ST BARBARA LIMITED — Interim / Quarterly Report 2004

Oct 30, 2003

ST BARBARA MINES LIMITED

ACN 009 165 066

ASX SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to:

Stephen W. Miller

Executive Chairman Telephone (08) 9476 5555 Overseas +61 8 9476 5555

$or$

Colin G. Jackson Investor Relations Telephone 0417 929 107

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

September 2003 Quarterly Report

Attached is the Company's Quarterly Report for the period ending 30 September 2003.

Stephen W. Miller Executive Chairman

31 October 2003

ST BARBARA MINES LIMITED

ACN 009 165 066

ACTIVITIES REPORT

Three months to 30 September 2003

Enquiries regarding this report may be directed to:

Stephen W. Miller Executive Chairman Telephone $(08)$ 9476 5555 Overseas +61 8 9476 5555 $\alpha r$ Colin G. Jackson Investor Relations Telephone 0417 929 107

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

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

St Barbara is a dedicated gold company listed on both the Australian Stock Exchange and the AIM (London Stock Exchange) - ticker symbol SBM $-vith$ nearly 12,000 shareholders.

OVERVIEW

MEEKATHARRA OPERATIONS

• Gold production 15,721 ounces
  • sourced entirely from low grade stockpiles, predominantly Paddys Flat
• Net cash cost $475 per ounce

FINANCE

• Meekatharra Operations
  • cash operating surplus $2.0 million
• Share placement raises $0.96 million (net of fees)
• Short term debt reduced $5.0 million
• Debt-for-equity swap ($7.3 million) and partial loan-for-equity swap ($2.8 million) proposed, both subject to shareholder approval

PADDYS FLAT DEVELOPMENT

• Prohibition drill results confirm resource model
• Down plunge drilling commenced

PAULSENS PROJECT

Parameters to develop Paulsens as a high grade shallow underground mine in place

CORPORATE

• Board expansion and separation of Chairman $\ddot{\bullet}$ and Chief Executive roles foreshadowed
• Burnakura area farmed-out in $2 million development and exploration joint venture

CHAIRMAN'S REVIEW

The quarter has been notable for a number of key events benefiting both the balance sheet and the gold production profile.

Resource Capital Funds II LP (Denver, Colorado, USA), a provider of credit and a supporter since January 2002, has agreed to convert the balance of its entire term facility ($7.3 million) into equity, which together with the earlier repayment of $5.0 million (from the sale of Dioro), will extinguish all secured debt from the St Barbara balance sheet.

The debt-to-equity swap will result in the issue of shares to Resource Capital Funds, taking their shareholding from a current 7.7 percent to approximately 24 percent of the enlarged capital base.

Ocean Resources will also convert $2.8 million of convertible loan into ordinary shares at 8 cents per share. Both the Resource Capital Funds and Ocean Resources conversions are subject to shareholder approval at the Annual General Meeting on 25 November 2003.

Post this event, interest bearing debt will be $4.4 million comprising the remainder of the Ocean Resources convertible loan - also convertible at 8 cents per share.

Subsidiary, Taipan Resources NL, will proceed with the development of Paulsens as a high grade shallow underground mine. The project has been re-engineered significantly reducing the capital associated with the previous high strip ratio open cut proposal. A decline, to an initial depth of 200 metres, is scheduled to deliver 675,000 tonnes at 12.2 g/t.

The catalyst for Paulsens proceeding is the acceptance by St Barbara of a debt-for-equity swap for the outstanding inter-company loan of $17.6 million. This facilitates a $21 million equity raise in Taipan of which $18 million is a share placement with the balance an underwritten Share Purchase Plan. St Barbara, as a consequence, will dilute from 88.3 percent to 54.9 percent in the expanded capital of Taipan.

The net outcome of the transaction is a Paulsens Project fully funded into production, reaching an annualised rate of 100,000 ounces within fifteen months of the January 2004 commitment.

At our other major development project, Paddys Flat at Meekatharra, recent mine design drilling has confirmed the mine model with modest positive reconciliation. A thirteen hole down plunge programme to extend the resource has commenced.

In recognition of best corporate governance practice, the Board will seek to appoint two new directors, one of whom will be a non-executive Chairman, thereby separating the roles of Chairman and Managing Director. Mr Stephen Miller continues as Group Managing Director to lead the re-establishment of growth in the gold production profile facilitated by the balance sheet recapitalisation.

Stephen W. Miller Executive Chairman

31 October 2003

MANAGEMENT DISCUSSION AND ANALYSIS

PRODUCTION

Gold production at 15,721 ounces was 16 percent lower than the previous quarter.

Mill feed comprised low grade stockpiles, predominantly Paddys Flat No. 1, No. 2 and No. 3 stockpiles. Minor tonnages were treated from Alliance and Boomerang during periods of higher spot gold prices.

Lower production was a consequence of lower average mill grade (down 10 percent), consequent lower recovery and slightly lower throughput (down 5.5 percent - although still an annualised rate of 2.8 million tonnes).

Outlook

Three of the four nearby small surface oxide deposits have been assessed as marginal. Five Mile remains subject to a geotechnical review of a pit last worked ten years ago.

The production schedule for the balance of the vear includes Paddys Flat and Bluebird low grade stockpiles and Batavia open pit.

Detailed evaluation of the higher grade underground Paddys Flat deposits continued. Four holes into Prohibition have confirmed the orebody model and a further 13 holes (7,500 metres) are planned to assess the potential for down plunge resource extension. A drill programme has also commenced on the lower grade open pit Mickey Doolan resource.

Production and Sales Statistics

Period	3 Months to30 Sept 2003	12 Months to30 June 2003
Ore mined (tonnes)	nil	483,041
Ore milled (tonnes)	700,658	2,284,599
Grade milled (g/t)	0.85	1.47
Recovery (%)	82.0	89.7
Gold produced (ounces)	15.721	96.611
Gold sold (ounces)	17,819	98,080

Production Cost Statement ($/oz) Modified Gold Institute Standard

Period	3 Months to30 Sept 2003	12 Months to30 June 2003
Mine site cash costs	448	448
State royalties	27	17
Net Cash Cost	475	465
Mine development
capital cost amortisation	68	103
Inventory movements	67	7
Net Operating Cost	609	575
Realised Gold Price	548	572

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

'total cash cost' per ounce.

FINANCE

Realised Gold Price

A total of 17,819 ounces was sold at a net realised gold price of $548 per ounce (against an average spot price of $554 per ounce).

The Company delivered all production into spot. The Company has no hedge positions.

Financial Performance

Meekatharra Operations generated a $2.0 million cash surplus for the quarter.

Financial Position

As at 30 September 2003, cash and bullion totaled $1.5 million (plus $3.3 million in rehabilitation bonds).

Major cash movements during the period included convertible note proceeds ($1.3 million), asset sales ($1.2 million), investment sale (Dioro $5.0 million) and Defiance debtor repayments ($1.0 million), Paddys Flat acquisition ($1.5 million) and repayment of debt finance (RCF $5.0 million).

ACN 009 165 066

MANAGEMENT DISCUSSION AND ANALYSIS

BURNAKURA JOINT VENTURE

A 70 percent interest in the 7 kilometre long Alliance line of gold mineralisation, 35 kilometres south of the treatment plant, has been farmed out subject to a $2 million commitment over 30 months, and payment of a royalty to a third party.

The joint venture partner proposes the immediate development of the 53,000 ounce NOA2 underground resource with milling of mined ore through the St Barbara treatment plant commencing May 2004.

PALILSENS

Paulsens has been significantly re-engineered as a high grade shallow underground mine. The net result is a reduction in capital cost to first gold pour from $40 million to $13 million.

A project risk mitigation programme comprising positional drilling (20 holes) into the orebody 100-125 metres below surface, resource extension drilling (39 holes) between 200-400 metres below surface and extraction of a 50,000 tonne sample to confirm mining and processing parameters is proposed.

Gold recovered from the major sample will partially offset site establishment, decline and level development costs.

Information in this report relating to mineral resources conforms to the reporting requirements of the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (The JORC Code). It is based on information compiled by Mr Graham Miller, FAusIMM, a Competent Person as defined by the Code. It is included in this report with his consent.

CORPORATE INFORMATION

Board of Directors and Executive Management

S. W. Miller.................. Executive Chairman K. A. Dundo .......... Non-Executive Director G. B. Speechly ....... Non-Executive Director H. G. Tuten ............ Non-Executive Director A. D. Rule ................. Chief Financial Officer ......................................

Registered Office

Level 2, 16 Ord Street
West Perth WA 6005
Telephone: +61 8 9476 5555
Facsimile: +61 8 9476 5500
Email:
Website:

Stock Exchange Listings

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

Issued Capital

As at the date of this report, issued capital is 443,464,225 shares.

There were 44,329,772 listed options, exercisable at 30 cents up until 29 February 2004 and 71.682.563 unlisted options exercisable at various prices between 11 cents and 40 cents up to 17 January 2008.

Major Shareholders

Westpac Custodians 15.75%
National Nominees 10.16%
Resource Capital Fund II LP 7.68%
Strata Mining Corporation Ltd 7.26%
Toto Capital Inc

Substantial Shareholders

RAB Europe Fund Ltd 10.15%
St James's Place Recovery
Unit Trust
Resource Capital Fund II LP 7.68%
Strata Mining Corporation Ltd 7.26%

Shareholder Enquiries

Matters related to shares held, change
of address and tax file numbers should
be directed to:
Australia:
Advanced Share Registry Services
Level 7, 200 Adelaide Terrace
Perth WA 6000
Telephone: +61 8 9221 7288
Facsimile:
United Kingdom:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone: +44 870 703 6088
Facsimile: +44 870 703 6142
ADR Depositary
The Bank of New York
ADR Division
101 Barclay Street
New York NY10286 USA
Telephone: +1 212 815 2218