## Financial Review 

The Company recorded a consolidated net loss of $24.3 million. Lower gold sales revenue and write-downs largely associated with the operations and the exploration portfolio were the dominant elements. 

## Financial Performance 

Gold revenue from operations at $22.0 million was lower as a consequence of lower throughput (campaign milling and cessation of operations in the second half of the year), and lower grade due to processing of low grade stockpiles. The average realised price of $546 per ounce re fl  ects the average spot price, as all production was sold into spot. 

The net operating cost of production (equivalent to the Gold Institute total cash cost) at $606 per ounce re fl  ected the lower throughput, grade and recovery. 

A loss before interest, tax, depreciation and amortisation of $24.3 million was determined after close to breakeven operations, after state royalties ($0.5 million), all exploration costs ($5.7 million), a loss on plant/equipment sales ($2.3 million-principally the Komatsu face shovel), mine development and exploration JV and tenement write-downs ($5.6 million) and diminution in value of investment held by the subsidiary company ($0.3 million). 

Other revenue includes the sale of the Dioro investment at $4.98 million and the Burnakura tenements for $1.0 million. 

Interest costs were lower re fl  ecting the conversion of the RCF loan to equity mid-year. 

The net loss attributable to outside equity interest in 2003 was limited to the net assets of NuStar Mining Corporation Limited. With the completion of the capital raising in December 2003, the net assets of the underlying entity have increased suf fi  ciently so as not to restrict the loss attributable to the outside equity interest for the year ended 30 June 2004. 

## Cash Flow Statement 

On a consolidated basis, cash at the period end increased to $12.8 million, largely due to the re- fi  nancing of 54.8 percent subsidiary NuStar Mining Corporation Limited, which completed a $21.0 million equity raising (before fees) and a $1.0 million Convertible Note issue (before fees) during the year and had a cash balance of $12.9 million at year end. 

During the year the Company also completed a placement which raised $0.96 million, realised $9.6 million in plant and investment sales, and received $0.5 million in released environment bonds. 

Furthermore, loan and fi  nance repayments included the RCF loan of $5.0 million in cash while the balance of $7.65 million, including fees, was satis fi  ed by an issue of shares at 8 cents. Part of the Ocean Capital Convertible Note ($2.8 million) was also converted into shares at 8 cents. 

## Financial Position 

The Company’s equity increased by $6.9 million, largely re fl  ecting the mine development and exploration write-downs off-set by the interest in NuStar Mining Corporation Limited. 

Lower current assets re fl  ected the sale of the Dioro investment, the Komatsu sale, consumption and obsolescent charge on consumable inventories offset by increased cash balances. 

Consolidated working capital improved from negative $7.4 million to negative $1.3 million. 

Interest bearing debt at balance date was $9.9 million, a signi fi  cant reduction ($14.1 million) through the year. The major outstanding component was the Ocean Resource $4.4 million Convertible Note at 12% interest (since converted to shares), $0.9 million Convertible Note at 13.5% interest in the subsidiary with the balance being lease and hire purchase liabilities. 

