ST BARBARA LIMITED — Proxy Solicitation & Information Statement 2004

Dec 14, 2004

ASX SHAREHOLDERS REPORT

Enquiries regarding this report or Company business may be directed to:

Colin G. Jackson Chairman Freecall: 1800 811 109

NuStar Mining Corporation Level 2, 16 Ord Street West Perth Western Australia 6005 Telephone (08) 9476 5599 Overseas +61 8 9476 5599

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

Target's Statement in response to Sedimentary Offer

Attached, in accordance with item 14 of section 633(1) of the Corporations Act, is a copy of the Company's Target's Statement dated 15 December 2004 to be dispatched to shareholders and optionholders of the Company.

Lee Boyd Company Secretary

15 December 2004

REJECT the Sedimentary Offer

The Directors of NuStar unanimously recommend that you REJECT the Offer from Sedimentary Holdings Ltd

THIS IS AN IMPORTANT DOCUMENT PLEASE READ IT CAREFULLY. IF YOU ARE IN ANY DOUBT AS TO HOW TO DEAL WITH THIS DOCUMENT. PLEASE CONSULT YOUR PROFESSIONAL ADVISER.

Site construction commences - May 2004

Resource estimation -- June 2004

Decline development commences - July 2004

NUSTAR DIRKCTORS' RECOMMENDATION

The Directors of your Company unanimously recommend that you

REJECT SEDIMENTARY'S TAKEOVER OFFER

Your Directors recommend that you carefully consider this document. which has been prepared in response to the Sedimentary Bidder's Statement.

WHAT SHOULD YOU DO?

To reject the Sedimentary Offer, simply DISREGARD all documents and communications from Sedimentary.

If you have any queries, please contact:

Colin Jackson, NuStar Mining Corporation Chairman, on 1800 811 109 (toll free)

Shareholders should note that the Corporations Act requires NuStar to record any conversation with shareholders* to discuss the takeover bid by Sedimentary (whether or not for some other purpose as well). NuStar will also need to identify the caller and to store and index the recording.

There are significant penalties for non-compliance with this law and consequently, all calls to the Company from shareholders* will be referred to the Chairman, Colin Jackson, and recorded. This may result in delays in dealing with shareholder queries and the Company regrets any inconvenience caused.

	Contents		Page
1.	Chairman's Letter		2
2.	Why you should REJECT the Offer		3
	2.1	How should the value of the Offer be assessed?	4
	2.2	Sedimentary appears to recognise the value in NuStar	5
	2.3	Dilution of your interest in gold production	6
	2.4	Dilution of your interest in operating cashflow and profit	7
	2.5	Enterprise Value per ounce differential	8
	2.6	Uncertainty as to the value of other Sedimentary projects	9
	2.7	A partial takeover by Sedimentary will not deliver benefits	-9
	2.8	Sedimentary does not offer material benefits to NuStar	10
	2.9	Corporate Governance is uncertain	12
	2.10	Capital Gains Tax rollover relief is uncertain	12
3.	Frequently Asked Questions		13
4.	Other Important Information		15

(* excludes "wholesale holders" as defined in the Corporations Act)

Chairman's Letter 1.

Dear fellow shareholder,

Your Board unanimously recommends that you REJECT the takeover Offer by Sedimentary Holdings Ltd for your NuStar Shares

NuStar Shareholders should be aware that Sedimentary is a minority partner in the Cracow gold mine (managed and owned 70 percent by Newcrest Mining Limited) with an attributable share of production, as forecast by Sedimentary, as being up to 35,000 ounces per annum (or an average of approximately 29,000 ounces per annum) over a projected seven year mine life.

In comparison, NuStar, from its 100 percent owned and managed Paulsens Project, is scheduled to average 80,000 ounces per annum over a mine life of approximately five years commencing May 2005.

In September 2004, Sedimentary approached NuStar proposing a merger of the two companies, Under a confidentiality agreement, NuStar provided all the information requested - a site visit, mine plan schedules and full geological database of the Paulsens Project - to allow Sedimentary to form a view on the value of NuStar.

Sedimentary obviously recognised the value of the Paulsen's Project and NuStar's substantial regional exploration interests and in early November 2004 proposed a merger on essentially the same terms as the current Offer. Despite the NuStar Board rejecting the terms, Sedimentary launched this hostile Offer.

Like the Paulsens Project, Cracow is a project with upside potential. Following the announcement of the Offer, your Directors made two formal requests for information on the project and a site visit in order to form a view on the potential upside that Cracow may ofter. At the date of this letter, Sedimentary has refused to provide direct access to any additional information, nor allow any NuStar representatives to visit the Cracow site. Your Directors have therefore had no option but to continue to rely on publicly available information to form a view on the merits of the Offer.

After careful consideration and for the reasons set out in this Target's Statement (including dilution of your interest in production, operating cashflow and profit and the absence of any material merger benefits) your Directors unanimously recommend Shareholders REJECT the Offer.

The NuStar Directors will not be accepting the Offer for NuStar Shares they own or control.

You should also be aware that St Barbara (which holds 38 percent of the shares in NuStar) has indicated that it does not presently intend to accept the Sedimentary Offer and instead is offering part of its holding in NuStar Shares pursuant to a Buy-Back offer to its shareholders.

The Offer, on its current terms (scheduled close on 4 January 2005) has little chance of success. It also appears capital gains tax rollover relief will not be available for NuStar Shareholders who accept the Offer

To reject the Offer, simply DISREGARD all documents and communications from Sedimentary.

Yours faithfully,

Mall ...

Colin G Jackson Chairman

15 December 2004

Why you should REJECT the Offer na.
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Summary

Your Directors have carefully considered the Offer and have concluded that the current terms of the Offer are not fair to NuStar Shareholders.

On the following pages, the reasons behind the decision of the NuStar Board to recommend you reject the Offer are set out in detail. Those reasons can be summarised as follows:

$(1)$ Terms are not considered fair to NuStar Shareholders

Based on a review of publicly available information on Sedimentary, your Directors do not believe that the Offer provides sufficient value to justify passing control of NuStar to Sedimentary (see Sections 2.1, 2.2 and 2.8).

Unfair dilution of NuStar Shareholders' interest in total and $(2)$ average annual production

Based on the publicly disclosed production parameters for the Paulsens Project and the Cracow Project, if the Offer succeeded, it would result in an unfair dilution of the interest of NuStar Shareholders in total production ounces and average annual production (see Section 2.3).

$(3)$ Unfair dilution of interest of NuStar Shareholders in operating cashflow and profit

There would be unfair dilution of the interest of NuStar Shareholders in operating cashflow and profit (see Section 2.4).

No material value evident in other Sedimentary assets $(4)$

No material value should reasonably be ascribed to Sedimentary's other exploration interests (see Section 2.6).

$(5)$ No other material benefits which justify support

The Offer does not offer NuStar Shareholders any other material benefits which might otherwise cause your Directors to recommend acceptance (see Sections 2.7 and 2.8).

$(6)$ Rollover relief uncertainty mitigates against acceptance of the Offer

Capital gains tax rollover relief appears unlikely to be available (see Section 2.10).

Your Directors urge you to read this Target's Statement carefully and consult your professional adviser if you are in any doubt about how to respond to Sedimentary's Offer.

2.1 How should the value of the Offer be assessed?

If you accept the Offer, you will receive two Sedimentary shares for every nine of your NuStar Shares. The value of Sedimentary shares will depend on the market's view of the underlying value of Sedimentary's assets post the Offer. Two scenarios need to be considered:

• Sedimentary secures 100 percent of NuStar $(1)$
• $(2)$ Sedimentary does not secure 100 percent of NuStar

Given that the Offer is subject to a 50.1 percent minimum acceptance condition, the recommendation of your Directors to reject the Offer and the publicly stated intention of a 38 percent shareholder not to accept the Offer, then the second scenario is the most likely. Sedimentary shares would then be priced by the market on the value of its 30 percent minority interest in Cracow, its partial ownership of NuStar and its other assets and liabilities.

Like the Paulsens Project, Cracow is a project with upside potential. Forming a view on this upside is important when assessing the value of a Sedimentary share. For this reason, NuStar made two separate requests for additional information from Sedimentary on the Cracow Project. A request was also made for a site visit.

• $(1)$ Sedimentary refused to provide additional requested information or access for a site visit. Sedimentary has had the benefit of a site visit to Paulsens and has been provided with a detailed production profile and a copy of the geological database. To date, Sedimentary has refused to provide NuStar with similar information in relation to its interest in Cracow.
• $(2)$ The NuStar Board has therefore been left with no alternative but to rely on publicly available information (including the limited details set out in Sedimentary's Bidder's Statement) to form a view on the Offer, noting the following key issues:
• Sedimentary currently has no JORC compliant Reserves and the Cracow mine plan is based on Inferred Resources. In comparison, 89 percent of NuStar's resource ounces are Indicated.
• Sedimentary is a minority partner in the Cracow Project and is not the manager, which leaves Sedimentary with limited control over operational management, exploration programmes and future development activities.
• NuStar was not provided access to additional requested information to form a detailed view on the broad-ranging operating parameters at Cracow referred to in the Bidder's Statement which implies that attributable annual production could be in the range of 29,000 to 38,000 ounces (a 30 percent variance).

Your Directors acknowledge the generally held view in the market that the Cracow Project will vield more gold than is currently planned. Your Directors are aware that Newcrest, the manager of the Cracow Project, has been quoted publicly as expressing the view that Cracow is "an emerging world class epithermal gold district" ("Cracow Project Exploration Presentation", Newcrest Mining Investor Presentation, 9 April 2003).

However, Sedimentary has refused to provide NuStar with direct access to information that might substantiate statements in the market that Cracow has the potential to host in excess of 2 million ounces of gold despite the fact that Sedimentary has not officially released information into the public domain that would enable such substantiation.

While your Directors recognise that the Cracow field offers upside potential, a view needs to be taken on the probability, timing and, most importantly, economic viability of that potential.

Your Directors will review the recommendation to reject the Offer in light of any additional material information that Sedimentary may provide to NuStar or release to the market during the term of the Offer. However, as a consequence of the factors outlined above, the analysis which follows in this document is based on the announced production parameters which Sedimentary has outlined in section 3.3 of its Bidder's Statement and which are repeated in Section 4.16 of this Target's Statement.

ケツ Sedimentary appears to recognise the value in NuStar

As stated in the Chairman's Address at the Annual General Meeting held on 29 November 2004, Sedimentary was provided with a site visit and detailed technical information about the Paulsens Project, including the full geological database.

That information clearly appears to have given Sedimentary confidence in the underlying value of NuStar and its future potential, a view already held by your Directors.

The Paulsens Project

Gold production at Paulsens is scheduled to commence in May 2005. Under the current mine plan, annual production will average 80,000 ounces per annum over a mine life of approximately five years. The mine plan is based on a JORC compliant Probable Reserve of 412,100 ounces situated within the first 300 metres below surface, a relatively shallow depth for an underground mine.

Paulsens Project Upside

Diamond drilling has confirmed that ore grade mineralisation extends to at least 470 metres below surface and remains open, being limited only by the extent of recent drilling. A JORC compliant Inferred Resource extends from the base of the current mine design to that depth. This provides your Directors with a high degree of confidence that mining will extend beyond the current mine plan.

NuStar Exploration Portfolio

In addition to the depth potential at Paulsens, NuStar has further exploration upside through its substantial regional exploration portfolio, including recent joint venture agreements over the Hardey Junction Joint Venture and the Wyloo Joint Venture which represent a significant consolidation of the ground in proximity to Paulsens.

Further details of the above are provided in Section 4.11.

NuStar's Future is Secure

NuStar has an experienced Board and executive committed to grow and develop the business. Key considerations include:

• Ă Development funding for the Paulsens Project, including contingencies, is in place.
• The development is well advanced with the decline 740 metres from the portal. Ore to surface ٠ is scheduled next month with gold production planned to commence in May 2005.
• Your Directors are confident that mine life extensions will occur, particularly in the depth extensions below the 300 metres vertical depth of the current mine plan.
• A targeted exploration programme is being undertaken on NuStar's extensive regional exploration portfolio to prioritise drill targets for the coming field season.
• The Paulsens Royalty previously held by St Barbara has been acquired at a fair price.

Notwithstanding Sedimentary's apparent confidence in the underlying value of NuStar following its review of detailed technical information and site visit at Paulsens, Sedimentary did not disclose to NuStar Shareholders the fact that it had been given privileged access to NuStar data prior to making its Offer.

D. Dilution of your interest in gold production

NuStar Shareholders would own approximately 46 percent of the enlarged Sedimentary (MergeCo) if the Offer is 100 percent successful in its current form, representing a disproportionate dilution of your interest in gold production.

The terms of Sedimentary's Offer would see NuStar Shareholder's effective equity ownership interest in total production ounces diluted by 29 percent from approximately 385,000 ounces to 270,000 ounces based on the NuStar Shareholders' effective share in the merged entity's production.

Likewise, the ownership interest in average annual production would be diluted by 37 percent from 80,000 ounces to approximately 50,000 ounces per annum.

Conversely, current Sedimentary Shareholder equity is increased considerably. Sedimentary Shareholders would see their equity interests in total gold production increase by 55 percent from approximately 204.000 ounces to 317.000 ounces.

Sedimentary Shareholders' ownership interest in average annual production would increase by 101 percent from approximately 29,000 ounces to 59,000 ounces per annum.

NuStar Directors unanimously REJECT the Offer because, amongst other things, NuStar Shareholders' equity in gold production would be unfairly diluted.

Dilution of your interest in operating cashflow and profit

NuStar Shareholders would own approximately 46 percent of the enlarged Sedimentary (MergeCo) if the Offer is 100 percent successful in its current form, representing a disproportionate dilution of your interest in operating cashflow and profit.

Sedimentary's Offer terms would see NuStar Shareholders' equity interest in average annual operating cashflow diluted by 29 percent from an average of \$21.7 million to \$15.5 million per annum.

Likewise, average annual operating profit would be reduced by 25 percent from approximately \$12.3 million to \$9.3 million per annum.

Conversely, Sedimentary Shareholders would see their interest in average annual operating cashflow increase by 53 percent from approximately \$11.8 million to \$18.0 million per annum.

Sedimentary Shareholders' interest in average annual operating profit would increase by 40 percent from approximately \$7.7 million to \$10.8 million per annum.

Note: The above dilution comparison is based on:

• NuStar's current life of mine model key parameters of which are set out in Section 4.11 below.
• Sedimentary's 30 percent equity interest in the Cracow Project as set out in section 3.3 of the Bidder's Statement.
• Revenue is based on the NuStar publicly announced hedge book profile, the Sedimentary hedge book profile included in section 3.5 of the Bidder's Statement and the spot gold price of A\$580 per ounce.
• Operating Cashflow is based on revenue received (including hedged gold sales) less cash operating costs.
• Operating Profit is based on revenue less total operating costs for NuStar of \$445 per ounce and for Sedimentary of \$360 per ounce (excluding any amortisation that may result from any merger),

NuStar Directors unanimously REJECT the Offer because, amongst other things, NuStar Shareholders' equity in operating cashflow and profit would be unfairly diluted.

Enterprise Value per ounce differential

Enterprise Value per resource, reserve and annual production ounce is a common method used in gold equity analysis to compare the relative value of companies.

The Enterprise Value is defined as the sum of the market equity capitalisation (including shares and options) plus the net debt (interest bearing liabilities less cash and near cash investments).

As with many analytical techniques, the outcome can be influenced by the assumptions made. Similarly, it is not always possible to identify which factors have contributed to the outcome.

Given that there are no published mineable reserves estimated for Cracow, there is no ability to make any comparison on a reserve basis. Sedimentary has also not provided information on projected debt levels in its Bidder's Statement. The comparisons are therefore based on public information.

Based on the Enterprise Value method (using the volume weighted average price for each of a NuStar Share of 6.5 cents per share and a Sedimentary share of 28.9 cents per share from and including the date of the announcement of the Offer to 13 December 2004, the assessed value of each company's options using Black-Scholes methodology and a NuStar net debt assumption of \$23.6 million and Sedimentary net debt assumption of \$7.5 million - both at 30 June 2005) it would appear Sedimentary is trading at a substantial premium to NuStar.

With an Enterprise Value per resource ounce of approximately \$345 per ounce, Sedimentary was trading at a 110 percent premium to NuStar's Enterprise Value per resource ounce of approximately \$160 per ounce.

The differential was more pronounced on an Enterprise Value per production ounce. Assuming average production, Sedimentary was trading on a multiple of approximately \$2,800 per ounce, at two and a half times or at a 155 percent premium to the \$1,100 per ounce multiple on which NuStar was trading.

While part of this premium differential could be attributable to the lower costs at Cracow compared to Paulsens, there remains a substantial premium which your Directors consider may be reconciled by expectations of exploration upside at Cracow.

Offsetting this is the need to make allowance for the fact that NuStar has total ownership and control over Paulsens. Sedimentary, on the other hand, has only a 30 percent minority interest in Cracow and is not in a position where it can control the development of the Cracow Project.

Given the unwillingness of Sedimentary to provide any additional requested information that might allow NuStar to form a comparative view of exploration potential of Cracow and Paulsens, your Directors have been unable to satisfactorily reconcile the per ounce differential in the Enterprise Value multiples.

Your Directors are unable to satisfactorily reconcile the significant value per ounce differential in favour of Sedimentary.

Uncertainty as to the value of other Sedimentary projects $\gamma_{\ell m}$

The Directors' review of public data does not suggest that material value should be attributed to Sedimentary's other exploration projects.

Sedimentary's other assets include the Miclere Project and Mt Britton joint venture (Sedimentary earning 51 percent) in Oueensland, the Foster Project in Victoria (Sedimentary earning 80 percent) and Weld River in Tasmania.

A review of public data does not suggest that material value should be attributed to these projects. In response to Sedimentary's comments in its Bidder's Statement on the Miclere Project, NuStar notes that:

• (1) Sedimentary has owned the Miclere Project since 1993 and despite entering into separate joint ventures in the early and late 1990s with two other miners, both joint venturers withdrew without apparent exploration success.
• (2) Sedimentary also conducted what appears to have been an unsuccessful Research and Development funded experiment with its novel Continuous Mining Transport and Treatment Technology ("CMTT") in the mid 1990s.
• (3) The decline referred to in section 3.3 of the Bidder's Statement in relation to the Miclere Project was first sunk by previous owners in the late 1980s and then extended by Sedimentary as part of the CMTT experiment in the mid 1990s.
• (4) The Bidder's Statement indicates the "initial target zone from the existing development is only 300 metres ahead of the face". Despite a specific request by NuStar, Sedimentary did not indicate when it anticipated reaching the target zone.

A partial takeover by Sedimentary will not deliver benefits

Many of the benefits identified by Sedimentary from a takeover of NuStar will only be available in the event that Sedimentary acquires 100 percent of NuStar. The Offer is subject to a 50.1 percent acceptance level.

Given your Directors' recommendation that you reject the Offer and the fact that St Barbara has publicly stated that it presently intends not to accept the Offer on its current terms, there is little chance that Sedimentary will gain 100 percent of NuStar. Should Sedimentary acquire less than 100 percent of NuStar:

• $(1)$ NuStar Shareholders who accept the Offer will hold a non-operating minority interest in Cracow and an indirect shareholding in NuStar. The Sedimentary share price could, as a consequence, suffer a holding company discount.
• $(2)$ Corporate costs may remain the same or increase due to the maintenance of two listed companies and the management of conflicts that could arise between Sedimentary's interests and those of the remaining minority shareholders in NuStar.
• Scale and market benefits will not be secured. $(3)$
• $(4)$ Direct access to the operating cashflows from Paulsens will not be possible.

$28$ Sedimentary does not offer material benefits to NuStar

In section 2 of its Bidder's Statement, Sedimentary sets out the reasons why it believes you should accept the Offer.

It is notable that NuStar asked Sedimentary to clarify a number of statements made in and arising from its Bidder's Statement which Sedimentary chose either to ignore or to offer responses of no substance.

The specific questions related to:

Sedimentary debt; availability of synergy savings; Cracow gold production range and parameters; contractual arrangements with Cracow manager, Newcrest; planned timing of orebody intersection at the Miclere Project and gold hedging.

Your Directors' views in response to the Sedimentary claims are set out below.

Sedimentary's Claim	NuStar's Response
You will receive an attractive premium for your shares	Your Directors do not believe that the Sedimentary Offer provides sufficient value or premium to justify passing control of NuStar to Sedimentary.
	Resource company share prices often re-rate as production commences and this may be one of the reasons why Sedimentary has made its Offer at this time.
	The market is aware of the likely rejection of the Offer by the NuStar Directors. The market is also aware that St Barbara (a 38 percent shareholder) has a present intention not to accept the Offer and is proceeding with the St Barbara Buy-Back Offer.
	Your Directors consider that the market is currently trading on the expectation that the Offer will fail. If so, formal closure of the Offer may not (in and of itself) have a material impact on the price of NuStar Shares.
	Since the announcement of the Offer there have been key acquisitions of shares, including 50 million shares by AMP Limited on 24 November 2004 and by Mathews Capital Partners Pty Ltd who became a substantial shareholder with 52.5 million shares on 25 November 2004.
A merger of Sedimentary and NuStar would result in a substantial Australian gold producer and explorer with significant potential for	The primary question must be: Are the Offer terms fair to NuStar Shareholders? Increased scale is not in itself a fundamental value driver. The dilution that would be suffered by NuStar Shareholders who accept the Offer does not, in the view of NuStar's Directors, outweigh the benefits of scale identified by Sedimentary.
further growth	The uplift to Sedimentary is significantly greater than the uplift to NuStar.

NuStar's Response
NuStar's Board and management have the necessary skills to continue to develop your Company as demonstrated by the performance of the current board and management in financing and developing the Paulsens Project.
Three NuStar Directors have combined mining career experience of one hundred years (geology, mining and metallurgy) including with major companies MIM, Newcrest, Normandy Mining, North Flinders, RGC and WMC.
NuStar executives Brett Lambert, Derek Humphry, Garry Mills, Tom Michalak and Brook Ekers have a collective 85 years of career experience including with major companies Anglogold, Boral, BP Minerals, Great Central Mines, LionOre Australia, Newmont, Normandy Mining, Western Metals and WMC.
Based upon our review of public information, there is nothing in the performance of Sedimentary's Board and management, in their current tenure, to suggest that they would provide superior management to that already available.
The current Sedimentary Board, with a collective service of approximately 45 years at Sedimentary, has overseen the closure of the Cracow mine, and the subsequent joint venturing out and handing over of management to Newcrest (who discovered the current resources and recently brought the project into production).
NuStar's funding requirements to bring the Paulsens Project into production have been met through its own equity raising late in November 2003 and via the debt facility with Westpac Banking Corporation in November 2004.
NuStar is fully funded to meet its planned development and exploration. In any event, any ability to add to funding capacity to NuStar's projects would be limited should Sedimentary achieve less than 100 percent control.
This is a potential benefit – but only if the Offer terms fairly reflect the relative contribution by each company to annual gold production and cash flows. Again, in the event that less than 100 percent control is secured
by Sedimentary this benefit would not be available.
This is also a potential benefit but it is unlikely to be material and, in any case, it is only relevant if the Offer terms are otherwise fair to NuStar Shareholders.

Why you should REJECT the Offer $\mathbb{Z}$ .

Sedimentary's Claim	NuStar's Response
Enlarged Sedimentary in better position to unlock the value of Paulsens	There is no basis for Sedimentary to make this assertion. NuStar has financed the development of Paulsens and has the necessary funding and management resources to carry out its planned development and regional exploration programme.
Opportunity to participate in upside from Sedimentary's assets	Sedimentary refused NuStar's request to provide information on which it could form a considered view on this assertion. Also refer to Section 2.6.
Synergies	There are no operational synergies - Sedimentary does not have any operations. There are no material corporate synergies. Sedimentary only has four employees in total and in any event has stated in the Bidder's Statement that it does not intend to close either Sedimentary's Melbourne office or NuStar's Perth office. Some relatively minor costs could be eliminated but these do not justify supporting an Offer which is not fair to NuStar Shareholders, particularly if Sedimentary was to secure less than 100 percent control.
Stamp duty or brokerage	No stamp duty is applicable on transfer of listed shares.

Corporate Governance is uncertain

NuStar Shareholders are not being afforded any insight into Sedimentary's intentions as to the Board composition and management arrangements. This is particularly important given that Sedimentary's bid is conditional on 50.1 percent acceptances.

Capital Gains Tax rollover relief is uncertain 2.10

There are some circumstances where, if you accepted the Sedimentary Offer, you might incur a capital gain for tax purposes. In those circumstances, in order for you to receive Capital Gains Tax rollover relief, Sedimentary would have to acquire more than 80 percent of NuStar Shares on issue at the close of the Sedimentary Offer.

St Barbara, a holder with more than 38 percent of NuStar's Shares, has stated that it does not presently intend to accept Sedimentary's Offer in its current form.

There is therefore a risk that if you accept the Offer you would have to fund a tax liability, even though you would not receive any cash from accepting the Sedimentary Offer.

Shareholders are advised to refer to Section 4.13 for more information on rollover relief and seek their own professional advice on the tax consequences of accepting the Sedimentary Offer.

3.1 How do I reject the Sedimentary Offer?

To reject the Sedimentary Offer - SIMPLY DO NOTHING.

When do I have to make a decision? $3.2$

The Sedimentary Offer closes at 5.00 pm WST on 4 January 2005. Sedimentary may, however, extend the Offer Period in accordance with the Corporations Act. Shareholders would be notified if this were to be the case.

If, within the last seven days of the Offer Period, Sedimentary's voting power in NuStar increases to more than 50 percent or Sedimentary varies its Offer under the bid to improve the consideration offered, then the Offer Period will automatically be extended by a further 14 days following that date, allowing NuStar Shareholders more time to fully consider the Sedimentary Offer.

Directors will keep you informed of any developments.

3.3 If I accept the Offer, can I withdraw my acceptance if I change my mind?

If you accept the Offer, you will only be able to withdraw that acceptance in very limited circumstances, including if Sedimentary varies the Offer in a way that postpones for more than one month the time when Sedimentary has to meet its obligations under the Offer (this would occur if Sedimentary extends the Offer Period by more than one month while the Offer is subject to a defeating condition).

If the conditions to Sedimentary's Offer are not met (or waived) Sedimentary is able to withdraw its Offer. Yet, if you accept whilst the Offer is still subject to conditions:

• you cannot otherwise deal in your NuStar Shares; $\bullet$
• you relinguish control of your NuStar Shares with no guarantee of receiving consideration for your $\bullet$ Shares until seven days after the conditions to the Offer are satisfied or waived. The Offer Period may be extended, further delaying receipt of consideration for your Shares;
• you are prevented from accepting any other offers, should they emerge during the Offer Period. $\bullet$

What happens if Sedimentary increases its Offer? $3.4$

If Sedimentary increases its Offer, the Directors will carefully consider the new Offer proposal and advise vou of their recommendation.

$3.5$ Can I be forced to sell my NuStar Shares?

You do not have to accept the Sedimentary Offer. Your NuStar Shares cannot be compulsorily acquired unless the requirements of the Corporations Act are met.

By way of summary, in order for Sedimentary to proceed to compulsorily acquire your NuStar Shares, Sedimentary and its associates must, during or at the end of the Offer Period, have relevant interests in at least 90 percent (by number) of the NuStar Shares and Sedimentary and its associates must have acquired at least 75 percent (by number) of the NuStar Shares that Sedimentary offered to acquire under its bid (whether the acquisitions happened under the bid or otherwise).

If Sedimentary does not become entitled to exercise compulsory acquisition rights following the bid (under Part 6A.1 of the Corporations Act) it may nevertheless become entitled to exercise general compulsory acquisition rights (under Part 6A.2 of the Corporations Act). These general compulsory acquisition rights would become available if Sedimentary were to acquire 90 percent voting power in NuStar and Sedimentary acquired full beneficial interest in 90 percent of NuStar Shares and any securities convertible into NuStar Shares.

The Directors of NuStar believe that Sedimentary is unlikely to be able to proceed to compulsorily acquire NuStar Shares under Part 6A.1 or Part 6A.2 of the Corporations Act (as referred to above) because a major shareholder holding more than 38 percent of NuStar Shares has indicated that it does not presently intend to accept the Sedimentary Offer on its current terms.

What are the risks of holding my NuStar Shares? $3.6$

In common with Sedimentary, NuStar's exploration and development activities in the mining sector have an inherent degree of risk, which may have a material effect on the Company's future performance or the value of its Shares. The Directors are mindful of the business risks associated with the proposed operations of the Company and will continue to monitor these factors closely through the Company's existing formal risk assessment and management plan. NuStar is applying an appropriate level of technology and technical resources to its programmes to ensure it minimises its risks as much as practicable. Refer also to Section 4.20.

It is possible that if the Offer lapses there may be a reduction in the market price for NuStar Shares in the short term.

If Sedimentary gains control of NuStar but is not able to compulsorily acquire your Shares, NuStar may become a partially owned subsidiary of Sedimentary. In those circumstances NuStar's stock market liquidity is likely to be reduced.

$3.7$ Further Ouestions

If you have any further questions in relation to this document, please call the Chairman, Colin Jackson, on the bid hotline at 1800 811 109 (toll free).

This is the Target's Statement dated 15 December 2004 given by NuStar under sections 633, 638 and 639 of the Corporations Act. This Target's Statement is given in response to the Sedimentary Bidder's Statement dated 19 November 2004

A copy of this Target's Statement has been lodged with ASIC. Neither ASIC nor any of its officers take any responsibility for the contents of this Target's Statement.

4.1 Recommendation of the Directors

The Directors of NuStar at the date of this Target's Statement are:

• Colin Jackson Chairman
• John den Dryver Non-Executive Director
• Kevín Dundo Non-Executive Director
• Trevor Ireland Non-Executive Director

Each of the NuStar Directors desires to make and considers himself justified in making a recommendation to Shareholders in relation to the Sedimentary Offer.

Each of the NuStar Directors recommends that Shareholders reject the Sedimentary Offer in respect of all their Shares for the reasons set out in Section 2 in this Target's Statement entitled "Why You Should REJECT Sedimentary's Offer".

The Sedimentary Offer will close at 5.00 pm (WST) on 4 January 2005 unless withdrawn or extended.

$4.2$ Relevant interests in marketable securities of NuStar held by the Directors of NuStar

The only marketable securities that NuStar has on issue are NuStar Shares and NuStar Options.

The number, description and amount of marketable securities of NuStar in which each Director has a relevant interest are as follows:

Name of Director	Number of NuStar Shares (Direct)	Number of NuStar Shares (Indirect)	Number of NuStar Options
C. Jackson	500,000	Nil	Nii
J. den Dryver	Nil	450.000	Nii
K. Dundo	400.000	Nil	Nii
T. Ireland	200,000	Nil	NH
	1,100,000	450.000

Intentions of NuStar Directors $4.3$

Each Director intends to reject or procure rejection of the Sedimentary Offer in respect of the NuStar Shares in which he has a relevant interest.

4.4 Relevant interests in marketable securities of Sedimentary held by the Directors of NuStar

No Director has a relevant interest in any marketable securities of Sedimentary.

4.5 Dealings in Sedimentary marketable securities by NuStar or by the Directors of NuStar

There have been no acquisitions or disposals of marketable securities in Sedimentary by NuStar or, to the knowledge of NuStar or any Director, by any Director of NuStar in the period of four months immediately preceding this Target's Statement.

4.6 Dealings in NuStar Shares and NuStar Options by the NuStar Directors

To the knowledge of NuStar or any Director, no NuStar Shares or NuStar Options were acquired or disposed of by the NuStar Directors within the period of four months immediately preceding this Target's Statement, save for the following NuStar Shares acquired:

• 200,000 NuStar Shares by Kevin Dundo on 21 September 2004 at an average price of 3.94 cents per NuStar Share.
• 200,000 NuStar Shares by Kevin Dundo $\bullet$ on 22 September 2004 at an average price of 4.04 cents per NuStar Share.
• 250,000 NuStar Shares by John den Dryver on 23 September 2004 at an average price of 3.90 cents per NuStar Share.

4.7 Impact of takeover bid on Employee Share Option Plan

A total of 4.5 million NuStar Options granted under the Employee Share Option Plan are currently exercisable. A further 3 million NuStar Options are not yet exercisable as at the date of this document in accordance with their terms of issue. The persons to whom the Sedimentary Offer is being made include those who become registered or entitled to be registered during the Offer Period as the holder of any NuStar Shares issued following the valid exercise of NuStar Options granted under the Employee Share Option Plan.

4.8 Payments and benefits

As a result of the Sedimentary Offer, no benefit (other than benefits permitted by the Corporations Act) has been, or will be given to a person:

• in connection with the retirement of a person from board or managerial office in NuStar or a related body corporate of NuStar; or
• who holds, or has held a board or managerial office in NuStar or a related body corporate, or a spouse, relative or associate of such a person, in connection with the transfer of the whole or any part of the undertaking or property of NuStar.

4.9 No agreement with any NuStar Director

There is no agreement made between any Director and any other person in connection with or conditional on the outcome of the Sedimentary Offer.

4.10 Changes in financial position

So far as known to any Director, the financial position of NuStar has not materially changed since 30 June 2004 (the balance date of the Company's last audited financial report) and the date of this Target's Statement, except as disclosed in or resulting from:

• the Bidder's Statement: ۰
• the information contained in NuStar's releases to ASX since 30 June 2004, including NuStar's 2004 Annual Report and the details of the acquisition of the Paulsens Royalty and interest in the Wyloo Joint Venture set out in the Notice of Annual General Meeting and Explanatory Memorandum dated 22 October 2004 (which were sent to NuStar Shareholders in October 2004);
• the information contained in this Target's $\bullet$ Statement; and
• any change in the financial position of NuStar solely as a result of fluctuations in commodity prices, exchange rates, interest and inflation rates since 30 June 2004.

4.11 Information in relation to NuStar

Overview of the Paulsens Project

The mine plan adopted for the Paulsens Project is based on the following key parameters:

• Mill capacity of 250,000 tpa;
• Resources of 1.44 Mt @ 11.7g/t (541,300 ounces) and reserves of 1.2 Mt @ 10.66g/t (412,100 ounces);
• Production commencing in May 2005 with the mine to produce approximately 385,000 ounces over a mine life of approximately five years at an average of 80,000 ounces per annum;
• Pre production capital expenditure of \$31.1 million and total capital expenditure of \$45 million; and
• Cash costs of approximately \$330 per ounce (including royalties) and total costs of \$450 per ounce.

Paulsens Project Upside

The current mining reserve at Paulsens is based on the Indicated Mineral Resource to 300 metres below surface, a relatively shallow depth for an underground mine. Deeper diamond drilling has confirmed that ore grade mineralization continues to at least 470 metres and an Inferred Resource has been estimated to that depth.

The confirmed continuity of resource beneath the base of the current mine design leads your Directors to believe that an extension to the present mining reserve and hence mine life is highly likely. There is no indication that the mineralization terminates and at this stage the resource is limited only by the extent of current drilling.

Additional drilling to more fully define and upgrade the deeper resources will be carried out after decline development reaches its planned depth of 300 metres.

NuStar's Exploration Portfolio

In addition to the depth potential at Paulsens, NuStar provides further exploration upside through its regional exploration portfolio.

NuStar has also been strengthening its regional exploration portfolio by entering into joint venture agreements with other companies with projects in the area. This includes:

• The joint venture with Cullen Exploration Pty Limited entitling NuStar to earn a 70 percent interest in the Hardey Junction Project. The exploration licences are located 15 kilometres south of the Paulsens Project and are adjacent to existing NuStar target areas.
• The joint venture with Pelican Resources Limited entitling NuStar to earn a 70 percent interest in the Wyloo Joint Venture. The exploration licences are located within 20 kilometres of the Paulsens Project and are adjacent to the Hardey Junction Project.

Regional exploration undertaken by NuStar during the current year has generated a number of highly prospective gold targets. Drill testing of selected prospects is planned during the next six months.

The Hardey Junction Joint Venture, together with the recent acquisition of the Wyloo Joint Venture interest, cements the dominant position of NuStar in the Ashburton region and provides further scope to leverage additional value from the Paulsens development.

Material Contracts

As previously disclosed to ASX, NuStar has entered into various key contracts for the purposes of the development of the Paulsens Project. Material terms of these contracts are set out in the St Barbara Buy-Back Booklet, including the following key matters:

Westpac Facility Agreement

As previously announced to ASX, by a contract between NuStar and Westpac Banking Corporation dated 10 November 2004 (Westpac Facility Agreement), Westpac agreed to provide a project finance facility, a revolving credit facility, a performance bond facility and a risk management facility to NuStar. The total available limit under the project finance facility is \$30.3 million, the total under the revolving credit facility (for working capital and general corporate purposes) is \$3 million and the total under the performance bond facility is \$2.65 million.

The permitted use of funds drawn under the project finance facility is to part fund the construction and development of the Paulsens Project and for initial working capital and to fund the payment of the \$5.1 million acquisition price of the Paulsens Royalty. A portion (\$3 million) of the \$30.3 million project finance facility may only be drawn down in certain circumstances for use in the event of capital cost overruns and ramp up delays. As at the date this document, approximately \$4 million has been drawn down under the project finance facility. It was a condition to drawdown that NuStar expends not less than \$12 million of its own cash with respect to the development and construction of the Paulsens Project, which condition has been met.

As at the date of this document, NuStar has hedged 115,000 ounces of gold on a flat forward basis at \$628 per ounce (representing 30 percent of forecast production) and established zero cost options over 58,000 ounces (a further 15 percent of forecast production), securing a floor price of \$609 per ounce with a full price participation up to \$650 per ounce. The forward sales and option contracts have maturities between July 2005 and December 2008.

In the event that NuStar becomes controlled by a person or entity holding a relevant interest in greater than 20 percent of the NuStar Shares (other than a controller as at 10 November 2004), NuStar must immediately give notice to Westpac and Westpac has the right to review the terms of the Westpac Facility Agreement. If NuStar and Westpac have not agreed to an amendment of the terms within two months of such notice being given by NuStar, Westpac may require repayment of all or part of any outstanding monies and may terminate the Westpac Facility Agreement.

The Westpac Facility Agreement is secured, including by the grant to Westpac on 10 November 2004 of a fixed and floating charge over the assets and undertakings of NuStar and a mining mortgage over the Paulsens Mining Lease (and other tenements held by NuStar), on standard commercial terms and conditions.

Mining Contract

As previously announced to ASX, by a contract between NuStar and Barminco Limited dated 17 November 2004 Barminco agreed to provide underground mine development and production services for the Paulsens Project. The commencement date was July 2004 for a three year term and the date for completion is 30 June 2007.

EPC Contract

As previously announced to ASX, by a contract between NuStar and Roche Mining (JR) Pty Ltd dated 19 November 2004 Roche agreed to provide engineering, procurement and construction services to NuStar for the construction of an on-site treatment plant at the Paulsens Project. The gold processing facility is to be capable of treating 250,000 tonnes per annum of underground ore with a design head grade of $12.2$ g/t of gold.

Camp Facilities Contract

As previously announced to ASX, NuStar and Compass Group (Australia) Pty Ltd have agreed that Compass will provide camp, office and service facilities and to supply catering, janitorial and grounds maintenance services to NuStar for the Paulsens Project. The commencement date of the agreement was July 2004 for a four year term.

Power Contract

As previously announced to ASX, by agreement reached between NuStar and Power West Pty Ltd dated 14 May 2004 Power West has agreed to supply and maintain power generation and reticulation facilities for the Paulsens Project. The commencement date was July 2004 for a four year term.

Key Executive Service Agreement

By a contract between NuStar and Brett Thomas Lambert (currently the acting chief executive

officer of NuStar) dated 27 July 2004 NuStar agreed to employ Brett Lambert as an executive employee for a three year term commencing on 1 May 2004.

4.12 St Barbara's Buy-Back Offer

As at the date of this Target's Statement, St Barbara holds approximately 38 percent of the NuStar Shares. On 29 November 2004, St Barbara announced that its shareholders had approved a buy-back offer to buy-back up to 192 million of St Barbara's shares for consideration of up to 240 million NuStar Shares (St Barbara Buy-Back Offer). On 10 December 2004, St Barbara lodged with ASIC and ASX its Buy-Back Booklet.

The St Barbara Buv-Back Booklet contains information in relation to NuStar, which information was prepared by NuStar pursuant to the terms of a deed of cooperation between NuStar and St Barbara dated 18 November 2004, whereby NuStar agreed, amongst other things, to provide St Barbara with all information in relation to NuStar necessary for St Barbara to meet its obligations under Part 6D.2 of the Corporations Act as regards to disclosure in the St Barbara Buy-Back Booklet. A copy of the St Barbara Buy-Back Booklet is available on the ASX website at www.asx.com.au (at both SBM and NMC codes).

The St Barbara Buy-Back Offer is scheduled to close on 14 January 2005. Under the Buy-Back, St Barbara expects to transfer the 240 million NuStar Shares the subject of the Buy-Back (approximately 24 percent of NuStar) to St Barbara shareholders who accept the Buy-Back Offer, on 21 January 2005. Therefore, on the current terms of the Sedimentary Offer, a St Barbara shareholder (who becomes registered as a NuStar Shareholder as a result of the Buy-Back) will not be able to participate in the Sedimentary Offer as it will not be open for acceptance on the date that shareholder is, or is entitled to be, registered as a NuStar Shareholder under the Buv-Back, unless the Offer Period is extended.

In addition, St Barbara has granted an option to Claymore Capital Pty Ltd to purchase 100 million NuStar Shares (approximately 10 percent) held by St Barbara, at 5 cents per NuStar Share at any

time up to 16 May 2005. Accordingly, St Barbara cannot accept the Offer in relation to those 100 million NuStar Shares.

St Barbara has stated that it does not presently intend to accept the Sedimentary Offer for the abovementioned 340 million NuStar Shares, nor for the balance of the NuStar Shares (approximately 42 million NuStar Shares representing 4 percent) it would hold after finalisation of the St Barbara Buy-Back Offer and the option to Claymore Capital Pty Ltd.

4.13 Capital Gains Tax Impact

As noted in Section 2.10 above, there are some circumstances where, if you accepted the Sedimentary Offer, you might incur a capital gain for tax purposes. In those circumstances, in order for you to receive CGT rollover relief, Sedimentary would have to acquire more than 80 percent of NuStar Shares on issue at the close of the Sedimentary Offer.

You are unlikely to get CGT rollover relief if you accept the Sedimentary Offer because St Barbara, a holder with more than 38 percent of NuStar's Shares, has stated that it does not presently intend to accept Sedimentary's Offer in its current form.

Based on the matters set out in Section 4.12 above and given that a NuStar Shareholder holding more than 38 percent of NuStar's Shares does not presently intend to accept the Sedimentary Offer, Sedimentary's minimum acceptance condition of 50.1 percent is unlikely to be satisfied. In the event that this condition is satisfied or waived by Sedimentary, NuStar Shareholders accepting Sedimentary's Offer would be unlikely to be entitled to rollover relief on any Capital Gains Tax liabilities arising from acceptance.

There is therefore a risk that you would have to fund a tax liability, even though you will not receive any cash from accepting the Sedimentary Offer.

Shareholders are advised to seek their own professional advice on the tax consequences of accepting the Sedimentary Offer.

4.14 Effect of acceptance

The effect of acceptance of the Sedimentary Offer is set out in section 8.5 of the Sedimentary Bidder's Statement. Shareholders should read these provisions in full to understand the effect which acceptance will have on their ability to exercise the rights attaching to their Shares and the representations and warranties which they give by accepting the Offer.

In particular, shareholders should note that once a NuStar Shareholder accepts the Offer, they will only be able to withdraw that acceptance in very limited circumstances, including if Sedimentary varies the Offer in a way that postpones for more than one month the time when Sedimentary has to meet its obligations under the Offer (this would occur if Sedimentary extends the Offer Period by more than one month while the Offer is subject to a defeating condition).

4.15 Intentions of certain NuStar Shareholders

The following shareholders have each indicated that they do not presently intend to accept the current Sedimentary Offer for Shares they own or control.

Shareholder	Shares held	Interest in NuStar Shares
St Barbara	380.719.338	38.46%
NuStar Directors	1,550,000	0.16%

4.16 Cracow operating parameters Sedimentary has set out in section 3.3 of the Bidder's Statement certain information about the operating parameters at Cracow (Sedimentary 30 percent), namely:

• Initial mine life 7 years ٠
• Plant capacity 300,000 tpa ó
• Gold grade $11 - 14$ g/t ٠

• Recovery $90 - 94\%$

• Production 680,000 ounces of gold over mine life with annual production of up to 35,000 ounces of gold and 18,000 ounces of silver.

• Average operating cash costs around A\$220 per ounce and average total production costs of around A\$360 per ounce.

4.17 Other information reasonably required by shareholders and their professional advisers to make an informed assessment

This Target's Statement is required to include all the information that Shareholders and their professional advisers would reasonably require to make an informed assessment of whether to accept the Sedimentary Offer, but:

• only to the extent to which it is reasonable for investors and their professional advisers to expect to find this information in this Target's Statement; and
• only if the information is known to any of the Directors of NuStar.

The Directors of NuStar are of the opinion that the information that shareholders and their professional advisers would reasonably require to make an informed assessment of whether to accept the Sedimentary Offer is:

• the information contained in the Bidder's Statement:
• the information relating to NuStar contained in the St Barbara Buy-Back Booklet dated 10 December 2004 in relation to the St Barbara Buv-Back Offer, released to ASX on 10 December 2004:
• the information contained in NuStar's releases to ASX since 30 June 2004, including NuStar's 2004 Annual Report and the details of the acquisition of the Paulsens Royalty and interest in the Wyloo Joint Venture set out in the Notice of Annual General Meeting and Explanatory Memorandum dated 22 October 2004 (which were sent to NuStar Shareholders in October 2004); and
• the information contained in this Target's Statement.

A copy of these documents may be obtained free of charge from NuStar during the Offer Period by calling NuStar's bid hotline at 1800 811 109 (toll free).

4.18 ASIC modifications

By Class Order 01/1543 ASIC has, amongst other things, modified the Corporations Act, with the effect that NuStar may include statements in this Target's Statement made by, or based on statements made by a person, without having to obtain their consent, where those statements were made in a document lodged with ASIC or ASX and this Target's Statement fairly represents such statements and identifies the relevant document.

NuStar have included in this Target's Statement statements based on statements made by St Barbara in the St Barbara Buy-Back Booklet announced to ASX on 10 December 2004 (including as to its present intention not to accept the Sedimentary Offer on its current terms), statements based on a statement made by Newcrest in an announcement to ASX on 9 April 2003, statements based on statements by AMP Limited and Mathews Capital Partners Pty Ltd in announcements to ASX on 24 November 2004 and 25 November 2004 respectively and information based on statements made by Sedimentary in the Bidder's Statement.

A copy of these documents may be obtained free of charge from NuStar during the Offer Period by calling NuStar's bid hotline at 1800 811 109 (toll free).

4.19 Consents

Q Legal has given and not withdrawn its consent before the date of this Target's Statement to being named in this Target's Statement as legal advisers to NuStar. Q Legal does not make or purport to make any statement that is included in this Target's Statement and there is no statement in this Target's Statement, which is based on any statement of Q Legal. Q Legal specifically disclaims responsibility for any statement included in this Target's Statement. Mr K. Dundo, a NuStar Director, is a partner of Q Legal.

Gresham Advisory Partners Limited has given and not withdrawn its consent before the date of this Target's Statement to being named in this Target's Statement as corporate adviser to NuStar. Gresham Advisory Partners Limited does not make or purport to make any statement that is included in this Target's Statement and there is no statement in this Target's Statement, which is based on any statement of Gresham Advisory Partners Limited. Gresham Advisory Partners Limited specifically disclaims responsibility for any statement included in this Target's Statement.

Each of the NuStar executives referred to in Section 2.8 has given and not withdrawn their consent before the date of this Target's Statement to being named in this Target's Statement and consents to the inclusion of the statements in section 2.8 of this Target's Statement which are based on statements made by them.

In accordance with the ASIC Class Order referred to in Section 4.18 of this Target's Statement, the persons referred to in Section 4.18 have not consented to their respective statements being included in, or referenced in, this Target's Statement in the form and context in which they are included or referenced.

4.20 Disclaimer regarding forwardlooking statements

This Target's Statement contains various forwardlooking statements. All statements other than statements of historical fact are forward-looking statements. Such statements have been based on NuStar's current expectations about future events. Shareholders should note that those forwardlooking statements are inherently subject to uncertainties in that they may be affected by a variety of known and unknown risks, variables and factors which could cause actual values or results, performance or achievements to differ materially from anticipated results, implied values, performance or achievements expressed or implied in those forward-looking statements. These risks, variables and factors include, but are not limited to:

• commodity price fluctuations;

• currency and exchange rate movements and inflationary factors;

• production, operating, resources and reserves ۰ risks:

• exploration and project development risks;
• legislative, economic, fiscal or regulatory $\bullet$ developments;
• NuStar's Share price performance and $\bullet$ variations:
• stock market volatility; and $\blacksquare$
• general risks associated with the business of NuStar, including risks as to personnel, environment, title and native title.

NuStar does not give any assurances that the anticipated results, performance or achievements expressed or implied in those forward-looking statements will be achieved.

4.21 Defined terms and interpretation

Defined terms

In this Target's Statement, the following words have these meanings unless the contrary intention appears:

ASIC means the Australian Securities and Investment Commission.

ASX means the stock market conducted by Australian Stock Exchange Limited (ABN 98 008 624 691).

Bidder's Statement means the Sedimentary Bidder's Statement dated 19 November 2004 lodged by Sedimentary in relation to its takeover bid to acquire all the ordinary shares in NuStar and sent to NuStar Shareholders on 3 December 2004.

Board means the Board of Directors of NuStar from time to time.

CGT means Capital Gains Tax.

Corporations Act means the Corporations Act 2001 (Cth).

Cracow Project means the gold project in Queensland described in section 3.3 of the Bidder's Statement, of which Sedimentary has a 30 percent interest.

Director means a director of NuStar.

Employee Share Option Plan means the employee share option plan established by resolution passed at the general meeting of NuStar held on 12 December 2003 as amended from time to time under which full or part time employees, directors and consultants maybe issued NuStar Options in accordance with the rules of the Plan.

Hardey Junction Joint Venture means the joint venture between Cullen Exploration Pty Ltd and NuStar in relation to NuStar earning a 70 percent interest over exploration licences E08/1145, E08/1166 and E08/1189 in the Ashburton region.

JORC compliant means in accordance with ASX Joint Ore Reserve Committee (JORC) Regulation on the reporting of Resources and Ore Reserves.

Newcrest means Newcrest Mining Limited (ABN 20 005 683 625).

NuStar or Company means NuStar Mining Corporation Limited (ABN 11 060 156 452).

NuStar Option or Option means one option over shares in NuStar, which entitles the holder to acquire shares upon exercise of the option.

NuStar Shareholder means the holder of one or more NuStar Shares.

NuStar Shares or Shares means one fully paid ordinary share in the issued capital of NuStar.

Offer or Sedimentary Offer means each offer comprising the Sedimentary Offer in accordance with the Bidder's Statement.

Offer Period means the period from 3 December 2004 until 4 January 2005 unless the Sedimentary Offer is withdrawn or extended.

Paulsens Mining Lease means mining lease M08/99 owned 100 percent by NuStar.

Paulsens Project means the gold deposit on the Paulsens Mining Lease.

Paulsens Royalty means the royalty by which the holder is entitled to 5 percent of the proceeds from gold sales in excess of 6,000 ounces from the Paulsens Mining Lease, such royalty having been acquired by NuStar from St Barbara on 30 November 2004.

Section means a section of this Target's Statement.

Sedimentary means Sedimentary Holdings Limited (ABN 92 000 697 183).

Sedimentary Shareholders means the holders of Sedimentary shares, excluding any NuStar Shareholders who may accept the Offer and receive shares in Sedimentary under the terms of the Offer.

St Barbara means St Barbara Mines Limited (ABN 36 009 165 066).

St Barbara Buy-Back Booklet means St Barbara's booklet dated 10 December 2004 in relation to the St Barbara Buv-Back Offer.

St Barbara Buy-Back Offer means the buy-back offer described in Section 4.12.

Wyloo Joint Venture means the joint venture between Pelican Resources Limited and NuStar in relation to NuStar earning a 70 percent interest over exploration licences E08/853 and E08/854 in the Ashburton region.

Target's Statement means this statement.

Interpretation

The following rules of interpretation apply artless the context requires otherwise.

• (a) Unless specified otherwise, all words and phrases in this Target's Statement shall have the meanings given to them (if any) in the Corporations Act.
• (b) A gender includes all genders.
• (c) The singular includes the plural and vice versa.
• (d) A reference to a person includes a body corporate, an unincorporated body or other entity and conversely.
• (e) Headings used in this Target's Statement are for ease of reference only and shall not affect the meaning or interpretation of this Target's Statement.
• (f) Where a word is defined, its other grammatical forms have a corresponding meaning.
• $(g)$ \$ or A\$ is a reference to the lawful currency of Australia.
• (h) US\$ is a reference to the lawful currency of the United States of America.

4.22 Date of the Target's Statement

Signed on behalf of NuStar following a unanimous resolution of the Directors.

Colin G. Jackson $\psi$ irector Dated: 15 December 2004

حكسب وسند $\overline{A}$

Kevin Dundo Director Dated: 15 December 2004

Nov 04	Sedimentary	launches	opportunistic conditional off-market scrip offer
	NUSIAN	secures	Bank debt to finance treatment plant and royalty purchase (plus working capital)
September 2002	NUSTAR	declares	Mine reserve of 1.20 million tonnes at 10.66 $g/t$ (cut) - 412,000 ounces
	NUSTAR	announces	Barminco (underground mine contractor) mobilised, decline commenced
	NUSTAR	awards	Camp, catering, civil and power contracts
Jure 2004	NUSTAR	completes	New JORC resource estimate - 1.44 million tonnes at 11.7 $g/t$ (59 percent increase in contained ounces)
	NUSTAR	reports	Ground broken at mine site
	NUSTAR	advises	Continued positive resource extension drill results
Marques	NUSTAR	declares	First results from resource extension drill programme
	NUSTAR		commences Resource extension drill programme $($1.9 \text{ million} - 57 \text{ holes})$
	NUSTAR	reports	Project equity financing ratified by shareholders
	NUSTAR	advises	Major shareholder swaps debt for equity
	NUSTAR	elects	New majority independent non-executive Board
December 2003	NUSTAR	completes	Share placement (\$18 million) and Share Purchase Plan (\$3 million)
	NUSIAR	announces	Paulsens Project re-engineering as a high grade shallow underground mine completed