ST BARBARA LIMITED — Interim / Quarterly Report 2005

Jul 18, 2005

The Company has re-emerged as a gold producer with gold sales of 83,646ozs at a cash cost of \$341/oz for the quarter.

Summary of Key Points

Gold Operations

• Significant improvement in performance due to higher grades, reduced unit costs and improved mining productivity.
• Safety at work is fundamental to the Company's success, Southern Cross operations completed 370 days without a lost time injury at the end of the quarter while Carosue Dam operations achieved 276 days without a lost time injury.

Gold Exploration

• Significant drilling results were achieved at Meekatharra at Paddys Flat and Reedys with the best results of 85m $@3.5g/t$ from a depth of 192m and 44m @ 3.4g/t from 187m respectively.
• Drilling is also underway at Yilgarn Star, Gwalia Deeps, Tarmoola and Marvel Loch to delineate reserves.
• Exploration expenditure was \$2.4M for the quarter.

Mineral Resources

The mineral resources of the Company now total 139Mt $@ 2.1g/t$ for 9.3Mozs as at 30 June 2005, and include the mineral resources acquired through the purchase of the Gwalia Ltd (Administrators Sons of Appointed) Gold Division ("SGWGD"). Refer Table 2.

Nickel Sulphide Exploration

Nickel sulphide targets at Sullivans, 4kms north of Tarmoola have been identified with drilling and ground EM to be conducted during the September 2005 quarter.

Corporate

• Cash at bank at 30 June 2005 totalled \$28M, of which \$12M was cash backing of Company performance bonds.
• The Company's investments, including its holding of 6.4% in NuStar Mining Corporation Limited ("NuStar") and 5.5% in Sedimentary Holdings Limited ("Sedimentary") had a market value of \$6.9M as at 30th June.
• Sale of surplus assets has commenced with contracts to the value of \$2.3M completed.
• An industry experienced Manager Environment & Rehabilitation is being appointed to coordinate the Company's rehabilitation, and bond environmental reduction activities.

Forecasts

• Gold production is forecast at 49,000ozs at a cash cost of \$400/oz for the September 2005 quarter.
• Gold production beyond November 2005 is currently being assessed.
• Exploration expenditure of \$4.1M is forecast for the September 2005 quarter.

Managing Director & CEO 19 July 2005

G:\Corporate\Financial Rpts\Quarterly\2005\June.doc

Operations

Operations Performance

Gold sales for the June 2005 quarter totalled 83,646ozs at a cash cost of \$341/oz compared to the forecast of 82,000ozs at \$415/oz for the quarter.

The improved performance of the operations was due to higher grades than forecast, reduced costs due to implementation of cost reduction measures and improved mining productivity at both Marvel Loch and Safari Bore.

Safety

The Company maintained its emphasis on safety at the operations and completed the first quarter injury free. At the end of the quarter Southern Cross operations had completed 370 days and Carosue Dam operations 276 days without a lost time injury.

The rolling 12 month Lost Time Injury Frequency Rate for the two operations is 0.7 (2003/4 WA Gold Industry 4.3). The quarter saw a total of 5 medically treated injuries at the sites resulting in a Medical Treatment Injury Frequency Rate for the quarter of 20. There were no disabling injuries in the quarter and the operations achieved a 12 month rolling Disabling Injury Frequency Rate of 3.5 (2003/4 WA Gold Industry 12.1).

Southern Cross

Gold production at Southern Cross was derived from the open pit and underground at Marvel Loch and Golden Pig. Production from the Golden Pig mine ceased during the quarter, as scheduled.

In the Marvel Loch Open Pit a change to the mine plan has resulted in a higher grade tonnage being extracted and completion of mining is likely during the September 2005 quarter.

Two stoping areas were mined in the Marvel Loch underground mine, Sherwood and Undaunted at the northern end. Sherwood has performed ahead of forecast. Undaunted production is on target with reference to tonnes and grade.

A third production stope at New Lode was drilled during the quarter and will be in full production during the September 2005 quarter. Further drilling during the quarter has already extended the mineralisation and it is anticipated that additional drilling planned for the September 2005 quarter will result in a further increase in reserves.

Forecast gold production for the September 2005 quarter from Southern Cross is 47,000oz at \$392/oz.

Carosue Dam

Mining and processing operations were completed at Carosue Dam during the quarter on schedule.

The mining operation achieved better than expected productivities and costs.

Gold production from Carosue Dam for the September 2005 quarter will comprise 2,000oz of clean-up gold.

		Southern	Carosue
		Cross	Dam
Open Pit	ŧ	287.356	256,848
Grade	g/t	2.25	3.84
Underground	t	116,944
Grade	g/t	7.02
Stockpiles Processed	ł.	259,065	56,750
Grade	g/t	1.32	0.77
Ore Milled	ŧ	663,365	313,598
Grade	g/t	2.94	3.28
Recovery	$\eta_{\alpha}$	92	96
Gold Shipped	02S	53,719	29,528
Cash Cost	5/02	336	349

In addition to gold shipped from operations of 83,247ozs, 399ozs was generated from other site clean-ups.

Care and maintenance is being continued at Meekatharra, as well as at Gwalia and Tarmoola. Leonora and Carosue Dam, South Laverton,

Gold Exploration

Meekatharra

• Significant drilling results were reported from Mudlode and Rand prospects. 85m @ 3.5g/t and 58m @ 4.1g/t were reported from Mudlode, in a carbonate-quartz-pyrite altered ultramafic. Best results from Rand include 44m @ 3.4g/t and 27.2m @ 3.6g/t, hosted in a biotite-quartz-pyrite altered zone below the North Rand pit. Details of these holes and others are in Table 1.
• Mudlode is a new position, outside of current resources, east of and adjacent to the Vivians-Consols porphyry. Mudlode mineralisation has been intersected over a 400m strike and remains open to both north and south. Follow-up drilling will occur.
• Drilling at Rand during the quarter has identified gold mineralisation, plunging southwards, below the North Rand pit. Further drilling, resource modelling and mining studies are underway to evaluate the possibility of a pit cutback.

Gwalia and Tarmoola

• Infill drilling has commenced at Gwalia Deeps to establish indicated resources utilising existing deep holes drilled in 2000/02 as platforms to drill daughter holes of 300-400m each. DrillCorp (contractors for the 2000/02 campaign) has been engaged for this work, with one UDR1500 rig on double shift. A second rig is expected to commence during August.
• Drilling has also commenced at Tarmoola, testing the gold in granite mineralisation at the ROM pad and West Saddle targets on the western margin of the open pit to a depth of 200m.

Southern Cross

A deep diamond drilling program at Yilgarn Star with a current resource of 780,000t @ $6.9g/t$ is in progress, targeting the northplunging mineralisation between 350m and 900m from surface. An intersection of 3m @ 9.9g/t was achieved in YSD1056, the first result from this campaign.

• Underground drilling at Marvel Loch of $\blacksquare$ Undaunted, Sherwood, New and the Exhibition Lode is underway, aiming to convert indicated and inferred resources of 917,000t at 8.2g/t for 242,000ozs into reserves.
• A dedicated, focussed gold targeting study has commenced, initially at Southern Cross to produce new exploration targets, and effectiveness of assess the previous exploration.

Nickel Sulphide Exploration

$\blacksquare$ High priority nickel targets within the acquired SGWGD ground are being assessed, with surface EM survey and RC drilling commencing on Leonora targets during July. Research into previous exploration has indicated the presence of significant nickel and copper anomalism in an ultramafic unit at Sullivans 35kms north of Leonora. Very little drill testing of the prospective ultramafic footwall contact, which extends for some 8km on Company owned tenements, has previously occurred.

Mineral Resources

• The mineral resources of the Company now total 139Mt @ 2.1g/t for 9.3Mozs as at 30 June 2005 and include the mineral resources acquired through the SGWGD purchase.
• $\blacksquare$ Resource modelling and upgrade at Meekatharra on Rand, Emu, Jack Ryan and Vivians-Consols by Cube Consulting is in progress. This work will incorporate all drilling results received to date and will report the resources in line with the JORC-compliant Company's reporting standards.

Table 1

Significant Drillhole Intersections

					Total	Mineralized Intercept
Hole No.	North	East	Dip	Azimuth	Depth	From	Tо	Length	Gold
	MANAMANA MANAMANA MANAMAN			Alban a shekara ta 1989 na shekara ta 1989 na shekara ta 1989 na shekara ta 1989 na shekara ta 1981 na shekara		11 millimining	$_{\rm int}$	nı	$g/\text{m}$
PADDYS FLAT - Mudlode
VIRCD033	2702	1313	61	270	450.8	192	282	85	3.5
VIRC029	2700	1315	60	270	340	201	259	58	4.1
VIRC040	2760	1315	60	270	322	238	276	38	2.3
VIRCD020	2740	1315	60	270	429.6	221	262	41	2.1
VIRC035	2780	1350	60	270	350	292	312	20	2.9
VIRC039	2740	1220	60	270	316	224	225	1	54.0
VIRC042	2820	1325	60	270	350	267	276	9	2.7
VIRCD023	3200	1590	60	270	510.6	358	364	6	3.8
VIRC040	2760	1315	60	270	322	210	215	5	4.5
VIRC041	2780	1260	60	270	250	156	180	24	0.9
VIRCD030	3000	1460	55	270	471.7	294	296	$\bar{2}$	8.8
VIRCD027	2960	1440	60	270	513.7	282	294	12	$1.2\,$
PADDYS FLAT - Vivians-Consols Porphyry
VIRCD024a VIRCD030	2996 3000	1448 1460	52 55	270	450.5 471.7	414.5 442	415.5	1	22.4 $10.1$
				270			444	2
REEDYS - Rand
RDRC016	11600	10147	55	270	280	187	231	$44\,$	3.4
RDRCD013	11560	10170	60	270	328.3	267,4	310	42.6	2.5
RDRCD020	11500	10182	60	270	363.7	275.33	302.5	27.2	3.6
					including	283	297.5	14.5	5.7
RDRC016	11600	10147	55	270	280	222	228	6	13.5
RDRC027	11140	10129	60	270	270	197	213	16	3.6
					including	202	212	$10\,$	5.1
RDRC028	11600	10147	45	270	202	170	183	13	4.0
RDRC019	11640	10145	$48\,$	270	249	161	185	24	2.0
RDRCD004	11200	10270	60	270	462.1	448.5	455	6.5	5.2
RDRC025	11000	10140	60	270	322	243	252	9	3.7
RDRC030	11550	10159	50	270	230	174	210	36	0.9
RDRCD007	11900	10210	60	270	456.6	416	425.4	9.4	3.1
RDRCD015	11520	10225	55	270	366.7	344	350	6	4.5
SOUTHERN CROSS - Yilgam Star
YSD1056	5529	11149	65	090	469	404	407	3	9.9

Corporate

The Company continues to hold a 5.5% interest in Sedimentary and a 6.4% interest in NuStar.

Financing for the replacement of SGWGD performance bond guarantees amounting to \$30M was finalised during the quarter and comprised:

• operations' generated cash of A\$9M; and
• offshore bank letter of credit of A\$21M.

Total cash backing for the Company's performance bonds, including the Meekatharra tenements, amounts to \$12M.

The Department of Industry and Resources has granted a 12 month moratorium for the lodging of securities for \$5.7M in proposed bond increases relating to the acquired SGWGD tenements.

Total funds drawn down on the Resource Capital Funds III LP facility remained unchanged at \$7M.

The transition of the SGWGD acquisition was completed smoothly during the quarter, including:

• signing on of key management and operations staff;
• renewing insurance cover for 2006 at a lower aggregate cost than for 2005; and
• establishing IT and communications platforms across all operations.

An industry experienced Manager - Environment & Rehabilitation is being appointed to strengthen the implementation of a range of rehabilitation programs planned to reduce current cash backed performance bonds.

Two experienced managers have been dedicated to negotiating the sale of surplus property, plant and equipment from the SGWGD acquisition. To date sales of surplus assets to the value of \$2.3M have been achieved. Further sales are anticipated.

There were no new securities issued during the quarter and 2,370,516 unlisted options expired.

Financials

The Consolidated Statement of Cash Flows reflects a full quarter's contribution from the recently acquired SGWGD operations.

The closing combined cash position and cash backing for performance bonds increased to \$28.0M at 30 June 2005 from \$9.5M at 31 March 2005. This increase is primarily attributable to strong Net Operating Cash Flows for the quarter of \$17.9M.

The closing cash position of \$16.2M at 30 June, excluding cash backing of bonds, compares with \$2.2M as at 31 March 2005.

Other details are as follows:

• For the June quarter, gold sales of 83,646 ounces were sold at spot, at a weighted average price of A\$557.13 per ounce. The Company's gold production remains unhedged.
• Corporate Project and Acquisition Costs of \$742k for the quarter related to the SGWGD acquisition, and included stamp duty costs.
• Proceeds from the Sale of Equity Investments includes \$957k from the sale of 19.1M NuStar shares at 5 cents each pursuant to an option with Claymore Capital agreement and nominees. The option agreement expired in May 2005.

Table 2

Mineral Resource Statement at 30 June 2005

REGION		MEASURED			INDICATED		INFERRED		TOTAL
	ktannes	Au g/t	Koz	k l'onnes	Augh	Koz	к Голиев	Au g/t	k.sz	klonnes	Au g/l	Koz
Leonora
Gwalia							7,200	7.4	1,720	7,200	7.4	1,720
Tarmoola	10,000	1.5	460	10,300	1.2	400	35,600	1.2	1.370	55,900	1.2	2,230
Other	990	1.0	30	6,370	1.6	330	6,800	2.1	460	14,160	1.8	820
	10,990	1.4	490	16,670	1.4	730	49.600	2.2	3.550	77,260	1.9	4,770
Southern Cross
Marvel Loch	60	4.0	8	3,000	3.9	370	1,100	6.7	230	4,160	4.6	608
Yilgarn Star				390	6.6	80	1,050	3.2	110	1.440	4.1	190
Other				6,200	2.7	550	4,800	2.9	450	11,000	2.8	1,000
	60	4.0	8.	9,590	3.2	1,000	6,950	3.5	790	16,600	3.4	1,798
Meekatharra (100% SBM)
Paddys Flat				16,500	1.7	910	9,300	1.4	420	25,800	1.6	1,330
Reedys	840	2.7	70	800	5.5	140	310	5.0	50	1.950	4.2	260
Other				150	3.1	15				150	3.1	15
	840	2.7	70	17,450	1.9	1,065	9,610	1.5	470	27,900	1.8	1,605
South Laverton				5.900	2.3	400	3,500	2.6	300	9.500	2.5	700
Meekatharra (JV)
Annean IV (SBM seducing to 30%).				4.800	1.5	230	1,550	2.2	110	6.350	1.7	340
Polelle JV (\$8M mducing to 35%)							1,120	1.6	60	1,120	1.6	60
				4,800	1.5	230	2,670	2.0	170	7,470	1.7	400
TOTAL ALL AREAS	11,890	1.5.	568	54,410	2.0	3,425	72,330	2.3	5,280	138,730	21	9,273

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 Peter Thompson, General Manager Exploration and Ms Jane Bateman, Manager Resources, full time employees of St Barbara and both Competent Persons as defined by the Code. It is included in this report with the written consent of Mr Peter Thompson and Ms Jane Bateman.

In accordance with ASIC Class Order 98/100 dated 10 July 1998 amounts in this report have been rounded off to the nearest thousand, unless otherwise stated.

Directors and Executive Management
S∫C Wise………………………………………………………………………………………………
E Eshuys
R Knight Non-Executive Director
H G Tuten Non-Executive Director
M K WheatleyNon-Executive Director
R J Kennedy Company Secretary
Registered Office
Level 2. 16 Ord Street
West Perth WA 6005
Telephone: +61 8 9476 5555
Facsimile: +61 8 9476 5500
Email:

Issued Capital

As at the date of this report, the issued capital is 566,533,352 shares.

As at the date of this report, there are 92,338,091 unlisted options exercisable at various prices between 4.7e and 35e up to 23 December 2011.

Largest Shareholder

Resource Capital Fund II LP ................ 31.4%

Stock Exchange Listings

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

Dollar values in this report are Australian Dollars unless otherwise stated

Shareholder Enquiries

Matters related to shares held, change of
address and tax file numbers should be
directed to:
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Telephone:
Facsimile:
or for UK residents:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 7NH, England
Telephone: +44 870 703 6088
Facsimile: +44.870 703 6142

Appendix 5B

Mining exploration entity quarterly report

Name of entity

ST BARBARA MINES LIMITED

ABN

36 009 165 066

Quarter ended ("current quarter")

30 JUNE 2005

Year to date

Consolidated statement of cash flows

	Cash flows related to operating activities	Current quarter	$(12 \text{ months})$
		\$A'000	\$A'000
$\mathbf{L}$	Receipts from debtors
	(a) gold sales	44,508	44,508
	(b) Other	642	1,550
1.2	Payments for:
	(a) exploration and evaluation	(2, 437)	(5,502)
	(b) development		(3,905)
	(c) production	(22, 763)	(22, 763)
	(d) care $\&$ maintenance	(870)	(2,000)
	(e) administration and corporate payments	(970)	(6,235)
	(f) projects $\&$ acquisition costs	(742)	(2,646)
1,3	Dividends received
1.4	Interest and other items of a similar nature
	received	161	478
1,5	Interest and other costs of finance paid	(148)	(585)
1,6	Income taxes paid
1.7	Other (payments of 30 June 2004 creditors)		(3,649)
	Net Operating Cash Flows	17,381	(749)
	Cash flows related to investing activities
1.8
	Payment for purchases of:	188
	(a) prospects (refund in quarter)		(2,182)
	(b) equity investments	(265)	(481)
1.9	(c) other fixed assets Proceeds from sale of:	(37)	(199)
			62
	(a) prospects	978
	(b) equity investments	186	9,746 5,092
1,10	(c) other fixed assets Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows	1,050	12,038

		Current quarter \$A'000	Year to date $(12$ months) \$A'000
1.13	operating and investing cash flows Total (brought forward)	18,431	11,289
	Cash flows related to financing activities
1,14 1,15 1.16	Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from convertible borrowings		2,905 8,382
1.17 1.18	Repayment of borrowings Dividends paid		(3,500)
1.19	Addition to cash backed bonds	(4, 440)	(10, 430)
	Net financing cash flows	(4, 440)	(2, 643)
	Net increase (decrease) in cash held	13,991	8,646
1,20 1.21	Cash at beginning Deconsolidation adjustment	2,211	12,849 (5,293)
1.22	Cash at end of quarter	16,202	16,202
1.23 1,24	Cash backing bonds at beginning Increase/(decrease) in cash backing bonds	7,361 4,440	3,108 8,693
1.25 1.26	Cash backing bonds at end of quarter Cash at end of quarter including cash backed bonds	11,801 28,003	11,801 28,003

Payments are shown net of GST.

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	122
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 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

None.

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

None.

$3.1$

$3.2$

Financing facilities available

Loan facilities

Add notes as necessary for an understanding of the position.

Amount available \$A'000	Amount used \$A'000

Estimated cash outflows for next quarter

Credit standby arrangements

	-	\$A'000
4.1	Exploration and evaluation	4.084
4.2	Development	$\overline{\phantom{0}}$
	Total	4,084

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter \$A'000	Previous quarter \$A'000
5.1	Cash on hand and at bank	1,454	853
5.2	Deposits at call	14.748	1,358
		16,202	2,211
5.3	Bank overdraft
5.4	Other (a) Cash security for bonds (b) Restricted cash held in escrow	11,801	2,830 4.500
	Total: cash at end of quarter (item 1.22)	28,003	9.541

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	M20/303 M20/306 M20/308 M20/215	Tenement Surrendered Reedys Reedys Reedys Reedys	100% 100% 100% 100%
6.2	Interests in mining tenements acquired or increased	P 20 /1863	Tenement Granted Reedys	٠	100%

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

		Total number	Number quoted	Issue price per security (see note $3)$ ) (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference i securities (description)
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3	+ Ordinary securities	566,533,352	566,533,352	Fully paid	Fully paid
7.4 7.5	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs + Convertible debt securities	Nil
7.6	(description) Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil
7.7	Options (description and conversion factor)	Employee and unlisted options 92,338,091	All options are unlisted	Exercise price Between 4.7¢ and $35¢$	Expiry date Between 13/08/05 and 23/12/11
7.8	Issued during quarter	Nil
7.9	Exercised during quarter	Nil
7.10	Expired during quarter	2,370,516	None	Various	Various
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

Compliance statement

• $\mathbf{I}$ 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 $4$ ).
• $\mathfrak{D}$ This statement does give a true and fair view of the matters disclosed.

Ross Kennedy,

Date: 19 July 2005

Sign here: Print name:

Notes

$\mathbf{I}$ 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.

. . . . . . . . . . . . . . . . . . . .

Chief Financial Officer and Company Secretary

• $\overline{2}$ 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.
• $\mathfrak{Z}$ 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.
• $\overline{4}$ The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• $\tilde{S}$ 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.

$\frac{1}{2}$