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ST BARBARA LIMITED Annual Report 2017

Oct 19, 2017

65749_rns_2017-10-19_83620a5a-7e2f-4f90-9f39-d71c5e9400b9.pdf

Annual Report

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ASX Release / 20 October 2017
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2017 Annual Report and Notice of Annual General Meeting

The 2017 Annual General Meeting of St Barbara Limited will be held at 11:00 am Melbourne time (UTC + 11 hours) on Wednesday 29 November 2017, in the Royce Conference Room, Royce Hotel, 379 St Kilda Road, Melbourne.

The 2017 Annual Report, Notice of Annual General Meeting and sample Proxy Form are attached, as distributed to shareholders today.

A live audio webcast of the Annual General Meeting will be available at St Barbara’s website at www.stbarbara.com.au/investors/webcast, or by clicking here. The audio webcast is ‘listen only’ and does not enable questions. The audio webcast will subsequently be made available on the website.

Investor Relations Mr Alistair Reid Manager Investor Relations +61 3 8660 1959 Media Relations Mr Tim Duncan Hinton & Associates +61 3 9600 1979

St Barbara Limited Level 10, 432 St Kilda Road, Melbourne VIC 3004 ACN 009 165 066 Locked Bag 9, Collins Street East, Melbourne VIC 8003

T +61 3 8660 1900 F +61 3 8660 1999 W www.stbarbara.com.au

Annual�Report�2017�

ST�BARBARA�LIMITED�2017�

Annual�Report�

St�Barbara�at�a�glance

  • St�Barbara�was�established�in�1969�and�is�an�ASX�200� listed�gold�mining�company�(ASX:SBM).�

FY�17�at�a�glance

  - Record�operational�performance�

     - Record�safety�
  • St�Barbara�has�two�mining�operations:�

  • Leonora �Operations�in�Western�Australia,�and�

  • Simberi �Operations�in�Papua�New�Guinea.�

  • Leonora �Operations�comprise�the� Gwalia �underground� mine�and�associated�processing�plant.�The� Gwalia underground�mine�is�St�Barbara’s�cornerstone�asset.�� The� Gwalia �deposit�has�an�average�Ore�Reserve�grade�of� 7.8�g/t�Au�down�to�2,140�metres�below�surface,�a�mine� plan�to�at�least�FY�24,�and�remains�open�at�depth.� Gwalia �compares�favourably�against�other�ASX�listed� gold�mines�on�grade,�reserve�size,�mine�life,�annual� production�and�cost�per�ounce.�

  • Simberi �Operations�has�an�open�pit�mine�and�associated� processing�plant.�Simberi�produced�116�koz�of�gold�in� FY�17�with�the�remaining�oxide�project�life�extended�to� FY�20.��Existing�sulphide�reserves�and�exploration�on�the� neighbouring�Tabar�Islands�provide�the�potential�for� Simberi�Operations�to�extend�mine�life.�

  • At�30�June�2017,�St�Barbara�had� Mineral�Resources �of� 9.63�million�ounces�of�contained�gold,�including� Ore� Reserves �of�4.31�million�ounces�of�contained�gold.�

  • Growth�initiatives� planned�for�FY�18�include:�

  • The �Gwalia�Extension�Project� will�extend�mining�at� Gwalia�to�at�least�2,000�mbs.�The�Project�has�an� overall�budget�of�A$100�million�and�is�expected�to� take�two�and�a�half�to�three�years�to�construct.�The� project�consists�of�two�main�components;�a� ventilation�upgrade�and�paste�aggregate�fill.

  • Deep�drilling�at� Gwalia �below�the�existing�Ore� Reserves�(which�remain�open�at�depth)�with�the� objective�of�increasing�Resources�and�Reserves.�

  • Exploration�utilising�new�seismic�geophysics�at� Gwalia�and�the�Leonora�region.�

  • Drilling�of�prospective�sulphide�oxide�and�copper� gold�targets�on�Tatau�and�Big�Tabar�Islands,�near� Simberi �Operations�in�PNG,�and�drilling�for�oxide� sulphide�targets�on� Simberi �Island.�

  • Drilling�at� Pinjin �in�Western�Australia,�and�

  • Systematic�evaluation�of�sensible,�value�accretive� inorganic�growth�opportunities.�

  • St�Barbara’s�primary�safety�measure,�total�recordable� injury�frequency�rate,�was�a�record�low�1.2�for�the�year� to�June�2017,�an�excellent�result�for�a�mixed�jurisdiction� combination�of�underground�and�open�pit�operations.

  • Record�production�from�continuing�operations�

  • Record�low�All�In�Sustaining�Cost�(AISC)�

  • Achieved�or�exceeded�guidance�at�both�operations�

  • Record�financial�results�

  • Record�underlying�profit�

  • Record�cash�flow�from�operating�activities�

  • US$�senior�secured�debt�repaid�in�full�

  • Positive�growth�outcomes�

  • A$100M�Gwalia�extension�project�commenced�

  • Reserves�and�Resources�increased�at�Gwalia�

  • Simberi�oxide�mine�life�extended�

  • $0.06�per�share�fully�franked�dividend�for�year

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Record�Production�from�continuing�operations
381,101�ounces
400,000
300,000
200,000
100,000
0
2013 2014 2015 2016 2017
Gwalia Simberi
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Record�Low�All�in�Sustaining�Cost
A$907/oz
1,500
1,000
500
0
2013 2014 2015 2016 2017
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Record�Low�Total�Recordable�Injury� Frequency�Rate�1.2

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6
4
2
0
2013 2014 2015 2016 2017
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i�

ST�BARBARA�LIMITED�2017�

Annual�Report�

St�Barbara�at�a�glance

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Leonora�(Gwalia�mine) Simberi� Simberi
PNG • Open�pit�mine
• Gwalia�underground�mine� • FY17�production�116�koz�
• FY17�production�265�koz� • FY18F�production��
• FY18F�production�� 105�–�115�koz�
245���260�koz� • 0.5�Moz�oxide�and�1.4�Moz�
• 2.1�Moz�Ore�Reserve� sulphide�Ore�Reserve�
(open�at�depth)� (sulphide�open�at�depth)�
• Mine�plan�to�FY24� • Mine�life�extended�to�mid�
Australia
FY20�
Growth�initiatives
• $100�million�Gwalia� Growth�initiatives
Extension�Project�to�extend� Leonora� • Exploration�of�near�mine�
mining�to�at�least�2,000mbs� targets�and�on�adjacent�
• Deep�drilling�targeting� Tatau�and�Big�Tabar�Islands�
Reserve�and�Resource� • Copper�gold�porphyry�
additions�to�extend�mine�life� exploration�with�Newcrest�
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FY18�planned�exploration��

2,250�km[2] �of�prospective�tenements�across�Western�Australia�and�Papua�New�Guinea

  • Western�Australia

  • Gwalia�deep�drilling,�adjacent�and�below� existing�Reserves�

  • Gwalia�and�Leonora�region�seismic�exploration�

Papua�New�Guinea�

  • Simberi�oxide�near�mine�drilling�

  • Tatau�and�Big�Tabar�Islands�copper�gold�drilling�

  • Tatau�Island�oxide�and�sulphide�drilling�

  • Pinjin�drilling�

OreReservesasat30June
OreReserves
Mt
OreReservesasat30June
OreReserves
Mt
2017
g/tAu
Moz
Leonora,WesternAustralia

Gwalia
8.6 7.8 2.1

TowerHill
2.5 3.7 0.3
Simberi,PapuaNewGuinea

Oxide

Sulphide
10.9
12.5
1.3
3.5
0.5
1.4
TotalReservesallRegions 34.6 3.9 4.3

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Ore�Reserves Mineral�Resources
(Moz)� (Moz)�
9.6
9.1
3.9
4.6
4.3
4.0
1.9
1.9 5.7
4.5
2.1 2.4
FY�16 FY�17 FY�16 FY�17
Leonora Simberi Leonora Simberi
Total
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Notes:�All�in�Sustaining�Cost�is�a�non�IFRS�measure,�refer�page�5.��Total�Recordable�Injury�Frequency�Rate�is�measured�for�each�million�hours�worked�on�a�12�month�rolling� basis.�All�Ore�Reserves�and�Mineral�Resources�figures�are�as�at�30�June�2017,�refer�to�pages�74�to�80�for�details.��Mineral�Resources�are�reported�inclusive�of�Ore� Reserves.��Mine�lives�based�on�Ore�Reserves�at�30�June�2017.��FY18�guidance�figures�per�June�2017�Quarterly�Report�released�to�ASX�on�26�July�2017.��Data�is�rounded� as�displayed�in�charts,�discrepancies�in�totals�may�occur�due�to�rounding.�

ii�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Contents Page
Directors’Report 2
Directors 2
Principalactivities 2
Overviewofgroupresults 3
Overviewofoperatingresults 4
AnalysisofAustralianoperations 5
AnalysisofSimberioperations 6
Discussionandanalysisoftheincomestatement 7
Discussionandanalysisofthecashflowstatement 8
Discussionandanalysisofthebalancesheet 8
Businessstrategyandfutureprospects 9
Materialbusinessrisks 10
Riskmanagement 12
Regulatoryenvironment 12
InformationonDirectors 13
MeetingsofDirectors 14
Directors’Interests 14
Remunerationreport 15
Indemnificationandinsuranceofofficers 35
Proceedingsonbehalfofthecompany 35
Environmentalmanagement 35
Non�auditservices 35
Auditorindependence 35
Eventsoccurringaftertheendofthefinancialyear 35
Roundingofamounts 36
Auditor’sindependencedeclaration 37
FinancialReport 38
OreReservesandMineralResourcesStatement 74
ShareholderInformation 81

Corporate�Governance�Statement�

The�Company’s�2017�Corporate�Governance�Statement�was� released�to�the�ASX�on�20�October�2017�and�is�available�at� www.stbarbara.com.au/profile/governance�

Directors’�Report

Directors��

The�Directors�present�their�report�on�the�“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�2017.�

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

  • T�C�Netscher� Non�Executive�Chairman��

  • R�S�Vassie� Managing�Director�&�CEO��

  • K�J�Gleeson� Non�Executive�Director�

  • D�E�J�Moroney� Non�Executive�Director��

The�qualifications,�experience�and�special�responsibilities�of�the� Directors�are�presented�on�page�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.�

Subsequent�to�year�end,�the�Board�declared�a�fully�franked�dividend� of�6�cents�per�ordinary�share.�

Sustainability�Report�

The�Company’s�2017�Sustainability�Report�was�released�to�the� ASX� on� 20� October� 2017� and� is� available� at� www.stbarbara.com.au/sustainability

Page�2�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Overview�of�group�results�

The�consolidated�result�for�the�year�is�summarised�as�follows:��

2017 2016
$’000 $’000
EBITDA(3)(6) 293,302 298,106
EBIT(2)(6) 207,719 217,191
Profitbeforetax(4) 189,706 183,402
Statutoryprofit(1)aftertax 157,572 169,388
Totalnetsignificantitemsafter (2,794) 42,031
tax
EBITDA(6)(excludingsignificant 320,575 284,050
items)
EBIT(6)(excludingsignificant 234,992 203,135
items)
Profitbeforetax(excluding 216,979 169,346
significantitems)
Underlyingnetprofitaftertax(5)(6) 160,366 127,357

Details�of�significant�items�included�in�the�statutory�profit�for�the� year�are�reported�in�the�table�below.��Descriptions�of�each�item�are� provided�in�Note�3�to�the�Financial�Report.�

2017 2016
$’000 $’000
Assetimpairmentsandwrite (27,273)
downs
GainonsaleofKOTHandKailis 14,056
Significantitemsbeforetax (27,273) 14,056
Incometax 24,479 27,975
Significantitemsaftertax (2,794) 42,031

(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) Profit�before�tax�is�earnings�before�income�tax�expense.�

(5) Underlying�net�profit�after�income�tax�is�net�profit�after�income�tax� (“statutory�profit”)�excluding�significant�items�as�described�in�Note�3�to� the�financial�statements.���

(6) 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�by�users.�

During�the�2017�financial�year�the�Group�recorded�another�year�of� strong�financial�performance,�with�key�achievements�over�the�year� being:�

  • •� Statutory�net�profit�after�tax�of�$157,572,000�(2016:� $169,388,000)�for�the�year�ended�30�June�2017.�

  • Repayment�of�the�U.S.�debt�that�commenced�in�June�2015� resulted�in�a�significant�reduction�in�interest�paid.�Total�finance� costs�of�$19,961,000�(2016:�$35,749,000)�reflected�the�benefit� of�the�lower�interest�expense.�

  • Cash� flows� from� operations� of� $301,314,000� (2016:� $269,199,000)�reflecting�the�strong�performance�of�both�Gwalia� and�Simberi.�

  • •� Full�repayment�of�the�U.S.�senior�secured�notes�and�other� facilities� totalling� $228,564,000� (2016:� $142,096,000),� strengthening�the�Group’s�balance�sheet.�

To�provide�additional�clarity�into�the�performance�of�the�operations� underlying�measures�for�the�year�are�reported,�together�with�the� statutory�results.��Underlying�net�profit�after�tax,�representing�net� profit�excluding�significant�items,�was�$160,366,000�for�the�year� (2016:�$127,357,000).�

Cash�on�hand�at�30�June�2017�was�$160,909,000�(2016:� $136,689,000).�Total�interest�bearing�borrowings�were�$547,000� (2016:�$226,318,000).�US$167,975,000�US�senior�secured�notes�at� 30�June�2016�were�repaid�during�the�year,�with�the�final�principal� repayment�made�on�15�March�2017.�

The�key�shareholder�returns�for�the�year�are�presented�in�the�table� below.�

below.
2017 2016
Basicearningspershare
(centspershare) 31.71 34.21
Returnoncapitalemployed 55% 49%
Changeinclosingshareprice (1)% 418%

Underlying�shareholder�returns�for�the�year�are�presented�in�the� table�below.�

tablebelow.
2017 2016
Basicearningspershare 32.27 25.72
(centspershare)
Returnoncapitalemployed 61% 48%

Page�3�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

The�table�below�provides�a�summary�of�the�underlying�profit�before� tax�from�operations�in�Australia�and�at�Simberi.�

Yearended30June Australian Simberi
2017 Operations Operations Group
$’000
Revenue 441,947 199,755 641,702
Mineoperatingcosts (143,107) (124,137) (267,244)
GrossProfit 298,840 75,618 374,458
Royalties (17,303) (4,471) (21,774)
Depreciationand (61,903) (19,838) (81,741)
amortisation
Underlyingprofit 219,634 51,309 270,943
fromoperations(1)

(1) Excludes�impairment�losses,�corporate�costs,�exploration�expenses,� interest�and�tax�and�is�non�IFRS�financial�information,�which�has�not� been�subject�to�review�or�audit�by�the�Group’s�external�auditors.�The� measure�is�presented�to�enable�an�understanding�of�the�underlying� performance�of�the�operations.�

The�table�below�provides�a�summary�of�the�cash�contribution�from� operations�in�Australia�and�at�Simberi.�

Overview�of�operating�results�

During�the�2017�financial�year�the�Group’s�operations�continued�to� achieve�record�production,�cost�and�safety�performance.�

Safety�of�people�working�across�the�Group�is�of�paramount� importance�and�this�focus�has�been�demonstrated�through�the� improvement�in�the�total�recordable�injury�frequency�rate�(TRIFR)�to� a�new�record�of�1.2�as�at�30�June�2017�(2016:�2.1),�calculated�as�a� rolling�12�month�average.�

Total�production�for�the�Group�in�the�2017�financial�year�was� 381,101�ounces�of�gold�(2016:�386,564�ounces),�and�gold�sales� amounted�to�380,173�ounces�(2016:�381,761�ounces)�at�an�average� gold�price�of�$1,685�per�ounce�(2016:�$1,595�per�ounce).�The�prior� year�gold�production�and�sales�included�9,112�ounces�from�King�of� the�Hills�which�was�disposed�of�in�October�2015.��

Consolidated�All�In�Sustaining�Cost�(AISC)�for�the�Group�was�$907� per�ounce�in�2017�(2016:�$933�per�ounce),�reflecting�the�benefits�of� strong�results�achieved�at�Gwalia�and�Simberi.�

Total�net�cash�contribution�from�the�operations�was�$301,314,000� (2016:�$269,199,000)�as�a�result�of�the�record�performance�from� Gwalia�and�Simberi,�which�was�after�capital�expenditure�and�funding� of�growth�capital�related�to�the�extension�project�and�deep�drilling� program�at�Gwalia.�

Yearended30June Australian Simberi
2017 Operations Operations Group
$’000
Operatingcash 279,040 73,454 352,494
contribution
Capitalexpenditure– (30,206) (3,711) (33,917)
sustaining
Capitalexpenditure� (9,402) (9,402)
growth(2)
Capitalexpenditure– (7,861) (7,861)
GwaliaExtension
Project
Cashcontribution(1) 231,571 69,743 301,314

(1) Cash�contribution�is�non�IFRS�financial�information,�which�has�not�been� subject�to�audit�by�the�Group’s�external�auditors.�This�measure�is� provided�to�enable�an�understanding�of�the�cash�generating� performance�of�the�operations.��

(2) Growth�capital�at�Gwalia�represents�deep�drilling�expenditure.�

Page�4�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Analysis�of�Australian�operations

Total�sales�revenue�from�the�Leonora�operations�of�$441,947,000� (2016:�$440,333,000)�was�generated�from�gold�sales�of�260,828� ounces�(2016:�276,210�ounces)�in�the�year�at�an�average�achieved� gold�price�of�$1,692�per�ounce�(2016:�$1,592�per�ounce).���During�the� 2017�year,�revenue�benefitted�from�the�significantly�higher�average� gold�price.�The�decrease�in�gold�ounces�sold�was�mainly�attributable� to�the�King�of�the�Hills�mine,�which�contributed�9,112�ounces�in�the� prior�year�before�its�divestment�in�October�2015.�

A�summary�of�production�performance�for�the�year�ended�30�June� 2017�is�provided�in�the�table�below.�

Details�of�2017�production�performance�

Gwalia Gwalia KingoftheHills KingoftheHills
2017 2016 2017 2016
Undergroundore
mined(kt)
790 924

76
3.9
95
9,112
893
964
Grade(g/t) 10.7 9.3
Oremilled(kt) 828 951
Grade(g/t) 10.3 9.1
Recovery(%) 97 96
Goldproduction
(oz)
265,057 267,166
Cashcost(1)
(A$/oz)
592 609
All�InSustaining
Cost(AISC)(2)
(A$/oz)
785 783

(1)�Cash�operating�costs�are�mine�operating�costs�including�government� royalties,�and�after�by�product�credits.��This�is�a�non�IFRS�financial� measure�which�has�not�been�subject�to�review�or�audit�by�the�Group’s� external�auditors.��It�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).�

  • (2)�All�In�Sustaining�Cost�(AISC)�is�based�on�cash�operating�costs,�and�adds� items�relevant�to�sustaining�production.�It�includes�some�but�not�all,�of� the�components�identified�in�World�Gold�Council’s�Guidance�Note�on� Non�GAAP�Metrics�–�All�In�Sustaining�Costs�and�All�In�Costs�(June�2013),� which�is�a�non�IFRS�financial�measure.�

Gwalia�

Gwalia�produced�265,057�ounces�of�gold�in�2017�(2016:�267,166� ounces).��The�consistent�high�performance�at�Gwalia�reflects�the� positive�impact�of�improvements�in�productivity�and�successful� implementation�of�innovations�in�mining�achieved�since�2015.���

Ore�tonnes�mined�from�the�Gwalia�underground�mine�decreased�to� 790,000�tonnes�in�2017�from�924,000�tonnes�in�2016,�largely�due�to� mine�sequencing�issues�and�weather�related�delays�in�the�March� 2017�quarter.�

Ore�mined�grades�increased�from�9.3�grams�per�tonne�in�2016�to� 10.7�grams�per�tonne�in�2017,�mainly�due�to�reduced�dilution�and� high�grade�shoots�present�in�stopes�that�cannot�be�reliably� estimated�by�production�drilling.��Ore�milled�grade�increased�from� 9.1�grams�per�tonne�in�2016�to�10.3�grams�per�tonne�in�line�with�the� higher�grade�of�ore�mined.��The�Gwalia�mill�continued�to�perform� strongly�in�2017,�with�the�average�recovery�improving�to�97%�(2016:� 96%).�

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Gwalia�gold�production
(koz)
267 265
248
214
185 183
131
109
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
----- End of picture text -----

Gwalia�unit�cash�operating�costs[(1)�] for�the�year�were�$592�per�ounce� (2016:�$609�per�ounce),�reflecting�the�benefit�of�higher�average� grade�and�sustained�production�efficiencies�through�innovations.�� The�unit�All�In�Sustaining�Cost�(AISC)[(2)] �for�Gwalia�was�$785�per� ounce�in�2017�(2016:�$783�per�ounce).�Total�cash�operating�costs�at� Gwalia�of�$156,914,000�were�lower�compared�with�the�prior�year� (2016:�$162,704,000)�due�mainly�to�the�lower�production�volumes.�

In�2017�Gwalia�generated�net�cash�flows,�after�capital�and�deep� drilling�expenditure,�of�$231,571,000�(2016:�$223,616,000).�The� deep�drilling�program�in�2017�targeted�extensions�to�the�Gwalia�lode� system�below�2,000�metres�below�surface�with�expenditure�in�the� year�totalling�$9,402,000�(2016:�$9,006,000�–�targeted�extensions� down�to�2,000�metres�below�surface).�

During�the�year�the�Board�approved�capital�expenditure�relating�to� the�Gwalia�extension�project.�The�project�will�enable�underground� mining�at�Gwalia�to�extend�to�at�least�2,000�metres�below�surface,� as�well�as�providing�the�foundation�for�potential�further�extensions.� The�project�has�an�overall�budget�of�$100,000,000�and�will�take�two� and�a�half�to�three�years�to�construct.�Expenditure�incurred�during� the�year�totalled�$7,861,000�(2016:�$Nil)�

Page�5�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Analysis�of�Simberi�operation

During�2017�the�Simberi�operation�continued�to�build�on�the� successful�turnaround�achieved�in�2016.�Total�sales�revenue�from� Simberi�in�2017�was�$199,755,000�(2016:�$169,782,000),�generated� from�gold�sales�of�119,345�ounces�(2016:�105,551�ounces)�at�an� average�achieved�gold�price�of�A$1,669�per�ounce�(2016:�A$1,604� per�ounce).�

A�summary�of�production�performance�at�Simberi�for�the�year�ended� 30�June�2017�is�provided�in�the�table�below.�

Simberi�

Simberi�production�of�116,044�ounces�of�gold�was�the�highest�since� the�Group�acquired�the�operations�in�September�2012�(2016:� 110,286�ounces).���

Ore�tonnes�mined�and�total�volume�of�material�moved�has�increased� significantly�since�2015.��Ore�mined�in�2017�totalled�4,020,000� tonnes,�which�was�an�increase�of�19%�on�the�prior�year.��The�increase� in�mining�performance�in�the�2017�financial�year�was�largely� attributable�to�continuous�improvements�introduced�during�the� prior�year�and�further�operating�efficiencies�across�the�operations.�

Details�of�2017�production�performance

Simberi Simberi
2017 2016
Openpitoremined(kt) 4,020 3,372
Grade(g/t) 1.13 1.26
Oremilled(kt) 3,690 3,315
Grade(g/t) 1.19 1.26
Recovery(%) 82 82
Goldproduction(oz) 116,044 110,286
Cashcost(1)(A$/oz) 1,092 1,143
All�InSustainingCost(AISC)(2)
(A$/oz)
1,187 1,293

(1)�Cash�operating�costs�are�mine�operating�costs�including�government� royalties,�and�after�by�product�credits.��This�is�a�non�IFRS�financial� measure�which�has�not�been�subject�to�review�or�audit�by�the�Group’s� external�auditors.��It�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).�

  • (2)�All�In�Sustaining�Cost�(AISC)�is�based�on�cash�operating�costs,�and�adds� items�relevant�to�sustaining�production.�It�includes�some�but�not�all,�of� the�components�identified�in�World�Gold�Council’s�Guidance�Note�on� Non�GAAP�Metrics�–�All�In�Sustaining�Costs�and�All�In�Costs�(June�2013),� which�is�a�non�IFRS�financial�measure.�

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Simberi�annual�total�material�moved
(kt)
----- End of picture text -----

==> picture [210 x 76] intentionally omitted <==

----- Start of picture text -----

14,335
9,899
6,294
4,151
FY14 FY15 FY16 FY17
----- End of picture text -----

Ore�mined�grades�were�generally�lower�than�the�prior�year�at�1.13� grams�per�tonne�gold�(2016:�1.26�grams�per�tonne).�The�overall� grade�in�2017�was�impacted�by�the�new�Pigibo�pit�in�the�first�quarter� of�the�year,�where�the�upper�area�of�the�pit�comprised�ore�with�low� density.�Ore�mined�grades�over�the�remainder�of�2017�improved�as� waste�stripping�efforts�successfully�exposed�higher�grade�ore�areas.�

Ore�milled�increased�to�3,690,000�tonnes�(2016:�3,315,000�tonnes),� reflecting�improvements�in�both�Aerial�Rope�Conveyor�and�mill� throughput.��

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----- Start of picture text -----

Simberi�gold�production
(koz)
116
110
80
44
FY14 FY15 FY16 FY17
----- End of picture text -----

Simberi�unit�cash�operating�costs�for�the�year�were�$1,092�per�ounce� (2016:�$1,143�per�ounce),�reflecting�the�positive�impact�of�increased� production�and�lower�operating�costs.��The�unit�All�In�Sustaining�Cost� (AISC)�for�Simberi�for�the�year�was�$1,187�per�ounce�(2016:�$1,293� per�ounce).��Total�cash�operating�costs�at�Simberi�during�the�2017� year�were�consistent�with�prior�year�at�$126,720,000�(2016:� $126,057,000)�despite�the�significant�increase�in�mining�activity�and� ore�milled.�

In�2017�Simberi�generated�positive�net�cash�flows,�after�capital� expenditure,�of�$69,743,000�(2016:�$33,808,000).���

Page�6�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Discussion�and�analysis�of�the�income�statement

Revenue�

Total�revenue�increased�from�$610,115,000�in�2016�to�$641,702,000� in�2017.��Revenue�from�Leonora�and�Simberi�was�higher�than�the� previous�year�due�to�the�higher�average�gold�price�and�an�increase� in�ounces�sold�at�Simberi.�

Mine�operating�costs�

Mine�operating�costs�in�2017�were�$267,244,000�compared�with� $280,927,000�in�the�prior�year.��The�decrease�in�operating�costs�was� mainly�due�to�lower�mining�volumes�at�Gwalia,�together�with�the� fact�that�the�prior�year�included�some�costs�related�to�King�of�the� Hills.�

Other�revenue�and�income�

Interest�revenue�was�$1,948,000�(2016:�$1,960,000),�earned�on�cash� held.�

Other�income�for�the�year�was�$86,000�(2016:�$3,564,000).�

Exploration�

Total�exploration�expenditure�incurred�during�the�2017�year� amounted�to�$20,083,000�(2016:�$15,792,000),�with�an�amount�of� $9,436,000�(2016:�$9,006,000)�capitalised,�relating�to�drilling� expenditure�at�Gwalia.��Exploration�expenditure�expensed�in�the� income�statement�in�the�year�was�$10,647,000�(2016:�$6,786,000).�� Exploration�activities�during�the�year�focused�on�investigating�highly� prospective�near�mine�high�grade�oxide�targets�at�Simberi,� undertaking�an�extensive�deep�drilling�program�at�Gwalia,�3D� Seismic�programs�at�Gwalia�and�regional�exploration�in�Western� Australia.�

Corporate�costs�

Corporate�costs�for�the�year�of�$20,977,000�(2016:�$19,184,000)� comprised�mainly�expenses�relating�to�the�corporate�office�and� compliance�related�costs.��Expenditure�in�2017�was�marginally�higher� than�in�the�prior�year�as�a�result�of�increased�business�development� activities.�

Royalties�

Royalty�expenses�for�the�year�were�$21,774,000�(2016:� $21,455,000).��Royalties�paid�in�Western�Australia�are�2.5%�of�gold� revenues,�plus�a�corporate�royalty�of�1.5%�of�gold�revenues.�� Royalties�paid�in�Papua�New�Guinea�are�2.25%�of�gold�revenues� earned�from�the�Simberi�mine.��The�increase�in�royalty�expenses�in� 2017�was�attributable�to�increased�gold�revenue�from�Leonora�and� Simberi.�

Impairment�losses�and�asset�write�downs�

At�31�December�2016,�an�impairment�loss�of�$27,273,000�was� recognised�against�the�Group’s�Simberi�cash�generating�unit�(2016:� $Nil)�and�further�information�is�provided�in�Note�7�to�the�financial� statements.���

Other�expenses�

Other�expenditure�of�$3,608,000�(2016:�$1,967,000)�included� amounts�associated�with�share�based�payments�and�charges�for� Company�projects.���

Net�finance�costs�

Finance�costs�in�the�year�were�$19,961,000�(2016:�$35,749,000).�� Finance�costs�comprised�interest�paid�and�payable�on�borrowings� and�finance�leases�of�$7,444,000�(2016:�$28,608,000),�borrowing� costs�relating�to�the�senior�secured�notes�amortised�and�premium� paid�for�early�repayment�of�$10,859,000�(2016:�$5,434,000)�and�the� unwinding�of�the�discount�on�the�rehabilitation�provision�of� $1,658,000�(2016:�$1,707,000).��

Net�foreign�exchange�gain�

A�net�foreign�exchange�gain�of�$3,037,000�was�recognised�for�the� year�(2016:�net�gain�of�$142,000),�which�included�a�realised�foreign� currency�gain�of�$2,125,000�(2016:�loss�of�$7,899,000)�on� repayments�of�US�denominated�debt�during�the�year�and�a�net� realised/unrealised�currency�gain�of�$1,390,000�(2016:�net�gain�of� $7,993,000)�related�to�Australian�and�US�intercompany�loans�and� third�party�balances.�

Income�tax�

An�income�tax�expense�of�$32,134,000�was�recognised�for�the�2017� year�(2016:�income�tax�expense�of�$14,014,000).�Income�tax� expense�of�$58,905,000�on�Australian�taxable�income�included�a� provision�of�$10,478,000�for�research�and�development�credits� previously�recognised�by�the�Company�for�projects�which� AusIndustry�reviewed�during�the�year�and�assessed�as�ineligible�in� accordance� with� research� and� development� legislation.�� Management�maintain�that�the�projects�are�eligible�and�have� requested�a�review�of�AusIndustry’s�findings.��The�matter�is�currently� following�the�statutory�review�process.�

A�tax�credit�of�$26,775,000�has�been�booked�relating�to�previously� unrecognised�PNG�deferred�tax�assets.�This�amount�has�been� booked�based�on�the�current�life�of�mine�plan�for�the�Simberi� operations.�

Depreciation�and�amortisation�

Depreciation�and�amortisation�of�fixed�assets�and�capitalised�mine� development�amounted�to�$85,583,000�(2016:�$80,915,000)�for�the� year.��Depreciation�and�amortisation�attributable�to�the�Australian� operations�was�$61,903,000�(2016:�$63,492,000).�The�expense�at� Simberi�was�$19,838,000�(2015:�$12,098,000),�with�the�higher� charge�due�to�increased�production�and�alignment�of�remaining� asset�lives�with�the�current�life�of�mine�following�the�completion�of� the�strategic�review�during�the�year.�

Page�7�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Discussion�and�analysis�of�the�cash�flow�statement

Operating�activities�

Cash�flows�from�operating�activities�for�the�year�were�$303,226,000� (2016:�$242,788,000),�reflecting�the�benefit�of�higher�receipts�from� customers�and�significantly�lower�payments�to�suppliers�and� employees�compared�to�the�prior�year.���

Receipts�from�customers�of�$640,354,000�(2016:�$615,244,000)� reflected�the�higher�achieved�gold�price�in�2017�and�increased�gold� sales�from�Simberi.�Payments�to�suppliers�were�$309,097,000�(2016:� $336,805,000),�with�the�reduction�mainly�attributable�to�lower� mining�volumes�at�Gwalia.���

Payments�for�exploration�expensed�in�the�year�amounted�to� $10,647,000�(2016:�$6,786,000).��Interest�paid�in�the�year�was� $11,304,000�(2016:�$30,405,000),�with�the�lower�expense�due�to� repayment�of�the�US�senior�secured�notes.��Borrowing�costs�of� $8,017,000�in�the�year�(2016:�$145,000)�related�to�the�premiums� paid�to�retire�the�US�senior�secured�notes�prior�to�the�15�April�2018� maturity�date.�

Investing�activities�

Net�cash�flows�used�in�investing�activities�amounted�to�$53,108,000� (2016:�$46,122,000)�for�the�year.��Higher�mine�development� expenditure� of� $32,036,000� (2016:� $21,071,000)� included� expenditure�related�to�the�extension�project�at�Gwalia.��

Lower�expenditure�on�property,�plant�and�equipment�of�$9,796,000� in�2017�(2016:�$16,057,000)�was�mainly�due�to�lower�expenditure�at� Simberi.���

Exploration�expenditure�capitalised�during�the�year�totalled� $9,436,000�(2016:�$9,006,000),�which�related�to�the�deep�drilling� program�at�Gwalia.���

Investing�expenditure�during�the�year�was�in�the�following�major� areas:�

  • Underground�mine�development�and�infrastructure�at�Gwalia�–� $24,175,000�(2016:�$23,285,000)�

  • Gwalia�extension�project�–�$7,861,000�(2016:�$Nil)�

  • Purchase�of�property,�plant�and�equipment�at�Gwalia�–� $5,554,000�(2016:�$3,780,000)�

  • Purchase�of�property,�plant�and�equipment�at�Simberi�–� $3,711,000�(2016:�$9,402,000)�

  • Investments�in�Catalyst�Metals�Limited�and�Peel�Mining�Limited� shares�totalling�$4,540,000�(2016:�$Nil)�

  • During�the�2017�year�the�deferred�proceeds�related�to�the�sale� of�King�of�the�Hills�amounting�to�$2,700,000�was�received�

Financing�activities�

Net�cash�flows�related�to�financing�activities�in�2017�were�a�net� outflow�of�$228,446,000�(2016:�net�outflow�of�$140,130,000).��The� main�movements�in�financing�cash�flows�included:�

Discussion�and�analysis�of�the�balance�sheet

Net�assets�and�total�equity�

St�Barbara’s�net�assets�and�total�equity�increased�substantially� during�the�year�by�$160,513,000�to�$461,127,000�as�a�result�of�the� strong�profit�result�and�significant�reduction�in�total�liabilities�with� the�full�repayment�of�the�US�senior�secured�notes�in�2017.�

Non�current�assets�decreased�during�the�year�by�$32,508,000�mainly� due�to�the�impairment�and�asset�write�down�at�Simberi�at�31� December�2016,�together�with�depreciation�and�amortisation�during� the�year.�

Current�trade�and�other�payables�decreased�to�$36,480,000�at�30� June�2017�(2016:�$39,768,000),�reflecting�the�reduction�in� operational�expenditure�during�the�year.�

The�deferred�tax�balance�was�a�net�liability�of�$1,822,000�(2016:�net� asset�of�$1,098,000).��A�current�provision�for�tax�payable�of� $29,692,000�was�recognised�at�30�June�2017�(2016:�$Nil).��

Debt�management�and�liquidity�

The�available�cash�balance�at�30�June�2017�was�$160,909,000�(2016:� $136,689,000),�with�no�amounts�held�on�deposit�as�restricted�cash� and�reported�within�trade�receivables�(2016:�$118,000).�

Total�interest�bearing�liabilities�reduced�to�$547,000�at�30�June�2017� (2016:�$226,318,000)�representing�lease�liabilities.�������

The�AUD/USD�exchange�rate�as�at�30�June�2017�was�0.7695�(30�June� 2016:�0.7452).�

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Cash�and�debt
(A$M)
200
161
100 137
79 77

(1)
(100)
(200) (226)
(300) (340) (347)
(400)
2014 2015 2016 2017
Cash Debt
----- End of picture text -----

  • Full�repayment�of�the�US�senior�secured�notes�of�$225,409,000� (2016:�$37,798,000).���

  • Premium�funding�payments�of�$2,209,000�(2016:�$Nil).�

  • Repayment�of�finance�leases�amounting�to�$946,000�(2016:� $2,225,000).�

  • In�the�prior�year�the�Red�Kite�facility�was�fully�repaid�giving�rise� to�a�cash�outflow�of�$102,073,000.�

During�the�year�cash�backed�banking�guarantees�of�$118,000�were� released�(2016:�$1,966,000).�

Page�8�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Business�strategy�and�future�prospects�

St�Barbara’s�strategic�focus�is�on�mining�lower�cost�gold�deposits�in� Australia�and�at�Simberi�in�Papua�New�Guinea.��Currently�the�Group� has�a�diversified�asset�portfolio�spanning�underground�and�open�cut� mines,�and�exploration�projects�in�Australia�and�Papua�New�Guinea.�� A�successful�turnaround�was�completed�at�the�Simberi�operations� during�the�prior�year�through�optimisation�of�the�processing�plant,� improving�the�mining�fleet,�and�productivity�improvements�in� mining�operations,�which�has�continued�in�the�2017�year.�

St�Barbara’s�strategy�is�to�generate�shareholder�value�through�the� discovery�and�development�of�gold�deposits�and�production�of�gold.�� The�Group�aligns�its�decisions�and�activities�to�this�strategy�by� focusing�on�key�value�drivers:�relative�total�shareholder�returns,� growth�in�gold�ore�reserves,�return�on�capital�employed�and� exploration�success.�

During�the�2017�financial�year�the�Group�achieved�a�number�of� strategic�milestones:�

  • Record�annual�gold�production�was�achieved�at�Simberi,�and� Gwalia�continued�its�consistent�strong�performance.��At�Gwalia� performance�was�broadly�in�line�with�the�prior�year’s�record� production.��At�Simberi�the�turnaround�of�the�operations�that� commenced�in�the�prior�year�was�further�consolidated�in�2017.�

  • Record�safety�performance�for�the�Group,�reporting�a�Total� Recordable�Injury�Frequency�Rate�(TRIFR)�of�1.2�(2016:�2.1).�

  • Through�strong�cash�generation�from�the�operations�the�Group� reduced�its�debt�by�$228,564,000�(2016:�$142,096,000),� repaying�the�US�senior�secured�notes�in�full,�twelve�months� ahead�of�schedule.�

  • During�the�year�the�deep�drilling�program�at�Gwalia�resulted�in� an�increase�to�Mineral�Resources�and�Ore�Reserves,�and�the� exploration�programs�in�Western�Australia�and�Simberi�on�the� neighbouring�islands�were�advanced.�

  • Subsequent�to�year�end�the�Board�declared�a�fully�franked� dividend�of�6�cents�per�ordinary�share�to�be�paid�on�28� September�2017.�

Strategic�drivers�for�the�business�include:�

  • Optimising�cash�flow�and�reducing�the�cost�base: ��The�Group�is� focused�on�optimising�cash�flow�from�operations�through� maximising�production�and�managing�costs�at�its�existing� operations,�enhancing�operating�capabilities�and�incorporating� new�technologies�across�St�Barbara.��The�Group�will�continue�to� identify�opportunities�to�enhance�productivity�and�improve� operating�performance�in�a�volatile�gold�market.���

  • Improving�productivity :��The�Group�is�focused�on�maintaining� consistent�operations�at�Gwalia�and�Simberi.��St�Barbara� continues�to�invest�to�improve�infrastructure,�mining�fleets�and� capability�to�ensure�consistent�and�reliable�production�at�its� operations.�

  • Growing�the�ore�reserve�base�through�the�development�of� existing�Mineral�Resources�and�exploration�activities: ��A�number� of�potential�organic�growth�opportunities�have�been�identified,� which�could�increase�production�and�extend�the�life�of�the� Gwalia�and�Simberi�operations.��During�2017�a�deep�drilling� program�continued�at�Gwalia�with�the�objective�to�extend�the� Gwalia�mineral�resource�and�develop�the�case�for�mining�below� the�current�reserve.��At�Simberi,�a�sulphide�ore�reserve,�which� has�been�estimated�at�1.4�Moz,�provides�an�opportunity�to� create�a�long�life�production�centre�at�Simberi,�while�incremental� extensions�to�the�oxide�mine�life�at�Simberi�is�also�a�focus.��In� addition�the�Group�is�generating�and�evaluating�exploration� targets�in�the�Tabar�Island�Group�in�Papua�New�Guinea�and�on� its�tenements�in�regional�Western�Australia.�

  • Maintaining�a�conservative�financial�profile: ��The�Group�will� continue�to�maintain�prudent�financial�management�policies� with�the�objective�of�maintaining�liquidity�to�ensure�appropriate� investments�in�the�operations.��The�Group’s�financial� management�policies�are�aimed�at�generating�net�cash�flows� from�operations�to�meet�financial�commitments�and�fund� exploration�to�the�extent�viable�and�appropriate.��The�Group’s� capital�management�plan�is�reviewed�and�discussed�with�the� Board�on�a�regular�basis.��During�2017�the�Company�successfully� repaid�all�of�its�US�debt�ahead�of�schedule�using�the�strong�cash� flows�generated�by�the�operations.�

  • Continue�and�strengthen�the�Group’s�commitment�to�employees� and�local�communities:�� The�Group�considers�the�capability�and� wellbeing�of�its�employees�as�key�in�delivering�the�business� strategy.��Creating�and�sustaining�a�safe�work�environment�and� ensuring�that�operations�conform�to�applicable�environmental� and�sustainability�standards�are�an�important�focus�for�the� Group.��The�Group�invests�in�the�training�and�development�of�its� employees,�talent�management�and�succession�planning.�

The�Company�views�such�efforts�as�an�important�component�of� instilling�St�Barbara’s�values�throughout�the�organisation�and� retaining�continuity�in�the�workforce.��The�Group�has� implemented�a�comprehensive�talent�management�framework� to�strengthen�the�capacity�to�attract,�motivate�and�retain� capable�people.��The�Group�also�has�an�ongoing�commitment�to� work�with�local�communities�to�improve�infrastructure,� particularly�in�health�and�education,�support�local�businesses,� and�provide�venues�for�leisure�activities,�and�other�opportunities� for�developing�communities�in�which�the�Group�operates.

Within�Australia,�the�Gwalia�underground�mine�with�ore�reserves�of� 2.1�million�ounces�remains�the�flagship�asset�of�the�Group,� generating�strong�cash�flows.��To�optimise�the�value�of�ongoing�truck� haulage�at�Gwalia�the�extension�project�was�approved�by�the�Board� in�March�2017�with�a�budget�of�$100�million;�truck�haulage�with� additional�ventilation�was�identified�as�the�preferred�long�term� materials�movement�solution�for�the�mine.��The�Project�consists�of� two�main�components,�a�ventilation�upgrade�and�paste�aggregate�fill� involving�mixing�paste�from�surface�with�waste�crushed� underground�to�fill�stope�cavities.�

In�Papua�New�Guinea,�a�prefeasibility�study�(PFS)�for�the�Simberi� sulphide�project�was�completed�during�2016.��A�strategic�review�of� the�PNG�assets,�including�the�Simberi�mine,�was�completed�in� September�2016.��As�a�result�of�the�review�it�was�decided�that�St� Barbara�would�retain�ownership�and�continue�to�operate�the� Simberi�mine.��In�addition�the�St�Barbara�Group�entered�into�an� Option�and�Farm�in�Agreement�with�Newcrest�PNG�Exploration� Limited�for�copper�gold�porphyry�exploration�on�the�tenements�on� the�Tatau�and�Big�Tabar�Islands.�

The�Group’s�2018�financial�year�budget�was�developed�in�the� context�of�a�volatile�gold�market�and�strengthening�Australian�dollar� against�the�United�States�dollar.��The�Group’s�priorities�in�the�2018� financial�year�are�to�continue�consistent�production�from�Gwalia�and� Simberi,�drive�productivity�improvements�at�both�operations�and� contain�capital�expenditure.��For�the�2018�financial�year�the�Group’s� operational�and�financial�outlook�is�as�follows:�

  • Gold�production�is�expected�to�be�in�the�range�350,000�to� 375,000�ounces.�

  • All�In�Sustaining�Cost�is�expected�to�be�in�the�range�of�$970�per� ounce�to�$1,035�per�ounce.�

  • Sustaining�capital�expenditure�is�expected�to�be�in�the�range�of� $40�million�to�$45�million.�

  • Growth�capital�at�Gwalia�is�anticipated�to�be�between�$50� million�to�$55�million.�

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  • Exploration�expenditure�is�anticipated�to�be�between�$16�million� and�$20�million.�

The�focus�for�the�exploration�program�in�2018�will�be�to�continue�the� deep�drilling�at�Gwalia,�continued�exploration�at�Pinjin�in�Western� Australia�and�to�drill�targets�on�the�Tatau�and�Big�Tabar�islands�in� Papa�New�Guinea.�

Material�business�risks

St�Barbara�prepares�its�business�plan�using�estimates�of�production� and�financial�performance�based�on�a�business�planning�system�and� a�range�of�assumptions�and�expectations.��There�is�uncertainty�in� these�assumptions�and�expectations,�and�risk�that�variation�from� them�could�result�in�actual�performance�being�different�to�planned� outcomes.��The�uncertainties�arise�from�a�range�of�factors,�including� the�Group’s�international�operating�scope,�nature�of�the�mining� industry�and�economic�factors.���The�material�business�risks�faced�by� the�Group�that�may�have�an�impact�on�the�operating�and�financial� prospects�of�the�Group�as�at�30�June�2017�are:�

  • Fluctuations�in�the�United�States�Dollar�(“USD”)�spot�gold�price: Volatility�in�the�gold�price�creates�revenue�uncertainty�and� requires�careful�management�of�business�performance�to� ensure�that�operating�cash�margins�are�maintained�despite�a�fall� in�the�spot�gold�price.�

Declining�gold�prices�can�also�impact�operations�by�requiring�a� reassessment�of�the�feasibility�of�a�particular�exploration�or� development�project.��Even�if�a�project�is�ultimately�determined� to�be�economically�viable,�the�need�to�conduct�such�a� reassessment�could�cause�substantial�delays�and/or�interrupt� operations,�which�may�have�a�material�adverse�effect�on�the� results�of�operations�and�financial�condition.�

In�assessing�the�feasibility�of�a�project�for�development,�the� Group�may�consider�whether�a�hedging�instrument�should�be� put�in�place�in�order�to�guarantee�a�minimum�level�of�return.��For� example,�the�Group�put�in�place�a�gold�collar�structure�when�the� King�of�the�Hills�project�was�commissioned,�and�used�gold� forward�contracts�to�secure�revenues�during�the�completion�of� the�turnaround�at�Simberi.�

The�Group�has�a�centralised�treasury�function�that�monitors�the� risk�of�fluctuations�in�the�USD�gold�price�and�impacts�on� expenditures�from�movements�in�local�currencies.��Where� possible,�the�exposure�to�movements�in�the�USD�relative�to�USD� denominated�expenditure�is�offset�by�the�exposure�to�the�USD� gold�price�(a�natural�hedge�position).��

  • Government�regulation:�� The�Group’s�mining,�processing,� development�and�exploration�activities�are�subject�to�various� laws� and� statutory� regulations� governing� prospecting,� development,�production,�taxes,�royalty�payments,�labour� standards�and�occupational�health,�mine�safety,�toxic� substances,�land�use,�water�use,�communications,�land�claims�of� local�people�and�other�matters.��

No�assurance�can�be�given�that�new�laws,�rules�and�regulations� will�not�be�enacted�or�that�existing�laws,�rules�and�regulations� will�not�be�applied�in�a�manner�which�could�have�an�adverse� effect�on�the�Group’s�financial�position�and�results�of�operations.� Any�such�amendments�to�current�laws,�regulations�and�permits� governing�operations�and�activities�of�mining�and�exploration� companies,�or�more�stringent�implementation�thereof,�could� have�a�material�adverse�impact�on�the�Group.��Failure�to�comply� with�any�applicable�laws,�regulations�or�permitting�requirements� may�result�in�enforcement�actions�against�the�Group,�including� orders�issued�by�regulatory�or�judicial�authorities�causing� operations�to�cease�or�be�curtailed,�and�may�include�corrective�

measures�requiring�capital�expenditures,�installation�of� additional�equipment,�or�remedial�actions.��

  • Operating�risks�and�hazards:�� The�Group’s�mining�operations,� consisting�of�open�pit�and�underground�mines,�generally�involve� a�high�degree�of�risk,�and�these�risks�increase�when�mining� occurs�at�depth.��The�Group’s�operations�are�subject�to�all�the� hazards�and�risks�normally�encountered�in�the�exploration,� development�and�production�of�gold.���Processing�operations�are� subject�to�hazards�such�as�equipment�failure,�toxic�chemical� leakage,�loss�of�power,�fast�moving�heavy�equipment,�failure�of� deep�sea�tailings�disposal�pipelines�and�retaining�dams�around� tailings�containment�areas,�rain�and�seismic�events�which�may� result�in�environmental�pollution�and�consequent�liability.��The� impact�of�these�events�could�lead�to�disruptions�in�production� and�scheduling,�increased�costs�and�loss�of�facilities,�which�may� have�a�material�adverse�impact�on�the�Group’s�results�of� operations,�financial�condition�and�prospects.��These�risks�are� managed�by�a�structured�operations�risk�management� framework.

  • Reliance�on�transportation�facilities�and�infrastructure: ��The� Group�depends�on�the�availability�and�affordability�of�reliable� transportation�facilities�and�infrastructure�(e.g.�roads,�bridges,� airports,�power�sources�and�water�supply)�to�deliver� consumables�to�site,�and�final�product�to�market.��Interruption� in�the�provision�of�such�infrastructure�(e.g.�due�to�adverse� weather;�community�or�government�interference)�could� adversely�affect�St�Barbara's�operations,�financial�condition�and� results�of�operations.��The�Group’s�operating�procedures�include� business�continuity�plans�which�can�be�enacted�in�the�event�a� particular�piece�of�infrastructure�is�temporarily�unavailable.�

  • Production,�cost�and�capital�estimates:�� The�Group�prepares� estimates�of�future�production,�operating�costs�and�capital� expenditure�relating�to�production�at�its�operations.��The�ability� of�the�Group�to�achieve�production�targets,�or�meet�operating� and�capital�expenditure�estimates�on�a�timely�basis�cannot�be� assured.��The�assets�of�the�Group�are�subject�to�uncertainty�with� regards�to�ore�tonnes,�grade,�metallurgical�recovery,�ground� conditions,�operational�environment,�funding�for�development,� regulatory� changes,� accidents� and� other� unforeseen� circumstances�such�as�unplanned�mechanical�failure�of�plant�and� equipment.��Failure�to�achieve�production,�cost�or�capital� estimates,�or�material�increases�to�costs,�could�have�an�adverse� impact�on�the�Group’s�future�cash�flows,�profitability�and� financial�condition.��The�development�of�estimates�is�managed� by�the�Group�using�a�rigorous�budgeting�and�forecasting�process.�� Actual�results�are�compared�with�forecasts�to�identify�drivers� behind�discrepancies�which�may�result�in�updates�to�future� estimates.�

  • Gwalia�Extension�Project:� �The�project�to�install�an�underground� paste�aggregate�fill�plant�and�ventilation�upgrade�are�critical�to� enabling�mining�at�depth.�Any�material�delays�in�completing�the� project,�or�material�defects�in�the�design�or�construction�of�the� project,�may�have�an�adverse�impact�on�the�productivity�of�the� mine�due�to�ineffective�handling�of�waste,�or�prevent�mining�at� depth�due�to�inadequate�ventilation.�The�Group�is�managing� these�risks�through�the�establishment�and�oversight�of�a� dedicated�project�team,�thorough�procurement�processes�to� ensure�appropriate�qualified�and�expert�suppliers�are�engaged� to�design�and�construct�each�component,�and�regular�reviews�by� senior�management�of�project�progress�on�critical�path� elements.�

  • Changes�in�input�costs:�� Mining�operations�and�facilities�are� intensive�users�of�electricity,�gas�and�carbon�based�fuels.��Energy� prices�can�be�affected�by�numerous�factors�beyond�the�Group's�

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control,�including�global�and�regional�supply�and�demand,� carbon�taxes,�inflation,�political�and�economic�conditions,�and� applicable�regulatory�regimes.��The�prices�of�various�sources�of� energy�may�increase�significantly�from�current�levels.���

The�Group's�production�costs�are�also�affected�by�the�prices�of� commodities�it�consumes�or�uses�in�its�operations,�such�as� diesel,�lime,�sodium�cyanide�and�explosives.��The�prices�of�such� commodities�are�influenced�by�supply�and�demand�trends� affecting�the�mining�industry�in�general�and�other�factors�outside� the�Group's�control.��Increases�in�the�price�for�materials� consumed�in�St�Barbara's�mining�and�production�activities�could� materially�adversely�affect�its�results�of�operations�and�financial� condition.�

Certain�of�the�Group's�operations�use�contractors�for�the�bulk�of� the�mining�services�at�those�operations,�and�some�of�its� construction�projects�are�conducted�by�contractors.��As�a�result,� the�Group's�operations�are�subject�to�a�number�of�risks,� including:��

  • negotiation�and�renewal�of�agreements�with�contractors�on� acceptable�terms;�

  • failure�of�contractors�to�perform�under�their�agreements,� including�failure�to�comply�with�safety�systems�and�standards,� contractor�insolvency�and�failure�to�maintain�appropriate� insurance;�

  • failure�of�contractors�to�comply�with�applicable�legal�and� regulatory�requirements;�and�

  • changes�in�contractors.�

�������In�addition,�St�Barbara�may�incur�liability�to�third�parties�as�a� result�of�the�actions�of�its�contractors.�The�occurrence�of�one�or� more�of�these�risks�could�have�a�material�adverse�effect�on�its� results�of�operations�and�financial�position.�

������The�Group�manages�risks�associated�with�input�costs�through�a� centralised�procurement�function�which�analyses�market�trends,� supply�environment,�and�operational�demand�planning,�to� establish�appropriate�sourcing�strategies�for�spend�categories.�

  • Exploration�and�development�risk: ��Although�the�Group’s� activities�are�primarily�directed�towards�mining�operations�and� the�development�of�mineral�deposits,�its�activities�also�include� the�exploration�for�mineral�deposits�and�the�possibility�of�third� party�arrangements�including�joint�ventures,�partnerships,�toll� treating�arrangements�or�other�third�party�contracts.��An�ability� to�sustain�or�increase�the�current�level�of�production�in�the� longer�term�is�in�part�dependent�on�the�success�of�the�Group’s� exploration�activities�and�development�projects,�and�the� expansion�of�existing�mining�operations.�

  • �������The�exploration�for�and�development�of�mineral�deposits� involves�significant�risks�that�even�a�combination�of�careful� evaluation,�experience�and�knowledge�may�not�eliminate.�While� the�discovery�of�an�ore�body�may�result�in�substantial�rewards,� few�properties�that�are�explored�subsequently�have�economic� deposits�of�gold�identified,�and�even�fewer�are�ultimately� developed�into�producing�mines.�Major�expenses�may�be� required�to�locate�and�establish�mineral�reserves,�to�establish� rights�to�mine�the�ground,�to�receive�all�necessary�operating� permits,�to�develop�metallurgical�processes�and�to�construct� mining�and�processing�facilities�at�a�particular�site.�It�is� impossible�to�ensure�that�the�exploration�or�development� programs�the�Group�plans�will�result�in�a�profitable�mining� operation.�

  • ������Whether�a�mineral�deposit�will�be�commercially�viable�depends� on�a�number�of�factors.�

������The�Group�has�a�disciplined�approach�to�allocating�budget�to� exploration�projects.��The�Group�also�has�investment�criteria�to� ensure�that�development�projects�are�only�approved�if�an� adequate�return�on�the�investment�is�expected.�

  • Ore�Reserves�and�Mineral�Resources:�� The�Group's�estimates�of� Ore�Reserves�and�Mineral�Resources�are�based�on�different� levels�of�geological�confidence�and�different�degrees�of�technical� and�economic�evaluation,�and�no�assurance�can�be�given�that� anticipated�tonnages�and�grades�will�be�achieved,�that�the� indicated�level�of�recovery�will�be�realised�or�that�Ore�Reserves� could�be�mined�or�processed�profitably.��The�quality�of�any�Ore� Reserve�or�Mineral�Resource�estimate�is�a�function�of�the� quantity�of�available�technical�data�and�of�the�assumptions�used� in�engineering�and�geological�interpretation,�and�modifying� factors�affecting�economic�extraction.��Such�estimates�are� compiled� by� experienced� and� appropriately� qualified� geoscientists�using�mapping�and�sampling�data�obtained�from� bore�holes�and�field�observations,�and�subsequently�reported�by� Competent�Persons�under�the�JORC�Code.���

Fluctuation�in�gold�prices,�key�input�costs�to�production,�as�well� as�the�results�of�additional�drilling,�and�the�evaluation�of� reconciled�production�and�processing�data�subsequent�to�any� estimate�may�require�revision�of�such�estimate.��

Actual�mineralisation�or�ore�bodies�may�be�different�from�those� predicted,�and�any�material�variation�in�the�estimated�Ore� Reserves,�including�metallurgy,�grade,�dilution,�ore�loss,�or� stripping�ratio�at�the�Group's�properties�may�affect�the�economic� viability�of�its�properties,�and�this�may�have�a�material�adverse� impact�on�the�Group's�results�of�operations,�financial�condition� and�prospects.��

There�is�also�a�risk�that�depletion�of�reserves�will�not�be�offset� by�discoveries�or�acquisitions�or�that�divestitures�of�assets�will� lead�to�a�lower�reserve�base.�The�reserve�base�of�the�Group�may� decline�if�reserves�are�mined�without�adequate�replacement�and� the�Group�may�not�be�able�to�sustain�production�beyond�current� mine�lives,�based�on�current�production�rates.�

  • Political,�social�and�security�risks: ��St�Barbara�has�production�and� exploration�operations�in�a�developing�country�that�is�subject�to� political,�economic�and�other�risks�and�uncertainties.��The� formulation�and�implementation�of�government�policies�in�this� country�may�be�unpredictable.��Operating�in�developing� countries�also�involves�managing�security�risks�associated�with� the�areas�where�the�Group�has�activities.��The�Group�has� established�policies�and�procedures�to�assist�in�managing�and� monitoring�government�relations.��The�Group’s�operating� procedures�at�its�mine�in�Papua�New�Guinea�includes�detailed� security�plans.�

  • Foreign�exchange: �The�Group�has�an�Australian�dollar� presentation�currency�for�reporting�purposes.��However,�gold�is� sold�throughout�the�world�based�principally�on�the�U.S.�dollar� price,�and�most�of�the�Group's�revenues�are�realised�in,�or�linked� to,�U.S.�dollars.��The�Group�is�also�exposed�to�U.S.�dollars�and� Papua�New�Guinea�Kina�in�respect�of�operations�located�in� Papua�New�Guinea�as�certain�of�its�operating�costs�are� denominated�in�these�currencies.��There�is�a�"natural"�(but�not� perfect)�hedge�which�matches�to�some�degree�U.S.�denominated� revenue�and�obligations�related�to�U.S.�dollar�expenditure.��The� Group�is�therefore�exposed�to�fluctuations�in�foreign�currency� exchange�rates.��The�Group�monitors�foreign�exchange�exposure� and�risk�on�a�monthly�basis�through�the�centralised�treasury� function�and�a�Management�Treasury�Risk�Committee.�

Page�11�

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  • Community�relations :��A�failure�to�adequately�manage� community�and�social�expectations�within�the�communities�in� which�the�Group�operates�may�lead�to�local�dissatisfaction� which,�in�turn,�could�lead�to�interruptions�to�production�and� exploration�operations.��The�Group�has�an�established� stakeholder�engagement�framework�to�guide�the�management� of�the�Group’s�community�relations�efforts.��At�Simberi�there�is� a�dedicated�community�relations�team�to�work�closely�with�the� local�communities�and�government.���

  • Insurance:�� The�Group�maintains�insurance�to�protect�against� certain�risks.��However,�the�Group’s�insurance�will�not�cover�all� the�potential�risks�associated�with�a�mining�company’s� operations.��The�Group�may�also�be�unable�to�maintain�insurance� to�cover�these�risks�at�economically�feasible�premiums.�� Insurance�coverage�may�not�continue�to�be�available�or�may�not� be�adequate�to�cover�any�resulting�liability.��Moreover,�insurance� against�risks�such�as�loss�of�title�to�mineral�property,� environmental�pollution,�or�other�hazards�as�a�result�of� exploration�and�production�is�not�generally�available�to�the� Group,�or�to�other�companies�in�the�mining�industry�on� acceptable�terms.��The�Group�might�also�become�subject�to� liability�for�pollution�or�other�hazards�which�may�not�be�insured� against,�or�which�it�may�elect�not�to�insure�against�because�of� premium�costs�or�other�reasons.��Losses�from�these�events�may� cause�the�Group�to�incur�significant�costs�that�could�have�a� material�adverse�effect�upon�its�financial�performance�and� results�of�operations.�

  • Weather�and�climactic�conditions:�� The�effects�of�changes�in� rainfall�patterns,�changing�storm�patterns�and�intensities�have� from�time�to�time�adversely�impacted,�and�may�in�the�future� adversely�impact,�the�cost,�production�levels�and�financial� performance�of�the�Group's�operations.��The�Group's�mining� operations�have�been,�and�may�in�the�future�be,�subject�from� time�to�time�to�severe�storms�and�high�rainfalls�leading�to� flooding�and�associated�damage,�which�has�resulted,�and�may� result�in�delays�to,�or�loss�of�production�at�its�mines�(e.g.�due�to� water�ingress�and�flooding�at�the�base�of�the�mine).��Seismic� activity�is�of�particular�concern�to�mining�operations.��The� Simberi�mine�in�Papua�New�Guinea�is�in�an�area�known�to�be� seismically�active�and�is�subject�to�risks�of�earthquakes�and�the� related�risks�of�tidal�surges�and�tsunamis.�

  • Risk�of�impairment : If�the�gold�price�suffers�a�significant�decline,� or�the�operations�are�not�expected�to�meet�future�production� levels,�there�may�be�the�potential�for�future�impairment�write� downs�at�any�of�the�operations.�

Risk�management

The�Group�manages�the�risks�listed�above,�and�other�day�to�day�risks� through�an�established�enterprise�wide�risk�management� framework,�which�conforms�to�Australian�and�international� standards�and�guidance.��The�Group’s�risk�reporting�and�control� mechanisms�are�designed�to�ensure�strategic,�safety,�environment,� operational,�legal,�financial,�reputational�and�other�risks�are� identified,�assessed�and�appropriately�managed.���

identified.��The�amount�of�the�benefits�provided�to�the�foreign�public� official�was�not�material�to�the�Company.��The�Company�self� reported�the�matter�to�relevant�authorities,�including�the�Australian� Federal�Police,�and�the�matter�is�being�assessed�and�investigated.��To� date,�there�has�been�no�action�taken�against�the�Company,� consequently,�the�range�of�potential�penalties,�if�any,�cannot�be� reliable�estimated.��Should�there�be�any�prosecution,�potential� penalties�if�any�are�governed�by�laws�in�various�jurisdictions� including� Criminal�Code�1995�(Cth)� in�Australia�and/or�the�UK� Bribery� Act.�

Regulatory�environment�

Australia�

The�Group’s�Australian�mining�activities�are�in�Western�Australia�and� 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�Mining�Rehabilitation�Fund�Act�2012�took�effect�from�1�July� 2013.��The�Mining�Rehabilitation�Fund�replaces�unconditional� environmental�performance�bonds�for�companies�operating�under� the�Mining�Act�1978.���

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�Group�is�registered�pursuant�to�the�National�Greenhouse�and� Energy�Reporting�Act�2007�under�which�it�is�required�to�report� annually�its�energy�consumption�and�greenhouse�gas�emissions.��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�Group�has�established�data� collection�systems�and�processes�to�meet�these�reporting� obligations.��The�Group’s�Australian�operations�are�also�required�to� comply�with�the�Australian�Federal�Government’s�Clean�Energy�Act� 2011,�effective�from�1�July�2012.�

Papua�New�Guinea

The�primary�Papua�New�Guinea�mining�legislation�is�the�Mining�Act� 1992,�which�governs�the�granting�and�cessation�of�mining�rights.�� Under�the�Mining�Act,�all�minerals�existing�on,�in�or�below�the� surface�of�any�land�in�Papua�New�Guinea,�are�the�property�of�the� State.��The�Mining�Act�establishes�a�regulatory�regime�for�the� exploration�for,�and�development�and�production�of,�minerals�and�is� administered�by�the�Minerals�Resources�Authority.��Environmental� impact�is�governed�by�the�Environment�Act�2000,�administered�by� the�Department�of�Environment�and�Conservation.�The�PNG� government�has�been�reviewing�the�Mining�Act�since�2014.�There�is� no�public�timeframe�for�completion�of�the�review.�

The�financial�reporting�and�control�mechanisms�are�reviewed�during� the�year�by�management,�the�Audit�and�Risk�Committee,�the�internal� audit�function�and�the�external�auditor.�

Senior�management�and�the�Board�regularly�review�the�risk�portfolio� of�the�business�and�the�effectiveness�of�the�Group’s�management�of� those�risks.�

During�July�2014,�the�Company�announced�that�by�operation�of�its� internal�reporting�mechanisms,�the�provision�of�benefits�to�a�foreign� public�official�that�may�violate�its�Anti�Bribery�and�Anti�Corruption� Policy�or�applicable�laws�in�Australia�or�in�foreign�jurisdictions�were�

Page�12�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Information�on�Directors�

Kerry�J�Gleeson� LLB�(Hons),�FAICD��

Tim�C�Netscher��

BSc�(Eng)�(Chemical),�BCom,�MBA,�FIChE,�CEng,�MAICD

Independent�Non�Executive�Director�

Appointed�as�a�Director�18�May�2015�

Independent�Non�Executive�Chairman�

Appointed�as�a�Director�17�February�2014� Appointed�as�Chairman�1�July�2015�

Mr�Netscher�is�an�experienced�international�mining�executive�with� extensive�operational,�project�development,�and�transactional� experience�and�expertise�in�senior�executive�management�roles.�� Mr�Netscher’s�experience�covers�a�wide�range�of�resources�including� nickel,�coal,�iron�ore,�uranium�and�gold�and�regions�including�Africa,� Asia�and�Australia.�

Other�current�listed�company�directorships:�

  • Gold�Road�Resources�Limited�

  • Western�Areas�Limited�

Former�listed�company�directorships�in�last�3�years:�

  • Toro�Energy�Limited�(resigned�September�2016)�

  • Deep�Yellow�Limited�(resigned�December�2015)�

  • Gindalbie�Metals�Limited�(resigned�October�2014)�

  • Aquila�Resources�Limited�(resigned�July�2014)�

Special�responsibilities:�

  • Chair�of�the�Health,�Safety,�Environment�and�Community� Committee��

  • Member�of�the�Audit�and�Risk�Committee�

  • Member�of�the�Remuneration�Committee�

Robert�S�(Bob)�Vassie��

B.�Mineral�Technology�Hons�(Mining),�GAICD,�MAUSIMM

Managing�Director�and�Chief�Executive�Officer��

Appointed�as�Managing�Director�and�CEO�1�July�2014�

Mr�Vassie�is�a�mining�engineer�with�over�30�years’�international� mining�industry�experience�and�has�18�years’�experience�in�a�range� of�senior�management�roles�with�Rio�Tinto.�He�has�particular� experience�in�operations�management,�resource�development� strategy,�mine�planning,�feasibility�studies,�business�improvement,� corporate�restructuring�and�strategic�procurement.�

Other�current�listed�public�company�directorships:��

  • Tawana�Resources�NL�(appointed�1�August�2017)�

Former�listed�company�directorships�in�last�3�years:� Nil

Special�responsibilities:�

  • Member�of�the�Health,�Safety,�Environment�and�Community� Committee�

Ms�Gleeson�is�an�experienced�corporate�executive�with�over�20� years’�boardroom�and�senior�management�experience�across� Australia,�UK�and�the�US,�in�a�variety�of�industries�including�mining,� agriculture,�chemicals,�logistics�and�manufacturing.��A�qualified� lawyer�in�both�UK�and�Australia,�she�has�significant�expertise�in� complex�corporate�finance�and�transactional�matters,�and�in� corporate� governance� in� Australian� and� international� businesses.��She�was�a�member�of�the�Group�Executive�at�Incitec� Pivot�Limited�for�10�years�until�2013,�including�as�Company�Secretary� and�General�Counsel.��Previously,�she�was�a�corporate�finance�and� transactional�partner�in�an�English�law�firm,�and�practised�as�a�senior� lawyer�at�the�Australian�law�firm,�Ashurst.���

Ms�Gleeson�is�a�Non�Executive�Director�of�Trinity�College,�University� of�Melbourne.��

Other�current�listed�company�directorships:�Nil�

Former�listed�company�directorships�in�last�3�years:��

  • McAleese�Limited�(resigned�September�2016)�

Special�responsibilities:�

  • Chair�of�Remuneration�Committee��

  • Member�of�the�Audit�and�Risk�Committee�

  • Member�of�the�Health,�Safety,�Environment�and�Community� Committee�

David�E�J�Moroney�

BCom,�FCA,�FCPA,�GAICD

Independent�Non�Executive�Director�

Appointed�as�a�Director�16�March�2015�

Mr�Moroney�is�an�experienced�finance�executive�with�more�than�20� years’�experience�in�senior�corporate�finance�roles,�including�15� years�in�the�mining�industry,�and�extensive�international�work� experience�with�strong�skills�in�finance,�strategic�planning,� governance,�risk�management�and�leadership.��

Mr�Moroney�is�an�independent�non�executive�director�of�non�ASX� listed�Geraldton�Fishermen’s�Co�operative�Ltd�(the�southern� hemisphere’s�largest�exporter�of�lobster)�and�chair�of�its�Audit�and� Risk�Management�Committee�and�member�of�its�Performance�and� Nomination�Committee.�Mr�Moroney�is�also�an�independent�non� executive�director�of�WA�Super,�Western�Australia’s�largest�public� offer�superannuation�fund�(and�Chair�of�the�Risk�Committee,�and�a� member�of�the�Compliance�&�Audit�and�Human�Resources� Committees).�Mr�Moroney�is�also�an�independent�non�executive� finance�director�of�Hockey�Australia�Ltd,�the�peak�national�sporting� body�for�hockey�in�Australia,�and�Chair�of�its�Finance,�Audit�and�Risk� Management�Committee.�

Other�current�listed�company�directorships:� Nil

Former�listed�company�directorships�in�last�3�years:� Nil

Special�responsibilities:�

  • Chair�of�the�Audit�and�Risk�Committee�

  • Member�of�the�Health,�Safety,�Environment�and�Community� Committee��

  • Member�of�the�Remuneration�Committee�

Page�13�

ST�BARBARA�LIMITED�2017�

Remuneration�Report�(audited)�

Directors’�Report�

Qualifications�and�experience�of�the�Company�Secretary�

Rowan�Cole�

B.Comm,�CA,�CIA,�MBA,�GAICD,�Grad.�Dip�AGC,�Dip�Inv�Rel� Company�Secretary

Mr�Cole�joined�St�Barbara�in�2010�as�General�Manager�Corporate� Services�and�was�appointed�as�Deputy�Company�Secretary�in�2012� and�as�Company�Secretary�in�2014.��

He�has�over�30�years’�experience�across�chartered�accounting,�retail� banking,�private�and�public�companies.��Mr�Cole's�experience� includes�external,�internal�and�IT�audit,�risk�management,�customer� service�delivery,�marketing,�strategy�formulation,�execution�and� measurement,�process�and�business�improvement,�financial�and� business�reporting�in�senior�roles�including�general�manager,�head� of�risk�and�compliance,�chief�audit�executive�and�chief�financial�and� risk�officer.���

Information�on�Executives��

Robert�S�(Bob)�Vassie�

B.�Mineral�Technology�Hons�(Mining),�GAICD,�MAUSIM Managing�Director�and�Chief�Executive�Officer

Mr�Vassie�joined�St�Barbara�as�Managing�Director�and�CEO�in�July� 2014.��Mr�Vassie�is�a�mining�engineer�with�over�30�years’� international�mining�industry�experience�and�has�18�years’� experience�in�a�range�of�senior�management�roles�with�Rio�Tinto.�He� has�particular�experience�in�operations�management,�resource� development�strategy,�mine�planning,�feasibility�studies,�business� improvement,�corporate�restructuring�and�strategic�procurement.�

Garth�Campbell�Cowan

B.Comm,�Dip�Applied�Finance�&�Investments,�FCA� Chief�Financial�Officer

Mr�Campbell�Cowan�is�a�Chartered�Accountant�with�over�30�years’� experience�in�senior�management�and�finance�positions�across�a� number�of�different�industries.�He�was�appointed�to�the�position�of� Chief�Financial�Officer�in�September�2006�and�is�responsible�for�the� Group’s�Finance�function,�covering�financial�reporting�and� accounting,�treasury,�taxation,�internal�audit,�capital�management,� procurement�and�information�technology.�Mr�Campbell�Cowan�also� has�executive�responsibility�for�business�development.��Prior�to� joining�the�Group,�he�was�Director�of�Corporate�Accounting�at� Telstra�and�has�held�senior�leadership�roles�with�WMC,�Newcrest� Mining�and�ANZ.�

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:�

BoardMeetings BoardMeetings BoardCommittees BoardCommittees BoardCommittees
Scheduled Supplementary Audit&Risk Remuneration Health,Safety,
Environment&
Community
A
H
A
H
A
H
A
H
A
H
KGleeson
DMoroney
TNetscher
RVassie
9
9
8
9
9
9
9
9
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
  • A�=��Number�of�meetings�attended�

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

Directors’�interests��

The�relevant�interest�of�each�Director�in�the�shares�and�rights�over� such�instruments�issued�by�the�companies�within�the�Group�and� other�related�bodies�corporate�as�notified�by�the�Directors�to�the� ASX�in�accordance�with�S205G(1)�of�the�Corporations�Act�2001,�as� the�date�of�this�report�is�as�follows:�

Ordinaryshares Rightsover
ordinaryshares
KGleeson
DMoroney
TNetscher
RVassie
8,333
100,000
22,000
1,769,053



4,062,500(1)
1,301,382(2)
  • (1) These�rights�were�determined�by�the�Board�on�23�August�2017�to�have� vested�as�at�30�June�2017�and�are�pending�issue�as�shares�as�at�the�date� of�this�report.�

(2) The�vesting�of�these�rights�is�subject�to�future�performance�conditions� as�described�in�the�Remuneration�Report.�

No�Directors�have�an�interest�in�options�over�shares�issued�by� companies�within�the�Group.��

Page�14�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

Remuneration�Report�(Audited)�

  • 2.1� Key�remuneration�outcomes�for�the�2017�financial�year� (details�in�Section�7)�

Contents�

  1. Introduction�and�Key�Management�Personnel�

  2. 2017�Remuneration�Summary�

  3. Executive�Remuneration�Strategy�

STI[1] �Outcomes� The�average�STI�outcome�for�Executives�was�90% of�the�maximum�potential�STI�based�on�an assessment�of�Group�and�individual�measures. This�reflects�the�Group’s�record�safety,�operating and�financial�performance�during�2017.�

  1. Remuneration�Governance�

  2. Remuneration�Structure��

  3. Relationship�between�Group�Performance�and�Remuneration�

  4. Remuneration� Disclosure� and� Executive� Remuneration� Outcomes�

  5. Non�Executive�Director�Remuneration�

  6. Additional�Statutory�Information�

  7. LTI[2] �Outcomes� 100%�of�the�3�year�LTI�performance�rights assessed�at�30�June�2017�vested.�This�is consistent�with�the�operational�and�strategic turnaround�during�the�corresponding�3�year period�which�resulted�in�total�shareholder returns�of�2,308%,�well�above�the�return�of�any of�its�comparator�companies�and�the�ASX�Gold Index�for�the�same�period.�

1. Introduction�and�Key�Management�Personnel�

This�Remuneration�Report�describes�the�remuneration�strategy�and� practices�that�applied�for�the�2017�financial�year.��The�report� provides�details�of�remuneration�paid�for�the�2017�financial�year�to� Non�Executive�Directors�and�the�Executives�named�in�this�report� with�the�authority�and�responsibility�for�planning,�directing�and� controlling�the�activities�of�the�Group,�collectively�referred�to�as�Key� Management�Personnel�(KMP).��

Key�Management�Personnel�during�2017�

Non�ExecutiveDirectors
TimNetscher IndependentNon�ExecutiveChairman
KerryGleeson IndependentNon�ExecutiveDirector
DavidMoroney IndependentNon�ExecutiveDirector
Executives
Robert(Bob)Vassie ManagingDirector&ChiefExecutive
Officer
GarthCampbell�Cowan ChiefFinancialOfficer

2. 2017�Remuneration�Summary�

The�Group’s�record�operational�and�financial�performance�for�the� 2017�financial�year�is�reflected�in�the�STI[1] �outcomes�awarded�to� Executives.�

The�Group’s�outstanding�transformation�over�the�last�three�years�is� clearly�demonstrated�by�a�corresponding�total�shareholder�return�of� 2,308%,�which�is�many�times�the�return�of�its�comparator�companies� and�the�ASX�Gold�Index�for�the�same�period.��During�this�time,�the� Group’s�market�capitalisation�increased�from�$56�million�to� $1.4�billion,�and�the�closing�share�price�increased�from�$0.115�at� 30�June�2014�to�$2.91�at�30�June�2017.����

The�Board�considers�that�the�Executive�remuneration�structure�in� place�during�this�period�has�been�appropriate�and�aligned�with� increasing�shareholder�wealth,�and�that�Executives�have�justifiably� earned�the�at�risk�incentives�awarded�this�year.�

Executive Executivefixedremunerationincreasedbyan
Remuneration averageof1%from2016to2017.
NED OverallNEDfeesincreasedby1%from2016
Remuneration to2017.
  • 2.2��Changes�in�the�Executive�remuneration�framework�during�the� 2017�financial�year�(details�in�Section�5)�

STI�Composition� The�proportion�of�at�risk�remuneration�for� Level�5�(CFO)�was�increased�at�target�level� from�40%�in�2016�to�45%�in�2017.�

  • 2.3��Changes�to�Executive�remuneration�for�the�2018�financial�year� (details�in�Section�5)�

STI�Composition� The�mix�of�Group�and�Individual�STI�targets�is� proposed�to�change�weighting�from�70%� Group�targets�and�30%�Individual�targets�in� 2017,�to�80%�Group�targets�and�20%� Individual�targets�in�2018.� Executive�fixed� Following�a�review�of�relevant�market� remuneration� remuneration�data,�the�Board�has�approved� increases�in�Executive�fixed�remuneration�of� between�2.5%�and�10%�for�the�2018�financial� year.�

  • 2.4� Changes�to�Non�Executive�Director�Remuneration�for�the�2018� financial�year�(details�in�Section�8)�

Non�Executive� Following�a�review�of�comparable�resource� Directors�fees� industry�remuneration�levels�for�Non� Executive�Directors,�the�Board�resolved�to� increase�Non�Executive�Directors�fees�by�an� average�10%�for�2018.�

The�Board�actively�monitors�market�practices�and�recommendations� from�industry�participants�on�remuneration�structure�and� disclosure,�and�may�amend�the�remuneration�framework� accordingly�at�any�time.��The�Board�needs�to�ensure�that�the�

1�� Short�term�incentive� 2�� Long�term�incentive�

Page�15�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

remuneration�framework�attracts,�retains�and�encourages�high� performance�by�its�key�employees,�whilst�remaining�aligned�with� shareholder�experience.��

3. Executive�Remuneration�Strategy��

The�Group’s�Executive�remuneration�strategy�is�designed�to�attract,� reward�and�retain�high�calibre,�high�performing,�and�team� orientated�individuals�capable�of�delivering�the�Group�strategy.��The� remuneration�strategy�and�related�employment�policies�and� practices�are�aligned�with�the�Group�strategy.��

The�objectives�of�the�remuneration�strategy�for�the�2017�financial� year�were�to�ensure�that:�

  • total�remuneration�for�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� performance�linked�at�risk�remuneration;�

  • performance�linked�at�risk�remuneration�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.

The�Group’s�remuneration�strategy�and�practices�are�influenced�by� the�Australian�gold�mining�industry�and�the�peer�companies�with� which�it�competes�for�talent.�

The�gold�price�is�the�primary�determinant�of�the�share�price�of�gold� companies,�including�St�Barbara.�The�gold�price�is�volatile,�as� illustrated�by�the�chart�below.�The�ASX�all�ordinaries�gold�index� (ASX:XGD)�was�4.5�times�more�volatile�(measured�by�standard� deviation)�than�the�ASX�200�(ASX:XJO)�over�the�previous�5�years.���

The�nature�of�the�industry�and�the�share�price�volatility�has�resulted� in�certain�key�features�of�the�Group’s�performance�linked�at�risk� remuneration,�in�the�form�of�the�annual�short�term�incentive�( STI )� and�the�long�term�incentive�( LTI )�which�measures�performance�over� three�financial�years.�

Executive�remuneration�outcomes�are�aligned�with�shareholder� experience,�as�the�STI�and�LTI�link�personal�remuneration�outcomes� with�the�achievement�of�targets�which�drive�Group�performance�and� shareholder�return.�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�Group�outcomes�and�drive� shareholder�return.�

The�criteria�used�to�assess�the�STI�include�production,�costs�and� safety���key�elements�that�are�within�management’s�control�and� underpin�the�overall�financial�result�of�the�Group.��The�Board�is�

aware�of�a�trend�in�some�larger�ASX�companies�to�partially�defer� payment�of�STI�to�subsequent�years�as�share�rights,�notionally�to� more�closely�align�the�STI�with�a�company’s�share�price� performance.�The�Board�has�determined�no�deferral�of�STI�is� appropriate�as�deferral�of�STI�is�extremely�rare�amongst�the� resources�companies�with�which�St�Barbara�competes�for�talent,�and� is�considered�to�be�a�disincentive�to�current�and�prospective� employees.�In�addition,�the�corresponding�LTI�is�closely�aligned�with� the�Company’s�share�price�performance,�and�also�provides�a� significant�retention�incentive.���

The�LTI�aligns�Executive�remuneration�with�shareholder�experience.�� The�vesting�conditions�for�the�LTI�comprise�two�measures,�relative� total�shareholder�return�(RTSR),�and�return�on�capital�employed� (ROCE)�in�excess�of�the�weighted�average�cost�of�capital.��The�LTI� allows�retesting�at�the�Board’s�discretion�which�is�consistent�with�the� volatile�character�of�the�gold�industry,�that�tends�to�be�cyclical�and� the�result�at�the�end�of�a�three�year�vesting�period�may�be�adversely� impacted�by�a�short�term�downturn�in�the�price�of�gold�or�in�the�gold� industry.�Rights�would�only�vest�under�retesting�if�there�is�a�positive� total�shareholder�return�and�the�performance�conditions�are�met� over�the�extended�term.��

RTSR�was�first�adopted�as�an�LTI�measure�at�the�2010�Annual�General� Meeting,�with�ROCE�first�adopted�at�the�2012�Annual�General� Meeting.��These�two�metrics�were�selected,�and�have�been�retained,� as�the�most�appropriate�measures�to�reflect�management’s� influence�on�shareholder�wealth.��RTSR�eliminates�the�impact�of� fluctuations�in�gold�price�to�illustrate�how�effective�management� have�been�in�creating�value�from�the�Group’s�gold�assets�compared� against�industry�peers.��ROCE�measures�the�efficiency�with�which� management�uses�capital�in�seeking�to�increase�shareholder�value.�� The�LTI�performance�measures�are�reviewed�annually�for�their� continued�relevance�and�consistency�against�peer�company�LTI� metrics.��

==> picture [250 x 166] intentionally omitted <==

----- Start of picture text -----

A$/oz A$�gold�vs�SBM�share�price ASX:SBM
$1,800 $4
$1,700
$3
$1,600
$2
$1,500
$1
$1,400
$1,300 $0
Jun�2012 Jun�2013 Jun�2014 Jun�2015 Jun�2016 Jun�2017
Gold�A$/oz�(LHS) SBM�(RHS)
Source:�IRESS�(5�year�weekly�data)
----- End of picture text -----

The�remuneration�strategy�and�structure�are�directly�linked�to�the� development�of�strategies�and�budgets�in�the�Group’s�annual� planning�cycle�shown�in�the�timetable�below.�

Page�16�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

Annual�Planning�Timetable�

Month Strategy&Reporting Remuneration
October Annualstrategyupdate
January ReviewSTI&LTIdesignframework
February HalfYearFinancialReport
ApriltoJune Budgetsettingframework Setremunerationreviewframework
July MeasureSTIoutcomesanddetermineaward
August AnnualFinancialReport MeasureLTIoutcomes(inconjunctionwithauditedfinancial
report)andactionanyvestedentitlements
SetSTItargetsforfollowingfinancialyear
October AnnualReport
November AnnualGeneralMeeting ShareholderapprovalofLTItobeissuedtoMD&CEO

4. Remuneration�Governance�

Remuneration�strategy�and�policies�are�approved�by�the�Board.�They� are�aligned�with,�and�underpin,�the�Group�strategy.��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�Group,�shareholders�and�employees� are�taken�into�account.�The�charter�for�the�Remuneration� Committee�is�approved�by�the�Board�and�is�available�on�the�Group’s� website�at www.stbarbara.com.au.�

The� Remuneration� Committee� is� responsible� for� making� recommendations�to�the�Board�on�all�aspects�of�remuneration� arrangements�for�Key�Management�Personnel.��

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

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

In�forming�remuneration�recommendations,�each�year�the� Remuneration�Committee�obtains�and�considers�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� Remuneration�Committee.��The�Remuneration�Committee�reviews� all�other�contracts�with�remuneration�consultants�and�directly� receives�the�reports�of�those�consultants.�Information�was�received� directly�by�the�Committee�from�Godfrey�Remuneration�Group� during�the�financial�year�regarding�aspects�of�remuneration�design� and�equity�plans.�The�information�provided�by�Godfrey� Remuneration� Group� did� not� include� a� remuneration� recommendation�as�defined�in�the� Corporations�Act�2001�(Cth) .�

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

K�Gleeson� Non�Executive�Director� Chair�of�the�Committee�since�1�July�2015�� Member�of�the�Committee�since�18�May�2015� D�Moroney� Non�Executive�Director� Member�of�the�Committee�since�16�March�2015� T�Netscher� Non�Executive�Chairman� Member�of�the�Committee�since�23�February�2015�

Page�17�

ST�BARBARA�LIMITED�2017�

Remuneration�Report�(audited)�

Directors’�Report�

5. Remuneration�Structure�

Executive�remuneration�comprises:�

  • Fixed�remuneration�

  • A�performance�linked�at�risk�short�term�incentive�(STI)�

  • A�performance�linked�at�risk�long�term�incentive�(LTI).�

Each�of�these�components�is�considered�in�more�detail�below. Composition�of�Executive�Remuneration�

The�mix�of�fixed�and�at�risk�remuneration�for�Executives�for�2017�is�as�follows:��

==> picture [529 x 172] intentionally omitted <==

----- Start of picture text -----

Fixed�Remuneration STI�(at�risk) LTI�(at�risk) Total
Level�6�(CEO)���at�target 53% 27% 20% 100%
Level�6�(CEO)���at�maximum 36% 36% 27% 100%
Level�5�(CFO)���at�target 57% 26% 17% 100%
Level�5�(CFO)���at�maximum 40% 36% 24% 100%
0% 20% 40% 60% 80% 100%
----- End of picture text -----

Figures�are�rounded�to�nearest�whole�percent�and�may�not�add.��

  • (1)� STI �as�a�%�of�Fixed�Remuneration�at�‘target’�is:�Level�6�(CEO)�50%,�Level�5�(CFO)�45%.�STI�at�‘maximum’�=�2�x�‘target’.��The�proportion�of�at�risk�remuneration� for�Level�5�(CFO)�was�increased�at�target�level�from�40%�in�2016�to�45%�in�2017.�

  • ‘Target’�is�the�mid�point�(50%)�of�the�‘maximum’�(100%)�STI�available�for�the�rated�performance�of�each�individual.�Less�than�target�performance�will�result�in� less�than�the�target�allocation,�potentially�down�to�zero,�and�significant�outperformance�can�lead�to�achieving�‘maximum’�(100%)�of�the�STI.���

  • See� Section�7.4 �for�STI�earned�in�2017.�

  • (2)� LTI �as�a�%�of�Fixed�Remuneration�at�‘target’�is:�Level�6�(CEO)�37.5%,�Level�5�(CFO)�30%.�LTI�at�‘maximum’�=�2�x�‘target’.�

  • ‘Target’�is�the�mid�point�(50%)�of�the�maximum�(100%)�LTI�available.�The�LTI�allocation�is�fixed�at�grant,�but�the�proportion�of�the�grant�that�ultimately�vests,� if�any,�is�subject�to�performance�measurement�under�the�relevant�LTI�plan.��

See� Section�7.5� for�LTI�vested�during�2017.�

The�relationship�between�‘target’�and�‘maximum’�remuneration�of�the�CEO�for�2017�is�as�follows:��

==> picture [529 x 83] intentionally omitted <==

----- Start of picture text -----

Fixed�Remuneration STI�(at�risk) LTI�(at�risk) Total
Level�6�(CEO)���at�target 53% 27% 20% 100%
Level�6�(CEO)���at�maximum 53% 53% 40% 147%
0% 20% 40% 60% 80% 100% 120% 140%
----- End of picture text -----

Figures�are�rounded�to�nearest�whole�percent�and�may�not�add.��

Page�18�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

Payment�profile�of�Executive�Remuneration�

The�timing�of�payments�of�Executive�remuneration�for�2017�is�as�follows�(illustrated�using�Level�6�(CEO)�at�target):

==> picture [525 x 170] intentionally omitted <==

----- Start of picture text -----

LTI�(at�risk)
20% FY17�LTI�measurement�period��3�yrs�from�1�Jul 2016�to�30�Jul�2019 20%
FY17�STI�
STI�(at�risk) 27% measurement�period 27%
Fixed�remuneration
(FR) 53% 53%
Level�6�(CEO)���at�target FY�2017 FY�2018 FY�2019 FY�2020
(for�illustration) (FY17�FR�paid) (FY17�STI�paid) (FY17�LTI�vested)
----- End of picture text -----

Fixed�remuneration�for�2017�was�paid�during�2017.�

STI�performance�is�assessed�as�part�of�this�report�after�the�end�of�the�2017�financial�year�and�is�paid�in�the�2018�financial�year.�

LTI�performance�is�assessed�after�the�end�of�the�3�year�performance�period�(1�July�2016�to�30�June�2019)�and,�if�determined�to�have�vested,�the�corresponding� performance�rights�vest�in�2020.�

5.1��Fixed�Remuneration�=�Base�salary�+�superannuation�+�benefits�

Fixed�remuneration�is�paid�in�cash,�superannuation�and�benefits� during�the�financial�year.�

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�Group’s�need�to�compete�in�the� market�place�to�attract�and�retain�the�right�person�for�the�role.�

Each�Executive�undergoes�an�annual�performance�appraisal�as�part� of�the�Group’s�work�performance�system,�in�which�individual�and� Group�performance�is�assessed�in�detail�against�their�respective�pre� determined�measures.�The�performance�appraisal�for�the�Chief� Financial�Officer�is�assessed�by�the�Managing�Director�and�CEO�and� reported�to�the�Remuneration�Committee�and�subsequently�to�the� Board�for�review,�including�recommended�remuneration�outcomes� that�flow�from�that�appraisal.�The�performance�appraisal�for�the� Managing�Director�and�CEO�is�undertaken�by�the�Chairman,�reported� to�the�Remuneration�Committee�and�subsequently�to�the�Board,�for� review.��

Benefits�vary�between�Executives�and�include�car�parking,�certain� professional�memberships�and�living�away�from�home�and�travel� expenses,�plus�any�associated�fringe�benefits�tax.��

In�considering�remuneration�for�Executives�for�the�2017�financial� year,�the�Remuneration�Committee�considered�reports�from�Aon� Hewitt,�as�well�as�industry�trend�data�and�other�relevant� remuneration�information.���

5.2���Performance�Linked�Remuneration�–�STI�

The�STI�is�linked�to�specific�personal�and�corporate�objectives�over� the�financial�year.��Performance�of�the�STI�objectives�is�assessed� subsequent�to�the�end�of�the�financial�year,�with�the�amount� determined�to�be�achieved�paid�in�cash�or�shares.�

The�Remuneration�Committee�is�responsible�for�recommending�to� the�Board�Executive�STIs�and�then�later�assessing�the�extent�to�which� the�Group�STI�measures�and�the�individual�KPIs�of�the�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.�The�Board�retains�overall�discretion� on�whether�a�STI�should�be�paid�in�any�given�year.�

As�noted�earlier�in�this�report,�deferral�of�STI�is�extremely�rare� amongst�the�resources�companies�with�which�the�Group�competes� for�talent,�and�is�considered�to�be�a�disincentive�to�current�and� prospective�employees.��The�current�weighting�between�STI�and�LTI� is�considered�to�provide�appropriate�alignment�with�long�term�share� price�performance�and�retention�of�Executives.��

The�STI�is�an�annual�“at�risk”�component�of�remuneration�for� Executives.�It�is�payable�based�on�performance�against�key� performance�indicators�( KPI )�set�at�the�beginning�of�the�financial� year.��

For�each�KPI�there�are�defined�“threshold”,�“target”�and�“stretch”� measures�which�are�capable�of�objective�assessment:�

Threshold representstheminimumlevelofacceptable
performance performanceacknowledgingextrinsicrisks
assumedinachievementofthefullyearbudget
(wherethebudgetisnormallymoredemanding
yearonyear)forquantifiablemeasureswhich
arewithinthecontrolofSTIparticipantssuchas
safety,productionandall�insustainingcost(as
proxiesforprofitabilityandcashgeneration),as
wellastheachievementofneartermgoals
linkedtotheannualstrategy.
Target representschallengingbutachievablelevelsof
performance performancebeyondachievementofbudget
measures.
Stretch requiressignificantperformanceaboveand
(ormaximum) beyondnormalexpectationsandifachievedis
performance anticipated
to
result
in
a
substantial
improvementinkeystrategicoutcomes,
operationalorfinancialresults,and/orthe
businessperformanceoftheGroup.

Page�19�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

STIs�are�structured�to�remunerate�Executives�for�achieving�annual� Group�targets�as�well�as�their�own�individual�performance�targets� designed�to�favourably�impact�the�business.��The�proportion�of�the� STI�earned�is�calculated�by�adding�the�average�result�of�the�Group� targets�with�the�average�result�of�an�individual’s�performance� targets,�where�target�performance�equals�one.��For�the�FY17�STI,�the� results�are�weighted�to�70%�Group�targets�and�30%�individual� targets.��Group�and�individual�targets�are�established�by�reference� to�the�Group�Strategy.�The�net�amount�of�any�STI�after�allowing�for� applicable�taxation,�is�payable�in�cash.���

All�service�agreements�with�Executives�comply�with�the�provisions�of� Part�2�D.2,�Division�2�of�the�Corporations�Act.�

These�service�agreements�may�be�terminated�early�by�either�party� giving�the�required�notice�and�subject�to�termination�payments� detailed�in�the�agreement.�Other�major�provisions�of�the� agreements�relating�to�remuneration�are�set�out�below.�

R�S�Vassie�–�Managing�Director�and�CEO��

  • Term�of�agreement�–�permanent�employee,�commenced�1�July� 2014.�

The�calculation�of�STI�earned�can�be�summarised�as�follows:��

STI�earned�=�STI�value�at�risk�x�[(70%�x�average�result�of�Group�STI� targets)�plus�(30%�x�average�result�of�Individual�STI�targets)],�where� target�performance�=�1.�

  • Other�than�for�serious�misconduct�or�serious�breach�of�duty,� the�Company�or�Mr�Vassie�may�terminate�employment�at�any� time�with�6�months’�notice.�

G�Campbell�Cowan�–�Chief�Financial�Officer�

Details�of�the�2017�financial�year�STI�are�set�out�in� Section�7.4� of�this� report.�

  • Term�of�agreement�–�permanent�employee,�commenced�1� September�2006.�

5.3� Performance�Linked�Remuneration�–�LTI��

LTIs�are�structured�to�remunerate�Executives�for�the�long�term� performance�of�the�Group�relative�to�its�peers.�The�LTIs�involve�the� granting�of�rights�which�only�vest�upon�achievement�of�performance� measures�over�a�three�year�period.�Performance�rights�on�issue�carry� no�dividend�or�voting�rights.�On�vesting�each�performance�right�is� convertible�into�one�ordinary�share.�

  • Other�than�for�gross�misconduct�or�for�poor�performance�as� judged�by�the�Company�in�its�absolute�discretion,�the�Company� may�terminate�the�employment�at�any�time�with�payment�of�a� termination�benefit�equal�to�8�months’�notice.�Mr�Campbell� Cowan�may�terminate�employment�at�any�time�with�6�weeks’� notice.��

5.5����Future�Developments�in�Remuneration�

As�noted�earlier,�the�gold�industry�is�much�more�volatile�than�the� economy�in�general.��The�gold�industry�tends�to�be�cyclical�and�the� result�at�the�end�of�a�three�year�vesting�period�may�be�adversely� impacted�by�a�short�term�downturn�in�the�price�of�gold�or�in�the�gold� industry.��Unlike�other�industries�where�matching�revenues�and� expenses�may�have�long�lead�times,�in�the�gold�industry�gold� produced�is�sold�at�arm’s�length�at�the�market�price�(unless�it�is�sold� into�a�hedge)�within�a�matter�of�days�from�production,�with� corresponding�revenue�and�expenses�recorded.��The�primary�LTI� performance�measure�of�relative�total�shareholder�return�means� that�LTI�awards�will�not�increase�merely�due�to�an�increase�in�gold� price,�but�only�on�better�than�average�industry�performance.���

These�characteristics�of�the�gold�industry,�and�comparison�with�long� term�incentive�structures�of�other�resource�companies�with�which� the�Group�competes�for�talent,�have�led�to�certain�characteristics�of� the�current�LTI�plan,�including�retesting.�The�Board�introduced� ‘retesting’�to�performance�rights�issued�from�September�2015.�� Should�no�rights�from�a�tranche�vest�at�the�conclusion�of�a� measurement�period,�at�its�discretion,�the�Board�may�choose�to� retest�the�relevant�performance�rights�for�the�same�performance� conditions�(e.g.�above�50[th] �percentile�Relative�Total�Shareholder� Return)�one�year�after�the�original�vesting�period�(and�potentially� again�one�year�later).��Performance�rights�would�only�vest,�with� Board�discretion,�if�there�was�positive�total�shareholder�return,�and� minimum�threshold�performance�achieved�for�Relative�Total� Shareholder�Return�and�Return�on�Capital�Employed�for�the� extended�vesting�period�(of�four�or�five�years),�which�should�only� correspond�with�a�positive�shareholder�experience.��

Vesting�conditions�of�each�tranche�of�performance�rights�issued�are� approved�by�the�Board�and�set�out�in�the�relevant�Notice�of�Annual� General�Meeting.��Details�of�the�LTI�relevant�to�the�2017�financial� year�are�set�out�in� Section�7.5� of�this�report.�

5.4�����Summaries�of�service�agreements�for�Executives�

Remuneration�and�other�terms�of�employment�for�the�Managing� Director�and�CEO�and�the�Chief�Financial�Officer�are�formalised�in� service�agreements.��These�agreements�provide,�where�applicable,� for�the�provision�of�performance�related�cash�payments,�other� benefits�including�allowances,�and�participation�in�the�St�Barbara� Limited�Performance�Rights�Plan.���

The�Group�continuously�monitors�its�remuneration�structure,� practices�and�disclosure�in�light�of�market�developments�to�ensure� that�collectively�they�continue�to:�

  • attract,�reward�and�retain�high�performing,�team�oriented� individuals�capable�of�delivering�the�Group�strategy;�

  • encourage�and�reward�individual�and�team�performance�aligned� with�value�creation�for�shareholders;�

  • appropriately�inform�shareholders�of�what�remuneration�is�paid� and�why.�

Almost�exclusively,�the�Group�competes�with�Australian�gold� industry�peer�companies�to�attract�and�retain�the�individuals� necessary�to�maintain�its�success.��This�drives�the�need�to�closely� monitor�and�respond�to�the�remuneration�practices�of�its�peers,�and� offer�a�competitive�and�comparable�remuneration�packages.��This� means�the�Group’s�remuneration�practices�are�consistent�with�the� Australian�gold�mining�industry�and�the�peer�companies�with�which� it�competes�for�talent,�rather�than�practices�that�may�be�used�by� broader�industrial�companies.�

There�are�no�planned�changes�to�the�remuneration�structure�for� Executives�at�the�time�of�this�report,�other�than�for�the�mix�of�Group� and�Individual�STI�targets,�which�is�proposed�to�change�the�weighting� from�70%�Group�targets�and�30%�Individual�targets�in�2017,�to�80%� Group�targets�and�20%�Individual�targets�in�2018.�

Following�a�review�of�various�resource�industry�market� remuneration�data�from�a�number�of�sources,�for�the�2018�financial� year�the�Board�has�approved�a�10%�increase�in�total�fixed� remuneration�for�the�MD�&�CEO�and�a�2.5%�increase�for�the�CFO.���

The�Board�identified�that�the�CEO’s�fixed�remuneration�was�not� commensurate�with�the�market.��The�Board�noted�that�the�market� capitalisation�of�the�Group�had�increased�over�20�times�(and�the� Group�had�re�joined�the�ASX�300�and�ASX�200)�in�the�three�years� since�the�CEO�was�appointed�on�1�July�2014.�

The�FY18�total�fixed�remuneration�of�both�Executives�is�between�P50� and�P75�of�the�benchmark�data,�which�is�consistent�with�the� Company’s�remuneration�strategy.

Page�20�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

6. Relationship�between�Group�Performance�and�Remuneration����past�five�years�

The�Board�has�regard�to�the�overall�performance�of�the�Group�over�a�number�of�years�in�assessing�and�ensuring�proper�alignment�of�the� performance�linked�“at�risk”�remuneration�framework�to�deliver�fair�and�proper�outcomes�consistent�with�the�Group’s�performance.��

Full�details�of�the�Group’s�operational�and�financial�performance�are�set�out�in�the�Directors’�Report�immediately�preceding�the�Remuneration� Report,�and�in�the�Financial�Report,�immediately�following�the�Remuneration�Report.��For�convenience,�a�summary�of�key�operating�and�financial� measures�is�reproduced�in�the�Remuneration�Report.���

In�assessing�the�Group’s�performance�and�shareholder�return,�consideration�is�given�to�the�following�measures�in�respect�of�the�current�financial� year�and�the�previous�four�financial�years.��

Earnings 2013
$’000
2014
$’000
2015
$’000
2016
$’000
2017
$’000
Salesrevenue
EBITDA(1)
Statutorynetprofit/(loss)aftertax
568,443
(150,628)
(191,854)
533,828
(331,634)
(500,831)
552,581
167,557
39,682
610,115
298,106
169,388
641,702
293,302
157,572
160,366
Underlyingnetprofit/(loss)aftertax(1) 29,285 (33,526) 41,964 127,357

(1) Non�IFRS�financial�measures,�refer�to�page�3.�

The�table�below�provides�the�share�price�performance�of�the�Group’s�shares�in�the�current�financial�year�and�the�previous�four�financial�years.�

Sharepricehistory 2013 2014 2015 2016 2017
Periodendshareprice($pershare) 0.45 0.115 0.57 2.95 2.91
2.71
Averagesharepricefortheyear($pershare) 1.35 0.38 0.21 1.56

During�the�2017�financial�year,�the�Group’s�daily�closing�share�price�ranged�between�$1.77�to�$3.69�per�share�(2016:�$0.395�to�$3.30�per�share).�

The�table�below�provides�the�percentage�of�performance�linked�remuneration�awarded�to�Executives�in�the�current�financial�year�and�the� previous�four�financial�years.�

PerformanceLinkedRemuneration 2013 2014 2015 2016 2017
%ofmaximumpotentialSTIearned 40% 0% 66% 99% 90%
100%
%ofmaximumpotentialLTIearned 0% 0% 0% 67%

Executive�Performance�Linked�Remuneration�

Five�Year�History

==> picture [255 x 195] intentionally omitted <==

----- Start of picture text -----

$2.71�
Average�share�price
$1.56�
$1.35�
$0.38� $0.21�
%�STI�/�LTI�
earned 99% 100%
100% 90%
75% 67%
50% 40%
25%
0% 0% 0%
0%
2013 2014 2015 2016 2017
STI LTI
----- End of picture text -----

Page�21�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

5�Year�Group�Performance���

Sales�Revenue

==> picture [249 x 150] intentionally omitted <==

----- Start of picture text -----

$M
700
600
500
400
300
200
100
0
2013 2014 2015 2016 2017
----- End of picture text -----

EBITDA[1]

==> picture [250 x 149] intentionally omitted <==

----- Start of picture text -----

$M
400
300
200
100
0
�100
�200
�300
�400
2013 2014 2015 2016 2017
----- End of picture text -----

Statutory�Net�Profit/(Loss)�After�Tax

==> picture [250 x 150] intentionally omitted <==

----- Start of picture text -----

$M
300
200
100
0
�100
�200
�300
�400
�500
2013 2014 2015 2016 2017
----- End of picture text -----

Underlying�Net�Profit/(Loss)�After�Tax[1]

==> picture [249 x 150] intentionally omitted <==

----- Start of picture text -----

$M
200
150
100
50
0
�50
2013 2014 2015 2016 2017
----- End of picture text -----

Gold�Production

==> picture [247 x 159] intentionally omitted <==

----- Start of picture text -----

koz
450
400
350
300
250
200
150
100
50
0
2013 2014 2015 2016 2017
Gwalia KOTH Southern�Cross Simberi Gold�Ridge
----- End of picture text -----

Total�Recordable�Injury�Frequency�Rate[2] measured�on�a�12�month�rolling�basis

==> picture [239 x 131] intentionally omitted <==

----- Start of picture text -----

7
6
5
4
3
2
1
0
2013 2014 2015 2016 2017
----- End of picture text -----

  1. Underlying�net�profit�after�tax�is�statutory�net�profit�after�tax�excluding�significant�items.��EBITDA�is�earnings�before�interest�revenue,�finance�costs,� depreciation�and�amortisation�and�income�tax�expense,�and�includes�revenues�and�expenses�associated�with�discontinued�operations.��These�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.�����

  2. Total�recordable�injury�frequency�rate�for�each�million�hours�worked�on�a�12�month�rolling�basis.�

Page�22�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

7. Remuneration�Disclosure�and�Executive�Remuneration�Outcomes��

7.1 STI�

The�STI�was�assessed�for�the�financial�year�ended�30�June�2017.���

Highlights�of�the�Group’s�achievements�in�2017�include:�

Records Recordsafetyperformanceof1.2TRIFR1,wellbelowthecomparableindustryrateof2.52
Recordannualproductionfromcontinuingoperationsof381,101oz(2016:377,452oz)
RecordannualproductionfromtheSimberimineof116,044oz(2016:110,286oz)
RecordlowAISC3ofA$907perounce(2016:A$933perounce)4
SafetyandPeople Inadditiontorecordsafetyperformancenotedabove:
WGEAEmployerofChoiceforGenderEqualityforthe3rdyearrunning
WinneroftheCompanyDiversityProgramintheVictorianWomeninResourcesAwards
WinnersCMEWAUndergroundMineEmergencyResponseTeamCompetition
WinnerofDiggeroftheyearaward
LeonoraOperationsemployeeturnoverof5.5%(comparedtoWesternAustralianaverageof15.3%5)
Operations Outperformedoriginal(andsubsequentlyamended)FY17marketguidanceforallpublishedmetrics:
Production
achieved381koz,initialguidance340�370koz
All�InSustainingCost
achievedA$907/oz,initialguidanceA$985/oz–A$1,075/oz
Capitalexpenditure
achievedA$43million,initialguidanceA$45�53million(sustainingandgrowthcapex)
Financial Increaseunderlyingnetprofitaftertaxandcashflowfromoperations
EarlyrepaymentoftheremainingA$225millionofUSs144ASeniorSecuredNotessimultaneouslywith
cashatbankincreasedto$161million(2016:$137million)
$0.06persharefullyfrankeddividedinrespectoffullfinancialyearannounced(firstdividendsince1995)
Strategy $100millionGwaliaExpansionProjectapprovedinMarch2017.Theprojectconsistsoftwomaincomponents,
aventilationupgradeandpasteaggregatefillandwilltaketwoandahalftothreeyearstocomplete.This
projectextendsminingatGwaliatoatleast2,000mbsinFY2024
Simberistrategicreviewconcluded,productionandcashflowincreasedyearonyear,togetherwithanoption
andfarm�inagreementestablishedwithNewcrestMiningLimited6forcopper�goldporphyryexploration
StrategicinvestmentsinhighlyprospectiveexplorersCatalystMetalsLtd(ASX:CYL)andPeelMiningLtd
(ASX:PEX)
OreReservesand 599kozofcontainedgoldaddedtoOreReservesatGwalia7
MineralResources 1,467kozofcontainedgoldaddedtoMineralResourcesatGwalia6

The�two�Executives�were�awarded�an�average�90%�of�available�STIs�in�2017,�as�a�result�of�the�Group’s�operational�and�financial�performance,� and�an�assessment�against�their�respective�Group�and�individual�STI�objectives.�Refer�to� Section�7.4 �of�this�report�for�details.�

7.2 LTI�

The�three�year�performance�period�for�the�FY15�Performance�Rights�ended�on�30�June�2017.���

The�last�three�years�have�been�transformational�period�for�the�Group,�with�outstanding�performance�in�share�price�growth,�return�on�capital� employed�and�total�shareholder�returns�of�2,308%.��Market�capitalisation�increased�from�$56�million�to�$1.4�billion�over�the�three�year�period� and�the�closing�share�price�increased�from�$0.115�at�30�June�2014�to�$2.91�at�30�June�2017.����

Consistent�with�the�outstanding�performance�of�the�Group�over�the�last�three�years,�and�an�assessment�against�the�performance�measures,� 100%�of�the�rights�held�by�Executives�under�the�FY15�LTI�that�matured�on�30�June�2017�were�assessed�to�have�vested.�Refer�to� Section�7.5 �of� this�report�for�details.�

1�� Total�Recordable�Injury�Frequency�Rate�calculated�on�a�rolling�12�month�average�

2�� Gold�mining�industry�TRIFR�data�per�the�Department�of�Mines�and�Petroleum�report�titled�‘Safety�Performance�in�the�Western�Australian�Mineral�Industry’� for�2014�2015�FY,�available�at:�www.dmp.wa.gov.au/Documents/Safety/MSH_Stats_Posters_SafetyPerfWA_1415.pdf���

3�� All�In�Sustaining�Cost�is�a�Non�IFRS�financial�measure,�refer�to�page�3�

4�� AISC�for�continuing�operations�

5�� Mackie�Resources�Industry�Turnover�Analysis�www.mesolutions.com.au�

6����Option�and�Farm�in�Agreement�between�the�St�Barbara�group�(through�its�wholly�owned�PNG�subsidiary�Nord�Australex�Nominees�(PNG)�Ltd)�and�Newcrest� PNG�Exploration�Limited�(a�wholly�owned�subsidiary�of�Newcrest�Mining�Limited).�

7�� Refer�Ore�Reserves�and�Mineral�Resources�Statements�as�at�30�June�2017�released�23�August�2017�

Page�23�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

Selected�highlights�of�the�Group’s�performance�during�the�3�year�performance�period�from�1�July�2014�to�30�June�2017�are�set�out�below:

30June20141 30June2017 Change Change(%)
Shareprice(10dayVWAP) $ $0.12 $2.89 +$2.77 +2,308%increase
Netprofit/(loss)aftertax(underlying) $M $(34)M $160M +$194M turnaround
Debt $M $374M �$374M 100%reduction
Dividendforfinancialyear cents Nil $0.062 +$0.06 new
Safety TRIFR1 4.1 1.2 �2.9 71%improvement

Additional�highlights�of�the�Group’s�achievements�during�the�three�year�FY15�Performance�Rights�vesting�period�include:�

  • Year�on�year�record�safety�performance��

  • Sustained�increased�production�from�the�Gwalia�mine��

  • Year�on�year�record�production�from�the�Simberi�mine��

  • Gwalia�extension�project�approved,�extends�life�of�mine�to�2024�

  • Deep�drilling�intersected�the�Gwalia�mine�sequence�at�2200�metres�below�surface�

  • Simberi�strategic�review�concluded,�option�and�farm�in�agreement�established�with�Newcrest��

  • Increase�in�mineral�resources�at�Gwalia�by�2,405,000�ounces�before�depletion,�and�increase�in�ore�reserves�at�Gwalia�by�1,089,000� before�depletion.�

  • Early�repayment�of�A$374�million�debt�

  • Divestment�of�the�closed�King�of�the�Hills�mine�in�Western�Australia�

  • Divestment�of�the�suspended�Gold�Ridge�Project�in�the�Solomon�Islands�

==> picture [256 x 172] intentionally omitted <==

----- Start of picture text -----

Absolute�performance�over�
FY15�LTI�vesting�period
�$4.00 6000
5000
�$3.00
4000
�$2.00 3000
2000
�$1.00
1000
�$� 0
2014 2015 2016 2017
ASX:XGD Gold�Price SBM
(A$/oz) (10�day�VWAP)
Source:�IRESS�(5�year�weekly�data)
----- End of picture text -----

==> picture [257 x 172] intentionally omitted <==

----- Start of picture text -----

Relative�performance�over�
FY15�LTI�vesting�period
2,500% +2,308%
2,000%
1,500%
1,000%
500% XGD +86%
0% 100% A$/oz +15%
2014 2015 2016 2017
SBM ASX:XGD Gold�Price
(10�day�VWAP) (A$/oz)
Source:�IRESS�(5�year�weekly�data)
----- End of picture text -----

==> picture [517 x 172] intentionally omitted <==

----- Start of picture text -----

A$M Market�cap�over� ASX:�SBM
FY15�LTI�vesting�period
2,000
$4.00
+$1,391M $3.50 FY15�LTI�vesting�period
1,500 $3.00
$2.50
1,000 $2.00
$1.50
500 $1.00
$0.50
0 $0.00
2014 2015 2016 2017 increase Jun�2012 Jun�2013 Jun�2014 Jun�2015 Jun�2016 Jun�2017
2014�to
M'Cap 2017 SBM
Source:�IRESS�(5�year�weekly�data)
----- End of picture text -----

1�� 30�June�2014�figures�used�to�illustrate�‘starting’�balances�for�the�3�year�LTI�performance�period�from�1�July�2014�to�30�June�2017�(e.g.�from�the�corresponding� Notice�of�2014�Annual�General�Meeting,�total�shareholder�return�for�the�period�is�calculated�from�‘the�10�day�VWAP�calculation�up�to,�and�including,�the�last� business�day�of�the�financial�period�immediately�preceding�the�period�that�the�performance�rights�relate�to’.�

2�� Dividend�announced�7�August�2017�in�respect�of�the�full�2017�financial�year.�

Page�24�

(1)Leaveincludeslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpensesincludingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
208,384


19,616



228,000
n/a
KJGleeson
116,895


11,105



128,000
n/a
DEJMoroney
116,895


11,105



128,000
n/a
TotalNon�ExecutiveDirectors
442,174


41,826



484,000
n/a
ExecutiveDirector
RSVassie
746,234
689,265
56,548
19,616
68,083
495,822

2,075,568
57%
Executives
GCampbell�Cowan
478,694
399,146
6,303
19,616
41,571
285,183

1,230,513
56%
TotalExecutives
1,224,928
1,088,411
62,851
39,232
109,654
781,005

3,306,081
57%
(1)Leaveincludeslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpensesincludingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
208,384


19,616



228,000
n/a
KJGleeson
116,895


11,105



128,000
n/a
DEJMoroney
116,895


11,105



128,000
n/a
TotalNon�ExecutiveDirectors
442,174


41,826



484,000
n/a
ExecutiveDirector
RSVassie
746,234
689,265
56,548
19,616
68,083
495,822

2,075,568
57%
Executives
GCampbell�Cowan
478,694
399,146
6,303
19,616
41,571
285,183

1,230,513
56%
TotalExecutives
1,224,928
1,088,411
62,851
39,232
109,654
781,005

3,306,081
57%
(1)Leaveincludeslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpensesincludingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
208,384


19,616



228,000
n/a
KJGleeson
116,895


11,105



128,000
n/a
DEJMoroney
116,895


11,105



128,000
n/a
TotalNon�ExecutiveDirectors
442,174


41,826



484,000
n/a
ExecutiveDirector
RSVassie
746,234
689,265
56,548
19,616
68,083
495,822

2,075,568
57%
Executives
GCampbell�Cowan
478,694
399,146
6,303
19,616
41,571
285,183

1,230,513
56%
TotalExecutives
1,224,928
1,088,411
62,851
39,232
109,654
781,005

3,306,081
57%
(1)Leaveincludeslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpensesincludingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
208,384


19,616



228,000
n/a
KJGleeson
116,895


11,105



128,000
n/a
DEJMoroney
116,895


11,105



128,000
n/a
TotalNon�ExecutiveDirectors
442,174


41,826



484,000
n/a
ExecutiveDirector
RSVassie
746,234
689,265
56,548
19,616
68,083
495,822

2,075,568
57%
Executives
GCampbell�Cowan
478,694
399,146
6,303
19,616
41,571
285,183

1,230,513
56%
TotalExecutives
1,224,928
1,088,411
62,851
39,232
109,654
781,005

3,306,081
57%
(1)Leaveincludeslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpensesincludingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
208,384


19,616



228,000
n/a
KJGleeson
116,895


11,105



128,000
n/a
DEJMoroney
116,895


11,105



128,000
n/a
TotalNon�ExecutiveDirectors
442,174


41,826



484,000
n/a
ExecutiveDirector
RSVassie
746,234
689,265
56,548
19,616
68,083
495,822

2,075,568
57%
Executives
GCampbell�Cowan
478,694
399,146
6,303
19,616
41,571
285,183

1,230,513
56%
TotalExecutives
1,224,928
1,088,411
62,851
39,232
109,654
781,005

3,306,081
57%
Proportionof
total
performance
related(4)
n/a
n/a
n/a
n/a 57%
56%
57%
Total
$
228,000
128,000
128,000
484,000 2,075,568
1,230,513
3,306,081
Long�termbenefits Termination
payments
$



Share�based
payments(2)
$


495,822
285,183
781,005
Leave(1)
$


68,083
41,571
109,654
Post�
employment
benefits
Super�
annuation
$
19,616
11,105
11,105
41,826 19,616
19,616
39,232
Short�termbenefits Non�
monetary
benefits(3)
$


56,548
6,303
62,851
STI
payment
$


689,265
399,146
1,088,411
Cash
salary&fees
$
208,384
116,895
116,895
442,174 746,234
478,694
1,224,928
2017 Name Non�ExecutiveDirectors
TCNetscher(Chairman)
KJGleeson
DEJMoroney
TotalNon�ExecutiveDirectors ExecutiveDirector
RSVassie
Executives
GCampbell�Cowan
TotalExecutives
(1)Theamountrepresentslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpenses.Includingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
204,392


19,308



223,700
n/a
KJGleeson
110,548


10,502



121,050
n/a
DEJMoroney
110,548


10,502



121,050
n/a
TotalNon�ExecutiveDirectors
425,488


40,312



465,800
n/a
ExecutiveDirector
RSVassie
731,217
750,525
54,771
19,308
63,298
294,240

1,913,359
55%
Executives
GCampbell�Cowan
478,687
382,772
6,288
19,308
39,713
217,648

1,144,416
52%
TotalExecutives
1,209,904
1,133,297
61,059
38,616
103,011
511,888

3,057,775
54%
(1)Theamountrepresentslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpenses.Includingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
204,392


19,308



223,700
n/a
KJGleeson
110,548


10,502



121,050
n/a
DEJMoroney
110,548


10,502



121,050
n/a
TotalNon�ExecutiveDirectors
425,488


40,312



465,800
n/a
ExecutiveDirector
RSVassie
731,217
750,525
54,771
19,308
63,298
294,240

1,913,359
55%
Executives
GCampbell�Cowan
478,687
382,772
6,288
19,308
39,713
217,648

1,144,416
52%
TotalExecutives
1,209,904
1,133,297
61,059
38,616
103,011
511,888

3,057,775
54%
(1)Theamountrepresentslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpenses.Includingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
204,392


19,308



223,700
n/a
KJGleeson
110,548


10,502



121,050
n/a
DEJMoroney
110,548


10,502



121,050
n/a
TotalNon�ExecutiveDirectors
425,488


40,312



465,800
n/a
ExecutiveDirector
RSVassie
731,217
750,525
54,771
19,308
63,298
294,240

1,913,359
55%
Executives
GCampbell�Cowan
478,687
382,772
6,288
19,308
39,713
217,648

1,144,416
52%
TotalExecutives
1,209,904
1,133,297
61,059
38,616
103,011
511,888

3,057,775
54%
(1)Theamountrepresentslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpenses.Includingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
204,392


19,308



223,700
n/a
KJGleeson
110,548


10,502



121,050
n/a
DEJMoroney
110,548


10,502



121,050
n/a
TotalNon�ExecutiveDirectors
425,488


40,312



465,800
n/a
ExecutiveDirector
RSVassie
731,217
750,525
54,771
19,308
63,298
294,240

1,913,359
55%
Executives
GCampbell�Cowan
478,687
382,772
6,288
19,308
39,713
217,648

1,144,416
52%
TotalExecutives
1,209,904
1,133,297
61,059
38,616
103,011
511,888

3,057,775
54%
(1)Theamountrepresentslongserviceleaveandannualleaveentitlements.
(2)ThevalueofperformancerightsdisclosedasremunerationistheportionofthefairvalueoftheperformancerightsrecognisedinthereportingperiodinaccordancewiththeCorporationsAct2001andrelevant
AustralianAccountingStandards.Thisvaluemaynotalwaysreflectwhatanexecutivehasreceivedinthereportingperiod.
(3)Non�monetarybenefitsforExecutivescomprisecarparking,professionalmembershipsand,forMrVassie,livingawayfromhometravelexpenses.Includingassociatedfringebenefitstax.
(4)Calculatedas‘STIpayment’plus‘Share�basedpayments’dividedby‘Total’remuneration.
Name
Cash
salary&fees
STI
payment
Non�
monetary
benefits(3)
Super�
annuation
Leave(1)
Share�based
payments(2)
Termination
payments
Total
Proportionof
total
performance
$ $ $ $ $ $ $ $ related(4)
Non�ExecutiveDirectors
TCNetscher(Chairman)
204,392


19,308



223,700
n/a
KJGleeson
110,548


10,502



121,050
n/a
DEJMoroney
110,548


10,502



121,050
n/a
TotalNon�ExecutiveDirectors
425,488


40,312



465,800
n/a
ExecutiveDirector
RSVassie
731,217
750,525
54,771
19,308
63,298
294,240

1,913,359
55%
Executives
GCampbell�Cowan
478,687
382,772
6,288
19,308
39,713
217,648

1,144,416
52%
TotalExecutives
1,209,904
1,133,297
61,059
38,616
103,011
511,888

3,057,775
54%
Proportionof
total
performance
related(4)
n/a
n/a
n/a
n/a 55%
52%
54%
Total
$
223,700
121,050
121,050
465,800 1,913,359
1,144,416
3,057,775
Long�termbenefits Termination
payments
$



Share�based
payments(2)
$


294,240
217,648
511,888
Leave(1)
$


63,298
39,713
103,011
Post�
employment
benefits
Super�
annuation
$
19,308
10,502
10,502
40,312 19,308
19,308
38,616
Short�termbenefits Non�
monetary
benefits(3)
$


54,771
6,288
61,059
STI
payment
$


750,525
382,772
1,133,297
Cash
salary&fees
$
204,392
110,548
110,548
425,488 731,217
478,687
1,209,904
2016 Name Non�ExecutiveDirectors
TCNetscher(Chairman)
KJGleeson
DEJMoroney
TotalNon�ExecutiveDirectors ExecutiveDirector
RSVassie
Executives
GCampbell�Cowan
TotalExecutives

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

7.4 Performance�Linked�Remuneration���STI�

The�table�below�describes�the�STIs�available�to,�and�achieved�by,�Executives�during�the�year.�Amounts�shown�as�“Actual�STI”�represent�the� amounts�accrued�in�relation�to�the�2017�financial�year,�based�on�achievement�of�the�specified�performance�criteria.��No�additional�amounts�vest� in�future�years�in�respect�of�the�STI�plan�for�the�2017�financial�year.��The�Board�has�discretion�whether�to�pay�the�STI�in�any�given�year,�irrespective� of�whether�Company�and�individual�STI�targets�have�been�achieved.��The�Board�also�has�discretion�to�pay�the�STI�in�cash�or�shares.��The�Board� did�not�apply�discretion�to�the�calculation�of�the�2017�STI.��The�Board�last�applied�discretion�to�the�STI�calculation�in�2014,�when�it�applied�its� discretion�not�to�award�an�STI�to�Executives�due�to�financial�underperformance,�even�though�one�of�the�targets�had�been�achieved�at�maximum.��

2017 MaximumpotentialSTI MaximumpotentialSTI ActualSTIincludedin %ofmaximum %ofmaximum
remuneration potentialtotalSTI potentialtotalSTI
earned(2) foregone
Target
$
Stretch(1)
$
$ % %
RSVassie
GCampbell�Cowan
382,925
224,240
765,850
448,480
689,265
399,146
90%
89%
10%
11%

(1)�Inclusive�of�STI�“Target”.�

(2)�The�total�STI�%�comprises�70%�Group�STI�measures�plus�30%�Individual�STI�measures.�

The�Group’s�STI�measures�for�the�2017�financial�year�were�equally�weighted�and�comprised�the�following:�

STIMeasure
Target
Weighting
Result
%of
max.
achieved
(a) TotalRecordable
InjuryFrequency
Rate
2.2andno
fatalities
33�%
TRIFRof1.2achievedwith
nofatalities,
betweentarget(2.2)and
maximum(1.0)
92%
(b) Goldproduction
367,000
ounces
33�%
381,101ouncesproduced,
betweentarget(367,000
oz)andmaximum
(390,000oz)
81%
(c) AllInSustaining
Costs
A$1,001/oz
33�%
AISCA$907/ozachieved,
outperformedmaximum
(A$947/oz)
100%
(d) Boarddiscretion
(1)
n/a

Discretionnotapplied

OverallGroupSTIPerformance
91%
Threshold
Target
Maximum

(1)� Discretionary�factor�determined�by�the�Board,�designed�to�take�into�account�unexpected�events�and�achievements�during�the�year.�

Individual�STI�performance�measures�were�aligned�with�the�Group�strategy�and�varied�according�to�the�individual�Executive’s�responsibilities,� and�for�the�2017�financial�year�are�set�out�below.��STI�performance�for�Executives�is�assessed�by�the�Board�against�objective�and�subjective� measures.��Some�of�the�detailed�measures�and�outcomes�are�commercially�sensitive�and�are�described�in�general�terms�only.�

Executive IndividualSTIperformancemeasures IndividualSTIperformancemeasures SummaryofperformanceassessedbyBoard SummaryofperformanceassessedbyBoard %of
maximum
achieved
MD&CEO Leadershipindesignandexecutionof
strategyandkeystrategicprojects
SuccessfulexecutionagainstBoardapprovedstrategic
plan,including:
88%
Leadershipoforganicandinorganicgrowth Gwaliaextensionprojectapproved
opportunities SuccessfulSimberistrategicreviewprocessand
outcome
Additionstoresourcesandreserves
Organicandinorganicgrowthoptions,including
optionandfarminagreementwithNewcrest
CFO Effectivecapitalmanagementanddebt
reduction
JudiciousearlyrepaymentofA$225millionin
principalofUSSeniorSecuredNotes,reducing
85%
Leadbusinessdevelopmentstrategyand interestexpenseforyearbyA$13million
execution Creationofanappropriatelyresourcedandfocussed
Leadfinancial,procurementandproject businessdevelopmentfunction
governanceofGwaliaextensionproject SuccessfulSimberistrategicreviewprocessanda
numberofbusinessdevelopmentoutcomes
SuccessfulgovernanceofGwaliaextensionproject
andrealisationofprocurementbenefits

Page�27�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

7.5 Performance�Linked�Remuneration���LTI�

There�are�three�LTI�tranches�relevant�to�the�2017�financial�year,�which�are�summarised�below:��

Grantyear/ Description Performance Performance Performance Status
tranchename Conditions&Weighting Period
FY15PerformanceRights GrantedasLTIremunerationin RTSR 67% 1July2014 Performanceperiod
2015anddisclosedinthe ROCE 33% to30June2017 completedandresults
2015RemunerationReport reportedbelow
FY16PerformanceRights GrantedasLTIremunerationin RTSR 67% 1July2015 Tobeassessedand
2016anddisclosedinthe ROCE 33% to30June2018 reportedinthe
2016RemunerationReport 2018RemunerationReport
FY17PerformanceRights GrantedasLTIremunerationin RTSR 67% 1July2016 Tobeassessedand
2017anddisclosedinthe ROCE 33% to30June2019 reportedinthe
2017RemunerationReport 2019RemunerationReport

The�three�LTI�tranches�can�be�illustrated�on�a�timeline�as�below:�

ThethreeLTItranchescanbeillustratedonatimelineasbelow: ThethreeLTItranchescanbeillustratedonatimelineasbelow: ThethreeLTItranchescanbeillustratedonatimelineasbelow: ThethreeLTItranchescanbeillustratedonatimelineasbelow:
Financialyear
FY15
FY16
FY17
FY18
FY19
FY15PerformanceRights
IssuedinFY15
3yrvestingperiod
TestedJune2017
FY16PerformanceRights
IssuedinFY16
3yrvestingperiod
TobetestedJune2018
FY17PerformanceRights
IssuedinFY17
3yrvestingperiod
TobetestedJune2019
FY16 FY17
FY18
FY19
IssuedinFY15 3yrvestingperiod _TestedJune2017 _
IssuedinFY16 3yrvestingperiod
TobetestedJune2018
IssuedinFY17
3yrvestingperiod
TobetestedJune2019

7.6 Rights�Vested�and�On�Issue�

The�number�of�rights�over�ordinary�shares�in�the�Company�held�directly,�indirectly�or�beneficially�during�the�financial�year�by�each�Executive,� including�their�related�parties,�and�the�number�of�rights�that�vested,�are�set�out�below:�

2017 Grantyear
/tranche
name
Grant Priceon
issuedate
Heldat
1July2016
Grantedas Vested
duringthe
year(3)
Forfeited
duringthe
year
Heldat Financial
yearin
which
grantmay
vest
Date compensation 30June
2017(1)
RSVassie FY15
FY16
FY17
9Dec14
10Dec15
12Dec16
$0.12
$0.51
$2.92
4,062,500
1,104,674


196,708(2)
4,062,500




1,104,674
196,708
2017
2018
2019
GCampbell�Cowan FY15
FY16
5Dec14
10Dec15
$0.12
$0.51
2,438,525
575,291

575,291
2,438,525


575,291
2017
2018
2019
FY17 21Oct16 $2.92 102,392 102,392

(1)�The�vesting�of�rights�held�at�30�June�2017�is�subject�to�future�performance�conditions.�

(2)�Approved�by�shareholders�at�the�Annual�General�Meeting�held�on�the�30�November�2016.�

(3)�These�rights�were�determined�by�the�Board�on�23�August�2017�to�have�vested�as�at�30�June�2017�and�are�pending�issue�as�shares�as�at�the�date�of�this�report.�

7.7 Rights�granted�in�2017�

Details�on�rights�over�ordinary�shares�in�the�Company�that�were�granted�as�remuneration�to�each�Executive�in�the�2017�financial�year�are�as� follows:�

2017 Grantyear/
tranche
identifier
Grantdate Numberof
performance
rightsgranted
during2017
Issuepriceper
performance
right
Expirydate Fairvalueper
performance
rightatgrant
date
($pershare)(1)
RSVassie FY17 12Dec2016 196,708(2) $2.92 30Jun2019 $2.64
$2.64
GCampbell�Cowan FY17 21Oct2016 102,392 $2.92 30Jun2019

(1)�For�accounting�purposes,�the�estimated�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.��Fair�values�at�grant�date�are�based�on�the� prevailing�market�price�on�the�date�the�performance�right�is�granted.��The�assessed�fair�value�at�the�grant�date�of�performance�rights�is�allocated�equally�over�the� period�from�grant�date�to�vesting�date.��This�methodology�complied�with�the�requirements�of�Australian�Accounting�standard�AASB�2� Share�based�Payments.

(2)�Approved�by�shareholders�at�the�Annual�General�Meeting�held�on�the�30�November�2016.�

Page�28�

ST�BARBARA�LIMITED�2017�

Remuneration�Report�(audited)�

Directors’�Report�

7.8 Calculation�of�the�number�of�FY15�Performance�Rights�vested�in�2017�

6,501,025�(100%)�of�the�6,501,025�FY15�Performance�Rights�available�to�Executives�vested�at�30�June�2017.��No�FY15�Performance�Rights�lapsed� at�30�June�2017.��The�Performance�Rights�vested�represent�1.3%�of�total�shares�on�issue�at�30�June�2017,�and�1.3%�of�the�increase�in�market� capitalisation�over�the�corresponding�three�year�measurement�period.��The�FY15�rights�were�issued�in�December�2014�at�a�10�day�VWAP�price� calculated�under�the�Rights�Plan�Rules�and�Notice�of�2014�Annual�General�Meeting�of�$0.12�each,�representing�an�at�risk�value�of�$780,123�for� the�aggregate�FY15�Executive�remuneration.��

TheFY15PerformanceRightswereassessedasfollows: TheFY15PerformanceRightswereassessedasfollows: TheFY15PerformanceRightswereassessedasfollows: TheFY15PerformanceRightswereassessedasfollows:
(a) RTSR
Weighting: 67%
Actualscore: highestrecordedTSRofcomparator
groupof2,308%(100thpercentile)
(detailsbelow)
Calculation: 100%(forachievingabovethe75th
percentile)
(b) ROCE
Weighting: 33%
ActualROCE: 45.2%(detailsbelow)
Calculation: 100%(forachievingaboveupper
thresholdofWACC7.6%+7%=14.6%
(c) Combinedscore
(100%x67%)
+ (100%x33%)
= 100%
Proportionofrightstovest
Min Max
(50%) (100%)

RTSR�Calculation�for�FY15�Performance�Rights�

The�result�of�the�RTSR�component�of�the�FY15�Performance�Rights�for�the�period�1�July�2014�to�30�June�2017�was:�

RelativeTSRPerformance PercentageofPerformanceRightstovest Result
Below50thpercentile 0% StBarbaraachievedaTSRof2,308%forthe
period,andrankedatthe100thpercentileof
50thpercentile 50% thecomparatorgroupofcompaniesforthe
Between50th&75thpercentiles Pro�ratafrom50%to100% period,abovethe75thpercentileupper
threshold.
75thpercentileandabove 100% Asaresult,100%ofthePerformanceRights
linkedtoRTSRvested.

TSR�over�LTI�vesting�period

==> picture [239 x 147] intentionally omitted <==

----- Start of picture text -----

2,500%
75th�percentile
2,000%
1,500%
1,000%
500%
0%
�500%
Co.�A Co.�B Co.�C Co.�D Co.�E Co.�F Co.�G Co.�H Co.�I Co.�J Co.�K Co.�L Co.�M Co.�N Co.�O Co.�P Co.�Q Co.�R Co.�S St�Barbara
----- End of picture text -----

Chart�of�TSR�results�for�comparator�companies�(table�next�page)��

ROCE�over�LTI�vesting�period

==> picture [238 x 139] intentionally omitted <==

----- Start of picture text -----

60%
51%
55%
50%
45%
40%
29%
30%
20%
15%
10%
0%
FY15 FY16 FY17
ROCE�(1�yr) ROCE�(3�yr) 100%�threshold
----- End of picture text -----

Chart�of�ROCE�(calculated�on�the�next�page)�

Page�29�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

The�comparator�group�of�companies�for�FY15�Performance�Rights�comprised:�

Alacer�Gold�Corp.�(ASX:�AQG)� Kingsrose�Mining�Limited�(ASX:�KRM)[1] Beadell�Resources�Limited�(ASX:�BDR)� Medusa�Mining�Limited�(ASX:�MML)� Evolution�Mining�Limited�(ASX:�EVN)� Northern�Star�Resources�Ltd�(ASX:�NST)� Focus�Minerals�Ltd�(ASX:�FML)� OceanaGold�Corporation�(ASX:�OGC)� Gryphon�Minerals�Limited�(ASX:�GRY)[2] Perseus�Mining�Limited�(ASX:�PRU)� Intrepid�Mines�Limited�(ASX:�IAU)� Ramelius�Resources�Limited�(ASX:�RMS)� Kingsgate�Consolidated�Limited�(ASX:�KCN)� Regis�Resources�Limited�(ASX:�RRL)�

Resolute�Mining�Limited�(ASX:�RSG)� Saracen�Mineral�Holdings�Limited�(ASX:�SAR)� Silver�Lake�Resources�Limited�(ASX:�SLR)� Tanami�Gold�NL�(ASX:�TAM)� Troy�Resources�Limited�(ASX:�TRY)�

ROCE�Calculation�for�FY15�Performance�Rights�

The�result�of�the�ROCE�component�over�the�three�year�vesting�period�commencing�1�July�2014�and�ending�on�30�June�2017�was:

ROCE PercentageofPerformanceRights Result
tovest
LessthanorequaltotheaverageannualWACC StBarbaraachievedaROCEfortheperiodof
overthethreeyearperiodcommencingon1July 45.2%(seecalculationbelow),whichisabove
2014 0% theupperthresholdofWACCfortheperiod
WACC(calculatedasabove)+3% 50% of7.6%+7%=14.6%.
WACC(calculatedasabove)+between3%and7% Pro�ratafrom50%to100% Asaresult,100%ofthePerformanceRights
WACC(calculatedasabove)+7% 100% linkedtoROCEvested

ROCE�is�calculated�as�EBIT�before�significant�items�expressed�as�a�percentage�of�average�total�capital�employed�(net�debt�and�total�equity)[3] .�

Measure 2015 20164 2017
EBIT(excludingsignificantitems)
EBIT(discontinuedoperations)5
EBIT(sumofabove)
99,010
18,528
117,538
204,585
_____�
204,585
234,992
_____�
234,992
Capitalemployed–openingbalance
Totalequity
Netdebt6
Capitalemployed–openingbalance
131,812
260,169
391,981
140,429
270,090
410,519
300,614
89,629
390,243
Capitalemployed–closingbalance
Totalequity
Netdebt6
Capitalemployed–closingbalance
140,429
270,090
410,519
300,614
89,629
390,243
461,127

461,127
Capitalemployed–averageforperiod 401,250 400,381 425,685
ROCE(EBIT÷averagetotalcapitalemployed)foryear 29.3% 51.1% 55.2%
ROCEaverageofthe3yearsinthevestingperiod n/a 25.6% 45.2%
WACCaverageofthe3yearsinthevestingperiod n/a 13.9% 7.6%

WACC�is�calculated�using�the�widely�available�formula�of�(relative�weight�of�equity�x�required�rate�of�return)�+�(relative�weight�of�debt�x�cost�of� debt)[7] .��In�this�instance,�WACC�is�calculated�on�a�pre�tax�basis�to�match�the�pre�tax�nature�of�EBIT.��The�full�calculation�of�WACC�is�not�disclosed� as�it�is�considered�to�be�commercial�in�confidence,�however,�the�primary�variables�include:�

  • reported�balance�sheet�figures�for�debt�and�equity.�

  • government�10�year�bond�rate�as�proxy�for�risk�free�premium.�

  • ASX�All�Ordinaries�Index�as�proxy�for�market�portfolio�and�to�determine�relative�volatility.�

On�this�basis,�average�WACC�of�the�3�years�commencing�1�July�2014�and�ending�on�30�June�2017�is�7.6%�(2016:�13.9%).��The�reason�for�the� reduction�in�WACC�is�primarily�due�to�the�lower�proportion�of�debt�in�FY17,�and�lower�market�returns�over�the�3�year�period.�

  • 1�� Kingsrose�Mining�Limited�went�into�trading�halt�on�12�December�2016,�was�suspended�from�trading�on�13�December�2016,�and�appointed�a�voluntary� administrator�on�28�December�2016.��The�RTSR�assessment�incorporates�a�pro�rata�calculation�of�Kingsrose�TSR�to�the�last�day�of�trade,�9�December�2016.�

2�� Gryphon�Minerals�Limited�was�acquired�by�Teranga�Gold�Corporation�(TSX:�TGZ,�ASX:�TGZ)�under�a�scheme�of�arrangement�and�was�suspended�from�quotation� at�close�of�trade�on�29�September�2016�and�subsequently�delisted�from�the�ASX�on�13�October�2016.��The�RTSR�assessment�incorporates�a�pro�rata�calculation� comprising�Gryphon�TSR�to�the�last�day�of�trade,�29�September�2016,�and�the�arithmetic�average�of�the�remaining�comparator�companies�(excluding�Kingsrose)� for�the�remainder�of�the�vesting�period.�

  • 3�� ROCE�is�not�an�IFRS�measure�and�is�calculated�in�the�table�above.��

  • 4�� 2016�calculation�as�reported�in�2016�Remuneration�Report.���

  • 5�� EBIT�for�discontinued�operations�calculated�as�profit�or�loss�on�discontinued�operations�before�tax�excluding�impairments.�

  • 6�� Net�debt�comprises�cash�and�cash�equivalents,�interest�bearing�borrowings�–�current�and�interest�bearing�borrowings�–�non�current.��The�minimum�net�debt� figure�applied�to�the�calculation�is�nil�(i.e.�where�the�Company�is�in�a�net�cash�position).�

  • 7�� WACC�is�not�an�IFRS�measure.��The�above�parameters�can�be�used�to�calculate�WACC�using�commonly�available�formula.�

Page�30�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

7.9 Details�of�FY16�Performance�Rights�granted�during�2016�

FY16�Performance�Rights�were�granted�under�the�St�Barbara�Limited� Rights�Plan�(2015),�and�details�of�the�performance�conditions�were� set�out�in�the�Notice�of�2015�Annual�General�Meeting�and�2016� Remuneration�Report.��Performance�rights�issued�to�Mr�Vassie,� Managing�Director�and�CEO,�were�also�approved�by�shareholders�at� the�2015�Annual�General�Meeting.���

Key�Features�of�FY16�Performance�Rights��

Performance RelativeTotalShareholderReturns RelativeTotalShareholderReturns RelativeTotalShareholderReturns (67%
conditions weighting);
Returnoncapitalemployedin excessofthe
weighted
average
cost
of capital (33%
weighting).
Other Includecontinuingemployment
conditions
Issueprice 10dayVWAPatstart,30June2015,$0.5092
Measurement 1July2015to30June2018
period
Vestingdate 30June2018

The�proportion�of�the�FY16�Performance�Rights�that�vest�will�be� influenced�by�the�Company’s�TSR�relative�to�the�comparator�group� over�the�three�year�vesting�period�commencing�1�July�2015�and� ending�30�June�2018�as�outlined�below:�

RelativeTSRPerformance %Contributiontothe
Numberof
PerformanceRightstoVest
Below50thpercentile 0%
50thpercentile 50%
Between50th&75thpercentiles Pro�ratafrom50%to100%
75thpercentileandabove 100%

(ii) ROCE�

The�proportion�of�FY16�Performance�Rights�that�vest�will�be� influenced�by�the�ROCE�achieved�by�the�Company�over�the�three� year�vesting�period�commencing�1�July�2015�and�ending�30�June� 2018.�

(i) RTSR��

RTSR�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.�At�the�discretion�of�the�Board,�the� composition�of�the�comparator�group�may�change�from�time�to� time.��

The�comparator�group�of�companies�for�FY16�Performance�Rights� comprises:��

AlacerGoldCorp OceanaGoldCorporation
(ASX:AQG) (ASX:OGC)
BeadellResourcesLimited PerseusMiningLimited
(ASX:BDR) (ASX:PRU)
EvolutionMiningLimited RameliusResourcesLimited
(ASX:EVN) (ASX:RMS)
FocusMineralsLtd RegisResourcesLimited
(ASX:FML) (ASX:RRL)
GryphonMineralsLimited ResoluteMiningLimited
(ASX:GRY) (ASX:RSG)
IntrepidMinesLimited SaracenMineralHoldings
(ASX:IAU) Limited(ASX:SAR)
KingsgateConsolidated SilverLakeResourcesLimited
Limited(ASX:KCN) (ASX:SLR)
KingsroseMiningLimited TanamiGoldNL
(ASX:KRM) (ASX:TAM)
MedusaMiningLimited TroyResourcesLimited
(ASX:MNL) (ASX:TRY)
NorthernStarResourcesLtd OzMineralsLimited
(ASX:NST) (ASX:OZL)
ReturnonCapitalEmployed %Contributiontothe
(ROCE) Numberof
PerformanceRightsto
Vest
Lessthanorequaltotheaverage 0%
annualweightedaveragecostof
capital(WACC)overthethreeyear
periodcommencingon1July2015
WACC(calculatedasabove)+3% 50%
WACC(calculatedasabove)+ Pro�ratafrom50%to
between3%and7% 100%
WACC(calculatedasabove)+7% 100%

The�outcome�of�FY16�Performance�Rights�will�be�reported�in�the� 2018�Remuneration�Report.�

Page�31�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

7.10 Details�of�FY17�Performance�Rights�granted�during�2017�

FY17�Performance�Rights�were�granted�under�the�St�Barbara�Limited� Rights�Plan�(2015),�and�details�of�the�performance�conditions�were� set�out�in�the�Notice�of�2016�Annual�General�Meeting.��Performance� rights�issued�to�Mr�Vassie,�Managing�Director�and�CEO,�were�also� approved�by�shareholders�at�the�2016�Annual�General�Meeting.�����

Key�Features�of�FY17�Performance�Rights��

Performance RelativeTotalShareholderReturns RelativeTotalShareholderReturns RelativeTotalShareholderReturns (67%
conditions weighting);
Returnoncapitalemployedin excessofthe
weighted
average
cost
of capital (33%
weighting).
Other Includecontinuingemployment
conditions
Issueprice 10dayVWAPatstart,30June2016,$2.92
Measurement 1July2016to30June2019
period
Vestingdate 30June2019

(i) RTSR�

RTSR�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.��At�the�discretion�of�the�Board,�the� composition�of�the�comparator�group�may�change�from�time�to� time.�

The�comparator�group�of�companies�for�FY17�Performance�Rights� comprises:��

AlacerGoldCorp OceanaGoldCorporation
(ASX:AQG) (ASX:OGC)
BeadellResourcesLimited PerseusMiningLimited
(ASX:BDR) (ASX:PRU)
EvolutionMiningLimited RameliusResourcesLimited
(ASX:EVN) (ASX:RMS)
FocusMineralsLtd RegisResourcesLimited
(ASX:FML) (ASX:RRL)
GryphonMineralsLimited ResoluteMiningLimited
(ASX:GRY) (ASX:RSG)
IntrepidMinesLimited SaracenMineralHoldings
(ASX:IAU) Limited(ASX:SAR)
KingsgateConsolidated SilverLakeResourcesLimited
Limited(ASX:KCN) (ASX:SLR)
KingsroseMiningLimited TanamiGoldNL
(ASX:KRM) (ASX:TAM)
MedusaMiningLimited TroyResourcesLimited
(ASX:MNL) (ASX:TRY)
NorthernStarResources OzMineralsLimited
Ltd(ASX:NST) (ASX:OZL)

The�proportion�of�the�FY17�Performance�Rights�that�vest�will�be� influenced�by�the�Company’s�TSR�relative�to�the�comparator�group� over�the�three�year�vesting�period�commencing�1�July�2016�and� ending�30�June�2019�as�outlined�below:�

RelativeTSRPerformance %Contributiontothe
Numberof
PerformanceRightstoVest
Below50thpercentile 0%
50thpercentile 50%
Between50th&75thpercentiles Pro�ratafrom50%to100%
75thpercentileandabove 100%

(ii) ROCE�

The�proportion�of�FY17�Performance�Rights�that�vest�will�be� influenced�by�the�ROCE�achieved�by�the�Company�over�the�three� year�vesting�period�commencing�1�July�2016�and�ending�30�June� 2019.�

ReturnonCapitalEmployed %Contributiontothe
(ROCE) Numberof
PerformanceRightsto
Vest
Lessthanorequaltotheaverage 0%
annualweightedaveragecostof
capital(WACC)overthethreeyear
periodcommencingon1July2016
WACC(calculatedasabove)+3% 50%
WACC(calculatedasabove)+ Pro�ratafrom50%to
between3%and7% 100%
WACC(calculatedasabove)+7% 100%

The�outcome�of�FY17�Performance�Rights�will�be�reported�in�the� 2019�Remuneration�Report.

Page�32�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

8. Non�Executive�Director�Remuneration�

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�is�consistent� with�the�market�to�ensure�that�the�Group�continues�to�attract�and� retain�Non�Executive�Directors�of�a�high�calibre.���

The�level�of�fees�paid�to�Non�Executive�Directors�is�set�by�the�Board,� within�the�aggregate�pool�approved�by�shareholders�(which�is� $1,200,000�per�annum�in�aggregate,�approved�by�shareholders�at� the�Annual�General�Meeting�in�November�2012)�and�reported�to� shareholders�in�this�report�each�year.��

Separate�fees�are�paid�for�the�following�roles:�

  • Chair�of�the�Board�(this�fee�is�inclusive�of�all�Board� Committee�commitments)�

  • Member�of�the�Board�

  • Chair�of�a�Board�Committee�

  • Member�of�a�Board�Committee�

In�order�to�maintain�their�independence�and�impartiality,�the�fees� paid�to�Non�Executive�Directors�are�not�linked�to�the�performance� of�the�Group.�

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

The�Chairman’s�fee�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.�

The�estimated�aggregate�Non�Executive�Directors’�fees�for�2018�is� well�within�the�shareholder�approved�aggregate�of�$1,200,000�per� annum.�

Following�a�review�of�comparable�resource�industry�remuneration�levels�for�non�executive�directors,�the�Board�resolved�to�increase�Non� Executive�Directors�fees�for�2018�as�follows:��

July2012toFeb2014 March2014toJune2016 2017 2018
Directorfee $ 100,000 90,000 92,000 101,200
CommitteeChair $ 17,500 15,750 16,000 20,000
CommitteeMember $ 8,500 7,650 10,000 10,000
Chairman1 $ 248,000 223,200 228,000 250,800
2015 2016 2017 2018
Annualaggregatefees $ 594,945 465,800 484,000 est.533,200 2

(1) The�Chairman’s�fee�is�inclusive�of�all�Board�Committee�commitments.���

(2) Aggregate�fees�for�2018�is�estimated�on�the�number�of�Directors�and�composition�of�Board�Committees�at�the�date�of�this�report.�

The�Directors�in�office�and�the�composition�of�Board�Committees�at�the�date�of�this�report�are:�

Director Appointed Lengthof Board Audit&Risk Health,Safety, Remuneration
service2 Committee Environment& Committee
Community
Committee
TCNetscher 17Feb20141 3years Chairman Member Chair Member
RSVassie 1Jul2014 3years MD&CEO Member
DEJMoroney 16Mar2015 2years Director Chair Member Member
KJGleeson 18May2015 2years Director Member Member Chair

(1) Appointed�as�Director�17�February�2014,�appointed�as�Chairman�1�July�2015.�

(2) Whole�years�to�30�June�2017.�

Page�33�

ST�BARBARA�LIMITED�2017� Remuneration�Report�(audited)�

Directors’�Report�

9. Additional�Statutory�Information�

Key�Management�Personnel�Shareholdings�

The�numbers�of�shares�in�the�Company�held�directly,�indirectly�or�beneficially�during�the�year�by�each�Key�Management�Personnel,�including� their�related�parties,�are�set�out�below.��There�were�no�shares�granted�during�the�year�as�compensation.�

Name
Note
Balanceatthestart
oftheyear
Issuedupon
exercisedof
performance
rights
Purchased Sold Otherchanges Balanceatthe
endofthe
year
Non�ExecutiveDirectors
TCNetscher
DEJMoroney
KJGleeson
ExecutiveDirector
RSVassie
Executives
GCampbell�Cowan

100,000

1,769,053
15,000




400,117
22,000

8,333









22,000
100,000
8,333
1,769,0531
415,1172

(1) In�addition,�4,062,500�employee�rights�were�determined�by�the�Board�on�23�August�2017�to�have�vested�as�at�30�June�2017�and�are�pending�issue�as�shares� as�at�the�date�of�this�report.�

(2) In�addition,�2,438,525�employee�rights�were�determined�by�the�Board�on�23�August�2017�to�have�vested�as�at�30�June�2017�and�are�pending�issue�as�shares� as�at�the�date�of�this�report.�

Shareholding�guidelines�for�Non�Executive�Directors�and�Executives�

The�Group�encourages�Non�Executive�Directors,�Executives�and�employees�to�own�shares�(subject�to�the�Group’s�Securities�Dealing�Policy).�

The�Group�does�not�specify�target�volumes�for�such�shareholdings,�as�it�does�not�know�the�personal�preferences�and�objectives,�financial�situation� or�risk�profile�of�individuals.�The�Group�acknowledges�that�gold�mining�equities�would�normally�only�comprise�a�small�proportion�of�an�individual’s� balanced�investment�portfolio,�and�that�gold�mining�equities�are�generally�considered�to�be�volatile�and�counter�cyclical�to�economic�cycles.��The� Group�has�not�identified�any�of�its�key�peers�with�which�it�competes�for�talent�to�have�shareholding�guidelines.��

Loans�to�Directors�and�Executives�

There�were�no�loans�to�Directors�or�Executives�during�the�financial�year�2017.�

END�OF�REMUNERATION�REPORT

Page�34�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Indemnification�and�insurance�of�officers�

The�Company’s�Constitution�provides�that,�to�the�extent�permitted� by�law,�the�Company�must�indemnify�any�person�who�is,�or�has�been,� an�officer�of�the�Company�against�any�liability�incurred�by�that� person�including�any�liability�incurred�as�an�officer�of�the�Company� or�a�subsidiary�of�the�Company�and�legal�costs�incurred�by�that� person�in�defending�an�action.�

The�Constitution�further�provides�that�the�Company�may�enter�into� an�agreement�with�any�person�who�is,�or�has�been,�an�officer�of�the� Company�or�a�subsidiary�of�the�Company�to�indemnify�the�person� against�such�liabilities.�

The�Company�has�entered�into�Deeds�of�Access,�Indemnity�and� Insurance�with�current�and�former�officers.�The�Deeds�address�the� matters�set�out�in�the�Constitution.�Pursuant�to�those�deeds,�the� Company�has�paid�a�premium�in�respect�of�a�contract�insuring� current�and�former�officers�of�the�Company�and�current�and�former� officers�of�its�controlled�entities�against�liability�for�costs�and� expenses�incurred�by�them�in�defending�civil�or�criminal�proceedings� involving�them�as�such�officers,�with�some�exceptions�where�the� liability�relates�to�conduct�involving�lack�of�good�faith.�

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.��

Non�audit�services�

During�the�year�the�Company�did�employ�the�auditor�to�provide� services�in�addition�to�their�statutory�audit�duties.�Details�of�the� amounts�paid�or�payable�to�the�auditor,�PricewaterhouseCoopers,� for�non�audit�services�provided�during�the�2017�financial�year�are�set� out�in�Note�18�to�the�financial�statements.�

The�Board�of�Directors�has�considered�the�position�and,�in� accordance�with�the�advice�received�from�the�Audit�&�Risk� Committee,�is�satisfied�that�the�provision�of�non�audit�services� during�the�year�as�set�out�in�Note�18�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�&�Risk� Committee�to�ensure�they�do�not�impact�the�impartiality�and� objectivity�of�the�auditor;�and�

  • The�Audit�&�Risk�Committee�annually�informs�the�Board�of�the� detail,�nature�and�amount�of�any�non�audit�services�rendered�by� PricewaterhouseCoopers�during�the�financial�year,�giving�an� explanation�of�why�the�provision�of�these�services�is�compatible� with�auditor�independence.��If�applicable,�the�Audit�&�Risk� Committee�recommends�that�the�Board�take�appropriate�action� in�response�to�the�Audit�&�Risk�Committee’s�report�to�satisfy� itself�of�the�independence�of�PricewaterhouseCoopers.�

Auditor�independence�

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.�

A�copy�of�the�Auditor’s�Independence�Declaration�required�under� section�307C�of�the�Corporations�Act�2001�is�set�out�on�page�37�and� forms�part�of�this�Directors’�Report.���

Events�occurring�after�the�end�of�the�financial�year�

Subsequent�to�year�end,�the�directors�have�declared�a�fully�franked� final�dividend�of�6�cents�per�ordinary�share�to�be�paid�on�the�28� September�2017.�A�provision�for�this�dividend�has�not�been� recognised�in�the�30�June�2017�financial�statements.�

Environmental�management

St�Barbara�regards�compliance�with�environmental�legislation,� regulations� and� regulatory� instruments� as� the� minimum� performance�standard�for�its�operations.��The�Group’s�operations�in� Western�Australia�are�subject�to�environmental�regulation�under� both�Commonwealth�and�State�legislation.��In�Papua�New�Guinea,� the�Group�ensures�compliance�with�the�relevant�National�and� Provincial�legislation�and�where�appropriate�standards�or�legislation� are�not�available,�the�Group�reverts�to�the�standard�of� environmental�performance�as�stipulated�in�the�Western�Australian� legislation.�

A�Group�wide�Environmental�Management�System�(EMS)�has�been� implemented� to� facilitate� the� effective� and� responsible� management�of�environmental�issues�to�the�same�high�standard� across�all�sites�in�both�Australia�and�Papua�New�Guinea.��Adoption� of�the�EMS�at�all�operations�has�contributed�to�further�reductions�in� the�number�of�minor�environmental�incidents,�and�an�improvement� in�internal�compliance�rates�for�environmental�audits�and� inspections.�There�were�no�externally�reportable�environmental� incidents�during�the�year�ended�30�June�2017�at�any�of�the�Group’s� Australian�and�Pacific�sites.�

Page�35�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Rounding�of�amounts�

St�Barbara�Limited�is�a�Company�of�the�kind�referred�to�in�ASIC� Corporations�(Rounding�in�Financial/Directors’�Report)�Instrument� 2016/191�issued�by�the�Australian�Securities�and�Investment� Commission�(ASIC).�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�23[rd] �day�of�August�2017�

==> picture [91 x 38] intentionally omitted <==

Bob�Vassie�

Managing�Director�and�CEO�

Page�36�

ST�BARBARA�LIMITED�2017�

Directors’�Report�

Auditors�Independence�Declaration�

==> picture [526 x 150] intentionally omitted <==

==> picture [526 x 149] intentionally omitted <==

Page�37�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Contents�

ontents
FinancialStatements Page
Aboutthisreport 38
Incomestatement 39
Statementofcomprehensiveincome 40
Balancesheet 41
Statementofchangesinequity 42
Cashflowstatement 43
Notestothefinancialstatements
A.Keyresults
1Segmentinformation 44
2Tax 46
3Significantitems 48
4Earningspershare 48
B.Miningoperations
5Property,plantandequipment 49
6Deferredminingcosts 50
7Minepropertiesandmineralrights 51
8Explorationandevaluation 54
9Rehabilitationprovision 55
C.Capitalandrisk
10Workingcapital 56
11Financialriskmanagement 57
12Netdebt 61
13Contributedequity 62
D.BusinessPortfolio
14Parententitydisclosures 63
15Controlledentities 63
E.Remuneratingourpeople
16Employeebenefitexpensesandprovisions 64
17Share�basedpayments 65
F.Otherdisclosures
18Remunerationofauditors 66
19Eventsoccurringafterthebalancesheetdate 66
20Contingencies 66
21Basisofpreparation 66
22Accountingstandards 67
Signedreports
Directors’declaration 68
Independentauditor’sreport 69

About�this�report�

St�Barbara�Limited�(the�“Company”�or�“Parent�Entity”)�is�a�company� limited�by�shares�incorporated�in�Australia�whose�shares�are� publicly�traded�on�the�Australian�Stock�Exchange.��The�consolidated� financial�statements�of�the�Company�as�at�and�for�the�year�ended� 30�June�2017�comprise�the�Company�and�its�subsidiaries�(together� referred�to�as�the�“Group”).��The�Group�is�a�for�profit�entity� primarily�involved�in�mining�and�sale�of�gold,�mineral�exploration� and�development.

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�consolidated�financial�statements�have�been�presented�in� Australian�dollars�and�all�values�are�rounded�to�the�nearest� thousand�dollars�($000)�as�specified�in�the�ASIC�Corporation� Instrument�2016/191�unless�otherwise�stated.�

The�Board�of�Directors�approved�the�financial�statements�on�23� August�2017.�

What’s�in�this�report�

St�Barbara’s�Directors�have�included�information�in�this�report�that� they�deem�to�be�material�and�relevant�to�the�understanding�of�the� financial�statements�and�the�Group.���

A�disclosure�has�been�considered�material�and�relevant�where:�

  • the�dollar�amount�is�significant�in�size�(quantitative);�

  • the�dollar�amount�is�significant�in�nature�(qualitative);�

  • the�Group’s�result�cannot�be�understood�without�the�specific� disclosure;�and�

  • it�relates�to�an�aspect�of�the�Group’s�operations�that�is� important�to�its�future�performance.�

Accounting�policies�and�critical�accounting�judgements�and� estimates�applied�to�the�preparation�of�the�financial�statements�are� represented�where�the�related�accounting�balance�or�financial� statement�matter�is�discussed.��To�assist�in�identifying�critical� accounting�judgements�and�estimates,�we�have�highlighted�them�in� the�following�manner:�

Accounting�judgements�and�estimates�

Page�38�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Income�statement�

for�the�year�ended�30�June�2017�

CONSOLIDATED CONSOLIDATED
2017 2016
Notes $'000 $'000
Operations
Revenue 1 641,702 610,115
Mineoperatingcosts 1 (267,244) (280,927)
Grossprofit 374,458 329,188
Interestrevenue 1,948 1,960
Otherrevenue 34
Otherincome 86 3,564
Explorationexpensed (10,647) (6,786)
Corporatecosts (20,977) (19,184)
Royalties 1 (21,774) (21,455)
Depreciationandamortisation 5 (85,583) (80,915)
Otherexpenses (3,608) (1,967)
Netgainondisposalofassets 14,570
Impairmentlossesandassetwrite�downs 3 (27,273)
Operatingprofit 206,630 219,009
Financecosts 12 (19,961) (35,749)
Netforeignexchangegain 3,037 142
Profitbeforeincometax 189,706 183,402
Incometaxexpense 2 (32,134) (14,014)
Profitfromoperations 157,572 169,388
ProfitattributabletoequityholdersoftheCompany 157,572 169,388
Earningspershareforoperations:
Basicearningspershare(centspershare) 4 31.71 34.21
Dilutedearningspershare(centspershare) 4 30.42 32.70

The�above�income�statement�should�be�read�in�conjunction�with�the�notes�to�the�financial�statements.�

Page�39�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Statement�of�comprehensive�income�

for�the�year�ended�30�June�2017�

CONSOLIDATED CONSOLIDATED
2017 2016
Notes $'000 $'000
Profitfortheyear 157,572 169,388
Othercomprehensiveincome
Itemsthatmaybereclassifiedsubsequentlytoprofit:
Changesinfairvalueofavailableforsalefinancialassets (8) (13)
Incometaxonothercomprehensiveincome 1,204
Foreigncurrencytranslationdifferences�foreignoperations 904 (11,322)
Othercomprehensiveprofit/(loss)netoftax(1) 896 (10,131)
TotalcomprehensiveincomeattributabletoequityholdersoftheCompany 158,468 159,257

(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� consolidated�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�statement�of�comprehensive�income�should�be�read�in�conjunction�with�notes�to�the�financial�statements.�

Page�40�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Balance�sheet�

as�at�30�June�2017�

CONSOLIDATED CONSOLIDATED
2017 2016
Notes $'000 $'000
Assets
Currentassets
Cashandcashequivalents 12 160,909 136,689
Tradeandotherreceivables 10 9,270 8,286
Inventories 10 55,340 58,164
Deferredminingcosts 6 5,608 4,446
Totalcurrentassets 231,127 207,585
Non�currentassets
Tradeandotherreceivables 10 2,366
Property,plantandequipment 5 126,493 162,448
Financialassets 4,569 56
Deferredminingcosts 6 9,253 11,271
Mineproperties 7 159,859 179,884
Explorationandevaluation 8 35,411 25,975
Mineralrights 7 7,560 19,785
Deferredtaxassets 2 29,399 3,267
Totalnon�currentassets 372,544 405,052
Totalassets 603,671 612,637
Liabilities
Currentliabilities
Tradeandotherpayables 10 36,480 39,768
Interestbearingborrowings 12 507 3,201
Rehabilitationprovision 9 488 493
Otherprovisions 16 12,154 10,519
Currenttaxliability 2 29,692
Totalcurrentliabilities 79,321 53,981
Non�currentliabilities
Interestbearingborrowings 12 40 223,117
Rehabilitationprovision 9 27,750 28,095
Deferredtaxliabilities 2 31,221 2,169
Otherprovisions 16 4,212 4,661
Totalnon�currentliabilities 63,223 258,042
Totalliabilities 142,544 312,023
NetAssets 461,127 300,614
Equity
Contributedequity 13 887,254 887,216
Reserves (55,736) (58,639)
Accumulatedlosses (370,391) (527,963)
Totalequity 461,127 300,614

The�above�balance�sheet�should�be�read�in�conjunction�with�notes�to�the�financial�statements.�

Page�41�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Statement�of�changes�in�equity�

for�the�year�ended�30�June�2017�

CONSOLIDATED CONSOLIDATED
Contributed Foreign Other Accumulated Total
Equity Currency Reserves Losses $'000
$'000 Translation $'000 $'000
Reserve
Note $'000
Balanceat1July2015 887,216 (49,459) 23 (697,351) 140,429
TransactionswithownersoftheCompanyrecogniseddirectly
inequity:
Share�basedpaymentsexpense 17 928 928
Totalcomprehensiveincomefortheyear
ProfitattributabletoequityholdersoftheCompany 169,388 169,388
Othercomprehensiveloss (10,118) (13) (10,131)
Balanceat30June2016 887,216 (59,577) 938 (527,963) 300,614
TransactionswithownersoftheCompanyrecogniseddirectly
inequity:
Share�basedpaymentsexpense 17 38 2,007 2,045
Totalcomprehensiveincomefortheyear
ProfitattributabletoequityholdersoftheCompany 157,572 157,572
Othercomprehensivegain/(loss) 904 (8) 896
Balanceat30June2017 887,254 (58,673) 2,937 (370,391) 461,127

The�above�statement�of�changes�in�equity�should�be�read�in�conjunction�with�notes�to�the�financial�statements.�

Page�42�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Cash�flow�statement�

for�the�year�ended�30�June�2017�

Consolidated Consolidated
2017 2016
Notes $'000 $'000
CashFlowsFromOperatingActivities:
Receiptsfromcustomers(inclusiveofGST) 640,354 615,244
Paymentstosuppliersandemployees(inclusiveofGST) (309,097) (336,805)
Paymentsforexplorationandevaluation (10,647) (6,786)
Interestreceived 1,948 1,910
Interestpaid (11,304) (30,405)
Financecharges–financeleases (11) (225)
Borrowingcostspaid (8,017) (145)
Netcashinflowfromoperatingactivities 12 303,226 242,788
CashFlowsFromInvestingActivities:
Proceedsfromsaleofproperty,plantandequipment 12
Proceedsfromdeferredsettlementrelatingtosaleofasset 2,700
Paymentsforproperty,plantandequipment (9,796) (16,057)
Paymentsfordevelopmentofminingproperties (32,036) (21,071)
Paymentsforexplorationandevaluation (9,436) (9,006)
Investmentsinshares (4,540)
Netcashoutflowusedininvestingactivities (53,108) (46,122)
CashFlowsFromFinancingActivities:
Movementinrestrictedcash 118 1,966
Premiumfundingrepayments (2,209)
RedKiteloanrepayments (102,073)
USseniorsecurednotesrepayments (225,409) (37,798)
Principalrepayments�financeleases (946) (2,225)
Netcashoutflowusedinfinancingactivities (228,446) (140,130)
Netincreaseincashandcashequivalents 21,672 56,536
Cashandcashequivalentsatthebeginningoftheyear 136,689 76,871
Netmovementinforeignexchangerates 2,548 3,282
Cashandcashequivalentsattheendoftheyear 12 160,909 136,689

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.�

The�above�cash�flow�statement�should�be�read�in�conjunction�notes�to�the�financial�statements.�

Page�43�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

A.����Key�results�

1 Segment�information�

1
Segmentinformation
Leonora Simberi Totalsegment
2017 2016 2017 2016 2017 2016
$’000 $’000 $’000 $’000 $’000 $’000
GoldRevenue 441,394 439,593 199,319 169,277 640,713 608,870
SilverRevenue 553 740 436 505 989 1,245
TotalRevenue 441,947 440,333 199,755 169,782 641,702 610,115
Mineoperatingcosts (143,107) (161,117) (124,137) (119,810) (267,244) (280,927)
Grossprofit 298,840 279,216 75,618 49,972 374,458 329,188
Royalties(1) (17,303) (17,608) (4,471) (3,847) (21,774) (21,455)
Impairmentlossesandassetwritedowns (27,273) (27,273)
Depreciationandamortisation (61,903) (63,492) (19,838) (12,098) (81,741) (75,590)
Netgain/(loss)ondisposalofassets 14,673 (103) 14,570
Segmentprofitbeforeincometax 219,634 212,789 24,036 33,924 243,670 246,713
Capitalexpenditure
Sustaining (30,206) (27,065) (3,711) (9,402) (33,917) (36,467)
Growth(3) (9,402) (9,006) (9,402) (9,006)
GwaliaExtensionProject (7,861) (7,861)
Totalcapitalexpenditure (47,469) (36,071) (3,711) (9,402) (51,180) (45,473)
Segmentassets(2) 304,904 317,514 123,963 146,666 428,867 464,180
Segmentnon�currentassets(2) 279,276 285,786 86,148 101,119 365,424 386,905
Segmentliabilities(2) 26,130 22,670 29,775 35,428 55,905 58,098

�(1)�Royalties�include�state�and�government�royalties�and�corporate�royalties.

(2)�Represents�the�reportable�segment�balances�after�impairment�and�asset�write�down�charges.�

(3)�Growth�capital�at�Gwalia�represents�deep�drilling�expenditure�reported�as�part�of�exploration.�

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

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�(including�production,�cost�per�ounce�and�capital� expenditure)�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.��

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.�

Segment�capital�expenditure�represents�the�total�cost�incurred� during�the�year�for�mine�development�and�acquisitions�of�property,� plant�and�equipment.�Growth�capital�at�Gwalia�represents�deep� drilling�exploration�expenditure�to�extend�mineral�resources.��

Sales�revenue��

Revenue�from�the�sale�of�gold�and�silver�in�the�course�of�ordinary� activities�is�measured�at�the�fair�value�of�the�consideration�received� or�receivable.�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.���

Royalties�

Royalties�are�payable�on�gold�sales�revenue,�based�on�gold�ounces� produced�and�sold,�and�are�therefore�recognised�as�the�sale�occurs.

Major�Customers�

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

Revenue Revenue %ofexternal %ofexternal
revenue
2017 2016 2017 2016
$’000 $’000 % %
CustomerA 217,305 296,399 33.9 48.7
CustomerB 250,736 262,384 39.2 43.1
CustomerC 106,774 16.7

Page�44�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

1������Segment�information�(continued)

Consolidated Consolidated
Operations 2017
$’000
2016
$’000
Totalprofitforreportablesegments 243,670 246,713
Otherincomeandrevenue 2,034 5,558
Explorationexpensed (10,647) (6,786)
Unallocateddepreciationand
amortisation
(3,842) (5,325)
Financecosts (19,961) (35,749)
Corporatecosts (20,977) (19,184)
Netforeignexchangegain 3,037 142
Otherexpenses (3,608) (1,967)
Consolidatedprofitbeforeincometax 189,706 183,402
Assets
Totalassetsforreportablesegments 428,867 464,180
Cashandcashequivalents 160,106 134,081
Tradeandotherreceivables(current) 7,578 7,500
Tradeandotherreceivables(non�current) 2,366
Financialassets 4,569 56
Property,plant&equipment 2,551 4,454
Consolidatedtotalassets 603,671 612,637

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,�exploration�expense,�finance�costs� and�corporate�costs.�

Liabilities
Totalliabilitiesforreportablesegments 55,905 58,098
Tradeandotherpayables 14,542 16,049
Interestbearingliabilities(current) 436 3,030
Provisions(current) 9,125 8,051
Interestbearingliabilities(non�current) 11 223,117
Provisions(non�current) 1,612 1,509
Currenttaxliability 29,692
Deferredtaxliabilities 31,221 2,169
Consolidatedtotalliabilities 142,544 312,023

Page�45�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

2 Tax�

Income�tax�expense�

2
Tax
Incometaxexpense
Consolidated
2017
$'000
2016
$'000
Currenttaxexpense 47,424 41,277
Under/(over)provisioninrespectofthe (2,474) 233
prioryear
Deferredincometaxbenefit
Totalincometaxexpense
(12,816)
32,134
(27,496)
14,014

Numerical�reconciliation�of�income�tax�expense�to�prima�facie�tax� payable�

payable
2017 2016
$'000 $'000
Profitbeforeincometax 189,706 183,402
TaxattheAustraliantaxrateof30% 56,912 55,021
Taxeffectofamountsnot
deductible/(taxable)incalculatingtaxable
income:
Equitysettledsharebasedpayments 613 279
Sundryitems
Recognitionofpreviouslyunbooked
deferredtaxassetsinPNG
Permanentdifferencesontaxableincome
281
(26,775)
(361)
(129)
(3,344)
(1,162)
Researchanddevelopmentincentive
Useoftaxlossesnotpreviouslyrecognised
Interestexpensepreviouslytreatedasnon
deductible
Deferredtaxassetsrecognisedasaresult
oftaxconsolidation
Permanentdifferencesarisingfromforeign
(580)
(3,341)
(2,289)
(630)
(7,474)

(18,796)
exchangewithinthetaxconsolidated
group
ProvisionforR&Dtaxcreditspreviously
recognised
Incometaxexpense
(2,804)
10,478
32,134
(9,751)

14,014

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�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.���

Tax�exposure�

In�determining�the�amount�of�current�and�deferred�tax�the�Group� takes�into�account�the�impact�of�uncertain�tax�positions�and�whether� additional�taxes�and�interest�may�be�due.��This�assessment�relies�on� estimates�and�assumptions�and�may�involve�a�series�of�judgements� about�future�events.��New�information�may�become�available�that� causes�the�Group�to�change�its�judgement�regarding�the�adequacy� of�existing�tax�liabilities;�such�changes�to�tax�liabilities�will�impact�tax� expense�in�the�period�that�such�a�determination�is�made.�

Tax�consolidation�

Entities�in�the�tax�consolidated�group�at�30�June�2017�included:�� St�Barbara�Ltd�(head�entity),�Allied�Gold�Mining�Ltd,�Allied�Gold�Pty� Ltd,�and�Allied�Gold�Finance�Pty�Ltd.��Current�and�deferred�tax� amounts�are�allocated�using�the�“separate�taxpayer�within�group”� method.���

A�tax�sharing�and�funding�agreement�has�been�established�between� the�entities�in�the�tax�consolidated�group.��The�Company�recognises� deferred�tax�assets�arising�from�the�unused�tax�losses�of�the�tax� consolidated�group�to�the�extent�that�it�is�probable�that�future� taxable�profits�of�the�tax�consolidated�group�will�be�available�against� which�the�asset�can�be�utilised.�

Current�tax�liability�

As�at�30�June�2017�the�Company�recognised�a�current�tax�liability�of� $29,692,000�(2016:�$Nil)�which�included�the�provision�for�R&D�tax� credits.�

Accounting�judgements�and�estimates�

During�the�year,�AusIndustry�performed�a�review�of�certain�research� and�development�projects�previously�claimed�by�the�Company�in� relation�to�the�research�and�development�tax�credit�benefit�scheme.� Following�their�review,�AusIndustry�deemed�the�projects�to�be� ineligible�in�accordance�with�research�and�development�tax� legislation.�While�the�Company�believes�the�projects�are�eligible,�and� has�requested�an�independent�review�of�the�AusIndustry�findings,�a� provision�has�been�raised�to�reflect�the�impact�of�the�projects� potentially�being�finally�disallowed�as�research�and�development,� and�the�ATO�issuing�an�amended�assessment�as�a�result.�

Page�46�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

2� Tax�(continued)�

Deferred�tax�balances�

2
Tax(continued)
Deferredtaxbalances
Consolidated
2017
$'000
2016
$'000
Deferredtaxassets
Taxlosses 41,722
Provisionsandaccruals
Investmentsatfairvalue
41,699
40,169
224
Unrealisedforeignexchangelosses 64,560
Property,plantandequipment 113,384 21,105
Other 630 3,326
Total 155,713 171,106
Taxeffect@30% 46,714 51,332
Deferredtaxliabilities
Accruedincome 255 229
Mineproperties–exploration 38,595 30,209
Mineproperties–development 57,131 81,976
Consumables 46,033 52,123
Capitalisedconvertiblenotescosts 3,347 2,908
Unrealisedforeignexchangegains 16,426
Total
Taxeffect@30%
161,787
48,536
167,445
50,234
Netdeferredtaxbalance (1,822) 1,098

Comprising�of:�

Australia–netdeferredtaxliabilities
PNG–netdeferredtaxassets
Deferredtaxassetshavenotbeen
recognisedinrespectofthe
followingitems:
Taxlosses–PNGOperations
Property,plantandequipment–PNG
Operations
(31,221)
(2,169)
29,399
3,267
53,079
74,283
48,159
192,433
Total 101,238
266,716
Taxeffect@30% 30,371
80,015

Deferred�tax�

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;�and�

  • 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�or�substantively�enacted�by�the� reporting�date.�

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.�

Tax�benefits�acquired�as�part�of�a�business�combination,�but�not� satisfying�the�criteria�for�separate�recognition�at�that�date,�are� recognised�subsequently�if�new�information�about�facts�and� circumstances�change.�

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.�

Accounting�judgements�and�estimates�

At�each�reporting�date,�the�Group�performs�a�review�of�the�probable� future�taxable�profit�in�each�jurisdiction.�The�assessments�are�based� on�the�latest�life�of�mine�plans�relevant�to�each�jurisdiction�and�the� application�of�appropriate�economic�assumptions�such�as�gold�price� and�operating�costs.�Any�resulting�recognition�of�deferred�tax�assets� is�categorised�by�type�(e.g.�tax�losses�or�temporary�differences)�and� recognised�based�on�which�would�be�utilised�first�according�to�that� particular�jurisdiction’s�legislation.�

At�30�June�2017�tax�losses�not�recognised�amounted�to�$15,924,000� (tax�effected)�relating�to�entities�associated�with�Simberi�operations� in�PNG�and�Australia.��These�tax�losses�have�not�been�recognised�as� it�is�not�deemed�probable�at�the�reporting�date�that�future�taxable� profits�will�be�available�against�which�they�can�be�utilised.�Deferred� tax�balances�recognised�are�based�on�taxable�profit�forecasts�from� current�life�of�mine�models.�

Page�47�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

3 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 Consolidated
2017
$'000
2016
$'000
Includedwithinprofitondisposalof
asset
GainonsaleofKingoftheHillsand
Kailis
14,056
Impairmentlosses(1) (27,273)
Totalsignificantitems–pretax (27,273) 14,056
TaxEffect
Taxeffectofpre�taxsignificantitems
8,182 (3,839)
Taxeffectoftheimpactoftax
consolidation
PNGdeferredtaxassetrecognised(2)
ProvisionforR&Dtaxcredits(3)

26,775
(10,478)
28,547
3,267
Totalsignificantitems–posttax (2,794) 42,031

(1)�Impairment�losses�

Represents�the�impairment�loss�booked�at�31�December�2016�in� relation�to�the�Simberi�cash�generating�unit.�Refer�to�note�7�for� further�information.��

(2)�PNG�deferred�tax�asset�recognised�

Prior�to�30�June�2016,�there�had�been�no�deferred�tax�asset� recognised�in�relation�to�the�PNG�jurisdiction,�as�it�had�been� previously�determined�that�it�was�not�probable�that�the�Simberi� operation�would�generate�future�taxable�profits.��At�30�June�2016,� following�the�successful�completion�of�the�turnaround�in� performance�of�the�Simberi�operation,�a�net�deferred�tax�asset�was� recognised�of�$3,267,000.��At�30�June�2017�a�further�$26,775,000� was�recognised�as�a�deferred�tax�asset�based�on�the�current�life�of� mine�plan.���

(3)�Provision�for�R&D�tax�credits�

Provision�arising�from�AusIndustry�review�of�certain�rereseach�and� development�projects�as�discussed�in�Note�2.��

4 Earnings�per�share�

Consolidated
2017 2016
Cents Cents
Basicearningspershare 31.71 34.21
Dilutedearningspershare 30.42 32.70

Reconciliation�of�earnings�used�in�calculating�earnings�per�share�

Consolidated
2017
2016
$'000
$'000
Consolidated
2017
2016
$'000
$'000
Consolidated
2017
2016
$'000
$'000
Basicanddilutedearningspershare:
Profitaftertaxfortheyearfrom
operations 157,572 169,388

Weighted�average�number�of�shares�

Weightedaveragenumberofordinary Consolidated
2017
2016
Number
Number
Consolidated
2017
2016
Number
Number
Consolidated
2017
2016
Number
Number
sharesusedincalculatingbasicearnings
pershare 496,990,112 495,102,525
Weightedaveragenumberofordinary
sharesandpotentialordinaryshares
usedincalculatingdilutedearningsper
share 517,994,473 519,136,813

Performance�rights�

Performance�rights�granted�to�employees�under�the�St�Barbara� Performance�Rights�Plan�are�considered�to�be�potential�ordinary� shares�and�are�included�in�the�determination�of�diluted�earnings�per� share�to�the�extent�to�which�they�are�dilutive.��The�rights�are�not� included�in�the�determination�of�basic�earnings�per�share.���

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.

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.�

Page�48�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

B.����Mining�operations�

5 Property,�plant�and�equipment�

Consolidated Consolidated
2017 2016
$'000 $'000
Landandbuildings
Atthebeginningoftheyear
Additions
Depreciation(average3�15years)
Disposals
Effects
of
movement
in
foreign
exchangerates
17,864
746
(4,899)
(507)
(126)
18,100
1,529
(1,937)

172
Attheendoftheyear 13,078 17,864
Plantandequipment
Atthebeginningoftheyear 144,584 151,945
Additions 9,557 14,687
Disposals (342) (1,703)
Depreciation(average3�10years) (20,180) (22,180)
Assetimpairmentandwritedowns(1) (19,750)
Effects
of
movement
in foreign
exchangerates (454) 1,835
Attheendoftheyear 113,415 144,584
Total 126,493 162,448

(1) Refer�to�Note�7�

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.��

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.�

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.

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

Security�

As�at�30�June�2017,�plant�and�equipment�with�a�carrying�value�of� $547,000�(2016:�$1,542,000)�was�pledged�as�security�for�finance� leases.���

Reconciliation�of�depreciation�and�amortisation�to�income� statement

statement
Consolidated
2017 2016
$'000 $'000
Depreciation
Landandbuildings (4,899) (1,937)
Plantandequipment (20,180) (22,180)
Amortisation(Note7)
Mineproperties (52,061) (53,176)
Mineralrights (8,443) (3,622)
Total (85,583) (80,915)

Capital�commitments�

Capitalcommitments
Consolidated
2017 2016
$’000 $’000
GwaliaExtensionProject
Purchaseordersraisedoncontracted
capitalexpenditure. 5,316

Page�49�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

6 Deferred�mining�costs�

6
Deferredminingcosts
Consolidated
2017 2016
$'000 $'000
Current
Deferredoperatingminedevelopment 5,608 4,446
Non�current
Deferredoperatingminedevelopment 9,253 11,271

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�balance�sheet�as�deferred�mining� costs.�

Underground�operations�

In�underground�operations�mining�occurs�progressively�on�a�level� by�level�basis.��Underground�mining�costs�in�the�period�are�deferred� based�on�the�metres�developed�for�a�particular�level.��Previously� deferred�underground�mining�costs�are�amortised�to�the�income� statement�based�on�the�recoverable�ounces�produced�over�the�life� of�mine�recoverable�ounces.�Deferred�costs�are�released�to�the� income�statement�as�ounces�are�produced�from�the�related�mining� levels.�

Open�pit�operations�

Overburden�and�other�mine�waste�materials�are�often�removed� during�the�initial�development�of�a�mine�site�in�order�to�access�the� mineral�deposit�and�deferred.�This�activity�is�referred�to�as�deferred� stripping.���

Removal�of�waste�material�normally�continues�throughout�the�life�of� an�open�pit�mine.��This�activity�is�referred�to�as�production�stripping.�

The�Group�has�no�deferred�waste�costs�associated�with�open�pit� operations�at�30�June�2017.�

Accounting�judgements�and�estimates�

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.���

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.�

Page�50�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

7 Mine�properties�and�mineral�rights�

Consolidated Consolidated
2017 2016
Mineproperties
Atbeginningoftheyear
$'000
179,884
$'000
211,989
Directexpenditure 32,036 21,071
Amortisationfortheyear
Atendoftheyear
(52,061)
159,859
(53,176)
179,884

Mine�properties�

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.�

Accounting�judgements�and�estimates�

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.�

Consolidated Consolidated
Mineralrights 2017
$'000
2016
$'000
Atthebeginningoftheyear 19,785 23,407
Amortisation (8,443) (3,622)
Impairmentlossesandwritedowns
Attheendoftheyear
(3,782)
7,560

19,785

Mineral�rights

Mineral�rights�comprise�identifiable�exploration�and�evaluation� assets,�mineral�resources�and�ore�reserves,�which�are�acquired�as� part�of�a�business�combination�or�a�joint�venture�acquisition,�and�are� recognised�at�fair�value�at�the�date�of�acquisition.��Mineral�rights�are� attributable�to�specific�areas�of�interest�and�are�amortised�when� commercial�production�commences�on�a�unit�of�production�basis� over�the�estimated�economic�reserves�of�the�mine�to�which�the� rights�relate.�

The�Group’s�mineral�rights�are�associated�with�the�Simberi� operations�and�PNG�interests.�The�assets�impairment�and�write� down�recognised�at�31�December�2016�included�a�write�down�of� mineral�rights.�

Page�51�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

7.�Mine�properties�and�mineral�rights���� (continued)�

Impairment�of�assets�

All�asset�values�are�reviewed�at�each�reporting�date�to�determine� whether�there�is�objective�evidence�that�there�have�been�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.��An�impairment� loss�is�recognised�for�the�amount�by�which�the�carrying�amount�of� an�asset�or�a�cash�generating�unit�(‘CGU’)�exceeds�the�recoverable� amount.��Impairment�losses�are�recognised�in�the�income�statement.��

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�identified�CGUs�of�the�Group�are:��Leonora�and�Simberi.��The� carrying�value�of�the�Leonora�and�Simberi�CGUs�are�assessed�using� fair�value�less�costs�of�disposal�(‘Fair�Value’).���

Fair�Value�is�determined�as�the�net�present�value�of�the�estimated� future�cash�flows.��Future�cash�flows�are�based�on�life�of�mine�plans� using�market�based�commodity�price�and�exchange�assumptions�for� both�Australian�Dollar�(AUD)�and�United�States�Dollar�(USD)�gold� price,�estimated�quantities�of�ore�reserves,�operating�costs�and� future�capital�expenditure.�Costs�to�sell�have�been�estimated�by� management.��

Accounting�judgements�and�estimates��Impairment�

At�30�June�2017,�the�Group�determined�that�there�were�no� indicators�of�impairment�for�either�the�Leonora�or�Simberi�cash� operating�units�due�to�strong�spot�and�forward�gold�prices�at�30�June� 2017�and�increases�in�mine�life�at�both�operations.��Although�gold� prices�were�stronger,�and�there�was�an�extension�to�mine�life�at� Simberi,�taking�all�factors�into�consideration�there�were�no� indicators�to�reverse�prior�impairments�booked.�

At�31�December�2016,�the�Group�determined�that�there�were� indicators�of�impairment�for�the�Simberi�CGU�given�its�sensitivity�to� gold�price�and�the�weakening�of�the�USD�spot�gold�price�from�30� June�2016�to�31�December�2016.��The�Group�conducted�the�carrying� value�analysis�of�the�Simberi�CGU�resulting�in�an�impairment�charge� of�$19,091,000�after�tax�at�the�31�December�2016�half�year�reporting� date,�as�summarised�in�the�table�below.�

goldpriceandtheweakeningoftheUSDspotgoldpricefrom30
June2016to31December2016.TheGroupconductedthecarrying
valueanalysisoftheSimberiCGUresultinginanimpairmentcharge
of$19,091,000aftertaxatthe31December2016halfyearreporting
date,assummarisedinthetablebelow.
goldpriceandtheweakeningoftheUSDspotgoldpricefrom30
June2016to31December2016.TheGroupconductedthecarrying
valueanalysisoftheSimberiCGUresultinginanimpairmentcharge
of$19,091,000aftertaxatthe31December2016halfyearreporting
date,assummarisedinthetablebelow.
Simberi
$’000
Writedownofassets
Inventories 3,741
Impairments
Propertyplantandequipment 19,750
Mineralrights 3,782
Totalimpairmentandassetwritedowns 27,273
Taxeffect (8,182)
Totalimpairmentandassetwritedownsaftertax 19,091

Significant�judgements�and�assumptions�are�required�in�making� estimates�of�Fair�Value.�The�CGU�valuations�are�subject�to�variability� in�key�assumptions�including,�but�not�limited�to:�long�term�gold� prices,�currency�exchange�rates,�discount�rates,�production,� operating�costs�and�future�capital�expenditure.��An�adverse�change� in�one�or�more�of�the�assumptions�used�to�estimate�Fair�Value�could� result�in�a�reduction�in�a�CGU’s�recoverable�value.��This�could�lead�to� the�recognition�of�impairment�losses�in�the�future.��The�inter� relationship�of�the�significant�accounting�assumptions�upon�which� estimated�future�cash�flows�are�based,�however,�are�such�that�it�is�

impractical�to�disclose�the�extent�of�the�possible�effects�of�a�change� in�a�key�assumption�in�isolation.���

The�assumptions�used�for�the�impairment�of�the�Simberi�CGU�at�31� December�2016�were:�

December2016were:
2017�2022
Gold(RealUS$perounce) $1,098/oz�$1,335/oz
AUD:USDexchangerate 0.74
Post�taxrealdiscountrate(%)–PNG 10.2
Commoditypricesandexchangerates

Commodity�prices�and�foreign�exchange�rates�are�estimated�with� reference�to�external�market�forecasts�and�updated�at�least� annually.�The�rates�applied�to�the�valuation�have�regard�to� observable�market�data,�including�spot�and�forward�values.��

Discount�rate

In�determining�the�Fair�Value�of�CGUs,�the�future�cash�flows�are� discounted�using�rates�based�on�the�Group’s�estimated�real�post��tax� weighted�average�cost�of�capital�for�each�functional�currency�used� in�the�Group,�with�an�additional�premium�applied�having�regard�to� the�geographic�location�of�the�CGU.�

Operating�and�capital�costs

Life�of�mine�operating�and�capital�cost�assumptions�are�based�on� the�Group’s�latest�life�of�mine�plans.��The�projections�do�not�include� expected�cost�improvements�reflecting�the�Group’s�objectives�to� maximise�free�cash�flow,�optimise�and�reduce�activity,�apply� technology,�improve�capital�and�labour�productivity.�� Unmined�resources�and�exploration�values�

Unmined�resources�are�not�included�in�a�CGU’s�life�of�mine�plan�for� a�number�of�reasons,�including�the�need�to�constantly�re�assess�the� economic�returns�on�and�timing�of�specific�production�options�in�the� current�economic�environment.��In�our�determination�of�Fair�Value,� there�are�no�unmined�resources�or�exploration�estimates�included� within�the�valuation.��

Any�variation�in�the�key�assumptions�used�to�determine�Fair�Value� will�result�in�a�change�of�the�assessed�fair�value.�If�the�variation�in� assumption�had�a�negative�impact�on�Fair�Value�it�could�indicate�a� requirement�for�additional�impairment�of�non�current�assets�in�the� future.�

It�is�estimated�that�changes�in�the�key�assumptions�would�have�the� following�approximate�impact�on�the�Fair�Value�of�the�CGU�in�its� functional�currency�that�was�subject�to�impairment�as�at�31� December�2016:�

Simberi� Decrease�in�Fair�Value�resulting�from:� $’000� US$100/oz�decrease�in�gold�price� 17,112� 0.50%�increase�in�discount�rate� 280� The�sensitivities�above�assume�that�the�specific�assumption�moves� in�isolation,�while�all�other�assumptions�are�held�constant.��In�reality,� a�change�in�one�of�the�aforementioned�assumptions�is�usually� accompanied�with�a�change�in�another�assumption,�which�may�have� an�offsetting�impact�(for�example,�a�decline�in�the�USD�gold�price� could�be�accompanied�by�a�decline�in�the�AUD�compared�to�the� USD).��Action�is�also�usually�taken�to�respond�to�adverse�changes�in� economic�assumptions�that�may�mitigate�the�financial�impact�of�any� such�change.�

Page�52�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

Ore�Reserves

The�Group�determines�and�reports�Ore�Reserves�under�the�2012� edition�of�the�Australian�Code�for�Reporting�of�Mineral�Resources� and�Ore�Reserves,�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.�

Accounting�judgements�and�estimates–�Ore�Reserves�

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.�

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.�

  • The�recognition�of�deferred�tax�assets.�

  • Depreciation�and�amortisation�charged�in�the�income�statement� may�change�where�such�charges�are�calculated�using�the�units�of� production�basis.�

  • Underground�capital�development�deferred�in�the�balance�sheet� or�charged�in�the�income�statement�may�change�due�to�a� revision�in�the�development�amortisation�rates.�

  • Decommissioning,�site�restoration�and�environmental�provisions� may�change�where�changes�in�estimated�reserves�affect� expectations�about�the�timing�or�cost�of�these�activities.�

Page�53�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

8 Exploration�and�evaluation�

8
Explorationandevaluation
Consolidated
2017 2016
Non�current
Atbeginningoftheyear
Additions
Disposals
$'000
25,975
9,436
$'000
16,969
9,006
Atendoftheyear 35,411 25,975

Commitments�for�exploration�

Commitmentsforexploration
Consolidated
2017 2016
$’000 $’000
Exploration
Inordertomaintainrightsoftenureto
miningtenements,theGroupiscommitted
to
tenement
rentals
and
minimum
explorationexpenditureintermsofthe
requirements
of
the
relevant
state
government
mining
departments
in
WesternAustralia.Thisrequirementwill
continueforfutureyearswiththeamount
dependentupontenementholdings. 4,779 4,898

All�exploration�and�evaluation�expenditure�incurred�up�to� establishment�of�resources�is�expensed�as�incurred.��From�the�point� in�time�when�reserves�are�established,�or�where�there�is�a� reasonable�expectation�for�reserves,�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.�Capitalised�costs�are� deferred�until�commercial�production�commences�from�the�relevant� area�of�interest,�at�which�time�they�are�amortised�on�a�unit�of� production�basis.�

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�expenditures�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.��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�commercially�viable�to�pursue,�accumulated�costs�in�respect� of�that�area�are�written�off�in�the�period�the�decision�is�made.�

Accounting�judgements�and�estimates�

Exploration�and�evaluation�expenditure�is�capitalised�where�reserves� have�been�established�for�an�area�of�interest,�or�where�there�is�a� reasonable�expectation�for�reserves,�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�is�likely.��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.�

Page�54�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

9 Rehabilitation�provision��

9
Rehabilitationprovision
Consolidated
2017 2016
$'000 $'000
Current
Provisionforrehabilitation 488 493
Non�current
Provisionforrehabilitation
27,750
28,238
28,095
28,588
MovementsinProvisions
Rehabilitation
Balanceatstartofyear 28,588 42,087
Unwindingofdiscount 1,658 1,707
Reductioninnetprovisionsmadeduring (14,008)
theyear(1)
Effectsofmovementsintheforeign (2,008) (1,198)
exchangerate
Balanceatendofyear 28,238 28,588

(1) Represents�the�elimination�of�the�King�of�the�Hills�rehabilitation�provision� ($14,008,000)�on�sale�of�the�tenements�to�Saracen�Metals�Pty�Ltd�in� October�2015.�

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.�

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

A�provision�is�made�for�the�estimated�cost�of�rehabilitation�and� restoration�of�areas�disturbed�during�mining�operations�up�to� reporting�date�but�not�yet�rehabilitated.��The�provision�also�includes� estimated�costs�of�dismantling�and�removing�the�assets�and� restoring�the�site�on�which�they�are�located.��The�provision�is�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.�

As�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),�the� rehabilitation�liability�is�remeasured�at�each�reporting�date�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.��A�large�proportion�of�the�outflows�are�expected� to�occur�at�the�time�the�respective�mines�are�closed.�

Accounting�judgements�and�estimates�

Mine�rehabilitation�provision�requires�significant�estimates�and� assumptions�as�there�are�many�transactions�and�other�factors�that� will�ultimately�affect�liability�payable�to�rehabilitate�the�mine�sites.� Factors�that�will�affect�this�liability�include�changes�in�regulations,� prices�fluctuations,�changes�in�technology,�changes�in�timing�of�cash� flows�which�are�based�on�life�of�mine�plans�and�changes�to�discount� rates.�When�these�factors�change�or�are�known�in�the�future,�such� difference�will�impact�the�mine�rehabilitation�provision�in�the�period� in�which�it�becomes�known.�

Page�55�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

C.�����Capital�and�risk�

10 Working�capital�

Trade�and�other�receivables��

10 Workingcapital
Tradeandotherreceivables
Consolidated
2017 2016
$'000 $'000
Current
Tradereceivables 3,676 1,932
Otherreceivables 2,119 2,392
Restrictedcash 118
Prepayments 3,475
9,270
3,844
8,286
Noncurrent
OtherReceivables
2,366
Total 9,270 10,652

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�(‘restricted�cash’)�within�the�business�is� disclosed�as�part�of�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.�

Amounts�receivable�from�Director�related�entities� At�30�June�2017,�there�were�no�amounts�receivable�from�Director� related�entities�(2016:�$Nil).�

Inventories�

Consolidated Consolidated
2017 2016
$'000 $'000
Consumables
Orestockpiles
Goldincircuit
Bulliononhand
37,418
1,467
10,594
5,861
55,340
42,148
649
9,565
5,802
58,164

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.�

Accounting�judgements�and�estimates�

The�calculation�of�net�realisable�value�(NRV)�for�ore�stockpiles,�gold� in�circuit�and�bullion�on�hand�involves�significant�judgement�and� estimate�in�relation�to�timing�and�cost�of�processing,�gold�prices,� exchange�rates�and�recoveries.�A�change�in�any�of�these�assumptions� will�alter�the�estimated�NRV�and�therefore�impact�the�carrying�value� of�inventories.

Trade�and�other�payables�

Tradeandotherpayables
Consolidated
2017 2016
$'000 $'000
Current
Tradepayables 35,411 39,346
Otherpayables 1,069 422
36,480 39,768

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

Page�56�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

11 Financial�risk�management�

Financial�risk�management�

The�Group’s�management�of�financial�risk�is�aimed�at�ensuring�net� cash�flows�are�sufficient�to�withstand�significant�changes�in�cash�flow� under�certain�risk�scenarios�and�still�meet�all�financial�commitments� as�and�when�they�fall�due.��The�Group�continually�monitors�and�tests� its�forecast�financial�position�and�has�a�detailed�planning�process� that�forms�the�basis�of�all�cash�flow�forecasting.�

The�Group's�normal�business�activities�expose�it�to�a�variety�of� financial�risk,�being:�market�risk�(especially�gold�price�and�foreign� currency�risk),�credit�risk�and�liquidity�risk.��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�Group�Treasury�function�in�accordance�with�Board� approved�directives�that�underpin�Group�Treasury�policies�and� processes.���The�Treasury�Risk�Management�Committee�assists�and� advises�the�Group�Treasury�function,�Executive�Leadership�Team,� Audit�and�Risk�Committee�and�Board�in�discharging�their� responsibilities�in�relation�to�forecasted�risk�profiles,�risk�issues,�risk� mitigation�strategies�and�compliance�with�Treasury�policy.��Group� Treasury�regularly�reports�the�findings�to�the�Treasury�Risk� Management�Committee�and�the�Board.�

(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� directives�and�policies�approved�by�the�Board.�

(b) Currency�risk�

The�Group�is�exposed�to�currency�risk�on�gold�sales,�purchases�and� borrowings�that�are�denominated�in�a�currency�other�than�the� Company’s�presentation�currency�of�Australian�dollars.�The� currencies�in�which�transactions�primarily�are�denominated�are� Australian�Dollars�(AUD),�US�Dollars�(USD)�and�Papua�New�Guinea� Kina�(PGK).�

The�exchange�rates�at�the�year�end�were�as�follows:�

Closingrateasat AUD/USD AUD/USD AUD/PGK AUD/PGK
30June2017 0.7695 2.3788
30June2016 0.7452 2.3216
2017 2016
Exposuretocurrency USD PGK USD PGK
$’000 $’000 $’000 $’000
Cashandcashequivalents 8,606 1,637 58,625 4,747
Tradereceivables 356 297 216 288
Tradepayables (4,095) (7,805) (6,054) (5,415)
Interestbearingliabilities (77) (168,102)
Netexposure 4,790 (5,871) (115,315) (380)

Sensitivity�analysis:�

The�following�table�details�the�Group's�sensitivity�to�a�10%� movement�(i.e.�increase�or�decrease)�in�the�Australian�dollar�against� the�US�dollar�and�PNG�Kina�at�the�reporting�date,�with�all�other� variables�held�constant.�The�10%�sensitivity�is�based�on�reasonably� possible�changes,�over�a�financial�year,�using�the�observed�range�of� actual�historical�rates�for�the�preceding�five�year�period:�

ImpactonProfitAfterTax
(Increaseprofit)/decrease
profit
2017
2016
$'000
$'000
AUD/USD+10%
AUD/USD�10%
(487)
11,522
487
(11,522)

PGK�against�the�AUD�has�been�reviewed�and�considered�an�immaterial� currency�risk .�

Significant�assumptions�used�in�the�foreign�currency�exposure� sensitivity�analysis�above�include:�

  • Reasonably�possible�movements�in�foreign�exchange�rates.�

  • The�translation�of�the�net�assets�in�subsidiaries�with�a�functional� currency�other�than�the�Australian�dollar�has�not�been�included� in�the�sensitivity�analysis�as�part�of�the�equity�movement.�

  • The�net�exposure�at�the�reporting�date�is�representative�of�what� the�Group�is�expected�to�be�exposed�to�in�the�next�12�months.�

  • The�sensitivity�analysis�only�includes�the�impact�on�the�balance� of�financial�assets�and�financial�liabilities�at�the�reporting�date.�

(c) Interest�rate�risk�exposures�

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�Treasury� manages�the�interest�rate�exposures�according�to�the�Board� approved�Treasury�policy.��Any�decision�to�hedge�interest�rate�risk�is� assessed�in�relation�to�the�overall�Group�exposure,�the�prevailing� interest�rate�market,�and�any�funding�counterparty�requirements.�� As�at�30�June�2017,�interest�rates�on�interest�bearing�liabilities�were� fixed.�

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� applying�variable�interest�rates,�as�the�Group�intends�to�hold�fixed� rate�assets�and�liabilities�to�maturity.�

Page�57�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

11�Financial�risk�management�(continued)

(d) Capital�management�

The�Group’s�total�capital�is�defined�as�total�shareholders’�funds�plus� net�debt.��The�Group�aims�to�maintain�an�optimal�capital�structure� to�reduce�the�cost�of�capital�and�maximise�shareholder�returns.��The� Group�has�a�capital�management�plan�that�is�reviewed�by�the�Board� on�a�regular�basis.�

onaregularbasis.
Consolidatedcapital 2017
$’000
2016
$’000
Totalshareholders’funds
Borrowings
Cashandcashequivalents(1)
Totalcapital
461,127
547
(547)
461,127
300,614
226,318
(136,689)
390,243

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

The�Group�does�not�have�a�target�net�debt/equity�ratio.��There�were� no�changes�in�the�Group’s�approach�to�capital�management�during� the�year,�with�the�focus�on�the�reduction�in�borrowings�using�surplus� cash�flows.�

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

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�and� 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.�

(e) Credit�risk�

Credit�risk�is�the�risk�that�a�counter�party�will�not�meet�its�obligations� under�a�financial�instrument�or�customer�contract,�with�a�maximum� exposure�equal�to�the�carrying�amount�of�the�financial�assets�as� recorded�in�the�financial�statements.��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.�

Credit�risks�related�to�receivables

The�Group’s�most�significant�customer�accounts�for�$2,586,000�of� the�trade�receivables�carrying�amount�at�30�June�2017�(2016:� $1,714,000),�representing�receivables�owing�from�gold�sales.��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�2017�were�past�due.�

counterparties�with�a�minimum�Standard�&�Poor’s�credit�rating,�and� there�is�a�financial�limit�on�funds�placed�with�any�single� counterparty.�

Derivative�transactions�are�only�made�with�approved�counterparties� in�accordance�with�the�Board�approved�Treasury�Policy.��Derivative� transactions�do�not�cover�a�major�proportion�of�total�Group� production,�with�maturities�occurring�over�a�relatively�short�period� of�time.�

(f) Cash�flow�hedges�

The�Group’s�revenue�is�exposed�to�spot�gold�price�risk.��Based�upon� sensitivity�analysis,�a�movement�in�the�average�spot�price�of�gold� during�the�year�of�$100�per�ounce�and�all�other�factors�remaining� constant,�would�have�changed�post�tax�profit�by�$26,612,000.�

In�accordance�with�the�Group’s�financial�risk�management�policies,� the�Group�has�managed�commodity�price�risk�from�time�to�time� using�gold�forward�contracts�as�described�below.���

In�April�2017,�the�Company�entered�into�gold�forward�contracts�for� 50,000�ounces�of�gold�at�$1,725�per�ounce�with�maturity�over�a� twelve�month�period�from�July�2017�to�June�2018.��

In�June�2017,�the�Company�entered�into�further�gold�forward� contracts�for�50,000�ounces�of�gold�at�$1,730�per�ounce�with� maturity�over�a�twelve�month�period�from�July�2017�to�June�2018.� The�forward�contracts�protect�Simberi�operating�margins.�

As�physical�delivery�of�gold�is�used�to�close�out�forward�contracts,� the�standard�provides�an�own�use�exemption�under�which�the�Group� is�not�subject�to�the�requirements�of�AASB�139�for�these�contracts.�

�The�maturity�profile�of�the�gold�forward�contracts�remaining�as�at� 30�June�2017�is�provided�in�the�table�below.�

6
months 6–12 1–2 2–5
Strike Total orless months years years
Price ounces ounces ounces ounces ounces
$1,725/oz 50,000 24,000 26,000
$1,730/oz 50,000 24,000 26,000

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.�

At�30�June�2017,�the�Group�did�not�hold�any�gold�options�to� hedge�against�movements�in�the�gold�price,�however�this�is� reviewed�by�the�Board�as�part�of�the�risk�management� framework.�

Credit�risks�related�to�cash�deposits�and�derivatives�

Credit�risk�from�balances�with�banks,�financial�institutions�and� derivative�counterparties�is�managed�by�the�centralised�Group� Treasury�function�in�accordance�with�the�Board�approved�policy.�� Investments�of�surplus�funds�are�only�made�with�approved�

Page�58�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

11� Financial�risk�management�(continued)

(g) Fair�value�estimation�

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

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.�

FixedInterestMaturingin2017
Non�
Floating 1yearor Over1to5 interest
Financialassets Interestrate
$’000
less
$’000
years
$’000
bearing
$’000
Total
$’000
Fairvalue
Cashandcashequivalents 40,909 120,000 160,909 160,909
Receivables 5,795 5,795 5,795
Availableforsalefinancialassets(1) 4,569 4,569 4,569
40,909 120,000 10,364 171,273 171,273
Weightedaverageinterestrate 1.06% 2.48% n/a n/a
Financialliabilities
Tradeandotherpayables 36,480 36,480 36,480
Financeleaseliabilities 507 40 547 547
507 40 36,480 37,027 37,027
Weightedaverageinterestrate n/a 6.49% 8.00% n/a
Netfinancialassets/(liabilities) 40,909 119,493 (40) (26,116) 134,246 134,246
FixedInterestMaturingin2016
Financialassets
Cashandcashequivalents 101,689 35,000 136,689 136,689
Restrictedcashandcashequivalents 118 118 118
Receivables 6,690 6,690 6,690
Availableforsalefinancialassets 56 56 56
101,689 35,118 6,746 143,553 143,553
Weightedaverageinterestrate 0.63% 2.84% n/a n/a
Financialliabilities
Tradeandotherpayables 39,768 39,768 39,768
Financeleaseliabilities 992 550 1,542 1,542
Loansfromotherentities 2,209 2,209 2,209
Seniorsecurednotes(2) 222,567 222,567 228,227
3,201 223,117 39,768 266,086 271,746
Weightedaverageinterestrate n/a 4.99% 8.87% n/a
Netfinancialassets/(liabilities) 101,689 31,917 (223,117) (33,022) (122,533) (128,193)

(1)��Fair�value�is�determined�based�on�Level�1�inputs�as�the�balance�represents�investments�in�listed�securities.�

(2)��Senior�secured�notes�amount�excludes�$2,551,000�of�capitalised�transaction�cost�and�$287,000�discount�on�notes�in�2016.�

Page�59�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

11� Financial�risk�management�(continued)

(h)���� 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.�During�the�financial�year�the�primary�objective�was�to�fully� repay�the�senior�secured�notes�and�to�maintain�sufficient�cash�to�provide�financial�flexibility.�

The�Group�manages�liquidity�risk�by�continuously�monitoring�forecast�and�actual�cash�flows,�and�matching�maturity�profiles�of�financial�assets� and�liabilities.��The�Group�undertakes�sensitivity�analysis�to�stress�test�the�operational�cash�flows,�which�are�matched�with�capital�commitments� to�assess�liquidity�requirements.��The�capital�management�plan�provides�the�analysis�and�actions�required�in�detail�for�the�next�twelve�months� and�longer�term.��The�maturity�of�non�current�liabilities�is�monitored�within�the�cash�management�plan.�

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,�which� includes�interest�obligations�over�the�term�of�the�facilities.�

Total
Lessthan
12months
Between1
and5years
Over5
years
contractual
cashflows
Carrying
amount
Maturityoffinancialliabilities–2017 $‘000 $‘000 $‘000 $‘000 $‘000
Financeleaseliabilities 521 41 562 547
Tradeandotherpayables 36,480 36,480 36,480
37,001 41 37,042 37,027
Maturityoffinancialliabilities–2016
SeniorSecuredNotes(1) 20,004 245,410 265,414 222,567
Premiuminsurancefunding 2,297 2,297 2,209
Financeleaseliabilities 1,059 565 1,624 1,542
Tradeandotherpayables 39,768 39,768 39,768
63,128 245,975 309,103 266,086

(1) Excluding�amortisation�of�capitalised�transaction�costs�and�discount.�

Page�60�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

12 Net�debt�

Cash�and�cash�equivalents�

12 Netdebt
Cashandcashequivalents
Consolidated
2017 2016
$'000 $'000
Cashatbankandonhand 40,909 101,689
Termdeposits 120,000 35,000
160,909 136,689

Cash�and�cash�equivalents�includes�cash�on�hand,�deposits�and�cash� at�call�held�at�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.���

Cash�at�bank�and�on�hand�

Cash�at�bank�at�30�June�2017�invested�“at�call”�was�earning�interest� at�an�average�rate�of�1.06%�per�annum�(2016:�0.63%�per�annum).�

Term�Deposits�

The�deposits�at�30�June�2017�were�earning�interest�at�rates�of� between�2.22%�and�2.80%�per�annum�(2016:�rates�of�between� 1.83%�and�3.00%�per�annum).�At�30�June�2017,�the�average�time�to� maturity�was�46�days�(2016:�31�days)�from�balance�date.�

Interest�bearing�liabilities�

Interestbearingliabilities
Consolidated
2017 2016
$'000 $'000
Current
Secured
Leaseliabilities 507 992
Insurancepremiumfunding 2,209
Totalcurrent 507 3,201
Non�current
Secured
Leaseliabilities 40 550
Seniorsecurednotes(netoftransaction 222,567
costs)
Totalnon�current 40 223,117
Totalinterestbearingliabilities 547 226,318

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.�

Senior�secured�notes�

On�27�March�2013,�the�Group�settled�an�offering�of�US$250�million� senior�secured�notes�issued�in�the�United�States�Rule�144A�bond� market�and�to�certain�persons�outside�the�United�States�with�a� maturity�of�15�April�2018.�The�facility�was�fully�repaid�on�15�March� 2017.�

Profit�before�income�tax�includes�the�following�specific�expenses:�

Consolidated Consolidated
2017 2016
$'000 $'000
FinanceCosts
Interestpaid/payable 7,433 28,383
Borrowingcosts 10,859 5,434
Financeleaseinterest 11 225
Provisions:unwindingofdiscount 1,658 1,707
19,961 35,749
Rentalexpenserelatingtooperatingleases
Leasepayments 598 1,253

Page�61�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

12�Net�debt�(continued)

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�interest�bearing�liabilities.�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�asset’s�useful�life,�or�the�lease�term�if� shorter�where�there�is�no�reasonable�certainty�that�the�Group�will� obtain�ownership�by�the�end�of�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.�

Commitments�for�leases

The�finance�lease�commitments�displayed�in�the�table�below�relate� to�vehicles�and�plant�and�equipment,�are�based�on�the�cost�of�the� assets�and�are�payable�over�a�period�of�up�to�48�months�at�which� point�ownership�of�the�assets�transfers�to�the�Group.�

Consolidated Consolidated
FinanceLeaseCommitments 2017
$'000
2016
$'000
Payablenotlaterthanoneyear 521 1,059
Payable
between
one
year and 41 565
fiveyears 562 1,624
Futurefinancecharges (15) (82)
Totalleaseliabilities 547 1,542
Current
Non�current
507
40
992
550
547 1,542
AnalysisofNon�CancellableOperating
LeaseCommitments
Payablenotlaterthanoneyear 405 396
Payablebetweenoneyearandfive 846 899
years 1,251 1,295

Reconciliation�of�profit�from�ordinary�activities�after�income�tax� to�net�cash�flows�from�operating�activities�

tonetcashflowsfromoperatingactivities
Consolidated
2017 2016
$'000 $'000
Profitaftertaxfortheyear 157,572 169,388
Depreciationandamortisation 85,583 80,915
Assetimpairmentsandwritedowns 27,273
Incometaxexpense
Unwindingofrehabilitationprovision
32,134
1,658
14,014
1,707
Netfinancecostsamortised 2,842 5,289
Unrealised/realisedforeignexchangegain 3,037 142
Equitysettledshare�basedpayments 2,045 928
Changeinoperatingassetsandliabilities
Receivablesandprepayments (1,436) (728)
Inventories (916) (5,892)
Otherassets (1,145) (1,019)
Tradecreditorsandpayables (3,288) (3,127)
Provisionsandotherliabilities (2,133) (18,829)
Netcashflowsfromoperatingactivities 303,226 242,788

13 Contributed�equity�

Numberof
Details shares $'000
Openingbalance1July2016 495,102,525 887,216
Vestedperformancerights 2,228,570 38
Closingbalance30June2017 497,331,095 887,254

Contributed�equity�

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

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.�

Page�62�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

D.����Business�portfolio�

15 Controlled�entities�

14 Parent�entity�disclosures�

The�consolidated�financial�statements�incorporate�the�assets,� liabilities�and�results�of�the�following�subsidiaries�in�accordance� with�the�accounting�policy�on�consolidation.��

As�at,�and�throughout,�the�financial�year�ended�30�June�2017,�the� parent�company�of�the�Group�was�St�Barbara�Limited.

All�subsidiaries�are�100%�owned�at�30�June�2017�and�30�June�2016� and�are�incorporated�in�Australia�unless�otherwise�stated.�

Financial�statements�

ParentEntity
2017
2016
$'000
$'000
Resultsoftheparententity
Profitaftertaxfortheyear
134,430
65,702
Othercomprehensiveloss
(147)
(2,821)
Totalcomprehensiveincomeforthe
year
134,283
62,881
OthercomprehensiveincomeissetoutintheConsolidated
StatementofComprehensiveIncome.
ParentEntity
2017
2016
Financialpositionoftheparententity
atyearend
$'000
$'000
Currentassets
204,213
173,591
Totalassets
423,046
442,357
Currentliabilities
67,051
38,548
Totalliabilities
122,803
276,582
Totalequityoftheparententity
comprising:
Sharecapital
887,254
887,216
Reserves
2,987
2,840
Accumulatedlosses
(589,998)
(724,281)

ParentEntity
2017
2016
$'000
$'000
Resultsoftheparententity
Profitaftertaxfortheyear
134,430
65,702
Othercomprehensiveloss
(147)
(2,821)
Totalcomprehensiveincomeforthe
year
134,283
62,881
OthercomprehensiveincomeissetoutintheConsolidated
StatementofComprehensiveIncome.
ParentEntity
2017
2016
Financialpositionoftheparententity
atyearend
$'000
$'000
Currentassets
204,213
173,591
Totalassets
423,046
442,357
Currentliabilities
67,051
38,548
Totalliabilities
122,803
276,582
Totalequityoftheparententity
comprising:
Sharecapital
887,254
887,216
Reserves
2,987
2,840
Accumulatedlosses
(589,998)
(724,281)

Countryof
Incorporation
Parententity
StBarbaraLimited
Australia
SubsidiariesofStBarbaraLimited
AlliedGoldMiningLtd
UK
SubsidiariesofAlliedGoldMiningLtd
AlliedGoldPtyLtd(1)
Australia
SubsidiariesofAlliedGoldPtyLtd
AdvanceR&DPtyLtd
Australia
AGL(ASG)PtyLtd
Australia
AGL(SGC)PtyLtd
Australia
AlliedGoldFinancePtyLtd
Australia
AlliedGoldServicesPtyLtd
Australia
AlliedTabarExplorationPtyLtd
Australia
AretrendPtyLtd
Australia
NordPacificLimited
Canada
SubsidiariesofAGL(SGC)PtyLtd
SubsidiariesofAlliedTabarExplorationPtyLtd
TabarExplorationCompanyLtd
PNG
SubsidiariesofNordPacificLimited
NordAustralexNominees(PNG)Ltd
PNG
SimberiGoldCompanyLimited
PNG
ParentEntity
2017
2016
Financialpositionoftheparententity
atyearend
$'000
$'000
Currentassets
204,213
173,591
Totalassets
423,046
442,357
Currentliabilities
67,051
38,548
Totalliabilities
122,803
276,582
Totalequityoftheparententity
comprising:
Sharecapital
887,254
887,216
Reserves
2,987
2,840
Accumulatedlosses
(589,998)
(724,281)
Totalequity
300,243
165,775
ParentEntity ParentEntity
2017 2016
Financialpositionoftheparententity $'000 $'000
atyearend
Currentassets 204,213 173,591
Totalassets 423,046 442,357
Currentliabilities 67,051 38,548
Totalliabilities 122,803 276,582
Totalequityoftheparententity
comprising:
Sharecapital 887,254 887,216
Reserves
Accumulatedlosses
Totalequity
2,987
(589,998)
300,243
2,840
(724,281)
165,775

(1)�Converted�from�Allied�Gold�Ltd�to�Allied�Gold�Pty�Ltd�on�1�August�2014.�

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.�It�is�the� Group’s�policy�that�transactions�are�at�arm’s�length.��

During�the�year�the�Company�charged�management�fees�of� $4,893,000�(2016:�$4,717,000),�operating�lease�rents�of�$375,000� (2016:�$969,000),�and�interest�of�$14,182,000�(2016:�$25,889,000)� to�entities�in�the�wholly�owned�group.�

Net�loans�payable�to�the�Company�amount�to�a�net�receivable�of� $204,781,000�(2016:�net�receivable�$242,446,000).��

Balances�and�transactions�between�the�Company�and�its� subsidiaries,�which�are�related�parties�of�the�Company,�have�been� eliminated�on�consolidation.��

Page�63�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

E.����Remunerating�our�people�

16 Employee�benefit�expenses�and�provisions�

Expenses�

Expenses
Consolidated
2017
2016
$'000
$'000
Employeerelatedexpenses
Wagesandsalaries
Contributionstodefinedcontribution
superannuationfunds
Equitysettledshare�basedpayments
69,875
5,288
2,045
77,208
62,396
4,904
928
68,228

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.��

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.�

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.�

Directors�and�key�management�personnel�

Directorsandkeymanagementpersonnel
Consolidated
2017 2016
$'000 $'000
Shorttermemployeebenefits 2,376 2,404
Post�employmentbenefits 39 39
Leave 110 103
Share�basedpayments 781 512
3,306 3,058

Disclosures�relating�to�Directors�and�key�management�personnel�are� included�within�the�Remuneration�Report,�with�the�exception�of�the� table�opposite.

Provisions

Provisions
Consolidated
2017 2016
$'000 $'000
Current
Employeebenefits–annualleave 4,063 3,486
Employeebenefits–longserviceleave
Otherprovisions
3,014
5,077
2,392
4,641
12,154 10,519
Non�current
Employeebenefits�longserviceleave 2,010 1,859
Otherprovisions 2,202 2,802
4,212 4,661

Employee�related�and�other�provisions�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.���

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.�

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.��

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� corporate�bonds�with�terms�to�maturity�and�currency�that�match,�as� closely�as�possible,�the�estimated�future�cash�outflows.

Page�64�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

17 Share�based�payments�

Employee�Performance�Rights�

During�the�year�ended�30�June�2017,�there�was�no�amount�transferred�as�a�gain�for�performance�rights�that�expired�during�the�year�(2016:�$Nil).� Accounting�standards�preclude�the�reversal�through�the�income�statement�for�amounts,�which�have�been�booked�in�the�share�based�payments� reserve�for�performance�rights�and�satisfy�service�conditions�but�do�not�vest�due�to�market�conditions.�

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

Consolidatedandparententity2017 Consolidatedandparententity2017 Consolidatedandparententity2017
Balanceat Granted Expired Balanceat Exercisable
GrantDate ExpiryDate Issueprice startofthe
year
duringthe
year
Vestedduring
theyear
duringthe
year
endofthe
year
atendofthe
year
Number Number Number Number Number Number
5Dec2014 30Jun2017 $0.12 15,953,028 (15,953,028)
10Dec2015 30Jun2018 $0.51 3,974,617 3,974,617
21Oct2016 30Jun2019 $2.92 837,568 837,568
12Dec2016 30Jun2019 $2.92 196,708 196,708
31Mar2017 30Jun2019 $2.92 42,440 42,440
Total 19,927,645 1,076,716 (15,953,028) 5,051,333
Consolidatedandparententity2016
29Nov2013 30Jun2016 $0.49 2,908,469 (1,809,209) (1,099,260)
5Dec2014 30Jun2017 $0.12 17,151,202 (419,361) (778,813) 15,953,028
10Dec2015 30Jun2018 $0.51 3,974,617 3,974,617
Total 20,059,671 3,974,617 (2,228,570) (1,878,073) 19,927,645

The�weighted�average�remaining�contractual�life�of�performance� rights�outstanding�at�the�end�of�the�year�was�1.2�years�(2016:�1.3� years).��Conditions�associated�with�rights�granted�during�the�year� ended�30�June�2017�included:�

  • i. Rights�are�granted�for�no�consideration.��The�vesting�of�rights� granted�in�FY2017�is�subject�to�a�continuing�service�condition� as�at�the�vesting�date,�Return�on�Capital�Employed�over�a�three� year�period,�and�relative�Total�Shareholder�Return�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�will�be�met.��A�Monte� Carlo�simulation�was�performed�using�data�at�grant�date�to�assist� management�in�estimating�the�probability�of�the�rights�vesting.���

As�a�result�of�the�Monte�Carlo�simulation�results,�the�assessed�fair� value�of�rights�issued�during�the�year�was�$2,846,000.��This�outcome� was�based�on�the�likelihood�of�the�market�condition�being�met�as�at� the�date�the�rights�vest.�

Expenses�arising�from�share�based�payment�transactions�

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

Consolidated Consolidated
2017 2016
$ $
Performancerightsissuedunder
performancerightsplan 2,045,000 928,000

Accounting�judgements�and�estimates�

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.�

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.

Page�65�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

F.����Other�disclosures�

18 Remuneration�of�auditors�

During�the�year�the�following�fees�were�paid�or�payable�for�services� provided�by�PricewaterhouseCoopers,�the�auditor�of�the�parent� entity,�and�its�related�practices:�

entity,anditsrelatedpractices:
Consolidated
2017 2016(1)
$ $
Auditandreviewoffinancialreports 295,000 358,500
Non�auditservices
Taxadvisoryandassuranceservices(2) 211,196
TaxadviceinrelationtoAusIndustry 337,772
review(2)
Accountingadviceandotherassurance 95,000
relatedservices
Totalremunerationforauditandnon 843,968 453,500
auditrelatedservices

(1) KPMG�were�the�appointed�auditors�for�the�Group�for�the�year�ended�30�June�2016�

(2) $409,772�of�the�total�tax�advisory�fees�related�to�non�recurring�services�

19 Events�occurring�after�the�balance�sheet�date�

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�or�the�Group’s�operations,�the�results�of�those� operations�or�the�state�of�affairs,�except�as�described�in�this�note:�

Subsequent�to�year�end,�the�directors�have�declared�a�fully�franked� final�dividend�in�relation�to�the�2017�financial�year�of�6�cents�per� ordinary�share,�to�be�paid�on�28�September�2017.�A�provision�for�this� dividend�has�not�been�recognised�in�the�30�June�2017�financial� statements.�

20 Contingencies�

During�July�2014,�the�Company�announced�that�by�operation�of�its� internal�reporting�mechanisms,�the�provision�of�benefits�to�a�foreign� public�official�that�may�violate�its�Anti�Bribery�and�Anti�Corruption� Policy�or�applicable�laws�in�Australia�or�in�foreign�jurisdictions�were� identified.��The�amount�of�the�benefits�provided�to�the�foreign�public� official�was�not�material�to�the�Company.��The�Company�self� reported�the�matter�to�relevant�authorities,�including�the�Australian� Federal�Police,�and�the�matter�is�being�assessed�and�investigated.��To� date,�there�has�been�no�action�taken�against�the�Company,� consequently,�the�range�of�potential�penalties,�if�any,�cannot�be� reliably�estimated.��Should�there�be�any�prosecution,�potential� penalties�are�governed�by�laws�in�various�jurisdictions�including� Criminal�Code�1995�(Cth)� in�Australia�and/or�the�UK� Bribery�Act .���

As�a�result�of�the�Australian�Taxation�Office’s�(ATO)�program�of� routine�and�regular�tax�reviews�and�audits,�the�Group�anticipates� that�ATO�reviews�and�audits�may�occur�in�the�future.��The�ultimate� outcome�of�any�future�reviews�and�audits�cannot�be�determined� with�an�acceptable�degree�of�reliability�at�this�time.��Nevertheless,� the�Group�believes�it�is�making�adequate�provision�for�its�tax� liabilities,�including�amounts�shown�as�deferred�tax�liabilities,�and� takes�reasonable�steps�to�address�potentially�contentious�issues� with�the�ATO.�

21 Basis�of�preparation�

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.��

Principles�of�consolidation���Subsidiaries�

The�consolidated�financial�statements�incorporate�the�assets�and� liabilities�of�all�subsidiaries�of�St�Barbara�Limited�as�at�30�June�2017� and�the�results�of�all�subsidiaries�for�the�year�then�ended.�

Subsidiaries�are�all�those�entities�(including�special�purpose�entities)� over�which�the�Group�has�the�power�to�govern�the�financial�and� operating�policies,�and�as�a�result�has�an�exposure�or�rights�to� variable�returns,�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.�

Foreign�currency�translation�

Both�the�functional�and�presentation�currency�of�St�Barbara�Limited� and�its�Australian�controlled�entities�are�Australian�dollars�(AUD).�� The�functional�currency�of�the�Group’s�foreign�operations�is�US� dollars�(USD).

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.��

The�assets�and�liabilities�of�controlled�entities�incorporated�overseas� with�functional�currencies�other�than�Australian�dollars�are� translated�into�the�presentation�currency�of�St�Barbara�Limited� (Australian�dollars)�at�the�year�end�exchange�rate�and�the�revenue� and�expenses�are�translated�at�the�rates�applicable�at�the� transaction�date.��Exchange�differences�arising�on�translation�are� taken�directly�to�the�foreign�currency�translation�reserve�in�equity.���

Page�66�

ST�BARBARA�LIMITED�2017�

Notes�to�the�Financial�Report�

21�Basis�of�preparation�(continued)

Critical�accounting�judgement�and�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.��

22 Accounting�standards�

New�Standards�adopted�

The�accounting�policies�applied�by�the�Group�in�this�30�June�2017�consolidated�financial�report�are�the�same�as�those�applied�by�the�Group�in�its� consolidated�financial�report�as�at�and�for�the�year�ended�30�June�2016.��These�accounting�policies�are�consistent�with�Australian�Accounting� Standards.�

Accounting�policies�are�applied�consistently�by�each�entity�in�the�Group.�

New�accounting�standards�not�yet�adopted�

Newaccountingstandardsnotyetadopted
Applicationof
Reference Standard
AASB9FinancialInstruments(December2014)andAASB 2009�11 Amendments to Australian AccountingStandards 1 January 2018
arisingfromAASB9
AASB16Leases 1 January 2019
AASB15RevenuefromContractswithCustomerswhichsupersedes AASB 111 Construction contracts, AASB118Revenue, 1 January 2018
interpretation12Customerloyaltyprogrammes,Interpretation15AgreementsfortheconstructionofRealEstate,
Interpretation18TransferofAssetsfromCustomers,interpretation131Revenue�BartertransactionsinvolvingAdvertising
servicesandInterpretation1042SubscriberAcquisitionCostsintheTelecommunicationsIndustry.
AASB2014�10(2015�101)Amendments toAustralianAccounting Standards�Sale or Contribution of Assetsbetweenan 1January2018
InvestoranditsAssociateorJointVenture.
AASB2016�1AmendmentstoAustralian AccountingStandards –Recognition of Deferred Tax Asset for UnrealisedLosses. 1January2017
AASB2016�2AmendmentstoAustralian AccountingStandards – Disclosure Initiative: Amendments to AASB107 1January2017

After�a�review�of�the�above�accounting�standards�the�company�has�assessed�that�there�is�unlikely�to�be�a�material�impact�on�the�recognition,� measurement�and�disclosure�of�the�financial�report.�

Page�67�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Directors’�declaration�

  • 1� In�the�opinion�of�the�directors�of�St�Barbara�Limited�(the�Company):�

  • (a)� the�consolidated�financial�statements�and�notes�that�are�contained�in�pages�38�to�67�and�the�remuneration�report�in�the� Directors’�report,�set�out�on�pages�15�to�34,�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�2017�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�2017.�

  • 3� The�directors�draw�attention�to�page�38�of�the�financial�statements,�which�includes�a�statement�of�compliance�with�International� Financial�Reporting�Standards.�

Signed�in�accordance�with�a�resolution�of�the�Directors:�

==> picture [97 x 41] intentionally omitted <==

Bob�Vassie�

Managing�Director�and�CEO�

Melbourne� 23�August�2017�

Page�68�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Independent�auditor’s�report� Independent�auditor’s�report�page�1�

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Page�69�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Independent�auditor’s�report�page�2�

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Page�70�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Independent�auditor’s�report�page�3�

==> picture [526 x 187] intentionally omitted <==

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Page�71�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Independent�auditor’s�report�page�4�

==> picture [526 x 187] intentionally omitted <==

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Page�72�

ST�BARBARA�LIMITED�2017�

Financial�Report�

Independent�auditor’s�report�page�5�

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Page�73�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Overview�

  • Successful�drilling�program�extended�Gwalia�Ore�Reserves�to�2,140�metres�below�surface�(mbs)�and�Mineral�Resources�to�2,200�mbs�

  • Additional�reserves�at�Simberi�offset�depletion�allowing�mine�life�to�extend�a�further�year�

  • Group�Ore�Reserves�increased�from�4.01�Moz�of�contained�gold�to�4.31�Moz,�net�after�depletion���

Company�Summary�at�30�June�2017�

  • Total�Ore�Reserves�are�estimated�at:�

    • 34.6�Mt�@�3.9�g/t�Au�for�� 4.31�Moz�of�contained�gold,�comprising:�
  • Leonora�Operations:�� 11.1�Mt�@�6.8�g/t�Au�for�� 2.44�Moz�of�contained�gold�

  • � Simberi�Operations:�� 23.4�Mt�@�2.5�g/t�Au�for�� 1.90�Moz�of�contained�gold�

  • Total�Mineral�Resources[1] �are�estimated�at:�104.6�Mt�@�2.9�g/t�Au�for��

  • 9.63�Moz�of�contained�gold,�comprising:�

  • Leonora�Operations:�� 28.8�Mt�@�6.2�g/t�Au�for�� 5.71�Moz�of�contained�gold�

  • � Simberi�Operations:�� 75.8�Mt�@�1.6�g/t�Au�for�� 3.92�Moz�of�contained�gold�

The�30�June�2017�Ore�Reserves�and�Mineral�Resources�Statements�released�to�the�ASX�on�23�August�2017�follow.�

1 Mineral�Resources�are�reported�inclusive�of�Ore�Reserves

Page�74�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

St�Barbara's�Mineral�Resources�and�Ore�Reserves�position�as�at�30�June�2017�is�summarised�and�compared�with�the�2016�statement�in�Table�1.��

Table�1:��St�Barbara�2016�and�2017�Ore�Reserves�and�Mineral�Resources�Summary�

Project 2016OreReserves 2016OreReserves 2016OreReserves 2017Production 2017OreReserves 2017OreReserves 2017OreReserves
Tonnes(‘000) Grade
(g/t)
Ounces(‘000) Ounces(‘000) Tonnes(‘000) Grade
(g/t)
Ounces(‘000)
Gwalia(WA) 6,795 8.3 1,808 265 8,556 7.8 2,133
TowerHill(WA) 2,572 3.7 306 2,572 3.7 306
TotalLeonora 9,367 7.0 2,114 265 11,128 6.8 2,439
Simberi(Oxide) 14,094 1.3 576 116 10,907 1.3 472
Simberi(Sulphide) 13,556 3.0 1,321 12,537 3.5 1,402
TotalSimberi 27,650 2.1 1,897 116 23,444 2.5 1,873
GrandTotal 37,017 3.4 4,011 381 34,572 3.9 4,312
2016MineralResources 2017MineralResources
Tonnes(‘000) Grade
(g/t)
Ounces(‘000) Tonnes
(‘000)
Grade
(g/t)
Ounces(‘000)
Gwalia(WA) 17,294 7.0 3,896 23,753 6.7 5,087
TowerHill(WA) 5,093 3.8 625 5,093 3.8 625
TotalLeonora 22,387 6.3 4,521 28,846 6.2 5,712
Simberi(Oxide) 29,428 1.0 951 21,288 1.1 744
Simberi(Sulphide) 67,850 1.7 3,607 54,517 1.8 3,179
TotalSimberi 97,278 1.5 4,558 75,805 1.6 3,923
GrandTotal 119,665 2.4 9,079 104,651 2.9 9,635

Data�is�rounded�to�thousands�of�tonnes�and�thousands�of�ounces.�Discrepancies�in�totals�may�occur�due�to�rounding.

The�Company’s�Ore�Reserves�and�Mineral�Resources�have�increased�above�net�depletion�primarily�as�a�consequence�of�resource�extension� drilling�at�Gwalia�(Figures�2�&�3).�Extension�drilling�is�continuing�and�the�additional�reserves�will�be�included�in�an�updated�Life�of�Mine�plan�that� is�anticipated�to�increase�mine�life�past�2024.�The�outcome�of�this�planning�work�will�be�available�in�FY18�Q2.�At�Simberi,�Ore�Reserves�have� reduced�marginally�after�mining�depletion,�however,�a�reduction�in�operating�costs�benefitted�reserve�estimation�for�this�cycle.�The�additional� oxide�reserves�allow�Simberi’s�oxide�operation�to�extend�a�further�year.�A�review�of�the�Simberi�geology�model�has�resulted�in�an�overall� reduction�of�Mineral�Resources�for�this�operation,�but�this�has�largely�impacted�Inferred�sulphide�resources.�

Page�75�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Figure�1:�Ore�Reserves�and�Mineral�Resource�FY16�and�FY17�

==> picture [497 x 218] intentionally omitted <==

----- Start of picture text -----

Mineral�Resources� Ore�Reserves
(Moz) (Moz)
9.6
9.1
3.2
3.6
0.7
4.3
1.0 0.6 Simberi�Sulphide 4.0
0.6 1.4
Simberi�Oxide 1.3
0.5
5.1 Tower�Hill 0.6 0.3 0.3
3.9
Gwalia 1.8 2.1
total
FY16 FY17 FY16 FY17
----- End of picture text -----

Figure�2:�Summary�Movement�in�Ore�Reserves�between�FY16�and�FY17

==> picture [497 x 230] intentionally omitted <==

Page�76�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Figure�3:�Summary�Movement�in�Mineral�Resources�between�FY16�and�FY17

==> picture [497 x 246] intentionally omitted <==

Mineral�Resources�Revisions�

Gwalia�(+1,191,000�ounces)�

The�Gwalia�Mineral�Resource�has�been�updated�following�the�completion�of�a�surface�drilling�program�targeting�extensions�to�all�lodes�down�to� 2,200�mbs�and�underground�grade�control�and�resource�definition�drilling�targeting�mineralisation�between�1,420�mbs�and�1,800�mbs.�The� previous�Measured,�Indicated�and�Inferred�Mineral�Resource�Estimate�reported�at�30�June�2016�was�17,294�kt�@�7.0�g/t�Au�containing�3,896�koz� of�gold.�This�has�increased�by�1,191�koz�of�gold�to�23,753�kt�@�6.7�g/t�Au�containing�5,087�koz�of�gold;�the�increase�before�depletion�and� sterilisation�was�1,467�koz.�Variances�between�the�two�estimates�are�primarily�due�to:�

  • Resource�extensions�down�to�2,200�mbs�due�to�surface�drilling�and�changes�to�local�geological�models�as�a�result�of�underground� drilling;�and�

  • Depletion�through�mining�and�sterilisation�of�non�recoverable�resources.�

Simberi�Oxide�(�207,000�ounces)�

A�revised�Mineral�Resource�estimate�was�completed�for�Simberi�Oxide�using�improved�geological�models�that�incorporated�grade�control�drilling� and�mapping�data.�The�previous�publicly�reported�Measured,�Indicated�and�Inferred�Oxide�Mineral�Resource�Estimate�reported�at�30�June�2016� was�29,428�kt�@�1.0�g/t�Au�containing�951�koz�of�gold.�This�has�decreased�by�207�koz�of�gold�to�21,288�kt�@�1.1�g/t�Au�containing�744�koz�of� gold.�Variances�between�the�two�estimates�are�primarily�due�to�depletion�through�mining�and�changes�to�geological�models.�

Simberi�Sulphide�(�428,000�ounces)�

The�Simberi�Sulphide�Mineral�Resource�estimate�was�updated�with�revised�geological�models.�The�previous�Measured,�Indicated�and�Inferred� Sulphide�Mineral�Resource�Estimate�reported�at�30�June�2016�was�67,850�kt�@�1.7�g/t�Au�containing�3,607�koz�of�gold.�This�has�decreased�by� 428�koz�of�gold�to�54,517�kt�@�1.8�g/t�Au�containing�3,179�koz�of�gold.�The�changes�to�geological�models�have�primarily�impacted�Inferred�Mineral� Resources.�

Page�77�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Ore�Reserve�Revisions�

Gwalia�(+325,000�ounces)�

The�previous�Proved�and�Probable�Ore�Reserve�Estimate�reported�at�30�June�2016�was�6,795�kt�@�8.3�g/t�Au�containing�1,808�koz�of�gold.�This� has�increased�by�a�net�325�koz�of�gold�to�8,556�kt�@�7.8�g/t�Au�containing�2,133�koz�of�gold.�Variances�between�the�two�estimates�are�due�to:�

  • Depletion�through�mining�(274�koz);�

  • Reserve�extensions�down�to�2,140�mbs�as�a�result�of�surface�drilling�(316�koz�of�reserves),�and�Geology�and�design�changes�primarily� driven�by�additional�drill�hole�data�which�increased�the�existing�Mineral�Resources�between�1,660�mbs�and�1,940�mbs�(+268�koz�in� reserves);�and�

  • 15�koz�modifying�factors�(dilution).�

Gwalia�Reserve�grade�has�decreased�from�8.3�g/t�Au�at�30�June�2016�to�7.8�g/t�Au�at�30�June�2017,�due�to�FY17�mined�grade�averaging�10.3�g/t� Au,�and�reserves�added�from�depth�extension�below�1,940�mbs�averaging�less�than�the�30�June�2016�Reserve�grade.�

Figure�4:�Gwalia�Ore�Reserve�grade�variance�between�FY16�and�FY17�

==> picture [485 x 215] intentionally omitted <==

==> picture [485 x 108] intentionally omitted <==

Data�is�rounded�to�the�nearest�0.1�g/t�Au.�Discrepancies�in�totals�may�occur�due�to�rounding.�

Simberi�(oxide�and�sulphide�combined:��24,000�ounces)�

The�previous�Proved�and�Probable�Ore�Reserve�Estimate�reported�at�30�June�2016�was�27,650�kt�@�2.1�g/t�Au�containing�1,897�koz�of�gold.�This� has�reduced�by�24�koz�of�gold�to�23,444�kt�@�2.49�g/t�Au�containing�1,873�koz�of�gold.�Variances�between�the�two�estimates�are�primarily�due� to:��

  • Depletion�through�mining;�

  • Changes�in�the�resource�model;�and

  • Reduced�operating�costs�as�mill�throughput�and�mine�output�has�increased.

Page�78�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Ore�Reserves�Statement�as�at�30�June�2017�

Project Proved Probable Total
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Gwalia,(WA) 2,308 9.8 725 6,248 7.0 1,408 8,556 7.8 2,133
TowerHill,(WA) 2,572 3.7 306 2,572 3.7 306
SimberiOxide,(PNG) 3,294 1.4 153 7,613 1.3 319 10,907 1.3 472
SimberiSulphide,(PNG) 245 3.2 25 12,291 3.5 1,307 12,537 3.5 1,402
TotalAllProjects 5,847 4.8 903 28,724 3.6 3,340 34,572 3.9 4,312

Notes�

  1. Ore�Reserves�are�based�on�a�gold�price�of:�Gwalia�(A$1,350/oz),�Tower�Hill�(A$1,250/oz),�Simberi�(US$1,200/oz).�

  2. Cut�off�Grades�Gwalia�(4.0�g/t�Au),�Tower�Hill�(2.8�g/t�Au),�Simberi�Oxide�(0.5�g/t�Au),�Simberi�Sulphide�(1.1�g/t�Au)�

  3. �� Mineral�Resources�are�reported�inclusive�of�Ore�Reserves.

  4. �� Data�is�rounded�to�thousands�of�tonnes�and�thousands�of�ounces.�Discrepancies�in�totals�may�occur�due�to�rounding.

  5. �� Details�relating�to�each�of�the�estimates�are�contained�in�the�2017�Annual�Mineral�Resource�and�Ore�Reserve�Report�at� www.stbarbara.com.au/exploration/Ore�Reserves�mineral�resources/

JORC�Code�Compliance�Statement�

The�information�in�this�report�that�relates�to�Ore�Reserves�is�based�on�information�compiled�by�Mr�Glen�Carthew�and�Mr�Tim�Richards,�who�are� respectively�a�Members�and�a�Fellow�of�the�Australasian�Institute�of�Mining�and�Metallurgy.�Glen�Carthew�and�Tim�Richards�are�full�time� employees�of�St�Barbara�Ltd�and�have�sufficient�experience�relevant�to�the�style�of�mineralisation�and�type�of�deposit�under�consideration�and� to�the�activity�which�they�are�undertaking�to�qualify�as�a�Competent�Person�as�defined�in�the�2012�Edition�of�the�“Australasian�Code�for�Reporting� of�Exploration�Results,�Mineral�Resources�and�Ore�Reserves”.�

Glen�Carthew�and�Tim�Richards�consent�to�the�inclusion�in�the�statement�of�the�matters�based�on�their�information�in�the�form�and�context�in� which�it�appears.�

Page�79�

ST�BARBARA�LIMITED�2017�

Ore�Reserves�and�Mineral�Resources�Statement�as�at�30�June�2017�

Mineral�Resources�Statement�as�at�30�June�2017�

Project Measured Measured Measured Indicated Indicated Indicated Inferred Inferred Total
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Tonnes
('000)
Gold
(g/t)
Ounces
('000)
Gwalia,(WA) 5,045 7.8 1,265 14,877 6.4 3,042 3,831 6.3 780 23,753 6.7 5,087
TowerHill,(WA) 4,604 3.9 574 489 3.3 51 5,093 3.8 625
SimberiOxide,(PNG) 4,056 1.3 164 12,313 1.1 427 4,919 1.0 152 21,288 1.1 744
SimberiSulphide,(PNG) 836 1.7 45 41,005 1.9 2,471 12,676 1.6 663 54,517 1.8 3,179
TotalAllProjects 9,937 4.6 1,474 72,799 2.8 6,514 21,915 2.3 1,646 104,651 2.9 9,635

Notes�

  1. Mineral�Resources�are�reported�inclusive�of�Ore�Reserves.�

  2. Cut�off�Grades�Leonora:�Gwalia�Deeps�(2.5�g/t�Au),�Tower�Hill�(2.5�g/t�Au),�Simberi�Oxide�(0.4�g/t�Au),�Simberi�Sulphide�(0.6�g/t�Au).�

  3. Simberi�Mineral�Resources�are�reported�constrained�by�a�US$1,800�per�ounce�pit�shell.�

  4. Data�is�rounded�to�thousands�of�tonnes�and�thousands�of�ounces.�Discrepancies�in�totals�may�occur�due�to�rounding.�

  5. Details�relating�to�each�of�the�estimates�are�contained�in�the�2017�Annual�Mineral�Resource�and�Ore�Reserve�Report�at� www.stbarbara.com.au/exploration/Ore�Reserves�mineral�resources/

JORC�Code�Compliance�Statement�

The�information�in�this�report�that�relates�to�Mineral�Resources�is�based�on�information�compiled�by�Ms�Jane�Bateman�and�Mr�Robert�Love�who� are�Fellows�of�the�Australasian�Institute�of�Mining�and�Metallurgy.�Jane�Bateman�and�Robert�Love�are�full�time�employees�of�St�Barbara�Ltd�and� have�sufficient�experience�relevant�to�the�style�of�mineralisation�and�type�of�deposit�under�consideration�and�to�the�activity�which�they�are� undertaking�to�qualify�as�Competent�Persons�as�defined�in�the�2012�Edition�of�the�“Australasian�Code�for�Reporting�of�Exploration�Results,� Mineral�Resources�and�Ore�Reserves”.�

Jane�Bateman�and�Robert�Love�consent�to�the�inclusion�in�the�statement�of�the�matters�based�on�their�information�in�the�form�and�context�in� which�it�appears.�

Page�80�

ST�BARBARA�LIMITED�2017�

Shareholder�Information�

Twenty�Largest�Shareholders�

Ordinary�fully�paid�shares�as�at�30�September�2017�

%ofIssued
Rank Name Shares Capital
1. HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 236,063,045 45.80
2. JPMORGANNOMINEESAUSTRALIALIMITED 86,157,657 16.72
3. CITICORPNOMINEESPTYLIMITED 58,449,854 11.34
4. NATIONALNOMINEESLIMITED 18,628,165 3.61
5. BNPPARIBASNOMINEESPTYLTD 7,604,000 1.48
6. BNPPARIBASNOMINEESPTYLTD 7,412,841 1.44
7. HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 4,243,231 0.82
8. BNPPARIBASNOMSPTYLTD 4,154,185 0.81
9. NATIONALNOMINEESLIMITED 3,500,000 0.68
10. AMPLIFELIMITED 2,965,359 0.58
11. SANDHURSTTRUSTEESLTD 2,677,087 0.52
12. SBNNOMINEESPTYLIMITED<10004ACCOUNT> 2,621,000 0.51
13. NATIONALNOMINEESLIMITED 2,546,675 0.49
14. BRISPOTNOMINEESPTYLTD 2,473,731 0.48
15. CITICORPNOMINEESPTYLIMITED 1,497,848 0.29
16. NORTHCLIFFEHOLDINGSPTYLTD 1,450,000 0.28
17. UBSNOMINEESPTYLTD 1,314,841 0.26
18. CPUSHAREPLANSPTYLTD 1,106,250 0.21
19. CSTHIRDNOMINEESPTYLIMITED 942,864 0.18
20. MERRILLLYNCH(AUSTRALIA)NOMINEESPTYLIMITED 937,500 0.18
Totaltop20holdersofordinaryfullypaidshares 446,746,133 86.67
Totalremainingholders 68,681,059 13.33
Total 515,427,192 100.00

Page�81�

ST�BARBARA�LIMITED�2017�

Shareholder�Information�

Distribution�of�Shareholdings�

Ordinary�fully�paid�shares�as�at�30�September�2017�

%ofIssued
Range TotalHolders Shares Capital
1–1,000 4,108 1,725,931 0.33
1,001–5,000 3,692 9,158,753 1.78
5,001–10,000 931 6,981,616 1.35
10,001–100,000 966 27,355,582 5.31
100,001andover 117 470,205,310 91.23
Total 9,814 515,427,192 100.00

Unmarketable�Parcels�

Ordinary�fully�paid�shares�as�at�30�September�2017

Minimum
TotalHolders Shares ParcelSize
Minimum$500.00parcelat$2.63perunit 1,196 73,936 191

Substantial�Shareholders��

Ordinary�fully�paid�shares�as�at�30�September�2017�

Name Shares %ofIssued
Capital
VanEckAssociatesCorporation 48,006,771 9.7%
M&GInvestmentManagementLtd 36,543,018 7.3%
NorgesBank 30,336,043 5.9%
VinvaInvestmentManagement 25,862,522 5.2%

Page�82�

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ABN�36�009�165�066�

BOARD�OF�DIRECTORS��

T�C�Netscher�� Non�Executive�Chairman� R�S�Vassie�� Managing�Director�&�CEO� K�J�Gleeson�� Non�Executive�Director� D�E�J�Moroney� Non�Executive�Director�

COMPANY�SECRETARY�� R�R�Cole��

REGISTERED�OFFICE�� Level�10,�432�St�Kilda�Road�� Melbourne�Victoria�3004�Australia�� Telephone:�+61�3�8660�1900� Facsimile:�+61�3�8660�1999�� Email:�[email protected]�� www.stbarbara.com.au��

SHARE�REGISTRY�

Computershare�Investment�Services�Pty�Ltd� GPO�Box�2975�Melbourne�Victoria�3001�Australia�� Telephone�(within�Australia):�1300�653�935�� Telephone�(international):�+61�3�9415�4356� Facsimile:�+61�3�9473�2500� www.investorcentre.com/au��

AUDITOR�� PricewaterhouseCoopers� 2�Riverside�Quay� Southbank�Victoria�3006�Australia�

STOCK�EXCHANGE�LISTING�� Shares�in�St�Barbara�Limited�are�quoted�on�the�� Australian�Securities�Exchange�(ASX),�Ticker�Symbol:�SBM�

==> picture [143 x 44] intentionally omitted <==

ABN 36 009 165 066

Notice of 2017 Annual General Meeting of St Barbara Limited

Notice is given that the 2017 Annual General Meeting of St Barbara Limited will be held:

Date: 29 November 2017 Time: 11:00 am (Melbourne time) Venue: Royce Conference Room Royce Hotel 379 St Kilda Road Melbourne Victoria 3004

Items of Business

1. Annual Reports

To receive and consider the Annual Financial Report of the Company and the reports of the Directors and Auditor for the year ended 30 June 2017.

2. Resolution 1: Adoption of Remuneration Report

To consider and, if thought fit, pass the following as an ordinary resolution:

“That the Remuneration Report for the year ended 30 June 2017 as set out on pages 15 to 34 (inclusive) of the Annual Report be adopted.”

Note – the vote on this resolution is advisory only and does not bind the Directors or the Company.

3. Resolution 2: Re‐election of Director – Mr Tim Netscher

To consider and, if thought fit, pass the following as an ordinary resolution:

“That Mr Tim Netscher, being a Director of the Company who retires pursuant to article 3.6 of the Company’s Constitution, and being eligible, be re‐elected as a Director of the Company.”

4. Resolution 3: Approval of issue of performance rights to Mr Robert (Bob) Vassie, Managing Director and Chief Executive Officer

To consider and, if thought fit, pass the following as an ordinary resolution:

“That, for the purposes of ASX Listing Rule 10.14, sections 200B and 200E of the Corporations Act and for all other purposes, approval be given to issue to Mr Bob Vassie 218,748 performance rights to acquire fully paid ordinary shares in the capital of the Company, on the terms and conditions set out and to provide Mr Vassie the benefits described, in the Explanatory Memorandum accompanying the Notice convening this Annual General Meeting, in part consideration of his employment as Managing Director and Chief Executive Officer of the Company in respect of the current 2018 financial year."

By Order of the Board

Rowan Cole Company Secretary 20 October 2017

Notice of 2017 Annual General Meeting

Eligibility to attend and vote at the Meeting

The Board has determined that the Shareholders entitled to attend and vote at the Meeting are those persons who are the registered holders of Shares on 27 November 2017 at 7:00 pm (Melbourne time).

Voting in Person or by Proxy

If you are a shareholder entitled to attend the meeting and vote, you have the right to appoint a proxy to attend and vote on your behalf. A proxy need not be a Shareholder and can be either an individual or a body corporate.

If you appoint a body corporate as a proxy, that body corporate will need to ensure that it:

  • appoints an individual as its corporate representative to exercise its powers at the meeting, in accordance with section 250D of the Corporations Act; and

  • provides satisfactory evidence of the appointment of its corporate representative prior to commencement of the meeting.

If such evidence is not received before the meeting, then the body corporate (through its representative) will not be permitted to act as a proxy.

If you are entitled to cast 2 or more votes, you may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy will exercise half of your votes.

A Proxy Form accompanies this Notice of Annual General Meeting.

For an appointment of a proxy to be effective for the Meeting, the proxy's appointment, and any authority under which the Proxy Form is signed or otherwise authenticated, must be received by St Barbara’s share registry by no later than 11:00 am on 27 November 2017 (Melbourne time) . Proxy Forms received after this time will not be effective for the scheduled commencement of the Annual General Meeting.

Proxy appointments and relevant authorities may be delivered to St Barbara's share registrar by one of the following methods:

Mail to: Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria, 3001

  • Fax to: 1800 783 447 (within Australia), +61 3 9473 2555 (outside Australia)

Online: login at www.investorvote.com.au using the Control Number found on the front of your accompanying proxy form and follow the instructions. Alternatively, with your mobile device scan the QR code located on the front of the proxy form and follow the instructions. You will be taken to have signed your Proxy Form if you lodge it in accordance with the instructions given on the website.

For details on how to complete and lodge the Proxy Form, please refer to the instructions on the Proxy Form.

For intermediary online subscribers only (custodians) please visit www.intermediaryonline.com.

Questions

If you have any questions about any matter contained in this Meeting Documentation, please contact Mr Rowan Cole, Company Secretary, at [email protected] or on +61 3 8660 1900.

Webcast

A live audio webcast of the Annual General Meeting will be available on St Barbara’s website at www.stbarbara.com.au/investors/webcast/. The audio webcast is ‘listen only’ and does not enable questions. The audio webcast will also be available on the website after the conclusion of the meeting.

Voting recommendations of the Board

If you wish to appoint a proxy on the enclosed Proxy Form to vote on your behalf in the manner consistent with the voting recommendations of the Board, mark the “ FOR ” box for Resolutions 1 to 3 as set out in the example below. The background and reasons for these recommendations are set out in the enclosed Explanatory Memorandum.

The Board recommends that Shareholders vote FOR Resolutions 1 to 3

  

page 2

Voting Exclusion Statement

Resolution 1: Adoption of the Remuneration Report

The Remuneration Report identifies the Company's Key Management Personnel for the financial year to 30 June 2017.

Under the Corporations Act, Key Management Personnel (including Directors) of the Company, details of whose remuneration are included in the Remuneration Report, and their closely related parties (as defined in the Corporations Act), (each a Restricted Person ), are prohibited from voting on Resolution 1 in any capacity (e.g.: as a Shareholder, proxy, attorney or corporate representative).

However, the prohibition does not apply if:

  • the Restricted Person is appointed as a proxy for a Shareholder entitled to vote and the proxy appointment specifies the way the Restricted Person is to vote on the resolution; or

  • the chair of the Meeting ( Chairman ) has been appointed as a proxy for a Shareholder entitled to vote and the proxy appointment:

  • does not specify the way the Chairman is to vote on the resolution; and

  • expressly authorises the Chairman to exercise the proxy (notwithstanding that Resolution 1 is connected directly or indirectly with the remuneration of Key Management Personnel).

The Chairman intends to vote undirected proxies (where the Chairman has been appropriately authorised) in favour of Resolution 1.

Other Directors and other Key Management Personnel of the Company and their closely related parties must not cast any votes in respect of Resolution 1 that arise from any undirected proxy that they hold.

Resolution 3: Approval of issue of performance rights to Mr Bob Vassie

In accordance with the ASX Listing Rules (and having regard to the voting restrictions in section 200E(2A) of the Corporations Act as it applies to Resolution 3), the Company will disregard any votes cast on Resolution 3 by Mr Vassie and his associates, other than where the vote:

  • is cast by a person as proxy for a Shareholder (not being Mr Vassie or any associate) who is entitled to vote, in accordance with the directions on the Proxy Form; or

  • is cast by the Chairman as proxy for a Shareholder (not being Mr Vassie or any associate) who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Further, under the Corporations Act, the Company's Key Management Personnel and their closely related parties are prohibited from voting on resolutions connected directly or indirectly with the remuneration of Key Management Personnel (such as Resolution 3) as a proxy for a Shareholder entitled to vote where the proxy appointment does not specify the way the proxy is to vote on the resolution.

However, this Corporations Act prohibition does not apply to the Chairman if the Chairman has been appointed as the proxy and the proxy appointment expressly authorises the Chairman to exercise an undirected proxy. The Chairman intends to vote undirected proxies (where the Chairman has been appropriately authorised) in favour of Resolution 3.

Definitions

Annual General Meeting or Meeting means the annual general meeting of St Barbara to be held on Wednesday 29 November 2017 at 11:00 am (Melbourne time) in the Royce Hotel, 379 St Kilda Road, Melbourne, Victoria to consider and, if thought fit, pass the resolutions set out in the Notice of Annual General Meeting

Annual Report means the 2017 annual report of St Barbara

ASIC means the Australian Securities and Investments Commission

ASX means ASX Limited

ASX Listing Rules means the official Listing Rules of ASX Limited

Board means the board of Directors of St Barbara

Chairman means the chairman of the Annual General Meeting of St Barbara

Change of Control means that one or more persons acting in concert have acquired or are likely to imminently acquire “control” of the Company as defined in section 50AA of the Corporations Act

Corporations Act means the Corporations Act 2001 (Cth)

Director means a director of St Barbara

Explanatory Memorandum means the explanatory memorandum accompanying the Notice of Annual General Meeting contained in this Meeting Documentation

FY17 Performance Rights means the LTI rights granted in respect of the 2017 financial year

FY18 Performance Rights means the LTI rights granted in respect of the 2018 financial year (which are subject to the approval of Resolution 3, for the number of performance rights to be issued to Mr Bob Vassie)

Key Management Personnel has the meaning given in the Corporations Act

KPI means key performance indicator

LTI means long term incentive

Meeting Documentation means this document, comprising the Notice of Annual General Meeting, Explanatory Memorandum and the Proxy Form

Non‐Executive Director means a Director who is not employed by the Company in an executive or management capacity

Notice of Annual General Meeting means the notice of meeting which is enclosed in the Meeting Documentation

Proxy Form means the proxy form for the Annual General Meeting contained in the Meeting Documentation

RP means the rights plan of the Company

Share means a fully paid ordinary share in the capital of St Barbara

Shareholder means a holder of Shares

St Barbara or the Company means St Barbara Limited ABN 36 009 165 066

STI means short term incentive

VWAP means volume weighted average price

Certain capitalised terms used in this document are defined below.

page 3

Explanatory Notes to Shareholders

These Explanatory Notes have been prepared to assist Shareholders to understand the business to be put to Shareholders at the forthcoming Annual General Meeting on 29 November 2017.

Ordinary Business

1. Annual Reports

The Corporations Act requires:

  • the reports of the Directors and Auditor; and

  • the Annual Financial Report, including the financial statements of the Company for the year ended 30 June 2017,

to be laid before the Annual General Meeting.

The 2017 Annual Report is available on the St Barbara website at www.stbarbara.com.au.

The Corporations Act does not require a vote of Shareholders on the reports or statements. However, Shareholders will be able to ask questions at the meeting in relation to the reports.

Also, a reasonable opportunity will be given to Shareholders to ask the Company’s Auditor for the year ended 30 June 2017, Mr John O’Donoghue, Partner, PricewaterhouseCoopers, questions relevant to the conduct of the audit, the preparation and content of the Auditor’s report, the accounting policies adopted by the Company in relation to the preparation of the financial statements and the independence of the Auditor in relation to the conduct of the audit.

2. Resolution 1: Adoption of Remuneration Report

The Remuneration Report sets out details on the remuneration paid to Non‐Executive Directors, the Managing Director and Chief Executive Officer and Chief Financial Officer. The Remuneration Report is set out on pages 15 to 34 (inclusive) of the 2017 Annual Report, and is available on the St Barbara website at www.stbarbara.com.au.

The Remuneration Report is required to be considered for adoption in accordance with section 250R of the Corporations Act.

Under section 250R(3) of the Corporations Act, the vote on this resolution is advisory only and does not bind the Directors or the Company. Shareholders will be able to ask questions about, and make comments on, the Remuneration Report at the AGM.

Board recommendation

The Board unanimously recommends that Shareholders vote in favour of this resolution.

3. Resolution 2: Re‐election of Director – Mr Tim Netscher

Mr Tim Netscher BSc(Eng) (Chemical), BCom, MBA, FIChE, CEng, MAICD

A Director of the Company since 17 February 2014, Mr Netscher is Chairman of the Board, Chair of the Health, Safety, Environment and Community Committee and a member of the Remuneration Committee and Audit & Risk Committee.

Mr Netscher is currently the Non‐Executive Chairman of Gold Road Resources Limited and a Non‐Executive Director of Western Areas Limited.

Mr Netscher is an experienced international mining executive with extensive operational, project development, and transactional experience and expertise in senior executive management roles. Mr Netscher’s experience covers a wide range of resources including nickel, coal, iron ore, uranium and gold and regions including Africa, Asia and Australia.

Mr Netscher was re‐elected at the Company's Annual General Meeting held on 27 November 2015.

In accordance with the Company's Constitution, Mr Netscher will retire at the Annual General Meeting and, being eligible, will seek re‐election.

Board recommendation

The Board, with Mr Netscher abstaining, unanimously recommends that Shareholders vote in favour of this resolution.

4. Resolution 3: Approval of issue of performance rights to Mr Bob Vassie, Managing Director and Chief Executive Officer

Introduction

The Board has resolved, subject to Shareholder approval, to issue Mr Vassie, Managing Director and Chief Executive Officer, performance rights pursuant to the Rights Plan ( RP ) to acquire Shares in the capital of the Company, in the quantum and on the terms which are set out below. These performance rights represent the long term incentive (LTI) component of Mr Vassie's total remuneration in respect of the 2018 financial year.

  • The number of performance rights to be issued in respect of the 2018 financial year ( FY18 Performance Rights ) is 218,748.

  • The number of FY18 Performance Rights was determined on the basis of the 10 day VWAP of Shares up to and including 30 June 2017, which was $2.89 per share.

  • The issue of the FY18 Performance Rights is subject to the terms of the RP approved by the Board on 22 September 2015, the material details of which are summarised in this document.

  • No cash consideration is payable for the issue, or on vesting or exercise of the FY18 Performance Rights.

page 4

  • The FY18 Performance Rights will vest subject to prescribed service and performance conditions being met. The number of FY18 Performance Rights that vest will be subject to the Company’s relative performance for each of the performance conditions.

  • The service condition requires continuous employment for a three year period commencing on 1 July 2017. The Board has discretion in circumstances of death, disability or bona fide redundancy to vary the service condition and reduce the number of performance rights proportionately for a period of service of less than three years.

  • The performance conditions comprise the following:

    • a. a condition based on Relative Total Shareholder Return; and

    • b. a condition based on the Return On Capital Employed by the Company,

each of which is calculated over the three year period commencing 1 July 2017 and ending on 30 June 2020 and is described in more detail in the attached Schedule. This vesting period may be extended by up to two years if retesting becomes necessary. Retesting is at Board discretion, and rights would only vest over the longer period if there was positive total shareholder return, and minimum threshold performance was achieved for Relative Total Shareholder Return and Return On Capital Employed, over the extended vesting period.

  • Subject to the satisfaction of the service and performance conditions and the rules of the RP, Mr Vassie will receive one Share for each FY18 Performance Right that vests. Any FY18 Performance Rights which do not vest will lapse.

  • The FY18 Performance Rights will not be listed on the ASX and will not be transferable, except as permitted under the RP.

  • In the event of a Change of Control of the Company, the RP provides that the Board may, in its absolute discretion, determine that all or a specified number of FY18 Performance Rights vest, having regard to whether pro‐rata performance is consistent with the performance conditions applicable to those FY18 Performance Rights over the period from the date of grant to the date of the Change of Control.

Shareholder approval

Shareholder approval for the issue of the FY18 Performance Rights to Mr Vassie is sought for all purposes under the Corporations Act and the ASX Listing Rules, including in particular, ASX Listing Rule 10.14, and sections 200B and 200E of the Corporations Act.

Under ASX Listing Rule 10.14, the acquisition of securities by a director under an employee incentive scheme generally requires Shareholder approval. Shareholder approval is therefore sought for the acquisition by Mr Vassie of the FY18 Performance Rights and Shares should the FY18 Performance Rights subsequently vest. If approval is given under ASX Listing Rule 10.14, the grant of

the rights will not use up the Company's capacity to issue equity under ASX Listing Rule 7.1.

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company or a related body corporate if it is approved by Shareholders in accordance with section 200E or an exemption applies. Section 200B of the Corporations Act applies to managerial or executive officers of the Company or any of its subsidiaries, which includes Mr Vassie. The term ‘benefit’ has a wide operation and, in effect, includes the automatic or accelerated vesting of the FY18 Performance Rights under the rules of the RP.

It is proposed, therefore, that this resolution will also approve, under section 200E of the Corporations Act, any ‘termination benefit’ that may be provided to Mr Vassie under the RP in relation to the FY18 Performance Rights to be granted to him, in addition to any other termination benefits that may be provided to Mr Vassie under the Corporations Act. The termination benefit that may be given under the RP is the early vesting of the FY18 Performance Rights (and the receipt of Shares upon exercise of the FY18 Performance Rights) if Mr Vassie ceases employment with the Company due to death, disability, bona fide redundancy or other reason with the approval of the Board.

The value of such benefits cannot presently be ascertained but matters, events and circumstances that will, or are likely to, affect the calculation of that value include:

  1. the number of performance rights held by Mr Vassie prior to cessation of employment;

  2. the number of performance rights that vest (which could be all of the performance rights held by Mr Vassie). The Board's decision as to the number of performance rights that vest will depend on, among other things, the circumstances of Mr Vassie's cessation of employment (for example, whether due to death, disability, redundancy or other reasons approved by the Board), the Board's assessment of Mr Vassie's performance in the period up to cessation of employment, the degree to which the performance conditions have been met at the relevant time, and the duration of Mr Vassie's employment; and

  3. the market price of Shares on ASX on the last ten ASX trading days up to and including the date of calculation.

The number of performance rights that could vest upon Mr Vassie ceasing employment, where the Board determines to permit performance rights to vest, will not exceed the maximum number of performance rights held by Mr Vassie.

Disclosures made for the purposes of ASX Listing Rule 10.15:

In accordance with ASX Listing Rule 10.15, the Company notes that:

  • the maximum number of securities that can be awarded to Mr Vassie if this resolution is approved is 218,748 FY18 Performance Rights, entitling Mr Vassie to a maximum of 218,748 Shares if all FY18 Performance Rights subsequently vest;

page 5

  • the price payable on the issue, vesting or exercise of each FY18 Performance Rights is nil;

  • Mr Vassie was granted 196,708 performance rights for nil cash consideration on 12 December 2016 under the Rights Plan ( RP ) approved by the Board on 22 September 2015, the material details of which were summarised in the Notice of 2016 Annual General Meeting;

  • Mr Vassie is the only Director entitled to participate in the RP because he is the only Executive Director and the Company has not declared any Non‐Executive Director as being eligible to participate in the RP;

  • there have not been any grants made to any Director or associate of a Director under the RP since Shareholder approval was last obtained at the Company’s Annual General Meeting held on 30 November 2016, aside from the issue of 196,708 performance rights (for nil cash consideration and no amount payable on vesting) to Mr Vassie on 12 December 2016, in accordance with Shareholder approval obtained at the Company’s Annual General Meeting held on 30 November 2016;

  • there is no loan proposed in relation to the proposed award of the FY18 Performance Rights to Mr Vassie; and

  • Mr Vassie's FY18 Performance Rights are intended to be issued by 31 December 2017 and in any event will not be issued later than 12 months after the date of the Meeting.

Board recommendation

The Board, with Mr Vassie abstaining, unanimously recommends the approval of the issue of the performance rights and of the related termination benefits to Mr Vassie and, accordingly, that Shareholders vote in favour of this resolution.

Schedule:

Performance rights – Further details

Performance rights to be granted to Key Management Personnel in respect of the 2018 financial year ( FY18 Performance Rights ) will be offered pursuant to the terms of the Rights Plan ( RP ) approved by the Board on 22 September 2015 and the performance conditions set out below.

1. Performance rights pricing

The issue price of the performance rights is based on the 10 day volume weighted average price ( VWAP ) on the ASX of the Company’s share price up to, and including, the last business day of the financial period immediately preceding the period that the performance rights relate to.

FY17 Performance Rights are priced at $2.89 per right, based on the 10 day VWAP up to and including 30 June 2017.

2. Performance conditions for performance rights

The performance conditions for FY18 Performance Rights will be measured over a three year vesting period commencing 1 July 2017 and ending on 30 June 2020. This vesting period may be extended by up to two years if retesting becomes necessary. Vesting conditions include satisfying conditions relating to:

  • Relative Total Shareholder Return (67% weighting); and

  • Return on Capital Employed (33% weighting).

3. Change of Control

In the event of a Change of Control of the Company, the RP provides that the Board may, in its absolute discretion, determine that all or a specified number of FY18 Performance Rights vest, having regard to whether pro‐ rata performance is consistent with the performance conditions applicable to those FY18 Performance Rights over the period from the date of grant to the date of the Change of Control.

4. Percentage of relevant total fixed remuneration offered as LTIs for the 2018 financial year

LTIs for the 2018 financial year
Managing Director and Chief 75%
Executive Officer
Executive General Manager 60%

The Board has the discretion to vary the relevant percentage each year, having regard to external advice and / or relevant market benchmarks.

5. An example of how performance rights are calculated for the 2018 financial year (assuming the maximum award level) is set out below:

el) is set out below:
Executive Level 5 Total Fixed $400,000
Remuneration (TFR) (example only)
LTI award value $240,000
60% of TFR (i.e. 60% of
TFR)
Performance rights issue price $2.89
(10 day VWAP)
Performance rights to be granted 83,045 rights
($240,000 ÷ $2.89)

6. Relative TSR

The Relative Total Shareholder Return ( Relative TSR or RTSR ) 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 comparator group of companies for FY18 Performance Rights is set out in the table below. At the discretion of the Board, the composition of the comparator group may change from time to time.

page 6

Comparator group of companies for FY18 Performance Rights

Alacer Gold Corp. (ASX: AQG)
Beadell Resources Limited (ASX: BDR)
Evolution Mining Limited (ASX: EVN)
Focus Minerals Ltd (ASX: FML)
Intrepid Mines Limited (ASX: IAU)
Kingsgate Consolidated Limited (ASX: KCN)
Medusa Mining Limited (ASX: MML)
Northern Star Resources Ltd (ASX: NST)
OceanaGold Corporation (ASX: OGC)
Perseus Mining Limited (ASX: PRU)
Ramelius Resources Limited (ASX: RMS)
Regis Resources Limited (ASX: RRL)
Resolute Mining Limited (ASX: RSG)
Saracen Mineral Holdings Limited (ASX: SAR)
Silver Lake Resources Limited (ASX: SLR)
Tanami Gold NL (ASX: TAM)
Troy Resources Limited (ASX: TRY)
Oz Minerals Limited (ASX: OZL)

TSR measures the growth for a financial year in the price company was listed and the average TSR of the remaining of shares plus cash distributions notionally reinvested in comparator companies. shares. Company and comparator TSR performances are Except when otherwise determined in the discretion of the measured using the 10 day VWAP calculation up to, and Board, the proportion of a grant that is subject to a TSR including, the last business day of the financial period vesting condition will not vest unless the Company’s TSR immediately preceding the period that the performance for the vesting period is greater than nil. rights relate to, and in determining the closing TSR performances at the end of the three year period and, if The proportion of the FY18 Performance Rights that vest retesting applies, at the end of the fourth and fifth year. will be influenced by the Company’s TSR relative to the Where a comparator company ceases to be listed on the comparator group over the three year vesting period ASX during the vesting period, the corresponding TSR is commencing 1 July 2017 and ending on 30 June 2020 as adjusted, taking into account the period the ceasing outlined below:

Relative TSR Performance % Contribution to the Number of
Performance Rights to Vest
Below 50thpercentile 0%
50thpercentile 50%
Between 50th& 75thpercentiles Pro‐rata from 50% to 100%
75thpercentile and above 100%

7. Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE) measures the efficiency with which management uses capital in seeking to increase shareholder value. The proportion of the FY18 Performance Rights that vest will be influenced by the ROCE achieved by the Company over the three year vesting period commencing 1 July 2017 and ending on 30 June 2020 as outlined below:

Return on Capital Employed (ROCE) % Contribution to the Number of
Performance Rights to Vest
Less than or equal to the average annual weighted average
cost of capital (WACC) over the three year period
commencing on 1 July 2017
0%
WACC (calculated as above) + 3% 50%
WACC (calculated as above) + between 3% and 7% Pro‐rata from 50% to 100%
WACC (calculated as above) + 7% 100%

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8. Example of calculation of the number of performance rights to vest

Assuming the following measures over the three year vesting period commencing on 1 July 2017 and ending on 30 June 2020:

 Relative TSR: 70%  ROCE WACC + 4%

then the following proportion of performance rights will vest:

(a) Relative TSR

Weighting: 67% Actual score: 70[th] percentile Calculation: 50% (for achieving the 50[th] percentile) + ((70% ‐ 50%)  (75% ‐ 50%)) x (100% ‐ 50%) = 90%

(b) Return on Capital Employed (ROCE)

Weighting: 33% Actual ROCE: WACC + 4% Calculation: 50% (for achieving the 50[th] percentile) + ((4% ‐ 3%)  (7% ‐ 3%)) x (100% ‐ 50%) = 62.5%

  • (c) Combined score

(90% x 67%) + (62.5% x 33%) = 80.9%

Using the above example of an executive being issued with 83,045 performance rights, based on the above 80.9% combined score, 67,183 (= 80.9% x 83,045) performance rights will vest.

9. Retesting

The 2017 Remuneration Report notes that the gold industry is much more volatile than the economy in general and tends to be cyclical in nature. Consequently, at its discretion the Board may choose to retest the relevant performance rights for the same performance conditions (i.e. RTSR above 50th percentile and ROCE above WACC +3%) one year after the original vesting period (and potentially again one year later).

In the event that none of the rights vest at the end of the three year vesting period, the vesting period will be extended by one year and a second testing for vesting will occur following the end of the extended period using the same vesting scales as at paragraphs 6 and 7 above. If none of the rights vest at the second test, the vesting period will be extended by a further year and a third test for vesting will occur following the end of the extended period using the same vesting scales as at paragraphs 6 and 7 above.

Performance rights would only vest over an extended vesting period (of four or five years), with Board discretion, if there was positive total shareholder return, and minimum threshold performance for RSTR and ROCE, over the extended vesting period.

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Lodge your vote:

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Online: www.investorvote.com.au

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

SBM

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

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For all enquiries call:

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Proxy Form

Vote and view the annual report online

  • Go to www.investorvote.com.au or scan the QR Code with your mobile device.

  • • Follow the instructions on the secure website to vote.

Your access information that you will need to vote:

Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

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  • For your vote to be effective it must be received by 11:00am (Melbourne time) on Monday, 27 November 2017.

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Signing Instructions for Proxy Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

A proxy need not be a securityholder of the Company.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,or turn over to complete the form

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MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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

Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a  broker (reference number commences with ‘ X ’) should advise your broker of any changes. I 9999999999 I ND

Proxy Form

Appoint a Proxy to Vote on Your Behalf

Please mark to indicate your directions

XX

I/We being a member/s of St Barbara Limited hereby appoint

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the ChairmanPLEASE NOTE: Leave this box blank if OR you have selected the Chairman of the of the Meeting Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of St Barbara Limited to be held in the Royce Conference Room, Royce Hotel, 379 St Kilda Road, Melbourne, Victoria on Wednesday, 29 November 2017 at 11.00am (Melbourne time) and at any adjournment or postponement of that Meeting.

Important Note:

Chairman authorised to exercise undirected proxies on remuneration related resolutions : Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolutions 1 and 3 (except where I/we have indicated a different voting intention below) even though Resolutions 1 and 3 are connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman. If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Resolutions 1 and 3 by marking the appropriate box in step 2 below.

Please Note: To fully inform shareholders in exercising their right to vote, please note that the Chairman of the Meeting intends to vote undirected proxies in favour of each resolution.

Items of Business

PLEASE NOTE: If you mark the Abstain box for a resolution, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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For Against Abstain
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For Again st
Abstain
Resolution 1 Adoption of Remuneration Report
Resolution 2 Re-election of Director – Mr Tim Netscher
Resolution 3 Approval of issue of performance rights to Mr Robert (Bob) Vassie, Managing Director and Chief
Executive Officer

SIGN

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Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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S B M

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