West Wits Mining Limited
ABN 89 124 894 060
Annual report
For the year ended 30 June 2020
West Wits Mining Limited
ABN 89 124 894 060
Annual report - 30 June 2020
Contents
Corporate Directory ........................................................................................................................................................ 3
Chairman's letter ............................................................................................................................................................ 4
Review of operations and activities ................................................................................................................................ 6
Directors' report ............................................................................................................................................................ 18
Auditor's Independence Declaration ............................................................................................................................ 35
Consolidated statement of profit or loss and other comprehensive income ................................................................. 36
Consolidated statement of financial position ................................................................................................................ 37
Consolidated statement of changes in equity ............................................................................................................... 38
Consolidated statement of cash flows .......................................................................................................................... 39
Notes to financial statements ..................................................................................................................................... 40
Directors' declaration ................................................................................................................................................... 74
Independent auditor's report to the members ............................................................................................................... 75
Shareholder information ............................................................................................................................................... 80
Page 2 of 81
Corporate Directory
Directors
Mr Michael Quinert
Executive Chairman
Mr Jac van Heerden (appointed on 16 April 2020)
Managing Director
Mr Hulme Scholes
Non-Executive Director
Dr Andrew Tunks
Non-Executive Director
Mr Peter O’Malley (appointed on 16 April 2020)
Non-Executive Director
Mr Daniel Pretorius (resigned on 16 April 2020)
Non-Executive Director
Joint Company Secretaries
Mr Simon Whyte
Mr Phillip Hains (resigned on 16 April 2020)
Principal registered office in Australia
Level 3, 62 Lygon Street
Carlton VIC 3053
Australia
Share and debenture register
Automic Pty Ltd
Level 5 126 Phillip Street
Sydney NSW 2000
+61 2 9698 5414
Auditor
William Buck
Level 20, 181 William Street
Melbourne VIC 3000
Solicitors
Quinert Rodda & Associates
Suite 1, Level 6, 50 Queen Street
Melbourne VIC 3000
Bankers
National Australia Bank
Level 2, 330 Collins Street
Melbourne VIC 3000
Website
http://www.westwitsmining.com/
Page 3 of 81
Chairman's letter
Dear Fellow Shareholders,
On behalf of the Board of Directors, I am pleased to present the 2020 Annual Report for West Wits Mining Limited
(ASX: WWI).
The Company’s primary focus during the 2020 financial period was the progression of the mining right application at
the Witwatersrand Basin Project (“WBP”) which hosts a 3.65M oz Au JORC Resource. A critical milestone was reached
in June 2020 with the Department of Mineral Resources (“DMR”) approving the Company’s Environmental Authorisation
after extensive engagement and an exhaustive review period.
The DMR requested the Company’s proof of funds for rehabilitation in 1Q 2020, a key final step in the DMR’s review
process which provided a strong signal of the Government’s support for the project and that the application process is
nearing conclusion. The Company’s provision of the Rehab Guarantee to the DMR gave the Board impetus to re-
commission WBP’s independent scoping study and geological work on West Wits exploration target. Both activities are
pivotal to achieving West Wits’ goal of becoming a junior gold producer targeting >60,000oz Au per annum over a 15-
year plus mine life.
The independent scoping study was completed shortly after the reporting period and confirmed the Company’s view
that WBP offers multiple areas for mining, identifying five distinct areas which enables staged development. Importantly,
this provides optionality to the Board in managing the CAPEX profile which is expected to be low due to the existing
historical infrastructure and planned toll treatment.
Part of the initial mining area at Kimberly East includes an exploration target for the K9A reef in that zone. The geology
team has been working hard to convert that exploration target into a JORC compliant Mineral Resource with results
expected imminently. This is expected to augment and underpin further the already sizeable 3.65Moz JORC Resource.
Furthermore, the ore bodies are still open in multiple directions with additional reef packages of the prolific
Witwatersrand Basin system yet to be explored by West Wits in the project area.
The Board restructure completed in April 2020 executes part of the Company’s strategic plan to move towards a more
operational focused footing as the WBP gears towards the development of the underground mine, introducing skillsets
to improve the Board’s capability to drive activity. The restructure was highlighted by the appointment of experienced
mining executive, Jac van Heerden, to Managing Director. The Company also made key appointments with the hiring
of a Geology & Exploration Manager and Social & Labour Manager, both roles critical to the success of the Company’s
strategic transformation.
The Board followed closely the developments in the Paterson Province after Rio Tinto and Greatland Gold’s exceptional
exploration results at WINU and Havieron respectfully. These results have fired escalating interest in the area
surrounding West Wits’ Mt Cecelia project in the Paterson Province, Western Australia. The Company signed an access
agreement with RIO during the year, enabling RIO to build tracks to access their tenements which virtually surround
West Wits 100% owned project. A specialist desktop study was completed in April 2020, identifying an orogenic gold
target, which is being followed up with a SkyTEM helicopter-borne aeromagnetic survey in September 2020 over the
entire tenement area. This method is an exploration technique which has been fundamental to the success of peer
companies in the region and the Board is looking forward to seeing the results as we take our next steps in this exciting
region.
Page 4 of 81
Chairman's letter (continued)
As we move forward towards the grant of the mining right for WBP the gold price has strengthened and with it our
prospects of providing meaningful returns on your investment.
Thank you for your ongoing interest and support of West Wits.
For and on behalf of the Board
Michael Quinert
Executive Chairman
West Wits Mining Ltd
30 September 2020
Page 5 of 81
Review of operations and activities
HIGHLIGHTS
Environmental Authorisation (EA) approval from the Department of Mineral Resources (DMR) on the
Witwatersrand Basin Project (WBP) marking a significant milestone
Independent Scoping Study by Bara Consulting on gold mining at the WBP was substantially progressed
during the period and completed in July 2020, identifies five distinct targets for staged development
Scoping Study assumptions are in sufficient detail to move directly into a Bankable Feasibility Study on the
Qala Shallows area which was commissioned in September 2020
An exploration desktop study of existing historical mining data is being utilised to evaluate the K9A reef with
an aim to bring this reef into the WBP’s 3.65Moz Au Global JORC Resource1
Regional exploration activity continues to accelerate near Mt Cecelia in the Paterson Province, the Company
signed an access deed with Rio Tinto Limited’s (“RIO”) during the period to enable RIO to access their
neighbouring tenements through Mt Cecelia
A Lithostructural Desktop Study of Mt Cecelia provided a new geological interpretation, identifying three
distinct targets: banded-iron formations (“BIF”) hosted Gold, Polymetallic VMS & Manganese
Strategic Board restructure included the appointment of South African based Managing Director, Jac van
Heerden, to drive development of WBP towards production
OVERVIEW
West Wits Mining (ASX: WWI) (the Company or West Wits) primary focus during the financial year was progressing
the mining right application at the Company’s marquee Witwatersrand Basin Project in South Africa and advancing
WBP’s independent scoping study which was completed shortly after reporting date. Both events significantly de-risk
WBP as the Company accelerates feasibility studies to target maiden underground production in 2021.
The DMR’s EA approval represents a significant milestone in the application process as it demonstrates the South
African Government’s support for the project after an exhaustive review period. The DMR’s EA approval was then
subject to SA’s appeal procedure, three appeals were received during the review period which was extended a further
30-days due to COVID-19 allowances. Appeals are a normal part of South Africa’s mining right application process;
the Company remains assured in the soundness of its EA process and is confident of a successful outcome.
West Wits recommissioned the independent scoping study on WBP in April 2020 with mining specialists, Bara
Consulting, updating the study’s 2019 key input assumptions which included the base gold price increasing from USD
1,200/oz to USD 1,500/oz, reflecting the prevailing market conditions which continue to strengthen. The Independent
Scoping Study by Bara is underpinned by the WBP’s 3.65Moz Au JORC Resource1 (Table 1) which covers the entire
Project footprint and the K9A exploration target (Table 2) which forms part of the Kimberley East Underground target
area.
A key objective of the Independent Scoping Study was to provide an assessment of the mining potential over the whole
Project area. The Independent Scoping Study confirmed the Project’s distinct positive investment parameters which
de-risks the Project and enables the Company to progress to the next stage of feasibility on the Qala Shallows as well
as the supporting exploration activity which is deemed a high priority.
1 The original report was “2019 Annual Report to Shareholders” which was issued with consent of competent persons Dr Andrew J. Tunks, it was released
to the ASX on 27th September 2019 and can be found on the Company’s website (https://westwitsmining.com/). The Company is not aware of any new
information or data that materially effects the information included in the relevant market announcement. The form & context in which the Competent
Persons’ findings are presented have not been materially modified.
Page 6 of 81
Review of operations and activities (continued)
WWI’s exploration activity ramped up in March 2020 and focused on converting the K9A Exploration Target (Table 2)
into a JORC compliant resource. WWI’s in-country geological consultant, Shango Solutions (Shango), is utilising
historical survey and assay information, capturing data in a 3D environment to compile a 3D(Digital Terrain Model) and
3D Block Model of the Kimberley Reef package which is utilised in the resource generation and feasibility studies. It is
anticipated the exploration work will convert the exploration target into a JORC compliant resource with results expected
soon.
West Wits 100% owned Mt Cecelia project lies in the Paterson Province which continues to see significant regional
exploration activity which is being led by RIO Tinto’s WINU project, approximately 70km’s east. Rio also hold the rights
to the majority of Mt Cecelia’s neighboring tenements. A third-party specialists desktop study was completed in April
2020 and resulted in a new interpretation of the Mt Cecelia’s geological structures, identifying the potential of a new
orogenic gold play, determination of VMS prospective host units and Manganese potential which provides significant
upside exploration opportunity to the region. West Wits followed up the study with the first field trip in July 2020 and
subsequent SkyTEM helicopter-borne aeromagnetic survey with results expected in 4Q 2020.
WITWATERSRAND BASIN PROJECT, SOUTH AFRICA
EXPLORATION
The project’s global MRE sits at 3.65Moz (33.9M tonnes at 3.4g/t) with 2.4Moz (21.1M tonnes at 3.55g/t) in the
Measured and Indicated categories at a 2.0g/t cut-off grade1.
TABLE 1: GLOBAL MRE FOR THE WITWATERSRAND BASIN PROJECT AT 2.0G/T CUT-OFF1
Category
Measured
Indicated
Measured & Indicated
Inferred
Total
Tonnes (millions)
Grade (g/t Au)
Ounces Au
12.0
9.1
21.1
12.8
33.9
3.65
3.37
3.55
3.0
3.4
1,420,000
988,000
2,408,000
1,240,000
3,648,000
Notes: The Global MRE set at a 2.0 g/t Au cut-off. Reported in accordance with the JORC Code of 2012. Number differences may occur due
to rounding errors. Table 1 shows the Global JORC Resource as announced on 16th July 20181 and also takes into account depletion
resulting from tonnes removed in the Kimberley Central Open Pit operations. The original report for the table above was “2019 Annual Report
to Shareholders” released to the ASX on 27/09/2019.
WWI’s current desk top study and exploration program is designed to advance the Company’s 650,000oz to
1,000,000oz Au Exploration Target on the K9A reef (Table 2) into a JORC compliant resource.
Exploration Target for K9A Reef -Kimberley East Project
Range
Tonnes (M)
Au (g/t)
Low
High
6.5
8.0
3.0
4.0
Au (Oz)
650,000
1,000,000
Table 2: The consolidated Exploration Target is stated above as ranges of potential tonnes and grades. Number differences may occur due
to rounding errors. The original report was “Witwatersrand Basin Project’s Kimberley Reef East Upside Potential”, released to the ASX on
31/08/2018.
The previously stated Exploration Target was proposed for the K9A reef which is situated approximately 10m
stratigraphically above the K9B Reef. The potential quantity and grade of the Exploration Target is conceptual in
nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration
will result in the estimation of a Mineral Resource.
Shango’s resource work is utilising historical survey and assay information, capturing data in a 3D environment to
compile a 3D digital terrain model (Image 1) and 3D geological model which is scheduled for completion soon.
Page 7 of 81
Review of operations and activities (continued)
Image 1: Shango’s preliminary 3D Digital Terrain model
WWI’s development plan aims to convert greater than 75% of the initial 10-year mining footprint of the Qala Shallows
into measured and indicated resource categories to underpin the Bankable Feasibility Study (“BFS”) on the Qala
Shallows which was commissioned in September 2020. The exploration work on the K9A target conversion project
carried out during the period will identify areas for infill drilling to improve the resource confidence level. Improving the
size of the indicated and measured resource categories will then allow Bara Consulting to assess a greater resource
for conversion to a reserve following the completion of the BFS.
The information in this report relates to Mineral Resources is based on information compiled by Dr. Andrew Tunks. Dr.
Tunks (Member Australian Institute Geoscientists) is a Director of the Company and has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Minerals Resources and Ore Reserves’. Dr Tunks consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.’
DEVELOPMENT
Bara’s Independent Scoping Study utilised a base gold price assumption of USD 1,500 and ZAR/USD exchange rate
of ZAR16.5. Sensitivity analysis of gold price in the study indicates the potential for significant upside when compared
to the prevailing gold price at the time of reporting.
The Independent Scoping Study identifies five distinct reef packages to develop mining operations (Image 2). The
combination of these five mining operations was in the previous phase of the mine’s life some 20 years ago producing
around 80koz-100koz Au per annum. However, due to expected constraints in re-opening old shafts the Independent
Scoping Study has concluded that the refurbished operations will achieve something moderately less than past
production rate.
Page 8 of 81
Review of operations and activities (continued)
Bird Reef Central
Qala Shallow (<500m)
Main Reef and MRL
Bird Reef East
Qala Deeps (500m – 1500m)
Not to scale
Image 2: Schematic of WBP Scoping Study conceptual mine layout shows the connection between the Qala Shallow to both the
Bird Reef East package and Qala Deeps.
The Qala Shallows and Qala Deeps areas still have extensive life left and will form the backbone of the Project. The
other areas of operation will supplement additional tonnes through the Qala operations mine life (Image 3).
The Qala Shallows was operational when the historical mine closed in the early 2000’s. The scoping study proposes
development via the refurbishment of the existing adit which is anticipated to include trackless haulage and would
require significantly lower CAPEX compared to reconstructing the incline shaft with winder.
A key factor in the Independent Scoping Study’s prioritisation of the Qala Shallows for initial development is the
Kimberley Reef’s ore profile which modelling shows is best suited to provide the steadiest state of production over
WBP’s mine life. In turn, production from Qala Shallows would support the development of other distinct target areas
during development phases. In addition, mine design undertaken as part of the Independent Scoping Study shows
that the Qala Adit provides a feasible access point for early mining development and future mechanised mining
operations, as well as access to the Qala Deep and Bird Reef East ore bodies (Image 2).
Page 9 of 81
Review of operations and activities (continued)
Image 3: 3D Schematic of Scoping Study conceptual mine layout
The scoping study’s production target is based on a combination of measured resource, indicated resource, inferred
resource and exploration target. Due to the inclusion of the inferred resource and exploration target areas in early
stage mining , the Company has decided to defer the decision to release the Scoping Study’s production target or
financial modelling until the currently underway exploration projects have been completed.
Mining Method & Processing
The scoping study utilises a narrow reef breast-mining method in the upper sections of the conceptual mine plan
which was the same mining method being used when the historical mine ceased in the early 2000’s and is still being
used extensively in South African gold mining today. Therefore, the scoping study is based on a tried and tested
mining method in the Witwatersrand Basin with a readily available, highly skilled workforce and supply network. The
BFS will also investigate additional mechanised mining techniques which are expected to provide significant efficiency
improvements where the reef dip is greater than 50o.
There is sufficient capacity and quality of processing in the region to enter a toll treating arrangement with one of the
local process plant operators as opposed to allocating CAPEX for the construction and operation of a process facility.
The Independent Scoping Study did not foresee any issues with processing of the ore as it has been successfully
processed during the mine’s historical operation and the neighbouring mines are currently mining the same reef
packages which achieve metallurgical recoveries greater than 90%.
MINING RIGHT APPLICATION
Final documents of the Mining Right application were provided to the DMR in July 2019 which triggered the
department’s final 107-day review period. The Company actively engaged the DMR, having numerous meetings at the
DMR offices and holding a site tour of the mining right application area to demonstrate the plans for underground mine
development via the refurbishment of existing infrastructure.
The DMR requested the removal of two proposed open-pit areas from the Mine Works Program, “Roodepoort Main Pit”
and “Rugby Club Main Reef Pit” due to the proximity of communities and housing developments to these two proposed
open-pits. WWI reviewed the DMR’s request and assessed the impact to not be material to the overall resource and
project with the project’s value predominately based on the underground mine targets, removing them from the
application.
Page 10 of 81
Review of operations and activities (continued)
The DMR requested a financial guarantee for the rehabilitation of the area under the mining right application on the
24th March 2020, 2-days prior to the COVID-19 lockdown. As a result of COVID restrictions, the EA Approval was
delayed approximately 9-weeks due to lockdown requirements which closed the DMR’s regional office and prevented
department officials from formally receipting the original copy of WWI’s rehabilitation guarantee per regulatory
requirements.
The EA was approved by the DMR on 24th June 2020 and represents a significant milestone towards mine
development and production at the WBP.
Following granting, the EA approval was subjected to public review for 20 calendar days whereby interested and
affected parties (IAP’s) can lodge an appeal against the EA decision. Once an appeal is lodged with the Department of
Environmental Affairs (“DEA”), the EA will not be further acted on until the appeal has been ruled on. A directive
issued by the Minister for Environment on 5th June provided for an additional 30-day period for appeals to be submitted
due to the impacts of COVID. Three parties submitted appeals in the extended period which were expected and had
been foreshadowed. West Wits’ legal counsel submitted the Company’s response to the DEA in August. The
Company remains confident in the soundness of its EA process and is confident of a successful outcome which is
expected by early November 2020.
COMMUNITY
West Wits stakeholder engagement process is continuing with interested and affected parties, community institutions,
provincial and national government offices actively engaged to ensure progressive mutually beneficial outcomes of the
Company operating in the region. The appointment of a full-time Social & Labour Manager during the year was a
critical step and will play a key role in the WBP’s development, driving West Wits’ sustainable community development
projects and harnessing locally sourced skills and resources.
The Company continued its proactive engagement with nearby communities by providing support to a local not-for-
profit organisation, Hlokomelo Community Organisation, which assists primary caregivers, youth-headed homes,
orphaned and vulnerable children and families that are impacted by the HIV and AIDS with food parcels in Sol Plaatjie
and Matholesville.
West Wits support enabled the not-for-profit organisation to purchase nutritional food parcels for those beneficiaries
that were unable to receive food parcels from government during the COVID 19 lockdown. The program reached
Orphaned and Vulnerable Children (OVC’s) who were depending on school nutrition programmes to eat and youth-
headed household in Durban Deep, Skoonplass and Matholesville. West Wits assistance also targeted the School
Governing Bodies (SGB) teachers who lost income as schools were closed during the lockdown, senior citizens living
with more than one grandchild and youth headed households.
Image 4: (Left) Food Parcels
provided during the COVID 19
lockdown at Sol Plaatje and
Matholesville and (Right)
WWI’s Social & Labour
Manager, Tozama, and
members of the Hlokomelo
Community Organisation
(NGO) with the motorbike
donated by West Wits Mining.
Page 11 of 81
Review of operations and activities (continued)
As part of its’ sustainable community development initiatives, West Wits funded the Hlokomelo Community
Organisation’s purchase of a motorbike for an income generation project. Hlokomelo motorbike delivery service has
been established to provide low-cost outsourcing delivery services to communities. It aims to assist community
members at large, including the aged and sickly, where members will no longer queue for medications, grants and
groceries. The motorbike will be used to deliver medication and groceries to the community of Sol Plaatjie, Matholesville
and Rooderpoort. This project is geared towards bringing a stable income to the organisation rather than solely relying
on donations and sponsorships.
KIMBERLEY CENTRAL OPEN-PIT PROJECT: PRODUCTION & REHABILITATION
Kimberley Central Open Pit’s main contractors were decommissioned at the end of June 2019 with final ore processed
in July 2019. Ore mined during the period was approximately 5,280t which was supplemented by a further 1,400t on
stockpile at the end of June. Head grade was 2.0g/t for the quarter and plant recovery of 97.5% resulted in a recovered
grade of 1.94g/t Au, approx. 8% above plan. The average delivered grade over the project life was 2.13g/t Au and plant
recovery of 88.2% resulted in an average recovered grade of 1.89g/t Au.
The Group final reconciliation for the toll treating arrangement which resulted in a further allocation of 8.6kg for historical
gold accounting discrepancies and for gold-in-plant (“GIP”). The additional allocation increased gold sales for the
financial year to 21.62kg.
At the end of the reporting period Pit 3 was the only remaining pit being backfilled to close out the rehabilitation project
which is nearing completion. All historical mine shafts have been plugged by concrete at depth and lie under cover,
preventing illegal miner access and enabling urban development.
MT CECELIA – EAST PILBARA, AUSTRALIA
WWI’s Mt Cecelia project is located approximately 150km ENE of Marble Bar, 150km NW of Telfer Mine, and 120km
NNW of Nifty mine (aerial distance). The region is considered one of the country’s most prominent addresses for mineral
exploration with several joint venture agreements being reached since RIO’s WINU discovery, approximately 70km E
of Mt Cecelia, and AIM Listed Greatland Gold’s Haverion project E of Telfer (Image 5).
Agreement was reached in June 2020 with the FNA proponent to access the 11% overlapping area of the exploration
area in the northern portion of the exploration license per the Department of Mines, Industry Regulation and Safety’s
license conditions.
RIO’s extensive 2018 pegging campaign included EL’s covering over 60% of Mt Cecelia’s border with its local interest
increased through the $6m farm-in & joint venture agreement with Carawine Resources (ASX:CWX) to explore CWX’s
Baton project2 which sits on Mt Cecelia’s SE boundary.
The Company signed an access deed with RIO Tinto Limited (“RIO”) in October 2019 and RIO submitted a Program of
Works in January 2020 to build tracks on the Mt Cecelia tenement area to access their surrounding EL’s. RIO’s activity
is an indication of the prospectivity of West Wits Mt Cecelia project and improves the Group’s tenement access with
the construction of tracks.
Page 12 of 81
Review of operations and activities (continued)
Image 5: Mt Cecelia’s
adjoins Carawine’s Baton
project to the south east
which was included in RIO’s
farm-in agreement and also
encompasses the Vines
Fault. RIO EL applications
on tenements adjacent to
Mt Cecelia to the north and
east were granted in
October 2019.
Mid-tier miner, IGO Limited (ASX:IGO), has also demonstrated strong interest in the region having completed a $15m
earn-in agreement with Encounter Resources (ASX:ENR) at ENR’s Yeneena project3. IGO’s interest extends via the
execution of a $32m Joint Venture term sheet in June 2020 with Metals X (ASX:MTX) at MTX’s Paterson Exploration
Project (PEP) but excludes the historically significant Nifty mine4. Both Yeneena, PEP and Nifty are located to the south
of WWI’s Mt Cecelia project along the Vines Fault which was a focus of the PGN desktop review and the upcoming
field work (Image 5).
Desktop Study Review
PGN Geoscience were engaged by the Company to perform a detailed Lithostructural desktop study to assist in
developing new exploration models for target generation at WWI’s Mt Cecelia project and to provide a context to
existing/known mineralisation occurrences.
The study generated an improved geological map and the revised understanding which has significant implications for
future exploration programs, primarily from the identification of a folded and faulted, banded-ironstone, felsic intrusive
complex that is highly prospective for orogenic gold.
The new geological interpretation and resultant map introduces a considerably more complex geology than the currently
available public geological map and includes a new interpretation for the Vines Fault a major structural element in the
Paterson. (Image 6)
Page 13 of 81
Review of operations and activities (continued)
Image 6: Newly
compiled map for
West Wits Mining
compared to (inset)
currently available
map.
BIF–Hosted Orogenic Gold Target
The initial interpretation suggests that a folded banded-iron sequence is juxtaposed by a series of steep structures.
The publicly available airborne magnetics further suggests a series of demagnetised zones internal to the BIF. The
hypothesis is that these are prospective for orogenic gold mineralising systems. The resultant new geological
interpretation has resolved a new architecture and consequently new litho-structural framework for the Mt Cecelia
project area within E45/5045, the central west area location is highly prospective for orogenic BIF hosted gold.
Polymetalic VMS & Manganese Targets
The study found, the Kylena Formation and Jeerinah Formation are prospective for VMS deposits. Both of which occur
in significant volumes within the tenement area. These formations represent classic bimodal volcanic sequences and
as such, present a significant opportunity and considerable spatial extent for exploration within the WWI tenure.
Through the extrapolation and resultant understanding from developing a district-scale exploration litho-structural map,
Manganese deposits such as those locally related to the Baramine series of deposits ~8km to the south-west are hosted
within a form-surface related to the synformally folded sequence of Pinjian Chert Breccia units.
Future Exploration Program for EL 45/5045
WWI engaged a Pilbara based contractor to perform an initial reconnaissance trip in July (post-reporting period) with
the key objective to determine access to the project and PGN’s target areas, supply stations for future exploration and
provide observation geological outcropping and other features.
The fieldtrip observed sand dune cover, commonly associated with the Paterson Province, resulted in a large portion
of the geological structures identified in PGN’s report to not outcrop at surface. Similar to other explorers in the region,
West Wits has opted to commission a SkyTEM helicopter-borne aeromagnetic survey over the entire tenement area
with activities commencing from September 2020. Survey results are expected to be available in 4Q 2020 which are
expected to include recommendations for drilling targets for the 2021 field season.
Page 14 of 81
Review of operations and activities (continued)
TAMBINA PROJECT – PILBARA, AUSTRALIA
First Au (ASX: FAU) continued to manage exploration at the Tambina Project, located approximately 100km West of
Marble Bar, as part of the 2019 Farm-In Agreement. No significant developments were reporting during the financial
year.
DEREWO PROJECT, INDONESIA
West Wits continued to work with local partners on securing clean & clear status on IUP’s whilst also seeking new
parties take the project forward for the potential disposal of part of WWI’s interest.
The Company is seeking further information from PTMQ on the status of the other IUP’s.
As reported in the 31 December 2019 Half Year accounts, WWI reports the Indonesian subsidiary group as a
discontinued operation with the investment written down to zero.
CORPORATE
West Wits’ Board promoted West Wits MLI CEO, Jac van Heerden, to the Board as Managing Director of WWI in April
2020. Mr van Heerden, a senior mining executive with over two decades experience in the mining sector, has
overseen project & mine development across southern Africa and more recently presided over a large-scale copper /
cobalt operation in the Democratic Republic of Congo prior to joining West Wits in January 2019.
The Company also appointment experienced US based investment finance executive, Mr Peter O’Malley, as Non-
Executive Director to the WWI Board at the same time. Mr O’Malley worked at Credit Suisse for 13 years and later,
while based in Hong Kong, managed Deutsche Bank’s Natural Resources investment banking practice in Asia-Pacific
for many years.
Importantly, the appointments introduce senior mine engineering and investment finance experience to the Board mix
which was viewed as strategically essential as the Company enters the development phase.
Niel Pretorius (Non-Executive Director) and Phillip Hains (Joint Company Secretary) elected to resign as part of the
changes.
The Company hired South African based and highly experienced geologist, Martin Bevenlander, as Geology and
Exploration Manager to oversee and drive the exploration programs at both WBP and Mt Cecelia with activity ramping
up at both projects in the subsequent period.
COVID-19 Update
The Company continues to monitor restrictions associated with the COVID-19 outbreak in both South Africa and
Australia. The main impact from COVID-19 to date is on the timing of the mining right application with an approximate
3-month delay from South Africa’s COVID lockdown and the Western Australian Government’s border restrictions
which impedes interstate personnel accessing the Mt Cecelia project.
There has been minimal impact on WWI’s management team and key contractors who have been able to work remotely
and progress key exploration, feasibility and licensing activities during lockdown periods.
WWI’s executive team continues to assess capital markets to ensure the Company has avenues to finance the
execution of its strategic development plan. The uncertainty surrounding the COVID-19 pandemic contributed to the
Board’s decision to take a prudent approach to raise funds in 2020 which sees the Company well capitalised at the
time of reporting.
Page 15 of 81
Review of operations and activities (continued)
Issue of Securities
The Company issued securities (detailed below) which further align the interests of employees, consultants and
directors with those of shareholders:
•
•
•
•
2,500,000 unlisted options to Dr Andrew Tunks and 2,500,000 unlisted options to Mr Hulme Scholes (or their
nominees), who are both Directors of the Group. The unlisted options have an exercise price of $0.012 (1.2
cents), expire 4 years from the issue date and, upon exercise, entitle the holder to a fully paid ordinary share
in the Group. The options are subject to periodic vesting over a period of 18 months.
5,000,000 unlisted options to Alces Capital Partners (or its nominee), a third-party consultancy who is not a
related party of the Group, in lieu of cash for investor relations services provided to the Group. The unlisted
options have an exercise price of $0.012 (1.2 cents), vest immediately, expire 4 years from the issue date and,
upon exercise, entitle the holder to a fully paid ordinary share in the Group.
5,500,000 unlisted options in recognition of the assistance and support provided by Mr Peter O’Malley of
Kenosis Capital LLC (“Kenosis”) in connection with recent strategic planning and development in the lead up
to the issue of the convertible notes. The options have an exercise price of $0.015 (1.5 cents) and expire two
years after issue.
Total of 24,500,000 performance rights to Michael Quinert, Jac van Heerden and Simon Whyte (or their
nominees).
West Wits raised additional capital during the period to support ongoing activities via the issue of securities detailed
below:
• Placement raised $735,000 through the issue of 122,500,000 fully paid ordinary shares at $0.006 (0.6 cents)
per share as announced to the ASX on 20th August 2019
•
•
•
1,000,000 convertible notes in the Company (Notes) at an issue price of USD$1 per Note for an aggregate
USD$1,000,000 capital raising pursuant to a subscription agreement as announced to ASX on 20 December
2019
$800,000 through the issue of 80,000,000 fully paid ordinary shares at $0.01 (1 cent) per share via a
Placement ($650,000) and SPP ($150,000) with the SPP oversubscribed by 177% which resulted in a scale-
back as announced to ASX on 23rd June 2020
The Company issued 5,595,278 fully paid ordinary shares at the same deemed price of $0.01 (1 cent) per
share in-lieu of cash for payment of accrued interest of $55,953 on the Convertible Notes
Shortly after the reporting period, the Company raised a further $3,407,750 via the issue of 161,940,477 fully paid
ordinary shares at $0.021 (2.1 cents) per share in a Placement to new and existing unrelated sophisticated and
professional investors, as announced to the ASX on 14th August 2020.
Carawine Resources ASX Release: “$6 Million Paterson Farm In With Rio Tinto” on 28/10/2019
ENR ASX Release: “Paterson Province Exploration Commences Under IGO Earn-In” on 08/05/2020
2.
3.
4. MTX ASX Release: “$32M Paterson Province Exploration JV with IGO Limited” on 11/06/2020
Page 16 of 81
Review of operations and activities (continued)
Interests in Mining Tenements
Tenements
Location
Held at
end of
period
66.6%*
80%*
Underground rights –
Witwatersrand Basin, West Rand,
South Africa
Pilbara region, Western Australia
Pilbara region, Western Australia
80%*
Pilbara region, Western Australia
80%*
GP183PR
Mining Lease –
M45/988
Mining Lease –
M45/990
Mining Lease –
M45/991
Exploration License –
EL 45/5045
Pilbara region, Western Australia
100%
Production IUP –
Paniai Regency, Indonesia
NO. 47/2010
^ Exploration IUP –
NO. 76/2010
^ Exploration IUP –
NO.31/2010
^ Exploration IUP –
Paniai, Indonesia
Intan Jaya, Indonesia
Nabire, Indonesia
29%*
64%*
64%*
64%*
Acquired
during the
period
-
Disposed
during the
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
NO. 543/142/SET
* Minority positions are held by local parties in compliance with local legislation in relation to foreign ownership and
mineral and production rights.
^ Exploration IUP’s may no longer be within the compliance period and could be subject to cancellation
Page 17 of 81
Directors' report
Your Directors present their report on the consolidated entity consisting of West Wits Mining Limited and the entities it
controlled at the end of, or during, the year ended 30 June 2020. Throughout the report, the consolidated entity is
referred to as the group.
Directors and company secretaries
The following persons held office as Directors of West Wits Mining Limited during the financial year or unless otherwise
stated:
Mr Michael Quinert, Executive Chairman
Mr Jac van Heerden, Managing Director (appointed on 16 April 2020)
Mr Hulme Scholes, Non-Executive Director
Dr Andrew Tunks, Non-Executive Director
Mr Peter O’Malley, Non-Executive Director (appointed on 16 April 2020)
Mr Daniel Pretorius, Non-Executive Director (resigned on 16 April 2020)
The following persons held office as joint company secretary of West Wits Mining Limited during the financial year:
Mr Simon Whyte, Joint Company Secretary
Mr Phillip Hains, Joint Company Secretary (resigned on 16 April 2020)
Information on directors & company secretaries
Mr Michael Quinert Executive Chairman
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares,
options and
performance rights
Mr Quinert graduated with degrees in economics and law from Monash University and
has over 30 years experience as a commercial lawyer, and over 20 years as a partner
in a Melbourne law firm. He has extensive experience in assisting and advising public
companies on capital raising and market compliance issues.
First Au Ltd (ASX: FAU)
Manalto Limited (ASX: MTL)
Covata Limited (ASX: CVT)
None
Interest in shares
Interest in options
Interest in performance rights
33,320,234
12,000,000
10,500,000
Mr Jac van Heerden Managing Director (appointed on 16 April 2020)
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares and
performance rights
Mr van Heerden is a Mining Engineer (MBA) with over 20 years of operations and
project experience in South Africa, DRC and Zimbabwe. His experience has been
gained on both underground and open pit mines with a focus in gold, platinum and
base metals. Jac was President of ERG Africa’s copper/cobalt mine overseeing 3,800
personnel prior to joining WWI.
None
None
None
Interest in shares
Interest in performance rights
Page 18 of 81
5,714,285
7,000,000
Information on directors & company secretaries (continued)
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Mr Daniel (Niel) Pretorius Independent Non-Executive Director (resigned 16 April 2020)
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares and
options
Mr Pretorius was appointed Group Legal Council for DRDGold Limited (DRDGold) in
2003 and Chief Executive Officer of DRDGold Ltd in January 2009. He has over 20 years’
experience in the mining industry. Mr Pretorius was present through the re-focus of
DRDGOLD's strategy to exit deep level underground mining, and focus on surface
reclamation through the expansion of their Crown Gold Recoveries footprint, the
acquisition and recommissioning of Ergo, and more recently the acquisition of the surface
gold portfolio of Sibanye Stilwater.
Executive Director of DRD Gold Limited (JSE:DRD).
None
None
Interest in shares
Interest in options
-
-
Mr Peter O’Malley Independent Non-Executive Director (appointed on 16 April 2020)
Experience and
expertise
Mr O’Malley is US based investment finance executive, Mr O’Malley’s experience
includes 13 years at Credit Suisse and later managing Deutsche Bank’s HK Natural
Resources investment banking practice in Asia-Pacific. Peter has extensive experience
advising on M&A, debt/equity transactions, and capital optimisation strategies in
multiple jurisdictions.
Other current
directorships
Bonterra Resources (TSX-V: BTR)
Barnwell Industries (NYSE: BRN)
Former directorships in
last 3 years
Special responsibilities
None
None
Interests in shares and
options
Interest in shares
Interest in options
300,000
5,500,000
Page 19 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Information on directors & company secretaries (continued)
Mr Hulme Scholes Non-Executive Director
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares and
options
Mr Scholes graduated with a BA Law and LLB degree from the University of the
Witwatersrand and is an admitted attorney of the High Court of South Africa. Mr Scholes
specialises in mining and mineral law, has practised exclusively in the field for 20 years
and is regarded as one of South Africa's experts within mining law. He was a partner of
Werksman Attorneys based in Johannesburg from 1999 to 2008 and is currently a senior
partner at Malan Scholes Attorneys. He started his professional career as a learner
official for Harmony Gold Mining Co. Limited in the 1980's which provides him with a
unique blend of experience.
Mr Scholes is currently a Non-Executive Director of Randgold and Exploration Company
Limited (JSE Listing) (JSE: RNG).
None
None
Interest in shares
Interest in options
1,136,364
2,500,000
Dr Andrew Tunks Non-Executive Director
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares and
options
Dr Tunks is a highly credentialed geologist with 30 years of local and international
experience, particularly in the gold sector. He has spent many years exploring and
overseeing projectsin developing countries throughout Africa and South America. Global
experience means Dr Tunks can provide expertise in navigating diverse regulatory
systems.
Having begun his career with Western Mining Corporation (WA) Dr Tunks progressed to
senior positions with leading gold producers including the role of Chief Geologist at both
IAMGOLD Corporation and Ranger Minerals (West Africa).
Since then, Dr Tunks has held several executive roles with ASX-listed groups including
CEO of Auroch Minerals, General Manager - Operations at Orinoco Gold (Brazil) and
CEO of A-Cap Resources (Botswana). More recently, he was appointed MD of Meteoric
Resources.
Dr Tunks has lectured on economic and structural geology at University of Tasmania,
published articles in peer-reviewed journals and presented at numerous conferences. He
is a member of the Australian Institute of Geoscientists, holds a Bachelor of Science
(Hons) from Monash and a PhD in geology from the University of Tasmania.
Meteoric Resources NL (ASX: MEI)
MSM Corporation International Limited (ASX: MSM)
Auroch Minerals Limited (ASX: AOU)
None
Interest in shares
Interest in options
2,644,026
14,500,000
Page 20 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Information on directors & company secretaries (continued)
Mr Simon Whyte Joint Company Secretary
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares,
options and
performance rights
Mr. Whyte is a Chartered Accountant and has over 12 years’ experience accounting and
operational management, including Ernst & Young and BP Australia Pty Ltd
None
None
None
Interest in shares
Interest in options
Interest in performance rights
7,460,020
3,000,000
7,000,000
Mr Phillip Hains Joint Company Secretary (resigned 16 April 2020)
Experience and
expertise
Other current
directorships
Former directorships in
last 3 years
Special responsibilities
Interests in shares and
options
Mr. Hains is a Chartered Accountant and holds a master of business administration from
RMIT University. Mr Hains has over 20 years’ experience in providing businesses with
accounting, administration, compliance and general management services.
None
None
None
Interest in shares
Interest in options
-
-
Page 21 of 81
Meetings of directors
The numbers of meetings of the group's board of Directors and of each board committee held during the year ended
30 June 2020, and the numbers of meetings attended by each Director were:
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Mr Michael Quinert
Dr Andrew Tunks
Mr Peter O’Malley
Mr Daniel Pretorius
Mr Hulme Scholes
Mr Jac van Heerden
Full meetings
of directors
B
A
5
5
5
4
1
1
4
3
5
3
1
1
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during the
year
* Due to the size of the Company the full Board assumes the role of the Audit & Remuneration committees
Principal activities
The Group's principal continued activities in the course of the financial year were to explore for gold at the mining
tenements situated in Western Australia and South Africa. During the financial year 2020, the Group has discontinued
its operations in Indonesia.
There have been no other significant changes in the nature of those principal activities during the financial year.
Dividends
The Directors did not pay or declare any dividends during the financial year (2019: Nil). The Directors do not
recommend the payment of a dividend in respect of the 2020 financial year.
Page 22 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Event since the end of the financial year
On 14 August 2020, the Group completed a share placement to raise $3.4 million (before costs) via the issue of 131.7
million new fully paid ordinary shares at $0.021 (2.1 cents) per share to existing and new sophisticated and professional
investors.
No other matters or circumstances have occurred subsequent to period end that has significantly affected, or may
significantly affect, the operations of the group, the results of those operations or the state of affairs of the Group in
subsequent financial years.
Likely developments and expected results of operations
The likely developments in the Group’s operations, to the extent that such matters can be commented upon, are
covered in the Review of Operations in this annual report and above. In the opinion of the Directors, disclosure of
detailed information regarding the expected results of those operations in financial years after the current financial year
is not predictable at this stage, or may prejudice the interests of the Group; accordingly this information has not been
included in this report.
Significant changes in the state of affairs
During the year, the Group successfully raised capital by approximately $1.5 million net of transaction costs and
resulted in 223.1 million new fully paid ordinary shares being issued. The funds received from capital raise are for the
purpose of working capital, to accelerate activities for the completion of the mining right application in South Africa, the
development of WBP and exploration of the Mt Cecelia Project.
PTMQ has been classified as a discontinued operation in the current financial year due to the lack of progress in
securing the Clean & Clear status of the IUP’s.
The Group entered in a subscription agreement with a US based investment group, Wingfield Capital Partners LLC, to
raise USD 1 million through the issuance of 1 million convertible notes with a conversion price of USD 0.007 (US Cents
per share), and minimum term of 3 years with an interest of 12% per annum accruing annually in arrears. The
convertible notes were issued in two tranches.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group during the
financial year under review not otherwise disclosed in this annual report.
Page 23 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited)
The Directors present the West Wits Mining Limited 2020 remuneration report, outlining key aspects of our
remuneration policy and framework, and remuneration awarded this year.
(A) Remuneration Policy
Remuneration of all Executive and Non-Executive Directors, and Officers of the Group is determined by the
remuneration and nomination committee.
The Group is committed to remunerating Senior Executives and Executive Directors in a manner that is consistent with
"best practice" (including the interests of shareholders) and market-competitive by ensuring fees are appropriate and
in line with the market. Remuneration packages are based on fixed component, determined by the Executives' position,
experience and performance, and may be satisfied via cash or equity.
Non-Executive Directors are remunerated out of the aggregate amount approved by shareholders and at a level that is
consistent with industry standards. Non-Executive Directors do not receive performance based bonuses and prior
shareholder approval is required to participate in any issue of equity. No retirement benefits are payable other than
statutory superannuation, if applicable.
Remuneration policy versus company financial performance
Since the Company was incorporated, it has listed on the Australian Securities Exchange and acquired mining
tenements in Western Australia, South Africa and in Papua Province, Indonesia. Exploration activities commenced in
January 2008 within the South African tenements.
The nature of the Group's mining activities is highly speculative and can provide high returns if successful. The
speculative nature of these activities and recent global economic trends, have been factors which have affected the
Group's share price performance and shareholder wealth over the period.
The Group's remuneration policy is based on industry practice rather than the Group's performance and takes into
account the risk and liabilities assumed by the Directors and Executives as a result of their involvement in the
speculative activities undertaken by the Group. Directors and Executives are fairly compensated for the extensive work
they undertake.
Other than the remuneration of one non-director key management personnel, Chairman and Managing Director, who
are entitled to remuneration linked to performance, no other Directors’ remuneration were linked to performance during
the financial year. The Group continued to recognise the share-based payment expense from equity issued in prior
period and in current year of $235,924 (2019: $204,608). The bonus expense recognised during the year related to
service condition of each recipient.
The Non-Executive Directors remuneration pool is $300,000, last approved by shareholders in 2007.
Use of remuneration consultants
Due to the size and nature of the organisation, the Company has not engaged remuneration consultants to review and
measure its policy and strategy. The board reviews remuneration strategy periodically and may engage remuneration
consultants in the future to assist with this process.
Page 24 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(A) Remuneration Policy (continued)
Additional remuneration approved by shareholders during the year
The list of remuneration related resolutions proposed for the Directors and other Key Management Personnel approved
at the AGM held on 29 November 2019 are as below:-
•
•
•
•
•
•
Issuance of 10,500,000 performance rights to Mr Michael Quinert
Issuance of 7,000,000 performance rights to Mr Jac van Heerden
Issuance of 7,000,000 performance rights to Mr Simon Whyte
Issuance of 2,500,000 options to Dr Andrew Tunks with each option has an exercise price of $0.012 and
expiry date of 4 years from date of issuance
Issuance of 2,500,000 options to Mr Hulme Scholes with each option has an exercise price of $0.012 and
expiry date of 4 years from date of issuance
Issuance of 5,428,571 ordinary shares at a deemed issue price of $0.007 per share to Mr Michael Quinert
Voting and comments made at the Company’s 2019 Annual General Meeting (“AGM”)
At the 2019 AGM, 87% of the votes received supported the adoption of the remuneration report for the year ended 30
June 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
(B) Remuneration report
(a) Details of remuneration
The following person was considered other KMP of West Wits Mining Limited during the financial year:
Mr Michael Quinert, Executive Chairman
Mr Daniel Pretorius, Non-Executive Director
Mr Hulme Scholes, Non-Executive Director
Dr Andrew Tunks, Non-Executive Director
Mr Jac van Heerden, Managing Director (previously Chief Executive Officer of West Wits SA (Pty) Ltd)
Mr Peter O’Malley, Non-Executive Director
Mr Simon Whyte, Chief Financial Officer and Joint Company Secretary
Key management personnel (KMP) of the group are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the group, directly or indirectly, including any Director (whether
executive or otherwise) of the group receiving the highest remuneration. Details of the remuneration of the KMP of the
group are set out in the following tables.
Page 25 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(a) Details of remuneration (continued)
Amounts of remuneration
The following table shows details of remuneration expenses recognised for the Group's KMP for the year ended 30
June 2020.
2020
Short-term benefits
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits(5)
$
Post-
employment
benefits
Share-based
payments
Super-
annuation
$
Equity-
settled
$
Options
$
Performance
Rights
$
Directors
Mr Michael Quinert
Mr Daniel Pretorius (3)
Mr Hulme Scholes
Dr Andrew Tunks(4)
Mr Peter O’Malley (2)
Mr Jac van Heerden (1)
Other KMP
Mr Simon Whyte
Total KMP
compensation
127,500
-
24,853
31,000
8,333
211,483
136,986
540,155
-
-
-
-
-
-
-
-
-
-
-
-
-
12,353
-
-
-
-
-
-
34,833
-
-
-
-
70,113
23,277
-
6,696
6,696
28,930
-
12,969
-
-
-
-
8,666
6,639
13,014
35,000
-
8,744
18,992
13,014
139,946
65,599
30,379
808,085
Total
$
198,579
-
31,549
37,696
37,263
302,615
-
200,383
Notes
(1) Mr Jac van Heerden’s remuneration for the period from 1 July 2019 to 15 April 2020 was covered under the capacity as the CEO
of the South African subsidiaries, which is part of other KMP. He was subsequently appointed on 16 April 2020 as the Managing
Director of the Group.
(2) Mr Peter O’Malley was appointed on 16 April 2020.
(3) Mr Daniel Pretorius resigned on 16 April 2020.
(4) Mr Andrew Tunks’s cash salary and fees includes $1,000 for consulting fees paid to Tunks GeoConsulting, a Company
related to Mr Andrew Tunks.
(5) Comprises of annual leave component.
Page 26 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(a) Details of remuneration (continued)
The following table shows details of remuneration expenses recognised for the group's KMP for the year ended 30
June 2019.
2019
Short-term benefits
Post-employment
benefits
Share-based
payments
Cash
salary and
fees
$
129,333
50,000
-
25,000
97,500
100,000
82,192
484,025
Cash
bonus
$
Non-
monetary
benefits(4)
$
Super-
annuation
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,430
8,430
-
-
-
-
-
-
7,808
7,808
Equity-
settled
$
38,000
-
-
-
-
Options
$
52,043
19,516
-
-
62,064
Total
$
219,376
69,516
-
25,000
159,564
25,000
30,000
-
15,985
125,000
144,415
93,000
149,608
742,871
Directors
Mr Michael Quinert(5)
Mr Vincent Savage (3)
Mr Daniel Pretorius
Mr Hulme Scholes
Dr Andrew Tunks
Other KMP
Mr Jac van Heerden (1)
Mr Simon Whyte (2)
Total KMP
compensation
Notes
(1) Mr Jac van Heerden’s remuneration covers the period from his appointment as the CEO of the South African subsidiaries from
1 January 2019 to 30 June 2019.
(2) On 1 October 2018, Mr Simon Whyte became a full-time employee of the Group and on 16 March 2019, he was appointed as
the Group’s Chief Financial Officer and Joint Company Secretary. For the period from 1 October 2018 until 15 March 2019, Mr
Simon Whyte was considered as a key management personnel based on his involvement in the decision-making process and
executive duties. His remuneration for 2019, therefore covered the period from 1 October 2018 to 30 June 2019. Prior to
becoming a KMP, Mr Simon Whyte was engaged as a consultant to the Group.
(3) Mr Vincent Savage resigned on 21 June 2019
(4) Comprises of annual leave component.
(5) Bonus payment through equity settlement for Mr Michael Quinert was approved after the financial report was lodged. The bonus
amount has since been included in the remuneration table subsequently given it related to that year.
Page 27 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(b) Equity issued as part of remuneration for the year ended 30 June 2020
Issue of shares
The number of shares in the Company held during the financial year by each Director and other Key Management
Personnel of the Company, including their personally related parties, are set out below.
Share holdings
2020
Directors
Mr Michael Quinert
Mr Jac van Heerden
Dr Andrew Tunks
Mr Peter O’Malley
Mr Daniel Pretorius
Mr Hulme Scholes
Other Key Management
Personnel
Mr Simon Whyte
Balance at the
start of the
period(1)
Granted as
remuneration
Received on
exercise of
options
Other
changes(2)
Balance at the
end of the
period(3)
23,140,391
-
2,283,449
300,000
-
1,136,364
5,428,571
5,714,285
-
-
-
-
2,562,013
29,422,217
3,857,142
14,999,998
-
-
-
-
-
-
-
-
4,751,272
-
360,577
-
-
-
33,320,234
5,714,285
2,644,026
300,000
-
1,136,364
1,040,865
7,460,020
6,152,714
50,574,929
(1) Balance may include shares held prior to individuals becoming Director/KMP. For individuals who became
Director/KMP during the period, the balance is as at the date they became Director/KMP.
(2) Other changes include on-market purchases and participation in share purchase plan.
(3) For former KMP, the balance is as at the date they cease being KMP.
Page 28 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(b) Equity issued as part of remuneration for the year ended 30 June 2020 (continued)
Issue of options
The number of options over ordinary shares in the Company held during the financial year by each Director and other
Key Management Personnel of the Company, including their personally related parties, are set out below.
Option holdings
2020
Directors
Mr Michael Quinert
Dr Andrew Tunks
Mr Jac van Heerden
Mr Daniel Pretorius
Mr Peter O’Malley
Mr Hulme Scholes
Other Key Management
Personnel
Mr Simon Whyte
Balance at
start of the
period(1)
Granted as
remuneration
Options
Expired
Other
changes(2)
Balance at
end of the
period(3)
Vested and
exercisable
12,000,000
12,000,000
-
-
5,500,000
-
-
2,500,000
-
-
-
2,500,000
3,000,000
32,500,000
-
5,000,000
-
-
-
-
-
-
-
-
- 12,000,000 12,000,000
- 14,500,000 13,250,000
-
-
-
-
-
-
5,500,000
5,500,000
-
1,250,000
2,500,000
-
3,000,000
-
3,000,000
- 37,500,000 35,000,000
(1) Balance may include options held prior to individuals becoming Director/KMP. For individuals who became
Director/KMP during the period, the balance is as at the date they became Director/KMP.
(2) Other changes incorporates changes resulting from the expiration/forfeiture of options.
(3) For former KMP, the balance is as at the date they cease being KMP.
Page 29 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(b) Equity issued as part of remuneration for the year ended 30 June 2020 (continued)
Issue of options (continued)
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other
Key Management Personnel in future reporting years are as follows:
Grant date
21/11/2017
21/11/2017
21/11/2017
21/11/2017
21/11/2017
21/11/2017
04/12/2017
04/12/2017
04/12/2017
29/11/2019
29/11/2019
15/01/2020
15/01/2020
Exercise
price
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
$0.05
$0.012
$0.012
$0.015
$0.015
Granted no.
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
1,000,000
1,000,000
1,000,000
2,500,000
2,500,000
2,200,000
3,300,000
37,500,000
Expiry date
03/12/2022
03/12/2022
03/12/2022
29/01/2023
29/01/2023
29/01/2023
03/12/2022
03/12/2022
03/12/2022
18/12/2023
18/12/2023
02/02/2022
01/03/2022
Total vested Vested % Exercised
-
-
-
-
-
-
-
-
-
-
-
-
-
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
1,000,000
1,000,000
1,000,000
1,250,000
1,250,000
2,200,000
3,300,000
35,000,000
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
100%
100%
Option holders do not have any rights to participate in any issues of shares or other interests in the Company or any
other entity. Option holders hold no voting rights. On exercise, each option is convertible into one ordinary share.
Issue of performance rights
The 24,500,000 equity settled options were issued to Management as per the ASX announcement on 18 December
2019 and related shareholder approval obtained at the AGM on 29 November 2019.
Page 30 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(b) Equity issued as part of remuneration for the year ended 30 June 2020 (continued)
Issue of performance rights (continued)
The performance hurdles, relevant dates and conditions of the rights are detailed below:
Number
issued
Issue date
Expiry
date
Exercise
price
Market/Non-
market
performance
condition
Probability
of non-
market
performance
condition
occurring
Fair value
for each
performance
rights
($)
4,700,000
18/12/2020 31/12/2020
0.0150
Market
3,800,000
18/12/2020 31/12/2021
0.0280
Market
3,100,000
18/12/2020 31/12/2022
0.0420
Market
N/A
N/A
N/A
0.0009
0.0012
0.0016
Total fair
value
recorded
($)
4,183
4,560
4,836
1,750,000
18/12/2020 30/06/2021
N/A
Non-market
60%
0.0050
3,150
1,750,000
18/12/2020 31/12/2021
N/A
Non-market
10%
0.0050
875
2,300,000
18/12/2020 30/06/2021
N/A
Non-market
10%
0.0050
1,150
3,200,000
18/12/2020 30/06/2022
N/A
Non-market
30%
0.0050
4,800
3,900,000
24,500,000
18/12/2020 30/06/2023
N/A
Non-market
35%
0.0050
6,825
30,379
Performance Hurdle
30-day VWAP of $0.015
at 31/12/2020
30-day VWAP of $0.028
at 31/12/2021
30-day VWAP of $0.042
at 31/12/2022
Expanding the JORC
Resource by 600,000oz
at a grade of at least
3g/t by 30/06/2021
Delineating a total of
650,000 ounces of gold
reserves (in accordance
with JORC 20121) at a
grade of at least 3g/t Au
by 31/12/2021
Achieving annualised
production of 5,500oz of
gold per annum over a
consecutive period of 3-
months in the 12-
months to 30/06/2021
Achieving annualised
production of 25,000oz
of gold per annum over
a consecutive period of
3-months in 2022
calendar year
Achieving annualised
production of 45,000oz
of gold per annum over
a consecutive period of
3-months in 2023
calendar year
TOTAL
Page 31 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
The number of performance rights held during the financial year by each Director and other Key Management Personnel
of the Company, including their personally related parties, are set out below.
Performance rights holdings
2020
Directors
Mr Michael Quinert
Dr Andrew Tunks
Mr Jac van Heerden
Mr Daniel Pretorius
Mr Peter O’Malley
Mr Hulme Scholes
Other Key Management
Personnel
Mr Simon Whyte
Balance at
start of the
period
Granted as
remuneration
Performance
rights
exercised
Other
changes
Balance at
end of the
period
-
-
-
-
-
-
10,500,000
-
7,000,000
-
-
-
-
-
7,000,000
24,500,000
-
-
-
-
-
-
-
-
- 10,500,000
-
-
7,000,000
-
-
-
-
-
-
-
-
7,000,000
- 24,500,000
Page 32 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Remuneration report (audited) (continued)
(B) Remuneration report (continued)
(c) Employment contracts of executives
Name:
Position:
Contract duration:
Notice period:
Fixed remuneration:
Mr Jac van Heerden
Managing Director
Unspecified
4 weeks by either party
$280,000 per annum, including superannuation
$70,000 annual bonus related to service condition
Name:
Position:
Contract duration:
Notice period:
Fixed remuneration:
Mr Simon Whyte
Chief Financial Officer and Company Secretary
Unspecified
4 weeks by either party
$180,000 per annum, including superannuation
$40,000 annual bonus related to service condition
(d) Related party transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. Transactions with related parties are as follows:
Legal fees that were paid to Quinert Rodda & Associates, a Director related entity to Mr
Michael Quinert
Rental expense paid to Brickwick Pty Ltd, a Director related entity to Mr Michael Quinert
Legal fees that were paid to Malan Scholes Attorneys, a Director related entity to Mr
Hulme Scholes
Consultancy fees that were paid to MERA Advisers, a Director related entity to Mr Hulme
Scholes
Consultancy fees paid to Kenosis Capital LLC, a related entity to Mr Peter O’Malley
[End of remuneration report]
2020
$
78,778
8,100
74,666
60,022
104,243
2019
$
27,857
-
111,187
128,291
-
Page 33 of 81
West Wits Mining Limited
Directors' report
30 June 2020
(continued)
Shares under option
At the date of this report, the unissued ordinary shares of West Wits Mining Limited under option are as follows:
Quantity
10,000,000
10,000,000
12,000,000
3,000,000
17,000,000
10,000,000
2,200,000
3,300,000
67,500,000
Grant Date
15/11/2017
21/11/2017
21/11/2017
04/12/2017
21/11/2017
29/11/2019
15/01/2020
15/01/2020
Exercise Price
$0.050
$0.050
$0.050
$0.050
$0.050
$0.012
$0.015
$0.015
Expiry Date
14/11/2020
30/11/2020
03/12/2022
03/12/2022
29/01/2023
18/12/2023
02/02/2022
01/03/2022
Shares issued as a result of the exercise of options
No options were exercised during the year ended 30 June 2020 (2019: Nil).
Insurance of officers and indemnities
During the financial year the Company entered into an insurance policy to indemnify Directors and Officers against
certain liabilities incurred as a Director or Officer, including costs and expenses associated in successfully defending
legal proceedings. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an
Officer or Auditor of the Company or of any related body corporate against a liability incurred as such as Officer or
Auditor.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section
237 of the Corporations Act 2001.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ reports) Instrument
2016/191, issued by the Australian Securities and Investments commission, relating to ‘rounding-off’ of amounts in the
Directors’ report. Amounts in the Directors’ report have been rounded off in accordance with that instrument to the
nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
The lead auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the year
ended 30 June 2020 has been received and is set out on the following page.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
Mr Michael Quinert
Executive Chairman
30 September 2020
Melbourne
Page 34 of 81
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF WEST WITS MINING LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 30 September 2020
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 30 June 2020
Continuing Operations
Revenue
Cost of sales of goods
Gross profit/(loss)
Other income
Corporate & administration expenses
Director and employee expenses
Exploration expenses
Loss before income tax
Income tax expense
Loss for the year from continuing operations
Discontinued operations
Loss after tax for the year from discontinued operations
Loss for the year
Other comprehensive income
Item that may be reclassified to profit or loss in subsequent year
Exchange differences on translation of foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive loss for the period
Loss is attributable to:
Owners of West Wits Mining Limited
Non-controlling interests
Total comprehensive income/(loss) for the period is attributable to:
Continuing operations
Discontinued operations
Non-controlling interests
Continuing operations
Discontinued operations
Owners of West Wits Mining Limited
Notes
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
(Restated)
3
4
19
142
(25)
117
171
(1,138)
(905)
(2)
(1,757)
-
(1,757)
(156)
(1,913)
(1,195)
(1,195)
(3,108)
(1,668)
(245)
(1,913)
(500)
(56)
(556)
(2,452)
(100)
(2,552)
4,825
(5,079)
(254)
-
(884)
(598)
(224)
(1,960)
-
(1,960)
(9,801)
(11,761)
301
301
(11,460)
(7,962)
(3,799)
(11,761)
(368)
(3,528)
(3,896)
(1,291)
(6,273)
(7,564)
Loss per share for continuing operations attributable to the ordinary equity
holders of the Group:
Basic earnings per share
Diluted earnings per share
Loss per share for discontinued operations attributable to the ordinary equity
holders of the Group:
Basic earnings per share
Diluted earnings per share
Loss per share for loss attributable to the ordinary equity holders of the Group:
Basic earnings per share
Diluted earnings per share
7(a)
7(a)
7(a)
7(a)
(3,108)
(11,460)
(0.19)
(0.19)
(0.02)
(0.02)
(0.21)
(0.21)
(0.26)
(0.26)
(1.30)
(1.30)
(1.56)
(1.56)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 36 of 81
Consolidated statement of financial position
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Plant and equipment
Exploration and evaluation, development and mine properties
Goodwill
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Liabilities held-for-sale
Total current liabilities
Non-current liabilities
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Accumulated losses
Equity attributable to owners of West Wits Mining Limited
Non-controlling interests
Total equity
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
Notes
8(a)
9
8(b)
8(c)
19
8(d)
10(a)
10(b)
1,202
32
2
1,236
5
10,847
-
-
10,852
12,088
1,017
111
154
1,923
3,205
1,740
1,740
4,945
7,143
175
1,740
-
1,915
19
11,744
115
13
11,891
13,806
4,458
101
495
-
5,054
65
65
5,119
8,687
38,406
(1,207)
(24,115)
13,084
(5,941)
7,143
36,963
(444)
(22,447)
14,072
(5,385)
8,687
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 37 of 81
Consolidated statement of changes in equity
For the year ended 30 June 2020
Attributable to owners of
West Wits Mining Limited
Notes
Share capital
$'000
36,089
-
Other
reserves
$'000
(992)
-
Accumulated
losses
$'000
(14,485)
(7,962)
Non-
controlling
interests
$'000
(1,489)
(3,799)
Total
$'000
20,612
(7,962)
Total
equity
$'000
19,123
(11,761)
-
398
(97)
301
(7,962)
(7,564)
(3,896)
(11,460)
Consolidated entity
Balance at 1 July 2018
Loss for the year
Other comprehensive income/(loss)
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs
Options issued
10(a)
10(b)(i)
-
-
874
-
874
398
398
-
150
150
-
-
-
874
150
1,024
-
-
-
874
150
1,024
8,687
Balance at 30 June 2019
36,963
(444)
(22,447)
14,072
(5,385)
Loss for the year from continuing
operations
Loss for the year from discontinued
operations
Other comprehensive income/(loss)
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs
Vesting of share-based payments for
options issued
Vesting of share-based payments for
performance rights issued
10(a)
10(b)(i)
10(b)(ii)
-
-
-
-
1,443
-
-
-
-
(884)
(884)
-
90
31
1,443
121
(1,568)
(1,568)
(189)
(1,757)
(100)
(100)
(56)
(156)
-
(884)
(311)
(1,195)
(1,668)
(2,552)
(556)
(3,108)
-
-
-
-
1,443
90
31
1,564
-
-
-
-
1,443
90
31
1,564
Balance at 30 June 2020
38,406
(1,207)
(24,115)
13,084
(5,941)
7,143
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 38 of 81
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash outflow from operating activities
Cash flows from investing activities
Cash received from farm-out arrangement
Payments for exploration
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares
Capital raising costs
Proceeds from issue of convertible notes
Proceeds from borrowings
Net cash inflow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
Notes
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
14(a)
10(a)
10(a)
2,006
(3,432)
(1,426)
3,434
(4,294)
(860)
-
(300)
(300)
1,535
(253)
1,441
-
2,723
997
175
30
1,202
60
(751)
(691)
845
(26)
-
101
920
(631)
1,068
(262)
175
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 39 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
1 Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the group
consisting of West Wits Mining Limited and its subsidiaries.
(a) Basis of preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The financial statements of the Group comply
with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board
(IASB).
The financial statements cover the Group of West Wits Mining Limited and controlled entities (the “Group” or “group”).
West Wits Mining Limited is a listed for profit public company, incorporated and domiciled in Australia.
(i) Reporting basis and conventions
The financial statements have been prepared on an accruals basis and are based on historical costs.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial
statements. The accounting policies have been consistently applied, unless otherwise stated.
(b) Going concern
For the year ended 30 June 2020, the Group has reported a net loss after income tax and before eliminating non-
controlling interests of $1.91 million (2019: $11.76 million) and net operating cash outflows of $1.43 million (2019: $0.86
million). As of 30 June 2020, the Group had $1.20 million cash at bank (2019: $0.18 million), and net current liabilities
of $1.97 million (2019: $3.14 million).
As announced to the ASX on 14 August 2020, the Group completed a share placement to raise $3.4 million (before
costs) via the issue of 131.7 million new fully paid ordinary shares at $0.021 (2.1 cents) per share to existing and new
sophisticated and professional investors.
On this basis, the Board has assessed the going concern basis is appropriate.
Page 40 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(c) New accounting standards and interpretations
(i) New and amended standards adopted by the group
• AASB 16 Leases
AASB 16 Leases became effective on 1 January 2019. Accordingly, this standard applies for the first time in this
financial report.
AASB 16 ‘Leases’ replaces AASB 117 ‘Leases’ along with three Interpretations (AASB Interpretation 4 ‘Determining
whether an Arrangement contains a Lease’, UIG 115 ‘Operating Leases-Incentives’ and UIG 127 ‘Evaluating the
Substance of Transactions Involving the Legal Form of a Lease’). The new Standard has been applied using the
modified retrospective approach, with the cumulative effect of adopting AASB 16 being recognised in equity as an
adjustment to the opening balance of retained earnings for the current period. Prior periods have not been restated.
The Group has adopted AASB 16 from 1 July 2019. Except for short-term leases and leases of low-value assets, right-
of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs).
Impact of adoption
During the reporting period, the Group only has operating leases with lease term less than 12 months. Therefore, the
Group has applied the optional exemption to not recognise right-of-use assets and corresponding lease liabilities but
to account for the lease expense on a straight-line basis over the remaining lease term.
(ii) New standards and interpretations not yet mandatory or adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The Group’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Group, are set out below.
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework.
At this time, the application of the Conceptual Framework is not expected to have a material impact on the Group’s
financial statements.
Page 41 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies
(i) Principles of consolidation
A controlled entity is any entity West Wits Mining Limited has the power to control the financial and operating policies
of, so as to obtain benefits from its activities. The Group controls an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Company controls another entity. Controlled entities are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the
date that control ceases.
A list of controlled entities is contained in Note 12 to the financial statements.
All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses,
have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to
ensure consistencies with those policies applied by the Company.
Where controlled entities have entered or left the Group during the year, their operating results have been
included/excluded from the date control was obtained or until the date control ceased.
Non-controlling interests in the equity and results of the entities that are controlled are shown as a separate item in
the consolidated financial statements.
(ii) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
(iii) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Page 42 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1
Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(iii) Provisions (continued)
Critical estimates and assumptions:
In calculating the provision of rehabilitation and restoration in relation to the mining production activities in South Africa,
a degree of estimation and judgement was applied to quantify the amount of potential costs required at the end of the
project life.
(iv) Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees up to the
end of the reporting period.
Short-term and Long-term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service
leave, and sick leave when it is probable that settlement will be required and they are capable of being measured
reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long term employee
benefits are measured as the present value of the estimated future cash outflows to be made by the Company in
respect of services provided by employees up to reporting date.
(v) Interest income
Interest income is recognised on a proportional basis taking into account the interest rates applicable to the financial
assets.
Other income is recognised when it is received or when the right to receive payment is established.
All income is stated net of the amount of goods and services tax (GST) or value added tax (VAT).
(vi) Income tax
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. 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 taxable profit or loss.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the
law.
The charge for current income tax expense is based on the profit adjusted for any non-assessable or disallowed items.
It is calculated using the tax rates that have been enacted or are substantially enacted by the end of the reporting
period.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability
is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may
be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Page 43 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(vii) Goods and Services Tax (GST)/ Value Added Tax (VAT)
Income, expenses and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT
incurred is not recoverable from the Taxation Authority. In these circumstances the GST/VAT is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of
financial position are shown inclusive of GST/VAT.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST/VAT component of
investing and financing activities, which are disclosed as operating cash flows.
(viii) Impairment of Non-Financial Assets
At the end of each reporting period, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to
sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its
recoverable amount is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(ix) Leases
Since AASB 16 has come to effect, any new contracts entered into on or after 1 July 2019, the group considers whether
a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use
an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the group
assesses whether the contract meets three key evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified
by being identified at the time the asset is made available to the Company,
the Company has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract,
the Company has the right to direct the use of the identified asset throughout the period of use. The Company
assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of
use.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost
is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life
and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable,
amounts expected to be payable by the lessee under residual value guarantees,
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Page 44 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(ix) Leases (continued)
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the
group’s incremental borrowing rate.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability,
any lease payments made at or before the commencement date, less any lease incentives received,
any initial direct costs, and
restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as
an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
(x) Trade and other payables
Liabilities for trade creditors and other amounts are initially recognised at the fair value of the consideration to be paid
in the future for goods and services received, whether or not billed to the Group. They are subsequently measured at
amortised cost.
Payables to related parties are measured at fair value initially then subsequently measured at amortised cost using
effective interest method. Interest, when charged by the lender is recognised as an expense on an accruals basis.
(xi) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity is measured using the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent
entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the statement
of profit or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
• assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
•
income and expenses are translated at average exchange rates, which approximate the rate at the date of the
transaction, for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
•
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve in the statement of financial position. These differences are recognised in the statement of profit or
loss and other comprehensive income in the period in which the operation is disposed.
Page 45 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(xii) Exploration and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped through successful
development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned
area are written off in full against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the
area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in
the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and
building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such
costs have been determined using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is an uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation.
Critical estimates and assumptions:
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the
mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining
expenditures directly related to these activities and allocating overheads between those that are expensed and
capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future commercial production at the
mine include the level of reserves and resources, future technology changes, which could impact the cost of mining,
future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which this determination is made.
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical
knowledge and best available current information and that capitalised exploration costs are expected to be recovered
either through successful development or sale of the relevant mining interest.
Page 46 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(xiii) Contributed equity
Ordinary shares and unissued share options are classified as issued capital. Ordinary issued capital is recognised at
the fair value of the consideration received by the Company.
Any transaction costs directly attributable to the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
(xiv) Share-based payments
Equity settled share-based payments are measured at fair value at the date of grant. Fair value for shares and listed
options is measured using market value. Fair value for unlisted options is measured by use of the Black-Scholes model.
The expected life used in the model has been adjusted, based on management's best estimate for the effects of non-
transferability or exercise restrictions.
The Black-Scholes option pricing model also takes into account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-market vesting conditions.
Critical estimates and assumptions:
The value attributed to share options issued is an estimate calculated using an appropriate mathematical formula based
on an option pricing model. The choice of models and the resultant option value require assumptions to be made in
relation to the likelihood and timing of the conversion of the options to shares and the value of volatility of the price of
the underlying shares.
(xv) Earnings per share
Basic earnings/(losses) per share is determined by dividing the result from ordinary activities after related income tax
expense by the weighted average number of ordinary shares outstanding during the financial year. Diluted
earnings/(losses) per share are equivalent to basic earnings/(losses) per share as the potentially dilutive securities are
excluded from the computation of diluted earnings/(losses) per share because the effect is anti-dilutive.
(xvi) Revenue from mining production
Revenue from mining production is recognised at a point in time when control over the gold ores is passed to the
customer. The performance obligation is satisfied when the quantity of gold ores produced is verified and certified by
both the customer and the company. A trade receivable is recognised at the date of sale and payment is made by the
customer within no more than 30 days from the sale date.
Page 47 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(d) Accounting policies (continued)
(xvi) Revenue from mining production (continued)
The contract is entered into and the transaction price is determined based on the quantity of ores produced at a pre-
determined unit price and there are no further adjustments to this price. There are no other performance obligations
(unsatisfied or partially unsatisfied), other than already disclosed requiring disclosure.
(xvii) Investments in associates and joint arrangements
Associates are those entities over which the Group is able to exert significant influence but which are not subsidiaries.
A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the
Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations
for underlying liabilities. A joint arrangement in which the Group has direct rights to underlying assets and obligations
for underlying liabilities is classified as a joint operation.
Investments in associates and joint ventures are accounted for using the equity method. Interests in joint operations
are accounted for by recognising the Group’s assets (including its share of any assets held jointly), its liabilities
(including its share of any liabilities incurred jointly), its revenue from the sale of its share of the output arising from the
joint operation, its share of the revenue from the sale of the output by the joint operation and its expenses (including its
share of any expenses incurred jointly).
Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised
separately and is included in the amount recognised as investment.
The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where
necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is
also tested for impairment.
Critical estimates and assumptions:
The arrangement in relation to the Kimberley Central Open Pit tenement requires the directors to exercise a degree of
judgement to conclude that the two partners have direct rights to the assets of the partnership and are jointly and
severally liable for the liabilities incurred by the partnership. This arrangement is therefore classified as a joint operation
and the Group recognises its direct right to the jointly held assets, liabilities, revenues and expenses.
Page 48 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(e) Liabilities held for sale and discontinued operations
For the year ended 30 June 2020, the Group classifies liabilities of disposal groups as held for sale if their carrying
amounts will be recovered principally through a sale transaction rather than through continuing use. liabilities of disposal
groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance
costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the liabilities or
disposal group is available for immediate sale in its present condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn.
Management must be committed to the plan to sell the asset/liabilities and the sale expected to be completed within
one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of,
or is classified as held for sale, and:
• Represents a separate major line of business or geographical area of operations
• Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area
of operations, or
• Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount
as profit or loss after tax from discontinued operations in the statement of profit or loss.
Additional disclosures are provided in Note 19. All other notes to the financial statements include amounts for
continuing operations, unless indicated otherwise.
Page 49 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
1 Summary of significant accounting policies (continued)
(e) Liabilities held for sale and discontinued operations (continued)
As a result of the classification of liabilities held for sale of the disposal groups and discontinued operations, the Group
has restated the comparatives for the consolidated statement of profit or loss and other comprehensive income for the
financial year ended 30 June 2019, as shown below
Consolidated statement of profit or loss and other
comprehensive income
Original
Discontinued
operations
Revised
Revenue
Cost of sales of goods
Gross Profit
Corporate & administration expenses
Director and employee expenses
Exploration expenses
Depreciation and amortisation expense
Impairment of exploration assets
Loss before income tax for the year from continuing
operations
Income tax expense
Loss after tax for the year from discontinued operations
Loss for the year
Item that may be reclassified to profit or loss in subsequent
year
Exchange differences on translation of foreign operations
Other comprehensive income (loss) for the year, net of tax
Total comprehensive loss for the year
Loss is attributable to:
Owners of West Wits Mining Limited
Non-controlling interests
Total comprehensive loss for the year is attributable to:
Owners of West Wits Mining Limited
Non-controlling interests
4,825
(5,079)
(254)
(944)
(598)
(224)
-
(9,741)
(11,761)
-
-
(11,761)
301
301
(11,460)
(7,962)
(3,799)
(11,761)
(7,564)
(3,896)
(11,460)
-
-
-
4,825
(5,079)
(254)
60
-
-
-
9,741
9,801
-
(9,801)
(884)
(598)
(224)
-
-
(1,960)
-
(9,801)
-
(11,761)
-
-
-
-
-
-
-
-
-
301
301
(11,460)
(7,962)
(3,799)
(11,761)
(7,564)
(3,896)
(11,460)
Page 50 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
2 Operating segments
(a) Segment results
The Group operates in one operating segment being mining and exploration.
During the year ended 30 June 2020, the Group announced an update on Derewo River Gold Project wherein a binding
Heads of Agreement with TME Group Pte Ltd has been signed and was established that West Wits International would
dilute its equity interests in PT Madinah Quarataa’n (“PTMQ”), the Project Company, from the current 64% to 10%. The
dilution was to come into effect upon implementation of the HOA. As of the date of report, the agreement has not been
finalised. PTMQ has been classified as discontinued operations, the Indonesian segment is no longer presented within
the segment note. As a result, the Group’s activities can be divided into two reportable segments based on reports
received and reviewed by the Board.
The two reportable segments are based on two distinct geographical locations, South Africa and Australia. Mining and
exploration activities are carried out only on the South African segments; whereas the Australian segment reflects only
the administrative arm of the business that supports the mining and exploration activities in the other geographical
location.
Consolidated entity
2020
External sales
Other income
Total
Segment Result
South
Africa Australia
$'000
$'000
Total
$'000
142
139
281
(448)
-
32
32
(1,309)
142
171
313
(1,757)
The segment information provided to the Board for the reportable segments for the year ended 30 June 2019 is as
follows:
Consolidated entity
2019 (Restated)
External sales
Other income
Total
Segment Result
South
Africa Australia
$'000
$'000
Total
$'000
4,825
-
4,825
(902)
-
-
-
(1,058)
4,825
-
4,825
(1,960)
(b) Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on
the operations of the segment and the physical location of the asset.
South Africa
Australia
Total segment assets
Page 51 of 81
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
8,077
4,011
12,088
10,573
3,090
13,663
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
2 Operating segments (continued)
(c) Segment liabilities
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based
on the operations of the segment and the physical location of the asset.
South Africa
Australia
Total segment liabilities
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
818
2,204
3,022
2,848
333
3,181
(d) Other segment information
During the year ended 30 June 2020, there was one major customer who contributed to 100% of the group's revenue
(2019: 100%) from our mining production activities in South Africa.
3 Revenue from contract with customers
(a) Disaggregation of revenue from contracts with customers
The group only derives revenue from the transfer of goods at a point in time (i.e sale of gold bearing ore) and revenue
from contracts with customers is only generated from the South Africa segment, as disclosed in note 2(a):
Timing of revenue recognition
• At a point in time
• Over time
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
142
-
142
4,825
-
4,825
Page 52 of 81
4
Income tax expense
(a) Numerical reconciliation of income tax expense to prima facie tax payable
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2019 - 27.5%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Impairment expense
Subtotal
Current year tax benefit not recognised
Income tax expense
5 Key management personnel disclosures
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
(Restated)
(1,757)
483
(1,960)
539
-
483
(483)
-
14,980
-
539
(539)
-
1,390
The aggregate compensation made to Directors and other members of key management personnel of the group is set
out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
(a) Transactions with other related parties
Consolidated entity
30 June
2020
$000
30 June
2019
$000
559
13
236
808
492
8
243
743
The following transactions occurred with related parties:
Consolidated entity
Sales and purchases of goods and services
Legal fees that were paid to Quinert Rodda & Associates, a Director related entity to
Mr Michael Quinert
Rental expense paid to Brickwick Pty Ltd, a Director related entity to Mr Michael
Quinert
Legal fees that were paid to Malan Scholes Attorneys, a Director related entity to Mr
Hulme Scholes
Consultancy fees that were paid to MERA Advisers, a Director related entity to Mr
Hulme Scholes
Consultancy fees paid to Kenosis Capital LLC, a related entity to Mr Peter O’Malley
30 June
2020
$000
30 June
2019
$000
79
8
75
60
104
28
-
111
128
-
Page 53 of 81
6 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
Remuneration of the auditor of the parent entity for:
Audit services and review of financial statements
Remuneration of other auditors of subsidiaries for:
Audit services and review of financial statements
Total remuneration for audit and other assurance services
7 Loss per share
(a) Basic & diluted loss per share
Loss per share for loss attributable to the ordinary equity holders of the Group:
Basic earnings per share
Diluted earnings per share
Attributable to the ordinary equity holders of the Group
From continuing operations
From discontinued operations
(b) Reconciliation of loss used in calculating earnings per share
Loss attributable to the ordinary equity holders of the Group used in calculating basic
& diluted earnings per share:
From continuing operations
From discontinued operations
Page 54 of 81
Consolidated entity
2020
$’000
2019
$’000
42
17
59
41
18
59
Consolidated entity
30 June
2020
Cents
30 June
2019
Cents
(0.21)
(1.56)
(0.19)
(0.02)
(0.26)
(1.30)
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
(1,757)
(156)
(1,913)
(1,960)
(9,801)
(11,761)
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
7 Loss per share (continued)
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic loss per share
Consolidated entity
2020
Number
2019
Number
919,064,924 753,490,824
The outstanding share options as at 30 June 2020 are considered to be anti-dilutive and therefore were excluded from
the diluted weighted average number of ordinary shares calculation.
8 Financial assets and financial liabilities
(a) Trade and other receivables
Consolidated entity
Current assets
Trade receivables (i)
Other receivables
(i) Aging analysis
30 June
2020
$'000
17
15
32
Balance as at
30 June 2020 ($’000)
%
30 June 2019 ($’000)
%
Less than 30
days
30 - 90 days
Greater than
90 days
17
100%
871
94%
-
-
-
-
-
0%
54
6%
30 June
2019
$'000
925
815
1,740
Total
17
100%
925
100%
Page 55 of 81
8 Financial assets and financial liabilities (continued)
(b) Trade and other payables
Current liabilities
Payables to creditors and employees
Accrued expenses
Trade payables are unsecured and are usually paid within 30 days of recognition.
(c) Provisions
Provisions
Provision for rehabilitation and restoration in relation to the mining
production in South Africa
Others
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
Consolidated entity
30 June
2020
$'000
691
326
1,017
30 June
2019
$'000
3,305
1,153
4,458
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
147
7
154
477
18
495
(d) Other financial liabilities
Non-current liabilities
Convertible notes
Other financial liability
Consolidated entity
30 June
2020
$'000
1,740
-
1,740
30 June
2019
$'000
-
65
65
Other financial liabilities mainly relates to convertible notes issued to Wingfield Capital Partners LLC. During the year
ended 30 June 2020, the Group entered in a subscription agreement with a US based investment group, Wingfield
Capital Partners LLC, to raise USD 1 million through the issuance of 1 million convertible notes with a conversion price
of USD 0.007 (US Cents per share), and minimum term of 3 years with an interest of 12% per annum accruing annually
in arrears. The convertible notes were issued in two tranches with details below:-
•
First tranche issued on 3 February 2020 for 400,000 convertible notes at USD1.00 each, expiring three years
from date of issue of second tranche, with an option to be extended twice for one year.
• Second tranche issued on 2 March 2020 for 600,000 convertible notes at USD1.00 each, expiring three years
from date of issue, with an option to be extended twice for one year.
Page 56 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
8 Financial assets and financial liabilities (continued)
(d) Other financial liabilities (continued)
The convertible notes represent a written option to exchange for the Group’s equity instruments that are denominated
in a foreign currency (USD) and a portion of its conversion feature is dependent on the movement in the gold price.
Therefore, this has been assessed to be a variable conversion price as there is a conversion formula based on the gold
price in foreign currency which will vary the number of shares to be issued. The convertible notes have two embedded
derivatives features apart from the principal amount of the convertible notes (host contract). As a result, the Group has
recognised host contract amount and the derivative financial liabilities in accordance with AASB 9. The convertible
notes are initially recorded at fair value at issue date and subsequently measured at fair value through profit or loss at
each reporting date. Since the convertible notes have an initial term of 3 years, they have been classified under non-
current liabilities.
Tranche 1 – 400,000 convertible notes
Convertible notes
Gold price option (derivative liability)
Foreign currency (derivative liability)
Interest accrued in arrears
Tranche 2 – 600,000 convertible notes
Convertible notes
Gold price option (derivative liability)
Foreign currency (derivative liability)
Interest accrued in arrears
Initial recognition
$'000
506
71
18
-
595
Revaluation as at
30 June 2020
$'000
583
82
24
7
696
Initial recognition
$'000
784
107
27
-
918
Revaluation as at
30 June 2020
$'000
874
123
37
10
1,044
As a result of the revaluation as of 30 June 2020, $0.2 million has been recognised in profit or loss.
Fair value hierarchy
Since the convertible notes are not traded in an active market and fall under the level 2 of the fair value hierarchy. The
fair value has been estimated by using the formula stated in the signed convertible note subscription agreement based
on observable market conditions that existed at the issue date and at 30 June 2020.
Page 57 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
9 Exploration and evaluation, development and mine properties
Consolidated entity
At 1 July 2018
Cost or fair value
Year ended 30 June 2019
Opening net book amount
Additions
Cash received under a farm-in
arrangement
Exchange differences
Acquisition of subsidiary
Closing net book amount at 30 June
2019
Consolidated entity
At 1 July 2019
Cost or fair value
Year ended 30 June 2020
Opening net book amount
Additions
Performance rights capitalised
Exchange differences
Closing net book amount at 30 June
2020
Derewo River
Gold Project
$'000
Rand & DRD
Leases
$'000
Tambina Gold
Project
$'000
Mt Cecelia
Project
$'000
9,397
9,397
-
344
(9,741)
7,838
7,838
715
-
213
-
-
8,766
1,847
1,847
-
(60)
2
-
1,789
1,099
1,099
90
-
-
-
1,189
Derewo River
Gold Project
$'000
Rand & DRD
Leases
$'000
Tambina Gold
Project
$'000
Mt Cecelia
Project
$'000
Total
$'000
20,181
20,181
805
(60)
559
(9,741)
11,744
Total
$'000
-
-
-
-
-
8,766
1,789
1,189
11,744
8,766
290
17
(1,214)
7,859
1,789
1
-
-
1,790
1,189
9
-
-
11,744
300
17
(1,214)
1,198
10,847
During the year ended 30 June 2019, the Group conducted a reassessment on the expected recoverability of the
Derewo River Gold Project (the "Project") on successful development and commercial exploitation in conjunction with
recent developments in working with local experts and consultants in evaluating different avenues to materialise the
return of investment. Even though the Group has not changed its view on the fundamental value of the Project,
management has made a decision to fully provide for the carrying value of the Project due to the uncertainty in
materialising the return.
Page 58 of 81
10 Equity
(a) Share capital
Ordinary shares
Fully paid
Total share capital
(i) Movements in ordinary shares:
Details
Balance at 1 July 2018
Shares issued during the year
Less: Transaction costs arising on share issues
Balance at 30 June 2019
Shares issued during the year
Less: Transaction costs arising on share issues
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
30 June
2020
Shares
30 June
2019
Shares
1,023,126,278 800,031,002
1,023,126,278 800,031,002
30 June
2020
$'000
38,406
38,406
30 June
2019
$'000
36,963
36,963
Number of
shares
(in thousands)
717,848
82,183
-
800,031
223,095
-
$'000
36,089
899
(25)
36,963
1,696
(253)
Balance at 30 June 2020
1,023,126
38,406
Page 59 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
10 Equity (continued)
(a) Share capital (continued)
Details of shares issued
Date
20/08/2019
18/12/2019
04/06/2020
05/06/2020
23/06/2020
Details
Issue of ordinary shares to provide working capital to
support the Company’s activities pending the anticipated
grant of the Company’s mining right for its Witwatersrand
Gold Project
Issue of ordinary shares in lieu of cash in connection with
services provided to the Company
Issue of ordinary shares
Issue of ordinary shares in lieu of cash for interest accrued
on the Convertible Notes
Issue of ordinary shares under Share Purchase Plan
No. of shares
Unit
price ($)
$'000
122,500,000
14,999,998
65,000,000
5,595,278
15,000,000
223,095,276
0.006
0.007
0.010
0.010
0.010
735
105
650
56
150
1,696
(ii) Ordinary shares
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number
of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
(b) Reserves
Foreign currency translation reserve
Shared-based payment reserve – options (i)
Shared-based payment reserve – performance rights (ii)
(i) Options
Opening balance
Options issued
Options expired
Amortisation of share-based payments for options
issued in prior periods
Closing balance
Consolidated entity
30 June
2020
$'000
(3,483)
2,245
31
(1,207)
30 June
2019
$'000
(2,599)
2,155
-
(444)
30 June
2020
Number of
Options
52,000,000
15,500,000
-
30 June
2019
Number of
Options
54,000,000
-
(2,000,000)
-
67,500,000
-
52,000,000
30 June
2020
30 June
2019
$'000
2,155
58
-
32
2,245
$'000
2,005
-
-
150
2,155
Page 60 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
10 Equity (continued)
(b) Reserves (continued)
(i) Options (continued)
During the financial year 2020, the following unlisted options were issued (2019: nil):-
Grant date
Details
29/11/2019
15/01/2020
Issued options to directors and consultant
Issued options to consultant
No. of shares
10,000,000
5,500,000
15,500,000
Share-based
payment expense
$'000
29
29
58
Share-based payment expense of $32,006 recognised during the current financial year related to options used in prior
year.
As at 30 June 2020, the following unlisted options are in existence:
Series Issued
15/11/2017
04/12/2017
04/12/2017
04/12/2017
30/01/2018
18/12/2019
15/01/2020
15/01/2020
Quantity
10,000,000
10,000,000
12,000,000
3,000,000
17,000,000
10,000,000
2,200,000
3,300,000
67,500,000
Grant date
15/11/2017
21/11/2017
21/11/2017
04/12/2017
21/11/2017
29/11/2019
15/01/2020
15/01/2020
Expiry date
14/11/2020
30/11/2020
03/12/2022
03/12/2022
29/01/2023
18/12/2023
02/02/2022
01/03/2022
Exercise price
($)
0.050
0.050
0.050
0.050
0.050
0.012
0.015
0.015
Fair value at
grant date per
option ($)
0.0170
0.0170
0.0190
0.0190
0.0170
0.0031
0.0052
0.0053
No options were exercised during the year (2019: nil)
(ii) Performance Rights
Opening balance
Performance rights issued and expensed
Performance rights issued and capitalised
Closing balance
30 June
2020
Performance
Rights
-
11,600,000
12,900,000
24,500,000
30 June
2019
Performance
Rights
-
-
-
-
30 June
2020
$'000
-
14
17
31
30 June
2019
$'000
-
-
-
-
Page 61 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
10 Equity (continued)
(b) Reserves (continued)
(ii) Performance Rights
During the financial year 2020, the following performance rights were issued (2019: nil):-
Grant date
Details
29/11/2019
Issued performance rights to directors
No. of shares
11,600,000
11,600,000
Share-based
payment expense
$'000
14
14
Performance rights amounted to $16,800 were capitalised as part of exploration assets during the current financial
year.
11 Share-based payments
(a) Options issued during the period
The value attributed to share options and remuneration shares issued is an estimate calculated using an appropriate
option-pricing model. The choice of models and the resultant option value require assumptions to be made in relation
to the volatility of the price of the underlying shares.
The 10,000,000 equity settled options were issued to Directors as per the ASX announcement on 18 December 2019
and related shareholder approval obtained at the AGM on 29 November 2019. The exercise price for the 10 million
options is at $1.2 cents per option. 7.5 million options fully vested on the 18 December 2019, with the remaining 2.5
million options vesting 9 months after the issue date.
The assessed fair value of options at grant date was determined using the Black-Scholes option valuation model that
takes into account the exercise price, term of the option (48 months), security price at grant date and expected price
volatility of the underlying security (112%), the expected dividend yield (0.00%), and the risk-free interest rate (0.65%)
for the term of the security. The volatility was based on analysing the Group's historical trading data for the last 24
months up to and including the valuation date.
The 5,500,000 equity settled options were issued to Directors as per the ASX announcement on 15 January 2020. The
exercise price for the 5.5 million options is at $1.5 cents per option. 2.2 million options fully vested on 3 February 2020,
with the remaining 3.3 million options vested on 2 March 2020.
The assessed fair value of options at grant date was determined using the Black-Scholes option valuation model that
takes into account the exercise price, term of the option (24 months), security price at grant date and expected price
volatility of the underlying security (118%), the expected dividend yield (0.00%), and the risk-free interest rate (0.81%)
for the term of the security. The volatility was based on analysing the Group's historical trading data for the last 24
months up to and including the valuation date.
The Group recognised the $57,821 of share-based payment expense in the statement of profit of loss due to immediate
vesting.
The Option-value model inputs during the year 30 June 2020 included:
Grant date
Expiry date
Exercise
price ($)
No. of
options
Expected
volatility
Dividend
yield
Share
price at
grant
date ($)
Risk-
free
interes
t rate
29/11/2019
15/01/2020
15/01/2020
18/12/2023
02/02/2022
02/03/2022
0.012 10,000,000
0.015 2,200,000
0.015 3,300,000
0.005
0.010
0.010
112%
118%
118%
0.00%
0.00%
0.00%
0.65%
0.81%
0.81%
Fair
value at
grant
date per
option
($)
0.0031
0.0052
0.0053
Page 62 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
11 Share-based payment (continued)
(b) Performance rights issued during the period
The 24,500,000 equity settled options were issued to Management as per the ASX announcement on 18 December
2019 and related shareholder approval obtained at the AGM on 29 November 2019.
The Group recognised $13,579 of share-based payment expense in the statement of profit or loss and capitalised
$16,800 of performance rights in the statement of financial position.
The performance hurdles, relevant dates and conditions of the rights are detailed below:
Number
issued
Issue date
Expiry
date
Exercise
price
Market/Non-
market
performance
condition
Probability
of non-
market
performance
condition
occurring
Fair value
for each
performance
rights
($)
4,700,000
18/12/2020 31/12/2020
0.0150
Market
3,800,000
18/12/2020 31/12/2021
0.0280
Market
3,100,000
18/12/2020 31/12/2022
0.0420
Market
N/A
N/A
N/A
0.0009
0.0012
0.0016
Total fair
value
recorded
($)
4,183
4,560
4,836
1,750,000
18/12/2020 30/06/2021
N/A
Non-market
60%
0.0050
3,150
1,750,000
18/12/2020 31/12/2021
N/A
Non-market
10%
0.0050
875
2,300,000
18/12/2020 30/06/2021
N/A
Non-market
10%
0.0050
1,150
3,200,000
18/12/2020 30/06/2022
N/A
Non-market
30%
0.0050
4,800
3,900,000
24,500,000
18/12/2020 30/06/2023
N/A
Non-market
35%
0.0050
6,825
30,379
Performance Hurdle
30-day VWAP of $0.015
at 31/12/2020
30-day VWAP of $0.028
at 31/12/2021
30-day VWAP of $0.042
at 31/12/2022
Expanding the JORC
Resource by 600,000oz
at a grade of at least 3g/t
by 30/06/2021
Delineating a total of
650,000 ounces of gold
reserves (in accordance
with JORC 20121) at a
grade of at least 3g/t Au
by 31/12/2021
Achieving annualised
production of 5,500oz of
gold per annum over a
consecutive period of 3-
months in the 12-months
to 30/06/2021
Achieving annualised
production of 25,000oz of
gold per annum over a
consecutive period of 3-
months in 2022 calendar
year
Achieving annualised
production of 45,000oz of
gold per annum over a
consecutive period of 3-
months in 2023 calendar
year
TOTAL
The management has assessed the probability of the non-market conditions being satisfied. The performance rights
with non-market conditions have been capitalised in exploration and evaluation assets as per the Group exploration
plan.
Page 63 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
12 Interests in other entities
(a) Material subsidiaries
The group’s principal subsidiaries at 30 June 2020 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership interests held
equals the voting rights held by the group. The country of incorporation or registration is also their principal place of
business.
Name of entity
Place of
business/ country
of incorporation
West Wits Mining SA (Pty) Ltd
West Wits MLI (Pty) Ltd
Mining & Mineral Reclamation
Services (Pty) Ltd
West Wits Monarch (Pty) Ltd
NuGold Company Ltd (Hong Kong)
PT. NuGold Indonesia
PT. Madinah Qurrata'ain
South Africa
South Africa
South Africa
South Africa
Hong Kong
Indonesia
Indonesia
Ownership interest
held by the group
2020
%
90
74
2019
%
90
74
74
100
100
100
64
74
100
100
100
64
Ownership interest held
by non-controlling
interests
2020
%
10
26
26
-
-
-
36
2019
%
10
26
26
-
-
-
36
All subsidiaries listed above operated in the mining and exploration industry.
(i) Significant restrictions
Cash held by all South Africa subsidiaries is subject to exchange control regulations governed by the South African
Reserve Bank (SARB). Ongoing approval by SARB is crucial to the transfer of cash funds into and out of South
Africa.
Page 64 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
12 Interests in other entities (continued)
(b) Non-controlling interests (NCI)
Set out below is summarised financial information for each subsidiary that has non-controlling interests that are material
to the group. The amounts disclosed for each subsidiary are before inter-Company eliminations.
South Africa
30 June
2020
$'000
30 June
2019
$'000
233
818
(585)
7,844
-
7,844
7,259
1,998
1,804
2,848
(1,044)
8,769
-
8,769
7,725
1,454
South Africa
30 June
2020
$'000
30 June
2019
$'000
(448)
822
374
(614)
(902)
12
(890)
(329)
South Africa
30 June
2020
$'000
30 June
2019
$'000
(846)
(377)
1,362
139
263
(715)
354
(98)
Summarised balance sheet
Current assets
Current liabilities
Current net liabilities
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated NCI
Summarised statement of comprehensive income
Loss for the period
Other comprehensive income
Total comprehensive income
Loss allocated to NCI
< blank header row >
Summarised cash flows
Cash flows (used in)/from operating activities
Cash flows used in investing activities
Cash flows from financing activities
Net increases/(decrease) in cash and cash equivalents
(c) Transactions with non-controlling interests
There have been no transactions with non-controlling interests during the year 2020 (2019: nil).
Page 65 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
12 Interests in other entities (continued)
(d) Joint operations
West Wits MLI (Pty) Ltd, a subsidiary of the Group has a 50% interest in a joint arrangement called the Kimberley
Central Open Pit which was set up as a partnership together with Elandiwave Pty Ltd (“Elandiwave”), a South Africa
based company for mining production activities. The joint venture operation ceased production at the beginning of the
reporting period with operations winding down during the period. Minor backfilling operations of the remaining open-pit
are expected to be completed in the current reporting period which will also end the joint arrangement.
The principal place of business of the joint operation is in South Africa.
13 Contingent liabilities and contingent assets
(a) Contingent liabilities
The group had no contingent liabilities at 30 June 2020 (2019: nil).
(b) Contingent assets
The group had no contingent assets at 30 June 2020 (2019: nil).
14 Cash flow information
(a) Reconciliation of loss after income tax to net cash inflow from operating activities
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
(1,913)
(11,761)
156
104
166
6
42
74
1,708
(2)
(1,426)
(341)
(1,426)
9,741
150
-
-
-
-
(1,391)
49
1,812
540
(860)
Loss for the year
Adjustments for:-
Impairment of assets
Share-based payments
Unrealised foreign exchange on convertible note
Other unrealised foreign exchange
Fair value movements of convertible note derivatives
Interest expense on convertible notes
Change in operating assets and liabilities:
Decrease/(Increase) in accounts receivable
(Increase)/Decrease in other current assets
(Decrease)/Increase in accounts payable
(Decrease)/Increase in provision
Net cash outflow from operating activities
Page 66 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
15 Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Issued capital
Share-based payments reserve
Accumulated losses
Profit or loss for the year
Total comprehensive income
30 June
2020
$'000
1,005
24,898
25,903
464
1,740
2,204
23,699
(21,978)
38,406
2,276
(16,983)
23,699
(653)
(653)
30 June
2019
$'000
96
21,816
21,912
181
-
181
21,731
(21,764)
36,963
2,155
(17,387)
21,731
(1,058)
(1,058)
(b) Guarantees entered into by the parent entity
West Wits Mining Ltd has not entered into any guarantees, in the current or previous financial year, in relation to the
debts of its subsidiaries (2019: Nil).
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019. For information about
guarantees given by the parent entity, please see above.
(d) Contractual commitments for the acquisition of property, plant or equipment
At 30 June 2020, West Wits Mining Ltd had not entered into any contractual commitments for the acquisition of property,
plant and equipment (2019: nil).
16 Events occurring after the reporting period
On 14 August 2020, the Group completed a share placement to raise $3.4 million (before costs) via the issue of 131.7
million new fully paid ordinary shares at $0.021 (2.1 cents) per share to existing and new sophisticated and professional
investors.
No other matters or circumstances have occurred subsequent to period end that has significantly affected, or may
significantly affect, the operations of the group, the results of those operations or the state of affairs of the group or
Group in subsequent financial years.
17 Capital management
The Group's policy is to maintain a strong and flexible capital base to maintain investor, creditor and market confidence
and to sustain future development of the business. The board monitors the return on capital, which the Group defines
as total shareholders’ equity attributable to members of West Wits Mining Limited divided by the quantity of shares on
issue. The Group is not subject to externally imposed capital requirements.
Page 67 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
18 Financial risk management
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. Management
have established risk management policies to identify and analyse the risks faced by the company and the group, to
set appropriate risk limits and controls, and to monitor risk and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the
respective functional currency of each company within the group.
The Group also has exposure to foreign exchange risk in the currency cash reserves it holds to meet subsidiary loan
requirements. This is kept to an acceptable level by buying foreign currency at spot rates only to fund short term cash
requirements.
The Group's exposure to foreign exchange risk has not changed from the previous year. The Group does not make
use of derivative financial instruments to hedge foreign exchange risk.
Assets
Liabilities
Total exposure
30 June
2020
ZAR
$'000
95,813
(9,703)
86,110
The following significant exchange rates applied during the year:
Currency
.
ZAR
Average Rate
2019
2020
30 June spot rate
2019
2020
10.5244
10.1065
11.8624
9.8938
Sensitivity
The Group is exposed to the South African Rand (ZAR) and Indonesian Rupiah (IDR). The average annual movement
in the AUD/ZAR and AUD/IDR exchange rate over the last 5 years was 6.6% for ZAR and 5.6% for IDR (2019: 6.6%
for ZAR and 5.6% for IDR) based on the year-end spot rates. A fluctuation of 6.6% for ZAR and 5.6% for IDR against
the AUD at 30 June would have changed the equity and loss by the amounts show below. This analysis assumes that
all other variables, in particular interest rates, remain consistent. The analysis is performed on the same basis for 2019.
Consolidated entity
Sensitivity result
Impact on post-tax profit
Impact on other components of
equity
2020
$'000
39
2019
$'000
607
2020
$'000
638
2019
$'000
407
The effect on equity is to the Foreign Currency Translation Reserve and Accumulated Losses.
Page 68 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
18 Financial risk management (continued)
(a) Market risk (continued)
(ii) Price risk
Exposure
The Group is exposed to the risk of fluctuations in prevailing market commodity prices on gold. The Group’s has not
established a formal policy to manage this risk. Management maintain a tight control over the production costs and
work closely with its key contractors to ensure that any fluctuation in the gold price is reflected in the production costs.
(b) Credit risk
(i) Risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to
the Group.
Surplus cash is invested with financial institutions of appropriate credit worthiness and the amount of credit exposure
to any one counter party is limited.
The Group only has one customer for its mining production activity and thus management works closely with this major
customer to minimise any credit risk. The Group's maximum exposure to credit risk at the end of the reporting period
is set out in the table below. The carrying amount of the financial assets represents the maximum credit risk exposure.
Cash and cash equivalents
Trade and other receivables
Consolidated entity
30 June
2020
$'000
30 June
2019
$'000
1,202
32
1,234
175
1,740
1,915
(ii) Impairment of financial assets
The group has one type of financial assets subject to the expected credit loss model:
•
trade receivables for mining production activities
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified impairment
loss was immaterial.
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics
and the days past due. The expected loss rates are based on the payment profiles of sales over a period since the
commencement of its mining production until 30 June 2020 and the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables.
On that basis, the loss allowance as at 30 June 2020 from the ECL method was concluded as immaterial as the group
had not written off any receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with the group, and a failure to make contractual payments
Page 69 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
18 Financial risk management (continued)
(b) Credit risk (continued)
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient assets to meet liabilities as they fall due.
The Group is exposed to liquidity risk via the quantity and type of financial assets and liabilities it holds. The board
ensures that the Group can meet its financial obligations as they fall due by maintaining sufficient reserves of cash,
continuously monitoring forecast and actual cash flows, matching the maturity profiles of financial assets and liabilities,
and identifying when they need to raise additional funding from the equity markets.
The Group’s exposure to liquidity risk has remained unchanged from the previous year.
(i) Maturities of financial instruments
Contractual maturities of financial liabilities
At 30 June 2020
Financial assets - cash flows realisable
Cash and cash equivalents
Trade and other receivables
Financial liabilities due to payment
Trade and other payables
Borrowings
Other financial liabilities
Net inflow/(outflow) on financial instruments
Due
within 1
year
$'000
Due
within 1 to
5 years
$'000
Total
contractual
cash
flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
Over 5
years
$'000
1,202
32
1,234
-
-
-
(1,017)
(111)
-
(1,128)
-
-
(1,740)
(1,740)
106
(1,740)
-
-
-
-
-
-
-
-
1,202
32
1,234
1,202
32
1,234
(1,017)
(111)
(1,740)
(2,868)
(1,017)
(111)
(1,740)
(2,868)
(1,634)
(1,634)
Page 70 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
18 Financial risk management (continued)
(c) Liquidity risk (continued)
Contractual maturities of financial liabilities
At 30 June 2019
Financial assets - cash flows realisable
Cash and cash equivalents
Trade and other receivables
Financial liabilities due to payment
Trade and other payables
Borrowings and other financial liabilities
Net inflow/(outflow) on financial instruments
Due
within 1
year
Due
within 1 to
5 years
Over 5
years
Total
contractual
cash
flows
$'000
$'000
$'000
$'000
Carrying
amount
(assets)/
liabilities
$'000
175
1,740
1,915
(4,458)
(101)
(4,559)
(2,644)
-
-
-
-
(65)
(65)
(65)
-
-
-
-
-
-
-
175
1,740
1,915
175
1,740
1,915
(4,458)
(166)
(4,624)
(4,458)
(166)
(4,624)
(2,709)
(2,709)
Fair value
The fair value of financial assets and liabilities equals to the carrying amounts shown in the statement of financial
position due to the short-term nature of those financial assets and liabilities.
Page 71 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
19 Discontinued operations
On 16 August 2019, the Group announced an update on Derewo River Gold Project wherein a binding Heads of
Agreement with TME Group Pte Ltd has been signed and was established that West Wits International would dilute
its equity interests in PT Madinah Quarataa’n (“PTMQ”), the Project Company, from the current 64% to 10%. The
dilution was to come into effect upon implementation of the HOA. As of the date of report, the agreement has not
been finalised. PTMQ has been classified as discontinued operations and the Indonesian segment is no longer
presented within the segment note.
The below table presents the financial performance information of the discontinued operations.
Revenue from operations
Cost of sales of goods
Corporate administration
Impairment of exploration assets
Impairment of trade and other receivables
Impairment of plant and equipment
Impairment of goodwill
Impairment of other non-current assets
Loss before tax from discontinued operations
Income tax expense
Loss for the year from discontinued operations
30 June
30 June
2020
$’000
-
-
-
-
(15)
(13)
(115)
(13)
(156)
-
(156)
2019
$’000
-
-
(60)
(9,741)
-
-
-
-
(9,801)
-
(9,801)
Page 72 of 81
West Wits Mining Limited
Notes to the financial statements
30 June 2020
(continued)
19 Discontinued operations (continued)
During the year ended 30 June 2020, PT Madinah Quarataa’n has written off all its assets amount to $156,000 and
hence the remaining classes of liabilities of PT Madinah Quarataa’n classified as held for sale as at 30 June 2020
are as follows:
Liabilities
Trade and other payables
Other financial liabilities
Total liabilities held-for-sale
Net liabilities directly associated with disposal group
30 June
2020
$’000
1,858
65
1,923
1,923
As of 30 June 2020 and 30 June 2019, PT Madinah Quarataa’n does not has any cash and cash equivalents and
hence no cash flows are presented.
30 June
30 June
2020
cents
2019
cents
Loss per share
Basic loss per share for the period from discontinued operations
Diluted loss per share for the period from discontinued operations
(0.02)
(0.02)
(1.30)
(1.30)
Page 73 of 81
Directors' declaration
In the Directors' opinion:
(a)
the financial statements and notes set out are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii)
(iii)
give a true and fair view of the financial position as at 30 June 2020 and of the performance for the
year ended on that date of the company and the Group; and
comply with International Financial Reporting Standards as disclosed in Note 1
(b)
(c)
the Chairman and Chief Finance Officer have each declared that:
(i)
the financial records of the company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view.
(ii)
(iii)
in the Directors' opinion there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Mr Michael Quinert
Director
Melbourne
30 September 2020
Page 74 of 81
West Wits Mining Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of West Wits Mining Limited. (the Company and its
controlled entities (the Group)), which comprises the consolidated statement of financial
position as at 30 June 2020, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii) 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
(including Independence Standards) (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 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.
CARRYING VALUE OF EXPLORATION AND EVAUATION ASSETS
Area of focus (Refer to notes 1 and 9)
How our audit addressed it
The Group has continued to incur exploration
costs for their gold mining projects in Australia
and South Africa. As these costs have been
incurred over a number of years, there is a risk
that the capitalisation of exploration and
evaluation expenditure may no longer be
appropriate.
An impairment review is only required if an
impairment trigger is identified.
Due to the nature of the gold industry, indicators
of impairment could include:
— Changes to exploration plans;
— Loss of rights to tenements;
— Changes to reserve estimates;
— Costs of extraction and production; or
— Exchange rate factors.
Based on management’s assessment the
exploration areas in Australia and South Africa
continue to meet the requirements for
capitalisation at 30 June 2020.
DISCONTINUED OPERATIONS
Area of focus (Refer to notes 1 and 19)
During the year, the Group decided to divest its
Indonesian operations through a proposed sale
to a third party. This proposed divestment of the
Indonesian operations meets the definition of a
discontinued operation under AASB 5 Non-
Current Assets Held for Sale and Discontinued
Operations.
During the year ended 30 June 2020 the Group
incurred a loss after tax from the Indonesian
operations of $0.2 million (30 June 2019: $9.8
million).
The accounting for this matter is complex and
as such we have determined it a Key Audit
Matter.
Our audit procedures included:
— A review of the directors’ assessment of the
criteria for the capitalisation of exploration
expenditure and evaluation of whether an
impairment charge is required;
— Understanding and vouching the underlying
contractual entitlement to explore and
evaluate each area of interest, including an
evaluation of the requirement to renew that
tenement at its expiry;
— Examining project spend per each area of
interest and comparing this spend to the
minimum expenditure requirements set out
in the underlying tenement expenditure
plan; and
— Examining project spend to each area of
interest to ensure that it is directly
attributable to that area of interest.
We also assessed the adequacy of the Group’s
disclosures in respect of exploration costs in the
financial report.
How our audit addressed it
Our audit procedures included;
— Assessing that the accounting treatment
has been applied by the Group is in
accordance with AASB 5 Non-Current
Assets held for sales and Discontinued
Operations;
— Performed audit procedures over the
residual balances held within the trial
balances of the Indonesian entities as at 30
June 2020; and
Assessed the disclosure is the financial
statements is appropriate including the
restatement of the of the statement of profit or
loss and other comprehensive income for the
prior year.
CONVERTIBLE NOTE
Area of focus (Refer to notes 1 and 8d)
The Group issued convertible notes to a single
investor during the current financial year.
Accounting for these transactions is complex, as
the Group’s accounting policy requires the
separation at initial recognition, where material,
of an embedded derivative, representing the
option to convert the note to a variable number
of shares, from the underlying host (principal)
contract. Both the embedded derivative and host
contract are reflected in the value of the
convertible note in the financial statements.
The accurate recording of the transactions
associated with the convertible notes is
dependent on the following:
— The share price as at the date of the issue
of the convertible notes;
— Inputs associated with the features of the
notes (interest rate, maturity, security); and
— Movement is in foreign exchange and the
market price of gold to determine the value
of the embedded derivative.
The accounting for this matter is complex and as
such we have determined it a Key Audit Matter.
GOING CONCERN
Area of focus (Refer to note 1)
The financial statements have been prepared on
a going concern basis.
Historically, the Group, in accordance with its
business plans, has incurred exploration costs
for their gold mining projects which has resulted
in significant accumulated losses.
Accumulated losses reported in the
Consolidated Statement of Financial Position
were stated at $24.1 million, as at 30 June 2020.
As announced to the ASX on 14 August 2020,
the Group completed a share placement to raise
$3.4million (before costs).
The going concern basis assumption is a Key
Audit Matter as the Group will rely on a
consistent equity raising strategy to progress the
objectives of the business plans of the Group.
How our audit addressed it
Our audit procedures included:
— Understanding the terms of the convertible
note agreement, including an assessment of
classification between current and non-
current for the underlying host contract and
a determination that the conversion formula
met the definition of an embedded derivative
and hence a financial liability;
— Verifying the voracity of pricing applied to
the value of the embedded derivative and
the accrual of amortised interest applicable
to the host contract;
— Performed a cross check against our own
findings and fair value with the independent
valuation commissioned by management;
and
— Verifying that the values attributed to the
transactions were in line with the terms of
the convertible note agreements.
We also assessed the adequacy of the Group’s
disclosures in the financial report.
How our audit addressed it
Our audit procedures included:
— Assessed the cash flow requirements of the
Company over 15 months from 30 June
2020 based on budgets and forecasts;
— Understanding what forecast expenditure is
committed and what could be considered
discretionary;
— Considering the liquidity of existing assets
on the balance sheet;
— Vouched the share placement cash received
to bank statements subsequent to year end;
— Examined capital raising alternatives
available to the Group to enable the
business plans of the Group to be fully
executed in the short to medium term; and
— Considered potential downside scenarios
and the resultant impact on available funds.
We also assessed the adequacy of the Group’s
financial statement disclosures.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2020 but does not include the financial
report and the 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 has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
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 these financial statements.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of West Wits Mining Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
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.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 30 September 2020
Shareholder information
The shareholder information set out below was applicable as at 25 September 2020.
A. Distribution of ordinary fully paid shares
All ordinary shares carry one vote per share.
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Ordinary shares
No. of holders
43
36
113
645
844
1,681
Total units
4,078
134,600
1,081,580
33,399,748
1,150,446,749
1,185,066,755
There were 219 holders of less than a marketable parcel of ordinary shares.
B. Ordinary fully paid shareholders
Top Twenty Ordinary fully paid shareholders
The names of the twenty largest holders of quoted equity securities are listed below:
Holding
Ordinary shares
DRD GOLD LIMITED
CITICORP NOMINEES PTY LIMITED
M&M INVESTMENT PTE LTD
KASTIN PTY LTD
TWYNAM INVESTMENTS PTY LTD
REALSTAR FINANCE PTY LTD
DEBT MANAGEMENT ASIA CORPORATION
MR LUM CHIN WENG
BNP PARIBAS NOMINEES PTY LTD
GERARD C TOSCAN MANAGEMENT PTY LIMITED
DRYCA PTY LTD
RINGWOOD MANAGEMENT PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MRS DIANNE BAILEY
JOHN WARDMAN & ASSOCIATES PTY LTD
MRS ANNA VORONTSOVA
MR CHRISTOPHER NORMAN SLEIGH
BNP PARIBAS NOMS PTY LTD
LGH NOMINEES PTY LTD
GREGORACH PTY LTD
Number held
47,812,500
44,936,620
33,333,334
30,772,614
28,984,104
24,698,294
23,093,417
21,666,666
21,020,074
19,000,000
17,500,000
16,575,000
14,772,343
12,081,731
12,000,000
10,321,459
10,000,000
9,592,648
9,000,000
8,284,132
415,444,936
%
4.03%
3.79%
2.81%
2.60%
2.45%
2.08%
1.95%
1.83%
1.77%
1.60%
1.48%
1.40%
1.25%
1.02%
1.01%
0.87%
0.84%
0.81%
0.76%
0.70%
35.06%
Page 80 of 81
Unquoted Equity Securities
Unlisted options
Class
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Other unquoted equity securities
Convertible notes
Performance rights
C. Substantial holders
Quantity
10,000,000
10,000,000
15,000,000
17,000,000
10,000,000
5,500,000
Exercise
price
$0.050
$0.050
$0.050
$0.050
$0.012
$0.015
Expiry Date
14-Nov-20
30-Nov-20
30-Nov-22
29-Jan-23
18-Dec-23
3-Feb-22
Number of
Holders
8
1
2
2
3
1
Number on Issue Number of Holders
1
3
1,000,000
24,500,000
There are no substantial holders in the Company at 25 September 2020.
D. Shareholder enquiries
Shareholders with enquiries about their shareholdings should contact the share registry:
Automic Pty Ltd
Level 5 126 Phillip Street
Sydney NSW 2000
+61 2 9698 5414
www.automicgroup.com.au
E. Change of address, change of name, consolidation of shareholdings
Shareholders should contact the Share Registry to obtain details of the procedure required for any of these changes.
F. Annual report
Shareholders do not automatically receive a hard copy of the Company’s Annual Report unless they notify the Share
Registry in writing. An electronic copy of the Annual Report can be viewed on the company’s website
www.westwitsmining.com.
G. Tax file numbers
It is important that Australian resident Shareholders, including children, have their tax file number or exemption
details noted by the Share Registry.
H. CHESS (Clearing House Electronic Subregister System)
Shareholders wishing to move to uncertified holdings under the Australian Securities Exchange CHESS system
should contact their stockbroker.
I. Uncertified share register
Shareholding statements are issued at the end of each month that there is a transaction that alters the balance of
an individual/company’s holding.
J. Listing rule 4.10.19 disclosure
The Company has used the cash and assets in a form readily convertible to cash that it had at the time of
admission in a way consistent with its business objectives.
Page 81 of 81