St Barbara : Quarterly Report Q2 December 2016

Quarterly Report / Q2 December 2016

> 99 koz gold produced at AISC A$876/oz in quarter > Continued strong operating cash flow drives debt reduction and improved net-cash position > Gwalia Extension Project Feasibility Study approved Executive Summary Operations

˃ Consolidated gold production for the December 2016 quarter was 98,982 ounces (Q1 Sep: 92,547 ounces).

˃ Consolidated All-In Sustaining Cost1 (AISC) was A$876 per ounce (Q1 Sep: A$935 per ounce). The average realised gold price for the quarter was A$1,636 per ounce (Q1 Sep: A$1,737 per ounce). Free cash flow (cash contribution from operations2) for the quarter of A$763 million (Q1 Sep: A$83 million).

˃ Gwalia (Western Australia) gold production for the quarter was 70,925 ounces (Q1 Sep: 67,118 ounces) at AISC of A$716 per ounce (Q1 Sep: A$774 per ounce). Mined grade for the quarter was 11.9 g/t Au (Q1 Sep: 10.4 g/t Au) with 201 kt ore milled (Q1 Sep: 215 kt).

˃ Simberi (PNG) gold production for the quarter was 28,057 ounces (Q1 Sep: 25,429 ounces), at AISC of A$1,277 per ounce (Q1 Sep: A$1,359 per ounce).

Health & Safety

˃ The Company-wide Total Recordable Injury Frequency Rate (TRIFR), calculated as a rolling 12 month average, continued at its record low of 1.8 to 31 December 2016 (Q1 Sep: 1.8).

Exploration

˃ Gwalia (Leonora) WA Activities focused on defining extensions to the Gwalia lode system continued during the quarter with surface drill programs targeting northern and down-plunge zones.

˃ Two daughter holes GWDD18B and GWDD18C were completed at Gwalia targeting below 2,000 metres, passing through intervals interpreted to represent South West Branch (SWB) and South Gwalia Series (SGS2)

˃ A new program seeking to extend Resources below 2,000 mbs has commenced. Three daughter holes were underway at the end of the quarter and ten additional holes are scheduled to be drilled during Q3 March 2017.

˃ The program targeting the northern extension to the Gwalia Lode system between 1,600 and 1,700 metres below surface (mbs) has successfully extended definition of the lode system a further 200m north of current development during the quarter.

˃ 2D seismic work utilising downhole methodology was completed at Gwalia during the quarter. Results from this work confirm the strong reflective nature of the Gwalia Mine Sequence and support a proposal to undertake a more extensive 3D seismic program in Q3 March 2017.

˃ Pinjin Project (Yilgarn) WA A 3,329 metre Reverse Circulation drilling program for 22 holes was completed during the December 2016 quarter (see summary on page 8 and details in Figures 3.0 to 3.3 and Table 3). A 290 hole 17,000 metre aircore drill program will commence early in Q3 March 2017 following-up the encouraging early stage results reported last quarter.

˃ Back Creek NSW A 3,776 line kilometre airborne geophysical survey was completed over Back Creek EL8214 in central NSW.

˃ Tatau Island PNG Trenching, mapping and drilling continued at Southwest Tatau Island, during the December 2016 quarter, targeting high grade sulphide-oxide gold mineralisation (see summary on page 9 and details in Figures 5.0 and 5.2).

˃ An airborne LiDAR (Light Detection and Ranging) survey was completed over Tatau Island to produce an accurate topographic map to support regional exploration.

˃ Option and farm-in with Newcrest As announced on 14 November 2016, St Barbara has entered into an option and farm-in with Newcrest for copper-gold porphyry exploration on the tenements on nearby Tatau and Big Tabar Islands (see detail on page 9). Field preparations for grid soil sampling over copper-gold porphyry targets located in central Tatau Island commenced late in the December 2016 quarter (Figure 5.0).

1. Non-IFRS measure, refer Appendix

2. Non-IFRS measure, refer cash movement table on page 12

3. Excludes Gwalia growth capex of $2 million

St Barbara Limited	Level 10, 432 St Kilda Road, Melbourne VIC 3004	T [phone] F [phone]
ACN 009 165 066	Locked Bag 9, Collins Street East, Melbourne VIC 8003	W www.stbarbara.com.au

Gwalia Extension Project

˃ Ventilation Upgrade The Feasibility Study to increase ventilation at Gwalia announced in August 2016 has been completed and approved by the Board. The project provides the additional ventilation needed to mine between 1,800 and 2,000 metres below surface (mbs). The study identified raiseboring as the primary project execution risk.

˃ Paste Aggregate Fill (PAF) A Feasibility Study on Paste Aggregate Fill (PAF) has also been completed and approved by the Board. PAF involves mixing paste from surface with waste crushed underground for stope fill and allows waste to be disposed of underground, boosting truck productivity. PAF also allows faster stope filling and therefore reduces stope cycle times.

˃ Expediting PAF for use during ventilation shaft construction will allow underground disposal of raisebore chippings, significantly reducing the impact of the project on ongoing production and greatly enhancing overall project value.

˃ The Board has approved project readiness and early works expenditure including detailed engineering, hiring project staff, engaging with vendors and commencing underground development. Key cost and schedule estimates for Gwalia Extension Project include1:

˃ capital cost for Ventilation project of A$70 to $75 million and PAF project of A$15 to $20 million

˃ construction period of two to two and a half years

˃ expenditure of A$6 million in the March 2017 quarter.

˃ The final project cost and schedule will depend on several factors including availability of raisebore machines and the result of further geotechnical studies.

˃ The current mine plan extends to 1,940 mbs in FY 2024. Should the current drilling program identify sufficient resources below 2,000 mbs, the Study defines additional infrastructure that could extend ventilation from 2,000 mbs to allow mining to 2,200 mbs at a cost of between A$30 to A$35 million.

˃ The 'Gwalia Extension Project' demonstrates a robust financial return that justifies advancing the early works outlined above. Project costs and schedules to support mining to 2,000 mbs are in preparation with intended submission to the Board for capital expenditure approval by the end of March 2017.

Finance (unaudited)

˃ The Company moved to a net-cash2 position during the quarter, and finished the quarter at A$31 million net-cash (not including gold inventory). After debt repayments and interest of A$130 million during the quarter, total cash at bank at 31 December 2016 was A$87 million 3 (30 September 2016: A$154 million). In addition, there was 14,538 ounces of gold inventory on hand at 31 December 2016.

˃ As announced on 19 December 2016, a further US$20 million principal4 of US Notes will be repurchased on 20 January 2017. The remaining US$20 million (A$27 million5) of US Notes is anticipated to be repurchased later in Q3 March 2017.

˃ As announced on 4 January 2017, Standard and Poor's lifted the company's financial rating from B to B+ with a stable outlook.

Outlook

˃ Guidance for FY17 has been revised upwards and is summarised as follows:

˃ Forecast Gwalia (Leonora) gold production of between 255,000 and 265,000 ounces (previously 245,000 to 265,000 ounces) at an AISC of between A$815 and A$850 per ounce (previously A$850 to A$910 per ounce), with sustaining capex of between A$32 and A$35 million (previously A$30 to A$35 million), plus growth capex of between A$12 to A$15 million (previously A$10 to A$12 million).

˃ Forecast Simberi gold production is unchanged at between 95,000 and 105,000 ounces at an AISC of between A$1,330 and A$1,490 per ounce (derived from AISC in Simberi's functional currency of between US$1,000 to US$1,120 per ounce), with capex of between A$4 and A$5 million (previously A$5 to A$6 million).

˃ Forecast exploration expenditure is unchanged at between A$18 and A$22 million, consisting of:

˃ A$10 to A$12 million at Gwalia

˃ A$8 to A$10 million spilt approximately 30% at Pinjin in WA and 70% on the Simberi Island group in PNG.

Bob Vassie

Managing Director and CEO 18 January 2017

1. See page 6 for full details

2. Non-IFRS measure, equivalent to cash and cash equivalents less current and non-current interest bearing borrowings

3. Financial information unaudited

4. US$21 million (A$28 million) in total consisting of principal repayment, premium and accrued interest.

5. Translated at indicative A$1.00 = US$0.74

St Barbara Gold Production & Guidance

Production Summary Consolidated	Q4 Jun FY16	Year FY16	Q1 Sep FY17	Q2 Dec FY17	Guidance FY173
Production		70,925	255 to 265 koz (previously 245 to 265 koz3)
Gwalia	oz			65,098	267,166	67,118
King of the Hills4	oz	-	9,112	-	-	-
Simberi	oz	26,935	110,286	25,429	28,057	95 to 105 koz
Consolidated	oz	92,033	386,564	92,547	98,982	350 to 370 koz
Mined Grade		11.9	(previously 340 to 370 koz3) Reserve grade 2
Gwalia	g/t		9.3	9.3	10.4	8.3
Simberi	g/t	1.18	1.26	1.05	1.13	1.3
Total Cash Operating Costs1		546	n/a
Gwalia	$/oz			638	609	580
King of the Hills4	$/oz	-	893	-	-	-
Simberi	$/oz	1,164	1,143	1,247	1,161	n/a
Consolidated	$/oz	792	768	763	721	815 to 850 (previously 850 to 9103)
All-In Sustaining Cost1		716
Gwalia	$/oz		836	783	774
King of the Hills4	$/oz	-	964	-	-	-
Simberi	$/oz	1,266	1,293	1,359	1,277	1,330 to 1,490
Consolidated	$/oz	960	933	935	876	950 to 1,030 (previously 985 to 1,0753)

[1] Non-IFRS measure, refer Appendix.

[2] Ore Reserve grade at 30 June 2016, refer Ore Reserve and Mineral Resources Statement (released 23 August 2016). [3] FY17 guidance announced in Q4 June 2016 quarterly report (released 19 July 2016), Gwalia updated this quarter. [4] King of the Hills ceased mining in April 2015 and ceased processing in September 2015.

It was sold in October 2015 (refer ASX announcement 16 October 2015).

Disclaimer

This report has been prepared by St Barbara Limited ("Company"). The material contained in this report is for information purposes only. This release is not an offer or invitation for subscription or purchase of, or a recommendation in relation to, securities in the Company and neither this release nor anything contained in it shall form the basis of any contract or commitment.

This report contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and the sale of gold. Forward-looking statements include those containing such words as anticipate, estimates, forecasts, indicative, should, will, would, expects, plans or similar expressions. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, and which could cause actual results or

trends to differ materially from those expressed in this report. Actual results may vary from the information in this report. The Company does not make, and this report should not be relied upon as, any representation or warranty as to the accuracy, or reasonableness, of such statements or assumptions. Investors are cautioned not to place undue reliance on such statements.

This report has been prepared by the Company based on information available to it, including information from third parties, and has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information or opinions contained in this report.

The Company estimates its reserves and resources in accordance with the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves 2012 Edition ("JORC Code"), which governs such disclosures by companies listed on the Australian Securities Exchange.

AISC (Consolidated)

(A$/oz)

992 947

FY16 average A$933/oz

Gold Production

(koz)

960

935

876

99

FY17 Production Indicative Quarterly Guidance Profile

28
	28	25	27	25
71
	64	66	65	67

92 92 92 93

27%
	25%
		24%	24%

FY 16	FY 16	FY 16	FY 17	FY 17	FY 17	FY 17	FY 17	FY 17
Q2 Dec	Q3 Mar	Q4 Jun	Q1 Sep	Q2 Dec	Q1 Sep	Q2 Dec	Q3 Mar	Q4 Jun

Total

Gwalia Simberi

Figures displayed to nearest thousand ounces. Reported ounces in associated table

Actual Indicative % of annual production (koz)

Presentation on quarterly report and audio webcast

Bob Vassie, Managing Director & CEO, will brief analysts and institutional investors on the December 2016 Quarterly Report at 11:00 am Australian Eastern Daylight Time (UTC + 11 hours) on Wednesday 18 January 2017. Participation on the conference call is by personal invitation only.

A live audio webcast of the briefing will be available on St Barbara's website at www.stbarbara.com.au/investors/webcast/ or by clicking here. The audio webcast is 'listen only' and does not enable questions. The audio webcast will subsequently be made available on the website.