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## PRINCIPAL ACTIVITIES 

The principal activities of St Barbara Mines Limited and entities controlled by it (collectively known as the consolidated entity) during the fi  nancial year ended 30 June 2004, were gold production, gold and mineral exploration, pastoral activities, and investment. 

## RESULTS OF OPERATIONS 

The consolidated operating loss after tax for the year ended 30 June 2004 attributable to members of the Company was $24,315,000 (2003: $32,733,000 loss). 

Commentary on the operations and the results of those operations are set out below: 

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Mining activity at Meekatharra was solely focussed on treatment of the Paddys Flat low grade stockpiles. These resources were depleted by mid-May. Mining and haulage operations ceased in April and by the end of June the process plant operations were suspended and prepared for a 6 - 12 month program of general maintenance and re-con fi  guration. 

A pre-feasibility evaluation of the Paddys Flat Underground Project was completed, with all necessary approvals received, allowing this project to proceed once further reserves have been established. A review of all previous exploration activitites and evaluations are required prior to any substantial capital expenditure. 

## DIVIDENDS 

The Directors do not recommend the payment of a dividend. 

## SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS 

Signi fi  cant changes in the state of affairs of the consolidated entity during the fi  nancial year were as follows: 

• On 7 July 2003, the Company issued 15,910,922 fully paid ordinary shares to Resource Capital Funds II L.P. (RCF) at price of $0.0374 per share in satisfaction of interest of $595,068. 

• On 7 July 2003, the Company issued the following options, with an expiry date of 7 January 2007, to RCF in satisfaction of the corporate debt facility fee: 

• 5,834,004 options exercisable at $0.2125; 

• 594,308 options exercisable at $0.2086; 

• 2,918,376 options exercisable at $0.2124; and 

• 17,430,243 options exercisable at $0.1138. 

• On 22 September 2003, the Company issued 12,000,000 fully paid ordinary shares at $0.08 per share to raise $960,000 (before issue expenses) for working capital. 

• On 31 October 2003, the Company announced that its subsidiary, Taipan Resources NL (now NuStar Mining Corporation Limited or “NuStar”) had received commitments to fi  nance the Paulsens Project. This was facilitated by the Company accepting equity of 352 million NuStar shares at $0.05 cents per share in full satisfaction of the $17.6 million intercompany loan between the Company and NuStar, together with the placement of an additional 420 million NuStar shares at $0.05 per share to raise $21 million of equity capital. The Company’s equity position in NuStar after these transactions was 54.8% (previously 88.3%). 

• On 28 November 2003, the Company issued 95,684,932 fully paid ordinary shares to RCF funds at a price of $0.08 per share in satisfaction of a corporate debt of $7 million and interest of $654,795. 

• On 28 November 2003, the Company issued the following options with an expiry date of 24 May 2008 to RCF in satisfaction of the corporate debt facility fee: 

• 257,857 options exercisable at $0.2125; 

• 485,953 options exercisable at $0.2086; 

• 2,386,296 options exercisable at $0.2124; and 

• 14,252,357 options exercisable at $0.1138. 

• On 5 December 2003, the Company issued 35,000,000 fully paid ordinary shares to Ocean Resources Capital Holdings Limited at a price of $0.08 per share to satisfy unsecured convertible notes totalling $2.8 million. 

• On 17 March 2004, the Company announced the sale of a Demag Komatsu large face shovel. This resulted in net proceeds of $2.1 million, which was to be used for working capital. 

