Prior to 30 June 2004, the Company had divested itself of previously 100% owned  substantial land holdings at Meekatharra. This occurred by entry into a number of joint venture agreements with the incoming parties earning a fully participating joint  venture interest by contributing exploration funds over some years in priority to the  Company. These arrangements will require an expenditure of $6.5m during the  12 month period ending 30 June 2005. This level of expenditure will result in considerable drilling activity on a number of highly prospective targets. In all but one of these joint ventures, St Barbara continues  as the manager of the joint venture. The Bluebird treatment plant, 15 kilometres south of Meekatharra, has a 3 million  tonnes per annum capacity but is currently idle and on care and maintenance. Its estimated replacement cost exceeds $50 million and as a consequence, the early  re-commencement of plant operations remains an important strategic objective for the  Company to pursue and is one of the key reasons behind the Company’s decision to  immediately commence drilling of several targets at Paddy’s Flat. A prime objective  in this regard is to re-establish gold production and positive cash fl  ow at the Bluebird  processing plant.  Australia is and remains highly prospective for gold, copper and nickel. The increase  in demand for all metals and subsequent increase in metal prices has improved the  attractiveness of exploring for these metals. A number of opportunities which may lead to the discovery of large mineral deposits  are being pursued by St Barbara. Our principal focus will be in Western Australia and  Queensland. Exploration will be balanced between grass roots conceptual targeting  and brown  fi  elds exploration seeking to extend the known mineralisation. Our initial  exploration budget including drilling, on 100% owned targets for the balance of the  2005  fi  nancial year, is expected to be in the range $3.0 - $3.5 million, and will be  funded from working capital. We believe that with metals markets continuing in a strong growth phase, there are  currently some exciting opportunities in Australia. Colin Wise Non-Executive Chairman Eduard Eshuys Managing Director and CEO 3