ST BARBARA LIMITED — Interim / Quarterly Report 2013

Feb 20, 2013

St Barbara Limited ACN 009 165 066 Level 10, 432 St Kilda Road, Melbourne VIC 3004 Locked Bag 9, Collins Street East, Melbourne VIC 8003 Tel +61 3 8660 1900 Fax +61 3 8660 1999 www.stbarbara.com.au

Half Year Financial Report 31 December 2012

Highlights

In the six month period to 31 December 2012, which covered the acquisition and investment in the Pacific Operations, net profit after tax was $2.5 million, compared to $46.5 million for the previous corresponding period.

Underlying NPAT[1] was $17.2 million (2011: $49.4 million), including $29.4 million for the Australian Operations. Underlying NPAT excludes the change to account for Southern Cross as a discontinued operation (loss $4.5 million) and the once-off charge of $16.4 million (pre-tax) for acquisition transaction and integration costs. The acquisition of the Pacific Operations and the winding down of the Southern Cross Operations resulted in significant changes and adjustments to the statutory and underlying profits and balance sheet as detailed in the attached Financial Report.

Key impacts from the operational performance at the EBIT[1] level were:

• Profit at Gwalia (down $9 million to $44 million);
• Loss at Gold Ridge ($11 million);
• Winding down at Southern Cross ($10 million lower).

Key figures:

• Consolidated gold production increased 11% to 170,421 ounces;
• Cash flows from operating activities were $21 million;
• Cash on hand at 31 December was $66 million, with total debt of $217 million;
• Gearing was 21%.

Details are set out in the attached Appendix 4D and Financial Report.

Tim Lehany Managing Director and CEO 21 February 2013

About St Barbara Limited

St Barbara was established in 1969, and is one of Australia's larger and more profitable ASX listed gold producers, developers and explorers.

St Barbara has three operations, one in Australia and two in the South-West Pacific. St Barbara has an extensive, prospective exploration portfolio including significant potential to extend resources in and around existing mines.

At 30 June 2012, each of the Gwalia, Simberi and Gold Ridge mines had an expected mine life of at least 9 years.

At 30 June 2012, Mineral Resources contained 16.6 million ounces of gold including Ore Reserves containing 5.7 million ounces of gold*.

* For full details refer to the Ore Reserves and Mineral Resources Statements contained in the 2012 St Barbara Ltd Annual Report, and Allied Gold Mining plc Scheme Document dated 18 July 2012, both available at www.stbarbara.com.au.

Appendix 4D

Half Year Report

ST BARBARA LIMITED
Half yearlyABN or equivalent companyPreliminaryreference(tick)final (tick)				Half year/financial year ended ('current period')
36 009 165 066		31 December 2012
Results for announcement to the market		%		A$'000
Revenues and other income	increase	29%	to	232,199
Profit from ordinary activities after tax fromcontinuing operations attributable to membersPrior period profit: $42,603,000	down	84%	to	6,942
Loss from ordinary activities after tax fromdiscontinued operations attributable to membersPrior period profit: $3,915,000	increasein loss	n/m	to	(4,481)
Profit attributable to membersPrior period profit: $46,518,000	down	95%	to	2,461
DividendsNo dividend has been declared
n/m = not meaningful		31 Dec 12$		30 Jun 12$
Net Tangible Assets per security		1.72		1.74
Details of dividend distribution		N/A		N/A
Details of reinvestment plans		N/A		N/A
Details of joint venture entities and associates		N/A		N/A
Foreign entity accounting standards		N/A		N/A
Audit dispute or qualification		N/A		N/A

On 7 September 2012 St Barbara Limited gained control over Allied Gold Mining Plc. Additional Appendix 4D disclosure requirements can be found in the Director's Report and the 31 December 2012 half-year financial statements. This report is based on the consolidated 2012 half-year financial statements which have been reviewed by KPMG with the independent Auditor's Report included in the 31 December 2012 half-year financial statements.

Dated: 21 February 2013

Timothy J Lehany Managing Director and Chief Executive Officer

ST BARBARA LIMITED

ABN 36 009 165 066

INTERIM FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS' REPORT 3
AUDITOR'S INDEPENDENCE DECLARATION11
CONSOLIDATED INCOME STATEMENT12
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME13
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY14
CONSOLIDATED BALANCE SHEET 15
CONSOLIDATED STATEMENT OF CASH FLOWS16
Note 1 – Basis of preparation17
Note 2 – Significant accounting policies17
Note 3 – Critical accounting estimates and judgements18
Note 4 – Segment information18
Note 5 – Events subsequent to balance date 21
Note 6 – Contingent liabilities21
Note 7 – Dividends21
Note 8 – Revenue 22
Note 9 – Finance costs22
Note 10 – Significant Items23
Note 11 – Income Tax Expense24
Note 12 – Cash and cash equivalents24
Note 13 – Interest bearing liabilities25
Note 14 – Derivative financial assets and liabilities25
Note 15 – Contributed equity 26
Note 16 – Accumulated losses26
Note 17 – Borrowings26
Note 18 – Acquisition of subsidiary27
Note 19 – Discontinued operations28
Note 20 – Assets classified as held for sale 29
Note 21 – Profit for the year from continuing operations30
Note 22 – Property plant and equipment 30
Note 23 – Mine Properties Development30
DIRECTORS' DECLARATION31
INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF ST BARBARA LTD32

The Directors present their report on the Group, consisting of St Barbara Limited ("St Barbara") and the entities it controlled at the end of, or during, the half year ended 31 December 2012.

Directors

The following persons were Directors of St Barbara Limited at any time during the period and up to the date of this report:

• S J C Wise Chairman
• T J Lehany Managing Director & CEO
• D W Bailey Non-executive director
• E A Donaghey Non-executive director
• P C Lockyer Non-executive director
• R K Rae Non-executive director

Principal activities

During the period the principal activities of the Group were mining and the sale of gold, mineral exploration and mine development. There were no significant changes in the nature of the activities of the Group during the period.

Consolidated results

The Group reported a net profit after tax ("Statutory Profit") of $2,461,000 (2011: $46,518,000) for the six months ended 31 December 2012. The Statutory Profit for the period included significant items after tax totaling a net loss of $10,244,000 (2011: loss of $6,829,000). Underlying net profit after tax for the period, after excluding significant items and the loss from discontinued operations for the period, was $17,186,000 (2011: $49,432,000). On 7 September 2012 the Company acquired all of the ordinary shares of Allied Gold Mining Plc. The statutory net profit after tax for the six months ended 31 December 2012 included a loss of $14,370,000 after tax representing the net loss generated by the Allied Gold assets since the date of acquisition.

The consolidated revenues and results for the period are summarized as follows:

	Period ended	Period ended
	31 Dec 2012$'000 6	31 Dec 2011$'000 6
Sales revenue (including discontinued operations)6	285,755	249,315
EBITDA3 (including significant items)	65,574	88,937
EBIT2 (including significant items)	13,676	45,764
Statutory Profit1 for the half year	2,461	46,518
Total significant items (before tax)	(12,444)	(6,829)
EBITDA4 –excluding significant items	73,551	78,458
EBIT4 –excluding significant items	29,843	48,678
Underlying net profit after tax4 for the half year	17,186	49,432

1 Statutory Profit is net profit after tax attributable to owners of the parent.

2 EBIT is earnings before interest revenue, finance costs and income tax expense. It includes revenues and expenses associated with discontinued operations.

3 EBITDA is EBIT before impairment, depreciation and amortisation. It includes revenues and expenses associated with discontinued operations. 4 EBITDA, EBIT and Underlying net profit after income tax is net profit after income tax ("Statutory Profit") less significant items as described in Note 10 to the financial report, and profit or loss from discontinued operations.

5 EBIT, EBITDA and underlying net profit after tax are non-IFRS financial information, which have not been subject to review or audit by the Group's external auditors. These measures are presented to enable understanding of the underlying performance of the Group by users.

6 Revenue, EBIT (including significant items), EBITDA (including significant items) and Statutory Profit provided in this table contain information for continuing and discontinuing operations. Sales Revenue includes $56,175,000 of revenue from Southern Cross (2011: $72,595,000) and Statutory Profit for the half year includes an after tax loss of $4,481,000 (2011: gain of $3,915,000) for Southern Cross.

The results for the period excluding the impact of the Allied operations since the date of acquisition are set out in the table below:

	Period ended31 Dec 2012$'000	Period ended31 Dec 2011$'000
Statutory Profit for the half year –excluding Allied operations	16,831	46,518
Underlying net profit after tax for the half year –excluding Alliedoperations	29,425	49,432

Note: The information in the table above is non-IFRS information and is presented to provide meaningful information to assist management, investors and analysts in understanding results of the operations compared with prior period. This non-IFRS information has not been audited.

Significant items included in the Statutory Profit for the period are as follows:

	Consolidated
	Period ended31 Dec 2012$'000	Period ended31 Dec 2011$'000
Unrealised gain/(loss) on derivatives	4,087	(7,464)
Realised gain on derivatives	190	635
Borrowing costs written off	(2,678)	-
Southern Cross related disposal costs	(305)	-
Allied Gold related acquisition costs	(7,576)	-
Integration costs	(4,031)	-
Redundancy costs	(2,131)	-
Total significant items–pre tax	(12,444)	(6,829)
Total significant items –post tax	(10,244)	(6,829)

Acquisition of Allied Gold Plc

The Group became the sole shareholder of Allied Gold Mining Plc ("Allied Gold") on 7 September 2012 and acquired the entire issued and to be issued ordinary share capital of Allied Gold for $1.025 in cash, and 0.8 St Barbara shares for each Allied Gold share. AASB 3 "Business Combinations" requires the application of acquisition accounting which involves recognising and measuring the identifiable assets acquired, liabilities assumed and the determination of mining rights assets and goodwill. At 31 December 2012, the initial accounting for the acquisition of Allied Gold has been provisionally determined and is expected to be finalised by 30 June 2013.

Included in the statutory profit for the period is a net loss of $14,370,000 attributable to the Allied operations from the effective date of acquisition to 31 December 2012. As part of the transaction an integration program was established to bring the two organisations under the single operating model. This has entailed a number of key activities relating to synergies, organisational design, policies and procedures, telecommunications and IT systems, planning processes and legal and financial structures.

The implementation plan for the program was completed during the period and execution of the plan is well advanced.

Costs associated with the acquisition of Allied Gold amounted to $7,576,000 and the costs associated with the integration program were $4,031,000 for the period. In addition, redundancy costs associated with integration of the two companies were $2,131,000 in the period.

Overview of Operating Results

Period ended 31 December 2012$'000	AustralianOperations(2)	PacificOperations(3)	Consolidated
Revenue	227,506	58,249	285,755
Mine operating costs	(131,490)	(53,410)	(184,900)
Gross Profit	96,016	4,839	100,855
Royalties	(8,751)	(1,072)	(9,823)
Depreciation and Amortisation	(37,188)	(13,915)	(51,103)
Contribution from operations(1)	50,077	(10,148)	39,929

(1) Excludes corporate and exploration costs, interest and tax, and includes discontinued operations. This is non-IFRS financial information, which has not been subject to review or audit by the Group's external auditors. These measures are presented to enable understanding of the underlying performance of the Group.

(2) Comprising of Gwalia, King of the Hills and Southern Cross operations. Southern Cross is classified as discontinued operations.

(3) Comprising of Simberi and Gold Ridge operations.

Analysis of Australian Operations

Total sales revenue, including discontinued operations, of $227,506,000 (2011: $249,315,000) was generated from gold sales of 139,958 ounces (2011: 154,385 ounces) in the period at an average achieved gold price of A$1,614 per ounce (2011: A$1,606 per ounce).

A summary of production performance for the period ended 31 December 2012 is provided in the table below.

		Southern Cross		Gwalia		King of the Hills
		6 months	6 months	6 months	6 months	6 months	6 months
		31 Dec 12	31 Dec 11	31 Dec 12	31 Dec 11	31 Dec 12	31 Dec 11
Underground Ore Mined	t	254,748	415,442	315,843	354,702	213,464	184,873
Grade	g/t	2.2	2.9	7.6	7.8	4.5	4.0
Ore Milled (including stockpiles)	t	800,477	813,636	415,366	366,648	209,090	187,720
Grade	g/t	1.4	1.9	6.1	7.6	4.5	4.1
Recovery	%	87	89	96	97	95	94
Gold Production	oz	31,468	44,460	78,038	86,313	28,644	23,450
Cash Cost	A$/oz	1,440	1,205	792	697	787	801
Total Cost	A$/oz	1,700	1,505	1,025	945	1,137	1,099
Capital expenditure	$'000	(427)	(9,979)	(24,941)	(26,418)	(13,351)	(14,201)
Net cash flow (1)	$'000	6,657	6,000	36,695	49,752	7,431	2,663

Details of 2012 Production Performance

(1) Net cash flow is operational cash flow less capital expenditure. This is non-IFRS financial information, which has not been subject to review or audit by the Group's external auditors. Net cash flow has been presented to enable understanding of the underlying performance of the Group.

Gwalia

Gold production from the Gwalia underground mine in the period was 78,038 ounces (2011: 86,313 ounces), which was a decrease on the prior corresponding period. The lower production at Gwalia was due to marginally lower average grade and a reduction in ore mined. The lower ore mined in the period was mainly attributable to truck haulage issues in the September 2012 quarter, which were resolved during the December quarter. The Gwalia processing plant continued to perform well during the period at or above design capacity with approximately 50% of recovered gold reporting to the gravity circuit. Recoveries during the period were maintained at an average of 96%.

Gwalia unit cash costs for the period were $792 per ounce (2011: $697 per ounce), reflecting the impact of lower production and cost inflation. Cost inflation was evident in a number of areas of operating costs and included the impact of the introduction of the carbon tax from 1 July 2012. Total Cash Operating Costs1 at Gwalia of $61,806,000 were higher compared with the prior corresponding period (2011: $60,125,000), due mainly to increased operating costs.

King of the Hills

Gold production from the King of the Hills underground mine in the period was 28,644 ounces (2011: 23,450 ounces). The average grade mined increased to 4.5 grams per tonne (2011: 4.0 grams per tonne), and the higher production in the period reflects the benefit of increased ore mined and the higher grade. King of the Hills unit cash costs were $787 per ounce (2011: $801 per ounce) reflecting the benefit of the increased production. Total Cash Operating Costs 1 were $22,543,000 (2011: $18,783,000) with the increase in operating costs attributable to the higher mining activity in the period.

Southern Cross

For the six month period ended 31 December 2012, Southern Cross operations generated positive net cash flows of $6,657,000 (including care and maintenance costs of $1,644,000). The Marvel Loch underground mine produced 31,468 ounces (2011: 44,460 ounces) in the period. The lower production compared with the prior corresponding period was due to lower tonnes mined from Marvel Loch at a lower grade. To offset the lower production from Marvel Loch underground the operations processed existing low grade stockpiles from satellite mine sites, which reduced the overall milled grade to 1.4 grams per tonne for the period (2011: 1.9 grams per tonne). Southern Cross unit cash costs for the period were $1,440 per ounce (2011: $1,205 per ounce), reflecting the impact of the lower production and processing of the low grade stockpiles. Total Cash Operating Costs1 were $45,324,000 (2011: $53,571,000).

Analysis of Pacific Operations

Total sales revenue of $58,249,000 was generated from gold sales of 34,561 ounces in the period at an average achieved gold price of A$1,675 per ounce. The achieved gold price per ounce was higher than that achieved for the Australian operations as the Australia operations includes gold sales during July and August when the spot gold price averaged A$1,550/oz.

Planning for the integration of the Pacific Operations was completed in the period and integrating the new operations into St Barbara is well progressed.

A summary of production performance for the period ended 31 December 2012 is provided in the table below.

1 Cash Operating Costs are mine operating costs including government royalties, and after by-product credits. This non-IFRS financial information is presented to provide meaningful information to assist management, investors and analysts in understanding the results of the operations. Cash Operating Costs are calculated according to common mining industry practice using The Gold Institute (USA) Production Cost Standard (1999 revision).

		Simberi	Gold Ridge
		4 months to31 Dec 12(1)	4 months to31 Dec 12(1)
Open Pit Ore Mined	t	759,750	609,636
Grade	g/t	1.0	1.3
Ore Milled (including stockpiles)	t	572,134	513,234
Grade	g/t	1.1	1.4
Recovery	%	88	67
Gold Production	oz	17,560	14,711
Cash Cost	A$/oz	1,253	2,086
Total Cost(2)	A$/oz	1,592	2,553
Capital expenditure	$'000	(24,854)	(6,464)
Net cash flow	$'000	(19,026)	(14,073)

Details of 2012 Production Performance

(1) Production attributable to St Barbara from 7 September 2012

(2) Does not include fair value adjustments posted per AASB 3 "Business Combinations" arising from the acquisition of Allied Gold Plc.

(3) Net cash flow is operational cash flow less capital expenditure. This is non-IFRS financial information, which has not been subject to review or audit by the Group's external auditors. Net cash flow has been presented to enable understanding of the underlying performance of the Group.

Simberi

Since the acquisition date, Simberi produced 17,560 ounces at 1.1 grams per tonne for the period. Unit cash costs were $1,253 per ounce for the period. Cash Operating Costs were $22,003,000. Improved mine planning and more efficient mining operations resulted in an increase in ore mined during the period. The Simberi operations were impacted during the period by unexpected downtime in the processing plant and low mining volumes during September 2012.

Gold Ridge

Gold production at Gold Ridge will take time to reach sustainable levels due to a backlog of waste stripping created prior to the change of control of the assets, the need to rebase the mine plan and introduce new operating disciplines. Since the acquisition date, Gold Ridge produced 14,711 ounces at 1.4 grams per tonne. Unit cash costs were $2,086 per ounce for the period and were negatively impacted by production delays due to short term mechanical issues in the processing plant and unseasonably heavy rain. Additionally, higher waste volumes were mined during the December quarter further impacting the cash cost. Cash operating costs for the period were $30,687,000. The low production rates and high fixed costs resulted in the high unit cash costs reported in the period.

Analysis of Corporate and Discovery & Growth expenditure

Exploration and evaluation expenditure in the period amounted to $4,588,000 (2011: $8,574,000), which was all expensed in the consolidated income statement (2011: $6,855,000).

Corporate administration costs for the period of $8,988,000 (2011: $6,814,000) comprised mainly expenses relating to the corporate office and compliance costs. During the period, costs associated with the Allied Gold corporate office were included in consolidated corporate administration costs.

Royalty expenses including royalties paid for Southern Cross Operation for the period were $9,823,000 (2011: $10,334,000). This expense represents gold royalties paid to the Western Australian, Papua New Guinea and Solomon Islands Governments and third party corporate royalties. Royalties paid in Papua New Guinea are 2.25% of gold revenues earned from the Simberi mine. Royalties are paid in Solomon Islands at 1.5% of gold revenues, plus excise duties on gold exports of 1.5%.

Other revenue of $2,498,000 (2011: $2,800,000) comprised mainly interest earned during the period of $2,354,000 (2011: $2,612,000).

Depreciation and amortisation of fixed assets and capitalised mine development (including discontinued operations) amounted to $51,898,000 (2011: $43,173,000) for the period. Depreciation and amortisation attributable to the Australian Operations was $37,188,000 (2011: $43,173,000) with a charge at the Pacific Operations of $13,915,000 (2011: nil); the balance of the expense was associated with corporate and exploration activities. The movement in depreciation is mainly due to an increase of fixed assets and capitalised mine development as a result of the acquisition of Allied Gold, and higher depreciation at King of the Hills of $3,020,000. There was also a decrease in depreciation at Southern Cross of $5,203,000 and at Gwalia of $3,290,000. The lower depreciation and amortisation charge at Gwalia was due mainly to lower production.

Net finance costs increased in the period to $10,325,000 (2011: $1,858,000), which included $2,678,000 of borrowing costs relating to the syndicated debt facility drawn down in September 2012 and written off when the facility was refinanced in December 2012. Interest paid and payable of $3,016,000 was attributable to the Syndicated debt facility drawn down in the period. Fair value movements during the period on the gold prepayment facility acquired as part of the Allied Gold acquisition of $1,219,000 were expensed as a borrowing cost.

A net realised/unrealised gain of $4,277,000 (2011: loss of $6,829,000) was recognised in the income statement for the period, representing the movement in the mark-to-market valuation of the Company's gold put and call options (collar structure) at 31 December 2012. Accounting standards require movements in the time value of the collar structure to be recognised in the income statement at each reporting date.

Discussion and Analysis of the Cash Flow Statement

Operating activities

Cash flow from operating activities for the period was $20,524,000 (2011: $93,777,000), representing a significant decrease on the prior corresponding period. The movement in operating cash flows included higher receipts from customers, reflecting the higher gold production as a result of the acquisition of the Pacific Operations.

Payments to suppliers and employees were higher than the prior corresponding period at $258,784,000 (2011: $152,116,000), due mainly to the consolidation of the Pacific Operations. Payments for exploration expensed in the period amounted to $4,449,000 (2011: $6,855,000).

Interest received of $4,397,000 (2011: $2,614,000) was higher than the corresponding period due to higher average cash balances than in the corresponding period. Interest paid in the period was $3,195,000 (2011: $206,000) reflecting the cost of the syndicated debt facility drawn down in September 2012.

Investing activities

Net cash flows used in investing activities amounted to $278,210,000 (2011: $53,893,000) for the period. The largest outflow of $206,622,000 represented payments for the acquisition of Allied Gold. Investing expenditure during the period was in the following major areas:

• Underground mine development and infrastructure at Gwalia $21,818,000 (2011: $23,687,000);
• Mine development and infrastructure at Simberi and Gold Ridge $4,022,000 (2011: nil);
• Underground mine development and infrastructure at King of the Hills $12,997,000 (2011: $14,094,000);
• Purchase of property, plant and equipment for the Australian operations $5,999,000 (2011: $5,614,000); and
• Purchase of property, plant and equipment for the Pacific operations $27,296,000 (2011: nil)

Financing activities

Net cash flows from financing activities was $139,004,000 (2011: outflows of $9,463,000), with major movements including:

• Proceeds from the draw down of the syndicated debt facility (including transaction costs) of $141,613,000 compared to a repayment of the GE financing facility of $7,860,000 in 2011; and
• Scheduled repayments of finance leasing and insurance premium funding facilities amounting to $2,609,000 (2011: $1,603,000).

Discussion and Analysis of the Balance Sheet

Net Assets and Total Equity

St Barbara's net assets increased during the period by $274,533,000 to $838,366,000 with major movements including:

• Increase in net assets from the acquisition of Allied Gold of $483,901,000 as at 7 September 2012. The significant balances included in this net asset balance included an increase to the opening balance of Property Plant and Equipment by $365,445,000 and Mineral Rights Asset by $269,795,000, representing the fair value allocation of the purchase price over the identifiable assets and liabilities of the acquired operations;
• Increase in interest bearing borrowings by $150,000,000, representing the syndicated debt facility to support the acquisition of Allied Gold; and
• Decrease in cash of $206,622,000 as a result of funding the cash component of the consideration for the acquisition of Allied Gold.

The cash balance at 31 December 2012 was $66,386,000 (30 June 2012: $185,242,000).

Property, plant and equipment, mine properties and capitalised exploration had a combined value on the balance sheet at 31 December 2012 of $1,057,502,000 (30 June 2012: $409,049,000). The increase is due to the acquisition of Allied Gold.

Net current assets at 31 December 2012 were $1,439,000 (30 June 2012: $172,695,000) reflecting the reduction in the cash balance, high level of inventory at the Pacific Operations, the net liability in relation to the Southern Cross Operations held for sale of $6,718,000 and the current portion of interest bearing borrowings of $81,688,000 (30 June 2012: $3,043,000).

Net debt

Net debt, comprising total borrowings less cash and cash equivalents on hand, was $150,989,000 at 31 December 2012 (30 June 2012: net cash of $180,986,000). As at 31 December 2012 total interest bearing borrowings amounted to $217,375,000 (30 June 2012: $4,256,000), comprising the syndicated debt of $150,000,000, and the gold prepayment facility of $66,921,000. The gearing ratio as at 31 December 2012, measured as debt to debt plus equity was 21% (30 June 2012: 1%).

Auditor Independence

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 11 and forms part of the Directors' Report for the half year ended 31 December 2012.

Rounding of Amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

This report is made in accordance with a resolution of directors.

Timothy J Lehany Managing Director & Chief Executive Officer

Melbourne 21 February 2013

	Half-Year
	Note	31 Dec 2012$'000	31 Dec 2011$'000
Revenue from continuing operations	8	229,580	176,720
Mine operating costs		(133,478)	(75,041)
Gross profit		96,102	101,679
Other revenue	8	2,498	2,800
Other income		121	609
Exploration expensed		(4,588)	(6,855)
Corporate administration costs		(8,988)	(6,814)
Expenses associated with acquisition/disposal	10	(14,043)	-
Royalties		(7,780)	(7,236)
Depreciation and amortisation		(43,708)	(29,780)
Other expenditure		(2,896)	(3,113)
Operating profit		16,718	51,290
Net finance costs	9	(10,325)	(1,858)
Net realised/unrealisedgains/(losses) on derivatives	10	4,277	(6,829)
Foreign exchange gain		1,436	-
Profit before income tax		12,106	42,603
Income taxexpense	11	(5,164)	-
Profitfor the period from continuing operations		6,942	42,603
(Loss)/Profitfor the period from discontinued operations	19	(4,481)	3,915
Profitfor the period		2,461	46,518
Earnings per share for discontinued and continued operations
Basic earnings per share (cents)		0.58	14.29
Diluted earnings per share (cents)		0.58	14.16
Earnings per share for continued operations:
Basic earnings per share (cents)		1.64	13.08
Diluted earnings per share (cents)		1.62	12.97

The above income statement should be read in conjunction with the accompanying notes.

ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the half-year ended 31 December 2012

	Half-Year
	31 Dec 2012$'000	31 Dec 2011$'000
Profit for the period	2,461	46,518
Other comprehensive income
Items that may be reclassified subsequently to Profit or Loss:
Changes in fair value of available for sale financial assets	34	19
Changes in fair value of cash flow hedges taken to reserves	(2,029)	(5,385)
Tax on other comprehensive income	609	-
Other comprehensive income net of tax(1)	1,075	(5,366)
Total comprehensive income attributable to equity holders of thecompany	1,075	41,152

(1) Other comprehensive income comprises items of income and expense that are recognised directly in reserves or equity. These items are not recognised in the Income Statement as required by accounting standards. Total comprehensive profit comprises the result for the year adjusted for the other comprehensive income.

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 December 2012

	ContributedEquity	Share BasedPaymentsReserve	Gold CashFlow HedgeReserve	InvestmentFair ValueReserve	RetainedEarnings	Total
	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 July 2012	613,275	2,996	(3,394)	(67)	(48,977)	563,833
Share issue (net of transaction cost)	272,967	-	-	-	-	272,967
Share-based payments expense	-	491	-	-	-	491
Unlisted options expired	-	(2,818)	-	-	2,818	-
Comprehensive income/(loss)for the period	-	-	(1,420)	34	2,461	1,075
Balance at 31 December 2012	886,242	669	(4,814)	(33)	(43,698)	838,366
	ContributedEquity	Share BasedPaymentsReserve	Gold CashFlow HedgeReserve	InvestmentFair ValueReserve	RetainedEarnings	Total
	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 July 2011	615,521	3,108	(2,059)	-	(180,223)	436,347
Share-based payments expense	-	627	-	-	-	627
Unlisted options expired	-	(1,016)	-	-	1,016	-
Comprehensive income/(loss) for the period	-	-	(5,385)	19	46,518	41,152
Balance at 31 December 2011	615,521	2,719	(7,444)	19	(132,689)	478,126

The above statement of changes in equity should be read in conjunction with the accompanying notes.

ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED BALANCE SHEET As at 31 December 2012

		Consolidated
		Dec	June
		2012	2012
	Notes	$'000	$'000
Assets
Current assets
Cash and cash equivalents	12	66,386	185,242
Trade and other receivables		14,951	13,795
Inventories		96,041	21,867
Derivative financial assets	14	-	87
Available for sale financial assets		239	154
Assets held for sale	20	10,369	-
Deferred mining costs		19,943	23,789
Total current assets		207,929	244,934
Non-current assets
Property, plant and equipment	22	481,902	103,928
Deferred mining costs		12,527	5,917
Mine properties	23	560,122	289,647
Exploration and evaluation		15,478	15,474
Net deferred tax asset		21,208	22,215
Total non-current assets		1,091,237	437,181
Total assets		1,299,166	682,115
Liabilities
Current liabilities
Trade and other payables		85,148	55,542
Interest bearing borrowings	13	81,688	3,043
Derivative financial liabilities	14	4,358	2,830
Liabilities associated with assets classified as held for sale	20	17,087	-
Provisions		18,209	10,824
Total current liabilities		206,490	72,239
Non-current liabilities
Interest bearing borrowings	13	135,687	1,213
Derivative financial liabilities	14	9,683	13,547
Provisions		53,033	31,283
Net deferred tax liability		55,907	-
Total non-current liabilities		254,310	46,043
Total liabilities		460,800	118,282
Net Assets		838,366	563,833
Equity
Contributed equity	15	886,242	613,275
Reserves		(4,178)	(465)
Accumulated losses	16	(43,698)	(48,977)
Total equity		838,366	563,833

The above balance sheet should be read in conjunction with the accompanying notes.

ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS For the half-year ended 31 December 2012

	Half-Year
	Note	31 Dec 2012$'000	31 Dec 2011$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST)		283,124	250,595
Payments to suppliers and employees (inclusive of GST)		(258,784)	(152,116)
Payments for exploration and evaluation		(4,449)	(6,855)
Interest received		4,397	2,614
Interest paid		(3,195)	(206)
Finance charges –hire purchase agreements		(119)	(191)
Borrowing costs paid		(450)	(64)
Net cash flow from operating activities		20,524	93,777
Cash flowsfrom investing activities
Proceeds from sale of property, plant and equipment		57	31
Payments for property, plant and equipment		(33,295)	(5,614)
Payments for available for sale financial assets		-	(250)
Payments for development of mine properties		(38,350)	(46,341)
Payments for business combination, net of cash acquired	18	(206,622)	-
Payments for exploration and evaluation capitalised		-	(1,719)
Net cash flow used in investing activities		(278,210)	(53,893)
Cash flows from financing activities
Syndicated Debt facility -draw down		150,000	-
Syndicated Debt facility -transaction costs		(8,387)	-
Principal repayments -equipment leasing facility		-	(7,860)
-hire purchase agreements		(72)	(423)
-insurance premium funding		(2,537)	(1,180)
Net cash flowfrom/(used in)financing activities		139,004	(9,463)
Net decrease in cash and cash equivalents		(118,682)	30,421
Cash and cash equivalents at beginning of the period		185,242	79,485
Net foreign exchange movement		(174)	-
Cash and cash equivalents at end of the period	12	66,386	109,906

The above statement of cash flows should be read in conjunction with the accompanying notes.

Note 1 – Basis of preparation

St Barbara Limited (the "Company") is a company domiciled in Australia. The consolidated half year financial report of the Company as at and for the six months ended 31 December 2012 comprises the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in associates and jointly controlled entities.

This general purpose financial report for the half year reporting period ended 31 December 2012 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This consolidated half year 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 audited annual report for the year ended 30 June 2012.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half year. This consolidated half year financial report was approved by the Board of Directors on 21 February 2013.

Note 2 – Significant accounting policies

The accounting policies applied by the Group in this consolidated half year financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2012, with the addition of the following policies for the half year ended 31 December 2012:

(a) Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group in exchange for control of the acquiree.

Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced as part of the business combination. Transaction costs that the Group incurs in connection with a business combination, other than those associated with the issue of debt or equity securities, are expensed as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net fair value of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement periods or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

(b) Assets classified as held for sale

Individual non-current assets or disposal groups comprising assets and liabilities are classified as "held for sale" if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Note 2 – Significant accounting policies (continued)

On initial recognition, assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell and are no longer depreciated (or amortised).

(c) New standards and interpretations not yet adopted

Due to the acquisition of the Pacific Operations, the company now operates surface mining operations in PNG and the Solomon Islands. IFRIC Interpretation 20 "Stripping costs in the production phase of a surface mine" requires an entity to recognise a production stripping asset only if certain criteria are met. This interpretation will be effective for the 2014 financial year. The potential impact of this interpretation on the financial statements of the Group is yet to be determined.

(d) Presentation of transactions recognised in other comprehensive income

From 1 July 2012 the Group applied amendments to AASB 134 Interim Financial Reporting outlined in AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income. The change in accounting policy only relates to disclosures and has had no impact on consolidated earnings per share or net income. The changes have been applied retrospectively and require the Group to separately present those items of other comprehensive income that may be reclassified to profit or loss in the future from those that will never be reclassified to profit or loss.

Note 3 – Critical accounting estimates and judgements

The preparation of the half year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing this consolidated half year financial report, the significant estimates and judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the most recent annual financial report and the additional accounting policies disclosed in Note 2 above. In particular judgement was applied when measuring the fair value of assets and liabilities acquired during the period (refer to Note 18).

Note 4 – Segment information

The Group has four operational business units: Leonora Operations, Southern Cross Operations, Gold Ridge Operations and Simberi Operations. The operational business units are managed separately due to their separate geographic regions.

The Leonora Operations comprise two reportable segments: the Gwalia and King of the Hills underground mines. The Simberi and Gold Ridge open pit mines were added as reportable segments in the current period as a result of the acquisition of Allied Gold Mining Plc.

The results of all mines are reviewed regularly by the Group's Executive Leadership Team, in particular production, cost per ounce and capital expenditures.

Information regarding the operations of each reportable segment is included below. Performance is measured based on segment profit before income tax, as this is deemed to be the most relevant in assessing performance after taking into account factors such as cost per ounce of production.

Note 4 – Segment information (continued)

							Southern Cross
	Simberi1	Gold Ridge1	Gwalia			King of the Hills	(Discontinued Operation)2			Total
For the six months	31 Dec 2012	31 Dec 2012	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Revenue	26,165	32,084	124,776	137,959	46,555	38,761	56,175	72,595	285,755	249,315
Mine operating costs	(18,195)	(35,215)	(56,828)	(56,837)	(22,295)	(18,204)	(52,367)	(52,189)	(184,900)	(127,230)
Gross profit/ (loss)	7,970	(3,131)	67,948	81,122	24,260	20,557	3,808	20,406	100,855	122,085
Royalties	(582)	(490)	(4,922)	(5,691)	(1,787)	(1,545)	(2,042)	(3,098)	(9,823)	(10,334)
Depreciation and
amortisation	(6,999)	(6,916)	(18,911)	(22,201)	(10,087)	(7,067)	(8,190)	(13,393)	(51,103)	(42,661)
Reportable segment profit
/(loss) before income tax	389	(10,537)	44,115	53,230	12,386	11,945	(6,424)	3,915	39,929	69,090
								Southern Cross
	Simberi1	Gold Ridge1	Gwalia		King of the Hills			(Discontinued Operation)2	Total
For the six months	31 Dec 2012	31 Dec 2012	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Capital expenditure	(24,854)	(6,464)	(24,941)	(26,418)	(13,351)	(14,201)	(427)	(9,979)	(70,037)	(50,598)
As at	31 Dec 2012	31 Dec 2012	31 Dec 2012	30Jun2012	31 Dec 2012	30Jun2012	31 Dec 2012	30Jun2012	31 Dec 2012	30Jun2012
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000

(1) 31 December 2011 comparatives are not included as these sites were acquired on 7 September 2012

(2) Southern cross operations was placed into care and maintenance in November 2012 and therefore was recognised as a discontinued operations. In addition, the sale negotiations with Hanking prior to 31 December 2012 resulted in the assets and liabilities being classified as held for sale.

Reportable segment assets 419,320 319,380 392,852 375,238 56,077 50,699 10,369 22,877 1,197,998 448,814

Note 4 – Segment information (continued)

Reconciliation of reportable segment revenues, profit or loss, assets, and other material items:

	Consolidated
	Period Ended	Period Ended
	31 Dec	31 Dec
	2012$'000	2011$'000
Revenues
Total revenue for reportable segments	285,755	249,315
Other revenue	2,498	2,800
Elimination of discontinued operations	(56,175)	(72,595)
Consolidated revenuefrom continuedoperations	232,078	179,520

	Consolidated
	Period Ended	Period Ended
	31 Dec	31 Dec
	2012	2011
	$'000	$'000
Profit or loss
Total profit for reportable segments	39,929	69,090
Other income and revenue	2,619	3,409
Exploration expensed	(4,588)	(6,855)
Unallocated depreciation and amortisation	(795)	(512)
Finance costs	(10,325)	(1,858)
Net fair value gain/(loss)on gold options	4,277	(6,829)
Foreign exchange gain	1,436	-
Corporate and support costs	(8,988)	(6,814)
Expenses associated withacquisitions/disposals	(14,043)	-
Other corporate expenses	(3,840)	(3,113)
Elimination of discontinued operations	6,424	(3,915)
Consolidated profit before income taxfromcontinued operations	12,106	42,603

Note 4 – Segment information (continued)

		Consolidated
	31 Dec2012$'000	30 June2012$'000
Assets
Total assets for reportable segments	1,197,998	448,814
Cash and cash equivalents	60,776	185,242
Trade and other receivables	11,448	13,949
Deferred tax asset	21,208	22,215
Capitalised borrowing costs	-	7,172
Derivative financial assets	-	87
Other assets	7,736	4,636
Consolidated total assets	1,299,166	682,115

Reconciliation of reportable segment revenues, profit or loss, assets, and other material items (continued):

	Half year ended 31 December 2012				Half year ended 31 December 2011
	Reportablesegment	Adjustments	Discontinuedoperationselimination	Consolidated	Reportablesegment	Adjustments	Discontinuedoperationselimination	Consolidated
Other material items
Depreciationandamortisation	51,103	795	(8,190)	43,708	42,661	512	(13,393)	29,780

Note 5 – Events subsequent to balance date

On 9 January 2013, the Group announced it had entered into an agreement with Hanking Gold Mining Pty Ltd, a subsidiary of China Hanking Holdings Limited, to sell the Southern Cross Operations, subject to various third party and Australian government approvals, including the Foreign Investment Review Board (FIRB). Completion of the sale and settlement is expected to occur by early March 2013. The sale includes all mine and related assets located at Southern Cross. Consideration for the sale is $22.5 million in cash, as well as Hanking Gold Mining Pty Ltd assuming the rehabilitation obligations applying to the tenements being sold.

The Southern Cross operations have been disclosed as a discontinued operations and an asset held for sale as negotiations for the sale of Southern Cross Operations were underway prior to 31 December 2012.

Note 6 – Contingent liabilities

No contingent liability exists at 31 December 2012 (2011: Nil).

Note 7 – Dividends

No dividends were declared or paid during the period. (2011: Nil).

Note 8 – Revenue

		Consolidated
	Period ended31 Dec 2012$'000	Period ended31 Dec 2011$'000
Sales revenue
-Sale of gold	228,035	175,419
-Sale of silver	1,545	1,301
	229,580	176,720
Other revenue
-Interest revenue	2,354	2,612
-Sub-lease rental	144	188
	2,498	2,800
Revenue from continuing operations	232,078	179,520
Revenue from discontinued operations	56,175	72,595

Consolidated

	Period ended31 Dec 2012$'000	Period ended31 Dec 2011$'000
Note 9–Finance costs
Interest paid/payable	3,016	206
Borrowing costs	4,241	64
Finance lease	110	191
Fair value movementin gold prepayment facility	1,219	-
Provisions: unwinding of discount	1,739	1,397
	10,325	1,858

Note 10 – Significant Items

Significant items are those items where their size and nature is considered material to the financial report. Such items included within the consolidated results for the period are detailed below.

		Consolidated
	Period ended31 Dec 2012$'000	Period ended31 Dec 2011$'000
Included within net realised/unrealised gains on derivatives
Unrealised gain/(loss) on gold cash flow hedges(i)	4,087	(7,464)
Realised gain on gold cash flow hedge(i)	190	635
	4,277	(6,829)
Included within borrowingcosts
written off(ii)Capitalisedborrowing costs	(2,678)	-
Included within Expenses associated with acquisition/disposal
(iii)Integration costs	(4,031)	-
Redundancy costs(iv)	(2,131)	-
SouthernCross disposalcosts	(305)	-
acquisition costs(iii)Allied Gold	(7,576)	-
	(14,043)	(6,829)
Total significant items	(12,444)	(6,829)

(i) At 31 December 2012 the mark-to-market value of the Company's gold put and call options (collar structure) was negative $14,041,000 (June 2012: negative $16,290,000). The put and call options at 31 December 2012 represent price protection for 143,250 ounces of King of the Hills production (June 2012: King of the Hills: 175,000 ounces). In accordance with accounting standards the net unrealised gain, representing the movement in the time value of the collar structure during the period, amounting to $4,087,000 was recognised in the income statement (2011: loss of $7,464,000). The unrealised loss related to the movement in the intrinsic value of the collar structure in the period of $2,028,000 (2011: loss of $5,385,000) was recognised in the gold cash flow hedge reserve in equity. Over time, the remaining unrealised negative mark-to-market valuation at 31 December 2012 will reverse either through a change to the mark-to-market value of the collar structure or maturity of the contracts.

(ii) As a result of the refinancing of the debt facility with Deutsche Bank and Barclays, cost capitalised to the balance sheet associated with the original NAB-Barclays facility have been written off to the Income Statement. Costs to establish the Deutsche/Barclays facility in December 2012 were capitalised.

(iii) These expenses relate to the acquisition and integration costs in relation to Allied Gold PLC. The amount includes advisor, consultant and legal fees associated with the acquisition and integration of Allied Gold's operations into St Barbara Limited.

(iv) Redundancy costs related to payments made, or provided for, in relation to positions made redundant as a result of the Allied Gold acquisition.

Note 11 – Income Tax Expense

		Consolidated
	Period ended31 Dec 2012$'000	Period ended 31Dec 2011$'000
Income tax expense calculated at 30%	6,799	-
Under/(over) provision in respect of prior years	(3,555)	-
Income tax expensefor continued and discontinued operations	3,244	-
Income tax expense for continued operationsIncome tax benefit for discontinued operations	5,164(1,920)	--

(1) Tax under provision in respect of prior years related to the inclusion of a R&D tax benefit which was finalised during the period and not included in the calculation at 30 June 2012.

(2) The tax expense for the period ended 31 December 2011 was nil due to the utilisation of tax losses not previously booked.

	Consolidated
	31 Dec 2012$'000	30June2012$'000
Note 12–Cash and cash equivalents
For the purpose of the Consolidated half-year Statement of Cash Flows,cash and cash equivalents at the 31 December balance date comprised thefollowing:
Cash at bank and on hand(1)	48,036	23,442
Term deposits(2)	18,350	161,800
	66,386	185,242

(1) Cash at bank at 31 December 2012 invested "at call" was earning interest at an average rate of 3.04% (30 June 2012: 3.82%)

(2) Term deposits at 31 December 2012 were earning interest at rates between 3% and 5.10% (30 June 2012: rates between 4.04% and 5.92%). While term deposits are invested for defined periods, all deposits can be immediately accessed. At 31 December 2012, the average time to maturity was 29 days (30 June 2012: 41 days).

	31 Dec 2012$'000	30 June 2012$'000
Note 13–Interest bearing liabilities
Current
Secured
Lease liabilities	2,152	1,067
Syndicatedloanfacility	48,500	-
facility(1)Gold prepayment	30,453	-
Unsecured
Insurance premium funding	583	1,976
	81,688	3,043
Non-Current
Secured
Lease liabilities	2,219	1,213
Syndicated loan facility	97,000	-
prepayment facility(1)Gold	36,468	-
	135,687	1,213

Note (1): This financial liability is influenced by the prevailing gold price which constitutes an embedded derivative. Changes in the fair value of embedded derivatives are recognised immediately in the consolidated income statement as part of finance costs.

	31 Dec 2012$'000	30 June 2012$'000
Note 14–Derivative financial assets and liabilities
Current assets
Fair value of gold option collar	-	87
	-	87
Current liabilities
Fair value of gold option collar	4,358	2,830
	4,358	2,830
Non-current liabilities
Fair value of gold option collar	9,683	13,547
	9,683	13,547

Note 15 – Contributed equity

			Parent entity		Parent entity
		31 Dec	30 June	31 Dec	30 June
		2012	2012	2012	2012
		Shares	Shares	$'000	$'000
Ordinary shares fully paid		488,074,077	324,620,389	886,242	613,275
			Number of
Date	Details		shares	Issue Price	$'000
1 July 2012	Opening balance		324,620,389		613,275
7Sep 2012	Issue of shares		163,453,688	1.67	272,967
31 Dec 2012	Closing balance		488,074,077		886,242

Note 16 – Accumulated losses

Movements in accumulated losses were as follows:

		Consolidated
	31 Dec 2012$'000	30 June 2012$'000
Balance at start of year*Transferred from share based payment reserve (a)Profit attributable to members of the Company	(48,977)2,8182,461	(180,223)1,016130,230
Balance at end of year	(43,698)	(48,977)

* The 30 June 2012 comparative discloses movements for the year ended 30 June 2012.

(a) Share based payment reserve transfers to accumulated losses

During the period ended 31 December 2012, $2,818,000 previously recognised in the share based payment reserve for 1,955,263 options which expired during the period were transferred as a gain to accumulated losses. During the period ended 30 June 2012, $1,016,000 previously recognised in the share based payment reserve for 416,668 options which expired during the period was transferred as a gain to accumulated losses.

Accounting standards preclude the reversal through the Income Statement for amounts which have been booked in the share based payments reserve for options which satisfy service conditions but do not vest due to market conditions.

Note 17 – Borrowings

On 10 September 2012, the Group drew down on the syndicated bank debt facility for $120 million.

On 24 December 2012, the Group's syndicated facility was increased from $120 million to $150 million. The debt facility is for a term of up to four years and bears interest at variable market rates. Subject to prevailing market conditions, the term facility providers may elect for $50 million to be repaid by 31 May 2013, or otherwise to be repaid by 24 December 2013. The remaining $100 million term facility is repayable in instalments over the term of the loan.

Note 18 – Acquisition of subsidiary

On 7 September 2012, the Company acquired 100% of the ordinary share capital of Allied Gold Mining Plc ("Allied Gold") in line with its growth strategy to enhance diversification and take advantage of further exploration opportunities.

Consideration transferred

Note	$'000
	210,934
15	272,967
	483,901

Acquisition related costs amounting to $7,576,000 have been excluded from the consideration transferred and have been recognised as an expense in the Consolidated Income Statement in the half year.

Details of the provisional fair values at the date of acquisition are set out below:

	$'000
Current Assets
Cash	4,312
Trade Receivables	5,856
Inventories	72,013
Available for sale financial assets	51
Other Assets	4,582
Total current assets	86,814
Non-Current Assets
Property Plant and Equipment	365,445
Mineral Rights Asset	269,795
Total Non-Current assets	635,240
Current Liabilities
Trade payables	(48,464)
Provisions (i)	(12,933)
Loans and Borrowings	(46,809)
Total current liabilities	(108,206)
Non-Current Liabilities
Provisions	(40,120)
Loans and Borrowings	(30,251)
Deferred Tax Liability	(59,576)
Total Non-Current liabilities	(129,947)
Provisional fair value of identifiable net assets	483,901

The initial accounting for the acquisition of Allied Gold has been provisionally determined at the end of the half-year. At the date of finalisation of this half-year financial report, the necessary calculations have not been finalised and therefore the fair value of the assets and liabilities noted above have only been provisionally determined based on the directors' best estimate of the likely fair value of the assets and liabilities.

(i) The legal due diligence process identified various legal matters and open litigation which have been identified and included in the current provision balance at fair value, representing the best estimate of the known and likely exposure at the time of the acquisition.

Net cash outflow arising on acquisition

	$'000
Consideration paid in cash	210,934
Less cash and cash equivalent balances acquired	(4,312)
	206,622

Impact of acquisition on the results of the Group

Included in the profit for the half year is $14,370,000 loss attributable to Allied Gold. Revenue for the half year includes $57,911,000 in respect of Allied Gold. Had the acquisition of Allied Gold been effected at 1 July 2012, the revenue of the Group from continuing operations for the six months ended 31 December 2012 would have been $315,914,000 (unaudited and unreviewed) and the loss for the year from continuing operations would have been $14,700,000 (unaudited and unreviewed). The Group consider these "pro-forma" numbers to represent an approximate measure of the performance of the combined group on a half-yearly basis and to provide a reference point for comparison in future half years. These pro-forma numbers have not been subject to audit or review.

In determining the "pro-forma" revenue and profit of the Group had Allied Gold been acquired at the beginning of the current half-year, the Group have calculated depreciation and amortisation of plant and equipment acquired on the basis of the fair values arising in the initial accounting for the business combination rather than the carrying amounts recognised in the pre-acquisition financial statements.

Note 19 – Discontinued operations

On 9 January 2013 the Group entered into an agreement with Hanking Gold Mining Pty Ltd, a subsidiary of China Hanking Holdings Limited, to sell the Southern Cross Operations. Subject to obtaining FIRB approval and other necessary consents, completion of the sale and settlement is expected to occur by late February / early March 2013.

The results of the discontinued operations included in the consolidated income statement are set out below. The comparative profit and cash flows from discontinued operations are shown in the tables below.

Note 19 – Discontinued operations (continued)

	31 Dec 2012$'000	31 Dec 2011$'000
Profit/(loss) for the periodfrom discontinued
operations
Revenue	56,175	72,595
Expenses	(62,576)	(68,680)
(Loss)/profitbefore tax	(6,401)	3,915
Attributable income tax benefit	1,920	-
	(4,481)	3,915
Loss on re-measurement to fair value less coststo sell	-	-
(Loss)/profit for the periodfrom discontinuedoperations(attributabletoownersofthecompany)	(4,481)	3,915
	31 Dec 2012$'000	31 Dec 2011$'000
Cash flows from discontinued operations
Net cash inflows from operating activities	8,544	14,956
Net cash outflows from investing activities	(243)	(8,956)
Net cash inflows from financing activities	-	-
Net cash inflows	8,301	6,000

At 31 December 2012 the Southern Cross operations has been classified and accounted for as Held for Sale (see note 20).

Note 20 – Assets classified as held for sale

As described in Note 19 the Group has entered into an agreement to dispose of the Southern Cross Operations subject to certain conditions precedent. The major classes of assets and liabilities of the business at the end of the reporting period are as follows:

	31 Dec 2012$'000
Property,Plant and Equipment	5,853
Inventories	4,505
Other assets	11
Assets classified as held for sale	10,369
Provisions	17,087
Liabilities associated with assets classified as held for sale	17,087
Net liabilities associated with assetsclassified as held for sale	(6,718)

Note 21 – Profit for the year from continuing operations

Profitfor the year from continuing operations attributableto owners of the Company	31 Dec 2012$'000	31 Dec 2011$'000
	6,942	42,603
Profit for the year from continuing operations has beenarrived at after charging:
Depreciation and amortisation expenseattributable tocontinuing operations
Depreciation of property, plant and equipment	43,708	29,780

Note 22 – Property plant and equipment

	31 Dec 2012$'000
Opening Balance	103,928
Additions through acquisition	365,445
Additions	32,785
Depreciation	(14,403)
Transfer to assets held for sale	(5,853)
Closing balance	481,902

Note 23 – Mine Properties Development

	31 Dec 2012
	$'000
Opening Balance	289,647
Additions through acquisition	269,795
Additions	38,175
Amortisation	(37,495)
Closing balance	560,122

DIRECTORS' DECLARATION

In the Directors' opinion:

• (a) the financial statements and notes set out on pages 12 to 30 are in accordance with the Corporations Act 2001, including:
  • i) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001; and
  • ii) giving a true and fair view of the Group's financial position as at 31 December 2012 and of its performance for the six month period ended on that date; and
• (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.

Timothy J Lehany Managing Director & Chief Executive Officer

Dated at Melbourne this 21st day of February 2013