ST BARBARA LIMITED — Capital/Financing Update 2008

Jun 9, 2008

Pathfinder Prospectus

Attached is the Pathfinder Prospectus in relation to A$120 million fully underwritten Pro‐rata Entitlement Offer and Institutional Placement.

St Barbara Limited ACN 009 165 066 Level 21, 90 Collins Street, Melbourne Vic 3000 Telephone +61 3 8660 1900 Facsimile +61 3 8660 1999 Email melbourne@stbarbara.com.au Website www.stbarbara.com.au

Ross Kennedy Company Secretary

10 June 2008

DISCLAIMER AND IMPORTANT INFORMATION

DRAFT PROSPECTUS

This document is a draft prospectus or pathfinder document for the purposes of section 734(9) of the Corporations Act 2001 Cth ("Corporations Act") in respect of a proposed entitlement offer of ordinary shares ("Securities") structured as a Renounceable Accelerated Pro-rata Issue with Dual Bookbuild Structures ("RAPIDS") by St Barbara Limited (ABN 36 009 165 066) ("Company"). This document has been prepared solely for information purposes and is provided so that you may consider an invitation to participate in the proposed offer of Securities ("Opportunity").

This document is not a prospectus and has not been lodged with the Australian Securities and Investments Commission ("ASIC"). This document is a draft only and is subject to change prior to it being approved by the directors of Company and lodged with ASIC. It is expected that a prospectus will be lodged with ASIC on or about 13 June 2008 ("Prospectus"). The Prospectus will be available in both electronic and paper form.

This document has been prepared at a time when the due diligence process and drafting of the Prospectus has not been finalised and therefore the information presented in this document may differ materially in both content and presentation from that presented in the Prospectus, and the Company reserves the right to alter the Prospectus accordingly. This document does not purport to be all inclusive or to contain all information which recipients may require to make an informed assessment of whether to invest in Securities.

The Company may in its absolute discretion, but without being under any obligation to do so, update or supplement this document. Any further information will be provided subject to these terms and conditions.

Certain parties named in this document have not reviewed the references to them and may seek amendments to these references once this review has occurred. These parties include Macquarie Capital Advisers Limited ("Macquarie"), Freehills, KPMG and Computershare Investor Services Pty Ltd.

NO DISCLOSURE DOCUMENT REQUIRED

This document is provided to you on the basis that you are a person, for the purposes of section 708 of the Corporations Act, to whom an offer of securities may be made without a disclosure document. This document is provided to you in accordance with section 734(9) of the Corporations Act.

CONFIDENTIALITY

This document is confidential. You must not copy this document or reproduce or distribute it, in whole or in part, to any other person unless they are directly involved in your consideration of the Opportunity or otherwise with the prior written consent of the Company.

DO NOT RELY ON THIS DOCUMENT

This document is based on information supplied by the Company and from sources believed to be reliable. No attempt has been made to independently verify the information. This document must not be relied on to make an investment decision. Any investment decision about the Opportunity should be made based on the Prospectus.

This document is not, and should not be construed as a recommendation by the Company, Macquarie or their advisers to you to participate in the Opportunity. Nothing in this document constitutes legal, tax or other advice. The information in this document does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision, you should consider whether an investment in the Securities or the Company is appropriate in light of your particular investment needs, objectives and financial circumstances and consider obtaining professional advice. In all cases you should conduct your own investigations and analysis of the Opportunity, the financial condition, assets and liabilities and business affairs of the Company and its business and the contents of this document.

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR ADVERTISEMENT

This document does not constitute an invitation to apply for, or an offer of, Securities and does not contain any application form for Securities. This document does not constitute an advertisement for an offer or proposed offer of Securities. Neither this document nor anything contained in it shall form the basis of any contract or commitment and it is not intended to induce any person to engage in, or refrain from engaging in, any transaction.

DISTRIBUTION

Distribution of this document outside Australia may be restricted by law. Persons who come into possession of this document who are not in Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This document has not been filed, registered or approved in any jurisdiction. No action has been taken or is proposed to be taken to register or qualify this document, the Securities or the proposed offer, or otherwise permit a public offering of Securities, in any jurisdiction outside Australia. The Securities the subject of the Opportunity have not been, and will not be, registered under the U.S. Securities Act of 1933 and may not be offered, sold or resold in the US or to, or for the account or benefit of US persons (as defined in Regulation S of the US Securities Act). This document may not be sent to any person in the US or otherwise distributed within the US or to US persons.

NO LIABILITY

The Company has prepared this document based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in this document. To the maximum extent permitted by law, the Company and Macquarie, their related bodies corporate (as that term is defined in the Corporations Act) and the officers, directors, employees, advisers and agents of those entities do not accept any responsibility or liability including, without limitation, any liability arising from fault or negligence on the part of any person, for any loss arising from the use of this document or its contents or otherwise arising in connection with it.

Some of the information contained in this document may constitute forward-looking statements that are subject to various risks and uncertainties. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect. The Company does not make any representation or warranty as to the accuracy of such statements or assumptions. You acknowledge that circumstances may change and the contents of this document may become outdated as a result. You also acknowledge that no audit or review has been undertaken by an independent third party of the assumptions, data, results, calculations and forecasts contained in or referred to in this document.

REPRESENTATIONS, WARRANTIES, ACKNOWLEDGEMENT AND INDEMNITY

By accepting this document, you acknowledge and agree that you understand the contents of this notice and that you agree to abide by the terms and conditions of this notice. You also:

• acknowledge and agree that this document and all of the information contained in it is confidential information which may be materially price sensitive to the Company and you acknowledge and agree that you will:
  • o keep strictly confidential the document and all such confidential information contained within it, and all other information made available to you in connection with it;
  • o act in accordance with the prohibitions on insider trading contained in the Corporations Act;
  • o not, and will procure that your officers and employees will not, use the document, in whole or in part, for any purpose other than deciding whether or not to participate in the Opportunity;
  • o not, and will procure that your officers and employees will not, copy, reproduce or distribute this document, and all other information made available in connection with it, in whole or in part, nor disclose any such information nor the contents of the document, including the nature of the Opportunity, to any other person at any time without the prior written consent of the Company and any such person may be required to enter into a confidentiality undertaking in terms acceptable to the Company as a condition of the Company giving its consent; and
  • o upon request, return promptly this document together with any other materials received in connection with it, to the Company without retaining any copies;
• represent and warrant that you are a person to whom an offer of securities can be made without a disclosure document under the Corporations Act;
• represent and warrant that you will act on the basis of your own investigations and analysis in respect of any investment decision whether to acquire Securities;
• represent and warrant that you are not in the US or a US person;
• acknowledge that the Company and Macquarie are relying on you complying with this notice and on the truth and accuracy of the representations and warranties given by you; and
• indemnify and agree to keep indemnified the Company and Macquarie, their related bodies corporate (as that term is defined in the Corporations Act) and their officers, directors, employees, advisers and agents against any loss, damage and costs incurred and arising out of or relating to any breach by you of this notice or representations or warranties given by you.

For the 2 for 7 RAPIDS of approximately 284 million New Shares at an Offer Price of A$0.40 per New Share

St Barbara Limited ABN 36 009 165 066

This Prospectus is an important document and requires your immediate attention. If you are an Eligible Shareholder you should read this Prospectus in its entirety before deciding whether to accept the offer of New Shares in St Barbara. Your Entitlement may have value and you should therefore consider whether to take up your Entitlement rather than allow it to lapse and potentially be sold through the relevant bookbuild. If you do not understand any part of this Prospectus, or are in any doubt as to how to deal with it or your Entitlement, you should consult your stockbroker, accountant or other professional adviser.

Important Information

This Prospectus is dated 13 June 2008 (Prospectus) and a copy of this Prospectus was lodged with ASIC on that date. ASIC takes no responsibility for the contents of this Prospectus.

This Prospectus expires on 12 July 2009. No New Shares will be issued on the basis of this Prospectus after that expiry date.

This Prospectus is important and requires your immediate attention.

You should read this Prospectus carefully and in its entirety before deciding whether to invest in New Shares. In particular, you should consider the risk factors that could affect the performance of the St Barbara Group or the value of an investment in St Barbara, some of which are outlined in Section 6 of this Prospectus. Note, however, that the information contained in this Prospectus is not financial product advice and does not take into account the investment objectives, financial situation, tax position or particular needs of individual investors.

Before deciding whether to apply for New Shares, you should consider whether they are a suitable investment for you in light of your own investment objectives and financial circumstances and having regard to the merits or risks involved. If, after reading this Prospectus, you have any questions about the Offer, you should contact your stockbroker, accountant or other professional adviser.

The potential tax effects of the Retail Entitlement Offer will vary between investors. A summary of potential Australian tax implications is contained in Section 8.10 of this Prospectus. However, all investors should satisfy themselves of any possible tax consequences by consulting their own professional tax advisers.

Investors should note that the past share price performance of St Barbara provides no guidance as to its future share price performance.

Entitlements are not transferable. If you decide not to take up all or part of your Entitlement and subscribe for New Shares, the balance of your Entitlement may be sold as part of the Retail Bookbuild. Please carefully read and follow the instructions in Section 3 of this Prospectus and on the back of the accompanying Entitlement and Acceptance Form when taking up any of your Entitlement.

St Barbara has applied or will apply for the grant by ASX of official quotation of the New Shares. ASX takes no responsibility for the contents of this Prospectus.

Prospectus availability Eligible Retail Shareholders in Australia and New Zealand can obtain a copy of this Prospectus during the period of the Retail Entitlement Offer on the St Barbara website at www.stbarbara.com.au or by calling the St Barbara Offer |Information Line on the numbers below. If you are an Eligible Retail Shareholder and you access the electronic version of this Prospectus, you should ensure that you download and read the entire Prospectus. The electronic version of this Prospectus on the St Barbara website will not include an Entitlement and Acceptance Form.

Neither this Prospectus nor the accompanying Entitlement and Acceptance Form may be sent to investors in the United States (US) or that are, or are acting on behalf of or for the account or benefit of a US Person, or otherwise be distributed in the US.

Offer in Australia This Prospectus contains an offer to Eligible Shareholders in Australia of continuously quoted securities (as defined in the Corporations Act) of St Barbara, and has been prepared in accordance with section 713 of the Corporations Act.

Offer in New Zealand This Prospectus is a prospectus under Australian law. It is not a New Zealand prospectus or an investment statement and has not been registered, filed with or approved by any New Zealand regulatory authority or under or in accordance with the Securities Act 1978 (New Zealand). This Prospectus may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain. Securities are not being offered or sold to the public of New Zealand under this Prospectus and no member of the public in New Zealand may accept the offer made under this Prospectus except in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

Foreign jurisdictions This Prospectus has been prepared to comply with the requirements of the securities laws of Australia. No action has been taken to register or qualify the Offer (including the Retail Entitlement Offer), the Entitlements or the New Shares, or otherwise permit the public offering of the Entitlements or New Shares, in any jurisdiction other than Australia or New Zealand.

Neither the New Shares nor the Entitlements have been, or will be, registered under the US Securities Act or the securities laws of any state of the United States, and may not be offered or sold in the United States, or to, or for the account or benefit of, a US Person, except in a transaction exempt from the registration requirements of the US Securities Act and applicable United States state securities laws. The Offer is not being extended to any Shareholder outside Australia or New Zealand, other than to Eligible Institutional Shareholders as part of the Institutional Entitlement Offer and to Institutional Investors as part of the Institutional Bookbuild and the Retail Bookbuild. This Prospectus does not constitute an offer of securities in the US or to any US Person or to any person acting for the account or benefit of a US Person. This Prospectus does not constitute an offer or invitation to potential investors to whom it would not be lawful to make such an offer or invitation.

The distribution of this Prospectus (including an electronic copy) outside Australia is restricted by law. If you come into possession of this Prospectus, you should seek your own advice on and observe such restrictions. Any non-compliance with these restrictions may contravene applicable securities laws. See Section 8.12 for further details.

Disclaimer of representations No person is authorised to give any information, or to make any representation, in connection with the Offer that is not contained in this Prospectus.

Any information or representation that is not in this Prospectus may not be relied on as having been authorised by St Barbara, the Underwriter or their respective affiliates in connection with the Offer. Except as required by law, and only to the extent so required, none of St Barbara, or any other person, warrants or guarantees the future performance of St Barbara or any return on any investment made pursuant to this Prospectus.

Forward-looking statements This Prospectus contains forwardlooking statements that are subject to risk factors associated with the sale of gold, exploring, developing, mining, processing of gold and other base metals. Forward-looking statements include those containing such words as anticipate, estimates, should, will, expects, plans or similar expressions. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a range of variables and changes in underlying assumptions which could cause actual results or trends to differ materially. These include but are not limited to the risks outlined in Section 6.

Defined words and expressions Some words and expressions used in this Prospectus have defined meanings, which are explained in the Glossary, as are certain rules of interpretation that apply to this Prospectus.

All references to time in this Prospectus are references to Australian Eastern Standard Time (AEST). All financial amounts in this Prospectus are expressed in Australian currency, unless otherwise stated.

Diagrams and maps The assets depicted in diagrams and maps in this Prospectus may not be assets of St Barbara unless otherwise stated, nor are they products or services provided by St Barbara. Diagrams and maps in this Prospectus are illustrative only and are not to scale.

Enquiries If you are an Eligible Retail Shareholder and have questions in relation to the Offer, please contact your stockbroker, accountant or other professional adviser. If you have questions in relation to the Shares upon which your Entitlement has been calculated, or how to complete the Entitlement and Acceptance Form or take up your Entitlement, please call the St Barbara Offer Information Line as set out below:

Within Australia 1300 653 935 (local call cost)

Outside Australia +61 9415 4356

Privacy Please read the privacy statement in Section 8.11 of this Prospectus. By making an Application, you consent to the matters outlined in that statement.

Contents

	Important Information	2
	Chairman's Letter	4
	Investment Highlights	6
	Summary of Key Risks	7
	Key Dates and Statistics	8
1	Questions and Answers	9
2	Details of the Offer	12
3	Actions Required by Eligible Retail Shareholders	18
4	Overview of St Barbara	21
5	Financial Effect of the Offer on St Barbara	28
6	Key Risk Factors	33
7	Directors and Management	39
8	Additional Information	41
	Glossary	53
	Corporate Directory	56

Chairman's Letter

13 June 2008

Dear Fellow Shareholder,

On behalf of the Board of St Barbara Limited (St Barbara), I am pleased to invite you to participate in this Retail Entitlement Offer which forms part of the overall Offer of New Shares in St Barbara. Such Offer is seeking to raise total funds of approximately A$120 million, and is fully underwritten by Macquarie Capital Advisers Limited.

Purpose of the Offer

St Barbara, an Australian dedicated gold producer, developer and explorer, has achieved success by expanding its Ore Reserves and Mineral Resources base and is well positioned at the end of the third year of a substantial growth phase to increase its current rate of development as a leading gold producer, developer and explorer.

The past 12 months have been an important stepping stone in our overall growth plan. The Gwalia mine development at Leonora, Western Australia, is near completion with gold production scheduled to commence by September 2008. The Southern Cross operations are forecast to produce between 155,000 – 160,000 ounces of gold in the current 2008 financial year.

Total gold production from both the Leonora and Southern Cross operations in the 2009 financial year is targeted to almost double, to between 295,000 and 315,000 ounces.

Other key highlights include:

• the Company has a strong growth profile with considerable exploration upside;
• the capacity to readily exploit exploration success is greatly enhanced by being able to utilise existing Company owned infrastructure at Southern Cross and Leonora;
• Ore Reserves and Mineral Resources have increased significantly at a relatively low discovery cost; and
• Ore Reserves of 1.7 million ounces at the Gwalia gold mine development will underpin a mine life of at least eight years.

St Barbara previously intended to pursue, as part of its announced funding strategy, a debt facility of A$50 million. However, in view of the significant recent changes in the debt capital markets, it has been decided to no longer pursue such a debt facility and instead, to proceed with this equity capital raising.

Accordingly, the Company now seeks to raise additional capital from both Institutional Investors and retail shareholders to:

• Sustain the current higher level of exploration activities in line with the Company's strategy to increase Ore Reserves;
• Undertake improvements at the Southern Cross processing plant to increase productivity and efficiency;
• Fund the remaining capital expenditure for the development of the Gwalia gold mine and related operations and infrastructure; and
• Support working capital requirements.

Further details of the application of funds is contained in Section 2.2.

Details of the Offer

The Offer is made up of several components. The Institutional Entitlement Offer, Institutional Bookbuild and Placement have already been conducted and raised approximately A$[TBC] million. This Prospectus relates only to the Retail Entitlement Offer and Retail Bookbuild which is expected to raise approximately A$[TBC] million.

Under this Prospectus, Eligible Retail Shareholders will have the opportunity to subscribe for 2 New Shares for every 7 Existing Shares held at 7.00pm (AEST) on 13 June 2008. The Offer Price of A$0.40 represents a 28.6% discount to St Barbara's closing market price and a discount of 23.7% to the Theoretical Ex-Rights Price (TERP) of Shares on Friday 6 June 2008, the last trading day on the ASX prior to the announcement of the Offer. The discount to the TERP is consistent with that offered in recent similar capital raisings using offer structures of this nature. The Retail Entitlement Offer will close at 5.00pm (AEST) on 4 July 2008.

Your Entitlement is set out in the personalised Entitlement and Acceptance Form that accompanies this Prospectus. Should you choose not to take up any or all of your Entitlement under the Offer, your Shares will be placed in the Retail Bookbuild and sold to Institutional Investors. For each Share you elect not to apply for under your Entitlement, you will receive the excess, if any, of the Clearing Price for the Retail Bookbuild above the Offer Price. For information on how to take up your Entitlement, you should refer to Section 3.

If you have any questions in respect of the Offer and your Entitlement, please call the St Barbara Offer Information Line on 1300 653 935 (local cost from within Australia) or +61 3 9415 4356 (from outside of Australia) or alternatively consult your stockbroker, accountant, legal adviser, tax adviser or other professional adviser.

On behalf of the Board, I invite you to fully support this Offer, which represents a significant opportunity for Shareholders, and is an important milestone in the continuing growth of our Company. This is consistent with the Board's efforts to continue to increase shareholder value.

Thank you for your continuing support.

Yours sincerely,

Colin Wise

Chairman

Investment Highlights

This Offer represents an opportunity for Shareholders to invest in St Barbara as it undertakes its next growth phase.

Australian focused gold producer and explorer

• Key assets include gold mines and associated infrastructure at Southern Cross and Leonora two of the three richest endowed gold provinces in Western Australia
• Established production track record with over 480,000 ounces of gold produced over the last three years
• Low sovereign risk

Project developer

• Ore Reserves of 1.7 million ounces at the Gwalia gold mine development will underpin a mine life of at least eight years
• The Hoover Decline at Gwalia is alongside the level of Ore Reserves at a vertical depth of 1,000 metres below surface
• Refurbishment of the Gwalia processing plant is nearing completion in readiness to commence gold production
• Gold production at Gwalia on schedule to commence in September quarter 2008, with an expected ramp-up to in excess of 200,000 ounces of gold per annum from the Leonora operations by 2011.

Strong growth profile

• Expected gold production of 155,000 160,000 ounces in FY08; Targeted gold production of 295,000 – 315,000 ounces in FY09 from the Southern Cross and Leonora operations
• Production at the rate of 450,000 ounces of gold per annum expected to be achieved during the June 2009 quarter
• Over 90% increase in gold Ore Reserves over the twelve months to 30 June 2007 to 2.3 million ounces. Further increases are expected to be completed by 30 June 2008 for inclusion in the June 2008 Quarterly Report
• Mineral Resources of 10.1 million ounces(1) provides strong potential for future growth of Ore Reserves
• Potential to exploit future exploration success by leveraging existing infrastructure in the Southern Cross and Leonora districts

Exploration upside

• Strong focus in 2009 on extension of higher grade underground and open pit Ore Reserves in proximity to existing production infrastructure
• Total exploration budget for the 2009 financial year of approximately A$35 million
• Extensive tenements in Australia covering approximately 18,000 square kilometres prospective for mineralisation
• Active base metals exploration program

No committed gold deliveries

• No committed gold deliveries, maximising exposure to favourable movements in the spot gold price
• Put option holdings provide downside protection for 1.6 million ounces of gold production to April 2017

St Barbara's strategic objective is to become a 1 million ounce per annum gold producer

Summary of Key Risks

The key risks associated with an investment in St Barbara include, but are not limited to, those risks set out below. You should consider these risks, and those included in Section 6 of this Prospectus, before applying for New Shares.

Specific Business Risks

Mining Operations Have Significant Operational and Development Risks

• The business of gold mining is subject to a variety of risks including consistency and reliability of ore quality, product prices, government policies and other unforseen contingencies. Other risks also exist such as, in extreme cases, cave ins, accidents, flooding, environmental hazards, the discharge of toxic chemicals and other hazards. Such and other similar occurrences may delay production, increase production costs or result in liability
• In addition, St Barbara's profitability could be adversely affected if for any reason its production and processing of gold or mine development is unexpectedly interrupted or slowed

Reliance on Key Personnel and Other Business Inputs

St Barbara's operations rely on the ability to source and retain skilled personnel, contractors, materials and supplies. The increase in demand across the resources industry could result in competition and cost inflation for these inputs which may have a material impact on St Barbara's results of operations

Gold Price Risk

• If gold prices should fall for any sustained period, St Barbara's business and results of operations could be materially and adversely affected
• The gold price is quoted in US dollars. As a result, St Barbara is exposed to exchange rate risk

Ore Reserves and Mineral Resources

St Barbara's Ore Reserves and Mineral Resources for its gold assets are estimates only and, as new information becomes available, may change, which may positively or negatively affect the economic viability of St Barbara's operations

Funding Risk

There can be no assurance that additional equity or debt funding will be available if required by St Barbara for its future asset development plans

Regulatory Risk

St Barbara's operations are subject to extensive government regulation that could cause St Barbara to incur costs that materially and adversely affect its operations

General Business and Investment Risks

• There are a number of risks associated with any stock market investment. The price of shares on ASX may rise or fall
• There are general risks associated with companies undertaking business in the natural resources sector, many of which are substantially outside the control of St Barbara

Key Dates and Statistics

Key Dates

Event	Indicative Date
Record Date for the Offer	Friday, 13 June 2008
Lodgement of the Prospectus for the Retail Entitlement Offer	Friday, 13 June 2008
Retail Entitlement Offer opens	Monday, 16 June 2008
Settlement of Institutional Entitlement Offer, Institutional Bookbuild and Placement M	onday, 23 June 2008
Issue of New Shares under the Institutional Entitlement Offer,Institutional Bookbuild and Placement	Tuesday, 24 June 2008
Normal Trading of New Shares issued under the Institutional Entitlement Offer,Institutional Bookbuild and Placement expected to commence on ASX	Tuesday, 24 June 2008
Retail Entitlement Offer closes	Friday, 4 July 2008
Retail Bookbuild	Thursday, 10 July 2008
Settlement of Retail Entitlement Offer and Retail Bookbuild	Wednesday, 16 July 2008
Issue of New Shares under the Retail Entitlement Offer and the Retail Bookbuild	Thursday, 17 July 2008
Normal trading of New Shares issued under the Retail Entitlement Offerand the Retail Bookbuild expected to commence on ASX	Thursday, 17 July 2008
Dispatch of payment (if any) in respect of Entitlements not accepted underthe Retail Entitlement Offer	Monday, 21 July 2008
Dispatch of holding statements	Monday, 21 July 2008

The above timetable is indicative only. St Barbara, in conjunction with the Underwriter, reserves the right to amend any or all of these dates and times subject to the Corporations Act, Listing Rules and other applicable laws. In particular, St Barbara reserves the right to extend the Closing Date for the Retail Entitlement Offer, to accept late Applications either generally or in particular cases, to defer the Retail Entitlement Offer, or to withdraw the Offer without prior notice. The commencement of quotation of New Shares is subject to confirmation from ASX.

Key Statistics

OfferPrice	A$0.40 perNew Share
Entitlement	2 New Shares	for7 Sharesheld	attheRecordDate
		New Shares	A$ Million
Institutional Entitlement Offer and Institutional Bookbuild (1) (2)
Retail Entitlement Offer and Retail Bookbuild (2)
Total Entitlement Offer		284 Million	114
Placement at A$[TBC] per Share (1)			6
Total Offer – Gross Proceeds (2) (3)			120

(1) The Institutional Entitlement Offer, Institutional Bookbuild and Placement were conducted between 10 and 13 June and are expected to settle on 23 June 2008.

(2) Due to rounding of Entitlements and reconciliation of Entitlements under the Institutional Entitlement Offer to Shareholdings on the Record Date, the exact number of New Shares to be issued, and the number to be issued under each part of the Offer, will not be known until completion of the Entitlement Offer.

(3) The Offer is underwritten by the Underwriter. See section 8.4 for a summary of the Underwriting Agreement. If the Underwriting Agreement is terminated, the full amount of the Offer may not be received, or the Entitlement Offer may not proceed.

What should I do if I receive a Retail Entitlement Offer?

This Prospectus contains important information in relation to the Entitlement Offer. You should read it carefully and in its entirety, including Section 6 which contains a summary of the major risks associated with an investment in St Barbara. If you are in doubt as to the course you should follow, you should seek appropriate professional advice before making an investment decision. If you are an Eligible Shareholder, you may either commit to take up all or some of your Entitlement or decline to take up your Entitlement (see Section 2 and Section 3 for further details).

1. Questions & Answers

Question	Answer	Refer to
What is the purposeof the Offer?	The funds raised under the Offer will be used to:Sustain the current higher level of exploration activities in line with the strategyto increase Ore Reserves;	Section 2.2
	Undertake improvements at the Southern Cross processing plant to improveproductivity and efficiency;
	Fund the remaining capital expenditure for the development of the Gwalia goldmine and related operations and infrastructure; and
	Support working capital requirements.
How is the Offerstructured?	The Offer is comprised of the Placement and the Entitlement Offer. The EntitlementOffer is a pro-rata entitlement offer made to Eligible Shareholders on a 2 for 7basis. The Entitlement Offer process comprises four steps which are conductedconsecutively:	Section 2
	the Institutional Entitlement Offer;the Institutional Bookbuild;
	the Retail Entitlement Offer; and
	the Retail Bookbuild.
	The Board believes that the structure of the Offer provides a number of benefitsto St Barbara and Shareholders as a whole. These reasons are set out in Section 2.9.
What is the Offer Price	A$0.40 per New Share.This represents a discount of:	Section 2.5.1
under the EntitlementOffer?	– 28.6% to A$0.56, the closing price on Friday, 6 June 2008 the last dayof trading before St Barbara announced the Offer; and
	– 23.7% to the theoretical ex-rights price (TERP), calculated using A$0.56
	as the pre-issue share price. The Offer Price is at a discount to the TERPto maximise Shareholder participation in the Offer.
How much will St Barbararaise through the Offer?	St Barbara is seeking to raise approximately A$120 million under the Offerbefore expenses.The Institutional Entitlement Offer, Institutional Bookbuild and Placement wereconducted between 10 June and 13 June 2008. The Institutional Entitlement Offer,Institutional Bookbuild and Placement raised approximately [A$TBC] million.St Barbara is seeking to raise approximately [A$TBC] million from the RetailEntitlement Offer and Retail Bookbuild.	Section 2.2
	Yes. The Offer has been fully underwritten by the Underwriter. See Section 8.4 for a	Section 2.1
Is the Offer underwritten?	summary of the terms of the Underwriting Agreement, including the circumstanceswhere the Underwriter may terminate the Underwriting Agreement.	Section 8.4
Who can participate inthe Retail Entitlement	Eligible Shareholders for the Retail Entitlement Offer are those persons who:were registered as St Barbara ordinary shareholders at 7.00pm (AEST) on Friday,13 June 2008 (the Record Date);	Section 2.5
Offer?	have a registered address in Australia or New Zealand;
	are not in the United States or US Persons, or acting for the account or benefitof US Persons;
	are eligible under all applicable securities laws to receive an offer under theEntitlement Offer;
	do not hold Shares as a result of post ex-date transactions (which are disregardedas described in Section 8.9); and
	have not received an invitation to participate in the Institutional Entitlement Offer(either directly or indirectly as or through a nominee) and are not an IneligibleInstitutional Shareholder.
What is my Entitlement?	Your Entitlement is the number of New Shares you are entitled to subscribe forunder the Entitlement Offer. Each Eligible Shareholder is entitled to subscribefor 2 New Shares for every 7 Shares held at 7.00 pm (AEST) on Friday, 13 June 2008(the Record Date).	Section 2.5.1
	Your Entitlement is set out in the personalised Entitlement and Acceptance Formwhich accompanies this Prospectus.

	Question	Answer	Refer to
	What can I do with myEntitlement?	You can either:take up your Entitlement in full;take up part of your Entitlement; ornot take up any of your Entitlement.If you do not wish to take up any part of your Entitlement, depending on theoutcome of the Retail Bookbuild, you may be paid a cash amount in respect of yourEntitlement or you may receive nothing.If you do not take up all of your Entitlement, your percentage shareholding inSt Barbara will fall.	Section 2.5Section 3
10	Can I trade myEntitlement?	No. Your Entitlement cannot be traded on ASX or any other exchange, nor can itbe privately transferred.	Section 2.8
	What is the effect of theOffer on St Barbara?	The effect, including the financial effect, of the Offer on St Barbara is explainedin Section 5.	Section 5
	What happens if I decidenot to take up myEntitlement, or take uponly part of myEntitlement?	If you are an Eligible Retail Shareholder and you decide not to take up yourEntitlement, or to take up less than your full Entitlement, New Shares equivalentto the number that you have not taken up will be offered for subscription to certainInstitutional Shareholders under the Retail Bookbuild.If the amount paid for New Shares under the Retail Bookbuild (i.e. the Clearing Price)is higher than the Offer Price, you will be paid a cash amount equal to thedifference.The amount paid per New Share under the Institutional Bookbuild was [A$TBC],which represents a [A$TBC] premium to the Offer Price of A$0.40.There can be no guarantee that the price at which the New Shares are acquired byparticipants in the Retail Bookbuild will be higher than the Offer Price or that theprice at which New Shares are sold under the Institutional Bookbuild will be matchedin the Retail Bookbuild.If you do not take up your Entitlement, or take up less than your full Entitlement,there will be a reduction in your percentage shareholding in St Barbara followingcompletion of the Offer.Eligible Retail Shareholders should note that the Placement will reduce theirpercentage shareholding in St Barbara, whether or not they accept their Entitlementin full.	Section 2.5.2Section 3.1
	Can I apply for additionalNew Shares above myEntitlement?	No.	N/A
	How do I take up myEntitlement under theRetail Entitlement Offer?	If you wish to take up all or part of your Entitlement under the Retail EntitlementOffer you should:complete the personalised Entitlement and Acceptance Form accompanying thisProspectus in accordance with the instructions set out on the form, indicating thenumber of New Shares you wish to subscribe for (up to your full Entitlement);attach payment for the full amount payable (being A$0.40 multiplied by thenumber of New Shares that you wish to subscribe for); andreturn the Entitlement and Acceptance Form to the Share Registry so that itis received by no later than 5.00pm (AEST) on 4 July 2008.Alternatively, you may accept all or part of your Entitlement by BPAY®. Payment mustbe received by the Share Registry before 5.00pm (AEST) on 4 July 2008. If you areapplying for New Shares and your payment is being made by BPAY® you do not needto return the Entitlement and Acceptance Form.	Section 3
	What happens if I ama Shareholder on theRecord Date but notan Eligible RetailShareholder?	You will not be entitled to subscribe for New Shares under the Entitlement Offer.If you are an Ineligible Retail Shareholder you will be sent a letter advising you.The New Shares that would have been offered to you had you been entitled toparticipate in the Entitlement Offer will be offered to certain Institutional Investorsunder the Retail Bookbuild.If the Clearing Price under the Retail Bookbuild is higher than the Offer Price,you will be paid a cash amount equal to the difference.	Section 2.5.1Section 2.5.2

Question	Answer	Refer to
What are the rights andliabilities attaching to theNew Shares issued underthe Offer?	New Shares issued under the Offer will be issued with the same rights and liabilitiesas Existing Shares.	Section 8.3
What are the keyrisks associated withan investment inNew Shares?	The key risks associated with an investment in New Shares are described inSection 6.Before making an investment decision you should read the entire Prospectusand carefully consider these risk factors.	Section 6
Can the Offer bewithdrawn?	Yes. The Directors reserve the right to withdraw the Offer and this Prospectus at anytime, subject to the Corporations Act, the Listing Rules and other applicable laws.If the Offer is withdrawn, St Barbara will refund Application Monies in respect ofNew Shares which have not yet been issued in accordance with the Corporations Actand will do so without interest.	Section 2.4	11
What are the fees andcosts of the Offer to theCompany?	The fees and costs associated with the Offer are expected to be approximatelyA$5 million and will be paid out of the proceeds of the Offer.	Section 8.4Section 8.7
What are the taximplications of the Offer?	A summary of the general Australian tax implications for Eligible Retail Shareholdersis set out in Section 8.10. The discussion is in general terms and is not intended toprovide specific advice in relation to the circumstances of any particular shareholder.Eligible Retail Shareholders should seek their own tax advice before deciding howto deal with their Entitlement.	Section 8.10
How can Eligible RetailShareholders obtainfurther information?	If you are an Eligible Retail Shareholder and would like further information you cancall the St Barbara Offer Information Line on 1300 653 935 (from within Australia),or +61 3 9415 4356 (from outside of Australia) between 8.30am and 7.00pm (AEST)Monday to Friday during the Offer Period.	N/A

2. Details of the Offer

2.1 Overview of the Offer

The Offer comprises the Entitlement Offer and the Placement. St Barbara is seeking to raise A$120 million through the Offer.

2.1.1 Entitlement Offer

The Entitlement Offer is an offer of approximately 284 million New Shares at the Offer Price of A$0.40 per New Share. All Eligible Shareholders are entitled to subscribe for 2 New Shares for every 7 Shares held at 7.00pm on the Record Date.

The Entitlement Offer is comprised of four parts. Steps 1 and 2 have already been completed.

• 1. Institutional Entitlement Offer Eligible Institutional Shareholders were invited to take up their Entitlement.
• 1. Institutional Bookbuild New Shares equivalent to the number not taken up by Eligible Institutional Shareholders, together with any New Shares that would have been offered to Ineligible Institutional Shareholders if they had been entitled to participate in the Institutional Entitlement Offer, were offered under a bookbuild to certain Institutional Investors (including those Eligible Institutional Shareholders who took up their Entitlement).
• 1. Retail Entitlement Offer Eligible Retail Shareholders are sent this Prospectus together with a personalised Entitlement and Acceptance Form and are required to decide whether or not they will take up all or part of their Entitlement.
• 1. Retail Bookbuild New Shares equivalent to the number not taken up by Eligible Retail Shareholders, together with any New Shares that would have been offered to Ineligible Retail Shareholders if they had been entitled to participate in the Retail Entitlement Offer, are offered under a bookbuild to certain Institutional Investors (including those Eligible Institutional Shareholders who took up their Entitlement under the Institutional Entitlement Offer).

2.1.2 Placement

The Placement was an offer of [TBC] million New Shares to Institutional Investors at A$[TBC] per New Share, raising approximately A$6 million. The New Shares issued under the Placement are issued after the Record Date and are not eligible to participate in the Entitlement Offer.

As noted above, the Institutional Entitlement Offer, Institutional Bookbuild and Placement have already been completed. It is expected that settlement will occur on Monday, 23 June 2008 and trading of the New Shares issued under those components will commence on Tuesday, 24 June 2008.

2.1.3 Underwriting

The Offer has been fully underwritten by Macquarie Capital Advisers Limited, the Underwriter. See Section 8.4 for a summary of the Underwriting Agreement, which includes a number of termination events. If the Underwriting Agreement is terminated by the Underwriter, the Offer may not proceed, in which case Application Monies that have not resulted in the issue of New Shares would be refunded without interest.

2.2 Sources and Uses of Proceeds

Under the Offer, St Barbara is seeking to raise approximately A$120 million before expenses. The Institutional Entitlement Offer, Institutional Bookbuild and Placement were conducted between 10 June 2008 and 13 June 2008 and raised approximately A$[TBC] million in total. St Barbara is seeking to raise approximately A$[TBC] million from the Retail Entitlement Offer and Retail Bookbuild, which will be conducted between 16 June 2008 and 10 July 2008. Fees and costs related to the Offer are expected to be approximately A$5 million.

The Company previously intended to pursue, as part of its announced funding strategy, a debt facility of A$50 million. However, in view of the significant recent changes to the debt capital markets, it has been decided to no longer pursue such a debt facility and instead, to proceed with this equity capital raising.

The funds raised under the Offer will be used to:

• Sustain the current higher level of exploration activities in line with the Company's strategy to increase Ore Reserves;

• Undertake improvements at the Southern Cross processing plant to increase productivity and efficiency (see Section 4.3);

• Fund the remaining capital expenditure for the development of the Gwalia gold mine and related operations and infrastructure; and

• Support working capital requirements.

The Company does not anticipate that the planned operations at Southern Cross and Leonora for the 2009 financial year will require the raising of any additional equity funds following this Offer.

The table below summarises the estimated sources and uses of the proceeds from the Offer:

Sources offunds A	$ million Us	e offunds A	$ million
Institutional Entitlement Offer andInstitutional Bookbuild	[TBC]A	Fund pre-commissioning capitalexpenditure incurred and to beincurred for the completion of Gwalia(previously planned to be funded by a$50m debt facility)	50
Placement	6 I	ncrease in Gwalia pre-commissioningcapital expenditure	17
Sub-total	[TBC] E	xploration budget – in line withstated strategy	35
Retail Entitlement Offerand Retail Bookbuild	[TBC]	Southern Cross plant –productivity improvements	10
		Working capital	3
		Fees and costs related to the Offer	5
Total	120 T	otal	120

2.3 Capital Structure

The effect of the Offer on the capital structure of St Barbara is set out in the table below:

	Number of Shares (millions)(1)
Before the Offer	994
Institutional Entitlement Offer and Institutional Bookbuild	[TBC]
Placement	[TBC]
Retail Entitlement Offer and Retail Bookbuild	[TBC]
Total after the Offer	[TBC]

(1) Due to rounding of Entitlements and reconciliation of Entitlements under the Institutional Entitlement Offer to shareholdings on the Record Date, the exact number of New Shares to be issued, and the number to be issued under each part of the Offer, will not be known until completion of the Offer.

2.4 Withdrawal of the Offer

The Directors reserve the right to withdraw the Offer and this Prospectus at any time, in which case St Barbara will refund Application Monies in accordance with the Corporations Act, without interest.

2.5 The Retail Entitlement Offer

2.5.1 The Retail Entitlement Offer

Overview

Under the Retail Entitlement Offer, Eligible Retail Shareholders are invited to take up their Entitlements at a price of A$0.40.

The proceeds of the Retail Entitlement Offer will form part of the Entitlement Offer proceeds, which will be used as described in Section 2.2.

Who can participate in the Retail Entitlement Offer?

The Retail Entitlement Offer is only open to Eligible Retail Shareholders. Eligible Retail Shareholders are those shareholders who satisfy each of the following criteria:

• as at the Record Date they have a registered address in Australia or New Zealand;

• they are not US Persons or acting for the account or benefit of a US Person;

• are eligible under all applicable securities laws to receive an offer under the Entitlement Offer;

• do not hold Shares as a result of post ex-date transactions (which are disregarded as described in Section 8.9); and

• they have not been invited to subscribe for New Shares under the Institutional Entitlement Offer either directly, as or through a nominee, and are not Ineligible Institutional Shareholders.

St Barbara reserves the right to reject any Application that it believes comes from a person who is not an Eligible Retail Shareholder.

What Eligible Retail Shareholders can apply for under the Retail Entitlement Offer

Under the Retail Entitlement Offer, Eligible Retail Shareholders are entitled to apply for 2 New Shares for every 7 Shares held as at 7.00pm (AEST) on the Record Date. This is called your Entitlement.

The ratio is the same ratio for the issue of New Shares under the Institutional Entitlement Offer. The Record Date is also the record date that applies to Eligible Institutional Shareholders for the Institutional Entitlement Offer.

The number of New Shares for which an Eligible Retail Shareholder is entitled to apply is shown on the personalised Entitlement and Acceptance Form that accompanies the copy of this Prospectus sent to each Eligible Retail Shareholder. Where fractions arise in the calculation of Entitlements, they will be rounded up to the next whole number of New Shares.

Offer Price

The Offer Price is A$0.40 per New Share for Eligible Retail Shareholders. This is payable on acceptance of your Entitlement and is the same price paid for New Shares by Eligible Institutional Shareholders under the Institutional Entitlement Offer.

Accepting Entitlements

Eligible Retail Shareholders can accept their Entitlement in full or in part by returning their Entitlement and Acceptance Form to the Share Registry together with a cheque, bank draft, or by paying by BPAY®, so that payment is received by no later than 5.00pm (AEST) on Friday 4 July 2008 (the Closing Date).

Payment may be made via cheque or BPAY® by following the instructions set out on the Entitlement and Acceptance Form. Once the Application (including by BPAY® payment) is made it is irrevocable and may not be withdrawn, except as allowed by law. For further information on how to take up your Entitlement see Section 3.

Entitlements are personal and cannot be traded, transferred, assigned or otherwise dealt with.

Entitlement not taken up

New Shares of an equivalent number to New Shares not taken up under the Retail Entitlement Offer will be offered for subscription under the Retail Bookbuild (see Section 2.5.2). These New Shares will be offered for subscription together with New Shares which would have been offered to Ineligible Retail Shareholders if they had been entitled to participate in the Retail Entitlement Offer.

2.5.2 Retail Bookbuild

Overview

The Retail Bookbuild will be conducted by the Underwriter pursuant to a bookbuild sale process on or about 10 July 2008. Institutional Investors will be invited by the Underwriter to participate in the Retail Bookbuild. They will be invited to bid for the number of New Shares equal to the sum of:

• New Shares not taken up by Eligible Retail Shareholders; and
• New Shares that would have been offered to Ineligible Retail Shareholders if they had been entitled to participate in the Retail Entitlement Offer.

Bookbuild Price

The Clearing Price under the Retail Bookbuild may be equal to or above the Offer Price.

If the Clearing Price is equal to the Offer Price:

• St Barbara will receive the Offer Price in respect of all New Shares issued under the Retail Bookbuild; and
• No cash will be payable to any Eligible Retail Shareholder or Ineligible Retail Shareholder.

If the Clearing Price is higher than the Offer Price:

• St Barbara will receive the Offer Price in respect of all the New Shares issued under the Retail Bookbuild; and
• the difference between the Clearing Price and the Offer Price (the Retail Premium) will be paid on a pro-rata basis to:
  • each Eligible Retail Shareholder who did not accept their full Entitlement (with respect to the part of the Entitlement they did not accept only); and o
  • each Ineligible Retail Shareholder. o

The Clearing Price will not be below the Offer Price because the Offer is fully underwritten by the Underwriter. If there is insufficient demand to clear the Retail Bookbuild at the Offer Price, the Underwriter will take up any shortfall at the Offer Price.

The ability to procure subscribers for New Shares under the Retail Bookbuild and the ability to obtain any Retail Premium will depend on various factors, including market conditions. It is possible that the Clearing Price under the Retail Bookbuild may be equal to the Offer Price, in which case, no Retail Premium would be payable. [The fact that the Institutional Premium was A$[TBC] per Share is not an indication that there will be a Retail Premium or what the Retail Premium may be.] To the maximum extent permitted by law, neither St Barbara nor the Underwriter, nor their respective Related Bodies Corporate, nor the directors, officers, employees, agents or advisers of any of them, will be liable, including for negligence, for any failure to procure subscribers under the Retail Bookbuild at a price equal to or in excess of the Offer Price.

2.5.3 No offer under the Retail Entitlement Offer to participants in the Institutional Entitlement Offer

The Retail Entitlement Offer does not constitute an offer to any person who is not an Eligible Retail Shareholder including:

• an Institutional Shareholder who received an offer under the Institutional Entitlement Offer (whether or not it accepted that offer);
• any Ineligible Institutional Shareholder; or
• a nominee for such a person, in respect of Existing Shares held for such Institutional Shareholder.

2.5.4 No offer under the Retail Entitlement Offer to holders of New Shares

Any person allocated New Shares under the Institutional Entitlement Offer or Institutional Bookbuild does not have any entitlement to participate in the Retail Entitlement Offer in respect of those New Shares.

2.6 The Institutional Entitlement Offer and Institutional Bookbuild

The Institutional Entitlement Offer and Institutional Bookbuild were conducted between 10 and 11 June 2008 and 12 and 13 June 2008 respectively.

The Institutional Entitlement Offer and the Institutional Bookbuild raised approximately [A$TBC] for St Barbara through the issue of [TBC] million New Shares. Settlement of the issue of the New Shares under the Institutional Entitlement Offer and Institutional Bookbuild is expected to occur on Monday, 23 June 2008. Trading on a normal settlement basis of those New Shares is expected to commence on ASX on 24 June 2008.

2.6.1 Institutional Entitlement Offer

Under the Institutional Entitlement Offer, Eligible Institutional Shareholders were invited to subscribe for 2 New Shares at the Offer Price for every 7 Shares held as at 7.00pm (AEST) on the Record Date. Under the Institutional Entitlement Offer, Eligible Institutional Shareholders subscribed for [TBC] million New Shares. As a result, [TBC] million New Shares were offered for subscription under the Institutional Bookbuild (see 2.6.2 below).

2.6.2 Institutional Bookbuild

Under the Institutional Bookbuild, Institutional Investors were invited to subscribe for [TBC] million New Shares being the number of New Shares equal to the sum of:

• New Shares not taken up by Eligible Institutional Shareholders under the Institutional Entitlement Offer; and
• New Shares which would have been offered to Ineligible Institutional Shareholders if they had been entitled to participate in the Institutional Entitlement Offer.

The Clearing Price under the Institutional Bookbuild was [A$TBC]. [As the Clearing Price exceeded the Offer Price, the difference between the Clearing Price and the Offer Price (the Institutional Premium) will be paid on a pro-rata basis to each Eligible Institutional Shareholder (to the extent they did not take up their full Entitlement), and to each Ineligible Institutional Shareholder]. The Offer Price per New Share will be received by St Barbara.

[The fact that the Institutional Premium was [A$TBC] per Share is not an indication that there will be a Retail Premium or what the Retail Premium may be.]

2.7 Placement

The Placement was carried out at the same time as the Institutional Bookbuild and comprised the issue of [TBC] million New Shares at A$[TBC] per New Share (which was A$[TBC] above the Offer Price under the Entitlement Offer). As a result, the Placement will raise approximately A$6 million before expenses. St Barbara will receive all the proceeds of New Shares issued under the Placement. Settlement of the issue of New Shares under the Placement is expected to occur on Monday, 23 June 2008. Any person allocated New Shares under the Placement does not have any entitlement to participate in the Entitlement Offer in respect of those New Shares.

2.8 No Trading of Entitlements

Entitlements cannot be traded on ASX or any other exchange or privately transferred.

However, New Shares equivalent to the number of New Shares not taken up under the Retail Entitlement Offer will be offered for subscription under the Retail Bookbuild (described in Section 2.5.2). If you do not take up all of your Entitlements, you may receive some cash for Entitlements not taken up (refer to Sections 2.5.2 and 3) or you may receive nothing.

2.9 Reasons for the chosen structure of the Offer

The Board believes that the structure of the Offer provides a number of benefits to St Barbara and Shareholders as a whole:

• Shareholders have the potential to be paid some cash for Entitlements not taken up. Ineligible Retail Shareholders and Ineligible Institutional Shareholders also have the potential to be paid some cash for Entitlements they would have received had they been eligible to participate in the Offer;
• Shareholders do not have to pay any brokerage or other transaction costs to receive any Retail Premium or to subscribe for New Shares;
• Eligible Retail Shareholders have the benefit of knowing the outcome of the Institutional Entitlement Offer and the Institutional Bookbuild before deciding whether or not to take up their Entitlements; and
• As the Institutional Entitlement Offer and Institutional Bookbuild were conducted at the beginning of the Entitlement Offer, St Barbara will receive approximately [A$TBC] million from the Institutional Entitlement Offer and Institutional Bookbuild, several weeks before the Retail Entitlement Offer closes.

2.10 Ranking of New Shares

Each New Share will be issued on a fully paid basis. From the date of issue, they will rank equally with Existing Shares. Details of the rights and liabilities attaching to the New Shares are set out in Section 8.3.

2.11 ASX quotation and trading of New Shares

St Barbara will apply to ASX within seven days of the date of this Prospectus for the official quotation of the New Shares issued under this Prospectus. Subject to approval being granted, it is expected that:

• normal trading of New Shares issued under the Institutional Entitlement Offer, Institutional Bookbuild and Placement will commence on Tuesday 24 June 2008; and
• normal trading will commence in relation to New Shares issued under the Retail Entitlement Offer and the Retail Bookbuild on Thursday 17 July 2008.

Holding statements are expected to be dispatched to Eligible Retail Shareholders on Monday 21 July 2008. It is the responsibility of each Applicant to confirm their holding before trading in New Shares. Any Applicant who sells New Shares before receiving confirmation of their holding in the form of their holding statement will do so at their own risk. St Barbara and the Underwriter disclaim all liability whether in negligence or otherwise (and to the maximum extent permitted by law) to persons who trade New Shares before receiving their holding statements, whether on the basis of confirmation of the allocation provided by St Barbara, the Share Registry or the Underwriter.

2.12 CHESS

The New Shares will participate from the date of commencement of quotation in the Clearing House Electronic Sub-register System (CHESS) operated by ASX Settlement and Transfer Corporation Pty Limited. The New Shares must be held in uncertificated form (i.e. no share certificate will be issued) on the CHESS sub-register under sponsorship of a participant (usually a broker) or on St Barbara-sponsored sub-register. Arrangements can be made at any subsequent time to convert your holding from St Barbara-sponsored sub-register to the CHESS sub-register or vice versa by contacting your sponsoring participant.

2.13 Taxation Implications of the Offer

Taxation implications will vary depending upon the specific circumstances of individual Shareholders. Investors should obtain their own professional advice before concluding on the particular taxation treatment which will apply to them. A summary of the taxation implications relevant to Australian resident Eligible Retail Shareholders participating in the Retail Entitlement Offer are explained in general terms in Section 8.10.

2.14 Reconciliation

The Offer is a complex structure and in some instances investors may believe that they will own more Shares in St Barbara than they ultimately do at 7.00 pm (AEST) on the Record Date. This results in a need for reconciliation. If reconciliation is required, it is possible that St Barbara may need to issue a small quantity of additional New Shares (Top-Up Shares) to ensure all Eligible Institutional Shareholders and Eligible Retail Shareholders receive their full Entitlements.

The price at which these Top-Up Shares would be issued is not known but would be no lower than the Offer Price.

St Barbara also reserves the right to reduce the number of New Shares or the amount of the Institutional Premium or Retail Premium allocated to Eligible Shareholders, or persons claiming to be Eligible Shareholders, if their claims prove to be overstated or if they or their nominees fail to provide information requested to substantiate their claims. Any Top-Up shares (and New Shares issued under the Retail Bookbuild) will be issued under this Prospectus and accordingly (without limiting other provisions of this Prospectus permitting variation of dates or acceptance of late applications), the offers in this Prospectus remain open for acceptance in respect of such Shares until the date of issue of New Shares following the Retail Bookbuild.

2.15 Ineligible Retail Shareholders

This Prospectus is being sent to Retail Shareholders on the St Barbara share register as at 7.00pm (AEST) on the Record Date (Friday, 13 June 2008) with registered addresses in Australia or New Zealand.

Retail Shareholders with registered addresses outside these countries are not eligible to participate in the Retail Entitlement Offer. In accordance with the Listing Rules, St Barbara considers it unreasonable to extend the Retail Entitlement Offer to Shareholders with registered addresses outside Australia and New Zealand given:

• the small number of such Shareholders;
• the small number and value of New Shares which would be offered in such jurisdictions; and
• the cost of complying with legal and regulatory requirements in those jurisdictions.

St Barbara will send all Ineligible Retail Shareholders details of the Entitlement Offer and advise them that St Barbara is not extending the Retail Entitlement Offer to Ineligible Retail Shareholders.

New Shares which would have been offered to Ineligible Retail Shareholders had they been entitled to participate in the Retail Entitlement Offer will be offered for subscription under the Retail Bookbuild. Any positive difference between the price at which the New Shares are sold under the Retail Bookbuild and the Offer Price will be paid pro-rata to each Ineligible Retail Shareholder (see Section 2.5.2).

2.16 Disclaimers

St Barbara and the Underwriter disclaim all liability (to the maximum extent permitted by law) in respect of the determination as to whether a Shareholder is an Eligible Retail Shareholder, an Eligible Institutional Shareholder or an Ineligible Shareholder. This disclaimer on liability applies notwithstanding that the price achieved under the Retail Bookbuild may be higher or lower than the price achieved under the Institutional Bookbuild.

To the maximum extent permitted by law, neither St Barbara nor the Underwriter, nor their respective Related Bodies Corporate, nor the Directors, officers, employees, agents or advisors of any of them will be liable, including for negligence, for any failure to achieve a price in the Retail Bookbuild or Institutional Bookbuild that is greater than the Offer Price.

3. Actions Required by Eligible Retail Shareholders

Before taking any action in relation to the Offer, Eligible Retail Shareholders should read this Prospectus in its entirety, particularly noting Section 6 (Key Risk Factors). If you do not understand any part of this Prospectus, or you are in any doubt as to how to deal with your Entitlement, you should consult your stockbroker, accountant, solicitor, taxation adviser or professional adviser.

If you are an Eligible Retail Shareholder, you may either:

• take up all of your Entitlement (refer to Section 3.1 for details);
• take up part of your Entitlement (refer to Section 3.2 for details); or
• decline to take up your Entitlement by doing nothing (refer to Section 3.3 for details).

If you have not received a personalised Entitlement and Acceptance Form, please contact the St Barbara Offer Information Line on 1300 653 935 (from within Australia) or on +61 3 9415 4356 (from outside Australia) between 8.30am and 7.00pm (AEST) Monday to Friday during the Offer Period.

Avoid reducing your percentage shareholding

The Entitlement Offer is a pro-rata offer. The percentage holding of Eligible Retail Shareholders who do not accept or who partially accept the Offer will be reduced as a result of the Entitlement Offer. If you are an Ineligible Shareholder, you may not take up any of, or do anything in relation to, your Entitlement under the Offer, and as a result your percentage holding will be reduced.

Eligible Retail Shareholders should note that the Placement will reduce their percentage Shareholding in St Barbara, whether or not they accept their Entitlement in full.

3.1 If you wish to take up all of your Entitlement

What you should do

If you are an Eligible Retail Shareholder, and you want to take up all of your Entitlement and wish to pay by cheque or bank draft, you should:

• Complete the personalised Entitlement and Acceptance Form accompanying this Prospectus in accordance with the instructions set out on the form; and
• Return the form to the Share Registry (address details below), together with your cheque or bank draft which must be:
  • In respect of the full Application Monies (being A$0.40 multiplied by the number of New Shares comprising your Entitlement); o
  • In Australian currency drawn on an Australian branch of a financial institution; and o
  • Made payable to "St Barbara Limited Share Offer" and crossed "Not negotiable". o

Cash payments will not be accepted. Receipts for payment will not be issued.

You need to ensure that your completed Entitlement and Acceptance Form and cheque or bank draft reaches the Share Registry at the following address by no later than 5.00pm (AEST) on Friday 4 July 2008.

Computershare Investor Services Pty Limited

GPO Box 505

Melbourne VIC 8060

If you wish to take up all of your Entitlement and wish to pay by BPAY® you should make your payment by BPAY® for the full Application Monies (being A$0.40 multiplied by the number of New Shares comprising your Entitlement). If you choose to pay by BPAY® you are not required to submit the personalised Entitlement and Acceptance Form but are taken to make the statements on that form. Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY® are received by this time.

You need to ensure that your BPAY® payment is received by the Share Registry by no later than 5.00pm (AEST) on Friday, 4 July 2008.

3.2 If you wish to take up part of your Entitlement

What you should do

If you wish to take up part of your Entitlement, and wish to pay by cheque or bank draft, you should:

• Complete the personalised Entitlement and Acceptance Form accompanying this Prospectus in accordance with the instructions set out on the form, and indicate the number of New Shares you wish to subscribe for; and
• Return the form to the Share Registry (address details below), together with your cheque or bank draft which must be:
  • In respect of the full Application Monies (being A$0.40 multiplied by the number of New Shares you wish to subscribe for); o
  • In Australian currency drawn on an Australian branch of a financial institution; and o
  • Made payable to "St Barbara Limited Share Offer" and crossed "Not negotiable". o

Cash payments will not be accepted. Receipts for payment will not be issued.

You need to ensure that your completed Entitlement and Acceptance Form and cheque or bank draft reaches the Share Registry at the following address by no later than 5.00pm (AEST) on Friday 4 July 2008.

Computershare Investor Services Pty Limited GPO Box 505

Melbourne VIC 8060

If you wish to take up part of your Entitlement and wish to pay by BPAY® you should make your payment by BPAY® for the full Application Monies (being A$0.40 multiplied by the number of New Shares you wish to subscribe for). If you choose to pay by BPAY® you are not required to submit the personalised Entitlement and Acceptance Form but are taken to make the statements on that form. Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY® are received by this time. You need to ensure that your BPAY® payment is received by the Share Registry by no later than 5.00pm (AEST) on Friday, 4 July 2008.

What you might receive

New Shares of an equivalent number to the New Shares you decide not to take up through your Entitlement will be offered for subscription under the Retail Bookbuild (as described in Section 2.5.2). You will receive some cash in respect of the Entitlements you do not take up if the Clearing Price for the Retail Bookbuild exceeds the Offer Price (see Section 2.5.2) or you may receive nothing.

3.3 If you do not wish to take up your entitlement at all

What you should do

If you do not wish to take up any part of your Entitlement, you should do nothing.

What you might receive

New Shares of an equivalent number to the New Shares you decide not to take up through your Entitlement will be offered for subscription under the Retail Bookbuild (as described in Section 2.5.2). You will receive a cash amount in respect of the Entitlements you do not take up if the Clearing Price for the Retail Bookbuild exceeds the Offer Price (see Section 2.5.2) or you may receive nothing.

3.4 Payment

You should ensure that sufficient funds are held in relevant account(s) to cover the Application Monies. If the amount of your cheque(s), bank draft(s) or BPAY® payments for Application Monies (or the amount for which those cheque(s) clear in time for allocation) is insufficient to pay for the number of New Shares you have applied for in your Entitlement and Acceptance Form, you may be taken to have applied for such lower number of New Shares as your cleared Application Monies will pay for (and to have specified that number of New Shares on your Entitlement and Acceptance Form) or your Application may be rejected.

If you choose to pay by BPAY® you are not required to submit the personalised Entitlement and Acceptance Form but are taken to make the statements on that form. Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY® are received by this time. You need to ensure that your BPAY® payment is received by the Share Registry by no later than 5.00pm (AEST) on Friday, 4 July 2008.

3.5 Entitlement and Acceptance Form

Returning a completed Entitlement and Acceptance Form or paying the Offer Price for New Shares by BPAY® will be taken to constitute a representation by the Eligible Retail Shareholder that they:

• have received a printed or electronic copy of the Prospectus (and any supplementary or replacement document) accompanying the form and have read them all in full;
• declare that all details and statements in the form are complete and accurate;
• acknowledge that once the form is returned or payment has been made the Application may not be withdrawn except as allowed by law;
• agree to being issued the number of New Shares they applied or paid for;
• are not in the United States and are not a US Person or acting for the account or benefit of a US Person; and
• authorise St Barbara and the Underwriter and their officers or agents, to do anything on their behalf necessary for New Shares to be issued to them, including to act on instructions received by the Share Registry using the contact details in the form.

3.6 No Interest on Application Monies

Any interest accrued on Application Monies will be retained by St Barbara and will not be paid to the relevant Eligible Shareholder including if the Offer is cancelled or withdrawn.

3.7 Risks and Further Information

This Prospectus contains important information in relation to the Offer. You should read it carefully and in its entirety, including Section 6 which contains a summary of the major risks associated with an investment in St Barbara. If you are in doubt as to the course you should follow, you should seek appropriate professional advice before making an investment decision.

Any questions relating to your Entitlement and the processing of your Application under the Offer can be directed to the St Barbara Offer Information Line on 1300 653 935 (from within Australia) or on +61 3 9415 4356 (from outside Australia) between 8.30am and 7.00pm (AEST) Monday to Friday during the Offer Period.

4. Overview of St Barbara

4.1 Introduction

St Barbara is an Australian gold producer and mineral explorer. St Barbara's key assets include its Southern Cross and Leonora operations, both of which are located in Western Australia, Mineral Resources of 10.1 million ounces of gold including Ore Reserves of 2.3 million ounces of gold as well as an extensive landholding comprising granted tenements and tenement applications of approximately 18,000 square kilometres throughout Australia.

The Southern Cross operations comprise the Marvel Loch 2.4 Mtpa processing facility, the Marvel Loch underground mine, nearby open pit operations and other development opportunities. The Southern Cross operations have produced between 155,000 -170,000 ounces of gold for each of the past three years.

The Leonora operations comprise the Gwalia 1.2 Mtpa processing plant, Gwalia underground mine development as well as other open pit and underground development opportunities. The Leonora operations will commence gold production in the September quarter 2008.

St Barbara's strategic objective is to become a 1 million ounce per annum gold producer with Ore Reserves of 10 million ounces of gold. Achieving this growth requires St Barbara to focus on:

• exploration success at Southern Cross and Leonora;
• continued conversion of Mineral Resources to Ore Reserves at Southern Cross and Leonora;
• expanding gold production at Southern Cross and Leonora;
• further assessment of potential recommencement of gold production from Tarmoola; and
• acquisitions of additional gold producing assets, capable of producing a minimum of 100,000 ounces per annum.

The Marvel Loch underground mine together with the development of Gwalia at Leonora, are the central building blocks to expand production levels.

4.2 Major Strengths

St Barbara believes that it is well positioned to grow and create shareholder value as a result of the following factors:

• St Barbara has existing gold operations with capacity for growth, supported by established infrastructure;
• St Barbara has Mineral Resources of 10.1 million ounces of gold including Ore Reserves of 2.3 million ounces of gold;
• St Barbara's extensive tenements in Australia covering 18,000 square kilometres in areas prospective for mineralisation;
• St Barbara has an experienced Board of Directors, management team and workforce;
• St Barbara has a well established mining culture with access to skilled personnel, service supplies and advanced mining technology; and
• St Barbara operates solely in Australia, which is considered to be one of the lowest sovereign risk nations in the world.

4.3 Major Assets

Southern Cross Operations

St Barbara's Southern Cross operations are centred at Marvel Loch, 30km south of the town of Southern Cross and 360km east of Perth, Western Australia. Current operations include the Marvel Loch underground mine, and other ore deposits located in the GVG area 13km to the south. Total gold production for the ten months to 30 April 2008 was approximately 130,000 ounces at a cash operating cost of A$544 per ounce.

Southern Cross, including Marvel Loch has gold Ore Reserves totalling 600,000 ounces and Mineral Resources of over 2 million ounces (see Section 4.5).

Marvel Loch

The Marvel Loch underground mine is the cornerstone of St Barbara's Southern Cross operations. Gold mineralisation extends over a 1.3km strike length, defined to depths of over 700 metres below surface (mbs) and remains open at depth. Underground drilling and mining studies to establish Ore Reserves below 500 metres are progressing. An upgraded recalculation of Ore Reserves at the Southern Cross operations will be reported in the June 2008 Quarterly Report.

The lodes being mined include:

• Sherwood and Undaunted at the north;
• Exhibition at the centre; and
• East and New at the south.

The underground mine is expected to deliver approximately 0.9 million tonnes of ore during the 2008 financial year. Mineral Resource extensional drilling at Marvel Loch has continued to focus on establishing additional indicated Mineral Resources for conversion to Ore Reserves.

The key focus elsewhere at Southern Cross is to develop underground deposits of greater than 3.5 grams per tonne and open pit deposits of greater than 2.0 grams per tonne and include Nevoria, GVG Lode 1, Parbo and Transvaal.

The GVG/Nevoria area is situated 13 kilometres south east of the Marvel Loch processing plant and has existing mining related infrastructure. Transvaal is located 30 kilometres to the north of Marvel Loch. Both of these areas are connected by dedicated haul roads to the Marvel Loch plant. Mining of the Hercules open pit deposit in the GVG area was completed in the second half of 2007.

Expected production for the 2008 financial year is in the range of 155,000 – 160,000 ounces of gold at a cash operating cost of approximately A$560 per ounce.

Production at Southern Cross for the 2009 financial year is expected to come from Marvel Loch underground and other identified open pit and underground deposits, including the GVG area and the Norton (Nevoria) deposit. In addition, production is anticipated from Edwards Find and/or GVG Lode 2 (subject to further assessment and usual regulatory approvals). Production from Edwards Find is subject to the negotiation of an access agreement for mining. Total targeted production for

the Southern Cross operations is in the range of 180,000 – 190,000 ounces for the 2009 financial year.

The Marvel Loch mill has a production capacity of 2.4 Mtpa. This mill has been in operation for more than 15 years. The Marvel Loch mill and mine is powered from the Western Australian state grid. During the last six months higher than expected maintenance outages have been experienced. Part of the Offer proceeds (see Section 2.2) will be applied towards maintenance and productivity improvement initiatives. These initiatives, which include expenditure on leach/absorption tank refurbishments, structural steel replacement and concrete repair, repairs to crushing curcuit, and gold recovery system upgrade, will be implemented in the 2009 financial year.

Subject to usual regulatory approvals, other potential sources of underground ore in the Southern Cross region after the 2009 financial year include Transvaal, Parbo, Nevoria and GVG Lode 1.

Leonora

The Leonora operations are located 200 kilometres north of Kalgoorlie.

The Leonora operations will initially include the high grade Gwalia underground mine with a mine life of 8 years and the Trump/Kailis open pit deposit. Future operations may include the Tower Hill underground deposit and recommencement of production at Tarmoola.

Power generation for the 1.2 Mtpa (fresh rock capacity) Gwalia mill and mine is planned to be generated by gas. The Company has back-up diesel fuel generation capability.

The Company's contracted gas supplier has not advised if the recent gas explosion at the Varanus Island gas facility in Western Australia will impact on the availability of gas to the Company.

It is not planned for gas to be available until September quarter 2008. In any event, the Company will be able to use diesel fuel, if required, to commence gold production in the September quarter 2008 as planned.

The Gwalia gold mine has one of the longest operating histories and largest gold production records of all the Archaean gold mines outside Kalgoorlie, Western Australia. Historic underground production was 7.4 million tonnes @ 11.4 grams per tonne for 2.6 million ounces of gold.

As previously announced, total pre-commissioning capital expenditure for the Gwalia mine is estimated at A$126.5 million, as shown in the table below:

	Expenditureforthe10 monthsendedpre30 April2008 (A$ million) budget	Total-commissioning(A$ million)	TOTAL AMOUNT STILLTO BE SPENT AT30 April2008 (A$ million)
Mining Developments	45.6	57.1	11.5
Processing Plant and Borefields	25.5	36.7	11.2
Mine Infrastructure	6.0	17.3	11.3
Run of Mine Pad	4.7	5.0	0.3
Village	2.0	3.6	1.6
Other	4.9	6.8	1.9
TOTAL	88.7	126.5	37.8

Pre-Commissioning Capital Expenditure for Gwalia

Of the remaining A$37.8 million pre-commissioning capital expenditure, approximately A$10 million is to be incurred in the 2009 financial year.

The Gwalia mine is on schedule to commence production in the September quarter 2008.

Targeted gold production for the 2009 financial year from Leonora is in the range of 115,000 – 125,000 ounces including expected production from the Trump and Kailis open pit deposits. The Gwalia mine is currently expected to increase production to an annual rate in excess of 200,000 ounces from 2011. Total Ore Reserves at Gwalia as at 30 June 2007 were 1.7 million ounces, representing an approximate mine life of 8 years. St Barbara's most recent estimated Life of Mine cash operating cost measured in 2007 dollars is A$420 per ounce. This is in the process of being updated in conjunction with detailed mine planning and schedules. A revised estimated Life of Mine cash operating cost will be released in the first half of the 2009 financial year.

Tower Hill is being considered as a potential underground development and is located 2 kilometres from the Gwalia mill.

At Tarmoola, drilling is underway, testing for extensions to the existing higher grade Mineral Resource for potential underground development.

Outlook

2008 Financial Year

St Barbara's revised forecast gold production for the 12 month period to 30 June 2008 is now in the range of 155,000 – 160,000 ounces at a cash operating cost of approximately A$560 per ounce. This compares to previous guidance of 165,000 – 170,000 ounces at a forecast cash operating cost of A$525 – A$550 per ounce. The difference in forecast gold production is primarily attributable to lower than expected mill availability and throughput at the Southern Cross operations in the first two months of the June quarter and more frequently recently, with a consequent increase in ore stockpiles at surface available for processing in the following financial year. Unscheduled maintenance required for the crushing circuit has reduced availability and consequently availability of fine ore stocks. This has been mitigated in part through the introduction of screens to assist production of fine ore stocks. Whilst maintenance issues have been addressed, should further unscheduled maintenance or milling throughput issues arise throughout June, gold production is likely to be at the lower end of the range.

The proposed productivity improvements to the Southern Cross plant (estimated at A$10 million) outlined in this Offer are anticipated to improve the productivity and reliability of the plant.

2009 Financial Year

Gold production for the 2009 financial year from the Southern Cross and Leonora operations is targeted to be in the range of 295,000 – 315,000 ounces.

The previously announced target of producing at the rate of 450,000 ounces per annum by December 2008 is now expected to be achieved by the middle of the 2009 calendar year. The reasons for this change are described below.

St Barbara recently optimised its mining approach at Gwalia, changing to a "bottom up" mining approach of the ore body above the dolerite dyke (which first intersects the Gwalia ore deposit at approximately 1,100 mbs), from the "top down" mining approach proposed in the Gwalia feasibility study. This change will result in greater longer term benefits for the management of the stress regime environment of the mine relative to the requirements of the Gwalia feasibility study stress regime model. As a consequence of this change of approach, the slower ramp-up of production will result in production from Gwalia Deeps of approximately 60,000 ounces in the 2009 financial year; a reduction of approximately 33,000 ounces compared to the 2006 feasibility study. This reduction is partially offset by expected production of approximately 12,000 ounces from West Lode, which is located 480 to 540 metres below the surface. St Barbara's targeted gold production in the range of 115,000 – 125,000 ounces in the 2009 financial year for the Leonora operations includes production from Gwalia, West Lode, Trump and Kailis.

In the 2011 financial year, production is scheduled to achieve the sustainable levels forecast in the Gwalia feasibility study.

A production summary for the 2008 and 2009 financial years is as follows:

ProductionRange(ounces)
155,000 – 160,000
180,000 – 190,000
115,000 – 125,000
295,000 – 315,000

St Barbara's Ore Reserves and Mineral Resource statements are presently being updated and revised statements will be included in the June 2008 Quarterly Report. This update is expected to reflect exploration success achieved by St Barbara during the current financial year, resulting in increased Ore Reserves.

Exploration

St Barbara currently has extensive tenements within Australia covering approximately 18,000 square kilometres. Exploration expenditure for the 2008 financial year is expected to be approximately A$37 million. Exploration is focused on the discovery of higher grade underground and open pit deposits in proximity to existing production infrastructure at Southern Cross and Leonora. Previous exploration success includes the establishment of 1.7 million ounces of Reserves at Gwalia at an exploration cost to St Barbara of approximately A$20 per ounce.

Exploration in the 2009 financial year will focus on proving up the Transvaal, Edwards Find and GVG Lode 1 deposits at Southern Cross and Tower Hill underground and Tarmoola at Leonora. In order to maintain St Barbara's level of effective exploration and to focus on the conversion of Mineral Resources to Ore Reserves, St Barbara's exploration budget of A$35m for the 2009 financial year will be funded from the proceeds of the Offer.

St Barbara is, in the ordinary course of business, in regular discussions with other resource companies which may result in St Barbara entering into a joint venture or other arrangements. There are no discussions currently underway that are of a material nature to St Barbara.

Southern Cross Gold Potential

St Barbara controls the majority of the Southern Cross-Forrestania greenstone belt, over a length of some 200km, which has a known historical gold endowment of over 12 million ounces. A comprehensive study of deposit styles, structural associations, the effectiveness of previous exploration and targeting has been completed in the current financial year, producing many gold targets within St Barbara's tenements. These targets have been ranked, further assessed and will be considered for future exploration.

Leonora Gold Potential

Gold endowment in the Leonora region is extensive, with the five largest known deposits historically producing a total of 13.5 million ounces of gold. St Barbara inherited a large database of drillhole, geophysical and geochemical data through the acquisition of the Leonora gold assets.

Greenfields

A budget of A$1.2 million for the 2009 financial year is allocated for greenfields exploration of the high ranked targets to identify world-scale deposits of gold in Australia, with the potential to host one million ounce or larger, gold deposits.

Base Metals

A dedicated exploration team has been established to explore for nickel, copper and zinc deposits at Leonora and Southern Cross. Diamond drilling along strike from the Teutonic Bore and Jaguar Copper/Zinc deposits at Leonora has intersected strongly altered mafic and felsic volcanic rocks hosting a number of sulphuric cherts and shale horizons. The intensity of alteration reflects a dynamic hydrothermal system and supports the potential for concealed deposits in the area.

As previously disclosed, drilling to date for nickel sulphide mineralisation at Sullivans (Leonora) has intersected a narrow interval of disseminated sulphides at the base of the ultramafic sequence.

The exploration budget for base metals for the 2009 financial year is A$5 million.

4.4 Investments

St Barbara has a strategic investment in approximately 10% of the ordinary shares in Bendigo Mining Limited. These ordinary shares were acquired in January 2007 and as at 31 May 2008 had a market value of A$14.6 million. The principal asset of Bendigo Mining Limited is a land package covering the Bendigo goldfield, historically the second largest goldfield in Australia, which produced 22 million ounces

4.5 Mineral Resources and Ore Reserves

The Proven and Probable Reserves statement prepared by St Barbara was included in the 30 June 2007 Quartely Report. The information in the June 2007 Quarterly Report (in respect of Ore Reserves) and December 2007 Quarterly Report (in respect of Mineral Resources) is presented in the tables below.

RegionPROVED		PROBABLE			TOTAL
	TONNES (K)	AUG/T	K OZ	TONNES (K)	AUG/T	K OZ	TONNES (K)	AUG/T	K OZ
Southern Cross
Marvel Loch	950	4.0	120	2,200	4.1	290	3,100	4.1	410
Nevoria				670	4.1	90	670	4.1	90
Hercules				450	2.4	34	450	2.4	34
GVG				530	1.6	27	530	1.6	27
Other	110	1.9	7	1,300	0.8	34	1,400	0.9	41
Sub-total	1,100	3.7	130	5,100	2.9	480	6,200	3.0	600
Leonora
Gwalia				5,600	9.4	1,700	5,600	9.4	1,700
TOTAL ALL AREAS	1,100	3.7	130	11,000	6.3	2,200	12,000	6.0	2,300

Proven & Probable Ore Reserves Statement at 30 June 2007

Notes – Southern Cross:

1. Information in this report that relates to Southern Cross Ore Reserves is based on information compiled by Mr. Jacobus Kirsten and Mr. Sam Larritt who are Members of the Australasian Institute of Mining and Metallurgy. Both Mr. Kirsten and Mr. Larritt are full-time employees of the Company. Mr. Kirsten and Mr. Larritt have sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons as defined by the 2004 edition of the 'Australasian Code for Reporting of Mineral Resources and Ore Reserves'. Mr. Kirsten and Mr. Larritt consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

• 1. The Ore Reserve estimates for Hercules and GVG used a gold price of A$750/oz. The gold price is based on put options bought by the Company, exercisable at A$760 each, for the twelve months within which these Ore Reserves are expected to be mined. A cut-off grade of 0.9g/t, dilution of 5% and mining recovery of 97.5% were applied. Metallurgical recovery is 93%.
• 1. The Ore Reserve estimate for Nevoria used a gold price of A$700/oz and a cut-off grade of 3.0g/t. A dilution of 10% and mining recovery of 75% were applied to all lodes. Metallurgical recovery is 93%.
• 1. The Ore Reserve estimate for Marvel Loch used a gold price of A$700/oz and a cut-off grade of 3.0g/t. A dilution of 30% and mining recovery of 85% were applied to Undaunted lode, a dilution of 12% and mining recovery of 90 % were applied to Sherwood lode, a dilution of 5% and mining recovery of 95 % were applied to Exhibition lode, New lode and East lode, a dilution of 20% and mining recovery of 95% were applied to Firelight lode. Metallurgical recovery is 93%.

1. All data is rounded to two significant figures. Discrepancies in summations will occur due to rounding.

Notes – Leonora:

• 1. The information in this report that relates to Gwalia Ore Reserve is based on information compiled by Mr. Per Scrimshaw and Mr. Daniel Donald, who are members of the Australasian Institute of Mining and Metallurgy. Mr. Scrimshaw is a consultant to and Mr. Donald an employee of St Barbara Limited and both have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves". Mr. Scrimshaw and Mr. Donald consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
• 1. The Ore Reserve estimate for Gwalia used a gold price of A$700/oz and a cut-off grade of 5.0g/t. The gold price is based on put options bought by the Company, exercisable at A$700 per ounce, corresponding to the period of time within which these Ore Reserves are expected to be mined. Dilution factors between 8% and 20% at 0.2g/t Au were applied based on stope width. Mining recovery factors are based on geotechnical studies and vary from 85% to 50% depending on depth of mining. Metallurgical recovery is 95%.
• 1. All data is rounded to two significant figures. Discrepancies in summations will occur due to rounding.

REGION PROJECT MEASURED INDICATED INFERRED TOTAL TONNES (K) AU G/T K OZ TONNES (K) AU G/T K OZ TONNES (K) AU G/T K OZ TONNES (K) AU G/T K OZ Southern Cross Marvel Loch 2,860 3.7 340 3,190 3.8 389 710 3.7 84 6,760 3.7 813 Nevoria 0 0.0 0 2,520 3.5 282 2,060 3.8 250 4,580 3.6 532 GVG (Sth Burbidge) 0 0.0 0 2,850 1.3 118 1,270 1.6 65 4,120 1.4 183 Other (8) 120 1.8 7 4,130 2.4 317 2,030 2.8 180 6,280 2.5 504 Total Southern Cross 2,980 3.6 347 12,690 2.7 1,106 6,070 3.0 579 21,740 2.9 2,032 Leonora Gwalia 0 0.0 0 10,440 8.4 2,835 1,930 11.6 720 12,370 8.9 3,555 Tarmoola 12,000 0.9 347 46,000 1.2 1,775 0 0.0 0 58,000 1.1 2,122 Tower Hill 0 0.0 0 14,300 2.2 1,026 4,130 2.9 379 18,430 2.4 1,405 Other (7) 990 1.0 33 3,370 1.4 156 5,690 4.4 814 10,050 3.1 1,003 Total Leonora 12,990 0.9 380 74,110 2.4 5,792 11,750 5.1 1,913 98,850 2.5 8,085 Total All Regions 15,970 1.4 727 86,800 2.5 6,898 17,820 4.3 2,492 120,590 2.6 10,117

Mineral Resource Statement (inclusive of Ore Reserves) at 31 December 2007

1. These Mineral Resources have been estimated under the direction of Mr Ben Bartlett and reviewed by Mr Peter Thompson.

2. Mr Thompson and Mr Bartlett listed above have sufficient experience relevant to the style of mineralisation and type of deposits under consideration and to the activities which they undertook to qualify as Competent Persons as defined in the "Australasian Code for Reporting of Mineral Resources and Ore Reserves". They have consented to the inclusion in the report of the matters based on their information in the form and context in which they appear.

3. The Tower Hill Mineral Resource estimate is calculated using a 0.8g/t cut-off to a vertical depth of 400m, and a 2g/t cutoff below 400m. 4) Some deposits that have been included in previous Mineral Resource statements for several years have been withdrawn from this statement pending further investigation of their potential for eventual economic exploitation.

4. All numbers have been rounded to two significant figures.

5. Some apparent discrepancies in summations will occur due to rounding.

6. Leonora Other - McGraths, Kailis, Harbour Lights, Tamoola s/pile, Royal Arthur Bore, Rainbow & Gwalia UG (Intermediates).

7. Southern Cross Other - Axehandle, North Edwards, Transvaal, Cornishman (SBM 51%), Golden Pig (Min. Waste), New Zealand Gully, Various Stockpiles, Great Victoria Lode 2, Great Victoria Lode 1 (Sulphide), Redwing, Yilgarn Star.

The Ore Reserves and Mineral Resource statements are presently being updated and revised statements will be included in the June 2008 Quarterly Report. The update is expected to reflect exploration success achieved by St Barbara during the current financial year, resulting in increased Ore Reserves.

4.6 Hedging Strategy

St Barbara's policy is to maximise the exposure of the Company to favourable movements in the spot gold price. Consistent with this policy, St Barbara has no committed gold deliveries.

A purchased put option strategy has been deployed since April 2007 which allows St Barbara to benefit from increases in gold prices above the strike price per ounce, while providing protection against a lower gold price. St Barbara will only consider undertaking gold delivery commitments in special circumstances in the future where St Barbara may be required by financiers to undertake gold hedging specific to identifiable production or to protect shorter term cash flows.

	Ounces	Price/oz	Maturity
Bought put options	13,800	A$760	Jun 08
Bought put options	222,000	A$700	Jul 08 – Apr 10
Bought put options	280,000	A$800	Jul 09 – Jun 12
Bought put options	1,106,400	A$700	Jul 10 – Apr 17
Total	1,622,200

The Company's put option position as at 31 May 2008 comprised:

As at 31 May 2008, these put options had a positive marked-to-market value of A$25.7 million.

5. Financial Effect of the Offer on St Barbara

5.1 Introduction

The effect of the Offer on St Barbara is set out in the sections below. The Offer will raise (before deducting the costs of the Offer) A$120 million.

5.2 Effect on Capital Structure and Effect for Shareholders

5.2.1 Effect on Capital Structure

The following table shows the effect of the Offer on the capital structure of St Barbara.

Type ofissuedSecurities	Before the Offer	After Placement	After theInstitutionalEntitlementOffer andInstitutionalBookbuild*	After the RetailEntitlementOffer and RetailEntitlementBookbuild**
Shares	994,374,609	[TBC]	[TBC]	[TBC]
Options	18,860,000	Same number	Same number	Same number
Convertible Notes	A$100 million ofConvertible Notes	Same number	Same number	Same number

*As at the date of this prospectus.

**Assuming the maximum number of New Shares is allotted. The Offer is fully underwritten.

Note: Due to rounding of Entitlements and reconciliation of Entitlements under the Institutional Entitlement Offer to shareholdings on the Record Date, the exact number of New Shares to be issued, and the number to be issued under each part of the Offer, will not be known until completion of the Entitlement Offer.

Options on issue

St Barbara currently has a total of 18,860,000 options on issue. None of these options are quoted on ASX. All of these options are held by employees or executives of St Barbara, and have expiry dates in either 2011 or 2012. The current exercise prices of these options range from A$0.1500 to A$0.5810. As a result of the terms on which these options were issued, and the Listing Rules of ASX, the exercise price of these options will vary as a result of the Offer. The variation to the exercise price of the options cannot be determined precisely at this stage. The adjusted exercise prices of the options range from A$0.11 to A$0.49. Option holders are not entitled to participate in the Entitlement Offer without first exercising their options so that Shares issued on exercise are allotted by the Record Date.

Convertible Notes on issue

St Barbara currently has A$100 million 8% convertible notes on issue with an initial conversion price of A$0.7261 per share and a final maturity date of 4 June 2012, which are not quoted on ASX. As a result of the terms on which these notes were issued, and the Listing Rules of ASX, the conversion price of these convertible notes will vary as a result of the Offer. The variation to the conversion price cannot be determined precisely at this stage, however, the conversion price is expected to be varied by approximately A$0.06.

After determining an adjustment to the conversion price of the convertible notes, St Barbara must give notice of the adjustment to noteholders by publishing the notice in a daily newspaper of general circulation in Asia and a daily newspaper of general circulation in Singapore. As the notes are listed on the official list of the SGX-ST mainboard, St Barbara must also immediately disclose to Singapore Exchange Securities Trading Limited any information which may have a material effect on the price or value of the notes or on an investor's decision whether to trade in the notes.

5.2.2 Effect on Shareholders

Dilution effect

The Placement will be dilutionary to shareholders that do not participate. Eligible Retail Shareholders who take up their full Entitlement under the Offer will not have their interest diluted (other than as a result of the Placement). However, if the holders of options or the holders of convertible notes elect to convert those securities into Shares, other security holders' interests will be diluted.

Eligible Retail Shareholders who decide not to take up their Entitlement, or to take up less than their full Entitlement will have a reduction in their percentage shareholding in St Barbara following completion of the Offer.

The holding of any Ineligible Retail Shareholder (unless they participate in the Retail Bookbuild) will be diluted.

Payment of difference between the Offer Price and Clearing Price

If you are an Eligible Retail Shareholder and you decide not to take up your Entitlement, or to take up less than your full Entitlement, New Shares equivalent to the number that you have not taken up will be offered for subscription under the Retail Bookbuild.

If the price at which the New Shares are acquired by participants in the Retail Bookbuild is higher than the Offer Price you will be paid the difference between the Offer Price and the price at which the New Shares were acquired by participants in the Retail Bookbuild in cash for each New Share not taken up.

However, there can be no guarantee that the Clearing Price at which the New Shares are acquired by participants in the Retail Bookbuild will be higher than the Offer Price or that the price at which New Shares sold under the Institutional Bookbuild will be matched in the Retail Bookbuild (or vice versa).

5.2.3 Earnings per Share impact of the Offer

Basic earnings per share (EPS) is calculated by dividing profit attributable to shareholders, after deducting for minority interest, by the weighted average number of Shares on issue during the year. Diluted EPS is calculated after adjusting for those Shares not yet exercised under option contracts.

As the Offer involves the issue of additional Shares the Offer will dilute both EPS and diluted EPS in the short term.

5.3 Existing debt

As at 31 December 2007 the Company's interest bearing liabilities comprised current lease and insurance premium funding liabilities of A$1.1 million, non-current lease liabilities of A$1.0 million and convertibles notes of $100 million.

As at 31 May 2008 there was no material change to this debt position. The Company is in the final stages of negotiating an asset finance facility totalling A$20 million, to be used to fund the construction of four infrastructure assets at Gwalia. This asset finance facility was part of the Company's capital management plan for funding the Gwalia development. The first drawdown under this Facility is expected to occur in June 2008. The Facility is repayable over 48 months and the interest rate is the 90 day bank bill rate plus an interest margin of 2.8%.

The proceeds of the Offer will be used to sustain the current higher level of exploration activities in line with the Company's strategy to increase Ore Reserves (A$35 million); undertake improvements at the Southern Cross processing plant to increase productivity and efficiency (A$10 million); fund the remaining capital expenditure for the development of the Gwalia gold mine and related operations and infrastructure (A$67 million) and support working capital requirements (A$3 million). Details of the use of funds are contained in Section 2.2.

The Company's debt position will not materially change as a result of the Offer.

5.4 Available cash

The Company's cash balance as at 31 December 2007 was A$114.9 million, which included restricted cash of A$11.9 million. The restricted cash represents cash placed on deposit with Commonwealth Bank under the terms of the Company's bank guarantee facility, which was sixty percent of the amount outstanding under the facility as at 31 December 2007. Since 31 December 2007 the cash placed on deposit with Commonwealth Bank has increased to one hundred percent of the amount outstanding under the terms of the facility, amounting to A$20.6 million as at 31 May 2008.

The Company's cash balance has reduced since 31 December 2007 as a result of expenditure on developing Gwalia and exploration. The cash balance as at 31 May 2008 was A$26.8 million, which included restricted cash of A$20.6 million. The sources of funds in the short term are from progressive drawdowns under the proposed asset finance facility (as described in Section 5.3) and a temporary reduction in restricted cash from A$20.6 million to A$10.6 million. The temporary reduction in the restricted cash is dependent on the signing of the underwriting agreement for this Offer and requires that the restricted cash is increased to A$20.6 million immediately following receipt of the proceeds of the Offer.

The Company's cash flow forecasts for financial year 2009 indicate that total funding of A$120 million is required to complete Gwalia (A$67 million), fund the exploration budget (A$35 million), upgrade the Southern Cross process plant (A$10 million) and provide working capital (A$3 million). The Company is currently committed to the majority of the expected expenditure in respect of Gwalia completion.

The Company does not anticipate that the planned operations at Southern Cross and Leonora for the 2009 financial year will require the raising of any additional equity funds following this Offer.

The Company is in negotiations with banking institutions for a bank guarantee facility of A$25 million (to replace the Commonwealth Bank guarantee facility) that does not restrict cash as security for the facility.

5.5 Dividends

The New Shares will rank equally in all respects (including dividend and bonus issues) with all existing Shares in the capital of St Barbara from the date of issue. The Board is not able to indicate if and when dividends may be paid in the future, as payment of any dividend will depend on the future profitability, financial position and cash requirements of St Barbara.

5.6 Financial information

The statement of financial position of the St Barbara Group as at 31 December 2007 is presented in section 5.6.1 below. The statement of financial position was included in the Company's 31 December 2007 half year financial statements and was subject to review by the Company's external auditors.

Investors should refer to the analysis provided in Sections 5.6.2 and 5.6.3 which sets out the movements in the Company's cash balance since 31 December 2007, the effect of the Offer on the most recent cash balance and the related accounting treatment for the Offer.

The St Barbara Group financial information has been prepared in accordance with the recognition and measurement principles of Australian accounting standards (AASBs) and in accordance with the St Barbara Group's accounting policies, as set out in the annual financial report for the year ended 30 June 2007. The St Barbara Group financial information also complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board.

The St Barbara Group financial information has been presented in an abbreviated form insofar as it does not contain all the disclosures required by the AASBs applicable to annual financial reports usually provided in an annual report prepared in accordance with the Corporations Act.

5.6.1 Statement of financial position as at 31 December 2007

BalanceSheet	31 December2007(A$'000)
Current assets
Cash and cash equivalents	114,921
Trade and other receivables	8,191
Inventories	14,340
Derivative financial assets	97
Deferred mining costs	19,676
Total current assets	157,225
Non-current assets
Available for sale financial assets	18,337
Property, plant & equipment	29,486
Derivative financial assets	20,278
Exploration and evaluation	20,403
Mine properties	109,770
Total non-current assets	198,274
Total assets	355,499
Current liabilities
Trade and other payables	42,788
Interest bearing liabilities	1,108
Provisions	1,427
Total current liabilities	45,323
Non-current liabilities
Interest bearing liabilities	98,075
Provisions	28,736
Total non-current liabilities	126,811
Total liabilities	172,134
Net assets	183,365
Equity
Contributed equity	304,926
Reserves	2,698
Accumulated Losses	(124,259)
Total equity	183,365

5.6.2 Cash flow movements since 31 December 2007

Since 31 December 2007, the Company has undertaken activities that have resulted in the net consumption of cash, as presented in the table below.

CashFlowMovements	A$'000
Cash balance at 31 December 2007	114,921
Net cash flows from operations	16,878
Gwalia development	(37,137)
Southern Cross capital	(12,140)
Exploration	(10,431)
Purchase of gold put options	(4,480)
Net financing cash flows	1,233
Cash balance as at 31 March 2008	68,844
Net cash flows from operations	2,205
Gwalia development	(28,385)
Southern Cross capital	(8,404)
Exploration	(7,865)
Net financing cash flows	403
Cash balance as at 31 May 2008	26,798
Restricted cash	20,597
Available cash as at 31 May 2008	6,201

The cash balance as at 31 March 2008 is as reported in the Company's March 2008 Quarterly Report. Restricted cash represents cash placed on deposit with the Commonwealth Bank under the terms of the bank guarantee facility. The bank guarantees are in relation to obligations entered into for office rents and environmental performance bonds issued in favour of the Western Australian Department of Industry and Resources.

5.6.3 Effect of the Offer on financial position

The table below has been prepared for this Prospectus for illustrative purposes only to demonstrate the impact of the Offer, after deducting fees, on the available cash as at 31 May 2008. Proceeds from the Offer, net of transaction costs, increases available cash by A$115.0 million. Transaction costs represent estimated fees and costs associated with the Offer of A$5.0 million, including an underwriting and management fee of A$3.9 million (being 3.25% of the gross proceeds of the Offer), $0.3 million in legal and accounting fees and $0.8 million for costs relating to printing, the registry and other related costs.

AvailableCash	A$'000
Available cash as at 31 May 2008	6,201
Net proceeds from the Offer	115,000
Pro forma available cash as at 31 May 2008	121,201

5.6.4 Short term cash management

To manage the Company's short term cash requirements subsequent to 31 May 2008 and before the proceeds from the Offer are received, cash flows will be enhanced by the following:

• The A$20 million asset financing facility (as described in section 5.3) is expected to be finalised. Under this facility funds can be drawn down in line with progressive payments under construction contracts.
• On signing the underwriting agreement for this Offer, the Commonwealth Bank has agreed to temporarily reduce the restriction on A$10 million of the cash balance held as security for the bank guarantee facility, with the requirement that the restriction is increased to the original A$20.6 million immediately the funds are received from the Offer.

6. Key Risk Factors

6.1 Introduction

A number of risks and uncertainties, which are both specific to St Barbara and of a more general nature, may affect the future operating and financial performance of St Barbara, the value of its Shares and its future funding requirements. You should carefully consider the following risk factors, as well as this Prospectus in its entirety, and consult your financial or legal advisers before deciding whether to invest in the New Shares. The risks and uncertainties described below are not exhaustive. Additional risks and uncertainties that the Company is unaware of, or that it currently considers to be immaterial, may also become important factors that adversely affect the Company's operating and financial performance.

6.2 Specific Business Risks

6.2.1 Operating and Development Risks

St Barbara's ability to achieve production, development, operating cost and capital expenditure estimates on a timely basis cannot be assured. The business of gold mining (including gold mine development) may be impacted by factors including ore tonnes, grade and metallurgical recovery, input prices (some of which are unpredictable and outside the control of St Barbara), overall availability of free cash to fund continuing development activities, industrial disputes, cost overruns, new changes in the regulatory environment, land claims for compensation, and other unforseen contingencies. Other risks also exist such as, in extreme cases, cave ins, accidents, flooding, environmental hazards, the discharge of toxic chemicals and other hazards. Such and other similar occurrences may delay and/or reduce production, increase production and/or capital costs or result in liability. St Barbara may become subject to liability for hazards which it cannot insure against, or which it may elect not to insure against because of high premium costs or other reasons.

In addition, St Barbara's profitability could be adversely affected if for any reason its production and processing of gold or mine development is unexpectedly interrupted or slowed. Examples of events which could have such an impact include mechanical failure of plant and equipment, unscheduled maintenance requirements, poor or unexpected geological or metallurgical conditions, poor or inadequate ventilation, failure of mine communication systems, interruptions to gas and electricity supplies, human error, and adverse weather conditions. In particular, the risk of many of these may be heightened in the commissioning phase of a mining operation where the level of uncertainty, and hence risk, may be greater.

The risks outlined above also mean that there can be no assurances as to the future development of a mining operation in relation to any of St Barbara's projects described in this Prospectus or which St Barbara may acquire in the future.

6.2.2 Shortages of Skilled Personnel and Business Inputs

St Barbara's success depends in part on the ability of its executive officers, senior management, employees, contractors and consultants to operate effectively, both individually and as a group. Further, St Barbara's success largely depends on its ability to attract and retain additional highly qualified management and personnel and its capacity to secure key resources such as contractors, material and supplies.

While St Barbara has contracts of service or employment with its key personnel and in respect of key resources, it cannot ultimately prevent termination of these contracts in accordance with the relevant agreed conditions. In addition, the strong commodity cycle and large number of projects being developed in the resources industry has increased the demand for skilled personnel, contractors, material and supplies. Accordingly, there is a risk to St Barbara of losing or being unable to source enough suitable key personnel or key resources and, as a result, being exposed to increased capital and operating costs and delays, which may in turn adversely affect the development of new and existing projects, the expansion of existing operations, the results of those operations and St Barbara's financial condition and prospects.

St Barbara is currently seeking replacements for its Chief Operating Officer and General Manager Exploration. There is no guarantee that suitable candidates will be able to be secured.

6.2.3 Fluctuations in the Market Price for Gold

Substantially all of St Barbara's revenues and cash flows are and will continue to be derived from the sale of gold. Therefore, the financial performance of St Barbara is exposed to gold price fluctuations. Historically, the market price for gold has fluctuated widely and has experienced periods of significant decline. Gold prices may be influenced by numerous factors and events which are beyond the control of St Barbara. These factors and events include world demand, forward selling activities, gold reserve movements at central banks, costs of production by other gold producers and other macro-economic factors such as inflationary expectations, interest rates, currency exchange rates (particularly the strength of the US dollar), as well as general global economic conditions and political trends. The value of gold derivatives is similarly affected and also impacted by volatility. If gold prices should fall below or remain below St Barbara's cost of production for any sustained period due to these and other factors and events, St Barbara's business and results of operations could be materially and adversely affected.

6.2.4 Estimates of Ore Reserves, Mineral Resources, Gold Deposits and Production Costs

The Ore Reserves and Mineral Resource estimates for St Barbara's gold assets are estimates only and no assurance can be given that any particular recovery level of gold from Ore Reserves will in fact be realised or that an identified Ore Reserve will ever qualify as a commercially mineable (or viable) ore body that can be economically exploited. St Barbara's estimates comply with the JORC Code. However, Ore Reserve and Mineral Resource estimates are expressions of judgment based on knowledge, experience and industry practice, and may require revision based on actual production experience. Estimates that are valid when made may change significantly when new information becomes available.

Estimates of Ore Reserves, Mineral Resources and production costs can also be affected by such factors as environmental regulations, weather, unforeseen technical difficulties, unusual or unexpected geological formations, work interruptions, gold price and exchange rates. In addition, the ore or mineral quality ultimately mined may differ from that indicated by drilling results and may have an adverse effect on mining operations and results of operations, financial condition and prospects. Material changes in Ore Reserves, ore quality, stripping ratios, recovery rates, gold price and exchange rates may affect the economic viability of projects. Ore Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations.

6.2.5 Exploration Risks

To maintain ore production beyond the life of current Proved and Probable Ore Reserves, further Ore Reserves capable of economic exploitation must be identified. A failure to discover new Ore Reserves or enhance existing Ore Reserves could negatively affect results of operations, financial condition and prospects. There is a risk that St Barbara may be unable to discover new deposits, expand existing deposits or acquire new exploration or mining properties on suitable terms, thus restricting St Barbara's future growth. Exploration activities may be impaired by factors including geological conditions, availability of drill rigs and assay facilities, product prices, overall availability of free cash to fund continuing exploration activities, regulatory approvals, industrial disputes, availability of personnel, cost overruns, land claims and compensation, and other unforeseen contingencies.

There can be no assurance that the proposed exploration programmes described in this Prospectus, or any other projects, tenements or databases that St Barbara may acquire in the future, will result in a discovery of a significant ore deposit. Even if a significant ore deposit is identified, there can be no guarantee that it can be economically exploited.

6.2.6 Litigation Risk

Litigation risks to St Barbara may include, but are not limited to, contesting development or regulatory approvals, native title claims, land tenure disputes, environmental claims, and occupational health and safety claims. In addition to traditional claimants, there is an emerging trend for environmental groups and other interested claimants seeking to bring claims against mining companies such as St Barbara.

For example, proceedings were commenced in July 2002 against St Barbara and one of its wholly owned subsidiaries, Zygot Ltd (Zygot) in the Supreme Court of Western Australia by Kingstream Steel Limited (Subject to Deed of Company Arrangement) (Kingstream). Further details are outlined in Section 8.5.

6.2.7 Funding Risk

St Barbara's continued ability to effectively implement its business plan in the future may depend in part on its ability to raise additional funds. External financial and credit markets, St Barbara's performance and future asset development plans are subject to numerous uncertain future influences and there can therefore be no assurance that any such equity or debt funding will be available to St Barbara, whether individual counterparty credit approvals for asset development will be forthcoming, or whether any funding will be on favourable terms.

Further, St Barbara, in the ordinary course of its operations and developments, is required to issue financial assurances, particularly insurances and bond/bank guarantee instruments, to secure statutory and environmental performance undertakings and commercial arrangements. St Barbara's ability to provide such assurances is subject to external financial and credit market assessments, and its own financial position.

The loan agreements and other financing arrangements such as debt facilities, convertible note issue and finance leases (and any related guarantees and security) entered into by St Barbara contain standard covenants, undertakings, negative pledges and other provisions for documents of that type. In the event that any such covenants, undertakings, negative pledges or other provisions are breached, lenders could accelerate repayment of loans and there is no assurance that St Barbara would be able to repay such loans in the event of an acceleration. Enforcement of any security granted by St Barbara or default under a finance lease could also result in the loss of assets.

Section 5.6 highlights the level of available cash and the Company's short term cash management strategy. This is dependent on the Company's ability to secure the proposed sources of funding within the timeframe required. Should there be a material change to the assumptions set out in Section 5.6, this could have a material adverse impact on the Company's ability to maintain continuity of it's current activities.

6.2.8 Risks Relating To The Convertible Notes On Issue

St Barbara currently has A$100 million of convertible notes on issue (the Notes). The holder of each Note has the right to convert such Note into Shares at any time during a specified conversion period. The number of Shares to be delivered upon conversion is determined by reference to the conversion price in effect on the conversion date.

The Note holders have the right to require St Barbara to repurchase all (or a portion) of their Notes if certain events occur; for example, if Shares cease to be listed on ASX, and on the "Put Option Date" (being 4 June 2010). In addition, upon an event of default, St Barbara may be required to pay all amounts then due in accordance with the terms and conditions of the Notes. Compliance with these obligations, if exercised, may result in a loss of cash flows, the potential requirement for a material refinancing and could also result in the loss of assets.

6.2.9 Environmental Health and Safety Risk

St Barbara's mining operations are subject to extensive Australian health and safety and environmental laws and regulations that may affect the operations of St Barbara. These laws and regulations set various standards regulating certain aspects of health and safety and environmental quality, and apply to both past and future conduct of St Barbara. They provide for penalties and other liabilities for the violation of such standards and establish, in certain circumstances, obligations to rehabilitate current and former facilities and locations where operations are or were conducted. Furthermore, the permission to operate could be withdrawn temporarily where there is evidence of serious breaches of health and safety and environmental laws and regulations, or even permanently in the case of extreme breaches.

The business of ore and mineral mining is subject to certain environmental and safety risks and hazards, such as industrial accidents, discharge of toxic chemicals, saline water, hydrocarbon fluids or other legislated substances, fire and flooding. The occurrence of any such environmental or safety incident could delay production or increase production costs. In addition, significant liabilities could be imposed on St Barbara for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is also a risk that the environmental laws and regulations may become more onerous, making St Barbara's operations more expensive.

Environmental and/or safety incidents and accidents may occur that could negatively impact reputation and freedom or licence to operate. The liabilities St Barbara may face could include liabilities against which St Barbara cannot insure or has elected not to insure because of high premium costs or other reasons.

6.2.10 Regulatory Risk

Each mining project operated by St Barbara will be subject to various Federal, State and local laws and plans relating to several factors including, but not limited to:

• resource licence consent conditions including environmental compliance and rehabilitation;
• taxation;
• employee relations;
• native title and heritage matters;
• historic matters;
• health and safety;
• royalties; and
• other matters.

St Barbara is required to provide bonds, guaranteed by an independent financial institution, to warrant its compliance with Government regulated rehabilitation obligations. St Barbara may divest land tenure in non-core areas to mitigate minimum expenditure requirements.

There is no assurance that the necessary permits, consents, authorisations and agreements to implement plans can be obtained under conditions or within timeframes that make such plans economic. Further, there is no assurance that applicable laws or the governing political authorities will not change or that such changes will not result in additional material expenditures. St Barbara is exposed to the risk of delay to its business activities and operations as a result of St Barbara's inability to obtain on a timely basis (or at all) governmental permits, licences or any other regulatory approvals required.

There is a risk that the Australian Government or, where relevant, a State, Territory or foreign government will alter tax regimes applying to St Barbara. Such alteration could have the effect of reducing cash available for distribution to Shareholders, or altering the tax treatment of distributions in the hands of Shareholders. It is possible that governments may also, through taxation incentives or subsidies, encourage the use of alternative energy sources. As with any entity, the ability of St Barbara to recoup its existing taxation losses is dependent upon the entity deriving future assessable income and continuing to comply with the conditions for deductibility imposed by legislation, and subject to such taxation legislation not changing in a manner which would adversely affect the entity's ability to recoup its tax losses. If a carbon tax is introduced in the future, it may increase the price of energy and consequently may lead to increased costs for St Barbara in its business activities and operations.

6.2.11 Exploration and Mining Titles

The ability of St Barbara to carry out successful exploration and mining activities will depend on the ability to maintain or obtain tenure to mining titles. The maintenance or issue of any such titles must be in accordance with the laws of the relevant jurisdiction and in particular the relevant mining legislation. Conditions imposed by such legislation must also be complied with. No guarantee can be given that tenures will be maintained or granted, or if they are maintained or granted, that St Barbara will be in a position to comply with all conditions that are imposed, or that they will not be plainted by third parties.

Furthermore, while it is common practice that permits and licences may be renewed or transferred into other forms of tenure appropriate for the ongoing operation, no guarantee can be given that a renewal or a transfer will be granted to St Barbara or, if they are granted, St Barbara will be in a position to comply with all conditions that are imposed or that the conditions will allow planned exploration or mining activities to take place.

While St Barbara has investigated title to all of its mineral claims and to the best of its knowledge title to all material properties are in good standing, this should not be construed as a guarantee of title. The properties may be subject to registered and unregistered agreements or transfers and title may be affected by undetected defects. Accordingly, other parties could possibly dispute St Barbara's title to its mining rights and other interests. Several plaints are lodged against tenements which are not material to planned operations. Disputes could include Aboriginal native title claims. Since 1992, Australian law has recognised that the Aboriginal peoples of Australia may have retained a form of "native title" over the lands of Australia where this has not been extinguished either by abandonment or by inconsistent acts of government such as the creation of freehold or leasehold title to the land. Subsequent Federal and State legislation provides for the regulation of native title claims and their inter-relationship with the creation of new land titles and mining tenements.

St Barbara may need to obtain approval or consent from government departments (such as the Department of Indigenous Affairs) and local communities in relation to its mining and exploration proposals in accordance with this legislation. Delay or the inability to obtain such approvals and consents is likely to affect St Barbara's ability to carry out exploration activities and operate its mining and other operations.

6.3 General Business and Investment Risks

6.3.1 General Economic Conditions and External Market Factors

Changes in both Australian and global economic conditions may affect the financial performance of St Barbara. These factors, over which St Barbara has no control, include:

• general market, political and economic conditions, including inflation rates, interest rates and foreign currency exchange rates;
• changes in market valuations of listed stocks in general and gold;
• structural changes in the global mining industry;
• supply and demand conditions for gold; and
• fluctuations in the gold price.

In addition, factors such as, but not limited to, political movements, stock market trends, changing customer preferences, interest rates, inflation levels, commodity prices, industrial disruption, environmental and adverse weather impacts, taxation changes and legislative or regulatory changes, may all have an adverse impact on St Barbara's operating costs, profit margins and share price. These factors are beyond the control of St Barbara and St Barbara cannot, to any degree of certainty, predict how they will impact on St Barbara. Some of these factors are discussed further below.

6.3.2 General Resource Sector Risk

In common with other enterprises undertaking business in the natural resources sector, certain risks are substantially outside the control of St Barbara. These risks include:

abnormal stoppages in production or delivery due to factors such as industrial disruption, major equipment failure, accident, power failure or supply disruption;

• unforeseen adverse geological or mining conditions and/or changes to predicted ore or mineral quality;
• the state of supply and demand for gold in Australian and overseas markets and the effect on the gold price;
• changes in government regulations (including environmental regulations) and government imposts such as royalties, rail freight charges and taxes; and
• risks to land titles, mining titles and use thereof as a result of native title claims.

6.3.3 Foreign Exchange Rate Risk

St Barbara is an Australian corporation that reports in Australian dollars. St Barbara's revenue is in Australian dollars derived from the sale of gold. However, the Australian dollar gold price is directly impacted by movements in the US dollar gold price and the US dollar/AUD exchange rate. Movements in the US dollar/ AUD exchange rate and/or the US dollar gold price may adversely or beneficially affect St Barbara's results of operations and cash flows.

6.3.4 Acquisition Plan Risk

St Barbara may acquire or make strategic investments in complementary businesses, or enter into strategic partnerships or alliances with third parties in order to enhance its business. At the date of this Prospectus, St Barbara is not aware of the occurrence or likely occurrence of any such risks which would have a material adverse effect on the St Barbara Group.

Further, St Barbara's acquisition strategy may require it to obtain additional debt, equity financing or performance obligations, resulting in additional leverage, or increased debt obligations as compared to equity, and dilution of ownership. St Barbara may not be able to finance acquisitions on terms satisfactory to it. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect its growth prospects.

6.3.5 Insurance

St Barbara maintains insurance within ranges of coverage consistent with industry practice, but no assurance can be given that St Barbara will continue to be able to obtain such insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover all claims.

6.3.6 Hedging Risks

At the date of this offer, St Barbara has no committed hedging or plans for committed hedging.

In the future, St Barbara may enter into hedging transactions in order to fix or underpin the price for a portion of its production. There is a risk that St Barbara may not be able to deliver physical production into committed hedges if, for example, there was a production stoppage. In that event St Barbara could be adversely affected if the price was to move unfavourably. In addition, there is a mark-to-market risk in respect of accounting for hedging that could adversely impact St Barbara's financial results.

6.3.7 Enforcement of Legal Rights

The rights of St Barbara to participate in its agreements to supply gold, nickel and copper to persons in other jurisdictions are predicated upon a series of supply agreements. St Barbara may sell ores and minerals into various overseas markets. Should it become necessary for St Barbara to seek to enforce its rights under any or all of these agreements, it would need to do so in accordance with the laws of such applicable jurisdictions. There can be no assurance that, should it become necessary for St Barbara to take such action, it will be possible to fully obtain the legal remedies that are being sought.

6.3.8 Trading Price of Shares

It is impossible to predict whether the price of Shares will rise or fall. St Barbara's credit quality, operating results, economic and financial prospects and other factors will affect the trading price of Shares. In addition, the price of Shares is also subject to varied and often unpredictable influences on the market for equities, including, but not limited to:

• general economic conditions, including Australian dollar and US dollar performance on world markets;
• commodity price fluctuations;
• fluctuations in the global market for gold;
• inflation rates, foreign exchange rates and interest rates;
• variations in the general market for listed stocks in general, or for Australian mining stocks in particular;
• changes to government policy, legislation or regulation;
• industrial disputes;
• general operational and business risks; and
• hedging or arbitrage trading activity that may develop involving the Shares.

In particular, the share prices for many companies have been and may in future be highly volatile, which in many cases may reflect a diverse range of non-company specific influences such as global hostilities and tensions relating to certain unstable regions of the world, in particular the Middle East, acts of terrorism and the general state of the global economy. No assurances can be made that St Barbara's market performance will not be adversely affected by any such market fluctuations or factors.

7. Directors and Management

7.1 Board of Directors

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

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

He is a Fellow of both the Australian Institute of Company Directors and the Australasian Institute of Mining and Metallurgy. He is a Non Executive Director of Southern Health, the largest health care service in Victoria, (and formerly Chair of its Quality Committee) and is a member of the Advisory Board to the Dean of Monash University's Faculty of Medicine, Nursing & Health Services.

Eduard Eshuys, B.Sc, FAICD, FAusIMM – Managing Director & Chief Executive Officer

Mr Eshuys is a geologist with 38 years of experience in mineral exploration, development and operation of gold and nickel mines in Australia. He has a credible record of exploration having led the exploration teams that discovered several major gold deposits, including Plutonic, Bronzewing and Jundee. He brought Bronzewing and Jundee as well as the Cawse Nickel mine into production.

Mr Eshuys was awarded the Geological Society of Australia's Joe Harms medal for distinction in exploration success and project development in 1996. He is a Fellow of both the Australian Institute of Company Directors and the Australian Institute of Mining and Metallurgy.

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

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

Barbara J Gibson BSc, FTSE, MAICD – Non-Executive Director

Ms Gibson possesses a broad range of business management experience. Ms Gibson was formerly the General Manager Chemicals Group of Orica Limited, a member of the Orica Group Executive and a Director of Incitec Pivot Limited. She is a Fellow of the Australian Academy of Technical Sciences and Engineering, and is a recipient of the Australian Centenary Medal in 2001 for service to Australian society in medical technology.

Philip C Lockyer, AWASM, DipMETALL, M.Sc – Non-Executive Director

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

Robert K Rae, B. Comm (Hons), FAICD – Non-Executive Director

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

7.2 Key Management

Ian Bird – Chief Operating Officer

Ian joined St Barbara in March 2007 and is responsible for operations across the group. The role involves growing existing production and ensuring development of future production opportunities is achieved. This involves a close focus on margins and capital budgets. Previously, Ian was the GM of the Tanami Operation with Newmont. He has held senior operational management positions in both open cut and underground mining operations.

Mr Ian Bird has resigned from St Barbara, effective 4 July 2008. An executive search for a replacement has commenced.

Garth Campbell-Cowan – Chief Financial Officer

Garth was appointed in September 2006 and is responsible for finance, treasury, taxation, reporting and business analysis, corporate planning and capital management. He has repositioned the finance team to focus on developing financial reporting systems and controls to assist with the Company's growth. He has also established a treasury function. Prior to joining St Barbara, he was Director of Corporate Accounting at Telstra and has held finance leadership roles with WMC and Newcrest Mining.

Ross Kennedy – Company Secretary & General Manager Corporate

Ross has been with St Barbara since 2004. The role of GM Corporate Services is to provide leadership on corporate standards and promote business improvement through HR initiatives and business intelligence systems. Corporate Services comprises a team of specialists to support the business across Human Resources, Information Technology and Communications, Legal and Contracts, Insurance and Risk Management. The Company Secretariat is responsible for statutory compliance with company law and stock exchange listing rules, in Australia and overseas, as well as organisation of Board related matters.

Peter Thompson – General Manager Exploration

Peter has been with St Barbara since late 2004. His role is to advance the Company's Mineral Resource and Ore Reserve base by the application of leading edge exploration technology to our project areas. Working with a growing team of geologists, the focus is to make new and extensional discoveries to underpin sustained improved gold production. Emphasis is given to new exploration opportunities, which include the Company's base metal potential as well as research angles and the recruitment of top quality geologists, which will give St Barbara a competitive edge. Peter worked previously at WMC, Anaconda Nickel and Jubilee Mines.

Mr Peter Thompson has resigned from St Barbara, effective 4 July 2008. An executive search for a replacement has commenced.

8. Additional Information

8.1 Reporting and disclosure obligations

St Barbara is a disclosing entity for the purposes of the Corporations Act and is therefore subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules.

These obligations require ASX to be continuously notified of information about specific events and matters as they arise for the purpose of ASX making the information available to the financial market operated by ASX.

In particular, St Barbara has an obligation under the Listing Rules (subject to certain limited exceptions), to notify ASX immediately of any information concerning St Barbara, of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of St Barbara's securities. St Barbara is also required to prepare and lodge with ASIC and ASX both yearly and half-yearly financial statements accompanied by a Directors' declaration and report, and an audit or review report.

8.2 Availability of other documents

ASIC also maintains records in respect of documents lodged with it by St Barbara, and copies of these may be obtained from or inspected at any office of ASIC.

St Barbara will provide a copy of any of the following documents, free of charge, to any person who requests a copy during the Offer Period in relation to this Prospectus:

• the annual financial report lodged with ASIC by St Barbara for the year ended 30 June 2007;
• the half-year financial report lodged with ASIC by St Barbara for the half year ended 31 December 2007; and
• any other document used to notify ASX of information relating to St Barbara under the continuous disclosure provisions of the Listing Rules and the Corporations Act after the date of lodgement with ASIC of the annual financial report referred to above and before lodgement with ASIC of this Prospectus.

8.3 Rights and liabilities attaching to Shares

The New Shares to be issued under the Offer (including the Retail Entitlement Offer) will be issued fully paid and will rank equally with Existing Shares.

The rights and liabilities attaching to Shares are set out in St Barbara's Constitution and in the Corporations Act. This Section contains a summary of the main rights and liabilities attaching to Shares as at the date of this Prospectus. This summary does not constitute a definitive statement of the rights and liabilities of Shareholders – rights and liabilities can involve complex questions arising from the interaction of the Constitution of St Barbara, statutes, common law and Listing Rule requirements. To obtain a definitive assessment of the rights and liabilities which attach to Shares in any specific circumstances, investors should seek their own advice.

A summary of the rights attaching to the Shares is set out below.

Voting

At a general meeting, every Shareholder present in person or by proxy, representative or attorney has one vote on a show of hands and one vote per Share on a poll.

General meetings

Each Shareholder is entitled to receive notice of, attend and vote at general meetings of St Barbara. The notice must set out the place, date and time for the meeting, the general nature of the business of the meeting and set out or include any other information or documents specified by the Corporations Act, the Listing Rules and the ASTC Operating Rules.

Dividends

Subject to any rights or restrictions attached to a class of shares, the Company may pay dividends as the Directors resolve but only out of profits of the Company.

Subject to any rights or restrictions attached to a class of shares, the person entitled to a dividend on a Share is entitled to (if the Share is fully paid), the entire dividend; or (if the Shares is partly paid) a portion of that dividend equal to the proportion which the amount paid (excluding amounts credited) on that Share is of the total amounts paid or payable (excluding amounts credited) on that Share.

Classes of Shares

The share capital in St Barbara consists of fully paid ordinary shares. All existing issued ordinary shares are of the same class and rank equally in all respects.

Subject to the Corporations Act and the terms of issue, the rights attaching to a class of shares in St Barbara can only be varied or cancelled by a special resolution of the Company and:

• a special resolution passed at a general meeting of the members holding shares in that class; or
• the written consent of members who are entitled to at least 75% of the votes that may be cast in respect of shares in that class.

Issue of further Shares

Subject to the Corporations Act, the Listing Rules, the ASTC Operating Rules and any rights and restrictions attached to a class of shares, the Board may resolve to allot and issue unissued Shares on any terms, at any time and for any consideration, as the Directors resolve.

Broadly, the Listing Rules prohibit the issue of equity or convertible securities if the number of those securities (at the time of their issue), when aggregated with the number of any other securities issued during the previous 12 months, exceeds 15 per cent of the number of ordinary shares on issue 12 months before the date of issue. This prohibition is subject to various exceptions, including prior ordinary shareholder approval or issues to ordinary shareholders on a pro-rata basis.

St Barbara must not issue any ordinary share which carries voting rights which, in the opinion of ASX, are inappropriate or confer inequitable representation on the holders of ordinary shares.

Transfer of Shares

Subject to St Barbara's Constitution, the Corporations Act, the Listing Rules and the ASTC Operating Rules, Shares are freely transferable.

The Directors of St Barbara may refuse to register a transfer or apply to the ASTC to apply a holding lock to prevent a transfer of shares only in limited circumstances, such as where required or permitted to do so by the Corporations Act, the Listing Rules or the ASTC Operating Rules.

Rights on winding-up

Subject to any rights or restrictions attached to a class of shares, on a winding up of the Company, any surplus must be divided among the members in the proportions which the amount paid (including amounts credited) on their shares is of the total amounts paid and payable (including amounts credited) on the shares of all members.

Subject to any rights or restrictions attached to a class of shares, on a winding up of the Company, the liquidator may:

• with the sanction of a special resolution of the members, distribute among the members the whole or any part of the property of the Company, and decide how to distribute the property as between the members or different classes of members; and
• settle any problem concerning such a distribution in any way, which may include vesting assets in a trustee on trust for the members entitled (subject to the Corporations Act).

A member need not accept any property, including shares or other securities, carrying a liability.

Directors

The minimum number of Directors is 3 and the maximum number is 10. Shareholders may vary the number by ordinary resolution in a general meeting, provided the minimum number of Directors will not be less than 3.

A Director (except the Managing Director) must retire from office no later than the longer of the third AGM of the Company or 3 years, following that Director's last election or appointment. If the Company has 3 or more Directors, one third of the Directors (rounded down to the nearest whole number) must retire at each AGM. If the Company has less than 3 Directors, one Director must retire at each AGM. A Director who retires as described in this paragraph is eligible for re-election.

Directors may also retire, be removed or cease to be a Director as otherwise described in St Barbara's Constitution.

The Directors may elect a Director as the chairperson of the Board.

To the extent permitted by law, the Company must indemnify each Director and company secretary against any liability incurred by the person as an officer of the Company or a subsidiary of the Company (a Liability), and legal costs incurred by that person in defending an action for a Liability of that person.

8.4 Underwriting Agreement

The Underwriter and St Barbara have entered into an underwriting agreement documenting their rights and obligations with respect to the Offer (Underwriting Agreement). Pursuant to the terms of the Underwriting Agreement, the Underwriter has agreed to manage and underwrite the Offer on the terms and conditions of the Underwriting Agreement including fully underwriting the Offer. In consideration for the services provided by the Underwriter to St Barbara, St Barbara has agreed to pay the Underwriter:

• for underwriting the Institutional Entitlement Offer and Placement and managing the Institutional Entitlement Offer, Institutional Bookbuild and Placement, fees totalling 2.75% of the gross proceeds of the Institutional Entitlement Offer and the Placement; and
• for underwriting the Retail Entitlement Offer and managing the Retail Entitlement Offer and Retail Bookbuild, fees totalling 2.75% of the gross proceeds of the Retail Entitlement Offer,

in addition to reasonable legal costs and various incidental and out-of-pocket expenses incurred by the Underwriter, St Barbara may also pay the Underwriter an incentive fee up to 0.5% of the gross proceeds of the Offer which will be payable at St Barbara's discretion, acting reasonably and in good faith having regard to certain factors.

Customary and usual representations and warranties are given by the parties in relation to matters such as power to enter into the Underwriting Agreement, corporate authority and approvals and St Barbara's compliance with the Corporations Act and Listing Rules in relation to the Offer.

St Barbara gives a number of further representations and warranties, including that this Prospectus and related public documents and information will not contain any misleading or deceptive statements or omissions, and that none of the information supplied to the Underwriter is misleading or deceptive in a material respect.

St Barbara indemnifies the Underwriter (and its related bodies corporate and their officers, employees and advisers) in respect of certain loss suffered in connection with the Offer.

In addition to customary undertakings, St Barbara undertakes not to allot or agree to allot shares or other securities that are convertible or exchangeable into equity, or that represent the right to receive equity, of the Company or any member of the St Barbara Group for a period of 120 days after the settlement of the Retail Entitlement Offer (the Retail Settlement Date), except with the Underwriter's consent (such consent not to be unreasonably withheld), pursuant to the Offer, a distribution reinvestment plan previously disclosed to ASX or under certain share or rights plans.

If a "Repricing Event" occurs between the date of the Underwriting Agreement and 12pm on Friday 13 June (the Institutional Bookbuild Close Date), the Underwriter will have the right to redetermine (acting reasonably and after consultation with St Barbara and having regard to the revised offer's prospects of success and the stability of the market for New Shares after completion of the offer) any or all of the following:

• the timetable;
• the Offer Price; or
• the number of New Shares offered.

If the Underwriter does not elect to redetermine following a Repricing Event, it may elect to terminate the Underwriting Agreement as set out below. Repricing Events are those termination events set out below marked with a #.

8.4.1 Termination of the Underwriting Agreement

Rights of Termination:

• The Underwriter may terminate by notice to St Barbara at any time after the Underwriter becomes aware of the happening of any one or more of the termination events not marked with an asterisk.
• The Underwriter may terminate by notice to St Barbara after the Underwriter becomes aware of the happening of any one or more of the termination events marked with an asterisk if the Underwriter has reasonable grounds to believe and does believe that the event:
  • has or is likely to have a materially adverse effect on the success or settlement of the Offer; or
  • could give rise to a liability of the Underwriter under any law or regulation.
• The Underwriter may also terminate by notice to St Barbara if any of the conditions set out in the Underwriting Agreement are not satisfied by the time required under the Underwriting Agreement.

8.4.2 Termination Events

• #A statement contained in the Pathfinder Prospectus or the Prospectus is misleading or deceptive (including, without limitation, misleading representations within the meaning of section 728(2)) in any material sense (as determined by the Underwriter, acting reasonably), or a material matter (as determined by the Underwriter, acting reasonably) is omitted from the Pathfinder or the Prospectus (having regard to the provisions of sections 711, 713 and 716);

• The Company fails to lodge a supplementary prospectus in a form acceptable to the Underwriter in circumstances where the Underwriter reasonably believes the Company is prohibited by section 728(1) of the Corporations Act from offering securities under the Prospectus.

• #A general moratorium on commercial banking activities in Australia, the United Kingdom or the United States is declared by the relevant central banking authority in those countries, or there is a material disruption in commercial banking or security settlement or clearance services in any of those countries.

• #Trading in all securities quoted or listed on ASX, the London Stock Exchange or the New York Stock Exchange is suspended or limited in a material respect for more than one day.

• #At the close of trading for three consecutive business days or until the end of the Retail Settlement Date (whichever is lesser), the S&P/ASX 300 Resource Index is 15% or more below the level as at the close of trading on the date of the Underwriting Agreement.

• #The Bloomberg $US spot gold price falls to 90% or less of $US 892.90 per oz at any time prior to the Institutional Settlement Date; or is 90% or less of $US892.90 per oz at the close of trading on ASX on three consecutive Business Days or until the end of the Retail Settlement Date (whichever is less).

• A director of the Company is charged with an indictable offence.

• A director of the Company is disqualified from managing a corporation under Part 2D.6 of the Corporations Act.

• The Company or any of its directors engage in any fraudulent activity.

• ASX approval for the quotation of the New Shares is not obtained or is withdrawn, qualified, withheld or subject to conditions that the Underwriters consider will have a material adverse effect on the success of the Offer.

• The Company is removed from the official list of ASX or ASX suspends or ceases trading in its securities.

• ASIC applies for or issues certain orders under the Corporations Act, or commences certain investigations or hearings under Part 3 of the ASIC Act 1989 (Cth) in relation to the Prospectus.

• Any person (other than the Underwriter) gives a notice under section 733(3) of the Corporations Act or any person who has previously consented to the inclusion of its name in the Prospectus (or any supplementary prospectus) or to be named in the Prospectus withdraws that consent.

• Any person (other than the Underwriter) gives a notice under section 730 of the Corporations Act in relation to the Prospectus.

• The Company withdraws the Prospectus or the Offer.

• Any of the ASX waivers referred to in Section 8.9 is withdrawn, or is varied in a way that in the reasonable opinion of the Underwriter, would have a material adverse effect on the success of the Offer.

• An entity of the St Barbara Group becomes subject to certain insolvency events.

• Settlement of the Institutional Entitlement Offer has not occurred by 31 August 2008.

• *#The due diligence report relating to the Prospectus or any other information supplied by or on behalf of the Company to the Underwriter in relation to the St Barbara Group, or the Offer is misleading or deceptive when considered in aggregate in its final form.

• *#Any adverse change occurs in the assets, liabilities, financial position or performance, profits, losses or prospects of the Company and the St Barbara Group (insofar as the position in relation to an entity in the group affects the overall position of the Company).

• *#A new circumstance occurs after the Pathfinder Prospectus is provided and prior to lodgement of the Prospectus with ASIC.

• *#A new circumstance occurs since this Prospectus was lodged with ASIC which would have been required by the Corporations Act to be included if the matter had arisen before this Prospectus was lodged.

• *#A provider of debt or other financial accommodation to the Company terminates or cancels its commitment, or the availability period of that financial accommodation expires without it being provided, or a condition precedent to drawdown of any part of that financial accommodation is not satisfied or waived or becomes incapable of being satisfied.

• *Hostilities commence or a major act of terrorism or escalation in existing hostilities occurs involving any Australia, New Zealand, China, any country in the European Union, Indonesia, Japan, United States of America, United Kingdom or a major terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries elsewhere in the world.

• *A new law is introduced (or proposed to be introduced) into the Parliament of Australia or any State of Australia which does or is likely to prohibit or regulate the Offer, capital issues or stock markets or materially adversely affect the taxation treatment of the New Shares.

• *The Reserve Bank of Australia, or any Commonwealth or State authority, adopts or announces a proposal to adopt a new policy which does or is likely to prohibit or regulate the Offer, capital issues or stock markets or materially adversely affect the taxation treatment of the New Shares.

• *A change in the Board of St Barbara occurs before allotment of New Shares under the Offer, without the prior consent of the Underwriter.

• *A contravention by the Company or any entity in the St Barbara Group of the Corporations Act, the Constitution, or any of the ASX Listing Rules.

• *The Pathfinder Prospectus, the Prospectus or any aspect of the Offer does not comply with the Corporations Act, the ASX Listing Rules, the ASX waivers referred to in Section 8.9 or any other applicable law or regulation.

• *A default by the Company in the performance of any obligation under the Underwriting Agreement occurs.

• *Any warranty in the Underwriting Agreement on the part of St Barbara is not true or correct.

• *Any regulatory body commences any public action against a director of the Company in their capacity as a director of the Company or announces that it intends to take such action.

8.5 Litigation with Kingstream Steel Creditors' Trust

Proceedings were commenced in July 2002 against St Barbara and one of its wholly owned subsidiaries, Zygot Ltd (Zygot) in the Supreme Court of Western Australia by Kingstream Steel Limited (Subject to Deed of Company Arrangement) (Kingstream Steel). The claim relates to the withdrawal by Zygot of three mining lease applications (MLAs). In August 2003, the claim was assigned by Kingstream Steel to the Kingstream Steel Creditors' Trust (Kingstream).

Kingstream alleges that the MLAs were part of the subject matter of an Option Deed (as supplemented) between St Barbara and Kingstream Steel. Kingstream Steel exercised the option in February 1999. Kingstream is seeking rectification of the Option Deed to include the MLAs on the basis that it was the common intention of the parties. St Barbara denies that this was the intention and further denies that rectification is available.

In November 2007, Kingstream provided a quantification of the damages that it claims, which was based on two reports by Snowden Mining Industry Consultants. Kingstream's particulars of alleged loss include a claim for the value of the MLAs at the time of withdrawal (A$500,000), alternatively the value of the lost opportunity of acquiring the MLAs (A$10,100,000) and alternatively the diminution in value of the other tenements acquired by Kingstream under the Option Deed (A$11,150,000). Unless rectification is ordered, the issue of damages does not arise.

The proceedings are scheduled to be heard in the Supreme Court of Western Australia in August 2008 and have been, and will continue to be, defended.

8.6 Interests of Directors

8.6.1 Interests

Except as set out in this Prospectus, no Director or proposed director of St Barbara holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:

• the formation or promotion of St Barbara;
• the Offer; or
• any property acquired or proposed to be acquired by St Barbara in connection with its formation or promotion or the Offer,

other than in their capacity as a Shareholder. Except as set out in this Prospectus, no one has paid or agreed to pay any amount, and no one has given or agreed to give any benefit, to any Director or proposed director of St Barbara:

• to induce that person to become, or qualify as, a Director; or
• for services provided by that person in connection with the formation or promotion of St Barbara or the Offer.

8.6.2 Holdings of Shares and options

As at the date of this Prospectus, the Directors held relevant interests in Shares, options over Shares and rights to acquire Shares, either directly or indirectly, as follows:

Director	Shares	Options/ConvertibleNotesRights
Colin Wise	5,027,340	Nil
Eduard Eshuys	20,942,403	10,000,000 unlisted options
Douglas Bailey	107,937	Notes with a face value of A$850,000,convertible into 1,170,638fully paid ordinary shares(based on a conversion price of A$0.7261)
Barbara Gibson	152,431	Nil
Phillip Lockyer	37,937	Nil
Robert Rae	100,000	Nil

All of these interests are held indirectly, except for Eduard Eshuys' interests (which are held directly and indirectly).

It is the current intention of each Director that he or she, and any persons who hold Shares in which he or she has indirect interests, will participate in the Retail Entitlement Offer to the full extent of the relevant Entitlements.

8.6.3 Remuneration

The St Barbara Constitution provides that the Directors will be entitled to remuneration as determined by the Directors but the remuneration of non executive Directors may not exceed a maximum total amount of directors' fees determined by Shareholders in general meeting. The amount last fixed by Shareholders in general meeting was A$750,000.

8.7 Interests of experts and advisers

Except as set out in this Prospectus, no:

• person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
• promoter of St Barbara; or
• broker or underwriter to the Offer,

(each a 'relevant person') holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:

• the formation or promotion of St Barbara;
• the Offer; or
• any property acquired or proposed to be acquired by St Barbara in connection with the formation or promotion of St Barbara or the Offer.

Except as set out in this Prospectus, no one has paid or agreed to pay any amount or given or agreed to give any benefit for services provided by a relevant person in connection with the formation or promotion of St Barbara or the Offer. The amounts below are exclusive of GST.

Macquarie Capital Advisers Limited is acting as Lead Manager and Underwriter to the Offer, in respect of which they will receive fees (see Section 8.4).

KPMG has provided accounting due diligence assistance in relation to the Offer. In aggregate, St Barbara has paid or agreed to pay KPMG approximately A$85,000 (plus disbursements) for these services to the date of this Prospectus. Further amounts may be paid to KPMG in accordance with its normal time-based charges.

Freehills has acted as Australian legal adviser to St Barbara in connection with the Offer. In aggregate, St Barbara has paid or agreed to pay Freehills approximately A$175,000 (excluding disbursements and GST) for these services to the date of this Prospectus. Further amounts may be paid to Freehills in accordance with its normal time-based charges.

8.8 Consents

Each of the parties referred to as consenting parties who are named below:

• (a) has not made any statement in this Prospectus or any statement on which a statement made in this Prospectus is based, other than as set out in paragraphs (d) below;
• (b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements in or omissions from this Prospectus;
• (c) has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named; and
• (d) in the case of each of Ben Bartlett, Per Scrimshaw, Sam Larritt, Jacobus Kirsten, Daniel Donald and Peter Thompson, each has given and has not, before lodgement of this Prospectus with ASIC, withdrawn his consent to the inclusion of statements noted to have been made by him or to be based on statements made by him.

Role	Consentingparties
Lead Manager and Underwriter	Macquarie Capital Advisers Limited
Share Registry	Computershare Investor Services Pty Limited
Australian legal adviser	Freehills
Auditor	KPMG
Competent person for the purposes of the JORC Code	Each of the persons namedin section 8.8(d) above

8.9 Regulatory matters

In connection with the Offer, ASX has granted to St Barbara waivers from Listing Rules 7.1 and 10.11 to the extent necessary to:

• permit St Barbara to make the Entitlement Offer in the manner described in this Prospectus without the requirement to obtain Shareholder approval; and
• permit related parties of St Barbara to participate in the Entitlement Offer up to the extent of their Entitlements on the same terms as other Shareholders without the requirement to obtain Shareholder approval.

The Listing Rule 7.1 waiver is subject to conditions. The effect of these conditions is to permit St Barbara to:

• offer New Shares pro rata to Eligible Institutional Shareholders on or before the Record Date under the Institutional Entitlement Offer;
• offer the New Shares relating to Entitlements not taken up by those Eligible Institutional Shareholders, and the New Shares relating to the Entitlements that Ineligible Institutional Shareholders would have received had they been Eligible Institutional Shareholders, to Institutional Investors via the Institutional Bookbuild;
• offer the New Shares relating to Entitlements not taken up by the Eligible Retail Shareholders, and the New Shares relating to the Entitlements that Ineligible Retail Shareholders would have received had they been Eligible Retail Shareholders, to Institutional Investors via the Retail Bookbuild,

as long as:

• Eligible Institutional Shareholders and Ineligible Institutional Shareholders who sell down their holding of Shares before the Record Date have their pro rata allocations reduced accordingly;
• New Shares are issued under the Institutional Entitlement Offer and the Retail Entitlement Offer at the same price and on the same 2 for 7 basis.

The Listing Rule 10.11 waiver permits related parties of St Barbara to participate in the Retail Entitlement Offer on the same terms as other Eligible Retail Shareholders without a requirement to obtain Shareholder approval. The waiver is subject to the same conditions imposed in relation to the waiver from Listing Rule 7.1. Additionally, it is a condition of this waiver that the related parties only participate in the Retail Entitlement Offer up to the extent of their pro rata Entitlement.

The waivers set out the arrangements for dealing with holdings registered in the names of nominees. In particular, a nominee Shareholder is treated as a separate holder in respect of securities held for each of one or more Eligible Retail Shareholders and Eligible Institutional Shareholders (and, accordingly, may receive offers under both the Institutional Entitlement Offer and the Retail Entitlement Offer in respect of Shares held as nominee for other persons). Offers under the Institutional Entitlement Offer will be treated as being made to the nominee, and therefore to an Eligible Institutional Shareholder, even where made directly to the Eligible Institutional Shareholder for whom the nominee holds.

The waivers also allow St Barbara to ignore, for the purposes of determining those entitled to receive Entitlements (both under the Institutional Entitlement Offer and the Retail Entitlement Offer) transactions occurring after the announcement of the trading halt in St Barbara's securities on 10 June 2008 (other than registrations of ITS transactions which were effected before the announcement) ('post ex-date transactions'). Transactions ignored under this provision are to be ignored in determining holders and registered holders, and holdings and registered holdings, of Shares as at 7.00 pm (AEST) on the Record Date, and references to such holders, registered holders, holdings and registered holdings are to be read accordingly. Therefore, any person who acquired Shares in a post ex-date transaction will not be entitled to receive an Entitlement in respect of those Shares.

ASX has also granted waivers of Listing Rules 3.20 and 7.40 to the extent necessary to permit the Offer to proceed on the timetable described in this Prospectus on the condition that the Offer timetable is acceptable to ASX.

8.10 Australian Taxation Implications of holding and dealing with Entitlement and Shares

8.10.1 Australian Tax Implications

The following comments address the Australian taxation implications of the Offer for Eligible Retail Shareholders. These comments deal only with the Australian taxation implications of the Offer for Australian tax resident Eligible Retail Shareholders holding their Shares on capital account and do not apply to Eligible Retail Shareholders who, for example, carry on a business of trading in shares or who may be non-residents of Australia or to Ineligible Retail Shareholders or Institutional Shareholders.

These comments are general in nature and are based on the law in force in Australia and proposed legislative changes (including amendments to the Income Tax Assessment Act 1997 contained in the Tax Laws Amendment (2008 Measures No.3) Bill 2008) ("Bill") at the time of issue of this Prospectus. The precise taxation implications will depend upon each Eligible Retail Shareholder's specific circumstances and the Bill being enacted without amendment. Accordingly, all Eligible Retail Shareholders should seek their own independent taxation advice before reaching conclusions as to the possible taxation consequences of the Offer. Neither St Barbara, nor any of its officers, nor its taxation or other advisers, accepts any liability or responsibility in respect of any statement concerning the Offer's taxation consequences in relation to particular Shareholders.

8.10.2 Granting of an Entitlement

Historically, rights offered by a company to its shareholders to acquire shares in the company have generally been treated as not giving rise to any assessable ordinary income for the shareholders at the time the rights are issued.

The High Court of Australia recently handed down its decision in the case of Federal Commissioner of Taxation v McNeil, which related to so-called "sell back rights" provided by a bank to its shareholders. Broadly, the majority decision in McNeil was that the value of such rights would be regarded as ordinary income in the hands of the (bank's) shareholders at the time the rights were provided.

However, the Bill contains retrospective amendments to Australia's income tax law to restore the longstanding taxation treatment of rights issues as being on capital account for taxation purposes. Broadly, the amendments are intended to ensure that shareholders issued with rights by companies seeking to raise capital will not have a taxation liability at the time of issue of the rights.

Therefore, based on legislation being enacted as proposed in the Bill, you should not make a capital gain for Australian taxation purposes or otherwise derive assessable income on the grant of an Entitlement to you under the Offer, and there should be no cost base reduction in respect of your existing Shares. If the Bill is not enacted in the proposed form, an assessable amount may arise on the granting of the rights.

8.10.3 If you take up your Entitlement

On taking up your Entitlement you should not make a capital gain or otherwise derive assessable income. However, as set out at Section 8.10.6 below, capital gains tax (CGT) will need to be considered upon the disposal of the New Shares you acquire.

8.10.4 If you do not take up your Entitlement

If you do not take up your Entitlement then it will be offered under the Retail Bookbuild as described in Section 2.5.2. If the Retail Bookbuild Price is higher than the Offer Price, the difference will be paid to you. Such an amount will be treated as a receipt of assessable income, derived at the time of receipt of the amount, and thus not eligible for the CGT discount (see Section 8.10.6 below).

8.10.5 Acquisition of New Shares by taking up your Entitlement

Your cost base in the New Shares you acquire will include the amount you paid to acquire the New Shares (A$0.40 per New Share) plus any non-deductible incidental costs you incurred to acquire them. Distributions in respect of the New Shares will be subject to the same taxation treatment as distributions on your Existing Shares.

8.10.6 Disposal of New Shares

You will make a taxable capital gain on the disposal of your New Shares if the capital proceeds received from disposal exceed your cost base in the New Shares. The disposal will give rise to a capital loss if the capital proceeds received from the disposal are less than your reduced cost base in the New Shares.

The New Shares that you acquire as a result of taking up your Entitlement will be treated as having been acquired by you on the day on which you took up your Entitlement. Therefore, if the New Shares are held for at least 12 months after acquisition, Eligible Retail Shareholders who are entitled to access the CGT discount (individuals, trustees and complying superannuation funds) should be able to apply the applicable CGT discount factor to their capital gain on disposal of their New Shares (after offsetting any capital losses).

8.10.7 Stamp Duty

No stamp duty should be payable on the grant of your Entitlement, the take up of your Entitlement or the subsequent disposal by you of the New Shares.

8.10.8 Goods and Services Tax (GST)

The acquisition of the New Shares acquired as a result of taking up your Entitlement will be classified as a "financial supply" for Australian GST purposes. As such, Australian GST of 10% will not apply to any Application Monies you pay in consideration for the New Shares issued on the take up of your Entitlement.

8.11 Privacy

As a Shareholder, St Barbara and the Share Registry have already collected certain personal information from you. If you apply for New Shares, St Barbara and the Share Registry may update that personal information or collect additional personal information. Such information will be used to assess your Application, service your needs as a Shareholder, provide facilities and services that you request and carry out appropriate administration.

Company and tax law requires some of the information to be collected. If you do not provide the information requested, your Application may not be able to be processed efficiently, if at all.

St Barbara and the Share Registry may disclose your personal information for purposes related to your shareholding to their agents and service providers, including those listed below or otherwise authorised under the Privacy Act:

• the Underwriter in order to assess your Application;
• the Share Registry for administration of the Offer and ongoing administration of the St Barbara share register; and
• printers and mailing houses for the purposes of preparation and distribution of Shareholder statements and for handling of mail.

Under the Privacy Act, you may request access to your personal information held by (or on behalf of) St Barbara or the Share Registry. You can request access to your personal information by contacting the Share Registry as follows:

Computershare Investor Services Pty Limited GPO Box 505

Melbourne VIC 8060 Australia Tel: (within Australia) 1300 653 935

Tel: (outside Australia) +61 3 9415 4356

If St Barbara's or the Share Registry's record of your personal information is incorrect or out of date, it is important that you contact the Share Registry so that your records can be corrected.

8.12 Foreign Selling Restrictions

This Prospectus is being sent to Eligible Retail Shareholders on the register as at 7.00pm (AEST) on the Record Date with registered addresses in Australia and New Zealand. This Prospectus and the accompanying Entitlement and Acceptance Form do not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. By submitting the Entitlement and Acceptance Form in or accompanying this Prospectus or making a payment by BPAY® you represent and warrant that there has been no breach of such laws.

The distribution of this Prospectus outside of Australia may be restricted by law and persons who come into possession of it should seek advice and observe any such restrictions. Any failure to comply with such restrictions may contravene applicable securities laws. St Barbara disclaims all liabilities to such persons. Eligible Shareholders who are nominees, trustees or custodians are therefore advised to seek independent advice as to how they should proceed. Eligible Shareholders who hold Shares on behalf of persons who are not resident in Australia or New Zealand are responsible for ensuring that taking up New Shares under the Entitlement Offer does not breach the selling restrictions set out in this Prospectus or otherwise violate the securities laws in the relevant overseas jurisdictions.

No action has been taken to register or qualify this Prospectus, the New Shares or the Entitlement Offer, or otherwise to permit a public offering of the New Shares, in any jurisdiction outside Australia and New Zealand.

8.12.1 United States

Neither the Entitlements nor the New Shares have been or will be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States. The Entitlements may not be taken up by persons in the United States or by, or for the account or benefit of, any US Persons, and the New Shares may not be offered, sold or resold in the United States or to, or for the account or benefit of, any US Persons, except in either case pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws.

Accordingly, the New Shares will constitute "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act and, for so long as the New Shares remain restricted securities, the New Shares may not be deposited into any unrestricted depositary receipt facility with respect to St Barbara's Shares that may be established or maintained by a depositary bank.

8.12.2 Canada

The New Shares will not be sold in Canada or to residents of Canada other than in compliance with applicable Canadian securities laws (Canadian Securities Laws). Without limiting the foregoing, the Lead Manager will only make offers and sales of the New Shares included in this Entitlement Offer in Canada or to residents of Canada (i) through an appropriately registered securities dealer or in accordance with an available exemption from the applicable registered securities dealer requirements under Canadian Securities Law, and (ii) pursuant to an exemption from the prospectus requirements under Canadian Securities Laws.

8.12.3 United Kingdom

This Prospectus is directed only at (i) persons outside the United Kingdom; or (ii) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; or (iii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Any investment or investment activity to which this Prospectus relates is only available to and will only be engaged in with such persons and persons within the United Kingdom who receive this communication (other than persons falling within (ii) and (iii) above) should not rely on or act upon this Prospectus.

8.12.4 Switzerland

This Prospectus does not constitute an issuance prospectus within the meaning of article 652a of the Swiss Code of Obligations (Bundesgesetz vom 30. März 1911 betreffend die Ergänzung des Schweizerischen Zivilgesetzbuches (Fünfter Teil: Obligationenrecht)) nor, as St Barbara has not applied for a listing of its New Shares on the SWX Swiss Exchange, a listing prospectus within the meaning of the listing rules of the SWX Swiss Exchange.

The New Shares will not be publicly offered or sold in Switzerland. The New Shares will be offered or sold only to a selected number of individual investors in Switzerland, under circumstances which will not result in the offer of the New Shares being a public offering within the meaning of article 652a of the Swiss Code of Obligations.

8.12.5 Other Member States of the European Economic Area

In relation to the other Member States of the European Economic Area who have implemented the Prospectus Directive and who have not been referred to specifically above (each, a Relevant Member State), an offer to the public of any New Shares contemplated by this Prospectus may not be made in that Relevant Member State other than offers:

• (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
• (b) to any legal entity which has two or more of
  • (i) an average of at least 250 employees during the last financial year;
  • (ii) a total balance sheet of more than 43,000,000 and

(iii) an annual net turnover of more than 50,000,000, all as shown in its last (or, in Sweden, its last two) annual or consolidated accounts (and, in Norway, who is registered with the Oslo Stock Exchange as a professional investor); or

(c) in any other circumstances which do not require the publication by St Barbara of a prospectus pursuant to Article 3 of the Prospectus Directive,

provided that no such offer of New Shares shall result in a requirement for the publication by St Barbara (or any Underwriter of the Offer) of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any New Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Entitlement Offer and the New Shares to be offered so as to enable an investor to decide to purchase or subscribe to the New Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/ED and includes any relevant implementing measure in each Relevant Member State.

8.12.6 Hong Kong

The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong.

This Prospectus does not constitute an offer or sale in Hong Kong of any New Shares and no person may offer or sell in Hong Kong, by means of this Prospectus, any New Shares other than (a) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.

No person may issue or have in his possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the New Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance.

All persons applying for New Shares agree not to offer or sell in Hong Kong any New Shares other than (a) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document offering for sale the New Shares being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. These persons also agree not to issue or have their possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the New Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the New Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance and any rules made under that Ordinance."

8.12.7 Singapore

This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of New Shares may not be circulated or distributed, nor may New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an existing holder of Shares pursuant to Section 273(1)(cd) of the Securities and Futures Act, Chapter 289 of Singapore (the SFA) or (ii) otherwise pursuant to, and in accordance with, the conditions of an exemption under any provision of Subdivision (4) of Division 1 of Part XIII of the SFA.

8.12.8 Germany

This Prospectus, the New Shares or the placing of the New Shares have not been and will not be registered or cleared by the German Financial Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) or any other competent German authority under applicable German laws or regulations. The New Shares may therefore not be offered, distributed, sold, transferred or delivered, directly or indirectly, to the public in Germany, except to 'qualified investors' in the meaning of Section 2 No. 6 of the German Securities Prospectus Act (Wertpapierprospektgesetz, WpPG). For the purpose of this section, 'offer of the New Shares to the public' means the communication in any form and by any means of sufficient information on the terms of the Offer and the New Shares to be offered, so as to enable an investor to decide to purchase or subscribe for the New Shares to be offered.

This Prospectus is only directed to such recipients to whom it is directly addressed, and it may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution or reproduction of this document, in whole or in part, is unauthorised.

8.13 Consents to lodgement

Each Director of St Barbara has given, and has not withdrawn, their consent to the issue of this Prospectus and to its lodgement with ASIC under the Corporations Act.

Glossary

Term	Meaning
$ or A$ or A dollars	Australian dollars
AEST	Australian Eastern Standard Time
Application	An application for New Shares pursuant to the Retail Entitlement Offer
Application Monies	Monies received from applicants in respect of their Applications
ASIC	Australian Securities and Investments Commission
ASTC Operating Rules	The operating rules of the settlement facility provided by ASX Settlement andTransfer Corporation Pty Ltd (ABN 49 008 504 532)
ASX	ASX Limited (ABN 98 008 624 691) or the financial market operated by thatentity (as applicable)
Au	The chemical symbol for gold
Board	The board of Directors of St Barbara Limited
Business Day	Has the meaning given in the Listing Rules
CGT	Capital gains tax as defined in the Income Tax Assessment Act 1997 (Cth)
Clearing Price	The price determined: (i) in respect of the Institutional Bookbuild, through theInstitutional Bookbuild process; or (ii) in respect of the Retail Bookbuild, throughthe Retail Bookbuild process, in each case in accordance with the terms of theUnderwriting Agreement (which may be equal to or above the Offer Price)
Closing Date	5.00 pm (AEST) on Friday 4 July 2008, being the last day on which completedEntitlement and Acceptance Forms and BPAY® payments of Application Monieswill be accepted (subject to variation)
Constitution	The constitution of St Barbara
Corporations Act	The Corporations Act 2001 (Cth)
Directors	The directors of St Barbara
Eligible Institutional Shareholder	An Institutional Shareholder to whom the Underwriter makes an offer on behalfof St Barbara under the Institutional Entitlement Offer (either directly orindirectly as or through a nominee), and who the Underwriter determines hassuccessfully received that offer
Eligible Retail Shareholder	A Shareholder as at 7.00 pm (AEST) on the Record Date who:has a registered address in Australia or New Zealand;
	is not located in the US or a US Person or acting for the account or benefitof a US Person;
	are eligible under all applicable securities laws to receive an offer under theEntitlement Offer;
	do not hold Shares as a result of post ex-date transactions (which aredisregarded as described in Section 8.9); and
	has not received an invitation to participate in the Institutional EntitlementOffer (either directly or indirectly as or through a nominee) and are not anIneligible Institutional Shareholder
Eligible Shareholder	Eligible Retail Shareholders and Eligible Institutional Shareholders
Entitlement	The number of New Shares for which an:
	Eligible Retail Shareholder is entitled to subscribe under the RetailEntitlement Offer; and
	Eligible Institutional Shareholder is entitled to subscribe under theInstitutional Entitlement Offer,
	in each case on the basis of 2 New Shares for every 7 Shares held at7.00 pm (AEST) on the Record Date
Entitlement Offer	The Offer of New Shares under the Institutional Entitlement Offer,the Institutional Bookbuild, the Retail Entitlement Offer and the Retail Bookbuild

Entitlement and Acceptance FormAn entitlement and acceptance form accompanying this Prospectus upon whichan Application may be made
Existing Shares	Shares on issue on or before the Record Date
g/t	Grams per tonne
Ineligible Institutional Shareholder	A Shareholder as at 7.00 pm (AEST) on the Record Date who is not an EligibleInstitutional Shareholder and who the Underwriter agrees:
	although an Institutional Investor, should not receive an offer under theInstitutional Entitlement Offer in accordance with rule 7.7.1(a) of theListing Rules; or
	although not an Institutional Investor, is a person to whom offers andissues of New Shares could lawfully be made in Australia without the needfor disclosure to investors under Chapter 6D of the Corporations Act ifthat Shareholder had received the offer in Australia, and who should betreated as an Ineligible Institutional Shareholder for the purposes of theEntitlement Offer
Ineligible Retail Shareholder	A Shareholder as at 7.00 pm (AEST) on the Record Date who is not an EligibleInstitutional Shareholder, an Ineligible Institutional Shareholder, or an EligibleRetail Shareholder
Institutional Bookbuild	The bookbuild process described in Section 2.6.2
Institutional Investor	A person:
	to whom offers and issues of New Shares may lawfully be made in Australiawithout the need for disclosure to investors under Chapter 6D of theCorporations Act and who is not a US Person or acting on account ofor for the benefit of a US Person; or
	to whom offers and issues of New Shares may lawfully be made outsideAustralia without any other lodgement, registration or approval with or bya government agency (other than one with which St Barbara, in its absolutediscretion, is willing to comply), provided that such a person is not locatedin the US or a US Person or acting for the account or benefit of a US Personunless it (and any such underlying holder for whose account or benefit itis acting) is a QIB
Institutional Entitlement Offer	As described in Section 2.6
Institutional Premium	Has the meaning given to it in Section 2.6.2
Institutional Shareholder	A Shareholder as at 7.00 pm (AEST) on the Record Date who is anInstitutional Investor
JORC Code	The Australasian Code for Reporting of Exploration Results, Mineral Resourcesand Ore Reserves
k oz	Thousand ounces
Lead Manager	Macquarie Capital Advisers Limited
Life of Mine	St Barbara's estimated period of production for a mine,as supported by Ore Reserves
Listing Rules	The official listing rules of ASX, as amended or replaced from time to timeexcept as waived in respect of St Barbara
Mineral Resources	Has the meaning given in the JORC Code
Mtpa	Million tonnes per annum
New Shares	The Shares offered pursuant to the Offer
Offer	The offer of New Shares, under the Placement and the Entitlement Offer
Offer Period	The period commencing on the opening date of the Retail Entitlement Offeras specified in the "Key Dates" section of this Prospectus and ending onthe Closing Date
Offer Price	The price payable for each New Share under the Entitlement Offer,
	being A$0.40

Oz	Ounce
Pathfinder Prospectus	The version of the Prospectus dated 10 June 2008 and provided toInstitutional Shareholders
Placement	As described in Section 2.7
Privacy Act	The Privacy Act 1988 (Cth)
Prospectus	This prospectus dated 13 June 2008 and lodged with ASIC on that dateincluding any supplementary or replacement prospectus
Quartely Report	The quarterly report released by St Barbara to the ASX
QIBs	Qualified Institutional Buyers as such term is defined in Rule 144A under theUS Securities Act
Record Date	Friday 13 June 2008
Related Bodies Corporate	Has the same meaning as in the Corporations Act
Retail Bookbuild	The bookbuild process described in Section 2.5.2
Retail Bookbuild Price	The Clearing Price obtained in the Retail Bookbuild
Retail Entitlement Offer	The offer of New Shares under this Prospectus to Eligible Retail Shareholders
Retail Premium	Has the meaning given to it in Section 2.5.2
Share Registry	Computershare Investor Services Pty Limited (ABN 48 078 279 277)
Shareholder	The holder of a Share
Shares	Fully paid ordinary shares in the capital of St Barbara
St Barbara or the Company	St Barbara Limited (ABN 36 009 165 066) or St Barbara Limited and its RelatedBodies Corporate, as the context requires
St Barbara Group	St Barbara and each of its Related Bodies Corporate
TERP	Theoretical Ex-Rights Price. The theoretical price at which Shares should tradeimmediately after the ex-date for the Entitlement Offer. This is a theoreticalcalculation and the actual price at which Shares trade immediately after theex date for the Entitlement Offer will depend on many factors
Top-Up Shares	New Shares issued to ensure all Eligible Shareholders receive their fullEntitlement, as described in Section 2.14
Underwriter	Macquarie Capital Advisers Limited
Underwriting Agreement	The Underwriting Agreement dated 10 June 2008 between St Barbara and theUnderwriter, as described in Section 8.4
US	United States of America, its territories and possessions, any state of theUnited States and the District of Columbia
US$ or US dollars	United States dollars
US Person	Has the meaning given to it in Rule 902(k) under Regulation S under theUS Securities Act
US Securities Act	The US Securities Act of 1933, as amended

Corporate Directory

Directors

Colin Wise (Non-Executive Chairman) Eduard Eshuys (Managing Director & CEO) Douglas Bailey (Non-Executive Director) Barbara Gibson (Non-Executive Director) Phillip Lockyer (Non-Executive Director) Robert Rae (Non-Executive Director)

Company Secretary

Ross Kennedy

Registered Office

Level 21, 90 Collins Street Melbourne VIC 3000 Australia

Auditor

KPMG 147 Collins Street Melbourne VIC 3000 Australia

Australian Legal Adviser

Freehills QV1 250 St Georges Terrace Perth WA 6000 Australia

Lead Manager and Underwriter

Macquarie Capital Advisers Limited Level 23, 101 Collins Street Melbourne VIC 3000 Australia

Share Registry

Computershare Investor Services Pty Limited Yarra Falls 452 Johnson Street Abbotsford VIC 3067 Australia

St Barbara Offer Information Line

Within Australia: 1300 653 935 (local call cost)

Outside Australia: +61 3 9415 4356