## NuStar Investment 

“St Barbara facilitated the development of Paulsens Project through a balance sheet capital reconstruction of subsidiary company NuStar Mining Corporation. Paulsens, now fully debt and equity funded is on schedule for the fi  rst gold pour in May 2005.” 

## Background 

At the commencement of the fi  nancial year St Barbara held an 88.3% interest in NuStar Mining Corporation Limited (formerly Taipan Resources NL). 

Early in the year the design concept for the 100% owned Paulsens Project in the Ashburton region of Western Australia changed from a high strip ratio open pit to a high grade shallow underground mine. 

In December 2003, NuStar raised equity to fi  nance the development of the mine and to complete a resource extension drill programme. 

As a result of the equity raise, and a shareholder approved debt for equity swap, the St Barbara interest in NuStar was diluted to 54.8%. 

During the year, the resource was increased by 59%, a mine reserve of 412,100 ounces was declared, the site infrastructure was established and the underground mine decline commenced. 

Post year end a debt funding package was secured from Westpac Banking Corporation to construct an on-site treatment plant and to purchase the St Barbara owned 5% gross revenue royalty over Paulsens production. 

At the date of this report, St Barbara commenced a structured sell down of its holding in NuStar, the details of which are described elsewhere in this document. 

## Resource Estimate 

A JORC compliant resource estimate, incorporating the result of the February/June 2004 Resource Extension program, was completed by independent Resource Evaluations Pty Ltd. 

The estimate data base comprised 270 holes (96 NQ diamond core and 174 percussion holes – 48,400 metres) drilled at 25 metre by 25 metre spacings on sections in the better mineralised portion of the deposit. 

The calculated estimate of 1.44 million tonnes at 11.7 g/t places 89% of the 541,300 contained ounces in the Indicated category. The estimate incorporates an assay top-cut to limit the in fl  uence of a signi fi  cant number of high grade intercepts. The un-cut average grade is 13.1 g/t. 

The orebody remains open at depth, with the resource potential below 300 metres only partially evaluated. 

## Mine Reserve 

Detailed mine planning established a mining reserve of 1.20 million tonnes at 10.66 g/t – containing 412,100 ounces of gold. 

The reserve is based on the Indicated Resource above 900MRL (300 metres below surface) and under Joint Ore Reserves Committee guidelines is classi fi  ed as probable. Full allowance has been made for dilution and ore loss during mining. 

## Mine Design 

The underground mine has been designed to deliver 250,000 tonnes per annum of ore via a 5 metre by 5.5 metre decline with a 1:6 gradient. 

The mine plan anticipates ore development on 7.5 metre to 10 metre vertical level intervals. Stoping will be predominantly up-hole benching and jumbo stripping. Some hand held mining is envisaged. 

## Treatment Plant 

JR Roche completed a fl  ow sheet design for a 250,000 tonne per annum plant based on extensive metallurgical testwork conducted in prior years. The process design comprised a three stage crushing, single ball mill in closed circuit, seven stage carbon-in-leach circuit and an AARL elution gold recovery circuit. The process design allowed for a fi  ne grind to achieve gold liberation (80% passing 53 microns) and the presence of minor carbonaceous material in a small part of the orebody. 

Construction on site is scheduled for November 2004. 

