Northern Star Resources
Annual Report 2014

Plain-text annual report

CORPORATE DIRECTORY INSERT COVER SHOT - KALGOORLIE Need to include note on Governance Statement 2014 Annual Financial Report CORPORATE DIRECTORY TABLE OF CONTENTS Corporate Directory Chairman’s Address Highlights Review of Operations Directors' Report Auditor’s Independence Declaration Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Notes to the Consolidated Interim Financial Statements Directors' Declaration Independent Auditor’s Report Additional Information Tenement Schedule DIRECTORS Christopher Rowe Bill Beament John Fitzgerald Peter O’Connor COMPANY SECRETARY Liza Carpene (Non-Executive Chairman) (Managing Director) (Non-Executive Director) (Non-Executive Director) REGISTERED OFFICE/ PRINCIPAL PLACE OF BUSINESS Level 1 1 Puccini Court Stirling WA 6021 Australia Telephone: +61 8 6188 2100 Facsimile: +61 8 6188 2111 Website: www.nsrltd.com Email: info@nsrltd.com PAGE Inside Cover 1 2 3 9 22 23 24 25 26 27 56 57 59 60 SHARE REGISTRY Advanced Share Registry Limited 110 Stirling Highway Nedlands WA 6009 Australia Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871 Website: www.advancedshare.com.au HOME STOCK EXCHANGE ASX Limited Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000 Australia ASX Code: NST AUDITORS Rothsay Chartered Accountants Level 1, Lincoln House 4 Ventnor Avenue West Perth WA 6005 Australia Cover photograph: Graeme Posnett, Production Geologist at Plutonic Gold Mine (April 2014) Photographer: Evan Collis 2014 Annual Financial Report CHAIRMAN’S ADDRESS Dear Shareholder So much has been said and written by so many that I feel somewhat reluctant to join the chorus exclaiming what an outstanding year 2013-14 was for your Company. The headlines told Northern Star’s story of rapid growth by every measure. Your Company was the best-performing stock in the ASX 200 index over the financial year, an achievement which reflected our significant production growth, exploration success and strong operating results across the board. The strong performance was the result of the growth strategy we devised two years ago. This strategy is clearly enunciated by the positioning statement on the front-page of our corporate presentation, which describes Northern Star as an Australian gold miner for global investors. The statement seeks to encapsulate our view of ourselves and provides a simple test by which we can measure virtually everything we do. Based on our ongoing discussions with leading investment institutions around the world, we understand the criteria by which they judge mining companies and we seek to ensure that everything we do is consistent with meeting those benchmarks. Much has been made of our recent transition from a 100,000ozpa gold producer to one which now targets 550,000- 600,000ozpa. While the overall figure is substantial – Northern Star is now the second-biggest ASX-listed gold miner – it is the critical mass which comes with this production base which is more pertinent. Equally, our acquisition of four gold projects over the past year is a direct consequence of our desire to achieve the lower risk profile that is delivered through asset diversification. Neither of these factors are the result of a shallow desire to be big for the sake of it. This is evidenced by our commitment to target all-in sustaining costs of A$1,050 to A$1,100 an ounce as well as our strategy of remaining an Australian gold miner – as emphasised in our positioning statement. If production growth were our sole driver, we may well have acquired major overseas mines with lower grades and high costs. We haven’t done that, and we don’t intend to, because that would be contrary to our objective of being a gold miner which is governed by a desire to maximise Shareholder returns. With the key objectives of critical mass and project diversity now met, your Company has entered the new financial year with the goal of growing mine lives at the top of its list of jobs to do. To help ensure we achieve this next target, the Board has approved a A$50 million exploration budget for the coming year. This is three times greater than that allocated for the past financial year and reflects both our commitment to growing the mining inventory at each of our projects as well as our strong belief that much gold remains to be found in and around our mines. The decision to invest such a substantial sum in exploration was made in response to overwhelming geological evidence of the potential to grow the mine lives of our operations. I look forward to the strong newsflow which this extensive program is expected to generate over the course of this year. Our commitment to exploration reflects our hunger to continue producing superior results at all levels of our business. This means maintaining strong production and a keeping a tight lid on costs whilst growing mine lives. Recent falls in the gold price mean that the need to maximise productivity and minimise costs is more essential than ever. Northern Star has an outstanding productivity record, in part due to the efficiencies generated by our in-house mining contracting model. But we cannot afford to be complacent in this respect and I assure all Shareholders that our determination to grow mine lives will be done in parallel with, and not instead of, an ongoing emphasis on safety and cost control. Striking the right balance between growth and cost management will be a key driver of success in the gold industry as companies seek to insulate themselves against lower prices while ensuring that they are well positioned to take full advantage of a price recovery. I believe we now have the right balance, the asset diversity and the scale to deliver strong results throughout the cycle. As we look back on the results of the past year, it is important to remember that Northern Star’s success to date is due to the skills and hard work of our talented team. On behalf of the Board, I would like to thank our management, staff, financial institutions, contractors and suppliers for their outstanding work in helping the Company to achieve its goals. I also thank our Shareholders, who have shown such strong support for the Company as we have pursued our strategy of building an Australian gold miner for global investors. I am confident that this strategy is well on track and I look forward to updating you on our progress as the year unfolds. Yours sincerely CHRIS ROWE Chairman 30 September 2014 2014 Annual Financial Report Page 1 HIGHLIGHTS Northern Star: an Australian mid-cap gold miner for global investors with scale, low costs, low debt and asset diversity – a year of achievements: Plutonic Gold Mine acquired 1 February 2014 Kanowna Belle & Kundana (51% interest) acquired 1 March 2014 Jundee Gold Mine acquired, settled 1 July 2014 Diggers & Dealers “Dealer of the Year 2014” Resources increased to 6.2Moz at 4.2gpt Reserves increased to 1.2Moz at 5gpt Record underlying profit of A$38.6M Annual fully franked dividends of A3.5 cents per share Our VISION is to continue to build a safe, quality mining and exploration company focussed on creating value for Shareholders. Our MISSION is to generate earning accretive value for our Shareholders through operational effectiveness, growth opportunities and exploration with a prime focus on success to deliver on our targets.” Our CORE VALUES: 2014 Annual Financial Report Page 2 REVIEW OF OPERATIONS OVERVIEW Northern Star Resources Limited (Northern Star) is an ASX 200 gold (Au) production and exploration company with a Mineral Resource base of 6.2 million ounces and Ore Reserves of 1.2 million ounces1, located in highly prospective regions of Western Australia with a total land package of >10,000km2. Northern Star remains focussed on delivering on its growth strategy objective of being a significant gold company producing 550,000 to 600,000 ounces of gold per annum from its five operating business units being the Paulsens, Plutonic, Kanowna Belle, Kundana2 and Jundee Gold Mines (acquired 1 July 2014). In parallel, the Company is rapidly progressing its exploration activities with the goal of extending mine life at all our operations and creating an organic pipeline of future projects. OUR PEOPLE, HEALTH AND SAFETY, ENVIRONMENT AND COMMUNITY Our People and Our Culture Northern Star, through its employees and contractors, is committed to operating its business at all levels based on its core values of: Safety, Teamwork, Accountability, Respect and Results (STARR). The Company has developed a committed and motivated high-calibre team responsible for driving the Company’s successful acquisition expansion phase. As the Company became the second largest ASX listed gold producer with the increase from one to five operating business units during the last twelve months, Northern Star’s direct workforce grew to more than 1,000 following the acquisition of the Jundee Gold Mine on 1 July 2014, an increase of some 900%. This, together with a contractor workforce of approximately 500, makes Northern Star a significant employer of Western Australian people. The Company acknowledges the dedication and hard work of its employees, contractors and suppliers, and it is pleasing to see the expanded Northern Star Family embrace the opportunity to grow with the business further. The STARR Core Values are the foundation for developing the culture within Northern Star, and align and enable our employees and contractors to achieve Northern Star’s vision. During the Company’s rapid expansion, the adherence to our STARR Core Values has never waned. Northern Star values diversity in its workforce at all levels and is an equal opportunity employer, based on the best person for the position at the time of recruitment. Through the integration of the new assets and the addition of the incumbent tenured workforces, Northern Star’s overall female participation rate unfortunately declined to 12.03% (2013: 18.75%) as a result. Management is committed to improving female participation rates in accordance with our recruitment practices. The Company’s 2013-14 Workplace Gender Equality Report is located on our website at http://www.nsrltd.com/corporate/corporategovernance.html. As our people are our greatest strength, the Company continues to focus on the development of its people, and encourages their ability to challenge conventional thinking and to work innovatively to produce superior results – but never to the detriment of safety. Health and Safety Northern Star values the health and safety of its employees and contractors, and it is the Company’s number one focus. The Company drives initiatives, such as its Five STARR safety program which is behaviour based safety system that rewards positive safety behaviour and increases focus on leading safety indicators, to continually raise awareness on a day-to-day basis and further improve safety in the workplace. With the recent expansion of the Company’s business through acquisition, the Company focussed heavily on the safe and effective integration of all new assets and personnel into the Group. The Company was pleased to report during the year that the Paulsens Mine Rescue Team participated in the third annual Mining Emergency Response Competition in September 2013 in Perth, and was placed second overall which was a fantastic effort for a first time team for Northern Star. We also acknowledge our Kalgoorlie Mine Rescue Team who were placed in the Best New Team category at the surface competition held in May 2014. The skill and dedication of our Mine Rescue teams is highly valued given the remote locations in which we operate. 1 As at 30 June 2014 – see ASX Release dated 4 August 2014. 2 51% interest in the East Kundana Joint Venture. Photographs: (top) Underground Team at Kalgoorlie, led by General Manager Jim Coxon (left) (bottom) Paulsens Mine Rescue Team at the Mining Emergency Response Competition 2014 Annual Financial Report Page 3 REVIEW OF OPERATIONS As at 30 June 2014, Northern Star’s Lost Time Injury frequency rate (LTIFR) was 2.4 (2013: 1.9) and its Total Reportable Injury frequency rate (TRIFR) was 13.3 (2013: 11.4). Although these rates are comparable to the mining standard LTIFR (2.5) and TRIFR (10.7) in Western Australia3, any injury is unacceptable and Northern Star remains focussed on proactively reducing these lagging indicators. The Company maintains its commitment to a safe environment and will continue to demand strong safety performance. Safety is the first key core value of the organisation and is fundamental to the success of the business. Environment Northern Star is committed to managing its activities in an environmentally responsible manner. Through effective management practices, and the commitment of its employees and contractors, Northern Star will ensure its activities have a minimum impact on the environment. Following the acquisition of its new operations, Northern Star has embraced its expanded environmental responsibility and will continue to meet or exceed its statutory requirements on all of its tenure. The risks associated with environmental incidents are taken into account as part of the Company’s normal course of business, and are managed through risk assessments, introduction of preventative measures, ongoing review and monitoring, and where necessary, effective and efficient corrective actions. Community Northern Star proactively engages with the Communities in which it operates, and acknowledges the Traditional Owners of the land as key Stakeholders. The Company believes that the support and endorsement of its activities by these Communities is fundamental to the long-term success of its business. Northern Star’s expanded family of employees and contractors embrace an inclusive culture, and continue to strengthen relationships with all Stakeholders. The Company appreciates all of its new Stakeholders through the recent expansion of its business activities, in particular its workforce. Northern Star recognises the importance of its contribution to our local residential communities, such as Kalgoorlie, as it is a significant employer of local people, utilises local suppliers where possible and participates in community initiatives and activities. Northern Star also believes that it is important to participate in community initiatives that are not directly related to our business, and to support worthwhile causes that can touch the lives of each and everyone one of us. The Company and its employees are pleased to participate in and support initiatives such as the Telethon Adventurers in the fight to find a cure for childhood cancer, City to Surf which supports people living with disability in Western Australia and the Royal Flying Doctor Service which is a critical service to remote communities as well as our FIFO operations. MINE OPERATIONS REVIEW Total Material Mined Total Material Milled Gold Grade Gold Recovery Gold Produced Revenue Cost of Sales Depreciation & Amortisation Operating EBIT All in Sustaining Cost Table 1 – Mine Operations Review Measure tonnes tonnes grams/tonne % ounces A$000's A$000's A$000's A$000's A$/ounce sold 12 months Paulsens 5 months Plutonic 510,244 464,777 7.4 90% 100,041 143,039 (77,916) (29,715) 35,408 1,105 360,852 399,317 3.9 83% 41,623 56,963 (45,802) (10,577) 584 1,414 4 months 4 months Kanowna Belle 302,383 352,375 4.0 91% 41,313 Kundana (51%) 72,450 76,184 13.7 97% 32,442 55,852 (47,022) (3,800) 5,030 993 41,121 (23,920) (3,511) 13,690 768 Total 1,245,929 1,292,653 5.8 90% 215,419 296,976 (194,661) (47,603) 54,712 1,094 Performance for the 2014 financial year has been sourced from the Paulsens (12 months), Plutonic (5 months), Kanowna Belle (4 months) and Kundana (4 months) gold mines. In the 2014 financial year, a total of 210,055 ounces of gold was sold at an average price of A$1,410. All in sustaining cost in accordance with the new World Gold Council reporting standard for the period was A$1,094 per ounce including allowance for rehabilitation (non-cash) of A$30 per ounce. During the period 1.3 million tonnes were milled at an average head grade of 5.8gpt Au for 215,419 ounces Au recovered. Unprocessed ore stocks available for mill feed at the end of the period totalled 584,014 tonnes containing 53,381 ounces Au. Gold in circuit at the end of the period totalled 20,974 ounces. Bullion on hand amounted to 1,456 ounces. Both of these items are reflected in the accounts as gold in circuit at cost. 3 Source: Safety Performance in the Western Australian Mineral Industry, Accident and Injury Statistics 2012-2013, Department of Mines and Petroleum 2012-2013: LTIFR 2.5 and TRIFR 10.7 (Metalliferous Underground). 2014 Annual Financial Report Page 4 REVIEW OF OPERATIONS EXPLORATION Paulsens In-Mine Drilling The Paulsens Mine continued to drill the Upper Paulsens, Voyager 1 and 2 Extensions down-plunge in concert with the newly discovered Titan extension. Lateral extension and exploration also targeted the Galileo and Southern Gabbro vein mineralisation systems. Plutonic In-Mine Drilling The Plutonic Mine during the transition has focussed predominantly on grade control drilling. Exploration is now in progress and expected to develop extensions to the existing mineral resource base in the Carribean, Baltic Extension and Pacific East areas of the Mine. Kalgoorlie Operations In-Mine Drilling The Kundana and Kanowna Belle Operations continued grade control extensions to the existing mineral resource domains in concert with the large near-mine exploration program upgrading the Pegasus Deposit. A recently announced 763,000oz Au @ 11.4gpt Mineral Resource for Pegasus (389,000oz Au Northern Star’s share – refer Table 2) is currently being accessed from the existing Rubicon Mine. This will open a new mining area with further drilling planned for all areas in the oncoming year. Jundee Operations In-Mine Drilling The Jundee Operations continued resources extensions and grade control infill to and within the existing mineral resource and reserve boundaries, and upgraded the Mineral Resource at Midas, Nexus and Moneyline as at 30 June 2014. Subsequent to the year’s end, the Mineral Resource increased 68% to 851,000oz @ 6.8gpt. Paulsens Region Kazput Coal Project Northern Star announced the discovery of a significant coal occurrence on the Electric Dingo Project at the Kazput prospect, with further details provided in an ASX release on 30 October 2013. Thick thermal coal intersections of up to 65m were encountered, with initial analysis showing that the coal would be suitable for fuelling a major base-load power station. Drilling to potentially establish a JORC resource estimate has now been completed. A maiden resource report is close to being finalised. Fortescue JV and Northern Star’s Regional Exploration Regional gold exploration continued on the Fortescue JV and 100% Northern Star tenements in the Ashburton Basin and Wyloo Dome areas. Regional targeting has been completed and follow up soil and stream sediment sampling is in progress. Exploration focussed on near mine targets, including the Paulsens East and Aries targets. In addition, soil sampling programs were completed on regional targets. Kalgoorlie Region Ashburton Region Extensive evaluation of the Ashburton stand-alone project was delayed in 2013. However, exploration for additional free-milling oxide resources has continued. Soil sampling programs were completed over several areas with a number of geochemical targets generated. Follow up RC drilling was completed at the Waugh East prospect, with drilling planned to commence at the Titus prospect shortly. Work continued at regional targets in the Kalgoorlie area, including RC drilling at the Ambition prospect (around 10km NW of Pegasus) and surface geochemical sampling and RC drilling at the Red Eye prospect (around 10km NW of Kanowna Belle). Mt Clement Project (ARV 80%: NST 20%) (Antimony, Lead, Silver, Gold) Artemis Resources Limited (ASX: ARV) announced a maiden JORC compliant resource for the Eastern Hills Taipan Zone, with a combined Indicated and Inferred resource of 1.3 million tonnes at 1.7% Sb and 2.5% Pb (see ASX: ARV release 29 November 2013 for more details). Cheroona & Beatty Park Projects (Copper/Gold) (RNI earning up to 70%) A farm in agreement with Resource and Investment NL (ASX: RNI) was announced on 4 December 2013. Initial reconnaissance exploration by RNI identified a high- grade copper-gold gossan at the T10 prospect, with rock chip samples including assay results of 17.4% Copper, 8.84gpt Gold and 2.0gpt Silver (see RNI ASX Announcement 28 May 2014). Photographs: (top) Senior Exploration Geologist, Jodi Williams at the Pegasus Project (left) Production Geologists Adam Baker and Chelsea Tutt in the Plutonic Core Farm 2014 Annual Financial Report Page 5 REVIEW OF OPERATIONS RESOURCES AND RESERVES As at 30 June 2014, Northern Star’s JORC 2012 reported Consolidated Group Mineral Resource Estimate (inclusive of Reserves) is 46 million tonnes at 4.2gpt Au for 6.2 million ounces (refer Table 2 below) and the Consolidated Group Mineral Reserve Estimate is 7.4 million tonnes at 5.0gpt Au for 1.2 million ounces (refer Table 3 below). The Consolidated Group Mineral Resource Estimate and the Consolidated Group Mineral Reserve Estimate includes the acquisition of the Plutonic, Kanowna Belle and Kundana (51% interest) Gold Mines acquired during the 2013/2014 financial year, and the Resources and Reserves attributable to the Jundee Gold Mine which the Company acquired on 1 July 2014. The variation on the Northern Star Consolidated Group year on year Mineral Resource is highlighted in Table 2 where Mineral Resources have increased by 4 million ounces Au from 2.2 million ounces Au as at 30 June 2013 year end to the current 6.2 million ounces Au Measured, Indicated and Inferred Mineral Resource. The variation on the Northern Star Consolidated Group year on year Proved and Probable Reserve is highlighted in Table 3 where reserves have increased by 927,000oz Au from 257,000oz Au as at 30 June 2013 to the current 1.2 million ounces Au Proven and Probable Reserve at 30 June 2014. Competent Persons Statements The information in this announcement that relates to mineral resource and reserve estimations, exploration results, data quality, geological interpretations and potential for eventual economic extraction, is based on information compiled by Brook Ekers (Member of the Australian Institute of Geoscientists), who is a full-time employee of Northern Star Resources Limited. Mr Ekers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" for the Group reporting. Mr Ekers consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears. Forward Looking Statements Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Northern Star Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with gold exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. 2014 Annual Financial Report Page 6 REVIEW OF OPERATIONS Table 2 – Consolidated Group Gold Mineral Resources Estimate (inclusive of Reserves) effective 30 June 2014 2014 Annual Financial Report Page 7 GOLD MINERAL RESOURCES Year on As at 30 June 2014Year Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces CompetentOunces Based on attributable ounces Au(000's) (gpt) (000's) (000's) (gpt) (000's) (000's) (gpt) (000's) (000's) (gpt) (000's) Person(000's) SurfacePaulsens- - - 573 2.6 47 169 2.6 14 742 2.6 61 3- Belvedere- - - 168 3.5 19 99 5.0 16 267 4.1 35 3- Merlin- - - - - - 523 1.4 24 523 1.4 24 3- Mt Clement (20%)- - - - - - 226 1.8 13 226 1.8 13 7- Underground- Upper Paulsens55 9.6 17 135 11.3 49 143 5.4 25 333 8.5 91 1(1) Voyager (Voy1, Voy2, Titan)407 8.9 117 111 9.8 35 72 8.6 20 590 9.1 172 1(121) Stockpiles161 2.9 15 - - - - - - 161 2.9 15 5 Gold in Circuit- - 3 - - - - - - - - 3 (1) Subtotal Paulsens623 7.6 152 987 4.7 150 1,232 2.8 112 2,842 4.5 414 (118) SurfaceMt Olympus- - - 6,038 2.3 448 9,138 2.2 632 15,176 2.2 1,080 2- Peake- - - 113 5.2 19 3,544 3.3 380 3,657 3.4 399 2- Waugh- - - 347 3.6 40 240 3.6 28 587 3.6 68 3- Zeus- - - 508 2.1 34 532 2.2 38 1,040 2.2 72 3- Electric Dingo- - - 98 1.6 5 444 1.2 17 542 1.3 22 3- Romulus- - - - - - 329 2.6 27 329 2.6 27 3- Subtotal Ashburton- - - 7,104 2.4 546 14,227 2.5 1,122 21,331 2.4 1,668 - UndergroundPlutonic East 33 6.7 7 89 6.4 18 724 5.8 136 846 5.9 161 4161 NW Extension - Indian11 6.0 2 268 5.6 48 659 5.1 109 939 5.3 159 4159 NW Extension - Caspian- - - 361 6.2 72 237 5.2 40 599 5.8 112 4112 Zone 19 : Baltic339 5.6 61 52 6.0 10 703 4.8 108 1,093 5.1 178 4178 Zone 19 : Baltic Extended- - - 169 5.0 27 424 5.1 70 593 5.1 96 496 Zone 61 : Caribbean87 6.3 18 35 6.2 7 428 6.1 84 550 6.1 109 4109 Zone 124 : Spur - Area 13445 9.8 14 845 6.5 177 1,147 4.9 181 2,037 5.7 372 4372 Zone 124 : Cortez - Med - Adr81 6.0 16 94 5.2 16 322 4.1 42 496 4.6 74 474 Zone 124 North : Pacific- - - 107 5.2 18 250 5.1 41 356 5.1 59 459 Zone 124 North : Timor- - - 436 6.1 85 230 4.8 36 666 5.6 121 4121 - Stockpiles15 3.6 2 15 3.6 2 2 Gold in Circuit4 - 4 4 Subtotal Plutonic611 6.3 123 2,456 6.1 478 5,121 5.1 845 8,188 5.5 1,446 1,446 Surface433 2.8 38 433 2.8 38 538 Underground1,741 4.8 269 2,875 4.9 455 2,037 4.7 305 6,653 4.8 1,029 51,029 Stockpiles66 3.9 8 793 1.0 24 859 1.2 32 32 Gold in Circuit15 - 15 15 Subtotal KB1,807 5.0 292 3,668 4.1 479 2,470 4.3 344 7,945 4.4 1,115 1,115 Raleigh North2 80.1 4 0 106.7 0 2 82.1 5 5 Subtotal Kundana2 80.1 4 0 106.7 0 - - - 2 82.1 5 5 East Kundana Joint Venture(EKJV) SurfaceHornet Pit (51%)86 3.7 10 2 1.6 0 88 3.6 10 510 Underground- Raleigh (50%)28 66.2 61 9 41.6 12 17 47.5 25 54 56.5 97 597 Hornet (51%)66 24.3 52 63 19.0 38 136 7.5 33 264 14.4 123 5123 Rubicon (51%)5 19.4 3 71 13.4 30 73 11.8 28 148 12.8 61 561 Pegasus (51%)- - - 715 11.9 273 346 10.5 116 1,060 11.4 389 6389 Stockpiles4 15.6 2 4 15.6 2 2 Subtotal EKJV103 35.3 117 943 12.0 363 572 11.0 202 1,618 13.1 683 683 Subtotal Kalgoorlie1,912 6.7 413 4,611 5.7 843 3,042 5.6 546 9,565 5.9 1,802 1,802 UndergroundBartonCardassian30 6.0 6 58 6.1 11 11 6.7 2 99 6.1 20 320 Gateway27 5.4 5 429 7.4 102 303 5.3 52 758 6.5 158 3158 Hamptons- - - 65 5.8 12 - - 65 5.8 12 312 Invicta- - - 60 6.6 13 36 20.0 23 96 11.6 36 336 Nexus/Moneyline/Midas- - - 46 8.7 13 1,164 9.4 350 1,210 9.3 363 3363 Nim3 / Champagne100 9.9 32 277 9.1 81 74 6.2 15 450 8.8 127 3127 Westside / Lyons157 8.7 44 118 6.2 24 36 6.1 7 311 7.4 74 374 Wilson- - - 47 7.8 12 18 8.6 5 65 8.0 17 317 Subtotal Jundee Underground313 8.5 86 1,099 7.6 267 1,641 8.6 454 3,053 8.2 807 807 - Stockpiles Underground102 4.3 14 102 4.3 14 14 Open Pit188 1.0 6 188 1.0 6 6 Low grade789 0.7 18 789 0.7 18 18 Mill Cone Base28 2.3 2 28 2.3 2 2 Gold in Circuit4 4 4 Subtotal Jundee Stockpiles1,107 1.2 44 1,107 1.2 44 44 Subtotal Jundee1,420 2.8 130 1,099 7.6 267 1,641 8.6 454 4,159 6.4 851 851 TOTAL RESOURCES4,565 5.6 818 16,257 4.4 2,284 25,263 3.8 3,079 46,086 4.2 6,181 4,793 Note :1. Mineral Resources are inclusive of Reserves.2. Mineral Resources are reported at various gold price guidelines: (a. A$1,850/oz Au - Paulsens, EKJV) (b. A$1,650/oz Au, Plutonic, Kanowna) (c.A$,1475/oz Au Jundee).3. Rounding may result in apparent summation differences between tonnes, grade and contained metal content.4. Numbers are 100% NST attributable (East Kundana Joint Venture partners Rand Mining Limited and Tribune Resources Limited for tonnes and contained ounces are not reported).5. The year on year variance in ounces is based on this Annual Report and the Northern Star Annual Operations Report 2013.Competent Persons1. Simon Lawson. 2. Graeme Bland. 3 Brook Ekers. 4. Luke Barbetti. 5. Darren Cooke. 6. Alan Pederson. 7. Artemis Company report.JUNDEE GOLD PROJECTASHBURTON GOLD PROJECTPLUTONIC GOLD PROJECTKALGOORLIE GOLD PROJECTKanowna Belle KundanaINFERRED (Inf)TOTAL (MI&Inf)PAULSENS GOLD PROJECTMEASURED (M) INDICATED (I) REVIEW OF OPERATIONS Table 3 – Consolidated Group Mineral Reserves Estimate effective 30 June 2014 2014 Annual Financial Report Page 8 GOLD MINERAL RESERVESYear on As at 30 June 2014PROVED PROBABLEPROVED and PROBABLE Year Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Ounces Based on attributable ounces Au(000's) (gpt) (000's) (000's) (gpt) (000's) (000's) (gpt) (000's) Competent Person(000's) PAULSENS GOLD PROJECTSurfacePaulsens- - - 424 2.3 31 424 2.3 31 2- Belvedere- - - 129 3.2 13 129 3.2 13 2- Underground- Upper Paulsens1 7.7 0 108 5.3 19 109 5.4 19 111 Voyager (Voy1, Voy2, Titan)121 5.3 20 117 5.9 22 238 5.6 43 1(94) Stockpiles161 2.9 15 - - - 161 2.9 15 4 Gold in Circuit- - 3 - - - - 3 (1) Subtotal Paulsens282 4.2 39 779 3.4 85 1,061 3.6 124 (81) ASHBURTON GOLD PROJECTSurfaceMt Olympus248 3.6 29 113 3.6 13 361 3.6 42 2- Peake- - - 47 5.3 8 47 5.3 8 2- Waugh- - - - - - - - - - Zeus- - - - - - - - - (3) Electric Dingo- - - - - - - - - - Romulus- - - - - - - - - - Subtotal Ashburton248 3.6 29 160 4.1 21 408 3.8 50 (3) PLUTONIC GOLD PROJECTUndergroundPlutonic East 35 5.3 6 101 4.8 16 136 5.0 22 322 NW Extension - Indian27 5.8 5 46 6.2 9 73 6.1 14 314 NW Extension - Caspian2 6.3 0 127 6.2 25 129 6.2 26 326 Zone 19 : Baltic42 4.5 6 0 5.2 0 42 4.5 6 36 Zone 19 : Baltic Extended- - - - - - - 3- Zone 61 : Caribbean9 7.3 2 7 7.9 2 15 7.5 4 34 Zone 124 : Spur - Area 13483 7.9 21 - 83 7.9 21 321 Zone 124 : Cortez - Med - Adr40 4.9 6 12 4.6 2 52 4.9 8 38 Zone 124 North : Pacific- - - 4 6.7 1 4 6.7 1 31 Zone 124 North : Timor3 8.6 1 15 10.2 5 17 10.0 6 36 - Stockpiles15 3.6 2 15 3.6 2 2 Gold in Circuit4 4 4 Subtotal Plutonic254 6.5 53 313 5.9 60 566 6.2 113 113 Kanowna BelleSurface- - - - - - - - - Underground99 4.5 14 1,115 5.0 178 1,214 4.9 193 5193 Stockpiles66 3.9 8 793 1.0 24 859 1.2 32 32 Gold in Circuit15 - 15 15 Subtotal KB165 7.0 37 1,908 3.3 203 2,073 3.6 240 240 Raleigh North7 7.4 2 0 - - 7 7.4 2 42 Subtotal Kundana7 7.4 2 0 - - 7 7.4 2 2 East Kundana Joint Venture(EKJV)SurfaceHornet Pit (51%)- - - - 4- UndergroundRaleigh (50%)80 13.5 35 - - - 80 13.5 35 435 Hornet/Rubicon (51%)129 14.4 60 159 9.9 51 288 11.9 110 4110 Pegasus (51%)- 403 9.8 127 403 9.8 127 4127 Stockpiles4 15.6 2 4 15.6 2 2 Subtotal EKJV212 14.1 96 562 9.8 178 775 11.0 274 274 Subtotal Kalgoorlie384 10.9 135 2,470 4.8 380 2,854 5.6 515 515 UndergroundBartonCardassian22 5.9 4 64 6.2 13 86 6.1 17 617 Gateway25 5.2 4 417 7.4 100 442 7.3 104 6104 Hamptons- - - 71 5.4 12 71 5.4 12 612 Invicta- - - 65 6.9 14 65 6.9 14 614 Nexus/Moneyline/Midas- - - - - - - 6- Nim3 / Champagne87 9.8 27 288 8.8 81 375 9.0 109 6109 Westside / Lyons160 8.7 45 129 6.2 26 289 7.6 71 671 Wilson- - - 46 7.9 12 46 7.9 12 612 Subtotal293 8.6 81 1,080 7.4 258 1,373 7.7 339 339 StockpilesUnderground102 4.3 14 102 4.3 14 614 Open Pit188 1.0 6 188 1.0 6 66 Low grade789 0.7 18 789 0.7 18 618 Mill Cone Base28 2.3 2 28 2.3 2 2 Gold in Circuit4 4 4 Subtotal Jundee Stockpiles1,107 1.2 44 1,107 1.2 44 44 Subtotal Jundee1,400 2.8 125 1,080 7.4 258 2,480 4.8 383 383 TOTAL RESERVES2,568 4.6 380 4,802 5.2 804 7,369 5.0 1,184 927 Note :1. Mineral Reserves are reported at the following gold prices of A$1,450/oz Au. Jundee is at A$1,415 Au price and the Ashburton is at A$1,650/oz Au.2. Tonnages include allowances for losses resulting from mining methods with tonnages rounded to the nearest 1,000 tonnes.3. Ounces are estimates of metal contained in the Mineral Reserve and do not include allowances for processing losses. 4. Numbers are 100% NST attributable (East Kundana Joint Venture partners Rand Mining Limited and Tribune Resources Limited for tonnes and contained ounces not reported).5. The year on year variance in ounces is based on this Annual Report and the Northern Star Annual Operations Report 2013.Competent Persons1. Roger Bryant. 2. Shane Mcleay (Entech Pty Ltd). 3. Jeff Brown. 4. Bryn Jones. 5. Stasi Capsanis. 6.Darren Stralow.JUNDEE GOLD PROJECTKALGOORLIE GOLD PROJECTKundana DIRECTORS’ REPORT The Directors of Northern Star Resources Limited (Northern Star) present their report together with the consolidated financial report for the year ended 30 June 2014. DIRECTORS The Directors in office at the date of this report, and at any time during the financial year, are as follows. Directors were in office for the entire year unless otherwise stated. Name and Qualifications Experience, Special Responsibilities and Other Directorships Christopher K G Rowe BA, MA Economics and Law Independent Non-Executive Chairman Appointed: 20 February 2003 Mr Rowe has practised as a lawyer both in the United Kingdom and in Western Australia before becoming a full time consultant to the mining and oil and gas industries. He has been chairman or deputy chairman of a number of public listed mining and oil and gas related companies in Australia and North America, holding both executive and non- executive positions. William J (Bill) Beament B.Eng-Mining (Hons) Managing Director Appointed: 20 August 2007 Peter O’Connor MA, Economics and Political Science, Trinity College, Dublin University; Barrister-at Law, The Kings Inn, Dublin Independent Non-Executive Director Appointed: 21 May 2012 John D Fitzgerald CA, Fellow FINSIA, GAICD Independent Non-Executive Director Appointed: 30 November 2012 Michael G Fotios BSc (Hons), MAusIMM Non-Executive Director Appointed: 4 September 2009 Resigned: 24 October 2014 COMPANY SECRETARY Liza Carpene MBA, AGIA, ACIS, GAICD Company Secretary Appointed: 15 April 2013 Mr Rowe is currently Chairman of Target Energy Limited (since January 2010) and was previously a director of Tangiers Petroleum Limited (from April 2008 to October 2010). Mr Rowe is a member of the Audit Committee, and Chair of the Nomination and Remuneration Committees. Mr Beament is a mining engineer with more than 19 years’ experience in the resource sector. Previously he held several senior management positions, including General Manager of Operations for Barminco Limited with overall responsibility for 12 mine sites across Western Australia and General Manager of the Eloise Copper Mine in Queensland. Mr Beament is the current President of Western Australian School of Mines Graduate Association representing over 3,000 graduates. Mr Beament is a member of the Nomination Committee. Mr O’Connor has extensive global experience in the funds management industry, both in public and private companies in developed and emerging economies. He was co-founder, director and deputy chairman of IMS Selection Management Ltd which had $10 billion under management or advice from 1998-2008. Following the sale of IMS to BNP Paribas in 2008, he was deputy chairman of FundQuest UK Ltd with $35 billion of assets under management from 2008-2010. Mr O’Connor was previously a Director and Chairman of ASX listed Brazilian Metals Group Limited (from May 2011 to October 2012), LSE listed Advance Developing Markets Fund (from October 1998 to April 2012) and TSX listed NEO Material Technologies Inc (from December 1993 to June 2012). Mr O’Connor is a member of the Audit, Nomination and Remuneration Committees. Mr Fitzgerald has over 25 years resource financing experience and has provided project finance and corporate advisory services to a large number of companies in the resource sector. Mr Fitzgerald is the Managing Director of Optimum Capital Pty Ltd, a corporate advisory business focussed on the mining sector. He has previously held senior positions at NM Rothschild & Sons, Investec Bank Australia, Commonwealth Bank and HSBC Precious Metals. Mr Fitzgerald is a Chartered Accountant, a Fellow of the Financial Services Institute of Australasia and a graduate member of the Australian Institute of Company Directors. Mr Fitzgerald is a Non-Executive Director of Mungana Goldmines Limited (from June 2009) and was previously Chairman of Integra Mining Limited. Mr Fitzgerald is the Chair of the Audit Committee and a member of the Nomination and Remuneration Committees. Mr Fotios has qualifications in Geology specialising in Economic Geology with extensive experience in exploration throughout Australia working with gold, base metals, tantalum, tin and nickel from exploration to feasibility over the last 26 years. He previously held positions with Homestake Australia Limited and Sons of Gwalia Limited. Mr Fotios is currently Executive Director of Redbank Copper Limited (from September 2012) and Non-Executive Director of Swan Gold Mining Limited (from September 2012), General Mining Corporation Limited (from June 2012), Horseshoe Metals Limited (from May 2012) and Pegasus Metals Limited (from December 2009). Mr Fotios was previously a director of Stirling Resources Limited (from September 2012 to November 2012). Mr Fotios was a member of the Nomination and Remuneration Committees. Ms Carpene has worked in the mining industry for more than 18 years and has significant experience in corporate administration, human resources, IT and community relations. Most recently, Ms Carpene was Company Secretary/CFO for listed explorer Venturex Resources Limited and previously held various site and Perth based management roles with Great Central Mines, Normandy Mining, Newmont Australia, Agincourt Resources and Oxiana. 2014 Annual Financial Report Page 9 DIRECTORS’ REPORT DIRECTORS’ MEETINGS The number of Directors’ meetings and attendance by each Director in the capacity of a Director of the Company from the beginning to the end of the period are: DIRECTORS’ MEETINGS AUDIT REMUNERATION NOMINATION Director Christopher Rowe Bill Beament John Fitzgerald Michael Fotios Peter O'Connor Attended 20 19 20 7 19 Held 20 20 20 7 20 Attended 2 * 3 * 3 Held 3 * 3 * 3 Attended 7 * 7 3 6 Held 7 * 7 4 7 Attended 2 2 2 1 2 Held 2 2 2 1 2 MEETINGS OF COMMITTEES * Not a member of the relevant committee Table 4: Director Attendance at Meetings CORPORATE STRUCTURE Northern Star Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. Northern Star Resources Limited has prepared a consolidated financial report incorporating the entities that it controlled during the financial year as follows:  Northern Star Resources Limited – parent entity  Northern Star Mining Services Pty Ltd – 100% owned subsidiary  Northern Star (Kanowna) Ltd – 100% owned subsidiary - acquired 1 March 2014 (including subsidiary Kundana Gold Pty Ltd)  Gilt-Edged Mining NL – 100% owned subsidiary - acquired 1 March 2014 (including subsidiary EKJV Management Pty Ltd)  Kanowna Mines Ltd – 100% owned subsidiary - acquired 1 March 2014  GKL Properties Pty Ltd – acquired 1 March 2014 PRINCIPAL ACTIVITIES The principal activities of the Group are:  mining of gold deposits at Paulsens, Plutonic, Kanowna Belle and Kundana (Jundee from 1 July 2014);  construction and development of extensions to existing gold mining operations at all locations, and  exploration for gold deposits in the Ashburton, Kalgoorlie and Plutonic regions of Western Australia. The entity’s operations are discussed in the Review of Operations section at the front of this report. FINANCIAL OVERVIEW Revenue EBITDA(1) EBIT(2) Net Profit / (loss) (3) Underlying Profit / (loss) (4) Cash flow from Operating Activities Cash flow from Investing Activities Sustaining Capital Non Sustaining Capital Exploration Free Cash flow Average Gold Price /ounce Earnings per share (cents/share) Table 5 – Financial Overview Financial Year End 30 June 2014 296,976 99,666 52,063 24,007 38,633 98,679 (49,964) (36,815) 0 (13,149) 48,715 A$1,410 5.0 Financial Year End 30 June 2013 144,236 63,785 37,560 28,328 28,328 65,892 (63,551) (30,132) (18,190) (15,229) 2,341 A$1,552 6.6 Change 152,027 35,881 14,503 (4,321) 10,305 32,787 13,587 (6,683) 18,190 2,080 46,374 (A$142) (1.6) % Change 106% 56% 39% (15%) 36% 50% (21%) 22% N/A (14%) 1,981% (9%) (24%) (1) EBITDA is calculated as follows: Profit before Income Tax plus depreciation and amortisation plus finance cost plus one off acquisition and redundancy charges (2) EBIT is calculated as follows: Profit before Income Tax plus finance costs plus one off acquisition and redundancy charges (3) Net Profit is calculated as net profit after taxation (4) Underlying Profit is calculated as net profit plus one off acquisition and redundancy charges Reference to $ in the Directors’ Report refers to Australian dollars (A$). 2014 Annual Financial Report Page 10 DIRECTORS’ REPORT Profit For the financial year ended 30 June 2014 the Company reported a net profit of $24 million (2013: $28.3 million). Reconciliation between the net profit after tax and the Group’s underlying profit is outlined in Table 6. This reconciliation is an unaudited non-IFRS measure that, in the opinion of the Board, provides useful information to assess the operating performance of the Group. Underlying profit for 30 June 2014 was $38.6 million which was 36% higher than the underlying profit for the previous financial year. Increased gold production from the Company’s recent acquisitions resulted in revenue increasing by 106% to $297 million for the financial year. Revenue was impacted somewhat by a decline in average gold price realised of 9%. Underlying profit and net profit differences are reconciled as follows:- Profit Reconciliation Net Profit Acquisition Costs Redundancy Costs Underlying Profit Table 6 – Profit Reconciliation $000s 24,007 7,382 7,245 38,634 Underlying EBITDA was $99.7 million for the financial year ended 30 June 2014, which was an increase of 51% over the corresponding period. Depreciation and amortisation charges in the 2014 financial year were up 82% with the increase largely attributable to the purchase of the Plutonic, Kanowna Belle and Kundana gold mines. Underlying EBIT was up by 31% to $49 million for the 2014 financial year the increase reflecting the strong performance of the newly acquired mines. Corporate costs for the financial year increased by $3.4 million in line with the increased scale of the Group. Balance Sheet Current assets as at the 30 June 2014 increased by 149% against the prior year balance date. The increase was largely a result of cash on hand increasing by $26.6 million and inventories (gold in circuit and ore stocks) increasing by $50.6 million which is a reflection that Northern Star had three operating processing centres during the period. Non-current assets increased by $138 million largely through the addition of the Plutonic, Kanowna Belle and Kundana mine assets. Increases in trade payables ($22.7 million) and provisions ($17.3 million) are in line with the addition of the three mines and the associated employee complement. Non-current liability increases are reflective of the increase in employee entitlements and the higher environmental liability provisions. Contributed equity increased through the capital raising of net $125.6 million. Review of Cash Flow Cash flow from operating activities for the 12 months ended 30 June 2014 was $98.7M which was $32.8 million higher than the previous financial year ($65.9 million).   receipts from customers increased by 114% due to higher gold production offset by a reduction in gold price of 9% from the previous year; and supplier payments increased by $126 million reflecting the increases the overall scale of the Company. Cash flows from investing activities decreased by 21% after allowance for the purchase of the Barrick mines. Lower exploration spend was a result of the fall in gold price which necessitated a review of discretionary spending. Sustaining capital increased by $6.7 million in line with the new mine additions. Dividends Dividends paid to Members during the 2014 financial year were as follows: Dividend Rate 2.5 cents per share 1.0 cent per share Record Date 16 August 2013 13 March 2014 Payment Date 27 September 2013 4 April 2014 Franking 100% franked 100% franked After balance date the following dividend was proposed by the Directors. Dividend Rate 2.5 cents per share Record Date 15 September 2014 Payment Date 3 October 2014 Franking 100% franked The financial effect of this dividend has not been brought to account in the financial statement for the period ended 30 June 2014 and will be recognised in subsequent financial reports. 2014 Annual Financial Report Page 11 DIRECTORS’ REPORT CAPITAL STRUCTURE As at 30 June 2014, the Company had 579,404,804 fully paid ordinary shares and 1,791,666 unlisted options on issue. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS The following significant changes in the state of affairs of the Company occurred during the period:  Northern Star entered into an agreement with Barrick Gold Corporation to acquire all the assets of Plutonic Gold Mine. The acquisition was completed on 1 February 2014. Further details of the transaction are discussed in Note 33.  Northern Star entered into an agreement with Barrick Gold Corporation to acquire all the assets of Kanowna Belle and Kundana Gold Mines (inclusive of Barrick's 51% interest in the East Kundana Joint Venture). The acquisition was completed on 1 March 2014. Further details of the transaction are discussed in Note 34.  Northern Star raised ~$128.9 million through the placement of ~150 million shares at $0.86 via an institutional placement and share purchase plan.  Other than noted elsewhere in this report, there were no other significant changes in the state of affairs of the Group that occurred during the year under review. SUBSEQUENT EVENTS Subsequent to the period end, the Company announced:  a final dividend of 2.5 cents per share to Shareholders on the record date of 15 September 2014 , payable on 3 October 2014;  an updated Resources and Reserves Statement effective as at 30 June 2014 which was released on the 4 August 2014;  the completion of the acquisition on 1 July 2014 of the Jundee Gold Mine from Newmont Mining Corporation for cash consideration of A$82.5 million. As part of the acquisition, the Group drew down A$70 million from its A$100 million credit facility with Investec Bank Plc; and the issue of 7,854,843 fully paid ordinary shares in return for waiving the right of first refusal to buy the Jundee Gold Mine, and the issue of 170,012 fully paid ordinary shares as a result of a cashless conversion of options.  There are no other matters or circumstances that have arisen since 30 June 2014 that have or may significantly affect the operations, results, or state of affairs of the Group in future financial years. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities. The Company has a policy of at least complying with, but in most cases exceeding, its statutory environmental performance obligations. These licences, Acts and Regulations specify limits and regulate the management of various environmental management issues, including discharges to the air, surface water and groundwater associated with the Company’s mining operations as well as the storage and use of hazardous materials. All environmental performance obligations are monitored by the Board and subjected from time to time to Government agency audits and site inspections. No environmental breaches have occurred or have been notified by any Government agencies during the year ended 30 June 2014. DIRECTORS’ INTERESTS The relevant interest of each Director in the share capital as notified by the Directors to the Australian Securities Exchange in accordance with Section 205G(1) of the Corporations Act 2001, at the date of this report is as follows: Name of Director Christopher Rowe Bill Beament John Fitzgerald Peter O'Connor Michael Fotios (as at 24 October 2013) SHARE OPTIONS Fully Paid Ordinary Shares 4,412,590 14,109,252 60,000 500,000 29,050,374 Options - Exercise Price - Details of Options - - - - - - - - - - - - - Unissued ordinary shares of the Company under option at the date of this report are as follows: Type Employee Options Employee Options Employee Options Employee Options Employee Options Employee Options Number 333,333 250,000 250,000 125,000 333,333 250,000 Exercise Price $1.50 $0.95 $1.22 $1.22 $1.81 $1.05 Expiry Date Expiring on 27 February 2015 Expiring on 15 April 2015 Expiring on 27 August 2015 Expiring on 1 November 2015 Expiring on 27 February 2016 Expiring on 15 April 2016 2014 Annual Financial Report Page 12 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) A. Introduction This report details the nature and amount of remuneration for Directors and Executive of Northern Star Resources Limited. The information provided in the Remuneration Report includes remuneration disclosures that are audited as required by Section 308(3C) of the Corporations Act 2001. For the purposes of this report, Key Management Personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the parent company. Northern Star’s KMP are defined as: Directors, Chief Operating Officer, Chief Financial Officer and Company Secretary. For the purposes of this report the term “Executive” includes the Managing Director, Chief Operating Officer, Chief Financial Officer and Company Secretary. Details of KMP during the Year: Non-Executive Directors Christopher Rowe Non-Executive Chairman Peter O’Connor Non-Executive Director John Fitzgerald Michael Fotios* Non-Executive Director Non-Executive Director Executives Bill Beament Managing Director Raymond Parry Chief Financial Officer Liza Carpene Stuart Tonkin** Company Secretary Chief Operating Officer * Resigned 24 October 2013 ** Appointed 2 September 2013 B. Remuneration Governance Board Oversight The Board is responsible for ensuring that the Group’s remuneration structures are aligned with the long-term interests of the Company and its Shareholders. Accordingly, the Board has an established Remuneration Committee to assist it in making decisions in relation to KMP remuneration. Remuneration Committee The Remuneration Committee currently comprises all Independent Non-Executive Directors. The Remuneration Committee comprised of three independent Non-Executive Directors for the entire period and one non-independent Non-Executive Director until 24 October 2013. The Remuneration Committee is responsible for reviewing and recommending to the Board:  the Company’s Remuneration Policy and framework (including determining short term incentives (STIs) key performance indicators and long term incentives (LTIs) performance hurdles, and vesting of STIs/LTIs), senior executives’ remuneration and incentives (including KMP and other senior executives),   non-executive individual remuneration and the aggregate pool for approval by Shareholders (as required),   superannuation arrangements, and remuneration by gender. Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative information (such as the Australasian Gold & General Mining Industry Remuneration Report by Aon Hewitt), and internal and independent external information. In order to ensure that this Committee is fully informed when making remuneration recommendations, the Committee receives reports from Management, independent sources, empirical market data and may draw on services from a range of other external sources if required. Use of Remuneration Consultants The Remuneration Committee consulted with external sources during the period to obtain information in relation to reviewing the Executive and Non-Executive remuneration and mix of remuneration. During the year ended 30 June 2014 no remuneration recommendations, as defined by the Corporations Act, were provided by remuneration consultants. C. Principles Used to Determine the Nature and Amount of Remuneration Remuneration Philosophy The performance of the Company depends upon the quality of its Directors and Executives. To succeed and endure, the Company must attract, motivate and retain highly skilled Directors and Executives. To this end, the Company embodies the following principles in its remuneration framework:  provides for competitive rewards to attract and retain high calibre Executives; 2014 Annual Financial Report Page 13 DIRECTORS’ REPORT  aligns the incentives of Executives with the long-term interests of Company Shareholders by linking rewards to Shareholder value; and  establishes appropriate key performance indicators and hurdles in relation to variable Executive remuneration. In accordance with good corporate governance practices, the structure of Non-Executive Director and Executive management remuneration is separate and distinct. Non-Executive Director Remuneration The Board’s objective is to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to Shareholders. Non-Executive Directors’ fees are paid within an aggregate limit (currently $500,000 per annum – approved in 2011) which is approved by the Shareholders from time to time. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act as at the time of a Director’s retirement or termination. The Board reviews on an annual basis the manner in which it apportions the aggregate remuneration amongst Non- Executive Directors at its discretion, and the amount of aggregate remuneration sought to be approved by Shareholders. When undertaking the annual review process, the Board considers the amount of Non-Executive Director fees being paid by comparable companies within the S&P ASX200 with similar market capitalisation, responsibilities and experience of the Non- Executive Directors. The Board has increased its current individual Directors’ Fees effective 1 July 2014 as detailed below in Section D, whilst remaining within the current aggregate limit of $500,000 per annum. Executive Director and Senior Executive Remuneration The Board’s objective is to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:  motivate and reward Executives for Company and individual performance,  ensure continued availability of experienced and effective management, and  ensure total remuneration is competitive by market standards. In reviewing the level and make-up of Executive total remuneration, the Remuneration Committee ensures remuneration reflects the market salary for a position and individual of comparable responsibility and experience. Remuneration is compared with the external market by reviewing industry salary surveys, sourcing empirical market data and other evaluation methods during the recruitment process. Target positioning of total remuneration against market is between the 50th and 75th percentile. If required, the Remuneration Committee may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable Executive roles. Total remuneration for the 2014 financial year consisted of a mix of: fixed remuneration; and   “at risk” variable remuneration, comprising STIs and LTIs. Component Consist of Objective Link to Performance FY2014 REMUNERATION STRUCTURE FOR 1 JULY 2013 TO 30 JUNE 2014 Fixed Remuneration (TFR) Base salary, superannuation and other non-cash benefits Short-term Incentives (STI) Cash payments targeted at a percentage of TFR Long Term Incentives (LTI) Performance Shares/Loans or Share Options based on a percentage of TFR To provide a base level of remuneration which is both appropriate for the position and competitive in the market  To provide an “at risk” incentive to reward Executives in a manner which aligns this element of the creation of Shareholder wealth through the achievement of annual performance measures remuneration with  To provide a market competitive STI opportunity  To provide an “at risk” grant to incentivise and motivate Executives to pursue the long term growth and success of the Company  To provide a market competitive LTI opportunity  To support retention of Executives and key personnel Annual performance of Company and individual. Combination of specific Company Key Performance Indicators (KPIs) (65%):  KPI 1: Financial outcome: increase in NPAT on FY2013 by 5%;  KPI 2: Stretch production: 5% above budget; and  KPI 3: Social Licence: safety measures, no significant environmental or community related incidents, achievement of diversity targets reduction in Individual KPI and personal performance at least satisfactory (35%). Vesting at year 3 on achievement of performance hurdles:  Relative Total Shareholder Return: target 50% of peers (RMS, SLR, SAR, RRL, RSG, EVN, NGF, KCN, OGC, SBM);  Total Shareholder Return: target 15% compound annual growth rate; and  Resource / Reserve Replacement: maintaining at least 2 years of Reserves and 4 years of Resources at Paulsens. Board reserves the right to vest LTIs at its discretion. Following a review by the Remuneration Committee subsequent to the end of the financial year, the Board resolved to set the STI KPIs and the LTI hurdles as follows for the 2015 financial year: 2014 Annual Financial Report Page 14 DIRECTORS’ REPORT REMUNERATION STRUCTURE FOR 1 JULY 2014 TO 30 JUNE 2015 Component Link to FY Performance 2015 TFR Salaries awarded effective 1 July 2014 used as base for determining value component for FY2015 STIs and LTIs. Short-term Incentives (STI) Combination of specific Company Key Performance Indicators (KPIs) (65%):  KPI 1: Financial outcome (20%): Achieve FY2015 Budget NPAT as approved by the Board4: o 10% payable on Budget NPAT achievement, and o then pro-rata for each additional percentage point above Budget achievement – max payable (20%) at 10% above Budget NPAT;  KPI 2: Production (15%): Production within stated guidance 550-600koz o payable pro-rata from 575koz: 0% @ 575koz to 15% @ 625koz); and  KPI 3: Costs (15%): AISC within stated guidance A$1,050 to A$1,100 o pro-rata 0% at A$1,075 to 15% at A$1,025  KPI 4: Social Licence (15%): reduction in safety measures, no environmental or community incidents, increase in diversity targets by 5% from 2014 numbers Individual KPI and personal performance at least satisfactory (35%). Long Term Incentives (LTI) Vesting at year 3 on achievement of performance hurdles:  Relative Total Shareholder Return (40%): target 50% of peers5 (SLR, SAR, RRL, RSG, EVN, KCN, OGC, SBM, NCM);  Total Shareholder Return (40%): target 15% compound annual growth rate; and  Resource / Reserve Replacement (20%): maintaining at least 2 years of Reserves based on the annualised Company production and 6 years of Resources. Board reserves the right to vest LTIs at its discretion. D. Non-Executive Director Remuneration 2014 Remuneration of Non-Executive Directors For the 2014 financial year, the Non-Executive Directors were paid base fees associated with their duties as Directors and members of Board Committees. The policy for Non-Executive Director base fees was $135,000 per annum for the Non- Executive Chairman and $85,000 per annum for other Non-Executive Directors, inclusive of superannuation contributions. The Chair of the Audit Committee received an additional $25,000 per annum in recognition of the additional level of commitment and responsibility. Refer to the table below for amounts paid for the period. Total Non-Executive Director Remuneration - FY2014 Total remuneration paid or payable to Non-Executive Directors for the period ended 30 June 2014 was: Salary / Consulting Fees Year $ STI Cash Payment^ $ Directors Christopher Rowe Peter O’Connor John Fitzgerald * *Appointed 20 November 2012 Michael Fotios** **Resigned 24 October 2013 2014 2014 2014 2013 2014 2013 135,000 84,996 100,000 57,197 26,505 77,500 Non-Executive Director Remuneration – FY2015 - - - - - - Super $ - - 10,250 5,530 - - Options $ - 281,492 - - - - Total $ 135,000 366,488 110,250 62,727 26,505 77,500 Remuneration Consisting of Options During the Year % 0.0% 76.8% 0.0% 0.0% 0.0% 0.0% The Board has increased its individual Directors’ Fees effective 1 July 2014 as detailed below, whilst remaining within the current aggregate limit of $500,000 per annum. Name Christopher Rowe Peter O’Connor John D Fitzgerald Base Salary (at 30/6/14) Termination Benefit Base Salary (from 1/7/14) Termination Benefit $135,000 $85,000 $110,000* None None None $150,000 $110,000 $135,000* None None None * Includes $25,000 in recognition of additional commitment and responsibility as Chair of the Audit Committee. The Board will seek approval from Shareholders to increase the aggregate fee limit at the 2014 Annual General Meeting to enable the Board to expand its membership as required in line with the growth of the Company. E. Executive Remuneration 2014 Executive Remuneration Remuneration for the 2014 financial year consisted of a mix of: fixed remuneration; and   variable remuneration, comprising STIs and LTIs*. *In relation to the 2014 financial year, LTIs were allocated in November 2013 following approval of the Performance Share Plan at the Annual General Meeting. 4 KPI 1 (based on 20% of total STI) will be measured against target NPAT performance for the year as set by the Board. Target NPAT performance requirements have not been disclosed due to commercial sensitivity but will be disclosed in the FY2015 Remuneration Report showing the performance achieved versus the target performance required and the relevant bonus amount based on this performance. 5 Peer group for FY2015 reviewed and modified effective 1 July 2014. 2014 Annual Financial Report Page 15 DIRECTORS’ REPORT Fixed Remuneration Individual Executives’ base salaries for the 2014 financial year were: Name Position Bill Beament Managing Director Raymond Parry Chief Financial Officer Liza Carpene Stuart Tonkin Company Secretary Chief Operating Officer (Appointed 2 September 2013) Base Salary (30/6/13) Base Salary Increase (%) for 2013/14 Base Salary (at 1/7/13 to 30/6/14) 495,000 287,000 227,273 N/A 0.25% 0.25% 0.00% N/A 496,238 287,718 227,273 425,000 * Statutory increase in superannuation contributions was attributed to base salary due to individual contributions cap of $25,000. Following a review by the Remuneration Committee subsequent to the end of the 2014 financial year, the Board determined the following remuneration package adjustments to individual Executives effective 1 July 2014: Name Position Bill Beament Managing Director Raymond Parry Chief Financial Officer Liza Carpene Company Secretary Stuart Tonkin Chief Operating Officer Base Salary Increase (%) effective 1/7/2014 Base Salary (at 1/7/14) Superannuation (capped) Total Fixed Remunderation Potential STI % Potential LTI % 31.6% 0.0% 32.0% 11.8% 725,000 287,718 300,000 475,000 25,000 25,000 25,000 25,000 750,000 312,718 325,000 500,000 35%* 25% 25% 35%* 65%* 35% 35% 65%* *Adjusted: refer to Variable Remuneration section below. These adjustments were approved after considering the substantial growth in Company size and operational production profile, levels of increased responsibility, Company and individual performance, and remuneration of peer companies based on market capitalisation and production profiles. As part of the review, the Remuneration Committee also considered industry data from the Australasian Gold & General Mining Industry Remuneration Report 2014 as well as a report commissioned specifically in relation to Executive Remuneration (Aon Hewitt/McDonald). The Aon Hewitt/McDonald general remuneration report is based on data collected from organisations in a survey group representing gold and other mining companies. The report on Executive Remuneration considered data in relation to the Company’s designated peer group as well as other ASX200 comparative mining companies. This comparator group reflects the key talent market for Northern Star and therefore competitiveness against this group is required to attract and retain key talent. Fixed remuneration is targeted between the 50th and 75th percentile of the market comparator group, with consideration of individual performance reviews determining final remuneration. Variable Remuneration – STIs STIs paid in the 2014 financial year were for the performance by eligible Executives in the 2013 financial year. The overall target STI amount available for 2013 financial year was up to 50% of TFR for each Executive. The STI was made up of a site performance measure and growth bonus of up to 35% (see table below) and an additional bonus of 15% of TFR should ounces produced exceed budget by greater than 10% and the market capitalisation of Northern Star increased by greater than 50% for the financial year period. The Board, however, retained absolute discretion to increase the STI to reward exceptional performance, and to reduce the award depending on the Company’s performance. Key Performance Indicators 2013 Measure Safety Metrics Production Budget Production Growth To ensure a safe working environment in terms of Loss Time Injuries and Total Recordable Injuries Attainment of tonnes, grade and ounces for the financial year budget Grow production profile to 400ktpa Reserve and Resource Metrics Increase reserves to 150koz and resources to 1.0moz Business Development Share Price Metrics Confidential KPI Share price increase by 25% over the financial year The Remuneration Committee approved STIs for KMP for the 2013 financial year based on Company KPI achievement and personal KPI performance based on the KMP’s TFR for the period (refer table on next below). STIs relating to the 2014 financial year were based on up to 50% of TFR for the Managing Director, and up to 25% of TFR for Other Executives. KPIs (corporate and individual) for the 2014 financial year were: Key Performance Indicators 2014 Measure KPI 1: Financial Outcome (35%) Increase in NPAT on FY2013 by 5% KPI 2: Stretch Production (15%) Increase in production above budget by 5% Achievement Did not achieve Partially achieved on a weighted basis due to change in scale of business KPI 3: Social Licence (15%) Reduction in safety measures, no Environmental or Community incidents, achievement of diversity targets Did not achieve Safety/Diversity Achieved Environmental/Community Individual KPIs/Personal Performance (35%) As determined for each individual Executive Majority achieved or set aside due to increased workload associated with significant corporate activity involving the acquisition of four operating mines Whilst the majority of the Company KPIs were not achieved, the Board recognised the significant achievements during the period, and exercised its discretion to award 80% of the potential of Executives’ STIs on the following basis:  outstanding performance during the year in acquiring the four operating mines promoting the Company to the second biggest ASX listed gold producer in Australia; 2014 Annual Financial Report Page 16 DIRECTORS’ REPORT  increase in Northern Star’s share price by ~115% over the 12 month period to 30 June 20146 resulting in it being the best performing stock in the ASX200 for FY2014; and  dedication and commitment to the Company’s overall performance and growth. As a result, STI payments for the 2014 financial year to Executive KMP were recommended as follows and will be paid in October 2014: Name Position Bill Beament Managing Director Raymond Parry Chief Financial Officer Liza Carpene Stuart Tonkin Company Secretary Chief Operating Officer *Pro-rata based on commencement date of 15 April 2013. **Appointed 2 September 2013 – pro-rata entitlement. Variable Remuneration – LTIs STI Payment For FY 2014 Paid In FY 2015 STI Payment For FY 2013 Paid In FY 2014 $208,495 $62,543 $50,113 $75,000** $134,288 $80,573 $14,479* N/A During the 2014 financial year, Performance Shares were issued to six Executives and ten senior staff in accordance with the Performance Share Plan approved by Shareholders at the Annual General Meeting in November 2013. This Plan provides the Board with the discretion to grant Performance Shares on an annual basis to certain Executives that will vest subject to the satisfaction of performance hurdles, as determined by the Board. Shareholder approval was obtained at the 2013 Annual General Meeting to issue LTIs in the form of Performance Shares to the Managing Director without seeking further Shareholder approval to a maximum of 3,000,000 shares. To date 1,000,000 Performance Shares have been issued to the Managing Director. The LTI arrangements have been designed to motivate and incentivise Executives to drive the Company’s long term performance to deliver greater returns to Shareholders. The hurdles defined for the 2014 financial year will be measured at year three (2016) against (1) a Relative Total Shareholder Return against a group of peers, (2) Total Shareholder Return targeting compound annual growth of 15% and (3) Resource/Reserve Replacement for the Paulsens Gold Mine (hurdle changed for FY2015). In order to achieve vesting of LTIs by Executives, the set hurdles must be achieved as at 30 June of the measurement year, along with continued employment and satisfactory performance reviews in all years. The Performance Share Plan also provides an appropriate framework to incentivise other key Company employees who are not at the Executive level as may be determined from time to time. For the sake of simplicity the comments here focus on incentivising of Executives, but the framework will apply in the same manner for select non-Executives, with differing percentage performance requirements against similar measures. Accordingly, under the Performance Share Plan, senior Executives will be granted Performance Shares (outlined below), with vesting of any Performance Shares subject to the satisfaction of performance hurdles. Each Performance Share represents an actual legal interest in a share in the Company on day one of the vesting period, with the Share being forfeited for no consideration should the vesting condition not be met. Under the terms of the Performance Share Plan, the Shares are issued to the Executive at their current market value, with the Executive required to pay this market value amount in order to take up the Share offer. The Company will provide the Executive with a loan to fund the acquisition price. The loan is interest-free and is secured against the Shares in the form of a holding lock preventing all dealing in the Shares. The loan is limited recourse, such that if the Shares are forfeited, this is treated as full repayment against the loan balance. While a loan balance remains outstanding, any dividends paid on the Shares will be automatically applied towards the repayment of the loan. In making the loan in respect of newly issued Shares, there is no cash cost to the Company, as the Shares are newly issued, with the loan essentially being an obligation to repay the amount due when the Shares are sold or forfeited. This also means that no funds are raised upon the issue of the Shares. In substance, the Performance Share Plan operates in the same way as an option plan, therefore provided the size of the LTI award is reasonable and there are appropriate vesting conditions, it should be viewed in the same light as an option plan. The following Performance Shares were issued to KMP in relation to the 2014 financial year. Name Bill Beament Raymond Parry Liza Carpene Stuart Tonkin Position Managing Director Chief Financial Officer Company Secretary (Appointed 15 April 2013) Chief Operating Officer No of Performance Shares Issued for FY2013/14 Period 1,000,000 425,000 325,000 500,000 Remaining Loan Value 30/6/2014 720,814 306,346 234,264 360,407 Note: Shares issued at 5 Day VWAP of $0.7304 on 20 November 2013, and loan values have been reduced due to the payment of interim dividends paid in April 2014. LTIs for the 2015 financial year will be issued in the same manner as for the 2013 financial year, except quantums will be based on the modified potential LTI percentage levels for the Managing Director and the Chief Operating Officer, and in accordance with the new LTI hurdles as detailed previously in this report7. The issue of the 2015 financial year LTIs will be issued subsequent to this report in October 2014. 6 5DVWAP 30 June 2013 $0.58. 5DVWAP 30 June 2014 $1.26. 7 Managing Director and Chief Operating Officer now receive STIs at 35% and LTIs at 65% per annum. 2014 Annual Financial Report Page 17 DIRECTORS’ REPORT Total Remuneration - 2014 Total remuneration paid or payable to KMP for the year ended 30 June 2014 was: Executive Executive Directors Bill Beament Other Executives Raymond Parry Liza Carpene Stuart Tonkin* Year 2014 2013 2014 2013 2014 2013 2014 Salary / Consulting Fees $ 496,238 493,939 287,718 287,000 227,273 48,369 354,167 Other Benefits (1) $ STI Cash Payment^ $ 9,343 19,961 1,431 2,071 2,576 357 416 134,288 150,223 80,573 90,134 14,479 - - Super $ 25,000 27,121 25,000 25,000 23,295 4,837 20,833 Options $ 250,706 257,457 - 14,553 85,213 10,973 - Total $ 915,575 948,701 394,722 418,758 350,261 64,806 375,000 Remuneration Consisting of Options During the Year % Percentage of Performance Related Remuneration % 27.4% 27.1% 0.0% 3.5% 24.3% 16.9% 0.0% 42.0% 42.9% 20.4% 25.0% 28.46% 16.9% 0.0% * Appointed 2 September 2013 (1)Other Benefits include: vehicle allowance, telephone allowance, salary continuance insurance and professional membership fees. Executive Contracts Executive Term of Agreement Executive Directors Base Salary (at 30/6/13) Base Salary (at 1/7/14) Termination Notice Termination Benefit Bill Beament Commencing 30 July 2010 – open ended 496,238 725,000 3 Months 12 Months Other Executives Raymond Parry Commencing 4 October 2010 – open ended Liza Carpene Stuart Tonkin Commencing 15 April 2013 – open ended Commencing 2 September 2013 – open ended 287,000 227,273 425,000 287,000 300,000 475,000 1 Month 1 Month 1 Month None None None F. Equity Instrument Holdings (i) Shareholdings The number of ordinary shares in the Company held during the financial year by each Director of Northern Star and any other KMP of the Group, including their personally related parties, are as follows: 2014 Name Directors Christopher Rowe Bill Beament* John Fitzgerald Peter O'Connor Michael Fotios (as at 24 October 2013) Key Management Personnel Ray Parry* Stuart Tonkin* Liza Carpene* Balance at the beginning of the year Net Change during the year Balance at the end of the year 3,986,195 12,284,735 - 200,000 29,050,374 904,813 - - 426,395 1,824,517 60,000 300,000 - 91,666 631,628 336,628 4,412,590 14,109,252 60,000 500,000 29,050,374 996,479 631,628 336,628 * Includes Performance Shares which are still subject to performance hurdles at 30 June 2016. 2013 Name Directors Christopher Rowe Bill Beament John Fitzgerald Peter O'Connor Michael Fotios Peter Farris (as at 30 November 2012) Key Management Personnel Ray Parry Karen Brown (as at 15 April 2013) Liza Carpene Balance at the beginning of the year Net Change during the year Balance at the end of the year 5,410,514 14,670,000 0 100,000 49,539,374 999,998 378,334 1,191,666 - -1,424,319 -2,385,265 0 100,000 -20,489,000 -750,000 526,479 735,332 - 3,986,195 12,284,735 0 200,000 29,050,374 249,998 904,813 1,926,998 - 2014 Annual Financial Report Page 18 DIRECTORS’ REPORT (ii) Option Holdings The number of options over ordinary shares in the Company held during the financial year by each Director of Northern Star and any other KMP of the Group, including their personally related parties are as follow: 2014 Name Directors Christopher Rowe Bill Beament John Fitzgerald Peter O'Connor Michael Fotios (as at 24 October 2013) Key Management Personnel Ray Parry Stuart Tonkin Liza Carpene 2013 Name Directors Christopher Rowe Bill Beament John Fitzgerald Peter O'Connor Michael Fotios Peter Farris (as at 30 November 2012) Key Management Personnel Ray Parry Karen Brown (as at 15 April 2013) Liza Carpene Balance at the beginning of the year Granted during the year Exercised during the year Forfeited, expired or cancelled during the year Balance at the end of the year Vested and exercisable at the end of the year - 2,000,000 - 750,000 - - - 500,000 - - - - - - - - - (2,000,000) - (750,000) - - - - - - - - - - - - - - - - - - - - - - - - - - 500,000 250,000 Balance at the beginning of the year Granted during the year Exercised during the year Forfeited, expired or cancelled during the year Balance at the end of the year Vested and exercisable at the end of the year 1,864,681 8,500,000 - - 5,000,000 - 666,666 735,332 - - - - 750,000 - - - - 500,000 (1,864,681) (6,500,000) - - (5,000,000) - (666,666) (735,332) - - - - - - - - - - 2,000,000 - 750,000 - 2,000,000 - 750,000 - - - - 500,000 - - - - - Options Issued during the period There were no options granted as equity compensation benefit to KMPs during the period. Options affecting remuneration in the current and future reporting period The terms and conditions of each grant of options affecting remuneration in the current or a future report period are as follows: Grant Date Vesting Date Expiry Date Exercise Price 29-Jun-12 3-Dec-12 15-Apr-13 15-Apr-13 29-Jun-12 3-Dec-12 15-Apr-14 15-Apr-15 28-Jun-14 28-Jun-14 15-Apr-15 15-Apr-16 $0.91 $0.91 $0.95 $1.05 Value Per Option At Grant Date $0.2570 $0.5910 $0.2350 $0.2800 Performance Achieved Exercised 26-Jun-14 Exercised 10-3-14 Remain employed Remain employed % Vested 100% 100% 100% 60% Options granted under the plan carry no dividend or voting rights. Details of options over ordinary shares in the Company provided as remuneration to KMP are shown below. Once vested, each option is convertible into one ordinary share of Northern Star upon payment of the exercise price and prior to the expiry date. The exercise price of options is based on the weighted average price at which the Company’s shares are traded on the Australian Securities Exchange during the week up to and including the date of grant. Name Bill Beament Peter O'Connor Liza Carpene Year of Grant Years In Which Options Vest Number of Options Granted Value of Options at Grant Date Number of Options Vested During the Year % Vested 2012 2012 2013 2013 2012 2012 2014 2015 2,000,000 750,000 250,000 250,000 $514,208 $443,563 $58,701 $70,109 - - 250,000 - 100% 100% 100% 60% The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. Shares provided on exercise of remuneration options. 2014 Annual Financial Report Page 19 DIRECTORS’ REPORT Name Executive Directors Bill Beament Other KMPs Peter O'Connor Date of Exercise of Options Number of Ordinary Shares Issued on Exercise of Options During the Year Value at Exercise Date $ 26-Jun-14 10-Mar-14 812,889 259,528 1,040,417 236,170 The amounts paid per ordinary share on the exercise of options at the date of exercise were as follows: Exercise Date 26-Jun-14 10-Mar-14 Amount Paid Per Share $1.28 $0.91 The above conversion did not result in the Company receiving any funds as the options were converted through the Company’s cashless conversion mechanism which results in less shares being issued. No amounts are unpaid on any shares issued through the exercise of options. (iii) Other Related Party Transactions with Key Management Personnel Michael Fotios (resigned on 24 October 2014) is a related party, and is: a. a Shareholder and Director of Delta Resource Management Pty Ltd. During the year, no amounts were paid to Delta Resources for services provided (2013: $562); and b. a Shareholder and Director of Investmet Limited. During the year an amount of $4,840 was paid to this business for corporate advice at normal commercial rates (2013: 58,400). Bill Beament is a related party, and: a. has a minor beneficial interest in a shareholding of Australian Underground Drilling Pty Ltd (a former Director who resigned in June 2014). During the year an amount of $7,397,675 was paid to this business for drilling services at normal commercial rates (2013: $6,886,439); b. has a minor beneficial interest in a shareholding in Premium Mining Personnel Pty Ltd. During the year, an amount of $6,202,673 was paid to this business for supplying specialist mining labour at normal commercial rates (2013: $5,327,172); and is the sole director and has a beneficial interest in a shareholding in Mining & Infrastructure Group Pty Ltd. During the year an amount of $7,100 was paid to this business for serviced vehicle expenses at normal commercial rates in relation to Mr Beament’s remuneration contract (2013:$18,800). c. In addition to the above, the Group had the followings receivables and payables from related parties noted above: 2014 $000's Assets Trade Receivables 57 2013 $000's 63 Liabilities Trade Payables (1,193) (2,210) (iv) Long Term Incentive Shares Issued to KMP Shares issued pursuant to this plan (LTI Shares) are for services rendered by eligible employees and Directors. The Company believes that LTI Shares provide effective remuneration for eligible employees and Directors for their ongoing commitment and contribution to the company. Where the Company offers to issue LTI Shares to eligible employees and Directors, the Company may offer to provide the employee a limited recourse, interest free loan to be used for the purposes of subscribing for the LTI Shares in the Company. The table below includes details of LTI Shares issued to KMP: 30 June 2014 Bill Beament Liza Carpene Raymond Parry Stuart Tonkin Date shares granted Loan expiry date 20/11/2013 20/11/2013 20/11/2013 20/11/2013 30/06/2016 30/06/2016 30/06/2016 30/06/2016 Issue Price 0.73 0.73 0.73 0.73 Balance at the start of year Granted During the period Forfeited during the period - - - - 1,000,000 325,000 425,000 500,000 - - - - Balance at the end of the Period 1,000,000 325,000 425,000 500,000 Vested at end of the period - - - - On 20 November 2013, 4,090,000 shares were issued to KMP and other personnel of the Company at an issue price of $0.7304 per share. Corresponding non-recourse loans totalling $2,987,336 were entered into in accordance with the Company's LTI Share Plan as part of their remuneration. As at 30 June 2014, the non-recourse loan had reduced to $2,948,130. 2014 Annual Financial Report Page 20 DIRECTORS’ REPORT Summary of Key Loan terms: a. Loan Amount b. Interest rate c. Term of Loan d. Vesting Conditions $0.7304 per share 0% 20 November 2013 - 30 June 2016 (1) Achievement of Performance Hurdles Measured at End of Year 3, being 30 June 2016 (2) Continued employment (3) Personal Performance reviews must be satisfactory in all years The loans are non-recourse and are secured against the Performance Shares held by the relevant participants. The Board may, at its discretion, agree to forgive a loan made to a participant. The fair value at grant date of $1,250,808 was calculated using the Black Scholes pricing model that took into account the term, the underlying value of the shares exercise price, the impact of dilution and the risk-free interest rate: Inputs used in Black Scholes pricing model to value LTI shares granted include: a. Exercise Price b. Market price of shares at grant date c Expected volatility of the Company's shares d. Weighted average risk free interest rate e. Time to Maturity $0.7304 $0.7100 68.12% 2.77% 2 years The expected volatility during the term of the options is based around assessments of the volatility of similar-sized listed companies, including newly listed entities and entities in similar industries at grant date. The value of the instruments has been expensed on a proportionate basis for each financial year from grant date to vesting date. The proportion of the value of the instrument which was expensed and accounted for in the share option reserve was $291,383 for the year ended 30 June 2014. < This is the end of the audited Remuneration Report. > CORPORATE GOVERNANCE STATEMENT The Company’s 2014 Corporate Governance Statement has been released as a separate document and is located on our website at http://www.nsrltd.com/corporate/corporategovernance.html. INDEMNIFICATION AND INSURANCE OF OFFICERS The Company has paid a premium to insure the Directors and Officers of the Company and its controlled entities. Details of the premium are subject to a confidentiality clause under the contract of insurance. The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and Officers in their capacity as officers of entities in the Group. AUDITOR INDEPENDENCE The Auditor’s independence declaration for year ended 30 June 2014 under Section 307C of the Corporations Act 2001 has been received and can be found on the next page. NON-AUDIT SERVICES No other services were provided by the Auditor. ROUNDING The amounts contained in this report and in the financial statements have been rounded to the nearest $1,000 (where rounding is applicable) as permitted under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. Signed in accordance with a resolution of the Directors. BILL BEAMENT Managing Director Perth, Western Australia 30 September 2014 2014 Annual Financial Report Page 21 AUDITOR’S INDEPENDENCE DECLARATION 2014 Annual Financial Report Page 22 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended 30 June 2014 Revenue from operations Mine operating costs Gross profit Other Income Exploration expenses Acquisition costs Redundancy costs Corporate expenses Net loss on financial assets held at fair value through profit or loss Finance costs Government Royalty expense Gain/(Loss) on derivatives Depreciation and amortisation Profit before Income Tax Income tax expense Profit for the Year Other comprehensive income Notes 2 (a) 3 (a) Group 30 June 2014 30 June 2013 $'000 296,976 (179,166) 117,810 $'000 144,236 (60,960) 83,276 2 (b) 3,788 2,253 (5,544) (7,382) (7,245) (10,193) (592) (1,800) (7,328) 1,726 (47,604) 35,636 (5,854) - - (6,790) (5,747) (783) (3,353) - (26,225) 36,777 11 5 (11,629) (8,449) 24,007 28,328 - - Total Comprehensive Income for the Year 24,007 28,328 Total Comprehensive Income Attributed to: Owners of the Company Earnings Per Share Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share) 24,007 28,328 Cents per Shares Cents per Shares 4 4 5.0 5.0 6.7 6.6 The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 2014 Annual Financial Report Page 23 STATEMENT OF FINANCIAL POSITION For the Year Ended 30 June 2014 Group 30 June 2014 30 June 2013 Notes $'000 $'000 ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventory Prepayments Derivative financial instrument Other current assets Total Current Assets Non-Current Assets Investments Property, plant & equipment Exploration tenements Mine Development Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Derivative financial instrument Financial Liabilities Provisions Current tax liabilities Other liabilities Total Current Liabilities Non-Current Liabilities Financial Liabilities Derivative financial instrument Provisions Deferred tax liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Retained earnings TOTAL EQUITY 7 (a) 8 9 10 11 12 13 14 15 16 17 11 18 (a) 19 (a) 6 (b) 18 (b) 11 19 (b) 6 (b) 20 21 82,387 13,665 63,104 11,225 3,024 400 55,775 1,713 12,405 - - 4 173,805 69,897 2,906 60,639 69,049 90,197 222,791 396,596 37,449 333 2,143 18,618 5,228 - 2,224 42,876 30,462 8,813 84,376 154,272 14,449 - 6,163 1,297 4,620 610 63,771 27,139 3,804 965 73,042 10,804 88,615 152,386 5,069 - 2,902 8,827 16,798 43,937 244,210 110,335 193,808 395 50,007 244,210 66,765 691 42,879 110,335 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 2014 Annual Financial Report Page 24 Net Cash From Operating Activities 7 (b) STATEMENT OF CASH FLOWS For the Year Ended 30 June 2014 Cash Flows From Operating Activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Finance costs Net Income taxes paid Cash Flows From Investing Activities Payments for property, plant & equipment Payments for equity investments Proceeds from sale of property, plant and equipment Proceeds from financial asset Payments for development of mining properties Exploration and evaluation expenditure Acquisition of Mine Net Cash Used In Investing Activities Cash Flows From Financing Activities Proceeds from issue of shares and conversion of options Payments for dividends Payments for share issue costs Net Proceeds /(Repayments) from financing facility Net Cash From Financing Activities Net Decrease In Cash And Cash Equivalents Cash and Cash Equivalents at 1 July Cash and Cash Equivalents at 30 June Group 30 June 2014 30 June 2013 Notes $'000 $'000 308,506 (200,603) 1,624 (1,804) (9,044) 98,679 (11,106) - (233) 24 (25,500) (13,149) (125,995) (175,959) 128,856 (16,393) (3,288) (5,284) 144,375 (74,590) 2,147 (750) (5,290) 65,892 (30,363) (1,318) 8 - (16,649) (15,229) - (63,551) 1,368 (14,842) - 1,946 103,891 (11,528) 26,612 55,775 82,387 (9,187) 64,962 55,775 7 (a) The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 2014 Annual Financial Report Page 25 STATEMENT OF CHANGES IN EQUITY Balance at 30 June 2012 Equity issues net of transaction costs Share based payments Transfer from option reserve Dividend Paid Total comprehensive income for the period Notes 3 (b) Share Capital $'000 64,613 1,368 71 713 - - Group Reserves $'000 503 Retained Earnings $'000 29,393 Total Equity $'000 94,508 - 901 (713) - - - - - 1,368 972 - (14,842) 28,328 (14,842) 28,328 Balance at 30 June 2013 66,765 691 42,879 110,335 Equity issues net of transaction costs Share based payments Transfer from option reserve Dividend Paid Other Total comprehensive income for the period 3 (b) 125,568 84 1,391 - - - - 1,095 (1,391) - - - - - - (16,393) (486) 24,007 125,568 1,179 - (16,393) (486) 24,007 Balance at 30 June 2014 193,808 395 50,007 244,210 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. 2014 Annual Financial Report Page 26 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES (i) Basis of Preparation The financial report is a general purpose financial report, prepared by a for-profit entity, in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). The financial report has been prepared on a historical cost basis, except for derivative financial instruments and available-for-sale assets which have been measured at fair value. The financial statements are presented in Australian dollars, which is the parent company’s functional and presentation currency, and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated. The Group is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that class order to the nearest thousand dollars. (ii) Statement of Compliance The financial statements comply with Australian Accounting Standards and International Financial Reporting Standards (IFRS). (iii) New, revised or amending Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. The following Accounting Standards and Interpretations are most relevant to the consolidated entity:  AASB 10 Consolidated Financial Statements The consolidated entity has applied AASB 10 from 1 July 2013, which has a new definition of 'control'. Control exists when the reporting entity is exposed, or has the rights, to variable returns from its involvement with another entity and has the ability to affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights that give it the current ability to direct the activities that significantly affect the investee's returns. The consolidated entity not only has to consider its holdings and rights but also the holdings and rights of other shareholders in order to determine whether it has the necessary power for consolidation purposes.  AASB 11 Joint Arrangements The consolidated entity has applied AASB 11 from 1 July 2013. The standard defines which entities qualify as joint arrangements and removes the option to account for joint ventures using proportional consolidation. Joint ventures, where the parties to the agreement have the rights to the net assets are accounted for using the equity method. Joint operations, where the parties to the agreements have the rights to the assets and obligations for the liabilities, will account for its share of the assets, liabilities, revenues and expenses separately under the appropriate classifications.  AASB 12 Disclosure of Interests in Other Entities The consolidated entity has applied AASB 12 from 1 July 2013. The standard contains the entire disclosure requirement associated with other entities, being subsidiaries, associates, joint arrangements (joint operations and joint ventures) and unconsolidated structured entities. The disclosure requirements have been significantly enhanced when compared to the disclosures previously located in AASB 127 'Consolidated and Separate Financial Statements', AASB 128 'Investments in Associates', AASB 131 'Interests in Joint Ventures' and Interpretation 112 'Consolidation - Special Purpose Entities'.  AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 The consolidated entity has applied AASB 13 and its consequential amendments from 1 July 2013. The standard provides a single robust measurement framework, with clear measurement objectives, for measuring fair value using the 'exit price' and provides guidance on measuring fair value when a market becomes less active. The 'highest and best use' approach is used to measure non-financial assets whereas liabilities are based on transfer value. The standard requires increased disclosures where fair value is used.  AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) The consolidated entity has applied AASB 119 and its consequential amendments from 1 July 2013. The standard eliminates the corridor approach for the deferral of gains and losses; streamlines the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income; and enhances the disclosure requirements for defined benefit plans. The standard also changed the definition of short-term employee benefits, from 'due to' to 'expected to' be settled within 12 months. Annual leave that is not expected to be wholly settled within 12 months is now discounted allowing for expected salary levels in the future period when the leave is expected to be taken. 2014 Annual Financial Report Page 27 NOTES TO THE FINANCIAL STATEMENTS  AASB 127 Separate Financial Statements (Revised), AASB 128 Investments in Associates and Joint Ventures (Reissued) and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards The consolidated entity has applied AASB 127, AASB 128 and AASB 2011-7 from 1 July 2013. AASB 127 and AASB 128 have been modified to remove specific guidance that is now contained in AASB 10, AASB 11 and AASB 12 and AASB 2011-7 makes numerous consequential changes to a range of Australian Accounting Standards and Interpretations. AASB 128 has also been amended to include the application of the equity method to investments in joint ventures.  AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets and Financial Liabilities The consolidated entity has applied AASB 2012-2 from 1 July 2013. The amendments enhance AASB 7 'Financial Instruments: Disclosures' and requires disclosure of information about rights of set-off and related arrangements, such as collateral agreements. The amendments apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement.  AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle The consolidated entity has applied AASB 2012-5 from 1 July 2013. The amendments affect five Australian Accounting Standards as follows: Confirmation that repeat application of AASB 1 'First-time Adoption of Australian Accounting Standards' is permitted; Clarification of borrowing cost exemption in AASB 1; Clarification of the comparative information requirements when an entity provides an optional third column or is required to present a third statement of financial position in accordance with AASB 101 'Presentation of Financial Statements'; Clarification that servicing of equipment is covered by AASB 116 'Property, Plant and Equipment', if such equipment is used for more than one period; clarification that the tax effect of distributions to holders of equity instruments and equity transaction costs in AASB 132 'Financial Instruments: Presentation' should be accounted for in accordance with AASB 112 'Income Taxes'; and clarification of the financial reporting requirements in AASB 134 'Interim Financial Reporting' and the disclosure requirements of segment assets and liabilities.  AASB 2012-10 Amendments to Australian Accounting Standards - Transition Guidance and Other Amendments The consolidated entity has applied AASB 2012-10 amendments from 1 July 2013, which amends AASB 10 and related standards for the transition guidance relevant to the initial application of those standards. The amendments clarify the circumstances in which adjustments to an entity's previous accounting for its involvement with other entities are required and the timing of such adjustments.  Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine and AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20 The consolidated entity has applied Interpretation 20 and its consequential amendments from 1 July 2013. The Interpretation clarifies when production stripping costs should lead to the recognition of an asset and how that asset should be initially and subsequently measured. The Interpretation only deals with waste removal costs that are incurred in surface mining activities during the production phase of the mine.  AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirement The consolidated entity has applied 2011-4 from 1 July 2013, which amends AASB 124 'Related Party Disclosures' by removing the disclosure requirements for individual key management personnel ('KMP'). Corporations and Related Legislation Amendment Regulations 2013 and Corporations and Australian Securities and Investments Commission Amendment Regulation 2013 (No.1) now specify the KMP disclosure requirements to be included within the directors' report. (iv) New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2014. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.  AASB 9 Financial Instruments and its consequential amendments This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1 January 2017 and completes phases I and III of the IASB's project to replace IAS 39 (AASB 139) 'Financial Instruments: Recognition and Measurement'. This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. Chapter 6 'Hedge Accounting' supersedes the general hedge accounting requirements in AASB 139 and provides a new simpler approach to hedge accounting that is intended to more closely align with risk management activities undertaken by entities when hedging financial and non-financial risks. The consolidated entity will adopt this standard and the amendments from 1 July 2017 but the impact of its adoption is yet to be assessed by the consolidated entity.  AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities The amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The amendments add application guidance to address inconsistencies in the application of the offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the meaning of 'currently has a legally enforceable right of set-off'; and clarifies 2014 Annual Financial Report Page 28 NOTES TO THE FINANCIAL STATEMENTS that some gross settlement systems may be considered to be equivalent to net settlement. The adoption of the amendments from 1 July 2014 will not have a material impact on the consolidated entity.  AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets These amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The disclosure requirements of AASB 136 'Impairment of Assets' have been enhanced to require additional information about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposals. Additionally, if measured using a present value technique, the discount rate is required to be disclosed. The adoption of these amendments from 1 July 2014 may increase the disclosures by the consolidated entity.  AASB 2013-4 Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation of Hedge Accounting These amendments are applicable to annual reporting periods beginning on or after 1 January 2014 and amends AASB 139 'Financial Instruments: Recognition and Measurement' to permit continuation of hedge accounting in circumstances where a derivative (designated as hedging instrument) is novated from one counter party to a central counterparty as a consequence of laws or regulations. The adoption of these amendments from 1 July 2014 will not have a material impact on the consolidated entity.  AASB 2013-5 Amendments to Australian Accounting Standards - Investment Entities These amendments are applicable to annual reporting periods beginning on or after 1 January 2014 and allow entities that meet the definition of an 'investment entity' to account for their investments at fair value through profit or loss. An investment entity is not required to consolidate investments in entities it controls, or apply AASB 3 'Business Combinations' when it obtains control of another entity, nor is it required to equity account or proportionately consolidate associates and joint ventures if it meets the criteria for exemption in the standard. The adoption of these amendments from 1 July 2014 will have no impact on the consolidated entity.  Annual Improvements to IFRSs 2010-2012 Cycle These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects several Accounting Standards as follows: Amends the definition of 'vesting conditions' and 'market condition' and adds definitions for 'performance condition' and 'service condition' in AASB 2 'Share-based Payment'; Amends AASB 3 'Business Combinations' to clarify that contingent consideration that is classified as an asset or liability shall be measured at fair value at each reporting date; Amends AASB 8 'Operating Segments' to require entities to disclose the judgements made by management in applying the aggregation criteria; Clarifies that AASB 8 only requires a reconciliation of the total reportable segments assets to the entity's assets, if the segment assets are reported regularly; Clarifies that the issuance of AASB 13 'Fair Value Measurement' and the amending of AASB 139 'Financial Instruments: Recognition and Measurement' and AASB 9 'Financial Instruments' did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amount, if the effect of discounting is immaterial; Clarifies that in AASB 116 'Property, Plant and Equipment' and AASB 138 'Intangible Assets', when an asset is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount (i.e. proportional restatement of accumulated amortisation); and Amends AASB 124 'Related Party Disclosures' to clarify that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a 'related party' of the reporting entity. The adoption of these amendments from 1 July 2014 will not have a material impact on the consolidated entity.  Annual Improvements to IFRSs 2011-2013 Cycle These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects four Accounting Standards as follows: Clarifies the 'meaning of effective IFRSs' in AASB 1 'First-time Adoption of Australian Accounting Standards'; Clarifies that AASB 3 'Business Combination' excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself; Clarifies that the scope of the portfolio exemption in AASB 13 'Fair Value Measurement' includes all contracts accounted for within the scope of AASB 139 'Financial Instruments: Recognition and Measurement' or AASB 9 'Financial Instruments', regardless of whether they meet the definitions of financial assets or financial liabilities as defined in AASB 132 'Financial Instruments: Presentation'; and Clarifies that determining whether a specific transaction meets the definition of both a business combination as defined in AASB 3 'Business Combinations' and investment property as defined in AASB 140 'Investment Property' requires the separate application of both standards independently of each other. The adoption of these amendments from 1 July 2014 will not have a material impact on the consolidated entity (v) Significant Accounting Estimates and Assumptions Significant accounting judgments In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements. Exploration and evaluation assets The Group’s accounting policy for exploration and evaluation expenditure is set out at Note 1. The application of this policy necessarily requires management to make certain estimates and assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recovered by future exploitation or sale, then the relevant capitalised amount will be written off to the statement of comprehensive income. 2014 Annual Financial Report Page 29 NOTES TO THE FINANCIAL STATEMENTS Critical accounting estimates and assumptions The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Impairment of assets In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The recoverable amounts of cash generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values. The calculations require the use of estimates and assumptions. It is reasonably possible that the gold price assumption may change which may then impact our estimated life of mine determinant and may then require a material adjustment to the carrying value of tangible assets. The Group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared for future cash flows of the mining assets. Expected future cash flows used to determine the value in use of tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot gold prices, discount rates, estimates of costs to produce reserves and future capital expenditure. Provisions for restoration costs Restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation. The ultimate cost of restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine-sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates. Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results. Share-based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the Black-Scholes model. Should the assumptions used in these calculations differ, the amounts recognised could significantly change. Commitments - Exploration The Group has certain minimum exploration commitments to maintain its right of tenure to exploration permits. These commitments require estimates of the cost to perform exploration work required under these permits. These have been disclosed in Note 24. Determination of Mineral Resources and Ore Reserves The Group reports its Mineral Resources and Ore Reserves in accordance with the Joint Ore Reserves Committee (JORC) “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” – the JORC Code. The information on Mineral Resources and Ore Reserves is prepared by Competent Persons as defined by the JORC Code. There are numerous uncertainties inherent in estimating Mineral Resources and Ore Reserves. Assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes may impact asset carrying values, depreciation and amortisation rates, deferred stripping costs and provisions for restoration. Recoverability of deferred income tax assets The Group recognises deferred income tax assets in respect of tax losses and temporary differences to the extent that the future utilisation of these losses and temporary differences is considered probable. Assessing the future utilisation of these losses and temporary differences requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, this could result in significant changes to the deferred income tax assets recognised, which would in turn impact future financial results. Fair value of derivative financial instruments The Group assesses the fair value of its financial derivatives in accordance with the accounting policy stated in Note 1. Fair values have been determined based on well established valuation models and market conditions existing at the reporting date. These calculations require the use of estimates and assumptions. Changes in assumptions concerning gold prices and volatilities could have significant impact on the fair valuation attributed to the Group’s financial derivatives. When these assumptions change or become known in the future, such differences will impact asset and liability carrying values in the period in which they change or become known. The Company does not have any hedging in place at the end of the financial period. 2014 Annual Financial Report Page 30 NOTES TO THE FINANCIAL STATEMENTS (vi) Summary of Significant Accounting Policies Basis of consolidation The consolidated financial statements include the financial statements of Northern Star Resources Limited (“the Company”), and its subsidiary (“the Group” or “Group”). The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. Where an entity has been acquired during the year, its results are included in consolidated results from the date control commenced. Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated in full on consolidation. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief financial decision maker. The chief financial decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors that makes strategic decisions. Jointly arrangements The proportionate interests in the assets, liabilities and expenses of a joint arrangement have been incorporated in the financial statements under the appropriate headings. Details of the joint arrangements are set out in Note 30. Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group measures goodwill at the acquisition date as:   The fair value of the consideration transferred; less The net recognised amount (generally fair value) of the identifiable assets and liabilities assumed. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Goodwill that arises on the acquisition of subsidiaries is included in intangible assets. Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole. Cash and cash equivalents Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Trade and other receivables Receivables are initially recognised at fair value and subsequently measured at amortised cost, less allowance for doubtful debts. Current receivables for GST are due for settlement within 30 days and other current receivables within 12 months. Cash on deposit is not due for settlement until rights of tenure are forfeited or performance obligations are met. Inventories Gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost or net realisable value. The stockpile amount is determined by reference to mining cost, including amortisation at the relevant stage of production. Consumables and spares are valued at the lower of cost and net realisable value. Any provision for obsolescence is determined by reference to specific stock items identified. Plant and equipment Items of plant and equipment are stated at their cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of material and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Depreciation is calculated on a straight line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their estimated expected useful lives as follows: Buildings Plant and equipment Motor vehicles Office furniture and equipment 1-15 years 1-10 years 1-5 years 1-5 years Mine specific items of property, plant and equipment are depreciated over the life of mine. The life of mine expectation is reviewed periodically. 2014 Annual Financial Report Page 31 NOTES TO THE FINANCIAL STATEMENTS Exploration and Evaluation Expenditure Costs related to the acquisition of properties that contain resources are allocated separately to specific areas of interest. These costs are capitalised until the viability of the area of interest is determined. Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of interest. Such costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area of interest (or alternatively by its sale), or where activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations are continuing. Accumulated costs in relation to an abandoned area are written off to the statement of comprehensive income in the period in which the decision to abandon the area is made. The company reviews the carrying value of each area of interest at each reporting date and any exploration expenditure which no longer satisfies the above policy is written off. Restoration costs expected to be incurred are provided for as part of exploration, evaluation, development or production phases that give rise to the need for restoration. Development expenditure When the technical and commercial feasibility of extracting a mineral resource has been demonstrated the resource enters its development phase. The costs of the assets are transferred from exploration and evaluation expenditure and reclassified into development expenditure and include past exploration and evaluation costs and development costs. Although development expenditure is not amortised, it is tested annually for impairment. Mine Development expenses Capitalised development costs are amortised on a unit-of-production basis over the economically recoverable resources of the mine. The unit of account will be ounces produced. Capitalised development costs include exploration and evaluation expenditure previously deferred relating to that ore body. Separate calculations are undertaken for each ore body. Impairment of assets At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Derecognition of financial assets and liabilities A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:   the rights to receive cash flows from the asset have expired; the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party; or  the Company has transferred its rights to receive cash flows from the asset and either  has transferred substantially all the risks and rewards of the asset, or  has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of comprehensive income. Restoration, rehabilitation, and environmental costs The Group recognises any legal restoration obligation as a liability at the time a legal liability exists. The carrying amount of the long lived assets to which the legal obligation relates is increased by the restoration obligation costs and amortised over the producing life of the asset. A provision is raised for the restoration and rehabilitation of each mine site. Restoration and rehabilitation works can include facility decommissioning and dismantling; removal or treatment of waste materials; land rehabilitation; and site restoration. The extent of the work required and the associated costs are dependent on the relevant regulatory requirements and the group’s environmental policies. 2014 Annual Financial Report Page 32 NOTES TO THE FINANCIAL STATEMENTS Financial Instruments Non-Derivative Financial instruments Available-for-Sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the other categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the cumulative gain or loss in equity is reclassified to profit or loss. Available-for-sale financial assets comprise equity securities. Financial Assets at Fair Value Through Profit or Loss A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated at such on initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Attributable transactions costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein are recognised in profit or loss. Financial asset designated at fair value through profit or loss comprise investments in equity securities that otherwise would have been classified as available-for-sale. Other Non-Derivative Financial Instruments Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit and loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured at amortised costs. Derivative Financial Instruments The Group occasionally uses derivative financial instruments such as gold options and gold forward contracts to manage the risks associated with commodity price. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured to their fair value. Changes in the fair value of derivatives are recorded in the statement of comprehensive income. The fair value of derivative financial instruments that are traded on an active market is based on quoted market prices at the statement of financial position date. The fair value of financial instruments not traded on an active market is determined using appropriate valuation techniques. A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. All borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Trade and other payables Trade payables and other payables are recognised initially at fair value and subsequently at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and usually paid within 30 days of recognition. Borrowings All borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. 2014 Annual Financial Report Page 33 NOTES TO THE FINANCIAL STATEMENTS Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave, and any other employee entitlements expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. Long service leave liabilities are measured at current cost for those employees with greater than 5 years’ service up to the reporting date. Consideration is given to future wage and salary levels, experience of employee departures and period of service. Employee entitlements expenses and revenues arising in respect of wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave and other entitlements are charged against profits on a net basis. Contributions are made to employee superannuation plans and are charged as expenses when incurred. Share-based payment transactions The Group may provide benefits to employees (including directors) of the Group in the form of share based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. Share-based payments – options and performance rights with an exercise price: The fair value of these payments is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The fair value of the options granted is adjusted to reflect market conditions, but excludes the impact of any non-market vesting conditions. Non-market vesting conditions, if any, are included in assumptions about the number of options likely to be exercisable. Share-based payments – Employee Shares. The fair value of these payments is determined based on the share price at the date the rights have been accepted by employees. Revenue recognition Revenue from the sale of goods is measured at the fair value of the consideration received or receivable. Revenue is recognised when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Interest revenue Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Borrowing costs Borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred except borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset that necessarily takes a substantial period to get ready for its intended use or sale. In this case, borrowing costs are capitalised as part of the cost of such a qualifying asset. Tax consolidations Northern Star Resources Limited is the head entity in the tax-consolidated group comprising its wholly-owned subsidiary. The effective date of implementation was 9 March 2011 for the tax-consolidated group. Northern Star Resources Limited accounts for the consolidated group’s current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right. In addition to its own current and deferred tax amounts, Northern Star Resources Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. Income tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the statement of financial position date. Deferred income tax is provided on all temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are 2014 Annual Financial Report Page 34 NOTES TO THE FINANCIAL STATEMENTS recognised for all taxable temporary differences, except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised, except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Other taxes Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense as applicable. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities that are recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Contributed equity Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on ordinary shares are recognised as a liability in the period in which they are declared. Treasury shares The Company operates the Northern Star Employee Share Trust (Trust). The main purpose of the Trust is to hold unvested employee incentive shares as part of Northern Star’s Employee Share Scheme. Under AASBs, the Trust qualifies as an equity compensation plan special purpose entity and its results are included in those for the Consolidated Entity. Any shares held by the Trust are accounted for as treasury shares and treated as a reduction in the number of publicly held shares of the Company and the Consolidated Entity. Earnings per share (EPS) Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share are determined when the Company has on issue potential ordinary shares which are dilutive. It is calculated by dividing net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and any expenses associated with dividends and interest of dilutive potential ordinary shares, by the weighted average number of ordinary shares (both issued and potentially dilutive) adjusted for any bonus element. 2014 Annual Financial Report Page 35 NOTES TO THE FINANCIAL STATEMENTS 2. REVENUE (a) Revenue from operations Sale of gold Sale of silver (b) Other Income Interest Income Other Total Revenue 3. EXPENSES (a) Mine operating costs Mining Expenses Processing Expenses Site Administration Expenses (b) Operating costs Exploration expenses Administration Personnel expenses Acquisition Cost Redundancy Cost Shares based payments Net loss on financial assets held at fair value through profit or loss Finance costs Government Royalty expense (Gain)/Loss on derivatives Depreciation Amortisation Total Expenses 4. EARNINGS PER SHARE Basic profit/(loss) per share (cents) Diluted profit/(loss) per share (cents) Group 30 June 2014 30 June 2013 $'000 $'000 296,263 144,057 713 179 296,976 144,236 1,727 2,061 3,778 2,200 53 2,253 300,764 146,489 Group 30 June 2014 30 June 2013 $'000 $'000 98,062 44,284 36,820 179,166 5,544 5,302 3,712 7,382 7,245 1,179 592 1,800 7,328 (1,726) 15,252 32,352 85,961 32,575 19,311 9,073 60,960 5,854 5,818 - - - 972 5,747 783 3,353 - 7,486 18,740 48,753 265,127 109,713 Group 30 June 2014 30 June 2013 $'000 5.0 5.0 $'000 6.7 6.6 Profit/(loss) used to calculate earnings per share ($'000) 24,007 28,328 Weighted average number of ordinary shares during the period used in calculation of basic profit/(loss) per share 481,545,715 421,050,679 Weighted average number of ordinary shares during the period used in calculation of diluted profit/(loss) per share 483,337,381 429,279,762 2014 Annual Financial Report Page 36 NOTES TO THE FINANCIAL STATEMENTS 5. INCOME TAX (a) Income tax expense Current tax Deferred tax Adjustment for current tax of prior periods Income tax expense (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit (Loss) before income tax Tax at the Australian tax rate of 30% Tax effect of amounts which are not deductible/ (taxable) in calculating taxable income: Share-based payments Tax offset - Research and development Trading stock Sundry items Subtotal Research and development tax credit Adjustments for current tax of prior periods Subtotal Income tax reported in the statement of profit or loss 6. DEFERRED INCOME TAX (a) Deferred tax assets At 1 July 2012 (Charged)/credited to Profit or loss At 30 June 2013 Adjustments for prior years (Charged)/credited to Profit or loss At 30 June 2014 Provisions Investments Employee Benefits $'000 $'000 $'000 - - - 16,630 16,630 - 1,724 1,724 (1,743) - (19) 308 116 424 5,624 6,048 The balance comprises temporary differences attributable to: Employee benefits Provisions Accruals Investments Other Gross deferred tax assets at 30 June 2014 Group 30 June 2014 30 June 2013 $'000 $'000 9,591 (652) 8,939 2,690 11,629 8,007 2,172 10,179 (1,730) 8,449 35,637 36,777 10,691 11,033 56 260 (1,803) 81 9,285 (346) 2,690 2,344 11,629 Other $'000 705 224 929 5,074 6,003 (475) (298) - (81) 10,179 - (1,730) (1,730) 8,449 Total $'000 1013 2,064 3,077 (1,743) 27,328 28,662 6,048 16,630 5,986 (19) 17 28,662 2014 Annual Financial Report Page 37 NOTES TO THE FINANCIAL STATEMENTS 6. DEFERRED INCOME TAX (continued) (b) Deferred tax liabilities Mine Properties Inventories $'000 7,296 4,101 11,397 4,886 16,283 $'000 371 136 507 6,335 6,841 At 1 July 2012 Charged/(credited) to Profit or loss At 30 June 2013 Adjustments for prior years Charged/(credited) to Profit or loss At 30 June 2014 The balance comprises temporary differences attributable to: Exploration and evaluation expenditure Mine Properties Property Plant and Equipment Inventories Accrued Income Other Gross deferred tax liabilities at 30 June 2014 Set off deferred tax assets Net deferred tax liabilities (c) Income tax liability Opening Balance Tax paid Current Tax Adjustments for current tax of prior periods Current charges deferred tax assets Total income tax liability Other $'000 - - - 887 15,455 16,342 Total $'000 7,667 4,237 11,904 887 26,675 39,466 15,284 15,785 975 6,841 549 32 39,466 (28,662) 10,804 Group 30 June 2014 30 June 2013 $'000 4,620 (9,044) 8,939 60 652 5,228 $'000 3,633 (8,321) 10,179 1,301 (2,172) 4,620 The Deferred Tax Asset brought to account for the period will only be obtained if: (i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised; (ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation; and (iii) the Company is able to meet the continuity of ownership and/or continuity of business tests under tax legislation Tax Consolidation The head entity, in conjunction with other members of the tax-consolidation group, have entered into a tax funding arrangement which sets out the funding obligations of members of the tax-consolidation group in respect of tax amounts. The tax funding arrangements require payments to/from the head entity equal to the current tax liability/ (asset) assumed by the head entity and any tax-loss deferred tax asset assumed by the head entity, resulting in the head entity recognising an inter-company receivable/(payable) equal in amount to the tax liability/ (asset) assumed. The inter-entity receivables/ (payable) will be at call. Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity's obligation to make payments for the liabilities to the relevant tax authorities. The head entity in conjunction with other members of the tax-consolidated group has also entered into a tax sharing arrangement. The tax sharing agreement will provide for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote. 2014 Annual Financial Report Page 38 NOTES TO THE FINANCIAL STATEMENTS 7. CASH AND CASH EQUIVALENTS (a) Cash and Cash Equivalents Cash at bank Cash on Deposit Total Cash and Cash Equivalents Group 30 June 2014 30 June 2013 $'000 $'000 80,887 1,500 82,387 19,163 36,612 55,775 The Group’s exposure to interest rate risk is discussed in Note 31. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. (b) Reconciliation of Net Profit/(Loss) after Tax to Net Cash From Operations Profit/(Loss) after income tax for the year Non-Cash Items: Depreciation and amortisation Acquisition Royalty Payments Net loss on financial assets held at fair value through profit or loss Gain on Derivatives Net (gain)/loss on sale of non-current assets Net (gain)/loss on sale of Exploration Tenements Interest Income Share-based payments Movements in Provisions Exploration expenditure written off (Increase)/Decrease in Assets: Trade and other receivables Inventories Deferred taxes Prepaid expenses Increase/(Decrease) in Liabilities: Trade and other payables Income tax liability Net Cash From Operating Activities 8. TRADE AND OTHER RECEIVABLES Amounts receivable from: Trade Debtors Sundry debtors Goods and services tax recoverable Fuel Rebates Other receivables Total Trade and other receivables 24,007 - 47,882 - 589 (1,726) (23) - (103) 1,179 4,664 5,770 9,495 6,307 1,978 - - (1,949) 608 98,679 28,328 - 26,233 - (8) - (53) 972 7120 4,303 53 (3,328) (2,064) 158 (58) 4,236 65,892 Group 30 June 2014 30 June 2013 $'000 $'000 2,945 7,874 2,406 440 - 107 40 906 195 465 13,665 1,713 Fair Value and Risk Exposure (a) Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. (b) The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security. (c) Details regarding interest risk exposure are disclosed in Note 31. (d) Other receivables generally have repayments between 30 and 90 days. (e) Transactions between Northern Star Resources Limited and its subsidiaries consist of intercompany loans, upon which no interest is charged and no repayment schedule exists. The intercompany loans have no set repayment date and the fair value approximates the carrying value of the receivable. 2014 Annual Financial Report Page 39 NOTES TO THE FINANCIAL STATEMENTS 9. INVENTORY Consumables and spares Ore Stockpiles Gold In Circuit Total Inventory at cost 10. PREPAYMENTS Prepayments Newmont – Jundee Acquisition Deposit 11. DERIVATIVE FINANCIAL INSTRUMENTS Financial Derivative Assets Current: Cash flow hedge asset Non-current: Cash flow hedge asset Financial Derivative Liabilities Current: Cash flow hedge liability Non-current: Cash flow hedge liability Group 30 June 2014 $'000 30 June 2013 $'000 22,802 17,240 23,061 63,104 1,688 5,680 5,037 12,405 Group 30 June 2014 $'000 30 June 2013 $'000 2,225 9,000 11,225 - - - Group 30 June 2014 $'000 30 June 2013 $'000 3,024 - 333 965 - - - - From time to time, the Group is party to derivative financial instruments, in the normal course of business, in order to hedge exposure to fluctuations in commodity prices. During the year, the company entered into two gold hedging contracts with Investec Bank, in which 100,000 ounces and 50,000 ounces were hedged at prices of $1,462 and $1,415 respectively, over a period of 2 years. As at 30 June 2014, the Group had 110,200 ounces outstanding at an average price of A$1,434 to be delivered into over the period from 20 July 2014 to 31 December 2015. The Groups gold revenues and cash flows are affected by commodity product prices, which are volatile and cannot be accurately predicted. The objective for holding these commodity derivatives is to protect the operating revenues and cash flows related to a portion of the future gold sales from the risk of significant declines in commodity prices, which helps ensure the Company's ability to fund the capital budget. The net fair value of commodity hedges at 30 June 2014 was an asset of $1.72m (2013: Nil) 12. OTHER CURRENT ASSETS Dampier Gold Royalty Other assets 13. INVESTMENTS Group 30 June 2014 $'000 30 June 2013 $'000 400 - 400 - 4 4 Group 30 June 2014 $'000 30 June 2013 $'000 Investment in listed entities – at fair value 2,906 2,224 Reconciliation of Other Financial Assets Balance bought forward Investment acquired for cash as part of business combination Shares acquired for cash Shares disposed for cash Realised gain on sale of available for sales securities Fair value loss at year end Investment in listed entities – at fair value 2014 Annual Financial Report 2,224 1,195 100 (24) 3 (592) 2,906 6,653 - 1,318 - - (5,747) 2,224 Page 40 NOTES TO THE FINANCIAL STATEMENTS 14. PROPERTY, PLANT AND EQUIPMENT Group 30 June 2014 30 June 2013 $'000 $'000 Plant and equipment at cost Accumulated depreciation Motor Vehicles at Cost Accumulated depreciation Buildings at cost Accumulated depreciation Office equipment at cost Accumulated depreciation 96,986 (41,060) 55,926 2,701 (1,715) 986 10,138 (7,074) 3,064 1,276 (612) 664 60,639 Plant and equipment Motor Vehicles Office equipment Buildings $'000 $'000 $'000 $'000 53,586 (14,603) 38,983 1,722 (689) 1,033 3,904 (1,604) 2,300 824 (264) 560 42,876 Total $'000 2014 Reconciliation of property, plant and equipment Carrying amount at beginning of the year Additions Acquired as part of Asset acquisition (a) Acquired as part of Business combination (b) Disposals Transfer from Construction in Progress Depreciation charge Carrying amount at end of the year (a) Refer to Note 33 - Asset Acquisition for more information (b) Refer to Note 34 - Business combination for more information 38,983 34,715 6,548 13,383 (528) (23,467) (13,708) 55,926 1,033 - 98 308 - - (453) 986 560 312 - - - - (209) 664 2,301 42,876 50 636 959 - - (882) 3,064 35,077 7,282 14,650 (528) (23,467) (15,252) 60,639 Plant and equipment Motor Vehicles Office equipment Buildings $'000 $'000 $'000 $'000 2013 Reconciliation of property, plant and equipment Carrying amount at beginning of the year Additions Disposals Depreciation charge Carrying amount at end of the year 18,143 27,306 (421) (6,045) 38,983 772 548 (212) (75) 1,033 572 2,301 - (573) 2,300 396 333 (6) (163) 560 2014 Annual Financial Report Total $'000 19,883 30,488 (639) (6,856) 42,876 Page 41 NOTES TO THE FINANCIAL STATEMENTS 15. EXPLORATION AND EVALUATION COSTS Exploration costs brought forward Exploration capitalised during the year Exploration costs now written off Transfer to development expenditure Acquired as part of Asset Acquisition (a) Acquired as part of Business Combination (b) Exploration costs carried forward (a) Refer to Note 33 - Asset Acquisition for more information (b) Refer to Note 34 - Business combination for more information Group 30 June 2014 30 June 2013 $'000 $'000 30,462 7,032 (159) - 1,500 30,214 69,049 24,785 15,229 (4,303) (5,249) - - 30,462 A regular review is undertaken of each area of interest within exploration and evaluation to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine the technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. During the impairment review for the year ended 30 June 2014, the recoverable amount of certain assets was assessed as lower than the carrying amount which resulted in a write off of $159,000 on exploration and evaluation assets. 16. DEVELOPMENT EXPENDITURE Development expenditure brought (acquired) forward Transfer from exploration and evaluation costs Acquired as part of Asset Acquisition (a) Acquired as part of Business Combination (b) Development expenditure this year Accumulated amortisation Development expenditure carried forward (a) Refer to Note 33 - Asset Acquisition for more information (b) Refer to Note 34 - Business combination for more information 17. TRADE AND OTHER PAYABLES Trade payables Accruals Other payables Total Trade and other payables Fair Value and Risk Exposures Group 30 June 2014 30 June 2013 $'000 8,813 - 19,879 48,671 45,185 (32,352) 90,197 $'000 5,654 5,249 - - 47,319 (49,409) 8,813 Group 30 June 2014 30 June 2013 $'000 11,365 20,027 6,057 37,449 $'000 14,449 - 610 15,059 (i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value. (ii) Details regarding liquidity risk are disclosed in Note 31. (iii) Trade and other payables are unsecured and usually paid within 30 days of recognition. 2014 Annual Financial Report Page 42 NOTES TO THE FINANCIAL STATEMENTS 18. FINANCIAL LIABILITIES (a) Current Hire Purchase / Loan Agreements Total Financial Liabilities (b) Non-Current Hire Purchase / Loan Agreements Total Financial Liabilities Risk Exposures Group 30 June 2014 30 June 2013 $'000 $'000 2,143 2,143 3,804 3,804 6,163 6,163 5,069 5,069 Details of the group’s exposure to risks arising from financial liabilities are set out in Note 31. The Group has entered into various Hire Purchase / Loan Agreements for the Purchase of Plant and Equipment. The interest rates are fixed and are payable over a period of up to 18 months. Financing Arrangements The group had an undrawn borrowing facility at the end of the reporting period of $100 Million from Investec. 19. PROVISIONS (a) Current Provision for annual leave Provision - Other Total Provisions (b) Non-Current Provision for long service leave Provision for rehabilitation Total Provisions Reconciliation of provision for rehabilitation: Carrying amount at beginning of the year Increase during the year Acquired as part of business combination (a) Accretion Carrying amount at end of the year Group 30 June 2014 30 June 2013 $'000 $'000 13,201 5,417 18,618 7,519 65,523 73,042 2,676 19,685 43,162 - 65,523 1,297 - 1,297 226 2,676 2,902 2,676 - - - 2,676 (a) Refer to Note 34 - Business combination for more information. The provision for rehabilitation represents the legal obligation for rehabilitation over tenement areas acquired and other non- current assets acquired. The timing of the provision is based on licences in existence at the end of the financial year. 2014 Annual Financial Report Page 43 NOTES TO THE FINANCIAL STATEMENTS 20. CONTRIBUTED EQUITY (a) Issued Capital Ordinary shares fully paid (b) Movements in Ordinary Share Capital Summary of Movements Closing Balance at 30 June 2012 Equity issue net of transaction costs Exercise of Options Transfer from Option Reserve Closing Balance at 30 June 2013 Equity issue net of transaction costs Issue of employees shares Exercise of Options Transfer from Options Reserve Employee share loan* Closing Balance at 30 June 2014 Group 30 June 2014 30 June 2013 579,404,804 424,279,762 Number of Shares Company $'000 402,358,752 64,613 58,859 21,862,151 - 71 1,368 713 424,279,762 66,765 149,833,510 125,568 106,932 1,094,600 - 4,090,000 84 1,391 - - 579,404,804 193,808 * Refer to Directors report for further details on the Groups LTI share scheme (c) Unlisted Options Northern Star had the following unlisted options on issue as at 30 June 2014: Employee Options Employee Options Employee Options Employee Options Employee Options Employee Options Employee Options NUMBER EXERCISE PRICE EXPIRY DATE 250,000 250,000 125,000 250,000 250,000 333,333 333,333 $0.95 $1.05 $1.22 $1.05 $1.22 $1.81 $1.50 Expiring on 15 April 2015 Expiring on 15 April 2016 Expiring on 1 November 2015 Expiring on 27 August 2014 Expiring on 27 August 2015 Expiring on 27 February 2016 Expiring on 27 February 2015 During the financial year, nil unlisted options expired (2013: 638,801), nil unlisted options were cancelled (2013: 125,000), 3,208,334 unlisted options were exercised (2013: 23,893,526) and no further unlisted options were granted during the year (2013: 2,000,000). (d) Terms and Conditions of Issued Capital Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. (e) Capital Management When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to Shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issue further shares in the market. Management has no current plans to adjust the capital structure. Total capital is equity as shown in the statement of financial position. The Group is not subject to any externally imposed capital requirements. 2014 Annual Financial Report Page 44 NOTES TO THE FINANCIAL STATEMENTS 21. SHARE-BASED OPTION RESERVE Balance at the beginning of the year Option exercised Option forfeited Option expense Balance at the end of the year GROUP 30 June 2014 30 June 2013 $'000 $'000 691 (1,391) - 1,095 395 503 (665) (48) 901 691 Nature and purpose of the reserve: The Share-based option reserve is used to recognise the fair value of options issued but not exercised. 22. DIVIDENDS Dividends paid during the financial year were as follows: Final dividend for the year ended 30 June 2013 of 2.5 cents per ordinary share Interim dividend for the year ended 30 June 2014 of 1.0 cents ordinary share GROUP 30 June 2014 30 June 2013 10,607 5,786 16,393 10,599 4,243 14,842 The directors declared a final dividend for the year ended 30 June 2014 of 2.5 cents per ordinary share to be paid on 3 October 2014, a total estimated distribution of $14.5 million based on the number of ordinary shares on issue as at 26 August 2014. As the dividend was fully franked, there are no income tax consequences for the owners of Northern Star Resources Limited relating to this dividend. 23. INTEREST IN SUBSIDIARY Country of Incorporation The Group consists of the Company and its wholly-owned controlled entity as follows: Northern Star Mining Services Pty Limited Northern Star (Kanowna) Ltd Kundana Gold Pty Ltd Gilt-Edged Mining NL EKJV Management Pty Ltd Kanowna Mines Ltd GKL Properties Pty Ltd 24. COMMITMENTS AND CONTINGENT LIABILITIES Australia Australia Australia Australia Australia Australia Australia Group (a) Operating Commitments: Commitments in relation to hire purchase arrangements under a master agreement with various banks and lending institutions contracted for at the reporting date. Within one year Later than one year but not more than five years Future Finance Charges (b) Capital Commitments: Commitments in relation to purchase of Property Plant and Equipment contracted for at the reporting date, but not recognised as liabilities. Within one year Later than one year but not more than five years 2014 Annual Financial Report 30 June 2014 30 June 2013 $'000 $'000 2,143 3,804 5,948 (227) 5,721 1,082 - 1,082 5,771 4,217 9,988 (631) 9,357 493 - 493 Page 45 NOTES TO THE FINANCIAL STATEMENTS 24. COMMITMENTS AND CONTINGENT LIABILITIES (continued) (c) Operating Lease Expenditure Commitments: The Company leases its Head Office property located at level 1, 1 Puccini Court, Stirling W.A. under an operating lease. The lease runs for a period of 3 years commencing on the 1st of May 2012, with an option to renew the lease for a further 5 years commencing on the 1st of May 2015. Lease payments are increased every year to reflect market rentals, currently CPI plus 1%. Within one year Later than one year but not more than five years (d) Tenement Expenditure Commitments: The Company and the Group are required to maintain current rights of tenure to tenements, which require outlays of expenditure in 2013/2014. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations, however, they are expected to be fulfilled in the normal course of operations. Estimated minimum required expenditure on mining, exploration and prospecting leases as at 30 June 2014 are: Within one year Later than one year but not more than five years Later than five years 298 - 298 297 272 569 14,922 57,245 81,302 153,469 3,806 9,159 897 13,862 (e) Contingencies: It is possible that native title, as defined in the Native Title Act 1993, might exist over land in which the Company has an interest. It is impossible at this stage to quantify the impact (if any) that the existence of native title may have on the operations of the Company. However, at the date of these accounts, the Directors are aware that applications for native title claims have been accepted by the Native Title Tribunal over tenements held by the Company. 25. EMPLOYEE INCENTIVE SCHEME AND OTHER SHARE-BASED PAYMENTS An employee incentive scheme has been established by Northern Star Resources Limited to provide eligible employees with a potential ownership interest in the Company for the purpose of:  providing them with an opportunity to share in the growth in value of the Company,  encouraging them to improve the longer-term performance of the Company and its returns to Shareholders, and  assisting in the attraction, reward and retention of employees of the Company and its subsidiary. These options/shares are granted at the discretion of the Board, who may take into account skills, experience, length of service with the Company, remuneration level and such other criteria as considered appropriate. Shares and Options issued pursuant to the scheme are issued free of charge. Shares issued under the Employee Share Plan are held in voluntary escrow. Where options are issued, the option exercise price and expiry date, and the date(s) on which the rights may be exercised, is determined by the Board. Options are unlisted and not quoted on the ASX, and transfers are restricted applied. (a) Set out below are the summaries of employee shares granted as share based payments. Grant Date 2014 30/1/2014 2013 10/1/2013 Balance at start of the year Granted during the year Forfeited or Cancelled during the year Balance at the end of the year 129,579 106,932 70,720 58,859 - - 236,511 129,579 2014 Annual Financial Report Page 46 NOTES TO THE FINANCIAL STATEMENTS 25. EMPLOYEE INCENTIVE SCHEME AND OTHER SHARE-BASED PAYMENTS (continued) (b) Set out below are the summaries of options granted as share based payments. Expiry Date Exercise Price Balance at start of the year Granted during the year Exercised during the year Forfeited, Expired or Cancelled during the year Balance at the end of the year Vested and exercisable at the end of the year 15/04/2016 15/04/2015 1/11/2015 1/11/2014 27/08/2015 27/08/2014 28/06/2014 28/06/2014 27/02/2014 27/02/2015 27/02/2016 1.05 0.95 1.22 1.05 1.22 1.05 0.91 0.91 1.20 1.50 1.81 250,000 250,000 125,000 125,000 250,000 250,000 750,000 2,000,000 333,334 333,333 333,333 - - - - - - - - - - - - - - (125,000) - - (750,000) (2,000,000) (333,334) - - - - - - - - - - - - - 250,000 250,000 125,000 - 250,000 250,000 - - - 333,333 333,333 - 250,000 125,000 - 250,000 - - - 333,333 - Expiry Date Exercise Price Balance at start of the year Granted during the year Exercised during the year Forfeited, Expired or Cancelled during the year Balance at the end of the year Vested and exercisable at the end of the year - - - - - - - 250,000 250,000 125,000 125,000 250,000 250,000 750,000 15/04/2016 15/04/2015 1/11/2015 1/11/2014 27/08/2015 27/08/2014 28/06/2014 28/06/2014 14/05/2013 30/06/2013 27/02/2014 27/02/2015 27/02/2016 17/10/2012 17/10/2013 17/10/2014 11/10/2013 11/10/2014 4/11/2012 4/11/2013 4/11/2014 30/07/2013 30/07/2013 30/07/2013 30/07/2013 4/09/2012 4/09/2012 4/09/2013 4/09/2013 4/09/2013 4/09/2013 1.05 0.95 1.22 1.05 1.22 1.05 0.91 0.91 0.80 0.80 1.20 1.50 1.81 0.35 0.50 0.65 0.20 0.25 0.15 0.20 0.25 0.20 0.20 0.20 0.20 0.05 0.05 0.10 0.10 0.10 0.10 2,000,000 375,000 375,000 333,334 333,333 333,333 333,334 333,333 333,333 333,333 333,333 333,334 333,333 333,333 250,000 250,000 250,000 250,000 500,000 333,333 500,000 6,500,000 5,000,000 333,333 - - - - - - - - - - - (375,000) (250,000) - - - - - - (333,334) - (333,333) - (333,333) - (333,333) - (333,333) - (333,334) - (333,333) - (333,333) - (250,000) - (250,000) - (250,000) - (250,000) - (500,000) - (333,333) - (500,000) - - (6,500,000) - (5,000,000) (333,333) - - - - - - - - - - (125,000) - - - - - - - - - - - - - - - - - - - - - 250,000 250,000 125,000 125,000 250,000 250,000 750,000 2,000,000 - - 333,334 333,333 333,333 - - - - - - - - - - - - - - - - - - - - - - - - - 2,000,000 - - - - - - - - - - - - - - - - - - - - - - - Grant Date 2014 15/04/2013 15/04/2013 10/01/2013 10/01/2013 10/01/2013 10/01/2013 3/12/2012 29/06/2012 2/03/2012 2/03/2012 2/03/2012 Grant Date 2013 15/04/2013 15/04/2013 10/01/2013 10/01/2013 10/01/2013 10/01/2013 3/12/2012 29/06/2012 15/05/2012 15/05/2012 2/03/2012 2/03/2012 2/03/2012 25/08/2011 25/08/2011 25/08/2011 28/10/2010 28/10/2010 18/11/2010 18/11/2010 18/11/2010 30/07/2010 30/07/2010 30/07/2010 30/07/2010 11/09/2009 11/09/2009 11/09/2009 11/09/2009 11/09/2009 11/09/2009 2014 Annual Financial Report Page 47 NOTES TO THE FINANCIAL STATEMENTS 26. COMPENSATION OF KEY MANAGEMENT PERSONNEL Short-term employee benefits - cash fees and bonus Post-employment benefits - superannuation Equity based payments Group 30 June 2014 30 June 2013 $'000 1,952 104 617 $'000 1,482 62 445 27. RELATED PARTY TRANSACTIONS Michael Fotios (resigned on 24 October 2013) is a related party, and is: (a) a Shareholder and Director of Delta Resource Management Pty Ltd. During the year, no amounts were paid to Delta Resources for services provided (2013: $562); (b) a Shareholder and Director of Investmet Limited. During the year an amount of $4,840 was paid to this business for corporate advice at normal commercial rates (2013: 58,400). Bill Beament is a related party, and: (a) has a minor beneficial interest in a shareholding of Australian Underground Drilling Pty Ltd (a former Director who resigned in June 2014). During the year an amount of $7,397,675 was paid to this business for drilling services at normal commercial rates (2013: $6,886,439); (b) has a minor beneficial interest in a shareholding in Premium Mining Personnel Pty Ltd. During the year, an amount of $6,202,673 was paid to this business for supplying specialist mining labour at normal commercial rates (2013: $5,327,172); and (c) is the sole director and has a beneficial interest in a shareholding in Mining & Infrastructure Group Pty Ltd. During the year an amount of $7,100 was paid to this business for serviced vehicle expenses at normal commercial rates in relation to Mr Beament’s remuneration contract (2013:$18,800). In addition to the above, the Group had the following receivables and payables from related parties noted above: 2014 $000's 57 1,193 Group 2013 $000's 63 2,210 Assets Trade Receivables Liabilities Trade Payables 28. AUDITOR'S REMUNERATION Amounts received, or due and receivable, by Rothsay Chartered Accountants for: An audit review of the financial report of the entity and any other entity in the consolidated group Amounts received, or due and receivable, by entities not part of Rothsay Chartered Accountants group for: GROUP 30 JUNE 2014 30 JUNE 2013 $ $ 128,000 57,800 Audit services - component auditors 95,000 - 2014 Annual Financial Report Page 48 NOTES TO THE FINANCIAL STATEMENTS 29. SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the Board that are used to make strategic decisions. The Group operates in only one geographic segment (i.e. WA, Australia) and has identified 5 operating segments as listed below. The Group's reportable operating segments are: 1. Paulsens, WA Australia 2. Plutonic, WA Australia 3. Kundana, WA Australia 4. Kanowna, WA Australia 5. Exploration and Other Exploration and Other mainly compromise projects in the exploration, evaluation and feasibility phase in WA, Australia. These include the Asburton gold project, Kazput coal project, Fortescue JV project and ongoing EKJV exploration. All of the Groups operations produces primarily gold, from which its revenue is derived. Revenue derived by the Group is received from one customer, being the Perth Mint. The Registered Manager of the respective mine is responsible for budgets and expenditure of the operations, which includes exploration activities on the mine's tenure. The Group's Exploration Manager is responsible for budgets and expenditure relating to the Group's exploration and feasibility studies. These exploration divisions do not ordinarily derive any income. Once a project generated by the exploration division enters the production phase and commences generating income, that operation would then be disaggregated from exploration and become reportable as a separate segment. Paulsens Plutonic Kanowna Kundana $'000 56,963 56,963 584 $'000 55,852 55,852 5,030 $'000 41,120 41,120 13,690 Exploration and Other $'000 - - Total $'000 296,976 296,976 (5,742)* 48,970 $'000 143,040 143,040 35,408 72,539 (5,426) Sales to external customers Total Segment revenue Segment net operating profit (loss) before income tax Segment Assets Segment Liabilities Depreciation and amortisation 58,427 85,393 63,607 69,049 349,016 (23,430) (37,941) (25,233) 29,715 10,577 3,800 3,511 Impairment loss before tax - - - Other non-cash expenses (975) (1,041) (1,240) - - *Includes redundancy cost of $198,000 in relation to the exploration division. (i) Reconciliation of segment net profit (loss) before tax to operating profit (loss) before tax Segment net profit (loss) before tax Finance and other income Realised gains/(losses) on financial assets Share-based payments expense Acquisition costs Other corporate costs Net gain/(loss) on gold hedge financing Total net profit/(loss) before tax 2014 Annual Financial Report - - 159 - (92,031) 47,603 159 (3,256) Group $'000 48,970 3,785 (589) (1,179) (7,382) (9,696) 1,726 35,637 Page 49 NOTES TO THE FINANCIAL STATEMENTS 29. SEGMENT INFORMATION (continued) (ii) Segment assets reconciliation to the Balance Sheet Total assets for reportable segments Unallocated assets Derivative asset Listed equity securities Corporate cash and receivables Total assets as per the balance sheet (iii) Segment liabilities reconciliation to the Balance Sheet Total liabilities for reportable segments Unallocated liabilities Deferred tax liabilities Creditors and accruals Provision for employee benefits Provision for Income tax Provision for Stamp Duty Payable Finance leases Derivative Liability Total liabilities as per the balance sheet Group $'000 349,016 3,024 2,906 41,650 396,596 Group $'000 (92,031) (10,804) (9,207) (23,282) (5,490) (4,326) (5,948) (1,298) (152,386) 30. JOINT VENTURES Joint Ventures FMG JV Hardey Junction JV Mt Clement JV East Kundana Production JV Kanowna West JV Kalbarra JV West Kundana JV Carbine East JV Principal Activities Exploration Exploration Exploration Exploration & Development Exploration Exploration Exploration Exploration Group 30 June 2014 30 June 2013 25% 80% 20% 51% 60% 60% 75.5% 95% 25% 80% 20% - - - - - The joint ventures are not separate legal entities. They are contractual arrangements between participants for the sharing of costs and outputs and do not in themselves generate revenue and profit. The joint ventures are of the type where initially one party contributes tenements with the other party earning a specified percentage by funding exploration activities; thereafter the parties often share exploration and development costs and output in proportion to their ownership of joint venture assets. The joint ventures are accounted for in accordance with the Group's accounting policy set out in Note 1. 2014 Annual Financial Report Page 50 NOTES TO THE FINANCIAL STATEMENTS 31. FINANCIAL RISK MANAGEMENT The Group’s principal financial instruments comprise cash, short-term deposits, borrowings and derivatives. The main purpose of these financial instruments is to provide working capital for the Group’s operations and mine development. The Group has various other financial instruments such as financial assets at fair value through profit and loss, trade debtors, trade creditors and finance leases, which arise directly from its operations. The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency risk, commodity price risk and credit risk. The Board reviews and agrees on policies for managing each of these risks. The Group holds the following financial instruments: Financial assets Cash and cash equivalents Trade and other receivables Financial Derivative Asset Other Financial Assets Financial liabilities Trade payables Finance Leases Derivative Financial Liability (a) Interest rate risk Group 30 June 2014 $'000 30 June 2013 $'000 82,387 25,290 3,024 2,906 37,449 5,948 1,298 55,775 1,713 - 2,224 14,449 11,232 - At balance date the Group’s exposure to market risk for changes in interest rates relates primarily to the Company’s short-term cash deposits and borrowings. The Group constantly analyses its exposure to interest rates, with consideration given to potential renewal of existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed. The Group had the following financial instruments exposed to interest rates: Group Financial assets Cash and cash equivalents Financial liabilities Finance Leases Net exposure Sensitivity 30 June 2014 $'000 30 June 2013 $'000 82,387 (5,948) 76,439 55,775 (11,232) 44,543 At 30 June 2014, if interest rates had increased/decreased by 1% (pre-tax) from the year end variable rates with all other variables held constant, post-tax profit and equity for the Group and Parent would have been $532,000 higher/lower (2013: $334,000 higher lower). The 0.7% (post-tax) sensitivity is based on reasonably possible changes, over a financial year, using an observed range of historical RBA movements over the last year. (b) Liquidity risk The Group manages liquidity risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained. A maturity analysis of financial liabilities is disclosed in the table below. 30 June 2014 Trade and other payables Hire Purchase liabilities Derivative liability 1 year or less $'000 37,449 2,143 333 1-2 years $'000 - 2,926 965 2 or more years $'000 - 879 - 30 June 2013 Trade and other payables Hire Purchase liabilities Derivative liability 1 year or less $'000 14,449 1,634 - 1-2 years $'000 - 4,820 - 2 or more years $'000 - 4,778 - Total $'000 37,449 5,948 1,298 Total $'000 14,449 11,232 - 2014 Annual Financial Report Page 51 NOTES TO THE FINANCIAL STATEMENTS 31. FINANCIAL RISK MANAGEMENT (continued) (c) Foreign Currency Risk The group's exposure to commodity risk arises from movements in the gold price. During the year the Group entered into a hedge contract (refer Note 11) for specified quantities of gold on specific dates to partly manage the commodity risk. (d) Commodity Price Risk The group is exposed to the Australian Dollar currency risk on gold sales, which are denominated in US dollars. During the year the Group entered into a hedge contract (refer Note 11) for specified quantities of gold on specified dates to partly manage the commodity and currency risk. Derivative assets and liabilities designated as cash flow hedges The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to occur and are expected to impact profit and loss. Net Hedged Asset Fair Value 000's 1,726 Total 000's 155,762 (i) Sensitivity Analysis Movement in Gold Price Expected CashFlows 2 months or less 000's 25,065 2-12 months 000's 89,762 1-2 years 000's 40,934 2 or more years 000's - The following table summarises the sensitivity of financial instruments held at 30 June 2014 to movements in gold price, with all other variables held constant. A 20% (2013: N/A) sensitivity rate is used to value derivative contracts held and is based on reasonable assessment of the possible changes Increase 20% (2013: N/A) Decrease 20% (2013: N/A) (e) Credit risk Group 2014 000's (30,807) 30,807 2013 000's - - Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. Cash is deposited only with institutions with a minimum credit rating of A (or equivalent) as determined by a reputable credit rating agency e.g. Standard & Poor. The Group has all cash deposited with one bank. The Group does not have any other significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates: Cash and cash equivalents Trade and Other Receivables Group 30 June 2014 30 June 2013 $'000 82,387 25,290 $'000 55,775 1,713 The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial assets recorded in the financial statements, net of any provision for losses, represents the Consolidated Entity’s maximum exposure to credit risk. All receivables noted above are due within 30 days. None of the above receivables are past due. 2014 Annual Financial Report Page 52 NOTES TO THE FINANCIAL STATEMENTS 31. FINANCIAL RISK MANAGEMENT (continued) (f) Net fair values The net fair values of financial assets and financial liabilities at the reporting date are as follows: Financial Assets Cash and cash equivalents Trade and Other Receivables Investments - Listed Financial Derivative Asset Total Financial Assets Financial Liabilities Trade Payables Finance Leases Derivative Financial Liability Total Financial Liabilities Total carrying amount as per the consolidated balance sheet Consolidated Fair Value 2014 $'000 82,387 25,290 2,906 3,024 2013 $'000 55,775 1,713 2,224 - 2014 $'000 82,387 25,290 2,906 3,024 2013 $'000 55,775 1,713 2,224 - 113,607 59,713 113,607 59,713 37,449 5,948 1,298 44,695 14,449 11,232 - 25,681 37,449 5,948 1,298 44,695 14,449 11,232 - 25,681 The following table provide an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable. Level 1: fair value measured are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the group can access at the measurement date. Level 2: fair value measured are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: fair values measured are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). 30 June 2014 Assets Listed shares are fair value Derivative asset $'000 Level 1 2,906 - $'000 Level 2 - 3,024 Liabilities Derivative liabilities - 1,298 $'000 Level 3 - - - 30 June 2013 $'000 Level 1 $'000 Level 2 $'000 Level 3 Assets Listed shares are fair value 2,224 Derivative asset Liabilities Derivative liabilities - - - - - - - - $'000 Total 2,906 3,024 1,298 $'000 Total 2,224 - - The fair value of financial instruments traded in active markets is based upon quoted market price at the end of the reporting period. The quoted market price is the quoted bid prices that are included in Level 1. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group makes a number of assumptions based upon observable market data existing at each reporting period. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair values of the financial assets and financial liabilities included in the level 2 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties. 2014 Annual Financial Report Page 53 NOTES TO THE FINANCIAL STATEMENTS 32. PARENT ENTITY INFORMATION (a) Information relating to Northern Star Resources Limited: Results of the parent entity Profit/(Loss) for the period Other comprehensive income for the year Total comprehensive income for the year Financial position of the parent entity at year end Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net Assets Contributed equity Reserves Retained earnings Total equity Parent Entity 30 June 2014 30 June 2013 $'000 $'000 2,591 - 2,591 23,106 - 23,106 151,451 130,182 281,633 29,866 28,488 58,353 69,334 77,109 146,443 23,522 14,806 38,328 223,280 108,115 193,808 395 29,077 223,280 66,765 691 40,659 108,115 (b) Details of any guarantees entered into by the parent entity in relation to the debts of its subsidiary Refer to Note 24. (c) Details of any contingent liabilities of the parent entity Refer to Note 24. (d) Details of any contractual commitments by the parent entity for the acquisition of plant, and equipment There are no contractual commitments by the parent entity for the acquisition of property, plant and equipment as at reporting date. (e) Tax Consolidation The Company and its 100% owned controlled entities have formed a tax consolidated group. Members of the group entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned controlled entities. The head entity of the consolidated group is Northern Star Resources Limited. 33. ASSET ACQUISITION On 21 December 2013, Northern Star Resources Limited executed a Sale and Purchase Agreement with Barrick Gold Corporation to purchase the Plutonic Gold mine assets. The total consideration paid by Northern Star Resources amounted to $42,167,461, which comprised of $25m cash consideration and the assumption by Northern Star Resources of certain liabilities (including Trade payables and Employee Entitlements) totalling $17,167,461. The acquisition was completed on 1 February 2014. The transaction has been accounted for using the guidelines as set out in AASB 3 "Business Combination". Details of the purchase consideration and assets acquired are as follows: Fair Value 000's 1,500 400 100 7,282 9,080 457 3,470 19,879 42,167 Pastoral Leases Dampier Gold Royalty Dampier Gold Shares Plant & Equipment Inventory Consumables Inventory Ore Gold In Circuit Mining Development Net Assets Acquired 2014 Annual Financial Report Page 54 NOTES TO THE FINANCIAL STATEMENTS 34. BUSINESS COMBINATION On 23 January 2014, Northern Star Resources Limited announced that it had agreed to acquire Barrick Gold Corporation's 100% owned Kanowna Belle Gold Mine, inclusive of Barrick's 51% interest in the East Kundana Joint Venture and on site production facilities for a total of $75 million cash consideration. The $75 million cash consideration was funded through a combination of: - existing cash reserves; - a new $50 million debt facility; and - $100 million capital raising via a two-tranche private placements with institutional investors The transaction was completed and effective 1 March 2014. The net assets acquired in the business combination are as follows: Nets Assets acquired Cash and cash equivalent Trade and other receivables Inventory - trading stock Consumables stores Investments Plant and equipment Mine Development Exploration and evaluation Accounts Payable Accruals - workforce related Other accruals Rehabilitation provision Net Assets acquired Fair value 000's 1,627 9,406 33,375 10,625 1,195 14,650 48,671 30,214 (6,090) (11,648) (13,863) (43,162) 75,000 Total Consideration paid $75,000 Acquisition related costs of $7.4 million have been excluded from the consideration transferred and have been recognised as an expense in profit or loss in the current year. We note that the fair values assigned to identifiable assets and liabilities above are presented on a provisional basis. As at the date of this report, taxation and fair value allocations are not yet finalised. The group will recognise any adjustments to these provisional values as a result of completing the fair value accounting within twelve months following the acquisition date. Impact of acquisition on the results of the Group Included in the profit for the year is $18.7 million attributable to the additional business generated by the Kalgoorlie Operations. Revenue for the year includes $97 million in respect of these assets. Had the business combination been effected at 1 July 2013, the revenue of the Group would have been $291 million and the profit for the year would have been $57 million on a pro-rata basis. The directors of the Group consider these ‘pro-forma’ numbers to represent an approximate measure of the performance of the combined group on an annualised basis and to provide a reference point for comparison in future periods. 35. EVENTS SUBSEQUENT TO YEAR END Subsequent to the period end, the Company announced:  a final dividend of 2.5 cents per share to Shareholders on the record date of 15 September 2014 , payable on 3 October 2014;  an updated Resources and Reserves Statement effective as at 30 June 2014 which was released on the 4 August 2014;   the completion of the acquisition on 1 July 2014 of the Jundee Gold Mine from Newmont Mining Corporation for cash consideration of A$82.5m. As part of the acquisition, the Group drew down A$70 million from its A$100 million credit facility with Investec Bank Plc; and the issue of 7,854,843 fully paid ordinary shares in return for waiving the right of first refusal to buy the Jundee Gold Mine, and the issue of 170,012 fully paid ordinary shares as a result of a cashless conversion of options. There are no other matters or circumstances that have arisen since 30 June 2014 that have or may significantly affect the operations, results, or state of affairs of the Group in future financial years. 2014 Annual Financial Report Page 55 DIRECTORS’ DECLARATION In accordance with a resolution of the Board of Directors, I state that: In the opinion of the Directors: 1. (a) the financial statements, notes and audited remuneration disclosures included in the Directors’ Report of the Company and the Group are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Group’s financial position at 30 June 2014 and of the performance for the year ended on that date; and ii. complying with Accounting Standards and Corporations Regulations 2001; and (b) (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and the remuneration disclosures set out in the Directors’ Report (as part of the audited Remuneration Report) for the year ended 30 June 2014 comply with Section 300A of the Corporations Act 2001. 2. 3. The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards (IFRS). This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ending 30 June 2014. On behalf of the Board BILL BEAMENT Managing Director Perth, Western Australia 30 September 2014 2014 Annual Financial Report Page 56 INDEPENDENT AUDITOR’S REPORT 2014 Annual Financial Report Page 57 INDEPENDENT AUDITOR’S REPORT 2014 Annual Financial Report Page 58 ADDITIONAL INFORMATION The following additional information required by the ASX Listing Rules is current as at 29 September 2014. EQUITY SECURITIES HOLDER INFORMATION Ordinary Shares 587,429,659 quoted fully paid ordinary shares (NST). All ordinary shares carry one vote per share. Distribution of Fully Paid Ordinary Shares 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,000+ Total Holders No of Holders 1,233 2,774 1,557 2,539 332 8,435 No of Shares % of Issued Capital 716,749 8,099,895 12,306,636 73,139,261 493,167,118 587,429,659 0.122 1.379 2.095 12.451 83.953 100.000 360 Shareholders held less than a marketable parcel (<$500) of ordinary fully paid shares based on the current market price ($1.31). Twenty Largest Holders of Ordinary Fully Paid Shares No of Shares 1. National Nominees Limited 2. HSBC Custody Nominees (Australia) Limited J P Morgan Nominees Australia Limited 3. 4. Citicorp Nominees Pty Limited 5. Mr William James Beament 6. 7. 8. Wyllie Group Pty Ltd 9. BNP Paribas Noms Pty Ltd Yandal Investments Pty Ltd Lujeta Pty Ltd Little Breton Nominees Pty Ltd RBC Investor Services Australia Nominees Pty Limited 10. Multi Metal Consultants Pty Ltd 11. 12. 13. Gunz Pty Ltd 14. National Nominees Limited 15. Mrs Catherine Anne Wilkinson 16. Mr Hendrius Petrus Indrisie 17. 18. 19. 20. AMP Life Limited Zero Nominees Pty Ltd Kyim Pty Ltd Leefab Pty Ltd TOTAL Options 143,768,695 89,246,188 80,953,914 24,492,195 12,872,624 7,941,464 7,854,843 3,566,852 3,200,000 3,132,725 2,912,590 2,869,186 2,791,022 2,261,874 2,165,000 2,011,628 2,000,000 2,000,000 2,000,000 1,714,062 399,754,862 % Issued Capital 24.474 15.193 13.781 4.169 2.191 1.352 1.337 0.607 0.545 0.533 0.496 0.488 0.475 0.385 0.369 0.342 0.340 0.340 0.340 0.292 68.052 1,541,666 unlisted options with various exercise prices and expiry dates (refer table below). Options do not carry a right to vote. Voting rights will be attached to the unissued shares when the options have been exercised. Expiry Date 27/2/2015 15/4/2015 27/8/2015 1/11/2015 27/2/2016 15/4/2016 No of Options Exercise Price No of Holders 333,333 250,000 250,000 125,000 333,333 250,000 $1.50 $0.95 $1.22 $1.22 $1.81 $1.05 1 1 1 1 1 1 Holding >20% Issued under employee incentive scheme Issued under employee incentive scheme Issued under employee incentive scheme Issued under employee incentive scheme Issued under employee incentive scheme Issued under employee incentive scheme Substantial Shareholders The substantial Shareholders as disclosed in the substantial shareholding notices received by the Company are: No of Shares 83,623,543 54,998,314 Holding 14.23% 9.36% Name BlackRock Group Van Eck Associates Corporation Restricted Securities The following securities are held in escrow: Ordinary Shares: Unlisted Options: 12,118,835 375,000 On-Market Buy-Back Currently there is no on-market buy-back of the Company’s securities. 2014 Annual Financial Report Page 59 TENEMENT SCHEDULE Tenement No. M15/0993 M15/1413 M16/0181 M16/0182 M16/0308 M16/0309 M16/0325 M16/0326 M16/0421 M16/0428 M16/0436 M24/0924 M16/0005 P16/2482 P16/2483 P16/2484 P16/2485 P16/2486 P16/2487 P16/2488 P16/2489 P16/2490 P16/2491 P24/4184 P24/4185 P24/4186 M16/0411 L16/0056 L16/0057 L16/0059 L16/0075 M16/0027 M16/0188 M16/0239 P16/2508 M27/0182 M27/0219 M27/0228 E27/0457 L26/0198 L27/0049 L27/0050 L27/0051 L27/0052 L27/0083 L27/0087 M27/0018 M27/0022 M27/0023 M27/0053 M27/0092 M27/0103 M27/0114 M27/0122 M27/0123 M27/0128 M27/0157 M27/0197 M27/0198 P27/1843 P27/1844 P27/1845 P27/1846 P27/1878 P27/1880 P27/1881 P27/1882 E24/0151 M27/0202 P24/4017 P24/4146 P24/4149 P24/4498 P24/4499 P24/4500 P24/4501 P24/4502 P24/4503 P24/4538 P24/4818 P24/4819 P24/4820 P26/3366 P26/3367 P26/3368 P26/3369 P26/3769 P26/3788 P26/3979 P26/3980 P26/3981 P26/3982 P26/3983 P27/1682 P27/1686 P27/1687 P27/1743 P27/2024 P27/2025 P27/2026 P27/2099 P27/2100 P27/2101 P27/2102 M27/0041 M27/0072 M27/0196 P27/1847 M27/0037 M27/0063 M27/0191 P27/1688 L27/0060 L27/0061 Interest % 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 0% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 60% 60% 60% 100% 100% 100% 100% 100% 100% 100% Project Name and Location East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie East Kundana JV, Kalgoorlie Carbine (Photios) Option, Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine East (Westex), Kalgoorlie Carbine Paradigm, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Carbine Zuleika, Kalgoorlie Four Mile Hill, Kalgoorlie Four Mile Hill, Kalgoorlie Four Mile Hill, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Golden Valley, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kalgoorlie Regional Gold Project, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna, Kalgoorlie Kanowna Belle, Kalgoorlie Kanowna Belle, Kalgoorlie Kanowna Belle, Kalgoorlie Kanowna Belle, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Tenement No. L27/0062 M27/0049 M27/0057 M27/0127 M27/0133 M27/0159 M27/0164 M27/0232 M27/0245 M27/0272 M27/0287 M27/0406 M27/0420 M27/0438 P27/1840 P27-1840 M27/0414 M27/0415 P27/1826 P27/1827 P27/1828 P27/1829 P27/1830 P27/1831 P27/1832 P27/1833 P27/1834 P27/1835 P27/1836 P27/1837 P27/1838 P27/1839 P27/1841 P27/1842 P27/1887 M27/0047 M27/0059 M27/0073 M27/0181 E24/0152 E24/0153 E26/0140 L16/0028 L16/0038 L16/0039 L16/0040 L16/0054 L16/0069 L16/0071 L16/0104 L16/0105 L16/0106 L16/104 L24/0183 L24/0184 L24/0205 L24/0206 M15/0669 M15/1351 M16/0072 M16/0073 M16/0074 M16/0075 M16/0087 M16/0097 M16/0157 M16/0260 M16/0408 M16/0438 M16/0440 M16/0441 M24/0142 M24/0435 M24/0606 M24/0626 M26/0680 M26/0681 M26/0687 M26/0688 P16/2575 P24/4229 P24/4230 P24/4236 P24/4237 P26/3573 P26/3574 M16/0366 M16/0367 M27/0175 M27/0378 M16/0213 M16/0214 M16/0218 M16/0310 E08/2232 E08/2393 E08/2395 E08/2456 E08/2472 E08/2474 E08/2475 E08/2499 E08/2565 E08/2566 E08/2567 E08/2568 E08/2569 E08/2570 L08/0103 P08/0653 P08/0670 E08/2310 E08/2487 E52/2815 Interest % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 75.50% 75.50% 75.50% 75.50% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Project Name and Location Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna Mining Centre, Kalgoorlie Kanowna West, Kalgoorlie Kanowna West, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kanowna West JV, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Kundana, Kalgoorlie Six Mile, Kalgoorlie Six Mile, Kalgoorlie West Kundana JV, Kalgoorlie West Kundana JV, Kalgoorlie West Kundana JV, Kalgoorlie West Kundana JV, Kalgoorlie Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton, Ashburton Ashburton (Nth Star), Ashburton Ashburton (Nth Star), Ashburton Ashburton (Nth Star), Ashburton 2014 Annual Financial Report Page 60 TENEMENT SCHEDULE Tenement No. E52/3008 P08/0646 P52/1420 E08/1166 E08/1189 E08/1763 E08/1842 E08/1843 E08/1844 P08/0546 E80/2612 E08/1650 E08/2494 E08/1628 E08/1629 E08/1630 E08/1631 E08/1632 E08/1633 E08/1741 E08/1878 E08/1915 E08/1916 E08/1949 E08/1950 E08/1961 E08/1985 E08/1986 E08/1992 E08/2000 E08/2003 E08/2034 E08/2038 E08/2039 E08/2065 E08/2067 E08/2114 E08/2250 E08/2258 E08/2280 E08/2281 E08/2282 E08/2293 E08/2294 E08/2295 E08/2296 E08/2353-I E08/2354-I E08/2364 E47/1395 E47/1396 E47/1535 E47/1549 E47/1677 E47/1735 E47/1773 E47/1833 E47/1879 E47/2035 E47/2171 E47/2236 E47/2292 E47/2587 E47/2636 E52/2484 E52/2730-I E52/2786 P47/1237 E80/4001 E08/1187-I E08/1845 E52/1941 E52/3024 E52/3025 E52/3026 M52/0639 M52/0640 M52/0734 M52/0735 G53/0020 L53/0052 L53/0060 L53/0068 L53/0069 L53/0070 L53/0071 L53/0072 L53/0073 L53/0075 L53/0099 L53/0100 L53/0102 L53/0112 L53/0113 L53/0117 L53/0136 L53/0137 L53/0138 L53/0142 L53/0143 L53/0153 L53/0169 L53/0174 M53/0155 M53/0156 M53/0182 M53/0191 M53/0192 M53/0196 M53/0197 M53/0198 M53/0199 M53/0221 M53/0226 Interest % 100% 100% 100% 80% 80% 80% 80% 80% 80% 80% 100% 100% 100% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Project Name and Location Ashburton (Nth Star), Ashburton Ashburton (Nth Star), Ashburton Ashburton (Nth Star), Ashburton Cullen JV, Ashburton Cullen JV, Ashburton Cullen JV, Ashburton Cullen JV, Ashburton Cullen JV, Ashburton Cullen JV, Ashburton Cullen JV, Ashburton East Kimberley (Northern Star), Kimberley Electric Dingo , Ashburton Eleven Bells, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton FMG JV, Ashburton Kimberley, Kimberley Metawandy Creek, Ashburton Metawandy Creek, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Mt Olympus, Ashburton Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Tenement No. M53/0228 M53/0229 M53/0230 M53/0235 M53/0236 M53/0237 M53/0245 M53/0246 M53/0247 M53/0248 M53/0249 M53/0250 M53/0326 M53/0347 M53/0372 M53/0412 M53/0413 M53/0414 M53/0441 M53/0446 M53/0451 M53/0452 M53/0461 M53/0477 M53/0478 M53/0479 M53/0480 M53/0492 M53/0535 M53/0536 M53/0537 M53/0538 M53/0539 M53/0540 M53/0541 M53/0552 M53/0588 M53/0589 M53/0611 M53/0707 M53/0708 M53/0711 M53/0712 M53/0836 M53/0874 M53/0895 M53/0911 M53/0929 M53/0935 M53/0940 M53/0966 E08/1649 E08/1744 E08/1745 E08/2240 E08/2251 E08/2252 E08/2555 E08/2556 E08/2558 E08/2559 E08/2560 E47/1134 E47/1553 L08/0012 L08/0013 L08/0014 L08/0015 L08/0081 L08/0091 L08/0092 L08/0113 M08/0099 M08/0196 M08/0222 P08/0516 P08/0543 P08/0565 P47/1313 P47/1637 E52/2509 L52/0040 L52/0041 L52/0048 L52/0052 L52/0054 L52/0055 L52/0056 L52/0070 L52/0071 L52/0074 M52/0308 M52/0309 M52/0591 M52/0592 P52/1394 M52/0148 M52/0149 M52/0150 M52/0170 M52/0171 M52/0222 M52/0223 M52/0263 M52/0264 M52/0289 M52/0295 M52/0296 M52/0300 M52/0301 E08/2613 E08/2614 Interest % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Project Name and Location Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Operations - Jundee, East Murchison Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Paulsens, Ashburton Peak Hill (Northern Star), Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Plutonic/Marymia, Peak Hill Wyloo, Ashburton Wyloo, Ashburton 2014 Annual Financial Report Page 61 BACK COVER INSERT COVER SHOT - KALGOORLIE 2014 Annual Financial Report

Continue reading text version or see original annual report in PDF format above