ST BARBARA LIMITED — Proxy Solicitation & Information Statement 2003

May 7, 2003

ST BARBARA MINES LIMITED

ACN 009 165 066

$\overline{ASX}$ SHAREHOLDERS REPORT

Enquiries regarding this report may be directed to: Stephen W. Miller Executive Chairman Telephone (08) 9476 5555 Overseas +61 8 9476 5555 or Colin G. Jackson Investor Relations Telephone 0417 929 107

St Barbara Mines Limited Level 2, 16 Ord Street West Perth Western Australia 6005 Telephone (08) 9476 5555 Overseas +61 8 9476 5555

Dollar values in this report are Australian Dollars unless otherwise stated.

Notice of General Meeting

Please find attached Notice of General Meeting and proxy form regarding the General Meeting of members of St Barbara Mines Limited to be held at 10.00 a.m. on Friday, 6 June, 2003 at the Conference Suite, Level 8, Exchange Plaza, 2 The Esplanade, Perth. This Notice is being dispatched to the Company's shareholders today.

Alan Rule Company Secretary

8 May 2003

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is given that the Extraordinary General Meeting of members of St Barbara Mines Limited (ABN 36 009 165 066) ("Company") will be held at the Conference Suite, Level 8, Exchange Plaza, 2 The Esplanade, Perth, Western Australia on Friday, 6 June 2003 at 10.00 a.m.

An Explanatory Memorandum containing information in relation to each of Resolutions 1 to 8 accompanies this Notice of Extraordinary General Meeting. Unless otherwise defined, terms used in this Notice of Extraordinary General Meeting are defined in, and are to be interpreted in accordance with the Explanatory Memorandum.

AGENDA

Resolution 1: RATIFICATION OF ISSUE OF SHARES AND OPTIONS

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purpose of Listing Rule 7.4 of the Listing Rules of ASX and all other relevant purposes, the Company ratifies the issue of 7,327,822 fully paid ordinary shares and 7,327,881 options to acquire fully paid ordinary shares in the capital of the Company to Resource Capital Fund II on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of Extraordinary General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 1 by any of the persons who participated in the issue the subject of Resolution 1 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 2: AUTHORITY FOR ISSUE OF OPTIONS

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purpose of Listing Rule 7.1 of the Listing Rules of ASX and all other relevant purposes, the Company authorises the issue of 17,752,662 options to acquire fully paid ordinary shares in the capital of the Company to Resource Capital Fund II on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of Extraordinary General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 2 by any of the persons who will participate in, or who may obtain a benefit from (except a benefit solely in the capacity of a holder of ordinary securities), the issue the subject of Resolution 2 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote. in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 3: RATIFICATION OF ISSUE OF SHARES

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 7.4 of the Listing Rules of ASX and for all other relevant purposes, the Company ratifies the issue of 280,140 fully paid ordinary shares in the capital of the Company to Grimwood Davies Ptv Ltd on 17 October 2002 at an issue price of 19.73 cents per share and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 3 by any of the persons who participated in the issue the subject of Resolution 3 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 4: RATIFICATION OF ISSUE OF SHARES

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 7.4 of the Listing Rules of ASX and for all other relevant purposes, the Company ratifies the issue of 15,000,000 fully paid ordinary shares in the capital of the Company to Citibank Nominees Pty Ltd on 31 January 2003 at an issue price of 11 cents per share and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 4 by any of the persons who participated in the issue the subject of Resolution 4 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 5: RATIFICATION OF ISSUE OF SHARES

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 7.4 of the Listing Rules of ASX and for all other relevant purposes, the Company ratifies the issue of 5,600,000 fully paid ordinary shares in the capital of the Company to Yamaji Marla Barna Baba Maaja Aboriginal Corporation as Trustee for the Puutu Kunti Kurrama Pinikura people on 17 February 2003 at an issue price of 11 cents per share and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 5 by any of the persons who participated in the issue the subject of Resolution 5 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 6: RATIFICATION OF ISSUE OF CONVERTIBLE NOTE

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Listing Rule 7.4 of the Listing Rules of ASX and for all other relevant purposes, the Company ratifies the issue of a Convertible Note to Ocean Resources Capital Holdings Limited on 27 February 2003 with a face value of \$2,800,000 and otherwise on the terms and conditions set out in the Explanatory Memorandum that forms part of this Notice of General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 6 by any of the persons who participated in the issue the subject of Resolution 6 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 7: AUTHORITY FOR ISSUE OF SHARES - CONVERTIBLE LOAN

To consider and, if thought fit, pass with or without amendment, the following resolution as an ordinary resolution;

"That, for the purposes of Listing Rule 7.1 of the Listing Rules of ASX and for all other relevant purposes. the Company authorises the issue of up to 43,076,923 fully paid ordinary shares in the capital of the Company to Ocean Resources Capital Holdings Limited pursuant to the conversion of the Convertible Loan issued to Ocean Resources Capital Holdings Limited and otherwise on such terms as are set out in the Explanatory Memorandum that forms part of this Notice of General Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 7 by any of the persons who will participate in. or who may obtain a benefit from (except a benefit solely in the capacity of a holder of ordinary securities), the issue the subject of Resolution 7 and any associate of any of those persons unless the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or is cast by the person chairing the meeting as proxy for a person who is entitled to vote. in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 8: ADOPTION OF NEW CONSTITUTION

To consider and, if thought fit, pass with or without amendment, the following resolution as a special resolution:

"That, in accordance with section 136(2) of the Corporations Act, the regulations contained in the printed document produced to this Meeting and signed by the Chairman for identification purposes are hereby approved and adopted as the Constitution of the Company in substitution for and to the exclusion of the existing Articles of Association of the Company."

In order to determine voting entitlements, the register of shareholders will be closed at 10.00 a.m. on Wednesday, 4 June 2003.

BY ORDER OF THE BOARD

ALAN RULE Company Secretary

Date: 5 May 2003

Enquiries

All enquiries in relation to the contents of the Notice of Extraordinary General Meeting or the Explanatory Memorandum should be directed to the Executive Chairman, Mr Stephen Miller (telephone: (08) 9476 5555).

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of shareholders of St Barbara Mines Limited (ABN 36 009 165 066) ("Company") in connection with the business to be conducted at the Extraordinary General Meeting of shareholders of the Company to be held on Friday, 6 June 2003 at 10.00 a.m. ("Meeting") at the Conference Suite, Level 8, Exchange Plaza, 2 The Esplanade, Perth, Western Australia,

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Extraordinary General Meeting ("Notice").

Resolution 1: RATIFICATION OF ISSUE OF SHARES AND OPTIONS

Resolution 1 seeks shareholder ratification pursuant to Listing Rule 7.4 of ASX for the prior issue of 7,327,822 fully paid ordinary shares and 7,327,881 options to acquire fully paid shares in the capital of the Company to Resource Capital Fund II.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eg. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

Listing Rule 7.4 provides that an issue of shares and options made within the 15% limit will be treated as having been made with the approval of shareholders for the purpose of Listing Rule 7.1 if subsequently approved by shareholders, thereby "refreshing" the Company's ability to issue shares within the 15% limit, and restoring the Company's ability to make placements (if that is thought desirable) without the need for shareholder approval. While the shares and options issued to Resource Capital Fund II were within this 15% limit, the Company is requesting shareholders to ratify the issue of the shares and options for the purpose of Listing Rule 7.4, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.5, the following information is provided:

• 1,562,000 fully paid ordinary shares were issued at 9.6 cents each to Resource Capital Fund II on 2 December 2002 in lieu of an extension fee on the \$20 million facility provided to the Company by Resource Capital Fund II.
• 1.067.616 fully paid ordinary shares were issued at 8.43 cents each to Resource Capital Fund II on 13 January 2003 in lieu of an extension fee on the \$20 million facility provided to the Company by Resource Capital Fund II.
• 4.261.200 fully paid ordinary shares were issued at 10.21 cents each to Resource Capital Fund II on 13 January 2003 in lieu of interest for the 6 months ended 31 December 2002 on the \$20 million facility provided to the Company by Resource Capital Fund II.
• 437,006 fully paid ordinary shares were issued at 11.36 cents each to Resource Capital Fund II on 13 January 2003 in lieu of a standby fee on the \$20 million facility provided to the Company by Resource Capital Fund II.
• The shares issued were fully paid ordinary shares and rank equally in all respects with the existing fully paid ordinary shares issued in the capital of the Company.
• The exercise price and expiry date of each of the 7,327,881 options issued to Resource Capital Fund II are as follows:

Date of issue of options	No. of options issued	Exercise price per option	Expiry date
15 October 2002	483,482	21.25 cents	10 October 2005
15 October 2002	49.252	10 October 2005 20.86 cents
15 October 2002	241.854	21.24 cents	10 October 2005
7 January 2003	1.482.677	21.25 cents	7 July 2006
7 January 2003	151.040	20.86 cents	7 July 2006
7 January 2003	741,686	$21.24$ cents	7 July 2006
7 January 2003	3,177,890	11.38 cents	7 July 2006
20 February 2003	1,000,000	11.00 cents	31 December 2005

• The options issued are convertible into fully paid ordinary shares and on conversion will rank equally in all respects with the existing fully paid ordinary shares issued in the capital of the Company.
• The options are exercisable in whole or in part in writing to the Company.
• The options are not listed on ASX.
• The options were issued to Resource Capital Fund II as a facility usage fee for the \$20 million facility provided to the Company by Resource Capital Fund II.
• The terms of the 7,327,881 unlisted options other than the relevant exercise price and expiry date and other terms mentioned in this section are set out in Annexure "A" hereto.

Resolution 2: AUTHORITY FOR ISSUE OF OPTIONS

Resolution 2 seeks shareholder approval pursuant to Listing Rule 7.1 for the issue of 17,752,662 options to acquire fully paid shares in the capital of the Company to Resource Capital Fund II. These options are due to be issued in July 2003 in lieu of interest for the 4 months ended 31 April 2003 on the \$20 million facility provided to the Company by Resource Capital Fund II.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eq. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months. While the options to be issued to Resource Capital Fund II are within this 15% limit, the Company is requesting shareholders to approve the issue of the options for the purpose of Listing Rule 7.1, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.3, the following information is provided:

The exercise price and expiry date of each of the 17,752,662 options to be issued to Resource Capital Fund II in July 2003 are as follows:

No. of options issued	Exercise price per option	Expiry date
3.867.849	$21.25$ cents	42 months after date of issue
394.016	20.86 cents	42 months after date of issue
1.934.835	21.24 cents	42 months after date of issue
11.555.962	$11.38$ cents	42 months after date of issue

• The options issued are convertible into fully paid ordinary shares and on conversion will rank equally in $\bullet$ all respects with the existing fully paid ordinary shares issued in the capital of the Company.
• The options are exercisable in whole or in part in writing to the Company. ۰
• The options are not listed on ASX. ٠
• The options are to be issued to Resource Capital Fund II in lieu of the interest charge on the \$20 million facility provided to the Company by Resource Capital Fund II.
• The terms of the 17,752,662 unlisted options other than the relevant exercise price and expiry date and other terms mentioned in this section are set out in Annexure "A" hereto.

Resolution 3: RATIFICATION OF ISSUE OF SHARES

Resolution 3 seeks shareholder ratification pursuant to Listing Rule 7.4 for the previous issue of 280.140 fully paid ordinary shares in the capital of the Company to Grimwood Davies Pty Ltd.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eq. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus

the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

Listing Rule 7.4 provides that an issue made within the 15% limit will be treated as having been made with the approval of shareholders for the purpose of Listing Rule 7.1 if subsequently approved by shareholders. thereby "refreshing" the Company's ability to issue shares within the 15% limit, and restoring the Company's ability to make placements (if that is thought desirable) without the need for shareholder approval. While the 280.140 fully paid ordinary shares issued to Grimwood Davies Pty Ltd were within this 15% limit, the Company is requesting shareholders to ratify the issue of the shares for the purpose of Listing Rule 7.4, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.5, the following information is provided:

• 280,140 fully paid ordinary shares were issued at 19.73 cents per share.
• The shares were issued to Grimwood Davies Pty Ltd in lieu of exploration drilling services provided to the Company.
• The shares were issued and allotted on 17 October 2002. ٠
• The shares issued were fully paid ordinary shares and rank equally in all respects with the existing fully paid ordinary shares in the Company.

RATIFICATION OF ISSUE OF SHARES Resolution 4:

Resolution 4 seeks shareholder ratification pursuant to Listing Rule 7.4 for the previous issue of 15,000,000 fully paid ordinary shares in the capital of the Company to Citibank Nominees Pty Ltd.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eg. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

Listing Rule 7.4 provides that an issue made within the 15% limit will be treated as having been made with the approval of shareholders for the purpose of Listing Rule 7.1 if subsequently approved by shareholders, thereby "refreshing" the Company's ability to issue shares within the 15% limit, and restoring the Company's ability to make placements (if that is thought desirable) without the need for shareholder approval. While the 15,000,000 fully paid ordinary shares issued to Citibank Nominees Pty Ltd were within this 15% limit, the Company is requesting shareholders to ratify the issue of the shares for the purpose of Listing Rule 7.4, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.5, the following information is provided:

• 15,000,000 fully paid ordinary shares were issued at 11 cents per share.
• The shares were issued and allotted on 31 January 2003.
• The shares issued were fully paid ordinary shares and rank equally in all respects with the existing fully ă paid ordinary shares in the Company.
• The shares were issued to Citibank Nominees Pty Ltd.
• The issue raised \$1,650,000 for working capital and part payment for the acquisition of Paddys Flat.

Resolution 5: RATIFICATION OF ISSUE OF SHARES

Resolution 5 seeks shareholder ratification pursuant to Listing Rule 7.4 for the previous issue of 5,600,000 fully paid ordinary shares in the capital of the Company to Yamaji Marla Barna Baba Maaja Aboriginal Corporation as Trustee for the Puutu Kunti Kurrama Pinikura people.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain

exceptions, eq. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

Listing Rule 7.4 provides that an issue made within the 15% limit will be treated as having been made with the approval of shareholders for the purpose of Listing Rule 7.1 if subsequently approved by shareholders. thereby "refreshing" the Company's ability to issue shares within the 15% limit, and restoring the Company's ability to make placements (if that is thought desirable) without the need for shareholder approval. While the 5,600,000 fully paid ordinary shares issued to Yamaji Marla Barna Baba Maaja Aboriginal Corporation were within this 15% limit, the Company is requesting shareholders to ratify the issue of the shares for the purpose of Listing Rule 7.4, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.5, the following information is provided:

• 5,600,000 fully paid ordinary shares were issued at 11 cents per share.
• The shares were issued to Yamaii Marla Barna Baba Maaia Aboriginal Corporation as Trustee for the Puutu Kunti Kurrama Pinikura people pursuant to the Native Title Agreement entered into in relation to the Paulsens tenements.
• The shares were issued and allotted on 17 February 2003.
• The shares issued were fully paid ordinary shares and rank equally in all respects with the existing fully paid ordinary shares in the Company.

RATIFICATION FOR ISSUE OF CONVERTIBLE NOTE Resolution 6:

Resolution 6 seeks shareholder ratification pursuant to Listing Rule 7.4 for the previous issue of a Convertible Note to Ocean Resources Capital Holdings Limited.

The Company issued a Convertible Note certificate with a total face value of \$2,800,000 to Ocean Resources Capital Holdings Limited on 27 February 2003. Pursuant to the terms of the Convertible Note, Ocean Resources Capital Holdings Limited, has the option to convert the Convertible Note into up to 21,538,462 fully paid ordinary shares in the capital of the Company, at a strike price of 13 cents per share, at any time prior to the termination date of 31 December 2007. If the proposed business combination between the Company and Defiance Mining Corporation proceeds, it is a condition to the Convertible Note that the ability to convert into fully paid ordinary shares in the capital of the Company will cease and be replaced with the option to convert the Convertible Note into up to 4,869,865 common shares in the capital of Defiance Mining Corporation at a strike price of A\$0.575 per share. The Convertible Note provides that St Barbara will cause Defiance Mining Corporation to enter into a suitable deed of novation.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eg. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

ASX Listing Rule 7.4 provides that an issue made within the 15% limit will be treated as having been made with the approval of shareholders for the purpose of Listing Rule 7.1 if subsequently approved by shareholders, thereby "refreshing" the Company's ability to issue securities within the 15% limit, and restoring the Company's ability to make placements (if that is thought desirable) without the need for shareholder approval. While the 21,538,462 fully paid ordinary shares that may be issued to Ocean Resources Capital Holdings Limited on conversion of the Convertible Note, are within this 15% limit, the Company is requesting shareholders to ratify the issue of the Convertible Note for the purpose of Listing Rule 7.4, so that the Company will have the flexibility to issue further securities under Listing Rule 7.1 without seeking shareholder approval, if the need or opportunity arises.

For the purpose of Listing Rule 7.5, the following information is provided:

• Up to 21,538,462 fully paid ordinary shares could be issued at a strike price of 13 cents per share.
• On conversion of the Convertible Note, the shares will be issued to Ocean Resource Capital Holdings Limited.

• The shares when issued will be fully paid ordinary shares and rank equally in all respects with the $\bullet$ existing fully paid ordinary shares in the Company.
• The terms of the Convertible Note other than the relevant issue price and other terms mentioned in this section are set out in Annexure "B" hereto

Resolution 7: APPROVAL FOR ISSUE OF SHARES - CONVERTIBLE LOAN

Resolution 7 seeks shareholder approval pursuant to Listing Rule 7.1 for the issue of up to 43.076.923 fully paid ordinary shares in the Company to Ocean Resources Capital Holdings Limited pursuant to a Convertible Loan issued to Ocean Resources Capital Holdings Limited.

The Company issued a Convertible Loan certificate with a total face value of \$5,600,000 to Ocean Resources Capital Holdings Limited on 27 February 2003. Pursuant to the terms of the Convertible Loan, Ocean Resources Capital Holdings Limited has the option, subject to shareholder approval, to convert the amount outstanding under the Convertible Loan into up to 43.076.923 fully paid shares in the capital of the Company. at a strike price of 13 cents per share, at any time prior to the termination date of 31 December 2007.

The Convertible Loan is subject to a condition subsequent that upon the Company calling for payment of the total face value of the Convertible Loan or any part of it, and upon such call being paid, the Company will promptly seek the approval of its shareholders to the conversion of the amount of the call into fully paid ordinary shares in the capital of the Company in accordance with the ASX Listing Rules. In the event the Company fails to gain such approval within 12 months of first being required to seek the same then Ocean Resources Capital Holdings Limited may require repayment of the total outstanding under the Convertible Loan within 60 business days notice.

If the proposed business combination between the Company and Defiance Mining Corporation proceeds, it is a condition to the Convertible Loan that the ability to convert into fully paid ordinary shares in the capital of the Company will cease and be replaced with the option to convert the Convertible Loan into up to 9.739.130 common shares in the capital of Defiance Mining Corporation at a strike price of A\$0.575 per share. The Convertible Loan provides that St Barbara will cause Defiance Mining Corporation to enter into a suitable deed of novation.

Listing Rule 7.1 limits the number of equity securities (e.g. shares, options and convertible notes) which a listed company may issue in any 12 month period without shareholder approval (subject to certain exceptions, eq. a pro rata issue to all shareholders). The limit is, generally speaking, no more than 15% of the total of the number of fully paid ordinary shares on issue at the beginning of the 12 month period, plus the number of fully paid ordinary shares issued with the approval of shareholders or under one of the exceptions during the previous 12 months.

As the maximum number of shares that may be issued under the Convertible Loan exceeds the 15% threshold referred to above, shareholder approval for the issue of shares under the Convertible Loan is required for the purposes of Listing Rule 7.1.

ASX Listing Rule 7.3 requires that the following information be provided to shareholders for the purpose of obtaining shareholder approval pursuant to ASX Listing Rule 7.1:

• up to 43,076,923 fully paid ordinary shares could be issued at a strike price of 13 cents per share.
• On conversion of the Convertible Loan, the shares will be issued to Ocean Resource Capital Holdings Limited. $\bullet$
• The shares when issued will be fully paid ordinary shares and rank equally in all respects with the $\bullet$ existing fully paid ordinary shares in the Company.
• Pursuant to the terms of the Convertible Note, the shares may be issued to Ocean Resource Capital Holdings Limited at any time up to 31 December 2007. For the purposes of Listing Rule 7.1, the shares must be issued within 3 months of the date of the resolution in order to comply with the Listing Rule. In the event that any shares are to be issued to Ocean Resource Capital Holdings Limited outside this 3 month period, further shareholder approval will be sought.
• The terms of the Convertible Loan other than the relevant issue price and other terms mentioned in this section are set out in Annexure "B" hereto.

Resolution 8: ADOPTION OF NEW CONSTITUTION

Resolution 8 seeks shareholder approval to adopt a new Constitution for the Company. The reasons for adopting a new Constitution are to ensure that the Company has a Constitution which comply with the current provisions of the Corporations Act and the ASX Listing Rules that apply to public companies. In addition, the Company seeks to update its Constitution in light of the age of, and language used in the current articles of association.

A copy of the proposed new Constitution is available for inspection at the Company's registered office at Level 2. 16 Ord Street. West Perth during normal business hours and will be sent to any member upon request.

Members are encouraged to inspect a copy of the proposed new Constitution to obtain an understanding of all of its provisions.

In summary, the proposed new Constitution includes provisions to the following effect:

$(a)$ Shares

The issue of shares and options by the Company is under the control of the Directors, subject to the Corporations Act, ASX Listing Rules and any rights attached to any class of shares.

$(b)$ Reduction of Capital

The proposed new Constitution relating to reduction of capital is consistent with the Corporations Act and ASX Listing Rules requirements which must be satisfied by the Company in undertaking an alteration of capital.

$(c)$ Liens

In the event that the Company issues partly paid shares and a call made on those shares is unpaid, the Company will have a lien over the shares on which the call is unpaid. The lien may be enforced by a sale of those shares.

$(d)$ Forfeiture of Shares

The Company may forfeit and sell a share of a member by a resolution of Directors where that member has failed to pay a call or instalment on that share. The Directors must provide the member with notice of an intention to forfeit the shares.

$(e)$ Transfer of Shares

The Directors may refuse to register a transfer of shares in circumstances permitted or required under the Corporations Act, the Listing Rules, the SCH Business Rules and the terms set out in the proposed constitution. The Company will not charge any fee for registering a transfer of shares.

$(f)$ Alterations of share capital

Shares may be converted or cancelled with member approval and the Company's share capital may be reduced in accordance with the requirements of the Corporations Act and the ASX Listing Rules.

Share Buy Backs $(q)$

The Company may buy back shares in itself on terms and at such times determined by the Company and in accordance with the Corporations Act, the Listing Rules and the SCH Business Rules.

$(h)$ Dividends

The Directors may fix the amount, the time for payment and the method of payment of a dividend on shares. Subject to any special rights attaching to shares (such as preference shares), dividends will be paid proportionately. The Company is not required to pay any interest on dividends.

$(i)$ Variation of class rights

Subject to the Corporations Act and the terms of issue of shares in a particular class, the Company may vary or cancel the rights attached to shares in that class or convert shares from one class to another, with the consent in writing of 75% of the members in the class, or by a special resolution of the members in that class.

$(i)$ Meetings of members

Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all members are entitled to elect to receive notice of meetings. Consistent with the Corporations Act, a meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is 2 eligible voters.

The Company will hold annual general meetings in accordance with the Corporations Act and the ASX Listing Rules.

Voting of members $(k)$

Resolutions of members will be decided by a show of hands unless a poll is demanded.

${|}$ Proxies

A member may appoint a proxy to attend and vote at the meeting on the member's behalf. The Constitution contains provisions specifying the form and manner of lodgement of proxy instruments.

Directors $(m)$

Unless changed by the Company in general meeting, the minimum number of directors is three and the maximum is ten. The existing directors of the Company may appoint a new director to fill a casual vacancy or as an addition to the board. Any such director must retire at the next following annual general meeting of the Company (at which meeting he or she may be eligible for election as a director).

The proposed Constitution requires that one third of the elected directors are to retire at each annual general meeting or, if there are less than three directors, one Director must retire at each annual general meeting.

Powers of Directors $(n)$

The business of the Company is to be managed by or under the direction of the directors.

$(0)$ Remuneration of Directors

The fees payable to non-executive directors must not exceed the aggregate fixed sum determined by members in general meeting and must not be by way of commission on, or percentage of. profits or operating revenue.

The remuneration of executive directors will be subject to the provisions of any contract between each of them and the Company but may not be by way of commission on, or percentage of, profits of the Company.

Managing Director $(p)$

The directors may appoint one or more of their number as Managing Director, for any period and on any terms (including as to remuneration) as the directors resolve, subject to the terms set out in the Constitution.

$(q)$ Execution of documents

The Constitution provides for execution of documents by the Company with or without the use of the Company's company seal.

Indemnities and insurance $(r)$

To the extent permitted by law, the Company indemnifies every person who is or has been a director or secretary of the Company against a liability incurred by that person in his or her capacity as a director or secretary. A similar indemnity is provided in respect of legal proceedings. The Company may also pay the premiums on these liability insurances.

Annexure "A"

Terms of unlisted options for the purposes of Resolution 1

Exercise

• If, at any time, the Market Price is equal to or exceeds 100% of the relevant exercise price of a St Barbara option issued to Resource Capital Fund II for a period of not less than 10 consecutive business days and the St Barbara shares to be issued upon exercise of those St Barbara options are capable of immediately being listed for trading on ASX, then upon written request by St Barbara, Resource Capital Fund II will exercise those St Barbara options on the basis that the exercise proceeds will be applied by Resource Capital Fund II (by way of set-off) against repayment of the funding portion in respect of which the St Barbara options were so issued.
• "Market Price" in relation to a St Barbara Share on any day, means the weighted average sell price of that St Barbara Share quoted on ASX during the 20 trading days immediately preceding that day.

Reorganisation of Capital

• In the event of a reorganisation or reconstruction of the share capital of St Barbara and subject to compliance by St Barbara with the ASX Listing Rules, the rights of Resource Capital Fund II L.P will be changed to the extent necessary to ensure the rights of the Resource Capital Fund II are not prejudiced by the reorganisation or reconstruction in accordance with the ASX Listing Rules applying to a reorganisation or reconstruction of capital at the time of the reorganisation or reconstruction.
• St Barbara must given written notice to the Resource Capital Fund II with 10 business days of any adjustment to the number of St Barbara Shares which the Resource Capital Fund II would be entitled to subscribe for on exercise of a St Barbara option, or the exercise price per St Barbara share in accordance with the ASX Listing Rules.

Participation in new Issues

Without limiting the clause below, the St Barbara options do not confer the right to participate in new issues of capital during the exercise period. St Barbara must give Resource Capital Fund II not less than 20 days' notice to exercise its St Barbara options prior to the date of determining shareholder entitlements for any new issues of capital that occur during the exercise period.

Changes to Exercise price or Number of Shares Issues on Exercise

• The options shall confer the right to a reduction in the exercise price if there is a pro-rata issue to the holders of St Barbara Shares (except a bonus issue) in accordance with the formula set out in the ASX Listing Rules.
• If there is a bonus issue to the holders of St Barbara Shares, the number of St Barbara Shares to be issued upon exercise of the options shall be increased by the number of St Barbara Shares which Resource Capital Fund II would have received if all St Barbara Options had been exercise before the record date for the bonus issue.

Annexure "B"

Terms of Convertible Notes and Convertible Loan for the purposes of Resolutions 6 and 7

Both the Convertible Note and the Convertible Loan provide that:

• The Principal Amount (being the Total Face Value, respectively, less any amounts converted or redeemed from time to time) is payable by the holder to the Company in full on the date of issue of the Convertible Note and Convertible Loan or such later times and in such tranches as the Company may, on not less than 7 business days notice by the Company, require,
• The Principal Amount must be used solely for working capital and funding of the Projects. The Projects are defined to include Taipan Resources NL's Paulsens gold project and the Company's Paddy's Flat gold project.
• The Convertible Note and the Convertible Loan are unlisted.
• Interest is payable on the amount outstanding at a rate of 12% per annum. Interest is payable (calculated daily and compounded six monthly) 6 monthly in arrears as follows:
• o on 28 February of each year if the consolidated EBITDA of the St Barbara Group for the 6 months ending on the preceding 31 December exceeds A\$0.75 million;
• on 30 August of each year if the consolidated EBITDA of the St Barbara Group for the 6 months ending on 30 June of that year exceeds A\$0.75 million; and
• shall otherwise accrue and form part of the total outstanding provided that accrued interest shall be payable to the Note holder if the consolidated EBITDA of the St Barbara Group for the 6 months ended on each of 30 June and 31 December of any year during the Conversion Period exceeds A\$1.5 million.
• The holder is granted an option to convert, in whole or in part (save that if in part, in multiples of not less than A\$100,000) during the Conversion Period, being the period from the date of issue of the Convertible Note to the Termination Date. being 31 December 2007, into the Company fully paid ordinary shares.
• Unless converted on or before the Termination Date (in each case 31 December 2007) the holder is entitled to receive from the Company the total amount outstanding under the Convertible Note and the Convertible Loan on the Termination Date.
• the Company has the right to give an early redemption notice the holder to redeem the Convertible Note and the Convertible Loan (or any part which has not been converted). The amount by which any early redemption payment reduces the amount outstanding under the Convertible Note and the Convertible Loan is dependent upon the then current trading price of St Barbara shares on ASX. If the trading price is less than or equal to the Strike Price the total outstanding under the Convertible Note and the Convertible Loan, respectively, will be reduced by the early redemption payment. If the price of the Company's shares are greater than the Strike Price then the total outstanding is reduced according to a formula.
• It is an event of default where, relevantly, without the prior written consent of the holder:
• o the Company:
  • ×. reduces its capital (including, without limitation, a purchase of its shares but excluding a redemption of redeemable shares);
  • passes a resolution to reduce its capital or to authorise it to purchase its shares; or $\blacksquare$
  • applies to a Court to call any such meeting or to sanction any such resolution or reduction;
• o all of the Shares are sold (being the Company's fully paid ordinary shares);
• o the Company is suspended or removed from the Official List of ASX.
• At all times during the Conversion period, the Company must give notice of certain matters to the holder, including relevantly, notice immediately upon becoming aware that the power to control more than 50% of the issued Shares will or is likely to change.
• The holder has the right to transfer the Convertible Note and the Convertible Loan, upon giving notice to the Company, save that if the holder intends to transfer all or part of its Convertible Note and Convertible Loan in accordance, the holder must grant a first right of refusal to the Company to purchase that Convertible Note and Convertible Loan, respectively, or part thereof (as the case may be) for a period of 60 days on terms no less favourable than those offered to the proposed transferee.
• The holder has the right to participate in bonus issues and rights offers as if the holder had converted the Convertible Note or Convertible Loan respectively to the Company shares.
• The Convertible Note and Convertible Loan provides that, save for the Business Combination if:
• $\circ$ the Company ("first company") merges with another company ("third party"); or
• o the first company enters into an arrangement under which its operations are disposed of to a third party,

the Company must ensure that it is a condition of the merger or arrangement that the right to convert in relation to the first company is transferred to a right to convert into ordinary shares in the third party at the strike price which would put the holder of the Convertible Note in the same position after the merger or arrangement that it was in before the merger or arrangement relative to the weighted average trading price of the first company for the 30 days before the date of the public announcement of the merger or arrangement.

PROXY FORM

The Secretary St Barbara Mines Ltd Level 2, 16 Ord Street WEST PERTH WA 6005 Australia Fax Number: +61 8 9476 5500 (marked for the attention of Mr Alan Rule)

I/We
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	being a shareholder/(s) of St Barbara Mines Ltd ("Company") and entitled to	shares in St Barbara
	hereby appoint must measure the community of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of t
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	or failing him/her
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or failing him/her the Chairman as my/our proxy to vote for me/us and on my/our behalf at the Meeting of the Company to be held at Conference Suite, Level 8, Exchange Plaza, 2 The Esplanade, Perth, Western Australia on Friday, 6 June 2003 commencing at 10.00 a.m and at any adjournment thereof in respect of of my/our shares or, failing any number being specified, ALL of my/our shares in the Company.

If two proxies are appointed, the proportion of voting rights this proxy is authorised to exercise is _________%. (An additional proxy form will be supplied by the Company on request.)

If you wish to indicate how your proxy is to vote, please tick the appropriate places below. If no indication is given on a resolution, the proxy may abstain or vote at his or her discretion.

I/we direct my/our proxy to vote as indicated below:

	RESOLUTION	FOR	AGAINST	ABSTAIN
	RATIFICATION OF ISSUE OF SHARES AND OPTIONS
2	AUTHORITY FOR ISSUE OF OPTIONS
3.	RATIFICATION OF ISSUE OF SHARES
4.	RATIFICATION OF ISSUE OF SHARES
5.	RATIFICATION OF ISSUE OF SHARES
6.	RATIFICATION OF ISSUE OF CONVERTIBLE NOTE
	AUTHORITY FOR ISSUE OF SHARES - CONVERTIBLE LOAN
8.	ADOPTION OF NEW CONSTITUTION

Proxies given by a natural person must be signed by each appointing shareholder or the shareholder's attorney duly authorised in writing. Proxies given by companies must be executed in accordance with section 127 of the Corporations Act or signed by the appointor's attorney duly authorised in writing. The Chairman intends to vote all undirected proxies in favour of all of the Resolutions.

If you do not wish to direct your proxy how to vote, please place a mark in the box

By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

DATED:	.2003
If a natural person: SIGNED by:
Signature	Signature (if joint holder)
Print Name in full	Print Name in full
If a company: Executed in accordance with section 127 of the Corporations Act
Signature of Director	Signature of Director / Secretary
Print Name in full	Name of Director / Secretary in full
If by power of attorney: SIGNED for and on behalf of by under a Power of Attorney dated and who declares that he/she has not received any revocation of such Power of Attorney in the presence of:
Signature of Attorney	Signature of Witness
	Name of Witness in full

PROXY AND VOTING ENTITLEMENT INSTRUCTIONS

PROXY INSTRUCTIONS

Shareholders are entitled to appoint up to two individuals to act as proxies to attend and vote on their behalf. Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the shareholder's voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes.

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be deposited at or sent by facsimile transmission to the registered office of the Company at Level 2, 16 Ord Street, West Perth, Western Australia, 6005, facsimile number +61 8 9476 5500, not less than 48 hours before the time for holding the Extraordinary General Meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the shareholder or his/her attorney duly authorised in writing or, if the shareholder is a corporation, in a manner permitted by the Corporations Act.

The proxy may, but need not, be a shareholder of the Company.

In the case of shares jointly held by two or more persons, all joint holders must sign the proxy form.

A proxy form is attached to this Notice.

VOTING ENTITLEMENT

For the purposes of determining voting entitlements at the Extraordinary General Meeting, shares will be taken to be held by the persons who are registered as holding the shares at 10.00 am (WST) on Wednesday, 4 June 2003. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Extraordinary General Meeting.