ST BARBARA LIMITED — Interim / Quarterly Report 2004

Feb 26, 2004

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 $\alpha r$ Colin G. Jackson Investor Relations 0417 929 107 Telephone

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.

Comparatives are six months to 31 December 2002

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

Interim Financial Result 2003/04 and Outlook

FINANCIAL RESULT

• Earnings before interest, tax, depreciation and amortisation, a loss of $2.75 million
• Gold sales 30,574 ounces (down 49 percent)
  • realised gold price $546 per ounce (down $26/oz)
  • net cash cost $505 per ounce (up $$40$ /oz)
  • Interest bearing liabilities ($9.4 million)
    • previously $24.0 million
• Consolidated cash $18.8 million (working capital $15.2 million)
• The Company remains unhedged and has no currency contracts

OUTLOOK

• Production
  • Campaign milling continues pending definite development plans for the expanding Paddys Flat underground resource
  • Mill feed for the balance of the financial year comprises Paddys Flat and Bluebird low grade stockpiles, Batavia open pit and NOA 2 JV
• Development
  • Paulsens development continues through the fully funded subsidiary, NuStar Mining Corporation
• Exploration
  • Substantial Meekatharra programmes funded through Reedys and Polelle JVs

phen W. Miller Executive Chairman

27 February 2004

ST BARBARA MINES LIMITED

ACN 009 165 066

The Company recorded a consolidated net loss of $6.8 million, compared with a loss of $22.0 million (due predominantly to accelerated mine development writedown of underground operations and a change in accounting policy) in the corresponding period.

Financial Performance

Gold revenue from operations at $16.7 million was $17.9 million lower than the corresponding six month period, a result of lower gold sales (30,574 ounces, down 49 percent) and lower realised price (down $26 per ounce).

The average realised price reflects the weighted spot price for the six months of $546 per ounce as the Company sold all production into the spot market.

The net cash cost of production at $505 per ounce (an increase of $40 per ounce) reflects the lower average grade of mill feed which was dominated by low grade Paddys Flat stockpiles.

Other revenue was dominated by the sale of the Dioro Exploration investment ($4.98 million), with the balance predominantly surplus equipment.

An operations loss before interest, tax, depreciation and amortisation of $3.8 million was determined after state royalties ($0.4 million), the expensing of all exploration costs ($1.8 million) and Paulsens project development costs.

Higher interest charges reflected an increased drawdown on the RCF loan and extension fees. The loan was extinguished late November 2003.

	Simplified Statement of Financial Performance
7870001

for the year ended 31 December	2003	2002
Gold revenue from operations	16,705	34,570
Other revenue	6,357	760
Earnings before interest, tax,depreciation and amortisation and
change in accounting policy	(2,721)	7.047
Change in accounting policy		(8,532)
Earnings before interest, tax,
depreciation and amortisation	(2.721)	(1,485)
Depreciation	(975)	(971)
Amortisation of mine development	(600)	(14,630)
Earning/(loss) before interest and tax	(4,296)	(17,086)
Interest (expense)/income	(2, 481)	(2,242)
Income tax expense		(2,965)
Outside equity interests	(33)	(252)
Net profit/(loss)	(6, 810)	(22,041)
Prepared in accordance with Australian Generally Accepted

Accounting Principles.

Segmental Analysis

$(5'000)$

for the year ended 31 December	2003	2002
Results from Operations	(3,733)	6.309
Amortisation and depreciation	(1.575)	(15,601)
Profit on sale of shares and property,plant and equipment	1.012	738
Change in accounting policy		(8.532)
Earnings/loss before interest and tax	(4.296)	(17.086)

Amortisation and depreciation includes:

- Gibraltar .	(7,515)
- Great Northern Highway	(2.557)

ACN 009 165 066

Cash Flow Statement

On a consolidated basis, cash at the period end increased to $18.8 million, largely due to the re-financing of 54.9 percent subsidiary NuStar Mining Corporation Limited (formerly known as Taipan Resources NL) which completed a $21 million equity and $1.0 million convertible note issue (before fees)

The Company also completed a placement ($0.96 million before fees) and sold the investment in Dioro Exploration ($4.98 million)

Loan and finance repayments included a part repayment of the RCF loan ($5 million) with the balance of the loan satisfied by a debt-for-equity swap.

Major capital expenditure for the half year consisted of $1.2 million on the Paddys Flat area for the future underground development (including $0.8 million in drilling).

Financial Position

Total shareholders' equity increased by $26.1 million, reflecting the strong balance sheet of subsidiary NuStar Mining Corporation.

Consolidated working capital at the end of December was $15.2 million, a significant improvement over the 30 June 2003 balance date (negative $7.4 million).

Interest bearing securities at $9.4 million comprise convertible loans ($5.9 million) with the balance lease and hire purchase liabilities.

Current assets of $26.4 million comprise cash ($18.8 million), minor receivables and a Demag face shovel which was sold post period end.

Simplified Cash Flow Statement
(5'000)
for the year ended 31 December	2003	2002
Operating Activities
Cash receipts	16,841	38,843
Payments - suppliers/employees	(17,901)	(41, 451)
Other (net)	(908)	(544)
Net cash flow	(1,968)	(3, 152)
Investing Activities
Payments –exploration/evaluation/development	(1,345)	(4,371)
Payments – listed investments	(500)	(365)
Payments – increased security bond		(1,500)
Investment sold	4.984	u
Payments-property/plant/equipment
(net)	1,043	(46)
Net cash flow	4,182	(6,282)
Financing Activities
Loan and finance repayments	(5,618)	(8,699)
Proceeds from borrowings	1,000	4.000
Issue of securities	20,611	5,361
Share buy-back		.,
Net cash flow	15,993	662
Cash - beginning of period	597	9.032
Net change in cash	18,207	(8,772)
Cash - end of period	18,804	260

Simplified Statement of Financial Position

$(5'000)$

As at	31 December2003	30 June2003
Assets
Current	26,433	19,164
Non-current	59.066	58,128
Total	85,499	77.292
Liabilities
Current	11,253	26,610
Non-current	10,184	12.709
Total	21,437	39,319
Net assets	64,062	37.973
Share capital & reserves	141,892	129,493
Accumulated losses	(98, 330)	(91, 520)
Outside equity interest	20,500
Total shareholders' equity	64,062	37.973

ST BARBARA MINES LIMITED

ACN 009 165 066

OUTLOOK

Production

Campaign milling continues for the balance of the financial year pending completion of the Paddys Flat revised economic mine model.

Ore sources comprise the balance of Paddys Flat low grade stockpiles, remaining Bluebird low grade stockpiles and the Batavia open pit.

Development

The Paddys Flat economic model is currently being revised following successful down plunge drilling of Prohibition/Red Spider. The resource increased 170% to 270,000 ounces with indications the mineralisation continues further down plunge.

The Paulsens Project is proceeding as a high grade shallow underground mine. Two rigs are currently engaged completing the stope definition drilling (25 holes) programme and the resource extension drill programme (44 holes). Decline commencement is scheduled for June/July 2004.

Exploration

Exploration activity at Meekatharra is at a three year high, with current activity on the Polelle JV (Mulla Mulla deposit and Kanji-Miniritchie prospect) and the Reedys JV.

St Barbara is the manager of both joint ventures.

CORPORATE INFORMATION

Directors and Executive Management
------------------------------------	--	--	--

S. W. Miller Executive Chairman
K. A. Dundo Non-Executive Director
M. K. Wheatley Non-Executive Director
H. G. Tuten Non-Executive Director
E. L. Boyd

Registered Office

Level 2, 16 Ord Street
West Perth WA 6005
	Telephone: +61 8 9476 5555
	Facsimile:
	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 574,149,157 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 ........... 5.61%

Substantial Shareholders

Resource Capital Fund II LP 22.60%
RAB Europe Fund Ltd
St James's Place Recovery Trust 7.04%
Ocean Resource Capital Holdings 6.09%
Strata Mining Corporation Ltd 5.61%

Shareholder Enquiries

Matters related to shares held, change of address and tax file numbers should his directed to:

Advanced Share Registry Services
Level 7, 200 Adelaide Terrace
Perth WA 6000
Telephone: +61 8 9221 7288
Facsimile: +61 8 9221 7869
ÖĽ
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

Appendix 4D

Half year report

Name of entityST BARBARA MINES LIMITED
ABN or equivalent companyreference	Half yearly(tick)	Preliminaryfinal (tick)	Half year/financial year ended ('current period')
36 009 165 066			December $31, 2003$

Results for announcement to the market

				$A'000
Revenues from ordinary activities (item 2.1)	down	35%	tο	23,062
Profit (loss) from ordinary activities after taxattributable to members (item 2.2)	up.	69%	to	(6, 810)
Profit (loss) attributable to members ( item 2.3 )	up	69%	to	(6, 810)
Dividends ( item 2.4 )No dividend has been declared
Tangible Assets per security (item 3)				N/A
Entities over which control has been gained orlost over the period ( item 4 )				N/A
Details of dividend distribution ( item 5 )				N/A
Details of reinvestment plans (item 6)				N/A
Details of joint venture entities (item 7)				N/A
Foreign entity accounting standards (item $\delta$ )				N/A
Audit dispute or qualification (item 9)				N/A

Sign here:

. filmolom . . . . . . . . . . . . . . . . . . . . $\ldots$ (Director/Company Secretary)

Date: 27 February 2004

Print name: Lee Boyd

ST BARBARA MINES LIMITED

ABN 36 009 165 066

HALF-YEAR FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2003

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT

Your Directors present their report on the consolidated entity consisting of St Barbara Mines Limited and the entities it controlled at the end of, or during, the half year ended 31 December 2003.

Directors

The names of Directors who held office during or since the end of the half year:

Name	Position	Period of Directorship
Stephen Miller	Executive Chairman and	Director since 12 March 1999
	Managing Director
Kevin Dundo	Non Executive Director	Director since 26 March 2002
Henderson Tuten	Non Executive Director	Director since 26 March 2002
Mark Wheatley	Non Executive Director	Director appointed 1 December 2003

Mr Speechly resigned as a director on 1 December 2003.

Review of Operations

The consolidated operating loss after tax for the half-year ended 31 December 2003 attributable to members of the Company was $$6,810,000$ (31 December 2002: $$22,041,000$ loss). The previous half year loss included the impact of a change in accounting policy effective 1 July 2002 to write off a total of $8,532,000 in current and previous exploration and evaluation expenditure.

Production and Sales Statistics	6 months to31 December 2003	6 months to30 June 2003	6 months to31 December 2002
Ore Mined (tonnes)		55,105	427,936
Head grade $(g/t)$		3.37	3.69
Ore Milled (tonnes)	1,263,719	1,352,703	931,896
Head grade $(g/t)$	0.84	0.98	2.18
Recovery $(%)$	82.5%	85.3%	92.6%
Gold produced (ounces)	27,936	36,218	60,393
Gold sold (ounces)	30,574	38,215	59,865

On 25 November 2003, shareholders at the Annual General Meeting approved, amongst others, the following:

• Issue of 95,684,932 fully paid ordinary shares to Resource Capital Fund II L.P. ("RCF") as follows:
  • $\circ$ 91,184,932 fully paid ordinary shares pursuant to the Share Subscription Agreement:
    • $\blacksquare$ 87,500,000 fully paid ordinary shares being the amount of RCF Facility owing of $7,000,000 divided by an issue price per fully paid ordinary share of $0.08; and
    • 3,684,932 fully paid ordinary shares being fully paid ordinary shares issued to $\blacksquare$ satisfy the interest on the RCF Facility for the period from 1 July 2003 to completion.
  • $\circ$ 4,500,000 fully paid ordinary shares in satisfaction of a fee for this transaction pursuant to the Share Subscription Agreement;

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT (cont)

• Issue of 17,382,463 unlisted options to RCF; $\bullet$
• Approval for the Company to issue up to 55,990,026 fully paid ordinary shares to RCF should they $\bullet$ exercise some or all of their 55,990,026 unlisted options: and
• Issue of up to 90,000,000 fully paid ordinary shares under the Convertible Loan to Ocean Resources Capital Holdings Limited ("Ocean") should Ocean exercise some or all of their conversion rights.

Events subsequent to 31 December 2003

• $\bullet$ On 9 February 2004, the Company entered into a bridging finance facility with Claymore Capital for working capital up to $$3,500,000$ .
• On 23 February 2004, the Company entered into an agreement for the sale of its DeMag 455 for a $\bullet$ . price of $3.6 million. The equipment is currently in a finance lease arrangement with Komatsu Cornorate Finance

Other than the matters discussed above, there has not arisen in the interval between the end of the half vear and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity, in future financial periods.

Rounding Off

The Company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investment Commission, relating to the "rounding off" of amounts in the Directors' report and Financial report. Amounts in the Directors' report and the Financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

Signed in accordance with a resolution of the Board of Directors.

EXPHEN W. MILLER EXECUTIVE CHAIRMAN

Dated at Perth this 27th day of February 2004

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES STATEMENT OF FINANCIAL PERFORMANCE for the 6 months ended 31 December 2003

	Note	Consolidated31 December2003$'000	Consolidated31 December2002$'000
Revenues from sale of gold		16,705	34,570
Other revenues from outside operating activities	3	6,357	760
Revenue from ordinary activities		23,062	35,330
Expenses
- cost of sale of investments		(4,891)
- changes in inventory - finished goods & work in progress		(1,210)	700
- raw materials and consumables used		(6,073)	(7,622)
- employee expenses		(3,505)	(4,536)
- cost of sale of plant and equipment		(124)	(22)
- contract mining, cartage, milling, maintenance, labour andconsultants		(5,340)	(14, 694)
- exploration drilling and assay expenditure	1	(1,783)	(1,692)
- exploration consultant expenditure	1		(963)
- cumulative effect of exploration write off 1 July 2003	1		(4, 422)
- write down of asset held for resale		(500)
- other expenses from ordinary activities		(2,357)	(3, 564)
Profit/(loss) before interest, tax, depreciation and amortisation(EBITDA)		(2,721)	(1, 485)
- depreciation		(975)	(971)
- amortisation of mine development expenses		(600)	(14, 630)
Profit/(loss) before interest and tax (EBIT)		(4,296)	(17,086)
- borrowing cost expense		(2,481)	(2, 242)
Profit/(loss) from ordinary activities before income tax		(6,777)	(19,328)
Income tax expense	4		(2,965)
Net (loss)		(6,777)	(22, 293)
Net (loss) attributable to outside equity interests		(33)	(252)
Net profit/(loss) attributable to members of St Barbara Mines
Limited		(6, 810)	(22, 041)
Total changes in equity other than those resulting from
transactions with owners as owners		(6, 810)	(22, 041)
Basic and diluted earnings/(loss) per share for St Barbara MinesLimited (cents per share)	12	(1.478)	(6.332)

The above statement of financial performance should be read in conjunction with the accompanying notes.

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION as at 31 December 2003

	Note	Consolidated31 December2003$'000	Consolidated30 June2003$'000
Current assets
Cash assets		18,804	597
Restricted cash			280
Receivables		1,484	3,688
Other financial assets			4,891
Inventories		2,319	4,264
Assets held for resale		3,594	4,194
Other		232	1,250
Total current assets		26,433	19,164
Non-current assets
Restricted cash		3,303	3,293
Other financial assets		500
Property, plant & equipment		7,546	8,380
Other			83
Mining properties		47,717	46,372
Total non-current assets		59,066	58,128
Total assets		85,499	77,292
Current liabilities
Payables		7,183	10,561
Interest bearing liabilities	10	3,384	15,151
Provisions		686	898
Total current liabilities		11,253	26,610
Non-current liabilities
Interest bearing liabilities	10	6,032	8,833
Provisions		4,152	3,876
Total non-current liabilities		10,184	12,709
Total liabilities		21,437	39,319
Net assets		64,062	37,973
Equity
Parent entity interest
Contributed equity	5	139,444	127,534
Option reserves	6	2,448	1,959
(Accumulated Losses)	7	(98, 330)	(91, 520)
Total Parent entity interest		43,562	37,973
Outside equity interests in controlled entities	8	20,500
Total equity		64,062	37,973

The above statement of financial performance should be read in conjunction with the accompanying notes.

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIESSTATEMENT OF CASH FLOWSfor the 6 months ended 31 December 2003

	Consolidated31 December2003$'000	Consolidated31 December2002$'000
Cash flows from operating activities:
Receipts in the course of operations (inclusive of GST)	16,841	38,843
Payments in the course of operations (inclusive of GST)	(17,901)	(41, 451)
Interest received	206	202
Borrowing costs paid	(1,114)	(746)
Net cash provided by $/$ (used in) operating activities:	(1,968)	(3,152)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment	1,043	391
Proceeds on sale of investments in listed securities	4,984
Payments for investments in listed securities	(500)	(365)
Payments in respect of mining properties	(1, 345)	(4,371)
Payments to increase security bonds		(1,500)
Payments for property, plant and equipment		(437)
Net cash provided by / (used in) investing activities:	4,182	(6, 282)
Cash flows from financing activities:
Proceeds from borrowings	1,000	4,000
Repayment of borrowings	(5,618)	(8,699)
Net proceeds from issues of shares	20,611	5,361
Payment for shares bought back
Net cash provided by / (used in) financing activities:	15,993	662
Net increase / (decrease) in cash held	18,207	(8, 772)
Cash at beginning of period	597	9,032
Cash at end of period	18,804	260

The above statement of financial performance should be read in conjunction with the accompanying notes.

Note 1 - Basis of preparation of half-year consolidated financial report

This general purpose financial report for the interim half-year reporting period ended 31 December 2003 has been prepared in accordance with Accounting Standard AASB 1029 Interim Financial Reporting, other mandatory professional reporting requirements (Urgent Issues Group Consensus Views), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2003 and any public announcements by St Barbara Mines Limited and its Controlled Entities during the interim reporting period in accordance with continuous disclosure requirements of the Corporations Act 2001.

Unless otherwise stated the accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The consolidated financial statements have been prepared on a going concern basis. At 31 December 2003 the consolidated entity's current assets exceeded its current liabilities by $15.2 million. Notwithstanding this, a significant portion ($18m) of cash at 31 December 2003 was raised by the 54% owned NuStar Mining Corporation Limited ("NuStar") (formerly Taipan Resources NL) specifically to develop the Paulsens project and is not readily available to meet the debts of other members of the consolidated entity. At 31 December 2003 the wholly owned group's (being the consolidated entity excluding NuStar Mining Corporation Limited) current liabilities exceeded its current assets by $2.9 million.

In the short term the ability of the wholly owned group to continue as a going concern is dependent upon its ability to:

• $\triangleright$ continue with its restructuring of the group's debt facilities (refer Note 10).
• $\ge$ continue its disposal of identified non core assets (refer Note 13).
• $\triangleright$ raise funding for and successfully develop the Paddy's Flat project.

The Directors are of the view that, based on past experience and the plans that are currently in place, the wholly owned group will be able to restructure its debt facilities, sell such assets as are necessary and secure funding and successfully develop Paddy's Flat which will enable the wholly owned group to continue as a going concern. However, should these events not occur there is significant uncertainty whether the wholly owned group will be able to continue as a going concern and realise its assets at the amounts stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded net asset and liability amounts that might be necessary should the entity not continue as a going concern.

Prior Period - Change in accounting policy for treatment of Mining Properties

With effect from 1 July 2002 all exploration and evaluation expenditure incurred by or on behalf of the Company up to the decision by the Board to proceed with development of a mining property, will be expensed as incurred. Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered.

Mining properties now consists only of acquired exploration assets and mineral properties currently under development or in production together with related mine development costs and capital assets. The cost of mineral properties includes the cash consideration and/or the fair value of shares issued on the date the property is acquired.

The recoverability of amounts shown for mining properties is dependent upon the existence of economically recoverable reserves; the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain financing to complete the development of the properties where necessary and upon future profitable production; or, alternatively, upon the Company's ability to recover its spent costs through a disposition of its interests.

Note 1 - Basis of preparation of half-year consolidated financial report (cont.)

Mine development costs relating to mineral properties are deferred until the properties are brought into commercial production, at which time they are amortised over the estimated useful life of the related property or on a unit-of-production basis over proven and probable reserves. Pre-production credits, including the value of marketable metals extracted during mine development, are credited against costs incurred.

For the period ended 31 December 2002, an adjustment of $8,532,000 was made on the statement of financial performance as a result of this change in accounting policy: $2000

Cumulative effect of write off of exploration expenditure incurred prior to 1 July 2002	4.422
Exploration expenditure written off in six months prior to 31 December 2002
- Exploration drilling and assay expenditure	1,692
- Exploration consultant expenditure	963
- Other exploration expenditure items	1,455
	8.532

The previous accounting policy was to carry forward exploration and evaluation expenditure to the extent that such activities in the area of interest had not yet reached a stage which permitted a reasonable assessment of the existence or otherwise of recoverable mineral resources.

Note 2 - Segment Information

The consolidated entity operates predominantly in the gold mining industry in Australia.

The consolidate entity's head office is in Australia.

Note 3 - Other revenue	Consolidated31 December2003$'000	Consolidated31 December2002$'000
Operating profit before income tax has been determined aftercrediting as other revenues from outside operating activities:
- proceeds on sale of investment in listed securities	4,984
- proceeds on sale of property plant $&$ equipment	1,043	391
- interest revenue	206	202
- other revenue	124	167
	6,357	760

Note 4 - Income Tax

The Economic Entity adopts the liability method of tax-effect accounting.

Tax expense

The amount of income tax attributable to the financial year differs from the amount prima facie payable on the operating profit (loss). The differences are reconciled as follows:

Operating (loss)	(6, 810)	(19, 328)
Prima facie income tax expense (benefit) on theoperating profit at $30%$ (2003: 30%)	(2,043)	(5,798)
Tax effect of permanent differences:
Legal and other capital expenditure	54	64
Sundry items		9
	55	73
Income tax (benefit) adjusted for permanent differences	(1,988)	(5, 725)
Future income tax benefit not brought to account	1,988	5,725
Future income tax benefits previously recognised, now
written off		2,965
Benefit of tax losses of prior year not previously
recognised
Income tax expense/(benefit)		2,965

	Consolidated31 December2003$'000	Consolidated30 June2003$'000
Note 5 - Contributed Equity
Ordinary Share CapitalIssued and paid up	139.444	127,534

These shares have no par value and are fully paid ordinary shares. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Movements in Ordinary Share Capital:

$'000
127,534
595
960
(100)
7.655
2,800
139.444

Share issue to RCF for Facility interest and fees. $\mathbf{i}$ .

ii. Placement to raise working capital.

iii. Share issue to RCF for Facility interest and fees and debt for equity swap. Transaction approved by shareholders at Annual General Meeting held on 25 November 2003

Share issue to Ocean Resources Capital Holdings Limited pursuant to part conversion of the iv. convertible $\text{loan} - \text{see Note } 10(c)$ .

Note 6 - Option Reserve	Consolidated31 December2003$'000	Consolidated30 June2003$'000
Option Reserve
Balance	2.448	1,959
	The option reserve increased during the half year to 31 December 2003 due to the issue of44.159.394 unlisted options to RCF in lieu of debt facility fees and interest. The value ascribed to

these issues is $489,353. The fair value of each option issued has been valued using the Black-Scholes option pricing model after considering factors such as the term of the option, the risk free interest rate and the volatility of the share price.

Note 7 - Accumulated Losses
Accumulated (losses) at 30 June 2003	(91, 520)
Net (loss) attributable to members of St Barbara Mines Limited	(6, 810)
Accumulated (losses) at 31 December 2003	(98, 330)
Note 8 – Outside Equity Interests in Controlled Entities
Opening balance at 30 June 2003
Contribution to share capital	20,467
Consolidated entity loss on dilution of interest	33
Closing balance at 31 December 2003	20,500

$\sim$ $\sim$ $\sim$ $\sim$

During the period NuStar Mining Corporation Limited ("NuStar") a subsidiary of St Barbara Mines Limited, raised $20.4 million by the issue of 420 million shares to outside investors to fund the Paulsens project. Simultaneously, St Barbara Mines Limited converted its loan of $17.6 million to NuStar to equity through the receipt of 352 million shares. As a result of this transaction, St Barbara diluted its interest in NuStar from 88% to 54%. Upon dilution there has been a net transfer of value of $33,000 from the consolidated entity to the minority interest

Note 9 - Notes to Statement of Cash Flows - Non Cash Financing and Investing Activities

During the half year the following transactions occurred which affected assets and liabilities and did not result in cash flows:

• The issue of 111,595,854 fully paid ordinary shares to RCF in satisfaction of the RCF interest and facility fees and the debt for equity swap approved by shareholders at the Annual General Meeting on 25 November 2003. The value ascribed to this issue is $8,249,863.
• Pursuant to a resolution by shareholders at the NuStar Mining Corporation Limited ("NuStar") Annual General Meeting held on 12 December 2003, the Company converted $17.6 million owing by NuStar to the Company into 352,000,000 fully paid ordinary shares in NuStar.
• Pursuant to a resolution by shareholders at the NuStar Annual General Meeting held on 12 December 2003, Claymore Capital converted $0.1 million owing by NuStar to Claymore Capital by way of a convertible note into 2,000,000 fully paid ordinary shares in NuStar.

Note 10 - Interest bearing liabilities	Consolidated31 December2003$'000	Consolidated30 June2003$'000
Current:
- Lease liability - secured (a)	1,441	2,018
- Hire purchase liability - secured	1,009	1,133
- Other Ioans (b)		12,000
- Convertible Ioan - unsecured (c)	933
	3,384	15,151
Non-Current:
- Hire purchase liability - secured	1,094	1,528
- Convertible Ioan - unsecured (d)	4,938	7,305
	6,032	8,833

(a) Secured by a fixed charge over the item of plant and equipment purchased by the funds advanced. The lease liability is payable monthly with the last payment due in November 2004. However, refer note 13, where reference is made to a post balance date sale of the equipment subject to this finance arrangement.

(b) On 8 January 2002, Resource Capital Fund II L.P. ("RCF") and the Company, Silkwest Holdings Pty Ltd and St Barbara Pastoral Co. Pty Ltd entered into a financing facility of $20 million ("RCF Facility"). Each of these companies entered into deeds of fixed and floating charges with RCF to secure their obligations under the RCF Facility. In addition, the Company granted RCF a share mortgage. Silkwest Holdings Pty Ltd and St Barbara Pastoral Co. Pty Ltd entered into deeds of guarantee and indemnity with RCF.

The security provided to RCF constituted first ranking security to RCF over any assets of the consolidated entity acquired by utilising funds drawn down under the RCF Facility and a second ranking charge over the consolidated entity assets generally. This second ranking security was subordinated to the existing Macquarie Bank Limited security under a deed of priority.

The RCF Facility was modified and extended on 10 September 2002 such that the facility of $20 million was reduced to $12 million on 1 January 2003, $5 million was repaid to RCF in early July 2003.

On 22 September 2003, the Company announced that RCF had agreed to convert its remaining debt ($7.0 million) into equity at $0.08 per share, thereby extinguishing all secured debt from the Company's balance sheet. The debt to equity swap by RCF, including a modification fee of 4.5 million shares and shares in lieu of interest for the period, resulted in the issue to RCF of 95,684,932 shares, taking its shareholding from 7.9% to approximately 22.6%. The transaction was approved by shareholders at the Annual General Meeting held on 25 November 2003. All security provided under the RCF Facility was removed as part of the debt for equity swap approved by shareholders.

Note 10 - Interest bearing liabilities (cont.)

• (c) On 30 September 2003, NuStar Mining Corporation entered into an unsecured convertible note with Claymore Capital Pty Ltd ("Claymore") for up to $1.5 million. As at the end of the half year, only $1.0 million had been drawn down. The convertible note is repayable on or before 30 September 2004 and bears interest at 13.5%. The convertible note is convertible at the option of Claymore into either:
  • I. fully paid ordinary shares of NuStar using the following formula:
    • i. up to 30 June 2004 at $0.05 per NuStar Share; and
    • ii, after 30 June 2004 but before 30 September 2004, the lower of:
      • 1. $0.065 per NuStar share; and

2.85% of the volume weighted average price of the NuStar shares on ASX during the 30 day period prior to the Conversion Date provided that the minimum strike price calculable under this clause $(a)(ii)$ is $0.05; or

II. fully paid ordinary shares of St Barbara at $0.08 per share.

At the Annual General Meeting of NuStar Mining Corporation held on 12 December 2003, shareholders approved the issue of shares to Claymore should Claymore elect to convert the convertible note into fully paid shares in NuStar. Following this, Claymore converted $100,000 of the convertible note into 2.000.000 shares in NuStar which were issued on December 23, 2003.

(d) On 10 July 2003, the Company announced that the existing convertible note and convertible loan dated 27 February 2003 had been cancelled and a new convertible loan had been entered into with Ocean Resources Capital Holdings Limited ("Ocean") effective 19 June 2003. The face value of the new unsecured convertible loan from Ocean was $7,200,000, the repayment date is 19 December 2005 and carries interest at 12%. The convertible loan is convertible, at the option of Ocean, into 90,000,000 fully paid ordinary shares in the Company at $0.08 per share. Any shares to be issued pursuant to this convertible loan were approved by shareholders at the Annual General Meeting held on 25 November 2003. On seven business days after shareholder approval at the Annual General Meeting, $2,800,000 of the total face value was automatically converted into 35,000,000 fully paid ordinary shares in the Company at $0.08 per share. Accordingly, the remaining face value owing has now reduced to $4,400,000.

Note 11 - Contingent Liabilities

There have been no changes to Contingent Liabilities disclosed since the Annual Report for the year ended 30 June 2003.

Note 12 - Earnings Per Share

	Consolidated31 December2003$'000	Consolidated31 December2002S'000
Basic and diluted earnings/(loss) per share - cents per share	(1.478)	(6.332)
Weighted average number of ordinary shares outstanding duringthe 6 months used in calculation of basic and diluted EPS	460.773.007	348,075,834

Note 13 - Events Subsequent to Balance Date

• On 9 February 2004, the Company entered into a bridging finance facility with Claymore Capital for $\bullet$ working capital up to $3,500,000.
• On 23 February 2004, the Company entered into an agreement for the sale of its DeMag 455 for a price of $3.6 million. The equipment is currently in a finance lease arrangement with Komatsu Corporate Finance

The financial effect of the above transactions have not been brought to account at 31 December 2003.

Other than the matters discussed above, there has not arisen in the interval between the end of the half year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity, in future financial periods.

ST BARBARA MINES LIMITED AND ITS CONTROLLED ENTITIES Half-year financial statements for the 6 months ended 31 December 2003

DIRECTORS' DECLARATION

The directors declare that the financial statements and notes set out on pages 4 to 14:

• comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory $(a)$ professional reporting requirements, and
• $(b)$ give a true and fair view of the consolidated entity's financial position as at 31 December 2003 and of its performance, as represented by the results of its operations and its cash flows, for the half year ended on that date.

In the directors' opinion:

• the financial statements and notes are in accordance with the Corporations Act 2001; and $(a)$
• $(b)$ there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

STEPHEN W. MILLER EXECUTIVE CHAIRMAN

Dated at Perth this 27th day of February 2004

PRICEWATERHOUSE COPERS

Independent review report to the members of St Barbara Mines Limited

PricewaterhouseCooners ABN 52 780 433 757

OVI 250 St Georges Terrace PERTH WA 6000 GPO Box D198 PERTH WA 6840 DX 77 Perth Anstralia www.pwc.com/au Telephone +61 8 9238 3000 Facsimile +61 8 9238 3999

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of St Barbara Mines Limited:

• does not give a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of the St Barbara Mines Limited Group (defined below) as at 31 December 2003 and of its performance for the half-year ended on that date, and
• is not presented in accordance with the Corporations Act 2001, Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.

This statement must be read in conjunction with the rest of our review report.

Inherent uncertainty regarding continuation as a going concern

Without qualification to the statement made above, attention is drawn to the following matter. As a result of matters described in note 1, there is significant uncertainty whether St Barbara Mines Limited will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for the St Barbara Mines Limited Group (the consolidated entity), for the half-year ended 31 December 2003. The consolidated entity comprises both St Barbara Mines Limited (the company) and the entities it controlled during that half-year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

C:\Documents and Settings\pkershaw\Local Settings\Temporary Internet Files\OLK2\St Barbara Half year 2004.doc

Review approach

We conducted an independent review in order for the company to lodge the financial report with the Australian Securities and Investments Commission. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements.

We performed procedures in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report does not present fairly, in accordance with the Corporations Act 2001, Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the consolidated entity's financial position, and its performance as represented by the results of its operations and cash flows.

We formed our statement on the basis of the review procedures performed, which included:

• inquiries of company personnel/the responsible entity's personnel, and
• analytical procedures applied to financial data.

When this review report is included in a document containing information in addition to the financial report, our procedures include reading the other information to determine whether it contains any material inconsistencies with the financial report.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit, and accordingly, we do not express an audit opinion.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

Our review did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

PricevorberhouseCoopers

PricewaterhouseCoopers

Savid J. Look

David J Smith Partner

Perth 27 February 2004