St Barbara Mines Limited Annual Report 2004 Joint Report by Chairman  and Managing Director In view of the special circumstances in which we were appointed as Directors  by shareholders on 20 July 2004, we consider it appropriate to jointly report to  shareholders about corporate activities since then, with the activities for the 2003/04  year being covered elsewhere in this annual report. Completion at the end of August 2004 of the review of the Company’s assets and  liabilities by the international accounting  fi  rm of Deloitte’s facilitated the identi fi  cation  of all assets and their status, and outstanding corporate debts and liabilities. This enabled the Board to better assess the corporate,  fi  nancial and technical issues  confronting the Company. As a consequence, the Board decided to substantially reduce its 54.8% controlling  interest in NuStar Mining Corporation Limited (“NuStar”) and utilise the funds  generated to retire the Company’s secured and other creditors, to recommence  exploration at the Company’s 100% owned Paddy’s Flat property at Meekatharra,  Western Australia and support the research of other opportunities. The share swap of 5 NuStar shares for 4 St Barbara shares mentioned below has been  proposed to facilitate the orderly separation of the two companies and a realignment  of relevant shareholders to their preferred interest in either St Barbara or NuStar. This divestment in NuStar is occurring as follows: • the sale of an initial tranche of 100 million shares at 4 cents per share, has been  completed; • an agreement for the sale to NuStar of the 5% Paulsen’s royalty for $5.1 million has  been signed. A cash deposit of $1.3 million has been received with the balance due  to be paid following approval by shareholders of St Barbara and NuStar respectively,  at their Annual General Meetings to be held on 29 November 2004; • the swap of up to 240 million of the Company’s shares in NuStar for St Barbara  shares in the agreed ratio of 1.25 NuStar shares for each Company share is also  subject to approval by shareholders in both companies; and • the grant of an option to Claymore Capital to purchase a further 100 million of the Company’s shares in NuStar at 5 cents per share will remain current until  16 May 2005. Assuming this option is exercised by Claymore, the remaining 102 million shares  held by the Company in NuStar (an interest of approximately 10.3% of NuStar) will  continue to be held as a strategic investment.