ST BARBARA LIMITED — Capital/Financing Update 2008

Jun 9, 2008

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

St Barbara Launches A$120 Million Fully Underwritten Pro‐rata Entitlement Offer and Institutional Placement

St Barbara Limited (St Barbara) is seeking to raise approximately A$120 million before expenses in new equity through a pro‐rata entitlement offer (the Entitlement Offer) and Institutional Placement (together the Offer).

The Offer

The funds from the Entitlement Offer will be raised through a 2 for 7 renounceable accelerated entitlement offer to shareholders. Under the Entitlement Offer, eligible shareholders will be invited to subscribe for a 2 for 7 entitlement to new St Barbara shares (New Shares) at a price of A$0.40 per New Share. The Offer is fully underwritten by Macquarie Capital Advisers Limited.

The Entitlement Offer price represents a discount of 28.6% to the closing price of St Barbara shares on ASX on Friday 6 June 2008 (the last trading day before this announcement) and a 23.7% discount to the theoretical ex‐entitlements price, consistent with that offered in recent similar capital raisings.

Under the Institutional Placement to Institutional Investors, St Barbara proposes to raise approximately A$6 million. The Placement is expected to be conducted on Thursday 12 June 2008 and Friday 13 June 2008

Highlights and Purpose of 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 gold production as a leading gold producer, developer and explorer.

The past 12 months have been an important stepping stone in St Barbara's 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 at a cash operating cost of approximately A$560 per ounce. This compares to previous production 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 period.

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.

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.

Details of the pro‐rata Entitlement Offer

The Entitlement Offer has two components:

1. Institutional Offer

Over the Institutional Offer period, existing eligible institutional shareholders will be invited to participate in the Institutional Offer. Eligible institutional shareholders can choose to take up their entitlement in whole, in part, or not at all.

New Shares of an equivalent number to those not taken up under the Institutional Offer and of those which would have been offered to institutional shareholders who are ineligible to participate in the Institutional Offer, will then be offered for subscription to selected institutional investors through a bookbuild process, to be undertaken on Thursday 12 June 2008 and Friday 13 June 2008 (the Institutional Bookbuild). The Underwriter has the right to close the Institutional Bookbuild earlier.

Any positive difference between the Institutional Bookbuild clearing price and the offer price of the New Shares will be paid to the institutional shareholders who did not take up their entitlement or who were ineligible to participate in the Institutional Offer. The Institutional Offer is expected to raise approximately A$68 million.

2. Retail Offer

Existing eligible retail shareholders in Australia and New Zealand will be invited to participate in the Retail Offer on the same terms as the Institutional Offer.

Eligible retail shareholders may choose to take up their entitlement in whole, in part or not at all. New Shares of an equivalent number to those not taken up under the Retail Offer and of those which would have been offered to retail shareholders who are ineligible to participate in the Retail Offer, will be offered for subscription to selected institutional investors through a bookbuild process expected to commence on Thursday, 10 July 2008 (the Retail Bookbuild).

Retail shareholders who do not take up their entitlement or who are ineligible to participate in the Retail Offer will receive any positive difference between the Retail Bookbuild Price and the offer price for the New Shares. The Retail Offer is expected to raise approximately A$46 million.

Entitlements under either the Institutional Offer or the Retail Offer cannot be traded on ASX or any other exchange, or privately transferred.

Full details of the Retail Offer will be set out in a prospectus which is expected to be lodged with ASIC on Friday, 13 June 2008 (the Prospectus). A copy of the pathfinder prospectus will be separately lodged with the ASX today.

Any eligible retail shareholder who wishes to acquire New Shares under the Retail Offer will need to complete the personalised application and entitlement form that will accompany the Prospectus.

Information Line

If you are a retail shareholder and you have any questions on your entitlement or whether you are eligible to participate in the Offer, please call the St Barbara Offer Information Line on 1300 653 935 (local call cost from within Australia) or +61 3 9415 4356 (from outside Australia).

Key Dates

St Barbara has requested that its shares be placed in a trading halt on ASX pending the outcome of the Institutional Offer and Institutional Bookbuild. Its shares are expected to remain in trading halt until Monday 16 June 2008. The record date for the Offer will be 7.00pm on Friday, 13 June 2008.

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	Monday, 23 June 2008
and Placement
IssueofNewSharesundertheInstitutionalEntitlementOffer,	Tuesday, 24 June 2008
Institutional Bookbuild and Placement
NormalTradingofNewSharesissuedundertheInstitutional	Tuesday, 24 June 2008
Entitlement Offer, Institutional Bookbuild and Placement expected to
commence on ASX
Retail Entitlement Offer closes
	Friday, 4 July 2008
Retail Bookbuild	Thursday, 10 July 2008
Settlement of Retail Entitlement Offer and Retail Bookbuild	Wednesday,16July
	2008
Issue of New Shares under the Retail Entitlement Offer and the Retail	Thursday, 17 July 2008
Bookbuild
Normal trading of New Shares issued under the Retail Entitlement	Thursday, 17 July 2008
Offer and the Retail Bookbuild expected to commence on ASX
Dispatch of payment (if any) in respect of Entitlements not acceptedunder the Retail Entitlement Offer	Monday, 21 July 2008

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.

Investment Market & Media Enquiries

Eduard Eshuys, Managing Director & CEO +61 3 8660 1910

Delphine Cassidy, General Manager Investor Relations +61 3 8660 1902

This document is not a prospectus and does not constitute an offer of securities. The offer of shares under the Entitlement Offer will only be made in, or accompanied by, a copy of the prospectus which will be sent to eligible shareholders. Eligible retail shareholders wishing to acquire New Shares should consider the prospectus and will need to complete the acceptance and entitlement form that will be in, or will accompany the prospectus.

NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES

The entitlements and New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act), or any U.S. state or other securities laws. The entitlements and the New Shares may not be offered, sold or otherwise transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities