West African Resources Limited
Annual Report
six months ended 31 December 2018
ABN 70 121 539 375
West African Resources Limited
TABLE OF CONTENTS
Page
CORPORATE INFORMATION ............................................................................................................................ 1
CHAIRMAN’S MESSAGE ................................................................................................................................... 2
DIRECTOR’S REPORT ....................................................................................................................................... 2
REMUNERATION REPORT (AUDITED) .......................................................................................................... 13
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........... 25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................... 26
CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................ 27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................... 28
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................... 29
Statement of significant accounting policies .............................................................................................. 29
Segment reporting ..................................................................................................................................... 39
Revenue and expenses ............................................................................................................................. 39
Employee expenses .................................................................................................................................. 39
Income tax ................................................................................................................................................. 40
Loss per share ........................................................................................................................................... 41
Cash and cash equivalents ....................................................................................................................... 42
Trade and other receivables ...................................................................................................................... 43
Property, plant and equipment .................................................................................................................. 44
Mine properties .......................................................................................................................................... 45
Other non-current assets ........................................................................................................................... 45
Trade and other payables .......................................................................................................................... 45
Other provisions ......................................................................................................................................... 46
Issued capital ............................................................................................................................................. 47
Reserves .................................................................................................................................................... 48
Dividends ................................................................................................................................................... 48
Commitments and other contingencies ..................................................................................................... 49
Related party disclosure ............................................................................................................................ 50
Subsequent events after the balance date ................................................................................................ 52
Auditors’ remuneration ............................................................................................................................... 53
Directors and executive disclosures .......................................................................................................... 53
Financial instruments ................................................................................................................................. 55
Financial risk management ........................................................................................................................ 55
Share-based payment plans ...................................................................................................................... 60
West African Resources Limited
Parent entity financial information ............................................................................................................. 61
DIRECTORS’ DECLARATION .......................................................................................................................... 62
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................... 63
INDEPENDENT AUDITOR’S REPORT ............................................................................................................ 64
ADDITIONAL INFORMATION ........................................................................................................................... 68
SUMMARY OF TENEMENTS IN BURKINA FASO .......................................................................................... 70
West African Resources Limited
CORPORATE INFORMATION
Directors
Mark Connelly (Non-Executive Chairman)
Richard Hyde (Managing Director)
Simon Storm (Non-Executive Director)
Ian Kerr (Non-Executive Director)
Principal Place of Business
Level 1, 1 Alvan Street
Subiaco WA 6008 Australia
T: +61 (8) 9481 7344
Registered Office
Level 1, 1 Alvan Street
Subiaco WA 6008 Australia
T: +61 (8) 9481 7344
Local Office
Secteur 27, Quartier Ouayalghin,
Parcelles 07/08, Lot 22, Section SL,
Ouagadougou, Burkina Faso
T: +226 50 36 73 84
Website
www.westafricanresources.com
Share Registry Australia
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terraces
Perth WA 6000 Australia
T: 1300 787 272
Share Registry Canada
Computershare
510 Burrard Street, 3rd Floor
Vancouver BC VC 3B9
T: 604 661 9436
Company Secretary
Simon Storm
Solicitors
Australia
Allion Legal
Level 2, 50 Kings Park Road
West Perth WA 6005
Canada
Stikeman Elliiot
Suite 1700, Park Place
666 Burrard Street
Vancouver BC V6C 2X6
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000 Australia
Security Exchange Australia
Australian Securities Exchange Ltd
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Trading Code
WAF
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West African Resources Limited
CHAIRMAN’S MESSAGE
Dear Shareholder,
I am pleased to present the six-month transition report for
West African Resources Limited following the Company’s
decision to change its financial year end from 30 June to
31 December. This brings the Company’s financial year
into alignment with its operational subsidiaries in Burkina
Faso, which will result in efficiency gains for group
reporting.
The past six months have seen the Board and
management
promised
deliver
transformation of your Company from a junior explorer
into a significant developer of a world-class gold mine.
team
the
on
I sincerely thank our existing and new Shareholders for
sharing our vision that Sanbrado is one of the best
undeveloped gold projects globally and participating in
the December 2018 A$43.2 million equity raising. With
this equity raising, the US$200 million (A$278 million)
debt funding through Taurus Funds Management Pty Ltd,
and the A$35.0 million equity raising completed in May
2018 of the prior period, construction of the Sanbrado
Gold Project in Burkina Faso is fully financed. Because of
your support we are now almost certain of soon becoming
a +200,000 ounce per annum gold producer.
The funding announcement and start of construction
came less than three years after our discovery of ultra-
high-grade gold at Sanbrado’s M1 South deposit. To
achieve this much in such a short time not only proves the
world-class quality of Sanbrado and the capability of our
management team, it also demonstrates the support and
sophistication of Burkina Faso’s government and national
mining industry.
Securing the Sanbrado funding followed five months of
work by West African’s Board and management to
complete extensive project due diligence and negotiate
the best debt terms for our shareholders, and we
undertook a highly competitive process from a strong
MARK CONNELLY
Non-Executive Chairman
bargaining position after receiving proposals from 14
banks and debt financiers.
It is exciting that we have started construction of
Sanbrado, having ordered the long lead mill components
and commenced construction of earthworks, building the
accommodation camp, and excavating the box cut to
provide underground access at M1 South. This is being led
by the Company’s experienced project build team, who
have a significant track record of completing West African
mining projects. We are also partnering with Lycopodium
Engineering
the engineering and construction
management and we are using proven manufacturers and
technologies to ensure that the Sanbrado gold processing
operations are the most reliable and efficient possible.
for
With construction fully funded and many key contracts
awarded, we are on track to pouring first gold at the
Sanbrado gold processing plant by the third quarter of the
2020 calendar year, which is now only 18-months away!
I take this opportunity to thank our management and staff
for their efforts over the past six months that enabled us
to secure the financing for Sanbrado, as well as progress
the building of our mine. It is a testament to the
dedication of our team, particularly the Company’s
founder and Managing Director Richard Hyde, for bringing
this project close to its fruition.
There are more busy months ahead for West African as
our team not only builds Sanbrado, but also works to
complete the Sanbrado Optimisation and Feasibility Study
update.
I also thank my fellow Directors for their support and
dedication to West African achieving its goals.
With many more important milestones ahead of us in
2019, I look forward to sharing our journey with you.
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West African Resources Limited
DIRECTOR’S REPORT
Your Directors present the financial report of West African Resources Limited (the “Company) and the consolidated
entity (the “Group”) for the six-month period ended 31 December 2018.
As announced on 13 November 2018, the Company changed its financial year end from 30 June to 31 December to align
the Company’s reporting period with its operational subsidiaries in Burkina Faso, which will result in efficiency gains for
group reporting. The comparative period in this report is the previous 12-month financial year ending 30 June 2018.
DIRECTORS
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Mark Connelly BBus MAICD
Non- Executive Chairman
Mr Connelly is the former Managing Director and Chief Executive Officer of Perth based Papillon Resources Limited, a
gold developer with Malian assets, which merged with Vancouver-based B2Gold Corp in a US570 million deal. Previously
he was Chief Operating Office of Endeavour Mining Corporation following its merger with Adamus Resources Ltd where
he was Managing Director and CEO.
Committee memberships
Other listed board memberships
Previous listed board memberships
(during past 3 years)
Interest in shares
Interest in options
Audit Committee, Remuneration Committee (Chair)
Tao Commodities Ltd, Calidus Resources Ltd, Primero Group Ltd
B2 Gold Corp, Ausdrill Ltd, Tiger Resources Ltd, Saracen Mineral
Holdings Ltd, Cardinal Resources Ltd
60,000
3,103,806
Richard Hyde BSc (Geology and Geophysics), MAusIMM, MAIG
Managing Director
Richard Hyde is a geologist with more than 20 years’ experience in the minerals industry including over 5 years’
experience operating in West Africa. Richard has worked in a number of different geological environments in Australia,
Africa and Eastern Europe. Mr Hyde has managed large exploration projects and worked extensively within the industry
as Regional Manager - West Africa, and as a Senior Consultant with RSG Global based in West Africa and Australia.
Committee memberships
Other listed board memberships
Previous listed board memberships
(during past 3 years)
Interest in shares
Interest in options
Nil
Nil
Nil
18,280,769
3,660,899
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West African Resources Limited
Ian Kerr (BE (Civil) Hons II), MIE Aus
Non- Executive Director
Ian Kerr is an engineer with more than 30 years’ experience in mining construction and operations with several
Australian and international mining companies including Placer Dome and EMC. He has also held senior positions with
engineering firms Lycopodium and Mintrex.
Committee memberships
Other listed board memberships
Previous listed board memberships
(during past 3 years)
Interest in shares
Interest in options
Audit Committee, Remuneration Committee
Gascoyne Resources Ltd
Tiger Resources Ltd
Nil
577,855
Simon Storm BCom, BCompt (Hons) FGIA, CA
Non- Executive Director and Company Secretary
Simon Storm is a Chartered Accountant with more than 30 years of Australian and international experience in the
accounting profession and commerce. He commenced his career with Deloitte Haskins & Sells in Africa then London
before joining Price Waterhouse in Perth. He has held various senior finance and company secretarial roles with listed
and unlisted entities in the agribusiness, banking, resources, construction, telecommunications, property development
and funds management industries. In the last 17 years he has provided consulting services covering accounting, financial
and company secretarial matters to various companies in these sectors.
Committee memberships
Other listed board memberships
Previous listed board memberships
(during past 3 years)
Interest in shares
Interest in options
Audit Committee (Chair), Remuneration Committee
Nil
Nil
3,090,769
827,855
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West African Resources Limited
DIRECTORS’ MEETINGS
The number of meetings of Directors held during the year and the number of meetings attended by each director
were as follows:
Director’s Meetings
A
4
5
4
5
B
5
5
5
5
Director
Mark Connelly
Richard Hyde
Ian Kerr
Simon Storm
A - meetings attended
B - meetings held whilst a director
Audit Committee Meetings
Remuneration Committee
Meetings
A
1
1
1
1
B
1
1
1
1
A
2
1
2
2
B
2
2
2
2
SHARE OPTIONS
At the date of the report the unissued ordinary shares of the Company under option are:
Date of issue
03-Jun-16
03-Jun-16
21-Mar-17
12-May-17
24-Jul-17
18-Oct-17
03-Nov-17
29-Mar-18
26-Sep-18
28-Nov-18
28-Dec-18
28-Dec-18
28-Dec-18
28-Dec-18
15-Feb-19
05-Mar-19
Total
DIVIDENDS
Exercise Price
$0.1000
$0.1500
$0.2400
$0.2400
$0.3200
$0.3750
$0.2400
$0.4100
$0.3100
$0.3100
$0.3200
$0.0000
$0.0000
$0.4300
$0.0000
$0.2950
Expiry date
03-Jun-19
03-Jun-19
21-Mar-20
12-May-20
24-Jul-19
18-Oct-20
09-Nov-20
29-Mar-21
26-Sep-21
28-Nov-21
28-Dec-21
28-Dec-21
28-Dec-23
28-Dec-22
14-Feb-21
05-Mar-22
Number of Options
1,000,000
1,000,000
400,000
500,000
1,078,125
750,000
2,750,000
1,250,000
500,000
1,000,000
2,500,000
1,022,565
944,167
1,223,828
259,516
1,000,000
17,178,201
No dividends have been paid or declared since the start of the financial year and the Directors do not recommend the
payment of a dividend in respect of the financial year.
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West African Resources Limited
PRINCIPAL ACTIVITIES
The principal activity of the Group during the reporting period were:
mineral exploration in Burkina Faso
development of the Sanbrado Gold Project;
REVIEW OF OPERATIONS
Background
The Company and its subsidiaries (the “Group” or “West African”) are engaged in mineral exploration and development
in West Africa. The Group’s key asset is the Sanbrado Gold Project (“Sanbrado”), located in Burkina Faso. West African
owns a 90% beneficial interest in Société des Mines de Sanbrado SA, which owns the Sanbrado mining licence. The
government of Burkina Faso retains a 10% carried interest. The Group’s mineral portfolio also includes gold and copper-
gold exploration permits in Burkina Faso.
Updated Mining Licence
The original mining licence for the Sanbrado Gold Project was issued in March 2017. In July 2018, the Burkina Faso
government approved an update to the original mining licence which encompasses revisions to the mining and ore
processing methods detailed in the June 2018 feasibility study. These changes include underground mining in addition
to open pit mining and carbon in leach (CIL) mineral processing.
Key Recruitments
Matthew Wilcox joined the West African executive team in September as Chief Development Officer to directly manage
the construction of Sanbrado. Matthew is highly experienced in the gold mining construction industry in West Africa,
having spent the past eight years working for Nord Gold SE, which operates nine gold mines globally, including three
mines in Burkina Faso and one mine in Guinea. He was also was Project Director for the construction of Nord Gold’s
4Mtpa Bissa Gold Project and 8Mtpa Bouly Gold Project, both located in Burkina Faso. Other key Burkina Faso-based
appointments to the owner’s construction team followed, including General Manager, Construction Manager,
Earthworks Manager, Contracts Manager, Chief of Security, HR Manager, Financial Controller, and Safety and First Aid
Officer. West African has assembled a construction team that is highly experienced in delivering gold mining projects
in West Africa and Burkina Faso.
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West African Resources Limited
Construction Works
West African commenced construction works at the Sanbrado project site during the reporting period, including:
-
-
-
-
-
-
Box cut excavation for underground mining access;
Stage one of the camp construction – 120 rooms of a total of 280 rooms;
Footings and block work medical clinic, cafeteria and administration buildings;
Clearing, grubbing and waste stripping of the M5 stage 1 pit area;
Clearing and grubbing of the Water Storage Facility (WSF), Tailing Storage Facility (TSF) and process plant site, and
Survey and line marking of the water pipeline route from the Nakambe river to site.
The planned layout of the Sanbrado Gold Project is presented below as figure 1.
Figure 1: Sanbrado Gold Project Layout
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West African Resources Limited
Key Contracts
EPCM
West African appointed Lycopodium (ASX: LYL) for the engineering, procurement, and construction management
(EPCM) of the Sanbrado mineral processing facilities. Lycopodium is an Australian-headquartered engineering and
project management consultancy that has completed the construction of more than twelve gold development projects
in West Africa since 2009. Lycopodium’s scope for Sanbrado includes a 2Mtpa carbon-in-leach (CIL) treatment facility
and other supporting infrastructure. Detailed design and procurement of mechanical equipment has commenced and
in-country construction of the processing plant is scheduled to start in Q2 2019.
Mill Supply
The Company selected Outotec to supply the 4MW semi-autogenous grinding (SAG) mill and 4MW ball mill, principally
due to their extensive experience with grinding mills especially in the size range required for Sanbrado. The order of
these long lead time items was placed in October 2018. Outotec is a global mineral processing company that has
extensive experience manufacturing and delivering more than 200 grinding mills to sites worldwide over the past 20
years, including more than 40 in West Africa. Outotec’s recent mill deliveries in West Africa include Endeavour Mining’s
Ity (Côte d'Ivoire) and Hounde (Burkina Faso) gold projects and the Toro Gold’s Mako gold project (Senegal).
Undergound Mining
The Company awarded the underground (UG) mining services contract to highly experienced UG contractor, Byrnecut
Burkina Faso SARL (Byrnecut), part of the Byrnecut group of companies. The award followed a competitive tender and
due diligence process examining safety, experience and capabilities. Portal establishment and UG mining development
will kick off at M1 South in the June quarter 2019.
Future key contracts
The Company plans to award the power supply and open-pit mining contracts in the first half of 2019.
Exploration
Exploration during the six-month period focused on the M1 South deposit at Sanbrado, aiming to extend underground
resources, with step-down drilling at depth remaining a high priority in the Company’s exploration strategy.
West African’s June 2018 Feasibility Study proposed open-pit mining down to 120m vertical and UG mining from 120m
below surface to approximately 470m below surface over 4.5 years. Drilling completed since June 2018 continued to
intercept high-grade mineralisation, extending it more than 220m beneath underground reserves.
Step-down drilling during the period returned significant results including:
-
-
-
TAN18-DD216: 2m at 5.1 g/t Au from 681.5m and 9m at 3 g/t Au from 705.5m;
TAN18-DD196: 8m at 7.0 g/t from 693 including 1.5m at 21.6 g/t Au and 1m at 9.2 g/t Au 705.5m;
TAN18-DD189: 11m at 11.2 g/t from 654 including 1m at 39.8 g/t Au and 6m at 24.4 g/t Au from 675m including
0.5m at 240 g/t Au;
TAN18-DD214A: 0.5m at 520 g/t Au from 578m and 23m at 7.3 g/t Au from 617m including 3.5m at 20.2 g/t Au, 4m
at 24.4 g/t Au and 1.5m at 21.5 g/t Au; and
TAN18-DD217A: 6.5m at 6.8 g/t Au from 603.5m including 0.5m at 35.7 g/t Au.
-
-
Subsequent infill drilling of the main M1 South high-grade shoot returned outstanding results such as:
-
-
-
TAN18-DD196-WD1: 12m at 3.4 g/t Au from 656.5m;
TAN18-DD196-WD1: 0.5m at 192 g/t Au from 690m;
TAN18-DD196-WD2: 1m at 18.1 g/t Au from 637m;
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West African Resources Limited
-
-
-
-
-
-
-
-
-
TAN18-DD196-WD2: 10.5m at 8.8 g/t Au from 648m, including 0.5m at 138 g/t Au;
TAN18-DD196-WD2: 1m at 36.9 g/t Au from 667.5m;
TAN18-DD189-WD1: 10m at 8.1 g/t Au from 646.5m, including 0.5m at 33.8 g/t Au, 0.5m at 61.7 g/t Au;
TAN18-DD189-WD1: 2.5m at 7.6 g/t Au from 666m;
TAN18-DD189-WD1: 3m at 13.8 g/t Au from 682m, including 0.5m at 71.5 g/t Au;
TAN18-DD189-WD2: 11m at 5.9 g/t Au from 639m, including 0.5m at 39.8 g/t Au;
TAN18-DD189-WD2: 0.5m at 33.7 g/t Au from 675.5m;
TAN18-DD214A-WD1: 21.5m at 15.3 g/t Au from 614m, including 0.5m at 102 g/t Au, 0.5m at 115 g/t Au, 0.5m at
42 g/t Au, 0.5m at 87.9 g/t Au and 0.5m at 39.7 g/t Au; and
TAN18-DD214A-WD2: 14.5m at 19.9 g/t Au from 595.5m, including 1m at 219 g/t Au, 1m at 46.9 g/t Au.
West African reported further results later in the year, including:
-
-
-
-
-
-
-
-
-
TAN18-DD196: 8m at 7.0 g/t from 693 including 1.5m at 21.6 g/t Au;
TAN18-DD189: 11m at 11.2 g/t from 654 and 6m at 24.4 g/t Au from 675m;
TAN18-DD214A: 0.5m at 520 g/t Au from 578m ;
TAN18-DD214A: 23m at 7.3 g/t Au from 617m including 4m at 24.4 g/t Au;
TAN18-DD189-WD1: 10m at 8.1 g/t Au from 646.5m, including 0.5m at 61.7 g/t Au;
TAN18-DD196-WD2: 10.5m at 8.8 g/t Au from 648m, including 0.5m at 138 g/t Au;
TAN18-DD214A-WD1: 21.5m at 15.3 g/t Au from 614m, including 0.5m at 115 g/t Au;
TAN18-DD214A-WD2: 14.5m at 19.9 g/t Au from 595.5m, including 1m at 219 g/t Au;
TAN18-DD228: 25m at 15 g/t Au from 862m including 5.5m at 40.4 g/t, 1.5m at 26.02 g/t Au from 879m and 0.5m
at 71.80 g/t Au from 886m.
A summary long-section and cross-section through M1 South are presented as Figures 2 and 3.
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West African Resources Limited
Figure 2: M1 South Long-section
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West African Resources Limited
Figure 3: M1 South Cross-section SE0350
P a g e | 8
O/P <120m
M1 South
U/G >120m
M5
Total
O/P
M1 North O/P
O/P
M3
Total
Deposit
M5 Open Pit
M1Sth Open Pit
M1Nth Open Pit
M3 Open Pit
Sub Total Open Pit
M1Sth Underground
Total
West African Resources Limited
Feasibility Study
In July 2018, West African filed a National Instrument 43-101 (NI 43-101) Technical Report titled "Open Pit and
Underground Feasibility Study, Sanbrado Gold Project, Burkina Faso", with an effective date of 25 April 2018 which
related to the updated feasibility study which was announced on 22 June 2018. The Group’s resources and reserves are
shown below. There were no changes to the Group’s resources and reserves in the reporting period.
Sanbrado Gold Project
December 2018 Resource
Indicated Resource
Inferred Resource
Resource
Area
Category
Cutoff
(Au g/t)
0.5
3.0
Combined
0.5
0.5
0.5
Tonnes
800,000
750,000
1,550,000
37,150,000
750,000
150,000
Grade
(Au g/t)
6.6
25.5
15.9
1.3
2.0
2.0
1.8
Au Oz
Tonnes
170,000
620,000
780,000
50,000
250,000
300,000
1,510,000
12,800,000
50,000
10,000
500,000
200,000
2,350,000
13,850,000
Grade
(Au g/t)
4.8
7.6
6.9
1.1
2.0
1.5
1.2
Au Oz
10,000
60,000
70,000
450,000
30,000
10,000
550,000
Combined
39,600,000
Sanbrado Gold Project
December 2018 Probable Ore Reserve
Strip Ratio
3.8
22.6
8.4
6.1
4.6
-
(Mt)
17.5
0.7
0.6
0.1
18.9
1.5
20.4
Au Grade
(g/t)
1.5
6.8
2.1
1.8
1.7
11.7
2.4
Cont. Au
(koz)1
817
157
39
8
1,021
553
1,574
The Company is planning to release an update to its Sanbrado Feasibility Study in 1H 2019, incorporating the new
exploration results and an accelerated mining and milling schedule based on a higher plant throughput.
P a g e | 9
West African Resources Limited
Corporate
Debt Facility
In December 2018, West African announced a credit approved Debt Facility for Sanbrado construction with Taurus
Funds Management Pty Ltd (Taurus). The key terms of the Debt Facility include:
- US$200,000,000 debt facility;
-
-
-
-
-
fixed interest rate of 7.75% per annum on drawn amounts, payable quarterly in arrears;
quarterly repayments commencing 30 June 2021, with final repayment 31 December 2024;
early repayment allowed at any time without penalty;
no mandatory gold hedging required;
offtake agreement for 1.25 million ounces of gold pursuant to which the Company will receive the prevailing spot
gold price subject to an agreed price quotation period. West African Resources retains the right to buy back the
remaining balance of the offtake rights at any time on pre-agreed terms;
conditions precedent to drawdown include execution and delivery of the Debt Facility documents, lodging of
security documents and other conditions customary for a facility of this nature; and
-
West African Resource’s first drawdown of the Debt Facility is expected to occur in April 2019, following signing of the
facility agreements and satisfaction of certain agreed conditions.
Taurus is a privately-owned mining finance fund that provides project development and acquisition finance to mining
and metals companies. Taurus has significant mining finance experience in West Africa and has recently provided debt
facilities for two other significant new gold projects in the West African region.
The Company awarded the debt facility mandate to Taurus following five-months of technical, environmental and legal
due diligence and a highly competitive selection process. West African received 14 debt package proposals for Sanbrado
construction ranging from US$124 million to US$215 million from banks, debt funds and royalty companies.
Equity Raising
In December 2018 West African completed a Share Placement to raise A$43,175,000 before costs. The Share Placement
was completed in a single tranche of 172.7 million new shares at $0.25 per share under West African’s existing 25%
placement capacity pursuant to ASX Listing Rules 7.1 and 7.1A.
The proceeds raised under the Share Placement will be used to fund Sanbrado construction, exploration, and corporate
administration costs.
P a g e | 10
West African Resources Limited
RESULTS FOR THE YEAR
The net loss of the Group for the six-month period ended 31 December 2018 of $3,551,000 was $21,750,000 lower than
the $25,300,000 net loss of the comparative period (12 months) mainly due to a $19,294,000 reduction in exploration
and evaluation (E&E) expenses. The lower E&E expense is a result of the change in accounting classification of Sanbrado
E&E expenditures after the decision was made to proceed with development of the Sanbrado gold project following
receipt of the updated mining licence on 18 July 2018. After issuance of the updated mining licence, Sanbrado E&E
expenditures have been capitalised to ‘Mine properties’.
Net assets as at 31 December 2018 were $77,763,000 ($39,292,000 as at 30 June 2018). The increase during the period
was mainly due to a $23,790,000 increase in ‘Cash and cash equivalents’ and an $18,830,000 increase in ‘Mine
properties’.
Cash increased from $42,565,000 at the start of the period to $66,355,000 at 31 December 2018 mainly due to a
$40,066,000 net cash inflow from financing activities, partially offset by a $4,230,000 net cash outflow from operating
activities, and a $11,872,000 net cash outflow from investing activities. Cash usage in operating activities in the period
mainly represents non-Sanbrado exploration expenditure and corporate administration. Cash usage in financing
activities in the period mainly represents Sanbrado construction and E&E expenditure. The Cash inflow from financing
activities reflect a $43,175,000 equity raising completed in December, partially offset by $2,043,000 of share issue costs
and $1,066,000 of borrowing costs for arranging the debt facility.
Mine properties increased from nil at the start of the period to $18,830,000 at 31 December 2018 reflecting capitalised
E&E and construction expenditure on the Sanbrado Gold Project during the reporting period.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
As outlined in the “Review of Operations” section of this report, the company has commenced construction of the
Sanbrado Gold Project in Burkina Faso.
SIGNIFICANT EVENTS AFTER BALANCE DATE
West African Resources Limited applied for a voluntary de-listing of its ordinary shares (“shares”) from trading on the
TSX Venture Exchange (“TSXV”). TSXV has subsequently confirmed that the Company’s shares will be de-listed and
therefore no longer traded on the TSXV after close of trading on Friday, 8 March 2019. No change will occur to the
quotation and trading of WAF shares on the Australian Securities Exchange (“ASX”) and its shares will remain available
for trading on the ASX under the code WAF.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In the opinion of the directors, likely developments in and expected results of the operations of the Group have been
disclosed in the “Review of Operations” section of this report. Disclosure of any further information regarding likely
developments in the operations of the consolidated entity in future financial years and the expected results of those
operations is likely to result in unreasonable prejudice to the consolidated entity.
P a g e | 11
West African Resources Limited
NON-AUDIT SERVICES
The Group may decide to employ the external auditor, HLB Mann Judd, on assignments additional to their statutory
audit duties where the auditor's expertise and experience with the Group are important.
Fees that were paid or payable for non-audit services provided by the auditor of the parent entity during the financial
year by the auditor are outlined in Note 20 of the accompanying financial statements.
The directors are satisfied that the provision of non-audit services during the financial year by the auditor is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making
capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in “ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument
2016/191”, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts
in the Directors’ Report and accompanying Financial Report. Amounts in the Directors’ Report have been rounded off
in accordance with that Rounding Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
P a g e | 12
West African Resources Limited
REMUNERATION REPORT (AUDITED)
Contents
1.
Remuneration Report Overview
2.
3.
4.
5.
6.
7.
1.
Remuneration Governance
Non-executive Director Remuneration
Executive Remuneration
Performance and Executive Remuneration Outcomes
Executive Employment Arrangements
Additional Disclosures
REMUNERATION REPORT OVERVIEW
The Directors of West African Resources Ltd present the Remuneration Report (“the Report”) for the Consolidated Entity
for the financial period ended 31 December 2018 (FY2018). This Report forms part of the Director’s Report and has
been audited in accordance with section 300A of the Corporations Act 2001 and its regulations.
The Report details the remuneration arrangements for West African Resources Key Management Personnel (“KMP”):
- Non-Executive Directors (“NEDs”)
- Managing Director (“MD”), executive directors and senior executives (collectively “the executives”).
KMP are those who directly or indirectly have authority and responsibility for planning, directing and controlling
the major activities of the Consolidated Entity and includes all directors of the parent entity.
Details of KMP of the Consolidated Entity are set out below:
Name
Position
Non-Executive Directors
Appointed
Resigned
Mark Connelly
Simon Storm
Ian Kerr
Executive Director
Non-executive Chairman
June 2015
Non-executive Director & Company Secretary
November 2007
Non-executive Director
June 2018
Richard Hyde
Managing Director
September 2006
Senior Executives
Lyndon Hopkins
Chief Operating Officer
Padraig O’Donoghue
Chief Financial Officer
Matthew Wilcox
Chief Development Officer
December 2016
June 2018
September 2018
-
-
-
-
-
-
-
P a g e | 13
West African Resources Limited
2.
REMUNERATION GOVERNANCE
Remuneration Committee Responsibility
The Remuneration Committee is a subcommittee of the Board. It is primarily responsible for making
recommendations to the Board on:
•
•
•
Non-executive Director fees;
Executive remuneration (directors and senior executives); and
The executive remuneration framework and incentive plan policies.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of non-
executive directors and executives on a periodic basis by reference to relevant employment market conditions with
the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing director and
executive team.
Use of Remuneration Advisors
During the period the Remuneration Committee approved the engagement of BDO Remuneration and Reward Pty Ltd
(“BDO”) to review and provide recommendations on the Consolidated Entity’s executive remuneration framework and
policies.
Both BDO and the Committee were satisfied the advice received from BDO was free from undue influence from the
KMP to whom the remuneration recommendations applied.
The remuneration recommendations were provided to the Committee as an input into decision making only and were
used to assist the Board in structuring remuneration packages in a form suitable for the Company as it embarks on a significant
ramp up in operations as it moves into the development and construction phase of the Sanbrado Gold Project. The
Committee considered the recommendations, along with other factors, in making its remuneration decisions.
The fees paid to BDO for the remuneration recommendations were $22,500 (GST exclusive).
P a g e | 14
West African Resources Limited
Outcome of BDO Remuneration Review
Following the BDO remuneration review the following remuneration framework overview was
recommended by the Remuneration Committee and adopted by the Board with effect from 1 January
2019.
Category
Definition of pay category
Elements
Purpose
Total Fixed Remuneration
Pay which is linked to the present value or
market rate of the role
Total Fixed
Remuneration
Pay for meeting role
requirements
Incentive pay
Pay for delivering the plan and growth
agenda for WAF which must create value for
shareholders. Incentive pay will be linked to
the achievement of ‘line-of-sight’
performance goals
It reflects ‘pay for performance’
Short term incentive
Incentive for the achievement
of annual objectives and
sustained business value
Reward pay
Pay for creating value for shareholders.
Reward Pay is linked to shareholder returns
Long term incentive
It reflects ‘pay for results’
Reward for executive
performance over the long
term
The Company tabled and had approved at the Annual General Meeting in November 2018 the Incentive Option &
Performance Rights Plan" (Incentive Plan) which facilitates the granting of incentive and reward based
remuneration.
The West African Resources incentive scheme is made up of:
1. A Short-term and Deferred Incentive (“STI”) Scheme designed to incentivize and reward Executives for the
attainment of short-term objectives, and to enable the executive to accumulate equity in the business, which not
only ensures a better alignment with shareholders, but provides a retentive benefit, as well (i.e. ‘skin in the game).
The ‘Short Term and Deferred Incentive Plan’ will be ‘reset’ on an annual basis (i.e. a cash and option award
opportunity will be made available at the beginning of each year).
2. A Long-term Incentive (“LTI”) Scheme is designed to ‘reward’ Executives for the creation of long-term
shareholder value as evidenced by market and non-market measures. A single award will be made at the beginning
of year ‘0’, and will represent a performance period of three years i.e. it will not be ‘reset’ annually. At the end of
this 3-year period, the Company would have evolved from project development status to a fully-fledged producer.
The 3-year long term goal communicated a clear direction as to what shareholders require from management at
the end of 3 years. There is therefore not requirement to set LTI objectives on an annual basis.
P a g e | 15
West African Resources Limited
3.
NON-EXECUTIVE DIRECTOR REMUNERATION
NED Remuneration Policy
West African Resources Ltd’s NED fee policy is designed to attract and retain high calibre directors who can discharge
the roles and responsibilities required in terms of good governance, strong oversight, independence and objectivity.
The Company’s constitution and the ASX listing rules specify that the NED fee pool limit, shall be approved periodically
by shareholders. The last determination at an annual general meeting (“AGM”) was an aggregate fee pool of $500,000
per year.
The Board considered advice from the BDO remuneration review regarding the amount of the aggregate remuneration
and the manner in which it is paid to NEDs and this was based on a review against comparable companies.
NED Remuneration Structure
The remuneration of NEDs consists of director’s fees. There is no scheme to provide retirement benefits to NEDs other
than statutory superannuation. NEDs will not participate in any performance related incentive programs.
Whilst WAF has no minimum shareholding policy for Non-executive directors, the BDO remuneration review
recommended that each NED held a percentage of their total fees in equity to align their interests with the Company’s
shareholders. This recommendation was put to the AGM in November 2018 and the issue of Options in lieu of 30% of
Directors fees was approved. This fee structure supports NED’s in building their shareholding in the company they
represent, and assists in facilitating NED’s building a ‘meaningful’ shareholding in the company. It should be noted that
this equity component:
1. Does not increase the NED fee above that of the market. It aligns NED fees with market median based on the time,
responsibilities and calibre of the incumbent.
2. Does not contain any performance conditions and the equity issued is in lieu of cash fees.
Fees paid to NEDs cover all activities associated with their role on the Board and any sub-committees. No additional
fees are paid to NEDs for being a Chair or Member of a sub-committee. However, NEDs are entitled to fees or other
amounts as the Board determines where they perform special duties or otherwise perform extra services on behalf of
the Company. They may also be reimbursed for out of pocket expenses incurred as a result of their Directorships.
P a g e | 16
West African Resources Limited
4.
EXECUTIVE REMUNERATION
Executive Remuneration Policy
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
competitive and reasonable, enabling the Company to attract and retain high calibre talent;
aligned to the Company’s performance, strategic and business objectives and the creation of shareholder
value;
transparent and easily understood; and
acceptable to shareholders.
The Company’s approach to remuneration ensures that remuneration is competitive, performance focused, clearly
links appropriate reward with desired business performance, and is simple to administer and understand by executives
and shareholders.
In line with the remuneration policy, remuneration levels are reviewed annually to ensure alignment to the market and
the Company’s stated objectives.
Executive Remuneration Structure
The Company’s remuneration structure provides for a combination of fixed and variable pay with the following
components:
fixed remuneration;
short-term incentives (“STI”); and
long-term incentives (“LTI”).
In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company performance,
a portion of executives’ remuneration is placed “at risk”. The relative proportion of total remuneration packages to be
split between the fixed and variable remuneration is shown below:
Executive
Fixed remuneration
Managing Director
Other Executives
42%
45-50%
STI
23%
21%
LTI
35%
31%
P a g e | 17
West African Resources Limited
Elements of remuneration
Fixed remuneration
Total Fixed remuneration (‘TFR’) consists of base salary, superannuation and other non-monetary benefits and is
designed to reward for:
the scope of the executive’s role;
the executive’s skills, experience and qualifications; and
individual performance.
Short-term Incentive (STI) arrangements
Under the STI, all executives have the opportunity to earn an annual incentive award. The STI recognises and rewards
achievement of annual Short-Term Incentive (‘STI’) performance metrics. These are paid in the form of a cash bonus
(up to 20% of TFR) and Zero Exercised Priced Options (ZEPO’s) (up to 25-35% of TFR).
The performance metrics under the STI are set out below. To ensure overall goal alignment amongst the executives
and the Company, a major component of the performance metrics are consistent amongst all the Executives.
Company performance (80%)
The Company has set out the following performance metrics for achievement within 12 months of the date the STI
ZEPOs are issued:
DFS update to mineral resources, reserves and project optimisation;
commencement of box cut, portal establishment and decline development;
formal investment decision;
detailed design and commencement of construction;
completion of project finance, documentation and first debt drawdown; and
Individual performance (20%)
Individual specific goals and supervisory discretion
Long-term Incentive (LTI) arrangements
Long Term Incentive (‘LTI’) performance metrics are associated achieving the vesting criteria for the associated option
prior to the option expiry date as follows:
Premium Exercise Priced Options (‘PEPO’) for achieving a market measure (absolute share price appreciation,
being a minimum of 45% at the end of a four-year performance period and service); and
Zero Exercised Priced Options (‘ZEPO’) for achieving non-market measure (first gold pour and commercial
production).
The Long-term Incentive Scheme is designed to ‘reward’ Executives and ensure goal alignment and the creation of
long-term shareholder value.
P a g e | 18
West African Resources Limited
5.
PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES
The remuneration of the non-executive directors and KMP for the six-month financial year ended 31 December 2018 is
detailed below. The prior period relates to 12 months ending 30 June 2018.
Short term benefits
Post-
employment
benefits
Share based
payments
Total
%
%
Cash
salary
and Fees
(paid/
payable)
2018
Bonus
Super-
annuation
Performance
related
Remunerations
consisting of
options
Directors
Mark
Connelly
Richard
Hyde
Simon
Storm
31 Dec
32,500
-
-
13,956
46,456
30 Jun
65,000
25,000
-
41,767
131,767
31 Dec
150,000
-
-
50,213
200,213
30 Jun
300,000 125,000
-
125,056
550,056
31 Dec
46,495
-
-
18,261
64,756
30 Jun
78,879
25,000
-
36,126
140,005
Ian Kerr
31 Dec
15,982
-
1,518
284
17,784
30 Jun
-
-
-
-
-
Executive
Lyndon
Hopkins
Padraig
O'Donoghue
Matthew
Wilcox
31 Dec
114,155
-
10,845
16,431
141,431
30 Jun
225,237
30,000
24,248
27,189
306,674
31 Dec
105,023
-
30 Jun
15,753
-
9,977
1,497
9,681
124,681
-
17,250
31 Dec
84,475
-
8,025
16,764
109,264
30 Jun
-
-
-
-
-
Total
31 Dec
548,630
-
30,365
125,306
704,301
0%
19%
0%
23%
0%
18%
0%
0%
0%
10%
0%
0%
0%
0%
0%
30 Jun
684,869 205,000
25,745
230,138 1,145,752
18%
30%
32%
25%
23%
28%
26%
0%
0%
12%
9%
8%
0%
15%
0%
18%
20%
STI performance and outcomes
No STI performance payments were made, or ZEPO’s vested, during the six months ending 31 December 2018.
LTI performance and outcomes
No LTI PEPO’s or ZEPO’s vested during the six months ending 31 December 2018.
Clawback of remuneration
In the event of serious misconduct, the Board has the discretion to reduce, cancel or clawback any
unvested short term or long term incentives.
P a g e | 19
West African Resources Limited
6.
EXECUTIVE EMPLOYMENT ARRANGEMENTS
A summary of the key terms of employment agreements for executives is set out below. There is no fixed
term for executive service agreements and all executives are entitled to participate in the Company’s STI
and LTI plans. The Company may terminate employment agreements immediately for cause, in which the
executive is not entitled to any payment other than the value of fixed remuneration and accrued leave
entitlements up to the termination date.
Name
Base Salary
(inclusive of Super)
Notice Period
Termination
Payment
Richard Hyde (Managing Director)1
$400,000
1 month
6 months base salary
Lyndon Hopkins (Chief Operations Officer)
$300,000
2 months
Padraig O’Donoghue (Chief Financial Officer)
$275,000
1 month
Matthew Wilcox (Chief Development Officer)
$300,000
2 months
per NES 2
per NES 2
per NES 2
Notes
1. Services provided through a consultancy agreement with Azurite Consulting Pty Ltd, an entity associated with Richard Hyde, for a
term of 3 years, expiring 30 June 2019.
2. NES are National Employment Standards as defined in the Fair Work Act 2009 (Cth).
P a g e | 20
West African Resources Limited
7.
ADDITIONAL DISCLOSURES
This section sets out the additional disclosures required under the Corporations Act 2001.
Share Based Compensation
Share holdings of Key Management Personnel
31 December 2018
Directors
Mark Connelly
Richard Hyde
Simon Storm
Ian Kerr
Executive
Lyndon Hopkins
Padraig O'Donoghue
Matthew Wilcox
Total
Balance
1 July 2018
Issued as
Remuneration
Issued on Exercise
of Options
Net Change
Other
-
18,280,769
3,090,769
-
2,000,000
-
-
23,371,538
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
-
-
-
1,000,000
112,995
400,000
1,572,995
Balance at end
of period
31 December
2018
60,000
18,280,769
3,090,769
-
3,000,000
112,995
400,000
24,944,533
Option holdings of Key Management Personnel
31 December 2018
Balance
1 July 2018
Granted as
Remuneration
Options
Exercised
Net Change
Other
Granted 31 December 2018
Balance
31
December
2018
Total
Vested
Not vested
Directors
Mark Connelly
Richard Hyde
Simon Storm
Ian Kerr
Executive
3,000,000
2,000,000
750,000
2,000,000
1,660,899
-
-
500,000
Lyndon Hopkins
1,250,000
Padraig O'Donoghue
Matthew Wilcox
-
-
Total
7,000,000
1,016,949
1,012,712
1,000,000
7,190,560
Options granted as compensation
-
-
-
-
-
-
-
-
(2,000,000)
3,000,000
3,000,000
-
-
-
3,660,899
3,660,899
750,000
500,000
750,000
500,000
(250,000)
2,016,949
2,016,949
-
-
1,012,712
1,012,712
1,000,000
1,000,000
(2,250,000)
11,940,560
11,940,560
-
-
-
-
-
-
-
-
3,000,000
3,660,899
750,000
500,000
2,016,949
1,012,712
1,000,000
11,940,560
Grant date
26-Sep-2018
28-Nov-2018
28-Dec-2018
28-Dec-2018
28-Dec-2018
Total
Number granted
Value per
option at grant
date
Value of options
at grant date
500,000
1,000,000
2,500,000
1,223,828
1,966,732
7,190,560
$0.127
$0.123
$0.104
$0.112
$0.250
$63,500
$123,000
$260,000
$137,069
$491,683
$1,075,252
P a g e | 21
West African Resources Limited
Options forfeited / lapsed during the year
Number
forfeited /
lapsed during
the period
Grant
date
2,000,000 01-Dec-2015
250,000 18-Aug-2015
31 December 2018
Directors
Mark Connelly
Executive
Lyndon Hopkins
Loans to Key Management Personnel
A loan of $290,000 has been provided to Richard Hyde in the prior year to exercise 2,000,000 options at 14.5 cents.
The loan advance charges interest at 5.5% per annum, with the maturity date extended from 31 December 2018 to
31 December 2019. At year end, the balance due is $303,723.
Additional Disclosures Relating to Key Management Personnel
Consolidated
31 December 2018
$'000
30 June 2018
$'000
Directors
Transaction: Fees paid to Dorado Corporate Services Pty Ltd which has
provided company secretarial and accounting services to the company on
normal commercial terms, for whom Mr Storm, Director and Company
Secretary, is a director and shareholder. This excludes fees included as
remuneration noted under 5
Balance: Amount payable to Dorado Corporate Services Pty Ltd at balance
date $14,967 (30 June 2018: $8,780).
Transaction: Loan advance of $290,000, bearing interest at 5.5%, provided
to the Managing Director on arm’s length terms, to fund the exercise of
2,000,000 options at 14.5 cents, with maturity date of 31 December 2018.
Balance: Amount receivable at balance date $303,723 (30 June 2018:
$295,682)
Transaction: The Managing Director's spouse has provided office premises
to the Company for $440 per week at 14 Southbourne Street,
Scarborough, Western Australia until 28 October 2018.
Balance: Amount payable to Managing Director's spouse at balance date
$Nil (30 June 2018: $3,960).
Transaction: Fees paid to Ausdrill Ltd. The Chairman, Mr Connelly was a
director of Ausdrill Ltd (resigned June 2018) which through its wholly
owned subsidiary, African Mining Services Burkina Faso SARL, has provided
exploration drilling services to Société des mines de Sanbrado SA, Wura
Resources Pty Ltd SARL and Tanlouka SARL on normal commercial terms.
Mr Connelly is not party to any of these commercial negotiations. This
excludes fees included as remuneration noted under B.
Balance: Amount payable to Ausdrill Ltd at balance date $Nil (30 June
2018: $2,374,764).
End of Audited Remuneration Report.
18
52
304
296
11
21
-
2,375
333
2,744
P a g e | 22
West African Resources Limited
AUDITOR INDEPENDENCE
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the
Company with an Independence Declaration in relation to the audit of the financial report. This written Auditor’s
Independence Declaration is set out on page 66 and forms part of this Directors’ Report.
Signed in accordance with a resolution of the directors.
_____________
RICHARD HYDE
Managing Director
Perth, 28 March 2019
P a g e | 23
West African Resources Limited
Qualified/Competent Person’s Statement
Information contained in this report that relates to exploration results, exploration targets or mineral resources is based on, and
fairly represents, information and supporting documentation prepared by Mr Brian Wolfe, an independent consultant specialising in
mineral resource estimation, evaluation and exploration. Mr Wolfe is a Member of the Australian Institute of Geoscientists. Mr
Wolfe 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 (or “CP”) as defined in the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and a Qualified Person under Canadian
National Instrument 43-101. Mr Wolfe has reviewed the contents of this news release and consents to the inclusion in this
announcement of all technical statements based on his information in the form and context in which they appear.
Information contained in this report that relates to open pit ore reserves is based on, and fairly represents, information and
supporting documentation prepared by Mr Stuart Cruickshanks, an independent specialist mining consultant. Mr Cruickshanks is a
Fellow of the Australian Institute of Mining and Metallurgy. Mr Cruickshanks 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 (or “CP”) as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (the JORC Code) and a Qualified Person under Canadian National Instrument 43-101. Mr Cruickshanks has reviewed
the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his
information in the form and context in which they appear.
Information contained in this report that relates to underground ore reserves is based on, and fairly represents, information and
supporting documentation prepared by Mr Peter Wade, an independent specialist mining consultant. Mr Wade is a Fellow of the
Australian Institute of Mining and Metallurgy. Mr Wade 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 (or “CP”) as defined
in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC
Code) and a Qualified Person under Canadian National Instrument 43-101. Mr Wade has reviewed the contents of this news release
and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in
which they appear.
Any other information contained in this report that relates to exploration results, exploration targets or mineral resources is based
on information compiled by Mr Richard Hyde, a Director, who is a Member of The Australian Institute of Mining and Metallurgy and
Australian Institute of Geoscientists. Mr Hyde 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 CP as defined in JORC Code and a QP under
National Instrument 43-101. Hyde has reviewed and approved the scientific and technical information and contents of this
presentation, and consents to the inclusion in this presentation of the statements based on his information in the form and context
in which they appear.
P a g e | 24
West African Resources Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended 31 December 2018
Revenue from continuing operations
Foreign exchange gain
Regulatory and compliance expense
Office expense
Depreciation expense
Employee expenses
Travel and accommodation expense
Property expense
Consulting fee expense
Directors' fees
Share based payments
Exploration and evaluation expenses
Feasibility and scoping studies
Impairment of other receivables
Impairment of non current assets
Foreign exchange loss
Interest expense
Loss before tax
Income tax benefit
Loss after tax
OTHER COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to
profit or loss:
Foreign currency translation differences for
foreign operations
Other comprehensive loss, net of income tax
Note
3(a)
3(a)
3(b)
4
24
3(b)
3(b)
8
3(b)
5
Consolidated
Six Months Ended Twelve Months Ended
30 June 2018
31 December 2018
$'000
$'000
405
-
(96)
(144)
(90)
(1,367)
(72)
(58)
(319)
(62)
(172)
(708)
(98)
(582)
(13)
(175)
-
(3,551)
-
(3,551)
461
325
(215)
(360)
(95)
(722)
(188)
(48)
(833)
(242)
(297)
(20,002)
(1,796)
(1,584)
-
-
(6)
(25,603)
302
(25,300)
717
717
(74)
(74)
Total comprehensive loss for the period
(2,834)
(25,375)
Loss attributable to:
Owners of the parent
Non-controlling interest
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interest
(3,536)
(15)
(3,551)
(2,819)
(15)
(2,834)
(25,300)
-
(25,300)
(25,375)
-
(25,375)
Basic and diluted loss per share (cents per
share)
6
(0.5)
(4.3)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
P a g e | 25
West African Resources Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
Consolidated
Note
31 December 2018
$'000
30 June 2018
$'000
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant & equipment
Mine properties
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Total Current Liabilities
NON-CURRENT LIABILITIES
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of the parent
Non-controlling interest
7
8
9
10
11
12
13
14
15
66,355
851
37
67,243
388
18,830
3,148
22,366
89,609
9,690
9,690
2,155
2,155
11,845
77,763
161,947
7,544
(89,640)
79,851
(2,088)
42,565
713
37
43,315
374
-
-
374
43,689
4,397
4,397
-
-
4,397
39,292
120,815
6,655
(88,177)
39,292
-
TOTAL EQUITY
77,763
39,292
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
P a g e | 26
West African Resources Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2018
Consolidated
Note
31 December 2018
$'000
30 June 2018
$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers
Payments to employees
Exploration and evaluation expenditure
Interest received
Finance costs
Other - R&D tax offset
Net cash outflow from operating activities
7
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Development expenditure
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from exercise of share options
Payments for share issue costs
Payments for borrowings
Net cash inflow from financing activities
Net increase / (decrease) in cash held
Cash at the beginning of the financial period
Effect of exchange rate changes on the balance of
cash held in foreign currencies
Cash at the end of the financial period
7
(697)
(1,080)
(2,880)
428
(1)
-
(4,230)
(116)
(11,756)
(11,872)
43,175
-
(2,043)
(1,066)
40,066
23,965
42,565
(175)
66,355
(3,473)
(738)
(19,479)
347
(5)
302
(23,046)
(316)
-
(316)
52,339
5,774
(3,113)
-
55,000
31,638
10,550
377
42,565
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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West African Resources Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2018
Balance at 1 July 2017
Loss after tax
Other comprehensive income for the year
Total comprehensive loss for the year
Shares issued during the year net of transaction costs
Share based payments
Balance at 30 June 2018
Balance at 1 July 2018
Loss after tax
Other comprehensive income for the year
Total comprehensive loss for the year
Shares issued during the year net of transaction costs
Transfer to non-controlling interest
Share based payments
Balance at 31 December 2018
Consolidated
Issued Capital
$'000
Accumulated
Losses
$'000
Foreign Currency
Translation
Reserve
$'000
Share Based
Payments
Reserve
$'000
Non-controlling
interest
$'000
65,670
-
-
-
55,145
-
120,815
120,815
-
-
-
41,132
-
-
161,947
(62,877)
(25,300)
-
(25,300)
-
-
(88,177)
(88,177)
(3,536)
-
(3,536)
-
2,073
-
(89,640)
27
-
(74)
(74)
-
-
(47)
(47)
-
717
717
-
-
-
670
6,261
-
-
-
-
441
6,702
6,702
-
-
-
-
-
172
6,874
-
-
-
-
-
-
-
-
(15)
-
(15)
-
(2,073)
-
(2,088)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Total
$'000
9,081
(25,300)
(74)
(25,374)
55,145
441
39,292
39,292
(3,551)
717
(2,834)
41,132
0
172
77,763
P a g e | 28
West African Resources Limited
December 2018 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 31 December 2018
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a)
Basis of Accounting
These financial statements are general purpose financial statements which have been prepared in accordance
with applicable accounting standards, the Corporations Act 2001 and mandatory professional reporting
requirements in Australia (including the Australian equivalents of International Financial Reporting Standards).
They have also been prepared on the basis of historical cost and do not take into account changing money values.
The accounting policies have been consistently applied, unless otherwise stated.
These financials statements are presented in Australian dollars and all values are rounded to the nearest thousand
dollars ($’000) unless otherwise stated under the option available to the Company under ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which this
instrument applies.
West African Resources Limited (the “Company”) is a public company, incorporated in Australia and operating in
Australia. The Company was incorporated on 1 September 2006 as a proprietary company and converted to a
public company on 16 November 2007. The Company listed on the Australian Securities Exchange Ltd on 11 June
2010.
Separate financial statements for West African Resources Limited, an individual entity, are no longer presented as
a consequence of a change to the Corporations Act 2001. However, required information for West African
Resources Limited as an individual entity is included in Note 25.
The company recently announced a change in its financial year end from 30 June to 31 December. This change
more closely aligns the Company’s reporting period with its subsidiaries’ operations in Burkina Faso. The Company
is therefore reporting on a six-month accounting period from 1 July 2018 to 31 December 2018. The comparative
accounting period is the 12 months from 1 July 2017 to 30 June 2018, in line with the previous released financial
report.
b)
Adoption of New and Revised Standards
In the period ended 31 December 2018, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Company and effective for the current reporting
periods beginning on or after 1 July 2018. As a result of this review, the Group has initially applied AASB 9 from 1
July 2018. Due to the transition methods chosen by the Group in applying AASB 9 and AASB 15, comparative
information throughout the interim financial statements has not been restated to reflect the requirements of the
new standards.
AASB 9: Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes changes to a number
of areas including classification of financial instruments, measurement, impairment of financial assets and hedge
accounting model.
Financial instruments are classified as either held at amortised cost or fair value. They are carried at amortised
cost if the business model concept can be satisfied.
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West African Resources Limited
December 2018 Annual Report
All equity instruments are carried at fair value and the cost exemption under AASB 139 which was used where it
was not possible to reliably measure the fair value of an unlisted entity has been removed. Equity instruments
which are non-derivative and not held for trading may be designated as fair value through other comprehensive
income (FVOCI). Previously classified available-for-sale investments now carried at fair value are exempt from
impairment testing and gains or loss on sale are no longer recognised in profit or loss.
The AASB 9 impairment model is based on expected loss at day 1 rather than needing evidence of an incurred loss,
this is likely to cause earlier recognition of bad debt expenses. Most financial instruments held at fair value are
exempt from impairment testing.
The Group has applied AASB 9 retrospectively with the effect of initially applying this standard recognised at the
date of initial application, being 1 July 2018 and has elected not to restate comparative information. Accordingly,
the information presented for 30 June 2018 has not been restated.
There is no material impact to profit or loss or net assets on the adoption of this new standard in the current or
comparative years.
AASB 15: Revenue from contracts with customers
AASB 15 replaces AASB 118 Revenue and AASB 111 Construction Contracts and related interpretations and it
applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other
standards.
The Group has applied AASB 15 Revenue from Contracts with Customers for the first time in the current period.
AASB 15 establishes a single comprehensive income for entities to use in accounting for revenue arising from
contracts with customers.
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is
recognised, including in respect of multiple element arrangements. The core principle of AASB 15 is that it requires
identification of distinct performance obligations within a transaction and associated transaction price allocation
to these obligations. Revenue is recognised upon satisfaction of these performance obligations, which occur when
control of goods or services is transferred, rather than on transfer of risks or rewards. Revenue received for a
contract that includes a variable amount is subject to revised conditions for recognition, whereby it must be highly
probable that no significant reversal of the variable component may occur when the uncertainties around its
measurement are removed.
The core principle of AASB 15 is that an entity should recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue
recognition:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
The Group has adopted AASB 15 using the modified retrospective method of adoption (without practical
expedients) with the effect of initially applying this standard recognised at the date of initial application, being 1
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West African Resources Limited
December 2018 Annual Report
July 2018. Accordingly, the information presented for 30 June 2018 has not been restated. The effect of the
application of AASB 15 has been applied to all contracts at date of initial application and there is no impact to
profit or loss or net assets on the adoption of this new standard in the current or comparative years.
Other than the above, the Directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Company and, therefore, no material change is necessary to Group
accounting policies.
c)
Standards and Interpretations in issue not yet adopted
AASB 16: Leases
AASB 16 replaces the AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease. AASB 16 removes the classification of leases as either operating leases or
finance leases - for the lessee - effectively treating all leases as finance leases. Most leases will be capitalised on
the balance sheet by recognising a lease liability for the present value obligation and a 'right-of-use' asset. The
right of use assets is calculated based on the lease liability plus initial direct costs, prepaid lease payments and
estimated restoration costs less lease incentives received. This will result in an increase in the recognised assets
and liabilities in the statement of financial position as well as a change in expense recognition, with interest and
deprecation replacing operating lease expense. There are exemptions for short-term leases and leases of low-
value items.
Lessor accounting remains similar to current practice, i.e. lessors continue to classify leases as finance and
operating leases.
This standard will primarily affect the accounting for the Group's operating leases. The Group is considering the
available options to account for this transition but the Group expects a change in reported earnings before
interest, tax, depreciation and amortisation (EBITDA) and increase in lease assets and liabilities recognition. The
lease standard is also expected to have considerable impact on deferred tax balances. This will, however, be
dependent on the lease arrangements in place when the new standard is effective. The Group has commenced
the process of evaluating the impact of the new lease standard.
d)
Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group. The financial statements
of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting
policies.
Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany
balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated
in full. Unrealised losses are eliminated unless costs cannot be recovered. Subsidiaries are consolidated from the
date on which control is transferred to the Group and cease to be consolidated from the date on which control is
transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements
include the results for the part of the reporting period during which West African Resources Limited has control.
e)
Rounding of Amounts
The Company is of a kind referred to in Rounding Instrument 2016/191, 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 Rounding Instrument to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
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West African Resources Limited
December 2018 Annual Report
f)
Statement of Compliance
These consolidated financial statements are general purpose financial statements prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations,
International Financial Reporting Standards and complies with other requirements of the law. The consolidated
financial statements were authorised for issue on 28 March 2019.
g)
Accounting Policies and Methods of Computation
The accounting policies and methods of computation adopted are consistent with those of the previous financial
year. These accounting policies are consistent with Australian Accounting Standards and with International
Financial Reporting Standards.
h)
Significant Accounting Judgements and Key Estimates
The preparation of this financial report requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
In preparing this financial report, the significant judgements made by management in applying the Group’s
accounting policies and the key sources of estimation uncertainty were the same as those that applied to the
consolidated annual financial report for the year ended 30 June 2018 with the exception of exploration and
evaluation costs that are recorded as a development asset as explained below in notes 1(i) and 1(j), and the
minority interest of 90%-owned subsidiary Société des Mines de Sanbrado SA.
Following the Group’s decision to commence development of Sanbrado, the Group identified a change in estimate
of the minority interest of Société des Mines de Sanbrado SA’s accumulated losses. Based on the fact these losses
are now likely to be recoverable out of the Group’s share of future profits, the minority interest has been brought
to account in the statement of changes in equity as a transfer between owners.
i)
Exploration and Evaluation Expenditure
Mineral exploration and evaluation costs are expensed as incurred. Acquisition costs will normally be expensed
but will be assessed on a case by case basis and if appropriate may be capitalised. These acquisition costs are only
carried forward to the extent that they are expected to be recouped through the successful development or sale
of the tenement. Accumulated acquisition costs in relation to an abandoned tenement are written off in full
against profit or loss in the year in which the decision to abandon the tenement is made.
Where a decision has been made to proceed with development in respect of a particular area of interest, all future
costs are recorded as a development asset.
Judgement: Following the issuance of the updated exploitation permit for the Sanbrado gold project on 18 July
2018, exploration and evaluation costs within the Sanbrado mining licence have subsequent to this date been
recorded as a development asset.
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West African Resources Limited
December 2018 Annual Report
j) Mine Properties
Mines under construction
Exploration and evaluation costs are added to ‘Mines under construction’ which is a sub-category of ‘Mine
properties’ after a decision has been made to proceed with development in respect of a particular area of interest
and such development receives appropriate approvals.
All subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised
in ‘Mines under construction’. Development expenditure is net of proceeds from the sale of ore extracted during
the development phase to the extent that it is considered integral to the development of the mine. Any costs
incurred in testing the assets to determine if they are functioning as intended, are capitalised, net of any proceeds
received from selling any product produced while testing. Where these proceeds exceed the cost of testing, any
excess is recognised in the statement of profit or loss and other comprehensive income. After production starts,
all assets included in ‘Mines under construction’ are then transferred to ’Producing mines’ which is also a sub-
category of ‘Mine properties’. No mine under construction costs were recognised prior to the transition period.
k)
Cash and Cash Equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above.
l)
Income Tax
The income tax expense or benefit for the year is based on the profit or loss for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantially enacted
as at balance date.
Deferred tax is provided on all temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or
taxation profit or loss.
Deferred income tax assets are recognised to the extent that it is probable that the future tax profits will be
available against which deductible temporary differences will be utilised. The amount of the benefits brought to
account or which may be realised in the future is based on the assumption that no adverse change will occur in
the income taxation legislation and the anticipation that the economic unit will derive sufficient future assessable
income to enable the benefits to be realised and comply with the conditions of deductibility imposed by law.
m) Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
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West African Resources Limited
December 2018 Annual Report
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
n)
Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value, less where applicable, any accumulated
depreciation and impairment losses. The carrying amount of the plant and equipment is reviewed annually by the
Directors to ensure it is not in excess of the recoverable amount of these assets. The recoverable amount is
assessed on the basis of the expected net cash flows that will be received from the assets employed and their
subsequent disposal. The expected net cash flows have been discounted to their present value in determining
recoverable amounts.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold
land, is depreciated on a straight-line basis over their useful lives to the Company commencing from the time the
asset is held ready for use. The asset’s residual value and useful lives are reviewed and adjusted if appropriate, at
each balance sheet date.
An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying value is
greater than the estimated recoverable amount. Gains and losses on disposal are determined by comparing
proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and
other comprehensive income.
o)
Recoverable Amount of Non-Current Assets
The carrying amounts of non-current assets are reviewed annually by Directors to ensure they are not in excess
of the recoverable amounts from those assets. The recoverable amount is assessed on the basis of the expected
net cash flows, which will be received from the assets employed and subsequent disposal. The expected net cash
flows have been or will be discounted to present values in determining recoverable amounts.
p)
Trade and Other Accounts Payable
Trade and other accounts payable represent the principal amounts outstanding at balance date, plus, where
applicable, any accrued interest.
q)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which
it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an
equivalent non-convertible note. This amount is recorded as a liability on an amortised cost basis until
P a g e | 34
West African Resources Limited
December 2018 Annual Report
extinguished on conversion or maturity of the note. The remainder of the proceeds is allocated to the conversion
option. This is recognised and included in shareholders’ equity, net of income tax effects.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as other income or finance costs.
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 period.
r)
Operating Revenue
Revenue represents interest received and reimbursements of exploration expenditures.
s)
Issued Capital
Ordinary Shares are classified as equity.
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. Incremental costs directly attributable to the issue of new shares or options, or for
the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
t)
Employee Benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the
reporting date. These benefits include wages and salaries, annual leave, and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be
settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration
rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured
at the present value of the estimated future cash outflow to be made in respect of services provided by employees
up to the reporting date. In determining the present value of future cash outflows, the market yield as at the
reporting date on national government bonds, which have terms to maturity approximating the terms of the
related liability, are used.
u)
Share-based Payments
The Group provides benefits to employees (including Directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled
transactions”). The cost of these equity-settled transactions with employees is measured by reference to the fair
value at the date at which they are granted. The fair value is determined by a valuation using Black-Scholes or
Binomial option pricing models.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired
and (ii) the number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This opinion
is formed based on the best available information at balance date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
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West African Resources Limited
December 2018 Annual Report
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date
of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award.
v)
Foreign Currency Translation
Both the functional and presentation currency of West African Resources Limited and its Australian subsidiary is
Australian dollars. Each entity in the Group determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These
are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or
loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined.
The functional currency of the foreign subsidiaries, Wura Resources Pty Ltd SARL, West African Resources
Development SARL, Tanlouka SARL and Société des Mines de Sanbrado SARL is the Communaute Financière
Africaine Franc (CFA). The functional currency of the foreign subsidiary, Channel Resources Ltd is the Canadian
Dollar (CAD). The functional currency of the foreign subsidiaries, Channel Resources (Cayman I) Ltd and Channel
Resources (Cayman II) Ltd is the United States Dollar (USD).
As at the reporting date the assets and liabilities of this subsidiary are translated into the presentation currency
of West African Resources Limited at the rate of exchange ruling at the balance date and their income and
expenses statements are translated at the average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity, being
recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular
foreign operation is recognised in profit or loss.
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West African Resources Limited
December 2018 Annual Report
w)
Financial Assets
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), or fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With the exception of
trade receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient, the Group initially 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. Trade receivables that do not contain a significant
financial component or for which the Group has applied the practical expedient for contracts that have a maturity
of one year or less, are measured at the transaction price determined under AASB 15.
In order for a financial asset to be classified and measured at amortised cost of fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the
Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial are classified in four categories:
i.
ii.
iii.
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments)
iv.
Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of
the following conditions are met:The financial asset is held within a business model with the objectives to hold
financial assets in order to collect contractual cash flows; and.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principle and interest on the principal amount outstanding. .
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and
are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
P a g e | 37
West African Resources Limited
December 2018 Annual Report
Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria for amortised cost are measured at fair value through profit or loss.
x)
Intangible Assets
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not
capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the
amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation
expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with
the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-
generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite
life is reviewed each reporting period to determine whether indefinite life assessment continues to be
supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change
in an accounting estimate and is thus accounted for on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is
derecognised.
y)
Parent Entity Financial Information
The financial information for the parent entity, West African Resources Limited disclosed in Note 25 has been
prepared on the same basis as the Group.
P a g e | 38
West African Resources Limited
December 2018 Annual Report
SEGMENT REPORTING
AASB 8 requires a “management approach” under which segment information is presented on the same basis as
that used for internal reporting purposes.
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker has been identified as the Board of West African
Resources Limited.
The Group operates in only one business and geographical segment being predominantly in the area of mineral
exploration and development in Burkina Faso, Africa. The Group considers its business operations in mineral
exploration and development to be its primary reporting function.
REVENUE AND EXPENSES
(a) Revenue
Interest received
Net foreign exchange gain
(b) Expenses
Depreciation of non-current assets
Net foreign exchange loss
Exploration expenditure
Exploration related costs
Feasibility and scoping studies
EMPLOYEE EXPENSES
Employee expenses:
Salaries and wages
Other employment expenses
Less: allocation to exploration expenses and mines under
construction
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
405
-
405
90
175
265
708
98
806
461
325
786
95
-
95
20,002
1,796
21,798
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
2,530
195
(1,358)
1,367
3,365
34
(2,677)
722
P a g e | 39
West African Resources Limited
December 2018 Annual Report
INCOME TAX
a)
Income tax recognised in profit or loss
No income tax is payable by the consolidated entity as they recorded losses for income tax purposes for the year.
b)
Numerical reconciliation between income tax expense and the loss before income tax.
The prima facie income tax benefit on pre-tax accounting loss from operations reconciles to the income tax benefit
in the financial statements as follows:
Consolidated
Six Months Ended
31 December 2018
$
Twelve Months Ended
30 June 2018
$
Accounting loss before tax
(3,551)
(25,603)
Income tax benefit at 27.5%
Non-deductible expenses:
Foreign exchange gain
Share based payments
Impairment of loan to third party
Impairment of other receivables
Other non-deductible expenses
Temporary differences not recognised
Income tax benefit not recognised
Accounting expenditure subject to R&D tax incentive
R&D tax incentive
Income tax benefit attributable to loss from ordinary
activities before tax
976
41
(47)
(4)
(160)
(1)
(292)
(493)
-
-
-
7,041
147
(82)
-
(436)
(1)
260
(6,615)
(315)
302
302
P a g e | 40
West African Resources Limited
December 2018 Annual Report
Unrecognised deferred tax balances
Tax losses attributable to members of the group -
revenue
Potential tax benefit at 27.5%
Deferred tax liabilities
Taxable temporary differences:
Accrued interest
Deferred tax asset asset not booked
Amounts recognised in profit & loss:
- accrued expenses
- Provisions
- share issue costs
Net unrecognised deferred tax asset at 27.5%
LOSS PER SHARE
Consolidated
Six Months Ended
31 December 2018
$’000
Twelve Months Ended
30 June 2018
$’000
75,185
20,676
75,414
20,739
-
-
807
1,290
1,187
23,960
553
-
1,040
22,333
Consolidated
Six Months Ended
31 December 2018
$
Twelve Months Ended
30 June 2018
$
Basic and diluted loss per share (cents per share)
(0.5)
(4.3)
The loss and weighted average number of ordinary shares
used in the calculation of basic earnings per share is as
follows:
Loss for the year
(3,550,653)
(25,300,694)
Weighted average number of shares outstanding during
the year used in calculations of basic loss per share
707,811,612
583,840,378
P a g e | 41
West African Resources Limited
December 2018 Annual Report
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Consolidated
31 December 2018
$'000
30 June 2018
$'000
7,297
59,058
66,355
1,373
41,192
42,565
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and four months, depending on the
immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
(i) Reconciliation to Statement of Cash Flows
For the purposes of the statement of cash flows, cash and
cash equivalents comprise cash on hand and at bank.
Cash and cash equivalents as shown in the statement of
cash flows are reconciled to the related items in the
statement of financial position as follows:
Cash and cash equivalents
66,355
42,565
(ii) Reconciliation of loss after income tax to net cash
flows from operating activities:
Loss after income tax
Depreciation
Share based payments
Foreign exchange (gain)/loss
Impairment of non-current assets and other receivables
Changes in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Decrease)/Increase in trade and other payables
Net cash (outflow) from operating activities
(3,551)
90
172
175
595
(2,519)
(377)
(1,334)
(4,230)
(25,300
95
297
(325)
1,584
(23,650)
(1,161)
1,765
(23,046)
P a g e | 42
West African Resources Limited
December 2018 Annual Report
TRADE AND OTHER RECEIVABLES
Current
Prepayments
Other receivables
Loan to Director
Allowance for impairment
Consolidated
31 December 2018
$'000
30 June 2018
$'000
204
2,509
304
(2,166)
851
4
1,997
296
(1,584)
713
Other receivables include value added taxes receivable of $2,166,000 from the revenue authorities of Burkina
Faso. An allowance for impairment for this amount has been made pending the outcome of a submission to the
revenue authorities in Burkina Faso.
Movement in the allowance for doubtful debts
Balance at the beginning of the year
Impairment losses and reversals recognised on
receivables
Balance at the end of the year
Ageing of past due but not impaired
30 - 60 days
60 - 90 days
90 - 120 days
Total
Consolidated
31 December 2018
$'000
30 June 2018
$'000
(1,584)
(582)
(2,166)
343
-
304
647
-
(1,584)
(1,584)
413
-
296
709
P a g e | 43
West African Resources Limited
December 2018 Annual Report
PROPERTY, PLANT AND EQUIPMENT
Carrying Value
30 June 2018
1 July 2017 - net of accumulated
depreciation
Effects of movement in foreign exchange
Additions
Depreciation charge for the year
30 June 2018 - net of accumulated
depreciation
31 December 2018
1 July 2018 - net of accumulated
depreciation
Effects of movement in foreign exchange
Additions
Depreciation charge for the year
31 December 2018 - net of accumulated
depreciation
Buildings
$'000
Office
Equipment
$'000
Consolidated
Plant &
Equipment
$'000
Motor
Vehicles
$'000
Total
$'000
2
-
144
(23)
123
123
3
1
(25)
102
21
1
1
(4)
19
19
-
40
(9)
50
101
5
189
(65)
230
230
5
-
(47)
188
3
-
2
(2)
3
3
-
54
(9)
48
127
6
336
(94)
375
375
8
95
(90)
388
Cost and Accumulated Depreciation
Buildings
$'000
Office
Equipment
$'000
Consolidated
Plant &
Equipment
$'000
Motor
Vehicles
$'000
Total
$'000
30 June 2018
Cost
Accumulated depreciation
Net carrying amount
31 December 2018
Cost
Accumulated depreciation
Net carrying amount
The useful life of the assets was estimates as 3 years.
185
(62)
123
191
(89)
102
219
(201)
18
1,645
(1,416)
229
856
(852)
4
2,905
(2,531)
374
264
(214)
50
1,690
(1,503)
187
933
(885)
48
3,078
(2,691)
388
P a g e | 44
West African Resources Limited
December 2018 Annual Report
MINE PROPERTIES
Mines under construction
Balance at 1 July 2018
Additions
Change in rehabilitation provision
Effects of movement in foreign exchange
Balance at 31 December 2018
OTHER NON-CURRENT ASSETS
Transaction costs
Consolidated
31 December 2018
$'000
30 June 2018
$'000
-
16,555
2,121
154
18,830
-
-
-
-
-
Consolidated
31 December 2018
$'000
30 June 2018
$'000
3,148
3,148
-
-
The transaction costs represent amounts directly attributable to establishing the debt facility negotiated for the
Sanbrado Gold Project. These amounts will be reclassified to borrowings upon drawdown of the facility.
TRADE AND OTHER PAYABLES
Current
Trade payables
Accruals
Other payables
Consolidated
31 December 2018
$'000
30 June 2018
$'000
6,383
2,936
371
9,690
3,969
311
117
4,397
Trade payables are non-interest bearing and are normally settled on 30-day terms.
P a g e | 45
West African Resources Limited
December 2018 Annual Report
OTHER PROVISIONS
Non-current
Long service leave provision
Rehabilitation provision
Reconciliation of movements in Rehabilitation Provision:
Balance at the start of the period
Increase in rehabilitation provision during the period
Balance at the end of the period
Consolidated
31 December 2018
$'000
30 June 2018
$'000
35
2,121
2,155
-
2,121
2,121
-
-
-
-
-
-
The rehabilitation provision is the best estimate of the present value of the future cash flows required to settle
the Sanbrado mine site restoration obligations at the reporting date, based on current legal requirements and
technology. The amount of the provision is capitalised as an asset and recognised in mine properties.
P a g e | 46
West African Resources Limited
December 2018 Annual Report
ISSUED CAPITAL
Consolidated
31 December 2018
$'000
30 June 2018
$'000
863,524,727 (30 June 2018: 690,824,727) fully paid
ordinary shares
161,947
120,815
(a) Shares
(i) Ordinary shares - number
No.
No.
At start of period
Issue of shares 26 July 2017
Issue of shares 23 August 20171
Issue of shares 20 February 20181
Issue of shares 20 February 20181
Issue of shares 15 May 2018
Issue of shares 15 May 20181
Issue of shares 13 December 2018
Balance at end of period
(ii) Ordinary shares – value
At start of period
Issue of shares 26 July 2017
Issue of shares 23 August 20171
Issue of shares 20 February 20181
Issue of shares 20 February 20181
Issue of shares 15 May 2018
Issue of shares 15 May 20181
Issue of shares 13 December 2018
Share issue costs
Balance at end of period
1 Share issued on exercise of options
690,824,727
-
-
-
-
-
-
172,700,000
863,524,727
$'000
120,815
-
-
-
-
-
-
43,175
(2,043)
161,947
484,248,253
53,906,250
40,545,224
500,000
2,000,000
109,375,000
250,000
-
690,824,727
$'000
65,670
17,338
5,676
73
290
35,000
25
-
(3,257)
120,815
(b) Options and rights
No.
No.
At start of period
Issue of options 24 July 2017
Issue of options 18 October 2017
Issue of options 3 November 2017
Issue of options 29 March 2018
Issue of options 26 September 2018
Issue of options 28 November 2018
Issue of options 28 December 2018
Issue of Class A performance rights 28 December 2018
Issue of Class B performance rights 28 December 2018
Issue of option 28 December 2018
Exercise of options
Expiry of options
Balance at end of period
15,978,125
-
-
-
-
500,000
1,000,000
2,500,000
1,022,565
944,167
1,223,828
-
(2,250,000)
20,918,685
57,263,974
1,078,125
750,000
2,750,000
1,250,000
-
-
-
-
-
-
(43,295,224)
(3,818,750)
15,978,125
P a g e | 47
West African Resources Limited
December 2018 Annual Report
RESERVES
Consolidated
31 December 2018
$'000
30 June 2018
$'000
Reserves
7,544
6,655
Reserves comprise the following:
Foreign Currency Translation Reserve
At start of period
Currency translation differences
Balance at end of period
Share Based Payments Reserve
At start of period
Options issued - share based payment expense
Options issued - share issue costs
Balance at end of period
Nature and purpose of reserves
Foreign currency translation reserve
(48)
717
669
6,703
172
-
6,875
27
(75)
(48)
6,261
297
145
6,703
The foreign currency translation reserve is used to record exchange differences arising from the translation of
loans to foreign subsidiaries that are expected to be repaid in the long term and the translation of the financial
statements of foreign subsidiaries.
Shared Based Payments reserve
The Shared Based Payments reserve is used to recognise the fair value of options issued to Directors, employees
and other suppliers or consultants but not exercised.
DIVIDENDS
No dividends have been paid or declared payable since the start of the reporting period (30 June 2018: nil).
P a g e | 48
West African Resources Limited
December 2018 Annual Report
COMMITMENTS AND OTHER CONTINGENCIES
a)
Exploration and mining lease commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to outlay rentals and
to meet the minimum expenditure requirements. These discretionary costs are not provided for in the financial
statements and are payable as follows:
Due within 1 year
Due after 1 year but not more than 5 years
Due after 5 years
b)
Lease commitments
Consolidated
31 December 2018
$'000
30 June 2018
$'000
697
539
-
1,236
684
833
-
1,517
Commitments for minimum lease payments in relation to operating leases are payable as follows:
Due within 1 year
Due after 1 year but not more than 5 years
Due after 5 years
Consolidated
31 December 2018
$'000
30 June 2018
$'000
307
266
-
573
-
-
-
-
c)
Capital commitments
Capital commitments in relation to the construction of the Sanbrado Gold Project mine site are payable as follows:
Due within 1 year
Due after 1 year but not more than 5 years
Due after 5 years
Consolidated
31 December 2018
$'000
30 June 2018
$'000
22,336
-
-
22,336
-
-
-
-
P a g e | 49
West African Resources Limited
December 2018 Annual Report
d)
Other Contingencies
From time to time the authorities in Burkina Faso are known to lodge claims with companies operating in Burkina
Faso for withholding taxes on payments of various non-resident service providers and the regulation of the
contracts of expatriate staff in accordance with taxation regulations in force. Whilst the Company has received a
tax exoneration certificate and believes it has complied with local regulations, some aspects of the regulations are
open to interpretation. The Company has not received any formal claim and in the event of one being received,
the effect, if any, that these claims will have, or which future claims will have on the Group’s operations in Burkina
Faso is not yet known. Against this backdrop, the Group has a fully provisioned amount of $2,165,000 in value
added tax (“VAT”) receivable from the revenue authorities in Burkina Faso (refer Note 8).
RELATED PARTY DISCLOSURE
The consolidated financial statements include the financial statements of West African Resources Limited and the
subsidiaries listed in the following table:
Controlled Entities
Parent Entity:
West African Resources Ltd
Subsidiaries of West African Resources Ltd:
Wura Resources Pty Ltd SARL
West African Resources Development SARL
Channel Resources Ltd
which owns
Channel Resources (Cayman I) Ltd
which owns
Channel Resources (Cayman II) Ltd
which owns
Tanlouka SARL
Société des Mines de Sanbrado SA 1
Country of
Incorporation
Australia
Burkina Faso
Burkina Faso
Canada
Cayman Islands
Cayman Islands
Burkina Faso
Burkina Faso
Percentage Owned
31 December 2018
30 June 2018
%
%
100
100
100
100
100
100
90
100
100
100
100
100
100
90
1 The remaining 10% of Société des Mines de Sanbrado SA is held by the government of Burkina Faso which is
entitled to a free carried 10% interest in the project.
The Company finances the operations of Wura Resources Pty Ltd SARL, WAR Development SARL, Channel
Resources Ltd, Channel Resources (Cayman I) Ltd, Channel Resources (Cayman II) Ltd, Tanlouka SARL and Société
des Mines de Sanbrado SA and thus these companies will have unsecured borrowings from the Company that are
interest free and at call. The ability for these controlled entities to repay debts due to the company (and other
parties) will be dependent on the commercialisation of the mining assets owned by the subsidiaries.
P a g e | 50
West African Resources Limited
December 2018 Annual Report
Amounts owed by/(to) Related Parties
Subsidiaries
Wura Resources Pty Ltd SARL
Societe des Mines de Sanbrado SA
West African Resources Development
SARL
Tanlouka SARL
Channel Resources (Cayman I) Ltd
Channel Resources (Cayman II) Ltd
Channel Resources Ltd
Total
Provision for impairment
Amounts payable to Directors for
Directors' Fees (including GST)
Amounts payable to Directors for
Consulting Fees (including GST)
Consolidated
31 December
2018
$'000
30 June
2018
$'000
Parent Entity
31 December
2018
$'000
30 June
2018
$'000
-
-
-
-
-
-
-
-
-
-
10
42
-
-
-
-
-
-
-
-
-
-
16
34
21,865
30,576
21,814
18,947
503
17,525
-
26
(23)
70,472
(70,469)
3
497
15,791
-
13
(14)
57,049
(57,053)
(5)
16
42
16
37
Further information with respect to related party transactions are included in Note 21.
P a g e | 51
West African Resources Limited
December 2018 Annual Report
Summarised financial information for Société des Mines de Sanbrado SA before intragroup eliminations, is set out
below;
Statement of profit or loss and other
comprehensive income
Revenue
Profit / (Loss) for the period:
Attributable to owners of the parent
Attributable to non controlling interest
Statement of financial position
Assets
Current assets
Non-current assets
Liabilities
Current liabilities
Non-current liabilities
Equity
Attributable to owners of the parent
Attributable to non controlling interest
Statement of cash flows
Net used in operating activities
Net used in investing activities
Net cash from/(used in) financing activities
Six Months Ended
31 December 2018
$'000
Twelve Months
Ended
30 June 2018
$'000
867
370
(138)
(15)
(153)
1,636
10,372
12,008
32,892
-
32,892
(18,796)
(2,088)
(20,884)
(245)
(10,184)
11,019
590
(13,994)
(1,555)
(15,549)
1,087
256
1,343
21,640
-
21,640
(18,274)
(2,023)
(20,297)
(7,389)
(31)
7,440
20
SUBSEQUENT EVENTS AFTER THE BALANCE DATE
West African Resources Limited applied for a voluntary de-listing of its ordinary shares (“shares”) from trading on
the TSX Venture Exchange (“TSXV”). TSXV has subsequently confirmed that the Company’s shares will be de-listed
and therefore no longer traded on the TSXV after close of trading on Friday, 8 March 2019. No change will occur
to the quotation and trading of WAF shares on the Australian Securities Exchange (“ASX”) and its shares will remain
available for trading on the ASX under the code “WAF”.
P a g e | 52
West African Resources Limited
December 2018 Annual Report
AUDITORS’ REMUNERATION
The auditor of West African Resources Limited is HLB
Mann Judd
Audit or review of the financial statements
All other services
Amounts received or due and receivable by non HLB
Mann Judd audit firms
Audit or review of the financial statements
Certification of expenditure
Consolidated
31 December 2018
$'000
30 June 2018
$'000
18
1
19
-
5
5
28
-
28
14
-
14
DIRECTORS AND EXECUTIVE DISCLOSURES
a)
Details of Key Management Personnel
Directors
Other
Mark Connelly
Richard Hyde
Simon Storm
Ian Kerr
Chairman (non-executive)
Managing Director
Director (non-executive)
Director (non-executive)
Lyndon Hopkins
Padraig O’Donoghue
Matthew Wilcox
Chief Operating Officer
Chief Financial Officer
Chief Development Officer
b)
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
549
30
125
704
890
26
230
1,146
c)
Compensation by category of Key Management Personnel for the year ended 31 December 2018
Consulting fees were paid to Directors, details of which are included in the Remuneration Report in the Directors’
Report. A salary was paid to the Chief Operating Officer, Chief Financial Officer, and Chief Development Officer,
details of which are included in the Remuneration Report in the Directors’ Report.
P a g e | 53
West African Resources Limited
December 2018 Annual Report
d)
Other transactions and balances with Key Management Personnel
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
Directors
Transaction: Fees paid to Dorado Corporate Services Pty
Ltd which has provided company secretarial and
accounting services to the company on normal
commercial terms, for whom Mr Storm, Director and
Company Secretary, is a director and shareholder. This
excludes fees included as remuneration noted under 6(a).
Balance: Amount payable to Dorado Corporate Services
Pty Ltd at balance date $14,967 (30 June 2018: $8,780).
Transaction: 5.5% interest on the $290,000 loan advance
provided to the Managing Director on arm’s length terms
to fund the exercise of 2,000,000 options at 14.5 cents,
with maturity date of 31 December 2018.
Balance: Amount receivable at balance date $303,723 (30
June 2018: $295,682)
Transaction: The Managing Director's spouse has
provided office premises to the Company for $440 per
week at 14 Southbourne Street, Scarborough, Western
Australia until 28 October 2018.
Balance: Amount payable to Managing Director's spouse
at balance date $Nil (30 June 2018: $3,960).
Transaction: Fees paid to Ausdrill Ltd. The Chairman, Mr
Connelly was a director of Ausdrill Ltd (resigned June
2018) which through its wholly owned subsidiary, African
Mining Services Burkina Faso SARL, has provided
exploration drilling services to Société des mines de
Sanbrado SA, Wura Resources Pty Ltd SARL and Tanlouka
SARL on normal commercial terms. Mr Connelly is not
party to any of these commercial negotiations. This
excludes fees included as remuneration noted under B.
Balance: Amount payable to Ausdrill Ltd at balance date
$Nil (30 June 2018: $2,374,764).
18
52
304
296
11
21
-
333
2,375
2,744
P a g e | 54
West African Resources Limited
December 2018 Annual Report
FINANCIAL INSTRUMENTS
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial Assets
Financial liabilities
Trade and other payables
Consolidated
31 December 2018
$'000
30 June 2018
$'000
66,355
851
37
67,243
(9,690)
(9,690)
42,565
713
37
43,315
(4,397)
(4,397)
FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
a)
Market risk
i)
Interest rate risk
The Group’s main interest rate risk arises from its cash balances. Cash held at variable rates expose the Group to
cash flow interest rate risk while cash deposits at fixed rates expose the Group to fair value interest rate risk.
During the period, the Group’s cash deposits at variable rates were denominated in Australian Dollars (“AUD”),
United States Dollar (“USD”), Euros, and CFA Francs (“CFA”).
P a g e | 55
West African Resources Limited
December 2018 Annual Report
The tables below analyse the Group's financial assets and financial liabilities into maturity groupings based on the
remaining period at the reporting date to the contractual maturity date.
Consolidated
Fixed Interest Rate Maturing
Weighted
Average
Effective
Interest
Rate
Floating
Interest
Rate
$
Within
Year
$
1 to 5
Years
$
Over 5
Years
$
Non-
interest
bearing
$
Total
$
30 June 2018
Financial Assets
Cash & cash equivalents
Trade and other receivables
Financial Assets
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
31 December 2018
Financial Assets
Cash & cash equivalents
Trade and other receivables
Financial Assets
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
2.0%
5.5%
2.7%
1,373
-
-
1,373
41,133
296
37
41,466
-
-
-
-
1.7%
5.5%
2.7%
7,297
-
-
7,297
51,821
304
37
52,162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59
417
-
42,565
713
37
477 43,315
4,397
4,397
4,397
4,397
7,237 66,355
851
37
7,784 67,243
547
-
9,690
9,690
9,690
9,690
P a g e | 56
West African Resources Limited
December 2018 Annual Report
ii)
Interest rate sensitivity
At 31 December 2018, if variable interest rates for the full year were -/+ 0.5% from the year-end rate with all other
variables held constant, pre-tax profit for the year would have moved as per the table below.
31 December 2018
30 June 2018
+0.5%
$'000
174
85
-0.5%
$'000
(174)
(85)
The sensitivity is calculated using the average cash position for the year ended 31 December 2018. The interest
income in note 3(a) of $405,000 (30 June 2018: $461,000) reflects cash balances in the period that ranged between
$33,480,000 and $66,354,000 (30 June 2018: $10,550,000 and $42,565,000).
iii) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk primarily arising from costs
denominated in CFA and USD. The Group seeks to mitigate the effects of its foreign currency exposure by holding
a portion of its cash deposits in Euro, which has an exchange rate that is pegged to the CFA, and USD.
The Group also has transactional currency exposures. Such exposure arises from purchases by an operating entity
in currencies other than the functional currency.
The Group does not have a policy to enter into forward contracts or other hedge derivatives.
At 31 December 2018 and 30 June 2018, the Group had the following exposure to CFA, Euro, and USD foreign
currencies expressed in AUD equivalents:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
31 December 2018
$'000
30 June 2018
$'000
14,269
2,166
16,435
2,352
2,352
1,464
1,749
3,213
3,330
3,330
P a g e | 57
West African Resources Limited
December 2018 Annual Report
iv)
Exchange rate sensitivity
A 10 per cent strengthening of the Australian dollar against the following currencies at 31 December would have
increase/(decreased) profit or loss by the amounts shown in the below table. This analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the same basis for the year
ended 30 June 2018.
USD
CFA
EUR
Profit or Loss
Six Months Ended Twelve Months Ended
30 June 2018
31 December 2018
$'000
$'000
(488)
(148)
(645)
(15)
33
(5)
A 10 per cent weakening of the Australian dollar against the above currencies at 31 December would have had the
equal but the opposite effect on the above currencies to the amounts shown above, on the basis that all other
variables remain constant.
b)
Credit risk
Credit risk arises primarily from the Group’s cash and cash equivalents held with financial institutions. Cash
transactions are limited to high credit quality financial institutions.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as
summarised at the beginning of this note.
P a g e | 58
West African Resources Limited
December 2018 Annual Report
c)
Liquidity risk
Liquidity risk is the risk the Group will not be able to meet its financial obligations as they fall due. Liquidity risk
management involves maintaining sufficient cash on hand or undrawn credit facilities to meet the operating
requirements of the business. This is currently managed through cash and cash equivalents of $66,355,000 and
prudent cashflow and financial commitment management. The tables below analyse the Group's financial assets
and liabilities into maturity groupings based on the remaining period at the reporting date to the contractual
maturity date.
Maturity analysis of financial assets and liability based on management's expectation.
31 December 2018
Consolidated
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial Assets
Borrowings
Financial liabilities
Trade & other payables
Net maturity
30 June 2018
Consolidated
Financial assets
Cash & cash equivalents
Trade & other receivables
Financial Assets
Financial liabilities
Trade & other payables
Net maturity
<6 months
$'000
6-12
months
$'000
1-5 years
$'000
>5 years
$'000
Total
$'000
66,355
851
37
-
67,243
(9,690)
(9,690)
57,553
-
-
-
-
-
-
-
-
-
-
-
3,148
3,148
-
-
3,148
-
-
-
-
-
-
-
-
66,355
851
37
3,148
70,391
(9,690)
(9,690)
60,701
<6 months
$'000
6-12
months
$'000
1-5 years
$'000
>5 years
$'000
Total
$'000
42,565
713
37
43,315
(4,397)
(4,397)
38,918
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,565
713
37
43,315
(4,397)
(4,397)
38,918
P a g e | 59
West African Resources Limited
December 2018 Annual Report
SHARE-BASED PAYMENT PLANS
Set out below is a summary of the options granted by the Group during the year ended 30 June 2018 and six
months ended 31 December 2018 financial periods. The fair value for options granted in financial periods are
independently determined using the Black-Scholes and Binomial Option Pricing Models, respectively. Both pricing
models take into account the value of the underlying share, the risk-free rate of return, the volatility of the share
price, the exercise price of the option, and the remaining time to maturity.
Grant
Date
Number
26-Sep-18
500,000
28-Nov-18
500,000
500,000
28-Nov-18
2,500,000 28-Dec-18
Expiry
date
26-Sep-21
28-Nov-21
28-Nov-21
28-Dec-21
Unlisted Options - 31 December 2018
Fair value at
grant date
$0.1270
$0.1230
$0.1230
$0.1040
Exercise
price
$0.3100
$0.3100
$0.3100
$0.3200
1,022,565 28-Dec-18
28-Dec-21
$0.0000
$0.2500
944,167
28-Dec-18
28-Dec-23
$0.0000
$0.2500
1,223,828 28-Dec-18
28-Dec-22
$0.4300
$0.1120
Weighted average exercise price
$0.2500
Vesting date
First gold production
First gold production
First concrete pour for the plant
First gold pour and commercial production
When the Company achieves certain
milestones in relation to its Sanbrado Gold
Project within 12 months of the date the
performance rights are issued
First gold pour and commercial production
When the company’s share price equals 145%
of the trading day VWAP of the company
Grant Date
26-Sep-18
28-Nov-18
28-Nov-18
28-Dec-18
28-Dec-18
28-Dec-18
28-Dec-18
Dividend
yield
0%
0%
0%
0%
0%
0%
0%
Unlisted Options - 31 December 2018
Risk-free
interest rate
2.13%
2.09%
2.09%
1.87%
1.93%
1.87%
2.02%
Expected life
of option
3 years
3 years
3 years
3 years
1 year
3 years
4 years
Expected
Volatility
71%
71%
71%
71%
44%
71%
74%
Exercise
price
$0.3100
$0.3100
$0.3100
$0.3200
$0.0000
$0.0000
$0.4300
Share price on
grant date
$0.285
$0.280
$0.280
$0.250
$0.250
$0.250
$0.250
Grant
Date
Number
1,078,125 24-Jul-17
18-Oct-17
750,000
2,750,000 09-Nov-17
1,250,000 29-Mar-18
Weighted average exercise price
Expiry
date
24-Jul-19
18-Oct-20
09-Nov-20
29-Mar-21
Unlisted Options - 30 June 2018
Fair value at
grant date
$0.1340
$0.1162
$0.1449
$0.1130
Exercise
price
$0.3224
$0.3750
$0.2400
$0.4100
$0.3100
Vesting date
24-Jul-17
First gold production
First gold production
First gold production
Grant Date
24-Jul-17
18-Oct-17
09-Nov-17
29-Mar-18
Dividend
yield
0%
0%
0%
0%
Unlisted Options - 30 June 2018
Risk-free
interest rate
2.00%
1.54%
2.19%
2.19%
Expected life
of option
2 years
3 years
3 years
3 years
Expected
Volatility
63%
58%
58%
45%
Exercise
price
$0.3224
$0.3750
$0.2400
$0.4100
Share price on
grant date
$0.350
$0.400
$0.380
$3.800
P a g e | 60
West African Resources Limited
December 2018 Annual Report
Expenses arising from share-based payment transactions:
Share based payments to Directors
Share based payments to employees
Share based payments to third party
Consolidated
Six Months Ended
31 December 2018
$'000
Twelve Months Ended
30 June 2018
$'000
83
84
6
172
203
80
14
297
PARENT ENTITY 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
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
PROFIT/(LOSS) FOR THE REPORTING PERIOD
Income tax benefit
Total comprehensive loss
Guarantees, Commitments and Contingencies
Parent
31 December 2018
$'000
30 June 2018
$'000
65,367
11,854
77,221
7,086
2,155
9,241
67,980
161,947
6,875
(100,842)
67,980
(757)
-
(757)
42,063
8
42,071
1,222
-
1,222
40,849
120,815
6,703
(86,669)
40,849
(22,847)
302
(22,545)
There are no guarantees, commitments or contingencies in the Parent Entity other than $178,130 of rental
property lease commitments due within one year (30 June 2018: nil).
P a g e | 61
DIRECTORS’ DECLARATION
1.
a)
b)
c)
2.
In the opinion of the Directors:
the financial statements, notes and the additional disclosures included in the Directors' report designated as
audited, of the consolidated entity are in accordance with the Corporations Act 2001 including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its
performance for the year then ended; and
(ii)
complying with Accounting Standards and Corporations Regulations 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
the financial statements also comply with International Financial Reporting Standards as disclosed in Note 1 (c).
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the year ended 31 December 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
____________________
RICHARD HYDE
Managing Director
28 March 2019
P a g e | 62
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of West African Resources for the
period ended 31 December 2018, I declare that, to the best of my knowledge and belief, there have
been no contraventions of:
(a)
(b)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 March 2019
B G McVeigh
Partner
P a g e | 63
INDEPENDENT AUDITOR’S REPORT
To the members of West African Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of West African Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position
as at 31 December 2018, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the period then
ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its
financial performance for the period then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
P a g e | 64
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of development expenditure
Note 10 to the financial report
As at 31 December 2018, the carrying value
of the Group’s mine properties was
$18,830,240, and is a material asset of the
Group.
The date in which a project transitions from
exploration and evaluation to development,
and then to production requires
management’s judgement.
At balance date the Group had one mine
property being a 100% share in the
Sanbrado Gold Project.
Our procedures included but were not limited to the
following:
We considered management’s assessment of the
date on which the project had transitioned from
exploration and evaluation to development and,
as a result, when capitalisation of development
costs commenced;
We performed an impairment assessment of
capitalised exploration costs
to
development expenditure at the date of transition;
transferred
In relation to the substantial capitalisation of
expenditure during the year as mine properties,
we performed detailed testing, including verifying
the authorisation, accuracy and completeness of
recording and classification of capital
the
expenditure;
We considered the Directors’ assessment of
potential indicators of impairment; and
We examined the disclosures made in the
financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the period ended 31 December 2018, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
P a g e | 65
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the period
ended 31 December 2018.
In our opinion, the Remuneration Report of West African Resources Limited for the period ended
31 December 2018 complies with section 300A of the Corporations Act 2001.
P a g e | 66
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 March 2019
B G McVeigh
Partner
P a g e | 67
ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 18 March 2019.
DISTRIBUTION OF SHARES
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 -100,000
100,001 – and over
Number of holders
89
283
269
930
471
2,042
The number of shareholdings held in less than marketable parcels is 133.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of quoted shares are:
Shareholders
ZERO NOMINEES PTY LTD
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2
3 CITICORP NOMINEES PTY LIMITED
4 CDS & CO
5
6 CS THIRD NOMINEES PTY LIMITED
7 NATIONAL NOMINEES LIMITED
8 UBS NOMINEES PTY LTD
9 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
10 BNP PARIBAS NOMINEES PTY LTD
11 STICHTING LICHFIELD US
12 ALOHA INVESTMENTS PTY LTD
13 P R PERRY NOMINEES PTY LTD
14 BRISPOT NOMINEES PTY LTD
15 MR RICHARD HYDE
16 AMP LIFE LIMITED
17 MR FRANCIS ROBERT HAWDON HARPER
18 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
19 BOSTON FIRST CAPITAL PTY LTD
20 CEDE & CO
No. Of Shares Held
199,836,324
82,451,816
55,302,665
38,423,160
27,959,791
27,464,093
23,383,117
23,179,898
19,881,475
13,998,859
13,250,000
10,550,000
9,234,734
8,707,686
7,730,769
7,249,192
5,450,464
5,293,742
5,189,385
5,115,106
589,652,276
% Holding
23.12%
9.54%
6.40%
4.45%
3.23%
3.18%
2.71%
2.68%
2.30%
1.62%
1.53%
1.22%
1.07%
1.01%
0.89%
0.84%
0.63%
0.61%
0.60%
0.59%
68.22%
STOCK EXCHANGE LISTING
Listing has been granted for the ordinary shares (ASX code: WAF) of the company on all Member Exchanges of the
Australian Stock Exchange Limited "ASX") with 864,400,727 shares on the register. The Company was previously also
listed on the Toronto Stock Venture Exchange (TSX), which it delisted from on 8th March 2019.
P a g e | 68
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders are:
Shareholder
VanEck Associates Corporation
Mason Hill Advisors, LLC on behalf of itself, Equinox Partners LP,
Wilhelmus Henricus Maria Pot and Stichting Lichfield
Number of shares
61,429,800
47,425,761
VOTING RIGHTS
All shares carry one vote per unit without restriction.
UNLISTED OPTIONS
22,178,201 options and performance rights are held by 18 option holders. Options do not carry a right to vote.
Holders of more than 20% of the unlisted options and performance rights are:
Unlisted option holder
Zenix Nominees Pty Ltd
Number of options
5,000,000
P a g e | 69
SUMMARY OF TENEMENTS IN BURKINA FASO
At 18 March 2019
Tenement
Name
Register
ed
Holder
Damongto
Goudré
Wura
Resources
Pty Ltd
SARL
Wura
Resources
Pty Ltd
SARL
% Held
Tenement
Number
Grant
Date
Expiry
Date
Tene-
ment
Type
Tene
ment
Area
km2
Geographical
Location
100%
No 2018-
184/MMC/SG/
DGCM
100%
No 2018-
186/MMC/SG/
DGCM
05/09/2018 01/03/2021
EL
26
05/09/2018 23/03/2021
EL
175
Manessé
Tanlouka
SARL
100%
N2017/014/M
EMC/SG/DGC
MIM
13/01/2017 13/01/2020
EL
90,35
05/08/2017 04/08/2020
EL
130.7
18/07/2017 17/07/2020
EL
166
18/07/2017 17/07/2020
EL
154.7
21/11/2017 20/11/2020
EL
205.5
05/09/2018 01/03/2021
EL
17.46
Sartenga
Toghin
Vedaga
Bollé
Zam Sud
West
African
Resources
Developm
ent SARL
Wura
Resources
Pty Ltd
SARL
Wura
Resources
Pty Ltd
SARL
Wura
Resources
Pty Ltd
SARL
Wura
Resources
Pty Ltd
SARL
100%
No 2018-
190/MMC/SG
/DGMC
100%
No 17 -
182/MMC/SG/
DGCM
100%
No 17 -
232/MMC/SG/
DGCM
100%
No 17 –
223//MMC/SG
/DGCM
100%
No 2018-
183/MMC/SG/
DGCM
Sanbrado
Societe Des
Mines De
Sanbrado
Sa
90%
Décret No
2017 –
104/PRES/PM
/MEMC/MINE
FID/MEEVCC
Arrêté No
2018-
139/MMC/SG/
DGMG
13/03/2017 12/03/2024
ML
25.9
Ganzourgou
Province
P a g e | 70
Ganzourgou
Province
Ganzourgou
Province
Ganzourgou
Province
Namentenga
Province
Ganzourgou,
Provinces
Gnagna,
Kouritenga
Provinces
Ganzourgou
Province
Ganzourgou
Province