2016 Annual Financial Report
CORPORATE DIRECTORY
TABLE OF CONTENTS
Corporate Directory
Chairman’s Address
Highlights
Review of Operations
Directors' Report
Auditor’s Independence Declaration
Financial Report
Independent Auditor’s Report
Additional Information
Tenement Schedule
PAGE
Inside Cover
1
2
3
15
26
27
68
70
71
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)
PRINCIPAL REGISTERED OFFICE IN AUSTRALIA
Level 1
388 Hay Street
Subiaco WA 6008
Australia
Telephone: +61 8 6188 2100
Facsimile: +61 8 6188 2111
Website: www.nsrltd.com
Email: info@nsrltd.com
SHARE REGISTRY
Link Market Services Limited
Level 4
152 St Georges Terrace
Perth WA 6000
Australia
Telephone: +61 1300 554 474
Website: www.linkmarketservices.com.au
HOME STOCK EXCHANGE
ASX Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
Australia
ASX Code: NST
AUDITORS
Deloitte Touche Tohmastu
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
Australia
Cover photograph (L-R):
Craig Boulton (Project Manager), Robert Osboine (Jumbo Operator) and Stasi Capsanis (Underground Manager) at the Millennium Project
Photographer: Melissa Drummond
2016 Annual Financial Report
CHAIRMAN’S ADDRESS
Dear Shareholder
It was a good year to be an Australian gold miner and a great year to be a Northern Star
Shareholder.
The combination of the higher US-dollar gold price and lower Australian dollar provided
our industry with the ideal environment to deliver strong returns for Shareholders.
With this wind in our back, the onus was on us as a company to maximise the opportunity
by continuing to drive down costs and to set ourselves up for the next chapter of growth
by investing in exploration and development.
I believe our team seized the day in every respect, delivering a 65% increase in net profit to
a record A$151.4 million for the year to 30 June 2016.
All-in sustaining costs continued to fall, averaging A$1,041/oz, helping to fuel a 21% rise in underlying free cash
flow to a record A$224.3 million.
The strong performance culminated in your Company finishing the year with cash and cash equivalents of
A$326 million, up from A$178 million a year earlier. And we have no bank debt.
As a result, we increased the full-year dividend from 5¢ to 7¢, fully-franked.
At the time of writing, your Company had just announced the sale of its Plutonic gold mine. While it may sound
odd to say that an asset sale can be a milestone in a growth strategy, the reality is that the transaction heralds
the next chapter in a plan based on organic growth and maximising financial returns.
As well as ensuring we can maintain downward pressure on our costs, the sale enables us to focus our
resources on four key operational centres: Kalgoorlie, Jundee, Paulsens and Tanami.
Each of these centres has significant production and exploration scale. This reflects a key theme being
pursued by both global investors and overseas gold mining majors and is consistent with Northern Star’s strong
belief that centres of such magnitude will be increasingly valuable as global gold exploration struggles to
replace the world-class orebodies as they are mined out.
This strategy also stems in part from the significant exploration success Northern Star has enjoyed at each of
these centres over the past two years. As our results show, we have numerous outstanding opportunities to
continue increasing our gold inventory, enabling us to generate organic growth at just a fraction of the prices
being paid to acquire Resources and Reserves in the current environment.
The benefits of this approach were highlighted by our recent 33% increase in Reserves to 2.0 million ounces.
Importantly, these Reserves were added at a cost of just A$50/oz, equal to about 10% of current market
acquisition prices.
This exploration success puts us firmly on track to achieve our goal of increasing production to an annual rate
of 600,000oz by 2018.
However, as impressive as this growth is, it still represents only a means to an end. That end is financial and
Shareholder returns. Northern Star is proud of its record of delivering some of the highest financial returns of any
ASX-listed company, including those in the industrial sector, and our approach to growth will always be
dictated by such measures, not by tonnes and ounces.
Your Board believes that it is particularly important to remember this adage at times such as those currently
being witnessed in the gold sector. Shareholder wealth has a habit of being damaged when markets are
thriving and therefore financial discipline is even more imperative in such a climate.
The past year has seen your Company capitalise on its opportunities and create a platform for further growth
while not exposing Shareholders unnecessarily to the inevitable volatility which comes with being a resources
company.
The credit for this success goes to our outstanding management team, employees, service providers and
suppliers. Their vision, commitment and willingness to run their own race has, with the support of the Board,
enabled Northern Star to deliver superior results on all fronts. I thank them for their enormous efforts.
I would also like to thank our Shareholders for the strong support you have given the Company as we
implement our strategies for growth.
Yours sincerely
CHRIS ROWE
Chairman
19 August 2016
2016 Annual Financial Report
Page 1
HIGHLIGHTS
NNoorrtthheerrnn SSttaarr::
an Australian mid-cap gold miner that is positioned among the top 25 gold miners
globally with costs in the lowest quartile of its peer group, no debt, asset diversity and
an exciting pipeline of organic growth opportunities –
aannootthheerr yyeeaarr ooff sstteellllaarr aacchhiieevveemmeennttss
Return on equity of 39% and Return on Invested
Capital of 28% in FY2016
Record net profit after tax of A$151.4M – up 65%
Annual fully franked dividends of A7¢ per share
– up 40%
Reserves increased by 33% to 2.0Moz, after
mining 611Koz and at a discovery cost of just
A$50/oz
Resources increased to 9.25Moz
Central Tanami Project Joint Venture settled
31 July 2015
Mines and Money “Best Australian Mining
Company”
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:
2016 Annual Financial Report
Page 2
REVIEW OF OPERATIONS
OVERVIEW
Northern Star Resources Limited (Northern Star) is an ASX 100
gold (Au) production and exploration company with a
Mineral Resource base of 9.25 million ounces and Ore
Reserves of 2.0 million ounces (1),
in highly
prospective regions of Western Australia and the Northern
Territory.
located
As the third largest Australian gold producer, Northern Star
continues to deliver on its growth strategy objective of being
a significant gold company delivering outstanding value to its
Shareholders. During FY2016, the Company sold 561,153
ounces of gold from its five West Australian operating
business units being the Jundee, Kundana (2), Kanowna Belle,
Paulsens and Plutonic Mines.
The Company continues to advance activities at the Central
Tanami Project in the Northern Territory.
In parallel, the Company has had significant exploration
success during the previous year through the diligent work of
our Exploration Team and targeted expenditure of A$50
million which has extended mine lives and has enabled the
Company to progress the creation of an exciting organic
pipeline of future projects for the business. In FY2017, the
Company will invest A$60 million in exploration to generate
the mines of the future, grow production and follow up the
significant success achieved in FY2016.
OUR PEOPLE, HEALTH AND SAFETY, ENVIRONMENT AND COMMUNITY
Our People and Our Culture
Over the last financial year, the Company continued to consolidate its operations, and embarked on an organic
growth strategy. As the Company strengthens and evolves, its reliance on its people grows.
Participants at the 2016 Leadership Forum
Northern Star conducts an offsite Leadership Forum each year involving the Board, Executive, key Site Leadership
and Technical personnel. This forum provides an opportunity to build relationships across the Group, and to generate
ideas and input into the future direction of the business.
The Company believes that its future leaders will be developed from within its diverse workforce and that they will
benefit from an inclusive and entrepreneurial environment. The Company seeks to provide challenging career
development opportunities and, as a result of the development and growth of the business, the Company is pleased
that it has been able to provide substantial internal career advancement opportunities to its employees during the
previous year.
Northern Star remains a significant and proud employer with a workforce of ~1,600 people, comprising ~900 direct
employees and ~700 contractors across the business.
Management is committed to operating the business at all levels based on its core values of: Safety, Teamwork,
Accountability, Respect and Results (STARR), and encourages its employees and contractors to challenge
behaviours that are inconsistent with these values. Adherence to the STARR Core Values is non-negotiable, as they
remain the foundation for driving the culture within the Northern Star Family, and are the platform for employees and
contractors alike to contribute to achieving Northern Star’s vision.
(1) As at 30 June 2016 – see ASX Release dated 28 July 2016.
(2) 51% interest in the East Kundana Joint Venture.
2016 Annual Financial Report
Page 3
REVIEW OF OPERATIONS
Northern Star values diversity in its workforce, and is an
equal opportunity employer, based on the best person
for the position at the time of recruitment. During FY2016,
the Company implemented a new Equal Employment
Opportunity Policy which aligns with its management
philosophy and Code of Conduct, and affirms the
Company’s commitment to equality across its business.
female participation
Northern Star’s overall
rate
increased to 14.11% (2015: 13.23%), with females in senior
positions accounting for 2.6% (2015: 2.01%) of the total
workforce. Management are committed to
further
improving female participation rates across the Group in
line with our recruitment practices. The Company’s 2015-
16 Workplace Gender Equality Report is located on our
website at http://www.nsrltd.com/about/corporate-governance/.
Northern Star attendees at the 2015 WIMWA Summit
Northern Star recognises its responsibility to ensure Aboriginal peoples and most importantly the Traditional Owners on
the lands which we operate on are meaningfully engaged through employment and enterprise development
opportunities across the Company’s operational footprint. Similarly, it understands Aboriginal people and their place-
based affinity with their traditional country offers the organisation a unique and valued resource of local employees.
Northern Star is proud to support Aboriginal Ranger Programs at three of its operations which engages local people
to perform environmental services on a flexible basis (see the Social Responsibility Section for further details).
The Company continues to support the professionals of the future by committing
to employ new graduates each year from a variety of disciplines relevant to the
mining industry. In addition, the Company also provides opportunities for
university students to engage in meaning summer vacation work to prepare them
for a future in the industry. Last year’s intake saw Northern Star employ 19 new
graduates and 17 vacation students. The Company was also pleased to offer
four new apprenticeships during the last year, which included two mature age
trade apprenticeships to existing employees.
People remain our greatest strength and the Company continues to create
opportunities where employees can build outstanding careers in a vibrant and
ever-changing industry. The Company encourages innovative thought and
entrepreneurial spirit in its employees, however Northern Star will not tolerate
unnecessary risk taking by employees or service providers which jeopardises the
safety of its workforce, the environment or its reputation in the Community.
Gerald Connors (Jundee) and Cleone Gunn,
CCI Apprenticeship Enrolment
The Board acknowledges the ongoing dedication and hard work of its employees, service providers and suppliers, as
it continues to grow the business.
Health and Safety
Northern Star values the health and safety of its employees, contractors and
stakeholders within our community. We have an embedded Company focus for hazard
identification and risk reduction, and promoting positive safety behaviours within the
Company. Importantly, we monitor leading safety indicators to target injury prevention
and awareness through our Five STARR safety program on a day-to-day basis to further
improve safety culture in the workplace.
Standardisation of key safety functions and processes has continued to remain the core
focus of the Company. Building a strong and robust safety management framework has
allowed further enhancement of areas such as leadership, risk management, training
and governance.
In November 2015, a team member at the Paulsens gold mine sadly passed away. The Board, management and
staff offer our deepest sympathy and condolences to his family, friends and colleagues. A full investigation is being
conducted by the relevant authorities following this sad event.
As at 30 June 2016, Northern Star’s Lost Time Injury frequency rate (LTIFR) was 5.1 (2015: 2.1) and its Total Recordable
Injury frequency rate (TRIFR) was 20.4 (2015: 13.0). The Company will continue to demand improvement in safety
performance and foster a culture that strives for zero harm outcomes.
2016 Annual Financial Report
Page 4
REVIEW OF OPERATIONS
Environment
Northern Star is committed to high standards in environmental management and performance.
Through the implementation of a company-wide Environmental Management System (EMS) and the dedication of its
workforce, Northern Star commits to mitigating and minimising environmental impacts associated with its business
activities. Northern Star acknowledges that there is more to simply being given a legal right to mine, and that
respecting the environmental values held by people outside of the organisation is an integral part of doing business.
The Northern Star’s revised EMS contains company-wide standards for:
Mine Closure
Environmental Incident Reporting
Energy and Climate Change
Biodiversity Management
Environmental Risk Management
Northern Star had no material adverse environmental incidents in FY2016.
Finch rehabilitation at Paulsens (Photo: Kirstie Warren)
Beyond the framework of the EMS, Northern Star has committed to a range of innovative strategies for continually
advancing our environmental performance. The following examples indicate the Company’s commitment:
Rangers Programs: the Company has expanded the contracting of Traditional Owners for environmental
services across three operations. This sees environmental services being conducted by local Ranger Groups
who have a cultural affinity and obligation with the lands on which we operate.
Heat Exchange Technology: the Company has entered into a Power Purchasing Agreement with Enerji Ltd to
progress heat exchange technology for power generation at the Jundee mine. Enerji’s cutting edge heat to
power generation technology captures waste heat and converts it into useable power. When the 1.5MW heat-
to-power plant is installed at the Jundee mine, it will reduce fuel consumption and carbon dioxide emissions.
Seed Germination Improvement Project: the Company is also partnering horticultural company Bentonite
Products WA in investigations to improve native seed germination rates through the use of bentonite clay in the
seeding process. If successful, this study has the potential to improve seed strike rates and ultimately make the
overall mine rehabilitation process both more economical and effective.
Social Responsibility
In FY2016, Northern Star continued to create both
relationships with all
trust-based
respectful and
Stakeholders touched by our business activities.
Northern Star operate on the belief that as an
organisation, its activities must be guided by a
purpose beyond profit and that the support and trust
of its activities by the communities in which it operates
is fundamental to the Company’s long-term success
and the creation of a strong Social License to
Operate.
the environmental, economic and
Stakeholder trust and respect is only gained through
the acknowledgement of the organisation’s impacts
on
social
landscapes: both positive and negative. With this in
mind, Northern Star seeks to identify opportunities for
the creation of shared-value for Stakeholders, in return
for the opportunity to extract mineral wealth.
In line with the EMS roll-out, the Company secured
operation-wide compliance to its Social Responsibility
Standards. These standards aim to ensure transparent
and open engagement processes exist for those
people who reside on or are located nearby our
business areas, and cover the following important
aspects of mine operation:
Stakeholder Mapping
Complaints and Grievances Management
Cultural Heritage Management
Stakeholder Engagement
through
supporting
The Company significantly expanded its commitment
to
the
Traditional Owners
expansion of Ranger environmental compliance
contracting across its operations. Building off the
success of the Jundee Ranger program, which is now
in its fifth year of continuous operation, the Gingirana
Marputu Rangers at Plutonic are expanding their work
to
the ground water
take on
compliance monitoring for the entire mine. To help
with the expansion of this project, Northern Star was
able to work with Gingirana Traditional Owners,
Central Desert Native
the
Department of Prime Minister and Cabinet to secure
from the
$350,000 of
Commonwealth.
funding over three years
Title Services and
this year
later
2016 Annual Financial Report
Page 5
REVIEW OF OPERATIONS
Similarly, at the Central Tanami Project in the Northern
Territory, the Company is pleased to contract with the
Lajamanu Rangers as professional environmental
contractors (through the Central Land Council) to
invasive weed control around the
manage the
Project’s operational areas, and to take over the
responsibility
the ground water compliance
monitoring program. This is a positive outcome for the
environment, and a business creation opportunity for
the Lajamanu Rangers.
for
The Company
reviewing other
is constantly
opportunities to increase its effective engagement of
Aboriginal employees and contractors, through both
mainstream and fit for purpose roles. Northern Star
encourages all of our service providers and valued
business partners
this strategy, by
to embrace
supporting the employment and training of local
Aboriginal peoples where possible.
Northern Star employees with Wiluna Martu Rangers and Central Desert Staff,
Wiluna (Photo: Wayne Quilliam)
for
their
support
institution, NintiOne and
leading Australian
The Company’s
research
Interplay
Project, should soon realise some invaluable data
regarding our investment in Aboriginal Ranger groups
when they release their final reports in late 2016. The
project aims to capture the
interplay between
Aboriginal health, culture, community empowerment,
The
employment, education and well-being.
Company anticipates the results will help to ensure
more Aboriginal people are provided with the
appropriate
for
meaningful career development in the future.
resources and opportunities
In late 2015, Company representatives participated in
a social return on investment analysis, run by Social
Ventures Australia, and commissioned by
the
Department of Prime Minister and Cabinet. A key
finding of this study was that for every dollar spent on
Aboriginal Rangers Programs, $2.30 of subsequent
value is created.
At the Jundee operation, support continued for the
Federal Government’s Remote School Attendance
Strategy, through the High Attendance Initiative with
the Wiluna Remote Community School. At the end of
each term, students who maintained an 80% or higher
attendance rate are invited out to the Jundee Village
for a special dinner and award ceremony. While
simple in strategy, feedback from the School confirms
that this initiative does play a positive role in improving
attendance rates.
Saint Barbara’s Festival 2015
the
recognises
importance of
its
Northern Star
contribution to our local residential communities, such
as Kalgoorlie. The Company is a significant employer
of local people, and through a buy-local strategy,
utilises local suppliers where possible and participates
in community initiatives and activities. Each year,
Northern Star and its employees join with the local
community to celebrate the Saint Barbara’s Festival
held in the beginning of December. Saint Barbara has
long been revered as the patron saint of miners. The
Festival is steeped in tradition and it recognises the
ongoing socio-economic contributions the mining
sector makes to the region, and honours the past and
present men and women of the mining industry.
Northern Star also believes that it is important to
participate in community initiatives that are not
directly related to our business. The Company and its
employees are pleased to participate in and support
initiatives such as:
The Telethon Adventurers: fighting to find a cure for
childhood cancer. Together, Northern Star and its
employees donated $250,000 in FY2016;
City to Surf: supporting people living with disability in
Western Australia. In FY2016, 90 employees and family
members participated in this event;
Kalgoorlie Girls Academy: promoting
sporting initiatives;
The Royal Flying Doctor Service: a critical service to
remote communities as well as FIFO operations;
Ruggies Recycling Program: proceeds from recycling
efforts at operations are donated to PMH Foundation,
and resulted in the purchase of much needed medical
equipment for doctors at Princess Margaret Children’s
Hospital; and
Kalgoorlie Boulder Urban Land Care Group: local tree
planting and clean up days.
local youth
Kalgoorlie Boulder Urban Land Care Group: Tree Planting Day
Northern Star had no material adverse Community
incidents in FY2016.
Northern Star’s expanded family of employees and
service providers are expected to, at all times,
inclusive culture, and continue to
embrace an
strengthen and expand
relationships with all
stakeholders.
2016 Annual Financial Report
Page 6
REVIEW OF OPERATIONS
MINE OPERATIONS REVIEW
Total Material Mined
Total Material Milled
Gold Grade
Gold Recovery
Gold Produced
Gold Sold
Revenue
Cost of Sales
Depreciation & amortisation
EBITDA
All in Sustaining Cost
* Discontinued operation
Measure
tonnes
tonnes
grams/tonne
%
Ounce
Ounce
A$000's
A$000's
A$000's
A$000's
A$/ounce sold
Jundee
1,245,354
1,290,366
5.5
93
209,515
209,572
330,603
231,404
73,932
173,316
1,007
Kundana
(51%)
463,161
454,617
7.6
96
107,189
107,188
158,031
99,800
25,639
103,981
888
Kanowna
Belle
748,610
$802,395
4.0
94
95,840
99,935
170,452
87,307
17,594
80,424
782
Paulsens
398,812
386,570
7.2
90
80,742
80,278
126,703
93,908
32,302
64,929
1,099
Plutonic*
639,742
934,507
2.8
78
64,857
64,180
101,629
120,419
24,168
4,448
1,738
Total
3,495,679
3,868,456
5.0
91
558,143
561,153
887,417
632,838
173,635
427,098
1,041
Performance for the 2016 financial year has been generated from the Jundee, Kundana, Kanowna Belle, Paulsens
and Plutonic gold mines. In the 2016 financial year, a total of 561,153 ounces of gold was sold at an average price of
A$1,578 (2015: A$1,453). All-in sustaining cost for the period was A$1,041 per ounce (2015: A$1,065).
During the period, 3.9 million tonnes were milled at an average head grade of 5.0gpt Au for 558,143 ounces Au
recovered. Unprocessed ore stocks available for mill feed at the end of the period contained 80,342 ounces Au.
Gold in circuit at the end of the period totalled 15,136 ounces. These items are reflected in the accounts as gold in
circuit at cost.
Jundee operation saw a number of achievements during
the year with delivery of strong gold production,
extension of mine life through Reserve growth and
improvement in operating cost base though productivity
and procurement initiatives. The development of a
strategic diamond drilling drill drive was completed
during the year to set a platform for drilling rigs to target
the mine extensions on multiple mineralised zones.
Investment continued in capital development to open
up new mining fronts and setup future mine infrastructure.
The Kundana mines continued to grow production
through the exploration and development of Hornet,
Rubicon, Pegasus and Raleigh zones. This high grade
mineralised system has demonstrated signs of linking at
depth and has provided solid opportunity to extend mine
life. Significant investment in exploration drilling has now
turned towards mining development and production
setup to grow mine output.
On the 100% Northern Star tenements, the Millennium
discovery was rapidly advanced during the period with
Resource drilling and dewatering of South pit occurring
for mining to commence. This new development is also
positioned well
to access historic operations of
Centenary, Pope John, Barkers and Strzelecki mines
creating a future production centre for the Company.
The Kanowna Belle operation had strong success in
lowering the operational cost base whilst maintaining
productivity during the year with the mining activity
throughout historic mining areas as well as accessing the
newly discovered Velvet zone. The mine plan was
extended through in-mine exploration leveraging off the
extensive infrastructure in the underground. The Kanowna
facility
increased
the
processing
contribution of Kanowna and Kundana ore grew, with a
record monthly throughput achieved in May 2016 at
levels not seen since 2004.
throughput as
The Paulsens operation continued to transition activity
from the Voyager 1 zone to Voyager 2 zone with a
resultant lift in head grade from the mine as the high
grade upper zone was accessed. Capital upgrades to
the ventilation system were completed which has set the
mine for future years of production as well as power and
surface infrastructure improvement. The mine continued
to build a stockpile in addition to what was processed
during the year that enables a future production source.
Plutonic transitioned its underground mining centre into
the Caribbean zone as a primary ore source. The
extensive underground workings enabled continued yield
from multiple production fronts, low grade stockpiles also
supplemented the year’s production in the second half
of the period to fully utilise the processing facilities.
Resource drilling of the Hermes project continued with
finalisation of mining plans were
success and the
performed during the year.
The Central Tanami Project settlement occurred at the
start of the year with Northern Star acquiring a 25%
interest, and the ability to expand to 60% through
redevelopment of the Project’s processing facility. The
focus during the year was Resource definition drilling of
the Groundrush deposit and evaluation of refurbishment
of the processing facilities. The Tanami region is integral to
the Company’s organic growth strategy to create a new
concentrated centre of production in future years.
2016 Annual Financial Report
Page 7
REVIEW OF OPERATIONS
FINANCIAL OVERVIEW
Key Highlights [a]
Revenue
EBITDA [1]
Net profit [2]
Cash flow from operating activities
Cash flow used in investing activities
Sustaining capital
Non sustaining capital
Exploration
Acquisition of businesses
Other investing
Free cash flow [3]
Underlying free cash flow [4]
Average gold price per ounce (A$)
Gold mined (ounces)
Gold sold (ounces)
All-in sustaining costs (AISC) per ounce sold (A$)
Cash and cash equivalents (A$ million)
Earnings Per Share (cents)
Year Ended
30 June 2016
$'000
887,417
401,280
151,365
383,335
(189,723)
(92,898)
(35,204)
(61,538)
-
(83)
196,312
224,281
1,578
611,288
561,153
1,041
315
25.2
Year Ended
30 June 2015
$'000
845,653
316,142
91,902
359,009
(239,458)
(104,747)
(9,301)
(35,619)
(90,729)
938
119,551
185,628
1,453
621,691
580,784
1,065
167
15.5
Change
$'000
Change
(%)
41,764
85,138
59,463
24,326
49,735
11,849
(25,903)
(25,919)
90,729
(1,021)
74,061
38,653
125
(10,403)
(19,631)
(24)
148
9.7
5%
27%
65%
7%
(21%)
(11%)
278%
73%
(100%)
(109%)
62%
21%
9%
(2%)
(3%)
(2%)
89%
63%
[a] Key highlights presented in the table above are inclusive of Plutonic operations results for the year ended 30 June 2016 and 30 June 2015.
(1) EBITDA is earnings before interest depreciation, amortisation and impairment and is calculated as follows: Profit before Income tax plus depreciation, amortisation, impairment and
finance costs.
(2) Net Profit is calculated as net profit after taxation.
(3) Free Cash Flow is calculated as operating cash flow minus investing cash flow.
(4) Underlying Free Cash Flow is calculated as follows: 30 June 2016 - free cash flow ($193.6 million) plus bullion awaiting settlement ($1.9 million), plus acquisition and development of
Central Tanami Project ($22.8 million), plus stamp duty paid on prior acquisitions ($4.9 million), less working capital adjustment ($1.0 million). 30 June 2015 - free cash flow ($119.6
million) plus Jundee gold mine acquisition ($90.7 million) and Hermes acquisitions ($1.95 million), plus one off acquisition and restructure expenses ($12.8 million and $4.2 million
respectively), less working capital adjustment ($43.6 million).
EBITDA, Underlying Free Cash Flow and All-in Sustaining Costs (AISC) are unaudited non IFRS measures
The Group’s operating and financial performance for the twelve months ended 30 June 2016 reflects the focus on
productivity and cost reduction whilst maintaining growth options through exploration. Increased free cash flow generation
in the 2016 financial year follows operational efficiencies, a focus on cost reduction across all sites and an increase in the
gold price realised per ounce.
Profit
The profit overview commentary includes results from both continuing and discontinuing operations. For the financial year
ended 30 June 2016 the Group reported a profit after tax of $151.4 million (2015: $91.9 million). Revenue increased 5% to
$887.4 million, the principle driver being the higher gold price per ounce realised (2016: $1,578; 2015: $1,453). Gold sold for
the current year was at the higher end of full year guidance at 561,153 ounces (guidance FY2016 535,000-570,000 ounces)
and AISC of $1,041 per ounce sold was below full year guidance ($1,050-$1,100 per ounce sold).
EBITDA was $401.3 million for the year ended 30 June 2016, which was an increase of 27% over the corresponding prior
period. The Group reduced overall finance charges by 51% (2016: $4.5 million; 2015: $9.1 million) consistent with the
refinancing and nil debt position of the Group. An impairment charge of $5.1m million was recorded on exploration and
evaluation assets (2015: $8.5 million).
Balance Sheet
Current assets as at the 30 June 2016 increased by 29% against the prior year balance date. The increase was largely a result
of cash and cash equivalents increasing by $147.9 million and the classification of the Plutonic operations as held for sale.
Non-current assets decreased by $7.2 million principally due to the re-classification of the Plutonic operations as a current
asset held for sale, which offsets the increased spend on non-sustaining capital (2016: $35.2 million; 2015: $9.3 million) and
exploration and evaluation during the year ended 30 June 2016 (2016: $61.5 million; 2015: 35.6 million).
Trade and other payables and provisions decreased as at 30 June 2016 principally due to the classification of the Plutonic
operations as held for sale. Current tax liabilities increased to $35 million consistent with the increased earnings profile of the
Group.
The increase in Issued capital was predominately due to the shares issued as part of the Central Tanami acquisition.
2016 Annual Financial Report
Page 8
REVIEW OF OPERATIONS
Cash Flow
Cash flow from operating activities for the 12 months ended 30 June 2016 were $383.3 million which was $24.3 million higher
than the previous financial year due to the higher realised gold price per ounce (2016: $1,578; 2015: $1,453) offset by
reductions in production and income taxes paid.
Cash flows for investing activities increased by 20% after allowance for the acquisitions in the current and prior period (2016:
Tanami $11.0 million; 2015: Jundee $90.7 million). This was largely as a result of the Group’s extensive capital development
and exploration program.
Cash flows from financing activities included payments for leased equipment of $9.7 million (2015: 8.0 million) and dividends
totalling $36.0 million (2015: 26.5 million) paid to Shareholders.
Full Year 2017 Production and Cost Guidance
The following guidance was announced to the ASX on 1 August 2016:
Jundee
Kalgoorlie Operations
Paulsens
Total
Production
Ounces
220,000 - 230,000
200,000 - 210,000
65,000 - 75,000
485,000 - 515,000
AISC/oz
$
1,000 - 1,050
950 - 1,000
1,200 - 1,250
1,000 - 1,050
2016 Annual Financial Report
Page 9
REVIEW OF OPERATIONS
EXPLORATION
Paulsens Mine
The Paulsens Mine continued to drill the Voyager 2 and
Titan extensions down-plunge to maintain resources in
future production areas. Lateral extension and exploration
also targeted the Galileo and Southern Gabbro vein
mineralisation systems.
Plutonic Mine
Plutonic Mine drilling focused predominantly on grade
control and Resource drilling. Exploration work undertaken
during the year developed extensions to the existing
Mineral Resource base in the Caribbean, Timor, Indian,
Caspian and Baltic areas of the Mine.
Kalgoorlie Operations
The Kundana and Kanowna Belle Operations continued
large near-mine exploration programs that delivered
strong growth to the existing Mineral Resource domains
and generated several new discoveries with an increase
of 0.5 million ounces in Resources after depletion. At
Kanowna Belle Operations, rapid exploration of the new
Velvet discovery continued with production development
reaching the deposit at the end of the year.
Near-mine exploration within the EKJV area (Northern Star
51%) in the Kundana region was successful in maintaining
the total Resource inventory for Pegasus, Rubicon, Hornet
and Raleigh Deposits.
Exploration within
the Northern Star’s 100% owned
Kundana tenements was exceptionally successful with a
further increase to the Millennium Deposit and maiden
Resource announced for the Barkers Deposit (137,000
ounces) with further drilling planned for all areas in the
coming year.
Jundee Operations
infill and Resource
Jundee Operations continued
extension drilling within the mine with increases in the
Gateway area more than offsetting depletion thus
growing existing Mineral Resource and Ore Reserve
boundaries. Exploration drilling commenced from the new
drill drive platform during the year resulting in two exciting
new discoveries, being the Revelation and Armada
trends, which are not included in the Mineral Resource
statement at this time.
Pilbara Regional
Paulsens Regional
Exploration drilling targeting extensions to the Paulsens
Mine sequence has been completed. Surface sampling
programs continued on regional targets across the Wyloo
Dome area.
Fortescue JV and Northern Star’s Regional Exploration
Gold exploration programs continued on the Fortescue JV
and 100% Northern Star tenements in the Ashburton Basin
with regional geochemical sampling programs and initial
exploration programs at the Soldiers Secret and Charlie’s
Creek prospects completed.
Plutonic Region
Exploration drilling at the Trout, Cod, MMR and Zone 114
and Plutonic West prospect areas were completed.
Target generation programs in the Timor and Zone 114
areas were completed to assist with drill targeting.
Hermes Project
Further infill and extensional drilling at the Hermes Project
resulted in a significant increase in Mineral Resources to
314,000 ounces and the definition of a maiden open pit
Ore Reserve of 101,000 ounces as at 30 June 2016. The
Project has moved into production planning with site
development to be commenced shortly.
Jundee Region
Surface exploration within the entire regional Jundee
tenement package resulted in a significant upgrade to
the
regional geological understanding and
the
generation of significant new drilling targets. Following
heritage clearance activities, initial drilling on these new
targets has commenced. Further drilling completed on
open pit targets in the Gourdis-Vause area has identified
extensions to existing Resource areas with further follow up
drilling planned.
Kalgoorlie Region
Kanowna Belle
Further drilling increased the open pit Resources for the Six
Mile Project.
Kundana EKJV (51% NST)
Surface drilling at the Pegasus, Drake and Falcon
prospects continued to define new zones of gold
mineralisation parallel to the main structures. Underground
exploration drilling/development at Raleigh South was
highly successful in identifying potential extensions to the
Raleigh deposit opening up a significant new exploration
target.
Carbine
Ongoing drilling at Paradigm has intersected significant
high grade mineralised zones with further extensional
drilling planned in this area.
Central Tanami (25% NST)
An extensive
infill and extensional drilling program
completed at the Groundrush Deposit achieved excellent
results extending the main ore system and discovering
new mineralisation within the hanging wall sequence.
Development studies for the area are in progress.
Exploration activities at Central Tanami Project
2016 Annual Financial Report
Page 10
REVIEW OF OPERATIONS
RESOURCES AND RESERVES
As at 30 June 2016, Northern Star’s JORC 2012 reported Consolidated Group Mineral Resource Estimate (inclusive of
Ore Reserves) is 82.5 million tonnes at 3.5gpt Au for 9.25 million ounces (refer Table 1 below) and the Consolidated
Group Ore Reserve Estimate is 13.1 million tonnes at 4.7gpt Au for 2.0 million ounces (refer Table 2 below).
Mineral Resources have increased by 350,000 ounces Au from 8.9 million ounces Au as at 30 June 2015 year end to
the current 9.25 million ounces Au Measured, Indicated and Inferred Mineral Resource after mining 611,000 ounces.
Proved and Probable Ore Reserve have increased by 460,000 ounces Au from 1.5 million ounces Au as at 30 June
2015 to the current 2.0 million ounces Au Proven and Probable Reserve at 30 June 2016.
Mineral Resource and Ore Reserve Governance and Internal Controls
Northern Star ensures that the Mineral Resource and Ore Reserve estimates quoted are subject to governance
arrangements and internal controls activated at a site level and at the corporate level. Internal and external reviews
of Mineral Resource and Ore Reserve estimation procedures and results are carried out through a technical review
team which is comprised of highly competent and qualified professionals. These reviews have not identified any
material issues. The Company has finalised its governance framework in relation to the Mineral Resource and Ore
Reserve estimates in line with the expansion of its business.
Northern Star reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code) 2012 Edition.
Mineral Resources are quoted inclusive of Ore Reserves. Competent Persons named by Northern Star are Members or
Fellows of the Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists, and
qualify as Competent Persons as defined in the JORC Code.
Geologists, Andrew Bull and Aimee Rogers, Kanowna Belle Underground
2016 Annual Financial Report
Page 11
REVIEW OF OPERATIONS
Competent Persons Statements
The information in this announcement that relates to data quality, geological interpretations and Mineral Resource
estimations for the Company’s Paulsens, Ashburton, Jundee and Plutonic Project areas is based on information compiled by
Brook Ekers (Member 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.
The information in this announcement that relates to exploration results, data quality, geological interpretations and Mineral
Resource estimations for the Company’s Kanowna, EKJV, Kundana and Carbine Project areas is based on information
compiled by Nick Jolly and fairly represents this information. Mr Jolly is a Member of the Australian Institute of Mining and
Metallurgy who is a full-time employee of Northern Star Resources Limited and 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”. Mr Jolly consents to the inclusion in this announcement of the matters based on this
information in the form and context in which it appears.
The information in this announcement that relates to Ore Reserve estimations for the Company’s Project areas is based on
information compiled by Jeff Brown and fairly represents this information. Mr Brown is a Member of the Australian Institute of
Mining and Metallurgy who is a full-time employee of Northern Star Resources Limited and 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". Mr Brown consents to the inclusion in this announcement of the matters based on this
information in the form and context in which it appears.
The information in this announcement that relates to the Central Tanami Gold Project is extracted from the Tanami Gold NL
ASX announcement entitled “Quarterly Report for the Period Ending 31 March 2014” released on 1 May 2014 and is
available to view on www.tanami.com.au.
The information in this announcement that relates to Mineral Resource estimations, data quality, geological interpretations
and potential for eventual economic extraction for the Groundrush deposit at the Central Tanami Gold Project is based on
information compiled by Brook Ekers (Member 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.
The Company confirms that it is not aware of any further new information or data that materially affects the information
included in the original market announcement entitled “Quarterly Report for the Period Ending 31 March 2014” released on
1 May 2014 and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical
parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially
changed. To the extent disclosed above, the Company confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the original market announcement.
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.
*Assumes an AUD/USD exchange rate of 0.7285c, averaged rate across FY2016
2016 Annual Financial Report
Page 12
REVIEW OF OPERATIONS
Table 1 – Consolidated Group Gold Mineral Resources Estimate (inclusive of Reserves) effective 30 June 2016
2016 Annual Financial Report
Page 13
MINERAL RESOURCES As at 30 June 2016Year on Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Competent Year OuncesBased 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)PAULSENS GOLD PROJECTSurface634 2.0 41 763 2.2 55 3 - Mt Clement (20%)226 1.8 13 226 1.8 13 10 - Underground425 9.6 131 265 9.7 83 120 9.6 37 810 9.6 251 1 (115) Stockpiles133 1.8 8 133 1.8 8 1 1 Gold in Circuit1 1 0 Subtotal Paulsens558 7.8 140 265 9.7 83 980 2.9 91 1,932 5.3 328 (114) ASHBURTON GOLD PROJECTSurface7,104 2.4 546 14,227 2.5 1,122 21,331 2.4 1,668 2,3- Subtotal Ashburton7,104 2.4 546 14,227 2.5 1,122 21,331 2.4 1,668 - PLUTONIC GOLD PROJECTSurface3,686 2.2 265 613 2.5 49 4,300 2.3 314 5 90 Underground1,010 5.8 189 2,611 5.3 446 5,230 4.4 748 8,852 4.9 1,384 4 (79) Stockpiles6 5.5 1 496 0.6 10 502 0.7 11 4 10 Gold in Circuit8 8 2 Subtotal Plutonic1,016 6.1 199 6,793 3.3 721 5,844 4.2 797 13,653 3.9 1,717 23 KALGOORLIE GOLD PROJECTKanownaSurface1,288 1.9 80 1,288 1.9 80 7 21 Underground1,903 4.1 254 5,163 4.1 684 3,256 3.9 404 10,322 4.0 1,342 6 237 Stockpiles72 3.2 7 798 0.9 24 870 1.1 31 6 1 Gold in Circuit8 8 (4) Subtotal Kanowna Belle1,975 4.2 269 5,961 3.7 708 4,544 3.3 484 12,480 3.6 1,461 255 KundanaSurface721 2.1 48 721 2.1 48 8 8 Underground1,087 6.8 237 2,183 8.3 584 3,269 7.8 822 7 210 Subtotal Kundana1,087 6.8 237 2,904 6.8 3,991 6.8 870 213 East Kundana Joint Venture (EKJV) Surface148 4.8 23 201 1.6 10 349 2.9 33 8 23 Underground160 24.7 127 1,539 10.7 529 634 11.7 239 2,334 11.9 895 7 (32) Stockpiles57 7.7 14 57 7.7 14 6 1 Subtotal EKJV218 20.2 141 1,687 10.2 552 836 9.3 249 2,740 10.7 942 (8) CarbineSurface190 0.8 5 7,044 1.4 312 7,234 1.4 317 8 53 Total Kalgoorlie2,193 5.8 411 8,735 5.3 1,497 15,328 3.4 1,678 26,445 4.2 3,591 512 JUNDEE GOLD PROJECTUnderground893 8.5 244 2,077 6.5 432 715 5.6 129 3,685 6.8 806 9 (93) Open Pit3,626 1.6 188 4,001 1.7 220 7,626 1.7 408 9 (4) Stockpiles1,036 1.23 41 1,036 1.2 41 9 3 Gold in Circuit3 3 (0) Subtotal Jundee1,929 4.6 288 5,703 3.4 620 4,715 2.3 349 12,347 3.2 1,257 3 CENTRAL TANAMI PROJECTCTP (25%)1,564 2.9 145 2,769 2.8 250 3,026 2.9 283 7,359 2.9 678 2,1122 Stockpiles (25%)350 0.7 8 350 0.7 8 12 (4) Subtotal CTP 1,914 2.5 153 2,769 250 3,026 283 7,709 2.8 686 18 TOTAL RESOURCES7,609 4.9 1,190 31,369 3.7 3,717 44,121 3.0 4,321 83,418 3.4 9,246 346 Note :1. Mineral Resources are inclusive of Reserves2. Mineral Resources are reported at various gold price guidelines (a. AUD$1,700/oz gold - Paulsens, Plutonic, Kanowna, Kundana, Jundee, and b. AUD$1,850 /oz gold -Ashburton)3. Rounding may result in apparent summation differences between tonnes, grade and contained metal content4. Numbers are 100% NST attributable Competent Persons1. Lauren Elliott. 2. Graeme Bland. 3 Brook Ekers. 4. Luke Barbetti. 5. Heath Anderson. 6. Darren Hurst. 7. Alan Pedersen. 8. Dena Omari. 9. Penelope Littlewood. 10. Artemis ASX release 2011. 11. Tanami Gold 2014 Annual ReportMEASUREDINDICATEDINFERRED TOTAL RESOURCES
REVIEW OF OPERATIONS
Table 2 – Consolidated Group Mineral Reserves Estimate effective 30 June 2016
2016 Annual Financial Report
Page 14
ORE RESERVESAs at 30 June 2016Year on Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Competent Year OuncesBased on attributable ounces Au(000's) (gpt) (000's) (000's) (gpt) (000's) (000's) (gpt) (000's) Person(000"s)PAULSENS GOLD PROJECTUnderground80 10.9 28 110 7.3 26 190 8.8 54 1 (28) Stockpiles133 1.8 8 133 1.8 8 1 1 Gold in Circuit1 1 0 Subtotal Paulsens213 5.4 37 110 7.3 26 323 6.1 63 (26) ASHBURTON GOLD PROJECTSurface248 3.6 29 160 4.1 21 408 3.8 50 2 - Subtotal Ashburton248 3.6 29 160 4.1 21 408 3.8 50 -PLUTONIC GOLD PROJECTSurface1,565 2.0 101 1,565 2.0 101 5 101 Underground153 4.8 24 522 4.4 74 674 4.5 98 3 (47) Stockpiles6 4.2 1 496 0.6 10 502 0.6 10 3 10 Gold in Circuit8 8 2 Subtotal Plutonic158 6.4 33 2,583 2.2 185 2,741 2.5 218 65 KALGOORLIE GOLD PROJECTKanownaKanowna Belle Underground521 4.5 76 1,001 4.7 151 1,522 4.6 227 6 101 Stockpiles72 3.2 7 798 1 24 870 1.1 31 7 1 Gold in Circuit8 8 (4) Subtotal Kanowna Belle592 4.8 91 1,799 3.0 175 2,391 3.5 266 98 KundanaUnderground12 6.2 2 1,371 4.7 205 1,383 4.7 208 8,10205 Subtotal Kundana1,371 4.7 205 1,383 4.7 208 205 East Kundana Joint Venture (EKJV)SurfaceHornet (51%)69 5.8 13 69 5.8 13 10 13 UndergroundRaleigh (50%)95 12.9 40 47 9.9 15 143 11.9 55 9,1111 Pegasus-Rubicon-Hornet (51%)375 8.7 105 1,173 6.7 251 1,548 7.2 356 9,11(31) Stockpiles57 7.7 14 57 7.7 14 7 1 Subtotal EKJV527 9.4 159 1,289 6.7 279 1,816 7.5 438 (6) Total Kalgoorlie1,120 7.0 250 4,459 4.6 659 5,591 5.1 912 297 JUNDEE GOLD PROJECTUnderground893 8.5 244 2,077 6.5 432 2,970 7.1 676 12 122 Stockpiles1,066 1.2 41 1,066 1.2 41 12 3 Gold in Circuit3 3 (0) Subtotal Jundee 1,958 4.6 288 2,077 6.5 432 4,035 5.5 720 125 TOTAL RESERVES3,697 5.4 637 9,389 4.4 1,323 13,098 4.7 1,962 461 Note :1. Mineral Reserves are reported at the following gold prices of AUD $1,500/oz gold, except Ashburton at AUD$1,600/oz gold2. Tonnages include allowances for losses resulting from mining methods with tonnages rounded to the nearest 1,000 tonnes3. Ounces are estimates of metal contained in the Mineral Reserve and do not include allowances for processing losses. 4. Numbers are 100 % NST attributable Competent Persons1. Tim McCambridge. 2. Shane McLeay. 3 Tony Malavisi. 4. Brad Valiukas. 5. Craig Man. 6. Robert Smith. 7. Darren Hurst. 8. Stasi Capsanis. 9. Bryn Jones. 10. Tristan Sommerfield. 11. Craig Newton. 12. William Stirling. TOTAL RESERVESPROVED PROBABLE
DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity consisting of Northern Star Resources Limited ("the Company")
and the entities it controlled at the end of, or during, the year ended 30 June 2016. Throughout the report, the consolidated
entity is referred to as the Group.
DIRECTORS
The following persons were Directors of Northern Star Resources Limited during the whole of the financial year and up to the
date of this report:
Christopher K G Rowe
William (Bill) J Beament
John D Fitzgerald
Peter E O'Connor
PRINCIPAL ACTIVITIES
During the year the principal continuing activities of the Group consisted of:
mining of gold deposits at Jundee, Kundana, Kanowna Belle, Paulsens and Plutonic operations;
construction and development of extensions to existing gold mining operations at all locations;
exploration at Central Tanami Project in the Northern Territory (acquired 31 July 2015); and
exploration and development of gold deposits within Western Australia.
No significant changes in the principal activities of the Group occurred during the year ended 30 June 2016.
The entity's operations are discussed in the Review of Operations section at the front of this report.
Dividends
Dividends paid to Members during the financial year ended 30 June 2016 were as follows:
Final ordinary dividend for the year ended 30 June 2015 of 3 cents (2014: 2.5 cents) per fully
paid share paid on 2 October 2015.
Interim ordinary dividend for the year ended 30 June 2016 of 3 cents (2015: 2 cents) per fully
paid share paid on 5 April 2016.
2016
$'000
18,001
18,013
36,014
2015
$'000
14,686
11,843
26,529
Since the end of the financial year, the Directors have recommended the payment of a final fully franked ordinary dividend
of $24 million (4 cents per fully paid share) to be paid on 13 October 2016 out of retained earnings at 30 June 2016.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year were as follows:
Completion of settlement with Tanami Gold NL under which the Company can progressively acquire a 60% joint venture
interest in the Central Tanami Project. Settlement occurred on 31 July 2015 following a payment of A$20 million by the
Company to Tanami Gold NL. This comprised a cash payment of A$11 million and the issue of 4.29 million shares in the
Company which have a value of A$9 million based on their five-day volume weighted average price prior to the ASX
announcement of the deal on 26 February 2015. As a result of the payment the Company now has a 25% interest in the
Central Tanami Project.
In February 2016, the Company announced its intention to run a formal process to consider the sale of the Plutonic
operations. As announced to the ASX on 15 August 2016, the Company has executed a legally-binding Sale and
Purchase Agreement to sell the Plutonic operations subject to satisfaction of certain conditions as disclosed in the
announcement. Plutonic operations are classified as held for sale at 30 June 2016, refer to note 15 of the financial report
for details.
There were no other significant changes in the state of affairs of the Group that occurred during the year under review.
EVENT SINCE THE END OF THE FINANCIAL YEAR
Subsequent to the period ended 30 June 2016, the Company announced:
A final fully franked dividend of 4 cents per share to Shareholders on the record date of 28 September 2016, payable on
13 October 2016.
The execution of a legally-binding conditional Sale and Purchase Agreement for the Plutonic gold mine. The Company
intends to declare a special dividend of 3 cents per share subject to completion as outlined in the announcement to the
ASX on 15 August 2016.
No other matter or circumstances has arisen since 30 June 2016 that has significantly affected the Group's operations, results
or state of affairs, or may do so in future years.
2016 Annual Financial Report
Page 15
DIRECTORS’ REPORT
ENVIRONMENTAL REGULATION
The Group holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection
authorities. The Group 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
Group’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 significant environmental breaches have occurred or have been notified by any
Government agencies during the year ended 30 June 2016.
INFORMATION ON DIRECTORS
The following information is current as at the date of this report.
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 industry. 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.
In addition to his resource related actives, Mr Rowe acted as one of the Counsel Assisting the
Royal Commission into WA Inc. and has served on the EPA of Western Australia as both a
member and as Deputy Chairman.
Other current directorships
Mr Rowe is currently Chairman of ASX listed Target Energy Limited (appointed 1 January 2010).
Former directorships
Mr Rowe was previously a director of fund manager Hawesbridge Capital Pty Ltd.
Special responsibilities
Mr Rowe is a member of the Audit and Risk Committee and the Remuneration Committee, and
Chair of the Nomination Committee.
Interests in shares and options
Fully Paid Ordinary Shares: 2,650,000
William (Bill) J Beament
B.Eng-Mining (Hons)
Managing Director
Appointed: 20 August 2007
Mr Beament is a mining engineer with more than 20 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.
Special responsibilities
Mr Beament is a member of the Nomination Committee.
Interests in shares and options
Fully Paid Ordinary Shares: 10,718,588
Peter E O’Connor
MA, Economics and Political Science;
Barrister-at Law
Independent Non-Executive Director
Appointed: 21 May 2012
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 from 1998-2008. Following the sale of IMS to BNP Paribas in 2008, he was deputy
chairman of FundQuest UK Ltd with $10 billion under management, and FundQuest globally had
$35 billion of assets under management from 2008-2010.
Former directorships
Mr O’Connor was previously a Director and Chairman of ASX listed Brazilian Metals Group Limited
(May 2011 to October 2012), LSE listed Advance Developing Markets Fund (October 1998 to April
2012) and TSX listed NEO Material Technologies Inc (December 1993 to June 2012).
Special responsibilities
Mr O’Connor is a member of the Audit and Risk, Nomination and Remuneration Committees.
Interests in shares and options
Fully Paid Ordinary Shares: 500,000
John D Fitzgerald
CA, Fellow FINSIA, GAICD
Independent Non-Executive Director
Appointed: 30 November 2012
Other current directorships
Former directorships
Special responsibilities
Mr Fitzgerald has over 30 years in the resource sector as a financier, corporate advisor and
Director.
Mr Fitzgerald has previously held senior positions at NM Rothschild & Sons, Investec Bank Australia,
Commonwealth Bank, HSBC Precious Metals and Optimum Capital. He 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 Non-Executive Chairman of Carbine Resources Limited (appointed 13 April 2016)
and Dakota Minerals Limited (appointed 23 December 2015), and a Non-Executive Director of
Danakali Limited (appointed 19 February 2015).
Mr Fitzgerald was previously the Chairman of Atherton Resources Limited (July 2009 to November
2015) and Integra Mining Limited (May 2011 to January 2013).
Mr Fitzgerald is the Chair of the Audit and Risk Committee and the Remuneration Committee,
and a member of the Nomination Committee.
Interests in shares and options
Fully Paid Ordinary Shares: 60,000
2016 Annual Financial Report
Page 16
DIRECTORS’ REPORT
COMPANY SECRETARY
Liza Carpene
MBA, AGIA, ACIS, GAIC
Company Secretary
Appointed: 15 April 2013
Ms Carpene has worked in the mining industry for 20 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.
Current directorships
Ms Carpene is a Non-Executive Director of Alchemy Resources Limited (from 18 March 2015).
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and each Board Committee held during the year ended
30 June 2016, and the numbers of meetings attended by each Director were:
DIRECTORS’ MEETINGS
AUDIT
REMUNERATION
NOMINATION
MEETINGS OF COMMITTEES
Director
Christopher Rowe
Bill Beament
John Fitzgerald
Peter O'Connor
Attended
12
13
13
13
* Not a member of the relevant committee
Held
13
13
13
13
REMUNERATION REPORT
Attended
3
*
4
4
Held
4
*
4
4
Attended
3
*
3
3
Held
3
*
3
3
Attended
4
4
4
4
Held
4
4
4
4
The Directors present the Northern Star Resources Limited 2016 remuneration report, outlining key aspects of the Company’s
remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
Key Management Personnel (KMP) Covered in this Report
Remuneration Governance
A.
B.
C. Remuneration Policy and Link to Performance
D.
Elements of Remuneration
Remuneration Expenses for Executive KMP
E.
F. Contractual Arrangements for Executive KMP
G. Non-Executive Director Remuneration
H. Additional Statutory Information
The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations
Act 2001.
A. Key Management Personnel Covered in this Report
Non-Executive and Executive Directors
Christopher Rowe
Non-Executive Chairman
Peter O’Connor
Non-Executive Director
John Fitzgerald
Non-Executive Director
Other Key Management Personnel
Liza Carpene
Stuart Tonkin
Shaun Day
Company Secretary
Chief Operating Officer
Chief Financial Officer
Bill Beament
Managing Director
Michael Mulroney
Chief Geological Officer
(see pages 16 to 17 for details about each Director)
For the purposes of this report the term “Executive” includes the Managing Director, Chief Operating Officer, Chief Financial
Officer, Chief Geological Officer and Company Secretary.
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 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 management);
Non-Executive Director individual remuneration, and the aggregate pool for approval by Shareholders (as required);
2016 Annual Financial Report
Page 17
DIRECTORS’ REPORT
superannuation arrangements; and
remuneration by gender.
Executive remuneration is reviewed annually having regard to individual and business performance, relevant industry
comparative information, current market conditions, 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 2016 no remuneration recommendations, as defined by the Corporations Act, were
provided by remuneration consultants.
C. Remuneration Policy and Link to Performance
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;
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 remuneration limit which is approved by the Shareholders from
time to time (currently $1,250,000 per annum - approved 12 November 2014). 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 (and now the S&P ASX100), plus
responsibilities and experience of the Non-Executive Directors.
The Board has not increased its current individual Non-Executive Directors’ Fees since 1 July 2015, with the exception of the
introduction of a Chair Fee for the Remuneration Committee. Refer to Section G. All fees payable to Non-Executive Directors
remain within the approved aggregate remuneration limit of $1,250,000 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 2016 financial year consisted of a mix of:
fixed remuneration; and
“at risk” variable remuneration, comprising STIs and LTIs.
2016 Annual Financial Report
Page 18
DIRECTORS’ REPORT
REMUNERATION STRUCTURE FOR 1 JULY 2015 TO 30 JUNE 2016 (FY2016)
Component
Consist of
Total 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
Objective
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
remuneration with the creation of
Shareholder wealth through the
annual
achievement
performance measures
of
To provide a market competitive
STI opportunity
To provide an “at risk” grant to
incentivise
motivate
and
Executives to pursue the long term
growth and
the
Company
success of
To provide a market competitive
LTI opportunity
To support retention of Executives
and key personnel
Links to Performance FY2016
Annual performance of Company and individual.
Combination of specific Company Key Performance Indicators (KPIs)
(65%) and individual performance (35%).
Combination of specific Company KPIs (65%):
KPI 1 (20%) - Financial outcome: Achieve FY2016 budget Net Profit
After Tax (NPAT) as approved by the Board;
KPI 2 (15%) - Production: Production within stated guidance 535-
570Koz;
KPI 3 (15%)- Costs: AISC within stated guidance A$1,050 to
A$1,100; and
KPI 4 (15%) - Social Licence: 5% reduction in safety measures, no
significant environmental or community incidents, increase in
diversity targets by 5% from 2015 numbers.
Individual KPI and personal performance (35%) at least satisfactory.
Vesting after year 3 on achievement of performance hurdles
measured at 30 June 2018:
Relative Total Shareholder Return (40%): target 50% of peers
(ASX: EVN, IGO, NCM, OGC, RRL, RSG, SAR, SBM);
Total Shareholder Return (40%): target 15% compound annual
growth rate; and
Resource / Reserve replacement (20%): maintaining at least 2
years of Reserves and 6 years of Resources based on the
annualised budgeted production.
Board reserves the right to vest LTIs at its discretion.
Following a review by the Remuneration Committee subsequent to the end of the 2016 financial year, the Board resolved to
set the STI KPIs and the LTI hurdles as follows for the 2017 financial year:
REMUNERATION STRUCTURE FOR 1 JULY 2016 TO 30 JUNE 2017 (FY2017)
Component
Links to FY2017 Performance
Total Fixed Remuneration
(TFR)
Salaries awarded effective 1 July 2016 used as base for determining value component for FY2017 STIs and LTIs.
Short-term Incentives (STI) Combination of specific Company Key Performance Indicators (KPIs) (65%):
KPI 1 (10%) - Safety: Target 25% reduction in FY2016 LTIFR (5.1) and TRIFR (20.4);
KPI 2 (15%) - Financial outcome: Achieve FY2017 Budget NPAT as approved by the Board1;
KPI 3 (15%) - Production: Gold sold within stated guidance 485 – 515Koz
KPI 4 (15%) - Costs: AISC within stated guidance A$1,000 to A$1,050; and
KPI 5 (10%) - Social Licence: No significant environmental or community incidents, and an increase in diversity numbers by ≥5%.
Individual KPI and personal performance (35%) at least satisfactory.
Long Term Incentives (LTI)
At the time of preparation of this report, allocation of the LTIs for FY2017 had not been determined by the Board.
D. Elements of Remuneration
(i) Fixed Annual Remuneration
Individual Executives’ base salaries for the 2016 financial year were:
Name
Bill Beament
Liza Carpene
Stuart Tonkin
Shaun Day
Michael Mulroney
Position
Managing Director
Company Secretary
Chief Operating Officer
Chief Financial Officer
Chief Geological Officer
Base Salary
FY2015
725,000
300,000
475,000
375,000
350,000
Base Salary
FY2016
725,000
300,000
475,000
375,000
350,000
Base Salary Increase
for FY2016
0%
0%
0%
0%
0%
Following a review by the Remuneration Committee subsequent to the end of the 2016 financial year, the Board
determined to maintain base salary levels for Executives in line with FY2016 taking into consideration general market
conditions at that time. Salaries have remained static since 1 July 2014.
The following table reflects remuneration components available to Executives effective 1 July 2016:
Name
Position
Base Salary
(FY2017)
Superannuation
(capped)*
Total Fixed
Remuneration
Potential
STI %*
Potential
LTI %*
Bill Beament
Managing Director
725,000
Liza Carpene
Company Secretary
300,000
Stuart Tonkin
Chief Operating Officer
475,000
Shaun Day
Chief Financial Officer
375,000
Michael Mulroney
Chief Geological Officer
350,000
30,000
30,000
30,000
30,000
30,000
755,000
330,000
505,000
405,000
380,000
35%
25%
35%
35%
35%
65%
35%
65%
65%
65%
Insurances
Health & Salary
Continuance
Health & Salary
Continuance
Health & Salary
Continuance
Health & Salary
Continuance
Health & Salary
Continuance
* Potential STIs and LTIs are based on a % of Total Fixed Remuneration or TFR comprising base salary and superannuation only.
1 Target NPAT performance requirements have not been disclosed due to commercial sensitivity.
2016 Annual Financial Report
Page 19
DIRECTORS’ REPORT
(ii) Short Term Incentives (STIs)
The following table indicates performance against FY2016 KPIs (corporate and individual):
Key Performance Indicators
KPI 1: Financial Outcome
KPI 2: Stretch Production
KPI 3: Costs
KPI 4: Social Licence
Weighting Measure
20%
15%
15%
15%
Achieve FY2016 Budget NPAT ($90M) as approved by the Board
Production within stated guidance 535-570Koz
AISC within stated guidance A$1,050 to A$1,100
Reduction in safety measures;
No significant environmental incidents;
No significant community incidents; and
Increase in diversity targets by ≥5% from 2015 numbers.
Individual KPIs/Personal Performance
35%
As determined for each individual Executive
Achievement
Achieved 100%
Achieved 100%
Achieved 100%
Not achieved 0%
Achieved 100%
Achieved 100%
Achieved 100%
Awarded 11.25%
Achieved 68%
Awarded 23.75%
As a result, STI payments for FY2016 to Executives were recommended as detailed in the following table:
Name
Bill Beament
Liza Carpene
Stuart Tonkin
Shaun Day
Michael Mulroney
Position
Managing Director
Company Secretary
Chief Operating Officer
Chief Financial Officer
Chief Geological Officer
1 % of STI achieved.
2 STI paid in October 2015.
3 STI to be paid in August 2016.
(iii) Long Term Incentives (LTIs)
FY2015
Achieved STI
%1
74%
74%
74%
74%
N/A
FY2015
Paid
$2
196,179
60,722
130,786
74,530
N/A
FY2016
Achieved STI
%1
85%
85%
85%
85%
85%
FY2016
Declared
$3
224,613
70,125
150,238
120,488
113,050
During the period, 2,810,953 Performance Shares were issued as FY2016 LTIs to five KMP Executives and eight senior
management personnel 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 and senior management 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. In relation to the FY2016 period, 597,836 Performance Shares were issued to the Managing Director under that
approval.
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 2016 issue will be measured at the end of
year three (30 June 2018) 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 Group. In order to
achieve vesting of LTIs, the set hurdles must be achieved as at 30 June 2018, 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. In addition, the Company may also issue unlisted
employee share options to incentivise other key Company employees. 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 allocation levels.
Accordingly, under the Performance Share Plan, KMP Executives were 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 Performance Share being forfeited for no consideration should the vesting condition not be met. Under the terms of
the Performance Share Plan, the Performance 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 Performance 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
Performance Shares in the form of a holding lock preventing all dealing in the Performance Shares. The loan is limited
recourse, such that if the Performance Shares are forfeited, this is treated as full repayment against the loan balance. While
a loan balance remains outstanding, any dividends paid on the Performance Shares will be automatically applied towards
the repayment of the loan.
In making the loan in respect of newly issued Performance Shares, there is no cash cost to the Company, as the
Performance Shares are newly issued, with the loan essentially being an obligation to repay the amount due when the
Performance Shares are sold or forfeited. This also means that no funds are raised upon the issue of the Performance 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 Executives in relation to the 2016 financial year:
2016 Annual Financial Report
Page 20
DIRECTORS’ REPORT
Name
Bill Beament
Liza Carpene
Stuart Tonkin
Shaun Day
Michael Mulroney
Performance
Shares at
30 June 2015
2,354,167
640,972
1,402,778
722,222
N/A
Remaining
Loan at
30 June 2015
2,278,177
594,822
1,403,789
847,043
N/A
Performance
Shares Issued
FY2016
597,836
140,703
399,877
320,694
300,898
Loan on
Performance
Shares Issued
FY2016*
1,304,359
306,986
872,452
699,690
656,499
Total
Performance
Shares at
30 June 2016
2,952,003
781,675
1,802,655
1,042,916
300,898
Remaining
Loan at
30 June 2016
3,453,491
867,637
2,197,439
1,501,143
643,346
* Shares issued at 5 Day VWAP of $2.1818 on 9 July 2015, and loan values have been reduced due to the payment of dividends up to 30 June 2016.
In addition to the above Performance Shares, 1,319,279 unlisted employee share options were issued to thirty-five senior staff
as FY2016 LTIs.
At the time of publication of this report, allocation of LTIs to Executive KMP for FY2017 was still under review by the Board.
LTIs issued to Executive KMP in FY2014 became eligible for measurement as at 30 June 2016. All FY2014 hurdles were
achieved by the Company and the Board resolved that 100% allocation for each holder will be eligible for vesting post
release of the 2016 Annual Report.
LTIs FY2014 – PERIOD 1 JULY 2013 TO 30 JUNE 2016
Hurdle 3
Hurdle 2
Hurdles
Hurdle 1
Criteria*
Relative Total Shareholder Return (40%): target 50% of peers
(ASX: RMS, SLR, SAR, RRL, RSG, EVN, NGF, KCN, OGC, SBM)#;
Total Shareholder Return (40%): target 15% compound annual growth
rate (CAGR)
Resource / Reserve replacement (20%): maintaining at least 2 years of
Reserves and 6 years of Resources based on the annualised budgeted
production^.
* LTI Hurdles as set and reported in 2014 Annual Report.
# Peer Group Notes: NGF was delisted and excluded. KCN was suspended in May 2016.
^ Board resolved to change the Resource/Reserve Replacement Hurdle to reflect 2 years Reserves and 6 years Resources for the Group, rather than Paulsens subsequent to the acquisitions of Plutonic, Kanowna Belle
and Kundana in 2014.
& Released to the ASX on 28 July 2016.
Results as at 30 June 2016
Achieved 100%
NST Ranked >75tth percentile or second in Peer Group after 3 years.
Achieved 100%
Exceeded 15% CAGR - 772% increase over 3 years
Achieved 100%
Reserves and Resources Update effective 30 June 2016& exceeds
requirement.
Refer to table in H(iv) Long Term Incentive Shares Issued to KMP for vesting amounts.
E. Remuneration Expenses for Executive KMP
The following table shows details of the remuneration expense recognised for the Group's Executive KMP for the current and
previous financial year measured in accordance with the requirements of the accounting standards.
Executive
Executive Directors
Bill Beament
Other KMP
Liza Carpene
Stuart Tonkin
Shaun Day1
Ray Parry2
Michael Mulroney3
Total Exec Directors
& Other KMP
Total NED
Remuneration
Total KMP Remun-
eration Expenses
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Fixed Remuneration
Variable Remuneration
Salary & Fees
$
Other Benefits
(1)
$
Post-
employment
Benefits
$
STI Cash
Payment
$
Performance
Shares
$
Options
$
Total
$
Performance
Related
Remuneration
%
725,000
725,000
300,000
300,000
475,000
475,000
375,000
269,153
-
74,249
345,976
29,167
2,220,976
1,872,569
469,364
373,721
2,690,340
2,246,290
8,465
3,913
12,496
2,120
5,027
1,267
13,574
3,772
-
277,093
6,692
1,267
46,254
289,432
-
-
46,254
289,432
30,000
25,000
30,000
25,000
30,000
25,000
30,000
17,958
-
6,521
30,000
2,083
150,000
101,562
13,240
11,279
163,240
112,841
196,179
208,495
60,722
50,113
130,786
75,000
74,530
-
-
-
-
-
462,217
333,608
-
-
462,217
333,608
365,335
231,599
91,592
60,117
232,802
143,349
159,899
88,159
-
28,178
67,311
-
916,939
551,402
-
-
916,939
551,462
-
-
1,324,979
1,194,007
32,624
-
-
-
-
-
-
32,624
-
-
-
32,624
494,810
469,974
873,615
719,616
653,003
379,042
-
386,041
449,979
32,517
3,796,386
3,181,197
482,604
385,000
4,278,990
3,566,197
42%
37%
31%
30%
42%
30%
36%
23%
-
7%
15%
0%
36%
29%
0%
0%
32%
26%
(1) Other Benefits include: telephone allowance, salary continuance insurance, health insurance and parking.
1 Appointed 13 October 2014
2 Ceased employment 3 October 2014. Prior year other benefits include $277,093 in termination payment
3 Appointed 2 June 2015
F. Contractual Arrangements with Executive KMP
Executive
Term of Agreement and Notice Period
Base Salary
Including
Superannuation ($)
Termination
Payments
Executive Directors
Bill Beament
Other KMP
Open ended - 3 Months
755,000
12 Months
Liza Carpene
Open ended - 1 Month
Stuart Tonkin
Shaun Day
Open ended - 1 Month
Open ended - 1 Month
Michael Mulroney
Open ended - 3 Months
G. Non-Executive Director Remuneration
330,000
505,000
405,000
380,000
None
None
None
None
For the 2016 financial year, the Non-Executive Directors were paid base fees associated with their duties as Directors and
members of Board Committees.
2016 Annual Financial Report
Page 21
DIRECTORS’ REPORT
The Board has not increased the individual Non-Executive Directors Fees and Committee Member Fees since 1 July 2015,
with the exception of the introduction of a Chair Fee for the Remuneration Committee. Current Non-Executive Director Fees
total $485,000 per annum, and remains well within the current Shareholder approved aggregate limit of $1,250,000.
Base fees
Chair
Other Non-Executive Directors
Additional fees
Audit and Risk Committee - Chair
Audit and Risk Committee - Member
Remuneration Committee - Chair*
Remuneration Committee - Member
*Effective from 19 October 2015
From 1 July 2015 to
30 June 2016
175,000
115,000
25,000
15,000
15,000
5,000
Total remuneration paid or payable to Non-Executive Directors for the period ended 30 June 2016 was:
Directors
Christopher Rowe
Peter O’Connor
John Fitzgerald
Total Non-Executive Director
Remuneration
Year
2016
2015
2016
2015
2016
2015
2016
2015
TOTAL NON-EXECUTIVE DIRECTOR REMUNERATION FOR FY2016
Base Fee
$
Audit and Risk
Committee
$
Nomination
Committee
$
Remuneration
Committee
$
Superannuation
$
Total
%
175,000
150,000
115,000
105,000
101,760
93,721
391,760
348,721
15,000
-
15,000
-
25,000
25,000
55,000
25,000
-
-
-
-
-
-
-
5,000
-
5,000
-
12,604
-
22,604
-
-
-
-
-
13,240
11,279
13,240
11,279
195,000
150,000
135,000
105,000
152,604
130,000
482,604
385,000
H. Additional Statutory Information
(i) Terms and Conditions of the Share-based Payment Arrangements
Options
The terms and conditions of each grant of options affecting KMP remuneration in the current or a future report period are as
follows:
Grant Date
Vesting Date
Expiry Date
Exercise Price
Value Per Option at
Grant Date
Performance Achieved
% Vested
15-Apr-13
15-Apr-15
15-Apr-16
$1.05
$0.28
Exercised 23 February 2016
100%
Options granted under the plan carry no dividend or voting rights.
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, 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 KMP remuneration options in FY2016:
Name
Other KMP of the Group
Liza Carpene
Date of exercise of
options
Number of ordinary shares
issued on exercise of
options during the year
Value at Exercise Date
23 February 2016
179,732
$3.74
The above conversion did not result in the Company receiving any funds as the options were converted through the
Company’s Employee Option Plan's cashless conversion mechanism which results in a reduced amount of shares being
issued. No amounts are unpaid on any shares issued through the exercise of options.
(ii) Reconciliation of Options, Performance Shares and Ordinary Shares held by KMP
The tables on the following pages show the number of:
(a) options over ordinary shares in the Company; and
(b) ordinary shares in the Company
2016 Annual Financial Report
Page 22
DIRECTORS’ REPORT
that were held during the financial year by KMP of the Group, including their close family members and entities related to
them.
(a) Option Holdings
2016
Name
Liza Carpene
2015
Name
Liza Carpene
Balance at
start of the
year
250,000
Balance at
start of the
year
500,000
Granted as
Compensation
-
Exercised
(250,000)
Granted as
Compensation
-
Exercised
(250,000)
Other
Changes
-
Other
Changes
-
Balance at
end of the
year
-
Balance at
end of the
year
250,000
Vested and
exercisable
-
Unvested
-
Vested and
exercisable
250,000
Unvested
-
There were no options granted as equity compensation benefits to KMP during the year ended 30 June 2016.
(b) Ordinary Shareholdings
2016
Name
Directors
Christopher Rowe
Bill Beament*
John Fitzgerald
Peter O'Connor
Key Management Personnel
Stuart Tonkin*
Liza Carpene*
Shaun Day*
Michael Mulroney
Balance at start of
the year
Received during the
year on the exercise
of options
Issuance of
performance shares
Other changes
during the year
Balance at end of
the year
2,900,000
15,228,504
60,000
600,000
1,534,406
805,136
722,222
-
-
-
-
-
-
179,732
-
-
-
597,836
-
-
399,877
140,703
320,694
300,898
(250,000)
(5,107,652)
-
(100,000)
(131,628)
-
-
-
2,650,000
10,718,688
60,000
500,000
1,802,655
1,125,571
1,042,916
300,898
* Includes unvested FY2014, FY2015 & FY2016 Performance Shares which are still subject to performance hurdles as at 30 June 2016, 30 June 2017 and 30 June 2018.
2015
Name
Directors
Christopher Rowe
Bill Beament*
John Fitzgerald
Peter O'Connor
Key Management Personnel
Raymond Parry* (as at 3 Oct 2014)
Stuart Tonkin*
Liza Carpene*
Shaun Day*
Balance at start of
the year
Received during the
year on the exercise
of options
Issuance of
performance shares
Other changes
during the year
Balance at end of
the year
4,412,590
14,109,252
60,000
500,000
996,479
631,628
336,628
-
-
-
-
-
-
-
152,536
-
-
1,354,167
-
-
-
902,778
315,972
722,222
(1,512,590)
(234,915)
-
100,000
-
-
-
-
2,900,000
15,228,504
60,000
600,000
996,479
1,534,406
805,136
722,222
* Includes unvested FY2014 and FY2015 Performance Shares which are still subject to performance hurdles as at 30 June 2016 and 30 June 2017.
(iii) Other transactions with Key Management Personnel
The Company has in place policies and procedures which govern transactions involving KMP or related parties, and these
policies and procedures restrict the involvement of the KMP or related party in the negotiation, awarding or direct
management of the resultant contract. The following services were provided on market competitive rates.
John Fitzgerald is a Director, and:
(a) is a board member and has a beneficial interest in a shareholding in Optimum Capital Pty Ltd. During the year, a
revenue amount of $10,000 was paid to Optimum Capital Pty Ltd for consulting services provided at normal commercial
rates (2015: $10,000).
Bill Beament:
(a) has a beneficial minority interest in a shareholding of Australian Underground Drilling Pty Ltd. During the year a revenue
amount of $14,940,849 was paid to this business for drilling services at normal commercial rates (2015: $6,952,574); and
(b) has a beneficial minority interest in a shareholding in Premium Mining Personnel Pty Ltd. During the year, a revenue
amount of $4,488,261 was paid to this business for supplying specialist mining labour at commercial rates (2015:
$3,979,135).
2016 Annual Financial Report
Page 23
DIRECTORS’ REPORT
Amounts recognised as assets and liabilities
At the end of the reporting period the following aggregate amounts were recognised in relation to the above transactions:
Current liabilities (amounts payable)
(iv) Long Term Incentive Shares Issued to KMP
The table below includes details of LTI Shares issued to KMP in FY2016:
30 June 2016
$
2,072,390
2,072,390
30 June 2015
$
726,589
726,589
30 June 2016
Bill Beament
Liza Carpene
Stuart Tonkin
Shaun Day
Michael Mulroney
Grant Date
9 July 2015
9 July 2015
9 July 2015
9 July 2015
9 July 2015
Hurdle
Measurement
Date
30 June 2018
30 June 2018
30 June 2018
30 June 2018
30 June 2018
Issue Price
$2.1818
$2.1818
$2.1818
$2.1818
$2.1818
Balance at the
start of the year
Granted during
the year
Balance at the
end of the year
2,354,167
640,972
1,402,778
722,222
-
597,836
140,703
399,877
320,694
300,898
2,952,003
781,675
1,802,655
1,042,916
300,898
Shares available
for vesting at year
end*
1,000,000
325,000
500,000
-
-
* LTIs issued to Executive KMP in FY2014 became eligible for measurement as at 30 June 2016. All FY2014 hurdles were achieved by the Company and 100% allocation will be eligible
for vesting post release of the 2016 Annual Report.
On 9 July 2015, 2,810,953 FY2016 performance shares were issued to KMP and other personnel of the Company at an issue
price of $2.1818. Corresponding non-recourse loans totalling $6,132,937 were entered into with the KMP and other personnel
in accordance with Company's LTI Share Plan as part of their remuneration. As at 30 June 2016, FY2016 non-recourse loans
had reduced to $6,010,058.
In FY2015, 4,827,059 FY2015 performance shares were issued to KMP and other personnel of the Company at an issue price
of $1.1874 per share, with a further 212,917 shares issued on 30 March 2015 to other personnel of the Company at an issue
price of $2.4549 per share. Corresponding limited recourse loans totalling $6,254,338 were entered into with KMP and other
personnel in accordance with the Company's LTI Share Plan as part of their remuneration. As at 30 June 2016, FY2015 non-
recourse loans had reduced to $5,960,580.
In FY2014, 4,090,000 FY2014 performance 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. During FY2015, 125,000 FY2014 performance shares were cancelled,
reducing the total FY2014 performance shares on issue to 3,965,000. As at 30 June 2016, FY2014 non-recourse loans had
reduced to $2,562,410.
Summary of key terms for the respective financial year issues are noted below:
Loan Terms:
FY2014
a. Loan Amount
$0.7304 per share
b. Interest rate
0%
FY2015
$1.1874 per share
0%
FY2016
$2.1818 per share
0%
c. Term of Loan
20 November 2013 to 30 June 2016
9 October 2014 to 30 June 2017
9 July 2015 to 30 June 2018
d. Vesting Conditions
(1) Achievement of Performance Hurdles Measured
at End of Year 3, being 30 June 2016
(2) Continued employment
(3) Personal Performance
satisfactory in all years
reviews must be
(1) Achievement of Performance Hurdles Measured
at End of Year 3, being 30 June 2017
(2) Continued employment
(3) Personal Performance
satisfactory in all years
reviews must be
(1) Achievement of Performance Hurdles Measured
at End of Year 3, being 30 June 2018
(2) Continued employment
(3) Personal performance
satisfactory in all years
reviews must be
The loans are limited 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 is independently
determined using a Monte Carlo simulation model (market based vesting conditions) and a Black Scholes Model (non-
market vesting conditions) that takes into account the exercise price, the term of the performance share, the impact of
dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield, the risk free rate for the term of the performance share and the correlations and volatilities of the peer group
companies.
The model inputs for performances shares granted during the year ended 30 June 2016 are noted below:
Model Inputs
(a) Exercise price
(b) Grant date
(c) Expiry date
(d) Share price at grant date
(e) Expected volatility of the company’s shares
(f) Expected dividend yield
(g) Risk-free interest rate
9 July 2015
$2.1818
9 July 2015
30 June 2018
$2.21
60%
2.26%
1.87%
The expected price volatility is based on the historic volatility (based on the remaining life of the performance share)
adjusted for any expected changes to future volatility due to publicly available information.
The value of the instruments granted have 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 were expensed and accounted for in the share option
reserve was for the year ended 30 June 2016 was $1,521,253 (2015: $896,587).
2016 Annual Financial Report
Page 24
DIRECTORS’ REPORT
SHARES UNDER OPTION
(a) Unissued Ordinary Shares
Unissued ordinary shares of Northern Star Resources Limited under option at the date of this report are as follows:
Date Options Granted
Expiry Date
Exercise Price
Number Under Option
14 November 2014
9 July 2015
31 July 2017
31 July 2018
$1.2804
$2.1818
2,338,132
1,157,015
3,495,147
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
CORPORATE GOVERNANCE STATEMENT
Northern Star Resources Limited and the Board are committed to achieving and demonstrating the highest standards of
corporate governance. Northern Star Resources Limited has reviewed its corporate governance practices against the
Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance
Council.
The 2016 Corporate Governance Statement is dated as at 18 August 2016 and reflects the corporate governance practices
in place throughout the 2016 financial year. The 2016 corporate governance statement was approved by the Board on
18 August 2016. A description of the Group's current corporate governance practices is set out in the Group's corporate
governance statement which can be viewed at http://www.nsrltd.com/about/corporate-governance/.
INSURANCE OF OFFICERS AND INDEMNITIES
During the year 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
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237
of the Corporations Act 2001.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or Group are important.
Details of the amounts paid or payable to the auditor (Deloitte Touche Tohmatsu) for the audit and non-audit services
provided during the year are disclosed in note 21 to the financial statements.
The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the
auditor did not compromise the auditor independence requirements of the Corporations Act 2001 because none of the
services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
AUDITOR INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 26.
ROUNDING
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to the 'rounding off' of amounts in the Directors' Report. Amounts in the Directors' Report have been rounded off in
accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of Directors.
BILL BEAMENT
Managing Director
Perth, Western Australia
19 August 2016
2016 Annual Financial Report
Page 25
AUDITOR’S INDEPENDENCE DECLARATION
2016 Annual Financial Report
Page 26
FINANCIAL REPORT
TABLE OF CONTENTS
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
PAGE
28
29
30
31
32
67
These financial statements are the consolidated financial statements of the Group consisting of Northern Star Resources
Limited and its subsidiaries. A list of subsidiaries is included in note 16.
The financial statements are presented in the Australian currency.
Northern Star Resources Limited is a company limited by shares, incorporated and domiciled in Australia.
Its Registered Office is:
Northern Star Resources Limited
Level 1
388 Hay Street
Subiaco WA 6008
The financial statements were authorised for issue by the Directors on 19 August 2016. The Directors have the power to
amend and re-issue the financial statements.
Press releases, financial reports and other information is available at our investor and media section on our website:
www.nsrltd.com
2016 Annual Financial Report
Page 27
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 30 June 2016
Continuing operations
Sales revenue
Cost of sales
Other income and expense
Corporate and technical services
Acquisition costs
Restructure costs
Impairment of assets
Finance costs
Profit before income tax
Income tax expense
Profit from continuing operations
Discontinued operations
Loss from discontinued operation
Profit for the year
Notes
30 June 2016
$'000
30 June 2015
$'000
3
6(a)
5
6(b)
6(c)
6(d)
6(e)
7
785,788
(512,419)
273,369
5,254
(30,952)
(1,312)
-
(4,389)
(4,278)
237,692
(72,365)
165,327
728,151
(515,902)
212,249
969
(23,035)
(12,757)
(4,223)
(8,099)
(7,987)
157,117
(48,391)
108,726
15(b)
(13,962)
151,365
(16,824)
91,902
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of available-for-sale financial assets
Income tax relating to these items
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Owners of the Company
Total comprehensive income for the year attributable to owners of Northern Star
Resources Limited arises from:
Continuing operations
Discontinued operations
Earnings per share for profit from continuing operations attributable to the
ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
Earnings per share for profit attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
22
22
22
22
1,104
(331)
773
152,138
152,138
166,100
(13,962)
152,138
Cents
27.6
27.4
25.2
25.1
4,131
(1,239)
2,892
94,794
94,794
111,618
(16,824)
94,794
Cents
18.4
18.3
15.5
15.5
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying
notes.
2016 Annual Financial Report
Page 28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Assets classified as held for sale
Total current assets
Non-current assets
Trade and other receivables
Available-for-sale financial assets
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Retained earnings
TOTAL EQUITY
Notes
30 June 2016
$'000
30 June 2015
$'000
8(c)
8(a)
9(e)
9(d)
15
8(a)
8(b)
9(a)
9(b)
9(c)
8(d)
8(e)
9(d)
9(f)
15
8(e)
9(f)
9(d)
10(a)
315,341
10,521
59,986
-
54,567
440,415
2,187
8,779
81,775
98,420
131,953
323,114
763,529
78,045
9,194
35,896
26,914
150,049
41,445
191,494
4,871
78,681
36,569
120,121
311,615
451,914
214,950
8,246
228,718
451,914
167,443
13,674
70,982
10,987
-
263,086
-
7,537
102,563
56,624
163,587
330,311
593,397
93,053
8,322
-
32,914
134,289
-
134,289
8,167
100,076
27,613
135,856
270,145
323,252
204,925
4,960
113,367
323,252
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2016 Annual Financial Report
Page 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2016
Notes
10(a)
12(b)
10(a)
12(b)
Balance at 1 July 2014
Profit for the period
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and
tax
Dividends provided for or paid
Employee share and option plans - value of
employee services
Exercise of employee share options
Share plan loan repayment
Other
Balance at 30 June 2015
Balance at 1 July 2015
Profit for the period
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and
tax
Dividends provided for or paid
Employee share and option plans - value of
employee services
Exercise of employee share options
Share plan loan repayment
Balance at 30 June 2016
Share
capital
$'000
193,808
-
-
-
Available for
sale reserve
$'000
287
-
2,892
2,892
Share-based
payments
reserve
$'000
395
-
-
-
Retained
earnings
$'000
47,994
91,902
-
91,902
Total
equity
$'000
242,484
91,902
2,892
94,794
10,000
-
980
443
-
(306)
11,117
204,925
204,925
-
-
-
9,000
-
955
70
-
10,025
214,950
-
-
-
-
-
-
-
3,179
3,179
-
773
773
-
-
-
-
-
-
3,952
-
-
-
(26,529)
10,000
(26,529)
1,206
(443)
317
306
1,386
1,781
1,781
-
-
-
-
-
-
-
(26,529)
113,367
113,367
151,365
-
151,365
2,186
-
317
-
(14,026)
323,252
323,252
151,365
773
152,138
-
-
-
(36,014)
9,000
(36,014)
2,147
(70)
436
2,513
4,294
-
-
-
(36,014)
228,718
3,101
-
436
(23,477)
451,914
Nature and purposes of reserves:
Available-for-sale financial assets
Changes in the fair value of investments that are classified as available-for-sale financial assets (eg. equity securities), are
recognised in other comprehensive income and accumulated in a separate reserve within equity. Amounts are reclassified
to profit or loss when the associated assets are sold or impaired.
Share-based payments
The share-based payments reserve relates to shares, performance shares and share options granted by the Company to its
employees. Further information about share-based payments to employees is set out in note 20.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2016 Annual Financial Report
Page 30
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for acquisition of businesses, net of cash acquired
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for mine properties
Payments for available for sale financial assets
Proceeds from sale of property, plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Finance lease payments
Dividends paid to Company's Shareholders
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of year
Notes
30 June 2016
$'000
30 June 2015
$'000
897,701
(506,085)
3,850
(1,258)
(10,873)
383,335
-
(17,918)
(61,538)
(110,184)
(152)
69
(189,723)
-
-
(9,700)
(36,014)
(45,714)
147,898
167,443
315,341
847,086
(449,676)
2,079
(1,917)
(38,563)
359,009
(90,729)
(20,524)
(35,619)
(93,524)
(500)
1,438
(239,458)
70,750
(70,750)
(7,966)
(26,529)
(34,495)
85,056
82,387
167,443
9(d)
8(c)
13
9(a)
9(b)
12(b)
8(c)
Details of cash flows related to discontinued operations are presented in note 15.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
2016 Annual Financial Report
Page 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
PAGE
1
Critical estimates and judgements
How numbers are calculated
2
3
4
5
6
7
8
9
Segment information
Revenue
Significant changes in the current reporting period
Other income and expense items
Expenses
Income tax expense
Financial assets and financial liabilities
Non-financial assets and liabilities
10
Equity
Risk
11
12
Financial risk management
Capital management
Group structure
13
14
15
16
Business combination
Asset acquisition
Discontinued operation
Interests in other entities
Unrecognised items
17
18
Commitments
Events occurring after the reporting period
Other information
19
20
21
22
23
24
25
Related party transactions
Share-based payments
Remuneration of auditors
Earnings per share
Deed of cross guarantee
Parent entity financial information
Summary of significant accounting policies
33
33
33
35
36
36
36
38
39
42
49
49
49
52
52
52
54
54
55
56
56
56
56
56
57
59
59
60
61
62
2016 Annual Financial Report
Page 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CRITICAL ESTIMATES AND JUDGEMENTS
a) Critical accounting estimates and assumptions
(i) 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 Rreserves being restated. Such changes may impact asset
carrying values, depreciation and amortisation rates, deferred development costs and provisions for restoration.
Other critical accounting judgements, estimates and assumptions are discussed in the following notes:
Unit of production method of depreciation/amortisation
Share-based payments
Exploration and evaluation expenditure
Recovery of deferred tax assets
Mine rehabilitation provision
Impairment of assets
note 6(a)
note 6(b)
note 9(b)
note 9(d)
note 9(f)
note 25(d); 9(c)
HOW NUMBERS ARE CALCULATED
This section provides additional information about those individual line items in the financial statements that the Directors
consider most relevant in the context of the operations of the entity, including:
(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements. These
cover situations where the accounting standards either allow a choice or do not deal with a particular type of
transaction
(b) analysis and sub-totals, including segment information
(c) information about estimates and judgements made in relation to particular items.
2. SEGMENT INFORMATION
(a) Description of segments and principal activities
The Group's Executive Committee consisting of the Managing Director, Chief Operating Officer, Chief Financial Officer and
Chief Geological Officer, examine the Group's performance and have identified six operating segments relating to the
continuing operations of the business:
1. Paulsens, WA Australia - Mining and processing of gold
2. Kundana, WA Australia - Gold mining
3. Kanowna Belle, WA Australia - Mining and processing of gold
4. Jundee, WA Australia - Mining and processing of gold
5. Tanami, NT Australia (acquired 31 July 2015)
6. Exploration - Exploration and evaluation of gold mineralisation
An operating segment is a component of the Group that engages in business activities from which it may earn revenues or
incur expenses.
Exploration compromises all projects in the exploration, evaluation and feasibility phase of the Group. These include the Mt
Olympus, Fortescue JV and Electric Dingo projects as well as ongoing exploration programmes at the Group’s respective
sites.
During the year the Group commenced a sales process related to its Plutonic operations in WA, which is consequently
classified as a discontinued operation as at 30 June 2016. Further information on Plutonic and the disposal process is
included in note 15.
An analysis of segment revenues is presented in note 3.
2016 Annual Financial Report
Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b) Segment results
The segment information for the year ended 30 June 2016 is as follows:
2016
Segment net operating profit (loss)
before income tax
Depreciation and amortisation
Impairment
Finance costs
Segment EBITDA
Total segment assets
Total segment liabilities
Paulsens
$'000
Kundana
$'000
Kanowna
Belle
$'000
32,481
32,302
-
146
64,929
57,506
(21,676)
78,322
25,639
-
20
103,981
69,021
(18,751)
62,174
17,594
-
656
80,424
60,935
(65,841)
The segment information for the year ended 30 June 2015 is as follows:
2015
Segment net operating profit (loss)
before income tax
Depreciation and amortisation
Impairment
Finance costs
Segment EBITDA
Total segment assets
Total segment liabilities
Paulsens
$'000
Plutonic
$'000
Kundana
$'000
12,918
24,072
-
141
37,131
62,336
(17,366)
(22,271)
27,065
-
1,238
6,032
56,751
(57,531)
71,671
27,609
-
48
99,328
59,835
(13,645)
Jundee
$'000
98,208
73,932
-
1,176
173,316
103,105
(69,405)
Kanowna
Belle
$'000
33,252
17,316
-
1,923
52,491
56,249
(64,994)
Tanami Exploration
$'000
$'000
Total
$'000
(2,099)
-
-
-
(2,099)
596
(834)
(4,375)
-
4,375
-
-
98,420
-
264,711
149,467
4,375
1,998
420,551
389,583
(176,507)
Jundee Exploration
$'000
$'000
Total
$'000
85,729
69,194
-
1,215
156,138
118,644
(72,025)
(8,573)
-
8,573
-
-
56,624
-
172,726
165,256
8,573
4,565
351,120
410,439
(225,561)
(c) Segment EBITDA
Segment EBITDA is a non-IFRS measure, being earnings before interest, tax, depreciation and amortisation and is calculated
as follows: profit before income tax plus depreciation, amortisation, impairment and finance costs.
Interest income, finance charges, interest expense and acquisition costs are not allocated to the operating segments as this
type of activity is driven by the central treasury function which manages the cash position of the Group.
Segment EBITDA reconciles to profit before income tax from continuing operations for the year ended 30 June 2016 as
follows:
Segment EBITDA
Other income
Finance costs
Depreciation
Amortisation
Corporate and technical services
Acquisition costs
Share-based payments
Impairment of assets
Profit before income tax from continuing operations
Segment EBITDA reconciles to profit before tax for the year ended 30 June 2015 as follows:
Segment EBITDA
Other income
Finance costs
Depreciation
Amortisation
Corporate and technical services
Acquisition costs
Share-based payments
Impairment of assets
Profit before tax
2016 Annual Financial Report
30 June 2016
$'000
420,551
5,254
(4,278)
(24,515)
(125,215)
(25,303)
(1,312)
(3,101)
(4,389)
237,692
30 June 2015
$'000
351,120
1,158
(9,098)
(43,032)
(122,454)
(21,095)
(12,757)
(2,186)
(8,573)
133,083
Page 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation to profit before income tax from continuing operations
Profit before tax
Loss before income tax from discontinued operations
Profit before income tax from continuing operations
133,083
24,034
157,117
(d) Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the
operations of the segment and the physical location of the asset.
Operating segments' assets are reconciled to total assets as follows:
Segment assets
Unallocated:
Assets classified as held for sale
Available-for-sale financial assets
Cash and cash equivalents
Trade and other receivables
Current tax asset
Property, plant and equipment
Total assets as per the Consolidated Statement of Financial Position
30 June 2016
$'000
389,583
30 June 2015
$'000
410,439
54,567
8,779
303,974
4,712
-
1,914
763,529
-
7,537
159,456
4,979
10,987
-
593,398
Investment in equity securities (classified as available-for-sale financial assets) held by the Group are not considered to be
segment assets as they are managed by the treasury function.
(e) Segment liabilities
Operating segments' liabilities are reconciled to total liabilities as follows:
Segment liabilities
Unallocated:
Trade and other payables
Borrowings
Provision for employee benefits
Current tax liabilities
Provisions - other
Deferred tax liabilities (net)
Liabilities attributable to assets held for sale
Total liabilities as per the Consolidated Statement of Financial Position
3. REVENUE
30 June 2016
$'000
176,507
30 June 2015
$'000
225,561
7,231
4,585
5,789
35,896
3,593
36,569
41,445
311,615
4,058
-
5,550
-
7,363
27,613
-
270,145
Accounting Policy
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and the revenue can
be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Revenue is recognised when there has been a transfer of risks and rewards from the Group to an external party, no further
processing is required by the Group, quality and quantity of the goods has been determined with reasonable accuracy, the
selling price is fixed or determinable and collectability is probable. The point at which risk and rewards passes for the majority
of the Group’s commodity sales is upon delivery of the gold bullion to the refiner or its agent. Adjustments are made for
variations in commodity price, assay and weight between the time of dispatch and the time of final settlement.
The Group derives the following types of revenue:
Sale of gold
Sale of silver
Total revenue from continuing operations
30 June 2016
$'000
784,072
1,716
785,788
30 June 2015
$'000
726,342
1,809
728,151
2016 Annual Financial Report
Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(a) Segment revenue
The total of revenue, broken down by operating segment, is shown in the following table. All revenue is from external
customers and from one geographical location (Australia). No revenues are generated by the Tanami or Exploration
operating segments.
2016
2015
*Plutonic classified as a discontinued operation as at 30 June 2016 and 2015 for comparative purposes.
Plutonic*
$'000
-
-
Kundana
$'000
170,452
148,734
Kanowna Belle
$'000
158,030
140,283
Paulsens
$'000
126,703
113,936
Jundee
$'000
330,603
325,198
Total
$'000
785,788
728,151
4. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD
The financial position and performance of the Group was particularly affected by the following events and transactions
during the reporting period:
Completion of settlement with Tanami Gold under which Northern Star can progressively acquire a 60% joint venture
interest in the Central Tanami Project. Settlement occurred on 31 July 2015 following a payment of A$20 million by
Northern Star to Tanami Gold NL. This comprised a cash payment of a A$11 million and the issue of 4.29 million Northern
Star shares which have a value of A$9 million based on their five-day volume weighted average price prior to the ASX
announcement of the deal on 26 February 2015. As a result of the payment Northern Star now has a 25% interest in the
Central Tanami Project
In February 2016, the Company announced its intention to run a formal process to consider the sale of the Plutonic
operations. As announced to the ASX on 15 August 2016, the Company has executed a legally-binding Sale and
Purchase Agreement to sell the Plutonic operations subject to satisfaction of certain conditions as disclosed in the
announcement. Plutonic operations are classified as held for sale at 30 June 2016, refer to note 15 of the financial report
for details.
For a detailed discussion about the Group’s performance and financial position please refer to our operating and financial
review on pages 3 to 14.
5. OTHER INCOME AND EXPENSE ITEMS
Net loss on disposal of property, plant and equipment
Interest income
Other
Interest
Interest income is recognised as it accrues using the effective interest method.
6. EXPENSES
(a) Cost of sales
Mining
Processing
Site services
Employee benefit expenses
Depreciation
Amortisation
Government royalty expense
Change in inventories
30 June 2016
$'000
(432)
4,250
1,436
5,254
30 June 2015
$'000
(1,845)
2,032
782
969
30 June 2016
$'000
163,478
63,805
19,062
99,499
24,253
125,215
19,689
(2,582)
512,419
30 June 2015
$'000
170,559
68,373
18,410
89,061
30,952
107,240
18,159
13,148
515,902
the unit-of-production basis when depreciating/amortising mine
Depreciation/amortisation method
Items of property, plant and equipment and mine properties are depreciated/amortised over their useful lives. The Group
uses
in a
depreciation/amortisation charge proportional to the depletion of the anticipated remaining life of mine which is
referenced to the estimated economic Reserve and Resources of the property to which the assets relate. Each item’s
economic life, which is assessed annually has due regard to both its physical life limitations and to present assessments of
economically recoverable Reserves and Resources of the mine property at which it is located.
specific assets which
results
Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to allocate
their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold
improvements and certain leased plant and equipment, the shorter lease term as follows:
2016 Annual Financial Report
Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Land and buildings
Plant and equipment
Motor Vehicles
Office equipment
5 - 20 years
2 - 20 years
4 - 10 years
2 - 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Royalties
Royalties under existing royalty regimes are payable on sales and are therefore recognised as the sale occurs.
(b) Corporate and technical services
Administration
Depreciation
Employee benefit expenses
Share-based payments
30 June 2016
$'000
14,812
263
12,776
3,101
30,952
30 June 2015
$'000
11,407
230
9,212
2,186
23,035
Accounting policy
Share-based compensation benefits are provided to employees via Option and Share Plans as discussed in note 20.
The fair value of shares and options granted under these Plans are recognised as a share-based payments expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the
shares or options granted, which includes any market performance conditions and the impact of any non-vesting conditions
but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of shares and options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of shares and options
that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in profit or loss with a corresponding adjustment to equity.
(c) Acquisition costs
Pre-emptive waiver expense
Gain on bargain purchase
Acquisition costs
30 June 2016
$'000
-
-
1,312
1,312
30 June 2015
$'000
10,000
(10,000)
12,757
12,757
During the year ended 30 June 2015, the Company completed the acquisition of the Jundee gold mine from Newmont
Mining Corporation. Acquisition related costs of $12.8 million and ordinary shares issued to the value of $10.0 million to a third
party to waive their pre-emptive right were excluded from the consideration transfer and have been recognised as an
expense in the statement of profit or loss and other comprehensive income. The bargain purchase arose as a result of the
vendor making a strategic decision to reduce their presence in the Australian market as part of a review of their global
operations.
(d) Impairment of assets
Exploration and evaluation assets
Available-for-sale financial assets
(e) Finance costs
Interest expense
Provisions: unwinding of discount
Finance charges
30 June 2016
$'000
4,375
14
4,389
30 June 2015
$'000
8,099
-
8,099
30 June 2016
$'000
1,173
1,998
1,107
4,278
30 June 2015
$'000
2,234
3,326
2,427
7,987
Provision - unwinding of discount
The Group records the present value of the estimated cost of legal and constructive obligations to rehabilitate operating
locations in the period in which the obligation is incurred. The unwinding of the effect of discounting the provision is
recorded as a finance charge in profit or loss.
Total expenses
553,350
567,780
2016 Annual Financial Report
Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME TAX EXPENSE
This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised directly in equity
and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates
made in relation to the Group's tax position.
(a) Income tax expense
Current tax
Current tax on profits for the year
Adjustments for current tax of prior periods
Total current tax
Deferred income tax
Decrease (increase) in deferred tax assets (note 9(d))
(Decrease) increase in deferred tax liabilities (note 9(d))
Total deferred tax expense/(benefit)
Income tax expense
Income tax expense/(benefit) is attributable to:
Profit from continuing operations
Loss from discontinued operations (note 15)
30 June 2016
$'000
30 June 2015
$'000
57,542
(27)
57,515
(1,882)
10,748
8,866
66,381
72,365
(5,984)
66,381
28,106
1,454
29,560
(3,010)
14,631
11,621
41,181
48,391
(7,210)
41,181
(b) Accounting policy
The income tax expense for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to
unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(c) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Loss from discontinuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2015 - 30.0%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Share-based payments
Sundry items
Recognition of deferred tax assets not recoverable in prior periods
Adjustment for current tax of prior periods
Income tax expense
(d) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised
in net profit or loss or other comprehensive income but directly debited or credited to
equity:
Deferred tax: available-for-sale financial assets
2016 Annual Financial Report
30 June 2016
$'000
237,692
(19,946)
217,746
65,324
30 June 2015
$'000
157,117
(24,034)
133,083
39,925
754
3
327
(27)
66,381
(284,127)
566
(134)
(630)
1,454
41,181
(174,264)
Notes 30 June 2016
$'000
30 June 2015
$'000
9(d)
331
1,239
Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
This note provides information about the Group's financial instruments, including:
an overview of all financial instruments held by the Group
specific information about each type of financial instrument
accounting policies
information about determining the fair value of the instruments, including judgements and estimation uncertainty
involved.
The Group holds the following financial instruments:
Financial assets
2016
Cash and cash equivalents
Trade and other receivables*
Available-for-sale financial assets
2015
Cash and cash equivalents
Trade and other receivables*
Available-for-sale financial assets
* excluding prepayments
Financial liabilities
2016
Trade and other payables
Borrowings
2015
Trade and other payables
Borrowings
Notes
8(c)
8(a)
8(b)
8(c)
8(a)
8(b)
Notes
8(d)
8(e)
8(d)
8(e)
Assets at
FVOCI
$'000
Financial assets
at amortised
cost
$'000
-
-
8,779
8,779
-
-
7,537
7,537
315,341
9,933
-
325,274
167,443
12,338
-
179,781
Liabilities at
amortised
cost
$'000
78,045
14,065
92,110
93,053
16,489
109,542
Total
$'000
315,341
9,933
8,779
334,053
167,443
12,338
7,537
187,318
Total
$'000
78,045
14,065
92,110
93,053
16,489
109,542
The Group’s exposure to various risks associated with the financial instruments is discussed in note 11. The maximum exposure
to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
(a) Trade and other receivables
Accounting policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Trade receivables
Sundry debtors
Goods and services tax recoverable
Prepayments
Other receivables
2016 Annual Financial Report
30 June 2016
30 June 2015
Current
$'000
2,768
2,166
3,468
589
1,530
10,521
Non-
current
$'000
-
-
-
2,187
-
2,187
Total
$'000
2,768
2,166
3,468
2,776
1,530
12,708
Current
$'000
5,024
1,551
4,791
1,336
972
13,674
Total
$'000
5,024
1,551
4,791
1,336
972
13,674
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(i) Classification as trade and other receivables
If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented as
non-current assets. Trade receivables are generally due for settlement within 30 days and therefore are all classified as
current.
(ii) Fair value of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is assumed to be the same as their fair value.
(b) Available-for-sale financial assets
Accounting policy
Investments are designated as available-for-sale financial assets if they do not have fixed maturities and fixed or
determinable payments and management intends to hold them for the medium to long-term. Financial assets that are not
classified into any of the other categories (at FVTPL, loans and receivables or held-to-maturity investments) are included in
the available-for-sale category. Refer to note 25 for further information on accounting policies for financial assets and note
8(f) in relation to fair value measurements.
Available-for-sale financial assets include the following classes of financial assets:
Non-current assets
Listed equity securities
30 June 2016
$'000
30 June 2015
$'000
8,779
7,537
(i) Classification of financial assets as available-for-sale
The financial assets are presented as non-current assets unless they mature or management intends to dispose of them
within 12 months of the end of the reporting period.
(ii) Amounts recognised in profit or loss and other comprehensive income
During the year, the following gains/(losses) were recognised in profit or loss and other comprehensive income.
Gains recognised in other comprehensive income
(c) Cash and cash equivalents
Accounting policy
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
30 June 2016
$'000
1,104
30 June 2015
$'000
4,131
Cash at bank and in hand
Deposits at call
(i) Reconciliation to the statement of cash flows
Reconciliation of profit after tax to net cash flow from operating activities:
Profit for the year
Adjustment for
Depreciation and amortisation
Non-cash employee benefits expense - share-based payments
Rehabilitation provision - unwinding of discount
Net loss on sale of non-current assets
Transaction costs written off
Impairment of assets during the period
Change in operating assets and liabilities:
Decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase) in deferred tax assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in current tax liability/asset
Increase in deferred tax liabilities
Increase in provisions
Net cash inflow from operating activities
2016 Annual Financial Report
30 June 2016
$'000
214,041
101,300
315,341
30 June 2015
$'000
165,143
2,300
167,443
30 June 2016
$'000
151,365
30 June 2015
$'000
91,902
173,899
3,101
2,221
635
-
5,147
2,187
(3,785)
(1,882)
(7,103)
46,883
10,507
160
383,335
165,487
2,186
4,564
2,537
1,290
8,573
1,712
14,184
(7,408)
55,577
(16,404)
26,430
8,379
359,009
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Risk exposure
The Group's exposure to interest rate risk is discussed in note 11. 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.
(d) Trade and other payables
Accounting policy
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 60 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised
initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Trade payables
Accruals
Payroll tax and other statutory liabilities
Other payables
30 June 2016
$'000
41,020
28,247
4,807
3,971
78,045
30 June 2015
$'000
45,026
37,923
1,908
8,196
93,053
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term
nature.
(e) Borrowings
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost.
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised under plant and equipment at the lease's inception at the
fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in 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.
Lease liabilities
Other loans
Total secured borrowings
30 June 2016
30 June 2015
Current
$'000
9,070
124
9,194
Non-
current
$'000
4,871
-
4,871
Total
$'000
13,941
124
14,065
Current
$'000
8,322
-
8,322
Non-
current
$'000
8,167
-
8,167
Total
$'000
16,489
-
16,489
(i) Secured liabilities and assets pledged as security
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the
lessor in the event of default.
(ii) Finance leases
The Group has entered into various loan agreements for the purchase of mobile equipment. The interest rates are fixed and
payable over a period of up to 36 months from the inception of the lease.
Commitments in relation to finance leases are payable as follows:
Within one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
Representing lease liabilities:
Current
Non-current
2016 Annual Financial Report
30 June 2016
$'000
30 June 2015
$'000
9,408
4,970
14,378
(437)
13,941
9,070
4,871
13,941
8,824
8,364
17,188
(699)
16,489
8,322
8,167
16,489
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Fair value
For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the interest
payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature. Refer above
for differences as at year end.
(iv) Financing arrangements
At the end of the reporting period, the Group had an undrawn $100 million (2015: $100 million) revolving credit facility and a
$5 million guarantee facility which was drawn down by $3.5 million (2015: nil).
(f) Recognised fair value measurements
As at 30 June 2016, the Group's level 1 financial instruments comprise available-for-sale equity securities of $8.8 million (2015:
$7.5 million). The Group's available-for-sale equity securities are traded in an active market and their fair values are based
upon quoted market prices at the end of the reporting period.
9. NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group's non-financial assets and liabilities, including:
specific information about the following non-financial assets and non-financial liabilities
property, plant and equipment
exploration and evaluation assets
mine properties assets
tax balances
inventories
provisions
accounting policies
information about determining the fair value of the assets and liabilities, including judgements and estimation
uncertainty involved.
(a) Property, plant and equipment
Accounting policy
Property, plant and equipment is carried at historical cost less accumulated depreciation and impairment losses. Refer to
note 25 for further information on accounting policies associated with impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Land &
buildings
$'000
Plant &
equipment
$'000
Motor
Vehicles
$'000
Office
equipment
$'000
Capital work
in progress
$'000
Total
$'000
At 30 June 2015
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2015
Opening net book amount
Additions
Adjustments to provisional business
combination value
Acquired as part of business combination
Disposals
Transfers
Transfer to mine properties
Reclassification of property, plant and
equipment
Depreciation charge
Depreciation charge - discontinued
operations
Closing net book amount
2016 Annual Financial Report
12,808
(5,165)
7,643
141,924
(59,484)
82,440
5,027
(3,342)
1,685
3,064
-
1,726
2,244
-
1,282
-
2,007
(2,067)
(613)
7,643
54,314
11,106
21,106
20,203
(3,797)
17,142
(145)
-
(26,476)
(11,013)
82,440
986
30
1,595
1,526
(178)
110
-
-
(2,195)
(189)
1,685
1,861
(952)
909
663
2
35
414
-
274
-
-
(444)
(35)
909
9,886
-
9,886
171,506
(68,943)
102,563
1,612
29,240
(841)
-
-
(18,808)
(1,317)
-
-
-
9,886
60,639
40,378
23,621
24,387
(3,975)
-
(1,462)
2,007
(31,182)
(11,850)
102,563
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 30 June 2016
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2016
Opening net book amount
Additions
Disposals
Transfers
Transfer to mine properties
Reclassification of property, plant and
equipment
Assets included in a disposal group classified
as held for sale and other disposals
Depreciation charge
Depreciation charge - discontinued
operations
Closing net book amount
Land &
buildings
$'000
Plant &
equipment
$'000
Motor
Vehicles
$'000
Office
equipment
$'000
Capital work
in progress
[$'000
10,653
(5,795)
4,858
140,178
(68,584)
71,594
7,643
-
-
977
-
(44)
(2,171)
(1,352)
(195)
4,858
82,440
-
(673)
26,159
-
(57)
(8,126)
(21,753)
(6,396)
71,594
6,006
(4,278)
1,728
1,685
-
(18)
1,324
-
131
(290)
(1,001)
(103)
1,728
2,443
(1,285)
1,158
909
-
-
773
-
(30)
(65)
(409)
(20)
1,158
2,437
-
2,437
9,886
25,450
-
(29,233)
(2,920)
-
(746)
-
-
2,437
Total
$'000
161,717
(79,942)
81,775
102,563
25,450
(691)
-
(2,920)
-
(11,398)
(24,515)
(6,714)
81,775
(i) Leased assets
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease's inception at the fair value of the lease property,
or, if lower, the present value of the minimum lease payments.
The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the
shorter of the asset’s useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at
the end of the lease term.
Plant and equipment includes the following amounts where the Group is a lessee under a finance lease:
Cost
Accumulation depreciation
Net book amount
30 June 2016
$'000
32,082
(14,894)
17,188
30 June 2015
$'000
27,722
(7,058)
20,664
(b) Exploration and evaluation assets
Accounting policy
Exploration and evaluation assets include the costs of acquiring licences, costs associated with exploration and evaluation
activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination.
Exploration and evaluation expenditure is capitalised on an area of interest basis. Costs incurred before the Group has
obtained the legal rights to explore an area are recognised in the statement of profit or loss and other comprehensive
income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either, the
expenditures are expected to be recouped through successful development and exploitation of the area of interest or
activities in the area of interest have not at the reporting date; reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable Reserves and active and significant operations in, or in relation to,
the area of interest are continuing.
Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of
interest that has been capitalised is transferred to mine properties where it is amortised over the life of the area of interest to
which it relates on a unit-of-production basis. No amortisation is charged during the exploration and evaluation phase.
The application of the above accounting policy requires management to make certain estimates and assumptions as to
future events and circumstances, in particular, the assessment of whether economic quantities of Reserves will be found.
Any such estimates and assumptions may change as new information becomes available, which may require adjustments
to the carrying value of assets. Capitalised exploration and evaluation expenditure is assessed for impairment when an
indicator of impairment exists, and capitalised assets are written off where required.
2016 Annual Financial Report
Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Opening balance at 1 July
Expenditure for the year
Acquired as part of asset acquisition (i)
Reclassification from current assets
Asset classified as held for sale
Transfer to property, plant and equipment
Transfer to mine properties
Reclassification to mine properties
Impairment (ii)
Impairment - discontinued operations
Closing balance
(i) Acquisition of tenements
30 June 2016
$'000
56,624
50,632
20,056
-
(7,704)
-
(16,054)
-
(4,375)
(759)
98,420
30 June 2015
$'000
69,049
34,268
1,450
400
-
(2,007)
(8,255)
(29,707)
(8,099)
(475)
56,624
On 31 July 2015 the Company completed settlement of the agreement with Tanami Gold NL (TAM) under which the
Company can progressively acquire a 60% joint venture interest in the Central Tanami Project. Settlement followed the
payment of A$20 million by the Company to TAM. This comprised a cash payment of A$11 million and the issue of
4.29 million shares in the Company which had a value of A$9 million based on the five-day volume weighted average price
prior to the ASX announcement on 26 February 2015.
As a result of this payment, the Company now has a 25% interest in the Central Tanami Project and surrounding tenements.
Refer to note 14 for further details.
(ii) Impairment
At each reporting date the Group undertakes an assessment of the carrying amount of its exploration and evaluation
assets. During the year the Group identified indicators of impairment on certain exploration and evaluation assets under
AASB 6 Exploration for and Evaluation of Mineral Resources. As a result of this review, an impairment loss of $4.4 million (2015:
$8.1 million) has been recognised in the statement of profit or loss and other comprehensive income in relation to areas of
interest where no future exploration and evaluation activities are expected.
(c) Mine properties
Accounting policy
Mine properties includes aggregate expenditure in relation to mine construction, mine development, exploration and
evaluation expenditure where a development decision has been made and acquired mineral interests.
Expenditure incurred in constructing a mine by, or on behalf of, the Group is accumulated separately for each area of
interest in which economically recoverable Reserves and Resources have been identified. This expenditure includes direct
costs of construction, drilling costs and removal of overburden to gain access to the ore, borrowing costs capitalised during
construction and an appropriate allocation of attributable overheads.
Mine development represents expenditure in respect of exploration and evaluation, overburden removal and construction
costs and development incurred by or on behalf of the Group previously accumulated and carried forward in relation to
properties in which mining has now commenced. Such expenditure comprises direct costs and an appropriate allocation of
directly related overhead expenditure.
All expenditure incurred prior to commencement of production from each development property is carried forward to the
extent to which recoupment out of future revenue from the sale of production, or from the sale of the property, is
reasonably assured. When further development expenditure is incurred in respect of a mine property after commencement
of commercial production, such expenditure is carried forward as part of the cost of the mine property only when future
economic benefits are reasonably assured, otherwise the expenditure is classified as part of the cost of production and
expensed as incurred. Such capitalised development expenditure is added to the total carrying value of mine development
being amortised.
Mine development costs (as transferred from exploration and evaluation and/or mines under construction) are amortised on
a units-of-production basis over the life of mine to which they relate. In applying the units of production method,
amortisation is calculated using the expected total contained ounces as determined by the life of mine plan specific to that
mine property. For development expenditure undertaken during production, the amortisation rate is based on the ratio of
total development expenditure (incurred and anticipated) over the expected total contained ounces as estimated by the
relevant life of mine plan to achieve a consistent amortisation rate per ounce. The rate per ounce is typically updated
annually as the life of mine plans are revised.
Mineral interests comprise identifiable exploration and evaluation assets, Mineral Resources and Ore Reserves, which are
acquired as part of a business combination or joint venture acquisition and are recognised at fair value at the date of
acquisition. Where possible, mineral interests are attributable to specific areas of interest and are classified within mine
properties.
Refer to note 25 for further information on accounting policies associated with impairment.
2016 Annual Financial Report
Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Opening balance at 1 July
Expenditure for the year
Transfer from exploration and evaluation
Acquired as part of business combination
Net transfer from property, plant and equipment
Adjustment to business combination provisional values - net of reclassification from
exploration and evaluation
Assets classified as held for sale
Amortisation
Amortisation - discontinued operations
Closing balance
(ii) Impairment
30 June 2016
$'000
163,587
111,934
16,054
-
2,920
30 June 2015
$'000
90,197
91,308
8,255
96,731
1,462
-
(19,872)
(125,215)
(17,455)
131,953
(1,912)
-
(107,240)
(15,214)
163,587
An impairment indicator assessment was undertaken for all operations at balance date. This review concluded that for the
Plutonic gold mine operation an impairment indicator did exist given the high cost of production and losses incurred during
the year. The other operations were assessed as not having indicators of impairment.
During the year, the Company announced its intention to conduct a sale process for the Plutonic operations. The Plutonic
operations have been classified as held for sale as at 30 June 2016.
An impairment assessment was undertaken prior to the reclassification to held for sale, with the recoverable amount being
referenced to the consideration presented within an arm’s length non-binding offer letter (The Offer). The consideration
included in The Offer composed of a number of components which required judgement in fair valuing. The various
components include:
A$12.5 million cash payment at completion of the Sale and Purchase Agreement ('SPA');
further payments in either cash or equity of the acquirer within six months of the execution of the SPA, valued at at least
A$25 million;
if the proposed acquirer’s parent is listed at completion or lists up to six months after completion of the SPA, one 10 year
warrant for every two shares issued to Northern Star exercisable at a 100% premium to the “Go Public” issue price;
potential milestone payments capped at A$10 million where A$2.5 million is payable for each additional 250,000 ounces
of NI 43-101 compliant indicated Resources (or better) in excess of 1,717,000oz JORC 2012 measured, indicated or
inferred Mineral Resources; and
a 2% net smelter royalty on production between 300,000oz and 600,000oz of refined gold generated from the Project,
capped at A$10 million. The acquirer is entitled to buy the royalty earlier for A$6.5 million.
The Offer was considered the best evidence of fair value less costs to sell in accordance with AASB 136 Impairment of Assets
given that it was a result of a competitive sales process participated in by a number of willing, able and knowledgeable
participants. Subsequent to year end, the Company executed a legally-binding conditional Sale and Purchase Agreement
for the Plutonic gold mine, refer to note 18.
Refer to note 15 for further information in relation to the Plutonic operations, including its related assets and liabilities which
will be transferred as part of any sale.
Based on management's estimate of the fair value of the consideration presented above, the recoverable amount
exceeded the carrying value of the associated assets of the Plutonic operations and therefore no impairment loss was
charged to the profit or loss for the year ended 30 June 2016.
(d) Tax balances
(i) Current tax asset/(liability)
Opening balance at 1 July
Tax paid
Current tax
Adjustment for current tax on prior periods
Closing balance
30 June 2016
$'000
10,987
10,873
(57,542)
(214)
(35,896)
30 June 2015
$'000
(5,228)
38,563
(28,106)
5,758
10,987
2016 Annual Financial Report
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Deferred tax assets
The balance comprises temporary differences attributable to:
Employee benefits
Provisions
Accruals
Available-for-sale financial assets
Other
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Movements
At 1 July 2014
(Charged)/credited
- to profit or loss
- adjustments to prior year
- acquisition of subsidiary
At 30 June 2015
(Charged)/credited
- to profit or loss
At 30 June 2016
(iii) Deferred tax liabilities
Employee
benefits
$'000
6,048
3,544
(5,633)
3,495
7,454
988
8,442
Provisions
$'000
16,630
Investments
$'000
(19)
1,722
-
11,791
30,143
888
31,031
649
-
-
630
(328)
302
The balance comprises temporary differences attributable to:
Property, plant and equipment
Inventories
Exploration and evaluation
Mine properties
Other
Available-for-sale financial assets
Total deferred tax liabilities
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax liabilities
30 June 2016
$'000
30 June 2015
$'000
8,442
31,031
576
302
40,351
1,053
41,404
(41,404)
-
Other
$'000
6,003
(2,905)
(1,803)
-
1,295
334
1,629
7,454
30,143
565
630
38,792
730
39,522
(39,522)
-
Total
$'000
28,662
3,010
(7,436)
15,286
39,522
1,882
41,404
30 June 2016
$'000
30 June 2015
$'000
1,554
8,102
25,710
41,036
76,402
1,571
77,973
(41,404)
36,569
1,918
9,139
16,867
37,972
65,896
1,239
67,135
(39,522)
27,613
Offsetting within tax consolidated group
Northern Star Resources Limited and its wholly-owned Australian subsidiaries have applied the tax consolidation legislation
which means that these entities are taxed as a single entity. As a consequence, the deferred tax assets and deferred tax
liabilities of these entities have been offset in the consolidated financial statements.
2016 Annual Financial Report
Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Movements
At 1 July 2014
Charged/(credited)
- profit or loss
- adjustment to prior year
- to other comprehensive income
- acquisition of subsidiary
At 30 June 2015
Charged/(credited)
- profit or loss
- adjustment to prior year
- to other comprehensive income
At 30 June 2016
Exploration
and
evaluation
$'000
15,284
Mine
properties
$'000
15,785
Property, plant
and
equipment
$'000
975
Inventories
$'000
6,841
1,583
-
-
-
16,867
8,843
-
-
25,710
17,763
327
-
4,097
37,972
3,301
(237)
-
41,036
(6,793)
-
-
7,736
1,918
(360)
(4)
-
1,554
2,298
-
-
-
9,139
(1,037)
-
-
8,102
Other
$'000
581
(220)
(361)
1,239
-
1,239
1
-
331
1,571
Total
$'000
39,466
14,631
(34)
1,239
11,833
67,135
10,748
(241)
331
77,973
Recovery of deferred taxes
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses. Deferred tax assets, including those arising from unutilised tax losses (where applicable),
require management to assess the likelihood that the Group will comply with the relevant tax legislation and will generate
sufficient taxable earnings in future years in order to recognise and utilise those deferred tax assets. Estimates of future
taxable income are based on forecast cash flows from operations and existing tax laws in each jurisdiction. These
assessments require the use of estimates and assumptions such as exchange rates, commodity prices and operating
performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates,
the ability of the Group to realise the deferred tax assets reported at the reporting date could be impacted. Additionally,
future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the Group to obtain tax
deductions in future years.
(e) Inventories
Accounting policy
Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost and net
realisable value. Cost represents the weighted average cost and includes direct purchase costs and an appropriate portion
of fixed and variable production overhead expenditure, including depreciation and amortisation, incurred in converting
materials into finished goods.
Materials and supplies are valued at the lower of cost and net realisable value. Any allowance for obsolescence is
determined by reference to specific stock items identified. A regular and on-going review is undertaken to establish the
extent of surplus items and an allowance is made for any potential loss on their disposal.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Ore stockpiles which are not expected to be processed in the 12 months after the reporting date are classified as non-
current inventory. There is a reasonable expectation the processing of these stockpiles will have a future economic benefit
to the Group and accordingly values these stockpiles at the lower of cost and net realisable value
Current assets
Consumable stores
Ore stockpiles
Gold in circuit
30 June 2016
$'000
30 June 2015
$'000
17,831
29,524
12,631
59,986
30,462
22,064
18,456
70,982
(i) Amounts recognised in profit or loss
Write-downs of inventories to net realisable value amounted to $4.3 million (2015 - Nil). These were recognised as an expense
during the year ended 30 June 2016 and included in 'cost of sales' in profit or loss.
(f) Provisions
Accounting policy
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
2016 Annual Financial Report
Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Provisions are measured at the present value of managements best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability.
Refer to note 25 for further information on accounting policies associated with rehabilitation costs.
Employee entitlements
Rehabilitation
Other
30 June 2016
Non-
current
$'000
1,245
77,436
-
78,681
Current
$'000
22,722
-
4,192
26,914
Total
$'000
23,967
77,436
4,192
105,595
30 June 2015
Non-
current
$'000
2,242
97,834
-
100,076
Current
$'000
24,767
-
8,147
32,914
Total
$'000
27,009
97,834
8,147
132,990
(i) Employee entitlements - leave obligations
The leave obligations cover the Group’s liability for long service leave and annual leave.
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service
leave where employees have completed the required period of service and also those where employees are entitled to
pro-rata payments in certain circumstances. The entire amount of the annual leave provision of $18.5 million (2015 - $17.3
million) is presented as current, since the Group does not have an unconditional right to defer settlement for any of these
obligations. Based on past experience, the Group does not expect all employees to take the full amount of accrued leave
or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid
within the next 12 months.
Current leave obligations expected to be settled after 12 months
30 June 2016
$'000
7,063
30 June 2015
$'000
3,505
(ii) Information about individual provisions and significant estimates
Rehabilitation provision
The Group assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision
for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the
mine sites, including future disturbances caused by further development, changes in technology, changes in regulations,
price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When
these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the
period in which the change becomes known.
Long service leave
The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash
outflows to be made by the Group for those employees with greater than 5 years’ service up to the reporting date. Long-
term benefits not expected to be settled within 12 months are discounted using the rates attaching to high quality
corporate bonds at the reporting date, which most closely match the terms of maturity of the related liability. In determining
the liability for these long-term employee benefits, consideration has been given to expected future increases in wage and
salary rates, the Group’s experience with staff departures and periods of service. Related on-costs are also included in the
liability.
(iii) Movements in provisions
Movements in each class of provision during the financial year, other than employee entitlements, are set out below:
2016
Carrying amount at the start of the year
- additional provisions recognised
- liabilities attributable to assets held for sale
Amounts used during the year
- unwinding of discount
- unwinding of discount - discontinued operations
Carrying amount at end of year
2015
Carrying amount at the start of the year
- additional provisions recognised
- adjustment to business combination provisional values
- acquired through business combination
- unwinding of discount
- unwinding of discount - discontinued operations
Carrying amount at end of year
2016 Annual Financial Report
Rehabilitation
$'000
97,834
473
(23,054)
(39)
1,998
224
77,436
65,523
1,200
(3,837)
30,384
3,326
1,238
97,834
Other
$'000
8,147
4,839
(181)
(8,613)
-
-
4,192
5,417
2,730
-
-
-
-
8,147
Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. EQUITY
Accounting policy
Ordinary shares are classified as equity. They entitle the holder to participate in dividends and have no par value.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
(a) Share capital
Ordinary shares
Fully paid
Total share capital
(i) Movements in ordinary shares:
Details
Opening balance 1 July 2014
Employee Share Plan issues
Equity issue net of transaction costs
Performance Share Plan issues
Exercise of options
Transfers to reserves
Balance 30 June 2015
Employee Share Plan issues
Equity issue net of transaction costs
Performance Share Plan issues
Exercise of options
Balance 30 June 2016
Equity issue
30 June 2016
Shares
30 June 2015
Shares
30 June 2016
$'000
30 June 2015
$'000
600,396,469
600,396,469
592,928,376
592,928,376
214,950
214,950
204,925
204,925
Number of
shares
579,404,804
392,496
7,854,843
5,039,975
236,258
-
592,928,376
187,180
4,290,228
2,810,953
179,732
600,396,469
Total
$'000
193,808
980
10,000
-
443
(306)
204,925
955
9,000
-
70
214,950
On 1 July 2014, the Company issued 7,854,843 fully paid ordinary shares at an issue price of $1.2731 per share in return for
waiving the right of first refusal to buy the Jundee gold mine.
On 31 July 2015, the Company issued 4,290,228 fully paid ordinary shares at an issue price of $2.0978 per share as part of the
settlement with Tanami Gold to progressively acquire a 60% joint venture interest in the Central Tanami Project.
Option and Share Plan
Information relating to the Employee Option Plan and Employee Share Plan, including details of options issued, exercised
and lapsed during the financial year, options outstanding at the end of the financial year and shares issued during the year,
is set out in note 20.
RISK
This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s
financial position and performance.
11. FINANCIAL RISK MANAGEMENT
This note explains the Group's exposure to financial risks and how these risks could affect the Group’s future financial
performance. Current year profit and loss information has been included where relevant to add further context.
Risk
Exposure arising from
Measurement of risk
How the risk is managed
Market risk - foreign exchange
Future commercial transactions
Cash flow forecasting
Market risk – interest rate
Borrowings at variable rates
Sensitivity analysis
Material expenses and revenues are
denominated in Australian Dollars.
Fixed interest rates over term of
borrowings on plant and equipment
Market risk – security prices
Investments in equity securities
Sensitivity analysis
Management of equity investments
Market risk - commodity price risk
Fluctuations in the prevailing
market prices of gold
Sensitivity analysis
Gold forward contracts
Credit risk
Cash and cash equivalents and
trade and other receivables
Aging analysis and credit
ratings
Diversification of bank deposits and
credit risk
Liquidity risk
Borrowings and other liabilities
Rolling cash flow forecasts Management of availability of
committed borrowing facilities and
maturity
2016 Annual Financial Report
Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Board has the overall responsibility for the establishment and oversight of the risk management framework. The Audit
and Risk Committee is responsible for developing and monitoring risk management policies. The Committee reports regularly
to the Board on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The Group’s Audit and Risk Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the
Group.
(a) Market risk
(i) Foreign exchange risk
At reporting date the Group has minimal exposure to foreign currency risk. The Group’s operations are all located within
Australia and material expenses and revenues are denominated in Australian Dollars, the Company’s functional currency.
(ii) Cash flow and fair value interest rate risk
At reporting date the Group has minimal exposure to interest rate risk. The majority of the Group’s borrowings relate to the
purchases of plant and equipment under finance lease arrangements which have fixed interest rates over their term and
therefore not subject to interest rate risk as defined in AASB 7.
(iii) Price risk
Exposure
The Group is exposed to the risk of fluctuations in the prevailing market prices for the gold and silver currently produced from
its operating mines.
The Group manages this risk through the use of gold forward contracts. These contracts are accounted for as sale contracts
with revenue recognised once gold has been physically delivered into the contract. The physical gold delivery contracts are
considered a contract to sell a non-financial item and therefore do not fall within the scope of AASB 139 Financial
Instruments: Recognition and Measurement. As at reporting date the Group has contractual sale commitments of 297,193
ounces of gold at an average price of A$1,737 per ounce (2015: 90,000 ounces at A$1,435 per ounce).
The Group is also exposed to equity securities price risk arising from investments held by the Group and classified in the
statement of financial position as available-for-sale financial assets.
All of the Group's equity investments are publicly traded on the ASX.
Sensitivity
The table below summarises the impact of increases/decreases of the gold price on the Group's post-tax profit for the year.
The analysis is based on the assumption that the gold price had increased/decreased by AUD$100 per ounce (2015:
increased/decreased by AUD$100 per ounce) with all other variables held constant.
Index
Gold price - increase A$100
Gold price - decrease A$100
Impact on post-tax profit
2016
$'000
19,047
(19,047)
2015
$'000
32,760
(32,760)
(b) Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the
Group. Credit risk arises from cash and cash equivalents and credit exposures to gold sales counterparties and financial
counterparties.
(i) Risk management
The Group has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial
loss from defaults. Cash is deposited only with institutions approved by the Board, typically with a current minimum credit
rating of A (or equivalent) as determined by a reputable credit rating agency eg. Standard & Poor’s. Permitted instruments
by which the Group hedges gold price risk are entered into with financial counterparties with a minimum credit of A (or
equivalent). The Group has established limits on aggregate funds on term deposit or invested in money markets to be
placed with a single financial counterparty and monitors credit and counterparty risk using credit default swaps. The Group
sells the majority of its unhedged gold and silver to a single counterparty with settlement terms of no more than 2 days. The
counterparty currently has an AA+ long term rating and AAA short term rating. The Group does not have any other
significant credit risk exposure to a single counterparty or any Group of counterparties having similar characteristics.
(ii) Credit quality
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:
2016 Annual Financial Report
Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Trade receivables
Counterparties with external credit rating
AA
Counterparties without external credit rating *
Group 1
Total trade receivables
Cash at bank and short-term bank deposits
AA
* Group 1 - counterparties with no defaults in the past
30 June 2016
$'000
30 June 2015
$'000
2,015
753
2,768
2,733
2,290
5,023
315,341
167,443
(iii) Impaired trade receivables
In determining the recoverability of trade and other receivables, the Group performs a risk analysis considering the type and
age of the outstanding receivable and the creditworthiness of the counterparty. If appropriate, an impairment loss will be
recognised in profit or loss. The Group does not have any impaired Trade and other receivables as at 30 June 2016 (2015:
nil).
(c) Liquidity risk
The Group manages liquidity risk by monitoring immediate and forecasted cash requirements and ensures adequate cash
reserves are maintained to pay debts as and when due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due. At the end of the
reporting period the Group held deposits at call of $101.3 million (2015: $2.3 million) that are expected to readily generate
cash inflows for managing liquidity risk. Due to the dynamic nature of the underlying businesses, the Group maintains
flexibility in funding by maintaining availability under committed credit facilities.
Management monitors rolling forecasts of the Group's available cash reserve (comprising the undrawn borrowing facilities
below and cash and cash equivalents) on the basis of expected cash flows. This is generally carried out at local level in the
operating companies of the Group. The Group's liquidity management policy involves seeking to maintain a minimum
available cash of at least 30 days costs of goods sold plus net interest costs.
(i) Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
Floating rate
- Expiring within one year (financing facility)
- Expiring beyond one year (financing facility)
30 June 2016
$'000
30 June 2015
$'000
-
100,000
100,000
100,000
-
100,000
The credit facilities may be drawn at any time.
(ii) Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual
maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of discounting is not significant.
Contractual maturities of
financial liabilities
At 30 June 2016
Less than 6
months 6-12 months
$'000
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Total
contractual
cash
flows
$'000
78,045
5,034
124
83,203
Trade and other payables
Finance lease liabilities
Other loans
Total non-derivatives
At 30 June 2015
-
Trade and other payables
1,520
Finance lease liabilities
1,520
Total non-derivatives
The weighted average interest rate on finance lease liabilities was 3.42% (2015: 4.33%)
-
4,374
-
4,374
-
4,023
-
4,023
93,053
4,868
97,921
-
6,844
6,844
-
3,956
3,956
-
947
-
947
-
-
-
-
-
-
-
78,045
14,378
124
92,547
93,053
17,188
110,241
2016 Annual Financial Report
Carrying
amount
liabilities
$'000
78,045
13,941
124
92,110
93,053
16,489
109,542
Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. CAPITAL MANAGEMENT
(a) Risk management
The Group's objectives when managing capital are to
safeguard their ability to continue as a going concern, so that they can continue to provide returns for Shareholders and
benefits for other stakeholders, and
maintain an optimal capital structure to reduce the cost of capital and maximise returns to Shareholders and benefits for
other stakeholders.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to Shareholders,
return capital to Shareholders or issue new shares.
Total capital is equity, as shown in the statement of financial position. The Group is not subject to any externally imposed
capital requirements.
(b) Dividends
(i) Ordinary shares
Final dividend for the year ended 30 June 2015 of 3 cents (2014: 2.5 cents)
per fully paid share paid on 2 October 2015 (2015: 3 October 2014)
Interim dividend for the year ended 30 June 2016 of 3 cents (2015: 2 cents)
per fully paid share paid on 5 April 2016 (2015: 3 April 2015)
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the Directors have recommended the
payment of a final dividend of 4 cents per fully paid ordinary share (2015 - 3 cents), fully
franked based on tax paid at 30%. The aggregate amount of the proposed dividend
expected to be paid on 13 October 2016 out of retained earnings at 30 June 2016, but not
recognised as a liability at year end, is
30 June 2016
$'000
30 June 2015
$'000
18,001
14,686
18,013
36,014
11,843
26,529
30 June 2016
$'000
30 June 2015
$'000
24,016
18,001
(iii) Franking credits
At balance date the value of franking credits available (at 30%) was $26.3 million (2015: $29.6 million).
GROUP STRUCTURE
This section provides information which will help users understand how the Group structure affects the financial position and
performance of the Group as a whole. In particular, there is information about:
changes to the structure that occurred during the year as a result of business combinations and the disposal of a
discontinued operation; and
interests in joint operations.
A list of significant subsidiaries is provided in note 16.
13. BUSINESS COMBINATION
Accounting policy
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the: fair
values of the assets transferred; liabilities incurred to the former owners of the acquired business; equity interests issued by the
Group; fair value of any asset or liability resulting from a contingent consideration arrangement; and fair value of any pre-
existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the
acquisition date fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed,
the difference is recognised directly in profit or loss as a bargain purchase.
2016 Annual Financial Report
Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(a) Jundee Gold Mine
(i) Summary of the acquisition
On 1 July 2014, Northern Star completed the acquisition of the Jundee gold mine from Newmont Mining Corporation. The
total cash consideration paid by Northern Star was $99.7 million, of which $9.0 million was paid during the period ended
30 June 2014.
Details of the purchase consideration and the net identifiable assets acquired are as follows:
Purchase consideration
Cash paid
The assets and liabilities recognised as a result of the acquisition are as follows:
Inventories
Property, plant and equipment
Mine properties
Provision for employee benefits
Provision for rehabilitation
Net identifiable assets acquired
Less: gain on bargain purchase
Net identifiable assets acquired
$'000
99,729
Fair value
$'000
22,150
24,387
96,731
(3,155)
(30,384)
109,729
(10,000)
99,729
Acquisition related costs of $12.8 million and shares issued to the value of $10 million to a third party to waive their pre-
emptive right have been excluded from the consideration transferred and have been recognised as an expense in the
statement of profit or loss and other comprehensive income for the year ended 30 June 2015. The bargain purchase arose
as a result of the vendor making a strategic decision to reduce their presence in the Australian market as part of a review of
their global operations.
(ii) Revenue and profit contribution
Details of the financial impact of the acquisition of the Jundee gold mine on the financial year ended 30 June 2015 are
disclosed in note 2.
(b) Plutonic Gold Mine
(i) Summary of the acquisition
On 1 February 2014, the Company completed a Sale and Purchase Agreement with Barrick Gold Corporation to purchase
the Plutonic gold mine which was initially provisionally accounted for in the consolidated financial statements for the year
ended 30 June 2014. An independent appraisal of the assets and liabilities was commissioned and completed during the
year ended 30 June 2015. Details of the final fair values reported that are impacting current year comparatives are
illustrated below:
Details of the purchase consideration and the net identifiable assets acquired are as follows:
Purchase consideration
Cash Paid
The assets and liabilities recognised as a result of the acquisition are as follows:
Inventories
Available-for-sale financial assets
Property, plant and equipment
Exploration and evaluation
Mine properties
Trade and other payables
Provision for employee entitlements
Provision for rehabilitation
Net identifiable assets acquired
$’000
25,000
Fair Value
$000's
13,007
89
18,422
400
30,554
(8,751)
(7,128)
(21,593)
25,000
(c) Kanowna Belle and East Kundana Joint Venture
(i) Summary of the acquisition
On 1 March 2014, the Company completed the acquisition of Barrick Gold Corporation's 100% owned Kanowna Belle gold
mine and production facilities and 51% interest in the East Kundana Joint Venture which was initially provisionally accounted
for in the consolidated financial statements for the year ended 30 June 2014. An independent appraisal of the assets and
liabilities was commissioned and completed during the year ended 30 June 2015. Details of the final fair values reported that
are impacting current year comparatives are illustrated below:
2016 Annual Financial Report
Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Details of the purchase consideration and the net identifiable assets acquired are as follows:
Purchase consideration
Cash Paid
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Available-for-sale financial assets
Property, plant and equipment
Mine properties
Deferred tax asset
Trade and other payables
Provision for employee entitlements
Provision for rehabilitation
Net identifiable assets acquired
(ii) Purchase consideration - cash outflow
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration
Less: cash balance acquired
14. ASSET ACQUISITION
$’000
75,000
Fair Value
$’000
1,627
9,406
41,560
1,195
29,133
54,933
3,453
(18,078)
(11,648)
(36,581)
75,000
$000
75,000
(1,627)
73,373
On 31 July 2015, the Group completed settlement with Tanami Gold NL (TAM) to progressively acquire a 60% joint venture
interest in the Central Tanami Project (CTP).
As part of the acquisition, the Group has granted TAM two put options to sell the remaining 40% interest in the CTP following
completion. The first put option will grant TAM the right to sell 15% of CTP for A$20 million in cash or NST shares at TAM’s
election, at any time from completion up until three years after the completion of the initial acquisition. If commercial
production is achieved more than three years after completion, TAM may exercise this option at any time up to 30 calendar
days following achievement of Commercial Production. The second put option will grant TAM the right to sell 25% of CTP for
A$32 million in cash or NST shares at TAM’s election at any time from completion up to six calendar months after the
achievement of commercial production.
The total undiscounted amount of payments that the Group could be required to make to TAM upon the exercise of the
two put options is A$52 million.
15. DISCONTINUED OPERATION
Accounting policy
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results
of discontinued operations are presented separately in the statement of profit or loss.
(a) Description
As announced to the ASX in February 2016, the Group commenced a formal sale process for the Plutonic gold mine.
Subsequently, the Group announced on 15 August 2016 that a legally binding conditional Sale and Purchase Agreement
was executed. The associated assets and liabilities were consequently presented as held for sale in the 2016 financial
statements.
As at 30 June 2016 the sales process was at an advanced stage and is expected to complete within 12 months of the
reporting date.
(b) Financial performance and cash flow information
The financial performance and cash flow information presented are for the year ended 30 June 2016.
Revenue (note 3)
Expenses
Loss before income tax
Income tax benefit
Loss after income tax of discontinued operation
Loss from discontinued operation
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from the disposal Group
2016 Annual Financial Report
30 June 2016
$'000
101,629
(121,575)
(19,946)
5,984
(13,962)
(13,962)
5,628
(14,077)
(8,449)
30 June 2015
$'000
117,502
(141,536)
(24,034)
7,210
(16,824)
(16,824)
6,878
(23,933)
(17,055)
Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as at 30 June
2016:
Assets classified as held for sale
Trade receivables
Inventories
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Total assets of disposal group held for sale
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Provisions - employee benefits
Provisions - rehabilitation
Total liabilities of disposal group held for sale
30 June 2016
$'000
812
14,781
11,398
7,704
19,872
54,567
30 June 2016
$'000
11,169
7,222
23,054
41,445
16. INTERESTS IN OTHER ENTITIES
(a) Material subsidiaries
The Group’s principal subsidiaries at 30 June 2016 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals
the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name of entity
Northern Star Mining Services Pty Ltd
Northern Star (Kanowna) Pty Ltd
Kundana Gold Pty Ltd
Gilt-Edged Mining Pty Ltd
EKJV Management Pty Ltd
Kanowna Mines Pty Ltd
GKL Properties Pty Ltd
Northern Star (Tanami) Pty Ltd
Place of
business/ country
of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest held by
the Group
2016
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2015
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
All subsidiaries listed above have been granted relief from the necessity to prepare financial reports in accordance with
Class Order 98/1418 issued by the Australian Securities and Investments Commission. For further information, refer to note 23.
(b) Joint arrangements
FMG JV
Hardey Junction JV
Mt Clement JV
East Kundana Production JV
Kanowna West JV
Kalbarra JV
West Kundana JV
Carbine East JV
Bryah Basin JV
Zebina JV
Principal Activities
Exploration & Development
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Ownership interest held
2015
%
60.00
80.00
20.00
51.00
70.06
62.34
75.50
95.00
0.00
0.00
2016
%
64.43
0.00
20.00
51.00
75.42
62.58
75.50
0.00
0.00
80.00
The joint arrangements listed above are classified as joint operations and are not separate legal entities. They are
contractual arrangements between participants for the sharing of costs and outputs and do not themselves generate
revenue and profit. The joint operations 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 operations are accounted for
in accordance with the Group's accounting policy set out in note 25.
2016 Annual Financial Report
Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNRECOGNISED ITEMS
This section of the notes provides information about items that are not recognised in the financial statements as they do not
(yet) satisfy the recognition criteria.
17. COMMITMENTS
(a) Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Property, plant and equipment
30 June 2016
$'000
16,018
30 June 2015
$'000
6,481
(b) Non-cancellable operating leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to profit or loss on a straight-line basis over the period of the lease.
The Company leases its corporate office under an operating lease, expiring within 1 year. The lease commenced
20 October 2014, with the end date being 9 June 2017. Lease payments are typically escalated annually reflecting market
conditions and inflation.
The Company has also entered into an operating lease for the operation and maintenance of a power station for the
Jundee mine site. The lease term is 10 years.
Commitments for minimum lease payments in relation to non-cancellable operating leases
are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Rental expense relating to operating leases
Minimum lease payments
(c) Gold delivery commitments
30 June 2016
$'000
30 June 2015
$'000
4,058
16,747
14,235
35,040
1,056
1,042
-
2,098
30 June 2016
$'000
1,442
30 June 2015
$'000
1,023
Within one year
Later than one year but not later than five years
18. EVENTS OCCURRING AFTER THE REPORTING PERIOD
Subsequent to the period ended 30 June 2016 the Company announced:
Gold for
physical
delivery
Ounces
161,693
135,500
Weighted
average
contracted
sales price
A$
1,687
1,797
Value of
committed
sales
$’000
272,716
243,470
a final fully franked dividend of 4 cents per share to Shareholders on the record date of 28 September 2016, payable on
13 October 2016.
the execution of a legally-binding conditional Sale and Purchase Agreement for the Plutonic gold mine. The Company
intends to declare a special dividend of 3 cents per share subject to completion as outlined in the announcement to the
ASX on 15 August 2016.
OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards and
other pronouncements, but that is not immediately related to individual line items in the financial statements.
19. RELATED PARTY TRANSACTIONS
(a) Subsidiaries
Interests in subsidiaries are set out in note 16(a).
2016 Annual Financial Report
Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b) Key Management Personnel compensation
Short-term employee benefits
Employee entitlements
Post-employment benefits
Share-based payments
Termination benefits
30 June 2016
$
3,025,572
173,240
163,240
916,939
-
4,278,991
30 June 2015
$
2,441,755
150,482
112,841
584,026
277,093
3,566,197
Detailed remuneration disclosures are provided in the remuneration report on pages 17 to 24.
(c) Transactions with other related parties
(i) Purchases from entities controlled by KMP
The Company has in place policies and procedures which govern transactions involving KMP or related parties. These
policies and procedures restrict the involvement of the KMP or related party in the negotiation, awarding or direct
management of the resultant contract.
The following transactions occurred with related parties:
John Fitzgerald is a Director, and:
is a board member and has a beneficial interest in a shareholding in Optimum Capital Pty Ltd. During the year, a
revenue amount of $10,000 was paid to Optimum Capital Pty Ltd for consulting services provided at normal commercial
rates (2015: $10,000).
Bill Beament:
has a minor beneficial interest in a shareholding of Australian Underground Drilling Pty Ltd. During the year a revenue
amount of $14,940,849 was paid to this business for drilling services at normal commercial rates (2015: $6,952,574); and
has a minor beneficial interest in a shareholding in Premium Mining Personnel Pty Ltd. During the year, a revenue amount
of $4,488,261 was paid to this business for supplying specialist mining labour at commercial rates (2015: $3,979,135).
(d) Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Current payables (purchases of goods and services)
Related entities of KMP
20. SHARE-BASED PAYMENTS
(a) Employee Option Plan
Set out below are summaries of options granted under the Employee Option Plan:
30 June 2016
$
30 June 2015
$
2,072,390
726,589
As at 1 July
Granted during the year
Exercised during the year
Cancelled during the year
As as 30 June
2016
2015
Average
exercise price
per share
option
1.17
2.18
1.05
1.73
1.88
Average
exercise price
per share
option
1.26
1.28
1.29
-
1.17
Number of
options
2,956,815
1,319,279
(250,000)
(530,947)
3,495,147
Number of
options
1,791,666
2,706,815
(1,541,666)
-
2,956,815
No options expired during the periods covered by the above tables.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
Expiry date
15 April 2013
19 November 2014
9 July 2015
Total
Expiring 15 April 2016
Expiring 31 July 2017
Expiring 31 July 2018
Exercise
price
1.05
1.28
2.18
Share
options
30 June 2016
-
2,338,132
1,157,015
3,495,147
Share
options
30 June 2015
250,000
2,706,815
-
2,956,815
2016 Annual Financial Report
Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(i) Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2016 was $0.67 per option (2015:
$0.25). The fair value at grant date is independently determined using a Monte Carlo simulation model (market based
vesting conditions) and a Black Scholes Model (non-market vesting conditions) that takes into account the exercise price,
the term of the options, the impact of dilution (where material), the share price at grant date and expected price volatility
of the underlying option, the expected dividend yield, the risk free rate for the term of the options and the correlations and
volatilities of the peer group companies.
The model inputs for options granted during the year ended 30 June 2016 included:
(a) Options are granted for no consideration and vest based on the Company’s total Shareholder returns (“TSR”) ranking
within a selected peer group of companies over a three year period.
(b) exercise price: $2.1818 (2015 - $1.2804)
(c) grant date: 9 July 2015 (2015 - 14 November 2014)
(d) expiry date: 31 July 2018 (2015 - 31 July 2017)
(e)
share price at grant date: $2.21 (2015 - $1.08)
(f) expected price volatility of the company's shares: 60% (2015 - 58%)
(g) expected dividend yield: 2.26% (2015 - 3.24%)
(h)
risk-free interest rate: 1.87% (2015 - 2.62%)
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any
expected changes to future volatility due to publicly available information.
(b) Employee Share Plan
Under the Employee Share Plan, eligible employees may be granted up to $1,000 of fully paid ordinary shares in the
Company annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount
divided by the weighted average price at which the Company’s shares are traded on the ASX during the week up to and
including the date of grant. The fair value of shares issued during the year was $5.09 (2015: $2.26) per share.
Number of shares issued under the plan to participating employees on 29 June 2016 (2015: 27
May 2015)
2016
2015
187,180
392,496
(c) Performance Share Plan
On 9 July 2015, 2,810,953 FY2016 performance shares were issued to KMP and other senior management of the Company at
an issue price of $2.1818. Corresponding non-recourse loans totalling $6,132,937 were entered into in accordance with the
Plan as part of their remuneration. As at 30 June 2016, non-recourse loans relating to this issue had reduced to $6,010,058.
On 9 October 2014, 4,827,058 FY2015 performance shares were issued to KMP and other senior management of the
Company at an issue price of $1.1874 per share, with a further 212,917 shares issued on 30 March 2015 to an employee of
the Company at an issue price of $2.4549 per share. Corresponding limited recourse loans totalling $6,254,338 were entered
into with KMP and senior management in accordance with the Plan as part of their remuneration. As at 30 June 2016, non-
recourse loans relating to this issued had reduced to $5,960,580.
The loans offered are limited recourse and are secured against the performance shares held by the relevant participants.
The Board may, at its discretion, agree to forgive a loan offered to a participant.
The assessed fair value at grant date of the performance shares granted during the year ended 30 June 2016 was $0.67 per
share (2015: 9 October 2014 $0.37 and 30 March 2015 $0.57).
The fair value at grant date is independently determined using a Monte Carlo simulation model (market based vesting
conditions) and a Black Scholes Model (non-market vesting conditions) that takes into account the exercise price, the term
of the performance share, the impact of dilution (where material), the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield, the risk free rate for the term of the performance share and
the correlations and volatilities of the peer group companies.
The model inputs for performance shares granted during the year ended 30 June 2016 and 30 June 2015 included:
(a) exercise price
(b) grant date
(c) expiry date
(d) share price at grant date
(e) expected volatility of the Company's shares
(f) expected dividend yield
(g) risk-free interest rate
2016
$2.1818
9 July 2015
30 June 2018
$2.21
60%
2.26%
1.87%
(2015: A)
$1.1874
9 October 2014
30 June 2017
$1.245
60%
2.81%
2.63%
(2015: B)
$2.2459
30 March 2015
30 June 2017
$2.26
65%
2.21%
1.73%
The expected price volatility is based on the historic volatility (based on the remaining life of the performance share).
Total performance shares on issued at 30 June 2016 is 11,815,929 (2015: 9,004,975), with a corresponding total non-recourse
loan value of $14,533,048 (2015: 8,837,249).
2016 Annual Financial Report
Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
(a) Deloitte Touche Tohmatsu
(i) Audit and other assurance services
Audit and other assurance services
Audit and review of financial statements
Other assurance services
Due diligence services
Total remuneration for audit and other assurance services
(ii) Taxation services
Taxation services
Tax consulting services
Total remuneration for taxation services
(iii) Other services
Other services
Other assurance services
Total remuneration for other services
Total remuneration of Deloitte Touche Tohmatsu
Total auditors' remuneration
2016
$
2015
$
226,002
203,600
21,000
247,002
-
203,600
55,650
55,650
8,400
8,400
-
-
302,652
302,652
15,540
15,540
227,540
227,540
It is the Group's policy to employ Deloitte Touche Tohmatsu on assignments additional to their statutory audit duties where
Deloitte Touche Tohmatsu expertise and experience with the Group are important. These assignments are principally tax
advice and due diligence reporting on acquisitions, or where Deloitte Touche Tohmatsu is awarded assignments on a
competitive basis. It is the Group's policy to seek competitive tenders for all major consulting projects.
22. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the Company; and
by the weighted average numbers of ordinary shares outstanding during the financial year, excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
(a) Basic earnings per share
From continuing operations attributable to the ordinary equity holders of the company
From discontinued operation
Total basic earnings per share attributable to the ordinary equity holders of the Company
(b) Diluted earnings per share
From continuing operations attributable to the ordinary equity holders of the company
From discontinued operation
Total diluted earnings per share attributable to the ordinary equity holders of the Company
30 June 2016
Cents
27.6
(2.4)
25.2
30 June 2015
Cents
18.4
(2.9)
15.5
30 June 2016
Cents
27.4
(2.3)
25.1
30 June 2015
Cents
18.3
(2.8)
15.5
2016 Annual Financial Report
Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share
Profit/(loss) attributable to the ordinary equity holders of the Company used in calculating
basic earnings per share:
From continuing operations
From discontinued operation
Diluted earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the Company
Used in calculating basic earnings per share
Loss from discontinued operation
Profit attributable to the ordinary equity holders of the company used in calculating diluted
earnings per share
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
Adjustments for calculation of diluted earnings per share:
Options
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
30 June 2016
$'000
30 June 2015
$'000
165,327
(13,962)
151,365
108,726
(16,824)
91,902
165,327
(13,962)
151,365
108,726
(16,824)
91,902
2016
Number
2015
Number
599,659,912
591,015,696
3,495,147
2,956,815
603,155,059
593,972,511
23. DEED OF CROSS GUARANTEE
Northern Star Resources Limited and the following entities are parties to a deed of cross guarantee under which each
company guarantees the debts of the others:
Closed Group:
Northern Star Mining Services Pty Ltd;
Northern Star (Kanowna) Pty Ltd;
Kanowna Mines Pty Ltd;
Gilt-Edged Mining Pty Ltd; and
Northern Star (Tanami) Pty Ltd.
Extended Closed Group:
GKL Properties Pty Ltd;
Kundana Gold Pty Ltd; and
EKJV Management Pty Ltd.
By entering into a deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report
and Directors’ Report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments
Commission.
The above companies represent an ‘extended closed group’ for the purposes of the Class Order, which represent the
entities who are parties to the deed of cross guarantee and which are controlled by Northern Star Resources Limited.
The consolidated statement of profit or loss and other comprehensive income and statement of financial position for the
closed Group is materially consistent with those of the consolidated entity.
2016 Annual Financial Report
Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Available-for-sale financial assets
Share-based payments
Retained earnings
Profit/(loss) for the year
Total comprehensive income
30 June 2016
$'000
30 June 2015
$'000
306,618
237,765
544,383
(93,138)
(215,442)
(308,580)
188,595
248,286
436,881
(76,089)
(158,477)
(234,566)
214,950
204,925
3,952
4,294
12,607
235,803
33,044
33,817
3,179
1,781
(7,570)
202,315
(8,107)
(5,215)
(b) Guarantees entered into by the parent entity
Refer to note 23 for details of guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2016 or 30 June 2015. For information about
guarantees given by the parent entity, please see above.
(d) Contractual commitments for the acquisition of property, plant or equipment
Refer to note 17 for commitments of the Group for the acquisition of property, plant and equipment as at 30 June 2016 or
30 June 2015.
(e) Determining the parent entity financial information
The financial information for the parent entity, Northern Star Resources Limited, has been prepared on the same basis as the
consolidated financial statements, except as set out below.
(i)
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of
Northern Star Resources Limited.
(ii) Tax consolidation legislation
Northern Star Resources Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation.
Investments in subsidiaries, associates and joint venture entities
The head entity, Northern Star Resources Limited, and the controlled entities in the tax consolidated Group account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated Group
continues to be a stand-alone 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.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate
Northern Star Resources Limited for any current tax payable assumed and are compensated by Northern Star Resources
Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are
transferred to Northern Star Resources Limited under the tax consolidation legislation. The funding amounts are determined
by reference to the amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the
head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require
payment of interim funding amounts to assist with its obligations to pay tax instalments.
2016 Annual Financial Report
Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
25. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of all significant accounting policies adopted in the preparation of these consolidated financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial
statements are for the Group consisting of Northern Star Resources Limited and its subsidiaries.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Northern Star Resources
Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the
Group complies with international financial reporting standards (IFRS).
(ii) Historical cost convention
These financial statements have been prepared under the historical cost basis, except for the following:
available-for-sale financial assets, financial assets and liabilities (including derivative instruments); and
assets held for sale - measured at the lower of cost and fair value less cost of disposal.
(iii) New and amended standards adopted by the Group
The Group 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 of the accounting policies of the Group 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 Group.
(iv) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below.
Title of standard
AASB 9
‘Financial
Instruments’
the
Nature of change
AASB 9 addresses
classification,
and
measurement
of
derecognition
and
financial
financial
liabilities,
introduces new rules for
hedge accounting and a
new
impairment model
for financial assets.
assets
Mandatory application date/ Date of
adoption by Group
Must be applied for financial years
commencing on or after 1 January 2018.
Based on the transitional provisions in the
completed AASB 9, early adoption in
phases was only permitted for annual
reporting periods beginning before 1
February 2015. After that date, the new
rules must be adopted in their entirety.
The Group is currently assessing whether it
should adopt AASB 9 before
its
mandatory date.
Impact
While the Group has yet to undertake a detailed
assessment of the classification and measurement of
financial assets, debt instruments currently classified
as available-for-sale (AFS) financial assets would
appear to satisfy the conditions for classification as
at fair value through other comprehensive income
(FVOCI) and hence there will be no change to the
accounting for these assets.
The other financial assets in held by the Group
include:
equity instruments currently classified as AFS for
which a FVOCI election is available,
equity investments currently measured at fair
value through profit or loss (FVPL) which would
likely continue to be measured on the same basis
under AASB 9, and
Accordingly, the Group does not expect the new
guidance to have a significant impact on the
classification and measurement of
financial
assets.
its
There will be no impact on the Group's accounting
for financial liabilities, as the new requirements only
affect the accounting for financial liabilities that are
designated at fair value through profit or loss and
the Group does not have any such liabilities. The
derecognition rules have been transferred from
AASB 139 Financial Instruments: Recognition and
Measurement and have not been changed.
2016 Annual Financial Report
Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The new impairment model requires the recognition
of impairment provisions based on expected credit
losses (ECL) rather than only incurred credit losses as
is the case under AASB 139. It applies to financial
assets classified at amortised cost, debt instruments
measured at FVOCI, contract assets under AASB 15
Revenue from Contracts with Customers,
lease
receivables,
loan commitments and certain
financial guarantee contracts. While the Group has
not yet undertaken a detailed assessment of how its
impairment provisions would be affected by the
new model, it may result in an earlier recognition of
credit losses.
standard also
requirements
introduces expanded
The new
disclosure
in
and
presentation. These are expected to change the
nature and extent of the group’s disclosures about
its financial instruments particularly in the year of the
adoption of the new standard.
changes
Management is currently assessing the effects of
applying the new standard on the Group's financial
statements
Mandatory for financial years
commencing on or after 1 January 2018,
but available for early adoption.
At this stage, the Group is not able to estimate the
effect of the new rules on the Group’s financial
statements. The Group will make more detailed
assessments of the effect over the next twelve
months.
Expected date of adoption by the
Group: 1 January 2018.
AASB 15
Revenue from
Contracts with
Customers
The AASB has issued a
new standard for the
recognition of revenue.
This will replace AASB 118
which covers revenue
arising from the sale of
goods and the rendering
of services and AASB 111
which covers
construction contracts.
The new standard is
based on the principle
that revenue is
recognised when control
of a good or service
transfers to a customer.
The standard permits
either a full retrospective
or a modified
retrospective approach
for the adoption.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions.
(b) Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are
eliminated.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Northern Star Resources
Limited ('Company' or 'parent entity') as at 30 June 2016 and the results of all subsidiaries for the year then ended. Northern
Star Resources Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated
entity.
(ii) Joint arrangements
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the
joint arrangement. Northern Star Resources Limited has only joint operations. A joint operation is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities,
relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous consent of the parties sharing control.
Joint operations
Northern Star Resources Limited Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint
operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been
incorporated in the financial statements under the appropriate headings. Details of the joint operation are set out in note
16().
2016 Annual Financial Report
Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners of Northern Star Resources Limited.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or
significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount
recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are
reclassified to profit or loss.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are
presented in Australian dollars ($), which is Northern Star Resources Limited's functional and presentation currency.
(d) Impairment of assets
At each reporting date, the Group reviews the carrying amounts of its tangible and other intangible assets to determine
whether there is any indication that those assets might be impaired. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss (if any) which is the amount by which the
assets carrying value exceeds its recoverable amount. Where the asset does not generate cash in-flows that are
independent from other assets, the Group estimates the recoverable amount of the cash-generating unit (CGU) to which
the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses for assets other than goodwill, the carrying amount of the asset (or CGU) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
(or CGU) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.
(e) Investments and other financial assets
(i) Classification
The Group classifies its financial assets in the following categories:
financial assets at fair value through profit or loss;
loans and receivables;
held-to-maturity investments; and
available-for-sale financial assets.
The classification depends on the purpose for which the investments were acquired. Management determines the
classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this
designation at the end of each reporting period. See note 8 for details about each type of financial asset.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless
they are designated as hedges. Assets in this category are classified as current assets if they are expected to be settled
within 12 months, otherwise they are classified as non-current.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the
reporting period which are classified as non-current assets. Loans and receivables are included in trade and other
receivables and receivables in the Statement of Financial Position.
2016 Annual Financial Report
Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities
that the Group's management has the positive intention and ability to hold to maturity. If the Group were to sell other than
an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as
available-for-sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less
than 12 months from the end of the reporting period, which are classified as current assets.
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either
designated in this category or not classified in any of the other categories. They are included in non-current assets unless the
investment matures or management intends to dispose of the investment within 12 months of the end of the reporting
period. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable
payments and management intends to hold them for the medium to long-term.
(ii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Loans and receivables and held-to-maturity investments are subsequently carried at amortised cost using the effective
interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair
value. Gains or losses arising from changes in the fair value are recognised as follows:
for ‘financial assets at fair value through profit or loss’ - in profit or loss within other income or other expenses;
for available for sale financial assets that are monetary securities denominated in a foreign currency - translation
differences related to changes in the amortised cost of the security are recognised in profit or loss and other changes in
the carrying amount are recognised in other comprehensive income;
for other monetary and non-monetary securities classified as available for sale - in other comprehensive income.
Dividends on financial assets at fair value through profit or loss and available-for-sale equity instruments are recognised in
profit or loss as part of revenue from continuing operations when the Group’s right to receive payments is established
Interest income from financial assets at fair value through profit or loss is included in the net gains/(losses). Interest on
available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of
revenue from continuing operations.
(iii) Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are
incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as
available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator
that the assets are impaired.
(f) Provision for rehabilitation
Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal
and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using
estimates of future costs, current legal requirements and technology.
Rehabilitation costs are recognised in full at present value as a non-current liability. An equivalent amount is capitalised as
part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after
abandonment as a result of bringing the assets to its present location. The capitalised cost is amortised over the life of the
project and the provision is accreted periodically as the discounting of the liability unwinds. The unwinding of the discount is
recorded as a finance cost.
Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted for on a
prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and extent of the
restoration due to community expectations and future legislation.
(g) Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to the 'rounding off' of amounts in the financial statements. Amounts in the financial statements have been rounded
off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.
2016 Annual Financial Report
Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(h) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of
Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
2016 Annual Financial Report
Page 66
DIRECTORS’ DECLARATION
In the Directors’ opinion:
1.
(a)
the financial statements and notes set out on pages 27 to 66 are in accordance with the Corporations Act
2001, including:
i.
ii.
complying with Accounting Standards, the Corporations Regulations 2001and other mandatory
professional reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its
performance for the financial year ended on that date; and
(b)
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
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended
closed group identified in note 23 will be able to meet any obligations or liabilities to which they are, or may
become, subject by virtue of the deed of cross guarantee described in note 23.
Note 25(a) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This declaration is made with a resolution of the Directors.
BILL BEAMENT
Managing Director
Perth, Western Australia
19 August 2016
2016 Annual Financial Report
Page 67
INDEPENDENT AUDITOR’S REPORT
2016 Annual Financial Report
Page 68
INDEPENDENT AUDITOR’S REPORT
2016 Annual Financial Report
Page 69
ADDITIONAL INFORMATION
The following additional information required by the ASX Listing Rules is current as at 18 August 2016
EQUITY SECURITIES HOLDER INFORMATION
Ordinary Shares
600,542,315 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
4,597
4,239
1,469
1,801
235
12,341
No of Shares
2,473,994
11,430,760
11,553,617
49,837,457
525,246,487
600,542,315
% of Issued Capital
0.412
1.903
1.924
8.299
87.462
100.000
426 Shareholders held less than a marketable parcel (<$500) of ordinary fully paid shares.
J P Morgan Nominees Australia Limited
Twenty Largest Holders of Ordinary Fully Paid Shares
1. HSBC Custody Nominees (Australia) Limited
2. National Nominees Limited
3.
4. Citicorp Nominees Pty Limited
5.
6. Mr William James Beament
7. HSBC Custody Nominees (Australia) Ltd
8. William James Beament
9.
RBC Investor Services Australia Nominees Pty Limited
BNP Paribas Noms Pty Ltd
10. National Nominees Limited
11. Mr Hendrius Petrus Indrisie
12. Wyllie Group Pty Ltd
13. HSBC Custody Nominees (Australia) Limited - A/C 2
14. AMP Life Limited
15.
16. Citicorp Nominees Pty Limited
17. HSBC Custody Nominees (Australia) Limited – GSCO ECA
18.
19. Mr Christopher Kenneth George Rowe
20. Marich Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Stuart Peter Tonkin
TOTAL
Options
No of Shares
148,040,081
115,632,116
106,088,604
41,359,655
12,722,605
7,637,709
4,930,835
2,952,003
2,553,242
2,498,852
2,011,628
2,000,000
1,940,582
1,824,056
1,802,655
1,794,722
1,788,307
1,612,568
1,500,000
1,265,100
461,955,320
% Issued Capital
24.65
19.25
17.67
6.89
2.12
1.27
0.82
0.49
0.43
0.42
0.33
0.33
0.32
0.30
0.30
0.30
0.30
0.27
0.25
0.21
76.92
3,237,737 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
31/7/2017
31/7/2018
No of Options
2,159,414
1,078,323
Exercise Price
$1.2804
$2.1818
No of Holders
25
29
Holding >20%
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
52,064,145
33,963,278
30,060,147
Holding
8.67%
5.66%
5.01%
Name
BlackRock Group
Van Eck Associates Corporation
Vinva Investment Management
Restricted Securities
The following securities are held in escrow:
Ordinary Shares:
Unlisted Options:
12,305,155
3,237,737
On-Market Buy-Back
Currently there is no on-market buy-back of the Company’s securities.
2016 Annual Financial Report
Page 70
TENEMENT SCHEDULE
Tenement
E08/2232
E08/2472
E08/2474
E08/2475
E08/2494
E08/2499
E08/2659
E08/2701
E08/2749
E08/2755
E08/2760
E47/3305
L08/103
P08/653
P52/1420
E52/1678
E52/1723
E52/1730
E52/1731
E52/1852
E52/2360
E52/2362
M52/1049
M52/722
M52/723
M52/737
M52/795
P52/1195
P52/1196
P52/1314
P52/1315
P52/1316
P52/1321
P52/1322
P52/1327
P52/1365
P52/1429
E52/1668
L16/75
M16/188
M16/239
M16/27
M16/411
P16/2508
L16/57
EL10355
EL10411
EL22229
EL22378
EL23342
EL9763
EL26925
EL26926
EL28282
EL28283
EL28474
EL28613
EL8797
ML22934
MLS119
MLS120
MLS121
MLS122
MLS123
MLS124
MLS125
MLS126
MLS127
MLS128
MLS129
MLS130
MLS131
MLS132
MLS133
MLS153
MLS167
MLS168
MLS180
E08/2839
E51/1391
M15/1413
M15/993
M16/181
M16/182
M16/308
M16/309
M16/325
M16/326
M16/421
M16/428
M24/924
E08/1650
EL22061
EL9843
E08/1632
E08/1915
E08/1949
E08/1950
E08/2000
E08/2038
E08/2039
E08/2065
E08/2067
E08/2114
E08/2280
E08/2282
E47/1773
E47/2171
E47/2236
E47/2292
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
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%
100%
100%
51%
51%
51%
51%
51%
51%
51%
51%
51%
51%
51%
100%
25%
25%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
64.43%
Project and Location
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
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Bryah Basin JV - Peak Hill
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Carbine Zuleika - Kalgoorlie
Cave Hill - Tanami
Cave Hill - Tanami
Cave Hill - Tanami
Cave Hill - Tanami
Cave Hill - Tanami
Cave Hill - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Central - Tanami
Cheela Plains - Ashburton
Cheroona - East Murchison
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
Electric Dingo - Ashburton
Farrands Hill - Tanami
Farrands Hill - Tanami
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
NST Status
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder
Holder & Farm-Out
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder & Production Joint Venture
Holder
Holder & Earning-In
Holder & Earning-In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Tenement
E52/2484
E52/2786
E52/2361
E52/3322
G52/291
L52/116
L52/117
L52/118
L52/164
L52/165
L52/166
M52/685
M52/753
M52/796
M52/797
E53/1872
G53/20
L53/100
L53/102
L53/112
L53/113
L53/117
L53/136
L53/137
L53/138
L53/142
L53/143
L53/153
L53/169
L53/174
L53/52
L53/60
L53/68
L53/69
L53/70
L53/71
L53/72
L53/73
L53/75
L53/99
M53/155
M53/156
M53/182
M53/191
M53/192
M53/196
M53/197
M53/198
M53/199
M53/221
M53/226
M53/228
M53/229
M53/230
M53/235
M53/236
M53/237
M53/245
M53/246
M53/247
M53/248
M53/249
M53/250
M53/326
M53/347
M53/372
M53/412
M53/413
M53/414
M53/441
M53/446
M53/451
M53/452
M53/461
M53/477
M53/478
M53/479
M53/480
M53/492
M53/535
M53/536
M53/537
M53/538
M53/539
M53/540
M53/541
M53/552
M53/588
M53/589
M53/611
M53/707
M53/708
M53/711
M53/712
M53/836
M53/874
M53/895
M53/911
M53/929
M53/935
M53/940
M53/966
M27/181
E27/343
E27/457
E27/542
E27/557
L26/198
L27/49
L27/50
Interest
64.43%
64.43%
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%
62.68%
80%
100%
100%
100%
100%
100%
100%
Project and Location
FMG JV - Ashburton
FMG JV - Ashburton
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Hermes - Peak Hill
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Jundee - East Murchison
Kalbara JV - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
NST Status
Earning -In
Earning -In
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Earning -In
Holder
Holder
Holder
Holder
Holder
Holder
Holder
2016 Annual Financial Report
Page 71
TENEMENT SCHEDULE
Tenement
L27/51
L27/60
L27/61
L27/62
L27/83
L27/87
M24/640
M27/103
M27/122
M27/123
M27/127
M27/128
M27/133
M27/157
M27/159
M27/164
M27/175
M27/18
M27/182
M27/191
M27/197
M27/198
M27/202
M27/219
M27/22
M27/228
M27/23
M27/232
M27/272
M27/287
M27/37
M27/378
M27/406
M27/420
M27/438
M27/49
M27/493
M27/494
M27/495
M27/53
M27/57
M27/63
M27/92
P24/4498
P24/4499
P24/4500
P24/4501
P24/4502
P24/4503
P24/4538
P24/4818
P24/4819
P24/4820
P24/4995
P26/3769
P26/3788
P26/4061
P26/4062
P26/4063
P26/4064
P26/4065
P26/4116
P26/4123
P26/4124
P26/4125
P26/4126
P26/4127
P26/4129
P26/4130
P26/4131
P26/4132
P26/4156
P27/1843
P27/1844
P27/1845
P27/1846
P27/1847
P27/1878
P27/1880
P27/1881
P27/1882
P27/2024
P27/2025
P27/2026
P27/2099
P27/2100
P27/2101
P27/2102
P27/2222
P27/2223
P27/2230
M27/245
M27/114
M27/196
M27/41
M27/414
M27/415
M27/47
M27/59
M27/72
M27/73
P27/1826
P27/1827
P27/1828
P27/1829
P27/1830
P27/1831
P27/1832
P27/1833
P27/1834
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%
40%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
Project and Location
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - Kalgoorlie
Kanowna - 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
NST Status
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Tenement
P27/1835
P27/1836
P27/1837
P27/1838
P27/1839
P27/1840
P27/1841
P27/1842
E24/151
P24/4146
P24/4149
P26/3979
P26/3980
P26/3981
P26/3982
P26/3983
P27/1743
E24/152
E24/153
E26/140
E26/194
L16/104
L16/105
L16/106
L16/28
L16/38
L16/39
L16/69
L24/205
L24/206
M15/1351
M15/669
M16/157
M16/260
M16/366
M16/367
M16/408
M16/436
M16/438
M16/440
M16/441
M16/72
M16/73
M16/74
M16/75
M16/87
m16/97
M24/142
M24/435
M24/606
M24/626
M26/680
M26/681
M26/687
M26/688
P16/2575
P24/4229
P24/4230
P24/4236
P24/4969
P24/4970
P24/4971
P24/4972
P26/3574
M08/191
M08/192
M08/193
E52/1941
E52/3024
E52/3025
E52/3026
M52/639
M52/640
M52/734
M52/735
E08/1649
E08/1744
E08/1745
E08/1845
E08/2251
E08/2252
E08/2555
E08/2556
E08/2558
E08/2559
E08/2560
E08/2655
E08/2716
E08/2791
E47/1134
E47/1553
E47/3396
L08/113
L08/12
L08/13
L08/14
L08/148
L08/15
L08/81
L08/91
L08/92
M08/196
M08/222
M08/515
M08/99
P08/565
P47/1637
E52/2509
E52/3189
L52/40
Interest
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
77.23%
80%
80%
80%
80%
80%
80%
80%
80%
80%
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%
20%
20%
20%
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 and Location
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
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- Kalgoorlie
KRGP- 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
Mt Clement - Ashburton
Mt Clement - Ashburton
Mt Clement - 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
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
Paulsens - Ashburton
Paulsens - Ashburton
Paulsens - Ashburton
Peak Hill
Plutonic - Peak Hill
Plutonic - Peak Hill
NST Status
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Earning -In
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Free-Carried Interest
Free-Carried Interest
Free-Carried Interest
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder & Farm-Out
Holder
Holder
2016 Annual Financial Report
Page 72
TENEMENT SCHEDULE
Tenement
L52/41
L52/48
L52/52
L52/54
L52/55
L52/56
L52/70
L52/71
L52/74
M52/148
M52/149
M52/150
M52/170
M52/171
M52/222
M52/223
M52/253
M52/263
M52/264
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Project and Location
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 - Peak Hill
Plutonic - Peak Hill
Plutonic - Peak Hill
Plutonic - Peak Hill
NST Status
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Tenement
M52/289
M52/295
M52/296
M52/300
M52/301
M52/308
M52/309
M52/395
M52/590
M52/591
M52/592
M52/670
M52/671
M52/672
P52/1394
M16/213
M16/214
M16/218
M16/310
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Project and Location
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
77.23% West Kundana - Kalgoorlie JV
77.23% West Kundana - Kalgoorlie JV
77.23% West Kundana - Kalgoorlie JV
77.23% West Kundana - Kalgoorlie JV
NST Status
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
Holder & Earning-In
2016 Annual Financial Report
Page 73
2016 Annual Financial Report