INSTRUCTIONS - Realview

DIRECTORS’ REPORTFor the year ended 30 June 2009Review of operations cont.Cash flows cont.Cash flow from financing activities totalled $122,179,000(2008: $145,126,000), which included proceeds from equityraisings during the year of $133,861,000, and the drawdown under the asset financing facility of $20,000,000.Transaction costs associated with the equity raisings totalled$5,354,000 for the year. A payment of $20,565,000 wasmade for the buy back of convertible notes during the year.Cash flow from financing activities included a movementin restricted cash of $3,742,000 (2008: $12,482,000).Significant changes in the state of affairsThe significant changes in the state of affairs of theCompany during the financial year are as follows:(a) Gwalia developmentCompletion of pre-commissioning of the Gwalia undergroundmine required capital expenditure covering undergrounddevelopment, mine infrastructure and refurbishmentof the plant totalling $67,209,000 in the year.(b) Reclassification of available-for-salefinancial assetsAt 30 June 2009 available-for-sale financial assets werereclassified to current assets. The Company’s strategicreview completed in June 2009 identified non-core assetsfor divestment within twelve months.(c) Impairment write-offDuring the year, the Company recognised impairmentwrite-offs in relation to mine development expenditureand capitalised exploration totalling $66,042,000.(d) Reclassification of non-current liabilitiesAs at 30 June 2009 the outstanding balance of convertiblenotes of $77,100,000 was reclassified to current liabilities.The reclassification of the convertible notes outstandingbalance to current liabilities was based on the fact that noteholders have an option to require repayment of all or someof their notes on 4 June 2010.(e) Changes in issued capitalIn July 2008 the Company received proceeds from the issueof new shares of $56,125,000, before transaction costs.A total of 140,312,045 new shares were issued at an issueprice of $0.40 per share.In February 2009 the Company received proceeds of$77,736,000, before transaction costs, from the issueof new shares. A total of 189,600,000 new shares wereissued at an issue price of $0.41 per share.(f) Operating loss for the yearThe consolidated entity reported a net loss for the year of$76,344,000 including significant items totalling $76,553,000.Total net loss for the year (including significant items)increased accumulated losses to $208,664,000.Likely developments and expected resultsof operationsThe Company will focus on achieving profitable productionwith a much stronger emphasis on lower cost, highermargin gold production in Australia. Open pit miningceased at Southern Cross operations in July 2009 and thetreatment plant at both Leonora and Southern Cross areplanned to operate on a campaign milling basis in the nextfinancial year.Further information about anticipated developments in theoperations of the Company and the anticipated results ofthose operations in future financial years have not beenincluded in this report because there is insufficient certaintyto warrant disclosure.Regulatory environmentThe Company’s mining activities are all in Western Australia,and are governed by Western Australian legislation, includingthe Mining Act 1978, the Mines Safety and Inspection Act1994, Dangerous Goods Safety Act 2004 and other miningrelated and subsidiary legislation. The consolidated entity issubject to significant environmental regulation, including theWestern Australian Environmental Protection Act 1986,Contaminated Sites Act 2003, Wildlife Conservation Act1950 and the Commonwealth Environmental Protectionand Biodiversity Conservation Act 1999, as well as safetycompliance in respect of its mining and exploration activities.Information on DirectorsS J Colin Wise LL.B, FAICD, FAusIMMChairman – Non-ExecutiveMr Wise is an experienced corporate lawyer, consultant andcompany director with significant expertise in the miningand exploration industry and resources, energy andcorporate sectors. He spent 24 years with WMC Limited,10 of which as General Counsel and subsequently, fouryears as Counsel to a New York law firm. He has extensivepractical experience in Australia and internationally witha wide range of corporate, operational and legal matters.He has been Chairman of St Barbara since mid 2004,and is a Fellow of both the Australian Institute of CompanyDirectors and the Australasian Institute of Mining andMetallurgy. He is a member of the Advisory Board to theDean of Medicine, Nursing and Health Sciences at MonashUniversity and was a Non-Executive Director for 5 yearsof Southern Health, the largest health care service inVictoria, Chair of its Quality Committee, and a memberof the Audit Committee.Other current public company directorshipsNilFormer public company directorships in last 3 yearsNil28