INSTRUCTIONS - Realview

DIRECTORS’ REPORTFor the year ended 30 June 2009The significant items are detailed in the table below.30 June 09 30 June 08Significant Items $’000 $’000Net realised/unrealised gains on gold put options (4) 1,515 16,834Write down of listed investments to fair value (3) (6,192) (4,876)Included within corporate and support costs• Restructuring provision (1,957) –• Redundancy payments (3,877) –Asset impairment write-downs• Open pit mine development (1) (16,904) –• Southern Cross assets (2) (40,488) –• Capitalised exploration (8,650) –(76,553) 11,958(1) Write down of capitalised open pit development expenditure as a result of decisions to cease open pit mining at Southern Cross andLeonora operations during the year.(2) The impairment write down taken on the Southern Cross assets was driven by a reduction in future estimated net cash flows from theSouthern Cross operations cash-generating unit as a result of the cessation of open pit mining. The revised cash flow estimates no longersupported full recovery of the carrying value of the Southern Cross cash-generating unit. Substantial net cash flows from future openpit operations at Southern Cross were previously included in the business plan and provided support for the carrying value of assets.(3) The listed investments were written down to fair value based on the mark-to-market value as at the 31 December 2008 half yearreporting date. As at 30 June 2009 the mark-to-market value of listed investments reflected an increase, which in accordance withaccounting standards was recorded in reserves in the balance sheet. Refer to the “Events occurring after the end of the financial year”in this report for details of accounting for the reserve after 30 June 2009.(4) The gain on gold put options in the year represents a realised gain on the close out of the options. In the prior year a net unrealisedgain of $16,834,000 was recognised in the income statement.Review of operationsThe Company’s focus during the year continued to be the achievement of profitable production and the extension of themine life at the Southern Cross operations, development of operations at Gwalia and to explore for gold close to existingoperations at Southern Cross and Leonora.During the year, the Company completed a comprehensive strategic and operational review of its operations, asset portfolio,organisational capability and financial requirements. The key outcomes of the review were:• the Company’s activities will have a much stronger emphasis on lower cost, higher margin gold production in Australia,• a three year plan to implement the strategic review was developed, underpinned by operations based on higher marginunderground mill feed from the Gwalia and Marvel Loch underground mines; and• open pit mining operations at Southern Cross will cease by the end of July 2009 and the treatment plant at Southern Crosswill be operated on a campaign milling basis. The Leonora treatment plan moved to campaign milling in March 2009.stbarbara.com.au – Annual Report 2009: 25