ST BARBARA LIMITED — Interim / Quarterly Report 2005

Oct 26, 2004

Strategy

The review of corporate, financial and technical issues and senior management has progressed and resulted in decisions to:

• divest a substantial portion of the Company's shareholdings in NuStar Mining Corporation Limited ("NuStar") in an orderly manner to refinance the Company:
• recommence drilling at Meekatharra particularly at Paddy's Flat with the objective of increasing the current resource estimate of 18.0 mt at $2.5$ g/t for 1.4 million ounces and re-establish reserves:
• restructure the Company's Meekatharra operations to reduce costs with an emphasis on exploration and continued suspension of mining and processing activities until adequate new reserves have been defined;
• reduce corporate overheads and make early repayment of high cost secured debts; and
• sell non-core assets, including surplus equipment and cattle but retain the Company's pastoral leases.

Finance

• Funds raised during the quarter totalled $10.88m, comprising $5.2m from debt to equity conversion. $2.9m from share issues. $1.2m from a non-interest bearing advance, $380k from asset sales and a $1.2m deposit on NuStar related transactions. The cash balance at the
  • end of the quarter was $1.6m.
  • In early October, proceeds of $4m were received from the sale of 100 million NuStar shares at $0.04 each swhich was largely used to repay high cost secured debt.

Eduard Eshuys

Managing Director & CEO

27 October 2004

Highlights

• Drilling has recommenced at Meekatharra, with the objective of increasing resources to facilitate the establishment of reserves.
• The drilling program will include reverse circulation and diamond core drilling and will continue until late December 2004. It is expected to complete approximately 30 holes for 10,000 metres during this time.
• Previous drilling at the Paddy's Flat, Vivians and Consols mines has intersected significant high grade mineralisation including 3 mt at 104 g/t at a depth of 220 metres, 5 mt at 78.6 g/t at 120 metres and 5 mt at $33.9$ g/t at 300 metres. The current drilling will focus on extending mineralisation to a vertical depth of approximately 400 metres with the objective of significantly increasing resources.
• Vivians and Consols are adjacent to and on the same mineralised trend as Fenian which produced 1.1 mt at $16.8$ g/t for $630,000$ ounces to a vertical depth of 400 metres, in the early 1900s.
• Negotiations are continuing to lease out to another party the Company's Bluebird plant to process other ore on a campaign basis over the next 18 months.
• Joint venture partner Mercator Gold plc ("Mercator") has advised the commencement of drilling on land in which Mercator can earn 70% by spending $8m. Mercator also expects to complete 10,000 metres of rotary air blast and reverse circulation drilling over the next three months and will focus on high grade shoots below and along strike from previously mined oxide resources
• Elara Mining Limited (Elara), a joint venture partner, appears unlikely to meet its minimum expenditure commitments under the Polelle and Reedys joint ventures. Elara is required to spend $750k at Reedys and $1m at Polelle by November 2004. Discussions are in progress with Elara representatives.
• Mr Ross Kennedy, currently the Chief Financial Officer of St Barbara, has also been appointed loint. Company Secretary

Meekatharra Exploration

Gold at Paddy's Flat, Meekatharra is associated with three parallel trends. Open pit mining during the early 1990's and underground mining in the early 1900's has occurred on each trend. (see Figure 1)

The largest historic underground mine Fenian at Paddy's Flat produced 1.16 mt at 16.8 g/t for 630,000 ounces to a vertical depth of 380 metres. Open pit production at Paddy's Flat during the period 1986 to 1996 totalled approximately 15.2 mt at 1.8 g/t for 900,000 ounces. Open pit mining extended to a maximum vertical depth of 100 metres and over a strike length of nearly 4 kilometres.

Drilling in recent years at Consols and Vivians, 100 metres and 400 metres north respectively from Fenian, has intersected significant high grade mineralisation including 3 mt at 104 g/t at 200 metres depth, 5 mt at 78.6 g/t at 130 metres, with the deepest intersection of 5 mt at 33.9 g/t at 300 metres.

The resource estimate for Vivian-Consols totals an inferred resource of 543,000 tonnes at $6.8$ g/t for 119,000 ounces to a vertical depth of 300 metres.

The current drilling at Vivian-Consols will consist of approximately 10 holes for 5,000 metres and will seek to extend the high grade gold mineralisation associated with porphyry to a vertical depth of 400 metres or a vertical extension of 100 metres.

Prohibition is adjacent and west of the Fenian Vivian-Consols trend, with the gold occurring in a banded iron formation (BIF), similar to Hill 50 at Mt Magnet.

An indicated and inferred resource of 2.1 mt at $4.0$ g/t for 267,000 ounces has been defined. Prohibition has been drilled to a vertical depth of 400 metres. The mineralisation is associated with a structure within the BIF which has a shallow plunge to the south. The down plunge extent is open. Open pit mining to a vertical depth of approximately 100 metres has occurred.

Micky Doolan is at the southern extension of the Fenian Vivian-Consols trend with open pit mining extending to a depth of approximately 100 metres. An inferred resource of 3.3 mt at 1.4 g/t for 153,000 ounces has been outlined

Meekatharra Exploration cont'd

The open pit mining at Mickey Doolan intersected a wide zone of approximately 50 metres of mineralisation with an average grade of $1.4$ g/t. The high grade Fenian Vivian-Consols trend associated with porphyry occurs adjacent to this wide zone. The mineralisation at Mickey Doolan occurs over a strike length of 800 metres and with a width of 50 metres has considerable tonnage potential. Drilling is planned for the December 2004 quarter.

Drilling at Batavia and Jack Ryan, which are 100% owned exclusions within the joint ventured land, will include 1,500 metres of reverse circulation drilling and 500 metres of core drilling. (see Figure 2)

Joint Venture Exploration

Mercator, the operator of the Annean Joint Venture has advised that a program of 10,000 metres in total of reverse circulation and rotary air blast drilling is due to commence to test three gold exploration targets. The initial targets are high grade shoots below and along strike from previously mined oxide resources. The Annean Joint Venture tenements are adjacent to Paddy's Flat and the Bluebird treatment plant. Mercator can earn a 70% interest by spending $8 million on exploration on the loint Venture area of 1.020 km2 in priority to St Barbara, at which point St Barbara will hold a 30% contributing interest in the Joint Venture. (see Figure 2)

Meekatharra Operations

The Company has previously completed an extensive prefeasibility study which included detailed mine planning and cost estimates. Underground production from Vivian-Consols and Prohibition is proposed by the study to be accessed from the one decline from the Prohibition pit, with, a previously established decline from the Consols pit, used for ventilation.

The study suggested an increase in resources at Vivian-Consols and Prohibition with depth should facilitate the establishment of a viable underground operation and help to offset the capital cost of development of the already defined resources.

Restructuring and reduction of overhead costs has occurred in view of the suspension of operations at Meekatharra and the priority to re-establish reserves.

Negotiations are continuing with another party wishing to process approximately 240,000 tonnes of ore on a campaign basis over the next 18 months, through the Company's Bluebird plant. This would allow the plant to be maintained in a working condition and available for when reserves have been re-established.

Corporate

As previously announced and detailed in the Notice of Meeting to be mailed to shareholders on 28 October the divestment of a substantial portion of St Barbara's shareholdings in NuStar will occur as follows:

• Sale of 100 million NuStar Shares to third parties at 4 cents per share. The Company completed this transaction on 30 September 2004;
• The surrender of the Company's 5% Paulsens Royalty to NuStar along with the sale of the Company's interest in the Pelican Joint Venture (being exploration tenements adjacent to the Paulsens Project) to NuStar. NuStar has paid the Company a cash deposit of $1.165 million;
• ¥ Grant of an option to Claymore Capital to purchase 100 million NuStar Shares at 5 cents per share at any time up to 16 May 2005; and
• The offer of a maximum of 240 million of the Company's NuStar Shares to Shareholders in consideration for the buy-back of St Barbara Shares at a ratio of 1.25 NuStar Shares for each St Barbara Share

Financials

Appendix 5B reflects consolidated cashflows for St Barbara and NuStar for the period 1 July 2004 to 30 September 2004.

On 30 September 2004 the Company sold 100 million NuStar shares to reduce its holding from 54% to 44.72% and as of this date no longer consolidates NuStar.

The opening cash balance includes NuStar's cash balances. On deconsolidation, an adjustment of $(5,293,000) is necessary to reflect the closing cash balance as that of St Barbara only.

Cashflows related to operating activities $\mathbf{r}$

The Company suspended ifs Meekatharra operations in June 2004.

Mine development costs of $3.905 million were incurred by NuStar for the Paulsens Project.

The costs of interest and financing for St Barbara will reduce during the December 2004 quarter following the repayment of secured debts in October 2004.

Payments to Directors include part severance payment to the former Executive Chairman, Stephen Miller.

Financials cont'd

Cashflows related to investing activities

On 30 September 2004. St Barbara reached agreement to surrender its gross royalty over the Paulsens Project for $5.1 million. The deposit received on 30 September of $1.2m eliminates on consolidation in the Appendix 5B attached.

Cashflows relating to financing activities

$1.682m was raised from the issue of 42,050,000 fully paid ordinary shares at $0.04 per share.

$1.223m was raised from the issue of 26.591.453 fully paid shares to Resource Capital Fund II KP Holdings Limited (Resource) at $0.046 per share.

On 6 August 2004, Resource advanced St Barbara $1.2m for working capital, to be converted into shares as part of a future placement. The fiming and quantum of such a placement has not yet been determined.

Non cashflow financing activities

Ocean Resource Capital Holdings Limited (Ocean) converted its $4.4m convertible notes into 55 million ordinary shares at $0.08 on 15 July 2004.

17,480,547 fully paid ordinary shares were issued to Ocean at $0.046 per share in satisfaction of interest of $804k.

Corporate Information

Directors and Executive Management

S J C Wise
E Eshuys
M K WheatleyNon-Executive Director
H G TutenNon-Executive Director
E L Boyd Joint Company Secretary
R J Kennedy Joint Company Secretary

Registered Office

Level 2, 16 Ord Street
West Perth WA 6005
Telephone:
Facsimile:

Email: .................................... Website: .................. www.stbarbara.com.au

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 715,271,157 shares.

84,840,026 unlisted There are options exercisable at various prices between 11 cents and 40 cents up to 24 May 2008.

Substantial Shareholders

Resource Capital Fund II LP ..............21.86% Ocean Resource Capital Holdings .... 10.13% RAB Europe Fund Ltd .................................. St James's Place Recovery Trust ..........5.65%

ADR Depositary

The Bank of New York ADR Division 101 Barclay Street New York NY10286 USA Telephone:................................ +1 212 815 2218

Shareholder Enquiries

Matters related to shares held, change
of address and tax file numbers should
be directed to:
Advanced Share Registry Services
Level 7, 200 Adelaide Terrace
Perth WA 6000
Telephone: +61 8 9221 7288
Facsimile: +61 8 9221 7869
Üř
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone: +44 870 703 6088
Facsimile: +44 870 703 6142

Dollar values in this report are Australian Dollars unless otherwise stated

Resources Statement as at 30 September 2004

		Measured			Indicated				Measured + Indicated$\sim$ .		Inferred			→ Total
Project Name	Tonnes Grade			Tonnes Grade			Tonnes Grade			Tonnes	Grade		Tonnes Grade
	(900)	ait	ΟŽ	(*000)	αÆ	0Ż	('000)	olt	OZ.	('000)	git	ΟŽ	('000)	alt	oz
Paddys Flat	(100% SBM)
Prohibition				1,230	4.6	182.000	1,230	4.6.	$-182,000$	840	3.1	84,000	2,070	4.0	266,000
Vivians Consols										543	6.8	118,800	543	6.8	118,800
Mickey Doolan										3,305	1.4	153,000	3,305	1.4	153,000
Macquarie				339	2.9	31.900	339	2.9	31,900	148	2.8	13.200	487	2.9	45,100
Ingleston				723	1.7	39,500	723	17	39,500	250	1.8	14,500	973	17	54,000
Five Mile Well	****									339	1.8	18,200	339	-1.7	18,200
Alberts East				335	2.9	31,200	335	2.9	31,200	357	3.8	43,600	692	3.4	74,800
Mudiode				109	2.2	7,700	109	2.2	7,700				109	2.2	7,700
Paddys Flat subtotal				2,736	3.3	292,300	2,736	3.3	292,300	5,782	2.4	445,300	8,518	2.7	737,600
Meekatharra Reg.	(100% SBM)
Batavia	147	3.10	14,700				147	$-3.10$	14,700				147	3.10	14,700
Jack Ryan	839	2.73	73,600				839	$-2.7$	73,600				839	2.7	-73.600
Regional subtotal	986	2.79	88,300				986	$-2.8$	88,300				986	2.8	88,300
Annean JV	(SBM reducing to 30%; Aurogenic earning 70%)
Bluebird East	411	1.20	15,900	1,706	1.2	65,800	2,117	-1.2	81,700	38	1.6	2.000	2,155	1.2	83,700
Bluebird Deeps										135	7.3	31,700	135	7.3	31,700
Bluebird Extension	88	2.10	5.900	1,568	1.8	90,700	1,656	1.8	96,600	885	1.6	45,500	2,541	1.7	142,100
South Gibraltar - Mystery	150	1.30	6,000	315	1.4	14.600	465	14	20.600	21	1.8	1,200	486	14	21,800
Ironbar	166	1.50	8,000	124	1.7	6,800	290	1.6	14,800	140	1.5	6,800	430	1.6	21,600
Luke's Junction	3	1.80	200	198	1.8	11,500	201	1.8	11,700	61	1.8	3,500	262	4.8	$-15,200$
Nannine Reef	106	2.00	6,800	59	2.1	4.000	165	2.0	10.800	102	2.2	7,200	267	2.1	18,000
Kohinoor Deeps				33	9.3	9,900	33	9.3	9,900	7	10.2	2,300	40	9.5	12,200
Annean JV subtotal	924	1.44	42,800	4,003	1.6	203,300	4,927	16	246.100	1,389	2.2	100,200	6,316	17	346,300
Poielle JV	(SBM reducing to 35%; Elara earning 65%)
Mulla Mulla										1.123	1.6	60,700	1,123	1.6	60,700
Reedys JV	(SBM reducing to 35%; Elara earning 65%)
North Rand	95	1.90	5,800	3	1.7	200	98	19	6,000	ŧ	17	100	:99	-1.9	6,100
Triton Deeps				78	8.5	21,300	-78	8.5	21,300				78	8.5	21,300
Triton North Deeps				217	5.7	39,800	217	5.7	39,800				217	5.7	39,800
South Emu				315	5.3	53,700	315	5.3	53,700				315	5.3	53,700
Boomerang Deeps				93	6.7	20,000	93	6.7	20,000	174	5.1	28.500	267	5.6	48,500
Rand Deeps										130	5.0	20,900	130	5.0	20,900
Reedys JV subtotal	95	1.90	5.800	706	5.9	135,000	801	5.5	140,800	305	5.0	49,500	1,106	5.4	190,300
Category Totals
SBM 100%	986	2.79	88,300	2.736	3.3	292,300	3,722	3.2	380,600	5.782	2.4	445.300	9,504	27	825,900
Annean JV	924	1.44	42,800	4,003	1.6	203,300	4,927	1.6	246,100	1,389	2.2	100.200	6,316	11	346,300
Elara JVs	95	1.90	5,800	706	5.9	135,000	801	5.5	140,800	1,428	2.4	110,200	2,229	3.5	251.000
Meekatharra Total	2,005		2.12 136,900	7,445	2.6	630,600	9,450	2.5	767,500	8,599	2.4	655,700	18,049	25	1,423,200

Note *** means only listed resource at Five Mile Well is 100% St Barbara, any additional resources discovered come under terms of Annean JV.

This resource estimate complies with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared in 1999 by the Joint Ore Reserves Committee (JORC). It was prepared by Mr Graham Miller, a full time employee of St Barbara and a Competent Person as defined by the Code. It is included in this report with his consent.

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

ST BARBARA MINES LIMITED

ABN

36 009 165 066

Quarter ended ("current quarter")

30 SEPTEMBER 2004

Consolidated statement of cash flows

			Year to date
	Cash flows related to operating activities	Current quarter	(3 months)
		$A'000	$A'000
1.1	Receipts from product sales and related debtors	85	85.
1.2	Payments for:
	(a) exploration and evaluation	(343)	(343)
	(b) development	(3,905)	(3,905)
	(c) production
	(d) administration	(2,520)	(2,520)
1.3	Dividends received
1.4	Interest and other items of a similar nature	166	166
	received
1.5	Interest and other costs of finance paid	(397)	(397)
1.6	Income taxes paid
1.7	Other (payments to 30 June 2004 creditors)	(2,101)	(2,101)
	Net Operating Cash Flows	(9,015)	(9,015)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets	(162)	(162)
1.9	Proceeds from sale of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets	380	380
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows	218	218
1.13	Total operating and investing cash flows(carried forward)	(8,797)	(8,797)

+ See chapter 19 for defined terms.

		Current quarter$A'000	Year to date(3 months)$A'000
1.13	investing cash flowsTotal operating and(brought forward)	(8,797)	(8,797)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	2.905	2,905
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings	1,382	1,382
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (restricted cash)	(1,490)	(1,490)
	Net financing cash flows	2,797	2,797
	Net increase (decrease) in cash held	(6,000)	(6,000)
1.20	Cash at beginning of quarter/year to date	12,849	12,849
1.21	Deconsolidation adjustment (refer 2.1(b))	(5,293)	(5,293)
1.22	Cash at end of quarter	1.556	1,556

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	289
1.24	Aggregate amount of loans to the parties included in item 1.10
1.25	Explanation necessary for an understanding of the transactions

Refer to attached commentary.

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
  • Conversion of debt, including interest, into equity $5,204,000. a)
  • As at 30 September 2004, following the sale of 100 million NuStar Mining Corporation $\mathbf{b}$ Limited (NuStar) shares, the Company has deconsolidated its interest in NuStar.
• $2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

No joint venture partners have increased their equity interest in projects owned by the Company.

+ See chapter 19 for defined terms.

. . . . . . .

Financing facilities availableAdd notes as necessary for an understanding of the position.

		Amount available$A'000	Amount used$A'000
-3.1	Loan facilities	1,200	1,200
3.2	Credit standby arrangements

Estimated cash outflows for next quarter

	Total	560
4.2	Development
4.1	Exploration and evaluation	560
		$A'000

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.	Current quarter$A'000	Previous quarter$A'000
5.1	Cash on hand and at bank	1.556
5.2	Deposits at call		12,848
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	1,556	12,849

Changes in interests in mining tenements

		Tenementreference	Nature of interest(note (2))	Interest atbeginningof quarter	Interest atend ofquarter
-6.1	Interests in miningtenements relinquished,reduced or lapsed		Nil
-6.2	Interests in miningtenements acquired orincreased		Nil

$+$ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price persecurity(see note $3)$ )(cents)	Amount paid up persecurity(see note 3)(cents)
7.1	Preference*securities(description)
7.2	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returnsof capital, buy-backs,redemptions
7.3	+Ordinarysecurities	715,271,157	715,271,157	Fully paid	Fully paid
7.4	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returnsof capital, buy-backs	141,122,000	141,122,000	Fully paid	Fully paid
7.5	+Convertibledebt securities(description)	Ocean ResourcesConvertible Note55,000,000 @$0.08
7.6	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthroughsecuritiesmatured,
7.7	convertedOptions	(55,000,000)		$0.08Exercise price	$0.08Expiry date
	(description andconversionfactor)	84,840,026	Nil	Various	Various
$7.8,$	Issued duringquarter
7.9	Exercised duringquarter
7.10	Expired duringquarter
7.11	Debentures(totals only)
7.12	Unsecurednotes (totalsonly)

$\div$ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Sign here: Print name:

Date: 27 October 2004 Ross Kennedy, Chief Financial Officer and Company Secretary

Notes

• $\mathbf{1}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• The definitions in, and provisions of, AASB 1022: Accounting for Extractive $\overline{A}$ Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

---

+ See chapter 19 for defined terms.