December 2014 Half Year Financial Report. Improved operating performance evident in improved financial results. ASX Release / 24 February 2015

Transcription

1 ASX Release / 24 February 2015 December 2014 Half Year Financial Report Improved operating performance evident in improved financial results The statutory loss after tax for the half year to 31 December 2014 was $20 million, with the underlying loss after tax 1 $13 million. This represents a significant improvement on the corresponding prior period (2013: $87 million statutory loss, $47 million underlying loss), primarily due to: increased segment profit at Leonora of $53 million (2013: $45 million) improving operating performance at Simberi resulting in reduced segment loss of $14 million (2013: $35 million, including $18 million impairment loss), noting that Simberi was cash flow positive for the first time in the month of December 2014 the suspension in April 2014 of the previously unprofitable Gold Ridge operations resulting in a segment loss of $6 million (2013: $43 million, including $25 million impairment loss). Cash and cash equivalents on hand at 31 December 2014 was $68 million (plus $2 million restricted cash), with total interest bearing debt of $390 million. The debt primarily comprised US$250 million senior secured notes and US$75 million Red Kite debt facility, which are unchanged from 30 June The increase in debt was due to the devaluation of the Australian dollar against the US dollar. Consolidated net cash flow from operations for the period increased to $22 million (2013: $6 million). Cash flow is anticipated to further improve in the second half, with Simberi production anticipated to increase to 100,000 ounces per annum run rate in Q4 June 2015, and minimal future expenditure anticipated at Gold Ridge. Full details are set out in the attached Appendix 4D and Interim Financial Report for the Half Year to 31 December St Barbara MD & CEO Bob Vassie said: The results of St Barbara s turnaround strategy are becoming evident. Our aim was to quickly reduce the pressure on the Company from its higher cost assets and reduce costs overall to suit a lower gold price environment. We are not resting or our laurels at Leonora, which has improved performance during the half. Simberi s performance improved dramatically over the half to be cash flow positive in the month of December. The improved operating performance we achieved towards the end of the first half positions us well for the second half. 1 Non-IFRS measure, refer attached Interim Financial Report for the Half Year to 31 December 2014, page 3 Investor Relations Mr Rowan Cole Company Secretary Media Relations Mr Tim Duncan Hinton & Associates St Barbara Limited Level 10, 432 St Kilda Road, Melbourne VIC 3004 T F ACN Locked Bag 9, Collins Street East, Melbourne VIC 8003 W

2 Appendix 4D Half Year Report ST BARBARA LIMITED ABN or equivalent company reference Half yearly (tick) Preliminary final (tick) Half year/financial year ended ( current period ) December 2014 Results for announcement to the market % A Revenues and other income increase 3% to 238,900 Loss from ordinary activities after tax from continuing operations attributable to members (Prior period loss: $41,478,000) Loss from ordinary activities after tax from discontinuing operations attributable to members (Prior period loss: $45,697,000) Net loss attributable to members of the parent entity (Prior period loss: $87,175,000) Dividends No dividend has been declared decrease in loss decrease in loss decrease in loss n/m to (7,784) n/m to (12,095) n/m to (19,879) n/m=not meaningful 31 Dec 14 $ 30 Jun 14 $ Net Tangible Assets per security Details of dividend distribution N/A N/A Details of reinvestment plans N/A N/A Details of joint venture entities and associates N/A N/A Foreign entity accounting standards N/A N/A Audit dispute or qualification N/A N/A Dated: 24 February 2015 Bob Vassie Managing Director and CEO

3 Interim Financial Report for the half-year ended 31 December 2014

4 ST BARBARA LIMITED HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2014 Table of Contents DIRECTORS REPORT... 3 AUDITOR S INDEPENDENCE DECLARATION CONSOLIDATED INCOME STATEMENT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED Statement of Financial Position CONSOLIDATED STATEMENT OF CASH FLOWS Note 1 Basis of preparation Note 2 Significant accounting policies Note 3 New standards and interpretations not yet adopted Note 4 Critical accounting estimates and judgements Note 5 Segment information Note 6 Contingent liabilities Note 7 Dividends Note 8 Revenue Note 9 Finance costs Note 10 Significant Items Note 11 Income tax Note 12 Cash and cash equivalents Note 13 Interest bearing liabilities Note 14 Contributed equity Note 15 Accumulated losses Note 16 Discontinued operations Note 17 Subsequent events Note 18 Financial instruments DIRECTORS' DECLARATION INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS OF ST BARBARA LTD CORPORATE DIRECTORY Page 2 of 31

5 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT The Directors present their report on the Group, consisting of St Barbara Limited ( St Barbara ) and the entities it controlled at the end of, or during, the half year ended 31 December Directors The following persons were Directors of St Barbara Limited at any time during the period and up to the date of this report: S J C Wise Non-executive Chairman R S Vassie Managing Director & CEO (appointed 1 July 2014) D W Bailey Non-executive director I L Scotland Non-executive director (retired 26 January 2015) T C Netscher Non-executive director Principal activities During the period the principal activities of the Group were mining and the sale of gold, mineral exploration and mine development. There were no significant changes in the nature of the activities of the Group during the period. Dividends There were no dividends paid or declared during the period. Overview of results The statutory loss for the period of $19,879,000 (2013: loss of $87,175,000) included significant items totaling a net loss after tax of $6,418,000 (2013: net loss after tax of $40,559,000). The result for the period reflected a significant improvement on the corresponding prior period due to reduced operating losses at Simberi, suspension of unprofitable operations at Gold Ridge and the fact that there were no impairment losses in the period. Underlying net loss after tax for the period, after excluding significant items, was $13,461,000 (2013: net loss of $46,616,000). The consolidated revenues and results for the period are summarised as follows: Period ended 31 Dec 2014 (6) Period ended 31 Dec 2013 Sales revenue 240, ,537 EBITDA 3 (including significant items) 45,118 (2,897) EBIT 2 (including significant items) 7,472 (56,062) Statutory net loss after tax 1 for the half year (19,879) (87,175) Total significant items before tax (6,264) (39,898) Total significant items after tax (6,418) (40,559) EBITDA 4 excluding significant items 51,382 37,001 EBIT 4 excluding significant items 13,736 (16,164) Underlying net loss after tax 4 for the half year (13,461) (46,616) 1 Statutory loss is net loss after tax attributable to owners of the parent. 2 EBIT is earnings before interest revenue, finance costs and income tax expense. It includes revenues and expenses associated with discontinued operations. 3 EBITDA is EBIT before impairment, depreciation and amortisation. It includes revenues and expenses associated with discontinued operations. 4 EBITDA, EBIT and Underlying net loss after income tax is net loss after income tax ( Statutory loss ) less significant items as described in Note 10 to the financial report. 5 EBIT, EBITDA and underlying net loss after tax are non-ifrs financial information, which have not been subject to review or audit by the Group s external auditors. These measures are presented to enable understanding of the underlying performance of the Group by users. 6 Revenue,EBIT (including significant items),ebitda (including significant items) and Statutory net loss provided in this table contains information for continuing and discontinuing operations. Sales revenue includes $3,894,000 from Gold Ridge (2013: $45,492,000) and Statutory net loss includes an after tax loss of $12,095,000 (2013: $45,697,000) for Gold Ridge. Page 3 of 31

6 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Significant items included in the statutory loss for the period are displayed in the table below. Descriptions of each item are provided in Note 10 to the Interim Financial Report. Period ended 31 Dec 2014 Consolidated Period ended 31 Dec 2013 Amortisation of realised gain on derivatives from equity 1,033 1,293 Asset impairment charges Pacific Operations - (42,100) Contingent consideration on Southern Cross disposal - 1,468 Redundancy costs (522) (559) Effect of unhedged borrowings/ ineffective component of net investment hedge, and related unrealised foreign exchange gains (6,775) - Total significant items pre tax (6,264) (39,898) Total significant items post tax (6,418) (40,559) Overview of Operating Results The statutory loss of $19,879,000 for the half year ended 31 December 2014 (2013: statutory loss of $87,175,000) was lower than the previous corresponding period due to improved profitability at Leonora, together with reduced losses from Simberi, and from Gold Ridge following suspension of operations. For the half year ended 31 December 2014, the Group reported an underlying loss before tax of $6,876,000 (2013: loss of $37,637,000). The underlying loss excludes the impact of significant items, totalling $6,264,000 before tax (2013: $39,898,000). Underlying loss after tax was $13,461,000 (2013: loss of $46,616,000). Group revenue (excluding discontinued operations) increased from $228,045,000 for the prior corresponding period to $236,358,000 for the period ended 31 December Revenue from Leonora Operations was impacted by marginally lower average spot gold prices in the period. The table below provides a summary of the contribution before tax from continued operations at Leonora and Simberi during the period (excludes discontinued operations). Period ended 31 December 2014 Leonora Operations (2) Simberi Operations Consolidated (3) Revenue 194,706 41, ,358 Mine operating costs (101,691) (51,047) (152,738) Gross Profit 93,015 (9,395) 83,620 Royalties (7,550) (1,034) (8,584) Depreciation and Amortisation (32,527) (3,111) (35,638) Contribution from operations (1) 52,938 (13,540) 39,398 (1) Excludes corporate and exploration costs, interest and tax. This is non-ifrs financial information, which has not been subject to review or audit by the Group s external auditors. This measure is presented to enable understanding of the underlying performance of the operations. (2) Comprising the Leonora operations, which includes the Gwalia and King of the Hills underground mines and the Leonora processing plant. (3) Excludes discontinued operations at Gold Ridge. Page 4 of 31

7 Analysis of Australian Operations ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Total sales revenue of $194,706,000 (2013: $199,051,000) was generated from gold sales of 137,877 ounces (2013: 139,188 ounces) in the period at an average achieved gold price of A$1,407 per ounce (2013: A$1,421 per ounce). A summary of production performance for the period ended 31 December 2014 is provided in the table below. Details of 2014 Australian Operations Production Performance 6 Months 31 Dec 14 Gwalia 6 Months 31 Dec 13 6 Months 31 Dec 14 King of the Hills 6 Months 31 Dec 13 Underground Ore Mined kt 435, , , ,774 Grade g/t Au Ore Milled (including stockpiles) kt 446, , , ,450 Grade g/t Au Recovery % Gold Production oz 113, ,782 22,827 34,453 Cash Cost (1) A$/oz , All-in-sustaining cost A$/oz ,257 1,244 Gwalia Gold production from the Gwalia underground mine in the period was 113,980 ounces (2013: 105,782 ounces), which was a substantial increase on the prior corresponding period. The higher production at Gwalia was due to higher tonnes and grade mined. The Gwalia processing plant continued to perform well during the period at or above design capacity, with recoveries maintained at an average of 96%. Gwalia unit cash costs for the period were $673 per ounce (2013: $770 per ounce), reflecting the benefit of higher production. The utilisation of more efficient mining practices led to a reduction in the total Cash Operating Costs 1 at Gwalia to $76,709,000 (2013: $81,452,000). King of the Hills Gold production from the King of the Hills underground mine in the period was 22,827 ounces (2013: 34,453 ounces). The lower gold production compared with the prior corresponding period was largely due to prioritisation of higher grade Gwalia ore through the processing plant subsequent to a maintenance shutdown in September Ore mined from King of the Hills in the period was only marginally lower than the prior corresponding period. King of the Hills unit cash costs were $1,089 per ounce (2013: $955 per ounce), which reflected the impact of reduced production in the period. Total Cash Operating Costs 1 were lower than the prior corresponding period at $24,859,000 (2013: $32,903,000) as a result of the reduction in ore processed in the period. 1 Cash Operating Costs are mine operating costs including government royalties, and after by-product credits. This non-ifrs financial information is presented to provide meaningful information to assist management, investors and analysts in understanding the results of the operations. Cash Operating Costs are calculated according to common mining industry practice using The Gold Institute (USA) Production Cost Standard (1999 revision). Page 5 of 31

8 Analysis of Pacific Operations ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Total sales revenue of $41,652,000 (2013 including discontinued operations: $74,486,000) was generated from gold sales of 29,083 ounces (2013 including discontinued operations: 51,600 ounces) in the period at an average achieved gold price of A$1,410 per ounce (2013: A$1,414 per ounce). A summary of production performance for the period ended 31 December 2014 is provided in the table below. Details of 2014 Pacific Operations Production Performance 6 months 31 Dec 14 Simberi 6 months 31 Dec 13 6 months 31 Dec 14 Gold Ridge 6 months 31 Dec 13 Open Pit Ore Mined t 889, , ,076 Grade g/t Ore Milled (including from stockpiles)t 1,152, , ,971 Grade g/t Recovery % Gold Production oz 29,934 20,649-29,431 Cash Cost (1) A$/oz 1,859 2,177-1,989 All-in-sustaining cost (1) A$/oz 1,866 2,404-2,299 (1) Before significant items Simberi Gold production from the Simberi open pit operation in the period was 29,934 ounces (2013: 20,649 ounces). Mining efficiency and various maintenance initiatives yielded increases to milling throughput during the period. There was improvement in the performance of Simberi late in the December 2014 quarter, with the month of December producing the highest monthly gold production since the Company acquired the operations in September Simberi unit cash costs for the period were $1,859 per ounce (2013: $2,177 per ounce). The main contributor to the lower unit cash cost was higher production volumes and reduction in operating costs. As a result of the marked improvement in production in December 2014 the unit cash cost was $1,196 per ounce for the month. Total Cash Operating Costs at Simberi of $55,647,000 were higher compared with the prior corresponding period (2013: $44,953,000) due mainly to the significant increase in mining volumes, including waste removable activities, and higher operating costs associated with business improvement and maintenance initiatives. Gold Ridge The Gold Ridge open pit operation was closed in April 2014 as a result of flooding following torrential rain. No gold production occurred from early April During the period $7,002,000 of stabilisation and other associated expenditure was incurred. Page 6 of 31

9 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Analysis of Corporate and Discovery & Growth expenditure Exploration and evaluation expenditure in the period amounted to $4,041,000 (2013: $10,277,000), of which all was expensed in the income statement. The lower expenditure reflects the impact of reduced exploration activities in Australia and the Pacific to conserve cash. Corporate administration costs for the period of $12,857,000 (2013: $8,441,000) comprised mainly expenses relating to the corporate office and compliance costs. During the period corporate administration costs included redundancy costs of $501,000 (2013: nil). Royalty expenses for the period were $8,584,000 (2013: $8,510,000). This expense represents gold royalties paid to the Western Australian, Papua New Guinea and third party corporate royalties. Other revenue of $556,000 (2013: $1,205,000) comprised mainly interest earned during the period of $443,000 (2013: $1,110,000). Other income of $1,986,000 (2013: $2,277,000) included royalty income, and in the prior year contingent consideration received in relation to the sale of Southern Cross. Depreciation and amortisation of fixed assets and capitalised mine development amounted to $37,646,000 (2013: $46,265,000) for the period. Depreciation and amortisation attributable to the Australian Operations was $32,527,000 (2013: $39,756,000) with the charge associated with the Simberi Operations totalling $3,111,000 (2013: $4,218,000); the balance of the expense was attributable to corporate activities. The lower expense at the Simberi Operations was attributable to the write down of asset values as part of the impairment of the Simberi operations at 30 June Net finance costs in the period amounted to $20,911,000 (2013: $21,894,000). Interest paid and payable of $17,267,000 (2013: $12,920,000) was attributable to the US$250 million senior secured notes issued in March 2013 and Red Kite debt facility. The higher interest paid and payable was due to the higher interest bearing liabilities balance and impact of the lower Australian dollar compared to the United States dollar. Discussion and Analysis of the Cash Flow Statement Cash flow from operating activities Cash flows from operating activities for the period were $21,883,000 (2013: $6,165,000) representing a significant increase on the prior corresponding period due mainly to lower payments to suppliers and exploration expenditure. Operating cash flows for the period were negatively impacted by lower receipts from the sale of gold, as a result of the lower average gold price compared with the prior corresponding period and the cessation of production at Gold Ridge in April Payments to suppliers and employees were lower than the prior corresponding period at $210,892,000 (2013: $244,165,000) due mainly to the reduced payments associated with the discontinued Gold Ridge operations. Exploration and evaluation expenditure at $3,791,000 (2013: $13,707,000) was significantly lower than the prior corresponding period due to reduced exploration activities. Interest received of $445,000 (2013: $1,110,000) was lower than the corresponding period due to lower average cash balances. Interest paid in the period was $17,411,000 (2013: $13,471,000) as a result of the increased facility utilised from Red Kite and negative impact of the lower Australian dollar compared to the United States dollar. Cash flow from investing activities Net cash flows used in investing activities amounted to $34,093,000 (2013: $47,061,000) for the period. Investing expenditure during the period was in the following major areas: Underground mine development and infrastructure at Gwalia - $19,497,000 (2013: $15,470,000); Underground mine development and infrastructure at King of the Hills - $4,314,000 (2013: $6,931,000); Purchase of property, plant and equipment for the Australian operations - $2,654,000 (2013: $2,048,000); and Purchase of property, plant and equipment and mine development for the Pacific operations - $8,863,000 (2013: $24,148,000) Investing expenditure at Simberi was materially lower than in the prior corresponding period due to commissioning of the mill expansion in December 2013 and completing of associated capital works in the prior period. In the period there was also no capital expenditure at Gold Ridge (2013: $4,463,000). Page 7 of 31

10 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Cash flow from financing activities Net cash flows used in financing activities was an outflow of $5,368,000 (2013: outflow of $18,254,000), with major movements being repayments of finance leasing of $3,215,000 (2013: $2,920,000) and facility financing costs of $1,646,000 (2013: $20,482,000). Discussion and Analysis of the Statement of Financial Position: Net Assets and Total Equity The Company s net assets decreased during the period by $58,967,000 to $72,845,000 (30 June 2014: $131,812,000), largely due to the increase in non current interest bearing liabilities. The significant increase in interest bearing liabilities of $50,851,000 was attributable to the significant devaluation of the Australian dollar compared to the United States dollar and its impact on the Company s US dollar denominated debt. The cash balance at 31 December 2014 was $67,565,000 (30 June 2014: $79,407,000), with an additional $2,084,000 (30 June 2014: $1,577,000) held on deposit as restricted cash and reported within trade and other receivables. Current assets at 31 December 2014 were $145,892,000 (30 June 2014: $152,551,000) reflecting mainly the reduction in the cash balance. Property, plant and equipment, mine properties, capitalised exploration and mineral rights had a combined value on the Statement of Financial Position at 31 December 2014 of $458,861,000 (30 June 2014: $451,701,000). Net debt, comprising total borrowings less cash and cash equivalents on hand, was $322,862,000 at 31 December 2014 (30 June 2014: $260,169,000). Interest bearing liabilities increased to $390,427,000 at 31 December 2014 (30 June 2014: $339,576,000) with the largest components of the period end balance representing: US$250 million senior secured notes translated at the AUD/USD exchange rate at 31 December 2014 ($291,985,000), net of capitalised transaction costs of $7,844,000. The AUD/USD exchange rate at 31 December 2014 was (30 June 2013: ). Interest is payable on a semi-annual basis at an interest rate of 8.875% per annum; A debt facility of US$75 million drawn down with RK Mine Finance ( Red Kite ) translated at the AUD/USD exchange rate at 31 December 2014 ($91,819,000), net of capitalised transaction costs of $6,246,000. The facility was entered into on 25 February 2014 with a term of 33 months. During the period the term was increased by six months, with the principal to be repaid over eight equal instalments beginning in September Interest is payable quarterly based on a linked reference rate; the current interest rate applied is 8.5% per annum. The facility is secured under the existing senior secured notes security trust structure and has priority payment status; and Lease liabilities of $6,623,000. Provisions increased to $89,852,000 (30 June 2014: $84,007,000) largely due to the devaluation of the Australian dollar and its impact on conversion of the provisions held in the Pacific entities which have a United States dollar functional currency. The deferred tax balance is a net Liability of $738,000 (30 June 2014: net asset of $5,859,000). The decrease in the net asset was largely attributable to utilisation of recognised tax losses, and unwinding of timing differences on other deferred tax assets. Deferred tax assets arising from accumulated tax losses in relation to the Pacific Operations of $147,345,000 (tax effected) have not yet been booked as it is not probable as at 31 December 2014 that future taxable profits will be generated to utilise these deferred tax assets. Page 8 of 31

11 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT Events occurring after the half year ended 31 December 2014: The Directors are not aware of any matter or circumstance that has arisen since the end of the financial period that, in their opinion, has significantly affected or may significantly affect in future years the Company s operations, the results of those operations or the state of affairs. Auditor Independence A copy of the auditor s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 10 and forms part of the Directors Report for the half year ended 31 December Rounding of Amounts The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors report and financial report. Amounts in the directors report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order. This report is made in accordance with a resolution of directors. Bob Vassie Managing Director & CEO Melbourne 24 February 2015 Page 9 of 31

12 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS REPORT AUDITOR S INDEPENDENCE DECLARATION Set text colour to white after inserting the auditor s independence declaration. Page 10 of 31

13 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED INCOME STATEMENT For the half-year ended 31 December 2014 Note 31 Dec 2014 Half-Year 31 Dec 2013 *restated Revenue from continuing operations 8 236, ,045 Mine operating costs (152,738) (148,727) Gross profit 83,620 79,318 Other revenue ,205 Other income 1,986 2,277 Exploration expensed (4,041) (10,277) Corporate administration costs (12,857) (8,441) Royalties (8,584) (8,510) Depreciation and amortisation (37,646) (46,265) Impairment losses and asset write-downs - (17,593) Other expenditure (1,247) (3,565) Operating profit/(loss) 21,787 (11,851) Net finance costs 9 (20,911) (21,894) Amortisation of hedge reserve 10 1,033 1,293 Net foreign exchange (loss)/gain (2,954) 614 Loss before income tax (1,045) (31,838) Income tax expense from continuing operations 11 (6,739) (9,640) Loss for the period from continuing operations (7,784) (41,478) Loss for the period from discontinued operations 16 (12,095) (45,697) Loss for the period (19,879) (87,175) Earnings per share for continued operations: Basic loss per share (cents) (1.59) (8.50) Diluted loss per share (cents) (1.59) (8.50) *The financial statements and notes have been restated to account for the discontinued operations in the period. The above income statement should be read in conjunction with the accompanying notes. Page 11 of 31

14 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the half-year ended 31 December 2014 Loss for the period Other comprehensive income Items that may be reclassified subsequently to Profit or Loss: 31 Dec 2014 Half-Year 31 Dec 2013 $'000 (19,879) (87,175) Changes in fair value of available for sale financial assets - 37 Changes in fair value of cash flow hedges taken to reserves (723) (4,771) Gain on closure of cash flow hedge collar (2) - 2,946 Tax on other comprehensive income Foreign Currency Translation-foreign operations (39,308) (14) Other comprehensive loss net of tax (1) (40,031) (1,542) Total comprehensive loss attributable to equity holders of the company (59,910) (88,717) (1) Other comprehensive income comprises items of income and expense that are recognised directly in reserves or equity. These items are not recognised in the Income Statement as required by accounting standards. Total comprehensive loss comprises the result for the period adjusted for the other comprehensive income. (2) Net gain on the closure of the King of the Hills collar, net of amounts reclassified to the income statement as required by AASB 139. The above statement of comprehensive income should be read in conjunction with the accompanying notes. Page 12 of 31

15 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 December 2014 Contributed Equity Share Based Payments Reserve Gold Cash Flow Hedge Reserve Investment Fair Value Reserve Currency translation reserve Retained Earnings Total Balance at 1 July , (138) (18,272) (737,442) 131,812 Equity issues (net of transaction costs) Share-based payments expense - (31) (31) Accumulated loss (19,879) (19,879) Comprehensive income/(loss) for the period - - (723) - (39,308) - (40,031) Balance at 31 December , (138) (57,580) (757,321) 72,845 Contributed Equity Share Based Payments Reserve Gold Cash Flow Hedge Reserve Investment Fair Value Reserve Currency translation reserve Retained Earnings Total Balance at 1 July ,242 1,141 3,627 (156) (29,614) (238,013) 623,227 Share-based payments expense Comprehensive income/(loss) for the period - - (1,565) 37 (14) (87,175) (88,717) Balance at 31 December ,242 1,637 2,062 (119) (29,628) (325,188) 535,006 The above statement of changes in equity should be read in conjunction with the accompanying notes. Page 13 of 31

16 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED Statement of Financial Position As at 31 December 2014 Consolidated Dec 2014 June 2014 Notes $'000 $'000 Assets Current assets Cash and cash equivalents 12 67,565 79,407 Trade and other receivables 10,137 7,878 Inventories 44,539 37,416 Available for sale financial assets Deferred mining costs 23,540 27,745 Total current assets 145, ,551 Non-current assets Property, plant and equipment 158, ,893 Deferred mining costs 7,599 4,235 Mine properties 253, ,402 Exploration and evaluation 14,872 15,036 Mineral rights 31,982 25,370 Net deferred tax asset - 5,859 Total non-current assets 466, ,795 Total assets 612, ,346 Liabilities Current liabilities Trade and other payables 58,490 58,951 Interest bearing borrowings 13 27,147 24,226 Provisions 12,587 15,138 Total current liabilities 98,224 98,315 Non-current liabilities Interest bearing borrowings , ,350 Provisions 77,265 68,869 Net deferred tax liability Total non-current liabilities 441, ,219 Total liabilities 539, ,534 Net Assets 72, ,812 Equity Contributed equity , ,242 Reserves (57,050) (16,988) Accumulated losses 15 (757,321) (737,442) Total equity 72, ,812 The above Statement of Financial Position should be read in conjunction with the accompanying notes. Page 14 of 31

17 Cash flows from operating activities ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS For the half-year ended 31 December 2014 Note 31 Dec 2014 Half-Year 31 Dec 2013 $'000 Receipts from customers (inclusive of GST) 253, ,874 Payments to suppliers and employees (inclusive of GST) (210,892) (244,165) Payments for exploration and evaluation (3,791) (13,707) Interest received 445 1,110 Interest paid (17,411) (13,471) Finance charges hire purchase agreements (273) (390) Borrowing costs paid (68) (86) Net cash flow from operating activities 21,883 6,165 Cash flows from investing activities Proceeds from sale of property, plant and equipment 1, Payments for property, plant and equipment (11,517) (26,196) Proceeds from sale of discontinued operations - 1,468 Payments for development of mine properties (23,811) (22,401) Net cash flow used in investing activities (34,093) (47,061) Cash flows from financing activities Proceeds from close out of gold options - 8,500 Movements in restricted cash and cash equivalents (507) (10) Secured notes drawdown, transaction costs - (187) Facility financing costs (1,646) (20,482) Principal repayments - hire purchase agreements (3,215) (2,920) - insurance premium funding - (3,155) Net cash flow (used in)/from financing activities (5,368) (18,254) Net decrease in cash and cash equivalents (17,578) (59,150) Cash and cash equivalents at beginning of the period 79, ,383 Net foreign exchange movement 5,736 7 Cash and cash equivalents at end of the period 12 67,565 58,240 The above statement of cash flows should be read in conjunction with the accompanying notes. Page 15 of 31

18 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the half-year ended 31 December 2014 Note 1 Basis of preparation St Barbara Limited (the Company ) is a company domiciled in Australia. The consolidated half year financial report of the Company as at and for the six months ended 31 December 2014 comprises the Company and its subsidiaries (together referred to as the Group ) and the Group s interest in associates. This general purpose financial report for the half year reporting period ended 31 December 2014 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act This consolidated half year financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the audited annual report for the year ended 30 June The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half year. This consolidated half year financial report was approved by the Board of Directors on 24 February Note 2 Significant accounting policies The accounting policies applied by the Group in this consolidated half year financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2014, except for the impact of the Standards and interpretations described below. These accounting policies are consistent with Australian Accounting Standards. The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include: AASB 1031 Materiality (2013) AASB Amendments to Australian Accounting Standards Offsetting Financial Assets and Financial Liabilities. AASB Amendments to AASB 136 Recoverable Amount Disclosures for Non-Financial Assets AASB Amendments to Australian Accounting Standards Part B: Materiality AASB Amendments to Australian Accounting Standards o Part A: Annual Improvements and Cycles o Part B: Defined Benefit Plans: Employee Contributions (Amendments to AASB 119) o Part C: Materiality Interpretation 21 Levies The Adopted standards have no material impact on the disclosure or the half year interim financial report. Note 3 New standards and interpretations not yet adopted I. AASB 9 Financial Instruments (December 2009), AASB Amendments to Australian Accounting Standards arising from AASB 9, AASB Amendments to Australian Accounting Standards Mandatory Effective Date of AASB 9 and Transition Disclosures AASB 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under AASB 9, financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. AASB 9 introduces new requirements relating to financial liabilities. The International Accounting Standards Board currently has an active project that may result in limited amendments to the classification and measurement requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge accounting. AASB 9 (2010 and 2009) is effective for annual reporting periods beginning on or after 1 January Note 4 Critical accounting estimates and judgements The preparation of the half year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Page 16 of 31

19 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the half-year ended 31 December 2014 Except as noted below, in preparing this consolidated half year financial report, the significant estimates and judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the most recent annual financial report and the additional accounting policies disclosed in Note 2 above. (i) Impairment of assets The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular assets that may lead to impairment. The recoverable amount of each Cash Generating Unit (CGU) is determined as the higher of value-in-use or fair value less costs to sell ( Fair Value ). Given the nature of the Group's mining activities, future changes in assumptions upon which these estimates are based may give rise to a material adjustment to the carrying value of the CGU. This could lead to the recognition of impairment losses in the future. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units ( CGUs ). The recoverable amount of the Leonora CGU was tested for impairment indicators at 31 December with no indicators noted, and the Simberi CGU was tested for impairment, and was assessed to be in excess of its carrying value. Note 5 Segment information The Group has two continuing operational business units: Leonora Operations and Simberi Operations. The operational business units are managed separately due to their separate geographic regions. The Group also has a discontinued business unit within the Solomon Islands; the Gold Ridge operations ceased production in April The Leonora Operations comprise underground gold mining operations in Western Australia, consisting of the Leonora processing plant, and the Gwalia and King of the Hills mines which were previously reported as separate reportable segments. Amendments to the operations reporting structure have changed the focus of review, reflected in the segment table below. The results of all segments are reviewed regularly by the Group s Executive Leadership Team, in particular production, cost per ounce and capital expenditures. Information regarding the operations of each reportable segment is included on the following page. Performance is measured based on segment profit before income tax (excluding corporate expenses), as this is deemed to be the most relevant in assessing performance after taking into account factors such as cost per ounce of production. Page 17 of 31

20 ST BARBARA LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the half-year ended 31 December 2014 Note 5 Segment information (continued) For the six months 31 Dec 2014 Leonora 31 Dec Dec 2014 Simberi 31 Dec 2013 Total (continuing segments) 31 Dec Dec 2013 Gold Ridge (discontinued segment) 31 Dec Dec 2013 Revenue 194, ,051 41,652 28, , ,045 3,894 45,492 Mine operating costs (101,691) (106,887) (51,047) (41,840) (152,738) (148,727) (9,408) (55,086) Gross profit/ (loss) 93,015 92,164 (9,395) (12,846) 83,620 79,318 (5,514) (9,594) Royalties (7,550) (7,863) (1,034) (647) (8,584) (8,510) (182) (1,909) Impairment losses (17,593) - (17,593) - (24,507) Depreciation and amortisation (32,527) (39,756) (3,111) (4,218) (35,638) (43,974) - (6,900) Reportable segment profit /(loss) before income tax 52,938 44,545 (13,540) (35,304) 39,398 9,241 (5,696) (42,910) For the six months 31 Dec 2014 Leonora Simberi Total Gold Ridge 31 Dec Dec Dec Dec Dec Dec Dec 2013 Capital expenditure (25,654) (24,537) (8,039) (18,670) (33,693) (43,207) - (4,463) As at 31 Dec Jun Dec Jun Dec Jun Dec Jun 2014 Reportable segment assets 399, , , , , ,749-6,952. Page 18 of 31

21 Note 5 Segment information (continued) Reconciliation of reportable continuing segment revenues, profit or loss, assets, and other material items: Revenues Period Ended 31 Dec 2014 Consolidated Period Ended 31 Dec 2013 $'000 Total revenue for reportable continuing segments 236, ,045 Other revenue 556 1,205 Consolidated revenue from continued operations 236, ,250 Profit or loss Period Ended 31 Dec 2014 Consolidated Period Ended 31 Dec 2013 $'000 Total profit for reportable continuing segments 39,398 9,241 Other income and revenue 2,542 3,482 Exploration expensed (4,041) (10,277) Unallocated depreciation and amortisation (2,008) (2,291) Finance costs (20,911) (21,894) Net fair value gain/(loss) on derivatives 1,033 1,293 Foreign exchange (loss)/gain (2,954) 614 Corporate and support costs (12,857) (8,441) Other corporate expenses (1,247) (3,565) Consolidated loss before income tax from continued operations (1,045) (31,838) Page 19 of 31

22 Note 5 Segment information (continued) Reconciliation of reportable continuing segment revenues, profit or loss, assets, and other material items (continued): Assets 31 Dec 2014 Consolidated 30 June 2014 $'000 Total assets for reportable segments 521, ,701 Cash and cash equivalents 67,565 76,888 Trade and other receivables 10,137 7,167 Available for sale financial assets Inventories - 3 Net deferred tax asset - 5,859 Property, plant & equipment 7,383 6,857 Other assets 5,425 5,766 Consolidated total assets 612, ,346 Half year ended 31 December 2014 Half year ended 31 December 2013 Reportable segment Adjustments Consolidated Reportable segment* Adjustments Consolidated Other material items Depreciation and amortisation 35,638 2,008 37,646 43,974 2,291 46,265 *Excludes depreciation from discontinued operations of $6.9 million Note 6 Contingent liabilities During July 2014, the Company announced that by operation of its internal reporting mechanisms, the provision of benefits to a foreign public official that may violate its Anti-Bribery and Anti-Corruption Policy or applicable laws in Australia or in foreign jurisdictions were identified. The amount of the benefits provided to the foreign public official was not material to the Company. The Company self-reported the matter to relevant authorities, including the Australian Federal Police, and the matter is being assessed and investigated. To date, there has been no action taken against the Company, consequently, the range of potential penalties, if any, cannot be reliably estimated. Should there be any prosecution, potential penalties are governed by laws in various jurisdictions including Criminal Code 1995 (Cth) in Australia and/or the UK Bribery Act. Note 7 Dividends No dividends were declared or paid during the period (2013: Nil). Page 20 of 31

23 Note 8 Revenue Consolidated Period ended 31 Dec 2014 Period ended 31 Dec 2013 $'000 Sales revenue - Sale of gold 239, ,000 - Sale of silver 794 1,537 Less revenue from discontinued operations (3,894) (45,492) 236, ,045 Other revenue - Interest revenue 443 1,110 - Sub-lease rental ,205 Revenue from continuing operations 236, ,250 Note 9 Finance costs Period ended 31 Dec 2014 Consolidated Period ended 31 Dec 2013 $'000 Interest paid/payable 17,267 12,920 Borrowing costs 2,470 1,319 Finance lease interest Fair value movement in gold prepayment facility - 5,904 Provisions: unwinding of discount 1,045 1,474 Less finance cost discontinued operations (144) (689) 20,911 21,894 Page 21 of 31

24 Note 10 Significant Items Significant items are those items where their size and nature is considered significant to the financial report. Such items included within the consolidated results for the period are detailed below. Continuing operations Included within Realised gains on derivatives Period ended 31 Dec 2014 Consolidated Period ended 31 Dec 2013 Realised gain on gold cash flow hedge (1) 1,033 1,293 1,033 1,293 Impairment losses - (17,593) (4) Redundancy costs Within Corporate and support costs (501) - Within Mine Operating costs (21) (559) Included within other income Contingent consideration received on sale of Southern Cross - 1,468 Included within net foreign exchange (loss)/gain Effect of unhedged borrowings/ineffective net investment hedge (2) (46,490) - Unrealised foreign exchange gains (3) 39,715 - Total significant items for continuing operations pre tax (6,264) (15,391) (1) Realised gain on gold cash flow hedge Represents the amount of the gain from the close out of the gold option collar amortised during the period. The collar was closed out in July 2013 for cash proceeds of $8.5 million, resulting in a gain of $4.2 million. Per accounting standards, this gain was deferred to an equity reserve and amortised in accordance with the underlying profile/timing of the collar tranches closed out. (2) Effect of unhedged borrowings/ ineffective net investment hedge The group hedges the foreign exchange exposure of its US dollar functional currency Pacific assets against its US dollar denominated borrowings. Per AASB 121 the ineffective component must be recognised in the Consolidated Income Statement. Additionally, the unrealised foreign exchange movement on the unhedged component of the US dollar denominated borrowings is also recognised in the Consolidated Income Statement. (3) Unrealised foreign exchange gains. The movement represent the unrealised gains on Australian and US denominated intercompany loans reflected within the Consolidated Income Statement per AASB 121. (4) Impact of discontinued operations The impairment write down of $24,507,000 for the Gold Ridge operation is not included in Impairment losses in the 31 December 2013 half year financial statements and has been reclassified to the Loss for the period from discontinued operations line item on the Income Statement. Page 22 of 31

25 Note 11 Income tax Period ended 31 Dec 2014 Consolidated Period ended 31 Dec 2013 Income tax expense 8,564 9,814 Over provision in respect of prior years (1,825) (174) Income tax expense for continued and discontinued operations 6,739 9,640 Income tax expense for continued operations 6,739 9,640 Income tax benefit for discontinued operations - - Note 12 Cash and cash equivalents For the purpose of the Consolidated half-year Statement of Cash Flows, cash and cash equivalents at the 31 December balance date comprised the following: 31 Dec 2014 Consolidated 30 June 2014 $'000 Cash at bank and on hand (1),(2) 35,565 68,985 Term deposits (3) 32,000 10,422 Total cash and cash equivalents 67,565 79,407 (1) Cash at bank at 31 December 2014 invested at call was earning interest at an average rate of 2.75% (30 June 2014: 2.7%) (2) Cash at bank excludes restricted cash of $2,084,000. (3) Term deposits at 31 December 2014 were earning interest at rates between 3.20% and 3.47% (30 June 2014: rates between 3.5% and 3.6%). To liquidate deposits invested for defined periods, 31 days notice is needed with the introduction of Basel III changes in banking APRA Prudential Standard APS 110 Capital Adequacy. At 31 December 2014, the average time to maturity was 34 days (30 June 2014: 69 days). Note 13 Interest bearing liabilities Current Secured Lease liabilities Loans from other entities Non-Current Secured 31 Dec ,192 22, June 2014 $'000 4,343 19,883 27,147 24,226 Lease liabilities 2,431 5,496 Senior secured notes (net of transaction costs) 291, ,048 Loans from other entities 68,864 53, , ,350 Page 23 of 31

26 Note 14 Contributed equity Parent entity 31 Dec June Dec 2014 Parent entity 30 June 2014 Shares Shares Ordinary shares fully paid 495,102, ,074, , ,242 Movement in Shares issued are as follows: 6,195,115 shares issued 29 October 2014 as part of the 2014 Short Term Incentives scheme; and 833,333 shares issued to the Managing Director and CEO on 8 December 2014 (AGM resolution 4). Note 15 Accumulated losses Movements in accumulated losses were as follows: Consolidated 31 Dec June 2014 $'000 Balance at start of the period (737,442) (238,013) Transferred from share based payment reserve (a) - 1,402 Loss attributable to members of the Company (19,879) (500,831) Balance at end of the period (757,321) (737,442) The 30 June 2014 comparative discloses movement for the year ended 30 June (a) Share based payment reserve transfers to accumulated losses No options expired during the period ended 31 December 2014 (30 June 2014: $1,402,000). Accounting standards preclude the reversal through the Income Statement for amounts which have been booked in the share based payments reserve for options which satisfy service conditions but do not vest due to market conditions. Page 24 of 31

27 Note 16 Discontinued operations With operations remaining suspended at Gold Ridge mine site, the Group has been negotiating the potential transfer of the mine to the Solomon Islands Government for a nominal amount. A Heads of Agreement has been discussed with the Solomon Islands Government, but negotiations have taken time, more recently due to the change of Solomon Islands Government after elections on 19 November The results of the discontinued operations included in the consolidated income statement are set out below. comparative profit and cash flows from discontinued operations are shown in the tables below. The Loss for the period from discontinued operations 31 Dec Dec 2013 Revenue 3,894 45,492 Mine operating expenses (9,408) (55,086) Gross loss (5,514) (9,594) Royalties (182) (1,909) Impairment - (24,507) Depreciation - (6,900) Exploration expense (291) (3,430) Foreign exchange /gain 894 2,523 Administration and Stabilisation costs (7,002) (1,880) Loss before tax (12,095) (45,697) Attributable income tax benefit - - Loss after tax (12,095) (45,697) Loss for the period from discontinued operations (attributable to owners of the company) (12,095) (45,697) Cash flows from discontinued operations 31 Dec Dec 2013 Net cash outflows from operating activities (9,312) (33,851) Net cash outflows from investing activities - (6,145) Net cash (outflows)/inflows (9,312) (39,996) Note 17 Subsequent events The Directors are not aware of any matter or circumstance that has arisen since the end of the financial period that, in their opinion, has significantly affected or may significantly affect in future years the Company s operations, the results of those operations or the state of affairs. Page 25 of 31