenditure associated with acquisitions	(5,664)	(681)
Other corporate expenses	(6,417)	(6,230)
Consolidated profit before income tax	109,499	68,629

	Consolidated
	20122011
	$'000	$'000
Assets
Total assets for reportable segments	448,814	431,966
Cash and cash equivalents	185,242	79,485
Trade and other receivables	13,795	24,140
Available for sale financial assets	154	-
Capitalised borrowing costs	7,172	7,912
Derivative financial assets	87	2,367
Net deferred tax assets	22,215	-
Other assets	4,636	2,514
Consolidated total assets	682,115	548,384

Note 5 Segment Information (continued)

	Year ended 30 June 2012
	Reportablesegmenttotals	Unallocated	Consolidatedtotals
Other material items
Mine operating costs	(268,877)	-	(268,877)
Depreciation andamortisation	(96,192)	(1,031)	(97,223)

	Year ended 30 June 2011
	Reportablesegmenttotals	Unallocated	Consolidatedtotals
Other material items
Mine operating costs	(208,021)	-	(208,021)
Depreciation andamortisation	(57,642)	(838)	(58,480)

Note 6 Revenue

	Consolidated
	2012	2011
	$'000	$'000
Sales revenue-continuing operations
Sale of gold	538,411	357,484
Sale of silver	2,778	2,091
	541,189	359,575
Other revenue
Interest revenue	6,442	5,611
Sub-lease rental	337	349
Third party revenue –ore processing	-	3,422
	6,779	9,382
Total revenue	547,968	368,957

Note 7 Other income

	Consolidated
	2012	2011
	$'000	$'000
Profit on sale of assets	67	1,224
Proceeds from sale of tenement rights	-	1,963
Other	855	1,262
	922	4,449

Note 8 Expenses

	Consolidated
	2012	2011
	$'000	$'000
Profit before income tax includes the following specific expenses:
Depreciation
Buildings	1,607	1,067
Plant and equipment	15,313	15,213
Impairment write-offs	3,901	-
	20,821	16,280

Amortisation
Mine development costs	72,638	41,085
Capitalised borrowing costs	854	702
Plant/equipment finance leases	457	413
Impairment write-offs	2,453	-
	76,402	42,200
Total depreciation & amortisation	97,223	58,480

Finance Costs
Interest paid/payable	448	378
Borrowing costs	138	99
Finance lease interest	278	962
Provisions: unwinding of discount	2,890	2,601
	3,754	4,040

Employee related expenses
Contributions to defined contribution superannuation funds	2,985	2,543
Termination payments	403	420
Equity settled share-based payments (note 25(a))	904	973
	4,292	3,936

Rental expense relating to operating leases
Lease payments	802	873

ST BARBARA LIMITED 30 JUNE 2012

Note 9 Significant items

Significant items are those items where their nature or amount is considered material to the financial report. Such items included within the consolidated results for the year are detailed below.

	Consolidated
	2012	2011
	$'000	$'000

Included within net realised/unrealised gains/(losses) on derivatives
Net unrealised (loss)/gain on gold cash flow hedges(1)	(6,102)	12,946
Realised gain on gold cash flow hedges(1)	702	525
	(5,400)	13,471
associated with acquisitions(2)Expenses	(5,664)	-
Southern Cross asset write down(3)

Included within mine operating costs –deferred operating developmentIncluded within depreciation and amortisation	(3,865)(6,354)	--
	(10,219)	-

Income tax benefit(4)	20,731	-
Included within Other Expenditure
Native title payments	-	(2,400)
	-	(2,400)
Included within Other Income
Profit on sale of Tarmoola processing plant	-	1,164
Proceeds from sale of tenement rights	-	1,963
	-	3,127
Total significant items	(552)	14,198

(1) Net realised/unrealised (loss)/gain on gold cash flow hedges

At 30 June 2012 the mark-to-market value of the Company's gold put and call options (collar structure) was negative $16,290,000 (June 2011: negative $8,101,000). The put and call options at 30 June 2012 represent price protection for 175,000 ounces of King of the Hills production, and 20,000 ounces for Southern Cross production (June 2011: King of the Hills: 238,000 ounces; Southern Cross: nil ounces). In accordance with accounting standards the net unrealised loss, representing the movement in the time value of the gold options during the year, amounting to $6,102,000, was recognised in the income statement (2011: unrealised gain of $12,946,000). The net realised gain of $702,000 represents the unwinding of the unrealised mark-to-market loss previously recognised for gold options that were exercised or expired during the year (2011: realised gain of $525,000). The unrealised loss related to the movement in the intrinsic value of the gold options in the year of $3,054,000 (2011: gain of $17,102,000) was recognised in the gold cash flow hedge reserve in equity, with a realised gain of $264,000 recognised in the reserve for options that were exercised or expired during the year. Over time, unrealised losses on the gold options recognised in the income statement will reverse either through a change in the mark-to-market value of the options or maturity of the contracts.

(2) Expenses associated with acquisitions

During the year, the Company engaged various consultants to assist with completing due diligence and in making an offer for Allied Gold (refer Note 33 for further details of the proposed Allied Gold transaction). In the prior year, these expenses were not reported as a significant item on the basis that the amount was not material.

(3) Southern Cross asset write-down

Based on an assessment of the Southern Cross operations cash generating unit ("CGU") at 30 June 2012, an impairment write down was taken against assets of the CGU. While the Southern Cross operations are expected to generate positive net cash flows in the remaining period to closure, the cash flow estimates no longer support the full recovery of the carrying value of the Southern Cross CGU assets, including deferred mine operating development expenditure disclosed in mine operating costs in the Income Statement ($3,865,000); and capitalised mine development expenditure ($1,723,000), plant and equipment ($3,901,000) and capitalised exploration and evaluation expenditure ($730,000) all disclosed in depreciation and amortisation in the Income Statement.

(4) Income tax benefit

At 30 June 2011, the Group had unbooked tax losses of $182,258,000 (before tax effect) – these losses were not booked as it was not probable at that time that future taxable profits would be generated to utilise these losses. At 30 June 2012, based on current operational forecasts, it is now probable that future taxable profits will be generated to utilise the Group's tax losses. The credit of $20,731,000 recognised as an income tax benefit represents the booking of the tax effect of remaining losses at 30 June 2012 which were not previously booked.

Note 10 Income tax expense

(a) Income tax expense

	Note	Consolidated
		2012$'000	2011$'000
Current tax expense		35,432	20,479
Deferred income tax benefit		(56,163)	(20,479)
Total	9	(20,731)	-

(b) Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable

	Consolidated
	2012$'000	2011$'000
Profit before income tax benefit	109,499	68,629
Tax at the Australian tax rate of 30%	32,850	20,589
Tax effect of amounts not deductible/(taxable) in calculating taxableincome:
Legal and other capital expenditure	636	(382)
Equity settled share based payments	271	263
Transaction costs treated as capital cost base	1,576	-
Sundry items	99	9
Utilisation of previously unbooked tax losses	(35,432)	(8,273)
Recognition of previously unbooked tax losses	(20,731)	-
Change in previously unrecognised temporary differences	-	(12,206)
Income tax benefit	(20,731)	-

(c) Deferred tax balance

	Consolidated
	2012	2011
	$'000	$'000
Deferred tax liabilities
Accrued income	543	464
Mining properties –exploration	23,470	20,529
Mining properties –development	176,194	178,460
Consumables	10,418	9,711
Capitalised convertible notes costs	7,172	7,911
Total	217,797	217,075
Tax effect @ 30%	65,339	65,123

Deferred tax assets
Tax losses	227,897	342,689
Tax losses not booked	-	(182,258)
Provisions and accruals	43,459	41,416
Hedges at fair value	16,290	8,101
Investments at fair value	96	-
Tax assets without a carrying amount	4,104	7,127
Total	291,846	217,075
Tax effect @ 30%	87,554	65,123
Net deferred tax asset	22,215	-

Note 11 Cash and cash equivalents

		Consolidated
	2012	2011
	$'000	$'000
Cash at bank and on hand	23,442	4,485
Term deposits	161,800	75,000
	185,242	79,485

(a) Cash at bank and on hand

Cash at bank at 30 June 2012 invested "at call" was earning interest at an average rate of 3.82% per annum (2011: 4.90% per annum).

(b) Deposits

The deposits at 30 June 2012 were earning interest at rates of between 4.04% and 5.92% per annum (2011: rates of between 6.00% and 6.23% per annum). While term deposits are invested for defined periods, all deposits can be immediately accessed. At 30 June 2012, the average time to maturity was 41 days (2011: 68 days), with $10,000,000 maturing between 90 to 180 days (2011: $36,000,000) from balance date.

Note 12 Trade and other receivables

		Consolidated
	2012	2011
	$'000	$'000
Current assets
Trade receivables	3,646	15,199
Other receivables	6,321	5,255
Restricted cash(1)	123	123
Prepayments	3,705	3,563
	13,795	24,140

(1) Restricted cash at 30 June 2012 is cash placed on deposit to secure five bank guarantees in respect of obligations entered into for environmental performance bonds issued in favour of the Western Australian Department of Industry and Resources. These deposits earned interest at an average interest rate of 3.45%.

(a) Effective interest rates and credit risk

Information concerning the effective interest rate and credit risk of receivables is set out in Note 3 and Note 16.

Note 13 Inventories

	Consolidated
	2012	2011
	$'000	$'000
Consumables	10,418	9,711
Ore stockpiles	760	723
Gold in circuit	10,689	6,407
Bullion on hand	-	1,017
	21,867	17,858

(a) Lower of cost and net realisable value

At 30 June 2012, all categories of inventory were valued at cost (2011: all categories at cost).

Note 14 Deferred mining costs

	Consolidated
	2012	2011
	$'000	$'000
Current
Deferred operating mine development	23,789	12,934

Non-current
Deferred operating mine development	5,917	10,230

Note 15 Available-for-sale financial assets

	Consolidated
	2012	2011
	$'000	$'000
Current
At beginning of year	-	-
Additions	250	-
Revaluation loss taken to equity	(96)	-
	154	-

(a) Listed securities

Available-for-sale financial assets as at 30 June 2012 consisted of companies listed on the Australian Securities Exchange.

Note 16 Financial instruments

(a) Credit Risk Exposures

Refer Note 3 for the Group's exposure to credit risk.

(b) Interest Rate Risk Exposures

The Group'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 Group intends to hold fixed rate assets and liabilities to maturity.

2012	Fixed Interest Maturing in
	Non
	Floating	1 year or	Over 1 to 5	interest
Financial assets	Interestrate $'000	less$'000	years$'000	bearing$'000	Total$'000
Cash and cash equivalents	23,442	161,800	-	-	185,242
Restricted cash and cash equivalents	123	-	-	-	123
Receivables	-	-	-	9,967	9,967
Available for sale financial assets	-	-	-	154	154
Gold put and call options	-	-	-	87	87
	23,565	161,800	-	10,208	195,573
Weighted average interest rate	3.78%	5.48%
Financial liabilities
Trade and other payables	-	-	-	55,542	55,542
Finance lease liabilities	-	1,024	992	264	2,280
Gold put and call options	-	-	-	16,377	16,377
Insurance premium funding	-	1,976	-	-	1,976
	-	3,000	992	72,183	76,175
Weighted average interest rate		5.93%	7.59%
Net financial assets/(liabilities)	23,565	158,800	(992)	(61,975)	119,398

Note 16 Financial Instruments (continued)

2011	Fixed Interest Maturing in
	FloatingInterest	1 year orless	Over 1 to 5years	Noninterestbearing	Total
Financial assets	rate $'000	$'000	$'000	$'000	$'000
Cash and cash equivalents	4,485	75,000	-	-	79,485
Restricted cash and cash equivalents	123	-	-	-	123
Receivables	-	-	-	20,454	20,454
Gold put and call options	-	-	-	2,367	2,367
	4,608	75,000	-	22,821	102,429
Weighted average interest rate	4.89%	6.12%
Financial liabilities
Trade and other payables	-	-	-	49,366	49,366
Finance lease liabilities	-	954	1,581	6	2,541
Equipment financing facility	7,860	-	-	-	7,860
Gold put and call options	-	-	-	10,468	10,468
Insurance premium funding	-	1,785	-	-	1,785
	7,860	2,739	1,581	59,840	72,020
Weighted average interest rate	7.73%	5.97%	7.52%
Net financial assets/(liabilities)	(3,252)	72,261	(1,581)	(37,019)	30,409

Note 17 Property, plant and equipment

		Consolidated
	2012	2011
	$'000	$'000
Non-current
Land	1,093	1,093
Housing and site buildings	21,626	17,870
Plant and equipment	145,215	129,520
Accumulated depreciationand impairment	(64,006)	(42,733)
	103,928	105,750

Reconciliation of the carrying amounts for each class of property, plant and equipment is set out below:

	Consolidated
	2012	2011
	$'000	$'000
Land
	1,093	1,093
Housing and site buildings
At the beginning of the year	15,163	16,230
Additions	3,756	-
Depreciation	(1,607)	(1,067)
At the end of the year	17,312	15,163

Plant and equipment
At the beginning of the year	89,494	94,773
Additions	15,701	12,176
Disposals	(1)	(1,829)
Depreciation	(15,770)	(15,626)
Assets written off	(3,901)	-
At the end of the year	85,523	89,494
Total	103,928	105,750

(a) Security

As at 30 June 2012, plant and equipment with a carrying value of $1,997,000 (2011: $31,909,000) was pledged as security for finance leases (Note 21).

In accordance with the security arrangements in relation to commercial banking facilities, all remaining assets of the Group have been pledged as security to the National Australia Bank Limited and Barclays Bank PLC for performance bond and hedging facilities.

Note 18 Mine properties

	Consolidated
	2012	2011
Non-current	$'000	$'000
Mine Properties -development
At beginning of the year	283,991	216,530
Direct expenditure	80,757	106,312
Transferred from exploration and evaluation	-	2,844
Amortisation for the year	(73,378)	(41,695)
Mine development written off	(1,723)	-
At end of the year	289,647	283,991

Note 19 Exploration and evaluation

		Consolidated
	2012	2011
Non-current	$'000	$'000
Exploration and evaluation
At beginning of the year	11,629	5,735
Tenements written off	-	(125)
Expenditure capitalised for the year	4,575	8,863
Transferred to mine properties	-	(2,844)
Exploration and evaluation written off	(730)	-
At end of the year	15,474	11,629

Note 20 Trade and other payables

		Consolidated
	2012	2011
	$'000	$'000
Current
Trade payables	54,434	47,397
Other payables	1,108	1,969
	55,542	49,366

Note 21 Interest bearing borrowings

	Consolidated
	2012	2011
	$'000	$'000
Current
Secured
Lease liabilities (Note 29)	1,067	960
Equipment finance facility (Note 29)	-	7,860
Transaction costs	-	(114)
	1,067	8,706

Unsecured
Insurance premium funding	1,976	1,785
Total current	3,043	10,491

Non-current
Secured
Lease liabilities (Note 29)	1,213	1,581
Total non-current	1,213	1,581

(a) Interest rate risk exposures

Details of the Group's exposure to interest rate changes on borrowings are set out in Note 16.

(b) Equipment finance facility

In August 2011, the Company repaid the remaining amount owing on the equipment facility held with GE Commercial Finance.

(c) Set-off of assets and liabilities

The parent entity has established a legal right of set-off with a financial institution over cash on deposit to secure the issue of bank guarantees for the purpose of environmental performance bonds. At 30 June 2012 restricted cash for this purpose amounted to $123,000 (2011: $123,000).

Note 22 Derivative financial assets and liabilities

		Consolidated
	2012	2011
	$'000	$'000
Current assets
Fair value of gold option collar	87	2,085
Non-current assets
Fair value of gold option collar	-	282

Current liabilities
Fair value of gold option collar	2,830	-
Non-current liabilities
Fair value of gold option collar	13,547	10,468

(a) Instruments used by the Group

Refer to Note 3 'Financial Risk Management' for details on instruments used by the Group.

(b) Estimation of current and non-current assets and liabilities

In estimating the fair value of the gold option collars at each reporting date, the Group obtains an independent valuation of each option tranche within each collar. The valuation is performed using a generally accepted option valuation model where inputs are based on market observable data for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). Each tranche is then classified as a current or non-current asset or liability accordingly.

Note 23 Provisions

		Consolidated
	2012	2011
	$'000	$'000
Current
Employee benefits –annual leave	2,569	2,244
Employee benefits –long service leave	1,583	1,056
Employee benefits -other	2,078	890
Provision for rehabilitation	3,694	3,643
Other provisions	900	149
	10,824	7,982

Non-current
Provision for rehabilitation	30,071	30,888
Employee benefits -long service leave	1,212	1,261
	31,283	32,149

Movements in Provisions

		Consolidated
	2012$'000	2011$'000
Rehabilitation
Balance at start of year	34,531	32,474
Unwinding of discount	2,890	2,601
Expenditure incurred	(3,656)	(544)
Balance at end of year	33,765	34,531

Note 24 Contributed equity

(a) Share capital

	Parent entity		Parent entity
	2012	2011	2012	2011
	Shares	Shares	$'000	$'000
Ordinary shares -fully paid	324,620,389	325,615,389	613,275	615,521

(b) Movements in ordinary share capital:

Date	Details	Notes	Number ofshares	Issueprice($/share)	$'000
1 July 2010			1,952,668,407		614,997
Plus	Shares issued on exercise of options	(i)	1,000,000	0.28	279
	Transfer of Option Reserve on conversion ofoptions	(ii)			245
	Shares on issue prior to consolidation		1,953,668,407		-
	Shares on issue following share consolidation	(iii)	325,615,389		-
30 Jun 2011			325,615,389		615,521
Less	Share buybacksShare buyback transaction costs	(iv)	(995,000)	2.25	(2,239)(7)
30 Jun 2012	Closing balance		324,620,389		613,275

(i) Shares issued on exercise of unlisted options held by executives and employees.

(ii) Transfer of the fair value in the Share Based Payment Reserve relating to the options exercised at (i).

(iii) On 18 November 2010 shareholders approved a share consolidation of six existing shares for one new share of the Company's issued capital.

(iv) Pursuant to the on-market share buy-back facility announced on 21 December 2011, the Company bought back 995,000 shares during February and March 2012.

(c) 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.

(d) Options and Performance Rights

Information relating to the St Barbara Employee Option Plan and Performance Rights Plan, including details of options and rights issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in Note 37.

Note 25 Reserves and accumulated losses

(a) Reserves

		Consolidated
	2012	2011
	$'000	$'000
Reserves
Share based paymentsreserve	2,996	3,108
Investment fair value reserve	(67)	-
Gold cash flow hedge reserve	(3,394)	(2,059)
	(465)	1,049

Share based payments reserve
Balance at start of year	3,108	2,484
Option/performance rightsexpense	1,828	973
Options exercised	-	(245)
Options expired and transferred to retained earnings	(1,016)	-
Options not vesting	(924)	(104)
Balance at end of year	2,996	3,108
Investments fair value reserve
Balance at start of year	-	-

Fair value adjustmentTax effect of fair value adjustments	(96)29	--
Balance at end of year	(67)	-

Gold cash flow hedge reserve
Balance at start of year	(2,059)	(19,161)
Options exercised/expired	264	-
Fair value adjustments	(3,054)	17,102
Tax effect of fair value movements	1,455	-
Balance at end of year	(3,394)	(2,059)

(b) Accumulated losses

Movements in accumulated losses were as follows:

		Consolidated
	2012$'000	2011$'000
Balance at start of year	(180,223)	(248,852)
Profit attributable to members of the Company	130,230	68,629
Transferred from share based paymentreserve	1,016	-
Balance at end of year	(48,977)	(180,223)

(c) Share based payments reserve

The share based payments reserve is used to recognise the fair value of options and rights issued to executives and employees but not exercised.

$1,016,000 previously recognised in the share based payments reserve in respect of 416,668 options, which expired during the year was transferred to accumulated losses. Accounting standards preclude the reversal through the Income Statement of amounts which have been booked in the share based payments reserve for options which have previously vested but subsequently expire.

(d) Gold cash flow hedge reserve

At each balance sheet date, a mark-to-market valuation of the Group's gold bought put options and sold call options (the "collar structure") is performed. Where the hedge is effective, changes in fair value relating to the intrinsic portion of the valuation are recognised in the gold cash flow hedge reserve. If the underlying options expire, the reserve relating to the expired options reverses against the derivatives liability.

Note 26 Parent Entity disclosures

As at, and throughout, the financial year ended 30 June 2012, the parent company of the Group was St Barbara Limited.

(a) Financial statements

		Parent Entity
	2012$'000	2011$'000
Results of the parent entity
Profit for the year	130,230	68,629
Other comprehensive income	(1,402)	17,102
Total comprehensive income for the year	128,828	85,731

Other comprehensive income is set out in the Consolidated Statement of Comprehensive Income.

	Parent Entity
	2012	2011
Financial position of the parent entity at year end	$'000	$'000
Current assets	244,936	136,504
Total assets	682,295	548,564

Current liabilities	83,640	79,240
Total liabilities	129,683	123,438
Total equity of the parent entity comprising of:
Share capital	613,275	615,521
Share based paymentsreserve	2,996	3,108
Investment fair value reserve	(67)	-
Gold cash flow hedge reserve	(3,394)	(2,059)
Accumulated losses	(60,198)	(191,444)
Total equity	552,612	425,126

(b) Parent entity contingencies

The parent entity had no contingent liabilities at 30 June 2012.

(c) Parent entity guarantees

Refer Note 28 for details of bank guarantees issued by the parent entity.

(d) Parent entity capital commitments for acquisition of property, plant and equipment

	Company
	2012$'000	2011$'000
Contracted but not yet provided for and payable
Within one year	-	-

Note 27 Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

	Consolidated
	2012	2011
	$'000	$'000
(a)Assurance services
Audit and audit related services
KPMG Australian firm
Audit and review of financial reports	261	245
Audit and review of financial controls	-	120
Total remuneration for audit and audit related services	261	365

(b)Non-audit services
KPMG Australian firm
Financial and accounting due diligence services	495	-
Total remuneration for non-audit services	495	-

Note 28 Contingencies

(a) Contingent liabilities and assets

The Company and consolidated entity had no contingent liabilities at 30 June 2012.

(b) Bank guarantees

The Group has negotiated bank guarantees in favour of various government authorities and service providers. The total of these guarantees at 30 June 2012 was $20,608,000 (2011: $20,716,000). Security is provided to the National Australia Bank Limited ("NAB") (refer to Note 17) for $20,485,000 of this amount through a fixed and floating charge over the Group's assets. Cash held on deposit with the Commonwealth Bank of Australia secures the remaining $123,000 as at 30 June 2012 (refer to Note 12).

Under the terms of the NAB facility, there are a number of undertakings related to the performance of the Company. Non compliance with these undertakings could constitute an event of default. In the year, and as at 30 June 2012, there were no events of default under the facility.

(c) Gold bought put and sold call options

In the 2011 financial year, the Company negotiated a 250,000 ounce zero cost collar hedge facility with National Australia Bank Limited (NAB) and Barclays Bank PLC ("Barclays") to provide price protection for production from King of the Hills. In August 2011, the Company negotiated a 100,000 ounce zero cost collar hedge facility with NAB and Barclays to provide price protection for production from Southern Cross. Refer to Note 3 for details of ounces exercised/expired during the year, and ounces remaining under these facilities.

Security is provided to NAB and Barclays through a fixed and floating charge over the assets of the Group, excluding assets securing finance leases.

Under the terms of the hedge facility there are a number of undertakings related to the performance of the Company. Non compliance with these undertakings could constitute an event of default. In the year, and as at 30 June 2012, there were no events of default under the facility.

Note 29 Commitments for expenditure

	Consolidated
	2012$'000	2011$'000
Exploration
In order to maintain rights of tenure to mining tenements, the Group iscommitted to tenement rentals and minimum exploration expenditure interms of the requirements of the relevant state government miningdepartments in WesternAustralia, New South Wales and South Australia.This requirement will continue for future years with the amount dependent
upon tenement holdings.	9,677	9,580

Note 29 Commitments for expenditure (continued)

	Consolidated
	2012$'000	2011$'000
Finance Lease Commitments
Payable not later than one year	1,144	1,124
Payable later than one year, not later than fiveyears	1,065	1,722
	2,209	2,846
Future finance charges	(193)	(311)
Recognised as a liability	2,016	2,535
Lease incentives on non-cancellable operating leases included in lease
liabilities	264	6
Total lease liabilities	2,280	2,541

Current (Note 21)	1,067	960
Non-current (Note 21)	1,213	1,581
	2,280	2,541

These finance lease commitments relate to vehicles and plant and equipment, and are based on the cost of the assets and are payable over a period of up to 48 months.

	Consolidated
	2012$'000	2011$'000
Equipment Finance Facility
Payable not later than one year	-	8,023
Future finance charges	-	(163)
Total lease liabilities	-	7,860

Current (Note 21)	-	7,860
Non-current (Note 21)	-	-
	-	7,860

	Consolidated
	2012$'000	2011$'000
Analysis of Non-Cancellable Operating Lease Commitments
Payable not later than one year	916	265
Payable later than one year, not later than five years	3,093	1,181
Payable later than five years	85	744
	4,094	2,190

Note 29 Commitments for expenditure (continued)

	Consolidated
	2012$'000	2011$'000
Analysis of Non-Cancellable Operating Sub-lease receipts
Receivable not later than one year	207	199
Receivable later than one year, not later than five years	607	813
	814	1,012

Note 30 Related party transactions

a) Directors and key management personnel

Disclosures relating to Directors and key management personnel are set out in Note 38.

(b) Transactions with entities in the wholly-owned group

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

During the year the Company did not transact with any entities in the wholly-owned group (2011: $ Nil). Net receivables from subsidiaries amounted to $2,000 (2011: $2,000). The Company provided accounting and administrative assistance free of charge to all of its wholly-owned subsidiaries.

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

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

		Company
	2012$'000	2011$'000
Aggregate amounts receivable at balance date from:
Entities in the wholly-owned group	852	852
Less provision for doubtful receivables	(850)	(850)
	2	2
Aggregate amounts payable at balance date to:Entities in the wholly-owned group	11,401	11,401

(d) Guarantees

Subsidiary companies have guaranteed the parent entity's obligations under the bank guarantee facilities provided by the National Australia Bank Limited and Commonwealth Bank of Australia.

(e) Terms and conditions

Outstanding balances are unsecured, interest free and are repayable in cash on demand.

(f) Amounts receivable from Director related entities

At 30 June 2012, there were no amounts receivable from Director related entities (2011: $ Nil).

(g) Other Transactions with Directors of the Company and their Director related entities

During the year ended 30 June 2012, there were no other transactions with Directors of the Company and their Director related entities.

Note 31 Controlled entities

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

					Carrying value ofCompany's
			Equity holding	investment
		June	June	June	June
	Class of	2012	2011	2012	2011
Name of entity	Shares	%	%	$'000	$'000
Australian Eagle Oil Co Pty Ltd	Ordinary	100	100	178	178
Capvern Pty Ltd	Ordinary	100	100	-	-
Eagle Group Management PtyLtd	Ordinary	100	100	-	-
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 Pty Ltd	Ordinary	100	100	-	-
				178	178

Each company in the Group was incorporated in Australia.

	June 2012Equity %	June 2011Equity %	Joint Venturers
WESTERN AUSTRALIA
Leonora Region
Mount Newman -Victory	87%	87%	Astro Diamond Mines N.L.
Sandy Soak	91%	91%	Hunter Resources Pty Ltd
Melita	80%	80%	Dalrymple Resources N.L.
McEast/Pipeline	20%	20%	Cheperon Gold Partnership
Black Cat	40%	40%	Terrain Minerals Ltd
Silver Phantom	70%	70%	Bellriver Pty Ltd
South Rankin	75%	75%	Comet Resources Limited

Note 32 Interests in jointly controlled assets

As at 30 June 2012 there was no joint venture assets recorded in the balance sheet (2011: Nil).

Note 33 Events occurring after the balance sheet date

On 29 June 2012, the Company announced a proposal to acquire all the shares of Allied Gold Mining Plc ("Allied Gold") via a scheme of arrangement. Under the terms of the recommended offer, St Barbara will acquire the entire issued and to be issued ordinary share capital of Allied Gold for A$1.025 in cash and 0.8 St Barbara shares for each Allied Gold share (the "Offer"). Based on the closing price of St Barbara shares on the Australian Securities Exchange on 28 June 2012, being the last trading day before the announcement, the offer values Allied Gold at $556 million.

Note 34 Reconciliation of profit after income tax to net cash flows from operating activities

	Consolidated
	2012	2011
	$'000	$'000
Profit after tax for the year	130,230	68,629
Depreciation and amortisation	90,869	58,480
Asset impairment write offs	10,219	-
Recognition of unbooked taxlosses	(20,731)	-
Profit on sale of assets	(67)	(1,180)
Gain on sale of tenement rights	-	(1,963)
Net realised/unrealised loss/(gain) on gold derivative fair value	5,400	(13,471)
movements
Tenement write-off	-	125
Equity settled share-based payments	904	869
Change in operating assets and liabilities
(Increase)/decrease in receivables and prepayments	10,345	(8,925)
(Increase)/decrease in inventories	(4,009)	197
(Increase)/decrease in other assets	(10,408)	(14,049)
Increase/(decrease) in trade creditors and payables	7,037	11,217
Increase/(decrease) in non-current provisions	(866)	1,504
Increase/(decrease) in other liabilities	2,904	1,640
Net cash flows from operating activities	221,827	103,073


Note 35Non-cash investing and financing activities

Consolidated 2012 2011 $'000 $'000 Acquisition of vehicles and equipment through finance leases 491 1,552

Note 36 Earnings per share

		Consolidated
		2012	2011
		Cents	Cents
(a)	Basic earningsper share
	Profit attributable to the ordinary equity holders of the Company	40.04	21.05
(b)	Diluted earnings per share
	Profit attributable to the ordinary equity holders of the Company	39.60	20.94

(c) Reconciliation of earnings used in calculating earnings per share

	Consolidated
	20122011
	$'000	$'000
Basic and diluted earnings per share:
Profit after tax for the year	130,230	68,629

(d) Weighted average number of shares

	Consolidated
	2012	2011
	Number	Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share	325,285,005	326,031,238
Weighted average number of ordinary shares and potential ordinaryshares used as the denominator in calculating diluted earnings per
share	328,885,173	327,753,818

(e) Information concerning the classification of securities

(i) Options

Executive Options and Options granted to employees under the St Barbara Limited Employee Option Plans are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in Note 37.

(ii) Performance rights

Performance rights granted to employees under the St Barbara Performance Rights Plan are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The rights have not been included in the determination of basic earnings per share. Details relating to the rights are set out in Note 37.

Note 37 Share-based payments

(a) Employee Option Plan

The establishment of the St Barbara Limited Employee Option Plan was approved by shareholders at the 2001 Annual General Meeting. Options are granted as part of an employee's total remuneration package. Options are granted for a three to five year period.

Options granted under the plan carry no dividend or voting rights.

When exercisable, each option is convertible into one ordinary share.

Set out below are summaries of options granted to employees under the St Barbara Limited Employee Option Plan approved by shareholders:

	Consolidated and parent entity – 2012
Grant Date	Expiry Date	ExercisePrice	Balance atstart of theyearNumber	Grantedduring theyearNumber	Exercisedduring theyearNumber	Expiredduring theyearNumber	Balance atend of theyearNumber	Exercisableat end of theyearNumber
11 Sep 06	11 Sep 11	$2.863	333,334	-	-	333,334(1)	-	-
01 Dec 06	01 Dec 11	$3.181	83,334	-	-	83,334(1)	-	-
06 May 09	02 Mar 14	$2.286	251,350	-	-	251,350(3)	-	-
06 May 09	03 Apr 14	$2.466	517,354	-	-	517,354(3)	-	-
23 Sep 09(2)	23 Sep 14	$1.722	2,284,737	-	-	329,474(4)	1,955,263	-
Total			3,470,109	-	-	1,514,846	1,955,263	-
	Weighted average exercise price		$2.02			$2.40	$1.72	-

(1) Options expired during the year.

(2) Vesting of options granted in September 2009 is subject to performance criteria as discussed below.

(3) Options did not meet performance criteria at 30 June 2012, therefore did not vest.

(4) Expired on termination of employment with the Company.

Grant Date	Expiry Date	ExercisePrice	Balance atstart of theyearNumber	Grantedduring theyearNumber	Exercisedduring theyearNumber	Expiredduring theyearNumber	Balance atend of theyearNumber	Exercisableat end of theyearNumber
30 Sep 05	30 Sep 10	$1.674	166,667	-	166,667	-	-	-
01 Jul 06	30 Jun 11	$2.832	83,334	-	-	83,334(1)	-	-
11 Sep 06	11 Sep 11	$2.863	333,334	-	-	-	333,334	333,334
01 Dec 06	01 Dec 11	$3.181	83,334	-	-	-	83,334	83,334
06 May 09(2)	02 Mar 14	$2.286	251,350	-	-	-	251,350	-
06 May 09(2)	03 Apr 14	$2.466	603,580	-	-	86,226(1)	517,354	-
23 Sep 09(2)	23 Sep 14	$1.722	2,407,960	-	-	123,223(1)	2,284,737	-
Total			3,929,559	-	166,667	292,783	3,470,109	416,668
	Weighted average exercise price		$2.02		$1.67	$2.26	$2.02	$2.93

Consolidated and parent entity – 2011

(1) Expired on termination of employment with the Company.

(2) Vesting of options granted in May 2009 and September 2009 is subject to performance criteria as discussed below.

The weighted average remaining contractual life of share options outstanding at the end of the year was 2.2 years (2011: 2.8 years).

Fair value of options granted

There were no options granted during the year ending 30 June 2012.

Options are granted for no consideration. The vesting of options granted in 2010 is subject to a continuing services condition as at each vesting date, and relative Total Shareholder Returns over a three year period measured against a peer group. The Board reserves the right to make changes to the peer group to allow for changing circumstances (e.g. takeover) for peer group companies.

All options expire on the earlier of their expiry date, thirty days after resignation of the relevant executive or twelve months after retirement or retrenchment.

Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share.

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date. Fair values at grant date are independently determined using a Black Scholes option pricing model that takes into account the exercise price (ordinarily linked to the average closing market price for the 5 business days immediately preceding the grant date), the term of the option, the performance hurdle (relative Total Shareholder Return) the share price at grant date and expected price volatility of the underlying share, no expected dividend yield and the risk free interest rate for the term of the option.

At each balance date, an assessment is performed with regard to the probability of options vesting with respect to service conditions, and is subject to management judgement. Refer to Note 4 for further details.

(b) Employee Performance Rights

Set out below are summaries of performance rights granted to employees under the St Barbara Limited Performance Rights Plan approved by shareholders:

Consolidated and parent entity – 2012
Grant Date	Expiry Date	Price onissue date	Balance atstart of theyearNumber	Grantedduring theyearNumber	Exercisedduring theyearNumber	Expiredduring theyearNumber	Balance atend of theyearNumber	Exercisableat end of theyearNumber
23 Dec 10	30 Jun 13	$2.26	2,274,252	-	-	364,612(1)	1,909,640	-
21 Jan 11	30 Jun 13	$1.81	114,611	-	-	-	114,611	-
28 Oct 11	30 Jun 14	$2.23	-	1,177,839		217,724(1)	960,115	-
23 Nov 11	30 Jun 14	$2.20	-	459,621	-	-	459,621	-
15 Mar 12	30 Jun 14	$2.09	-	243,496	-	-	243,496	-
Total			2,388,863	1,880,956	-	582,336	3,687,483	-
	Weighted average exercise price		-	-	-	-	-	-

(1) Expired on termination of employment with the Company.

Consolidated and parent entity – 2011
Grant Date	Expiry Date	Price onissue date	Balance atstart of theyearNumber	Grantedduring theyearNumber	Exercisedduring theyearNumber	Expiredduring theyearNumber	Balance atend of theyearNumber	Exercisableat end of theyearNumber
23 Dec 10	30 Jun 13	$2.26	-	2,412,992	-	138,740(1)	2,274,252	-
21 Jan 11	30 Jun 13	$1.81	-	114,611	-	-	114,611	-
Total			-	2,527,603	-	138,740	2,388,863	-
	Weighted average exercise price		-	-	-	-	-	-

(1) Expired on termination of employment with the Company

The weighted average remaining contractual life of performance rights outstanding at the end of the year was 1.5 years (2011: 2.0 years).

The model inputs for rights granted during the year ended 30 June 2012 included:

i. Rights are granted for no consideration. The vesting of rights granted in 2012 is subject to a continuing service condition as at each vesting date, and relative Total Shareholder Returns over a three year period measured against a peer group.
ii. Performance rights do not have an exercise price
iii. Any performance right which does not vest will lapse
iv. Grant date varies with each issue.

The fair value of rights issued was adjusted according to estimates of the likelihood that the market conditions would be met. A Monte-Carlo simulation was performed using data at grant date to assist management in estimating the probability of the rights vesting. Refer Note 4 for further details.

As a result of the Monte-Carlo simulation results, the assessed fair value of rights issued during the

year was $2,073,000. This outcome was based on the likelihood of the market condition being met as at the date the rights vest.

(c) Expenses arising from share based payment transactions

Total expenses/(gains) arising from equity settled share based payment transactions recognised during the year as part of the employee benefit expenses were as follows:

		Consolidated
	2012$'000	2011$'000
Options/performance rightsissued/expired under
employee option plan	904	624

Note 38 Key Management Personnel Disclosures

(a) Directors

The following persons were Directors of St Barbara Limited during the financial year:

S J C Wise Chairman
T J Lehany Managing Director & CEO
D W Bailey Non-executive director
E A Donaghey Non-executive director
P C Lockyer Non-executive director
R K Rae Non-executive director

(b) Key management personnel disclosures

The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year:

Tim J Lehany Managing Director & CEO
David Rose Chief Operating Officer (resigned 31 January 2012)
Alistair Croll Chief Operating Officer (appointed 16 January 2012)
Garth Campbell-Cowan Chief Financial Officer
Ross Kennedy Executive General Manager Corporate Services/Company Secretary
Phil Uttley Executive General Manager Discovery & Growth

(c) Key Management Personnel Compensation

	Consolidated
	2012	2011
	$'000	$'000
Short term employee benefits	4,207,826	2,713,826
Post employment benefits	78,522	75,995
Long Service Leave	104,216	65,086
Share-based payments	1,162,542	488,259
Termination payments	330,716	-
	5,883,822	3,343,166

(d) Equity Instrument Disclosures Relating to Key Management Personnel

(i) Options provided as remuneration and shares issued on exercise of such options

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options, are disclosed in Note 37.

(ii) Option holdings

The numbers of options over ordinary shares in the Company held during the financial year by each Director of St Barbara Limited and key management personnel of the Group, including their related parties, are set out below:

2012Name	Balance atthe start ofthe year	Granted duringthe year ascompensation	Exercisedduring theyear	Expiredduring theyear	Otherchangesduring theyear	Balance atthe end ofthe year	Vested andexercisableat the end ofthe year
Executive Director
T J Lehany	1,227,570	-	-	-	(251,350)(1)	976,220	-
Key management personnel
D Rose	329,474	-	-	-	(329,474)(2)	-	-
G Campbell-Cowan	825,196	-	-	(333,334)	(1)(201,192)	290,670	-
R Kennedy	413,032	-	-	-	(156,774)(1)	256,258	-
P Uttley	256,258	-	-	-	-	256,258	-

(1) Options did not vest at 30 June 2012.

(2) Options expired upon termination of employment.

2011Name	Balance atthe start ofthe year	Granted duringthe year ascompensation	Exercisedduring theyear	Expiredduring theyear	Otherchangesduring theyear	Balance atthe end ofthe year	Vested andexercisableat the end ofthe year
Executive Director
T J Lehany	1,227,570	-	-	-	-	1,227,570	-
Key management personnel
D Rose	329,474	-	-	-	-	329,474	-
G Campbell-Cowan	825,196	-	-	-	-	825,196	333,334
R Kennedy	413,032	-	-	-	-	413,032	-
P Uttley	256,258	-	-	-	-	256,258	-

(iii) Performance rights

The numbers of rights over ordinary shares in the Company held during the financial year by each Director of St Barbara Limited and key management personnel of the Group, including their related parties, are set out below:

2012Name	Balance at thestart of theyear	Grantedduring theyear ascompensation	Exercisedduring theyear	Other changesduring theyear	Balance at theend of theyear	Vested andexercisable atthe end of theyear
Executive Director
T J Lehany	757,819	459,621	-	-	1,217,440	-
Key management personnel
D Rose	252,011	152,846	-	(404,857)(1)	-	-
A Croll	-	169,106	-	-	169,106	-
G Campbell-Cowan	225,737	146,472	-	-	372,209	-
R Kennedy	195,174	118,374	-	-	313,548	-
P Uttley	195,174	126,634	-	-	321,808	-

(1) Performance rights expired upon termination of employment.

2011Name	Balance at thestart of theyear	Grantedduring theyear ascompensation	Exercisedduring theyear	Other changesduring theyear	Balance at theend of theyear	Vested andexercisable atthe end of theyear
Executive Director
T J Lehany	-	757,819	-	-	757,819	-
Key management personnel
D Rose	-	252,011	-	-	252,011	-
G Campbell-Cowan	-	225,737	-	-	225,737	-
R Kennedy	-	195,174	-	-	195,174	-
P Uttley	-	195,174	-	-	195,174	-

(iv) Share holdings

The numbers of shares in the Company held during the year by each Director of St Barbara Limited and key management personnel of the Group, including their related parties, are set out below. There were no shares granted during the year as compensation.

2012Name	Balance at thestart of theyear	Exercise ofoptions	Other changes	Purchased	Sold	Balance at theend of theyear
Directors
S J C Wise	1,139,389	-	-	-	-	1,139,389
T J Lehany	167,822	-	-	-	-	167,822
D W Bailey	30,247	-	-	-	-	30,247
E A Donaghey	-	-	-	40,000	-	40,000
P C Lockyer	20,631	-	-	-	-	20,631
R K Rae	48,976	-	-	-	-	48,976
Key management personnel
A Croll	-	-	-	-	-	-
G Campbell-Cowan	-	-	-	15,000	-	15,000
R Kennedy	65,218	-	-	9,000	-	74,218
P Uttley	-	-	-	-	-	-

2011	Balance at thestart of the	Exercise of	Other changes	Purchased	Sold	Balance at the
Name	year	options				end of the year
Directors
S J C Wise	1,139,389	-	-	-	-	1,139,389
T J Lehany	167,822	-	-	-	-	167,822
D W Bailey	30,247	-	-	-	-	30,247
E A Donaghey	-	-	-	-	-	-
P C Lockyer	10,631	-	-	10,000	-	20,631
R K Rae	42,310	-	-	6,666	-	48,976
Key management personnel
D Rose	23,334	-	-	-	-	23,334
G Campbell-Cowan	-	-	-	-	-	-
R Kennedy	70,885	-	-	11,000	(16,667)	65,218
P Uttley	-	-	-	-	-	-

DIRECTORS' DECLARATION

1 In the opinion of the directors of St Barbara Limited (the Company):
- (a) the financial statements and notes that are contained in pages 37 to 100 and the Remuneration report in the Directors' report, set out on pages 14 to 32, are in accordance with the Corporations Act 2001, including:
  - (i) giving a true and fair view of the Group's financial position as at 30 June 2012 and of its performance for the financial year ended on that date; and
  - (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
- (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2 The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive officer and chief financial officer for the financial year ended 30 June 2012.
3 The directors draw attention to Note 1(a) to the financial statements, which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the directors:

Timothy J Lehany Managing Director and CEO

Melbourne 23 August 2012

Independent auditor's report to the members of St Barbara Limited

Report on the financial report

We have audited the accompanying financial report of St Barbara Limited (the Company), which comprises the consolidated statement of financial position as at 30 June 2012, and consolidated income statement and consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the year ended on that date, notes 1 to 38 comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the Group comprising the Company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. In note 1(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements of the Group comply with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control*.* An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Group's financial position and of its performance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor's opinion

In our opinion:

(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group's financial position as at 30 June 2012 and of its performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1(a).

Report on the remuneration report

We have audited the Remuneration Report included in pages 14 to 32 of the directors' report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with auditing standards.

Auditor's opinion

In our opinion, the remuneration report of St Barbara Limited for the year ended 30 June 2012, complies with Section 300A of the Corporations Act 2001.

KPMG

Tony Romeo Partner

Melbourne

23 August 2012

AI assistant

ST BARBARA LIMITED — Annual Report 2012

65749_rns_2012-08-22_690222c9-0342-400a-acec-5498f8ea348c.pdf

Net Profit after Tax increases to $130 million

ST BARBARA LIMITED

Preliminary Final Report

Financial year ended 30 June 2012

Results for announcement to the market

Dividends

Any other significant information needed by an investor to make an informed assessment of the entity's financial performance and financial position.

Discussion and Analysis of Operating Results and the Income Statement

Financial performance

Details of 2012 Production Performance

Gwalia

King of the Hills

Southern Cross

Corporate and Discovery & Growth

Discussion and Analysis of the Cash Flow Statement

Operating activities

Investing activities

Financing activities

Discussion and Analysis of the Statement of Financial Position

Net Assets and Total Equity

Net debt

Subsequent Events

Net tangible asset backing

Statement about the audit status

ST BARBARA LIMITED

Directors

Principal activities

Dividends

Overview of Results

Discussion and Analysis of Operating Results and the Income Statement

Financial performance

Details of 2012 Production Performance

Gwalia

King of the Hills

Southern Cross

Corporate and Discovery & Growth

Discussion and Analysis of the Cash Flow Statement

Operating activities

Investing activities

Financing activities

Discussion and Analysis of the Statement of Financial Position

Net Assets and Total Equity

Net debt

Significant changes in the state of affairs

Likely developments and expected results of operations

Regulatory environment

Information on Directors

S J Colin Wise LL.B, FAICD, FAusIMM Chairman – Non Executive

Timothy J Lehany B.E., MBA, MAusIMM Managing Director and Chief Executive Officer

Douglas W Bailey, BBus (Acc), CPA, ACIS Non Executive Director

Elizabeth A (Betsy) Donaghey B.Sc(Eng) M.S Non Executive Director

Phillip C Lockyer M.Sc, AWASM, DipMETALL Non Executive Director

Robert K Rae B.Com (Hons), FAICD Non Executive Director

Qualifications and experience of the company secretary

Ross J Kennedy BComm, Grad.Dip – Company Secretarial Practice, ACA, FTIA, MAusIMM, FAICD, ACIS Company Secretary

Meetings of Directors

Remuneration report (Audited)

Introduction

Overview of contents

1. Strategy and Industry Context

Company Strategy

Remuneration Report (Audited) – continued

Industry context

Remuneration Strategy

Key developments

Remuneration Report (Audited) – continued

2. Decision making authorities for remuneration at St Barbara

Remuneration Report (Audited) – continued

3. Principles applied in determining the structure and amount of remuneration

(a) Non Executive Directors' fees

Remuneration Report (Audited) – continued

(b) Executive Remuneration

Remuneration Report (Audited) – continued

(i) Fixed Remuneration

(ii) Fixed Remuneration - Superannuation

(iii) Fixed Remuneration - Benefits

(iv) Variable Remuneration - Short term incentives (STI)

ST BARBARA LIMITED Annual Report 2012