(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ANNUAL REPORT
30 JUNE 2022
CONTENTS
COMPANY DIRECTORY ...................................................................................................................................................... 3
MINERAL RESOURCES AND ORE RESERVES STATEMENT ................................................................................................... 4
DEED ADMINISTRATORS’ REPORT..................................................................................................................................... 6
REMUNERATION REPORT ............................................................................................................................................... 15
AUDITOR INDEPENDENCE DECLARATION ........................................................................................................................ 25
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................................. 26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................................... 27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................................... 28
CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................................................ 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................... 30
DEED ADMINISTRATORS’ DECLARATION ......................................................................................................................... 72
INDEPENDENT AUDITOR’S REPORT ................................................................................................................................. 73
ASX ADDITIONAL SHAREHOLDER INFORMATION ............................................................................................................ 75
3 | P a g e
Company Directory
DEED ADMINISTRATORS – APPOINTED VOLUNTARY ADMINISTRATORS IN JULY 2022 & DEED ADMINISTRATORS IN
JULY 2023
Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis
FTI Consulting
Level 47 Central Park
152-158 St Georges Terrace
Perth, Western Australia, 6000
Telephone: +61 8 9321 8533
Facsimile: +61 8 9321 8544
COMPANY SECRETARY
Dan Travers
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Level 2, 643 Murray Street
WEST PERTH WA 6005
www.wilunamining.com.au
SHARE REGISTRY
Link Market Services Limited
Level 12, 250 St Georges Terrace
PERTH WA 6000
Ph: +1300 554 474
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
Code: WMC
ABN
Number: 18 119 887 606
SECURITIES ON ISSUE AT 30 JUNE 2022
Ordinary shares:
354,461,735
Listed options:
153,821,790
Unlisted options:
720,000
Zero Exercise Price Options (“ZEPOs”):
2,913,809*
* ZEPOs balances are sourced from the share registry’s records. Wiluna will be revisiting the terms and conditions of these ZEPOs,
which have been issued under long term incentives agreements, to determine eligibility of staff to retain these options.
AUDITOR
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
PERTH WA 6000
BANKERS
Commonwealth Bank
95 William Street
PERTH WA 6000
SENIOR DEBT PROVIDER
Mercuria Energy Trading
12 Marina View #26-01 Asia Square Tower 2
SINGAPORE 018961
CORPORATE GOVERNANCE STATEMENT
Located at: https://wilunamining.com.au/wp-content/uploads/2021/10/WMC-Corp-Gov.pdf
4 | P a g e
Mineral Resources and Ore Reserves Statement
Mineral Resources
Wiluna Mining Corporation Limited (Subject to a Deed of Company Arrangement) released an updated JORC Mineral Resource
estimate on the 29th August 2023. Reference should be made to the announcement relating to the updated Mineral Resources
including the JORC Table 1 Appendices for detailed information relating to the estimate. The resources have now been
depleted as of the 30th September 2023 to enable inclusion within the 2022 Annual Report.
Since the release of the updated Mineral Resources as announced on the 29th August 2023 the company has mined tailings and
stockpiles at the Wiluna project.
The 2023 Mining One Mineral Resource model was therefore created using low grade (<2 ppm Au) and high grade domains (>2
ppm Au) throughout the entire Wiluna Central Mine area deposit. These domains were constructed in Leapfrog software. The
new Mineral Resource estimate used Ordinary Kriging for the gold grade estimation and inverse distance and regression
equations for the deleterious elements.
Open pit Mineral Resources were reported within a $3,250 AUD/oz reasonable prospect for economic extraction (RPEE) pit shell
and underground Mineral Resources were reported below this pit. Cut-off grades range between 0.35 ppm and 2.3 ppm Au due
to recovery factors of oxide, transition and fresh material in addition to economic factors relating to open pit an underground
mining scenarios.
Mining One have not re-estimated the satellite deposits, stockpiles and tailings deposits, these are included as reported by
Wiluna Mining Corporation in the 17th November 2021 ASX announcement1 however have been depleted as of 30th September
2023. The 2023 Open Pit and Underground Mineral Resources estimated by Mining One Consultants in addition to the satellite
deposit, depleted stockpile and tailings Mineral Resources reported in 2021 are summarized in the following table and image
below.
Comparison to the 2021 Mineral Resources
The 2023 updated Mineral Resources represent a 16% increase in total ounces compared to the Mineral Resources reported at
the 17th November 2021.
WILUNA CENTRAL MINE AREA MINERAL RESOURCE COMPARISON
2023 Mineral Resources
2021 Mineral Resources
Variance
Tonnes (Mt)
44.95
35.99
+24.9%
Au ppm
3.69
3.90
-5.4%
Au Oz (Moz)
5.23
4.51
+16%
Competent Persons Statement
The information in the report to which this statement is attached that relates to Mineral Resources of the Wiluna Central Mine
area is based on information compiled or reviewed by Mr Stuart Hutchin, a Competent Person who is a Member of the
Australian Institute of Geoscientists (AIG). Stuart Hutchin is a fulltime employee of Mining One Consultants and has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Results, Mineral Resources and Ore Reserves’. Stuart Hutchin consents to the inclusion in this
announcement of statements based on this information in the form and context in which it appears.
Where the company refers to Mineral Resources in this report it confirms that it is not aware of any new information or data that
would materially effect the reported Mineral Resources and that all assumptions and technical parameters underpinning the
estimates have not materially changed. The company confirms that the form and context in which the Competent Persons
findings are presented have not materially changed from the previous announcement. Where the company refers to Mineral
Resources in this report it confirms that it is not aware of any new information or data that would materially effect the reported
Mineral Resources and that all assumptions and technical parameters underpinning the estimates have not materially changed.
The company confirms that the form and context in which the Competent Persons findings are presented have not materially
changed from the previous announcement.
5 | P a g e
Table 1: Wiluna Mining Corporation Total Mineral Resources as of 30 September 2023
Wiluna Mining Corporation Mineral Resource Summary as of 30th Sep 2023
Mining Centre
MINERAL RESOURCES
Measured
Indicated
Inferred
Total 100%
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
AUGUST 2023 MINING ONE MINERAL RESOURCES – WILUNA CENTRAL MINE AREA
Wiluna – Open Pit
0.13
2.45
11
12.16
2.15
839
4.04
2.35
305
16.33
2.20
1,156
Wiluna – UG
1.70
4.97
272
4.99
4.73
760
21.58
4.41
3,059
28.27
4.50
4,083
SUB TOTAL
1.83
4.35
283
17.15
2.90
1,719
25.62
4.09
3,364
44.60
3.69
5,239
Table 2: Wiluna Mining Corporation Satellite Deposits November 2021
Wiluna Mining Corporation Mineral Satellite Deposit Resource Summary as at 21st November 2021
Mining Centre
MINERAL RESOURCES
Measured
Indicated
Inferred
Total 100%
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
NOVEMBER 2021 WMC REPORTED MINERAL RESOURCES – SATELLITE DEPOSITS
Matilda
0.03
2.18
2
1.24
1.72
68
0.88
2.71
76
2.14
2.13
147
Lake Way
0.27
1.73
15
0.68
2.27
50
2.11
1.56
106
3.06
1.74
171
Galaxy
0.01
1.87
1
0.03
2.24
2
0.11
3.35
12
0.15
3.02
15
SUB TOTAL
0.31
1.78
18
1.95
1.92
120
3.10
1.95
194
5.35
1.93
333
Table 3: Wiluna Mining Corporation Depleted Stockpile and Tailings Resources Sep 30th 2023
Wiluna Mining Corporation Mineral Resource Summary as of 30th Sept 2023
Mining Centre
MINERAL RESOURCES
Measured
Indicated
Inferred
Total 100%
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
Mt
g/t Au Koz Au
DEPLETED NOVEMBER 2021 WMC MINERAL RESOURCES -TAILINGS & STOCKPILES
Tailings
-
-
-
33.0
0.57
605
-
-
-
33.0
0.57
605
Stockpiles
-
-
-
3.03
0.50
49
-
-
-
3.03
0.50
49
SUB TOTAL
-
-
-
36.2
0.57
654
-
-
-
34.1
0.57
654
Notes:
1. Tonnes are reported as million tonnes (Mt) and rounded to three significant figures; gold (Au) ounces are reported as thousands rounded to
the nearest 1,000.
2. Data is rounded to reflect appropriate precision in the estimate which may result in apparent summation differences between tonnes, grade,
and contained metal content.
3. Mineral Resource at each Mining Centre in (Table 1 only) reported at cut-offs related to material type inside A$3,250 optimised pit shells (>
0.35 g/t for oxide and transitional material, and >0.70 g/t for fresh rock), and >2.3 g/t below the pit shells.
4. Resource update work completed by Mining One Consultants was only completed over the Wiluna Central Mine area. The satellite deposits,
stockpiles and tailings Mineral Resources are reported as released by Wiluna Mining Corporation in the 21 November 2021 ASX announcement1
(https://wcsecure.weblink.com.au/pdf/WMC/02453149.pdf)
5. The stockpile and tailings Mineral Resources have been depleted by 1,147kt since the November 2021 statement.
Ore Reserves
Updated reserves are currently being prepared and is anticipated to be available before the end of the calendar year.
6 | P a g e
Deed Administrators’ Report
On 20 July 2022, Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis of FTI Consulting were appointed as
Joint and Several Voluntary Administrators (Administrators) of Wiluna Mining Corporation Limited (Subject to Deed of
Company Arrangement) and its controlled entities (together Wiluna or the Group). Since this appointment, the
Administrators have had control of the Group’s business, property and affairs. On 28 July 2023, a Deed of Company
Arrangement (DOCA) was executed and the Administrators were appointed as Joint and Several Deed Administrators (Deed
Administrators) of the Group.
Accordingly, this report (which takes the place of the Directors’ report), together with the financial statements of the
consolidated entity, for the year ended 30 June 2022 are presented by the Deed Administrators pursuant their powers under
the DOCA.
DIRECTORS
The names of Directors who held office during or since the end of the financial year are as follows:
Rowan Johnston
Non-Executive Interim Chairman
Mr Johnston is a highly experienced Mining Executive with over 40 years’ experience as a mining engineer. He is a graduate
of Western Australian School of Mines and has worked on a number of different projects in several different jurisdictions,
with particularly experience in the gold sector. Mr Johnston brings a track record of successful project development and
turnaround success. Mr Johnston also brings significant Corporate and Board/NonExecutive Director experience in the mining
sector and is currently a Non-Executive Director of Gascoyne Resources Ltd and Bardoc Gold Ltd.
▪
Appointed:
10 December 2021
▪
Committee memberships:
Nil
▪
Other listed board memberships:
Spartan Resources Ltd, PNX Metals Ltd and Kin Mining NL.
▪
Previous listed board memberships:
Bardoc Gold Ltd, Excelsior Gold Ltd, Mutiny Gold Ltd and Integra Mining
Ltd.
▪
Interest in shares at the date of this report: Nil
▪
Interest in options at the date of this report: Nil
Hansjoerg Plaggemars
(DIPLOM KAUFMANN)
Non-Executive Director
Mr Plaggemars is an experienced Company Director highly skilled in corporate finance, corporate strategy, European and
North American Capital markets, and governance. He has qualifications in Business Administration and has served on several
Boards both on the ASX and in Europe. Mr Plaggemars is a USA citizen and is based in Germany.
▪
Appointed:
21 July 2021
▪
Committee memberships:
Audit & Risk
▪
Other listed board memberships:
2invest AG, Ming Le Sports AG, Decheng Technology AG i.I.,
Spartan Resources Ltd, PNX Metals Limited,
4basebio UK Societas, Altech Chemicals Limited,
Azure Minerals Limited, KIN Mining NL, Neon Equity AG
NL, Altech Advanced Materials AG, Geopacific Resources Ltd
▪
Previous listed board memberships:
CARUS AG, Enapter AG, KlickOwn AG, MARNA Beteiligungen
AG, 4basebio AG, Biofrontera AG, The Grounds Real Estate
Development AG, South Harz Potash Limited,
▪
Interest in shares at the date of this report: Nil
▪
Interest in options at the date of this report: Nil
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
7 | P a g e
Colin Jones
(BSC)
Non-Executive Director
Mr Jones is a highly experienced Mining Executive with almost 40 years’ experience as a mining, exploration and consulting
geologist. He has experience in several different geological environments and has worked in a number of countries on
producing mines, as part of feasibility teams and as an explorationist. He has acted as Independent Engineer on behalf of
major international resource financing institutions and banks and as Technical Adviser to private equity resource funds in
Australia and Canada.
▪
Appointed:
21 July 2021
▪
Committee memberships:
Remuneration & Nomination
▪
Other listed board memberships:
Newrange Gold, Eurotin Inc
▪
Previous listed board memberships:
Geodrill Limited
▪
Interest in shares at the date of this report: Nil
▪
Interest in options at the date of this report: Nil
Milan Jerkovic
(B.APP.SC (GEOL), GDIP (MINING), GDIP (MINERAL ECONOMICS), FAUSIMM MAICD)
Executive Chair
Mr Jerkovic is a geologist with over 35 years’ experience in the mining industry including resource evaluation, operations,
financing, acquisition, project development and general management. Mr Jerkovic is also principal of the Xavier Group. He
was previously the CEO of Straits Resources Limited, has held positions with WMC, BHP, Nord Pacific, Hargraves, Tritton and
Straits Asia and was the founding chair of Straits Asia Resources.
▪
Appointed:
27 November 2015
▪
Resigned:
6 July 2022
▪
Committee memberships:
Nil
▪
Other listed board memberships:
Nil
▪
Previous listed board memberships:
Geopacific Resources Limited, Metals X Limited
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
Greg Fitzgerald
(BBUS, CA)
Non-executive Director (Lead Independent Director)
Mr Fitzgerald is a Chartered Accountant with more than 30 years’ of gold mining and resources related experience. He has
extensive executive experience in managing finance and administrative matters for listed companies including holding the
positions of Chief Financial Officer and Company Secretary for an ASX 200 gold mining company for more than 15 years.
▪
Appointed:
19 February 2018
▪
Resigned:
21 April 2022
▪
Committee memberships:
Audit & Risk (Chair), Remuneration & Nomination (Chair)
▪
Other listed board memberships:
Nil
▪
Previous listed board memberships:
Nil for the last three years
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
8 | P a g e
Anthony James
(BENG, AWASM, FAUSIMM)
Non-executive Director
Mr James is a mining engineer with considerable operational, new project development and corporate experience including
roles as Managing Director of Carbine Resources Ltd, Atherton Resources Ltd and Mutiny Gold Ltd. At Atherton Resources,
Mr James achieved a favourable outcome for shareholders following the takeover by Auctus Minerals. At Mutiny Gold, Mr
James led the implementation of a revised development strategy for the Deflector copper-gold deposit in Western Australia
that resulted in the successful merger of Mutiny Gold and Doray Minerals Ltd.
Prior to this, Mr James held a number of senior executive positions with international gold producer Alacer Gold Corporation
following the merger of Anatolia Minerals and Avoca Resources in 2011. As the Chief Operations Officer of Avoca Resources,
he played a key role in Avoca’s initial growth and success, leading the feasibility, development and operations of the Trident
Underground Mine and the Higginsville Gold Operations.
▪
Appointed:
22 June 2018
▪
Resigned:
31 July 2021
▪
Committee memberships:
Audit & Risk, Remuneration & Nomination
▪
Other listed board memberships:
Galena Mining Limited, Medallion Metals Limited
▪
Previous listed board memberships:
Carbine Resources Limited, Apollo Consolidated Limited
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
Sara Kelly
(LLB, BCOMM)
Non-executive Director
Ms Kelly has significant transactional and industry experience having worked in private practice, as a corporate advisor, and
as in-house counsel. Ms Kelly regularly acts for ASX listed companies and their directors and officers in relation to capital
raisings, recapitalisations of ASX shells, asset acquisitions and disposals, Corporations Act and Listing Rules compliance,
corporate reconstructions and insolvency, director’s duties, meeting procedure, as well as general corporate and commercial
advice.
Ms Kelly is a Partner at Edwards Mac Scovell, a boutique litigation, insolvency and corporate firm based in Perth, Western
Australia.
▪
Appointed:
22 May 2020
▪
Resigned:
31 October 2021
▪
Committee memberships:
Audit & Risk, Remuneration & Nomination
▪
Other listed board memberships:
Midas Minerals Limited
▪
Previous listed board memberships:
Blue Mountain Energy
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
9 | P a g e
Neil Meadows
(B.APP.SC (METALLURGY), M.APP.SC (METALLURGY), GDIP (BUS ADMIN), MAUSIMM, DIP AICD)
Operations Director
Mr Meadows is a metallurgist with over 30 years experience in the mining and processing industries. Prior to joining Wiluna
Mining, he worked as Chief Operating Officer for European Metals Holdings Limited. Mr Meadows’ previous roles include
COO of Karara Mining Ltd, Managing Director of IMX Resources Ltd, COO of Queensland Nickel Pty Ltd, and General
Manager of Murrin Murrin Operations for Minara Resources Ltd.
▪
Appointed:
1 December 2019 (previously the Company’s General
Manager of Major Projects and Business Improvement,
until appointment to the Board)
▪
Resigned:
1 October 2021
▪
Committee memberships:
Nil
▪
Other listed board memberships:
Nil
▪
Previous listed board memberships:
Nil for the last three years
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
Lisa Mitchell
(FCPA (AUST))
Non-Executive Director
Ms Mitchell has significant experience as a CFO, Company Secretary and Executive Director of several Australian and London
listed companies (across ASX, LSE and AIM bourses). Ms Mitchell’s strengths include financial management, leadership, debt
and equity raising capabilities, LSE compliance and M&A. She has significant experience with the LSE (having worked for
former FTSE 250 Ophir Energy plc) and will bring valuable experience to Wiluna Mining’s upcoming LSE listing. Ms Mitchell
was born and raised in Melbourne and has resided in the United Kingdom for the past 10 years.
▪
Appointed:
1 October 2021
▪
Resigned:
9 May 2022
▪
Committee memberships:
Nil
▪
Other listed board memberships:
Nil
▪
Previous listed board memberships:
NIl
▪
Interest in shares at the date of this report: Not applicable as no longer a director
▪
Interest in options at the date of this report: Not applicable as no longer a director
Daniel Travers
(BSC (HONS), FCCA)
Company Secretary - appointed 3 May 2019
Mr Travers is a Fellow of the Association of Chartered Certified Accountants with over 10 years’ experience in the
administration and accounting of publicly listed companies following significant public practice experience. Mr Travers holds
undergraduate degrees with honours in both Mathematics and Accounting and is an employee of Endeavour Corporate,
which specialises in the provision of company secretarial and accounting services to ASX listed entities in the mining and
exploration industry.
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
10 | P a g e
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year were:
▪
production of gold from the Wiluna Gold Operation; and
▪
gold exploration and development.
REVIEW AND RESULTS OF OPERATIONS
For the year ended 30 June 2022 (FY22), the Group generated a net loss after tax of A$276.1m (2021: $20.4m profit), which
includes an impairment charge of $234.3m (comprising $195.3m against mine properties, $37.6m against plant and
equipment and $1.4m against exploration and evaluation expenditure) and treasury losses of $31.2m (comprising an
unrealised loss on forward contracts of $26.7m and FX losses of $4.5m). The gross loss from operations was A$14.2m (2021:
$20.6m profit), which was derived from total gold production of 41,986oz, with 26,239ozs gold produced from areas in pre-
production (with the associated costs and revenue capitalised to mine development prior to the impairment charge).
At the beginning of FY22, Wiluna was in development stage seeking to implement its Stage 1 Expansion Plan with targeted
gold production of 120kozpa. More specifically, Stage 1 involved completing construction and commissioning of the
Concentrate Plant, implementing tailings retreatment from historical tailings dams (through development of the Wiltails
Plant) and progressing underground mine development. The Group was also targeting completion of a Stage 2 Feasibility
Study in the December 2021 quarter, which originally envisaged doubling production to circa 250kozpa.
The Group was funded by several capital raisings supported by international and Australian investors, which together with
debt and working capital, was invested to grow and develop the mining properties. During FY22, this involved a $53m (before
costs) capital raising at a placement price of $1.00 per share, which was completed in two tranches. Tranche 1 was completed
on 30 November 2021 for a total of approximately $35m, and Tranche 2 was completed for a total of approximately $18m on
6 January 2022.
The capital raising funds received were used to continue to progress the Stage 1 expansion, with over $40m invested during
FY22 in plant and equipment, including approximately $33m used for Capital WIP, being primarily the development of the
Concentrate Plant and Wiltails Plant. The Concentrate Plant was successfully commissioned in December 2021; however the
Wiltails Plant remained incomplete at end FY22 (construction completed in September 2023 and commissioning is now
underway). In excess of $100m was also invested in mine properties during FY22, which included pre-production and
underground development costs, and represented more than 10,000 meters of underground development achieved during
the year.
Working capital during FY22 was impacted by ramp-up issues and delays in achieving Stage 1 commercial production
(originally targeted for June 2022, but ultimately never achieved), underground mine production being constrained due to
labour shortages caused by the COVID-19 pandemic, additional rehabilitation activity to improve mine area access, the
impact of increasing cost pressures in a high inflationary environment, gold grade mined being lower than planned (i.e.
underground ore reserve gold grade as of April 2022 declined by approximately 14% which materially impacted Wiluna’s
revenue) and trading difficulties including worldwide shipping constraints on delivering gold concentrate to off-takers.
In May 2022, Wiluna conducted a capital raising intended to address the working capital deficiency and to facilitate
completion of Stage 1, including the Wiltails Plant. As set out in the prospectus filed with the ASX in May 2022, the Group
sought to raise a minimum of $50m and up to approximately $85m (before costs). However, insufficient funds were raised to
adequately address the working capital issues, with only approximately $50m received under the raising which included
approximately $16.8m of supplier debt-to-equity conversion. As at 30 June 2022, Wiluna had a working capital deficiency of
$76.4m (being current assets minus current liabilities and assuming the Mercuria debt all became current).
Although Wiluna investigated options to address the working capital and cashflow shortfall, through obtaining funding and
financial accommodation from creditors and shareholders, it became apparent those options would not successfully address
the cashflow shortfall in the time available. Shortly after the end of FY22, the Directors of Wiluna Mining Corporation Limited
and its subsidiaries resolved on 20 July 2022 to appoint Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis
as Voluntary Administrators.
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
11 | P a g e
Recognising the existence of impairment triggers as at 30 June 2022, the Group has performed an impairment test to assess
the recoverable amount of the Wiluna Gold Mine against the carrying values of its mine properties and plant & equipment.
The outcome of this testing determined that an impairment charge of approximately $233.0 million was appropriate to
record against these assets. An additional $1.3m charge was recorded against exploration and evaluation expenditure to
impair costs associated with the Scadden coal project.
Since the appointment of the Voluntary Administrators, significant work has been undertaken and significant progress made
with the support of multiple key stakeholders towards stabilising Wiluna’s business, refocusing its business to be cash-flow
positive, restructuring Wiluna’s financial obligations and providing a basis for a Capital Raising and effectuation of the DOCA
so that Wiluna can be returned to the control of Directors in a sound financial position. Notwithstanding being in external
administration, Wiluna has been maintaining a sufficient level of operations and has been improving its financial condition.
Having achieved execution of the DOCA means that the Deed Administrators now have a certain level of confidence that
Wiluna may be able to exit external administration and come under the control of Directors on a solvent basis again.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
There are no likely developments of which the Deed Administrators are aware which could significantly affect the results of
the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities and Operating and
Financial Review or the Events Subsequent to Reporting Date sections of the Deed Administrators’ Report.
DIVIDENDS PAID OR RECOMMENDED
No dividend is recommended for the 30 June 2022 financial year and no amount has been paid or declared by way of a
dividend to the date of this report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year.
EVENTS SUBSEQUENT TO REPORTING DATE
On 6 July 2022, Mr Milan Jerkovic resigned from the Board of Directors and his role as Executive Chairman. Mr Rowan
Johnston was appointed as Interim Non-Executive Chairman. Mr Michael Monaghan and Mr Robert Ryan were also
appointed as acting Chief Executive Officer and Chief Operating Officer, respectively.
On 20 July 2022, the Board of Directors resolved to appoint the Voluntary Administrators to the Group.
On 11 July 2023, the Voluntary Administrators announced the concurrent second meeting of creditors was held on 7 July
2023 and the Deed of Company Arrangement Proposal (DOCA Proposal) as outlined in the report to creditors dated 30 June
2023 was approved by creditors (refer to ASX Announcement dated 3 July 2023 for further information on the DOCA
Proposal).
On 1 August 2023, the Voluntary Administrators announced that the Voluntary Administrators and each member of the
Wiluna Mining Group executed the DOCA on 28 July 2023 in accordance with the indicative terms of the DOCA Proposal as
approved by creditors of the Wiluna Mining Group (refer to the ASX Announcements dated 3 July 2023 and 11 July 2023 for
further information on the DOCA Proposal).
Because of the execution of the DOCA, each member of the Wiluna Mining Group is no longer in Voluntary Administration
and are now subject to the DOCA on and from 28 July 2023. Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian
Francis have been appointed as the Deed Administrators of the DOCA. The Deed Administrators will continue to manage
Wiluna’s business and operations while progressing the conditions precedent to the effectuation of the DOCA.
On 24 August 2023, the Deed Administrators of the Group announced the following conditions precedents to the DOCA have
been satisfied following the announcement on 1 August 2023, by the execution of the agreements between the relevant
members of the Wiluna Mining Group and:
•
Mercuria, pursuant to which the parties agree to restructure and amend the Mercuria facility agreement;
•
Deutsche Balaton Aktiengesellschaft and Byrnecut Australia Pty Ltd, for the provision of convertible loan facilities
totalling A$6,666,667 to be used to build and commission carbon-in-leach tanks and associated infrastructure at the
Wiluna Mine and provide Wiluna with additional working capital;
•
Trafigura Pte Ltd, pursuant to which the terms of the Trafigura offtake agreement has been amended and Trafigura
agrees to forbear from enforcing certain rights under its offtake agreement; and
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
12 | P a g e
•
Osisko Bermuda Limited, pursuant to which Osisko Bermuda Limited agrees to (amongst other things) forbear from
enforcing (and waive) certain rights under its gold purchase deed.
The remaining conditions precedent to the effectuation of the DOCA are:
•
Wiluna issuing new shares to raise new capital in an amount determined by the Deed Administrators on or before
31 December 2024 (Capital Raising), and obtaining necessary regulatory relief, ASX Listing Rule waivers or member
approvals (if any) to complete the Capital Raising; and
•
The appointment of one or more suitably qualified and experienced directors to the boards of directors of the
Wiluna Mining Group.
On 24 August 2023, the Deed Administrators of the Group give notice that Wiluna relies on the relief granted under sections
6A and 8 of the ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 (Instrument) in respect of the
requirements to:
•
lodge its annual report for the financial year ending 30 June 2023 within 3 months after the end of the financial year
under section 319 of the Corporations Act 2001 (Cth) (Corporations Act);
•
send its annual report for the financial year ending 30 June 2023 to its shareholders within 4 months after the end of
the financial year under sections 314 and 315 of the Corporations Act; and
•
hold an annual general meeting (AGM) at least once in each calendar year and within 5 months after the end of its
financial year under section 250N of the Corporations Act.
As a result of the relief granted under the Instrument, the new due date for Wiluna will be:
•
to lodge and send its annual report for the financial year ending 30 June 2023, the earlier of:
-
24 months after the day when administrators were appointed for Wiluna;
-
the day on which a director of Wiluna has the right to, or is able to, perform or exercise all or most of the
management powers or functions of a director of Wiluna under the DOCA or with the consent of the Deed
Administrators; or
-
the day the external administration of Wiluna ends, (Deferral Period); and
•
to hold an AGM, within 2 months after the end of the Deferral Period.
There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected or
could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
MEETINGS OF DIRECTORS
The number of directors' meetings held (including meetings of the Committees of the Board) and number of meetings
attended by each of the directors of the Company during the financial year are:
Director’s meeting
Audit and Risk
Committee
Remuneration and
Nomination
Committee
Director
Eligible
Attended
Eligible
Attended
Eligible
Attended
Milan Jerkovic
11
11
-
-
-
-
Neil Meadows
2
2
-
-
-
-
Greg Fitzgerald
9
9
3
3
2
2
Anthony James
1
1
-
-
1
1
Sara Kelly
3
2
1
1
2
2
Hansjoerg Plaggemars
11
9
1
1
2
2
Colin Jones
11
11
-
-
3
3
Lisa Mitchell
7
7
2
2
-
-
Rowan Johnston
8
8
1
1
-
-
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
13 | P a g e
ENVIRONMENTAL ISSUES
The Group is subject to significant environmental regulations under various legislation. The Group aims to ensure that it
complies with the identified regulatory requirements in each jurisdiction in which it operates. Wiluna is mining multiple
deposits and is planning to mine various other locations. The timing and preparation for mining each of these deposits is
dependent on the reconciled performance of each and the ongoing mine evaluation and planning process. Each time a new
deposit is mined, separate regulatory approvals are required and the timing of this process is continually changing in a fluid
mine planning process. As a direct result of this, at any one time, the formal approval process may still be outstanding at the
time mining commences, which is usual in practice.
OPTIONS
Options on issue at the date of this report*:
Expiry date
Quoted/
Unquoted
Exercise
price $
Number
13/02/24
Unquoted
8.00
720,000
30/06/23
Unquoted ZEPOs
-
593,676
30/06/24
Unquoted ZEPOs
-
680,482
30/06/25
Unquoted ZEPOs
-
1,639,651
31/12/24
Quoted
0.60
153,821,790
157,455,599
*ZEPOs balances are sourced from the share registry’s records. Wiluna will be revisiting the terms and conditions of these
ZEPOs, which have been issued under long term incentives agreements, to determine eligibility of staff to retain these options.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
36,463 shares of the Company were issued during the year ended 30 June 2022 and up to the date of this report on the
exercise of options granted.
INDEMNIFYING OFFICERS AND AUDITORS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer, or agent of the
Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as
Officer or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever
occurring or in defending any proceedings, whether civil or criminal. No indemnification has been paid with respect to the
Group’s auditor.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility
on behalf of the company for all or part of those proceedings.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is attached to
the Director’s Report.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in the financial statements.
The Deed Administrators are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
DEED ADMINISTRATORS’ REPORT
(CONTINUED)
14 | P a g e
The Deed Administrators are of the opinion that the services as disclosed in the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
•
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF THE AUDITOR
There are no officers of the company who are former partners of RSM Australia Partners.
ROUNDING
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/91 and
in accordance with that class order, amounts in the financial statements have been rounded off to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
REMUNERATION REPORT
15 | P a g e
Remuneration Report
This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in
accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, Key
Management Personnel of the Group are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company and the Group, including any director (whether executive or otherwise) of
the parent company.
REMUNERATION FRAMEWORK
The Board, the Executive and Key Management Personnel are eligible to participate in the incentive arrangements of the
Company. The incentive plan focuses the efforts of the executive and management team on business performance, business
sustainability, business growth and long term value creation. It provides for clear ‘line of sight’ objectives to maximise the
effectiveness of the participants’ total incentive awards and facilitates the meaningful accumulation of Company securities by
participants to encourage an ownership mentality which in addition to having a retentive benefit, also further aligns
management interests with those of the Shareholders. The Remuneration Policy, including the incentive plan, has been
tailored to increase goal congruence between Shareholders and executives. Two methods have been applied to achieve this
aim, being the Operations and Growth Incentive Plan (short term) and the Value Creation Plan (long term) which is
administered under the Company’s Employee Option Plan (EOP).
REMUNERATION FRAMEWORK OVERVIEW
Category
Definition of pay category
Element
Purpose
Fixed pay
Pay which is linked to the present value or market rate of
the role
Total Fixed
Remuneration (‘TFR’)
Pay for meeting role
requirements
Incentive pay
Pay for delivering the plan and growth agenda for the
Group which must create value for shareholders. Incentive
pay will be linked to achievement of ‘line-of-sight’
performance goals
It reflects ‘pay for performance’
Short Term Incentive
(‘STI’)
Incentive for the achievement of
annual objectives
Incentive for the achievement of
sustained business value
Reward pay
Pay for creating value for shareholders. Reward pay is
linked to shareholder returns.
It reflects ‘pay for results’
Long Term Incentive
(‘LTI’)
Reward for performance over
the long term
The incentive opportunities under the Remuneration Policy contain a maximum amount of Total Incentive Opportunity (‘TIO’),
as shown below:
MAXIMUM TOTAL INCENTIVE OPPORTUNITY AS A PERCENTAGE OF TFR ON AN ANNUAL BASIS
Plan:
WMC Ops &
Growth
WMC Value
Creation
Performance period:
1 year (STI)
3 year vest
(LTI)
Award:
Cash
ZEPO’s
TIO
Executives
48% p.a.
20% p.a.
68% p.a.
The maximum amount of TIO would only be delivered to Directors, the Executive and/or Key Management Personnel if the
highest performance levels for each of the performance hurdles are achieved. The actual value of incentives may be zero if
the performance hurdles are not met.
The Total Annual Remuneration (i.e. TFR + STI + LTI) for the Key Management Personnel has been set at a level that is
broadly in line with the average Total Annual Remuneration for a peer group of Australian based gold miners.
REMUNERATION REPORT (CONTINUED)
16 | P a g e
Performance Hurdles
Participation in the incentive opportunities of the Remuneration Policy is based on successful milestone achievements against
the following performance hurdles:
Short Term Incentive (‘STI’) performance metrics (paid in the form of a cash bonus and to ensure goal alignment, are
consistent amongst all the Executive):
Company performance (60%-80%)
▪
Safety measures (Total Reportable Injury Frequency Rate “TRIFR”)
▪
Company operating cash flow
▪
All in sustaining cost per ounce produced
▪
Production target gold ounces
Individual performance (20%-40%)
▪
Individual specific goals and supervisory discretion
Long Term Incentive (‘LTI’) performance metrics (paid in Zero Exercise Price Options (“ZEPOs”) and to ensure goal
alignment, are consistent amongst all the Executive):
▪
Performance versus ASX Gold Index (*)
▪
Reserves increased
▪
Resources maintained
(*) – the hurdle relating to the performance versus the ASX Gold Index will see 50% of this portion of the ZEPO’s vest if
WMC’s share price outperforms the ASX Gold Index. 100% of this portion of the ZEPOs will vest if the WMC share price
outperforms the ASX Gold Index by at least 50%. The payout will increase on a straight line basis between these two points.
ZEPO’s issued from 1 July 2020 will only have the performance metric of Performance versus ASX Gold Index.
Vesting conditions for LTI performance hurdles will be tested once only at the end of every 3 year measurement period.
Executive Chair Remuneration
Mr Jerkovic’s employment contract was for a 3-year fixed term, beginning 1 July 2020, ending on 30 June 2023.
Mr. Jerkovic stepped down with immediate effect as Executive Chairman and resigned from the Board of Directors on 6 July
2022.
Effective 1 April 2021, the Executive Chair’s remuneration was as follows:
Total Fixed Remuneration
TFR increased from $420,000pa to approximately $520,000pa.
Short Term Incentives
Up to 48% of fixed remuneration per annum for each year of the contract. Participation in the incentive opportunities of
the Remuneration Policy is based on successful milestone achievements against the following Key Performance Indicators
(KPI):
Company KPIs (60%)
▪
Safety measures (Total Reportable Injury Frequency Rate “TRIFR”)
▪
Company operating cash flow
▪
All in sustaining cost per ounce produced
▪
Production target gold ounces
Individual performance (40%)
•
Individual specific goals and Board's discretion
REMUNERATION REPORT (CONTINUED)
17 | P a g e
VOTING AND COMMENTS MADE AT THE COMPANY'S 2021 ANNUAL GENERAL MEETING ('AGM')
At the 2021 AGM 99.64% of the votes received supported the adoption of the remuneration report for the year ended
30 June 2021. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
KEY MANAGEMENT PERSONNEL
The key management personnel of the Company consists of the following directors and executives:
Directors
Position
Greg Fitzgerald
Non-executive Director – resigned 21 April 2022
Anthony James
Non-executive Director - resigned 31 July 2021
Milan Jerkovic
Executive Chair – resigned 6 July 2022
Rowan Johnston
Non-executive Director – appointed 10 December 2021, Interim Non-Executive
Chairman – appointed 6 July 2022
Colin Jones
Non-executive Director - appointed 21 July 2021
Sara Kelly
Non-executive Director – resigned 31 October 2021
Neil Meadows
Operations Director – resigned 1 October 2021
Lisa Mitchell
Non-executive Director – appointed 1 October 2021 and resigned 9 May 2022
Hansjoerg Plaggemars
Non-executive Director – appointed 21 July 2021
Key Management Personnel (KMP)
Position
Greg Fitzgerald
Chief Financial Officer – appointed 21 April 2022
Cain Fogarty
GM – Geology and Business Development – resigned 6 July 2023
Jim Malone
GM – Investor Relations & Communications - resigned 6 July 2023
Anthony Rechichi
Chief Financial Officer - resigned 21 April 2022
The details of the Key Management Personnel’s remuneration have been set out in the following tables.
REMUNERATION REPORT (CONTINUED)
18 | P a g e
REMUNERATION STRUCTURE FOR KEY MANAGEMENT PERSONNEL
Remuneration is based on the following components approved by the Remuneration and Nomination Committee;
•
base pay and non-monetary benefits
•
short-term performance incentives
•
long-term performance incentives
•
other remuneration such as superannuation and long service leave
Table 1: Contract terms for Key Management Personnel:
Name
Title
Term of
Agreement
Notice Period by
Employee
Notice Period by
Company
Termination
benefit
Greg Fitzgerald
Non-executive Director
Open
Upon resignation as
director
Upon termination as
director
n/a
Cain Fogarty
GM – Geology and
Business Development
Open
3 months notice
3 months notice
n/a
Anthony James
Non-executive Director
Open
Upon resignation as
director
Upon termination as
director
n/a
Milan Jerkovic
Executive Chair
Commenced
01/07/20
with a 3-year
term but
ended
6/07/22
3 months notice
12 months year 1
9 months year 2
6 months year 3
n/a
Colin Jones
Non-executive Director
Open
Upon resignation as
director
Upon termination as
director
n/a
Sara Kelly
Non-executive Director
Open
Upon resignation as
director
Upon termination as
director
n/a
Jim Malone
GM – Investor Relations &
Communications
Open
3 months notice
3 months notice
n/a
Neil Meadows
Operations Director
Open
3 months notice
3 months notice
n/a
Hansjoerg Plaggemars
None-executive Director
Open
Upon resignation as
director
Upon termination as
director
n/a
Anthony Rechichi
Chief Financial Officer
Open
3 months notice
3 months notice
n/a
REMUNERATION REPORT (CONTINUED)
19 | P a g e
KEY MANAGEMENT PERSONNEL REMUNERATION
Table 2: Remuneration for the year ended 30 June 2022
Short term
Post
employment
Long term
Performance related
2022
Salary &
fees
STI
Non-
monetary
benefits*
Annual
leave
Super-
annuation
Long service
leave
LTI
Termination
payments
At risk –
STI
At risk -
LTI
$
$
$
$
$
$
$
%
%
Directors
Milan Jerkovic
459,968
-
4,188
38,338
23,568
1,076
-
-
0%
0%
Neil Meadows
320,745
-
1,059
26,734
17,676
-
-
99,219
0%
0%
Greg Fitzgerald
97,101
-
3,383
-
9,710
-
-
-
0%
0%
Anthony James
6,469
-
345
-
647
-
-
-
0%
0%
Sara Kelly
25,875
-
1,404
-
2,588
-
-
-
0%
0%
Colin Jones
124,359
-
3,958
10,363
13,568
-
-
8,601
0%
0%
Hansjoerg Plaggemars
80,532
-
3,958
-
-
-
-
-
0%
0%
Lisa Mitchell
51,545
-
2,532
-
-
-
-
-
0%
0%
Rowan Johnston
43,391
-
2,324
-
4,339
-
-
-
0%
0%
Other KMP
Anthony Rechichi
321,508
-
4,188
26,798
23,568
17,128
-
-
0%
0%
Cain Fogarty
261,509
-
4,188
21,797
23,568
-
-
-
0%
0%
Jim Malone
246,483
-
4,188
20,540
23,568
867
-
-
0%
0%
Total
2,039,485
-
35,715
144,570
142,800
19,071
-
107,820
0%
0%
*
Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.
REMUNERATION REPORT (CONTINUED)
20 | P a g e
Table 2: Remuneration for the year ended 30 June 2021
Short term
Post
employment
Long term
Performance related
2021
Salary &
fees
STI(ii)
Non-
monetary
benefits*
Annual
leave
Super-
annuation
Long service
leave
LTI
Termination
payments
At risk –
STI
At risk -
LTI
$
$
$
$
$
$
$
%
%
Directors
Greg Fitzgerald
91,324
-
-
-
8,676
-
-
-
0%
0%
Anthony James
77,626
-
-
-
7,374
-
-
-
0%
0%
Milan Jerkovic
412,198
105,654
4,188
29,373
21,694
-
55,546
-
16%
9%
Sara Kelly
77,626
-
-
-
7,374
-
-
-
0%
0%
Neil Meadows
388,306
113,481
4,188
29,234
21,694
1,634
69,000
-
18%
11%
Other KMP
Cain Fogarty
254,429
78,500
4,188
20,194
21,694
14,519
39,680
-
18%
9%
Wayne Foote
309,800
70,841
4,050
23,868
29,350
-
-
81,963
14%
0%
Jim Malone
209,584
65,365
4,188
10,860
20,852
315
17,015
-
20%
5%
Anthony Rechichi
308,667
100,217
4,188
24,874
21,694
7,692
6,049
-
21%
1%
Total
2,129,560
534,058
24,990
138,403
160,402
24,160
187,290
81,963
21%
1%
*
Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.
(i)
The STI remuneration represents the estimated amounts to be paid in cash in September 2021 and relates to incentives offered for the 12 month period ended 30 June 2021. The STI amounts to be paid for FY21 were less than the
maximum opportunity, due to under achievement in safety and production against target. The STI achieved is primarily attributable to the Company’s operating cashflows, unit production costs and individual performances.
REMUNERATION REPORT (CONTINUED)
21 | P a g e
Table 4: Share holdings of key management personnel:
Held at the
start of the
year
Issued on
exercise of
options
Participation
in rights
issue and
share
purchase
plan(i)
Disposed
Held at the
end of the
year
Name
Acquired
on market
Directors
Milan Jerkovic
1,554,201
12,500
2,266,701
-
-
3,833,402
Neil Meadows
-
-
-
-
-
-
Greg Fitzgerald
-
-
-
-
-
-
Anthony James
-
-
-
-
-
-
Sara Kelly
-
-
-
-
-
-
Colin Jones
-
-
-
-
-
-
Hansjoerg Plaggemars
-
-
-
-
-
-
Lisa Mitchell
-
-
-
-
-
-
Rowan Johnston
-
-
-
-
-
-
Other KMP
-
Cain Fogarty
110,000
-
-
-
-
110,000
Jim Malone
210,000
-
200,000
144,040
(194,520)
359,520
Anthony Rechichi
-
16,302
-
-
-
16,302
Total
1,874,201
28,802
2,466,701
144,040
(194,520)
4,319,224
(i)
Shares were purchased at the offer issue prices of $1.00 per share and $0.40 per share.
REMUNERATION REPORT (CONTINUED)
22 | P a g e
Table 5: Option holdings of key management personnel*:
Name
Held at the start of
the year
Granted as
remuneration
Number
Grant
date
Fair
value
at
grant
date
Vesting conditions
Vesting
Date
Expiry
Exercise
price
Decrease(i)
Held at the end
of the year
Directors
Greg
Fitzgerald
-
-
-
-
-
-
-
-
-
-
Anthony
James
-
-
-
-
-
-
-
-
-
-
Milan
Jerkovic
12,500
-
11/05/18
7.7
Reserves & resources increased
31/12/20
31/12/21
-
(12,500)
-
12,613
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
12,613
8,829
-
5/07/19
1.3
Reserve increase
30/06/22
30/06/23
-
-
8,829
3,784
-
5/07/19
1.3
Resource maintained
30/06/22
30/06/23
-
-
3,784
183,438
- 10/07/20
1.3
Performance vs ASX Gold Index
30/06/23
30/06/24
-
-
183,438
-
50,535
18/11/21
0.9 Performance vs ASX Gold Index
30/06/24
30/06/25
-
-
50,535
Sara Kelly
-
-
-
-
-
-
-
-
-
-
Neil
Meadows
79,615
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
79,615
55,731
-
5/07/19
1.3
Reserve increase
30/06/22
30/06/23
-
-
55,731
23,885
-
5/07/19
1.3
Resource maintained
30/06/22
30/06/23
-
-
23,885
-
213,098
23/11/21
0.9
Performance vs ASX Gold Index
30/06/24
30/06/25
-
-
213,098
Colin Jones
-
-
-
-
-
-
-
-
-
-
Hansjoerg
Plaggemars
-
-
-
-
-
-
-
-
-
-
Lisa
Mitchell
-
-
-
-
-
-
-
-
-
-
Rowan
Johnston
-
-
-
-
-
-
-
-
-
-
Other KMP
-
REMUNERATION REPORT (CONTINUED)
23 | P a g e
Cain
Fogarty
28,954
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
28,954
20,268
-
5/07/19
1.3
Reserve increase
30/06/22
30/06/23
-
-
20,268
8,686
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
8,686
81,752
- 10/07/20
1.1
Performance vs ASX Gold Index
30/06/23
30/06/24
-
-
81,752
65,889
2/07/21
0.9
Performance vs ASX Gold Index
30/06/24
30/06/25
-
-
65,889
Jim Malone
2,477
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
2,477
1,734
-
5/07/19
1.3
Reserve increase
30/06/22
30/06/23
-
-
1,734
743
-
5/07/19
1.3
Resource maintained
30/06/22
30/06/23
-
-
743
58,394
- 10/07/20
1.1
Performance vs ASX Gold Index
30/06/23
30/06/24
-
-
58,394
Anthony
Rechichi
16,302
-
11/05/18
7.7
Reserves & resources increased
31/12/20
31/12/21
-
-
16,302
16,449
-
5/07/19
1.3
Performance vs ASX Gold Index
30/06/22
30/06/23
-
-
16,449
11,514
-
5/07/19
1.3
Reserve increase
30/06/22
30/06/23
-
-
11,514
4,935
-
5/07/19
1.3
Resource maintained
30/06/22
30/06/23
-
-
4,935
99,271
- 10/07/20
1.1
Performance vs ASX Gold Index
30/06/23
30/06/24
-
-
99,271
-
81,020
2/07/21
0.9
Performance vs ASX Gold Index
30/06/24
30/06/25
-
-
81,020
Total
731,874
410,542
-
-
-
-
-
-
(12,500)
1,129,916
(i) “Decrease” represents options vested, exercised, expired during the year and/or forfeited due to termination/resignation.(12,500).
* Option holding balances in the table above include ZEPOs with vesting conditions. ZEPO balances have been sourced from the share registry’s records. Wiluna will be revisiting the terms and conditions of these ZEPOs, which have been issued
under long term incentives agreements, to determine the eligibility of staff who have ceased employment with Wiluna to these options. Under the Plan Rules, where you become a Good Leaver, the Board may determine in its sole and absolute
discretion allow some or all of the unvested ZEPOs to vest. Where the person is a Bad Leaver, all unvested ZEPOs will automatically be forfeited and lapse, subject to any determination by the Board in its sole and absolute discretion. Both Good
Leaver and Bad Leaver are defined under the Plan Rules.
REMUNERATION REPORT (CONTINUED)
24 | P a g e
CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
The earnings of the Group for the five years to 30 June 2022 are summarised below:
2022
2021
2020
2019
2018
$’000
$’000
$’000
$’000
$’000
Sales revenue
($’000)
40,263
131,467
126,562
102,466
118,252
Profit/(loss) after income tax
($’000)
(276,055)
20,404
14,250
(73,161)
(20,027)
Share price at 30 June
$ per share
0.235
0.93
1.34(i)
0.01
0.07
Basic profit/(loss) per share
cents per
share
(143.61)
17.72
24.43(i)
(4.29)
(2.95)
(i)
Note, the company performed a 100:1 share consolidation on 25 May 2020
LOANS TO KEY MANAGEMENT PERSONNEL
There were no loans to key management personnel during the years ended 30 June 2022.
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
Transactions
with related
parties
Balances
outstanding
$’000
$’000
Xavier Group Pty Ltd(i)
204
17
Ironbridge Capital Partners (ii)
94
-
(i)
Entity related to Milan Jerkovic, Executive Chair. Mr Jerkovic is an officer and co-owner of Xavier Group Pty Ltd.
(ii)
Entity related to Lisa Mitchell, Non-Executive Director. Ms Mitchell spouse is also a director and beneficiary of Ironbridge Capital Partners
All transactions were made on normal commercial terms and conditions and at market rates.
End of audited Remuneration Report.
Signed for the purposes of section compliance with 298 of the Corporations Act 2001 for an on behalf of the Deed
Administrators.
Michael Ryan
Joint and Several Deed Administrator
Perth, 31 October 2023
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Wiluna Mining Corporation Limited (Subject to Deed of
Company Arrangement) for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief,
there have been no contraventions of:
(i)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
Any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
AIK KONG TING
Dated: 31 October 2023
Partner
26 | P a g e
Consolidated Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
2021
Note
$’000
$’000
Continuing operations
Revenue from gold and silver sales
1
40,263
131,467
Cost of production relating to gold and silver sales
2
(42,087)
(80,267)
Gross (loss)/profit before depreciation and amortisation
(1,824)
51,200
Depreciation and amortisation relating to gold and silver sales
2
(12,307)
(30,577)
Gross (loss)/profit from operations
(14,131)
20,623
Other income
4
6,945
3,162
Administration expenses
3,307
(5,094)
Non-capital exploration expenditure
-
(384)
Depreciation of non-mine site assets
(41)
(95)
Share-based payments
3
-
(145)
Finance costs
3
(2,819)
(3,395)
Treasury – realised loss
5
(4,648)
(117)
Treasury – unrealised gain/(loss)
5
(26,650)
6,576
Impairment expense
3
(234,310)
-
Other expenses
3
(3,708)
(727)
(Loss)/profit before income tax expense for the year from
continuing operations
(276,055)
20,404
Income tax expense
6
-
-
(Loss)/profit after income tax expense for the year from
continuing operations
(276,055)
20,404
Other comprehensive income
-
-
Total comprehensive (loss)/profit for the year, net of tax
(276,055)
20,404
Cents
Cents
Basic earnings per share
7
(143.61)
17.72
Diluted earnings per share
7
(143.61)
17.51
The accompanying notes form part of these financial statements
27 | P a g e
Consolidated Statement of Financial Position
AS AT 30 JUNE 2022
Consolidated
2022
2021
Note
$’000
$’000
Current assets
Cash and cash equivalents
16
17,217
54,077
Gold bullion awaiting settlement
17
56
55
Trade and other receivables
24
2,298
3,503
Inventories
25
14,476
26,118
Financial assets
19
18
2,549
Total current assets
34,065
86,302
Non-current assets
Other receivables
24
656
656
Right of use assets
20
11,455
4,442
Plant and equipment
11
85,644
85,691
Mine properties – areas in production
12
-
72,965
Mine properties – areas in development
13
49,359
61,927
Exploration and evaluation expenditure
14
47,524
34,242
Financial assets
19
-
3,416
Total non-current assets
194,638
263,339
Total assets
228,703
349,641
Current liabilities
Trade and other payables
26
48,166
30,289
Provisions
27
2,337
2,050
Financial liabilities
19
1,510
-
Interest-bearing liabilities
18
57,311
9,895
Lease liabilities
20
1,133
2,294
Total current liabilities
110,457
44,528
Non-current liabilities
Interest-bearing liabilities
18
3,874
48,352
Provisions
27
46,220
34,270
Lease liabilities
20
10,486
2,339
Financial liabilities
19
18,938
-
Total non-current liabilities
79,518
84,961
Total liabilities
189,975
129,489
Net assets
38,728
220,152
Equity
Issued capital
22
392,353
297,760
Reserves
23
6,531
6,493
Accumulated losses
(360,156)
(84,101)
Total equity
38,728
220,152
The accompanying notes form part of these financial statements
28 | P a g e
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
Issued
Reserves
Accumulated
losses
Total
capital
$’000
$’000
$’000
$’000
At 1 July 2020
236,865
6,177
(104,505)
138,537
Profit after income tax for the year
-
-
20,404
20,404
Other comprehensive income, net of tax
-
-
-
-
Total comprehensive profit for the year
-
-
20,404
20,404
Transactions with owners in their capacity as owners:
Share-based payments expense
-
316
-
316
Shares issued, net of transactions costs
60,895
-
-
60,895
At 30 June 2021
297,760
6,493
(84,101)
220,152
At 1 July 2021
297,760
6,493
(84,101)
220,152
Loss after income tax for the year
-
-
(276,055)
(276,055)
Other comprehensive income, net of tax
-
-
-
-
Total comprehensive loss for the year
-
-
(276,055)
(276,055)
Transactions with owners in their capacity as owners:
Share-based payments expense
-
38
-
38
Shares issued, net of transactions costs
94,593
-
-
94,593
At 30 June 2022
392,353
6,531
(360,156)
38,728
The accompanying notes form part of these financial statements
29 | P a g e
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
2022
2021
Note
$’000
$’000
Cash flows from operating activities
Proceeds from gold and silver sales
41,468
133,299
Payments to suppliers and employees
(34,878)
(99,849)
Interest received
6,945
36
Interest paid
(2,475)
(2,422)
Other
-
2,881
Net cash flows from operating activities
16
11,060
33,945
Cash flows from investing activities
Purchase of plant and equipment
(39,777)
(27,998)
(Loss) from sale of non-core assets, net of costs
-
(175)
Payments for geology
(18,971)
(26,133)
Payments for mine properties
(77,363)
(46,382)
Proceeds from pre-production gold sales
-
1,436
Net cash flows used in investing activities
(136,111)
(99,252)
Cash flows from financing activities
Proceeds from issue of equities
100,556
64,218
Payment of share issue costs
(5,925)
(3,583)
Proceeds from loan, net of fees
-
75,100
Repayment of loans
(4,173)
(19,250)
Net (repayment)/proceeds from finance leases
(21)
2,047
Change in bank guarantees
-
(86)
Repayment of lease liabilities
(2,246)
(7,966)
Net cash flows from financing activities
88,191
110,480
Net (decrease)/increase in cash held
(36,860)
45,173
Cash and cash equivalents at beginning of the year
54,077
8,904
Cash and cash equivalents at end of the year
17,217
54,077
The accompanying notes form part of these financial statements
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
30 | P a g e
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
Basis of preparation
These consolidated financial statements and notes represent those of Wiluna Mining Corporation Limited (the ‘Company’ or
‘Wiluna’) and its controlled entities (the ‘Group’).
The financial statements were authorised for issue on 31 October 2023 by the Deed Administrators.
The financial report is a general purpose financial report which:
•
has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’), International Financial
Reporting Standards (‘IFRS’) and the Corporations Act 2001;
•
are presented in Australian dollars, which is the Company’s and Group’s functional and presentation currency, with
all values rounded to the nearest thousand dollars ($’000) unless otherwise stated, in accordance with ASIC
Instrument 2016/91;
•
have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the
measurement at fair value of selected non-current assets, financial assets and financial liabilities;
•
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the
operations of the Group and effective for reporting periods beginning on or after 1 July 2021; and
•
does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet
effective.
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/91 and
in accordance with that class order, amounts in the financial statements have been rounded off to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
GOING CONCERN
The financial statements have been prepared on a going concern basis, which assumes the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2022, the Company generated a net loss after tax of A$276.1m (2021: $20.4 million profit), which
includes an impairment charge of $234.3m and treasury losses of $31.2m. Gross loss from operations was A$14.2m, which
was derived from total gold production of 41,986oz, with 26,239ozs gold produced from areas in pre-production (with the
associated costs and revenue capitalised to mine development prior to the impairment charge).
As at balance date, Wiluna had a working capital deficit of $76.4 million (2021: $41.8 million surplus). Working capital during
the year ended 30 June 2022 was impacted by ramp-up issues and delays in achieving Stage 1 commercial production
(originally targeted for June 2022, but ultimately never achieved), underground mine production being constrained due to
labour shortages caused by the COVID-19 pandemic, additional rehabilitation activity to improve mine area access, the
impact of increasing cost pressures in a high inflationary environment, gold grade mined being lower than planned (i.e.
underground ore reserve gold grade as of April 2022 declined by approximately 14% which materially impacted Wiluna’s
revenue) and trading difficulties including worldwide shipping constraints on delivering gold concentrate to off-takers.
On 20 July 2022 the Directors determined to place the Company and each of its wholly owned subsidiaries into voluntary
administration. Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis of FTI Consulting were appointed as Joint
and Several Voluntary Administrators of the Company and each of its wholly-owned subsidiaries. The Administrators
determined that the best option to preserve value of the Company’s assets was to continue trading the operations on a
‘business as usual’ basis, rather than placing the mine on care and maintenance. With the support of the Company’s secured
creditors, employees and key suppliers, the Administrators stabilised the business, implemented workstreams to complete
mining technical work necessary to understand the potential of the mine and its operations, and initiated a dual track process
to achieve either a sale of its assets or recapitalisation of the Company.
On 1 August 2022 the first meeting of creditors was held. The intention of the Administrators was to continue to operate the
mine, with a view to maximising gold recovery from operations in the near term, whilst exploring opportunities for a
recapitalisation or sale of Wiluna. This strategy was dependent on cash flow. The Administrators also worked with technical
advisors to review the mine plan at that time and overall historical performance of the mine’s operations, as the
Administrators believed rectifying those issues was key to maximising a positive outcome for stakeholders.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31 | P a g e
On 30 June 2023, pursuant to their Report to Creditors, the Administrators recommended that the Company’s creditors
approve the DOCA as part of a broader recapitalisation and relisting plan. This recommendation came after an operational
turnaround was achieved by the Company during the previous 12 months.
On 7 July 2023, at a second meeting of creditors, the Company’s creditors passed a resolution approving entry into the
DOCA. The purpose of the DOCA was to restructure the Company’s debts and facilitate the recapitalisation of the Company.
Under the DOCA, the Administrators were appointed as Deed Administrators.
The DOCA is being implemented as part of a broader strategic turnaround involving Wiluna’s key stakeholders to find a long
term financially sustainable solution for Wiluna. The Deed Administrators are continuing to manage Wiluna’s business and
operations while progressing the conditions precedent to the effectuation of the DOCA.
Effectuation under the DOCA was conditional on the following conditions precent being satisfied (or waived):
•
the execution of the Creditors’ Trust Deed by the Administrators and the Wiluna Mining Company. The Creditors’
Trust Deed has been executed and this condition precedent has been satisfied;
•
the execution of agreements between Wiluna and:
o
Mercuria, pursuant to which the parties will agree to restructure and amend the Mercuria facility
agreement;
o
existing shareholders, Deutsche Balaton Aktiengesellschaft and Byrnecut Australia Pty Ltd, for the provision
of convertible loan facilities totalling A$6,666,667 to be used to build and commission carbon-in-leach
tanks and associated infrastructure at the Wiluna Mine and provide Wiluna with additional working capital;
o
Franco-Nevada Australia Pty Ltd, pursuant to which Franco-Nevada Australia Pty Ltd will convert some or
all amounts owing to it under the royalty deeds into convertible notes and forbear from enforcing any
rights under its securities;
o
Trismegist Pte Ltd, pursuant to which the terms of the Trismegist offtake agreement will be amended and
Trismegist will forbear from enforcing certain rights under its offtake agreement;
o
Trafigura Pte Ltd, pursuant to which the terms of the Trafigura offtake agreement will be amended and
Trafigura will forbear from enforcing certain rights under its offtake agreement; and
o
Osisko Bermuda Limited, pursuant to which Osisko Bermuda Limited will agree to (amongst other things)
forbear from enforcing (and waive) certain rights under its gold purchase deed;
On 24 August 2023, Wiluna announced each of the above agreements had been executed and this condition
precedent has been satisfied;
•
Wiluna issuing new shares to raise new capital in an amount determined by the Deed Administrators on or before
31 December 2024 (Capital Raising), and obtaining necessary regulatory relief, ASX Listing Rule waivers or member
approvals (if any) to complete the Capital Raising. This condition precedent remains outstanding; and
•
The appointment of one or more suitably qualified and experienced directors to the boards of directors of the
Wiluna Mining Company. This condition precedent remains outstanding.
The Deed Administrators believe the ability for the Company to continue to remain as a going concern is dependent upon,
amongst other factors, the following key assumptions:
•
the DOCA effectuating before 31 December 2024 (i.e. completion of the remaining conditions precedent);
•
the planned capital raising receiving the necessary support from equity markets;
•
continued gold production from Wiluna at rates and costs generally consistent with those planned;
•
the Australian dollar denominated price received for gold sold by the Company being higher than the prevailing
cost of gold production at Wiluna and associated overhead costs; and
•
the Company being able to service its debt facility with Mercuria and remaining in compliance with the amended
facility agreement, as updated from time to time.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
32 | P a g e
Based on the above, the Deed Administrators have reasonable grounds to believe that the DOCA will effectuate on or before
31 December 2024, and that the Company will be able to pay its debts as and when they become due and payable, and the
Deed Administrators consider that the going concern basis of preparation to be appropriate for these financial statements.
If the Company is unable to continue as a going concern, it may be required to realise its assets and/or settle its liabilities
other than in the ordinary course of business and at amounts different from those stated in the financial report.
The financial report does not include adjustments to the recoverability and classification of recorded asset amounts nor to
the amounts and classification of liabilities that may be necessary should the Company not continue as a going concern.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate the assets, liabilities and results of all subsidiaries of the Company at the
end of the reporting period. A list of controlled entities (subsidiaries) at year end is contained in note 29.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Subsidiaries are consolidated from the date on which control is obtained to the date on which control is disposed. The
acquisition of subsidiaries is accounted for using the acquisition method of accounting.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in Australian dollars, which is the Group’s functional and presentation currency.
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding
of the financial statements are provided throughout the notes to the financial statements. Where possible, wording has been
simplified to provide clearer commentary on the financial report of the Group. Accounting policies determined as non-
significant are not included in the financial statements. There have been no changes to the Group’s accounting policies that
are no longer disclosed in the financial statements.
KEY ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. The judgements, estimates and assumptions
material to the financial report are found in the following notes:
Note 2:
Cost of goods sold
Note 12: Mine properties – areas in production
Note 13: Mine properties – areas in development
Note 14: Exploration and evaluation expenditure
Note 15: Impairment of Assets
Note 20: Right of Use Assets
Note 25: Inventories
Note 27: Provisions
Note 28: Share-based payments
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
33 | P a g e
THE NOTES TO THE FINANCIAL STATEMENTS
The notes include information which is required to understand the financial statements and is material and relevant to the
operations and the financial position and performance of the Group.
Information is considered relevant and material if, for example:
•
The amount is significant due to its size and nature;
•
The amount is important for understanding the results of the Group;
•
It helps to explain the impact of significant changes in the Group’s business; or
•
It relates to an aspect of the Group’s operations that is important to its future performance.
The notes are organised into the following sections:
•
Performance for the year;
•
Production and growth assets;
•
Cash, debt and capital;
•
Operating assets and liabilities; and
•
Other disclosures.
A brief explanation is included under each section.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
34 | P a g e
Performance for the year
This section focuses on the results and performance of the Group. This covers both profitability and the return to
shareholders via earnings per share combined with cash generation.
1.
REVENUE FROM GOLD AND SILVER SALES
Consolidated
2022
2021
$’000
$’000
Gold and silver sales
- gold sales at spot price (i)
40,069
122,022
- loss on gold forward contracts
(121)
9,263
Total gold sales
39,948
131,285
- silver sales
315
182
Total gold and silver sales
40,263
131,467
(i)
Pre-production gold sales are capitalised and are not included in sales revenue
Accounting Policies
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are initially recognised as deferred revenue in the form of a separate refund liability.
GOLD SALES
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods. Control is
generally considered to have passed when:
-
physical possession and risk of goods are transferred;
-
determination of accuracy of the metal content of the goods delivered; and
-
The refiner has no practical ability to reject the goods where it is within contractually specified terms.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
35 | P a g e
2.
COST OF GOODS SOLD
Consolidated
2022
2021
$’000
$’000
Cost of goods sold
Costs of production
18,786
78,487
Royalties
4,909
7,539
Open pit waste removal movements
3,774
1,528
Stockpile movements
8,633
(5,193)
Gold in circuit movements
5,985
(2,094)
Sub-total cost of production
42,087
80,267
Depreciation of mine plant and equipment
6,510
9,788
Amortisation of mine properties
5,797
20,789
Sub-total depreciation and amortisation
12,307
30,577
Total cost of good solds
54,394
110,844
Accounting Policies
COSTS OF PRODUCTION
Cash costs of production include direct costs incurred for mining, processing and mine site administration, net of costs
capitalised to pre-strip and production stripping assets.
ROYALTIES
Royalty expenses under existing royalty regimes are payable on sales and are therefore recognised as the sale occurs.
DEPRECIATION
Depreciation of mine specific plant and equipment and buildings and infrastructure is charged to the statement of
comprehensive income on a unit-of-production basis over the mine inventory of the mine concerned (consistent with the Life
of Mine plan), except in the case of assets whose useful life is shorter than the life of the mine, in which case the straight-line
method is used. The unit of account is ounces of gold produced.
Depreciation of non-mine specific plant and equipment is calculated using the straight line method to allocate their cost or
revalued amounts, net of their residual values, over their estimated useful lives as follows:
-
Plant and equipment
10% to 33%
-
Motor vehicles
6% to 33%
-
Office furniture and equipment
6% to 50%
-
Buildings and infrastructure
4%
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
AMORTISATION
Mine properties are amortised on a unit-of-production basis over the mine inventory of the mine concerned (consistent with
the Life of Mine plan). The unit of account is ounces of gold produced.
KEY JUDGMENTS
Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life of mine specific assets which results in a
depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life of mine production. Each
asset’s economic life, which is assessed annually, has due regard for both its physical life limitations and to present
assessments of economically recoverable mine plan of the mine property at which it is located. These calculations require the
use of estimates and assumptions.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
36 | P a g e
3.
EXPENSES
Consolidated
2022
2021
$’000
$’000
Share-based payments expense
Employees/service providers
-
21
Directors
-
124
Share-based payments expense recognised in the statement of
comprehensive income
-
145
SHARE-BASED PAYMENTS
Equity-settled share-based compensation benefits are provided to employees and consultants. Equity-settled transactions are
awards of shares, or options over shares, that are provided to employees and consultants in exchange for the rendering of
services under an employee share plan.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is determined using an option
pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for
the term of the option, together with non-vesting conditions that do not determine whether the group receives the services
that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period.
Consolidated
2022
2021
Note
$’000
$’000
Finance costs
Interest
1,079
1,167
Borrowing costs
587
1,255
Unwinding on discount of rehabilitation provision
27
344
25
Interest on embedded leases
809
948
Total
2,819
3,395
BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of
that asset. All other borrowing costs are expensed as part of finance costs in the period incurred. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the borrowing of funds.
UNWINDING OF DISCOUNT ON PROVISIONS
The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation provisions
are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate each mine site with the
increase in the provision due to the passage of time being recognised as a finance cost in accordance with the policy
described in note 27.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
37 | P a g e
3.
EXPENSES (CONT’D)
Consolidated
2022
2021
Note
$’000
$’000
Other expenses
Loss on sale of non-core assets
3,139
675
Other
569
52
Total
3,708
727
Accounting Policies
ASSETS DISPOSAL
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Consolidated
2022
2021
$’000
$’000
Impairment expenses
Plant and equipment
37,630
-
Exploration and evaluation expenditure
1,354
-
Mine properties – areas in production
89,820
-
Mine properties – areas in development
105,506
-
Total
234,310
-
4.
OTHER INCOME
Consolidated
2022
2021
$’000
$’000
Other income
- interest revenue
40
36
- job keeper subsidy
-
2,085
- Toll treatment revenue
6,704
-
- other income
201
1,041
Total
6,945
3,162
Accounting Policies
OTHER INCOME
Interest revenue is recognised as it accrues using the effective interest rate method. Other revenue is recognised when it is
received or when the right to receive payment is established.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
38 | P a g e
5.
TREASURY GAINS AND (LOSSES)
Consolidated
2022
2021
$’000
$’000
Treasury – realised (loss)
Hedge premium (paid)/income
-
(64)
Foreign exchange loss
(4,648)
(53)
Total
(4,648)
(117)
Treasury – unrealised (loss)/gain
Unrealised (loss)/gain on forward contracts
(26,650)
6,565
Gain on financial assets
-
11
Total
(26,650)
6,576
Note: All gold forward contracts have been marked to market through profit or loss at 30 June 2022, as per note 8.
6.
INCOME TAX
Consolidated
2022
2021
$’000
$’000
The components of the tax expense/(income) comprise:
Current tax
-
-
Deferred tax
-
-
Total
-
-
(a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:
Net loss before income tax
(276,055)
20,404
Prima facie tax on loss from ordinary activities before income tax at
30% (2021: 30%)
(82,817)
6,121
Add the tax effect of:
Permanent differences
115
305
Effect of current year temporary differences not recognised
82,702
-
Effect of current year tax losses not recognised
-
(6,426)
Income tax expense reported in the income statement
-
-
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
39 | P a g e
6.
INCOME TAX (CONT’D)
(b)
Unrecognised deferred tax assets and (liabilities)
Consolidated
2022
2021
$’000
$’000
Trade and other receivables
(33)
(62)
Financial assets and liabilities
2
(1,768)
Right of use assets
(3,436)
(1,332)
Plant and equipment
5,516
(2,807)
Geology and development expenditure
(9,889)
(10,266)
Mine properties
29,861
(30,982)
Trade and other payables
100
83
Interest-bearing liabilities
3,168
3,892
Lease liabilities
2,096
(1,737)
Provisions
14,983
10,896
Equity
(382)
25
Tax losses recognised to offset deferred tax liabilities
(41,986)
34,060
Balance at the end of the year
-
-
The Deed Administrators’ have considered it prudent not to bring to account the deferred tax asset of income tax losses until
it is probable of deriving assessable income of a nature and amount to enable such benefit to be realised.
(c)
Tax losses
Consolidated
2022
2021
$’000
$’000
The group has estimated carried forward tax losses which are available indefinitely for
offset against future taxable income, subject to meeting the relevant statutory tests:
Revenue losses
Income tax losses
220,967
227,341
Losses used against deferred tax liabilities
-
(113,534)
Gross tax losses for which no deferred tax asset has been recognised
220,967
113,807
Tax effected at 30%
66,290
34,142
Capital losses
Estimated capital losses for which no deferred tax asset is
recognised
-
-
Accounting Policies
INCOME TAX
The income tax expense/benefit for the year comprises current income tax expense/benefit and deferred tax expense/benefit.
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities are measured
at the amounts expected to be paid to the relevant taxation authority.
Deferred income tax expense/benefit reflects movements in deferred tax asset and deferred tax liability balances during the
year as well as unused tax losses.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
40 | P a g e
6.
INCOME TAX (CONT’D)
Current and deferred income tax expense/benefit is charged or credited outside profit or loss when the tax relates to items
that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit 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 and their measurement also reflects 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 differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Current tax assets and liabilities are offset 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 offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate
to income taxes levied by the same taxation authority on either the same taxable entity or different 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 significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
7.
EARNINGS PER SHARE
Consolidated
2022
2021
$’000
$’000
(a) Loss after income tax for the year
(276,055)
20,404
No. of Shares
No. of Shares
(‘000s)
(‘000s)
(b) Weighted average number of ordinary shares outstanding
during the year used in the calculation of basic EPS:
192,224
115,126
(b) Weighted average number of ordinary shares outstanding
during the year used in the calculation of diluted EPS:
192,224
116,535
Accounting Policies
EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
41 | P a g e
8.
PHYSICAL GOLD DELIVERY COMMITMENTS
Gold contracts
Contracted gold
Value of committed
sales
Mark-to-market(ii)
sale price
2022
2021 (i)
2022
2021
2022
2021
2022
2021
Open contracts
Ounces
Ounces
$/oz
$/oz
$’000
$’000
$’000
$’000
Within one year
- Fixed forward contracts
50,000
23,500
2,642
2,459
132,100
57,782
(1,510)
2,530
Between one and two years
- Fixed forward contracts
51,000
47,000
2,642
2,421
134,742
113,799
(4,876)
2,584
Between two and five years
- Fixed forward contracts
76,500
92,000
2,635
2,421
201,578
222,756
(14,062)
832
177,500
162,500
468,420
394,337
(20,448)
5,946
(i)
159,000 oz of the contracted ounces are denominated in USD and are priced at US$1,820/oz.
(ii)
Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold spot
price at that date. A negative amount reflects a valuation in the counterparty’s favour.
Accounting Policies
GOLD FORWARD CONTRACTS
As part of the risk management policy, the Group enters into gold forward contracts to manage the gold price of a
proportion of anticipated gold sales. The counterparty of the gold forward contracts is Mercuria Energy Trading Pte Ltd.
9.
OPERATING SEGMENT INFORMATION
The Group has one reportable segment which is gold production for the years ended 30 June 2022 and 30 June 2021. The
Chief Operating Decision Maker (CODM) as at 30- June 2022 was the Board of Directors and the Executives. As at the date of
this report, this function is performed by the Deed Administrators. There is currently one operating segment identified, being
the operating of the of the Matilda-Wiluna Gold Operation based on internal reports reviewed by the CODM in assessing
performance and allocation of resources.
Accounting Policies
OPERATING SEGMENTS
Operating segments are presented using the “management approach”, where the information presented is on the same basis
as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
10.
DIVIDENDS PAID OR PROVIDED FOR
There were no dividends paid or provided for during the year (2021: Nil).
Accounting Policies
DIVIDENDS
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
42 | P a g e
Production and growth assets
Included in this section is relevant information about recognition, measurement, depreciation, amortisation and impairment
considerations of the core producing and growth (exploration and evaluation) assets of the Group.
11.
PLANT AND EQUIPMENT
Consolidated
Plant &
Equipment
Motor
Vehicles
Furniture
&
Equipment
Buildings &
Infrastructure
Tails
Dam
Capital
Total
WIP
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Net carrying amount at 1 July 2021
26,833
2,768
1,036
7,695
25,180
22,179
85,691
Additions
2,710
4,167
218
1,635
-
33,274
42,004
Depreciation expense
(1,344)
(952)
(424)
(586)
(1,025)
-
(4,331)
Transfers between classes
1,319
79
-
46
-
(1,444)
-
Transfers to mine
properties
-
-
-
-
-
(33)
(33)
Impairment
-
-
-
- (24,155)
(13,475)
(37,630)
Disposals
-
(57)
-
-
-
-
(57)
Net carrying amount at 30 June
2022
29,518
6,005
830
8,790
-
40,501
85,644
At 30 June 2022
Cost
51,436
7,952
2,841
14,202
30,927
53,976
161,334
Accumulated depreciation and
impairment
(21,918)
(1,947)
(2,011)
(5,412)
(30,927)
(13,475)
(75,690)
Net carrying amount
29,518
6,005
830
8,790
-
40,501
85,644
Net carrying amount at 1 July 2020
25,920
606
617
6,907
9,185
20,348
63,583
Additions
2,877
2,358
480
332
(220)
22,179
28,006
Depreciation expense
(2,829)
(306)
(563)
(542)
(1,030)
-
(5,270)
Transfers between classes
865
110
502
998
17,245
(19,719)
1
Transfers to mine
properties
-
-
-
-
-
(629)
(629)
Other
Disposals
-
Net carrying amount at 30 June
2021
26,833
2,768
1,036
7,695
25,180
22,179
85,691
At 30 June 2021
Cost
47,100
3,776
2,623
12,521
30,927
22,179
119,126
Accumulated depreciation and
impairment
(20,267)
(1,008)
(1,587)
(4,826)
(5,747)
-
(33,435)
Net carrying amount
26,833
2,768
1,036
7,695
25,180
22,179
85,691
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
43 | P a g e
11.
PLANT AND EQUIPMENT (CONT’D)
PLANT AND EQUIPMENT SECURED UNDER FINANCE LEASES
Refer to note 18 for further information on plant and equipment secured under finance leases.
Accounting Policies
PLANT AND EQUIPMENT
Plant and equipment is carried at historical 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 in profit or loss. A
formal assessment of recoverable amount is made when impairment indicators are present.
Gains and losses on disposals of plant and equipment are determined by comparing proceeds with the carrying amount.
These gains and losses are included in profit or loss.
12.
MINE PROPERTIES – AREAS IN PRODUCTION
Consolidated
Mine
Properties
Stripping
Activity
Asset
Total
2022
Note
$’000
$’000
$’000
Balance at 1 July
72,965
-
72,965
Transferred to mine properties – areas in development
13
11,162
-
11,162
Impaired during the year
(89,820)
-
(89,820)
Rehabilitation provision adjustment
27
11,490
-
11,490
Amortisation charged to costs of production
2
(5,797)
-
(5,797)
Balance at 30 June
-
-
-
Consolidated
Mine
Properties
Stripping
Activity
Asset
Total
2021
Note
$’000
$’000
$’000
72,965
-
72,965
Balance at 1 July
90,114
1,528
91,642
Transferred to mine properties – areas in development
13
(8,224)
-
(8,224)
Transferred
from
exploration
and
evaluation
expenditure
14
4,481
-
4,481
Additions
4,570
-
4,570
Rehabilitation provision adjustment
27
2,813
-
2,813
Amortisation charged to costs of production
2
-
(1,528)
(1,528)
Amortisation during production
2
(20,789)
-
(20,789)
Balance at 30 June
72,965
-
72,965
Accounting Policies
MINE PROPERTIES – AREAS IN PRODUCTION
Mine development expenditure incurred by, or on behalf of, the Group is accumulated separately for each area of interest in
which economically recoverable resources have been identified. Such expenditure comprises cost directly attributable to the
construction of a mine and the related infrastructure.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
44 | P a g e
12.
MINE PROPERTIES – AREAS IN PRODUCTION (CONT’D)
A development property is reclassified as a mining property in this category at the end of the commissioning phase, when
the property is capable of operating in the manner intended by management.
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 estimated mine inventory
(consistent with the Life of Mine plan). Development properties are tested for impairment in accordance with the policy on
impairment of assets.
Stripping activity asset
Once access to the ore is attained, all waste that is removed from that point forward is considered production stripping
activity. The amount of production stripping costs deferred is based on the extent to which the current strip ratio of ore
mined exceeds the life of mine strip ratio of the identified component. A component is defined as a specific volume of the
ore body that is made more accessible by the stripping activity and is identified based on the mine plan.
The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the
stripping activity that improves access to the identified component of the ore body. The production stripping asset is then
carried at cost less accumulated amortisation and any impairment losses.
The production stripping asset is amortised over the expected useful life of the identified component (determined based on
economically recoverable mine plan), on a unit-of-production basis. The unit of account is tonnes of ore mined.
KEY JUDGMENTS
Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life of mine specific assets which results in a
depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life of mine production. Each
asset’s economic life, which is assessed annually, has due regard for both its physical life limitations and to present
assessments of economically recoverable mine plan of the mine property at which it is located. These calculations require the
use of estimates and assumptions.
Determination of mineral resources, ore reserves and mine plan
The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The Group
estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves 2012 (the JORC Code). The information on mineral resources and ore reserves was
prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts presented are based
on the mineral resources and ore reserves determined under the JORC Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid
at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic
status of reserves and the mine plan and may ultimately result in reserves and mine plan being restated.
Stripping asset
The Group capitalises stripping costs incurred during the development and production phase of mining. As a result, the
Group distinguishes between the production stripping that relates to the extraction of inventory and that which relates to the
stripping asset.
The Group has identified its production stripping for each surface mining operation it identifies the separate components of
the ore bodies for each of its mining operations. An identifiable component is a specific volume of the ore body that is made
more accessible by the stripping activity. Judgement is required to identify and define these components, and also to
determine the expected volumes of waste to be stripped and ore to be mined in each of these identified components.
These assessments are undertaken for each individual identified component based on life of mine strip ratio. Judgement is
also required to identify a suitable production measure to be used to allocate production stripping costs between inventory
and any stripping activity asset(s) for each identified component. Changes in the expected strip ratio is accounted for
prospectively from the date of change.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
45 | P a g e
13.
MINE PROPERTIES – AREAS IN DEVELOPMENT
Consolidated
2022
2021
Note
$’000
$’000
Balance at 1 July
61,927
4,677
Pre-production expenditure capitalised, net of gold sales
104,100
45,781
Transferred from/(to) mine properties – areas in production
12
(11,162)
8,224
Impaired during the year
(105,506)
-
Transferred from/(to) plant and equipment
11
-
629
Expansion study expenses
-
2,616
Balance at 30 June
49,359
61,927
Accounting Policies
MINE PROPERTIES – AREAS IN DEVELOPMENT
Mine properties under development represent the costs incurred in preparing mines for production and includes plant and
equipment under construction and operating costs incurred before production commences. These costs are capitalised to the
extent they are expected to be recouped through the successful exploitation of the related mining leases. Once production
commences, these costs are transferred to property, plant and equipment and mine properties, as relevant, and are
depreciated and amortised using the units-of-production method based on the mine inventory to which they relate or are
written off if the mine property is abandoned.
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and Other Amendments
amends AASB 116 to require an entity to recognise the sales proceeds from selling items produced while preparing property,
plant and equipment for its intended use and the related cost in profit or loss, instead of deducting the amounts received
from the cost of the asset. Management have assessed the impact of the application of AASB 2020-3 and estimate that the
changes to AASB 116 will have no impact on the Mine Properties – Areas in Development account balance. The increase to
amortisation expense of $10.1m from the accounting standard change is offset by an equal reduction in impairment expense
for the year ended 30 June 2022.
KEY JUDGMENTS
Production start date
The Group assesses the stage of each mine under construction to determine when a mine moves into the production stage.
The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such
as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine and the
processing plant is substantially complete and ready for its intended use. At this time, any costs capitalised to ‘mine
properties – areas in development’ are reclassified to ‘mine properties – areas in production’ and ‘property, plant and
equipment’. Some of the criteria will include, but are not limited, to the following:
-
availability of the plant;
-
completion of a reasonable period of testing of the mine plant and equipment;
-
ability to produce metal in saleable form (within specifications); and
-
ability to sustain ongoing production of metal at commercial rates of production.
When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs
ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation relating to mine
asset additions or improvements, mine development or mineable reserve development. It is also at this point that
depreciation/amortisation commences.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
46 | P a g e
14.
EXPLORATION AND EVALUATION EXPENDITURE
Consolidated
2022
2021
Note
$’000
$’000
Reconciliation of movements during the year
Balance at 1 July
34,242
12,974
Exploration expenditure capitalised during the year
14,636
25,688
Transferred to mine properties – areas in production
12
-
(4,481)
Impaired during the year
(1,354)
-
Other
-
61
Balance at 30 June
47,524
34,242
Accounting Policies
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is
carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered
through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are
continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or
otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure
incurred thereon is written off in the year in which the decision is made.
Once a development decision has been taken, the carrying amount of the exploration and evaluation expenditure in respect
of the area of interest is aggregated with the mine development expenditure and classified under non-current assets as
development properties.
The value of the Group’s interest in exploration expenditure is dependent upon:
•
the continuance of the Group’s rights to tenure of the areas of interest;
•
the results of future exploration; and
•
the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by
their sale.
KEY JUDGMENTS
Exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related
exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources,
future technological changes which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this
will reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a
stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the
extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and
net assets in the period in which this determination is made.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
47 | P a g e
EXPLORATION EXPENDITURE COMMITMENTS
In order to maintain current rights of tenure to mining tenements, the Group has the following exploration expenditure
requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not
provided for in the financial statements and are payable as follows:
Consolidated
2022
2021
$’000
$’000
Within one year
2,431
2,447
15.
IMPAIRMENT OF ASSETS
The carrying values of non-current assets are reviewed for impairment when indicators of impairment exist or changes in
circumstances indicate the carrying value may not be recoverable. When an indicator of impairment does exist, the below
process is followed.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to
which the asset belongs, and where the carrying values exceed the estimated recoverable amount, the assets or CGU are
written down to their recoverable amount.
The recoverable amount of an asset is the greater of the fair value less costs to sell, and value in use:
•
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and
•
Value in use is the present value of the future cash flows expected to be derived from an asset or CGU.
AASB 136.20 states it may be possible to measure fair value less costs of disposal, even if there is not a quoted price in an
active market for an identical asset. The Group believes fair value can be estimated based on discounted cash flows using
market-based commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels,
operating costs and capital requirements, based on CGU life of mine (LOM) plans.
When LOM plans do not fully utilise existing mineral properties for a CGU, and options exist for the future extraction and
processing of all or part of those resources, an estimate of the value of mineral properties is included in the determination of
fair value. The Company considers this fair value valuation approach to be consistent with the approach taken by market
participants and is consistent with that adopted in the prior year assessment.
In accordance with AASB 136, CGU is defined as “the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets”. The Group operates as one CGU, being the
Matilda-Wiluna Gold Mine or the Wiluna Mining Operation (WMO), which is unchanged from the assessment for the
financial year ended 30 June 2021.
DETERMINATION OF MINERAL RESOURCES AND ORE RESERVES
The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, deferred
stripping costs and provisions for decommissioning and restoration. The information in this report as it relates to ore
reserves, mineral resources or mineralisation is reported in accordance with the AusIMM “Australian Code for reporting of
Identified Mineral Resources and Ore Reserves” (Code). The information has been prepared by or under supervision of
competent persons as identified by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at
the time of estimation which may change significantly when new information becomes available. Changes in the forecast
prices of commodities, exchange rates, production costs, ore grades and/or recovery rates may change the economic status
of reserves and may, ultimately, result in the reserves being restated.
IMPAIRMENT OF MINE PROPERTIES, PLANT AND EQUIPMENT
The future recoverability of capitalised mine properties and plant and equipment is dependent on a number of key factors
including; gold price, discount rates used in determining the estimated discounted cash flows of CGUs, foreign exchange
rates, the level of proved and probable reserves and measured, indicated and inferred mineral resources, the estimated value
of unmined inferred mineral properties included in the determination of fair value less cost to dispose (fair value), future
technological changes which could impact the cost of mining, and future legal changes (including changes to environmental
restoration obligations).
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
48 | P a g e
Fair value is estimated based on discounted cash flows using market based commodity price and exchange assumptions,
estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, based on CGU
LOM plans. Consideration is also given to independent valuations and the market value of the Company’s securities. When
LOM plans do not fully utilise existing mineral properties for a CGU, and options exist for the future extraction and processing
of all or part of those resources, an estimate of the value of mineral properties is included in the determination of fair value.
The Group considers this valuation approach to be consistent with the approach taken by market participants and is
consistent with that adopted in the prior year.
The Group has estimated its unmined resource values based on a dollar value per gold equivalent ounce basis, taking into
account a range of factors although principally the current market rate for similar resources.
In determining the fair value of CGUs, future cash flows were discounted using rates based on the Group’s estimated
weighted average cost of capital. When it is considered appropriate to do so, an additional premium is applied with regard to
the geographic location and nature of the CGU. Life of mine operating and capital cost assumptions are based on the
Group’s latest assumptions. Operating cost assumptions reflect the expectation that costs will, over the long term, have a
degree of positive correlation to the prevailing commodity price and exchange rate assumptions.
KEY ASSUMPTIONS FOR THIS REVIEW:
Commodity prices are estimated with reference to external market forecasts, and the rates applied to the valuation have
regard to observable market data.
Discount Rate %: 10.0% to 13.0%, with a mid-point of 11.5% (2021: 6.88% to 14.88%, with a mid-point of 10.88%).
In determining the fair value of the CGU, the future cash flows were discounted using rates based on the Company’s
estimated weighted average cost of capital.
Value of Unmined Resources: A$35/oz – A$45/oz, with a preferred value of A$43/oz (2021: A$68/oz – A$76/oz, with a mid-
point of A$72/oz).
In assessing the value of unmined resources, the Company has referred to broker multiples for development companies,
independent valuation work performed for Wiluna and existing comparable completed transactions involving the
acquisition/sale of a gold asset. The assessed resource multiple is weighted towards the resource multiples of those
transactions involving assets considered to be the most comparable to the Group, which included assessment of the
following factors:
•
Type of ore body (presence of sulphides, which can interfere with the processing of the gold);
•
Known operational issues or in distress (Wiluna is currently subject to deed of company arrangement and was under
voluntary administration from 20 July 2022 to 28 July 2023 and has faced a number of operational issues since
mining recommenced in July 2016);
•
Contained resources (a defining feature of the WMO is the large size of its resource base);
•
Existence of significant infrastructure, including a Biox Plant to process the sulphides (as previously noted, WMO has
access to much of the infrastructure required to mine and process);
•
Stage of Development (the WMO is a large tenement package); and
•
Grade and method of mining (Wiluna has contemplated both open pit and underground mining).
Operating and capital costs:
Operating and capital cost assumptions are based on the Group’s expected run-rate for these costs.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
49 | P a g e
Cash, debt and capital
This section outlines how the Group manages its cash, capital, related financing costs and its exposure to various financial
risks. It explains how these risks affect the Group’s financial position and performance and what the Group does to manage
these risks.
16.
CASH AND CASH EQUIVALENTS
Accounting Policies
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-term highly liquid
investments with original maturities of three months or less.
Consolidated
2022
2021
$’000
$’000
Cash and cash equivalents in the statement of financial position and
statement of cash flows
Cash at bank and on hand
17,217
54,077
Short-term deposits
-
-
Total
17,217
54,077
Consolidated
2022
2021
$’000
$’000
Reconciliation of loss after income tax to the net cash flow from
operating activities
(Loss)/gain after income tax
(276,055)
20,404
Adjustments for
Depreciation and amortisation
12,348
30,672
Impairments during the year
234,310
-
Equity based payments
-
316
Treasury – unrealised (gain)/loss
26,650
(6,576)
Loss/(profit) on disposal of fixed asset
3,139
-
Non-capital exploration expenditure
(2,564)
384
Unwinding of discount on rehabilitation provision
344
25
Finance costs
4,648
950
Sale of non-core assets
-
175
Other
-
(2)
Changes in operating assets and liabilities
Receivables
1,205
1,413
Inventories
2,616
(10,339)
Payables
4,016
(3,477)
Provisions
403
-
Net cash inflow from operating activities
11,060
33,945
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
50 | P a g e
16.
CASH AND CASH EQUIVALENTS (CONT’D)
Consolidated
Interest-
bearing
liabilities
Lease liabilities
Total
$’000
$’000
$’000
Changes in liabilities arising from financing activities
Balance at 1 July 2020
293
10,425
10,718
Net cash from/(used in) financing activities
57,898
(7,966)
49,932
Acquisition of plant and equipment by means of leases
56
2,174
2,230
At 30 June 2021
58,247
4,633
62,880
Net cash from/(used in) financing activities
2,959
9,232
12,191
Acquisition of plant and equipment by means of leases
(21)
(2,246)
(2,267)
At 30 June 2022
61,185
11,619
72,804
17.
GOLD BULLION AWAITING SETTLEMENT
Consolidated
2022
2021
$’000
$’000
Current
Gold bullion awaiting settlement
56
55
Accounting Policies
GOLD BULLION AWAITING SETTLEMENT
Bullion awaiting settlement comprises gold that has been received by the refiner prior to period end but which has not yet
been delivered into a sale contract. Gold bullion awaiting settlement is initially recognised at the expected selling price and
adjustments for variations in the gold price are made at the time of final settlement, which is within a matter of days.
Due to the short-term nature of the bullion awaiting settlement, the carrying value is assumed to approximate fair value. The
maximum exposure to credit risk is the fair value.
18.
INTEREST-BEARING LIABILITIES
Consolidated
2022
2021
$’000
$’000
Current interest-bearing liabilities
Secured loan – Mercuria, net of capitalised fees
55,691
9,196
Finance lease liabilities
1,620
699
57,311
9,895
Non-current interest-bearing liabilities
Secured loan – Mercuria, net of capitalised fees
-
46,710
Finance lease liabilities
3,874
1,642
3,874
48,352
Accounting Policies
BORROWINGS AND BORROWING COSTS
Loans and borrowings are initially recognised at the fair value of the consideration received.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
51 | P a g e
18.
INTEREST-BEARING LIABILITIES (CONT’D)
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the
loans or borrowings are classified as non-current.
Borrowing costs are expensed as incurred. Borrowing costs consist of interest and other costs that the Group incurs in
connection with the borrowing of funds.
INTEREST-BEARING LIABILITIES
SECURED LOANS – MERCURIA
On 16 June 2021, the Company announced that the final conditions and documentation for a US$42 million Term Loan
agreement (“Tranche 2”) with Mercuria had been completed, the loan was drawn down on 18 June 2021. The Term Loan has
a 48-month tenor, with a grace period of 6 months (during which the Company will only pay interest) followed by equal
monthly repayments thereafter. The interest rate was LIBOR + 9.5%. Tranche 2 was complemented by a gold hedging facility
for 159,000oz priced at US$1,820/oz. The Term Loan and hedging program are secured under a general security
arrangement. The facility was fully drawn down.
On 30 June 2022 gold hedging contracts in place with Mercuria were 177,500oz at ~US$1,818/oz, with a negative mark to
market position of $20.5m. On 22 July 2022 the Administrators were notified by Mercuria that it was closing out the gold
hedging contracts in place with the Company, following the Company’s decision to enter Voluntary Administration. The gold
hedging contracts were closed out with a net realised gain of $3.2m (US$2.2m), which was set off against the Mercuria debt
principal.
Throughout the External Administration period the Company continued to make monthly interest only payments to Mercuria
and at key milestones principal and interest payments.
FINANCE LEASE LIABILITIES
The Group holds hire purchase agreements for the acquisition of mobile equipment. The agreements incorporate fixed rates
between 2% and 12%, monthly repayments and expiry dates between June 2021 and June 2026. Finance lease liabilities are
effectively secured as the rights to the leased assets revert to the lessor in the event of default.
19.
FINANCIAL ASSETS AND LIABILITIES
Consolidated
2022
2021
$’000
$’000
Financial assets – current
Derivative financial asset
-
2,530
Other
18
19
Sub-total – current
18
2,549
Financial assets – non-current
Derivative financial asset
-
3,416
Sub-total – non-current
-
3,416
Total financial assets
18
5,965
Financial liabilities - current
-
Derivative financial liability
(1,510)
-
Sub-total – current
(1,510)
-
Financial liabilities - non-current
Derivative financial liability
(18,938)
-
Sub-total – non-current
(18,938)
-
Total financial assets
(20,448)
-
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
52 | P a g e
19.
FINANCIAL ASSETS AND LIABILITIES (CONT’D)
Gold forward contracts have been marked-to-market at 30 June 2022 as per note 8.
On 22 July 2022, shortly after the appointment of the Voluntary Administrators, notice of early termination of the gold
hedging agreement was provided to Mercuria. The early termination amount was $2,211,888, payable by Mercuria to Wiluna,
with the gold hedge moving from out-of-the-money at 30 June 2022 to in-the-money at the termination date.
Gold Forward Contracts
The gold hedge contracts at 30 June 2022 comprised the following:
-
Initial Tranche 2 - On 16 June 2021, as part of the US$42 million Term Loan agreement with Mercuria (Tranche 2) a
gold hedging facility for a total of 159,000oz at an average price of US$1,820/oz was put in place; and
-
Variation to Tranche 2 - On 18 January 2022, Mecuria Tranche 2 debt principal repayment was extended to
April 2022 and an additional 38,750oz at an average price of US$1,812/oz was added to the hedge facility. This
resulted in the updated hedge book at the date of this report being for 177,500oz @ US$1,818/oz, maturing by the
end of December 2025 (previously end of May 2025).
The Term Loan and hedging program are secured under a general security arrangement.
Mark-to-market
2022
2021
Open contracts
$’000
$’000
Within one year
(1,510)
2,530
- Forward contracts
Between one and two years
(4,876)
2,584
- Forward contracts
Between two and five years
(14,062)
832
- Forward contracts
Total open contracts
(20,448)
5,946
Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold spot price
at that date. A negative amount reflects a valuation in the counterparty’s favour.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
53 | P a g e
19.
FINANCIAL ASSETS AND LIABILITIES (CONT’D)
Accounting Policies
FINANCIAL ASSETS
Financial assets are initially recognised at fair value, plus transaction costs that are directly attributable to its acquisition and
subsequently measured at amortised costs or fair value depending on the business model for those assets and the
contractual cash flow characteristics.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on the
nature of the derivative.
Derivatives are classified as current or non-current depending on the expected period of realisation.
GOLD FORWARD CONTRACTS
As part of the risk management policy, the Group enters into gold forward contracts to manage the gold price of a
proportion of anticipated gold sales. The counterparty of the gold forward contracts is Mercuria Energy Trading Pte Ltd. As
set out above, the forward contracts were closed out subsequent to year-end.
20.
RIGHT OF USE ASSETS
This note provides information for leases where the Group is a lessee.
Amounts recognised in statement of financial position
Consolidated
2022
2021
$’000
$’000
Right of use assets
Buildings
1,163
1,163
Plant & equipment
11,010
7,533
Less: Accumulated depreciation
(718)
(4,254)
Total right of use assets
11,455
4,442
Right of use lease liabilities
Current
1,133
2,294
Non-current
10,486
2,339
Total lease liabilities
11,619
4,633
Amounts recognised in statement of profit or loss and other comprehensive income
Consolidated
2022
2021
$’000
$’000
Gain on modification of lease
-
340
Depreciation of right of use assets
(2,219)
(4,817)
Interest expense (included in finance costs)
(809)
(948)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
54 | P a g e
20.
RIGHT OF USE ASSETS (CONT’D)
Accounting Policies
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
RIGHT-OF-USE ASSETS
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
As at the balance date, the Group assessed under AASB 16 whether there was a significant change in circumstances and
whether termination of any of the agreements was reasonably certain. After this assessment, all ROU assets and liabilities
associated with the mining contractor were derecognised as at 30 June 2022.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit
or loss as incurred.
LEASE LIABILITIES
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully
written down.
21.
FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, held-for-trading investments, derivative financial
instruments, cash and short-term deposits.
The Deed Administrators’ have overall responsibility for the oversight and management of the Group’s exposure to a variety
of financial risks (including market risk, credit risk and liquidity risk).
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group.
MARKET RISK
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return.
Gold price volatility and exchange rate risks
Any revenue the Group derives from the sale of gold is exposed to commodity price and exchange rate risks. Commodity
prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
55 | P a g e
demand fluctuations for gold, technological advancements, forward selling activities, financial investment and speculation
and other macro-economic factors.
Interest rate risks
The Group’s exposure to market interest rates relates to cash deposits held at variable rates. The Board regularly analyses its
interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions.
Sensitivity analysis
The Company has performed sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity
analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
Interest rate sensitivity analysis
At 30 June 2022, the effect on loss as a result of changes in the interest rate, with all other variables remaining constant,
would be as follows:
Consolidated
2022
2021
$’000
$’000
Change in loss/equity
Increase in interest rate by 100 basis points
120
189
Decrease in interest rate by 100 basis points
(120)
(189)
CREDIT RISK
The maximum exposure to credit risk at reporting date is the carrying amount of those assets as disclosed in the statement of
financial position and notes to the financial statements. The Group has adopted a policy of only dealing with credit-worthy
counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate
value of transactions concluded is spread amongst approved counterparties.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Credit risk related to balances with banks and other financial institutions is managed by the Board. The Board’s policy
requires that surplus funds are only invested with counterparties with a Standard & Poor’s rating of at least A+. All of the
Group’s surplus funds are invested with AA and A+ Rated financial institutions.
LIQUIDITY RISK
The responsibility for liquidity risk management rests with the Deed Administrators. The Group manages liquidity risk by
maintaining sufficient cash or credit facilities to meet the operating requirements of the business and investing excess funds
in highly liquid short term investments.
Financing arrangements
Refer to note 18 for unused (if any) borrowing facilities at reporting date.
FOREIGN CURRENCY RISK
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
56 | P a g e
21.
FINANCIAL RISK MANAGEMENT (CONT’D)
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
2022
2021
$’000
$’000
Assets
US dollars
5,063
34,932
Liabilities
US dollars
56,792
56,042
The Group had net liabilities denominated in foreign currencies of $51.7 million (assets of $5.1 million less liabilities of
$56.8 million) as at 30 June 2022 (2021: $21.1 million). Based on this exposure, had the Australian dollar weakened by 10%
/strengthened by 5% against these foreign currencies with all other variables held constant, the consolidated entity's profit
before tax for the year and subsequently equity would have been $5.7 million lower/$2.5 million higher. The percentage
change is the expected overall volatility of the significant currencies, which is based on management’s assessment of
reasonable possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate at
each reporting date. The actual foreign exchange loss for the year ended 30 June 2022 was $4.5 million (2021: $0.1 million
loss).
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
2022
Weighted
average
interest
rate
1 year or
less
Between 1
Between 2
Over 5
years
Remaining
contractual
maturities
and 2 years
and 5 years
%
$’000
$’000
$’000
$’000
$’000
Non-derivatives
Non-interest bearing
Trade and other payables
-
48,166
-
-
-
48,166
Interest-bearing – fixed rate
Secured loan - Mercuria
9.4%
56,792
Finance lease liability
7.3%
1,620
1,377
2,497
-
5,494
Lease liability
9.3%
1,133
1,248
3,548
5,690
11,619
Total non-derivatives
122,071
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
57 | P a g e
21. FINANCIAL RISK MANAGEMENT (CONT’D)
2021
Weighted
average
interest
rate
1 year or
less
Between 1
Between 2
Over 5
years
Remaining
contractual
maturities
and 2 years
and 5 years
%
$’000
$’000
$’000
$’000
$’000
Non-derivatives
Non-interest bearing
Trade and other payables
-
30,289
-
-
-
30,289
Interest-bearing – fixed rate
Secured loan – Mercuria
9.4%
9,907
15,962
31,923
-
57,792
Finance lease liability
4.8%
699
701
931
10
2,341
Lease liability
9.3%
2,294
1,117
1,222
-
4,633
Total non-derivatives
43,189
17,780
34,076
10
95,055
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
FAIR VALUE MEASUREMENTS
The Company measures and recognises the following assets and liabilities at fair value on a recurring basis after initial
recognition:
▪
Financial assets held for trading
▪
Derivative financial instrument – receivable in relation to equity swap
The Company does not subsequently measure any liabilities at fair value on a non-recurring basis.
FAIR VALUE HIERARCHY
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is
significant to the measurement can be categorised into as follows:
-
LEVEL 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.
-
LEVEL 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly or indirectly.
-
LEVEL 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
VALUATION TECHNIQUES
The Company selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available
to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation technique selected by the Company is:
-
Market approach:
Valuation techniques that use prices and other relevant information generated by market transactions for identical
or similar assets or liabilities.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
58 | P a g e
21. FINANCIAL RISK MANAGEMENT (CONT’D)
When selecting a valuation technique, the Company gives priority to those techniques that maximise the use of observable
inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available
information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the
asset or liability are considered observable, whereas inputs for which market data is not available and therefore are
developed using the best information available about such assumptions are considered unobservable.
The following table provides the fair values of the Company’s assets and liabilities measured and recognised on a recurring
basis after initial recognition and their categorisation within the fair value hierarchy:
30 June 2022
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
Recurring fair value measurements
Financial assets at fair value through profit or loss:
- held-for-trading Australian listed shares
18
-
-
18
- gold forward contracts
-
(1,385)
-
(1,385)
30 June 2021
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
Recurring fair value measurements
Financial assets at fair value through profit or loss:
- held-for-trading Australian listed shares
18
-
-
18
- gold forward contracts
-
-
-
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Accounting Policies
FAIR VALUE MEASUREMENT
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best
use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
59 | P a g e
21. FINANCIAL RISK MANAGEMENT (CONT’D)
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
INVESTMENT AND OTHER FINANCIAL ASSETS
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model
within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group
has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering
part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Group intends to
hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised
cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's
assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to
obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
22.
ISSUED CAPITAL
Consolidated
2022
2021
$’000
$’000
Ordinary shares – issued and fully paid
392,353
297,760
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
60 | P a g e
22. ISSUED CAPITAL (CONT’D)
Number
$’000
(‘000s)
Movement in ordinary shares on issue
At 1 July 2020
100,284
236,865
Issued on exercise of options
22
3
Placement
56,191
63,638
Issued in lieu of payment
1,781
837
Transaction costs
-
(3,583)
On issue at 30 June 2021
158,278
297,760
At 1 July 2021
158,278
297,760
Issued on exercise of options
36
-
Placement
53,000
53,000
Issue of shares (i)
135,644
47,257
Issue shortfall
7,504
3,002
Transaction costs
-
(8,666)
On issue at 30 June 2022 (ii)
354,462
392,353
(i)
Includes 17.65m shares issued in June 2022, but no funds received. These shares will be cancelled pending recovery
proceedings
(ii)
Shares on issue agrees to the share registry as at 30 June 2022; updated announcement to be provided to the ASX re
shares on issue.
Accounting Policies
ISSUED CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group is subject to certain financing arrangement covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
61 | P a g e
23.
RESERVES
Consolidated
Number
$’000
(‘000s)
Share-based payments reserve consists of:
Share options
3,634
5,121
Performance rights
-
1,410
3,634
6,531
Balance at 1 July 2020
8,444
6,177
Options expired
(6,736)
-
Options issued
995
1,140
Options exercised
(21)
-
Options forfeited
(549)
(824)
Balance at 30 June 2021
2,133
6,493
Balance at 1 July 2021
2,133
6,493
Options vested
-
-
Options issued
1,778
38
Options exercised
(36)
-
Options forfeited
(241)
-
Balance at 30 June 2022
3,634
6,531
Accounting Policies
SHARE-BASED PAYMENT RESERVES
Options and performance rights are issued to suppliers, directors, employees and consultants. The options and performance
rights issued may be subject to performance criteria and are issued to directors and employees of the Company to increase
goal congruence between executives, directors and shareholders. Options and performance rights granted carry no dividend
or voting rights.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
62 | P a g e
Operating assets and liabilities
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result.
Liabilities relating to the Group’s financing activities are addressed in the capital structure and finance costs section.
Accounting Policies
CURRENT AND NON-CURRENT CLASSIFICATION
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is current when:
-
it is expected to be realised or intended to be sold or consumed in a normal operating cycle;
-
it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting
period; or
-
the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
-
it is expected to be settled in a normal operating cycle;
-
it is held primarily for the purpose of trading;
-
it is due to be settled within twelve months after the reporting period; or
-
there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities, when recognised, are classified as non-current.
24.
TRADE AND OTHER RECEIVABLES
Consolidated
2022
2021
$’000
$’000
Current
GST receivable
1,635
2,789
Fuel tax credit receivable
110
207
Other debtors
553
507
Total
2,298
3,503
Non-current
Bank guarantees (restricted cash)
656
656
Total
656
656
Accounting Policies
TRADE AND OTHER RECEIVABLES
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other
receivables are recognised at amortised cost, less any allowance for expected credit losses.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
63 | P a g e
24. TRADE AND OTHER RECEIVABLES (CONT’D)
GOODS AND SERVICES TAX
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 Taxation Office (‘ATO’).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
25.
INVENTORIES
Consolidated
2022
2021
$’000
$’000
Current
Consumable stores
6,910
4,766
Ore stockpiles – at cost
311
7,777
Ore stockpiles – at net realisable value
6,352
6,927
Gold in circuit – at cost
903
6,648
Total current
14,476
26,118
(a) Amounts recognised in profit or loss
Net realisable value changes to inventories during the year are recognised in profit and loss.
Accounting Policies
INVENTORY
Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at either cost or net realisable
value. Cost is determined by the weighted average method and comprises direct purchase costs and an appropriate portion
of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting ore into gold bullion.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
costs of selling the final product, including royalties.
Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is measured on an
average basis.
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the reporting date are classified as
current assets, all other inventories are classified as non-current.
KEY JUDGMENTS
Inventories
Ore stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of
contained gold ounces based on assay data, and the estimated processing plant metal recovery percentage. Stockpile
tonnages are verified by periodic surveys.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
64 | P a g e
26.
TRADE AND OTHER PAYABLES
Consolidated
2022
2021
$’000
$’000
Current
Trade payables
30,577
9,976
Accrued expenses
16,333
19,363
Other creditors
1,256
950
Total
48,166
30,289
Accounting Policies
TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
ANNUAL LEAVE
A liability is recognised for the amount expected to be paid to an employee for annual leave they are presently entitled to as
a result of past service. The liability includes allowances for on-costs such as superannuation and payroll taxes, as well as any
future salary and wage increases that the employee may be reasonably entitled to.
DEFINED CONTRIBUTION SUPERANNUATION EXPENSE
Contributions to defined contribution superannuation plans are recorded in the period in which they are incurred.
27.
PROVISIONS
Consolidated
2022
2021
Note
$’000
$’000
Current
Rehabilitation
-
-
Annual leave payable
2,337
2,050
Balance at 30 June
2,337
2,050
Non-Current
Long service leave
310
194
Rehabilitation
45,910
34,076
Balance at 30 June
46,220
34,270
Provision for rehabilitation
Balance at 1 July
34,076
31,238
Provisions re-measured during the year
12
11,490
2,813
Provision used during the year
-
-
Unwinding of discount
3
344
25
Balance at 30 June
45,910
34,076
The provision for mine rehabilitation and closure on acquired tenements has been recognised at each reporting date. The
provision is based on the net present value of the current life of mine model.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
65 | P a g e
27. PROVISIONS (CONT’D)
Accounting Policies
PROVISIONS
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as
a finance cost.
LONG SERVICE LEAVE
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have
earned in return for their service up to reporting date, plus related on costs. The benefit is discounted to determine its
present value and the discount rate is the yield at the reporting date on high-quality corporate bonds that have maturity
dates approximating the terms of the Group’s obligations.
SHORT-TERM EMPLOYEE BENEFITS
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
KEY JUDGMENTS
Site rehabilitation
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The
Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. The Group recognises management’s best estimate for an assets’ retirement obligations and site rehabilitations
in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates.
Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the
carrying amount of this provision.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
66 | P a g e
Other disclosures
28.
SHARE-BASED PAYMENTS
Options and performance rights are issued to directors, employees and service providers. The options and performance
rights issued may be subject to performance criteria and are issued to directors and employees of the Company to increase
goal congruence between employees, directors and shareholders. Options and performance rights granted carry no dividend
or voting rights.
SUMMARY OF OPTIONS GRANTED
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share
options issued under the Employee Option Plan during the year:
2022
2021
No.
WAEP $
No.
WAEP $
At beginning of reporting period
2,133,200
2.70
8,444,209
3.08
Granted during the period:
- Entitlements Offer
-
-
- Employees and service providers
1,727,670
-
995,423
-
- Directors
50,535
-
-
-
Forfeited during the period
(241,133)
-
(549,347)
-
Exercised during the period
(36,463)
-
(20,699)
-
Expired during the period
-
-
(6,736,386)
3.00
Balance the end of reporting period
3,633,809
1.59
2,133,200
2.70
2022
2021
Weighted average remaining contractual life
years
2.2 years
2.5 years
Range of exercise prices
$
$0.00 - $8
$0.00 - $8
Weighted average fair value of entitlement offer options granted
during the year
$
-
-
Weighted average fair value of employee and service providers’ options
granted during the year
$
-
-
Weighted average fair value of directors’ options granted during the
year
$
-
-
KEY ESTIMATES
Equity-based payments
The fair value of options granted to directors, executives and contractors is recognised as an expense with a corresponding
increase in contributed equity. The fair value is measured at grant date and recognised over the period during which the
directors, executives and contractors becomes unconditionally entitled to the options.
The fair value at grant date is determined using an option pricing model that takes into account the exercise price, the term
of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share
price at grant date and expected price volatility of the underlying share, the expected divided yield and the risk-free interest
rate for the term of the option.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
67 | P a g e
28. SHARE-BASED PAYMENTS (CONT’D)
OPTION PRICING MODEL
The following table lists the inputs to the valuation model used for the year ended 30 June 2022:
Allottee
Number
of
options
Fair value
at grant
date per
option
Estimated
volatility
Life of
option until
expiry
Exercise
price
Share
price at
grant
date
Risk free
interest
rate
$
%
(years)
$
$
%
Directors & employees
1,778,205
$0.00
80%
4
-
$0.96
1.5%
The following table lists the inputs to the valuation models used for the year ended 30 June 2021:
Allottee
Number of
options
Fair value at
grant date per
option
Estimated
volatility
Life of option
until expiry
Exercise
price
Share price
at grant
date
Risk free
interest
rate
$
%
(years)
$
$
%
Directors & employees
811,985
1.11
100%
4
-
1.46
0.4%
Director
183,438
1.29
100%
4
-
1.72
0.3%
(i) Note: These figures are post-consolidation of the Company’s securities, being 100:1, completed on 25 May 2020.
29.
RELATED PARTIES
KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel compensation included in employee benefits expense and share-based payments (note 28)
is as follows:
Consolidated
2022
2021
$’000
$’000
Short-term employee benefits
2,749
2,783
Long-term employee benefits
42
211
Post employment benefits
149
160
Termination benefits
108
82
Total compensation
3,048
3,236
CONTROLLED ENTITIES
The consolidated financial statements include the assets, liabilities and results of the following wholly-owned subsidiaries,
each of which is also subject to the DOCA:
% Entity Interest
Name of controlled entity
Country of
incorporation
Consolidated entity company
holding the investment
2021
2020
Scaddan Energy Pty Ltd
Australia
Wiluna Mining Corporation Limited
100%
100%
Zanthus Energy Pty Ltd
Australia
Scaddan Energy Pty Ltd
100%
100%
Lignite Pty Ltd
Australia
Scaddan Energy Pty Ltd
100%
100%
Wiluna Gold Pty Ltd
Australia
Wiluna Mining Corporation Limited
100%
100%
Kimba Resources Pty Ltd
Australia
Wiluna Gold Pty Ltd
100%
100%
Wiluna Operations Pty Ltd
Australia
Wiluna Gold Pty Ltd
100%
100%
Wiluna Mining Corporation Limited is the parent entity of the Group.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
68 | P a g e
29. RELATED PARTIES (CONT’D)
TRANSACTIONS WITH RELATED ENTITIES
Mr Milan Jerkovic is an officer and co-owner of Xavier, a company who provides consulting and corporate advisory services
to the Group. During the year, Xavier was paid $204,27 (2021: $729,182) for consulting services provided to the Group.
$16,500 (2021: $336,182) was outstanding at balance date.
Ms Lisa Mitchell, a Director of the Company, whose spouse is also a Director and beneficiary of Ironbridge Capital Partners, a
company who provides consulting services to the Group; during the year, $93,562 (2021: $7,344) was paid (or is payable) to
Ironbridge Capital Partners for consulting services provided to the Group. All transactions were made on normal commercial
terms and conditions, and at market rates. There is no outstanding balance at 30 June 2022 (2021: nil)
All transactions were made on normal commercial terms and conditions, and at market rates.
LOANS TO/ FROM RELATED PARTIES:
There were no loans from related parties as at 30 June 2022 and 30 June 2021.
30.
JOINT VENTURES AND ASSOCIATES
2022
2,021
Joint Operation
Joint Operation Parties
Principal
Activities
Interest %
Interest %
Wilconi JV
Wiluna A-Cap Resources Limited
Exploration
20%
20%
The joint venture operations are not separate legal entities. They are contractual arrangements between participants for the
sharing of costs and outputs and do not in themselves generate revenue and profit. The joint operations are of the type
where initially one party contributes tenements with the other party earning a specified percentage by funding exploration
activities; thereafter the parties often share exploration and development costs and output in proportion to their ownership
of joint operation assets.
31.
PARENT ENTITY INFORMATION
The following information is for the parent entity, Wiluna Mining Corporation Limited, at 30 June 2022. The information
presented here has been prepared using consistent accounting policies as detailed in the relevant notes of this report.
2022
2021
$’000
$’000
Current assets
17,908
60,794
Non-current assets
312,413
194,890
Total assets
330,321
255,684
Current liabilities
(83,428)
(62,988)
Non-current liabilities
(119)
(90)
Total liabilities
(83,547)
(63,078)
Issued capital
(393,403)
(297,760)
Reserves
(6,738)
(6,493)
Accumulated losses
153,367
111,647
Total equity
(246,774)
(192,606)
Total comprehensive (loss) of the parent
(185,285)
(4,742)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
69 | P a g e
31.
PARENT ENTITY INFORMATION (CONT’D)
ACCOUNTING POLICIES
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
▪
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
▪
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
32.
COMMITMENTS
CONTRACTUAL COMMITMENTS
In May 2021, the Group extended its agreement with Synergy for the supply of gas to the Matilda-Wiluna Gold Operation out
to 2024. The terms of these agreement commit the Group to purchasing a minimum amount of gas for the term of the
contract. As at 30 June 2022, at the current contract price, the Group had commitments to purchase gas for the remaining
term of $2,953,000 (2021: $4,200,000).]
During FY21, the Group’s agreements with APA and Goldfields Gas Transmission Pty in relation to gas transportation to the
Matilda-Wiluna Gold Operation, were extended out to 2023 with no other amendments made to the terms. The terms of the
agreements commit the Group to transporting a minimum monthly amount of gas for the term of the contract. As at 30 June
2022, at the current contract prices, the Group had commitments for the use of the pipeline for the remaining term of
$844,000 (2021: $2,524,000).
Consolidated
2022
2021
$’000
$’000
Not longer than one year
2,110
2,842
Longer than one year, but not longer than five years
1,687
3,881
Longer than five years
-
-
Total
3,797
6,723
Additionally, the Company has a limited commitment to deliver and sell 1.65% of its monthly gold production to Osisko
Bermuda Limited at a 70% discount to the prevailing spot gold price (but limited to at a price not higher than US$600 per
ounce).
The Company pays an indefinite royalty to Franco Nevada, being 3.6% of revenue (net of refining costs, gold freight and the
2.5% Western Australian State Government royalty).
33.
CONTINGENT ASSETS AND LIABILITIES
CONTINGENT ASSETS:
As part of the farm-in and Joint Venture Agreement with A-Cap Resources Limited on the exploration tenements (project)
owned by the Group, the following contingent assets exist:
▪
$1 million in cash and issuing A-Cap Resources Limited’ shares equal to $1.5 million on exclusive right to earn a 20%
participant interest on the project by A-Cap Resources Limited (Third Earn in Interest).
CONTINGENT LIABILITIES:
Based on the Voluntary Administration Report to Creditors (dated 30 June 2023), FTI have investigated and made enquiries
into
Wiluna’s
business,
property,
affairs
and
financial
circumstances.
This
report
is
available
at
https://www.fticonsulting.com/creditors/wiluna-group.
In the report, FTI set out preliminary views and findings about:
▪
the solvency position of the Group and any potential claim for insolvent trading;
▪
the capital raising conducted by Wiluna in May 2022;
▪
voidable transactions and any charges that may be voidable; and
▪
offences that may have been committed by the Companies’ Directors.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
70 | P a g e
Wiluna and FTI’s current view is none of the preliminary findings in relation to any of these matters give rise to a contingent
liability, but this view has not been confirmed by independent legal advice.
In relation to insolvent trading, FTI’s preliminary view is that Wiluna was likely insolvent from at least 30 April 2022 and
possibly as early as 30 October 2021. Wiluna remained insolvent up until the date of the Administration on 20 July 2022.
Under section 588G of the Corporations Act, directors have a positive duty to prevent a company from trading whilst it is
insolvent. If a director is found to have contravened section 588G of the Act, they may be ordered to pay an amount of
compensation to the Companies equal to the amount of loss or damage suffered by creditors of the company due to the
contravention. Information about possible insolvent trading is relevant to creditors when deciding about the future of the
company as directors of the companies can only be pursued for insolvent trading if the companies are in liquidation. Any
potential claim for insolvent trading has not yet been quantified and is believed to be against the directors rather than the
company itself, although it is possible that there may be claims against the Company under sections 588V and 588W of the
Corporations Act.
34.
AUDITOR’S REMUNERATION
Consolidated
2022
2021
$’000
$’000
Audit services – RSM Australia Partners
- Auditing or reviewing the financial report
156
137
- Other services
-
32
Total
156
169
35.
SUBSEQUENT EVENTS
On 6 July 2022, Mr Milan Jerkovic resigned from the Board of Directors and his role as Executive Chairman. Mr Rowan
Johnston was appointed as Interim Non-Executive Chairman. Mr Michael Monaghan and Mr Robert Ryan were also
appointed as acting Chief Executive Officer and Chief Operating Officer, respectively.
On 20 July 2022, the Board of Directors resolved to appoint the Voluntary Administrators to the Group.
On 11 July 2023, the Voluntary Administrators announced the concurrent second meeting of creditors was held on 7 July
2023 and the Deed of Company Arrangement Proposal (DOCA Proposal) as outlined in the report to creditors dated 30 June
2023 was approved by creditors (refer to ASX Announcement dated 3 July 2023 for further information on the DOCA
Proposal).
On 1 August 2023, the Voluntary Administrators announced that the Voluntary Administrators and each member of the
Wiluna Mining Group executed the DOCA on 28 July 2023 in accordance with the indicative terms of the DOCA Proposal as
approved by creditors of the Wiluna Mining Group (refer to the ASX Announcements dated 3 July 2023 and 11 July 2023 for
further information on the DOCA Proposal).
Because of the execution of the DOCA, each member of the Wiluna Mining Group is no longer in Voluntary Administration
and are now subject to the DOCA on and from 28 July 2023. Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian
Francis have been appointed as the Deed Administrators of the DOCA. The Deed Administrators will continue to manage
Wiluna’s business and operations while progressing the conditions precedent to the effectuation of the DOCA.
On 24 August 2023, the Deed Administrators of the Group announced the following conditions precedents to the DOCA have
been satisfied following the announcement on 1 August 2023, by the execution of the agreements between the relevant
members of the Wiluna Mining Group and:
•
Mercuria, pursuant to which the parties agree to restructure and amend the Mercuria facility agreement;
•
Deutsche Balaton Aktiengesellschaft and Byrnecut Australia Pty Ltd, for the provision of convertible loan facilities
totalling A$6,666,667 to be used to build and commission carbon-in-leach tanks and associated infrastructure at the
Wiluna Mine and provide Wiluna with additional working capital;
•
Trafigura Pte Ltd, pursuant to which the terms of the Trafigura offtake agreement has been amended and Trafigura
agrees to forbear from enforcing certain rights under its offtake agreement; and
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
71 | P a g e
•
Osisko Bermuda Limited, pursuant to which Osisko Bermuda Limited agrees to (amongst other things) forbear from
enforcing (and waive) certain rights under its gold purchase deed.
The remaining conditions precedent to the effectuation of the DOCA are:
•
Wiluna issuing new shares to raise new capital in an amount determined by the Deed Administrators on or before
31 December 2024 (Capital Raising), and obtaining necessary regulatory relief, ASX Listing Rule waivers or member
approvals (if any) to complete the Capital Raising; and
•
The appointment of one or more suitably qualified and experienced directors to the boards of directors of the
Wiluna Mining Group.
On 24 August 2023, the Deed Administrators of the Group give notice that Wiluna relies on the relief granted under sections
6A and 8 of the ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 (Instrument) in respect of the
requirements to:
•
lodge its annual report for the financial year ending 30 June 2023 within 3 months after the end of the financial year
under section 319 of the Corporations Act 2001 (Cth) (Corporations Act);
•
send its annual report for the financial year ending 30 June 2023 to its shareholders within 4 months after the end of
the financial year under sections 314 and 315 of the Corporations Act; and
•
hold an annual general meeting (AGM) at least once in each calendar year and within 5 months after the end of its
financial year under section 250N of the Corporations Act.
As a result of the relief granted under the Instrument, the new due date for Wiluna will be:
•
to lodge and send its annual report for the financial year ending 30 June 2023, the earlier of:
-
24 months after the day when administrators were appointed for Wiluna;
-
the day on which a director of Wiluna has the right to, or is able to, perform or exercise all or most of the
management powers or functions of a director of Wiluna under the DOCA or with the consent of the Deed
Administrators; or
-
the day the external administration of Wiluna ends, (Deferral Period); and
•
to hold an AGM, within 2 months after the end of the Deferral Period.
There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected or
could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
36.
ROUNDING
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/91 and
in accordance with that class order, amounts in the financial statements have been rounded off to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
72 | P a g e
Deed Administrators’ Declaration
Under the DOCA and on behalf of the Deed Administrators of Wiluna Mining Corporation Limited, I state that:
1.
In the opinion of the Deed Administrators:
(a)
The financial statements, notes and additional disclosures included in the Deed Administrators’ report
designated as audited, are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the financial year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2.
The Deed Administrators draw attention to the notes to the financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
3.
The Deed Administrators have been given the declarations required by section 295A of the Corporations Act 2001.
This report is made by the Deed Administrators on the date set out below pursuant to their power under the DOCA.
On behalf of the Deed Administrators
Michael Ryan
Perth, 31 October 2023
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Wiluna Mining Corporation Limited (Subject to Deed of
Company Arrangement)
Disclaimer of Opinion
We were engaged to audit the financial report of Wiluna Mining Corporation Limited (Subject to Deed of Company
Arrangement) and its subsidiaries (the Group), which comprises the consolidated statement of financial position
as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to
the financial report, including a summary of significant accounting policies, and the declaration by the Deed
Administrators.
We do not express an opinion on the accompanying financial report of the Group. Because of the significance of
the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain
sufficient appropriate audit evidence to provide a basis for an audit opinion on this financial report.
Basis for Disclaimer of Opinion
On 20 July 2022, the directors of the Company resolved to put the Group into voluntary administration. Since the
appointment of the voluntary administrators, majority of the board of directors and management resigned, and its
day-to-day operations were managed by the voluntary administrators. Subsequent to the appointment of voluntary
administrators, the Group’s major operations were put under care and maintenance. On 28 July 2023, the Group
executed a deed of company arrangement.
The Group’s accounting and statutory records were not adequate to permit the application of necessary audit
procedures, and we were unable to obtain all the information and explanations we required in order to form an
opinion on the financial report. Areas where we were unable to determine whether the financial report complies
with Australian Accounting Standards include valuation of inventories and right of use assets, classification and
completeness of lease liabilities, provisions and other liabilities, carrying value of plant and equipment, mine
properties- area in development, exploration and evaluation of assets, recognition of share based payment and
issued capital and occurrence and cut off of revenue.
Accordingly, we were unable to determine whether any adjustments were necessary in respect of the Group’s
consolidated statement of financial position as at 30 June 2022, its consolidated statement of profit or loss and
other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the financial report.
We draw attention to Notes to the consolidated financial statements which indicate that the Group incurred a loss
after income tax of $276 million, a deficit in working capital (current liabilities exceed current assets) of $76.4
million and had net cash outflows from investing activities of $136.1 million respectively for the year ended 30
June 2022. These events or conditions, along with other matters as set forth in Notes to the consolidated financial
statements, indicate the existence of a material uncertainty which may cast significant doubt about the Group’s
ability to continue as a going concern.
Responsibilities of the Deed Administrators for the Financial Report
The Deed Administrators of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the Deed Administrators determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Deed Administrators are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Deed Administrators either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
The Deed Administrators are responsible for overseeing the financial reporting process of the Group.
Auditor's Responsibilities for the Audit of the Financial Report
Our responsibility is to conduct an audit of the financial report in accordance with Australian Auditing Standards
and to issue an auditor's report. However, because of the matter described in the Basis for Disclaimer of Opinion
section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on the financial report.
We are independent of the Group in accordance with the ethical requirements of the Corporations Act 2001 and
the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our
other ethical responsibilities in accordance with the Code.
Report on the Remuneration Report
Disclaimer of Opinion on the Remuneration Report
We were engaged to audit the Remuneration Report included within the Deed Administrators' report for the year
ended 30 June 2022.
We do not express an opinion on the Remuneration Report. Because of the significance of the matter described
in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on the Remuneration Report.
Responsibilities
The Deed Administrators of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards. However, because of the matter described in the Basis for Disclaimer of Opinion section of
our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on the Remuneration Report.
RSM AUSTRALIA PARTNERS
Perth, WA
AIK KONG TING
Dated: 31 October 2023
Partner
75 | P a g e
ASX Additional Shareholder Information
SHAREHOLDING
The distribution of members and their holdings of equity securities in the Company is:
Number Held as at 29 October 2023
Fully Paid Ordinary
Shares
%
Quoted Options
%
1 - 1,000
723,548
0.20%
38,508
0.02%
1,001 - 5,000
3,054,009
0.86%
571,830
0.37%
5,001 – 10,000
3,562,885
1.00%
795,604
0.51%
10,001 - 100,000
22,480,217
6.30%
5,338,659
3.44%
100,001 and over
326,734,263
91.64%
148,495,376
95.66%
1.
TOTALS
356,554,922
100.00%
155,239,977 100.00%
Note: the shareholding figures differ to those contained in the June 2022 financial report due to a make up issue of approximately
1.8 million shares on 5 July 2022 and approximately 675,000 shares already issued but no HIN numbers provided.
The number of holders with less than a marketable parcel of fully paid ordinary shares is 2,072 holding a total of 1,764,996 shares.
The number of holders with less than a marketable parcel of quoted options is 363 holding a total of 1,648,924 options.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders as at 29 October 2023 (based on substantial shareholder notices received by the Company):
Name
Number of Fully Paid
Ordinary Shares Held
% Held of Issued
Ordinary Capital
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT AND ITS
AFFILIATES
104,784,600
29.55%
MAXIM GEYZER
38,910,000
10.91%
BYRNECUT AUSTRALIA PTY LTD
33,500,000
9.40%
FRANKLIN RESOURCE, INC. AND ITS AFFILIATES
26,800,000
7.56%
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest ordinary fully paid shareholders at 29 October 2023:
Name
Number of Fully Paid
Ordinary Shares Held
% Held of Issued
Ordinary Capital
MR MAXIM GEYZER
38,910,000
10.91%
BYRNECUT AUSTRALIA PTY LTD
33,500,000
9.40%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
22,905,536
6.42%
SPARTA AG
22,490,000
6.31%
CITICORP NOMINEES PTY LIMITED
21,744,611
6.10%
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
21,728,103
6.09%
2INVEST AG
14,190,240
3.98%
DELPHI UNTERNEHMENSBERATUNG AG
13,114,112
3.68%
BNP PARIBAS NOMINEES PTY LTD
9,927,721
2.78%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
8,730,555
2.45%
DDH1 DRILLING PTY LTD
8,000,000
2.24%
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
7,464,659
2.09%
HEIDELBERGER BETEILIGUNGSHOLDING AG
7,320,000
2.05%
DEUTSCHE BALATON AKTIENGESELLSCHAFT
6,322,400
1.77%
BRISPOT NOMINEES PTY LTD
5,980,917
1.68%
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
4,911,112
1.38%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
4,903,345
1.38%
INTERQUIP CONSTRUCTION PTY LTD
4,680,000
1.31%
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
4,172,385
1.17%
SPARTA AG
3,150,000
0.88%
76 | P a g e
Total
264,145,696
74.08%
Note: the option figures differ to those contained in the June 2022 financial report due to a make up issue of approximately 1.8
million options on 5 July 2022.
UNLISTED OPTIONS
The unlisted options on issue at 29 October 2023:
Details of Holders
Number of
Holders
Exercise
price
Expiry
Date
Number of
options Held
Various holders – issued pursuant to ESOP
16
Nil1
30 Jun 2023
593,676
Lind Asset Management XIV, LLC
1
$8.00
13 Feb 2024
720,000
Various holders – issued pursuant to ESOP
14
Nil1
30 Jun 2024
680,482
Various holders – issued pursuant to ESOP
39
Nil1
30 Jun 2025
1,639,651
1 Zero priced options issued to employees pursuant to the terms and conditions of the Company’s Employee Share Option Plan
(ESOP).
RESTRICTED SECURITIES
The Company has no restricted securities.
VOTING RIGHTS
ORDINARY SHARES
In accordance with the Company's Constitution, on a show of hands every member present in person or by proxy or attorney or duly
authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised
representative has one vote for every fully paid ordinary share held.
TWENTY LARGEST QUOTED OPTIONHOLDERS
The names of the twenty largest holders of quoted options at 29 October 2023:
Name
Number of Fully Paid
Ordinary Shares Held
% Held of Issued
Ordinary Capital
BYRNECUT AUSTRALIA PTY LTD
33,500,000
21.58%
MR MAXIM GEYZER
17,500,000
11.27%
DELPHI UNTERNEHMENSBERATUNG AG
13,000,000
8.37%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10,155,369
6.54%
RHUROIN PTY LTD
10,000,000
6.44%
CITICORP NOMINEES PTY LIMITED
8,568,150
5.52%
DDH1 DRILLING PTY LTD
8,000,000
5.15%
SPARTA AG
7,540,000
4.86%
2INVEST AG
7,234,240
4.66%
INTERQUIP CONSTRUCTION PTY LTD
4,680,000
3.01%
DEUTSCHE BALATON AKTIENGESELLSCHAFT
3,900,000
2.51%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
3,645,000
2.35%
LAZARUS CORPORATE FINANCE PTY LTD
2,500,000
1.61%
LAZARUS CORPORATE FINANCE PTY LTD
1,813,187
1.17%
LAZARUS CORPORATE FINANCE PTY LTD
1,337,500
0.86%
SAM INVESTORS PTY LTD
1,275,266
0.82%
CRANPORT PTY LTD
1,250,000
0.81%
BNP PARIBAS NOMINEES PTY LTD
1,079,762
0.70%
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
917,827
0.59%
BNP PARIBAS NOMS PTY LTD
841,553
0.54%
Total
138,737,854
89.37%