1st Quarter Results

RNS Number:5274R
St. Barbara Mines Limited
31 October 2003




ACTIVITIES REPORT

Three months to 30 September 2003

or see pdf version on our website:

http://www.stbarbara.com.au/UPLOADED/SBM000408.pdf


OVERVIEW

MEEKATHARRA OPERATIONS

       Gold production 15,721 ounces

-      sourced entirely from low grade stockpiles, predominantly Paddys Flat

       Net cash cost $475 per ounce



FINANCE

             Meekatharra Operations

-      cash operating surplus $2.0 million

             Share placement raises $0.96 million (net of fees)

             Short term debt reduced $5.0 million

             Debt-for-equity swap ($7.3 million) and partial loan-for-equity
swap ($2.8 million) proposed, both subject to shareholder approval



PADDYS FLAT DEVELOPMENT

             Prohibition drill results confirm resource model

             Down plunge drilling commenced



PAULSENS PROJECT

             Parameters to develop Paulsens as a high grade shallow underground
mine in place



CORPORATE

             Board expansion and separation of Chairman and Chief Executive
roles foreshadowed

             Burnakura area farmed-out in $2 million development and exploration
joint venture



CHAIRMAN'S REVIEW

The quarter has been notable for a number of key events benefiting both the
balance sheet and the gold production profile.

Resource Capital Funds II LP (Denver, Colorado, USA), a provider of credit and a
supporter since January 2002, has agreed to convert the balance of its entire
term facility ($7.3 million) into equity, which together with the earlier
repayment of $5.0 million (from the sale of Dioro), will extinguish all secured
debt from the St Barbara balance sheet.

The debt-to-equity swap will result in the issue of shares to Resource Capital
Funds, taking their shareholding from a current 7.7 percent to approximately 24
percent of the enlarged capital base.

Ocean Resources will also convert $2.8 million of convertible loan into ordinary
shares at 8 cents per share.  Both the Resource Capital Funds and Ocean
Resources conversions are subject to shareholder approval at the Annual General
Meeting on 25 November 2003.

Post this event, interest bearing debt will be $4.4 million comprising the
remainder of the Ocean Resources convertible loan - also convertible at 8 cents
per share.

Subsidiary, Taipan Resources NL, will proceed with the development of Paulsens
as a high grade shallow underground mine.  The project has been re-engineered
significantly reducing the capital associated with the previous high strip ratio
open cut proposal.  A decline, to an initial depth of 200 metres, is scheduled
to deliver 675,000 tonnes at 12.2 g/t.

The catalyst for Paulsens proceeding is the acceptance by St Barbara of a
debt-for-equity swap for the outstanding inter-company loan of $17.6 million.
This facilitates a $21 million equity raise in Taipan of which $18 million is a
share placement with the balance an underwritten Share Purchase Plan.  St
Barbara, as a consequence, will dilute from 88.3 percent to 54.9 percent in the
expanded capital of Taipan.

The net outcome of the transaction is a Paulsens Project fully funded into
production, reaching an annualised rate of 100,000 ounces within fifteen months
of the January 2004 commitment.

At our other major development project, Paddys Flat at Meekatharra, recent mine
design drilling has confirmed the mine model with modest positive
reconciliation.  A thirteen hole down plunge programme to extend the resource
has commenced.

In recognition of best corporate governance practice, the Board will seek to
appoint two new directors, one of whom will be a non-executive Chairman, thereby
separating the roles of Chairman and Managing Director.  Mr Stephen Miller
continues as Group Managing Director to lead the re-establishment of growth in
the gold production profile facilitated by the balance sheet recapitalisation.



Stephen W. Miller
Executive Chairman

31 October 2003



MANAGEMENT DISCUSSION AND ANALYSIS

PRODUCTION

Gold production at 15,721 ounces was 16 percent lower than the previous quarter.

Mill feed comprised low grade stockpiles, predominantly Paddys Flat No. 1, No. 2
and No. 3 stockpiles.  Minor tonnages were treated from Alliance and Boomerang
during periods of higher spot gold prices.

Lower production was a consequence of lower average mill grade (down 10
percent), consequent lower recovery and slightly lower throughput (down 5.5
percent - although still an annualised rate of 2.8 million tonnes).

Outlook

Three of the four nearby small surface oxide deposits have been assessed as
marginal.  Five Mile remains subject to a geotechnical review of a pit last
worked ten years ago.

The production schedule for the balance of the year includes Paddys Flat and
Bluebird low grade stockpiles and Batavia open pit.

Detailed evaluation of the higher grade underground Paddys Flat deposits
continued.  Four holes into Prohibition have confirmed the orebody model and a
further 13 holes (7,500 metres) are planned to assess the potential for down
plunge resource extension.  A drill programme has also commenced on the lower
grade open pit Mickey Doolan resource.

Production and Sales Statistics

Period                                  3 Months to   12 Months to
                                        30 Sept 2003  30 June 2003

Ore mined (tonnes)                             nil          483,041
Ore milled (tonnes)                        700,658        2,284,599
Grade milled (g/t)                            0.85             1.47
Recovery (%)                                  82.0             89.7
Gold produced (ounces)                      15,721           96,611
Gold sold (ounces)                          17,819           98,080

Production Cost Statement ($/oz)

Modified Gold Institute Standard

Period                                  3 Months to   12 Months to 30
                                        30 Sept 2003  June 2003

Mine site cash costs                           448              448
State royalties                                 27               17
Net Cash Cost                                  475              465
Mine development capital cost                   68              103
amortisation
Inventory movements                             67                7
Net Operating Cost                             609              575
Realised Gold Price                            548              572



St Barbara calculates cost of production using a modified Gold Institute
Standard.  The modification is designed to clearly identify the actual cash cost
incurred, which is then normalised depending upon over or under development
against the life-of-mine plan.

The resultant 'net operating cost' per ounce is equivalent to the GI 'total cash
cost' per ounce.

FINANCE

Realised Gold Price

A total of 17,819 ounces was sold at a net realised gold price of $548 per ounce
(against an average spot price of $554 per ounce).

The Company delivered all production into
spot.  The Company has no hedge positions.

Financial Performance

Meekatharra Operations generated a $2.0 million cash surplus for the quarter.

Financial Position

As at 30 September 2003, cash and bullion totaled $1.5 million (plus $3.3
million in rehabilitation bonds).

Major cash movements during the period included convertible note proceeds ($1.3
million), asset sales ($1.2 million), investment sale (Dioro $5.0 million) and
Defiance debtor repayments ($1.0 million), Paddys Flat acquisition ($1.5
million) and repayment of debt finance (RCF $5.0 million).



MANAGEMENT DISCUSSION AND ANALYSIS

BURNAKURA JOINT VENTURE

A 70 percent interest in the 7 kilometre long Alliance line of gold
mineralisation, 35 kilometres south of the treatment plant, has been farmed out
subject to a $2 million commitment over 30 months, and payment of a royalty to a
third party.

The joint venture partner proposes the immediate development of the 53,000 ounce
NOA2 underground resource with milling of mined ore through the St Barbara
treatment plant commencing May 2004.

PAULSENS

Paulsens has been significantly re-engineered as a high grade shallow
underground mine.  The net result is a reduction in capital cost to first gold
pour from $40 million to $13 million.

A project risk mitigation programme comprising positional drilling (20 holes)
into the orebody 100-125 metres below surface, resource extension drilling (39
holes) between 200-400 metres below surface and extraction of a 50,000 tonne
sample to confirm mining and processing parameters is proposed.

Gold recovered from the major sample will partially offset site establishment,
decline and level development costs.



Information in this report relating to mineral resources conforms to the
reporting requirements of the Australasian Code for Reporting of Identified
Mineral Resources and Ore Reserves (The JORC Code).  It is based on information
compiled by Mr Graham Miller, FAusIMM, a Competent Person as defined by the
Code.  It is included in this report with his consent.




CORPORATE INFORMATION
Board of Directors and Executive      Issued Capital                             Shareholder Enquiries
Management
                                      As at the date of this report, issued      Matters related to shares held,
S. W. Miller.............. Executive  capital is 443,464,225 shares.             change
Chairman                                                                         of address and tax file numbers
                                      There were 44,329,772 listed options,      should
K. A. Dundo...... Non-Executive       exercisable at 30 cents up until 29        be directed to:
Director                              February 2004 and 71,682,563 unlisted
                                      options exercisable at various prices      Australia:
G. B. Speechly.. Non-Executive        between 11 cents and 40 cents up to 17
Director                              January 2008.                              Advanced Share Registry Services

H. G. Tuten....... Non-Executive      Major Shareholders                         Level 7, 200 Adelaide Terrace
Director
                                      Westpac Custodians.....................    Perth  WA  6000
A. D. Rule............. Chief         15.75%
Financial Officer                                                                Telephone:................. .+61
                                      National Nominees......................    8 9221 7288
........................... and       10.16%
Company Secretary                                                                Facsimile:....................
                                      Resource Capital Fund II LP..........      [phone]
                                      7.68%
                                                                                 United Kingdom:
Registered Office                     Strata Mining Corporation Ltd...... 7.26%
                                                                                 Computershare Investor Services
Level 2, 16 Ord Street                Toto Capital                               PLC
                                      Inc.............................. 3.15%
West Perth  WA  6005                                                             The Pavilions, Bridgwater Road

Telephone:..................... +61 8                                            Bristol  BS99  7NH,  England
9476 5555                             Substantial Shareholders
                                                                                 Telephone:................ +44
Facsimile:....................... +61 RAB Europe Fund Ltd..................      870 703 6088
8 9476 5500                           10.15%
                                                                                 Facsimile: ................. +44
Email:..................              St James's Place Recovery                  870 703 6142
[e-mail]
                                                                                ADR Depositary
Website:...............               Unit Trust.         9.12%
www.stbarbara.com.au                                                            The Bank of New York

                                      Resource Capital Fund II LP..      7.68%  ADR Division
                                      
Stock Exchange Listings                                                          101 Barclay Street
                                      Strata Mining Corporation Ltd...... 7.26%
Australian Stock Exchange                                                        New York  NY10286  USA

AIM Board of London Stock Exchange                                               Telephone:.................. +1
                                                                                 212 815 2218
Ticker Symbol:       SBM


Enquiries regarding this report may be directed to:

Stephen W. Miller Executive Chairman

Telephone          [phone]
Overseas         [phone]

or

Colin G. Jackson
Investor Relations

Telephone              0417 929 107



St Barbara Mines Limited
Level 2, 16 Ord Street
West Perth
Western Australia    6005

Telephone           [phone]
Overseas          [phone]



Dollar values in this report are Australian Dollars unless otherwise stated.



St Barbara is a dedicated gold company listed on both the Australian Stock
Exchange and the AIM (London Stock Exchange) - ticker symbol SBM - with nearly
12,000 shareholders.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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