St Barbara Mines Limited Annual Report 2004 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. Cash Flow Statement Financial Performance 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. 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. 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. 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. 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. Financial Position