WESTGOLD RESOURCES LIMITED
ANNUAL REPORT
2021
A DYNAMIC, GROWTH
ORIENTED AUSTRALIAN
GOLD MINER
With over 1,000 staff and in excess of 1,300km2 of tenure,
we are the dominant gold miner in the Murchison Region
of Western Australia.
Westgold is unique as we are the owner-operator of our mines.
We operate a hub and spoke model in which we can deliver ore
from our six underground mines and numerous open pits to
several of our regional processing hubs.
www.westgold.com.au
CONTENTS
Our Purpose and Ambition
Values and Behaviours
Chairman’s Letter
Financial Results
1
1
2
5
6 Our Annual Outputs
8 Our Operations
14 Mineral Resources & Ore Reserves
20 Director’s Report
31 Remuneration Report (Audited)
48 Auditors Independence Declaration
49 Consolidated Statement of Comprehensive Income
50 Consolidated Statement of Financial Position
51 Consolidated Statement of Cash Flows
52 Consolidated Statement of Changes in Equity
53 Notes to the Consolidated Financial Statements
98 Directors’ Declaration
99
104 Shareholder Information
106 Corporate Directory
Independent Auditor’s Report
b
Westgold Resources Limited Annual Report 2021 OUR PURPOSE
AND AMBITION
Leverage our gold assets and expand our
Western Australian footprint to:
– create shareholder value,
– provide opportunities for our team to
grow and succeed, and
– contribute to our wider communities.
VALUES AND
BEHAVIOURS
Our values and behaviours guide how we
work with each other, our communities, and
external stakeholders. They influence our
actions and decisions, hold us accountable
and ultimately determine our success.
CHOOSE SAFETY
– Think safety and act safely
– Look out for each other
– Protect our environment
SHOW RESPECT
– Appreciate everyone
for who they are and
what they contribute
– Enable everyone
to do a great job
– Grow strong teams
and communities
DELIVER VALUE
– Plan to succeed as a team
– Execute with excellence
– Rise to the challenge and
keep on improving
1
Westgold Resources Limited Annual Report 2021 CHAIRMAN’S LETTER
FIRMLY FOCUSSED
ON GROWTH
Our flag is firmly planted in the
Central Murchison region and a
key milestone for the year was
achieved in October 2020 when we
produced our first million ounces of
production, just short of four-years
since commencing trading on the
ASX as a separate Company. During
the year we also completed the final
divestment of all non-core assets
external to this region.
Our operating results reflect a solid
improvement over the previous year
with revenue increasing by 16% year-
on-year to $571 million, total cost
of sales decreasing by 2% to $455
million, net profit after tax growing
by 122% to $76.7 million and at
financial year end, a closing cash
and cash equivalents balance of
$150.6 million leaving the Group in a
solid trading position. We continued
to build balance sheet strength over
the year with net assets increasing
by more than 16% to $607 million.
This solid and upward trajectory
was rocked mid-year when the
unthinkable occurred. The very
thing our teams plan, manage and
so vehemently try to protect against
occurred with a tragic accident
claiming the life of an employee
at our Big Bell mine. This was the
first fatality I have directly endured
in nearly 40 years in the industry,
it devastated our management
and deeply affected our close-knit
teams as they suffered the loss of a
colleague and immense sorrow for
her family and friends.
As the Chairman I was extremely
proud of the way that our
management team and site staff
reacted to this tragedy. Our people
are resilient, and I witnessed first-
hand the range of human responses
within our workforce as our people
began dusting themselves off from
this incident during early 2021 and
helping each other move forward.
In regard to business performance,
the first half of FY2021 saw the
Westgold share price improve as
our gold operations began to gain
momentum with key mines moving
towards steady state operation. The
second half of FY2021 saw some
production momentum lost and,
even with strong cost management,
the share price and corresponding
market capitalisation closed at
disappointing levels at financial
year end.
As a founder of Westgold, inaugural
Managing Director and after having
served as an interim Executive
Chairman for the second half
of the year, my transition to the
Non-executive Chairman’s role
is complete. The announcement
of the 2 cents per share maiden
dividend is very pleasing and
marks another milestone for the
company. Further, the Directors are
establishing a dividend reinvestment
plan to provide for the opportunity
for dividends to be reinvested. Our
operational succession plan is in
place, and I am confident that the
foundations that have been built at
Westgold are strong and that our
Executive management can deliver.
Dear Shareholders,
It is my pleasure to present
you the Westgold Resources
Limited (Westgold or the
Group) Annual Report for
the financial year ended
30 June 2021 (FY2021).
This financial year has been pivotal
yet bittersweet for Westgold. With
the overprint of COVID-19 and the
many disruptions and consequences
it has brought, our operations
continued to advance. Our gold
output was under our expectations
as minor delays were experienced,
however the fundamentals of our
owner-operator model shone
through and, despite the high fixed
component of our costs, our team
prudently managed our fiscal drivers
solidly such that our key unit costs
delivered better than expected
guidance outcomes.
2
Westgold Resources Limited Annual Report 2021
Our FY2022 production, costs and
safety objectives are clear, and
I expect a strong and improved
performance over the ensuing
year. After many years of building,
Westgold has a production platform
that can sustain our mining outputs
and, with this established, our
focus can now turn to exploration
and growth. The strategic regional
footprint and infrastructure we have
consolidated and built in the Central
Murchison region can underwrite
expansion and I look forward
to driving this strategy with the
Executive team.
It is with the sincerest gratitude
that I thank you as my fellow
shareholders for your continued
support and belief over the past
year. The COVID-19 pandemic
has forced many companies to
become more dynamic to survive.
This dynamism has always been a
characteristic of Westgold and I can
assure all shareholders that the
ability to deal with a rapidly changing
business landscape is a part of
Westgold’s DNA and remains strong
within the team.
REVENUE
$571m
PETER COOK
Chairman
NET PROFIT AFTER TAX
$76.7m
CLOSING CASH AND
CASH EQUIVALENTS
$150.6m
Westgold Resources Limited Annual Report 2021
3
4
Westgold Resources Limited Annual Report 2021 YEAR END 30 JUNE 2021
FINANCIAL
RESULTS
GOLD SALES [OZ]
REVENUE
NET CASH FROM OPERATIONS
245,066
$571.1m
$249.1m
(FY20: 235,196)
15%
(FY20: $492.3m)
16%
(FY20: $155.7m)
60%
NET PROFIT BEFORE TAX
NET PROFIT AFTER TAX
CLOSING CASH & CASH EQUIVALENTS
$112.0m
$76.7m
$150.6m
(FY20: $43.9m)
155%
(FY20: $34.6m)
122%
(FY20: $137.6m)
9%
PROFIT PER SHARE
NET ASSETS
18.16c
$607.3m
(FY20: 8.65c)
110%
(FY20: $521.9m)
16%
AVERAGE HEDGE PRICE
HEDGES OUNCES
$2,133/oz
156,000oz
(FY20: $2,062/oz)
3%
(FY20: 200,000oz)
22%
Westgold Resources Limited Annual Report 2021
5
YEAR END 30 JUNE 2021
OUR ANNUAL
OUTPUTS
GOLD SALES
CASH COST
(C1)
ALL IN SUSTAINING
COSTS
MEEKATHARRA GOLD
OPERATIONS
MEEKATHARRA GOLD
OPERATIONS
MEEKATHARRA GOLD
OPERATIONS
103,728oz
A$1,309/oz
A$1,628/oz
CUE GOLD
OPERATIONS
CUE GOLD
OPERATIONS
CUE GOLD
OPERATIONS
81,326oz
A$1,079/oz
A$1,222/oz
FORTNUM GOLD
OPERATIONS
60,011oz
FORTNUM GOLD
OPERATIONS
FORTNUM GOLD
OPERATIONS
A$1,009/oz
A$1,304/oz
TOTAL GOLD SALES
GROUP
GROUP
245,066oz
A$1,158/oz
A$1,411/oz
6
Westgold Resources Limited Annual Report 2021
7
Westgold Resources Limited Annual Report 2021 OUR OPERATIONS
REVIEW OF
OPERATIONS
Westgold Resources Limited [ASX: WGX] is a uniquely Western Australian gold company. With a workforce of over 1000
people, we are the dominant explorer, developer, operator and gold mining company in the Murchison region. With
over 1,300 km2 of tenure across the Murchison and Bryah Basin we currently operate six underground mines, several
open pits and three processing plants with an installed processing capacity of ≈4 Mtpa.
Westgold is the owner-operator of all of its underground and open pit mines and as such this vertical integration
provides greater cost control and operating flexibility across the Company’s assets. We operate on a ‘hub and spoke’
model with our Murchison mines being able to feed ore to our Meekatharra and Tuckabianna processing hubs and
our Bryah Basin mines sending ore to the Fortnum hub.
MURCHISON OPERATIONS
The Murchison Operations incorporate two processing hubs including the Cue Gold Operation [CGO] and
the Meekatharra Gold Operation [MGO]. Combined these operations are forecast to produce approximately
+210,000 oz in financial year 2021-2022 [FY22].
CUE GOLD OPERATION
CGO is located around the regional town of Cue and
encompasses Westgold’s southern-most group of
Murchison assets including the historic mining centres
of Big Bell, Cuddingwarra, Day Dawn, Tuckabianna and
Pinnacles. This package includes two of Australia’s most
prolific past producers in the Big Bell mine [≈2.6 million
ounces] and the Great Fingall mine [≈1.2 million ounces].
CGO incorporates the 1.2-1.4 Mtpa Tuckabianna
processing hub, a 136-person village at Big Bell, a
250-person camp at Cue and associated mining
infrastructure to support a large FIFO and DIDO
mining operation. The Tuckabianna plant receives
underground ore from the large Big Bell underground
and the smaller Comet underground mines as well ore
from the Cuddingwarra open pits.
The Tuckabianna processing hub treated 1,261,129
tonnes of ore, within the mid-range of the plants
operating capacity and in line with expectations.
The metallurgical recoveries rate for the ore blend
was 88.21%.
8
Westgold Resources Limited Annual Report 2021
While Big Bell is the primary
producer of ore to the
Tuckabianna mill, the Comet
underground mine has served
well as a supplementary
source and is expected to
continue as such in FY22.
After three years of de-
watering, mine rehabilitation
and refurbishment, Big Bell
mine production began to
rise in FY21 with steady state
operations expected to be
achieved in FY22.
A number of open pits
commenced at CGO in
FY2021 including a new
mining hub at Cuddingwarra
North and open pits at Jim’s
Find and City of Chester.
Exploration and viability
studies were carried out
during FY2021 at the
previously mined Fender open
pit mine on the southern
limits of the Big Bell shear,
testing the economics of a
transition to underground
operations with this potential
development scheduled to
commence during FY22.
In addition to the mining operations, the Company is accelerating exploration
activities across CGO with the primary focus being the Cuddingwarra and Day Dawn
mining centres. This work has recently included the collection of new geophysical
datasets and geological re-interpretations leading to the selection of new priority
targets for drill testing in the second half of FY22.
CGO GOLD SOLD & A$ COSTS
25,000
20,000
15,000
10,000
5,000
0
’
S
Z
O
D
L
O
S
D
L
O
G
R
T
Q
Gold Sales
C1 Cash Cost/oz
AISC/oz
Sep Q
2020
18,983
1,112
1,285
Dec Q
2020
22,279
1,001
1,154
Mar Q
2021
20,631
1,098
1,247
Jun Q
2021
19,433
1,120
1,245
Gold Sales
C1 Cash Cost/oz
ASIC/oz
1,500
1,200
900
600
300
0
C
O
S
T
P
E
R
O
Z
Westgold Resources Limited Annual Report 2021
9
OUR OPERATIONS
REVIEW OF OPERATIONS
(CONTINUED)
MEEKATHARRA GOLD
OPERATION
MGO is located around the
regional town of Meekatharra and
encompasses Westgold’s central
group of assets including the historic
gold mining centres of Meekatharra
North, Paddy’s Flat, Yaloginda,
Nannine and Reedy’s.
The MGO project hub incorporates
the 1.6-1.8 Mtpa Bluebird processing
hub, a 420-person village, and
associated mining infrastructure
required to support a large FIFO
and DIDO mining operation. The
Bluebird plant receives underground
ore from the Paddy’s Flat, South Emu
- Triton and Bluebird underground
mines and supplementary lower
grade open pit ore from Five Mile
Well, Maid Marion, Albury Heath and
Aladdin open pits.
The Bluebird underground mine
recommenced in FY21, following
the temporary suspension of
development works due to a
skilled labour shortage. During the
temporary closure, an extensive
underground drilling program was
completed producing excellent
results and extending the resource
significantly.
With the recommencement of
mining at Bluebird, Westgold now
operates three underground mines
at MGO, including Paddy’s Flat
and South Emu – Triton. At steady
state production, these three
mines are expected to deliver more
than 100,000oz per annum to the
Bluebird processing plant with
potential supplemental ore available
from the Aladdin, Albury Heath and
Maid Marion deposits.
The Bluebird processing plant
processes both underground and
open pit ore, performing strongly
this year treating more than
1,684,000 tonnes, inline with the
plant’s capacity of 1.6-1.8 million
tonne. The metallurgical recoveries
rate for the ore blend was 85.21%.
10
Westgold Resources Limited Annual Report 2021
During the year the Company has
accelerated new mine exploration
activities at MGO with the primary
focus being the Meekatharra North,
Yaloginda and Reedy’s mining
centres. This work has recently
included the collection of new
geophysical datasets and geological
re-interpretations leading to the
selection of new priority targets
for drill testing in the second half
of FY22.
In-mine exploration at MGO
focussed on the extension of
the Paddy’s Flat and Reedy’s ore
systems:
– Prohibition lodes returned
excellent drill results
demonstrating the ongoing,
large-scale nature of
mineralisation at Paddy’s Flat;
– Triton North lodes produced
promising drill results
underscoring the strong potential
of the Reedy’s deposit;
– drilling results from the Three
Sisters prospect indicates well
for future small scale open pit
mining at Nannine.
MGO GOLD SOLD & A$ COSTS
30,000
25,000
20,000
15,000
10,000
5000
0
’
S
Z
O
D
L
O
S
D
L
O
G
R
T
Q
Gold Sales
C1 Cash Cost/oz
AISC/oz
Sep Q
2020
25,614
1,335
1,652
Dec Q
2020
27,395
1,126
1,434
Mar Q
2021
25,983
1,407
1,704
Jun Q
2021
24,737
1,389
1,742
Gold Sales
C1 Cash Cost/oz
ASIC/oz
2,100
1,800
1,500
1,200
900
600
300
0
C
O
S
T
P
E
R
O
Z
Westgold Resources Limited Annual Report 2021
11
OUR OPERATIONS
REVIEW OF OPERATIONS
(CONTINUED)
BRYAH OPERATIONS
The Bryah Operations currently include the Fortnum Gold Operation [FGO]. This operation is forecast to
produce approximately +60,000 oz in FY22.
FORTNUM GOLD OPERATION
FGO is located in the Proterozoic age Bryah Basin
stratigraphy approximately 150 km northwest of
Meekatharra and represents the northernmost group of
Westgold assets. These assets encapsulate the historic
mining centres of Labouchere, Fortnum, Horseshoe and
Peak Hill which collectively has delivered approximately
2 million ounces of reported gold production.
The process plant performed well given the hard ore and
limited grind capacity, achieving more than 1,260,000
tonnes for the year with metallurgical recoveries at
95%. In FY22 open pit mining will recommence to
replace the existing low-grade ore stocks in the mill
feed and enhance overall ore grade sent to the FGO
processing plant.
The FGO processing hub incorporates the 0.9 Mtpa
Fortnum carbon-in-leach (CIL) processing plant, a
200-person village, airstrip and associated mining
infrastructure required to support a remote FIFO
operation. Mining output is currently dominated by
the Starlight underground mine with supplementary,
free on surface low grade stocks providing a blended
feedstock to the plant.
In-mine exploration at FGO is focussed on the potential
extension of the Starlight orebodies to ensure longevity
of the low-cost, high productivity mining model that
is the cornerstone of the FGO project. In addition,
Westgold is evaluating potential open pit opportunities to
supplement underground ore sources at FGO increasing
the ore optionality and mine life across this under-
explored tenement package.
FGO continues to deliver strong profit from the Starlight
underground mine and additional mill feed sourced from
large, existing low-grade surface stockpiles. This year saw
expanded production in the Starlight mine including the
Moonlight, Twilight North and Trev’s lodes.
New mine exploration has similarly been accelerated with
the initial primary focus being the Peak Hill mining centre.
This work has included data compilation and geological
re-interpretations leading to the selection of new priority
targets for drill testing in the second half of FY22.
12
Westgold Resources Limited Annual Report 2021
FGO GOLD SOLD & A$ COSTS
20,000
15,000
10,000
5,000
0
’
S
Z
O
D
L
O
S
D
L
O
G
R
T
Q
Gold Sales
C1 Cash Cost/oz
AISC/oz
Sep Q
2020
15,433
1,089
1,351
Dec Q
2020
15,493
973
1,261
Mar Q
2021
16,525
861
1,135
Jun Q
2021
12,560
1,158
1,527
Gold Sales
C1 Cash Cost/oz
ASIC/oz
1,800
1,500
1,200
900
600
300
0
C
O
S
T
P
E
R
O
Z
Westgold Resources Limited Annual Report 2021
13
OUR OPERATIONS
MINERAL RESOURCES
& ORE RESERVES
Westgold released its annual update of Mineral Resource and Ore Reserve Estimates on the ASX on 29 September 2021.
Shareholders should refer to that announcement for full detail including JORC 2012 appendices. The tables below
summarise them by Operational area and Mining Centre location:
MINERAL RESOURCE STATEMENT – 30 JUNE 2021 BY PROJECT AREA
Project
Measured
Murchison (MGO + CGO)
Bryah (FGO)
Sub-Total
Indicated
Murchison (MGO + CGO)
Bryah (FGO)
Sub-Total
Inferred
Murchison (MGO + CGO)
Bryah (FGO)
Sub-Total
Total
Murchison (MGO + CGO)
Bryah (FGO)
Grand Total
Tonnes (‘000s)
Grade (g/t)
Ounces Au (‘000s)
8,634
1,608
10,242
47,131
15,818
62,949
33,598
4,460
38,058
89,363
21,886
111,249
3.23
3.61
3.42
2.19
1.78
1.99
2.20
1.86
2.03
2.20
1.86
2.11
896
186
1,082
3,316
903
4,219
2,377
267
2,644
6,589
1,357
7,946
ORE RESERVE STATEMENT – 30 JUNE 2021 BY PROJECT AREA
Project
Proven
Murchison (MGO + CGO)
Bryah (FGO)
Sub-Total
Probable
Murchison (MGO + CGO)
Bryah (FGO)
Sub-Total
Total
Murchison (MGO + CGO)
Bryah (FGO)
Grand Total
Glossary:
Murchison incorporates MGO + CGO Operations;
MGO is the Meekatharra Gold Operations;
CGO is the Cue Gold Operations; and
FGO is the Fortnum Gold Operations.
14
Westgold Resources Limited Annual Report 2021
Tonnes (‘000s)
Grade (g/t)
Ounces Au (‘000s)
6,363
603
6,966
16,050
6,029
22,079
22,413
6,632
29,045
2.75
2.86
2.81
2.45
1.67
2.06
2.60
2.27
2.43
563
55
618
1,265
324
1,589
1,828
379
2,207
The Mineral Resources by mining project are tabulated below:
MURCHISON GOLD OPERATIONS (MGO AND CGO)
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2021
Measured
Indicated
Inferred
Total
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna
Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
5,565
288
58
212
67
0
68
991
425
145
814
3.30
1.99
1.73
4.88
3.04
0.00
2.55
4.32
3.95
3.42
1.19
3.23
591
10,811
18
3
33
7
0
6
1,809
3,501
3,366
3,756
246
1,298
138
10,911
54
16
31
2,993
8,439
0
896
47,131
2.56
1.81
4.42
2.70
0.71
1.57
2.16
1.72
2.53
1.82
0.00
2.19
891
106
497
292
85
12
90
604
243
494
0
4,667
918
3,089
5,835
10
76
488
2,505
8,957
7,053
0
3,316
33,598
2.57
1.59
2.57
2.33
0.76
2.09
2.21
2.22
2.44
1.46
0.00
2.20
386
47
256
437
0
5
35
179
703
330
0
21,043
3,015
6,648
9,414
3,833
322
1,855
14,408
12,375
15,637
814
2.76
1.76
3.54
2.52
0.75
1.70
2.19
1.99
2.51
1.67
1.19
Ounces
Au
(‘000s)
1,868
171
756
762
92
18
130
921
1,000
840
31
Total
8,634
2,377
89,363
2.29
6,589
BRYAH (FORTNUM GOLD OPERATIONS)
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2021
Measured
Indicated
Inferred
Total
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
1,324
0
0
284
1,608
4.12
0.00
0.00
1.22
3.61
175
0
0
11
6,110
1,266
7,547
894
186
15,818
2.14
2.09
1.55
0.73
1.78
421
85
376
21
2,423
183
1,838
16
903
4,460
1.97
1.43
1.78
0.54
1.86
153
8
105
0
9,857
1,449
9,385
1,194
267
21,886
2.37
2.01
1.60
0.85
1.93
750
93
481
32
1,357
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
Westgold Resources Limited Annual Report 2021
15
OUR OPERATIONS
MINERAL RESOURCES
& ORE RESERVES
(CONTINUED)
The movement in Mineral Resource estimates over the past year are tabulated below:
MINERAL RESOURCE STATEMENT COMPARISON
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Stockpiles
CGO Total
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Stockpiles
MGO Total
Fortnum
Horseshoe
Peak Hill
Stockpiles
FGO Total
Tonnes
(‘000s)
27,598
4,050
6,784
9,240
3,833
51,506
573
1,253
24,501
12,101
15,371
1,029
54,829
9,100
1449
9,385
1,360
21,295
2020
Grade
(g/t)
2.65
1.76
3.52
2.56
0.75
2.54
1.77
2.45
1.7
2.47
1.63
1.23
1.86
2.4
2.01
1.6
0.9
1.92
Ounces
Au (‘000s)
Tonnes
(‘000s)
2,352
21,043
229
767
759
92
3,015
6,648
9,414
3,833
4,199
43,953
33
99
322
1,855
1,340
14,408
963
808
41
12,375
15,637
814
3,283
45,411
703
93
481
39
9,857
1,449
9,385
1,194
1,317
21,885
2021
Grade
(g/t)
Change
Ounces
Au (‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au (‘000s)
2.76
1.76
3.54
2.52
0.75
2.52
1.7
2.19
1.99
2.51
1.67
1.19
1.85
2.37
2.01
1.6
0.85
1.86
1,868
171
756
762
92
-6,555
-1,035
-136
174
0
3,649
-7,553
18
130
921
1,000
840
31
-251
602
-10,093
274
266
-215
2,940
-9,418
750
93
481
32
1,357
757
0
0
-166
590
0.11
0.00
0.02
-0.04
0.00
-0.02
-0.07
-0.26
0.29
0.04
0.04
-0.04
-0.02
-0.03
0.00
0.00
-0.05
-0.06
-484
-58
-11
3
0
-550
-15
31
-419
37
32
-10
-343
47
0
0
-7
40
Grand Total
127,629
2.14
8,799
111,249
2.11
7,946
-16,380
-0.03
-853
16
Westgold Resources Limited Annual Report 2021
The Ore Reserves by mining project are tabulated below:
MURCHISON GOLD OPERATIONS (MGO AND CGO)
ORE RESERVE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2021
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
Total
Proven
Probable
Grade
(g/t)
Ounces
Au (‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au (‘000s)
Tonnes
(‘000s)
Total
Grade
(g/t)
Ounces
Au (‘000s)
2.95
0.00
0.00
3.13
3.04
0.00
0.00
4.71
4.25
3.33
1.23
2.75
462
0
0
3
7
0
0
34
10
7
41
5,005
1,074
1,398
860
3,756
169
1,074
868
845
1,000
0
563
16,050
2.64
1.71
6.55
2.36
0.71
1.12
1.49
3.37
3.07
3.14
0.00
2.45
425
59
294
65
85
6
51
94
84
101
0
9,879
1,074
1,398
889
3,823
169
1,074
1,090
922
1,065
1,029
1,265
22,413
2.79
1.71
6.55
2.39
0.75
1.12
1.49
3.64
3.17
3.15
1.23
2.54
887
59
294
68
92
6
51
128
94
108
41
1,828
Tonnes
(‘000s)
4,874
0
0
29
67
0
0
222
77
65
1,029
6,363
BRYAH (FORTNUM GOLD OPERATIONS)
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2021
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
Proven
Probable
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au (‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au (‘000s)
Tonnes
(‘000s)
320
0
0
284
603
4.31
0.00
0.00
1.22
2.86
44
0
0
11
55
3,252
761
1,122
894
6,029
1.79
1.84
1.95
0.73
1.67
188
45
70
21
324
3,572
761
1,122
1,178
6,633
Total
Grade
(g/t)
2.02
1.84
1.95
0.85
1.78
Ounces
Au (‘000s)
232
45
70
32
379
Westgold Resources Limited Annual Report 2021
17
OUR OPERATIONS
MINERAL RESOURCES
& ORE RESERVES
(CONTINUED)
The movement in Ore Reserves over the past year are tabulated below:
ORE RESERVE STATEMENT COMPARISON
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Stockpiles
CGO Total
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Stockpiles
MGO Total
Fortnum
Horseshoe
Peak Hill
Stockpiles
FGO Total
Tonnes
(‘000s)
13,719
814
1,398
886
3,823
20,640
263
550
1,625
789
718
1,029
4,975
3,426
579
1,122
1,344
6,471
2020
Grade
(g/t)
Ounces
Au (‘000s)
Tonnes
(‘000s)
2021
Grade
(g/t)
Change
Ounces
Au (‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au (‘000s)
2.76
1.92
6.55
2.43
0.75
2.6
1.66
1.99
3.38
3.93
2.98
1.23
2.72
2.27
2.06
1.95
0.91
1.91
1,217
50
294
69
92
9,879
1,074
1,398
889
3,823
1,722
17,063
14
35
177
100
69
41
435
250
38
70
39
398
169
1,074
1,090
922
1,065
1,029
5,349
3,572
761
1,122
1,178
6,633
2.79
1.71
6.55
2.39
0.75
2.39
1.12
1.49
3.64
3.17
3.15
1.23
2.32
2.02
1.84
1.95
0.85
1.78
887
59
294
68
92
1,400
6
51
128
94
108
41
428
232
45
70
32
379
1,890
-51
-549
-888
55
457
-84
161
-137
-381
94
310
-35
146
182
0
-166
162
-0.12
-0.28
0.94
-0.06
-0.01
-0.09
-0.21
-0.32
0.05
0.62
-0.22
0.04
-0.1
0
0
0
0
121
-11
-57
-73
1
-19
-7
6
-12
-25
5
13
-19
-18
7
0
-7
-0.13
-19
Grand Total
32,086
2.48
2,555
29,046
2.32
2,207
529
-0.1
-64
18
Westgold Resources Limited Annual Report 2021
COMPLIANCE AND
FORWARD-LOOKING STATEMENTS
EXPLORATION TARGETS, EXPLORATION RESULTS AND MINERAL RESOURCES
The information in this report that relates to Exploration Targets, Exploration Results and Mineral Resources is
compiled by Westgold technical employees and contractors under the supervision of Mr. Jake Russell B.Sc. (Hons),
who is a member of the Australian Institute of Geoscientists. Mr Russell is a full time employee to the company, and
has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration
and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Russell consents
to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Mr Russell is eligible to participate in short and long term incentive plans of the company.
ORE RESERVES
The information in this report that relates to Ore Reserves is based on information compiled by Mr. Anthony
Buckingham B.Eng. (Mining Engineering) MAusIMM. Mr. Buckingham has sufficient experience which is relevant to the
styles of mineralisation and types of deposit under consideration and to the activities which they are undertaking to
qualify as a Competent Person as defined in the 2012 Editions of the “Australasian Code for Reporting of Exploration
Results, Mineral Re- sources and Ore Reserves (JORC 2012)”. Mr. Buckingham consents to the inclusion in this report
of the matters based on his information in the form and context in which it appears. Mr. Buckingham is a full-time
senior executive of the Company and is eligible to and may participate in short-term and long-term incentive plans
of the Company as disclosed in its annual reports and disclosure documents.
EXPLORATION RESULTS
The information is extracted from the report entitled ‘Exploration Highlights - 30 September 2019 Quarter’ created
by Westgold on 14 October 2019 and available to view on Westgold’s website (www.westgold.com.au) and the ASX
(www.asx.com.au). The company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement.
The company confirms that the form and context in which the Competent Person’s findings are presented have not
been materially modified from the original market announcement.
FORWARD LOOKING STATEMENTS
Certain statements in this report relate to the future, including forward looking statements relating to Westgold’s
financial position and strategy. These forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other important factors that could cause the actual results, performance or achievements of Westgold
to be materially different from future results, performance or achievements expressed or implied by such statements.
Actual events or results may differ materially from the events or results expressed or implied in any forward-looking
statement and deviations are both normal and to be expected. Other than required by law, neither Westgold, their
officers nor any other person gives any representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements will actually occur.
You are cautioned not to place undue reliance on those statements.
Westgold Resources Limited Annual Report 2021
19
Fiona Van Maanen - Non-Executive Director
(Appointed 6 October 2016)
Mrs Van Maanen is a CPA, holds a Bachelor of
Business (Accounting) and a Graduate Diploma in
Company Secretarial Practice. Mrs Van Maanen has
significant experience in corporate governance,
financial management and accounting in the mining
and resources industry. Mrs Van Maanen serves on the
Company’s Audit, Risk & Compliance Committee and
Remuneration & Nomination Committee.
During the past three years, she has served as a director
of the following public listed company:
– Pantoro Limited (Appointed 4 August 2020).
Peter Schwann - Independent Non-Executive Director
(Appointed 2 February 2017)
Mr Schwann (Assoc. in Applied Geology, FAIG, MSEG)
is a highly experienced, internationally recognised
geologist and mining executive. Mr Schwann has broad
experience across multiple commodities with extensive
geological capability as well as significant operational
management. Mr Schwann serves on the Company’s
Audit, Risk & Compliance Committee and Remuneration
& Nomination Committee.
During the past three years, he has served as a director
of the following public listed company:
– Aruma Resources Limited (appointed 10 February
2010).
Gary Davison - Non-Executive Director
(Appointed 1 June 2021)
Mr Davison, FAusIMM (CP), is a highly regarded mining
engineer with over 40 years of worldwide mining
experience. Gary holds a Diploma in Engineering (Mining)
and a Masters in Mineral and Energy Economics. He is
also the Managing Director of Australia’s premier mining
consultancy Mining One Pty Ltd. Mr Davison serves on
the Company’s Audit, Risk & Compliance Committee and
Remuneration & Nomination Committee.
During the past three years, he has served as a director
of the following public listed company:
– Nagambie Resources Ltd (Appointed 15 May 2019,
resigned 8 September 2021).
DIRECTOR’S REPORT
The Directors submit their report together with the
financial report of Westgold Resources Limited (Westgold
or the Company) and of the Consolidated Entity, being
the Company and its controlled entities (the Group), for
the year ended 30 June 2021.
DIRECTORS
The names and details of the Company’s Directors in
office during the financial year and until the date of this
report are as follows. Directors were in office for this
entire period unless otherwise stated.
Names, qualifications, experience and special
responsibilities
Peter Cook – Non-Executive Chairman
(Appointed 19 March 2007)
Mr Cook is a geologist and mineral economist and
holds a Bachelor of Science (Applied Geology), Master
of Science in Mineral Economics and a MAusIMM.
Mr Cook has over 35 years of experience in the fields
of exploration, project, operational and corporate
management of mining companies.
During the past three years, he has also served as a
director of the following public listed companies:
– Nelson Resources Limited (Appointed 4 June 2013 -
Resigned 1 February 2019)
– Castile Resources Limited (Appointed 7 June 2011)
– Breaker Resources NL ( Appointed 6 September 2021)
– Titan Minerals Limited (Appointed 30 August 2021).
Wayne Bramwell - Executive Director
(Appointed 3 February 2020)
Mr Bramwell is a metallurgist and mineral economist,
experienced director and mining executive with
extensive project and corporate development, executive
management and governance expertise in precious and
base metal companies spanning nearly three decades.
He holds a Bachelor of Science in Extractive Metallurgy,
a Graduate Diploma in Business, a Master of Science in
Mineral Economics and is a graduate of the Australian
Institute of Company Directors (GAICD). Mr Bramwell
served on the Company’s Audit, Risk & Compliance
Committee and Remuneration & Nomination Committee.
During the past three years, he has served as a director
of the following public listed companies:
– CZR Resources Limited (appointed 3 November 2020,
resigned 19 February 2021)
– Azure Minerals Limited (appointed 14 October 2020,
resigned 19 February 2021)
– Ardea Resources Limited (appointed 29 January 2018,
resigned 3 July 2020).
20
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT COMPANY SECRETARY
Lisa Smith (Appointed 30 December 2019)
Ms Smith holds a Bachelor of Laws and a Bachelor of Commerce and brings over 15 years legal experience across a
broad range of practice areas including commercial and corporate, regulation and compliance as well as experience
with secretarial duties. Ms Smith has previously acted as principal lawyer for a private resources industry services firm
and has substantial policy and advocacy experience.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the Directors in the shares and options of the Company were:
Director
PG Cook
FJ Van Maanen
PB Schwann
WC Bramwell
GR Davison
Total
Fully Paid
Ordinary
Shares
Options/
Rights
10,596,241
387,316
435,521
–
34,150
–
–
–
–
–
11,065,912
387,316
Excluding shares issued under the Dividend Reinvestment Plan.
PRINCIPAL ACTIVITIES
The principal activities during the year of the Group were the exploration, development and operation of gold mines,
primarily in Western Australia.
EMPLOYEES
The Group had 1,051 employees at 30 June 2021 (2020: 934).
CORPORATE OVERVIEW
Westgold is an explorer, mine developer, operator and gold producer with a large and strategic land package in the
Murchison region of Western Australia. The Company has been a prolific deal maker and after listing on the ASX in
December 2016 has consolidated over 1,300 km2 of mining titles that encompass the Fortnum operations (in the north),
the Meekatharra operations (in the centre) and the Cue operations (in the south), of our Murchison portfolio.
The gold endowment of the region is extensive with the Murchison being one of the largest historic goldfields in
Western Australia. To date the Murchison has produced more than 10 million ounces of gold with Westgold reporting a
total Mineral Resource of 8.8 million ounces with 2.56 million ounces of gold in Ore Reserves (refer ASX announcement
13 August 2020).
Westgold operates six underground mines, several open pits and three processing plants (currently with an installed
processing capacity of ≈4 Mtpa) and in 2021 established a new Exploration and Growth division to explore and assess
the next suite of potential gold mines in this prolific gold mining region.
Westgold has continued to build its production profile since listing and in FY2021, gold output totalled 245,411 ounces
from its Fortnum, Meekatharra and Cue Gold operations.
Westgold Resources Limited Annual Report 2021
21
CORPORATE STRUCTURE
Westgold operates a corporate structure that places its operations with wholly owned subsidiaries as depicted in the
following corporate organisational structure:
WESTGOLD
RESOURCES LIMITED
ACN 009 260 306
Aragon Resources Pty Ltd
Big Bell Gold Operations Pty Ltd
Minterra Pty Ltd
ACN 114 714 662
ACN 090 642 809
ACN 080 756 172
Fortnum Gold
Operations
(FGO)
Cue Gold
Operations
(CGO)
Meekatharra
Gold Operations
(MGO)
Mining
Services
(MPL)
OPERATING AND FINANCIAL REVIEW
IMPACT OF COVID-19
Westgold did not apply for or receive any COVID-19 funding support from the Federal or State governments during
FY2021.
Westgold utilises a predominantly fly-in, fly-out (FIFO) and drive-in, drive-out (DIDO) workforce to operate its
Murchison gold assets. Ongoing state and regional border closures, often with less than 24 hours’ notice, continued to
impact operations during the year.
At the onset of COVID-19 restrictions, approximately 85% of our personnel were domiciled in Western Australia, the
remaining 15% commuting from outside of Western Australia. Consequently, to sustain our operations in the face
of snap lock downs, border closures and travel restrictions, Westgold dynamically responded to the ever-changing
environment to protect its workforce and sustain operations.
The financial impact of COVID-19 is difficult to estimate but it is clear that many of the inputs to our business have
escalated during FY2021 as sector demand for labour, equipment and mining consumables outstripped short-term
availability.
Westgold continues to closely monitor the health advice across Australia and work cooperatively with government
departments and other stakeholders to mitigate impacts of COVID-19.
22
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT DIRECTOR’S REPORT OPERATING RESULTS
The Group’s full year operating results improved substantially compared to the previous year. Overall, the results reflect
the continued maturity and growth of the core assets following the rationalisation on non-core assets and focus on the
expansion of the Group’s activities in the Murchison Region.
These actions over the year are reflected in the following key measures:
– Consolidated revenue increased by 16% to $571,170,198 (2020: $492,268,271);
– Consolidated total cost of sales decreased by 2% to $455,456,036 (2020: $462,752,732);
– Profit after income tax increased by 122% to $76,751,880 (2020: $34,607,315).
REVIEW OF FINANCIAL CONDITION
The Consolidated Statement of Cash Flows reflects a closing cash and cash equivalents of $150,684,029
(2020: $137,564,914).
Operating Activities
Group cash flow generated by operating activities increased on that of the previous year with a total inflow of
$249,141,949 (2020: $155,731,640).
Investing Activities
Cash flows used in investing activities across the Group increased on that of the previous year with a total outflow of
$213,805,325 (2020: $122,278,247).
Cash flow applied to investing activities in the current year relate to key growth capital at the Big Bell underground mine
(CGO) and the Bluebird and South Emu underground mines (MGO). Other capital investment was sustaining capital in
all of the operating underground mines to maintain developed tonnes and production output at similar levels.
Total capital investment in mine properties and development, exploration and evaluation expenditure and property, plant
and equipment during the current year was $266,190,255 (2020: $210,949,085), broken into key operations as follows:
– MGO $87,777,406 (2020: $82,842,250);
– CGO $140,595,398 (2020: $99,721,650);
– FGO $37,817,451 (2020: $27,391,009); and
– Other $Nil (2020: $994,176).
Capital commitments of $19,360,999 (2020: $10,098,601) existed at the reporting date, principally relating to the
purchase of plant and equipment.
Exploration activities continued at all operations during the year with $14,249,778 (2020: $14,049,293) expended.
A review of accumulated land titles was completed resulting in a write-off of $86,058 (2020: $356,317) of carrying values.
Financing Activities
Net cash flows used in financing activities amounted to $22,217,509 (2020: Inflow of $36,915,232).
– The Group received $8,373,750 from the conversion of 3,625,000 listed options at $2.31;
– The Group’s interest bearing loans and borrowings increased to $45,075,838 (2020: $37,826,450) with marginal
additions to the mobile mining fleet with the expanded growth activities.
Westgold Resources Limited Annual Report 2021
23
SHARE ISSUES DURING THE YEAR
The following share issues have been undertaken during the year:
Date
12 October 2020
22 October 2020
28 October 2020
11 November 2020
30 June 2021
Total
DIVIDENDS
Number of
shares
Purpose
350,000
Issued on conversion of options
950,000
20,000
Issued on conversion of options
Issued on conversion of options
2,305,000
Issued on conversion of options
69,936
Issued on conversion of options
3,694,936
No dividends were paid to members in respect of the year ended 30 June 2020.
The Board has taken into consideration the uncertainties that COVID-19 has created upon personnel availability, their
movement and the integrity of the supply chain that supports our operations when considering any payment of a
dividend. These uncertainties remain for FY2022 and as such the Board has taken a pragmatic view and recommended
the payment of a maiden cash dividend (unfranked) of 2.0 cents per fully paid share for FY2021 in recognition of
Westgold’s improved financial metrics for this year. The Directors will establish a dividend reinvestment plan (“DRP”)
with the issue price for shares under the DRP being at a 7.5% discount to the daily volume weighted average price
(“VWAP”) of the Company’s share price for the 5 business days from the commencing of trading after the record date.
The final dividend will have a record date of 1 October 2021 and a payment date of 15 October 2021.
REVIEW OF OPERATIONS
Westgold remains the dominant explorer, developer, operator and gold mining company in the Central Murchison
region. The Company has ≈ 350 mining titles covering 1,300 km2 across this highly prospective region and operates six
underground mines, several open pits and three processing plants (currently with an installed processing capacity of
≈4 Mtpa).
Westgold is unique in that it is an owner-operator of all of its underground and open pit mines and as such this vertical
integration provides greater cost control and operating flexibility across the Company’s assets.
Westgold continued to streamline the business in FY2021 and disposed of its non-core lithium royalties. The Group’s
production profile continues to grow and in FY2021 Westgold delivered a record 245,411 ounces from its Fortnum,
Meekatharra and Cue Gold operations with the Company also establishing a new Exploration and Growth unit to
define, explore and develop the next suite of mineral assets within the Westgold landholding.
Fortnum Gold Operations (FGO)
FGO is located in the Proterozoic age Bryah Basin stratigraphy approximately 150 km northwest of Meekatharra and
represents the northernmost group of Westgold assets in the Central Murchison region. These assets encapsulate
the historic mining centres of Labouchere, Fortnum, Horseshoe and Peak Hill which collectively has delivered
approximately 2 million ounces of reported gold production.
The FGO processing hub incorporates the 0.9 Mtpa Fortnum carbon-in-leach (CIL) processing plant, a 200-person
village, airstrip and associated mining infrastructure required to support a remote FIFO operation. Mining output is
currently dominated by the Starlight underground mine with supplementary, free on surface low grade stocks providing
a blended feedstock to the plant.
Gold output for the year was 60,265 ounces at a C1 Cash Cost of $1,009 per ounce and an all-in sustaining cost (AISC)
of $1,304 per ounce as disclosed in the table on page 26.
The increase in the gold output and associated increase in the gold price resulted in an increase in revenue to
$140,661,201 (2020: $130,688,889). Segment profits also increased to $42,842,540 (2020: $33,236,970).
24
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT DIRECTOR’S REPORT In addition to current Mineral Resources and Ore Reserves, FGO has a number of exploration targets which should
underwrite sustainable gold production at the operations beyond existing targets, including:
– extensions to the Starlight underground mine;
– open pit mining from the historic Yarlarweelor, Nathans and Labouchere mines;
– the new Regent and Messiah deposits; and
– new targets within the proximate Peak Hill tenements.
This procession of potential open pit mines can replace the low-grade feedstock and extend the current mine life
expectation to in excess of six years
Meekatharra Gold Operations (MGO)
MGO is located around the regional town of Meekatharra and encompasses Westgold’s central group of assets
including the historic gold mining centres of Meekatharra North, Paddy’s Flat, Yaloginda, Nannine and Reedy’s.
The MGO processing hub incorporates the 1.6-1.8 Mtpa Bluebird processing plant, a 420-person village, and associated
mining infrastructure required to support a large FIFO and DIDO mining operation. The Bluebird plant receives
underground ore from the Paddy’s Flat, South Emu - Triton and Bluebird underground mines and supplementary lower
grade open pit ore from Five Mile Well, Maid Marion, Albury Heath and Aladdin open pits.
Gold output increased and revenue improved to $240,726,306 (2020: $211,570,622). Segment profits increased to
$32,539,833 (2020: $8,379,385).
Gold output from the operation for the year was 103,061 ounces at a C1 Cash Cost of $1,309 per ounce and an AISC
of $1,628 per ounce as disclosed in the table on page 26.
In addition to current mineral resources and reserves MGO has a number of exploration targets which should
underwrite sustainable gold production at the operations beyond existing targets, including:
– extensions to the existing South Emu – Triton, Bluebird and Paddy’s Flat Mines;
– Boomerang, Rand and Rand North in the Reedy Mining Area; and
– New targets across the central package where drilling under 100m in depth is sparse.
Cue Gold Operations (CGO)
CGO is located around the regional town of Cue and encompasses Westgold’s southern-most group of Murchison
assets including the historic mining centres of Big Bell, Cuddingwarra, Day Dawn, Tuckabianna and Pinnacles. This
package includes two of Australia’s most prolific past producers in the Big Bell mine (2.6 million ounces) and the Great
Fingall mine (1.2 million ounces).
The CGO processing hub pivots on the 1.2-1.4 Mtpa Tuckabianna processing plant, a 136-person village at Big Bell,
a 250-person camp at Cue and associated mining infrastructure to support a large FIFO and DIDO mining operation.
The Tuckabianna plant receives underground ore from the large Big Bell underground and the smaller Comet
underground mines. After three years of de-watering, mine rehabilitation and refurbishment, Big Bell mine production
began to rise in FY2021 with steady state operations expected to be achieved in H2 FY2022.
During the year gold output and revenue increased to $189,713,622 (2020: $148,830,137). Gold output was focused on
minor short-term open pit mines to build capacity, whilst the major Big Bell mine rehabilitation and development works
were completed, resulting in a segment profit of $40,233,943 (2020: Loss of $12,641,721).
Gold output for CGO was 82,086 ounces at a C1 Cash Cost of $1,079 per ounce and an AISC of $1,222 per ounce as
disclosed in the table on page 26.
In addition to current Mineral Resources and Ore Reserves, CGO has a number of exploration targets which should
underwrite sustainable gold production at the operations beyond existing targets, including:
– The Great Fingall – Day Dawn area – which has hosted the significant past producers of Great Fingall and Golden
Crown (historic head grades of 19.5g/t and 14g/t respectively);
– The new Fender Mine – a shallow underground target identified beneath Westgold’s Fender open pit;
– Additional shallow targets on the Big Bell line of lode beneath the 700, 1600 and the Shocker pits; and
– Open pit targets within the Cuddingwarra Mining centre.
Westgold Resources Limited Annual Report 2021
25
Mining Services Division (MPL)
Westgold is unique in the WA mining sector in that it is predominantly an owner-operator of its mines, with the
underground mining services division operating through a 100% owned subsidiary.
During FY2021 MPL was refocussed to provide services exclusively to Westgold and these services were undertaken on
a cost re-imbursement basis. This resultantly reduced external revenue to $69,069 (2020: $1,178,623).
Westgold Operating Performance by Operation
Year Ended 30 June 2021
Physical Summary
UG Ore Mined
UG Grade Mined
OP Ore Mined
OP Grade Mined
Ore Processed
Head Grade
Recovery
Gold Produced
Gold Sold
Achieved Gold Price
Cost Summary
Mining
Processing
Admin
Stockpile Adjustments
C1 Cash Cost (produced)1
Royalties
C2 Cash Cost (produced)
Corporate Costs
Sustaining Capital
All-in Sustaining Costs2
Project Startup Capital
Plant and Equipment
Exploration Holding Cost
All-in Cost3
MURCHISON
MGO
CGO
BRYAH
FGO
GROUP
Units
t
g/t
t
g/t
1,024,569
813,602
703,508
2,541,679
2.87
2.63
306,580
335,383
1.32
1.94
2.71
–
–
2.75
641,962
1.65
t
1,684,490
1,261,129
822,326
3,767,945
g/t
%
oz
oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
2.23
85.21
103,061
103,728
2,321
2.30
88.21
82,086
81,326
2,333
2.40
95.21
60,265
60,011
2,344
2.29
88.40
245,411
245,066
2,330
873
376
74
(14)
1,309
125
1,434
11
183
1,628
313
124
72
687
377
73
(58)
1,079
60
1,139
14
69
1,222
1,183
126
54
647
347
71
(56)
1,009
68
1,077
22
205
1,304
207
62
40
755
369
73
(39)
1,158
89
1,247
14
150
1,411
578
109
58
2,137
2,585
1,613
2,156
26
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT DIRECTOR’S REPORT Achieved Gold Price
$/oz
2,052
Year Ended 30 June 2020
Physical Summary
UG Ore Mined
UG Grade Mined
OP Ore Mined
OP Grade Mined
Ore Processed
Head Grade
Recovery
Gold Produced
Gold Sold
Units
t
g/t
t
g/t
t
g/t
%
oz
oz
Cost Summary
Mining
Processing
Admin
Stockpile Adjustments
C1 Cash Cost (produced)
Royalties
Sustaining Capital
Corporate Costs
All-in Sustaining Costs
Project Startup Capital
Exploration Holding Cost
All-in Cost
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
MURCHISON
MGO
CGO
BRYAH
FGO
GROUP
898,911
462,479
497,578
1,858,968
3.60
2.99
3.18
3.34
379,909
563,329
1.55
1.34
–
–
943,238
1.42
1,508,812
1,270,953
865,254
3,645,019
2.62
81.90
104,088
103,095
746
344
61
20
1.89
90.75
70,223
70,893
2,099
985
480
78
6
2.29
95.56
60,839
61,208
2,135
568
360
63
86
2.29
88.23
235,150
235,196
2,088
771
389
67
33
1,171
1,549
1,077
1,260
122
193
10
1,496
412
64
1,972
58
107
15
1,729
988
63
2,780
67
142
22
1,308
164
52
1,524
89
154
15
1,518
520
60
2,098
1. C1 Cash Cost (C1): represents the cost for mining, processing and administration after accounting for movements in inventory
(predominantly ore stockpiles). It includes net proceeds from by-product credits, but excludes the cost of royalties and capital costs for
exploration, mine development and plant and equipment.
2. All-in Sustaining Cost (AISC): is made up of the C1 cash cost plus royalty expense, sustaining capital expense and general corporate and
administration expenses.
3. All-in Cost (AIC): is made up of the AISC plus growth (major project) capital and discovery expenditure.
C1, C2, AISC and AIC are non-IFRS measures and have not been audited.
CORPORATE
Gold Forward Contracts
At the end of the financial year, the Group had unrecognised sales contracts for 156,000 ounces at an average price of
$2,133 per ounce ending in March 2023, which the Group will deliver physical gold to settle (refer to Note 5).
Lithium Royalties
Westgold divested the Mount Marion Lithium Royalty to a third party during FY2021 for cash (refer to Note 15).
Westgold Resources Limited Annual Report 2021
27
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Total equity increased to $607,360,307 (2020: $521,860,827). This included the conversion of 3,625,000 listed options
equating to cash proceeds of $8,373,750.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
The directors, at their meeting on 27 August 2021, recommended a final unfranked dividend for the year ended on
30 June 2021 of 2 (two) cents per share to all ordinary shareholders registered at 1 October 2021. The amount is
not recognised as a liability at 30 June 2021. The Directors will establish a DRP with the issue price for shares under
the DRP being at a 7.5% discount to the daily VWAP of the Company’s share price for the 5 business days from the
commencing of trading after the record date.
There have been no other significant events after the balance date.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group is expected to continue exploration, development, operations and production and marketing of gold bullion
in Australia and will continue the development of its gold exploration projects.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group’s operations are subject to the relevant Commonwealth and State environmental protection legislations.
The Group holds various environmental licenses issued under these laws and these licenses include conditions and
regulations in relation to specifying limits on discharges into the air, surface water and groundwater, the storage of hazardous
substances and the rehabilitation of areas disturbed during the course of exploration, mining and processing activities.
The Board monitors all environmental performance obligations. Our operations are subjected to regular Government
agency audits and site inspections. There have been no material breaches of the Group’s licenses and all mining and
exploration activities have been undertaken in compliance with the relevant environmental regulations.
SHARE OPTIONS AND PERFORMANCE RIGHTS
Employee options and rights
During the year ending 30 June 2021, the Company granted 1,486,500 unlisted Employee Rights (WGXO) and 33,681
unlisted Employee Options to senior management under the Employee Share Option Plan. Included in this issue were
233,506 Employee Rights granted to the Executive Chairman.
The principal terms of the Employee Rights are:
– The Employee Rights have been issued for nil consideration;
– Each Employee Right carries an entitlement to one fully paid ordinary share in the Company for each Employee Right
vested;
– Vesting only occurs after the end of the Performance Periods (30 June 2023) and the number of Employee Rights
that vest (if any) will depend on:
– Relative Total Shareholder Return;
– Absolute Total Shareholder Return;
– Absolute Earnings Per Share;
– Operational Growth;
– Employee Rights that vest will expire if not exercised on the vesting date;
– Unvested Employee Rights lapse on cessation of a holder’s employment with Westgold;
– Any Employee Rights that do not vest after the end of the Performance Periods will automatically lapse; and
– No amount is payable by a holder of Employee Rights in respect of the shares allocated upon vesting of the
Employee Option.
28
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT DIRECTOR’S REPORT Unissued shares
As at the date of this report, unissued ordinary shares under share based payment arrangements are:
Zero Exercise Price Options (ZEPOs) /
Performance Rights (Rights)
Number of
shares
Exercise
Price
ZEPOs - Tranche 2 - Employees
ZEPOs - Tranche 3 - Directors
ZEPOs - Tranche 3 - Employees
Rights – Tranche 4 - Directors
Rights – Tranche 4 - Employees
Total
205,768
153,810
367,820
233,506
1,252,994
2,213,898
Zero
Zero
Zero
Zero
Zero
Expiry Date
30 June 2023
30 June 2022
30 June 2022
30 June 2023
30 June 2023
Holders of these instruments do not have any right, by virtue of instrument, to participate in any share issue of the
Company or any related body corporate.
Shares issued as a result of exercising options
During the financial year 3,694,936 listed options were converted to acquire fully paid ordinary shares in the Company,
refer to Note 26 for further details.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium in respect of a contract of insurance to insure Directors and
Officers of the Company and related bodies corporate against those liabilities for which insurance is permitted under
section 199B of the Corporations Act 2001. Disclosure of the nature of the liabilities and the amount of the premium is
prohibited under the conditions of the contract of insurance.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors held during the year and the
number of meetings attended by each Director was as follows:
PG Cook
PB Schwann
FJ Van Maanen
WC Bramwell
GR Davison
Directors
Audit, Risk & Compliance
Committee
Remuneration & Nomination
Committee
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
19
19
19
19
2
19
19
19
19
2
–
2
2
2
–
–
2
2
2
–
–
2
2
2
–
–
2
2
2
–
Westgold Resources Limited Annual Report 2021
29
Committee Membership
As at the date of this report, the Company had an Audit, Risk & Compliance Committee and a Remuneration and
Nomination Committee of the Board of Directors. Members acting on these committees during the year were:
Audit, Risk & Compliance Committee
Remuneration and Nomination Committee
FJ Van Maanen *
PB Schwann
WC Bramwell (Resigned 1 August 2021)
WC Bramwell * (Resigned 1 August 2021)
PB Schwann *
FJ Van Maanen
GR Davison (Appointed 1 August 2021)
GR Davison (Appointed 1 August 2021)
* Designates the Chairperson of the Committee.
30
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT DIRECTOR’S REPORT REMUNERATION REPORT (AUDITED)
CONTENTS
1. Remuneration report overview
2. Remuneration and Nomination Committee responsibilities
3. Remuneration governance
4. Non-Executive Director remuneration
5. Executive remuneration
6. Performance and executive remuneration outcomes
7. Executive employment arrangements
8. Additional statutory disclosure
1. REMUNERATION REPORT OVERVIEW
The Directors of Westgold Resources Limited present the Remuneration Report (the Report) for the Group for the year
ended 30 June 2021 (FY2021). This Report forms part of the Directors’ Report and has been audited in accordance with
section 300A of the Corporations Act 2001 and its regulations.
The Report details the remuneration arrangements for Key Management Personnel (KMP) being the:
– Non-Executive Directors (NEDs); and
– Executive Chairman, executive directors and senior executives (collectively “the executives”).
KMP are those who directly, or indirectly, have authority and responsibility for planning, directing and controlling the
major activities of the Group.
Details of KMP of the Group are set out below:
Position
Appointed
Resigned
Name
(i)
Non-Executive
Directors
FJ Van Maanen
PB Schwann
WC Bramwell
GR Davison
(ii)
Executive Director
Independent Non-Executive Director
06/10/2016
Independent Non-Executive Director
02/02/2017
Independent Non-Executive Director1
03/02/2020
Independent Non-Executive Director
01/06/2021
PG Cook
Executive Chairman2
19/03/2007
(iii)
Senior Executives
DA Fullarton
Chief Executive Officer
A Buckingham
Chief Operating Officer
SH Heng
L Smith
Chief Financial Officer3
Company Secretary & General Counsel
30/12/2019
01/07/2020
01/10/2019
02/08/2021
–
–
–
–
–
–
–
–
–
1. WC Bramwell appointed Executive Director with effect from 1 August 2021.
2.
3.
PG Cook remained on the board as Non-Executive Chairman with effect from 1 August 2021.
SH Heng appointed Chief Financial Officer with effect from 2 August 2021.
Westgold Resources Limited Annual Report 2021
31
for the year ended 30 June 2021FINANCIAL REPORT 2.
REMUNERATION AND NOMINATION COMMITTEE RESPONSIBILITIES
Remuneration and nomination committee duties
The remuneration and nomination committee is a subcommittee of the Board and are chartered to:
– Oversee formulation and review of the Company’s organisational development, succession planning for the Group’s
Executive Directors and senior executives;
– Approve, review and refer to the Board matters relating to the appointment and the removal of executives who report
directly to the Managing Director and or Executive Director to ensure that an appropriate Board succession plan is in
place;
– Ensure that the performance of the Board and its members is regularly reviewed; and
– Assist the Chairman in advising Directors about their performance and possible retirement.
Remuneration report at FY2020 AGM
The FY2020 remuneration report received positive shareholder support at the FY2020 AGM with a vote of 98% in
favour.
Director succession planning
The Remuneration and Nomination Committee continually considers the changing needs of the Group with the aim to
maintain consistent governance over all activities.
During the financial year, Westgold appointed GR Davison as an Independent Non-Executive Director on 1 June 2021.
The Company has further re-aligned the structure of the Board with the transition of PG Cook to Non-Executive
Chairman and the appointment of WC Bramwell as Executive Director. These changes were effective 1 August 2021.
The current Board structure is as follows:
Name
PG Cook
WC Bramwell
FJ Van Maanen
PB Schwann
GR Davison
Position
Non-Executive Chairman
Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
3. REMUNERATION GOVERNANCE
The Remuneration and Nomination Committee makes recommendations to the Board on:
– Non-Executive Director fees;
– Executive remuneration (Directors and senior executives); and
– The executive remuneration framework and incentive plan policies.
The Remuneration and Nomination Committee assess the appropriateness of the nature and amount of remuneration
of Non-Executive Directors and executives on a periodic basis by reference to relevant employment market conditions
with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Directors
and executive team. The composition of the Remuneration and Nomination Committee is set out on page 30 of this
financial report.
Use of remuneration advisors
The Remuneration and Nomination Committee did not engage any remuneration advisors during the current year.
Recommendations applied
A short-term incentive (STI) policy that has the objective of linking executive remuneration with the achievement of
the Group’s key operational and financial targets. The STI will be an annual “at risk” component of remuneration for
executives that is payable in cash based on performance against key performance indicators (refer to section 4).
32
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) A long-term incentive (LTI) policy focussing on the efforts of executives on long-term value creation to further
align management’s interests with those of the shareholders. The LTI is considered to be an “at risk” component of
remuneration for executives that is payable in performance rights (Rights) being the right to acquire an ordinary share in
Westgold for nil consideration subject to performance conditions.
The Executive Chairman has a maximum LTI opportunity of 80% of fixed remuneration and other executives have a
maximum LTI opportunity of 40% of fixed remuneration. The number of options granted is determined by dividing the
LTI remuneration dollar amount by the volume weighted average price of Westgold shares traded on the ASX during the
5-day trading period prior to the day of the grant.
Rights are granted with a three-year performance period. Any Rights that do not vest will lapse after testing. Rights will
be subject to the following performance conditions:
– Growth in Relative Total Shareholder Return (RTSR) (25%)
– Growth in Absolute Total Shareholder Return (ATSR) (25%)
– Growth in Absolute Earnings Per Share (EPS) (25%)
– Operational Growth (25%)
The Rights vest over a period of three years, subject to meeting performance measures. Where a participant ceases
employment prior to the vesting of their Rights, the Rights are forfeited. The service condition is met if employment
with Westgold is continuous for the period commencing on the grant date until the date the Rights vest. The
measurement period for FY2021 Rights is 1 July 2020 to 30 June 2023.
Participants who commence service during the course of the first year in the vesting period will receive a pro-rata
allotment at the discretion of the Board. This would be based on commencement salary with the number of Rights
proportioned from the commencement date over the full three-year vesting period.
4. NON-EXECUTIVE DIRECTOR REMUNERATION
NED Remuneration Policy
The NED fee policy is designed to attract and retain high calibre directors who can discharge the roles and
responsibilities required in terms of good governance, strong oversight, independence and objectivity.
The Company’s constitution and the ASX listing rules specify that the NED fee pool limit, shall be approved periodically
by shareholders. The last determination was on listing of the Company was approved at the Extraordinary General
Meeting of shareholders on 24 November 2016 with an aggregate fee pool of $500,000 per year. The amount of the
aggregate remuneration sought to be approved by shareholders and the manner in which it is paid to NEDs is reviewed
annually against comparable companies. The Board also considers advice from external advisors when undertaking the
review.
Non-executive directors are encouraged to hold shares in the Company and align their interests with the Company’s
shareholders. The shares are purchased by the directors at the prevailing market share price.
NED Remuneration Structure
The remuneration of NEDs consists of director’s fees. There is no scheme to provide retirement benefits to NEDs other
than statutory superannuation. NEDs do not participate in any performance-related incentive programs. Fees paid to
NEDs cover all activities associated with their role on the Board and any sub-committees. Additional fees will be paid
to NEDs in FY2021 for being a Chair of a sub-committee. NEDs are entitled to fees or other amounts as the Board
determines where they perform special duties or otherwise perform extra services on behalf of the Company. They
may also be reimbursed for out-of- pocket expenses incurred as a result of their directorships.
Position
Non-Executive Chairman
Non-Executive Director
Chairperson of Audit, Risk and Compliance Committee
Member of Audit, Risk and Compliance Committee
Chairperson of Remuneration and Nomination Committee
Member of Remuneration and Nomination Committee
Annual Fees $
175,000
85,000
10,000
7,500
10,000
7,500
Westgold Resources Limited Annual Report 2021
33
5. EXECUTIVE REMUNERATION
Executive Remuneration Policy
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
– competitive and reasonable, enabling the Company to attract and retain high calibre talent;
– aligned to the Company’s strategic and business objectives and the creation of shareholder value;
– transparent and easily understood; and
– acceptable to shareholders.
The Company’s approach to remuneration ensures that remuneration is competitive, performance-focused, clearly
links appropriate reward with desired business performance and is simple to administer and understand by executives
and shareholders.
In line with the remuneration policy, remuneration levels are reviewed annually to ensure alignment to the market and
the Company’s stated objectives to provide a base level of remuneration which is both appropriate to the position and
is competitive in the market.
Executive Remuneration Structure
The Company’s remuneration structure provides for a combination of fixed and variable pay with the following
components:
– fixed remuneration
– short-term incentives (STI)
– long-term incentives (LTI)
In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company
performance, a portion of executives’ remuneration is placed “at risk”. The relative proportion of FY2021 potential total
remuneration packages split between the fixed and variable remuneration is shown below:
Executive
Executive Chairman
Other Executives
Elements of remuneration
Fixed remuneration
Fixed
remuneration
67%
75%
STI
13%
11%
LTI
20%
14%
Fixed remuneration consists of base salary, superannuation and other non-monetary benefits and is designed to
reward for:
– the scope of the executive’s role;
– the executive’s skills, experience and qualifications; and
– individual performance.
34
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) Short Term Incentive (STI) arrangements
Under the STI, all executives have the opportunity to earn an annual incentive award which is delivered in cash. The STI
recognises and rewards annual performance.
How is it paid?
Any STI award is paid in cash after the assessment of annual performance.
How much can executives earn?
In FY2021, the STI dollar values that executives are entitled to receive as a
percentage of their fixed remuneration would not exceed 50% for the Executive
Chairman and 40% for the other executives.
How is performance measured? A combination of specific Company Key Performance Indicators (KPIs) is chosen
to reflect the core drivers of short-term performance and provide a framework for
delivering sustainable value to the Group and its shareholders.
These measures have been selected as they can be reliably measured, are key
drivers of value for shareholders and encourage behaviours in line with the
Company’s core values.
What KPIs were chosen?
The following KPIs were chosen for the 2021 financial year:
When is it paid?
What happens if an
executive leaves?
– KPI 1: Safety & Environmental Performance Targets (25%)
– KPI 2: All-in Sustaining Cost (AISC) relative to budget (25%)
– KPI 3: Gold production relative to budget (25%)
– KPI 4: Personal KPI reviewed by the Remuneration Committee (25%)
The STI award is determined after the end of the financial year following a review
of performance over the year against the STI performance measures by the
Remuneration and Nomination Committee. The Board approves the final STI award
based on this assessment of performance and the award is paid in cash up to three
months after the end of the performance period.
Where executives cease to be an employee of the Group:
– due to resignation or termination for cause, before the end of the financial year,
no STI is awarded for that year; or
– due to redundancy, ill health, death or other circumstances approved by the
Board, the executive will be entitled to a pro-rata cash payment based on
assessment of performance up to the date of ceasing employment for that year;
– unless the Board determines otherwise.
What happens if there
is a change of control?
In the event of a change of control, a pro-rata cash payment will be made based
on assessment of performance up to the date of the change of control (subject to
Board discretion).
Westgold Resources Limited Annual Report 2021
35
During the financial year a combination of financial and non-financial measures were used to measure performance for
STI rewards, with a score being calculated on the following measures:
Metric
Weighting
Targets
Safety - Medically Treated
Injury Frequency Rate (MTIFR)
Safety - Lost Time Injury
Frequency Rate (LTIFR)
Annual MTIFR decreases by 25% or more
10
Annual MTIFR stays within ±25%
Annual MTIFR increases by 25% or more
Annual LTIFR decreases by 25% or more
10
Annual LTIFR stays within ±25%
Annual LTIFR increases by 25% or more
Exceptional environmental management performance
Score
10
5
0
10
5
0
5
Environmental
5
No serious breaches of environmental management
2.5
AISC relative to budget
25
Gold Production relative to
budget
25
Serious breach of environmental management
Actual costs below budget by 10%
Actual costs below budget by between 5% and 10%
Actual costs below budget by less than 5%
Actual costs above budget by less than 5%
Actual costs above budget by between 5% & 10%
Actual costs above budget by more than 10%
Actual production above budget by 10%
Actual production above budget by between 5% and 10%
Actual production above budget by less than 5%
Actual production equals to budget
Actual production below budget by less than 5%
Underperforms budget by between 5% & 10%
Exceptional Effort and Exceptional Achievement
Exceptional Effort and Good Achievement
Personal performance
25
Good Effort and Good Achievement
Good Effort and Average Achievement
Average Effort and Average Achievement
Total
100
0
25
20
15
10
5
0
25
20
15
10
5
0
25
20
15
10
5
36
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) STI outcomes
Performance against those measure is as follows for FY2021:
Name
PG Cook
Position
Executive Chairman
DA Fullarton
Chief Executive Officer
A Buckingham
Chief Operating Officer
L Smith
Total
Company Secretary & General Counsel
Achieved STI
%
STI
Awarded(ii)
$
Maximum
potential
award
$
21
17
17
12
123,250
290,000
71,400
168,000
68,000
160,000
31,875
75,000
294,525
693,000
Performance is measured based on a combination of the operational segment performance as well as overall Group performance.
The FY2021 STI awards were paid in August 2021.
(i)
(ii)
(iii) A zero score was applied against both safety metrics in light of the fatality in December 2020.
Long Term Incentive (LTI) arrangements
Under the LTI plan, annual grants of options are made to executives to align remuneration with the creation of
shareholder value over the long-term. The following structures will be reviewed during FY2021.
How is it paid?
Executives are eligible to receive Performance Rights (Rights).
In FY2021 Rights were issued, being a right to acquire an ordinary share in Westgold
for a zero exercise price.
Are options eligible for dividends?Executives are not eligible to receive dividends on unvested rights.
How much can executives earn? The LTI dollar values that executives are entitled to receive as a percentage of
their fixed remuneration would not exceed 80% (FY2020: 50%) for the Executive
Chairman and 40% (FY2020: 40%) for the other executives.
The number of Rights granted were determined using the fair value at the date
of grant using a Monte Carlo valuation model, taking into account the terms and
performance conditions upon which the Rights were granted.
How is performance measured? Tranche 4 Rights will vest and become exercisable subject to the following
conditions:
A service condition which requires:
– Continued employment for the three-year period from 1 July 2020 to
30 June 2023.
A performance condition which comprises the following:
– Growth in Relative Total Shareholder Return (RTSR)
– Growth in Absolute Total Shareholder Return (ATSR)
– Growth in Absolute Earnings Per Share
– Operational Growth
Westgold Resources Limited Annual Report 2021
37
How is performance measured? Relative Total Shareholder Return Performance Condition
The Relative TSR Rights (25% of total Rights) are measured against a defined peer
group of companies over the service period, which the Board considers compete
with the Company for the same investment capital, both in Australia and overseas,
and which by the nature of their business are influenced by commodity prices and
other external factors similar to those that impact on the TSR performance of the
Company.
The vesting schedule for the Relative TSR measure is as follows:
Absolute Total Shareholder Return Performance Condition
The ATSR Rights (25% of total Rights) will vest subject to the performance of the
Company’s TSR over the service period. The ATSR will be measured by comparing
the 30 day VWAP at grant dated (30 June 2020) to the 30 day VWAP at vesting date
(30 June 2023).
The vesting schedule for the ATSR measure is as follows:
Absolute Earnings Per Share Performance Condition
The AEPS Rights (25% of total Rights) will vest subject to the annual growth rate
of the Company’s EPS over the service period. The AEPS will be measured by
comparing the EPS (excluding any non-recurring items) at the grant date (30 June
2020) to the EPS (excluding any non-recurring items) at vesting date (30 June 2023).
The vesting schedule for the AEPS measure is as follows:
38
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) How is performance measured? Operational Growth Performance Conditions
The Operation Growth Rights (25% of total Rights) will be measured by a
combination of Ore Reserve Growth (10%) and Production Growth (15%).
Ore Reserves will be measured based on the Reserve Statement as reported at the
end of the FY2021 financial year under JORC guidelines.
Production Growth will be measured as the cumulative annual growth rate over the
service period.
The vesting schedule for the Ore Reserves measure is as follows:
Ore Reserve Performance
Negative Growth
Depletion Replaced
% Contribution to the Number of
Employee Rights to Vest
0%
50%
Between depletion replaced and 10%
increase
Depletion replaced and 10% increase or
greater
Pro-rata from 50% to 100%
100%
The vesting schedule for the Production Growth measure is as follows:
Production Growth Performance
% Contribution to the Number of
Employee Rights to Vest
Negative Growth
5% growth
0%
50%
Above 5% per annum growth and below 10% per
annum growth
Pro-rata from 50% to 100%
10% per annum growth or greater
100%
When is performance measured? Tranche 4
What happens if an executive
leaves?
The measurement date is 31 March 2023 unless otherwise determined by the Board.
Executives must exercise the Rights on the vesting date.
Where executives cease to be an employee of the Group:
– due to resignation or termination for cause, then any unvested Rights will
automatically lapse on the date of the cessation of employment; or
– due to redundancy, ill health, death or other circumstances approved by
the Board, the executive will generally be entitled to a pro-rata number of
unvested Rights based on achievement of the performance measures over the
performance period up to the date of cessation of employment; and
– where an employee ceases employment after the vesting of their Rights, the
Rights automatically lapse after three months of cessation of employment.
unless the Board determines otherwise on compassionate grounds.
What happens if there is a change
of control?
In the event of a change of control, the performance-period end date will be
brought forward to the date of the change of control and rights will vest based on
performance over the shortened period (subject to Board discretion).
Westgold Resources Limited Annual Report 2021
39
6. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES
Remuneration earned by executives in 2021
The actual remuneration earned by executives in the year ended 30 June 2021 is set out in the Table on page 42.
This provides shareholders with a view of the remuneration paid to executives for performance in FY2020 year.
Use of board discretion over remuneration outcomes
During the year the Remuneration and Nomination Committee
– Considered the appropriateness of awarding STI in relation to performance outcomes and market conditions;
– Reviewed the personal KPIs for all senior executives in line with the short term incentive arrangements; and
– Determined the appropriate total remuneration packages for new appointments of senior executives to ensure
alignment to the market and the Company’s stated objectives.
STI performance and outcomes
A combination of financial and non-financial measures was used to measure performance for STI rewards. As a result
of the Group’s performance against those measures STIs rewarded for the FY2021 as disclosed in the Table on page 37,
were paid in August 2021.
LTI performance and outcomes
Performance Rights were granted in FY2021 (Tranche 4). ZEPO’s have been granted in Tranches during FY2019
(Tranche 2) and FY2020 (Tranche 3). All LTI’s are subject to performance hurdles.
– Tranche 2 has a three-year vesting period ending in June 2021.
– Tranche 3 has a three-year vesting period ending in June 2022.
– Tranche 4 has a three-year vesting period ending in June 2023.
The Executive Chairman PG Cook was granted 233,506 Tranche 4 LTI’s in November 2020.
Senior Executives were granted a total 405,615 Tranche 4 LTI’s in May 2020 under the ESOP.
For further details of options granted and vested refer to Table 3 below.
Overview of Company performance
The table below sets out information about Westgold’s earnings and movements in shareholder wealth for the past five
years up to and including the current financial year.
Closing share price
Profit (loss) per share (cents)
Net tangible assets per share**
Dividend paid per shares (cents)
30 June 17 *
30 June 18 *
30 June 19 *
30 June 20
30 June 21
$1.84
5.18
$0.98
–
$1.85
(0.34)
$1.12
–
$1.88
3.74
$1.14
–
$2.09
8.65
$1.24
–
$1.88
18.16
$1.43
–
The comparatives have not been adjusted for changes due to the adoption of AASB 15, AASB 16 and AASB 9.
*
** Net tangible assets per share include right of use assets and lease liabilities.
Clawback of remuneration
In the event of serious misconduct or material misstatement in the Group’s financial statements, the Board has the
discretion to reduce, cancel or clawback any unvested short-term incentives or long-term incentives.
Share trading policy
The Westgold trading policy applies to all Non-Executive Directors and Executives. The policy prohibits employees
from dealing in Westgold securities while in possession of material non-public information relevant to the Group.
Executives must not enter into any hedging arrangements over unvested long-term incentives under the Group’s
long-term incentive plan. The Group would consider a breach of this policy as gross misconduct, which may lead to
disciplinary action and potentially dismissal.
40
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) 7. EXECUTIVE EMPLOYMENT ARRANGEMENTS
A summary of the key terms of employment agreements for executives in place at 30 June 2021 is set out below.
There is no fixed term for executive service agreements and all executives are entitled to participate in the Company’s
STI and LTI plans. The Company may terminate employment agreements immediately for cause, in which the executive
is not entitled to any payment other than the value of fixed remuneration and accrued leave entitlements up to the
termination date.
Name
PG Cook (Executive Chairman)
DA Fullarton (Chief Executive Officer)
A Buckingham (Chief Operating Officer)
Base Salary $ Superannuation
Notice
Period
Termination Payment
580,000
420,000
400,000
9.5%
9.5%
9.5%
9.5%
3 months
6 months base salary
3 months
3 months
3 months
Per NES
Per NES
Per NES
L Smith (Company Secretary & General Counsel)
250,000
– NES are National Employment Standards as defined in the Fair Work Act 2009 (Cth), which outline the minimum
termination benefits based on years of service.
– SH Heng appointed Chief Financial Officer 2 August 2021.
– PG Cook resigned as Executive Chairman and was appointed as Non-Executive Chairman with effect from
1 August 2021.
– WC Bramwell was appointed as an Executive Director on 1 August 2021.
Westgold Resources Limited Annual Report 2021
41
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42
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED)
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43
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44
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED)
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.
9
2
e
t
o
N
o
t
r
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f
e
r
e
s
a
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p
l
,
d
e
s
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s
n
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t
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a
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Westgold Resources Limited Annual Report 2021
45
Table 2: Shareholdings of key management personnel (including nominees)
Directors
PG Cook
FJ Van Maanen
PB Schwann
WC Bramwell
GR Davison
Executives
DA Fullarton
A Buckingham
L Smith
Total
Balance
held at
1 July 2020
On exercise
of options
Net change
other1
Balance
held at
30 June 2021
10,762,922
1,469,936
(1,636,617)
10,596,241
435,521
–
–
–
5,000
–
–
–
–
–
–
–
–
–
435,521
–
34,150
34,150
–
–
5,000
10,000
100,000
(100,000)
–
–
5,985
5,985
11,203,443
1,569,936
(1,691,482)
11,081,897
1.
Represents acquisition or disposal of shares on market.
Table 3: Option holdings of key management personnel (including nominees)
Options
Directors
PG Cook
FJ Van Maanen
PB Schwann
WC Bramwell
GR Davison
Executives
DA Fullarton
A Buckingham
L Smith
Total
Balance at
beginning of
year
1 July 2020
Granted as
remuneration
Exercised
Lapsed
Balance at
end of year
30 June
2021
Not vested
and not
exercisable
Vested and
exercisable
1,693,682
233,506
(1,469,936)
(69,936)
387,316
387,316
–
–
–
–
–
–
–
–
85,001
169,090
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(22,611)
231,480
231,480
215,569
161,038
(100,000)
(33,917)
242,690
242,690
–
109,168
–
–
109,168
109,168
1,994,252
672,802
(1,569,936)
(126,464)
970,654
970,654
–
–
–
–
–
–
–
–
–
Loans to key management personnel and their related parties
There were no loans to key management personnel during the years ended 30 June 2021 and 30 June 2020.
Other transactions to key management personnel and their related parties
There are no other transactions with key management personnel during the years ended 30 June 2021 and
30 June 2020.
End of Audited Remuneration Report.
46
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT REMUNERATION REPORT (AUDITED) CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the
Company support and have adhered to the principles of Corporate Governance. The Company’s corporate governance
key statements, frameworks, policies and charters are all available on the Company’s website at:
www.westgold.com.au/site/about-us/corporate-governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTING
The Company intends to release an ESG report in October 2021 outlining the impacts, footprint and achievements of
the Group during 2021.
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
AUDITOR’S INDEPENDENCE DECLARATION
The Directors received the Auditor’s Independence Declaration, as set out on page 48, from Ernst & Young.
NON-AUDIT SERVICES
The following non-audit services were provided by the entity’s auditor, Ernst & Young. The Directors are satisfied that
the provision of non-audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor
independence was not compromised.
Ernst & Young received or are due to receive the following amounts for the provision of non-audit services (refer to
Note 32):
Tax compliance and other services
$
22,174
Signed in accordance with a resolution of the Directors.
PG Cook
Chairman
Perth, 30 August 2021
Westgold Resources Limited Annual Report 2021
47
AUDITORS INDEPENDENCE DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Westgold Resources
Limited
As lead auditor for the audit of the financial report of Westgold Resources Limited for the financial
year ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Westgold Resources Limited and the entities it controlled during the
financial year.
Ernst & Young
Philip Teale
Partner
Perth
30 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WGX:010
48
Westgold Resources Limited Annual Report 2021
continuedFINANCIAL REPORT CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Gain on demerger of subsidiary
Finance costs
Other expenses
Net gain on fair value changes of financial assets
Exploration and evaluation expenditure written off
Profit before income tax from continuing operations
Income tax expense
Net Profit for the year
Other comprehensive profit for the year, net of tax
Total comprehensive profit for the year
Total comprehensive profit attributable to:
members of the parent entity
Earnings per share attributable to the ordinary equity holders of the
parent (cents per share)
Basic profit per share
Continuing operations
Diluted profit per share
Continuing operations
Notes
2021
2020
5
7(a)
6
38
7(b)
7(c)
15
18
571,170,198
492,268,271
(455,456,036)
(462,752,732)
115,714,162
29,515,539
2,292,234
–
5,921,274
8,727,618
(347,475)
(918,881)
(10,881,936)
(7,915,557)
5,202,140
8,888,756
(86,058)
(356,317)
111,893,067
43,862,432
8
(35,141,187)
(9,255,117)
76,751,880
34,607,315
–
–
76,751,880
34,607,315
76,751,880
34,607,315
76,751,880
34,607,315
9
9
18.16
18.12
8.65
8.65
Westgold Resources Limited Annual Report 2021
49
for the year ended 30 June 2021FINANCIAL REPORT FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes
2021
2020
10
11
12
13
14
15
16
17
18
19
20
21
23
25
22
24
8
26
27
28
28
150,684,029
137,564,914
7,466,095
7,231,137
59,129,368
43,948,165
4,035,977
1,149,449
3,369,998
1,149,449
222,464,918
193,263,663
6,423,091
13,000,000
166,748,178
161,893,032
407,335,920
298,513,129
89,738,936
78,874,701
7,258,887
11,942,577
677,505,012
564,223,439
899,969,930
757,487,102
83,783,431
69,664,918
11,405,262
9,786,926
22,962,067
23,734,814
–
198,841
118,150,760
103,385,499
77,118,556
78,490,073
22,113,771
14,091,636
75,226,536
39,659,067
174,458,863
132,240,776
292,609,623
235,626,275
607,360,307
521,860,827
364,077,523
356,130,055
46,522,657
(30,229,223)
15,266,496
14,466,364
181,493,631
181,493,631
607,360,307
521,860,827
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Other financial assets
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit and loss
Property, plant and equipment
Mine properties and development
Exploration and evaluation expenditure
Right-of-use assets
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Interest-bearing loans and borrowings
Unearned income
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Interest-bearing loans and borrowings
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Retained earnings (accumulated losses)
Share-based payments reserve
Other reserves
TOTAL EQUITY
50
Westgold Resources Limited Annual Report 2021
as at 30 June 2021FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
OPERATING ACTIVITIES
Receipts from customers
Interest received
Receipts from other income
Payments to suppliers and employees
Interest paid
Income tax refunded (paid)
Notes
2021
2020
570,971,358
466,596,319
333,794
691,995
1,957,496
2,603,081
(322,933,634)
(311,533,581)
(1,240,191)
(2,293,877)
53,126
(332,297)
Net cash flows from operating activities
10
249,141,949
155,731,640
INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for mine properties and development
Payments for exploration and evaluation
Payment for financial assets
Proceeds from sale of financial assets
Proceeds from sale of property, plant and equipment
Cash relinquished on disposal of a subsidiary
Proceeds from performance bond facility
Net cash flows used in investing activities
FINANCING ACTIVITIES
(32,351,779)
(31,486,090)
(182,395,512)
(132,909,127)
(14,249,778)
(14,049,293)
(5,986,129)
(2,057,789)
17,765,178
56,113,502
3,412,695
1,939,129
–
–
(86,966)
258,387
(213,805,325)
(122,278,247)
15
38
Payment of hire purchase arrangements
4(g)
(22,245,203)
(19,331,761)
Payment for lease liabilities
Proceeds from share issue
Payments for share issue costs
Net cash flows from (used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(8,346,056)
(7,753,813)
26(b)
8,373,750
66,542,506
–
(2,541,700)
(22,217,509)
36,915,232
13,119,115
70,368,625
137,564,914
67,196,289
Cash and cash equivalents at the end of the year
10
150,684,029
137,564,914
Westgold Resources Limited Annual Report 2021
51
for the year ended 30 June 2021FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2021
At 1 July 2020
Profit for the year
Other comprehensive income, net of tax
Total comprehensive profit for the year net
of tax
Transactions with owners in their capacity
as owners
Share-based payments
Issue of share capital
Share issue costs, net of tax
At 30 June 2021
2020
At 1 July 2019
Profit for the year
Other comprehensive income, net of tax
Total comprehensive profit for the year net
of tax
Transactions with owners in their capacity
as owners
Share-based payments
Capital reduction via share distribution
Issue of share capital
Share issue costs, net of tax
Demerger dividend (Note 38)
Retained
Earnings
(accumulated
losses)
(Note 27)
Share-based
payments
reserve
(Note 28)
Issued capital
(Note 26)
Equity
reserve
(Note 28)
Total Equity
356,130,055 (30,229,223) 14,466,364 181,493,631 521,860,827
– 76,751,880
–
–
– 76,751,880
–
–
–
– 76,751,880
–
–
– 76,751,880
–
8,373,750
(426,282)
–
–
–
800,132
–
–
–
–
–
800,132
8,373,750
(426,282)
364,077,523
46,522,657
15,266,496 181,493,631 607,360,307
299,494,861
(51,784,989)
14,282,408 181,493,631 443,485,911
–
–
–
–
(8,803,840)
67,644,506
(2,205,472)
34,607,315
–
34,607,315
–
–
–
–
–
–
–
183,956
–
–
–
(13,051,549)
–
–
–
–
34,607,315
–
34,607,315
183,956
– (8,803,840)
– 67,644,506
–
(2,205,472)
(13,051,549)
At 30 June 2020
356,130,055 (30,229,223)
14,466,364 181,493,631 521,860,827
52
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Westgold Resources Limited for
the year ended 30 June 2021 was authorised for issue
in accordance with a resolution of the Directors on
27 August 2021.
Westgold Resources Limited (the Company or the Parent)
is a for profit company limited by shares incorporated
in Australia whose shares are publicly traded on
the Australian Securities Exchange.
The nature of the operations and principal activities of
the Group are described in the Directors Report.
The address of the registered office is Level 6,
197 St Georges Terrace, Perth WA 6000.
to variable returns from its involvement with the investee
and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls
an investee if and only if the Group has:
– Power over the investee (existing rights that give it
the current ability to direct the relevant activities of
the investee);
– Exposure, or rights, to variable returns from its
involvement with the investee; and
– The ability to use its power over the investee to affect
its returns.
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it
has power over an investee, including:
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
– The contractual arrangement with the other vote holders
of the investee;
(a) Basis of Preparation
The financial report is a general-purpose financial
report, which has been prepared in accordance with
the requirements of the Corporations Act 2001 and
Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards
Board.
The financial report has been prepared on a historical
cost basis, except for certain financial assets, which have
been measured at fair value through profit or loss.
The financial report is presented in Australian dollars.
(b) Statement of compliance
The financial report complies with Australian Accounting
Standards as issued by the Australian Accounting
Standards Board and also International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
Adoption of new accounting standards
In the current year, the Group has adopted all of the new
and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are
relevant to its operations and effective for annual reporting
periods beginning on 1 July 2020. Other than the changes
described in Note 39, the accounting policies adopted are
consistent with those of the previous financial year.
(c) Basis of consolidation
The consolidated financial statements comprise
the financial statements of the parent entity and its
subsidiaries (the Group) as at 30 June each year. Control
is achieved when the Group is exposed, or has rights,
– Rights arising from other contractual arrangements; and
– The Group’s voting rights and potential voting rights.
The Group re-assesses whether it controls an investee if
facts and circumstances indicate that there are changes
to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired
or disposed of during the year are included in the
Consolidated Statement of Comprehensive Income from
the date the Group gains control until the date the Group
ceases to control the subsidiary.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intercompany transactions between members of
the Group are eliminated in full on consolidation.
(d) Foreign currency translation
Functional and presentation currency
The Group’s consolidated financial statements are
presented in Australian (A$), which is also the parent
entity’s functional currency. The Group does not have
any foreign operations.
Transactions and balances
Transactions in foreign currencies are initially recorded
in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are
translated at the rate of exchange at the reporting date.
All exchange differences are taken to the profit or loss.
Westgold Resources Limited Annual Report 2021
53
for the year ended 30 June 2021FINANCIAL REPORT 2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(e) Operating segments
An operating segment is a component of an entity that
engages in business activities from which it may earn
revenues and incur expenses (including revenues and
expenses relating to transactions with other components
of the same entity), whose operating results are regularly
reviewed by management to make decisions about
resources to be allocated to the segment and assess its
performance and for which discrete financial information
is available. This includes start-up operations which are
yet to earn revenues. Management will also consider
other factors in determining operating segments such as
the existence of a line manager and the level of segment
information presented to the board of directors.
Operating segments have been identified based on
the information provided by management to the Board of
Directors. The Group aggregates two or more
operating segments when they have similar economic
characteristics. Operating segments that meet the
quantitative criteria as prescribed by AASB 8 are reported
separately. However, an operating segment that does not
meet the quantitative criteria is still reported separately
where information about the segment would be useful to
users of the financial statements.
Information about other business activities and operating
segments that are below the quantitative criteria are
combined and disclosed in a separate category for
“all other segments”.
(f) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement
of financial position comprise cash at bank and in hand
and short-term deposits that are readily convertible to
known amounts of cash and which are subject to an
insignificant risk of changes in value.
(g) Financial Instruments
Financial instruments - initial recognition and
subsequent measurement
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Certain commodity
contracts are accounted for as executory contracts
and not recognised as financial instruments as these
contracts were entered into and continue to be held for
the purpose of the delivery of gold bullion in accordance
with the Group’s expected sale requirements (see Note 5).
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition, and
subsequently measured at amortised cost, or fair value
through profit or loss or fair value through OCI.
The classification of financial assets at initial recognition
that are debt instruments depends on the financial asset’s
contractual cash flow characteristics and the Group’s
business model for managing them. With the exception
of trade receivables, the Group initially measures a
financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss,
transaction costs. In order for a financial asset to be
classified and measured at amortised cost, it needs
to give rise to cash flows that are ‘solely payments of
principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level.
Trade receivables that do not contain a significant
financing component or for which the Group has applied
the practical expedient for contracts that have a maturity
of one year or less, are measured at the transaction price
determined under AASB 15.
The Group’s business model for managing financial
assets refers to how it manages its financial assets in
order to generate cash flows. The business model
determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets,
or both.
Subsequent measurement
For purposes of subsequent measurement, the Group’s
financial assets are classified in these categories:
– Financial assets at amortised cost (debt instruments)
– Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
The Group’s financial assets at amortised cost include
cash, short-term deposits, and trade and other
receivables. The Group measures financial assets at
amortised cost if both of the following conditions are
met:
– The financial asset is held within a business model
with the objective to hold financial assets in order to
collect contractual cash flows, and
– The contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding
Financial assets at amortised cost are subsequently
measured using the effective interest rate (EIR) method
and are subject to impairment. Interest received is
recognised as part of other income in the Consolidated
Statement of Comprehensive Income. Gains and
losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
54
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(g) Financial Instruments (continued)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
include financial assets held for trading, financial assets
designated upon initial recognition at fair value through
profit or loss, or financial assets mandatorily required
to be measured at fair value, i.e., where they fail the
SPPI test. Financial assets are classified as held for
trading if they are acquired for the purpose of selling
or repurchasing in the near term. Derivatives, including
separated embedded derivatives, are also classified as
held for trading unless they are designated as effective
hedging instruments. Financial assets with cash flows that
do not pass the SPPI test are required to be classified, and
measured at fair value through profit or loss, irrespective
of the business model.
Notwithstanding the criteria for debt instruments to be
classified at amortised cost or at fair value through OCI,
as described above, debt instruments may be designated
at fair value through profit or loss on initial recognition
if doing so eliminates, or significantly reduces, an
accounting mismatch.
Financial assets at fair value through profit or loss are
carried in the statement of financial position at fair value
with net changes in fair value recognised in profit or loss.
Impairment of financial assets
The Group recognises an allowance for ECLs for
all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between
the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original
EIR. The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements
that are integral to the contractual terms. ECLs are
recognised in two stages. For credit exposures for which
there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit
losses that result from default events that are possible
within the next 12-months (a 12-month ECL).
For those credit exposures for which there has been a
significant increase in credit risk since initial recognition,
a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For trade receivables, the Group applies the simplified
approach in calculating ECLs, as permitted by AASB 9.
Therefore, the Group does not track changes in credit
risk, but instead, recognises a loss allowance based on
the financial asset’s lifetime ECL at each reporting date
(see Note 3). For any other financial assets carried at
amortised cost (which are due in more than 12 months),
the ECL is based on the 12-month ECL.
The 12-month ECL is the proportion of lifetime ECLs that
results from default events on a financial instrument that
are possible within 12 months after the reporting date.
However, when there has been a significant increase in
credit risk since origination, the allowance will be based
on the lifetime ECL. When determining whether the credit
risk of a financial asset has increased significantly since
initial recognition and when estimating ECLs, the Group
considers reasonable and supportable information that is
relevant and available without undue cost or effort.
This includes both quantitative and qualitative
information and analysis, based on the Group’s historical
experience and informed credit assessment including
forward-looking information.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a
financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive
the outstanding contractual amounts in full before
taking into account any credit enhancements held by
the Group. A financial asset is written off when there is
no reasonable expectation of recovering the contractual
cash flows and usually occurs when past due for more
than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether
financial assets carried at amortised cost are credit-
impaired. A financial asset is credit-impaired when one
or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have
occurred.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss,
loans and borrowings, and payables as appropriate.
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other
payables, loans and borrowings.
Subsequent measurement
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at
fair value through profit or loss.
Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing in
the near term. This category also includes derivative
financial instruments entered into by the Group that
are not designated as hedging instruments in hedge
relationships.
Westgold Resources Limited Annual Report 2021
55
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(g) Financial Instruments (continued)
Gains or losses on liabilities held for trading are
recognised in the statement of profit or loss and
other comprehensive income.
Loans, borrowings, and trade and other payables
After initial recognition, interest-bearing loans
and borrowings and trade and other payables are
subsequently measured at amortised cost using the
EIR method. Gains and losses are recognised in the
statement of comprehensive income when the liabilities
are derecognised, as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement of
comprehensive income.
This category generally applies to interest-bearing loans
and borrowings and trade and other payables.
(h) Inventories
Inventories are valued at the lower of cost and net
realisable value.
Cost includes expenditure incurred in acquiring and
bringing the inventories to their existing condition and
location and is determined using the weighted average
cost method.
(i) 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 in the period they occur. Borrowing costs
consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(j) Rehabilitation costs
The Group is required to decommission and rehabilitate
mines and processing sites at the end of their producing
lives to a condition acceptable to the relevant authorities.
The expected cost of any approved decommissioning or
rehabilitation programme, discounted to its net present
value, is provided when the related environmental
disturbance occurs. The cost is capitalised when it gives
rise to future benefits, whether the rehabilitation activity
is expected to occur over the life of the operation or at
the time of closure. The capitalised cost is amortised
over the life of the operation and the increase in the net
present value of the provision for the expected cost is
included in financing expenses.
Expected decommissioning and rehabilitation costs are
based on the discounted value of the estimated future
cost of detailed plans prepared for each site. Where
there is a change in the expected decommissioning and
restoration costs, the value of the provision and any
related asset are adjusted, and the effect is recognised in
profit or loss on a prospective basis over the remaining
life of the operation.
The estimated costs of rehabilitation are reviewed
annually and adjusted as appropriate for changes in
legislation, technology or other circumstances. Cost
estimates are not reduced by potential proceeds from the
sale of assets or from plant clean up at closure.
(k) Property, plant and equipment
Property, plant and equipment is stated at historical cost
less accumulated depreciation and any impairment in
value.
Capital work-in-progress is stated at cost and comprises
all costs directly attributable to bringing the assets under
construction ready to their intended use. Capital work-in-
progress is transferred to property, plant and equipment
at cost on completion.
Depreciation is calculated on a straight-line basis over the
estimated useful life of the asset, or where appropriate,
over the estimated life of the mine.
Major depreciation periods are:
– Mine specific plant and equipment is depreciated
using – the shorter of life of mine and useful life.
Useful life ranges from 2 to 25 years.
– Buildings – the shorter of life of mine and useful life.
Useful life ranges from 5 to 40 years.
– Office plant and equipment is depreciated at 33% per
annum for computers and office machines and 20%
per annum for other office equipment and furniture.
Impairment
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable.
For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying
values exceed the estimated recoverable amount, the
assets or cash-generating units are written down to
their recoverable amount. Refer to Note 2(o) for further
discussion on impairment testing performed by the Group.
Derecognition
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
56
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(k) Property, plant and equipment (continued)
Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal
proceeds and the carrying amount of the item) is
included in the profit and loss in the period the item is
derecognised.
(l) Exploration and evaluation expenditure
Expenditure on acquisition, exploration and evaluation
relating to an area of interest is carried forward at cost
where rights to tenure of the area of interest are current
and:
– it is expected that expenditure will be recouped
through successful development and exploitation of
the area of interest or alternatively by its sale; and/or
– exploration and evaluation activities are continuing
in an area of interest but at reporting date have not
yet reached a stage which permits a reasonable
assessment of the existence or otherwise of
economically recoverable reserves.
A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
Where uncertainty exists as to the future viability of
certain areas, the value of the area of interest is written
off to the profit and loss or provided against.
Impairment
The carrying value of capitalised exploration and
evaluation expenditure is assessed for impairment on
a regular basis or whenever impairment indicators are
present. When information becomes available suggesting
that the recovery of expenditure which had previously
been capitalised is unlikely or that the Group no longer
holds tenure, the relevant capitalised amount is written
off to the profit or loss in the period when the new
information becomes available.
(m) Mine properties and development
Expenditure on the acquisition and development of
mine properties within an area of interest are carried
forward at cost separately for each area of interest.
This includes the costs associated with waste removal
(stripping costs) in the creation of improved access and
mining flexibility in relation to the ore to be mined in the
future. Accumulated expenditure is amortised over the
life of the area of interest to which such costs relate on a
production output basis.
A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Impairment
The carrying value of capitalised mine properties and
development expenditure is assessed for impairment
whenever facts and circumstances suggest that the
carrying amount of the asset may exceed its recoverable
amount.
Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
Refer to Note 2(o) for further discussion on impairment
testing performed by the Group.
Stripping (waste removal) costs
As part of its mining operations, the Group incurs
stripping (waste removal) costs both during the
development phase and production phase of its
operations. Stripping costs incurred in the development
phase of a mine, before the production phase
commences (development stripping), are capitalised
as part of the cost of constructing the mine and
subsequently amortised over its useful life using a unit
of production (“UOP”) method. The capitalisation of
development stripping costs ceases when the mine/
component is commissioned and ready for use as
intended by management.
Stripping activities undertaken during the production
phase of a surface mine (production stripping) are
accounted for as set out below. After the commencement
of production, further development of the mine may
require a phase of unusually high stripping that is similar in
nature to development phase stripping. The cost of such
stripping is accounted for in the same way as development
stripping (as outlined above).
Production stripping is generally considered to create
two benefits, being either the production of inventory
or improved access to the ore to be mined in the future.
Where the benefits are realised in the form of inventory
produced in the period, the production stripping costs
are accounted for as part of the cost of producing those
inventories.
Where the benefits are realised in the form of improved
access to ore to be mined in the future, the costs are
recognised as a non-current asset, referred to as a
‘stripping activity asset’, if the following criteria are met:
– Future economic benefits (being improved access to
the ore body) are probable
– The component of the ore body for which access will
be improved can be accurately identified
– The costs associated with the improved access can be
reliably measured
If any of the criteria are not met, the production stripping
costs are charged to profit or loss as operating costs as
they are incurred.
Westgold Resources Limited Annual Report 2021
57
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(n) Non-current assets and disposal groups held
for sale and discontinued operations
(m) Mine properties and development (continued)
In identifying components of the ore body, the Group
works closely with the mining operations personnel for
each mining operation to analyse each of the mine plans.
Generally, a component will be a subset of the total
ore body, and a mine may have several components.
The mine plans, and therefore the identification of
components, can vary between mines for a number of
reasons.
These include, but are not limited to the type of
commodity, the geological characteristics of the ore
body, the geographical location, and/or financial
considerations. Given the nature of the Group’s
operations, components are generally either major
pushbacks or phases and they generally form part
of a larger investment decision which requires board
approval.
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 ore, plus an allocation of directly
attributable overhead costs.
If incidental operations are occurring at the same time as
the production stripping activity, but are not necessary
for the production stripping activity to continue as
planned, these costs are not included in the cost of the
stripping activity asset.
If the costs of the inventory produced and the stripping
activity asset are not separately identifiable, a relevant
production measure is used to allocate the production
stripping costs between the inventory produced and
the stripping activity asset. This production measure is
calculated for the identified component of the ore body
and is used as a benchmark to identify the extent to
which the additional activity of creating a future benefit
has taken place. The Group uses the expected volume of
waste extracted compared with the actual volume for a
given volume of ore production of each component.
The stripping activity asset is accounted for as an addition
to, or an enhancement of, an existing asset, being the
mine asset, and is presented as part of ’Mine properties’ in
the statement of financial position. This forms part of the
total investment in the relevant cash generating unit(s),
which is reviewed for impairment if events or changes of
circumstances indicate that the carrying value may not
be recoverable.
The stripping activity asset is subsequently depreciated
using the UOP method over the life of the identified
component of the ore body that became more accessible
as a result of the stripping activity. Economically
recoverable reserves, which comprise proven and
probable reserves, are used to determine the expected
useful life of the identified component of the ore body.
The stripping activity asset is then carried at cost less
depreciation and any impairment losses.
Non-current assets and disposal groups are classified as
held for sale and measured at the lower of their carrying
amount and fair value less costs of disposal if their
carrying amount will be recovered principally through a
sale transaction. They are not depreciated or amortised.
For an asset or disposal group to be classified as held for
sale it must be available for immediate sale in its present
condition and its sale must be highly probable.
An impairment loss is recognised for any initial or
subsequent write-down of the asset (or disposal group)
to fair value less costs to sell. A gain is recognised for
any subsequent increases in fair value less costs to sell
of an asset (or disposal group), but is not in excess of any
cumulative impairment loss previously recognised.
A gain or loss not previously recognised by the date of
the sale of the non-current asset (or disposal group) is
recognised as the date of de-recognition.
A discontinued operation is a component of the Group
that has been disposed of or is classified as held for sale
and that represents a separate major line of business
or geographical area of operations, is part of a single
coordinated plan to dispose of such a line of business or
area of operations, or is a subsidiary acquired exclusively
with a view to resale. The results of discontinued
operations are presented separately on the face of the
Consolidated Statement of Comprehensive Income and
the assets and liabilities are presented separately on the
face of the Consolidated Statement of Financial Position.
(o) Impairment of non-financial assets
The Group assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing
for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is
the higher of an asset’s or cash-generating unit’s (CGU)
fair value less costs of disposal (FVLCD) and its value in
use (VIU).
Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset or
CGU. In determining FVLCD, recent market transactions
are taken into account. If no such transactions can be
identified, an appropriate valuation model is used.
The Group bases its impairment calculation on detailed
budgets and forecasts, which are prepared separately for
each of the Group’s CGUs to which the individual assets
are allocated, based on the life-of-mine plans.
58
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(o) Impairment of non-financial assets (continued)
The estimated cash flows are based on expected future
production, metal selling prices, operating costs and
forecast capital expenditure based on life-of-mine plans.
VIU does not reflect future cash flows associated with
improving or enhancing an asset’s performance, whereas
anticipated enhancements to assets are included in
FVLCD calculations.
Impairment losses of continuing operations, including
impairment on inventories, are recognised in the
profit and loss. For such properties, the impairment
is recognised in other comprehensive income up to
the amount of any previous revaluation.
For assets, an assessment is made at each reporting
date to determine whether there is an indication that
previously recognised impairment losses no longer exist
or have decreased. If such indication exists, the Group
estimates the asset’s or CGU’s recoverable amount.
A previously recognised impairment loss is reversed only
if there has been a change in the assumptions used to
determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited
so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in profit or loss.
(p) Provisions
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of
the amount of the obligation.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date.
The discount rate used to determine the present value
reflects current market assessments of the time value of
money and the risks specific to the liability. The increase
in the provision resulting from the passage of time is
recognised in finance costs.
(q) Lease liabilities
The Group has lease contracts for various items of
mining equipment, motor vehicles and buildings used
in its operations. Upon adoption of AASB 16, all leases
with the exception of short term (under 12 months)
and low value leases, are recognised on the balance
sheet as a right-of-use asset and a corresponding
interest-bearing liability. Lease costs are recognized in
the income statement over the lease term in the form
of depreciation on the right-of-use asset and finance
charges representing the unwinding of the discount on
the lease liability. The Group recognises leases entered
into after 1 July 2019 using the interest rate implicit in the
lease (refer to Note 39 for the accounting policy).
(r) Interest revenue
Revenue is recognised using the effective interest
method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest
income over the relevant period using the effective
interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to the net carrying amount of
the financial asset.
(s) Revenue from contracts with customers
Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Group expects to be entitled
in exchange for those goods or services. The Group has
concluded that it is the principal in its revenue contracts
because it typically controls the goods or services before
transferring them to the customer.
Gold bullion sales
For bullion sales, most of this is sold under a long-term
sales contract with the refiner, forward sale agreements
with various banks or a pre-pay facility with Citibank N.A.
The only performance obligation under the contract
is the sale of gold bullion. Revenue from bullion sales
is recognised at a point in time when control passes to
the buyer. This generally occurs after the unrefined doré
is outturned and the Group either instructs the refiner to
purchase the outturned fine metal or advises the refiner
to transfer the gold to the bank by crediting the metal
account of the bank. As all performance obligations are
satisfied at that time, there are no remaining performance
obligations under the contract. The transaction price is
determined at transaction date and there are no further
adjustments to this price.
A contract liability is the obligation to transfer goods
or services to a customer for which the Group has
received consideration from the customer. If a customer
pays consideration before the Group transfers goods
or services to the customer, a contract liability is
recognised when the payment is made, or the payment
is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Group performs under
the contract. The Group applies the practical expedient
to not adjust the promised consideration for the effects
of a significant financing component where the period
between the transfer of the refined gold to a customer
and the receipt of the advance is one year or less. For
long-term advances from customers the transaction
price is discounted, using the rate that would be
reflected in a separate transaction between the Group
and its customers at contract inception, to take into
consideration the significant financing component.
Westgold Resources Limited Annual Report 2021
59
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(s)
Revenue from contracts with customers
(continued)
Mining and contracting services.
Mining and contracting services is the provision of
equipment and personnel to carry out mining activities
on behalf of the customer.
These contracts are assessed to have multiple
performance obligation as each equipment and service
are capable of being distinct and separately identifiable.
Revenue is recognised over time as the customer
simultaneously receives and consumes the benefits
provided by the Group as the services are rendered.
The transaction price for each contract is based on an
agreed schedule of rates to which the Group is entitled.
(t) Earnings per share
Basic earnings per share is calculated as net profit
attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided
by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit
attributable to members of the parent adjusted for:
– cost of servicing equity (other than dividends) and
preference share dividends;
– the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares
that have been recognised; and
– other non-discriminatory changes in revenues or
expenses during the period that would result from
the dilution of potential ordinary shares divided by
the weighted average number of ordinary shares and
dilutive potential ordinary shares; adjusted for any
bonus element.
(u) Issued capital
Issued and paid-up capital is recognised at the fair
value of the consideration received by the Group.
Any transaction costs arising on the issue of ordinary
shares are recognised directly in equity as a reduction in
the proceeds received.
(v) Share-based payment transactions
The Group provides benefits to employees (including
Directors) in the form of share-based payment
transactions, whereby employees render services in
exchange for shares or rights over shares (equity-settled
transactions). The Group has one plan in place that
provides these benefits. It is the Long-Term Incentive
Plan (LTIP) which provides benefits to all employees
including Directors.
In valuing equity-settled transactions, no account is taken
of any vesting conditions (such as service conditions),
other than conditions linked to the price of the shares
of Westgold Resources Limited (market conditions)
if applicable.
The cost of these equity-settled transactions with
employees is measured by reference to the fair value
at the date at which they are granted. The fair value is
determined by using either a Black & Scholes or a Monte
Carlo model as appropriate. Further details of which are
given in Note 29.
The cost of equity-settled transactions is recognised,
together with a corresponding increase in equity, over
the period in which the performance and/or service
conditions are fulfilled (the vesting period), ending on
the date on which the relevant employees become fully
entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the
cumulative charge to the consolidated statement of
comprehensive income is the product of (i) the grant date
fair value of the award; (ii) the current best estimate of the
number of awards that will vest, taking into account such
factors as the likelihood of employee turnover during
the vesting period and the likelihood of non-market
performance conditions being met; and (iii) the expired
portion of the vesting period.
The charge to profit and loss for the period is the
cumulative amount as calculated above, less the
amounts already charged in previous periods. There is a
corresponding credit to equity.
Until an award has vested, any amounts recorded are
contingent and will be adjusted if more or fewer awards
vest than were originally anticipated to do so. Any award
subject to a market condition is considered to vest
irrespective of whether or not the market condition is
fulfilled, provided that all other conditions are satisfied.
If a non-vesting condition is within the control of
the Group, Company or the employee, the failure to
satisfy the condition is treated as a cancellation. If a
non-vesting condition within the control of neither
the Group, Company nor employee is not satisfied
during the vesting period, any expense for the award not
previously recognised is recognised over the remaining
vesting period, unless the award is forfeited.
If the terms of an equity-settled award are modified, as
a minimum an expense is recognised as if the terms had
not been modified. An additional expense is recognised
for any modification that increases the total fair value of
the share-based payment arrangement, or is otherwise
beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as
if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised
immediately.
60
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
(v) Share-based payment transactions (continued)
However, if a new award is substituted for the cancelled
award and designated as a replacement award on
the date that it is granted, the cancelled and new
award are treated as if they were a modification of the
original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is
reflected as additional share dilution in the computation
of dilutive earnings per share.
(w) Employee benefits
Wages, salaries, sick leave and other short-term
benefits
Liabilities for wages and salaries, including non-monetary
benefits, accumulating sick leave and other short-term
benefits expected to be settled wholly within 12 months
of the reporting date are recognised in respect of
employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when
the liabilities are settled.
Long service leave
The liability for long service leave is recognised and
measured as the present value of expected future
payments to be made in respect of services provided by
employees up to the reporting date using the projected
unit credit method. Consideration is given to the
expected future wage and salary levels, experience of
employee departure and periods of service. Expected
future payments are discounted using market yields at
the reporting date on high quality corporate bonds with
terms to maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
Superannuation
Contributions made by the Group to employee
superannuation funds, which are defined contribution
plans, are charged as an expense when incurred.
(x) Other taxes
Revenues, expenses and assets are recognised net of
the amount of GST except:
– when the GST incurred on purchase of goods or
services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost
of acquisition of the asset or as part of the expense
item as applicable; and
– receivables and payables, which are stated with the
amount of GST included.
The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of
receivables or payables in the Consolidated Statement
of Financial Position.
Cash flows are included in the Consolidated Statement of
Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
Commitments and contingencies are disclosed net
of amounts of GST recoverable from, or payable to,
the taxation authority.
(y) Income tax
Current income tax assets and liabilities for the current
and prior periods are measured at the amount expected
to be recovered from, or paid to, the taxation authorities.
The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the
reporting date in the countries where the Group operates
and generates taxable income.
Current income tax relating to items recognised directly
in other comprehensive income or equity is recognised
in other comprehensive income or equity and not
in profit or loss. Management periodically evaluates
positions taken in the tax returns with respect to
situations where applicable tax regulations are subject
to interpretation and establishes provisions where
appropriate.
Deferred tax is provided for using the full liability
balance sheet approach.
The tax rates and tax laws used to compute the amount
of deferred tax assets and liabilities are those that are
enacted or substantively enacted at the reporting date in
the countries where the Group operates and generates
taxable profits.
Deferred tax liabilities are recognised for all taxable
temporary differences except to the extent that the
deferred tax liability arises from:
– the initial recognition of goodwill;
– the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit (or tax loss); and
– taxable temporary differences associated with
investments in subsidiaries, associates and interests in
joint ventures when the timing of the reversal of the
temporary differences can be controlled by the Group
and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, including carry-forward tax
losses and tax credits, to the extent that it is probable
that taxable profit will be available against which the
deductible temporary differences can be utilised
except when:
Westgold Resources Limited Annual Report 2021
61
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
(y) Income tax (continued)
– the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not
a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit (or tax loss); and
– the deductible temporary difference is associated with
investments in subsidiaries, associates and interests in
joint ventures and it is not probable that the temporary
difference will reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to
be utilised.
Unrecognised deferred tax assets and deferred tax
liabilities are reassessed at each reporting date and
are recognised to the extent that they satisfy the
requirements for recognition.
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred
tax assets and deferred tax liabilities relate to income
taxes levied by the same taxation authority on the same
taxable entity.
Income taxes relating to transactions recognised
outside profit and loss (for example, directly in other
comprehensive income or directly in equity) are also
recognised outside profit and loss.
Tax consolidation
Westgold Resources Limited and its wholly owned
Australian resident subsidiaries formed a tax consolidated
group (the Tax Group) with effect from 1 December
2016. Members of the Tax Group have entered into a tax
sharing agreement, which provides for the allocation of
income tax liabilities between members of the Tax Group
should the parent, Westgold Resources Limited, default
on its tax payments obligations.
The Group has applied the group allocation approach
in determining the appropriate amount of current taxes
and deferred taxes to allocate to members of the tax
consolidated group. Members of the tax consolidated
group have entered into a tax funding agreement. The tax
funding agreement provides for the allocation of current
taxes to members of the tax consolidated group.
The allocation of taxes under the tax funding agreement
is recognised as an increase/decrease in the controlled
entities intercompany accounts with the tax consolidated
group head company, Westgold Resources Limited. The
nature of the tax funding agreement is such that no tax
consolidation adjustments are required.
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. Management
bases its judgements and estimates on historical experience
and on other various factors it believes to be reasonable
under the circumstances, the result of which form the basis
of the carrying values of assets and liabilities that are not
readily apparent from other sources.
Management has identified the following critical
accounting policies for which significant judgements
have been made as well as the following key estimates
and assumptions that have the most significant impact
on the financial statements. Actual results may differ
from these estimates under different assumptions and
conditions and may materially affect financial results or
the financial position reported in future periods.
Further details of the nature of these assumptions and
conditions may be found in the relevant notes to the
financial statements.
Significant judgements
– Revenue from contracts with customers
Judgement is required to determine the point at
which the customer obtains control of gold. Factors
including transfer of legal title, transfer of significant
risks and rewards of ownership and the existence of a
present right to payment for the gold typically result
in control transferring upon allocation of the gold to
the customers’ account.
– Mine properties and development - stripping costs
Significant judgement is required to distinguish
between development stripping and production
stripping and to distinguish between the production
stripping that relates to the extraction of inventory
and that which relates to the creation of a stripping
activity asset.
Once 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. Significant
judgement is required to identify and define these
components, and also to determine the expected
volumes (e.g., in tonnes) of waste to be stripped and
ore to be mined in each of these components.
These assessments are undertaken for each individual
mining operation based on the information available
in the mine plan. The mine plans and, therefore,
the identification of components, will vary between
mines for a number of reasons. These include, but are
not limited to, the type of commodity, the geological
characteristics of the ore body, the geographical
location and/or financial considerations.
62
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
(CONTINUED)
Significant judgements (continued)
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 component.
The Group considers that the ratio of the expected
volume (e.g., in tonnes) of waste to be stripped for
an expected volume (e.g., in tonnes) of ore to be
mined for a specific component of the ore body, is
the most suitable production measure. Furthermore,
judgements and estimates are also used to apply the
UOP method in determining the depreciable lives of
the stripping activity asset(s).
There are a number of uncertainties inherent in
estimating the carrying value of mine properties and
development and assumptions that are valid at the
time of estimation may change significantly when
new information becomes available. Changes in
the forecast price of commodities, exchange rates,
production costs or recovery rates may change the
economic status of reserves and may ultimately, result
in the requirement to restate the carrying value.
Significant accounting estimates and assumptions
Determination of mineral resources and ore reserves
The determination of reserves impacts the accounting
for asset carrying values, depreciation and amortisation
rates and provisions for mine rehabilitation. The Group
estimates its mineral resource and 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 were 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 may ultimately,
result in the reserves being restated.
Mine rehabilitation provision
The Group assesses its mine rehabilitation provision on
an annual basis in accordance with the accounting policy
stated in Note 2(j). In determining an appropriate level of
provision consideration is given to the expected future
costs to be incurred, the timing of those future costs
(largely dependent on the life of mine) and the estimated
level of inflation. The ultimate rehabilitation costs are
uncertain, and cost estimates can vary in response to
many factors, including estimates of the extent and
costs of rehabilitation activities, technological changes,
regulatory changes, timing, cost increases as compared
to the inflation rate of 2.2% (2020: 2.2%), and changes in
discount rates. The applicable discount rates are based
on the expected life of mine for each operation.
The expected timing of expenditure can also change,
for example in response to changes in reserves or
production rates. These uncertainties may result in
future actual expenditure differing from the amounts
currently provided. Therefore, significant estimates and
assumptions are made in determining the provision for
mine rehabilitation. As a result, there could be significant
adjustments to the provisions established which would
affect future financial result. The provision at reporting
date represents management’s best estimate of the
present value of the future rehabilitation costs required.
Impairment of capitalised exploration and evaluation
expenditure
The future recoverability of capitalised exploration
and evaluation expenditure is dependent on various
factors, including whether the Group decides to
exploit the related area interest itself or, if not, whether
it successfully recovers the related exploration and
evaluation asset through sale.
Factors that could impact the future recoverability
include the level of reserves and 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, profits and net assets will be reduced 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 that permits a reasonable assessment of
the existence or otherwise of economically recoverable
reserves. To the extent it is determined in the future that
this capitalised expenditure should be written off, profits
and net assets will be reduced in the period in which this
determination is made.
Life of mine method of amortisation and depreciation
Estimated economically recoverable reserves are used
in determining the depreciation of mine-specific assets.
This results in a depreciation charge proportional to
the depletion of the anticipated remaining life-of-mine
production. The life of each item, which is assessed
at least annually, has regard to both its physical life
limitations and present assessments of economically
recoverable reserves of the mine property at which the
asset is located. Changes in estimates are accounted for
prospectively.
Westgold Resources Limited Annual Report 2021
63
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
(CONTINUED)
Significant accounting estimates and assumptions
(continued)
These calculations require the use of estimates and
assumptions, including the amount of recoverable reserves
and estimates of future capital expenditure. The calculation
of the UOP rate of depreciation could be impacted to
the extent that actual production in the future is different
from current forecast production based on economically
recoverable reserves, or if future capital expenditure
estimates change. Changes to economically recoverable
reserves could arise due to changes in the factors or
assumptions used in estimating reserves, including:
– The effect on economically recoverable reserves for
differences between actual commodity prices and
commodity price assumptions
– Unforeseen operational issues.
Impairment of capitalised mine development
expenditure, property, plant and equipment
The future recoverability of capitalised mine development
expenditure, property, plant and equipment is dependent
on a number of factors, including the level of proved
and probable reserves, and the likelihood of progressive
upgrade of mineral resources in to reserves over time.
In addition, consideration is given to future technological
changes, which could impact the cost, future legal
changes (including changes to environmental restoration
obligations), and changes in commodity prices.
Non-financial assets are reviewed for impairment if there
is any indication that the carrying amount may not be
recoverable.
When applicable, FVLCD is estimated based on
discounted cash flows using market based commodity
prices and foreign exchange rate assumptions, estimated
quantities of recoverable minerals, production levels,
operating costs and capital requirements, based on the
relevant CGU’s life-of-mine (LOM) plans.
Consideration is also given to analysts’ valuations.
The fair value methodology adopted is categorised as
Level 3 in the fair value hierarchy.
In determining the VIU, future cash flows for each CGU
(i.e. each mine site) are prepared utilising management’s
latest estimates of:
– the quantities of ore reserves and mineral resources
for which there is a high degree of confidence of
economic extraction;
– royalties and taxation;
– future production levels;
– future commodity prices;
– future cash costs of production and development
expenditure; and
– other relevant cash inflows and outflows.
Cash flow scenarios for a range of commodity prices
and foreign exchange rates are assessed using internal
and external market forecasts, and the present value of
the forecast cash flows is determined utilising a pre-tax
discount rate.
The Group’s cash flows are most sensitive to movements
in commodity price, expected quantities of ore reserves
and mineral resources and key operating costs. In
particular, CGO, MGO and FGO are most sensitive
to expected quantities of ore reserves and mineral
resources to be extracted and therefore the estimated
future cash inflows resulting from the sale of product
produced is dependent on these assumptions. Variations
to the expected cash flows, and the timing thereof, could
result in significant changes to any impairment losses
recognised, if any, which in turn could impact future
financial results.
To the extent that capitalised mine development
expenditure is determined not to be recoverable in
the future, this will reduce profit in the period in which
the Group makes this determination. Capitalised mine
development expenditure is assessed for recoverability in
a manner consistent with property, plant and equipment
as described below.
Refer to Note 2(o) for further discussion on the
impairment assessment process undertaken by
the Group.
Provision for expected credit losses (ECLs) on trade
receivables and other short-term receivables carried
at amortised cost
The Group uses a provision matrix to calculate ECLs
for trade and other short-term receivables carried at
amortised cost. The provision rates are based on days
past due.
The provision matrix is initially based on the Group’s
historical observed default rates. The Group calibrates the
matrix to adjust the historical credit loss experience with
forward-looking information. For instance, if forecast
economic conditions are expected to deteriorate over
the next year, which can lead to an increased number of
defaults, the historical default rates are adjusted. At every
reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates
are analysed.
The assessment of the correlation between historical
observed default rates, forecast economic conditions
and ECLs is a key estimate. The amount of ECLs is
sensitive to changes in circumstances and of forecast
economic conditions. The Group’s historical credit loss
experience and forecast of economic conditions may
also not be representative of customer’s actual default in
the future.
64
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
(CONTINUED)
Significant accounting estimates and assumptions
(continued)
Share-based payment transactions
The Group measures the cost of equity-settled
transactions with employees by reference to the fair
value of the equity instruments at the date at which they
are granted. The fair value is determined by using an
appropriate valuation, using the assumptions as discussed
in Note 29. The accounting estimates and assumptions
relating to equity-settled share-based payments would
have no impact on the carrying amounts of assets and
liabilities in the next annual reporting period but may
impact expenses and equity.
Estimating the incremental borrowing rate
Where the Group cannot readily determine the interest
rate implicit in its leases, it uses the relevant incremental
borrowing rate (IBR) to measure lease liabilities. The IBR
is the rate of interest that the Group would have to pay to
borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to
the right-of-use asset in a similar economic environment.
Significant judgement in determining the lease term
of contracts with renewal options
The Group determines the lease term as the non-
cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
Significant judgement in relation to future cash flow
The Group has several lease contracts relating to
premises and power stations that include extension
and termination options. These options are negotiated
by management to provide flexibility in managing the
leased-asset portfolio and align with the Group’s business
needs. Management exercises significant judgement in
determining whether these extension and termination
options are reasonably certain to be exercised. For
renewal options that were reasonably certain to be
exercised, these have been included in the calculation of
right-of-use assets and lease liabilities.
4.
FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise
receivables, trade and other payables, finance lease and
hire purchase contracts, cash and cash equivalents,
deposits and equity investments.
Risk exposures and responses
The Group manages its exposure to key financial risks in
accordance with the Group’s financial risk management
policy. The objective of the policy is to support the
delivery of the Group’s financial targets while protecting
future financial security.
The main risks arising from the Group’s financial
instruments are interest rate risk, credit risk, equity price
risk and liquidity risk. The Group uses different methods
to measure and manage different types of risks to which
it is exposed. These include monitoring levels of exposure
to interest rate, foreign exchange risk and assessments of
market forecasts for interest rate, foreign exchange and
commodity prices. Ageing analysis and monitoring of
receivables are undertaken to manage credit risk, liquidity
risk is monitored through the development of future
rolling cash flow forecasts.
The board reviews and agrees policies for managing each
of these risks as summarised below.
Primary responsibility for identification and control of
financial risks rests with the Board. The Board reviews
and agrees policies for managing each of the risks
identified below, including for interest rate risk, credit
allowances and cash flow forecast projections.
Details of the significant accounting policies and
methods adopted, including the criteria for recognition,
the basis of measurement and the basis on which income
and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are
disclosed in Note 2 to the financial statements.
(a) Interest rate risk
The Group’s exposure to risks of changes in market
interest rates relate primarily to the Group’s interest-
bearing liabilities and cash balances. The level of debt
is disclosed in Notes 23 and 24. The Group’s policy is to
manage its interest cost using fixed rate debt. Therefore,
the Group does not have any variable interest rate risk
on its debt. The Group constantly analyses its interest
rate exposure. Within this analysis, consideration is given
to potential renewals of existing positions, alternative
financing positions and the mix of fixed and variable
interest rates. There is no significant exposure to changes
in market interest rates at the reporting date.
Westgold Resources Limited Annual Report 2021
65
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Risk exposures and responses (continued)
At the reporting date the Group’s exposure to interest rate risk for classes of financial assets and financial liabilities is set
out below.
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing liabilities
Net financial assets
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Royalties receivable
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing liabilities
Net financial liabilities
Interest rate risk exposure
Judgements of reasonably possible movements:
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
66
Westgold Resources Limited Annual Report 2021
Floating
interest rate Fixed interest
Non-interest
bearing
Total
carrying
amount
150,684,029
–
–
–
–
– 150,684,029
7,466,095
7,466,095
1,149,449
–
1,149,449
150,684,029
1,149,449
7,466,095 159,299,573
–
–
– (83,783,431)
(83,783,431)
(7,338,534)
–
(7,338,534)
– (37,737,304)
– (37,737,304)
– (45,075,838)
(83,783,431) (128,859,269)
30,440,304
137,218,827
346,087
– 137,564,914
–
–
–
–
7,231,137
7,231,137
– 13,000,000 13,000,000
1,149,449
–
1,149,449
137,218,827
1,495,536
20,231,137 158,945,500
–
– (69,664,918)
(69,664,918)
– (12,222,659)
– (12,222,659)
– (25,603,791)
– (25,603,791)
– (37,826,450)
(69,024,918) (107,491,368)
51,454,132
Post tax profit higher (lower)
Other Comprehensive
Income higher (lower)
30 June 2021 30 June 2020 30 June 2021 30 June 2020
527,394
481,477
(527,394)
(481,477)
–
–
–
–
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk exposure (continued)
(b) Credit risk
Credit risk arises from the financial assets of the Group, which comprises cash and cash equivalents, trade and other
receivables and other financial assets held as security and loans. Cash and cash equivalents are held with National
Australia Bank, which is an Australian Bank with an AA- credit rating (Standard & Poor’s).
The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal
to the carrying amount of the financial assets (as outlined in each applicable note).
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it the
Group’s policy to securitise its trade and other receivables.
Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant
exposure to bad debts.
Significant concentrations of credit risk are in relation to cash and cash equivalents with Australian banks.
(c) Price risk
Equity Security Price Risk
The Group’s operations were exposed to equity security price fluctuations arising from investments in equity securities.
Refer to Note 15 for details of equity investments at fair value through profit or loss held at 30 June 2021.
The Group has equity investments, which have shown volatility in price movements over the year. If security prices
varied by 20%, with all other variables held constant, the impact on post tax profits and equity at 30 June, is reflected
below:
Judgements of reasonably possible movements:
Price + 20%
Price - 20%
(d) Commodity price risk
Post tax profit higher (lower)
Other Comprehensive
Income higher (lower)
30 June 2021 30 June 2020 30 June 2021 30 June 2020
899,233
(899,233)
–
–
–
–
–
–
The Group’s operations are exposed to commodity price fluctuations. The Group has a commodity risk management
hedging policy that authorises management to enter into price protection contracts to ensure revenue streams up to
60% of gold sales for up to three years of forecast production.
At the end of the financial year, the Group had unrecognised sales contracts for 156,000 ounces at an average price of
$2,133 per ounce ending in March 2023, which the Group will deliver physical gold to settle. There was therefore no
exposure on recognised financial instruments at the balance sheet date.
(e) Liquidity risk
Liquidity risk arises from the financial liabilities of the Group and the subsequent ability to meet the obligations to repay
the financial liabilities as and when they fall due.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of hire
purchase arrangements.
The table below reflects all contractually fixed payables for settlement, repayment and interest resulting from
recognised financial liabilities as of 30 June 2021. Cash flows for financial liabilities without fixed amount or timing are
based on the conditions existing as 30 June.
Westgold Resources Limited Annual Report 2021
67
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk exposure (continued)
The remaining contractual maturities of the Group’s financial liabilities are:
6 months or less
6 - 12 months
1 - 5 years
Over 5 years
2021
2020
(97,943,429)
(83,348,476)
(9,402,276)
(11,222,942)
(22,875,599)
(14,542,416)
–
–
(130,221,304) (109,113,834)
Maturity analysis of financial assets and liabilities based on management’s expectation
The risk implied from the values shown in the table below reflects a balanced view of cash inflows and outflows.
Leasing obligations, trade payables and other financial liabilities mainly originate from the financing of assets used in
our ongoing operations such as property, plant, equipment and investments of working capital e.g. inventories and
trade receivables. To monitor existing financial assets and liabilities, as well as to enable effective controlling of future
risks, management monitors its Group’s expected settlement of financial assets and liabilities on an ongoing basis.
<6 months 6-12 months
1-5 years
>5 years
Total
2021
Financial assets
Cash and equivalents
Trade and other receivables
Royalties receivable
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing loans
151,074,769
7,466,095
–
1,149,449
159,690,313
(83,783,431)
–
–
–
–
–
–
–
–
–
–
–
–
(4,308,744)
(1,315,528)
(1,941,010)
(9,851,254)
(8,086,748) (20,934,589)
– 151,074,769
–
–
–
7,466,095
–
1,149,449
– 159,690,313
– (83,783,431)
–
(7,565,282)
– (38,872,591)
Net inflow/(outflow)
61,746,884
(9,402,276)
(22,875,599)
– 29,469,009
(97,943,429)
(9,402,276)
(22,875,599)
– (130,221,304)
2020
Financial assets
Cash and equivalents
Trade and other receivables
Royalties receivable
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing loans
138,486,771
7,231,137
–
1,149,449
146,867,357
(69,664,918)
–
–
–
–
–
–
–
–
– 138,486,771
–
7,231,137
3,795,334
9,204,666 13,000,000
–
–
1,149,449
3,795,334
9,204,666 159,867,357
–
(4,448,934)
(3,306,613)
(4,982,152)
(9,234,624)
(7,916,329)
(9,560,264)
(83,348,476)
(11,222,942)
(14,542,416)
– (69,664,918)
– (12,737,699)
– (26,711,217)
– (109,113,834)
Net inflow/(outflow)
63,518,881
(11,222,942)
(10,747,082)
9,204,666
50,753,523
68
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk exposure (continued)
(f) Fair values
For all financial assets and liabilities recognised in the Consolidated Statement of Financial Position, carrying amount
approximates fair value unless otherwise stated in the applicable notes.
The methods for estimating fair value are outlined in the relevant notes to the financial statements.
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from price).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in
the table below.
2021
Financial assets
Instruments carried at fair value
Listed investments
Royalties receivable
2020
Financial assets
Instruments carried at fair value
Royalties receivable
Valuation
technique
market
observable
inputs
(Level 2)
Valuation
technique
non-market
observable
inputs
(Level 3)
Quoted
market price
(Level 1)
Total
6,423,091
–
6,423,091
–
–
6,423,091
–
6,423,091
–
–
–
–
– 13,000,000 13,000,000
– 13,000,000 13,000,000
Westgold Resources Limited Annual Report 2021
69
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk exposure (continued)
(g) Changes in liabilities arising from financing activities
Lease liability
2021
Current obligations
Non-current obligations
Total liabilities
2020
Current obligations
Non-current obligations
Total liabilities
Interest bearing liability
2021
Current obligations
Non-current obligations
Total liabilities
2020
Current obligations
Non-current obligations
Total liabilities
Opening
Cash flows
New leases
Reclassi-
fication
adjustment
Closing
7,425,093
(8,346,056)
920,963
5,469,969
5,469,969
4,797,566
–
2,540,968
(5,469,969)
1,868,565
12,222,659
(8,346,056)
3,461,931
–
7,338,534
6,031,093
(7,753,813)
1,722,720
7,425,093
7,425,093
6,935,551
–
5,287,108
(7,425,093)
4,797,566
12,966,644
(7,753,813)
7,009,828
–
12,222,659
Opening
Cash flows
Additions
Reclassi-
fication
adjustment
Closing
16,309,721 (22,245,203)
5,935,482
17,492,098
17,492,098
9,294,070
– 28,443,234 (17,492,098) 20,245,206
25,603,791 (22,245,203) 34,378,716
–
37,737,304
18,271,020
(19,331,761)
1,060,741
16,309,721
16,309,721
18,465,857
–
7,137,934
(16,309,721)
9,294,070
36,736,877
(19,331,761)
8,198,675
–
25,603,791
70
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. REVENUE
Sale of gold at spot
Sale of gold under forward contracts
Sale of gold under a prepay facility (refer Note 25)
Mining and contracting services
Total revenue from contracts with customers
2021
2020
386,888,429 264,025,099
184,212,700 201,126,150
– 25,938,399
69,069
1,178,623
571,170,198 492,268,271
Disaggregated revenue per segment has been disclosed in Note 33.
No revenue was recognised during the year for performance obligations satisfied in previous periods.
The transaction price allocated to remaining performance obligations under forward contracts not recognised at
the balance sheet date at 30 June 2021 is as follows:
Gold forward contracts
- Within 1 year
- 1 to 2 years
The amounts due are for delivery of gold which will be paid within 3 days of delivery.
6. OTHER INCOME
Interest income calculated using the effective interest rate method
Net gain on sale of assets
Other income
Total other income
2021
2020
179,148,738 247,470,000
153,556,062 164,980,000
332,704,800 412,450,000
2021
2020
334,738
286,620
–
3,031,573
1,957,496
2,603,081
2,292,234
5,921,274
Westgold Resources Limited Annual Report 2021
71
7. EXPENSES
(a) Cost of sales
Gold production
Salaries, wages expense and other employee benefits
Other production costs
Write down in value of inventories to estimated net realisable value
Royalty expense
Contract mining services
Salaries, wages expense and other employee benefits
Mining and contracting service costs
Depreciation and amortisation expense
Depreciation of non-current assets:
Property, plant and equipment
Buildings
Right-of-use assets
Amortisation of non-current assets:
Mine properties and development costs
Total cost of sales
(b) Finance costs
Interest expense
Capitalised borrowing costs to qualifying asset
Unwinding of rehabilitation provision discount
Total finance costs
2021
2020
158,441,833 133,259,379
129,580,548 167,889,923
6,175,664
1,005,487
21,922,481
20,901,094
54,126
632,015
3,155
308,958
52,350,718
43,275,574
1,883,586
1,827,771
7,482,892
7,531,333
77,561,033
86,121,198
455,456,036 462,752,732
1,587,326
2,694,183
(1,587,326)
(2,694,183)
347,475
347,475
918,881
918,881
The development of the Big Bell Underground Mine is deemed to be a qualifying asset and interest expenses of
$1,587,326 (2020: $2,694,183) have therefore been capitalised to the underlying qualifying asset. The rate used to
determine the amount of borrowing costs eligible for capitalisation was 4.16% (2020: 4.60%).
72
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. EXPENSES (CONTINUED)
(c) Other expenses
Administration expenses
Employee benefits expense
Salaries and wages expense
Directors' fees and other benefits
Other employee benefits
Share-based payments expense
Other administration expenses
Consulting expenses
Travel and accommodation expenses
Other costs
Depreciation expense
Property plant and equipment
Right-of-use assets
Total administration expenses
Other expenses
Net loss on sale of assets
Total other expenses
8. INCOME TAX
(a) Major components of income tax expense:
Income Statement
Current income tax expense
Current income tax expense
Adjustment in respect of current income tax of previous years
Deferred income tax
Relating to origination and reversal of temporary differences
Adjustment in respect of prior year tax losses / DTA
Income tax for continuing and discontinuing operations
(b) Amounts charged or credited directly to equity
Share issue costs
2021
2020
5,171,086
4,343,331
477,552
288,200
71,664
95,295
800,132
183,956
6,520,434
4,910,782
1,477,317
1,359,535
83,184
191,333
895,838
606,845
2,456,339
2,157,713
335,981
344,501
516,028
852,009
502,561
847,062
9,828,782
7,915,557
1,053,154
1,053,154
–
–
10,881,936
7,915,557
2021
2020
8,157,254
7,140,285
–
332,296
26,811,823
3,040,207
172,111
(1,257,671)
35,141,188
9,255,117
426,282
(336,228)
426,282
(336,228)
Westgold Resources Limited Annual Report 2021
73
8. INCOME TAX (CONTINUED)
(c) A reconciliation of income tax benefit and the product of accounting loss before
income tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting profit (loss) before tax from continuing operations
Accounting profit (loss) before tax from discontinuing operations
Total accounting profit before income tax
At statutory income tax rate of 30% (2020: 30%)
Non-assessable income
Under (over) in respect of prior years
Income tax expense reported in the income statement
Tax expense from continuing operations
Income tax expense reported in the income statement
(d) Deferred income tax at 30 June relates to the following:
2021
2020
111,893,067
43,862,432
–
–
111,893,067
43,862,432
33,567,920
13,158,730
(124,779)
(2,978,238)
1,698,047
(925,375)
35,141,188
9,255,117
35,141,188
9,255,117
35,141,187
9,255,117
Deferred tax liabilities
Exploration
Consolidated Statement of
Financial Position
Consolidated Statement of
Comprehensive Income
2021
2020
2021
2020
(11,469,917)
(7,823,986)
3,645,931
(12,686,103)
Trade and other receivables
(676,017)
(608,739)
67,278
(50,006)
Net gain on financial assets AFVTP
(181,141)
(3,900,000)
(3,718,859)
(2,514,195)
Prepayments
Deferred mining
Inventories
(11,839)
(18,830)
(6,991)
5,320
(76,471,436)
(60,595,582)
15,875,854
27,748,773
(8,703,078)
(5,691,339)
3,011,739
1,306,632
Property plant and equipment
(5,986,013)
291,063
6,277,076
(2,148,882)
Gross deferred tax liabilities
(103,499,441)
(78,347,413)
Deferred tax assets
Accrued expenses
834,674
534,117
(300,557)
(10,061)
Provision for employee entitlements
4,104,863
3,487,834
(617,029)
(707,090)
Provision for rehabilitation
14,086,706
16,643,909
2,557,203
(7,647,145)
Business related costs
Capital raising costs
Recognised tax losses
Gross deferred tax assets
Net deferred tax liabilities
Deferred tax expense (income)
(e) Unrecognised losses
63,028
83,205
20,177
(36,285)
801,486
1,227,768
426,282
–
8,382,148
16,711,513
8,329,365
1,733,921
28,272,905
38,688,346
(75,226,536)
(39,659,067)
35,567,469
4,994,879
At 30 June 2021, there are no unrecognised losses for the Group (2020: nil).
74
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. EARNINGS PER SHARE
The following reflects the data used in the basic and diluted earnings per share computations.
(a) Earnings used in calculating earnings per share
Net profit attributable to ordinary equity holders of the parent
Profit attributable to discontinued operations
Net profit attributable to ordinary equity holders of the parent
Basic earnings per share (cents)
Discontinued operations
Earnings used in calculating earnings per share
For diluted earnings per share:
Net profit attributable to ordinary equity holders of the parent (from basic EPS)
Profit attributable to discontinued operations
Net profit attributable to ordinary equity holders of the parent
Diluted profit per share (cents)
Continuing operations
Discontinued operations
(b) Weighted average number of shares
2021
2020
76,751,880
34,607,315
–
–
76,751,880
34,607,315
18.16
–
18.16
8.65
–
8.65
76,751,880
34,607,315
–
–
76,751,880
34,607,315
18.12
–
18.12
8.65
–
8.65
Weighted average number of ordinary shares for basic earnings per share
422,637,346 399,990,790
Effect of dilution:
Share options
Rights
441,278
557,582
–
–
Weighted average number of ordinary shares adjusted for the effect of dilution
423,636,207 399,990,790
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit
attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The Company has included share options and rights on issue in the calculation of dilutive earnings per share for
the current financial period. In the prior year ending 30 June 2020, 5,107,698 share options were excluded from the
calculation of diluted earnings per share because they were considered anti-dilutive or contingently issuable.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting
date and the date of authorisation of these financial statements.
Westgold Resources Limited Annual Report 2021
75
10. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash at bank and in hand
CASH FLOW RECONCILIATION
Reconciliation of net profit after income tax to net cash flows from operating activities
Profit after income tax
Amortisation and depreciation
Gold prepayment physical deliveries (refer to Note 25)
Provisional gold sales (refer to Note 25)
Income tax expense
Share based payments
Unwinding of rehabilitation provision discount
Net loss (profit) on disposal of property, plant and equipment
Fair value change in financial instruments (refer to Note 15)
Exploration and evaluation expenditure written off (refer to Note 18)
Profit on demerger of a subsidiary (refer to Note 38)
Changes in assets and liabilities
(Increase) decrease in inventories
Increase in trade and other receivables and prepayments
Increase in trade and other creditors
Increase in provisions
Net cash flows from operating activities
2021
2020
150,684,029 137,218,827
–
346,087
150,684,029 137,564,914
76,751,880
34,607,315
140,130,238 139,602,938
– (25,470,487)
(198,841)
–
35,141,187
9,255,117
800,132
183,956
347,475
918,881
1,053,154
(3,031,573)
(5,202,140)
(8,888,756)
86,058
356,317
–
(8,727,618)
248,909,143 138,806,090
(15,181,202)
1,554,748
(954,066)
(2,272,566)
14,258,184
15,617,527
2,109,890
2,025,841
249,141,949 155,731,640
At 30 June 2021, the Group had available $5,988,078 (2020: $17,405,057) of undrawn borrowing facilities.
11. TRADE AND OTHER RECEIVABLES (current)
Statutory receivables
Other debtors
Total trade and other receivables
2021
2020
6,738,159
5,364,679
727,936
1,866,458
7,466,095
7,231,137
Statutory receivables comprises of GST input tax credits and diesel fuel rebates.
Other debtors are non-interest bearing and generally have a 30-60 day term.
All trade and other receivables are classed as recoverable in full. The carrying amount of other debtors approximate
their fair value. Refer Note 4(b) for credit risk disclosures.
76
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. INVENTORIES (current)
Ore stocks at net realisable value
Gold in circuit at cost
Gold metal at cost
Stores and spares at cost
Provision for obsolete stores and spares
Total inventories at lower of cost and net realisable value
2021
2020
13,906,060
9,421,255
15,529,300
15,326,412
161,235
197,885
34,250,915
22,561,112
(4,718,142)
(3,558,469)
59,129,368
43,948,165
During the year there were write-downs in inventories of $6,175,664 (2020: $1,005,487) from continuing operations for
the Group. This is included in cost of sales refer to Note 7(a).
13. PREPAYMENTS (current)
Prepayments
14. OTHER FINANCIAL ASSETS (current)
Cash on deposit
The cash on deposit is interest bearing and is used as security for bank guarantees.
15. FINANCIAL ASSETS
Listed shares - Australian
Royalties receivable - Lithium rights
Movement in Listed Shares
At 1 July
Additions of listed shares
Proceeds on disposal of financial assets
Net gain on fair value changes of financial assets
At 30 June
Movement in Royalties Receivable
At 1 July
Net gain on financial assets at FVTPL
Settlement of Mount Marion lithium royalty
Settlement of Buldania royalty
At 30 June
2021
2020
4,035,977
3,369,998
4,035,977
3,369,998
2021
2020
1,149,449
1,149,449
1,149,449
1,149,449
2021
2020
6,423,091
–
– 13,000,000
6,423,091
13,000,000
–
41,210,813
5,986,129
4,263,933
(265,178)
(54,363,502)
702,140
8,888,756
6,423,091
–
13,000,000 15,000,000
4,500,000
(17,500,000)
–
–
– (2,000,000)
– 13,000,000
Westgold Resources Limited Annual Report 2021
77
15. FINANCIAL ASSETS (CONTINUED)
Listed shares
These financial assets consist of investments in ordinary shares. The fair value of equity investments at fair value
through profit or loss has been determined directly by reference to published price quotations in an active market.
Movement in investments during the year ended 30 June 2021 are as follows:
– Acquired shares in Karora Resources and subsequently disposed of its total investment;
– Acquired shares in Musgrave Minerals Limited (Musgrave) by participating in a placement. The Group has a 0.26%
(30 June 2020: nil) interest in Musgrave, which is involved in the exploration of gold and base metals in Australia.
Musgrave is listed on the Australian Securities Exchange (ASX: MGV). At the end of the period, the fair value of the
Group’s investment was $513,889 (30 June 2020: nil).
– Acquired shares in Alto Metals Limited (Alto). The Group has a 14.11% (2020: Nil) interest in Alto which is involved in
the exploration of gold and base metals in Australia. Alto is listed on the Australian Securities Exchange (ASX: AME). At
the end of the year, the fair value of the Group’s investment was $5,909,201 (2020: Nil) which is based on the quoted
share price.
Royalties Receivable
These financial assets consist of Lithium royalty rights. The fair value of royalties receivable at fair value through profit
or loss has been determined using a discounted cash flow model.
The Mount Marion Lithium Royalty Rights
Westgold reached agreement to divest its Mt Marion Royalty to Reed Industrial Minerals (50% owned by Mineral Resources
Limited ASX:MIN) for a gross amount of $17.5 million in cash. The royalties represented a 1.5% gross revenue royalty and a
production royalty of $2 per tonne of ore mined and/or processed from a 30 hectare area of Location 53 which it held for
a 20 year period from 2016. There was no production from area during the year (refer to Note 35).
16. PROPERTY, PLANT & EQUIPMENT
Plant and equipment
Gross carrying amount at cost
Accumulated depreciation and impairment
Net carrying amount
Land and buildings
Gross carrying amount at cost
Accumulated depreciation and impairment
Net carrying amount
Capital work in progress at cost
Total property, plant and equipment
Movement in property, plant and equipment
Plant and equipment
At 1 July net of accumulated depreciation
Transfer from capital work in progress
Disposals
Disposal of subsidiary
Depreciation charge for the year
78
Westgold Resources Limited Annual Report 2021
2021
2020
349,487,807 306,397,153
(208,263,726)
(170,981,154)
141,224,081 135,415,999
24,398,325
23,053,950
(7,026,047)
(5,142,462)
17,372,278
17,911,488
8,151,819
8,565,545
166,748,178 161,893,032
135,415,999 137,166,856
62,953,599
43,117,946
(4,458,817)
(1,157,556)
–
(91,173)
(52,686,700)
(43,620,074)
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. PROPERTY, PLANT & EQUIPMENT (CONTINUED)
At 30 June net of accumulated depreciation
Land and buildings
At 1 July net of accumulated depreciation
Transfer from capital works in progress
Disposal of subsidiary
Depreciation charge for the year
At 30 June net of accumulated depreciation
Capital work in progress
At 1 July
Additions
Transfer to mine properties (refer to Note 17)
Transfer to mine capital development (refer to Note 17)
Transfer to plant and equipment
Transfer to property
At 30 June
2021
2020
141,224,081 135,415,999
17,911,488
15,655,400
1,344,375
4,257,657
–
(173,797)
(1,883,585)
(1,827,772)
17,372,278
17,911,488
8,565,545
22,750,247
66,730,495
36,684,765
(1,687,813)
(2,179,429)
(1,158,434)
(1,314,436)
(62,953,599)
(43,117,945)
(1,344,375)
(4,257,657)
8,151,819
8,565,545
The carrying value of plant and equipment purchase under financing arrangements at 30 June 2021 is $43,054,511
(2020: $40,034,638).
Assets under hire purchase contracts are pledged as security for the related interest bearing liabilities (refer to
Notes 23 and 24).
17. MINE PROPERTIES AND DEVELOPMENT
Development areas
Gross carrying amount at cost
Net carrying amount
Mine properties
Gross carrying amount at cost
Accumulated amortisation and impairment
Net carrying amount
Mine capital development
Gross carrying amount at cost
Accumulated amortisation
Net carrying amount
Total mine properties and development costs
Movement in mine properties and development
Development areas
At 1 July
Disposal of subsidiary
At 30 June
2021
2020
–
–
–
–
314,945,512 219,555,904
(42,821,170)
(30,605,966)
272,124,342 188,949,938
394,338,003 303,343,786
(259,126,425) (193,780,595)
135,211,578 109,563,191
407,335,920 298,513,129
–
–
–
756,919
(756,919)
–
Westgold Resources Limited Annual Report 2021
79
17. MINE PROPERTIES AND DEVELOPMENT (CONTINUED)
Mine properties
At 1 July net of accumulated amortisation
Additions
Transfer from capital work in progress (refer to Note 16)
Transfer from mine capital development
Transfer from exploration (refer to Note 18)
(Decrease) Increase in rehabilitation provision
Amortisation charge for the year
At 30 June net of accumulated amortisation
Mine capital development
At 1 July net of accumulated amortisation
Additions
Transfer from capital work in progress (refer to Note 16)
Transfer from exploration (refer to Note 18)
Transfer to capital development
Amortisation charge for the year
At 30 June net of accumulated amortisation
18. EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation costs carried forward in respect of mining areas of interest
Pre-production areas
At cost less expenditure written off
Net carrying amount
Movement in deferred exploration and evaluation expenditure
At 1 July net of accumulated impairment
Additions
Disposal of subsidiary
Transferred to mine properties (refer to Note 17)
Transferred to mine capital development (refer to note 17)
Expenditure written off - continuing operations
At 30 June net of accumulated impairment
2021
2020
188,949,938 117,840,138
92,956,156
58,293,797
1,687,813
2,179,429
1,851,824
726,071
1,051,234
18,510,592
(2,157,420)
6,714,063
(12,215,203)
(15,314,152)
272,124,342 188,949,938
109,563,191
99,610,277
89,439,356
74,615,330
1,158,434
1,314,436
2,248,251
5,556,265
(1,851,824)
(726,071)
(65,345,830)
(70,807,046)
135,211,578 109,563,191
2021
2020
89,738,936
78,874,701
89,738,936
78,874,701
78,874,701 104,276,449
14,249,778
15,151,294
– (16,129,868)
(1,051,234)
(18,510,592)
(2,248,251)
(5,556,265)
(86,058)
(356,317)
89,738,936
78,874,701
80
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. EXPLORATION AND EVALUATION EXPENDITURE (CONTINUED)
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of the respective mining areas. During the year, a review was
undertaken for each area of interest to determine the appropriateness of continuing to carry forward costs in relation
to that area of interest. In assessing the carrying value of all of the Group’s projects, certain expenditure on exploration
and evaluation of mineral resources has not led to the discovery of commercially viable quantities of mineral resources.
As a result, exploration and evaluation expenditure of $86,058 (2020: $356,317) was written off to the profit and loss.
The amount relates to tenements which were written down to nil as the expenditure did not result in the discovery of
commercially viable quantities of mineral resources and as a result no future benefits are expected.
19. RIGHT-OF-USE ASSETS
Group as a lessee
AASB 16 Leases requires the recognition of right-of-use assets for the remaining term of the current leases for office
premises and the warehouse facility, as well as the power stations at the various mine sites.
The Group has lease contracts for various items of mining equipment, motor vehicles and buildings used in its
operations. Leases of mining equipment generally have lease terms between three and seven years, while motor
vehicles and buildings generally have lease terms between three and five years.
The Group also has certain leases of assets with lease terms of 12 months or less and leases of office equipment with low
value. The Group applies the short-term lease and lease of low-value assets recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
As at 1 July 2020
Additions
Disposals
Depreciation expense
As at 30 June 2021
Power
Stations
Premises
Mining
Equipment
Total
8,478,339
2,963,092
501,146
11,942,577
2,561,880
–
–
–
760,382
3,322,262
(7,032)
(7,032)
(6,640,551)
(929,874)
(428,495)
(7,998,920)
4,399,668
2,033,218
826,001
7,258,887
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and
the movements during the period:
As at 1 July
Additions
Disposals
Accretion of interest
Payments
As at 30 June
The following are the amounts recognised in profit or loss:
Depreciation expense for right-of-use assets
Included in cost of sales
Included in administration expenses (Note 7)
Interest expense on lease liabilities
Less interest expense capitalised to qualifying asset
Total amount recognised in profit or loss
2021
2020
11,942,577
12,966,644
3,322,262
7,009,827
(7,032)
–
347,136
593,956
(8,346,056)
(8,627,850)
7,258,887
11,942,577
7,482,892
7,531,333
516,028
502,561
347,136
593,956
(347,136)
(593,956)
7,998,920
8,033,894
The interest expense of these lease liabilities has been capitalised to the qualifying assets.
Westgold Resources Limited Annual Report 2021
81
20. TRADE AND OTHER PAYABLES
Trade creditors (a)
Sundry creditors and accruals (b)
The carrying value of trade and other payables approximates the fair value.
(a)
(b)
Trade creditors are non-interest bearing and generally on 30-day terms.
Sundry creditors and accruals are non-interest bearing and generally on 30-day terms.
21. PROVISIONS (current)
Provision for annual leave
Provision for long service leave
22. PROVISIONS (non-current)
Provision for long service leave
Provision for rehabilitation (a)
(a) Provision for rehabilitation
2021
2020
44,573,485
34,521,626
39,209,946
35,143,292
83,783,431
69,664,918
2021
2020
9,262,707
7,884,585
2,142,555
1,902,341
11,405,262
9,786,926
2021
2020
2,277,616
1,839,187
74,840,940
76,650,886
77,118,556
78,490,073
The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on
a discounted basis at the time of developing the mines and installing and using those facilities. The rehabilitation
provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred
up to 2030, which is when the producing mine properties are expected to cease operations. These provisions have
been created based on the Group’s internal estimates. Assumptions based on the current economic environment have
been made, which management believe is a reasonable basis upon which to estimate the future liability.
These estimates are reviewed regularly to take into account any material changes to the assumptions. However, actual
rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that
will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when
the mines cease to produce at economically viable rates. This, in turn, will depend upon future gold prices, which are
inherently uncertain.
The discount rates used in the calculation of the provision as at 30 June 2021 range from 0.90% to 1.37% (2020: range
from 0.58% to 0.87%). Refer to Note 3 for further detail.
(b) Current and non-current movements in provision for rehabilitation
At 1 July
Disposal of subsidiary
Adjustment due to revised conditions
Unwind of discount
At 30 June
82
Westgold Resources Limited Annual Report 2021
2021
2020
76,650,886
69,017,942
–
–
(2,157,420)
6,714,063
347,474
918,881
74,840,940
76,650,886
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. INTEREST-BEARING LOANS AND BORROWINGS (current)
Lease liabilities
Hire purchase arrangements
At 30 June
2021
2020
5,469,969
7,425,093
17,492,098
16,309,721
22,962,067
23,734,814
Represents current portion of hire purchase arrangements which have repayment terms of 36 months from inception.
24. INTEREST-BEARING LOANS AND BORROWINGS (non-current)
Lease liabilities
Hire purchase arrangements
At 30 June
2021
2020
1,868,565
4,797,566
20,245,206
9,294,070
22,113,771
14,091,636
Represents non-current portion of hire purchase arrangements which have repayment terms of 36 months from
inception.
The weighted average interest rate is 4.16% per annum (2020: 4.60%).
Assets pledged as security:
The carrying amounts of assets pledged as security for current and non-current interest-bearing liabilities:
Non-current
Hire purchase arrangements
Plant and equipment
Total non-current assets pledged as security
2021
2020
49,177,558 40,034,638
49,177,558 40,034,638
Plant and equipment assets are pledged against liabilities for the term of the arrangement.
Future commitments in respect of interest bearing loans
Hire purchase commitments
The Company has hire purchase contracts for various items of plant and machinery. The hire purchase contracts have
an average term of 36 months. Assets under hire purchase contracts are pledged as security for the related interest
bearing liabilities.
Interest bearing liabilities
2021
Within one year
After one year but not more than five years
Total minimum payments
Less amounts representing finance charges
Present value of minimum payments
Minimum
payments
Present value
of payments
17,938,002
17,492,098
20,934,589 20,245,206
38,872,591
37,737,304
(1,135,287)
–
37,737,304
37,737,304
Westgold Resources Limited Annual Report 2021
83
24. INTEREST-BEARING LOANS AND BORROWINGS (non-current) (CONTINUED)
Future commitments in respect of interest bearing loans (continued)
Interest bearing liabilities
2020
Within one year
After one year but not more than five years
Total minimum payments
Less amounts representing finance charges
Present value of minimum payments
Lease liabilities
Minimum
payments
Present value
of payments
17,150,953
16,309,721
9,560,264
9,294,070
26,711,217
25,603,791
(1,107,426)
–
25,603,791
25,603,791
AASB 16 Leases requires the recognition of right-of-use assets for the remaining term of the current leases for office
premises and the warehouse facility, as well as the power stations and equipment at the various mine sites.
Lease liabilities
2021
Within one year
After one year but not more than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Lease liabilities
2020
Within one year
After one year but not more than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
25. UNEARNED INCOME
Gold prepayment
Provisional gold sales
Movement in gold prepayment
At 1 July
Revenue recognised during the year (refer Note 5)
Fee for restructure
Deemed finance component
At 30 June
84
Westgold Resources Limited Annual Report 2021
Minimum
lease
payments
Present value
of lease
payments
5,624,272
5,469,969
1,941,010
1,868,565
7,565,282
7,338,534
(226,748)
–
7,338,534
7,338,534
Minimum
lease
payments
Present value
of lease
payments
7,755,547
7,425,093
4,982,152
4,797,566
12,737,699
12,222,659
(515,040)
–
12,222,659
12,222,659
2021
2020
–
–
–
–
198,841
198,841
– 25,470,487
– (25,938,399)
–
–
–
67,606
400,306
–
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 25. UNEARNED INCOME (CONTINUED)
Movement in provisional gold sales
At 1 July
Provisional gold sales at 30 June
At 30 June
This represents gold sold on provisional outturns on 30 June 2021.
26. ISSUED CAPITAL
(a) Ordinary Shares
Issued and fully paid
(b) Movements in ordinary shares on issue
At 1 July 2019
Capital reduction via demerger
Issued share capital (refer Note 29 (b))
Issued share capital on conversion of listed options
Issued share capital
Share issue costs, net of tax
At 30 June 2020
Issued share capital on conversion of listed options
Share issue costs, net of tax
At 30 June 2021
(c) Terms and conditions of contributed equity
2021
2020
198,841
–
(198,841)
198,841
–
198,841
2021
2020
364,077,523 356,130,055
Number
$
389,154,354 299,494,861
– (8,803,840)
530,313
1,102,000
10,545,603
21,542,506
20,000,000 45,000,000
–
(2,205,472)
420,230,270 356,130,055
3,694,936
8,373,750
–
(426,282)
423,925,206 364,077,523
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholder meetings. In the event of winding up the Company the holders are entitled to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par share
values. Accordingly, the Parent does not have authorised capital nor par value in respect of its issued shares.
(d) Escrow restrictions
There are no current escrow restrictions on the issued capital of the Company.
Westgold Resources Limited Annual Report 2021
85
26. ISSUED CAPITAL (CONTINUED)
(e) Options on issue
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Type
Unlisted - Tranche 2 (i)
Unlisted - Tranche 3 (i)
Unlisted - Tranche 3 (i)
Unlisted - Tranche 4 (ii)
Unlisted - Tranche 4 (ii)
Total
Expiry Date
30/06/2023
30/06/2022
30/06/2022
30/06/2023
30/06/2023
(i)
(ii)
ZEPOs issued pursuant to the Westgold Resources Limited Employee Share and Option Plan.
Rights issued pursuant to the Westgold Resources Limited Employee Share and Option Plan.
(f) Option conversions
3,694,936 listed options were exercised during the financial year (2020: 10,545,603).
(g) Capital management - gearing ratio
Gearing ratio
Debt
Capital
Exercise
Price
Number of
options
Nil
Nil
Nil
Nil
Nil
205,768
153,810
367,820
233,506
1,252,994
2,213,898
2021
2020
7.42%
7.25%
45,075,838
37,826,450
607,360,307 521,860,827
Capital includes issued capital and all other equity reserves attributable to the equity holders of the parent for the
purpose of the Group’s capital management. The primary objective of the Group’s capital management is to ensure
that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise the
shareholder’s value. The Group manages its capital structure and makes adjustments in light of changes in economic
conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may
return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes
during the years ended 30 June 2021 and 30 June 2020. The Group monitors capital using a gearing ratio, which is
debt divided by the aggregate of equity. The Group includes in its net debt, interest bearing loans and borrowings. The
Group’s policy is to keep the gearing ratio between 5% and 20%.
27. RETAINED EARNINGS (ACCUMULATED LOSSES)
At 1 July
Net profit in current year attributable to members of the parent entity
Dividend on demerger of Castile (refer to Note 38)
At 30 June
2021
2020
(30,229,223)
(51,784,989)
76,751,880
34,607,315
– (13,051,549)
46,522,657 (30,229,223)
86
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 28. RESERVES
At 30 June 2019
Share-based payments
At 30 June 2020
Share-based payments
At 30 June 2021
Equity reserve
Share-based
payments
reserve
Equity
reserve
Total
14,282,408 181,493,631 195,776,039
183,956
–
183,956
14,466,364 181,493,631 195,959,995
800,132
–
800,132
15,266,496 181,493,631 196,760,127
This reserve relates to the intercompany loans with Metals X Ltd written off on demerger of the Group and includes tax
consolidated adjustments.
Share-based payments reserve
This reserve is used to recognise the fair value of options issued to employees in relation to equity-settled share-based
payments.
29. SHARE-BASED PAYMENTS
(a) Recognised share-based payment expense
The expense recognised for services received during the year is shown in the table below:
Expense arising from equity-settled share-based payments
2021
2020
800,132
183,956
The share-based payment plan is described below. There have been no cancellations or modifications to the plan
during 2021, 2020 and 2019.
(b) Transactions settled using shares
There were no transactions settled using shares in the year ending 30 June 2021.
Transactions settled using shares in the previous financial year are listed below:
– On 23 April 2020, the Company announced that it had agreed to acquire the Albury Heath project from Cervantes
Corporation Limited. Consideration for the acquisition included the issue of 303,313 fully paid ordinary shares to
the value of $700,000. Contingent consideration includes $400,000 if future production from the project exceeds
25,000 ounces and an additional $200,000 if the quantity of gold produced exceeds 35,000 ounces. The contingent
consideration is payable in cash and/or shares. The Company determined that it could not readily estimate the fair
value of the assets acquired on the basis that this was an exploration asset. The purchase was measured by reference
to the share issued measured at market value on 8 May 2020 (acquisition date) at $2.31 per share.
– On 27 November 2019, the Company announced that it had agreed to acquire the 20% free carried interest owned
by Fe Ltd in the Peak Hill JV agreement. Consideration for the acquisition included the issue of 200,000 fully paid
ordinary shares. The Company determined that it could not readily estimate the fair value of the assets acquired on
the basis that this was an exploration asset. The purchase was measured by reference to the share issued measured
at market value on 04 December 2019 (acquisition date) at $2.01 per share.
(c) Employee share and option plan
Under the Employee Share and Option Plan (ESOP), grants are made to senior executives and other staff members
who have made an impact on the Group’s performance. ESOP grants are delivered in the form of share options or
performance rights which vest over periods as determined by the Board of Directors.
Westgold Resources Limited Annual Report 2021
87
29. SHARE-BASED PAYMENTS (CONTINUED)
(d) Share options and performance rights
Zero Exercise Price Options (ZEPO)
Unlisted employee options are issued to senior management under the Employee Share Option Plan, the principal
terms being:
– The Employee Options have been issued for nil consideration;
– Each Employee Option carries an entitlement to one fully paid ordinary share in the Company for each Employee
Option vested;
– Vesting only occurs after the end of the Performance Periods (30 June 2020 and 30 June 2021) and the number of
Employee Options that vest (if any) will depend on:
– Growth in Return on Capital Employed over the Performance Periods (“ROCE”) (50%); and
– Total Shareholder Return relative to the S&P/All Ordinaries Gold Index over the Performance Periods (50%).
– Unvested Employee Options lapse on cessation of a holder’s employment with Westgold;
– Any Employee Options that do not vest after the end of the Performance Periods will automatically lapse; and
– No amount is payable by a holder of Employee Options in respect of the shares allocated upon vesting of the
Employee Option.
Performance Rights (Rights)
Unlisted Employee Performance Rights are issued to senior management under the Employee Share Option Plan, the principal
terms being:
– The Performance Rights have been issued for nil consideration.
– Exercise Price of a Performance Right is nil
– The Performance Rights measurement date is 31 March 2023
– The Performance Rights are subject to defined Performance Conditions
– Growth in Relative Total Shareholder Return (“RTSR”) (25%);
– Growth in Absolute Total Shareholder Return (“ATSR”) (25%);
– Growth in Absolute Earnings Per Share (“EPS”) (25%); and
– Operational Growth (25%).
– Subject to the terms contained in this Offer, the Performance Rights will not be transferable in whole or in part
(except, in the case of the Performance Right holder’s death, by his or her legal personal representative).
– The Company will issue fully paid ordinary Shares ranking pari passu with the issued ordinary shares once the
Performance Rights have vested.
– The Company will apply for listing on the ASX of the resultant Shares of the Company issued upon vesting of any
Performance Rights.
– A Performance Rights holder cannot participate in dividends or bonus issues, with respect to those Performance
Rights, unless those Performance Rights are vested.
– A Performance Rights holder does not have any right to participate in new issues of securities in the Company made
to shareholders with respect to those Performance Rights.
– The Board has the right to vary the entitlements of Participants to take account of the effect of capital reor-
ganisations, bonus issues or rights issues.
– No amount is payable by a holder of Performance Rights in respect of the shares allocated upon vesting of the
Performance Rights.
Summary of options and rights granted under the Employee Share and Option Plan
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed/forfeited during the year
Outstanding at the year end
Exercisable at the year end
88
Westgold Resources Limited Annual Report 2021
2021
Number
5,107,698
1,520,181
2021
WAEP
2020
Number
1.64
16,999,600
0.00
684,141
(3,694,936)
2.29 (10,530,000)
(719,045)
2,213,898
–
0.00
0.00
0.00
(2,046,043)
5,107,698
3,625,000
2020
WAEP
1.87
0.00
2.04
0.95
1.64
2.31
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29. SHARE-BASED PAYMENTS (CONTINUED)
(d) Share options and performance rights (continued)
The following table represents the outstanding balance as at 30 June 2021:
Grant Date
Vesting date
Expiry date
PEPO - Tranche 1
Exercise
price
Number of
Options /
Rights
Options
lapsed /
forfeited
Options /
Rights
Issued /
(exercised)
Number of Options / Rights
at end of the year
On issue
Vested
22/11/2017 22/11/2018
24/11/2020
$2.31
2,400,000
– (2,400,000)
– 2,400,000
23/11/2017 24/11/2018
24/11/2020
$2.31
1,225,000
– (1,225,000)
–
1,225,000
ZEPO - Tranche 2
28/11/2018 30/06/2021 30/06/2021
10/05/2019 30/06/2021 30/06/2023
ZEPO - Tranche 3
07/05/2020 30/06/2022 30/06/2022
07/05/2020 30/06/2022 30/06/2022
Rights - Tranche 4
24/11/2020 30/06/2023 30/06/2023
24/11/2020 30/06/2023 30/06/2023
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
230,307
(160,371)
(69,936)
–
69,936
205,768
205,768
568,250
(362,482)
153,810
–
–
–
153,810
530,331
(196,192)
33,681
367,820
–
–
–
–
233,506
233,506
1,252,994
1,252,994
–
–
–
–
Total
5,107,698
(719,045)
(2,174,755)
2,213,898
3,900,704
Weighted average remaining contractual life of share-based payments
The weighted average remaining contractual life for the share-based payments outstanding as at 30 June 2021 is
1.76 years (2020: 0.93 years).
Range of exercise price of share-based payments
The range of exercise price for share-based payments outstanding at the end of the year is $0.00 (2020: $0.00 to $2.31).
Weighted average fair value of share-based payments
The weighted average fair value of share-based payments granted during the year was $1.77 (2020: $0.80).
Valuation of share-based payments
The fair value of the equity-settled share-based payments granted under the ESOP is estimated at the date of grant
using either a Black & Scholes or a Monte Carlo model, which takes into account factors including the exercise price,
the volatility of the underlying share price, the risk-free interest rate, the market price of the underlying share at grant
date, historical and expected dividends and the expected life of the option or right, and the probability of fulfilling the
required hurdles.
– Tranche 2 Options vest subject to performance hurdles, measured for the period 1 July 2018 to 30 June 2021
– Tranche 3 Options vest subject to performance hurdles, measured for the period 1 July 2019 to 30 June 2022
– Tranche 4 Rights vest subject to performance hurdles, measured for the period 1 July 2020 to 30 June 2023
Westgold Resources Limited Annual Report 2021
89
29. SHARE-BASED PAYMENTS (CONTINUED)
(d) Share options and performance rights (continued)
The following table gives the assumptions made in determining the fair value of the rights granted in Tranche 4.
Grant date
24/11/2021
24/11/2021
24/11/2021
24/11/2021
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
RTSR
53%
0.11%
2.6
$0.00
$2.23
$1.48
ATSR
53%
0.11%
2.6
$0.00
$2.23
$1.25
Operational
Growth
53%
0.11%
2.6
$0.00
$2.23
$2.17
AEPS
53%
0.11%
2.6
$0.00
$2.23
$2.17
The effects of early exercise have been incorporated into the calculations by using an expected life for the option
that is shorter than the contractual life based on historical exercise behaviour, which is not necessarily indicative of
exercise patterns that may occur in the future. The expected volatility was determined using a historical sample of the
Company’s share price over a three-year period. The resulting expected volatility therefore reflects the assumptions
that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
30. COMMITMENTS
(a) Capital commitments
At 30 June 2021, the Group has capital commitments that relate principally to the purchase and maintenance of plant
and equipment for its mining operations.
Capital expenditure commitments
- Within one year
(b) Mineral tenement lease commitments
2021
2020
19,360,999
10,098,601
The Company has commercial leases over the tenements in which the mining operations are located. These tenement
leases have a life of between six months and twenty-one years. In order to maintain current rights to explore and mine the
tenements, the Group is required to perform minimum exploration work to meet the expenditure requirements specified
by the relevant state governing body. There are no restrictions placed on the lessee by entering into these contracts.
Mineral tenement leases:
- Within one year
- After one year but not more than five years
- After more than five years
(c) Other commitments
2021
2020
4,158,593
3,921,796
16,361,419
15,431,391
25,743,066
27,470,108
46,263,078
46,823,295
The Group has obligations for various expenditures such as royalties, production-based payments and exploration
expenditure. Such expenditures are predominantly related to the earning of revenue in the ordinary course of business.
Royalties paid under contractual arrangements
90
Westgold Resources Limited Annual Report 2021
2021
2020
21,922,481
20,901,094
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31. CONTINGENT ASSETS AND LIABILITIES
(i) Bank guarantees and rental deposits
The Group has a number of bank guarantees and rental deposits in favour of various government authorities and
service providers. These primarily relate to office leases and environmental and rehabilitation bonds at the various
projects. The total amount of these guarantees at the reporting date is $1,149,449 (2020: $1,149,449). The bank
guarantees are fully secured by term deposits (refer to Note 14).
32. AUDITOR’S REMUNERATION
Amounts received or due and receivable by Ernst & Young (Australia) for:
Fees for auditing the statutory financial report of the parent covering the group and
auditing the statutory financial reports of any controlled entities
280,800
245,577
Fees for other assurance and agreed upon procedures services and other legislation or
contractual arrangements where there is discretion as to whether the service is provided by
the auditor or another firm.
3,640
2021
2020
Fees for other services:
- Tax compliance
Total auditor’s remuneration
33. OPERATING SEGMENTS
22,174
208,409
306,614
453,986
For management purposes, the Group is organised into operating segments determined by the location of the mineral
being mined or explored, as these are the sources of the Group’s major risks and have the most effect on rates of return.
Reportable segments
The Group comprises the following reportable segments
Reference
Segment
Nature
FGO
MGO
CGO
Fortnum Gold Operations
Mining, treatment, exploration and development of gold assets
Meekatharra Gold Operations Mining, treatment, exploration and development of gold assets
Cue Gold Operations
Mining, treatment, exploration and development of gold assets
Other
Other
General
Exploration and development of other mineral assets and contract mining
services
Executive management monitors the operating results of its operating segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating
profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However,
certain income and expenses (see below) are managed on a consolidated basis and are not allocated to operating
segments. All other adjustments and eliminations are part of the detailed reconciliations presented further below.
Unallocated income and costs
Finance income and fair value gains and losses on financial assets are not allocated to individual segments as the
underlying instruments are managed on a Group basis.
Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are
also managed on a Group basis. Corporate charges comprise non-segmental expenses such as head office expenses
and interest costs. Corporate charges are not allocated to operating segments. Refer to reconciliation segment results
to consolidated results.
Westgold Resources Limited Annual Report 2021
91
33. OPERATING SEGMENTS (CONTINUED)
Other disclosures
Capital expenditure consists of additions of property, plant and equipment, mine properties and development and
exploration and evaluation expenditure including assets from the acquisition of subsidiaries.
The following table presents revenue and profit information for reportable segments for the years ended 30 June 2021
and 30 June 2020.
MGO
CGO
FGO
Other
Total
Year ended 30 June 2021
External revenue
Sale of gold at spot
159,820,033 128,211,446 98,856,950
– 386,888,429
Sale of gold under forward contracts
80,906,273
61,502,176
41,804,251
– 184,212,700
Mining and contracting services
–
–
–
69,069
69,069
Total segment revenue
240,726,306 189,713,622 140,661,201
69,069 571,170,198
Results
Depreciation and amortisation
(56,420,333)
(51,444,120)
(31,413,778)
(852,009) (140,130,240)
Exploration and evaluation expenditure written off
(40,997)
(35,638)
(9,423)
–
(86,058)
Segment (loss) profit
32,539,833 40,233,943 42,842,540
(335,687) 115,280,629
Total assets
Total liabilities
Capital expenditure
Year ended 30 June 2020
External revenue
Sale of gold at spot
220,191,947 396,979,551 123,621,044
32,465 740,825,007
(82,885,129)
(91,337,560)
(36,025,281)
(14,632) (210,262,602)
(87,777,406) (140,595,398)
(37,817,451)
– (266,190,255)
94,889,987
85,345,963
83,789,150
– 264,025,100
Sale of gold under forward contracts
103,711,436
50,514,975
46,899,739
– 201,126,150
Sale of gold under a prepayment facility
12,969,199
12,969,199
Mining and contracting services
–
–
–
–
– 25,938,398
1,178,623
1,178,623
Total segment revenue
211,570,622 148,830,137 130,688,889
1,178,623 492,268,271
Results
Depreciation and amortisation
(68,288,134)
(45,259,226)
(25,155,454)
(900,123) (139,602,937)
Exploration and evaluation expenditure written off
(222,595)
(98,152)
(35,570)
–
(356,317)
Segment profit (loss)
8,379,385
(12,641,721) 33,236,970
(734,293) 28,240,341
Total assets
Total liabilities
189,724,542 301,119,381
113,175,719
13,077,793 617,097,436
(81,497,781)
(72,469,552)
(36,709,743)
(62,890) (190,739,966)
Capital expenditure
(82,842,250)
(99,721,650)
(27,391,009)
(994,176) (210,949,085)
92
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 33. OPERATING SEGMENTS (CONTINUED)
(a) Reconciliation of profit (loss)
Segment profit (loss)
Corporate administration expenses
Corporate interest income
Corporate other income
Gain on demerger of subsidiary
Net gain on fair value changes of financial assets
Net (loss) gain on disposal of assets
2021
2020
115,280,629
28,240,341
(9,828,782)
(7,915,557)
334,738
286,620
1,957,496
2,603,081
–
8,727,618
5,202,140
8,888,756
(1,053,154)
3,031,573
Total consolidated profit from continuing operations before income tax
111,893,067
43,862,432
(b) Reconciliation of assets
Segment operating assets
Unallocated corporate assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other financial assets
Financial assets (equity investments)
Property, plant and equipment
Right-of-use assets
Total consolidated assets
(c) Reconciliation of liabilities
Segment operating liabilities
Unallocated corporate liabilities
Trade and other payables
Provision for employee benefits
Interest-bearing loans and borrowings
Deferred tax liability
Total consolidated liabilities
(d) Segment revenue from external customers
Segment revenue
Total revenue
740,825,007 617,097,435
149,545,568 136,810,316
57,478
170,765
700,969
525,681
795,590
1,141,677
6,423,091
–
1,106,052
709,025
516,175
1,032,203
899,969,930 757,487,102
210,262,602 190,739,966
3,914,097
1,736,621
2,644,100
2,395,708
562,288
1,094,913
75,226,536
39,659,067
292,609,623 235,626,275
571,170,198 492,268,271
571,170,198 492,268,271
Westgold Resources Limited Annual Report 2021
93
33. OPERATING SEGMENTS (CONTINUED)
Revenue from external customers by geographical locations is detailed below. Revenue is attributable to geographical
location based on the location of the customers. The Company does not have external revenues from external
customers that are attributable to any foreign country other than as shown.
Australia
Total revenue
2021
2020
571,170,198 492,268,271
571,170,198 492,268,271
The Group has two customers to which it sells gold and each account for 68% and 32% of this external revenue
respectively (2020: Three customers 41%, 46% and 13%).
(e) Segment non-current assets are all located in Australia.
34. KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
(i) Non-Executive Directors (NEDs)
FJ Van Maanen
Non-Executive Director
PB Schwann
WC Bramwell
GR Davison
Non-Executive Director
Non-Executive Director1
Non-Executive Director
(ii) Executive Directors
(iii) Other Executives (KMPs)
DA Fullarton
Chief Executive Officer
A Buckingham
Chief Operating Officer
Chief Financial Officer
SH Heng
L Smith
Appointed
Resigned
06/10/2016
02/02/2017
03/02/2020
01/06/2021
01/07/2020
01/10/2019
02/08/2021
–
–
–
–
–
–
–
–
–
PG Cook
Executive Chairman2
19/03/2007
Company Secretary & General Counsel
30/12/2019
1. WC Bramwell appointed Executive Director with effect from 1 August 2021.
2.
3.
PG Cook remained on the board as NON-Executive Chairman with effect from 1 August 2021.
SH Heng appointed Chief Financial Officer with effect 02 August 2021.
There are no other changes of the key management personnel after the reporting date and before the date the financial
report was authorised for issue.
94
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 34. KEY MANAGEMENT PERSONNEL (CONTINUED)
(b) Compensation of Key Management Personnel
Short term benefits
Other fees
Post-employment benefits
Other long-term benefits
Share-based payment
2021
2020
2,470,589
3,979,630
135,820
–
129,445
231,832
41,250
441,116
76,241
93,648
3,218,220
4,381,351
(c) Loans to Key Management Personnel
There were no loans to key management personnel during the current or previous financial year.
(d) Interest held by Key Management Personnel under the Long-Term Incentive Plan
Share options held by key management personnel under the long-term incentive plan to purchase ordinary shares:
Grant date
22/11/2017
28/11/2018
10/05/2019
07/05/2020
24/11/2020
Total
Expiry date
24/11/2020
30/06/2021
30/06/2023
30/06/2022
30/06/2023
35. RELATED PARTY DISCLOSURES
(a) Subsidiaries
Exercise price $
2021
2020
2.31
0.00
0.00
0.00
0.00
–
–
3,625,000
230,307
56,530
568,250
275,003
684,141
639,121
–
970,654
5,107,698
The consolidated financial statements of the Group include Westgold Resources Limited and the subsidiaries listed in
the following table:
Name
Aragon Resources Pty Ltd
Big Bell Gold Operations Pty Ltd
Minterra Pty Ltd
Location 53 Pty Ltd1
1.
Entity disposed on sale.
Country of
incorporation
Australia
Australia
Australia
Australia
Ownership interest
2021
100%
100%
100%
0%
2020
100%
100%
100%
100%
Westgold Resources Limited Annual Report 2021
95
35. RELATED PARTY DISCLOSURES (CONTINUED)
(b) Ultimate parent
Westgold Resources Limited is the ultimate parent entity.
(c) Key management personnel
Details relating to key management personnel, including remuneration paid, are included in Note 34.
(d) Transactions with related parties
Services provided by Westgold Resources Limited to Castile Resources Ltd
Amount owing by Castile Resources Ltd at 30 June
Services provided to Westgold Resources Limited by Castile Resources Ltd
Amount owing by Westgold Resources Ltd at 30 June
2021
2020
14,000
395,355
4,730
7,348
(104,869)
(12,286)
PG Cook was the non-executive chairman of Castile Resources Ltd during the financial period.
There were no other related party transactions for the year ending 30 June 2021.
36. INFORMATION RELATING TO WESTGOLD RESOURCES LIMITED (THE PARENT ENTITY)
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings (accumulated losses)
Share-based payments reserve
Other reserves
Total Equity
Profit (loss) of the parent entity1
Total comprehensive profit of the parent entity
2021
2020
151,099,603 138,595,311
378,493,869 389,667,260
7,115,222
4,611,826
7,120,484
5,174,113
364,077,524 356,130,056
(12,527,418)
9,339,943
15,266,496
14,466,365
4,556,783
4,556,783
371,373,385 384,493,147
(21,867,361)
1,585,208
(21,867,361)
1,585,208
1.
Includes $27m elimination of intercompany receivable on sale of subsidiary.
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, Westgold and its wholly owned
subsidiaries (except Location 53 Pty Ltd) entered into a deed of cross guarantee on 28 November 2016 (the Guarantee). The
effect of the Guarantee is that Westgold has guaranteed to pay any deficiency in the event of winding up of any controlled
entity which is a party to the Guarantee or if they do not meet their obligations under the terms of any debt subject to
the Guarantee. The controlled entities which are parties to the Guarantee have given a similar guarantee in the event that
Westgold is wound up or if it does not meet its obligations under the terms of any debt subject to the Guarantee.
The Consolidated Statement of Financial Position and Consolidated Statement of Comprehensive Income for the
closed group is not different to the Group’s Statement of Financial Position and Statement of Comprehensive Income.
Other contingent liabilities of the parent entity
Contractual commitments by the parent entity for the acquisition of property, plant or equipment
Nil
Nil
96
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 37. EVENTS AFTER THE BALANCE SHEET DATE
The directors, at their meeting on 27 August 2021, recommended a final unfranked dividend for the year ended on
30 June 2021 of 2 (two) cents per share to all ordinary shareholders registered at 1 October 2021. The amount is
not recognised as a liability at 30 June 2021. The Directors will establish a DRP with the issue price for shares under
the DRP being at a 7.5% discount to the daily VWAP of the Company’s share price for the 5 business days from the
commencing of trading after the record date.
There have been no other significant events after the balance date.
38. GAIN ON DEMERGER OF SUBSIDIARY
On 3 December 2019, Castile Resources Pty Ltd was demerged from the Westgold Consolidated Group, following
approval by Westgold Shareholders at the Annual General Meeting held on 25 November 2019. Existing Westgold
shareholders received shares in Castile on a 1 Castile share for every 4 Westgold shares held (in specie distribution).
The fair value of Castile at demerger was determined to be $21,855,388 being distributed as a demerger dividend of
$13,051,549 with an associated reduction in share capital of $8,803,840. The number of Castile shares on issue was
99,844,305 resulting in a market value of $0.2189 per share.
Carrying value of net assets of demerged entity
Assets
Cash and cash equivalents
Bonds
Trade and other receivables
Property, plant and equipment
Mine properties and development
Exploration and evaluation expenditure
Liabilities
Trade and other payables
Provisions
Deferred tax liabilities
Net assets and liabilities disposed of
Reduction in share capital
Demerger dividend
Gain on demerger of entity
03/12/2019
86,966
20,000
38
264,969
756,919
16,129,868
17,258,760
(201,877)
(1,172)
(3,927,940)
(4,130,989)
13,127,771
(8,803,840)
(13,051,549)
(8,727,618)
39. ACCOUNTING STANDARDS
New and amended standards and interpretations
The Group has adopted all Accounting Standards and Interpretations effective from 1 July 2020. The accounting
policies adopted are consistent with those of the previous financial year.
Several new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2020 but did
not have an impact on the consolidated financial statements of the Group and, hence, have not been disclosed.
Westgold Resources Limited Annual Report 2021
97
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Westgold Resources Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes of the Company and of the Group are in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2021 and of their
performance for the year ended on that date; and
(ii) complying with the Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001; and
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
Note 2(b) and;
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable; and
(d) this declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
As at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group will
be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross
Guarantee identified in Note 36.
On behalf of the Board.
PG Cook
Chairman
Perth, 30 August 2021
98
Westgold Resources Limited Annual Report 2021
for the year ended 30 June 2021FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Westgold Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Westgold Resources Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2021, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WESTGOLD:011
Westgold Resources Limited Annual Report 2021
99
FINANCIAL REPORT We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
1. Amortisation of assets
Why significant
How our audit addressed the key audit matter
As at 30 June 2021 the Group had capitalised mine
properties and development costs amounting to
$407.3 million (refer to Note 17 of the financial
report).
Calculating amortisation requires considerable
judgement and estimation in relation to reserves and
resources (used as the denominator in a “units-of-
production” calculation) of the mines and the
assessment of future costs (included in the numerator
in a “units-of-production” calculation) required to
extract these reserves and resources for each
underground mine.
Accordingly, this creates a risk the amortisation rates
are inappropriate, resulting in the expense profile that
does not reflect the pattern of consumption of the
assets’ future economic benefits.
This was considered to be a key audit matter due to
the judgment and estimation involved.
We evaluated the assumptions and methodologies
used by the Group in their calculation of amortisation.
Our audit procedures included the following:
•
•
•
•
•
•
Assessed the qualifications, competence and
objectivity of the Group’s internal experts, the
work of whom, formed the basis of the Group’s
estimates on the reserves and resources and the
future costs used in the amortisation calculation
Assessed the application of reserves and
resources in the amortisation models by
comparing them to the latest published
statement and underlying mining records
Assessed the reasonableness of the future costs
included in the calculation with reference to
historical costs incurred and the mine plans
approved by the Group’s internal experts
Evaluated the consistency of application of the
Group’s amortisation methodology on its
capitalised mine properties and development
assets across the mine sites
Tested the mathematical accuracy of the
amortisation models
Assessed the adequacy of the Group's disclosures
relating to amortisation.
2. Rehabilitation and restoration provisions
Why significant
How our audit addressed the key audit matter
As a consequence of its operations, the Group incurs
obligations to restore and rehabilitate the
environment. Rehabilitation activities are governed
by a combination of legislative requirements and
Group policies. As at 30 June 2021 the Group’s
consolidated statement of financial position includes
provisions of $74.8 million in respect of such
obligations (refer to Note 22 of the financial report).
We evaluated the assumptions and methodologies
used by the Group in determining their rehabilitation
obligations.
Our audit procedures included the following:
•
Assessed the qualifications, competence and
objectivity of the Group’s internal and external
experts, the work of whom, formed the basis of
the Group’s rehabilitation cost estimates
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WESTGOLD:011
100
Westgold Resources Limited Annual Report 2021
continuedFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT Why significant
How our audit addressed the key audit matter
Estimating the costs associated with these future
activities requires considerable judgment in relation
to factors such as timing of the rehabilitation, the
costs associated with the rehabilitation activities and
economic assumptions such as discount rates and
inflation rates.
Accordingly, this was considered to be a key audit
matter.
•
•
•
Our rehabilitation specialists have assessed
whether the Group’s cost estimates were
reasonable considering industry benchmarks and
relevant legislative requirements. Our
rehabilitation specialists also compared the data
used in calculating the provision to the mine
closure plans submitted to Department of Mines,
Industry, Regulation and Safety and the
reasonableness of year-on-year changes of the
obligation
Tested the Group’s calculation of the present
values of the liabilities considering the estimated
timing of when the cash flows will be incurred by
reference to the most appropriate inflation and
discount rates
Assessed the adequacy of the Group's disclosures
relating to rehabilitation obligations.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WESTGOLD:011
Westgold Resources Limited Annual Report 2021
101
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WESTGOLD:011
102
Westgold Resources Limited Annual Report 2021
continuedFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Westgold Resources Limited for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Philip Teale
Partner
Perth
30 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:DA:WESTGOLD:011
Westgold Resources Limited Annual Report 2021
103
SHAREHOLDER INFORMATION
as at 4 October 2021
(A) TOP 20 QUOTED SHAREHOLDERS
Name
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
3 CITICORP NOMINEES PTY LIMITED
4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
5 BNP PARIBAS NOMS PTY LTD
6 AJAVA HOLDINGS PTY LTD
7 MR RICHARD FARLEIGH
8 BNP PARIBAS NOMINEES PTY LTD
9 BNP PARIBAS NOMINEES PTY LTD
10 ALL-STATES FINANCE PTY LIMITED
11 NATIONAL NOMINEES LIMITED
12 MR PETER GERARD COOK
13 SUN HUNG KAI INVESTMENT SERVICES LIMITED
14 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
15 BNP PARIBAS NOMINEES PTY LTD CIBC WORLD MARKETS INC
16 CS THIRD NOMINEES PTY LIMITED
17 BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
18 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
19 DEBORTOLI WINES PTY LIMITED
20 BNP PARIBAS NOMINEES PTY LTD BARCLAYS
(B) DISTRIBUTION OF QUOTED ORDINARY SHARES
Range (size of parcel)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
TOTAL
No. Shares
193,705,988
51,437,084
32,776,625
24,182,549
16,556,434
7,720,137
4,578,597
4,103,085
4,009,374
3,715,274
3,385,804
2,693,750
2,000,000
1,911,793
1,866,869
1,847,624
1,663,821
1,660,629
1,158,631
1,123,448
%
45.67
12.13
7.73
5.70
3.90
1.82
1.08
0.97
0.95
0.88
0.80
0.64
0.47
0.45
0.44
0.44
0.39
0.39
0.27
0.26
Number of
Shareholders
Number of
Shares
2,733
1,400,010
3,142
8,208,669
976
7,445,606
968
25,382,911
98 381,693,778
7,917 424,130,974
(C) NUMBER OF HOLDERS WITH LESS THAN A MARKETABLE PARCEL OF ORDINARY SHARES
Total unmarketable parcels at $500 parcel at $1.6100 per unit
834
137,143
104
Westgold Resources Limited Annual Report 2021
FINANCIAL REPORT (D) SUBSTANTIAL SHAREHOLDERS
VAN ECK ASSOCIATES CORPORATION
RUFFER LLP
FIL LIMITED
INVESCO ADVISERS, INC
L1 CAPITAL PTY LTD
* As at 30 June 2021
(E) VOTING RIGHTS
No. Shares
40,109,110
38,245,650
34,141,825
24,102,469
21,301,666
%
9.5
9.0
8.1
5.7
5.0
The voting rights for each class of security on issue are:
Ordinary Fully Paid Shares
– Each ordinary shareholder is entitled to one vote for each share held.
Unquoted Employee Options
– The holders of options have no rights to vote at a general meeting of the Company.
(F) UNQUOTED EQUITY SECURITIES
ASX Code
WGXAC
WGXAE
TOTAL
Security Description
Number of
Securities
Options Expiring 20 June 2022, zero exercise price
521,630
Performance Rights Expiring 30 June 2023
1,486,500
2,064,565
Westgold Resources Limited Annual Report 2021
105
FINANCIAL REPORT
CORPORATE DIRECTORY
DIRECTORS
Peter G Cook (Non-Executive Chairman)
Wayne C Bramwell (Executive Director)
Fiona J Van Maanen (Independent Non-Executive Director)
Peter B Schwann (Independent Non-Executive Director)
Gary R Davison (Independent Non-Executive Director) (appointed 1 June 2021)
COMPANY SECRETARY
Lisa Smith
SENIOR EXECUTIVES
Debra A Fullarton (Chief Executive Officer)
Anthony Buckingham (Chief Operating Officer)
Su Hau Heng (Chief Financial Officer) (appointed 2 August 2021)
Lisa Smith (General Counsel and Company Secretary)
REGISTERED OFFICE
Level 6, 197 St Georges Terrace
Perth WA 6000
Phone: +61 8 9462 3400
Fax: +61 8 9462 3499
Email: reception@westgold.com.au
Website: www.westgold.com.au
POSTAL ADDRESS
PO Box 7068
Cloisters Square
WA 6850
SECURITIES EXCHANGE
Listed on the Australian Securities Exchange
ASX Code: WGX
SHARE REGISTRY
Computershare Investors Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Phone: +61 3 9415 4000
Fax: +61 3 6473 2500
Website: www.computershare.com
DOMICILE AND COUNTRY OF INCORPORATION
Australia
106
Westgold Resources Limited Annual Report 2021
www.westgold.com.au