T +61 8 9334 7777
F +61 8 9486 7866
E info@westernareas.com.au
Registered Offi ce
Level 2, 2 Kings Park Road, West Perth WA 6005
PO BOX 1891 West Perth 6872
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ABN 68 091 049 357
2013 ANNUAL REPORT
CORPORATE
DIRECTORY
Directors
Terry Streeter (Chairman)
Robin Dunbar
Julian Hanna
Dan Lougher
David Southam
Rick Yeates
Ian Macliver
Company Secretary
Joseph Belladonna
Auditors
Crowe Horwath
Level 6
256 St Georges Terrace
Perth WA 6000
Bankers
ANZ Banking Group Limited
77 St Georges Terrace
Perth WA 6000
Share Registry
Computershare Investor Services Pty Ltd
Level 2
45 St Georges Terrace
Perth WA 6000
Stock Exchange
Australian Securities Exchange Limited
Code: WSA
Solicitors
Allion Legal
Level 2
50 Kings Park Road
West Perth WA 6005
Registered Offi ce
Level 2
2 Kings Park Road
West Perth WA 6005
Phone (08) 9334 7777
Fax (08) 9486 7866
Competent Person Statement:
“The information within this report as it relates to mineral resources, reserves and mine development activities is based on information compiled
by Mr Dan Lougher of Western Areas Ltd. Mr Lougher is a members of AusIMM and is a full time employee of the Company. Mr Lougher has
suffi cient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as Competent Persons as defi ned in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.’ Mr Lougher consents to the inclusion in the report of the matters based on the information in the form
and context in which it appears.”
Forward Looking Statements:
This release contains certain forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties beyond
the Company's ability to control or predict which could cause actual events or results to diff er materially from those anticipated in such forward-
looking statements.
This announcement does not include reference to all available information on the Company or the Forrestania Nickel Project and should not be
used in isolation as a basis to invest in Western Areas. Any potential investors should refer to Western Area’s other public releases and statutory
reports and consult their professional advisers before considering investing in the Company.
For Purposes of Clause 3.4 (e) in Canadian instrument 43-101, the Company warrants that Mineral Resources which are not Mineral Reserves do
not have demonstrated economic viability.
Designed by Dash Digital
ANNUAL
REPORT
2013
TABLE OF CONTENTS
Chairman’s Letter
Managing Director’s Report
Operations Review
Directors’ Report
Corporate Governance Statements
Auditor’s Independence Declaration
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Opinion
Tenement Listing
Shareholder Information
PAGE
2
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43
44
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92
94
100
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
1
CHAIRMAN’S
LETTER
Terry Streeter - Chairman
“Several business
development
announcements
that support
Western Areas
targeted approach
to growth were
made throughout
FY2013.”
Dear shareholders,
On behalf of your Board of Directors, I am pleased to
present to you our Annual Report for the fi nancial year
ending 30 June 2013 (FY2013). Thank you to each and every
one of you for your continued support throughout what
has been a challenging but positive year for your Company.
Throughout FY2013, we achieved strong output and
record results from our operations with 27,819 tonnes
of nickel in concentrate sold. Our sales for the month of
June 2013 surpassed expectations and we were pleased
to report a positive cash fl ow from our operations of
A$112.1 million (M) for the full year. Most importantly, we
achieved it safely. Proudly, our team’s record for keeping
our people safe is one of the best in the mining industry.
Despite these eff orts in managing the aspects of our
business we can control well, the parts of our business
shaped by the global economy, being a sustained weak
nickel price and high Australian dollar worked against
our underlying fi nancial results. These factors combined
contributed to a reported net loss after tax of $94.1M
for Western Areas in FY2013. Notwithstanding some
negative market headwinds, the Company managed to
repay signifi cant debt totalling $A150.5M and delivered
an underlying net profi t after tax of $5.5M when most
nickel companies across the globe reported losses. I am
very encouraged to see a solid and sound balance sheet
leading into the new fi nancial year.
We have witnessed pressure from the high Australian
dollar ease in more recent times, but it is no reason
to be complacent, there is no immunity from future
fl uctuations so it is imperative that we continue to
be prudent with our costs. This is a task which our
2
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Managing Director, Dan Lougher, who reached his fi rst
year anniversary with Western Areas in February 2013,
has performed outstandingly. Western Areas is still in the
lowest quartile of worldwide nickel production costs.
In this current volatile market, your Board of Directors
determined that it would be more prudent capital
management to refrain from paying a fi nal dividend for
the year, after having paid a fully franked interim dividend
(two cents per share) to shareholders. This was obviously
a decision which required careful consideration but it was
decided that the most important thing for your company,
in this environment, was to retain its balance sheet
strength and fl exibility.
Several business development announcements that
support Western Areas targeted approach to growth
were made throughout FY2013. In particular, a non-
binding Strategic Alliance Deed with China’s largest nickel
producer Jinchuan Group Limited was reached. Under
the alliance, Western Areas and Jinchuan will share the
assessment and due diligence on future evaluation of
base metal projects. Together we will consider potential
global mining opportunities including exploration,
development and operation of the projects. Western
Areas has a proven track record of exploring, fi nding,
developing and producing profi table mines and this
mutually benefi cial partnership will support and enhance
our capacity to do this.
Under our exploration program, a new high grade nickel
sulphide discovery was made at the New Morning deposit
in January this year. This exciting discovery is made in
close proximity (within 3km) of both the high grade
Flying Fox and Spotted Quoll mines. Drilling since the
end of the fi nancial year has revealed further high grade
intersections and assessment will take place throughout
the year so the Board of Directors can make an informed
decision on how to proceed with this potential new
mining project.
These strategies and new opportunities for growth, the
predicted rallying of the nickel market and the forecast
steady demand for resources from China provide
Western Areas with an optimistic outlook for FY2014. Our
production costs are lower and our product grade higher
than the majority of our peers and throughout the year we
will focus on maintaining a sound and stable balance sheet.
On Saturday, 7 September 2013, we welcomed Australia’s
decision to vote out the government who had failed to
promote or support growth and opportunities within the
resources sector. The government had sought only to
exploit the sector for immediate yet unsustainable cash
benefi t. They instigated poorly designed tax policies such
as initially proposed Resource Super Profi ts Tax (RSPT)
and later imposed the fundamentally fl awed Minerals
Resource Rent Tax (MRRT). We applaud the commitment
of the Abbott Coalition Government to abolish the MRRT
and reinstate economic confi dence amongst Australians.
Thank you to all of you for continuing to support our
company and I look forward to a safe and prosperous year
ahead with you.
Terry Streeter
Chairman
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
3
MANAGING
DIRECTOR’S REPORT
“Importantly, the
Company is maintaining
an excellent safety record
(LTIFR 0.83) in all our
operations and this is
constantly reviewed for
improvement.”
Against a backdrop of a challenging nickel price
environment, I am pleased to report that the operations at
Western Areas have performed well over the year. The 100%
owned Forrestania Operations exceeded our production
forecast whilst delivering costs lower than budget for the
year and did so with an excellent safety record.
Financially, the year was dominated by the downward
movement in the nickel price coupled with the continued
high Australian dollar through to 30 June 2013. This has
seen us deliver an underlying net profi t after tax (NPAT)
of $A5.6M for the year, on a statutory Net Loss After Tax
(NLAT) of A$94.1M. Since the end of the fi nancial year,
we’ve seen signifi cant falls in the value of the Australian
dollar which, if sustained over the course of the coming
year, should help off set an unsustainably low nickel price.
The NLAT arises from our recognition of a tax
eff ected non-cash impairment charge of $99.7M which
predominately related to historical exploration and the
Diggers South project. Again, our decision to review
past historical expenditure arose from the nickel price
environment. After more than 10 years exploring the
Forrestania Belt we built up signifi cant capitalised
expenditure, not all of which will one day lead to a nickel
mine. This does not diminish our desire to explore the
Forrestania region – the same exploration program
delivered us Flying Fox, Spotted Quoll and the recent
New Morning discovery. We will remain active explorers,
building the future of our Company.
Despite the fi nancial headwinds, we’ve been able to
generate signifi cant cash fl ow from the business over the
year as well as pay down over A$150.5M in Convertible
Bonds and Borrowings.
Daniel Lougher - Managing Director
In common with our peers in the industry, controlling
costs continues to be a major focus for management
over the year. As expected, the change from open pit
mining to underground mining at Spotted Quoll added
to the absolute costs line, however cost savings have
been eff ective in maintaining our position in the bottom
quartile cash costs of nickel producers. This has been
demonstrated by our cash fl ow pre-fi nancing cost and
repayments (after all capital expenditure and exploration)
reaching A$33.0M for the year, compared to A$35.4M on
the same measure for FY2012 which had the benefi t of a
signifi cantly higher nickel price.
Having reported a NLAT resulting from the impairment
charge and recognition of the low nickel price
environment, the Board took the dec ision not to pay
a fi nal dividend this year. The dividends declared for
the year (2 cents per share interim dividend) represent
a payout ratio of approximately 70% of the underlying
NPAT, in comparison to an average of around 30%
to 35% of NPAT in the past two years. The Board
remains committed to providing sustainable returns
to shareholders which match our profi tability whilst
retaining suffi cient cash to invest in the future growth of
the Company. With a continued focus on prudent capital
management, Western Areas remains in a solid fi nancial
position with balance sheet fl exibility to pursue growth
objectives.
Importantly, the Company is maintaining an excellent
safety record (LTIFR 0.83) in all our operations and this is
constantly reviewed for improvement. We maintain a high
level of safety training for staff and contractors with a focus
on occupational health for site based employees. Western
Areas also maintains the highest possible environmental
standards in all its operations from exploration and mining
to exporting nickel concentrate to China.
4
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
FY12
FY13
Lost Time Injury Frequency Rate (LTIFR)
1.5
0.83
Total Ore Mined (tns)
Average Mined Grade
634,122
555,736
4.9%
5.0%
Contained Nickel Mined (tns)
31,102
27,639
Total Ore Processed (tns)
547,668
586,254
Average Processed Grade
Average Recovery
5.1%
92%
5.1%
91%
Contained Nickel Processed (tns)
25,641
26,918
Nickel Sold (tns)
26,637
27,819
Average Nickel Price Received (US$/tn)
17,791
16,112
Cash Costs before smelting/refi ning (A$/lb)
Average Exchange Rate USD/AUD
2.43
1.03
2.68
1.03
In October 2012, Western Areas won two prestigious
awards at the Western Australian Industry and Export
Awards; the Premier’s Award for Excellence and the
Minerals and Energy Export Award. These awards
demonstrate the Company’s commitment to deliver value
through our nickel concentrate sales.
At an operational level, Spotted Quoll underground
mining remains ahead of the feasibility study schedule
and during the year reached the 10,000 nickel tonnes
per annum run rate which will be increased in FY2014 to
12,000 tonnes per annum. Spotted Quoll, clearly a world
class deposit, now has a mine life greater than 10 years
and remains open at depth. After the purchase of Kagara
Ltd’s nickel assets in March last year, the operational
team at Flying Fox have fully integrated the Lounge
Lizard deposit into the mine plan. Flying Fox continues to
perform extremely well with an excellent safety record. In
support of the two mines, the Cosmic Boy Concentrator
continues to perform above its nameplate capacity of
550,000 tonnes of ore per annum.
In February 2013, a new off take contract (3rd) commenced
with Jinchuan for 26,000 tonnes of nickel in concentrate
which should be completed during the March quarter
in 2015. This new contract resulted in improved payable
terms for the Company. The strategy of tendering our
off take contracts has proven to be very successful for
Western Areas in past years as there is growing consensus
the world’s nickel smelters will be short of high quality
nickel concentrates in future years.
On the exploration front, with our continued focus on
organic exploration at Forrestania, we have had success
with the new high grade discovery at New Morning
complimented by the execution of a Farm-in and JV
agreement with Traka Resources in the Musgraves. These
will provide excellent opportunities in the coming year
for nickel and copper exploration. During the year, we
opted to discontinue activities in the Sandstone, Kawana,
Mt Jewel and Koolyanobbing project areas, in order to
prioritise areas we felt had higher potential to deliver our
next mine. The current challenging funding situation for
junior exploration companies continues to off er Western
Areas a wealth of opportunities to enter relatively
advanced exploration projects, for attractive entry prices.
Looking overseas, the Company has taken the option
to reduce its activities in Canada, but still holds a
19.9% interest in Mustang Minerals. Minor investments
in Finland have seen an increased holding to an 84%
interest in FinnAust Mining PLC. The intent now is to list
FinnAust on the London AIM stock exchange by the end
of 2013, market conditions permitting. It is expected
that suffi cient funds will be raised to conduct a two year
surface drilling program.
During FY2013, we saw a signifi cant drop in the nickel
price (9.5%) and the operations of many in the nickel
industry outside Western Areas are now in a non-profi table
situation. This has been exacerbated by fl at demand for
stainless steel in the world market (ex-China) and further
reductions in the cost of Nickel Pig Iron (NPI) production
due to the introduction of a new processing method
called Rotary Kiln Electric Arc Furnace (RKEF). However,
this production is totally dependent on high grade (>1.8%
nickel) and low iron (<25% Fe) Indonesian Laterite ore and
a potential ban on ore export from that country in early
2014 should positively impact the nickel price.
In this challenging environment the Company spends
a signifi cant amount of time on cost and production
control. To this end, all employees contribute to ways
in which the Company can continue to drive effi ciency
improvements. Further, every major service provider has
committed to reduce their cost structure in the coming
year. It’s this dedication to details and critical analysis,
together with the high quality of our mines, that ensures
we have been able to maintain our position as the lowest
cost nickel producer in Australia with the strongest
operational margins.
A high standard of environmental management has been
maintained at the Forrestania Operations. The Company
continues to support a series of biodiversity initiatives
such as the funding of the Carnaby’s Black Cockatoo
research program within the south eastern wheatbelt
and is a major sponsor of Perth Zoo’s Western Quoll
exhibit. Part of this sponsorship results in admission
passes to the Perth Zoo which the Company donates
to The Starlight Children’s Foundation. Involvement has
also been initiated in the Energy Effi ciency Opportunities
program which aims to encourage industry to assess
and fi nd opportunities to reduce their energy usage and
carbon emissions.
To conclude, I would like to thank all of our staff ,
contractors and support companies for their dedication
and commitment in making Western Areas a strong
company with outstanding assets.
I look forward to another successful year during FY2014.
Thank you for your support.
Daniel Lougher
Managing Director
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
5
OPERATIONS
OPERATIONS
REVIEW
REVIEW
GROUP OVERVIEW
Western Areas Ltd is an Australian-based nickel miner listed on the ASX. The main asset is the 100% owned Forrestania
Nickel Operations, 400km east of Perth. Western Areas is currently targeting total annual production from the Flying
Fox and Spotted Quoll mines of 25,000t to 26,000t nickel in ore for FY14.
The Forrestania Nickel Operations (FNO) is comprised of two 100% owned underground nickel mines, i.e. Flying Fox and
Spotted Quoll operations, the Cosmic Boy nickel concentrator and the associated Cosmic Boy accommodation village.
Flying Fox is one of the highest grade nickel mines in Australia and has been in production since 2006 and the second
mine, Spotted Quoll, commenced underground high grade nickel ore production in November 2011.
STRUCTURE
Western Areas is a Company limited by shares that is incorporated and domiciled in Australia. Western Areas has
prepared a consolidated fi nancial report incorporating the material entities that it controlled during the fi nancial year,
which are shown below along with the principal assets of each:
Bacterial Heap Leach
Worldwide Patents
Full Laboratory and
Management Team
Finland
VMS Deposits
Polymetallic
Outokumpu Copper
FinnAust
Mining PL C
84 %
B i o heap Ltd
100%
East Bull Lake (65%) - Ni/PGM
Makwa - Ni/PGM
Mayville (M2) - Cu/PGM
Corp
M
usta
oratio
n
g
C
a
n
n
(
a
1
M
i
n
e
r
a
d
9
a
.
9
l
s
%
)
)
Bullfinch North - Ni
Mt Alexander - Ni
Southern Cross
Goldfileds
Traka Resources
A
u
s
t
E
x
p
l
o
A
s
s
e
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s
a
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i
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e
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s
e
%
0
0
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(
.
d
t
L
y
t
el P
k
Western Areas Ltd
2 Operating Mines
Flying Fox - Ni
Spotted Quoll - Ni
o
n
Forresta n i a W
(100%) (Ni , A u ) Nic
Lounge Lizard - Ni
Diggers South - Ni
Sunrise - Ni
Mt Gibb - Ni
New Morning - Ni
Cosmic Boy - Ni
Lake King - Ni
Daybreak - Ni
Hatters Hill - Ni
Gold Rights
FORRESTANIA SAFETY
At the end of January 2013, the FNO 12 month rolling Loss Time Injury (LTI) frequency rate dropped to zero for the
fi rst time since operations began in December 2004. However, the LTI Frequency Rate rose to 0.83 at the end of June,
ending a 509 day period of zero LTI’s. This was due to a soft tissue strain injury requiring remedial surgery resulting in a
single LTI. Underpinning this excellent safety performance is Western Areas and its contractor’s ongoing commitment to
proactive risk management.
At the end of FY13, the Flying Fox mine has been 684 days Lost Time Injury (LTI) free and the Spotted Quoll mine has
not recorded any LTI’s to date (806 days).
The Western Areas management, safety teams and site contractors have worked closely and collaboratively to
investigate incidents and close out corrective actions as soon as possible.
6
6
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Rope Rescue Training at Forrestania
Native seedlings ready for rehabilitation planting
During the year, training in the Incident Cause Analysis
Method (ICAM) Incident Investigation methodology was
conducted and work continues to improve the quality and
outcomes of incident investigations.
Safety training has focused on the needs of the various
work areas and the special skills required by the Emergency
Response Team. Training has included Senior First Aid,
vehicle extrication, confi ned space rescue, vertical (rope)
rescue and fi re fi ghting. A series of interactive on-line
training modules have been developed to include company
policy awareness and other OH&S subjects.
FORRESTANIA ENVIRONMENTAL ACTIVITIES
A high standard of environmental management has
been maintained at the FNO for the fi nancial year with
all activities compliant with statutory regulations and
licence conditions. Some of the notable environmental
undertakings onsite for the year include the following:
• • Continued support of biodiversity conservation
initiatives within the Forrestania area and regional
Western Australia. These commitments include; funding
of a research program over a fi ve year period studying
the Carnaby’s Black Cockatoo within the south eastern
wheatbelt area; sponsorship of the Perth Zoo’s Western
Quoll exhibit and a continuation of our sponsorship
of the Eastern Wheatbelt Declared Species Group wild
dog control program which aims to reduce impact of
wild dog incursions on livestock holdings in the eastern
wheatbelt agricultural zone.
• • Voluntary reporting of greenhouse gas emissions and
assessment of climate change risks and opportunities
has been undertaken through the international
Carbon Disclosure Project (CDP). Participation in the
CDP provides a valuable tool for analysis of climate
change related risks and opportunities aff ecting our
environmental performance.
• • Involvement, as a member of the core planning team
and as a stakeholder, in the Shire of Kondinin Gondwana
Link group who are developing a conservation action
plan for the portions of the Great Western Woodlands
located in both the Shire of Kondinin and the Shire of
Dundas. Development of the plan is ongoing.
• • Participation in the Energy Effi ciency Opportunities
program provided by the Commonwealth Government
Department of Resources, Energy and Tourism. This
program aims to encourage industry to assess and fi nd
opportunities to reduce their energy usage and carbon
emissions.
• • Participation in the Jobs and Competitiveness Program
run by the Commonwealth Government Department of
Industry, Innovation, Climate Change, Science, Research
and Tertiary Education. This program is aimed at
providing assistance over the fi rst fi ve years of carbon
pricing to companies that produce signifi cant carbon
pollution but which are constrained in their capacity to
pass through costs in the global market place (i.e. trade
exposed).
• • Substantial completion of the FNO Mine Closure Plan in
line with the Department of Mines and Petroleum and
Environmental Protection Authority guidelines.
• • Progressive rehabilitation continues throughout the
Forrestania operations in line with our commitment
to return the areas disturbed by mining to a stable,
self sustaining vegetation complex similar to the
surrounding landforms. During the fi nancial year, 9,000
seedlings were planted across both the Flying Fox and
Spotted Quoll minesites.
• • Commencement of planning for the development of
Western Areas inaugural Sustainability Report which will
summarise company performance against selected key
sustainability indicators.
Environmental Technician, Duane Byrnes,
undertaking seedling planting at Spotted Quoll
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
7
7
OPERATIONS
REVIEW
FLYING FOX MINE
SPOTTED QUOLL MINE
By the end of the fi nancial year, the Hanna Decline
was advanced to a depth of 410m (990m RL) below
the surface with over 2.2km of lateral decline metres.
Approximately 2.8km of capital mine development has
been completed, as well as approximately 7.2km of total
development.
The top stoping block between 1230 and 1125 levels
has progressed well for the year with two full levels
fully extracted (1195 and 1185). A second stoping block
between the 1125 and 1110 levels was brought online with
two stope panels completed during the last quarter. The
development of the second stoping block will facilitate
Spotted Quoll steady state production at 12,000 nickel
tonnes per year.
The paste-fi ll plant started operation in October 2012
and by the end of the fi nancial year had delivered a
total of 21,800 m^3 into stope voids, which was in-line
with budget targets. The paste-fi ll plant and associated
reticulation network has performed very well for the
year and paste-fi lling is now established as a reliable
production activity.
By the end of the fi nancial year, the Streeter Decline
was advanced to a depth of 1,191m below surface,
with total decline development at just over 8.0km.
Approximately 22.3km of capital mine development has
also been completed, as well as approximately 35.6km
of total development. Decline capital development was
not a priority throughout the year as current mining
levels already provide full access to all T5 ore reserves
above the 335 level. The Streeter Decline was advanced
approximately 360m laterally during the year to access
ore below the 335 horizon.
Development of both the T4 and T5 orebodies is eff ectively
complete, however minimal small profi le development was
undertaken on the southern fringes of the orebody. Some
narrow vein development was undertaken on several T4
and T5 levels, whilst bulk Avoca longhole mining methods
were continued in the T5 core area.
The mine has continued to operate as a predominately
production focussed mine with stoping methods
generating the majority of ore production. Geotechnical
conditions below 1km depth continue to be relatively
benign and ground conditions in the production stopes
are as expected.
The use of hand held air-leg techniques on the narrower
fringes of both the T4 and T5 ore zones continued during
the year and enabled the mine to eff ectively extract these
narrower sections of the orebody without excessive waste
rock dilution.
No major geotechnical issues have occurred throughout
the year and mine dewatering quantities have remained
at relatively low levels.
High-grade Nickel-bearing
massive sulphide (pentlandite) -
Nickel tenor = 12% Ni
Face Grade = 10.6% Ni
4.5m
Disseminated
meta-sediment
1% Ni
5.5m
295 South ore drive showing face of massive sulphide
Massive sulphides in the 1095 Ore Drive face
8
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Cosmic Boy Concentrator at dawn
MINE ORE PRODUCTION
Tonnes Mined
Flying Fox
Ore Tonnes Mined
Grade
Ni Tonnes Mined
Spotted Quoll - Underground
Ore Tonnes Mined
Grade
Ni Tonnes Mined
Total - Ore Tonnes Mined
Grade
Total Ni Tonnes Mined
FLYING FOX PRODUCTION
2012/2013
Sep Qtr
Dec Qtr
Mar Qtr
Jun Qtr
102,218
5.0%
5,129
43,581
5.4%
2,375
89,846
4.9%
4,380
50,907
5.1%
2,577
82,668
4.9%
4,081
59,335
5.2%
3,066
145,799
140,753
142,003
5.1%
7,504
4.9%
6,957
5.0%
7,147
73,716
4.7%
3,447
53,465
4.8%
2,584
127,181
4.7%
6,031
FY
Total
348,448
4.9%
17,037
207,288
5.1%
10,602
555,736
5.0%
27,639
Tn's
Ni %
Tn's
Tn's
Ni %
Tn's
Tn's
Ni %
Tn's
During the year, Western Areas mined a total of 348,448 ore tonnes at an average grade of 4.9% nickel for 17,037
contained nickel tonnes which included 109,008 ore tonnes @ 4.4% for 4,750 nickel tonnes from the Lounge Lizard
tenements.
SPOTTED QUOLL PRODUCTION
During the year, Western Areas mined a total of 207,288 ore tonnes at an average grade of 5.1% for 10,602 contained
nickel tonnes.
COSMIC BOY CONCENTRATOR PRODUCTION
Tonnes Milled and Sold
Sep Qtr
Dec Qtr
Mar Qtr
Jun Qtr
2012/2013
FY
Total
Ore Processed
Grade
Ave. Recovery
Ni Tonnes in Concentrate
Ni Tonnes in Concentrate Sold
Total Nickel Sold
Tns
%
%
Tns
Tns
Tns
142,795
151,855
145,348
146,256
586,254
5.3%
92%
6,951
6,923
6,923
4.9%
90%
6,722
6,829
6,829
5.0%
91%
6,611
6,845
6,845
5.1%
89%
6,634
7,222
7,222
5.1%
91%
26,918
27,819
27,819
For the fi nancial year 2013, the Cosmic Boy Concentrator treated 586,254 tonnes at an ore grade of 5.1% nickel. A total
of 181,608 tonnes of concentrate was produced at 14.8% nickel containing 26,918 nickel tonnes. Nickel recovery for the
year averaged 91%.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
9
OPERATIONS
REVIEW
NICKEL SALES
A total of 190,840 tonnes of concentrate was delivered into the off take contracts during FY 2013. This concentrate
contained a total of 27,819 tonnes of nickel.
The second off take agreement with Jinchuan for 15,000 tonnes of nickel in concentrate was completed ahead of
schedule in February 2013. The third off take with Jinchuan commenced in March 2013. To date, 6,615 tonnes of nickel in
concentrate has been delivered under this off take arrangement.
The 30 June 2013 concentrate stockpile at Cosmic Boy stands at 1,383 tonnes at a grade of 14.1% nickel containing
195 tonnes of nickel metal. The reduction in the concentrate stockpile over the year refl ected ongoing logistical
improvements with container turnaround times from Asia.
Stockpiles
Ore
Grade
Concentrate
Grade
Contained Ni in Stockpiles
COST OF PRODUCTION
2012/2013
Sep Qtr
Dec Qtr
Mar Qtr
Jun Qtr
179,968
168,866
160,884
138,862
4.2%
7,118
14.3%
8,625
4.3%
5,872
14.2%
8,074
4.3%
2,989
14.8%
7,330
4.0%
1,383
14.1%
5,700
Tns
%
Tns
%
Tns
The annual cash cost of nickel in concentrate was A$2.68/lb which puts Western Areas as the lowest cost nickel miner
in Australia.
Financial Statistics
Group Production Cost/lb
Mining Cost (*)
Haulage
Milling
Admin
By Product Credits
Cash Cost Ni in Con (***)
A$/lb
A$/lb
A$/lb
A$/lb
A$/lb
A$/lb
Cash Cost Ni in Con (***)
US$/lb (**)
Exchange Rate US$ / A$
2012/2013
Sep Qtr
Dec Qtr
Mar Qtr
Jun Qtr
1.82
0.09
0.40
0.20
(0.02)
2.49
2.59
1.04
2.27
0.05
0.41
0.17
(0.02)
2.89
3.00
1.04
2.23
0.05
0.41
0.19
(0.02)
2.86
2.97
1.04
1.87
0.05
0.38
0.18
(0.02)
2.46
2.44
0.99
FY
Total
2.05
0.06
0.40
0.19
(0.02)
2.68
2.75
1.03
(*) Mining Costs are net of deferred waste costs and inventory stockpile movements
(**) US$ FX for Relevant Quarter is RBA ave daily rate (Jun Qtr = A$1:US$0.99)
(***) Payable terms are not disclosed due to confi dentiality conditions of the off take agreements. Cash costs exclude royalties.
Note: Grade and recovery estimates are subject to change until the fi nal assay data are received.
10
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
OPERATIONS
REVIEW
FLYING FOX ORE RESERVES / MINERAL RESOURCES
The T5 orebody mineral resource estimate was updated following additional drilling. During the September quarter 2012
the upgrade resulted in an increase of 1,196 nickel tonnes, net of mining depletion. A long section of the T5 orebody is
shown below.
Indicated Mineral Resources (Excluding Disseminated
Zone) 1,509,983 tonnes @ 5.7% Ni (86,548 Ni Tonnes)
Inferred Mineral Resources (Excluding Disseminated
Zone) 166,594 tonnes @ 5.0% Ni (8,308 Ni Tonnes)
T4T4
n
e
p
O
n
o
i
t
a
s
i
l
a
r
e
n
M
i
T5T5
T7T7
Mineralisation open at depth
Figure 1: Flying Fox longitudinal section
Deposit
Classifi cation
Ore
tonnes
Grade
(Ni%)
Ni
tonnes
T1 South
T1 North
T4
T5 Flying Fox
T5 Lounge Lizard
T7
Indicated
65,600
Inferred
35,200
Indicated
45,400
Inferred
12,700
Indicated
147,000
Inferred
14,680
Indicated
562,500
Inferred
12,400
Indicated
628,800
Inferred
82,100
Indicated
60,593
Inferred
9,514
Flying Fox
Total
1,676,487
3.9
4.9
4.2
4.8
5.0
3.9
6.2
4.3
5.8
5.6
5.4
3.1
5.7
2,580
1,720
1,900
610
7,380
580
34,860
540
36,560
4,560
3,268
298
94,856
Flying Fox mineral resource statement (excluding Disseminated Resources)
An updated Flying Fox ore reserve estimate was completed
during the December 2012 quarter. The 30 June 2012 ore
reserve, net of mining depletion, is summarised in the
table below.
Deposit
Classifi cation
Ore
tonnes
Grade
(Ni%)
Ni tonnes
Flying Fox
Probable
1,670,900
4.0
67,000
Flying Fox ore reserve statement
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
11
OPERATIONS
REVIEW
SPOTTED QUOLL ORE RESERVES / MINERAL
RESOURCES
During the past 12 months, the mineral resource
statement for Spotted Quoll North was updated based
on additional surface drilling results which resulted in an
overall resource increase of approximately 51,000 tonnes
@ 11% Ni for 5,700 Ni tonnes at the end of September.
A longitudinal section of the Spotted Quoll deposit is
shown below.
Indicated Mineral Resource
2,379,500 tonnes @ 6.0% Ni
(144,010 Ni Tns)
Inferred Mineral Resource
539,700 tonnes @ 5.1% Ni
(27,510 Ni Tns)
m
0
0
9
240m
Figure 2: Longitudinal section of the Spotted Quoll main and north
deposit with Mineral Resources as at 30 June 2013
The updated Spotted Quoll mineral resource statement,
net of mining depletion, is summarised in the table below.
Classifi cation
Ore tonnes
Grade (Ni%)
Ni tonnes
Indicated
Inferred
Total
2,379,500
539,700
2,919,200
6.0
5.1
5.9
144,010
27,510
171,520
Spotted Quoll mineral resource statement
The updated Spotted Quoll ore reserve statement, net mining
depletion at year end is summarised in the table below.
Classifi cation
Ore tonnes
Grade (Ni%)
Ni tonnes
Probable
2,898,500
4.2
121,400
Spotted Quoll ore reserve statement
Scanning electron microscopy image of BioHeap’s mineral leaching
microbes (yellow, rod-shaped) attached to sulphide minerals (purple-
blue crystals) at 4,500 magnifi cation.
BIOHEAP
During the year, signifi cant third party testwork has
progressed to variability testing in an external laboratory
using a commercial fl uidised bed reactor (FBR). This work
will continue for several months to enable the client to
evaluate the FBR before potentially moving to an onsite
pilot test program.
The BioHeap team received approaches from prospective
clients to conduct testwork on base metal and gold
projects. BioHeap proposals are generally confi dential in
nature and the model for generating returns for Western
Areas will vary depending on the type of work being
undertaken. Additional proposals were prepared for other
companies following presentations on BioHeap’s new high
pH leaching microbial culture and the use of diagnostic
testwork utilised in the early stages of testing at the ALTA
2013 Nickel Cobalt Copper, Uranium and Gold conference in
Perth. The presentation and trade booth were well received
and the conference has generated interests which have
lead to potential clients for BioHeap work.
Testwork on a process stream from the Cosmic Boy
Concentrator (CBC) was completed and the encouraging
results are being used to conduct a preliminary
engineering study. The testwork on the process stream
from CBC has verifi ed the capability of BioHeap’s high
pH microbial cultures. This study has the potential for
BioHeap to provide unique solutions to concentrators
around the world for process streams that world normally
be rejected from fi nal concentrates. The data generated
from the developmental and CBC test on work using
BioHeap’s high pH leaching microbial culture was also
used to strength its patent application.
Procedural, technology and equipment enhancements
continue to be made at BioHeap’s laboratory to further
improve effi ciency and reliability of research and testwork
programs with the aim of reducing the administrative load
on BioHeap’s key scientists and researchers, allowing them
to focus on innovating and improving the technology.
A marketing campaign is planned for the coming year to
promote the BioHeap™ technology to the mining industry
and to invite companies considering processing options
for sulphide ores to consider the use of the BioHeap™
technology. Alliances and working relationships with
research institutes, engineering fi rms and testwork
facilities continue to be formed and strengthened.
INFRASTRUCTURE
FNP Internal Haul Road
The 16km internal haul road between the Spotted Quoll
minesite and the Cosmic Boy concentrator plus a buried
110mm diameter potable water pipeline following the
haul road route, was completed and operational by the
end of October 2012. The new internal haul road has
almost halved surface ore haulage costs from both mines
to the Cosmic Boy concentrator.
12
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
OPERATIONS
REVIEW
WESTERN AREAS ORE RESERVE / MINERAL RESOURCE STATEMENT -
EFFECTIVE DATE 30TH JUNE 2013
Deposit
Ore Reserves
1. Flying Fox Area
2. Spotted Quoll
3. Diggers Area
TOTAL ORE RESERVES
Mineral Resources
1. Flying Fox Area
Digger South
Digger Rocks
T1 South
T1 North
T4 FF
T5 FF Massive Zone
LL Massive Zone
T6
T7 FF
Total High Grade FF- LL
T5 FF Disseminated Zone
T5 LL Disseminated Zone
Total Disseminated FF - LL
Total Flying Fox - Lounge Lizard
New Morning / Daybreak
Massive Zone
Disseminated Zone
Total New Morning / Daybreak
Spotted Quoll
Total Spotted Quoll
TOTAL WESTERN BELT
Beautiful Sunday
2. Cosmic Boy Area
Cosmic Boy
Seagull
TOTAL COSMIC BOY AREA
3. Diggers Area
Diggers South - Core
Diggers South - Halo
Digger Rocks - Core
Digger Rocks - Core
Digger Rocks - Halo
Purple Haze
TOTAL DIGGERS AREA
TOTAL MINERAL RESOURCES
Tonnes
Grade Ni%
Ni Tns
JORC Classifi cation
1,670,900
2,898,500
2,016,000
93,000
6,678,400
65,600
35,200
45,400
12,700
147,000
14,680
562,500
12,400
628,800
82,100
-
60,593
9,514
1,676,487
197,200
357,800
4,428,000
4,983,000
6,659,487
321,800
93,100
1,069,800
659,200
2,143,900
2,379,500
539,700
2,919,200
480,000
12,202,587
180,900
195,000
375,900
3,000,000
4,800,000
54,900
172,300
1,441,000
560,000
10,028,200
22,606,687
4.0
4.2
1.4
2.0
3.3
3.9
4.9
4.2
4.8
5.0
3.9
6.2
4.3
5.8
5.6
0.0
5.4
3.1
5.7
0.9
1.0
0.8
0.8
2.0
3.7
3.5
0.9
0.9
1.4
6.0
5.1
5.9
1.4
2.8
2.8
2.0
2.4
1.5
0.7
3.7
1.1
0.7
0.9
1.0
2.0
67,000
Probable Ore Reserve
121,400
Probable Ore Reserve
28,950
1,850
219,200
Probable Ore Reserve
Probable Ore Reserve
Probable Ore Reserve
2,580
1,720
1,900
610
7,380
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
580
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Inferred Mineral Resource
Indicated Mineral Resource
34,860
540
36,560
4,560
-
3,268
298
94,856
1,590
3,460
36,000
41,050
135,906
12,010
3,260
9,650
5,780
30,700
144,010
27,510
171,520
6,720
344,846
5,050
3,900
8,950
44,700
35,600
2,030
1,850
10,350
5,040
99,570
453,366
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
13
OPERATIONS
REVIEW
EXPLORATION
FORRESTANIA EXPLORATION
Western Areas continues to actively explore the wholly owned and Joint Venture tenement package at Forrestania. The
area comprises some 900km2 and covers over a 125km strike length of prospective stratigraphy, Figure 3. The exploration
activities are directed towards identifying new deposits, evaluating potential extensions to the existing Flying Fox and
Spotted Quoll deposits as well as new discoveries, such as those recently announced at New Morning. The majority of
the work continues to take place along what the Company describes as the Western Ultramafi c Belt (“WUB”) which runs
for 25km and contains the bulk of the known high grade deposits at Forrestania, including Flying Fox, Spotted Quoll and
New Morning. The WUB has a total known endowment of over 450,000t of contained nickel metal. The decision to direct
exploration resources to the WUB, starting at New Morning, has in a relatively short time period, delivered the Sunrise
discovery and more recently the discovery below the existing New Morning deposit. The 6km zone between the Flying
Fox and Spotted Quoll mines remains largely untested with no eff ective deep drill testing (T5 depth equivalent) and the
evaluation of this area continues and will remain a priority in the coming year.
Assessment of the existing resources outside the main deposits was undertaken, including that at Seagull (2km north of
Cosmic Boy) and Beautiful Sunday (7.5 km north of Flying Fox), with active exploration at Beautiful Sunday still in progress.
Prospectivity reviews and subsequent generation of drill targets to locate new nickel sulphide deposits in the Forrestania
Project region are undertaken on a continual basis. With a strong portfolio of projects, priority areas where exploration
activities have either been undertaken or are planned to commence include the area between New Morning and Spotted
Quoll, New Morning north, the Boojum area (7km south of Spotted Quoll), the South Ironcap area (12km south of Cosmic
Boy), Hatters Hill (34km south of Cosmic Boy), and Mt Gibb (30km south of Diggers South). In addition to the above,
activities are also being undertaken on the ground acquired from Kagara, including at Lounge Lizard (south of the Flying
Fox Mine), T15 (12km south of Spotted Quoll) and Northern Estates areas (43km north of Flying Fox).
14
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Figure 3: Plan showing Forrestania tenements; mines and key prospects
OPERATIONS
REVIEW
New Morning
The New Morning area, situated approximately half
way between the existing Flying Fox and Spotted Quoll
operating mines, continues to be one of the key priority
targets for exploration. The New Morning mineralisation
comprises both the “basal contact” style as well as the
mineralisation discovered at Sunrise, 300m south east
of the high grade New Morning deposit, which occurs in
the hanging wall stratigraphy. This horizon is known to
occur along the length of the WUB but has received little
testing in the past, opening up the opportunity to locate
further deposits of this type. The drilling at Sunrise is now
complete and work at estimating a resource for this new
discovery is in progress.
The New Morning “basal contact” style mineralisation is
associated with a thick cumulate ultramafi c body (lava
channel?) which has a mineralised strike length of some
800m. The current resources include both high grade
massive nickel sulphides as well as disseminated sulphides.
During the later part of 2012, an assessment of the
potential for further high grade mineralisation within the
New Morning system highlighted the untested area below
the T3 fault (akin to the position of the T5 ore body at
Flying Fox). Drilling to test this area commenced during
the December quarter. The initial holes, NMD 161 (and
W1), intersected the mineralised contact (albeit weak) but
indicated the contact (T5 panel) much further west than
anticipated (a reverse fault). This lead to a hole (NMD177),
being drilled some 200m to the south, to intersect an
interpreted embayment in the footwall. NMD177 intersected
3.0m at 6.3% nickel, including 2.4m at 7.6% nickel from
1237.2m, released on 24 January 2013 and 2 February 2013.
The technical challenges of completing the subsequent
drilling from the hanging wall resulted in the decision to
commence a new parent hole from surface drilling from the
footwall position. The footwall hole (NMD182) has allowed
subsequent wedges to be drilled with increased effi ciency with
the drilling occurring in more favourable ground conditions. It
should also result in an early assessment of footwall ground
conditions if underground mining in this area is to proceed.
NMD182 successfully intersected high grade nickel sulphides,
released on 19 July 2013, intersecting 1.7m at 5.6% Ni from
1241.9m. Most recently, the drilling has returned both the
highest and widest intercept to date (NMD182, released on
30 August 2013 and 6 September 2013), 4.4m at 7.4% nickel,
including 3.6m at 8.7% nickel. Importantly the recent drilling
has confi rmed an approximate 150m down plunge extent of
mineralisation below the reverse fault. The mineralised extent
remains open below and laterally to this. Initial geological
interpretations continue to indicate that the mineralised
position lies below the reverse fault, in a similar manner to the
T4 mineralisation relative to the T3 fault junction at Flying Fox.
Further holes will be drilled from the parent hole (NMD182),
in combination with data from down hole electro magnetic
surveys, to test both the down plunge extensions of the
existing intersections and also the interpretation that the
mineralisation is getting better with depth. Further testing of
the strike continuity of the existing intersections will also be
undertaken.
The exploration eff orts remain fi rmly committed to fully
test the newly discovered high grade mineralisation at
New Morning. The ability to access any discovery in this
zone is believed to be extremely capital effi cient due to the
proximity to mature infrastructure in the form of underground
development. The Company considers that the infrastructure
investment in either Spotted Quoll or Flying Fox would be used
in accessing any economic deposit.
Figure 4: Interpreted Long Projection of the Western Belt footwall contact extending 6km from Spotted Quoll to Flying Fox
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
15
OPERATIONS
REVIEW
Drilling the footwall hole at New Morning
Forrestania Project Exploration
As part of the review of the prospectivity of the WUB,
approximately 10km long strike of highly prospective
basal ultramafi c contact north of Flying Fox was assessed.
At Beautiful Sunday, located some 8km north of Flying
Fox and on the northern end of the WUB, a program
of drilling has been designed to test the interpreted
potential mineralisation down-plunge to the south and
to test the extent and plunge direction of the existing
mineralisation. The ‘true footwall’, is under tested
with most previous holes terminating in banded-iron
formation. Drilling to date has intersected minor nickel
sulphides. As this work is at an early stage, it is not
possible to determine the signifi cance of the results.
This evaluation work is expected to continue through the
coming year.
As part of the continued priority assessment of the 6km
corridor between Spotted Quoll and Flying Fox mines,
the Company is assessing the highly prospective section
between the Lounge Lizard deposit (currently mined from
Flying Fox) and the New Morning deposit, Figure 5. The
majority of the northern portion of this area was formally
held by Kagara Limited (Kagara), but was acquired as part
of the purchase of Kagara’s nickel tenements in 2012. The
Lounge Lizard area has had little deep drilling and the
majority of the near surface drilling was directed towards
gold exploration. In the coming year, the intention is to
test for extensions of the existing mineralisation, both
north of New Morning and south of Flying Fox as well
testing the area in between with deeper holes, drilled at
the equivalent level of the T1/T2 Flying Fox mineralisation.
With the purchase of Kagara’s nickel tenements,
approximately 4.5km of the southern portion of the
WUB was acquired in the T15, Arrowhead and Boojum
areas. Previous exploration of this area has been
limited. Evaluation of this area, some 10km south of
Spotted Quoll, continued with the drill testing of EM/
DHEM anomalies at the T15 prospect and targets where
cumulate ultramafi cs are known to occur at the other
prospects. Although the presence of cumulate ultramafi cs
was confi rmed, the EM anomalies were shown to be
sourced from non nickeliferous massive sulphides.
Data from the completed programs are being used to
generate further drilling priorities and targets in this area,
particularly where the magnetic signatures associated
with the cumulate rocks indicate they extend into areas
where there has been no drilling.
Exploration activities, including drilling, were also
undertaken at a number of prospects outside the WUB
in the Forrestania area, including the Purple Haze area,
Crazy Chameleon, Hatters Hill, and Mt Gibb and Northern
Estates areas.
At Purple Haze, a program of 9 RC holes for 1,812m tested
a number of areas that had returned anomalous results
indentifi ed from previous drilling. Although a number of
long intervals of lower grade nickel assays were returned
from the drilling, no high grade nickel sulphides were
intersected. Further work will be undertaken to determine
if the anomalous results are associated with a halo to
higher grade mineralisation.
16
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
OPERATIONS
REVIEW
Geologists examining core at Forrestania
Figure 5: Interpreted Long Projection of the footwall contact at New Morning
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
17
OPERATIONS
REVIEW
Mt Gibb (WSA 70% interest)
REGIONAL EXPLORATION
The Mt Gibb Project comprises a Joint Venture with
Great Western Exploration Limited (GTE) over a 303km2
tenement area in part of the Forrestania region. The bulk
of the Project area lies along the south-eastern margin of
Western Areas Forrestania tenements.
During the year, two drilling programs (initial RC drilling -
6 holes for 940m, with follow up diamond 2 DDH holes for
205.1m) was undertaken on targeting gold mineralisation.
Assay results from four of the holes has returned patchy
elevated results with the best result from HCRC005, which
returned 5m @ 3 g/t from 48m. The two subsequent
diamond holes targeted gold intersections from the
previous RC drilling. Twinning (HCD003) of the previous
hole HCRC005 (which intersected 9m at 1.9 g/t from 43m,
including 5m at 3.0 g/t from 47m) returned 10.5m at 3.06
g/t from 48.5m, including 5m at 5.25 g/t from 53m, and
6m at 1.17 g/t from 78m. Further drilling following up
these results is planned later in the year.
A review of the previous drilling by Western Areas
indicates there are areas of potential mineralisation that
was not tested previously. Further exploration activities
are planned by the Company to test the nickel potential,
including further testing of the southern portion of the
project area with EM geophysics and subsequent drill
testing of any anomalies generated in the coming year.
Western Areas has consolidated substantial nickel
interests in the “Central Yilgarn Nickel Province” which
extends approximately 450km. During the last 12 months,
results from a number of the projects determined
that there was no potential to discover economic
mineralisation and as a consequence the number of the
Company’s active projects within the area was lessened.
At Sandstone, the outcomes of a detailed prospectivity
analysis of the Project have shown that the extensive
exploration programs completed by both Western Areas
and Troy Resources have eff ectively screened the belt
for a camp scale nickel deposit. While nickel sulphides
were discovered in the belt during the exploration work
(the fi rst of their kind), the volume and nature of the
mineralisation and host ultramafi cs suggests that the
stratigraphy is likely not to be prospective for large
komatiitic nickel sulphide deposits. On this basis, the
Company elected to exit from the Sandstone Nickel Joint
Venture re-focusing its regional exploration and resources
to other more prospective areas. At Koolyanobbing,
exploration during the year included testing the extents
of the known nickel mineralisation and EM anomalies
that were identifi ed during the previous phase of
exploration. No signifi cant anomalism was returned from
the drilling and no further work is planned. The outcomes
were similar for the Kawana Joint Venture and Mt Jewel
projects with no further work being justifi ed.
18
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Figure 6: Regional geology showing WSA interests
OPERATIONS
REVIEW
Exploration activities will continue to be conducted over
the remaining projects including the Southern Cross
Goldfi elds Joint Venture, the Lake King Joint Venture and
Mt Gibb Joint Venture (see below). BHP Billiton continues
to manage the Mt Alexander Joint Venture with the
Company retaining a 25% interest.
With the evaluation of other areas of higher prospectivity,
the identifi cation of the West Musgrave area in the
eastern portion of Western Australia saw the Company
enter into a Farm-in and JV with Traka Resources over
selected Traka tenements in that district.
Southern Cross Goldfi elds Limited Nickel JV (WSA
70% interest)
Target generation activities covering the other areas within
the Joint Venture tenure are now well advanced. A number
of prospective areas have been identifi ed for follow-up.
This includes the Marda area, which is interpreted to be a
tectonic intersection of the known mineralised stratigraphy
at Koolyanobbing (nickel), Trough Well (nickel) and Copper
Bore (base metals prospect). Regional fi eld activities have
been planned and are expected to commence shortly,
initially involving aircore drilling at the priority targets.
Lake King Joint Venture (WSA 70%)
The Lake King Joint Venture tenements cover a 40km long
nickel prospective belt located approximately 70km south
of Forrestania.
WSA has acquired 70% of Southern Cross Goldfi elds Limited
(SXG) nickel rights across much of its 3,300km2 tenement
portfolio in the Marda and Southern Cross regions of
Western Australia. The SXG tenement package covers the
north western portion of the Southern Cross-Bullfi nch
Greenstone Belt within the “Central Yilgarn Nickel Province”.
Work on the project area during the last 12 months
included the evaluation of prospective areas known to
contain cumulate ultramafi c rocks. Several programs of
MLEM surveys, aircore drilling (68 drill holes for 3,271m)
and, where warranted, follow up diamond drill testing was
completed over a number priority targets.
Initial work commenced within the Bullfi nch North region,
at the Trough Well area, where previous drilling had
intersected several zones of nickel sulphides over a strike
length of 800m within a classic Kambalda-style setting.
Although the presence of nickel sulphides was confi rmed
(TWD027 0.34m at 3.97% Ni from 42.7m), there was not
signifi cant encouragement to justify further exploration.
Although no nickel sulphides were identifi ed in the
programs, the “stratigraphic” drilling successfully
identifi ed further ultramafi c rocks, some along the
prospective “Nickel Hill” trend, and these will be the focus
of the next phase of exploration during the coming year.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
19
Aircore drilling at Lake King Nickel JV
OPERATIONS
REVIEW
Musgrave Nickel-Copper Joint Venture (WSA to earn
up to 70% interest)
On 1 July 2013 the Company announced the execution
of a Farm-in and Joint Venture Agreement with Traka
Resources Limited (“Traka”). The Agreement provides a
staged program for Western Areas to acquire up to a 70%
interest in a number of Traka’s core tenements within
the Musgrave region of Western Australia. The total area
included under the proposed Musgrave JV Project is
approximately 1,075km2.
The Musgrave region of Western Australia is known to
contain signifi cant amounts of nickel, copper and PGEs,
namely within the giant Nebo-Babel and recently discovered
Succoth deposits. The area also contains lesser known
(and smaller), but equally signifi cant high-grade nickel
and copper deposits. Western Areas plans to build on the
results generated by Traka’s exploration activities as well as
utilising its extensive in-house experience to focus on the
discovery of these higher grade mafi c hosted ore-bodies.
Additionally, further target defi nition work will be
undertaken on an existing EM anomaly (Finlay) that
has been confi rmed with ground geophysics recently
undertaken by Traka. It is anticipated these activities will
continue through to December 2013.
The Company’s goal with this project is to locate a
high grade intrusive orebody, rather than multi million
tonnages of low grade sulphides.
CANADIAN EXPLORATION
East Bull Lake Project - Ontario (WSA earning 65%)
Western Areas has a joint venture with Mustang Minerals
(TSX:MUM) to explore the East Bull Lake Project. East
Bull Lake is a 20km long mafi c intrusive complex which
consists of two separate zoned intrusions joined by a 5km
long feeder dyke.
Exploration activities are advancing, with the initial
program of Moving-Loop Electro-Magnetic (MLEM)
surveys over the most prospective target areas in
progress, Figure 7.
The assessment to determine the eff ectiveness of the
exploration completed to date is continuing. This work
will be used both in resolving the prospectivity of the
project and establishing future work requirements.
Figure 7: Interpreted geology of the JV tenure (blue), indicating known Ni-Cu deposits (green
stars), Finlay untested EM anomaly and priority target areas (red circles)
20
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
OPERATIONS
REVIEW
FINNAUST MINING PLC
FinnAust is exploring a number of base metal projects in
south-eastern Finland. The Company considers this region
represents a highly prospective metal province based on
favourable geology, widespread past mining activity and
numerous base metal occurrences.
A project review was conducted during 2012 which
concluded that:
1. 2013 drilling should focus on defi ning potential
resources in the Outokumpu Copper Project and
Hammaslahti VMS Project, 50km east of Outokumpu.
Both projects have signifi cant historic copper
production and exploration potential.
2. The prospective Outokumpu Mine Sequence (OKU)
appears to be widespread and relatively unexplored
along FinnAust’s holdings in the western part of the
Outokumpu copper belt.
3. Preliminary interpretation of data from an extensive
ZTEM survey conducted in mid 2012 suggests that
ZTEM is defi ning conductors and geological structures
to over 1km depth.
4. Western Areas is considering a number of options to
fund ongoing exploration in Finland and drill six high
priority targets at the Outokumpu and Hammaslahti
projects in 2013.
The 2013 drilling program (13 holes for 2,474.3m) was
completed on two targets, Teyrisuo and Kuusjärvi 15, in
the Outokumpu Copper Project and on the Hammaslahti
East target in the Hammaslahti Project area (Figure 8).
Drilling at Kuusjärvi 15 prospect showed the geophysical
target modelling has correctly interpreted the
geology with all but one hole intersecting rocks of the
prospective Outokumpu Mine Sequence, though no
copper mineralisation was intersected. Further drilling
is warranted at Kuusjärvi 15 where over a 5km section
of this same prospective prospect stratigraphy remains
untested, especially along strike towards Outokumpu.
Drilling at Teyrisuo between the old Outokumpu and
Vuonos mines on the Outokumpu Belt failed to intersect a
new Outokumpu assemblage with signifi cant size. However,
even a thin intercept of these rocks on a new position
requires further geophysical interpretation and modelling.
Drilling within the Hammaslahti VMS Project area tested
for potential extensions and repetitions 2km east of
the existing mine, where a strong ZTEM conductor is
interpreted to occur in a favourable structural setting.
The drilling intersected a number of conductive zones
(the interpreted source of the ZTEM anomaly). At the end
of the drilling program, the two last drill holes intersected
a similar lithological contact to that which hosts the
Hammaslahti Cu-ore deposit. Hydrothermal alteration on
the contact is not as strong as at the Hammaslahti mine,
but this alteration zone remains completely untested
along strike and with depth. Further geophysical modelling
and drilling is required to test this zone in the future.
Western Areas is currently advancing the potential
listing of FinnAust onto the London AIM. Should market
conditions and other factors be favourable, FinnAust will
be raising enough equity to fund two years of exploration
activity. Western Areas is targeting to complete the listing
by the end of 2013.
Figure 8: Magnetic image showing the Outokumpu Copper Project and Hammaslahti VMS Project
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
21
DIRECTORS’
REPORT
Left to right: Rick Yeates, Julian Hanna, Ian Macliver, Terry Streeter, Dan Lougher, David Southam, Robin Dunbar, Joe Belladonna.
The Directors of Western Areas Ltd submit herewith the fi nancial report of the Company for the fi nancial year ended
30 June 2013. Unless noted, all amounts in this report refer to Australian dollars. In order to comply with the provisions
of the Corporations Act 2001, the Directors’ Report follows:
INFORMATION ABOUT THE DIRECTORS
Directors
Terry Streeter
Dan Lougher
David Southam
Ian Macliver
Julian Hanna
Robin Dunbar
Rick Yeates
Non-Executive Chairman. Mr Streeter is a Perth based businessman with extensive experience in
exploration and mining companies and has held various interests in the nickel sulphide industry for over
30 years. Mr Streeter is a member of the Remuneration, Nomination and Treasury Committees.
Managing Director. Mr Lougher is a qualifi ed Mining Engineer with over 30 years experience in all
facets of resource and mining, project exploration, feasibility, development and operational activities
in Australia and overseas. Mr Lougher is a member of AUSIMM. Mr Lougher serves on the Nomination
Committee.
Executive Director. Mr Southam is a Certifi ed Practicing Accountant with more than 20 years experience
in accounting, banking and fi nance across the resources and industrial sectors. Mr Southam was
responsible for completing one of Australia’s largest project fi nancing transactions for 2010 and in
securing life of mine off take contracts with consortiums out of China.
Lead Independent Non-Executive Director. Mr Macliver is Managing Director of Grange Consulting Group
Pty Limited which provides specialist corporate advisory services to both listed and unlisted companies.
He has many years experience as a senior Executive and Director of both resource and industrial
companies, with particular responsibility for capital raising and other corporate initiatives. Mr Macliver
chairs the Treasury and Audit & Risk Management Committees and is a member of the Remuneration
and Nomination Committee. During the year, the Board unanimously endorsed appointing Mr Macliver
as the Lead Independent Non-Executive Director.
Non-Executive Director. Mr Hanna is a geologist with over 30 years experience in gold and base metal
exploration and mine development. He has a BSc. in geology, is a member of AusIMM and has been
involved in the discovery and development of several gold and base metal deposits.
Non-Executive Director. Mr Dunbar is based in Toronto, Canada and has held a number of senior
positions in both the commercial and corporate banking sectors and is currently the President
of Mustang Minerals Corp. Mr Dunbar is a member of the Audit & Risk, Nomination, Treasury and
Remuneration Committees.
Non-Executive Director. Mr Yeates is a Geologist with more than 30 years mining industry experience
in various roles and he has signifi cant experience across a wide range of resource projects around the
world. He is familiar with the ASX regulatory environments and has had exposure to international
resource funds and fi nancial institutions. Mr Yeates chairs the Remuneration and Nomination
Committee and is a member of the Treasury and Audit & Risk Management Committees.
22
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Name
T Streeter
J Hanna
D Lougher
R Dunbar
Company
Period of Directorship
Midas Resources Limited (Ceased)
February 2003 - April 2013
Fox Resources Limited
Since June 2005
Waratah Resources Ltd (Ceased)
January 2012 - October 2012
Mustang Minerals Corp
MOD Resources Ltd
Since December 2006
Since January 2013
Mustang Minerals Corp
Since January 2011
Mustang Minerals Corp
Lexam VG Gold Inc.
Aquila Resources Inc.
Since November 1997
Since September 2005
Since May 2006
D Southam
Padbury Mining Ltd (Ceased)
September 2011 - December 2011
R Yeates
I Macliver
Middle Island Resources Ltd
Since March 2010
Stratatel Ltd
Select Exploration Ltd
Otto Energy Ltd
Since July 2000
Since September 2010
Since January 2004
Mt Gibson Iron Ltd (Ceased)
February 2001 - November 2011
Port Bouvard Ltd (Ceased)
December 1994 - April 2011
Car Parking Technologies Ltd (Ceased)
May 2006 - February 2011
INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interest of the Directors or associates of the Directors in the shares and options of the
Company are:
Name
Ordinary Shares
Performance
Rights (*)
T Streeter
D Lougher
J Hanna
D Southam
R Dunbar
R Yeates
I Macliver
23,937,630
79,957
723,791
-
112,500
10,000
23,948
-
408,691
-
273,254
-
-
-
(*) None of the performance rights have vested at 30 June 2013.
All equity transactions with specifi ed Directors and specifi ed Executives, other than those arising from the exercise
of options, have been entered into under terms and conditions no more favourable than those the entity would have
adopted if dealing at arm’s length.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
23
DIRECTORS’
REPORT
COMPANY SECRETARY
Mr Joseph Belladonna is a Certifi ed Practicing Accountant and has been employed at Western Areas Ltd since 2005,
originally as Financial Controller and then as the Company Secretary and Chief Financial Offi cer. In his time at the
Company, he has been intimately involved in the accounting, debt fi nancing, corporate governance, capital raising and
fi nancial initiatives at the Company. Mr Belladonna has over 10 years experience in the resources industry including
listed gold and base metal companies in a range of management positions.
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
Information about the remuneration of Directors and senior management is set out in the remuneration report of this
Directors’ Report on page 35.
PERFORMANCE RIGHTS GRANTED TO DIRECTORS AND SENIOR MANAGEMENT
Performance Rights granted to Directors and senior management during the fi nancial year ended 30 June 2013 is set
out in the Remuneration Report of this Directors’ Report on page 37.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year consisted of mining, processing and sale of nickel
sulphide concentrate, the continued feasibility and development of the high grade nickel mines and the exploration for
nickel sulphides, other base metals and platinum group metals.
OPERATING AND FINANCIAL REVIEW
Income Statement
Consolidated revenue for the year decreased by 7.3% to $306.5 million, while gross profi t decreased by $49.5 million to
$46.7 million. This has resulted from a fall in the realised nickel price and the ore feed for the Group now being sourced
from two underground mines, rather than one open cut and one underground mine.
Consolidated net loss after tax (NLAT) for the Group amounted to $94.1 million, a decrease of $134.3 million from the
results reported for the year ended 30 June 2012. The primary driver impacting the change in earnings were impairment
and write-off charges to the Income Statement of $142.4 million ($99.7 million tax eff ected) and a reduction in the
average realised nickel price from US$8.07/lb in the prior fi nancial year to US$7.31/lb for the year ended 30 June 2013.
Impacting net loss after tax of $94.1 million for the year were the following pre-tax non-cash items:
• • Depreciation charges of $12.9 million
• • Amortisation charges of $70.2 million
• • Impairment and write-off charges of $142.4 million
• • Convertible bond accretion expense of $7.5 million
These non-cash items amounted to $233.0 million.
Statement of Financial Position
Total assets at reporting date were $518.0 million, representing a decrease of $257.0 million from 2012. Cash and cash
equivalents decreased by $84.8 million, mainly as a result of the retiring convertible bond of $105.5 million. Mine
development decreased by $53.9 million, which includes impairment and write-off charges of $48.3 million. Exploration
and evaluation expenditure decreased by $101.1 million, which includes impairment and write-off charges of $94.1 million
and a transfer of exploration expenditure to mine development of $30 million. Stockpiles decreased by $11.8 million
mainly due to lower concentrate stockpiles and the planned throughput of stockpiled ore from the Tim King Pit.
Total liabilities at reporting date were $275.0 million, a decrease of $210.1 million from 2012. The decrease is mainly
attributable to the repayment of the $105.5 million convertible bond in July 2012 and the full repayment of the $45.0
million drawn portion of the corporate loan facility. The deferred tax liability decreased by $30.6 million, mainly due to
impairment charges, and trade and other payables decreased by $29.5 million.
Total equity attributable to the shareholders has decreased by $46.9 million to $242.9 million. This includes a capital raising
of $65.0 million, off set by dividend payments to shareholders totalling $14.7 million, and accounting losses of $94.1 million.
24
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
Statement of Cash Flows
Cash at bank on 30 June 2013 totalled $80.7 million. The decrease of $84.8 million from the corresponding period
resulted from cash repayment of $105.5 million of the convertible bond, full repayment of the $45 million corporate
facility and $14.3 million for the purchase of the Outokumpu royalty. This was partially off set by a capital raising of
$65.0 million. The average monthly nickel price weakened from US$8.07 in the prior fi nancial year to US$7.31 for the
year ended 30 June 2013, while the Australian Dollar traded at an average of $1.03 to the US$ during the fi nancial year.
Consolidated cash fl ow from operations was $112.1 million, representing a decrease of $47.1 million from the prior year.
This decrease was mainly driven by a weaker average realised nickel price, lower net interest received, higher operating
expenses with a shift to underground mines and increased tax payments. Partially off setting was an increase in sales
volumes and slightly lower royalties associated with a weaker nickel price.
Net cash used in investing activities decreased from the corresponding period by $117.2 million to $93.7 million as
a result of the purchase of Kagara Nickel Pty Ltd for $71.1 million (including stockpiles and stamp duty) in the prior
year. Mine development and asset purchases decreased by $26.5 million to $54.7 million for the year. $24.5 million
was invested in exploration and evaluation activities, representing a decrease of $18.2 million from the prior year.
Exploration and evaluation includes the Company’s investment into FinnAust which amounted to $4.3 million for the
current fi nancial year.
Net cash from fi nancing activities decreased by $111.4 million, primarily due to the repayment of the convertible bond
of $105.5 million and the full repayment of the $45.0 million corporate loan facility, partially off set by a capital raising
of $65.0 million. Two dividend payments totalling $14.7 million were paid during the fi nancial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
No signifi cant changes in the Consolidated Group’s state of aff airs occurred during the fi nancial year.
SUBSEQUENT EVENTS
There have been no subsequent events after 30 June 2013 which has a material eff ect on the fi nancial statements for
the year ended 30 June 2013.
FUTURE DEVELOPMENTS
Disclosure of information regarding likely developments in the operations of the Consolidated Entity in future fi nancial
years and the expected results of those operations is likely to result in unreasonable prejudice to the Consolidated
Entity. Accordingly, this information has not been disclosed in this report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity has conducted exploration and development activities on mineral tenements. The right to
conduct these activities is granted subject to State and Federal environmental legislation and regulations, tenement
conditions and Mining Proposal commitments. The Consolidated Entity aims to ensure that a high standard of
environmental management is achieved and, as a minimum, to comply with all relevant legislation and regulations,
tenement conditions and Mining Proposal commitments. WSA has achieved a high level of compliance with all
environmental conditions set for its projects and actively strives for continual improvement.
DIVIDENDS PAID OR RECOMMENDED
In respect of the fi nancial year ended 30 June 2012, the Directors declared the payment of a fi nal, 30% partially franked
dividend of 6 cents per share to the holders of fully paid ordinary shares to be paid on 12 October 2012.
In respect of the half year ended 31 December 2012, an interim fully franked dividend of 2 cents per share was declared
and subsequently paid to the holders of fully paid ordinary shares on 4 April 2013.
Given the result for the fi nancial year and in recognition of low commodity prices, the Board has decided not to pay a
fi nal dividend in respect of the fi nancial year ended 30 June 2013. The Board believes this represents prudent capital
management, and note that dividends declared for the year (2 cents per share interim dividend) represents a payout
ratio of approximately 70% of underlying NPAT.
SHARE OPTIONS
No options were issued during the fi nancial year and all existing options expired.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
25
25
DIRECTORS’
REPORT
INDEMNIFICATION OF OFFICERS AND DIRECTORS
During the fi nancial year, the parent entity paid a premium under a contract insuring all Directors and Offi cers of the
Company against liability incurred in that capacity. Disclosure of the nature of liabilities insured and the premium is
subject to a confi dentiality clause under the contract of insurance.
The Company has not otherwise, during or since the end of the fi nancial year, except to the extent permitted by law,
indemnifi ed or agreed to indemnify an offi cer or auditor of the Company against a liability incurred as such an offi cer
or auditor.
DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the parent entity’s Directors and meetings of the sub-committees
of the Board held during the year ended 30 June 2013 and the number of meetings attended by each Director.
Directors
Meetings
Audit & Risk
Management
Remuneration
Nomination (*)
Treasury (*)
Meetings of Committees
Number of Meetings held:
Number of Meetings attended:
T Streeter
D Lougher
D Southam
J Hanna
R Dunbar
R Yeates
I Macliver
10
10
10
10
10
10
10
10
3
3
-
-
-
3
3
3
2
2
-
-
-
2
2
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(*) Regular June 2013 meeting was held in July 2013. Board composition is discussed as a regular Board agenda item.
DIRECTORS’ BENEFITS
No Directors of the Consolidated Entity have, since the end of the previous fi nancial year, received or become entitled
to receive a benefi t (other than a benefi t included in the total amount of emoluments received or due and receivable
by Directors shown on page 35 of the Directors’ Report) by reason of a contract made by the parent entity or a related
body corporate with the director or with any entity in which the Director has a substantial fi nancial interest, with the
exception of benefi ts that may be deemed to have arisen in relation to the transactions entered into in the ordinary
course of business as disclosed in Note 30 to the accounts.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of the Court to bring proceedings on behalf of the Company or 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 any part of those proceedings.
The Company was not a party to any such proceedings during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration to the Directors of Western Areas Ltd on page 43 forms part of the Directors’
Report for the year ended 30 June 2013.
NON-AUDIT SERVICES
The entity’s auditor, Crowe Horwath, provided non-audit services amounting to $7,500 during FY13 (FY12: Nil). The Board
has the following procedures in place before any non-audit services are obtained from the auditors:
• • all non audit services are reviewed and approved by the Board and the Audit & Risk Management Committee prior to
commencement to ensure they do not adversely aff ect the integrity and objectivity of the auditor; and
• • the nature of the services provided does not compromise the general principles relating to auditor independence as set out
in APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
26
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and Executives of Western Areas Ltd.
Key Changes/Events from FY12 to FY13
• • Reduction in the quantum of the maximum Short Term Incentive (“STI”) payment available to Executives, via the
reduction of the percentage of base salary per employee available to be paid as an STI bonus.
• • Executive and Management team forfeited a minimum of 50% of their STI payment that was triggered and earned via
achievement of the individual KPI’s. These have been cancelled not deferred.
• • The Company has frozen salaries going into the new fi nancial year.
• • The second tranche of the FY12 Long Term Incentive (“LTI”) allocation has not vested due to the relative total
shareholder return minimum threshold not being reached.
The report is comprised of the following key sections:
• • Section A: Who this report covers
• • Section B: Remuneration governance and philosophy
• • Section C: Voting and comments made at the Company’s 2012 Annual General Meeting
• • Section D: Use of remuneration consultants
• • Section E: Executive remuneration framework
• • Section F: Non-Executive Director remuneration
• • Section G: Service contracts
• • Section H: Link between performance and remuneration outcomes
• • Section I: Details of remuneration
SECTION A: WHO THIS REPORT COVERS
The following persons acted as Directors of the Company during the fi nancial year:
Mr T Streeter (Non-Executive Chairman)
Mr D Lougher (Managing Director)
Mr D Southam (Executive Director)
Mr I Macliver (Lead Independent, Non-Executive Director)
Mr J Hanna (Non-Executive Director)
Mr R Dunbar (Independent, Non-Executive Director)
Mr R Yeates (Independent, Non-Executive Director)
Other Key Management Personnel (“KMP”) of the Company during the fi nancial year were:
Mr J Belladonna (Chief Financial Offi cer/Company Secretary)
Mr C Wilkinson (General Manager, Exploration)
Mr G Marshall (General Manager, Commercial)
Mr W Jones (General Manager, Operations - appointed 1 August 2012)
SECTION B: REMUNERATION GOVERNANCE AND PHILOSOPHY
Remuneration Committee
The Remuneration Committee is a sub-committee of the Board. It is responsible for assisting the Board in fulfi lling
its responsibilities relating to the remuneration of Directors, the remuneration and incentivisation of the Managing
Director and other KMP, and remuneration practices, strategies and disclosures generally.
Remuneration levels and other terms of employment for the Directors and the senior management team are reviewed
at least annually by the Remuneration Committee, having regard to qualifi cations and experience, relevant market
conditions, and performance against goals set each year.
The Remuneration Committee assesses the appropriateness of remuneration levels to ensure the Company is able to
attract and retain high quality Executives. The Remuneration Committee utilises independent salary reports to assist in
this regard.
The Corporate Governance Statement set out on pages 39 to 42 provides further information on the role of the
Remuneration Committee.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
27
DIRECTORS’
REPORT
REMUNERATION PHILOSOPHY
The Company recognises that it operates in a global environment and to prosper in such an environment, it must
attract, motivate and retain personnel of the highest calibre.
The principles supporting the Company’s remuneration policy are that:
• • Reward refl ects the competitive global market in which we operate;
• • Individual reward is based on performance across a range of disciplines that apply to delivering results for the Company;
• • Executive remuneration is linked to the creation of shareholder value; and
• • Remuneration arrangements are equitable, fair and facilitate the deployment of senior management across the Company.
SECTION C: VOTING AND COMMENTS MADE AT THE COMPANY’S 2012 ANNUAL GENERAL
MEETING
Western Areas received more than 97% of “yes” votes on its remuneration report for the 2012 fi nancial year. The
Company did not receive any specifi c feedback at the AGM or throughout the year on its remuneration practices.
SECTION D: USE OF REMUNERATION CONSULTANTS
Western Areas engaged PwC as Remuneration Consultants during the 2013 fi nancial year to provide assistance with the
implementation of the LTI plan, however no “remuneration recommendations” as defi ned in the Corporation Act 2001
were made.
SECTION E: EXECUTIVE REMUNERATION FRAMEWORK
“The key principle of our remuneration strategy is to pay for performance”
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position,
experience and responsibilities within the Company. The objective is to:
• • Reward Executives for their individual performance against targets set by reference to appropriate benchmarks;
• • Align the interests of Executives with those of the shareholders; and
• • Ensure that total remuneration is competitive by market standards.
The Company’s Executive reward structure provides a combination of fi xed and variable pay, and is comprised of:
• • Fixed remuneration, inclusive of base pay, superannuation, allowances, and salary-sacrifi ce components;
• • Short term incentives; and
• • Long term incentives.
Remuneration mixes
In accordance with the Company’s objective to ensure that Executive remuneration is aligned to company performance,
a signifi cant portion of Executives’ remuneration is placed “at risk”. The relative proportion of target FY13 total
remuneration packages split between fi xed and variable remuneration is shown below:
Fixed Remuneration
Target STI
Target LTI
Executive Directors
Mr D Lougher
Mr D Southam
Executives
Mr J Belladonna
Mr C Wilkinson
Mr G Marshall
Mr W Jones
39%
43%
43%
53%
53%
53%
22%
24%
24%
21%
21%
21%
39%
33%
33%
26%
26%
26%
During the 2013 fi nancial year, adjustments were made to Executives’ remuneration mix via a reduction in the maximum
STI opportunity available, resulting in increased emphasis on LTI. This further aligns management with Shareholders and
long term value generation. Refer to Section H: Link between performance and remuneration outcomes for details of
Executives’ actual remuneration mix for FY13.
28
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
Fixed remuneration
“Fixed remuneration is positioned around the median of the external market for comparable roles”
Fixed remuneration consists of base salary, superannuation, allowances, and any salary sacrifi ce components. The
fi xed remuneration component is reviewed annually by the Remuneration Committee. Base salary for each Executive
is benchmarked against market data for comparable roles in the market and the Remuneration Committee refers to
external independent salary reports to ensure that the remuneration levels set meet the objectives of the Company.
There is no guaranteed base pay increases included in any Executives’ contracts.
Short Term Incentive (“STI”)
“The STI plan is designed to motivate and reward Executives for the achievement of short term business goals”
The objective of STI’s is to link the achievement of key company operational targets with the remuneration received by
those Executives charged with meeting those targets. The STI plan involves linking key performance indicators (“KPIs”)
with the opportunity to earn a cash bonus. Target STI opportunity for Executives was reduced by 10% in FY13 down to
ranges of between 55% to 40% of their base salary. Challenging KPIs are set to ensure payouts are only triggered to
reward high performing employees for outperformance.
It is the Company’s policy to cap STI payments at target STI levels. Target STI for each KMP during FY13 is outlined below:
Name
Executive Directors
Mr D Lougher
Mr D Southam
Executives
Mr J Belladonna
Mr C Wilkinson
Mr G Marshall
Mr W Jones (*)
Base salary
FY2013
Target STI quantum
(% of base salary)
Target STI quantum
($)
$680,000
$510,106
$320,000
$327,690
$297,901
$385,000
55%
55%
55%
40%
40%
40%
$374,000
$280,500
$176,000
$135,000
$119,000
$154,000
(*) Annualised salary for the GM Operations position.
The KPIs used span across key focus areas of the business (operations, corporate and exploration), and the respective
KPIs and their weightings will vary by role and are designed to align to those measures relevant to the responsibilities
of each role.
The KPIs for Executives in FY13 were selected from the below (note that not all the below KPIs are used in the scorecard
for each role):
Overview KPI
Why KPI was set
Operations
Forrestania safety
performance
Forrestania unit cash cost
Based on Lost Time Injury performance in
each quarter.
Motivate and reward the continued focus on
safety standards.
Focused on average unit cash costs for Flying
Fox (FF) and Spotted Quoll (SQ) mines per
pound of nickel produced. Above budget
performance required.
Motivate and reward the stringent
management of production costs outcomes
that exceed the Board’s set business plan.
Forrestania nickel in ore
production
Need to exceed set budget nickel metal in
ore from combined production of FF and SQ
mines.
Motivate and reward nickel production
outcomes that exceed Board set business
plans.
Forrestania mill recoveries
Achieve a set threshold recovery above budget
levels for the combined ore feed from FF and
SQ mines.
Motivate and reward nickel production
outcomes that exceed Board set business
plans.
Forrestania nickel in
concentrate sales
Sale of nickel metal in concentrate to exceed a
set tonnes per quarter target (above budget).
Motivate and reward nickel production
outcomes that exceed Board set business
plans.
Forrestania environmental
incidents
Based on the number of reportable
environmental incidents per quarter.
Motivate and reward the continued focus on
best practice environmental management.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
29
DIRECTORS’
REPORT
Corporate
Earnings
Cash fl ow
Overview KPI
Why KPI was set
Achieve EBIT target above budget.
Motivate and reward fi nancial outcomes that
exceed Board set business plans.
Achieve pre-funding cash fl ow target above
budget.
Motivate and reward fi nancial outcomes that
exceed Board set business plans.
Off take contracts
Securing off take contracts at more favourable
commercial terms than existing contracts.
Motivate and reward contractual outcomes that
exceed Board set business plans and benefi t
shareholders.
Business development
Successful completion of business development
transactions that add value to the Company
and shareholders.
Motivate and reward business development
initiatives that enhance the corporate capital
structure and benefi ts shareholders.
Exploration
New nickel resources
Establishing new published nickel resources
exceeding a targeted nickel tonnage levels.
Motivate and reward economic nickel discovery.
New nickel discovery
Discovery of a new nickel deposit.
Motivate and reward economic nickel discovery.
The Remuneration Committee is responsible for determining the STI to be paid based on an assessment of whether
the KPIs are met. To assist in this assessment, the Remuneration Committee receives detailed reports on performance
which are verifi ed against outcomes.
Based on the achievements of the Company in FY13, the Remuneration Committee determined that Executives
achieved between 51% to 75% of their target STI opportunity. In making this assessment, the Remuneration Committee
considered the following factors:
• • An exceptional safety performance across the Group and below industry benchmark injury frequency rate.
• • The high level of environmental management and no reportable environmental incidences.
• • Mine and Concentrator nickel production and recovery rates were a minimum of 10% above budgeted expectation.
• • Achieving nickel sales quantities over and above a Board set limit.
• • Net pre-fi nancing cash fl ow performance was a minimum 15% above the Board approved budget expectation.
• • The discovery of a new exploration project area.
In recognition of the diffi cult commodity price environment and its impact on earnings, the Executive Directors and
Executives elected to voluntarily forfeit 50% of their respective STI payments earned FY13.
Performance achieved during FY13 against the above KPIs has resulted in Executives earning the following STI
payments:
Name
Executive Directors
Mr D Lougher
Mr D Southam
Executives
Mr J Belladonna
Mr C Wilkinson
Mr G Marshall
Mr W Jones
Target STI quantum
($)
STI quantum
earned ($)
Adjusted STI
quantum ($) ^
STI forfeited ($)
$374,000
$280,500
$176,000
$135,000
$119,000
$154,000
$214,000
$155,000
$90,000
$70,000
$79,000
$115,000
$107,000
$77,500
$45,000
$35,000
$39,500
$57,500
$267,000
$203,000
$131,000
$100,000
$79,500
$96,500
^ In recognition of the diffi cult commodity price environment, the Executive Directors and Executives have elected to voluntarily forfeit 50% of
their respective STI payments earned during FY13. Adjusted STI quantum refl ects the actual STI payments to be made to Executives.
Long Term Incentive (“LTI”)
“The objective of the LTI plan is to reward senior management in a manner that aligns this element of remuneration
with the creation of shareholder wealth”
The Performance Rights plan (“LTI plan”) was approved by shareholders at the Annual General Meeting held in November
2011 and was implemented during FY12. The initial two years of the plan’s operation involved a transition towards a
three year testing period which is now complete. As such, from the FY14 grant onwards, grants will be measured against
TSR over a three year period such that no vesting occurs until the end of the three year period. This ensures Executives
are focused on long term shareholder value generation.
30
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
Grant frequency and quantum
Under the remuneration structure, Executives will receive a grant of Performance Rights each year, such that the LTI
now forms a key component of Executives’ Total Annual Remuneration.
The LTI dollar value that Executives will be entitled to receive is set at a fi xed percentage of their base salary, ranging
from 50% to 100% of base salary, depending on the participant’s position within the Company. This level of LTI remains
in line with current market practice.
The number of Performance Rights to be granted is determined by dividing the LTI dollar value of the award by the fair
value of a Performance Right.
The quantum of LTI grants made during FY13 is as follows:
Name
Base salary
Executive Directors
LTI
quantum
(% of base
salary)
LTI
quantum
($)
Number of
Performance
Rights issued *
Fair value per
Performance
Right at
grant date ^
Exercise date
Expiry date
Mr D Lougher(&)
$680,000
100%(&)
$680,000
294,800
$2.31
Upon receipt of
a vesting notice
issued in FY15
30 June 2016
Mr D Southam
$510,106
75%
$382,580
165,900
$2.31
As above
30 June 2016
Executives
Mr J Belladonna
$320,000
Mr C Wilkinson
Mr G Marshall
Mr W Jones
$327,690
$297,901
$379,780
75%
50%
50%
50%
$240,000
104,074
$163,845
$148,951
$189,890
71,050
64,591
83,476
$2.31
$2.31
$2.31
$2.31
As above
As above
As above
As above
30 June 2016
30 June 2016
30 June 2016
30 June 2016
& Mr Lougher increased to the 100% level in line with his appointment to Managing Director in 2012.
* The number of Performance Rights to be issued to each participant is determined by undertaking an indicative valuation at 1 July of each
respective year for allocation and Board ratifi cation purposes. The average FY13 valuation at 1 July 2012 was $2.31/right.
^ Fair value as required under AASB 2. Valuation is determined at the date of the Annual General Meeting held in each respective year.
The quantum of grants made during FY12 is as follows:
Name
Base salary
Executive Directors
LTI
quantum
(% of base
salary)
LTI
quantum
($)
Number of
Performance
Rights issued *
Fair value per
Performance
Right at
grant date ^
Exercise date
Expiry date
Mr D Lougher
$515,597
75%
$386,698
113,891
$3.75
Upon receipt of
a vesting notice
issued in FY14
30 June 2015
Mr D Southam
$486,000
75%
$364,500
107,354
$3.75
As above
30 June 2015
Executives
Mr J Belladonna
$291,600
Mr C Wilkinson
Mr G Marshall
Mr W Jones
$315,087
$286,443
$368,280
75%
50%
50%
50%
$218,700
$157,544
$143,221
$184,140
64,411
46,399
42,182
54,234
$3.75
$3.75
$3.75
$3.75
As above
As above
As above
As above
30 June 2015
30 June 2015
30 June 2015
30 June 2015
* The number of Performance Rights to be issued to each participant is determined by undertaking an indicative valuation at 1 July of each
respective year for allocation and Board ratifi cation purposes. The average FY12 valuation at 1 July 2011 was $3.75/right.
^ Fair value as required under AASB 2. Valuation is determined at the date of the Annual General Meeting held in each respective year.
Performance conditions
Careful consideration was given to ensure that the selected performance condition would only reward Executives where
shareholder value is generated, as determined via the change in the Company’s share price.
Refl ecting on market practice, the Board has decided that the most appropriate performance measure to track share
price performance is via a relative total shareholder return (“TSR”) measure. TSR measures the return received by
shareholders from holding shares in a company over a particular period and is calculated by taking into account the
growth in a company’s share price over the period as well as the dividends received during that period.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
31
DIRECTORS’
REPORT
The Company’s TSR performance will be assessed against a customised peer group comprising the following 23 companies:
Aditya Birla Minerals Ltd
Alumina Ltd
Aquarius Platinum Ltd
Atlas Iron Ltd
Beadell Resources Ltd
Bouganville Copper Ltd
Cudeco Ltd
Discovery Metals Ltd
Gindalbie Metals Ltd
Independence Group NL
Medusa Mining Ltd
Mincor Resources NL
Mirabela Nickel Ltd
Mt Gibson Iron
OM Holdings Ltd
Oz Minerals Ltd
PanAust Ltd
Paladin Energy Ltd
Panoramic Resources Ltd
Perilya Ltd
Rex Minerals Ltd
Sandfi re Resources Ltd
Zimplats Holdings Ltd
No Performance Rights will vest unless the percentile ranking of the Company’s TSR for the relevant performance year,
as compared to the TSR’s for the peer group companies, is at or above the 50th percentile.
The following table sets out the vesting outcome based on the Company’s relative TSR performance:
Relative TSR performance
Performance Vesting Outcomes
Less than 50th percentile
At the 50th percentile
0% vesting
50% vesting
Between 50th and 75th percentile
Pro-rata / progressive vesting from 50% - 100%
At or above 75th percentile
100% vesting
Performance period and vesting
For grants made under the LTI plan during FY13, vesting will occur subject to the meeting of service and performance
conditions as follows:
• • Two-thirds of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to
30 June 2014.
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to
30 June 2015.
The FY13 grants will also be subject to a service based vesting condition which will provide that, notwithstanding
the passing of the performance test, no Performance Rights will vest and become exercisable into shares unless the
participant remains employed as at 30 June 2015.
As noted above, FY13 concludes the LTI transition period and as such, from FY14 onwards, LTI grants will be subject to
performance assessed over a three year period such that no vesting will occur until the end of the three year period.
Share trading policy
The trading of shares issued to participants under any of the Company’s employee equity plans is subject to, and
conditional upon, compliance with the Company’s employee share trading policy contained in the Corporate Code of
Conduct. Executives are prohibited from entering into any hedging arrangements over unvested performance rights
under the LTI plan. The Company would consider a breach of this policy as gross misconduct which may lead to
disciplinary action and potentially dismissal.
SECTION F: NON-EXECUTIVE DIRECTOR REMUNERATION
Non-Executive Directors remuneration policy and structure
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and
retain Directors of the highest calibre whilst incurring a cost that is acceptable to shareholders.
The aggregate remuneration of Non-Executive Directors (“NEDs”) is determined from time to time by shareholders in a
General Meeting. An amount not exceeding the approved amount is then divided between the Directors as determined
by the Remuneration Committee.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board and the Remuneration Committee considers independent salary reports
as well as the fees paid to NEDs of comparable companies when undertaking this annual review.
32
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
It is an objective of the Company to encourage Directors to own shares in Western Areas. However, share based
payments in the form of options or equity in the Company are not off ered to NEDs as encouraged by Corporate
Governance guidelines.
There is no scheme to provide retirement benefi ts to NEDs, other than statutory superannuation.
Non-Executive Directors fees limits
NED fees are determined within an aggregated fee limit of $1,000,000, which was approved by shareholders at the 2012
AGM. The following fees (including statutory superannuation) were applicable for the year:
Fees
$187,238
$162,273
Board Chair
Board Member
For the second consecutive year, the Remuneration Committee resolved not to increase NED remuneration levels for
FY14. NED fees have not been increased since 1 July 2011.
Non-Executive Directors fee structure
NED remuneration consists of a base Directors fee for their role as Board members, and is inclusive of compensation
for any role on nominated Board sub-committees. That is, no separate committee fees are payable. NEDs do not receive
any performance-based pay.
SECTION G: SERVICE CONTRACTS
Executives
A summary of the key contractual provisions for each of the current Executives is set out below:
Name & job title
D Lougher,
Managing Director*
D Southam,
Finance Director*
J Belladonna,
Chief Financial Offi cer/
Company Secretary *
W Jones,
General Manager,
Operations
C Wilkinson,
General Manager,
Exploration
G Marshall,
General Manager,
Commercial
Base salary
$ (&)
Contract
duration
Notice period required
by employee or WSA
Termination provision
680,000
No fi xed term
3 months
510,106
No fi xed term
3 months
320,000
No fi xed term
3 months
379,780
No fi xed term
1 month
327,690
No fi xed term
1 month
297,900
No fi xed term
1 month
12 months termination
payment and accrued leave
entitlements
12 months termination
payment and accrued leave
entitlements
6 months termination
payment and accrued leave
entitlements
6 months termination
payment and accrued leave
entitlements
6 months termination
payment and accrued leave
entitlements
2 months termination
payment and accrued leave
entitlements
& The Company pays superannuation at a rate of 11% of the employee’s base salary.
* In the event that there is a takeover of, or merger with, the Company, the Company must pay the Executive a bonus within 10 days of that
takeover or merger occurring.
The amount of the takeover bonus will be calculated as follows:
(a) The positive diff erence (expressed as a percentage of the 20 day VWAP) between the bid price for the Company’s shares as a result of a
takeover or merger bid, and the volume weighted share price of the Company’s share price for the 20 days immediately preceding the
takeover or merger bid; and
(b) Multiplied by 3, as a percentage of the Executive’s base annual salary at the time that such a bid is completed.
All other senior management contracts are as per the Group’s standards terms and conditions and there are no
contracted entitlements to cash bonuses, options or performance rights.
Non-Executive Directors
Non-Executive Directors receive a letter of appointment before commencing duties on the Board. The letter outlines
compensation arrangements relevant to the Offi cer or Director. Non-Executive appointments have no end date,
retirement, redundancy or minimum notice periods included in their contracts.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
33
DIRECTORS’
REPORT
SECTION H: LINK BETWEEN PERFORMANCE AND REMUNERATION OUTCOMES
The remuneration framework detailed above has been tailored with the objective of attracting and retaining the
highest calibre staff who contribute to the success of the Company, while maintaining alignment between Company
performance and individual rewards. The remuneration policies seek a balance between the interests of stakeholders
and competitive market remuneration levels.
Company Performance
Year Ended 30 June
Net Profi t / (Loss) after Tax
EPS
Dividends
Market capitalisation
Closing share price
TSR – 1 year (%’ile) ranking
TSR – 3 year rolling (%’ile) ranking
2013
(94,105)
(49.8)
0.02
456.7M
2.32
48
75
2012
40,181
22.4
0.11
729.7M
4.06
80
39
2011
134,973
75.1
0.25
2010
14,212
8.0
0.06
2009
(35,172)
(20.9)
-
1,060.4M
679.4M
1,053.6M
5.90
67
41
3.78
2
57
5.90
75
80
The second tranche of the FY12 (“LTI”) has not vested due to the relative total shareholder return minimum
threshold not being reached by a small margin. This highlights the link between shareholder outcomes and Executive
remuneration. Furthermore, as at 30 June 2013, the TSR ranking for all FY13 grants is currently below the minimum 50th
percentile rank for the TSR performance hurdle.
As mentioned above, in recognition of the diffi cult commodity price environment, the Executive Directors and Executives
have elected to voluntarily forfeit at least 50% of their respective STI payments earned during the 2013 fi nancial year. The
percentage of the maximum STI payment that was paid and forfeited during FY13 is outlined in the table below:
Name
Executive Directors
Mr D Lougher
Mr D Southam
Executives
Mr J Belladonna
Mr C Wilkinson
Mr G Marshall
Mr W Jones
Percentage of max STI
awarded
Percentage of max STI
forfeited
29%
28%
26%
26%
33%
37%
71%
72%
74%
74%
67%
63%
The table below represents the Executives’ actual remuneration mix of fi xed remuneration, short term incentives and
long term incentives based upon remuneration paid or expensed during FY13. It is the Company’s policy to ensure that a
suitable portion of Executive remuneration is placed “at-risk” and subject to performance against appropriately set targets.
Executive Directors
Mr D Lougher
Mr D Southam
Executives
Mr J Belladonna
Mr C Wilkinson
Mr G Marshall
Mr W Jones
Fixed Remuneration
STI
63%
65%
67%
74%
72%
79%
8%
8%
7%
6%
8%
10%
LTI1
29%
27%
26%
20%
20%
11%
1 LTI refers to the value of the Options and Performance Rights that were expensed during the FY13. No Options have been granted over the last
two fi nancial years.
34
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
SECTION I: DETAILS OF REMUNERATION
Short Term Employee Benefi ts
STI
Payments
/ Bonuses
(iii)
Allowances
Non
Monetary
Long Term Employee
Benefi ts
Post Em-
ployment
Long
Service
Leave
Share
Based
Payments
LTI (i)
Superan-
nuation
TOTAL
2013
Base
Salary
Non-Executive Directors
T Streeter
J Hanna (ii)
R Dunbar
R Yeates
I Macliver
168,683
146,192
162,273
146,192
146,192
Executive Directors
-
-
-
-
-
D Lougher
D Southam
729,800
541,218
107,000
77,500
Executive Offi cers
J Belladonna
330,126
W Jones
C Wilkinson
G Marshall
395,981
336,701
306,093
45,000
57,500
35,000
39,500
-
-
-
-
-
3,667
3,667
3,667
1,742
3,667
3,667
45,806
-
-
-
-
38,162
48,148
43,586
30,847
35,003
33,126
-
-
-
-
-
-
-
-
-
-
18,555
16,081
-
16,081
16,081
233,044
162,273
162,273
162,273
162,273
6,800
5,101
359,930
256,566
25,000
25,000
1,270,359
957,200
3,200
3,850
3,277
2,979
157,282
61,575
110,407
100,372
25,000
25,000
27,034
24,577
607,861
576,495
551,089
510,314
5,355,454
Short Term Employee Benefi ts
Long Term Employee
Benefi ts
Post Em-
ployment
2012
Base
Salary
STI
Payments
/ Bonuses
Allowances
/ Termina-
tion
Non
Monetary
Long
Service
Leave
Share
Based
Payments
LTI (i)
Superan-
nuation
TOTAL
Non-Executive Directors
T Streeter
168,683
J Hanna
D Cooper
R Dunbar
R Yeates
I Macliver
60,913
36,548
162,273
146,192
109,644
Executive Directors
J Hanna
D Lougher
D Southam
367,857
579,390
514,460
Executive Offi cers
J Belladonna
302,759
130,000
C Wilkinson
G Marshall
307,087
286,443
80,000
65,000
-
-
-
-
-
-
-
-
-
-
-
-
95,000
1,091,873
290,000
270,000
-
-
-
-
-
35,893
-
-
-
-
-
19,657
30,633
41,602
31,541
29,187
29,627
-
-
-
-
-
-
3,679
5,156
4,860
2,916
3,151
2,864
-
-
-
-
-
-
18,555
6,700
4,020
-
16,081
12,061
223,131
67,613
40,568
162,273
162,273
121,705
32,848
175,324
134,192
40,465
1,651,379
45,836
24,997
1,126,339
990,111
93,220
70,705
59,080
22,914
42,660
48,883
583,350
532,790
491,897
6,153,429
(i) LTI refers to the value of Options and Performance Rights that were expensed during the FY13. No Options were granted during the year.
(ii) Mr J Hanna receives separate consulting fees for services performed beyond his duties as a NED, the details of which are separately outlined
below under “Consulting fees”.
(iii) Includes all paid and accrued bonuses for FY13.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
35
DIRECTORS’
REPORT
Consulting fees
After stepping down as Managing Director, Mr Hanna agreed to remain on the Board as a NED and as a consultant to
assist with identifying and developing new growth opportunities for the Company.
In addition to receiving fees for his role as a NED of the Board, Mr Hanna was paid arms-length consulting fees for his
services as a consultant to the value of $50,000 during FY13.
Options held by Key Management Personnel
There were no options held by key management personnel at the end of FY13. There were no options issued during FY13
and all historical options have now lapsed. As such, no portion of any KMP’s remuneration for FY13 consisted of options.
Balance at
1 July 2012
Granted as
Remuneration
On Exercise
of Options
Purchases /
(Sales)
Expired /
Lapsed
Balance
at 30 June
2013
Options
Vested
D Lougher
J Hanna
C Wilkinson
G Marshall
J Belladonna
TOTAL
200,000
200,000
100,000
50,000
100,000
650,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
200,000
100,000
50,000
100,000
650,000
-
-
-
-
-
-
-
-
-
-
-
-
Shareholding by Key Management Personnel
D Lougher
T Streeter
J Hanna
R Dunbar
R Yeates
I Macliver
C Wilkinson
J Belladonna
W Jones
TOTAL
Balance at
1 July 2012
64,884
25,889,410
1,134,666
102,500
10,000
20,000
7,000
60,000
60,000
27,348,460
Granted as
Remuneration
On Exercise of
Options
Other Changes
During the Year
Balance at
30 June 2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,073
79,957
(1,951,780)
23,937,630
(410,875)
10,000
-
3,948
-
3,948
-
723,791
112,500
10,000
23,948
7,000
63,948
60,000
(2,329,686)
25,018,774
36
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
REPORT
Performance Rights held by Key Management Personnel
Details of Performance Rights granted under the LTI plan during FY13 are outlined below:
Grant date
Number
granted
Vesting
conditions
Fair value
at grant
date
Exercise
price
Exercise
date
D Lougher
22/11/12
294,800
(a)
$2.31
Nil
D Southam
22/11/12
165,900
C Wilkinson
G Marshall
22/11/12
22/11/12
71,050
64,591
J Belladonna
22/11/12
104,074
W Jones
TOTAL
22/11/12
83,476
783,891
(a)
(a)
(a)
(a)
(a)
$2.31
$2.31
$2.31
$2.31
$2.31
Nil
Nil
Nil
Nil
Nil
Upon
receipt of
a vesting
notice
issued in
FY14
As above
As above
As above
As above
As above
Expiry
date
1/7/16
1/7/16
1/7/16
1/7/16
1/7/16
1/7/16
Number
vested
-
-
-
-
-
-
-
a) Performance rights granted during FY13 were granted under the LTI plan and will vest subject to the meeting of service and performance
conditions as follows:
• •
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to 30 June 2015.
Two-thirds of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to 30 June 2014.
The FY13 grants will also be subject to a service based vesting condition which will provide that, notwithstanding the passing of the performance
test, no Performance Rights will vest and become exercisable into shares unless the participant remains employed as at 30 June 2015.
Balance at
1 July 2012
Number
granted as
Remuneration
Number
exercised
Number
expired /
lapsed
Balance at 30
June 2013
Portion vested
(%)
D Lougher
D Southam
C Wilkinson
G Marshall
J Belladonna
W Jones
TOTAL
113,891
107,354
46,399
42,182
64,411
-
374,237
294,800
165,900
71,050
64,591
104,074
83,476
783,891
-
-
-
-
-
-
-
-
-
-
-
-
-
-
408,691
273,254
117,449
106,773
168,485
83,476
1,158,128
-
-
-
-
-
-
The second tranche of the FY12 (“LTI”) has not vested due to the relative total shareholder return minimum threshold
not being reached.
End of audited remuneration report.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
37
DIRECTORS’
REPORT
Rounding of Amounts
The Company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance
with that Class Order, amounts in the Directors’ Report and the fi nancial statements are rounded off to the nearest
thousand dollars, unless otherwise indicated.
Corporate Governance
In recognising the need for the highest standards in corporate behaviour and accountability, the Directors of Western
Areas Ltd support and, unless otherwise stated, adhere to the Australian Stock Exchange Corporate Governance
Council’s “Principles of Good Corporate Governance and Best Practice Recommendations”.
The Company’s corporate governance statement is contained in the following section of this report.
Signed in accordance with a resolution of the Board of Directors.
D Lougher
Managing Director
Perth, 27 August 2013
38
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
CORPORATE GOVERNANCE
STATEMENTS
The Board of Directors of Western Areas Ltd is responsible for the corporate governance of the Consolidated Entity. The
Board guides and monitors the business and aff airs of Western Areas Ltd on behalf of the shareholders by whom they
are elected and to whom they are accountable.
In accordance with the Australian Stock Exchange Corporate Governance Council’s “Principles of Good Corporate
Governance and Best Practice Recommendations” (the “Recommendations”), the Corporate Governance Statement must
contain certain specifi c information and must disclose the extent to which the Company has followed the guidelines
during the period. Where a recommendation has not been followed; that fact must be disclosed, together with the
reasons for the departure.
During the current fi nancial year, the Board of Directors have monitored, developed and implemented changes to ensure
that an appropriate level of corporate governance was in place during this year. The Board has taken into consideration
the nature of the governance matter, the impact of immediate or accelerated change to comply on the Company and
the issues (particularly risks) associated with deferred implementation. Where compliance has not been achieved,
explanations are provided.
Other than as highlighted in this Statement, Western Areas’ corporate governance practices were in place throughout
the year and were compliant with the Council’s best practice recommendations.
For further information on corporate governance policies adopted by the Company, refer to our website:
www.westernareas.com.au
BOARD COMPOSITION
The skills, experience and expertise relevant to the position held by each Director in offi ce at the date of the Annual
Report is included on page 22. One of the Council’s recommendations is that the Board of Directors should comprise
a majority of independent Directors. Directors of Western Areas Ltd are considered to be independent when they are
independent of management and free from any business or other relationships that could materially interfere with, or
could reasonably be perceived to materially interfere with the exercise of their unfettered and independent judgement.
Composition Developments
Lead Independent Director
During the 2013 fi nancial year, Mr Ian Macliver was appointed as the Western Areas’ Board Lead Independent Non-
Executive Director (“LINED”, or “Lead Independent”). The appointment of a Lead Independent Director was to provide
the Board an independent alternative to the Chairman should a real or perceived confl ict arise during Board proceedings
or voting. Mr Macliver also serves as the Chairman of the Audit and Risk Committee and it was thought that the
combination of these two roles would be complementary.
Independence
In the context of Director independence, “materiality” is considered from both the Company and individual Director’s
perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An
item is presumed to be quantitatively immaterial if it is equal to or less than 5% of the appropriate base amount. It is
presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the
appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the
competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other
factors which point to the actual ability of the Director in question to infl uence the direction of the Company.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
39
CORPORATE GOVERNANCE
STATEMENTS
In accordance with the defi nition of independence above, and the materiality thresholds set, the following Directors of
Western Areas Ltd are considered to be independent:
Name
I Macliver
R Dunbar
R Yeates
Position
Lead Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Council Recommendations
At the date of this report and throughout the fi nancial year, Western Areas Ltd complied with the Council’s
recommendations with the exception of recommendation 2.1 – Majority of the Board comprise Independent Directors and
recommendation 2.2 – that the Chair be an Independent Director.
While not complying with recommendation 2.1, the Directors of Western Areas believe that the Board operates
effi ciently and eff ectively. It continues to evaluate and monitor the available pool of independent Directors via a
specialist Non-Executive Director search consultant for suitable candidates. Regarding recommendation 2.2 related
to Chairman Independence, the Board believes that the current Chair is the best person that exists on the Board to
hold the offi ce at this time. While the Chair is Non-Executive they are not independent due to Western Areas’ share
ownership only.
The Board has in place a Charter which defi nes the role and structure of the Board. It also outlines the Board’s ability to
delegate authority to the Managing Director and Senior Management of the Company and highlights the procedures in
place to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company’s expense.
ETHICAL STANDARDS
The Board acknowledges the importance of maintaining high levels of ethical conduct. A code of conduct is in place and
contained inside the Company’s Corporate Governance Statement.
The key provisions of the code of conduct are to:
• • Act honestly and with integrity.
• • Act in the best interests of the Company and shareholders.
• • Avoid and disclose any confl icts of interest both real and perceived.
• • Comply with the law.
• • Keep all material information confi dential, until released to the wider market.
• • Not use their position for personal gain.
• • Ensure compliance with the code of conduct.
DIVERSITY POLICY
The Company’s policy regarding Diversity is contained in the Western Areas Code of Conduct. Diversity in the context of
the policy includes, but is not limited to, gender, age, ethnicity and cultural background. The policy ensures that roles
and positions are fi lled by the best possible candidate available without discrimination.
The Diversity Policy outlines the requirements of the Board to develop measurable objectives for achieving diversity,
and annually assess both the objectives and the progress in achieving those objectives. Over the next few years the
Company aims to increase diversity in senior appointments as positions become available. All appointments will be
based on merit and expertise required to discharge the duties of such roles.
Women on the Board
Women in Senior Management
Women employees in total
30 June 2013
0
1
21
%
0
7(*)
16
30 June 2012
0
1
21
%
0
5
15
(*) Percentage increase relates to the retirement of a Manager that has not been replaced.
To assist in fostering diversity, the policy includes the requirement for a least one female candidate to be shortlisted for
all senior appointments (including Director appointments), if a suitably qualifi ed candidate exists in the applications.
40
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
CORPORATE GOVERNANCE
STATEMENTS
TRADING POLICY
The Company’s policy regarding Directors and Employees trading in securities is published in the Western Areas Code
of Conduct and is also available on the Company’s website. The policy contains provisions on trading in Company
securities, including when trading windows are available, restricted periods and prohibited periods. The policy defi nes
Insider Trading and restricts Directors and Employees from acting on material information until it has been released to
the market and adequate time has elapsed for this to be refl ected in the securities price.
NOMINATION COMMITTEE
The Board has established a Nomination Committee to assess the necessary and desirable competencies of a Board
member and to evaluate the Board’s performance. The Nomination Committee shall also review Board succession plans
and make recommendations for the appointment and removal of Directors. The Nomination Committee operates under
a charter approved by the Board.
For details of the Directors that are members of the Nomination Committee and their attendance at meetings of the
Nomination Committee, refer to page 26 of the Directors’ Report.
The Nomination Committee conducted one Board performance evaluation. The performance assessment involved each
member of the Board to rate the Board’s performance against specifi c qualitative and quantitative criteria.
AUDIT & RISK MANAGEMENT COMMITTEE
The Board has an established Audit & Risk Management Committee which operates under a charter approved by the
Board. It is the Board’s responsibility to ensure that an eff ective internal control framework exists within the entity.
This includes internal controls to deal with both the eff ectiveness and effi ciency of signifi cant business processes, the
safeguarding of assets, the maintenance of proper accounting records, and the reliability of fi nancial information, as
well as non-fi nancial considerations such as the benchmarking of operational key performance indicators. The Board
has delegated the responsibility for the establishment and maintenance of a framework of internal control and ethical
standards for the management of the Consolidated Entity to the Audit & Risk Management Committee.
The Committee also provides the Board with additional assurance regarding the reliability of fi nancial information
included in the fi nancial reports and the independence of the Company’s Auditor. The majority of the members of the
Audit & Risk Committee are Independent Non-Executive Directors.
Refer to page 26 of the Directors’ Report for a list of committee members and the number of meetings of the Audit &
Risk Management Committee attended throughout the year.
RISK MANAGEMENT
Management of material risks
There is an established Risk Management Policy, which defi nes our commitment to maintaining a risk management
culture to eff ectively manage risk and protect our business from value destroying events. To enable an integrated
and systematic approach to managing risk, senior management has designed and implemented the Western Areas
Risk Management Program (“RMP”). The RMP supports the identifi cation, evaluation and management of material
risks within all areas of the business. It establishes standard criteria for the assessment of risk, WSA’s risk tolerance
parameters and reporting requirements. The Risk Management Policy can be located on the Company’s website.
The RMP is the subject of ongoing development and enhancement to ensure it continues to meet our needs and
supports our corporate governance requirements.
Reporting on material risks
Senior management has regularly reported to the Board on the eff ectiveness of the management of material risks
against the RMP criteria. Risk and control reporting is undertaken six monthly, comprising a statement of relevant
business objectives, a summary of risk and control profi les against those objectives, a commentary on the eff ectiveness
of the risk management system and key activities. Any deterioration of controls over material risks is highlighted.
Reporting is also provided on progress against the RMP annual schedule and upcoming activities.
The Board has received assurance from the Managing Director and the Chief Financial Offi cer that the declaration
provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and
internal control and that the system is operating eff ectively in all material respects in relation to fi nancial reporting risks.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
41
CORPORATE GOVERNANCE
STATEMENTS
Activity
In 2013, the Company continued enhancing its approach to risk management developing a whole of business approach,
recognising the importance of risk management to business success and in meeting Corporate Governance requirements.
The integration of risk management across the business is designed to facilitate the capture of all signifi cant risks and
to ensure senior management and the Board are made aware of material risks in operations, projects and corporate
activities. This occurs by applying a standard approach, including the assessment and communication of risks.
The Company has an ongoing operational risk management program, with a strong emphasis on safety and emergency
risk management embedded in our Health and Safety management system.
Within the new program we have, or intend to, focus workshops on risk management in four key areas, Strategy,
Business as Usual, Sustainability and Resilience.
The Company engages MYR Consulting Pty Ltd to assist in development of the risk management framework, activities
and policies.
REMUNERATION
The Board has established a Remuneration Committee, which operates under a charter approved by the Board.
It is the Company’s objective to provide maximum stakeholder benefi t from the retention of a high quality Board
and Executive team by remunerating Directors and key Executives fairly and appropriately with reference to relevant
employment market conditions and the review of independent employment statistics such as the McDonald
Remuneration Report. The Remuneration Committee will also engage independent remuneration consultants to provide
impartial advice in respect of remuneration trends and Executive employment contracts.
To assist in achieving this objective, the Remuneration Committee links the nature and amount of Executive Directors’
and Offi cers’ emoluments to the Company’s fi nancial and operational performance. The expected outcomes of the
remuneration structure are:
• • Retention and motivation of key Executives;
• • Attraction of quality management to the Company; and
• • Performance incentives which allow Executives to share the rewards of the success of the Company.
A full discussion of the Company’s remuneration philosophy and framework along with details on the amount of
remuneration received by Directors and Executives during the year is provided in the Remuneration Report, which is
contained within the Directors’ Report.
For details on the members, number of meetings held and member attendance of the Remuneration Committee
meetings held during the year refer to page 26 of the Directors’ Report.
For further details regarding the Board’s committees refer to our website www.westernareas.com.au
TREASURY
The Board established a Treasury Committee that operates within policies set by the Board.
The aim of the Treasury Committee is to maintain the Treasury Risk Management policy and ensure that the Company
only enters hedging contracts as approved by the Board to prudently manage currency and nickel price risk in a
balanced and measured way, while still maintaining adequate exposure to the spot nickel price.
For details on the Treasury Committee members, number of meetings held and meeting attendance during the year
refer to page 26 of the Directors’ Report.
BOARD AND EXECUTIVE PERFORMANCE
The performance of the Board and Key Management Personnel is reviewed against both measurable and qualitative
indicators. The performance criteria against which Directors and Executives are assessed is aligned with the fi nancial
and non-fi nancial objectives of the Company.
SHAREHOLDER RIGHTS
Shareholders are entitled to vote on signifi cant matters impacting on the business, which include the election and
remuneration of Directors, changes to the constitution and receipt of annual and interim fi nancial statements.
Shareholders are strongly encouraged to attend and participate in the Annual General Meeting of Western Areas Ltd, to
lodge questions to be responded to at the meeting, and are able to appoint proxies.
42
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
AUDITOR’S INDEPENDENCE
DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for
the audit of Western Areas Ltd for the year ended 30 June 2013, I declare that, to the best of my
knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
CROWE HORWATH PERTH
SEAN MCGURK
Partner
Signed at Perth, 27 August 2013
Liability limited by a scheme approved under
Professional Standards Legislation
Crowe Horwath Perth is a Crowe Horwath Australasia Group Firm and a member of Crowe Horwath
International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
43
CONSOLIDATED
INCOME STATEMENT
Year Ended 30 June 2013
Sales
Cost of sales
Gross profi t
Other income
Finance costs
Employee benefi t expense
Foreign exchange gain
Administration and other expenses
Business combination acquisition costs
Share based payments
Impairment / write-off of non-current assets
Realised derivative gains
Changes in fair value of derivatives
(Loss) / Profi t before income tax
Income tax benefi t / (expense)
(Loss) / Profi t for the year
Basic (loss) / earnings per share (cents per share)
Diluted (loss) / earnings per share (cents per share)
The accompanying notes form part of these fi nancial statements.
Notes
Consolidated Entity
2013
$’000
306,541
(259,838)
46,703
6,980
(26,736)
(8,800)
2,303
(6,934)
-
(1,159)
(142,421)
2,978
(1,472)
(128,558)
34,453
(94,105)
2012
$’000
330,698
(234,524)
96,174
8,763
(37,441)
(7,664)
663
(6,304)
(3,618)
(882)
(79)
9,030
(1,181)
57,461
(17,280)
40,181
(49.8)
(49.8)
22.4
22.4
2
3
35
11, 12
3
3
4
19
19
44
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Year Ended 30 June 2013
(Loss) / profi t for the year
Other comprehensive income/(loss), net of tax
Items that may be reclassifi ed to profi t or loss
Changes in fair value of hedging instruments
Changes in fair value of available for sale fi nancial assets
Exchange diff erences on translation of foreign controlled entities
Notes
Consolidated Entity
2013
$’000
2012
$’000
(94,105)
40,181
(1,460)
(2,625)
1,459
970
(4,070)
(607)
Total comprehensive (loss) / income for the year
(96,731)
36,474
(Loss) / Profi t attributable to:
Members of the parent entity
Non controlling interest
Total Comprehensive (Loss) / Income attributable to:
Members of the parent entity
Non controlling interest
(93,986)
(119)
(94,105)
(96,612)
(119)
(96,731)
40,301
(120)
40,181
36,594
(120)
36,474
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
45
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As At 30 June 2013
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative fi nancial instruments
Total Current Assets
Non Current Assets
Property, plant and equipment
Intangible assets
Exploration & evaluation expenditure
Mine properties
Available for sale fi nancial assets
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Current tax liabilities
Derivative fi nancial instruments
Total Current Liabilities
Non Current Liabilities
Borrowings
Provisions
Deferred tax liabilities
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Other reserves
Retained earnings
Equity attributable to members of the parent entity
Non controlling interest
Total Equity
The accompanying notes form part of these fi nancial statements.
46
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Notes
Consolidated Entity
2013
$’000
2012
$’000
20 (b)
6
7
17
9
10
11
12
8
14
15
16
17
15
16
13
18
32
80,719
18,610
30,318
663
130,310
112,110
525
32,182
241,776
1,120
387,713
518,023
36,911
104
1,932
324
1,906
41,177
216,915
6,298
10,629
233,842
275,019
165,502
25,360
42,121
1,973
234,956
107,111
525
133,282
295,634
3,460
540,012
774,968
66,444
150,392
1,374
10,606
284
229,100
208,688
6,096
41,219
256,003
485,103
243,004
289,865
266,043
42,140
(65,286)
242,897
107
243,004
202,611
75,739
11,289
289,639
226
289,865
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Year Ended 30 June 2013
CONSOLIDATED
ENTITY
Issued
Capital
Capital
Raising
Costs
Share
Based
Payment
Reserve
Hedge
Reserve
Investment
Reserve
Convert-
ible Note
Reserve
Foreign
Exchange
Reserve
Retained
Earnings
Non-
Controlling
Interest
Total
Equity
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Total Equity at 1 July
2011
Comprehensive
income
Profi t for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transactions with
owner in their
capacity as owner,
and other transfers
Share based payments
expense
Dividends paid
Total Equity at 30
June 2012
Comprehensive
income
Loss for the year
Other comprehensive
loss for the year
Total comprehensive
loss for the year
Transactions with
owner in their
capacity as owner,
and other transfers
Contributions of
equity
Transaction costs on
equity
Share based payments
expense
Transfer of
convertible note
reserve
Dividends paid
Total Equity at 30
June 2013
212,833
(10,222)
16,159
-
(2,695)
65,090
10
6,937
346
288,458
40,301
(120)
40,181
970
(4,070)
(607)
(3,707)
970
(4,070)
(607)
40,301
(120)
36,474
882
(35,949)
882
(35,949)
212,833
(10,222)
17,041
970
(6,765)
65,090
(597)
11,289
226
289,865
(93,986)
(119)
(94,105)
(1,460)
(2,625)
1,459
(2,626)
(1,460)
(2,625)
1,459
(93,986)
(119)
(96,731)
65,009
(1,577)
1,159
65,009
(1,577)
1,159
-
(14,721)
(32,132)
32,132
(14,721)
277,842
(11,799)
18,200
(490)
(9,390)
32,958
862
(65,286)
107
243,004
The accompanying notes form part of these fi nancial statements.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
47
CONSOLIDATED STATEMENT
OF CASH FLOWS
Year Ended 30 June 2013
Notes
Consolidated Entity
2013
$’000
2012
$’000
Cash fl ows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Royalties paid
Other receipts
Interest paid
Realisation on settlement of derivatives
Income tax paid
Net cash infl ow from operating activities
20(a)
313,929
(175,590)
1,621
(12,011)
4,958
(21,113)
6,741
(6,420)
112,115
326,808
(144,403)
10,257
(16,344)
12
(24,252)
8,699
(1,524)
159,253
Cash fl ows from investing activities
Payments for property, plant and equipment
(19,052)
(13,721)
Rental deposit
Mine development expenditure
Exploration & evaluation expenditure
Payment for termination of royalty agreement
Payment for acquisition of subsidiary
35
Purchase of available for sale fi nancial assets
Net cash outfl ow from investing activities
Cash fl ows from fi nancing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds from issues of shares
Share issue transaction costs
Finance lease payments
Borrowing costs
Dividends paid to Company’s shareholders
Net cash (outfl ow) / infl ow from fi nancing activities
Net decrease in cash and cash equivalents held
Cash and cash equivalents as at the beginning of the fi nancial year
20
(35,527)
(24,510)
(14,317)
-
(285)
9
(67,417)
(42,677)
(14,926)
(71,100)
(1,085)
(93,671)
(210,917)
-
45,000
(150,500)
65,009
(1,577)
(68)
(1,370)
(14,721)
(103,227)
(84,783)
165,502
-
-
-
(69)
(764)
(35,949)
8,218
(43,446)
208,948
Cash and cash equivalents at end of fi nancial year
20(b)
80,719
165,502
The accompanying notes form part of these fi nancial statements.
48
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
Year Ended 30 June 2013
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated fi nancial statements and notes represent those of Western Areas Ltd and Controlled Entities (the
“Consolidated Group” or “Group”).
The separate fi nancial statements of the parent entity, Western Areas Ltd, have not been presented within this fi nancial
report as permitted by amendments made to Corporation Act 2001 eff ective as at 28 June 2010.
The Group is a for profi t entity for fi nancial reporting purposes under Australian Accounting Standards.
The fi nancial report was approved by the Board of Directors on 27 August 2013.
Basis of Preparation
These general purpose fi nancial statements have been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a fi nancial
report containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the fi nancial statements and notes also comply with International
Financial Reporting Standards. Material accounting policies adopted in the preparation of this fi nancial report are
presented below and have been consistently applied unless stated otherwise.
Except for cash fl ow information, the fi nancial statements have been prepared on an accruals basis and are based on
historical costs, modifi ed, where applicable, by the measurement at fair value of selected non-current assets, fi nancial
assets and fi nancial liabilities.
Adoption of new and revised Accounting Standards
None of the new standards and amendments to standards that are mandatory for the fi rst time for the fi nancial year
beginning 1 July 2012 aff ected any of the amounts recognised in the current period or any prior period and are not
likely to aff ect future periods. However, amendments made to AASB 101 Presentation of Financial Statements eff ective
1 July 2012 now require the Statement of Comprehensive Income to show the items of comprehensive income grouped
into those that are not permitted to be classifi ed to profi t or loss in a future period and those that may have to be
reclassifi ed if certain conditions are met. These changes are included in the Income Statement and Statement of
Comprehensive Income.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
49
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
Principles of Consolidation
The consolidated fi nancial statements incorporate the assets, liabilities and results of entities controlled by Western
Areas Ltd at the end of the reporting period. A controlled entity is an entity over which Western Areas Ltd has the
power to govern the fi nancial and operating policies so as to obtain benefi ts from its activities.
Where controlled entities have entered or left the Group during the year, the fi nancial performance of those entities are
included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 8(a)
to the fi nancial statements.
In preparing consolidated fi nancial statements, all inter-group balances and transactions between entities in the
Consolidated Group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are
shown separately within the equity section of the Consolidated Statement of Financial Position and Statement of
Comprehensive Income. The non-controlling interest in the net assets comprise their interests at the date of the
original business combination and their share of changes in equity since that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control. The business combination will be accounted for from the date that
control is attained, whereby the fair value of the identifi able assets acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited exceptions).
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for
the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the
acquiree where less than 100% ownership interest is held in the acquiree.
The acquisition date fair value of the consideration transferred for a business shall form the cost of the investment in
the separate fi nancial statements.
When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classifi ed as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classifi ed as an asset or a liability is remeasured each reporting period to fair value through the Income
Statement unless the change in value can be identifi ed as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the Income Statement.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated
fi nancial statements as well as their results for the year then ended.
The accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies
applied by the parent entity. All consolidated entities have a 30 June fi nancial year end.
(b)
Revenue
Revenue from the sale of nickel is recognised when the risks and rewards of the products pass to the buyer, currently
being the point at which the product is delivered on site to the buyer or passes the ships’ rail or as otherwise agreed
between Western Areas and the buyer. Revenue is recognised at estimated sales value. The estimated sales value
is determined by reference to the estimated metal content, metal recovery, the metal price and exchange rate. An
adjustment is made to refl ect the fi nal sales value when the actual metal content and metal recovery has been
determined. The fi nal metal content and metal recovery is generally known between 30 and 90 days after delivery to
the customer.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the fi nancial assets.
All revenue is stated net of the amount of goods and services tax (GST).
50
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to prepare for their intended use, are added to the cost of
those assets, until such time as the assets are substantially ready for their intended use.
All other borrowing costs are recognised in the Income Statement in the period in which they are incurred.
(d)
Inventories
Inventories are measured at the lower of cost and net realisable value. Costs, including an appropriate portion of fi xed
and variable overhead expenses, are assigned to inventories on hand by the method most appropriate to each class of
inventory with the majority being valued on an average cost basis. Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fi xed overhead
costs relating to mining activities.
The cost of consumables and spare parts includes cost of materials and transportation costs.
(e)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Property
Freehold land and buildings are carried at their fair value (being the amount for which an asset could be exchanged
between knowledgeable, willing parties in an arm’s length transaction), based on periodic, but at least triennial,
valuations by external independent valuers, less accumulated depreciation for buildings. Increases in the carrying
amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity. Decreases that off set
previous increases of the same asset are recognised against revaluation surplus directly in equity; all other decreases
are recognised in profi t or loss. Any accumulated depreciation at the date of revaluation is eliminated against the gross
carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Plant and Equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and
any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated
recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and
impairment losses are recognised either in profi t or loss or as a revaluation decrease if the impairment losses relate to
a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to
Note 1(m) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash fl ows
that will be received from the asset’s employment and subsequent disposal. The expected net cash fl ows have been
discounted to their present values in determining recoverable amounts.
The cost of fi xed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fi xed and variable overheads. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts
associated with the item will fl ow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are recognised as expenses in profi t or loss during the fi nancial period in which they are incurred.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
51
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Property, Plant and Equipment (Continued)
Depreciation
The depreciable amount of all property, plant and equipment is depreciated on a straight line basis over their useful
lives or the estimated life of mine, if shorter. Land is not depreciated. The depreciation rates used for each major type
of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Property
2-20%
Plant and equipment
2-33% or unit of production basis over the life of mine
Motor vehicles
20%
Furniture and fi ttings
6-27%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are recognised in profi t or loss in the period in which they arise. When revalued assets are sold, amounts included in the
revaluation surplus relating to that asset are transferred to retained earnings.
(f)
Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifi able area of
interest. These costs are only capitalised to the extent that they are expected to be recovered through the 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 profi t or loss 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. Where it is determined that uncertainty exists as to the ability to recoup carry
forward exploration, evaluation and development costs an impairment loss will be raised against the asset and charged
against profi t in the year that determination is made.
(g) Mine Development
Development expenditure incurred by or on behalf of the Consolidated Entity is accumulated separately for each
area of interest in which economically recoverable resources have been identifi ed. Such expenditure comprises costs
directly attributable to the construction of a mine, the related infrastructure and capitalised exploration and evaluation
expenditure transferred from capitalised exploration and evaluation expenditure account.
Amortisation is charged using the units-of production method, with separate calculations being made for each area of
interest. The units-of-production basis results in an amortisation charge proportional to the depletion of proved and
probable reserves.
Mine properties are tested for impairment in accordance with the policy in Note 1(m).
Costs of site restoration are provided for over the life of the facility from when exploration commences and are included
in the costs from that stage. Site restoration costs include obligations relating to dismantling and removing mining plant,
reclamation, waste dump rehabilitation and other costs associated with restoration and rehabilitation of the site. Such
costs have been determined using estimates for current costs and current legal requirements and technology.
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed
within one year of abandoning the site.
52
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h)
Income Tax
The income tax expense for the year comprises current income tax expense and deferred tax expense.
The charge for current income tax expense is based on the profi t for the year adjusted for any non-assessable or disallowed
items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.
Current income tax expense charged to the profi t or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are
therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense refl ects movements in deferred tax asset and deferred tax liability balances during the
year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profi t or loss
when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary diff erences arising between the tax bases of
assets and liabilities and their carrying amounts in the fi nancial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no eff ect on
accounting or taxable profi t or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also
refl ects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary diff erences and unused tax losses are recognised only to the extent that it is
probable that future taxable profi t will be available against which the benefi ts of the deferred tax asset can be utilised.
Current tax assets and liabilities are off set where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are off set where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or diff erent taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur
in future periods in which signifi cant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
The amount of benefi ts 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 economic entity will derive
suffi cient future assessable income to enable the benefi t to be realised and comply with the conditions of deductibility
imposed by the law.
Tax Consolidation
Western Areas Ltd and its wholly owned Australian subsidiaries have formed an income tax consolidated group
under the Tax Consolidation Regime from 1 July 2002. Western Areas Ltd is responsible for recognising the current
and deferred tax assets and liabilities for the tax consolidated group. Each entity in the Group recognises its own
current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to
allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the
subsidiaries are immediately transferred to the head entity. The tax consolidated group has entered into a tax funding
arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion
to their contribution to the Group’s taxable income. Diff erences between the amounts of net tax assets and liabilities
derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a
contribution by, or distribution to the head entity.
(i)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Offi ce. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial
Position are shown inclusive of GST.
Cash fl ows are presented in the cash fl ow statement on a gross basis, except for the GST component of investing and
fi nancing activities, which are disclosed as operating cash fl ows.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
53
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
Employee Benefi ts
Provision is made for the Consolidated Entity’s liability for employee benefi ts arising from services rendered by
employees to balance date. Employee benefi ts expected to be settled within one year together with entitlements
arising from salaries and wages, annual leave and sick leave have been measured at their nominal amount. Employee
benefi ts that are expected to be settled after one year have been discounted to the present value of the future
expected cash outfl ow to be made for those benefi ts.
Contributions are made by the Consolidated Entity to employee superannuation funds and are charged as expenses
when incurred.
Share based payment transactions
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to refl ect the number of awards for which the related service
and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an
expense is based on the number of awards that do meet the related service and non-market performance conditions at
the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-
based payment is measured to refl ect such conditions and there is no true-up for diff erences between expected and
actual outcomes.
(k)
Leases
Leases of fi xed assets, where substantially all the risks and benefi ts incidental to the ownership of the asset – but not
the legal ownership – are transferred to entities in the consolidated group, are classifi ed as fi nance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value
of the leased property or the present value of the minimum lease payments, including any guaranteed residual values.
Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefi ts remain with the lessor, are charged
as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life
of the lease term.
(l)
Financial Instruments
Initial recognition and measurement
Financial assets and fi nancial liabilities are recognised when the entity becomes a party to the contractual provisions
to the instrument. For fi nancial assets, this is equivalent to the date that the Company commits itself to either the
purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classifi ed
“at fair value through profi t or loss”, in which case transaction costs are expensed to the Income Statement immediately.
Classifi cation and Subsequent Measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using the eff ective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between
knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In
other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
a) the amount at which the fi nancial asset or fi nancial liability is measured at initial recognition;
b) less principal repayments;
c) plus or minus the cumulative amortisation of the diff erence, if any, between the amount initially recognised and the
maturity amount calculated using the eff ective interest method; and
d) less any reduction for impairment.
54
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Financial Instruments (Continued)
The eff ective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the fi nancial instrument to the net carrying amount of the fi nancial asset or fi nancial liability.
Revisions to expected future net cash fl ows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profi t or loss.
Financial assets at fair value through profi t and loss
Financial assets are classifi ed at “fair value through profi t or loss” when they are either held for trading for the purpose
of short term profi t taking, derivatives not held for hedging purposes, or when they are designated as such to avoid
an accounting mismatch or to enable performance evaluation where a group of fi nancial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment strategy.
Such assets are subsequently measured at fair value with changes in carrying value being included in profi t or loss.
Loans and receivables
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an
active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12
months after the end of the reporting period (all other loans and receivables are classifi ed as non-current assets).
Available-for-sale fi nancial assets
Available-for-sale fi nancial assets are non-derivative fi nancial assets that are either not suitable to be classifi ed into
other categories of fi nancial assets due to their nature, or they are designated as such by management. They comprise
investments in the equity of other entities where there is neither a fi xed maturity nor fi xed or determinable payments.
Available-for-sale fi nancial assets are included in non-current assets, except for those which are expected to mature
within 12 months after the end of the reporting period (all other fi nancial assets are classifi ed as current assets).
Financial liabilities
Non-derivative fi nancial liabilities (excluding fi nancial guarantees) are subsequently measured at amortised cost.
De-recognition
Financial assets are de-recognised where the contractual rights to receipt of cash fl ows expires or the asset is
transferred to another party whereby the entity no longer has any signifi cant continuing involvement in the risks
and benefi ts associated with the asset. Financial liabilities are de-recognised where the related obligations are either
discharged, cancelled or expired. The diff erence between the carrying value of the fi nancial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profi t or loss.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a fi nancial instrument has been
impaired. In the case of available for sale fi nancial instruments, a prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen. Impairment losses are recognised in the Income Statement.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
55
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Financial Instruments (Continued)
Derivative fi nancial instruments
Derivative fi nancial instruments are used by the Consolidated Entity to hedge exposures to commodity prices and
foreign currency exchange rates.
The Group documents at the inception of a transaction the relationship between hedging instruments and hedged
items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to be highly eff ective in off setting changes in fair values or cash
fl ows of hedged items.
Derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently
remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item being hedged. Hedging derivatives are either
Fair Value Hedges or Cash fl ow Hedges.
Fair Value Hedges
Changes in the fair value of derivatives classifi ed as fair value hedges are recognised in the Income Statement, together
with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk.
Cash Flow Hedge
The eff ective portion of changes in the fair value of derivatives that qualify as cash fl ow hedges are recognised
in equity in the hedging reserve. The ineff ective portion is recognised directly in the Income Statement. Amounts
accumulated in equity are classifi ed to profi t or loss in the periods when the hedged item aff ects profi t or loss (for
instance when the forecast sale that is hedged takes place).
All Other Derivatives
Changes in the fair value of derivatives that do not qualify for hedge accounting are recognised in the Income Statement.
(m)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information including dividends
received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profi ts. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset,
being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is expensed to the Income Statement.
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.
Reversal of impairment losses
An impairment loss recognised in prior periods for an asset/CGU is reversed if there has been a change in the estimates
used to determine the asset’s/CGU’s recoverable amount. When an impairment loss subsequently reverses, the carrying
amount of the asset/CGU is increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset/CGU in prior years.
Impairment testing is performed annually for goodwill and intangible assets with indefi nite lives.
(n)
Rounding Amounts
The parent entity has applied the relief available to it under the ASIC Class Order 98/100 and accordingly, amounts in
the fi nancial report have been rounded to the nearest $1,000.
(o)
Joint Ventures
The Group’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in the
appropriate items of the consolidated fi nancial statements. Details of the Group’s interests are shown at Note 28.
56
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)
Cash and Cash Equivalents
Cash and cash equivalents comprise cash-on-hand, cash in banks and investments in money market instruments, net
of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the Statement of
Financial Position.
(q)
Provisions
Provisions are recognised where the Group has a legal or constructive obligation, as a result of past events, for which it
is probable that an outfl ow of economic benefi ts will result and that outfl ow is able to be reliably measured.
(r)
Convertible Bonds
The component of the convertible bond that exhibits characteristics of a liability is recognised as a liability in the
Statement of Financial Position, net of transaction costs. On issuance of the convertible bonds, the fair value of the
liability component is determined using a market rate for an equivalent non-convertible bond and this is carried as a
long term liability. The increase in the liability due to the passage of time is recognised as a fi nance cost.
The remainder of the proceeds are allocated and included in shareholder equity, net of transaction costs. The carrying
amount of the convertible bond is not remeasured in subsequent years.
(s)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated fi nancial 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 diff erences arising on the translation of monetary items are recognised in the Income Statement, except
where deferred in equity as a qualifying cash fl ow or net investment hedge.
Exchange diff erences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss can be directly recognised in equity, otherwise the exchange diff erence is recognised in the
Income Statement.
The fi nancial results and position of foreign operations whose functional currency is diff erent 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 for the period; and
• • retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange diff erences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve in the Statement of Financial Position. These diff erences are recognised in the Statement of
Comprehensive Income in the period in which the operation is disposed.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
57
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t)
Critical Accounting Estimates and Balances
The Directors evaluate estimates and judgements incorporated into the fi nancial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group.
Key estimates
i) Impairment
The Group assesses each asset or cash generating unit (CGU) at each reporting period to determine whether
any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the
recoverable amount is made.
Recoverable amounts for the Group’s CGU, being the Forrestania Nickel Project, are determined using a fair
value less cost to sell (FVLCS) approach. These calculations incorporate various assumptions and estimates as
detailed in Notes 11 and 12.
ii) Reserve estimates
Estimates of recoverable quantities of proven and probable reserves include assumptions regarding
commodity prices, exchange rates, discount rates, production and transportation costs for future cash
fl ows. It also requires interpretation of complex and diffi cult geological and geophysical models in order
to make an assessment of the size, shape, depth and quality of reserves and their anticipated recoveries.
The economic, geological and technical factors we use to estimate reserves may change from period to
period. Changes in reported reserves can impact asset carrying values, the provision for restoration and
the recognition of deferred tax assets, due to changes in expected cash fl ows. Reserves are integral to the
amount of depreciation, depletion and amortisation charged to the Income Statement and the calculation of
inventory. The Group prepares reserve estimates in accordance with the JORC Code, guidelines prepared by
the Joint Ore Reserves Committee of The Australian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia.
Key judgements
i) Provision for restoration and rehabilitation
Provision is made for the costs of Restoration and Rehabilitation when the related environmental
disturbance takes place as outlined in Note 16. The provision recognised represents management’s best
estimate of the costs that will be incurred, but signifi cant judgement is required as many of these costs will
not crystallise until the end of the life of the mine. Estimates are reviewed annually and are based on current
regulatory requirements and the estimated useful of the life of mine. Engineering and feasibility studies
are undertaken periodically, however signifi cant changes in the estimates of contamination, restoration
standards and techniques will result in changes to provisions from period to period.
ii) Exploration and evaluation expenditure
The application of the Group’s accounting policy for exploration and evaluation expenditure requires
judgement to determine whether it is likely that future economic benefi ts are likely, from either future
exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of
the existence of commercially viable quantities of reserves. The policy requires management to make certain
estimates and assumptions about future events or circumstances, in particular, whether an economically
viable extraction operation can be established. Estimates and assumptions may change if new information
becomes available. If, after expenditure is capitalised, information becomes available suggesting that the
recovery of expenditure is unlikely, the amount capitalised is impaired or written off in the Income Statement
in the period when the new information becomes available.
58
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u)
Contributed equity
Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue
of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the
purchase consideration.
If the entity reacquires its own equity instruments, for example, as the result of a share buy-back, those instruments are
deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profi t and loss and
the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly
in equity.
(v)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identifi ed as the Board of Directors.
(w) Earnings per share
Basic earnings per share
Basic earnings per share are calculated by dividing:
• • The profi t attributable to equity holders of the Company, excluding any costs of servicing equity other than
ordinary shares.
• • By the weighted average number of ordinary shares outstanding during the fi nancial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares (Note 19).
Diluted earnings per share
Diluted earnings per share adjusts the fi gures used in the determination of basic earnings per share to take into account:
• • The after income tax eff ect of interest and other fi nancing costs associated with dilutive potential ordinary shares, and
• • The weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(x)
Comparative fi gures
Where necessary, comparative fi gures have been restated to conform with changes in presentation for the current year.
(y)
Intangibles
Expenditure during the research phase of a project is recognised as an expense when incurred. Patents and trademarks
are capitalised only when technical feasibility studies identify that the project will deliver future economic benefi ts and
these benefi ts can be measured reliably.
Patents and trademarks have a fi nite life and are amortised on a systematic basis matched to the future economic
benefi ts over the useful life of the project.
(z)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the eff ective
interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. They
are presented as current assets unless collection is not expected for more than 12 months after the reporting date.
The amount of the impairment loss is recognised in profi t or loss within other expenses. When a trade receivable for
which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against other
expenses in profi t or loss.
(aa) Trade and other payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at
the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within
30 days of recognition of the liability.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
59
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 2: OTHER INCOME
- Interest income
- Sundry income
- Income on sale of carbon credits
Total other income
NOTE 3: PROFIT BEFORE INCOME TAX
Profi t before income tax includes the following specifi c expenses:
- Depreciation of property, plant and equipment
- Amortisation of mine development asset
- Rental expenditure relating to operating leases
- Realised derivative gains
- Changes in fair value of derivatives
- Employee benefi ts expense
Consolidated Entity
2013
$’000
2012
$’000
1,493
344
5,143
6,980
8,624
139
-
8,763
Notes
Consolidated Entity
2013
$’000
2012
$’000
9
12
12,861
70,225
1,270
2,978
1,472
15,258
76,423
849
9,030
1,181
Defi ned contribution superannuation expense
1,996
2,143
- Finance costs:
Interest expense – borrowings
Provisions: unwinding of discount
Bond accretion expense
Interest expense – fi nance leases
Borrowing costs amortised
Total borrowing costs
NOTE 4: INCOME TAX
The components of the tax expense comprise:
- Current tax
- Deferred tax
- R&D Tax off set
- Adjustment of current tax for prior periods
Income tax (benefi t) / expense
16,758
298
7,483
15
2,182
26,736
24,367
284
9,083
5
3,702
37,441
Notes
Consolidated Entity
2013
$’000
2012
$’000
324
(30,590)
(5,547)
1,360
(34,453)
12,130
5,150
-
-
17,280
The prima facia tax on the profi t from ordinary activities before income tax at the statutory income tax rate to income tax
expense at the Groups’ eff ective income tax rate is as follows:
Prima facia tax on (loss)/profi t before income tax at 30% (2012: 30%)
(38,567)
17,238
Adjusted for the tax eff ect of:
- Changes in fair value of derivatives
- Share based payment expense
- Other non allowable items
- Share issue costs deductible
- Other temporary diff erences
- Royalty buy back
- Convertible bond accretion expense
Tax Expense
60
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
442
348
7
(200)
1,272
-
2,245
(34,453)
354
265
136
(109)
1,132
(4,461)
2,725
17,280
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 5: DIVIDENDS
Dividends paid
Final ordinary dividend of 6 cents (2011: 15 cents) per share for the year ended 30 June
2012, 30% franked and 70% unfranked.
Interim fully franked ordinary dividend of 2 cents (2012: 5 cents unfranked) per share
Consolidated Entity
2013
$’000
2012
$’000
10,784
3,937
14,721
26,962
8,987
35,949
Dividends proposed
No fi nal dividend proposed for the year ended 30 June 2013 (2012: 6 cents per share).
-
10,784
NOTE 6: TRADE AND OTHER RECEIVABLES
Trade debtors
Other debtors
GST refund due
Prepayments
Notes
Consolidated Entity
2013
$’000
2012
$’000
14,372
1,582
1,150
1,506
18,610
21,765
780
1,741
1,074
25,360
There are no balances within trade and other receivables that contain assets that are past due. It is expected the
balances will be received when due.
NOTE 7: INVENTORIES
Ore stockpiles – at cost
Nickel concentrate stockpiles – at cost
Consumables and spare parts – at cost
NOTE 8: FINANCIAL ASSETS
Available for sale fi nancial assets include the following classes of fi nancial assets:
Non-current assets
Listed securities:
- Equity securities
(a)
Investments in subsidiaries
Name
Western Platinum NL
Australian Nickel Investments Pty Ltd
Bioheap Ltd
FinnAust Mining PLC
Western Areas Nickel Pty Ltd (formerly known as Kagara Nickel
Pty Ltd) (Note 35)
24,926
1,473
3,919
30,318
1,120
1,120
31,319
7,089
3,713
42,121
3,460
3,460
Percentage of equity held
Country of
Incorporation
Australia
Australia
Australia
United Kingdom
Australia
2013
%
100%
100%
100%
84%
100%
2012
%
100 %
100 %
100%
81%
100%
All the entities above, except FinnAust Mining PLC, are members of the tax consolidated group of which Western Areas
Ltd is the head entity. Western Areas Ltd is the parent entity and is incorporated and domiciled in Australia.
Australian Nickel Investments Pty Ltd has a controlling interest in one unlisted company. Due to the immaterial value
of the fi nancial results of this company, the fi nancial information of this company has not been consolidated into the
Consolidated Entity.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
61
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
Property – at cost
Accumulated depreciation
Plant & equipment – at cost
Accumulated depreciation
Plant & equipment under lease
Accumulated depreciation
Total property, plant & equipment – at cost
Accumulated Depreciation
Total
Consolidated Entity
2013
$’000
2012
$’000
40,925
(11,316)
29,609
127,415
(45,290)
82,125
990
(614)
376
169,330
(57,220)
112,110
22,871
(6,481)
16,390
127,820
(37,357)
90,463
779
(521)
258
151,470
(44,359)
107,111
Assets Pledged as Security
The property, plant and equipment are assets over which a mortgage has been granted as security over project loans.
The terms of the mortgage preclude the assets from being sold or being used as security for further mortgages without
the permission of the existing mortgagor. Assets under lease are pledged as security for the associated lease liabilities.
Movement in carrying amounts:
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end
of the current year:
Property
Written down value at the beginning of the year
- Additions / transfers
- Depreciation expense
Written down value at the end of the year
Plant & Equipment
Written down value at the beginning of the year
- Additions / transfers
- Depreciation expense
Written down value at the end of the year
Plant & Equipment under Lease
Written down value at the beginning of the year
- Additions
- Depreciation expense
Written down value at the end of the year
62
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Consolidated Entity
2013
$’000
2012
$’000
16,390
18,054
(4,835)
29,609
90,463
(405)
(7,933)
82,125
258
211
(93)
376
16,240
1,934
(1,784)
16,390
95,310
8,552
(13,399)
90,463
133
200
(75)
258
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 10: INTANGIBLE ASSETS
Capitalised patents and trademarks costs – at cost
NOTE 11: EXPLORATION & EVALUATION EXPENDITURE
Exploration & Evaluation Expenditure consists of:
- At cost
- Transferred to mine development
- Accumulated impairment loss
Total Exploration and Evaluation Expenditure
Movement in carrying amount:
Consolidated Entity
2013
$’000
2012
$’000
525
525
Notes
Consolidated Entity
2013
$’000
2012
$’000
204,786
(76,000)
(96,604)
32,182
198,844
(46,000)
(19,562)
133,282
Movement in the carrying amounts for exploration and evaluation expenditure between the beginning and the end of
the current period:
Exploration & Evaluation Expenditure
Written down value at the beginning of the year
- Expenditure incurred during the year
- Transferred to mine development
- Write-off
- Impairment charge
Written down value at the end of the year
Impairment and write-off
133,282
23,015
(30,000)
(17,073)
(77,042)
32,182
91,875
46,486
(5,000)
-
(79)
133,282
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. Management regularly evaluates the
recoverability of exploration and evaluation assets.
At 30 June 2013, Management have assessed that:
• • Exploration activities are inherently risky, but can be ultimately very rewarding. In recognition of the risk involved
in exploration, specifi c amounts of exploration and evaluation expenditure are unlikely to be recovered through
successful development or sale, and as such have impaired those assets by $77.0 million; and
• • Exploration expenditure in relation to specifi c areas of interest have not lead to the discovery of commercially viable
quantities of mineral resources and have therefore decided to discontinue activities at this time in these areas, as
such $17.0 million has been written off .
Carry Forward Exploration & Evaluation Expenditure
The recovery of the costs of exploration and evaluation expenditure carried forward is dependent upon the discovery of
commercially viable mineral and other natural resource deposits and their development and exploitation or alternatively
their sale.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
63
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 12: MINE PROPERTIES
Capitalised development expenditure consists of:
- Mine development
- Acquisition of mining assets
- Exploration expenditure transfer
- Deferred mining expenditure
- Capitalised restoration costs
- Capitalised interest
- Accumulated impairment loss
- Accumulated amortisation
Total Mine Development
Movement in carrying amount:
Notes
Consolidated Entity
2013
$’000
2012
$’000
180,041
59,796
76,000
244,810
5,843
11,175
(39,896)
191,457
59,796
46,000
207,131
5,843
11,175
-
(295,993)
(225,768)
241,776
295,634
Movement in the carrying amounts for mine development expenditure between the beginning and the end of the
current period:
Development Expenditure
Written down value at the beginning of the year
- Additions
- Exploration expenditure transfer
- Impairment charge
- Write-off
- Amortisation charge for the year
Written down value at the end of the year
Write-off of mine property expenditure
295,634
34,673
30,000
(39,896)
(8,410)
(70,225)
241,776
209,454
157,603
5,000
-
-
(76,423)
295,634
Management has reviewed the recoverable amount of each asset or group of assets within the Group’s Cash Generating
Unit (CGU), being the Forrestania Nickel Project, and written off $8.4 million. The major element of this was a charge of
$6.5 million relating to the Diggers South assets.
Impairment of Forrestania Nickel Project
The past six months has seen a deterioration in the nickel price. This, combined with management’s understanding of
the fundamental drivers of nickel supply and demand, triggered the Group to undertake an impairment assessment.
For assets within the Group’s CGU where it was not possible to determine the recoverable amount of individual assets
or group of assets, the recoverable amount has been determined based on the CGU using a fair value less cost to sell
(FVLCS) approach. Given the nature of the Group’s activities, information on the fair value of an asset is usually diffi cult
to obtain unless negotiations with potential purchasers or similar transactions are taking place. Consequently, the
FVLCS for the CGU was determined based on the net present value of the future cash fl ows expected (discounted cash
fl ow model) to be generated by the CGU and are based on the most recent life of mine plans and are adjusted to ensure
these refl ect those assumptions a market participant would apply.
The cash fl ows were discounted using a nominal after-tax discount rate that refl ects current market assessment. Other
key inputs in the discounted cash fl ow model included:
• • Nickel price – future nickel prices were based on the 30 June 2013 consensus views from market participants;
• • Nickel production – future nickel production was based on the Group’s Life of Mine Plan;
64
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 12: MINE PROPERTIES (CONTINUED)
• • Operating and capital cost – these costs were based on management’s best estimates of direct and allocated costs at
the time of the impairment testing;
• • Foreign exchange rates – US dollar to AU dollar exchange rates were based on consensus views from market participants;
• • Taxation – a 30% corporate tax rate; and
• • Discount rate – a post–tax nominal discount rate of 10% (pre-tax 13%).
The carrying value of the CGU was determined to be greater than the recoverable amount and accordingly, an
impairment loss of $39.9 million was recognised.
NOTE 13: DEFERRED TAX LIABILITIES
The balance comprises temporary diff erences attributable to:
(a) Liabilities
- Exploration & evaluation expenditure
- Property, plant and equipment
- Other
(b) Assets
- Provisions
- Mine development
- Other
Net deferred tax liabilities
(c) Reconciliation
(i) Gross movement
Consolidated Entity
2013
$’000
2012
$’000
(24,120)
(5,036)
(706)
(29,862)
2,469
16,764
-
19,233
(10,629)
(58,108)
5,623
(773)
(53,258)
1,829
9,966
244
12,039
(41,219)
The overall movement in the deferred tax account is as follows:
Opening balance
Credit / (Debit) to Income Statement
Closing balance
(41,219)
30,590
(10,629)
(36,069)
(5,150)
(41,219)
(ii) Deferred tax liability
The movement in the deferred tax liabilities for each temporary diff erence
during the year is as follows:
Exploration & development expenditure
Opening balance
Credit / (Debit) to Income Statement
Closing balance
Property, plant and equipment
Opening balance
(Debit) / Credit to Income Statement
Closing balance
Other
Opening balance
Credit to Income Statement
Closing balance
(58,108)
33,988
(24,120)
5,623
(10,659)
(5,036)
(773)
67
(706)
(44,126)
(13,982)
(58,108)
2,026
3,597
5,623
(2,106)
1,333
(773)
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
65
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 13: DEFERRED TAX LIABILITIES (CONTINUED)
(i) Deferred tax assets
The movement in the deferred tax assets for each temporary diff erence during
the year is as follows:
Consolidated Entity
2013
$’000
2012
$’000
-
-
-
1,829
640
2,469
9,966
6,798
16,764
244
(244)
-
8,670
20,728
7,513
36,911
-
-
-
104
104
168
(168)
-
1,837
(8)
1,829
5,023
4,943
9,966
1,109
(865)
244
15,214
39,377
11,853
66,444
45,000
105,500
(156)
48
150,392
15 (a)
15 (b)
15 (c) & 21 (b)
15 (b)
221,046
213,563
15 (c) & 21 (b)
(2,597)
275
(1,809)
(4,367)
187
(695)
216,915
208,688
Deferred tax assets due to tax losses
Opening balance
Credit to Income Statement
Closing balance
Provisions
Opening balance
Credit / (Debit) to Income Statement
Closing balance
Mine development
Opening balance
Credit to Income Statement
Closing balance
Other
Opening balance
Credit to Income Statement
Closing balance
NOTE 14: TRADE & OTHER PAYABLES
Trade payables
Accrued expenses
Accrued interest
NOTE 15: BORROWINGS
Current
Corporate loan facility
Convertible bond
Convertible bond borrowing cost
Lease liabilities
Non Current
Convertible bonds
Convertible bond borrowing costs
Lease liabilities
Corporate loan facility borrowing cost
66
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 15: BORROWINGS (CONTINUED)
(a)
Corporate loan facility
The Corporate Loan facility is available for broad company purposes as agreed between the Australia and New Zealand
Banking Group Ltd (ANZ) and Western Areas Ltd. In February 2013, the Company executed a revised loan facility that
both extends and enlarges the existing loan facility between ANZ and Western Areas Ltd. The facility is for $125M, is
undrawn as at 30 June 2013 and remains in place until March 2016.
The carrying value of assets secured under the corporate loan facility is as follows:
Mine development
Property, plant & equipment
(b)
Convertible bonds
Current
Convertible bond (Issued June 2007)
Non-current
Convertible bond (Issued April 2010)
Convertible bond (Issued November 2010)
Total non-current
Total convertible bond borrowing
Consolidated Entity
2013
$’000
241,776
111,733
353,509
2012
$’000
295,634
106,853
402,487
-
105,500
115,563
105,483
221,046
221,046
111,934
101,629
213,563
319,063
(i) The convertible bond issued in November 2010 and April 2010 mature on 2 July 2014 and 2 July 2015 respectively.
The November 2010 and April 2010 convertible bond are convertible into fully paid ordinary share at $6.41/share and
$7.47/share respectively prior to maturity.
(ii) Interest is payable on the convertible note as follows:
• • 6.4% on convertible bond issued in April 2010
• • 6.375% on convertible bond issued in November 2010
(c)
Lease liabilities
The lease liabilities are secured over the assets under the lease. The fi nance leases have an average term of three years
and an average implicit discount rate of 6.4%. Refer to Note 9 for the carrying value of the assets under lease.
16 (a)
1,932
1,374
NOTE 16: PROVISIONS
Current
Employee entitlements
Non Current
Rehabilitation and restoration cost
Opening balance
Unwinding of discount
Rehabilitation expenditure incurred during the period
Closing balance
16 (b)
(a) Employee entitlements relate to balance of annual leave and long service leave accrued by the Consolidated Entity’s
employees. Recognition and measurement criteria have been disclosed in Note 1.
(b) Rehabilitation and restoration cost relates to an estimate of restoration costs that will result from the development
of the Forrestania Nickel Project. The current mine life is 10 years, after which time the rehabilitation activities will
be undertaken.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
67
6,096
297
(95)
6,298
6,122
284
(310)
6,096
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 17: DERIVATIVE FINANCIAL INSTRUMENTS
Current Assets
Foreign exchange collar options
Current Liabilities
Foreign exchange collar options
Consolidated Entity
2013
$’000
2012
$’000
29 (c)
29 (c)
663
663
1,906
1,906
1,973
1,973
284
284
Collar options are used to hedge cash fl ow risk associated with future transactions. Gains and losses arising from
changes in the fair value of derivatives are initially recognised directly in the Statement of Comprehensive Income.
At the date of the transaction, amounts included in the hedge reserve are transferred from equity and included in the
Income Statement.
NOTE 18: ISSUED CAPITAL
a) Issued capital
196,843,803 fully paid ordinary shares (2012: 179,735,899)
b) Movements in issued capital
2013
Balance at beginning of the fi nancial year
- Share issue expense
- Issued via share placement
Consolidated Entity
2013
$’000
266,043
2012
$’000
202,611
Number of
Shares
179,735,899
-
17,107,904
$’000
202,611
(1,577)
65,009
Balance at end of the fi nancial year
196,843,803
266,043
2012
There was no movement in issued capital during the prior year.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor, and market confi dence and to sustain
future development of the business. There were no changes to the Consolidated Entity’s approach to capital management
during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
The Board eff ectively manages the Group’s capital by assessing the Group’s fi nancial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
c) Share options
Information relating to options issued, exercised, lapsed during the year and the options outstanding at the end of the
year are detailed in Note 31 Share Based Payments.
d) Terms and conditions of ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
68
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 19: EARNINGS PER SHARE
(Loss) / earnings used to calculate basic / diluted earnings per share
Weighted average number of ordinary shares outstanding during the year used in
calculating basic earnings per share
Weighted average number of dilutive options outstanding*
Consolidated Entity
2013
$’000
2012
$’000
(94,105)
40,181
2013
Number
2012
Number
196,843,803
179,735,899
-
-
Weighted average number of ordinary shares outstanding during the year used in
calculating dilutive earnings per share
196,843,803
179,735,899
* As at 30 June 2012 and 30 June 2013, none of the outstanding options were dilutive as the weighted average exercise price of the options were
higher than the weighted average share price for the year.
NOTE 20: CASH FLOW INFORMATION
a) Reconciliation of the net profi t after tax to net cash provided by
operating activities
(Loss) / Profi t after income tax
Depreciation expense
Amortisation expense
Convertible bond accretion expense
Impairment expenses
Interest receivable
Others
Share based payment expense
Changes in fair value of derivatives
Stamp duty on acquisition of subsidiary (Note 35)
Change in Assets and Liabilities
(Decrease) / increase in trade and other payables
Decrease / (increase) in inventories
Decrease / (increase) in trade and other receivables
(Decrease) / increase in interest payable
(Decrease) / increase in tax liabilities
Net cash provided by operating activities
b) Reconciliation of Cash and Cash Equivalents
Cash and cash equivalents comprises:
Cash on hand and at bank
Consolidated Entity
2013
$’000
2012
$’000
(94,105)
12,861
72,407
7,483
142,421
128
1,406
1,159
1,472
-
(6,693)
11,802
6,986
(4,340)
(40,872)
112,115
40,181
15,258
80,125
9,083
79
1,633
461
882
1,181
3,487
688
(7,875)
(1,806)
120
15,756
159,253
Consolidated Entity
2013
$000
2012
$000
80,719
165,502
The cash at bank on 30 June 2013 includes restricted cash of $7.5M interest on convertible bonds payable on 2 July 2013.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
69
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 20: CASH FLOW INFORMATION (CONTINUED)
c) Financing Facilities Available
As at the reporting date the Consolidated Entity had the following fi nancing facilities in place:
Banking Facilities:-
ANZ Banking Group
- Cash advance facility*
Performance Guarantees:-
ANZ Banking Group
- Security bond facility
Commonwealth Bank
- Security bond facility
Total Facility
Utilised at Balance
Date
Available Facilities
(*)
$’000
$’000
$’000
125,000
-
125,000
10,000
71
135,071
6,998
71
7,069
3,002
-
128,002
* The facility is made available to the Company upon satisfaction of conditions precedent typically associated with corporate loans.
d) Non Cash Financing Activities
During the year, the Consolidated Entity acquired plant & equipment by means of a fi nance lease to the value of $212k
(2012: $200k).
NOTE 21: COMMITMENTS
The Directors are not aware of any commitments as at the date of these fi nancial statements other than those listed
below.
a) Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised in the accounts.
- no later than 1 year
- later than 1 year and not later than 5 years
Lease expenditure contracted for at year end
Consolidated Entity
2013
$’000
912
3,757
4,669
2012
$’000
876
3,610
4,486
The operating leases are for miscellaneous offi ce equipment and offi ce premises in West Perth. The West Perth offi ce
lease expires September 2018.
b) Finance Lease Commitments
- no later than 1 year
- later than 1 year and not later than 5 years
Total Minimum Lease Payments
- future fi nance charges
Total Lease Liability
- current
- non current
104
275
379
37
416
134
282
416
48
187
235
28
263
61
202
263
The fi nance lease commitments relate primarily to the motor vehicles, but also include some offi ce equipment. Motor
vehicles are fi nance leased under three year contracts at normal commercial rates, balloon payments are generally
required at the expiry of the fi nance lease, at which point the Company takes ownership of the vehicle.
70
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 21: COMMITMENTS (CONTINUED)
c) Capital Expenditure Commitments
- no later than 1 year
- later than 1 year and not later than 5 years
Total minimum commitments
(d) Exploration Expenditure Commitments
- no later than 1 year
- later than 1 year and not later than 5 years
Total minimum payments
Consolidated Entity
2013
$’000
2012
$’000
-
-
-
4,866
19,468
24,334
-
-
-
5,138
20,552
25,690
Under the terms and conditions of the Company’s title to its various tenements, it has an obligation to meet tenement
rentals and minimum levels of exploration expenditure as gazetted by the Department of Mines and Petroleum.
NOTE 22: AUDITOR REMUNERATION
During the year, the following fees were paid or payable for services provided by
the auditor of the Company:
- Audit and review of fi nancial statements
- Audit of Jobs and Competitiveness Program Assistance Application
Consolidated Entity
2013
$’000
2012
$’000
171
7
178
159
-
159
NOTE 23: MATERIAL CONTRACTS
The Company has two main customers. A summary of the key terms of the off -take agreements entered into with these
customers are detailed below. Credit risk associated with these customers is detailed in Note 29.
In May 2009, the Company entered a Concentrate Purchase Agreement (“CPA”) with BHP Billiton Ltd. Under the terms of
this agreement, BHP Billiton are entitled to purchase up to 10,000 tonnes per annum of nickel in concentrate produced
from the Forrestania tenements. The agreement is for a term of 7.5 years. In March 2012, the quantity of nickel in
concentrate sold to BHP was increased to 12,000 tonnes per annum.
In March 2013, the Company entered into a new Sale and Purchase Agreement for Nickel Concentrates with Jinchuan
Group Ltd (“Jinchuan”) to deliver up to 26,000 tonnes of nickel in concentrate for a period of two years.
NOTE 24: CONTINGENT LIABILITIES
The Directors are not aware of any contingent liabilities as at the date of these fi nancial statements.
NOTE 25: SUBSEQUENT EVENTS
There have been no subsequent events after 30 June 2013 which has a material eff ect on the fi nancial statements for
the year ended 30 June 2013.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
71
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 26: STATEMENT OF OPERATIONS BY SEGMENTS
Identifi cation of reportable segment
The Group identifi es its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
The Group operates primarily in nickel mining and exploration in Australia and exploration in Finland. The fi nancial
information in relation to the operations in Finland is not reported separately to the chief operating decision maker and
as a result, the fi nancial information presented in the Income Statements and Statement of Financial Position is the
same as that presented to chief operating decision maker.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker is in accordance
with accounting policies that are consistent to those adopted in the annual fi nancial statements of the Group.
NOTE 27: KEY MANAGEMENT PERSONNEL
Key Management Personnel
Key management personnel of the Consolidated Entity (as defi ned by AASB 124: Related Party transactions) include
the following:
T Streeter
I Macliver
J Hanna
R Dunbar
R Yeates
D Lougher
D Southam
J Belladonna
W Jones
C Wilkinson
G Marshall
Chairman (Non-Executive)
Lead Independent Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
Managing Director
Executive Director
Chief Financial Offi cer / Company Secretary
General Manager Operations (Appointed 1 August 2012)
General Manager Exploration
General Manager Commercial
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to
each member of the Group’s key management personnel for the year ended 30 June 2013.
The total of remuneration paid to key management personnel of the Consolidated Entity during the year is detailed below:
Short term employee benefi ts
Share based payments
Post-employment benefi ts
2013
$’000
2012
$’000
3,815
1,045
343
5,203
5,813
646
324
6,783
Performance Rights held by Key Management Personnel 2013
Balance at
1 July 2012
Granted as
Remuneration
Exercised
Expired /
Lapsed
Balance at
30 June 2013
Performance
Rights Vested
D Lougher
D Southam
C Wilkinson
G Marshall
J Belladonna
W Jones
TOTAL
113,891
107,354
46,399
42,182
64,411
-
374,237
294,800
165,900
71,050
64,591
104,074
83,476
783,891
-
-
-
-
-
-
-
-
-
-
-
-
-
-
408,691
273,254
117,449
106,773
168,485
83,476
1,158,128
-
-
-
-
-
-
72
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 27: KEY MANAGEMENT PERSONNEL (CONTINUED)
Performance Rights held by Key Management Personnel 2012
D Lougher
D Southam
C Wilkinson
G Marshall
J Belladonna
TOTAL
Balance at
1 July 2011
Granted as
Remuneration
Exercised
Expired /
Lapsed
Balance at
30 June 2012
Performance
Rights Vested
-
-
-
-
-
-
113,891
107,354
46,399
42,182
64,411
374,237
-
-
-
-
-
-
-
-
-
-
-
-
113,891
107,354
46,399
42,182
64,411
374,237
-
-
-
-
-
-
Shareholding by Key Management Personnel 2013
J Hanna
T Streeter
R Dunbar
I Macliver
R Yeates
D Lougher
D Southam
W Jones (*)
C Wilkinson
J Belladonna
TOTAL
Balance at
1 July 2012
1,134,666
25,889,410
102,500
20,000
10,000
64,884
-
60,000
7,000
60,000
27,348,460
Granted as
Remuneration
On Exercise of
Options
Other Changes
During the Year
Balance at
30 June 2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(410,875)
723,791
(1,951,780)
23,937,630
10,000
3,948
-
15,073
-
-
-
3,948
112,500
23,948
10,000
79,957
-
60,000
7,000
63,948
(2,329,686)
25,018,774
* Mr Jones was promoted to General Manager Operations on 1 August 2012 and held the above shares at that time.
Shareholding by Key Management Personnel 2012
J Hanna
T Streeter
R Dunbar
D Cooper (*)
I Macliver (**)
R Yeates
D Lougher
D Southam
C Wilkinson
J Belladonna
TOTAL
Balance at
1 July 2011
1,293,987
25,809,410
102,500
1,000,000
-
6,000
50,884
-
7,000
60,000
28,329,781
Granted as
Remuneration
On Exercise of
Options
Other Changes
During the Year
Balance at
30 June 2012
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(159,321)
80,000
-
(1,000,000)
20,000
4,000
14,000
-
-
-
1,134,666
25,889,410
102,500
-
20,000
10,000
64,884
-
7,000
60,000
(1,041,321)
27,288,460
* Mr D Cooper resigned as Non-Executive Director on 30 September 2011 and held the above shares at that time.
** Mr I Macliver joined the Board on 1 October 2011 and held the above shares at that time.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
73
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 27: KEY MANAGEMENT PERSONNEL (CONTINUED)
Options held by Key Management Personnel 2013
Balance at
1 July 2012
Granted as
Remuneration
On Exercise
of Options
Purchases /
(Sales)
Expired /
Lapsed
Balance
at 30 June
2013
Options
Vested (*)
J Hanna
D Lougher
C Wilkinson
G Marshall
200,000
200,000
100,000
50,000
J Belladonna
100,000
TOTAL
650,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(200,000)
(200,000)
(100,000)
(50,000)
(100,000)
(650,000)
-
-
-
-
-
-
-
-
-
-
-
-
(*) 100% of options that have vested with the Directors and Executives are exercisable at any time up until expiry.
Options held by Key Management Personnel 2012
Balance at
1 July 2011
Granted as
Remuneration
On Exercise
of Options
Purchases /
(Sales)
Expired /
Lapsed
Balance
at 30 June
2012
Options
Vested (*)
J Hanna
D Lougher
200,000
200,000
C Wilkinson
100,000
G Marshall
50,000
J Belladonna
100,000
TOTAL
650,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
200,000
200,000
200,000
100,000
100,000
50,000
50,000
100,000
100,000
650,000
650,000
(*) 100% of options that have vested with the Directors and Executives are exercisable at any time until expiry.
NOTE 28: INTERESTS IN JOINT VENTURES
At balance date, the Consolidated Entity had entered into the following material unincorporated joint ventures. The
Consolidated Entity and percentage interest and share of non-current assets after impairment write off is listed below:
Joint Venture
% Interest
Principal Activities
Koolyanobbing (3 JV’s)
51%-100%
Nickel & Gold exploration
Sandstone Project
51%-70%
Nickel exploration
Mt Alexander
25%
Nickel & Copper exploration
Great Western Project
51%-70%%
Nickel & Copper exploration
Kawana Project
70%-80%
Nickel & Copper exploration
Consolidated Entity
2013
$’000
2012
$’000
1,574
-
100
2,174
390
832
5,625
100
1,772
304
The principal activities of the Consolidated Entity joint ventures are to explore tenement interests for exploitable
mineral resources.
74
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT
Financial Risk Management Policies
The Treasury Committee consisting of senior management and Non-Executive Board members meets on a regular basis
to analyse and discuss amongst other issues, monitoring and managing fi nancial risk exposures of the Consolidated
Entity. The Treasury Committee monitors the Consolidated Entity fi nancial risk management policies and exposures and
approves fi nancial transactions within the scope of its authority. It also reviews the eff ectiveness of internal controls
relating to commodity price risk, counter party credit risk, currency risk, fi nancing risk and interest rate risk.
The Treasury Committee’s overall risk management strategy seeks to assist the Consolidated Entity in meeting its
fi nancial targets, while minimising potential adverse eff ects on fi nancial performance. Its functions include the review
of the use of hedging derivative instruments, credit risk policies and future cash fl ow requirements.
Specifi c Financial Risk Exposures and Management
The main risks the Group is exposed to through its fi nancial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and commodity and equity price risk.
a) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in fi nancial loss to
the Consolidated Entity. The Consolidated Entity has adopted a policy of only dealing with creditworthy counterparties
as a means of mitigating the risk of fi nancial loss from defaults.
The Consolidated Entity does not have any signifi cant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics.
The carrying amount of fi nancial assets exposed to credit risk is detailed below:
Cash and cash equivalents
Trade and other receivables
Available for sale fi nancial assets
Derivative fi nancial instruments
2013
‘000
80,719
18,610
1,120
663
2012
‘000
165,502
25,360
3,460
1,973
Cash and cash equivalents and derivative fi nancial instruments
The credit risk on liquid funds and derivative fi nancial instruments is limited because the counterparties are banks with
high credit-ratings.
Trade and other receivables
The Consolidated Entity does not have signifi cant credit risk exposure to trade receivables as the Consolidated Entity’s
customers are considered to be of high credit quality. There were no balances within trade and other receivables that
are past due. It is expected these balances will be received when due.
Available for sale fi nancial assets
Credit risk on available for sale fi nancial assets is minimised by undertaking transactions with recognised counterparties
on recognised exchanges.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
75
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
b) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter diffi culty in settling its debts or otherwise
meeting its obligations related to fi nancial liabilities. The Group manages this risk through the following mechanisms
which include:
• • preparing forward looking cash fl ow analysis in relation to its operational, investing and fi nancing activities
• • using derivatives that are only traded in highly liquid markets
• • monitoring undrawn credit facilities, to the extent that they exist
• • obtaining funding from a variety of sources
• • maintaining a reputable credit profi le
• • managing credit risk related to fi nancial assets
• • investing surplus cash only with major fi nancial institutions
• • comparing the maturity profi le of fi nancial liabilities with the realisation profi le of fi nancial assets
The tables below refl ect an undiscounted contractual maturity analysis for fi nancial assets and liabilities. Cash fl ows
realised from fi nancial assets refl ect management’s expectation as to the timing of realisation. Actual timing may
therefore diff er from that disclosed. The timing of cash fl ows presented in the table to settle fi nancial liabilities refl ects
the earliest contractual settlement dates and does not refl ect management’s expectations that banking facilities will be
rolled forward.
Financial liability and fi nancial asset maturity analysis
The Consolidated Entity’s contractual maturity analysis of fi nancial assets and fi nancial liabilities is shown below:
2013 Consolidated Entity
Financial Assets – Non Derivative
Cash and Cash Equivalents
Trade and Other Receivables
Financial Assets – Derivative
Nickel Collar Options (net settled)
Financial Liabilities – Non Derivative
Trade and Other Payables
Convertible bonds
Lease liabilities
Financial Liabilities – Derivative
Collar options (net settled)
Net Financial Assets/(Liabilities)
1 year
or less
$’000
Over 1 to 5
years
More than 5
Years
$’000
$’000
Total
contractual
cash fl ows
$’000
80,719
18,610
663
99,992
36,911
-
104
1,906
38,921
61,071
-
-
-
-
-
255,262
275
-
255,537
(255,537)
-
-
-
-
-
-
-
-
-
-
80,719
18,610
663
99,992
36,911
255,262
379
1,906
294,458
(194,466)
76
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
b) Liquidity Risk (Continued)
2012 Consolidated Entity
Financial Assets – Non Derivative
Cash and Cash Equivalents
Trade and Other Receivables
Financial Assets – Derivative
Nickel Collar Options (net settled)
Financial Liabilities – Non Derivative
Trade and Other Payables
Convertible bonds
Corporate loan facility
Lease liabilities
Financial Liabilities – Derivative
Collar options (net settled)
Net Financial Assets/(Liabilities)
c) Market Risk
1 year
or less
$’000
Over 1 to 5
years
More than 5
Years
$’000
$’000
Total
contractual
cash fl ows
$’000
165,502
25,360
1,973
192,835
66,444
105,500
45,000
61
284
217,289
(24,454)
-
-
-
-
-
273,212
-
202
-
273,414
(273,414)
-
-
-
-
-
-
-
-
-
-
-
165,502
25,360
1,973
192,835
66,444
378,712
45,000
263
284
490,703
(297,868)
Market risk is the risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, price risk and currency risk.
i) Interest Rate Risk
Exposure to interest rate risk arises on fi nancial assets and fi nancial liabilities recognised at reporting date whereby a
future change in interest rates will aff ect future cash fl ows or the fair value of fi xed rate fi nancial instruments. Interest
rate risk is managed using a mix of fi xed and fl oating rate debt.
At the reporting date, the interest rate risk profi le of the Consolidated Entity’s interest bearing fi nancial instruments
was as follows:
2013 Consolidated Entity
Fixed Interest maturing in:
Floating
Interest
Rate
$’000
1 year or
less
Over 1 to
5 years
More than
5 Years
$’000
$’000
$’000
Financial Assets
Cash and Cash Equivalents
80,719
Trade and Other Receivables
-
Financial Liabilities
Trade and Other Payables
Convertible bonds
Lease liability
80,719
-
-
-
-
-
-
-
-
-
104
104
-
-
-
-
218,449
275
218,724
Net Financial Assets/(Liabilities)
80,719
(104)
(218,724)
-
-
-
-
-
-
-
-
Non-
Interest
Bearing
$’000
-
18,610
18,610
Total
$’000
80,719
18,610
99,329
Weighted
Average
Interest
Rate
4.1%
36,911
36,911
-
-
218,449
379
6.4%
6.4%
36,911
255,739
(18,301)
(156,410)
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
77
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
c) Market Risk (Continued)
2012 Consolidated Entity
Fixed Interest maturing in:
Floating
Interest
Rate
$’000
1 year or
less
Over 1 to
5 years
More than
5 Years
$’000
$’000
$’000
Non-
Interest
Bearing
$’000
Total
$’000
Weighted
Average
Interest
Rate
Financial Assets
Cash and Cash Equivalents
165,502
Trade and Other Receivables
-
165,502
Financial Liabilities
Trade and Other Payables
Corporate loan facility
Convertible bonds
Lease liability
-
-
-
-
-
-
-
-
-
45,000
-
-
-
-
-
105,344
209,196
48
187
150,392
209,383
Net Financial Assets/(Liabilities)
165,502
(150,392)
(209,383)
-
-
-
-
-
-
-
-
-
-
165,502
3.75%
25,360
25,360
25,360
190,862
66,444
-
-
-
66,444
45,000
314,540
235
66,444
426,219
(41,084)
(235,357)
5.4%
7.05%
6.4%
Interest rate sensitivities have not been included in the fi nancial report as the changes in profi t before tax due to
changes in interest rate is not material to the results of the Consolidated Entity.
ii) Price Risk
a) Equity Price Risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Group and
classifi ed on the Statement of Financial Position as available-for-sale.
A majority of the Consolidated Entity’s equity investments are publicly traded and are quoted either on the ASX or the TSX.
The table below summarises the impact of increases/decreases of these two indexes on the Consolidated Entity’s
comprehensive income. The analysis is based on the assumption that the equity indexes had increased by 10% /
decreased by 10% (2012 – increased by 10% / decreased by 10%) and foreign exchange rate increased by 5% / decrease
by 5% (2012 increased by 5% / decrease by 5%) with all other variables held constant and all the Consolidated Entity’s
equity instruments moved according to the historical correlation with the index. The percentages are the sensitivity
rates used when reporting equity price risk internally to key management personnel and represents management’s
assessment of the possible change in equity prices.
Available for sale fi nancial assets Index
ASX
TSX
Impact on comprehensive income
30 June 2012
30 June 2013
$’000
$’000
7
46
27
143
Comprehensive income would increase/decrease as a result of gains/losses on equity securities classifi ed as available-
for-sale. A decrease in the share price and exchange rate would result in a further decrease in fair value compared to
cost. Management is satisfi ed that the decrease in fair value will not require an impairment loss to be recognised in the
Income Statement.
78
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
c) Market Risk (Continued)
b) Commodity Price Risk
The Consolidated Entity is exposed to commodity price risk. Commodity price risk arises from the sale of nickel. The
entity manages its commodity price risk exposure arising from future commodity sales through sensitivity analysis, cash
fl ow management and forecasting and where appropriate utilise derivative fi nancial instruments to reduce price risk.
The following table details the Consolidated Entity’s sensitivity to a USD 500 increase and decrease in the nickel price.
USD 500 is the sensitivity rate used when reporting commodity price risk internally to key management personnel and
represents management’s assessment of the possible change in commodity price. The table below assumes all other
variables remaining constant.
Sensitivity analysis
Year Ended 30 June 2013
+- $500 / tonne nickel
Year Ended 30 June 2012
+- $500 / tonne nickel
Nickel Collar Options
Profi t
$‘000
Equity
$‘000
+1,974
-1,974
Profi t
$‘000
Equity
$‘000
+-1,143
+-1,143
The Consolidated Entity enters into fi nancial transactions in the normal course of business and in line with Board
guidelines for the purpose of hedging and managing its expected exposure to nickel prices. The hedges are treated as
cash fl ow hedges in accordance with AASB 139 “Financial Instruments: Recognition and Measurement”.
As at 30 June 2013, the Consolidated Entity did not have any open nickel collar options. (2012: Nil)
iii) Currency Risk
Currency risk arises when future commercial transactions and recognised fi nancial assets and liabilities are denominated
in a currency that is not the entity’s functional currency. The Consolidated Entity manages its foreign currency risk
exposure through sensitivity analysis, cash fl ow management, forecasting and where appropriate, utilises derivative
fi nancial instruments. The carrying amount of the Consolidated Entity’s foreign currency denominated monetary assets
and monetary liabilities at the reporting date is as follows:
US$ ‘000
Euros ‘000
30 June 2013
Financial
liabilities
Financial assets
30 June 2012
Financial
liabilities
Financial assets
-
-
16,754
200
-
-
24,231
1,207
The following table details the Consolidated Entity’s sensitivity to a 5% increase and decrease in the Australian Dollar
against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to
key management personnel and represents management’s assessment of the possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the period end for a 5% change in foreign currency rates.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
79
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
c) Market Risk (Continued)
Sensitivity analysis
Year Ended 30 June 2013
+ 5% in $A/$US
- 5% in $A/$US
Year Ended 30 June 2012
+ 5% in $A/$US
- 5% in $A/$US
Foreign exchange collar options
Profi t
$‘000
Equity
$‘000
(2,690)
2,973
(2,690)
2,973
Profi t
$‘000
Equity
$‘000
(1,796)
1,985
(1,796)
1,985
The Consolidated Entity had open foreign exchange collar options at 30 June 2013 relating to highly probable forecast
transactions and recognised fi nancial assets and fi nancial liabilities. These contracts commit the Group to buy and sell
specifi ed amounts of foreign currencies in the future at specifi ed exchange rates. The hedges are treated as cash fl ow
hedges in accordance with AASB 139 “Financial Instruments: Recognition and Measurement”.
The following table summarises the notional amounts of the Consolidated Entity’s commitments in relation to foreign
exchange collar options. The notional amounts do not represent amounts exchanged by the transaction counter parties
and are therefore not a measure of the exposure of the Consolidated Entity through the use of these contracts.
Consolidated Group
Buy AUD / Sell USD
Settlement
—
—
less than 6 months
6 months to 1 year
d) Net fair values
Notional Amounts
Exchange Rate
2013
$000
2012
$000
2013
$
Put Call
2012
$
Put Call
40,000
30,000
40,000
20,000
1.000 0.920
0.960 0.802
1.007 0.903
1.007 0.903
The fair values of fi nancial assets and fi nancial liabilities are presented in the following table and can be compared
to their carrying values as presented in the balance sheet. Fair values are those amounts at which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where changes in
assumptions may have a material impact on the amounts estimated. Areas of judgement and the assumptions have
been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market,
with more reliable information available from markets that are actively traded. In this regard, fair values for listed
securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available,
fair value is obtained using discounted cash fl ow analysis and other valuation techniques commonly used by market
participants.
Diff erences between fair values and carrying values of fi nancial instruments with fi xed interest rates are due to the
change in discount rates being applied by the market since their initial recognition by the Group. Most of these
instruments which are carried at amortised cost are to be held until maturity and therefore the net fair value fi gures
calculated bear little relevance to the Group.
80
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
d) Net fair values (Continued)
Financial Assets
Cash and cash equivalents
Available-for-sale assets at fair value
Derivative fi nancial assets
Loans and receivables
Financial Liabilities
Trade and other payables
Convertible bonds
Derivative fi nancial liabilities
Corporate loan facility
Other liabilities
2013
2012
Carrying
Amount
$’000
Net Fair Value
$’000
Carrying
Amount
$’000
Net Fair Value
$’000
80,719
1,120
663
18,610
101,112
80,719
1,120
663
18,610
101,112
165,502
165,502
3,460
1,973
25,360
196,295
3,460
1,973
25,360
196,295
2013
2012
Carrying
Amount
$’000
Net Fair Value
$’000
Carrying
Amount
$’000
Net Fair Value
$’000
36,911
218,449
1,906
-
379
36,911
235,198
1,906
-
379
66,444
314,540
284
44,305
235
66,444
333,500
284
44,500
235
257,645
274,394
425,808
444,963
(i)
(ii)
(iii)
(i)
(i)
(iv)
(iii)
(iv)
(i)
The fair values disclosed in the above table have been determined based on the following methodologies:
i) Cash and cash equivalents, trade and other receivables and trade and other liabilities are short term instruments
in nature whose carrying value is equivalent to fair value. Trade and other payables exclude amounts provided for
annual leave, which is not considered a fi nancial instrument.
ii) Quoted closing bid prices at reporting date.
iii) Fair valuation performed by fi nancial risk management fi rm which include valuation techniques incorporating
observable market data relevant to the hedged position.
iv) Discounted cash fl ow models are used to determine the fair values of loans and advances. Discount rates used
on the calculations are based on interest rates existing at reporting date for similar types of loans and advances.
Diff erences between fair values and carrying values largely represent movements of the eff ective interest rate
determined on initial recognition and current market rates.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
81
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 29: FINANCIAL RISK MANAGEMENT (CONTINUED)
d) Net fair values (Continued)
Financial Instruments Measured at Fair Value
The fi nancial instruments recognised at fair value in the Statement of Financial Position have been analysed and
classifi ed using a fair value hierarchy refl ecting the signifi cance of the inputs used in making the measurements. The
fair value hierarchy consists of the following levels:
• • quoted prices in active markets for identical assets or liabilities (Level 1);
• • inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (Level 2); and
• • inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Consolidated Group
2013
Financial assets:
Available-for-sale fi nancial assets
Derivative fi nancial instrument
Total fi nancial assets
Financial liabilities
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
1,120
-
1,120
-
663
663
Derivative fi nancial instruments
-
1,906
2012
Financial assets:
Available-for-sale fi nancial assets
Derivative fi nancial instrument
Total fi nancial assets
Financial liabilities
3,460
-
3,460
-
1,973
1,973
Derivative fi nancial instruments
-
284
-
-
-
-
-
-
-
-
1,120
663
1,783
1,906
3,460
1,973
5,433
284
NOTE 30: RELATED PARTY TRANSACTIONS
Mr Julian Hanna received $50K for consulting services provided through Ravelstone Consulting Ltd.
There were no other related party transactions during the fi nancial year, except for the key management compensation
as disclosed in the Directors’ Report.
82
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 31: SHARE BASED PAYMENTS
(a) Expenses arising from share based transactions
Equity settled share options and performance rights granted during:
Year ended 30 June 2012
Year ended 30 June 2013
Total expense recognised as employee costs
(b) Performance rights
Consolidated Entity
2013
$’000
2012
$’000
535
623
1,158
535
-
535
Under the Performance Rights plan, Executives are granted a right to be issued a share in the future subject to the
performance based vesting conditions being met. The Company’s share price performance is measured via a relative
total shareholder return (“TSR”). The Company’s TSR will be measured against a customised peer group of companies.
For grants made under the Long Term Incentive (“LTI”) plan during FY12, vesting will occur subject to the meeting of
service and performance conditions as follows:
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2011 to
30 June 2012.
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to
30 June 2013.
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2013 to
30 June 2014.
For grants made under the LTI plan during FY13, vesting will occur subject to the meeting of service and performance
conditions as follows:
• • Two-thirds of the rights will be performance tested against the relative TSR measure for the period 1 July 2012 to
30 June 2013.
• • One-third of the rights will be performance tested against the relative TSR measure for the period 1 July 2013 to
30 June 2014.
All of the grant will be subject to a service based vesting condition which will provide that, notwithstanding the passing
of the performance test, no Performance Rights will vest and become exercisable into shares unless the participant
remains employed as at 30 June 2014.
The following table sets out the vesting outcome based on the Company’s relative TSR performance:
Relative TSR performance
Less than 50th percentile
At the 50th percentile
Performance Vesting Outcomes
0% vesting
50% vesting
Between 50th and 75th percentile
Pro-rata / progressive vesting from 50% - 100%
At or above 75th percentile
100% vesting
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
83
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
(b) Performance rights (Continued)
No Performance Rights will vest unless the percentile ranking of the Company’s TSR for the relevant performance year,
as compared to the TSRs for the peer group companies, is at or above the 50th percentile.
The valuation inputs used in determining the fair value of performance rights issued during the year is detailed below:
Underlying share price
Exercise price of rights
Risk free rate
Volatility factor
Dividend yield
Eff ective life
Entitled number of employees
2013
$4.06
Nil
2.40%
2012
$5.66
Nil
3.12%
35% to 55%
35% to 55%
4.0%
4.0%
3.0 years
2.58 years
7
6
Performance Rights held by Key Management Personnel at 30 June 2013
Balance at
1 July 2012
Granted as
Remuneration
Exercise of
Performance
Rights
Expired /
Lapsed
Balance at
30 June 2013
Performance
Rights Vested
D Lougher
D Southam
C Wilkinson
G Marshall
J Belladonna
W Jones
113,891
107,354
46,399
42,182
64,411
-
294,800
165,900
71,050
64,591
104,074
83,476
TOTAL
374,237
783,891
-
-
-
-
-
-
-
Performance Rights held by Key Management Personnel at 30 June 2012
Balance at
1 July 2011
Granted as
Remuneration
Exercise of
Performance
Rights
Expired /
Lapsed
D Lougher
D Southam
C Wilkinson
G Marshall
J Belladonna
TOTAL
-
-
-
-
-
-
113,891
107,354
46,399
42,182
64,411
374,237
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
408,691
273,254
117,449
106,773
168,485
83,476
1,158,128
-
-
-
-
-
-
Balance at
30 June 2012
Performance
Rights Vested
113,891
107,354
46,399
42,182
64,411
374,237
-
-
-
-
-
-
84
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 31: SHARE BASED PAYMENTS (CONTINUED)
(c) Option plans
Options issued to employees under the Western Areas Employee Share Option Scheme and Directors incentive options
vest as detailed below:
(i) The $7.25 employee options issued in September 2009, expiring in September 2012, vest as follows: half vest 12
months before expiry and half vest 24 months before expiry date.
(ii) The $7.50 Directors’ options issued in November 2009, expiring in September 2012, vest as follows: half vest 12
months before the expiry date and half vest 24 months before expiry date.
The weighted average contractual life remaining for the current outstanding options is three months.
The following options were outstanding at 30 June 2013:
Opening balance
Options cancelled
Options Expired
Closing balance
Vested balance
Consolidated Entity
2013
2012
Number of
options
1,900,000
-
(1,900,000)
-
-
Weighted
average
exercise price
7.32
-
7.32
-
-
Number of
options
2,010,000
(110,000)
-
1,900,000
1,900,000
Weighted
average
exercise price
7.32
7.32
-
7.32
7.32
The movement in the various classes of options for the year ended 30 June 2013 were as follows:
Opening balance
Options cancelled
Closing balance
Option Terms (Exercise Price and Maturity)
Director
$7.50 Sep 12
Employee
$7.25 Sep 12
TOTAL
600,000
1,300,000
1,900,000
(600,000)
(1,300,000)
(1900,000)
-
-
-
The movement in the various classes of options for the year ended 30 June 2012 were as follows:
Opening balance
Options issued
Options Expired
Options Cancelled
Options exercised
Closing balance
Option Terms (Exercise Price and Maturity)
Director
$7.50 Sep 12
Employee
$7.25 Sep 12
TOTAL
600,000
1,410,000
2,010,000
-
-
-
-
-
-
-
-
(110,000)
(110,000)
-
-
600,000
1,300,000
1,900,000
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
85
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 32: RESERVES
(i)
Option equity reserve
The option reserve records the items recognised as expenses on valuation of employee share options.
(ii)
Hedge reserve
The hedge reserve records revaluations of items designated as hedges.
(iii)
Investment Revaluation reserve
The investment revaluation reserve records revaluations of available for sale fi nancial assets.
(iv) Convertible Bond Reserve
The Convertible bond reserve records the equity proportion value of the convertible bond.
NOTE 33: NEW ACCOUNTING STANDARDS FOR APPLICATION IN THE FUTURE PERIODS
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods, some of which are relevant to the Group. The Group has decided not
to early adopt any of the new and amended pronouncements. The Group’s assessment of the new and amended
pronouncements that are relevant to the Group but applicable in future reporting periods is set out below:
– AASB 9: Financial Instruments (December 2010) and AASB 2010–7: Amendments to Australian Accounting Standards
arising from AASB 9 (December 2010).
These Standards are applicable retrospectively and include revised requirements for the classifi cation and
measurement of fi nancial instruments, as well as recognition and derecognition requirements for fi nancial
instruments.
The key changes made to accounting requirements include:
-
-
-
-
simplifying the classifi cations of fi nancial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for fi nancial assets carried at
amortised cost;
- allowing an irrevocable election on initial recognition to present gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income. Dividends in respect of these
investments that are a return on investment can be recognised in profi t or loss and there is no impairment or
recycling on disposal of the instrument;
-
-
requiring fi nancial assets to be reclassifi ed where there is a change in an entity’s business model as they are
initially classifi ed based on: (a) the objective of the entity’s business model for managing the fi nancial assets;
and (b) the characteristics of the contractual cash fl ows; and
requiring an entity that chooses to measure a fi nancial liability at fair value to present the portion of the change in
its fair value due to changes in the entity’s own credit risk in other comprehensive income, except when that would
create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present
all changes in fair value (including the eff ects of changes in the credit risk of the liability) in profi t or loss.
86
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 33: NEW ACCOUNTING STANDARDS FOR APPLICATION IN THE FUTURE PERIODS
(CONTINUED)
These Standards were mandatorily applicable for annual reporting periods commencing on or after 1 January 2013.
However, AASB 2012–6: Amendments to Australian Accounting Standards – Mandatory Eff ective Date of AASB 9 and
Transition Disclosures (issued September 2012) defers the mandatory application date of AASB 9 from 1 January
2013 to 1 January 2015. In light of the change to the mandatory eff ective date, the Group is expected to adopt AASB
9 and AASB 2010–7 for the annual reporting period ending 31 December 2015. Although the Directors anticipate that
the adoption of AASB 9 and AASB 2010–7 may have a signifi cant impact on the Group’s fi nancial instruments, it is
impracticable at this stage to provide a reasonable estimate of such impact.
– AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other
Entities, AASB 127: Separate Financial Statements (August 2011) and AASB 128: Investments in Associates and
Joint Ventures (August 2011) (as amended by AASB 2012–10: Amendments to Australian Accounting Standards –
Transition Guidance and Other Amendments), and AASB 2011–7: Amendments to Australian Accounting Standards
arising from the Consolidation and Joint Arrangements Standards (applicable for annual reporting periods
commencing on or after 1 January 2013).
AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and
Interpretation 112: Consolidation – Special Purpose Entities. AASB 10 provides a revised defi nition of “control” and
additional application guidance so that a single control model will apply to all investees. The Group has not yet been
able to reasonably estimate the impact of these pronouncements on its fi nancial statements.
– AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires joint arrangements
to be classifi ed as either “joint operations” (where the parties that have joint control of the arrangement have rights
to the assets and obligations for the liabilities) or “joint ventures” (where the parties that have joint control of the
arrangement have rights to the net assets of the arrangement) The Group has not yet been able to reasonably
estimate the impact of these pronouncements on its fi nancial statements.
– AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint
venture, joint operation or associate. AASB 12 also introduces the concept of a “structured entity”, replacing the
“special purpose entity” concept currently used in Interpretation 112, and requires specifi c disclosures in respect of
any investments in unconsolidated structured entities. This Standard will aff ect disclosures only and is not expected
to signifi cantly impact the Group’s fi nancial statements.
To facilitate the application of AASBs 10, 11 and 12, revised versions of AASB 127 and AASB 128 have also been
issued. The Group has not yet been able to reasonably estimate the impact of these pronouncements on its fi nancial
statements.
– AASB 13: Fair Value Measurement and AASB 2011–8: Amendments to Australian Accounting Standards arising from
AASB 13 (applicable for annual reporting periods commencing on or after 1 January 2013).
AASB 13 defi nes fair value, sets out in a single Standard a framework for measuring fair value, and requires
disclosures about fair value measurement.
AASB 13 requires:
-
inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and
- enhanced disclosures regarding all assets and liabilities (including, but not limited to, fi nancial assets and
fi nancial liabilities) to be measured at fair value.
These Standards are expected to result in more detailed fair value disclosures, but are not expected to
signifi cantly impact the amounts recognised in the Group’s fi nancial statements.
– AASB 2011–4: Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel
Disclosure Requirements (applicable for annual reporting periods beginning on or after 1 July 2013).
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
87
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 33: NEW ACCOUNTING STANDARDS FOR APPLICATION IN THE FUTURE PERIODS
(CONTINUED)
This Standard makes amendments to AASB 124: Related Party Disclosures to remove the individual key management
personnel disclosure requirements (including paras Aus29.1 to Aus29.9.3). These amendments serve a number
of purposes, including furthering trans-Tasman convergence, removing diff erences from IFRSs, and avoiding any
potential confusion with the equivalent Corporations Act 2001 disclosure requirements.
This Standard is not expected to signifi cantly impact the Group’s fi nancial report as a whole because:
-
some of the disclosures removed from AASB 124 will continue to be required under s 300A of the Corporations
Act, which is applicable to the Group; and
- AASB 2011–4 does not aff ect the related party disclosure requirements in AASB 124 applicable to all reporting
entities, and some of these requirements require similar disclosures to those removed by AASB 2011–4.
– AASB 119: Employee Benefi ts (September 2011) and AASB 2011–10: Amendments to Australian Accounting Standards arising
from AASB 119 (September 2011) (applicable for annual reporting periods commencing on or after 1 January 2013).
These Standards introduce a number of changes to the presentation and disclosure of defi ned benefi t plans,
including:
-
removal of the “corridor” approach from AASB 119, thereby requiring entities to recognise all changes in a net
defi ned benefi t liability/(asset) when they occur; and
- disaggregation of changes in a net defi ned benefi t liability/(asset) into service cost, net interest expense and
remeasurements and recognition of:
(i) service cost and net interest expense in profi t or loss; and
(ii) remeasurements in other comprehensive income.
AASB 119 (September 2011) also includes changes to the criteria for determining when termination benefi ts should
be recognised as an obligation.
The Directors anticipate that the application of the amendments to AASB 119 will not have an impact on the
amounts reported as the Group does not have a defi ned benefi t plan.
– AASB 2012–5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011
(applicable for annual reporting periods commencing on or after 1 January 2013).
This Standard amends a number of Australian Accounting Standards as a consequence of the issuance of Annual
Improvements to IFRSs 2009–2011 Cycle by the International Accounting Standards Board, including:
- AASB 1: First-time Adoption of Australian Accounting Standards to clarify the requirements in respect of the
application of AASB 1 when an entity discontinues and then resumes applying Australian Accounting Standards;
- AASB 101: Presentation of Financial Statements and AASB 134: Interim Financial Reporting to clarify the
requirements for presenting comparative information;
- AASB 116: Property, Plant and Equipment to clarify the accounting treatment of spare parts, stand-by equipment
and servicing equipment;
- AASB 132 and Interpretation 2: Members’ Shares in Co-operative Entities and Similar Instruments to clarify the
accounting treatment of any tax eff ect of a distribution to holders of equity instruments; and
- AASB 134 to facilitate consistency between the measures of total assets and liabilities an entity reports for its
segments in its interim and annual fi nancial statements.
The Group has not yet been able to reasonably estimate the impact of these pronouncements on its fi nancial
statements.
88
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 34: PARENT INFORMATION
The following information has been extracted from the books of the Parent and has been prepared in accordance with
the accounting standards.
Statement of Financial Position
Assets
Current Assets
Non Current Assets
Total Assets
Liabilities
Current Liabilities
Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained Earnings
Total Equity
Statement of Comprehensive Income
Profi t for the year
Total comprehensive income for the year
Guarantees
Parent Entity
2013
$’000
2012
$’000
128,914
411,637
540,551
44,955
233,842
278,797
232,009
548,814
780,823
227,388
256,003
483,391
261,754
297,432
266,043
41,277
(45,566)
261,754
(81,463)
(84,086)
202,611
76,335
18,486
297,432
46,640
43,540
Western Areas Ltd has not entered into any guarantees, in the current or previous fi nancial year, in relation to the debts
of its subsidiaries.
Contingent Liabilities
The Directors are not aware of any contingent liabilities as at the date of these fi nancial statements.
Contractual Commitments
Refer to Note 21 as all commitments entered into were by Western Areas Ltd.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
89
NOTES TO THE
FINANCIAL STATEMENTS
NOTE 35: BUSINESS COMBINATION
Acquisition of Kagara Nickel Pty Ltd
On 29 February 2012, Western Areas Ltd acquired 100% of the paid-up capital of Kagara Nickel Pty Ltd from Kagara Ltd.
Kagara Nickel Pty Ltd is principally engaged in nickel mining and exploration and owns the high grade Lounge Lizard
nickel deposit, located adjacent to Western Areas’ 100% owned Flying Fox nickel mine, at the Forrestania Nickel Project.
The purchase consideration of $68M was paid from cash reserves of $23M and $45M utilising the ANZ corporate facility.
As part of the agreement, a further $3.1M was paid from cash reserves in April as consideration for the ore stockpiles.
Net Identifi able Assets Acquired and Liabilities
Assumed at Fair Value at Date of Acquisition
Inventory
Receivables
Property, plant and equipment
Mine development
Exploration and evaluation expenditure
Cash consideration paid
2012
$’000
3,128
150
26
59,796
8,000
71,100
71,100
Kagara Nickel Pty Ltd did not generate any revenue or incur any expenses since 29 February 2012. Had the results of
Kagara Nickel Pty Ltd been consolidated from 1 July 2011, revenue of the Consolidated Group would have been $330.7M
and consolidated profi t would have been $40.2M for the year ended 30 June 2012.
NOTE 36: ADDITIONAL COMPANY INFORMATION
Western Areas Ltd is a Public Company, incorporated and domiciled in Australia.
Registered offi ce and Principal place of business:
Level 2
2 Kings Park Road
West Perth WA 6005
Tel: +61 8 9334 7777
Fax: +61 8 9486 7866
Web: www.westernareas.com.au
Email: info@westernareas.com.au
90
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
DIRECTORS’
DECLARATION
1.
In the opinion of the Directors of Western Areas Ltd:
(a) the Consolidated Entity’s fi nancial statements and notes set out on pages 44 to 90 are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Consolidated Entity’s fi nancial position as at 30 June 2013 and of its
performance, for the fi nancial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australia Accounting Interpretations) and the
Corporations Regulations 2001;
(b) the fi nancial report also complies with International Financial Reporting Standards as set out in Note 1;
(c) the remuneration disclosures that are contained in the remuneration report in the Directors’ Report comply
with Australian Accounting Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the
Corporations Regulations 2001;
(d) there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when
they become due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Offi cer, Managing Director, Financial Director and Chief Financial Offi cer for the fi nancial year ended
30 June 2013.
Signed in accordance with a resolution of the Board of Directors.
D Lougher
Managing Director
Dated this 27th day of August 2013
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
91
INDEPENDENT
AUDITOR’S OPINION
(cid:3)
INDEPENDENT AUDIT REPORT TO MEMBERS OF WESTERN AREAS LTD AND ITS
CONTROLLED ENTITIES
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(cid:87)(cid:82)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3)
(cid:3)
Directors’ Responsibility for the Financial Report
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(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3)(cid:36)(cid:36)(cid:54)(cid:37)(cid:3)(cid:20)(cid:19)(cid:20)(cid:3)Presentation of Financial
Statements(cid:15)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:92)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3)(cid:3)
(cid:3)
Auditor’s Responsibility
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(cid:3)
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(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:3)
(cid:3)
Independence
(cid:44)(cid:81)(cid:3) (cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:15)(cid:3) (cid:90)(cid:72)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:72)(cid:71)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) Corporations
Act 2001(cid:17)(cid:3)
Auditor’s Opinion
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(cid:11)(cid:68)(cid:12)(cid:3)
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(cid:11)(cid:76)(cid:12)(cid:3)
(cid:74)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:3) (cid:87)(cid:85)(cid:88)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:73)(cid:68)(cid:76)(cid:85)(cid:3) (cid:89)(cid:76)(cid:72)(cid:90)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:182)(cid:86)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:87)(cid:3) (cid:22)(cid:19)(cid:3) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3)
(cid:21)(cid:19)(cid:20)(cid:22)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:30)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)Corporations Regulations 2001(cid:30)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:3)
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)
(cid:11)(cid:69)(cid:12)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)International Financial Reporting Standards
(cid:68)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:3)(cid:20)(cid:17)(cid:3)
Liability limited by a scheme approved under(cid:3)
Professional Standards Legislation(cid:3)
Crowe Horwath Perth is a Crowe Horwath Australasia Group Firm and a member of Crowe Horwath
International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity.
92
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
(cid:3)
REPORT ON THE REMUNERATION REPORT
(cid:58)(cid:72)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:83)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:21)(cid:26)(cid:3) (cid:87)(cid:82)(cid:3)(cid:22)(cid:26)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:22)(cid:19)(cid:3) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3) (cid:21)(cid:19)(cid:20)(cid:22)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:85)(cid:72)(cid:83)(cid:68)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:22)(cid:19)(cid:19)(cid:36)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) Corporations Act
2001(cid:17)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:91)(cid:83)(cid:85)(cid:72)(cid:86)(cid:86)(cid:3) (cid:68)(cid:81)(cid:3) (cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:15)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)
(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3)
(cid:3)
Auditor’s Opinion
(cid:44)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:58)(cid:72)(cid:86)(cid:87)(cid:72)(cid:85)(cid:81)(cid:3) (cid:36)(cid:85)(cid:72)(cid:68)(cid:86)(cid:3) (cid:47)(cid:87)(cid:71)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:22)(cid:19)(cid:3) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3) (cid:21)(cid:19)(cid:20)(cid:22)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:19)(cid:19)(cid:36)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)Corporations Act 2001. (cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:38)(cid:53)(cid:50)(cid:58)(cid:40)(cid:3)(cid:43)(cid:50)(cid:53)(cid:58)(cid:36)(cid:55)(cid:43)(cid:3)(cid:51)(cid:40)(cid:53)(cid:55)(cid:43)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:54)(cid:40)(cid:36)(cid:49)(cid:3)(cid:48)(cid:38)(cid:42)(cid:56)(cid:53)(cid:46)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)
(cid:3)
(cid:54)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:87)(cid:3)(cid:51)(cid:72)(cid:85)(cid:87)(cid:75)(cid:15)(cid:3)(cid:21)(cid:26)(cid:3)(cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3)(cid:21)(cid:19)(cid:20)(cid:22)(cid:3)
(cid:3)
Liability limited by a scheme approved under(cid:3)
Professional Standards Legislation(cid:3)
Crowe Horwath Perth is a Crowe Horwath Australasia Group Firm and a member of Crowe Horwath
International, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal entity.
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
93
TENEMENT
LISTING
Year Ended 30 June 2013
Tenement No
Status
Company's
Interest
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
Forrestania
E74/00470
E74/00499
E77/01865
E77/02099
G70/00226
G70/00231
L70/00111
L74/00011
L74/00012
L74/00025
L74/00044
L77/00104
L77/00141
L77/00182
L77/00197
L77/00203
L77/00204
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
L77/00217
Pending
M74/00057
M74/00058
M74/00064
M74/00065
M74/00081
M74/00090
M74/00091
M74/00092
M77/00098
M77/00215
M77/00216
M77/00219
M77/00284
M77/00285
M77/00286
M77/00329
M77/00335
M77/00336
M77/00389
M77/00399
M77/00458
M77/00542
M77/00545
M77/00550
M77/00568
M77/00574
M77/00582
M77/00583
M77/00584
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Forrestania (Continued)
M77/00585
M77/00586
M77/00587
M77/00588
M77/00589
M77/00911
M77/00912
E77/00806
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
100%
100%
100%
E77/01086
Granted
100%
Western Areas Ltd (100)
E77/01399
Granted
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
E77/01400.
Granted
100%
E77/01416
Granted
100%
Western Areas Ltd (100)
E77/01436
Granted
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
E77/01581
Granted
100%
G77/00037
Granted
100%
G77/00038
Granted
100%
G77/00045
Granted
100%
Western Areas Ltd (100)
G77/00047
Granted
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
G77/00048
Granted
100%
G77/00049
Granted
100%
G77/00050
Granted
100%
G77/00068
Granted
100%
Western Areas Ltd (100)
G77/00070
Granted
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
G77/00071
Granted
100%
G77/00072
Granted
100%
G77/00073
Granted
100%
L77/00059
Granted
100%
Western Areas Ltd (100)
L77/00096
Granted
100%
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
L77/00107
Granted
100%
M77/00099
Granted
100%
M77/00467
Granted
100%
M77/00468
Granted
100%
94
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Ltd (100)
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Tenement No
Status
Forrestania (Continued)
Company's
Interest
M77/00544
Granted
100%
P77/03733
Granted
100%
P77/03734
Granted
100%
P77/03735
Granted
100%
P77/03736
Granted
100%
P77/03737
Granted
100%
P77/03738
Granted
100%
P77/03743
Granted
100%
P77/03748
Granted
100%
P77/03749
Granted
100%
P77/03750
Granted
100%
P77/03751
Granted
100%
P77/03752
Granted
100%
P77/03758
Granted
100%
P77/03836
Granted
100%
P77/03837
Granted
100%
P77/03838
Granted
100%
P77/03839
Granted
100%
P77/03840
Granted
100%
P77/03846
Granted
100%
P77/03847
Granted
100%
P77/03860
Granted
100%
P77/03861
Granted
100%
P77/03862
Granted
100%
P77/03863
Granted
100%
P77/03864
Granted
100%
P77/03865
Granted
100%
P77/04065
Granted
100%
P77/04067
Pending
100%
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
Forrestania (Continued)
P77/04075
Pending
100%
M77/00324*
Granted
100%
Mt Alexander
E29/00638
Granted
25%
Western Areas Nickel
Pty Ltd
Western Areas Nickel
Pty Ltd
BHP Billiton Nickel West
Pty Ltd
Western Areas Ltd
Koolyanobbing
E77/01004
Granted
E77/01307
Granted
100% Ni
rights
100% Ni
rights
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Granted
100%
Western Areas Ltd (100)
E77/01407
L77/00214
Granted
M77/00606
Granted
M77/00607
Granted
M77/00611
Granted
100% Ni
rights
100% Ni
rights
100% Ni
rights
100% Ni
rights
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
M77/00676
Granted
100%
Western Areas Ltd (100)
M77/00839
Granted
100%
Western Areas Ltd (100)
M77/00988
Granted
M77/00989
Granted
M77/00990
Granted
P77/03482
Granted
100% Ni
rights
100% Ni
rights
100% Ni
rights
100% Ni
rights
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
Cliff s Asia Pacifi c Iron Ore
Pty Ltd
P77/03807
Granted
100%
Western Areas Ltd (100)
Mt Gibb
E74/00305
Granted
100%
E74/00313
Granted
100%
E74/00368
Granted
100%
E74/00428
Granted
100%
E74/00445
Granted
100%
E74/00446
Granted
100%
E77/01545
Granted
100%
E77/01546
Granted
100%
E77/01547
Granted
100%
E77/01590
Granted
100%
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
*This tenement is in the process of being transferred to Western Areas Nickel Pty Ltd
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
95
TENEMENT
LISTING
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
Tenement No
Status
Mt Gibb (Continued)
Company's
Interest
E77/01677
Granted
100%
P74/00251
Granted
100%
P74/00322
Granted
100%
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Great Western Exploration
Ltd
Southern Cross (Continued)
E77/01320
Granted
E77/01321-I
Granted
E77/01322-I
Granted
E77/01537
Lake King
Granted
100%
Jindalee Resources Ltd
E77/01342-I
Granted
E70/02148
Granted
E70/04028
Granted
E70/04029
Granted
E70/04430
Granted
E74/00532
Pending
E74/00533
Pending
P70/01641
Pending
P70/01642
Pending
Southern Cross
E29/00564-I
Granted
E29/00593-I
Granted
E29/00653-I
Granted
E29/00654-I
Granted
E29/00655-I
Granted
E30/00331-I
Granted
E77/01034-I
Granted
E77/01063
Granted
E77/01117-I
Granted
E77/01141-I
Granted
E77/01164-I
Granted
E77/01171
Granted
E77/01233
Granted
E77/01268-I
Granted
E77/01275-I
Granted
E77/01293-I
Granted
E77/01295-I
Granted
E77/01314-I
Granted
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Swanoak Holdings Pty Ltd
E77/01353-I
Granted
Western Areas & Swanoak
Holdings Pty Ltd
Western Areas & Swanoak
Holdings Pty Ltd
Western Areas & Swanoak
Holdings Pty Ltd
Western Areas & Swanoak
Holdings Pty Ltd
Western Areas & Swanoak
Holdings Pty Ltd
Swanoak Holdings Pty Ltd
E77/01368
Granted
E77/01371-I
Granted
E77/01372
Granted
E77/01373
Granted
E77/01374-I
Granted
E77/01376-I
Granted
Swanoak Holdings Pty Ltd
E77/01380
Granted
E77/01384-I
Granted
Southern Cross Goldfi elds
E77/01390
Granted
Southern Cross Goldfi elds
E77/01391-I
Granted
Southern Cross Goldfi elds
E77/01423
Granted
Southern Cross Goldfi elds
E77/01424
Granted
Southern Cross Goldfi elds
E77/01427-I
Granted
Southern Cross Goldfi elds
E77/01459
Granted
Southern Cross Goldfi elds
E77/01474
Granted
Southern Cross Goldfi elds
E77/01477
Granted
Southern Cross Goldfi elds
E77/01488-I
Granted
Southern Cross Goldfi elds
E77/01490
Granted
Southern Cross Goldfi elds
E77/01496
Granted
Southern Cross Goldfi elds
E77/01497-I
Granted
Southern Cross Goldfi elds
E77/01498
Granted
Southern Cross Goldfi elds
E77/01499
Granted
Southern Cross Goldfi elds
E77/01500-I
Granted
Southern Cross Goldfi elds
E77/01505
Granted
Southern Cross Goldfi elds
E77/01508
Pending
Southern Cross Goldfi elds
E77/01509
Granted
96
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
TENEMENT
LISTING
Tenement No
Status
Southern Cross (Continued)
E77/01566
Granted
E77/01599
Granted
E77/01630
Granted
E77/01642
Granted
E77/01649-I
Granted
E77/01650-I
Granted
E77/01653-I
Granted
E77/01654-I
Granted
E77/01657-I
Granted
E77/01658-I
Granted
E77/01659-I
Granted
E77/01699
Granted
E77/01721
Pending
E77/01726-I
Granted
E77/01728-I
Granted
E77/01741-I
Granted
E77/01742
Granted
E77/01765-I
Granted
E77/01766
Granted
E77/01773
Granted
E77/01775
Granted
E77/01776
Granted
E77/01777-I
Granted
E77/01778-I
Granted
E77/01790-I
Granted
E77/01791
Pending
E77/01803
Granted
E77/01814
Granted
E77/01817
Granted
E77/01837
Pending
E77/01874
Granted
Company's
Interest
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
E77/01878
Pending
Southern Cross (Continued)
Southern Cross Goldfi elds
E77/01879
Pending
Southern Cross Goldfi elds
E77/01880
Pending
Southern Cross Goldfi elds
G77/00035
Granted
Southern Cross Goldfi elds
L77/00211
Granted
Southern Cross Goldfi elds
L77/00221
Pending
Southern Cross Goldfi elds
L77/00223
Pending
Southern Cross Goldfi elds
L77/00224
Pending
Southern Cross Goldfi elds
L77/00225
Pending
Southern Cross Goldfi elds
L77/00226
Pending
Southern Cross Goldfi elds
M77/00123
Granted
Southern Cross Goldfi elds
M77/00166
Granted
Southern Cross Goldfi elds
M77/00228
Granted
Southern Cross Goldfi elds
M77/00394
Granted
Southern Cross Goldfi elds
M77/00576
Granted
Southern Cross Goldfi elds
M77/00581
Granted
Southern Cross Goldfi elds
M77/00646
Granted
Southern Cross Goldfi elds
M77/00824
Granted
Southern Cross Goldfi elds
M77/00931
Granted
Southern Cross Goldfi elds
M77/00948
Granted
Southern Cross Goldfi elds
M77/00962
Granted
Southern Cross Goldfi elds
M77/01025
Granted
Southern Cross Goldfi elds
M77/01044
Granted
Southern Cross Goldfi elds
M77/01064
Granted
Southern Cross Goldfi elds
M77/01089
Granted
Southern Cross Goldfi elds
M77/01090
Granted
Southern Cross Goldfi elds
M77/01094
Granted
Southern Cross Goldfi elds
M77/01101
Granted
Southern Cross Goldfi elds
M77/01102
Granted
Southern Cross Goldfi elds
M77/01103
Granted
Southern Cross Goldfi elds
M77/01246
Granted
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
97
TENEMENT
LISTING
Tenement No
Status
Southern Cross (Continued)
M77/01250
Granted
M77/01253-I
Granted
M77/01256
Granted
P29/01922-I
Granted
P29/01923-I
Granted
P29/01924-I
Granted
P29/01925-I
Granted
P29/01926-I
Granted
P29/01927-I
Granted
P30/01011-I
Granted
P77/03304
Granted
P77/03333
Granted
P77/03412
Granted
P77/03413
Granted
P77/03414
Granted
P77/03425
Granted
P77/03427
Granted
P77/03428
Granted
P77/03429
Granted
P77/03430
Granted
P77/03447
Granted
P77/03458
Granted
P77/03459
Granted
P77/03460
Pending
P77/03461
Pending
P77/03462
Pending
P77/03470-I
Granted
P77/03476
Granted
P77/03477
Granted
P77/03552
Granted
P77/03553-I
Granted
Company's
Interest
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
P77/03554-I
Granted
Southern Cross (Continued)
Southern Cross Goldfi elds
P77/03555-I
Granted
Southern Cross Goldfi elds
P77/03564-I
Granted
Southern Cross Goldfi elds
P77/03565-I
Granted
Southern Cross Goldfi elds
P77/03597
Granted
Southern Cross Goldfi elds
P77/03601
Granted
Southern Cross Goldfi elds
P77/03602
Granted
Southern Cross Goldfi elds
P77/03603
Granted
Southern Cross Goldfi elds
P77/03604
Granted
Southern Cross Goldfi elds
P77/03624-I
Granted
Southern Cross Goldfi elds
P77/03624-I
Granted
Southern Cross Goldfi elds
P77/03624-I
Granted
Southern Cross Goldfi elds
P77/03625
Granted
Southern Cross Goldfi elds
P77/03626
Granted
Southern Cross Goldfi elds
P77/03627
Granted
Southern Cross Goldfi elds
P77/03628
Granted
Southern Cross Goldfi elds
P77/03629
Granted
Southern Cross Goldfi elds
P77/03630-I
Granted
Southern Cross Goldfi elds
P77/03631-I
Granted
Southern Cross Goldfi elds
P77/03632-I
Granted
Southern Cross Goldfi elds
P77/03633-I
Granted
Southern Cross Goldfi elds
P77/03634-I
Granted
Southern Cross Goldfi elds
P77/03635-I
Granted
Southern Cross Goldfi elds
P77/03636-I
Granted
Southern Cross Goldfi elds
P77/03645
Granted
Southern Cross Goldfi elds
P77/03646
Granted
Southern Cross Goldfi elds
P77/03647
Granted
Southern Cross Goldfi elds
P77/03648
Granted
Southern Cross Goldfi elds
P77/03649
Granted
Southern Cross Goldfi elds
P77/03650
Granted
Southern Cross Goldfi elds
P77/03651
Granted
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
98
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
TENEMENT
LISTING
Company's
Interest
Applicant / Holder
Tenement No
Status
Company's
Interest
Applicant / Holder
Southern Cross Goldfi elds
P77/03902
Granted
Southern Cross (Continued)
Southern Cross Goldfi elds
P77/03903
Granted
Southern Cross Goldfi elds
P77/03907
Granted
Southern Cross Goldfi elds
P77/03908
Granted
Southern Cross Goldfi elds
P77/03936
Granted
Southern Cross Goldfi elds
P77/03957
Granted
Southern Cross Goldfi elds
P77/03958
Granted
Southern Cross Goldfi elds
P77/03959
Granted
Southern Cross Goldfi elds
P77/03967
Granted
Southern Cross Goldfi elds
P77/03978
Pending
Southern Cross Goldfi elds
P77/03979
Pending
Southern Cross Goldfi elds
P77/03994
Pending
Southern Cross Goldfi elds
P77/03996
Granted
Southern Cross Goldfi elds
P77/03997
Granted
Southern Cross Goldfi elds
P77/04016
Granted
Southern Cross Goldfi elds
P77/04022
Granted
Southern Cross Goldfi elds
P77/04028
Granted
Southern Cross Goldfi elds
P77/04029
Granted
Southern Cross Goldfi elds
P77/04032
Granted
Southern Cross Goldfi elds
P77/04033-I
Pending
Southern Cross Goldfi elds
P77/04036
Pending
Southern Cross Goldfi elds
P77/04037
Pending
Southern Cross Goldfi elds
P77/04038
Pending
Southern Cross Goldfi elds
P77/04055
Pending
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
Southern Cross Goldfi elds
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
70% Ni
rights
Tenement No
Status
Southern Cross (Continued)
P77/03652
Granted
P77/03653
Granted
P77/03656
Granted
P77/03657
Granted
P77/03658
Granted
P77/03659
Granted
P77/03660
Granted
P77/03661
Granted
P77/03662
Granted
P77/03663
Granted
P77/03664
Granted
P77/03670-I
Granted
P77/03698
Granted
P77/03699
Granted
P77/03801
Granted
P77/03802
Granted
P77/03808
Granted
P77/03809
Granted
P77/03810
Granted
P77/03811
Granted
P77/03812
Granted
P77/03813
Granted
P77/03816
Granted
P77/03817
Granted
P77/03818
Granted
P77/03830
Granted
P77/03868
Granted
P77/03898
Granted
P77/03899
Granted
P77/03900
Granted
P77/03901
Pending
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
99
SHAREHOLDER
INFORMATION
The Shareholder Information set out below shows the position as at 31 August 2013
A) DISTRIBUTION OF SHAREHOLDINGS
i)
Distribution schedule of holdings:
Ordinary Shares*
1 – 1,000
1,001 – 5,000
5001 – 10,000
10,001 – 100,000
100,001 – over
Total number of holders
Number of holders of less than a marketable parcel
Number of overseas holders
Percentage held by 20 largest holders
ii)
iii)
iv)
*All ordinary shares carry one vote per share without restriction.
B) LARGEST SECURITY HOLDERS
Names of the 20 largest holders of Ordinary Shares are listed below:
Name
Mr Terrence EJ Streeter
JCP Investment Partners
Mr & Mrs Allan R Greenwell
Celeste Funds Mgt
BT Investment Mgt
Concise Asset Mgt
Antares Equities
Avoca Investment Mgt
Tribeca Investment Partners
Mr Giovanni Santalucia
Colonial First State - Global Resources
Colonial First State - Growth Australian Equities
Kinetic Investment Partners
Colonial First State - Core Australian Equities
Kosmos Asset Mgt
Dimensional Fund Advisors
UBS Global Asset Mgt
JPMorgan Asset Mgt
Mount Kellett Capital Mgt
Legg Mason Asset Mgt Australia
C) SUBSTANTIAL SHAREHOLDERS
Name
Mr Terrence EJ Streeter
Mr & Mrs Allan R Greenwell
Mr Giovanni Santalucia
No of Shares Held
23,937,630
16,666,940
9,897,801
8,106,160
6,825,314
6,436,311
6,127,675
4,835,030
4,695,026
4,638,548
4,395,233
4,368,782
4,100,218
3,861,728
3,277,279
3,265,657
3,265,343
3,252,710
3,060,980
3,025,548
No of Shares Held
23,937,630
9,897,801
4,638,548
100
W E S T E R N A R E A S 2 0 1 3 A N N U A L R E P O R T
1,591
1,902
607
673
98
4,871
408
182
65.0%
%
12.2%
8.5%
5.0%
4.1%
3.5%
3.3%
3.1%
2.5%
2.4%
2.4%
2.2%
2.2%
2.1%
2.0%
1.7%
1.7%
1.7%
1.7%
1.6%
1.5%
%
12.2%
5.0%
2.4%
CORPORATE
DIRECTORY
Directors
Terry Streeter (Chairman)
Robin Dunbar
Julian Hanna
Dan Lougher
David Southam
Rick Yeates
Ian Macliver
Company Secretary
Joseph Belladonna
Auditors
Crowe Horwath
Level 6
256 St Georges Terrace
Perth WA 6000
Bankers
ANZ Banking Group Limited
77 St Georges Terrace
Perth WA 6000
Share Registry
Computershare Investor Services Pty Ltd
Level 2
45 St Georges Terrace
Perth WA 6000
Stock Exchange
Australian Securities Exchange Limited
Code: WSA
Solicitors
Allion Legal
Level 2
50 Kings Park Road
West Perth WA 6005
Registered Offi ce
Level 2
2 Kings Park Road
West Perth WA 6005
Phone (08) 9334 7777
Fax (08) 9486 7866
Competent Person Statement:
“The information within this report as it relates to mineral resources, reserves and mine development activities is based on information compiled
by Mr Dan Lougher of Western Areas Ltd. Mr Lougher is a members of AusIMM and is a full time employee of the Company. Mr Lougher has
suffi cient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as Competent Persons as defi ned in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.’ Mr Lougher consents to the inclusion in the report of the matters based on the information in the form
and context in which it appears.”
Forward Looking Statements:
This release contains certain forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties beyond
the Company's ability to control or predict which could cause actual events or results to diff er materially from those anticipated in such forward-
looking statements.
This announcement does not include reference to all available information on the Company or the Forrestania Nickel Project and should not be
used in isolation as a basis to invest in Western Areas. Any potential investors should refer to Western Area’s other public releases and statutory
reports and consult their professional advisers before considering investing in the Company.
For Purposes of Clause 3.4 (e) in Canadian instrument 43-101, the Company warrants that Mineral Resources which are not Mineral Reserves do
not have demonstrated economic viability.
Designed by Dash Digital
T +61 8 9334 7777
F +61 8 9486 7866
E info@westernareas.com.au
Registered Offi ce
Level 2, 2 Kings Park Road, West Perth WA 6005
PO BOX 1891 West Perth 6872
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ABN 68 091 049 357
2013 ANNUAL REPORT