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ST BARBARA LIMITED — Investor Presentation 2012
Oct 23, 2012
65749_rns_2012-10-23_88c52b9c-1d80-484c-811f-0ed51a8aa62c.pdf
Investor Presentation
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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
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Presentation on the September 2012 Quarter
Attached is a presentation to analysts and investors by Tim Lehany, Managing Director and CEO.
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Ross Kennedy
Executive General Manager Corporate Services Company Secretary 24 October 2012
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September 2012 Quarterly Report Highlights
Tim Lehany, Managing Director & CEO
24 October 2012
1
Disclaimer
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This presentation has been prepared by St Barbara Limited (“Company”). The material contained in this presentation is for information purposes only. This presentation is not an offer or invitation for subscription or purchase of, or a recommendation in relation to, securities in the Company and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. This presentation is not financial product or investment advice. It does not take into account the investment objectives, financial situation and particular needs of any investor. Before making an investment in the Company, an investor or prospective investor should read this document in its entirety, consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances, seek legal and taxation advice appropriate to their jurisdiction and consult a financial adviser if necessary. The Company is not licensed to provide financial product advice in respect of the Company’s securities.
This presentation may contain forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of gold. Forward-looking statements include those containing such words as anticipate, estimates, forecasts, should, will, expects, plans or similar expressions. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a range of variables and changes in underlying assumptions which could cause actual results or trends to differ materially. Nothing in this document is a promise or representation as to the future. Actual results may vary from the information in this presentation and any variation may be material. Past performance is not an indication of future performance. Statements or assumptions in this presentation as to future matters may prove to be incorrect and any differences may be material. The Company does not make any representation or warranty as to the accuracy of such statements or assumptions. Investors are cautioned not to place undue reliance on such statements.
This presentation has been prepared by the Company based on information available to it and has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of the Company or its subsidiaries or affiliates or the directors, employees, agents, representatives or advisers of any such party, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including without limitation, any liability arising from fault or negligence on the part of the Company or its subsidiaries or affiliates or the directors, employees, agents, representatives or advisers of any such party.
The Company estimates its reserves and resources in accordance with the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves 2004 Edition ("JORC Code"), which governs such disclosures by companies listed on the Australian Securities Exchange.
Financial figures are in Australian dollars. Financial year is 1 July to 30 June.
2
September 2012 Quarterly Report Highlights
Highlights
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St Barbara gained control of the Allied Gold Mining Plc group on 7 September 2012, including:
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Simberi in Papua New Guinea and
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Gold Ridge in the Solomon Islands
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Post-acquisition integration activities are well advanced and are progressing to schedule
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Gold production expected to increase in Q2 and 2H FY13
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FY13 guidance maintained for the Australian Operations
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Expect to update Allied Gold’s previous guidance by 31 January 2013
3
September 2012 Quarterly Report Highlights
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Tragically, on 8 September, a local villager working at the Simberi Mine was fatally injured in an incident involving the aerial rope ore transport conveyor. Mining operations were suspended and recommenced following a mourning period. Personal safety is the foundation of our business, and we are rigorously reviewing the implications of this incident.
4
September 2012 Quarterly Report Highlights
Combined Quarterly Output
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Combined Output All Operations
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130
120
115 17
107
19
19 15 97
20
15
12 14
28
16 14
24 25
21 16 19
14 17
9
16
54
40 46 44
34
FY 12 FY 12 FY 12 FY 12 FY 13
Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep
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Chart compares total output quarter on quarter
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St Barbara acquired Pacific Operations 7 Sep 2012
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St Barbara attributable gold production next slide
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Commentary on each operation follows
Gwalia King of the Hills Marvel Loch Simberi Gold Ridge Total
koz
Figures displayed to nearest thousand ounces.
5
September 2012 Quarterly Report Highlights
St Barbara Attributable Gold Production
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St Barbara Attributable Gold Production
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99
86
84
28 78
71
4
24 25 4
16
21 19
14 17
9
16
54
40 46 44
34
FY 12 FY 12 FY 12 FY 12 FY 13
Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep
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• Includes Pacific Operations from 7 September 2012
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FY13 guidance for Australian Operations maintained
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Commentary on each operation follows
Gwalia King of the Hills Marvel Loch Simberi Gold Ridge Total
koz
Figures displayed to nearest thousand ounces.
6
September 2012 Quarterly Report Highlights
Gwalia
Gold Production
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54
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40
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June quarter was a record, due to high grade main lode stopes
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Lower grade stopes in Q1
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Change of mining contractor during Q1
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Initial poor reliability of new haul trucks (now rectified)
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Processed low grade underground ore and surface stockpiles
FY 12 FY 12 FY 12 FY 12 FY 13 Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep koz
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Processing recovery at 96%
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Full year guidance maintained
7
September 2012 Quarterly Report Highlights
Gwalia grade and costs
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Grade
Mined Grade
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Q1 mined grade 7.4 g/t Au in accordance with mine schedule
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Majority of ore sourced from lower grade areas of South West Branch and South Gwalia Series
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10.5
8.1
7.5
9.3
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- Reserve grade 8.7 g/t Au
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7.4
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Costs
- Q1 costs of $853/oz almost entirely due to lower gold production
FY 12 FY 12 FY 12 FY 12 FY 13 Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep g/t Au
8
September 2012 Quarterly Report Highlights
King of the Hills
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Gold Production
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9
FY 12 FY 12 FY 12 FY 12 FY 13
Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep
koz
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Production ahead of expectations
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Q1 cash operating costs $754/oz (FY12 $753/oz)
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Opportunities to expand mineral resources to be drill tested in FY13
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September 2012 Quarterly Report Highlights
Southern Cross Operations
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Gold Production
28 25 24 21 19 FY 12 FY 12 FY 12 FY 12 FY 13 Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep koz
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Marvel Loch underground production winding down
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Underground mining expected to cease by end October 2012
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Processing expected to continue until end November 2012
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Operations generated positive net cash flows in Q1
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September 2012 Quarterly Report Highlights
Integrating Pacific Operations
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Collaborative approach to integration at all levels of the organisation
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Supply chain to be redesigned to improve logistics and reduce supply costs
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St Barbara’s centralised procurement function rolling out supply contracts to leverage the benefit of existing and new group-wide contracts
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Implementing expenditure controls to manage capital expenditure programs and reduce operating costs
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Mine plans are being completely re-cast with focus on plan compliance and ore presentation
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Close management of the oxide expansion and new power generation plant projects at Simberi
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September 2012 Quarterly Report Highlights
Gold Ridge Operations Solomon Islands
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Gold Production
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- St Barbara assumed control 7 September 2012
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19 19
17
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FY 12 FY 12 FY 12 FY 12 FY 13
Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep
koz
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Production down due to poor mine planning and plan execution, ore handling and plant performance
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Access to higher grade Kupers and Dawsons Pits washed away
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Technical Services team deployed to site to improve mining efficiencies, materials handling, processing throughput and recoveries
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Expect to see performance trend improving
12
September 2012 Quarterly Report Highlights
Simberi Operations
Papua New Guinea
Gold Production
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15
15
14
12
FY 12 FY 12 FY 12 FY 12 FY 13
Q1 Sep Q2 Dec Q3 Mar Q4 Jun Q1 Sep
koz
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- St Barbara assumed control 7 September 2012
Production below expectations due to rope conveyor stoppages for 43 days
Production anticipated to increase with completion of oxide processing expansion project due March 2013
New power generators due December 2012, will assist to reduce operating costs
Supply chain to be redesigned to improve logistics and reduce supply costs
13
September 2012 Quarterly Report Highlights
FY13 focus on extending near mine reserves and targeting new discoveries
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Exploration spend $25+M Simberi
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Active drilling programs Simberi • Ore bodies open • Near mine targets for exploration
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Leonora Gold Ridge • Sulphide potential
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• Gwalia open at depth • King of the Hills remains open along strike
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• Attractive regional Gold Ridge targets. • Ore bodies open • Near mine targets for
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East Lachlan exploration
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Leonora • Regional exploration
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Southern Cross
Southern Cross
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Mineral resources identified East Lachlan
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• Targets to follow up previous results • Prospective exploration area for copper-gold porphyry mineralisation
Tabar-Tatau
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Exploration potential
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Multiple drilling targets on both islands
14
September 2012 Quarterly Report Highlights
D&G Q1 Highlights
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Gold Mineralisation intercepted below and north of the Dawsons deposit at Gold Ridge, Solomon Islands. Results from hole GDC035 included (all intercepts down-hole, details in Table 1):
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4m @ 5.5 g/t Au from 3m;
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23m @ 5.4 g/t Au from 33m;
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8m @ 4.4 g/t Au from 144m.
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At Botlu South West on Simberi Island, encouraging trench sampling results included 35m@ 6.1 g/t Au.
15
September 2012 Quarterly Report Highlights
Cash and debt as expected
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A$76 million cash at 30 September 2012
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Interest bearing liabilities A$121 million[[2]] (inc. NAB/Barclays loan of A$117 million[[2]] )
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Red Kite gold loan A$76 million[[2] ] (pre-existing Allied facility)
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Gearing (inc. gold loan) at 30 September 2012 approx. 19%[ [1] ]
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Litigation with GR Engineering settled
[1] Debt / debt + equity [2] As at 30 Sep 2012
16
September 2012 Quarterly Report Highlights
Conclusion
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Acquisition of Allied Gold completed
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Integration well advanced
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Production expected to increase in December 2012 quarter
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and into second half of FY13
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Update Allied Gold’s previous guidance from Pacific Operations expected by 31 January 2013
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Drilling Programs targeting discoveries continuing at:
- Gwalia region, Leonora, WA
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Gold Ridge, Solomon Islands
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Yilgarn Province, WA
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Simberi, Papua New Guinea
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East Lachlan, NSW
17
September 2012 Quarterly Report Highlights
Appendices
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18
September 2012 Quarterly Report Highlights
FY13 guidance Australian operations
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King of Gwalia Total the Hills Leonora Leonora Leonora
Gold production koz 175-190
55-60 230-250
Cash operating cost $/oz 670-700 840-870 710-745
Capex
$M
45-50
20-25
65-75
19
September 2012 Quarterly Report Highlights
Appendices
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20
September 2012 Quarterly Report Highlights
Combined Quarterly Output
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| Production Summary Consolidated |
Mar Qtr FY12 Jun Qtr FY12 Sep Qtr FY13 |
|
|---|---|---|
| Gold Production Gwalia oz King of the Hills oz Southern Cross oz Gold Ridge oz Simberi oz Consolidated oz Mined Grade Gwalia g/t Au King of the Hills g/t Au Southern Cross g/t Au Gold Ridge g/t Au Simberi g/t Au Total Cash Operating Costs Gwalia $/oz King of the Hills $/oz Southern Cross $/oz Consolidated $/oz Gold Ridge $/oz Simberi $/oz |
43,881 54,340 34,293 17,110 16,393 15,935 24,849 28,083 19,176 19,056 16,845 14,079 15,051 14,602 13,733 |
|
| 85,840 98,816 97,216 9.3 10.5 7.4 4.2 4.0 4.3 2.6 3.2 2.2 1.5 1.5 1.4 1.1 1.1 1.1 627 580 853 693 746 754 1,272 1,127 1,583 |
||
| 827 763 1,032 1,4721 1,8201 1,713 1,4451 1,5671 1,277 |
The combined quarterly gold production of St Barbara’s Australian and Pacific Operations is presented in the above table for comparative purposes, noting that gold production attributable to St Barbara from Simberi and Gold Ridge is measured from 7 September 2012.
21
1 Previously reported USD converted to AUD at average exchange rate for respective quarter
St Barbara Attributable Gold Production
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| St Barbara Attributable Gold Production |
|
|---|---|
| Production Summary Consolidated |
Sep Qtr FY13 |
| Production Gwalia oz King of the Hills oz Southern Cross oz Gold Ridge1 oz Simberi1 oz Consolidated oz Mined Grade Gwalia g/t King of the Hills g/t Southern Cross g/t Gold Ridge1 g/t Simberi1 g/t Total Cash Operating Costs Gwalia $/oz King of the Hills $/oz Southern Cross $/oz Australia $/oz Gold Ridge1 $/oz Simberi1 $/oz |
34,293 15,935 19,176 4,057 4,269 |
| 77,730 7.4 4.3 2.2 1.3 1.1 853 754 1,583 |
|
1,032 1,838 1,251 |
~~2~~ 2
1 Pacific Operations attributable from 7 September 2012
September 2012 Quarterly Report Highlights
Gwalia
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| Production Summary | Mar Qtr | Jun Qtr | Sep Qtr | ||
|---|---|---|---|---|---|
| Gwalia | FY12 | FY 12 | FY13 | ||
| Underground ore mined | t | 145,609 | 161,989 | 137,693 | |
| Grade | g/t | 9.3 | 10.5 | 7.4 | |
| Low grade ore & stockpiles | t | 22,440 | 19,957 | 45,841 | |
| Grade | g/t | 2.6 | 2.3 | 1.4 | |
| Ore milled | t | 168,049 | 181,943 | 185,125 | |
| Grade | g/t | 8.4 | 9.6 | 6.0 | |
| Recovery | % | 97 | 97 | 96 | |
| Gold production | oz | 43,881 | 54,340 | 34,293 | |
Cash Operating Costs |
$ per ounce | ||||
| Mining | 465 | 384 | 598 | ||
| Processing | 99 | 87 | 143 | ||
| Site services | 68 | 59 | 114 | ||
| Stripping and ore inventory adjustments | (41) | 11 | (40) | ||
| 591 | 541 | 815 | |||
| By product credits | (3) | (3) | (4) | ||
| Third party refining & transport | 2 | 1 | 2 | ||
| Royalties | 37 | 41 | 40 | ||
| Total cash operating costs | 627 | 580 | 853 | ||
| Depreciation and amortisation | 232 | 220 | 238 | ||
| Total operating costs | 859 | 800 | 1,091 |
September 2012 Quarterly Report Highlights
~~2~~ 3
King of the Hills
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| Production Summary | Mar Qtr | Jun Qtr | Sep Qtr | |
|---|---|---|---|---|
| King of the Hills | FY12 | FY12 | FY13 | |
| Underground ore mined | t | 136,016 | 136,486 | 114,358 |
| Grade | g/t Au | 4.2 | 4.0 | 4.3 |
| Ore milled | t | 131,739 | 133,482 | 117,559 |
| Grade | g/t Au | 4.3 | 4.0 | 4.4 |
| Recovery | % | 94 | 95 | 95 |
| Gold production | oz | 17,110 | 16,393 | 15,935 |
| Cash Operating Costs | $ per ounce | |||
| Mining | 569 | 564 | 531 | |
| Processing | 201 | 215 | 195 | |
| Site services | 31 | 36 | 38 | |
| Stripping and ore inventory adjustments | (132) | (90) | (33) | |
| 669 | 725 | 731 | ||
| By product credits | (17) | (19) | (19) | |
| Third party refining & transport | - | 1 | 1 | |
| Royalties | 41 | 38 | 41 | |
| Total cash operating costs | 693 | 746 | 754 | |
| Depreciation and amortisation | 298 | 299 | 350 | |
| Total operating costs | 991 | 1,045 | 1,104 |
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September 2012 Quarterly Report Highlights
Marvel Loch
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| Production Summary Marvel Loch |
Mar Qtr FY12 Jun Qtr FY12 Sep Qtr FY13 |
|
|---|---|---|
| Underground ore mined t Grade g/t Au Ore milled t Grade g/t Au Recovery % Gold production oz Cash Operating Costs Mining Processing Site services Stripping and ore inventory adjustments By product credits Third party refining & transport Royalties Total cash operating costs Depreciation and amortisation Total operating costs |
240,957 235,966 175,471 2.6 3.2 2.2 527,790 501,394 456,949 1.6 2.0 1.5 89 88 88 24,849 28,083 19,176 $per ounce |
|
| 664 575 794 488 400 668 103 81 122 (11) 34 (33) |
||
| 1,244 1,090 1,551 (17) (5) (6) 3 1 1 42 41 37 |
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| 1,272 1,127 1,583 272 260 274 |
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| 1,544 1,387 1,857 |
||
September 2012 Quarterly Report Highlights
Gold Ridge
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| Gold Ridge | |||||
|---|---|---|---|---|---|
| Production Summary | Mar Qtr | Jun Qtr | Sep Qtr | ||
| Gold Ridge | FY12 | FY12 | FY13 | ||
| Ore mined | t | 493,309 | 532,253 | 420,005 | |
| Grade | g/t | 1.5 | 1.5 | 1.4 | |
| Ore milled | t | 538,609 | 472,609 | 435,081 | |
| Grade | g/t | 1.5 | 1.5 | 1.4 | |
| Recovery | % | 72 | 76 | 74 | |
| Gold production | oz | 19,056 | 16,845 | 14,079 | |
Cash Operating Costs |
$ per ounce[1] | ||||
| Mining | 292 | 430 | 465 | ||
| Processing | 534 | 731 | 732 | ||
| Site services | 352 | 346 | 411 | ||
| Stripping and ore inventory adjustments | (200) | ||||
| (94) | 64 | ||||
| 1,083 | 1,307 | 1,672 | |||
| By product credits | (18) | (10) | (10) | ||
| Third party refining & transport | 6 | 4 | 5 | ||
| Royalties | 31 | 54 | 46 | ||
| Total cash operating costs | 1,1021 | 1,3551 | 1,713 | ||
| Depreciation and amortisation | 2931 | 4471 | 390 | ||
| Total operating costs | 1,3951 | 1,8021 | 2,103 |
1 Previously reported USD figures converted at average exchange rate for respective quarter after adjusting Site Services costs for By Product Credits
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September 2012 Quarterly Report Highlights
Simberi
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| Simberi | |||||
|---|---|---|---|---|---|
| Production Summary | Mar Qtr | Jun Qtr | Sep Qtr | ||
| Simberi | FY12 | FY 12 | FY13 | ||
| Ore mined | t | 518,866 | 521,236 | 503,728 | |
| Grade | g/t | 1.1 | 1.1 | 1.1 | |
| Ore milled | t | 509,206 | 482,440 | 464,261 | |
| Grade | g/t | 1.1 | 1.1 | 1.1 | |
| Recovery | % | 86 | 83 | 83 | |
| Gold production | oz | 15,051 | 14,602 | 13,733 | |
Cash Operating Costs |
$ per ounce[1] |
||||
| Mining | 271 | 357 | 373 | ||
| Processing | 456 | 513 | 513 | ||
| Site services | 279 | 406 | 275 | ||
| Stripping and ore inventory adjustments | 12 | (101) | 59 | ||
| 1,018 | 1,175 | 1,220 | |||
| By product credits | (7) | (6) | (7) | ||
| Third party refining & transport | 8 | 10 | 18 | ||
| Royalties | 41 | 40 | 46 | ||
| Total cash operating costs | 1,060 | 1,219 | 1,277 | ||
| Depreciation and amortisation | 310 | 334 | 329 | ||
| Total operating costs | 1,369 | 1,553 | 1,606 |
- 1 Previously reported USD figures converted at average exchange rate for respective quarter after adjusting Site Services costs for By Product Credits
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September 2012 Quarterly Report Highlights
Start safe, stay safe
Safety
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14.8
12.5
11.1
9.0
6.1
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Tragically, on 8 September, a local villager working at the Simberi Mine was fatally injured in an incident involving the aerial rope conveyor. Mining operations were suspended and recommenced following a mourning period
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TRIFR for Australian Operations improved from 9.0 at June 2012 to 6.7 at September 2012
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Overall TRIFR, including Pacific Operations, 6.1 at September 2012
FY 09 FY 10 FY 11 FY 12 Q1 TRIFR FY 13
(rolling 12 month average Total Recordable Injury Frequency Rate)
28
September 2012 Quarterly Report Highlights
Investor Relations Enquiries
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Ross Kennedy Executive General Manager Corporate Services E: [email protected]
Rowan Cole General Manager Corporate Services E: [email protected]
T: +61 3 8660 1900
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September 2012 Quarterly Report Highlights
Competent persons statement
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The information in this report that relates to Exploration Results and Mineral Resources in Australia is based on information compiled by Mr. Phillip Uttley, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Phillip Uttley is a full-time employee of St Barbara Ltd and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr. Uttley consents to the inclusion in the statement of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Ore Reserves in Australia is based on information compiled by Mr. John de Vries, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. de Vries is a full-time employee of St Barbara Ltd and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr. de Vries consents to the inclusion in the statement of the matters based on his information in the form and context in which it appears.
The information in this document that relates to Exploration Results, Mineral Resources and Ore Reserves for Simberi and Gold Ridge, together with any related assessments and interpretations, has been based on information compiled by Colin Ross Hastings who is a Member of The Australasian Institute of Mining and Metallurgy. Colin Ross Hastings is a full-time employee of St Barbara Ltd. Colin Ross Hastings has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code). Colin Ross Hastings consents to the inclusion of the information relating to Exploration Results, Mineral Resources and Ore Reserves for Simberi and Gold Ridge contained in this document in the form and context in which it appears.
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September 2012 Quarterly Report Highlights
Non-IFRS Measures
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We supplement our financial information reporting determined under International Financial Reporting Standards (IFRS) with certain non-IFRS financial measures, including cash operating costs. We believe that these measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance.
Cash operating costs are calculated according to common mining industry practice using The Gold Institute (USA) Production Cost Standard (1999 revision).
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September 2012 Quarterly Report Highlights