More annual reports from Westgold Resources Limited:
2023 ReportPeers and competitors of Westgold Resources Limited:
Cyprium Metals LimitedWESTGOLD RESOURCES LIMITED
ANNUAL
REPORT
2022
A DYNAMIC,
GROWTH ORIENTED
AUSTRALIAN
GOLD MINER
With over 1,000 staff and more than
1,300km2 of tenure, Westgold is the
dominant gold miner in the Murchison
and Bryah regions of Western Australia.
www.westgold.com.au
CONTENTS
Our Purpose and Ambition
Values and Behaviours
Letter from the Chair
Financial Results
Our Annual Outputs
Our Operations
1
1
2
5
6
8
20 Directors’ Report
30 Remuneration Report (Audited)
48 Auditor’s 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
101 Directors’ Declaration
102
108 Shareholder Information
110 Corporate Directory
Independent Auditor’s Report
Westgold Resources Limited Annual Report 2022 OUR PURPOSE
AND AMBITION
VALUES AND
BEHAVIOURS
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.
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
enable a culture that drives 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 2022 LETTER FROM THE CHAIR
A YEAR
OF RECORDS
Dear Shareholders,
It is my pleasure
to present
the Westgold
Resources Limited
Annual Report for
the financial year
ended 30 June
2022 (FY22).
Having recently joined the Board
with new Non Executive Director
Mr Julius Matthys in March, we have
quickly come to understand the
opportunities and challenges that lie
ahead for the Group.
This financial year has seen Westgold
deliver its first full year production
and cost guidance in a period where
COVID-19 has continued to impact
personnel mobility and availability.
Achieving our production target of
over 270,000 ounces of gold from our
Western Australian assets at $1,692/
oz all-in sustaining costs (AISC) was a
remarkable achievement considering
significant increases in all key inputs
to our business.
Diesel fuel price increased 106%
over the financial year with material
changes in other major consumables
such as reagents, grinding balls,
ground support, flights, haulage
services and freight. No part of the
value chain was immune to global
inflationary pressures.
2
Westgold Resources Limited Annual Report 2022
Despite the challenges faced,
safe, consistent and predictable
production remained our key
objectives in FY22. With an
expanded safety team, our safety
performance began to positively
improve. Our major mines began to
perform consistently during FY22
with Bluebird, Starlight and Big Bell
undergrounds all reaching steady
state. Importantly Bluebird and Big
Bell began to produce above design
levels in the second half of FY22.
With this growing momentum in
production at our larger mines, the
Group is becoming less reliant on our
smaller underground operations and
higher cost open pits. As planned,
open pit operations ceased in the
latter half of FY22 and the South Emu
– Triton underground was put into
care and maintenance in Q1 FY23,
pending a revised mine plan that
underpins suitable economic returns.
Our exploration efforts began to
deliver results during the year with
early success at the high-grade
Sovereign target near Cue. This new
discovery between the iconic Great
Fingall and Golden Crown mines
demonstrates new prospectivity and
evidences the opportunity for organic
growth from within Westgold’s
existing tenure.
Westgold advanced many
environmental, social and governance
(ESG) initiatives during the year.
This included signing new electricity
supply and LNG gas supply
agreements that will see Westgold
replace six diesel fired power stations
with four new gas fired power
stations commencing in FY23. These
new agreements see the Group
integrating renewable energy into
our power infrastructure and this will
deliver significant cost savings and
emission reductions. The first new
station will be commissioned in the
second half of financial year 2022-
2023 (H2, FY23).
Our operating results reflect another
solid improvement with record
production over the previous year but
total cost increases, together with the
non-cash impairment charges directly
impacted Group profitability.
Westgold finishes FY22 with a strong
balance sheet, $183M in cash and
cash equivalents and a refreshed
Board and management team.
The Group starts FY23 in robust
financial condition and with a clear
objective.
Westgold will simplify the business
and test all options to improve
productivity and operational
efficiencies and build on our balance
sheet strength.
The reset of our operating model
is well advanced with the key to
delivering shareholder value being
to mine ‘profitable ounces’ not just
ounces. Industry wide cost inflation
is forcing a granular cost assessment
and Westgold has commenced this
deep dive into opportunities that can
reduce waste and improve the ability
of the business to generate stronger
cash flows.
There are opportunities to leverage
our operating footprint, scale
and internal capability with the
optimisation of these key factors
critical to increasing the profitability
and sustainability of the business.
The non-cash impairment, alongside
a more disciplined approach to capital
and operating expenditure, positions
Westgold with the opportunity to
deliver larger financial returns to our
shareholders.
Our vision for Westgold 2.0 is to
continue to evolve to become a safer,
inclusive, socially responsible and
highly profitable gold miner. Our
workforce is innovative, committed
and focussed and with the continued
support of our shareholders,
stakeholders, communities and staff
we are confident that the business can
deliver on our FY23 objectives.
Hon. Cheryl Edwardes AM
Non-Executive Chair
3
Westgold Resources Limited Annual Report 2022 4
Westgold Resources Limited Annual Report 2022 YEAR END 30 JUNE 2022
FINANCIAL
RESULTS
Unless specifically noted, all dollar amounts disclosed in this report are Australian
Dollars (A$ or AUD)
GOLD SALES (OZ)
REVENUE
269,705
$647.6m
(FY21: 245,066)
15%
(FY21: $571.1m)
16%
NET CASH FROM
OPERATIONS
$179.9m
NET PROFIT/(LOSS)
BEFORE TAX
($160.1m)
(FY21: $249.1m)
60%
(FY21: $112.0m)
155%
NET PROFIT/(LOSS)
AFTER TAX
($111.1m)
CLOSING CASH
& CASH EQUIVALENTS
$182.7m
(FY21: $76.7m)
122%
(FY21: $150.6m)
9%
PROFIT PER SHARE
NET ASSETS
(25.32c)
$587.8m
(FY21: 18.16c)
110%
(FY21: $607.3m)
16%
AVERAGE HEDGE GOLD PRICE
HEDGES OUNCES
A$2,396/oz
148,000oz
(FY21: A$2,133/oz)
3%
(FY21: 156,000oz)
22%
Westgold Resources Limited Annual Report 2022
5
YEAR END 30 JUNE 2022
OUR ANNUAL
OUTPUTS
MURCHISON OPERATIONS
204,937oz
BRYAH OPERATIONS
65,947oz
GROUP
270,884oz
MURCHISON OPERATIONS
A$1,487/oz
BRYAH OPERATIONS
A$1,294/oz
GROUP
A$1,438/oz
MURCHISON OPERATIONS
A$1,748/oz
BRYAH OPERATIONS
A$1,525/oz
GROUP
A$1,692/oz
GOLD PRODUCTION
CASH COST
(C1)
ALL IN SUSTAINING
COSTS
6
Westgold Resources Limited Annual Report 2022
7
Westgold Resources Limited Annual Report 2022 OUR OPERATIONS
REVIEW OF
OPERATIONS
Westgold Resources Limited (ASX: WGX) (Westgold or the Group) is a uniquely Western Australian gold mining business.
With a workforce of over 1,000 people, we are the dominant gold miner in the Murchison and Bryah regions with over 1,300
km2 of tenure.
Westgold is the owner-operator of all of its underground mines. This internal capability provides a level of operational
flexibility that has insulated our business from the many labour impacts caused by COVID-19. Our operating model is
‘hub and spoke’ style whereby we have the optionality to process ore from our Meekatharra and Cue operations at either
processing hub. In contrast the Bryah Basin operation is centred upon the Fortnum processing hub.
MURCHISON OPERATIONS
The Murchison operations incorporate two processing hubs near Cue and Meekatharra. Combined, these operations
are forecast to produce ≈200,000 oz in financial year 2022-2023 (FY23).
MURCHISON GOLD PRODUCTION AND A$ COSTS
MMuurrcchhiissoonn GGoolldd PPrroodduuccttiioonn aanndd AA$$ CCoossttss
$ 1,781 /oz
$ 1,795 /oz
$ 1,896 /oz
$ 1,640 /oz
50,537 oz
50,291 oz
49,301 oz
54,808 oz
Sep Q 2021
Dec Q 2021
Mar Q 2022
Jun Q 2022
Gold Produced
AISC $/oz
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
-
.
z
o
r
e
p
t
s
o
C
60,000
50,000
40,000
30,000
20,000
10,000
0
.
z
o
n
o
i
t
c
u
d
o
r
P
d
o
G
l
CUE
Our Cue operation is located around the regional town of Cue and encompasses Westgold’s southern-most group of
Murchison assets including the historic mining centres of Big Bell, Cuddingwarra, Day Dawn, Tuckabianna and Pinnacles.
This package includes two of Western Australia’s most iconic past producers in the Big Bell mine (≈2.6 million ounces) and
the Great Fingall mine (≈1.2 million ounces).
BBrryyaahh GGoolldd PPrroodduuccttiioonn aanndd AA$$ CCoossttss
$ 1,683 /oz
20,000
2,000
1,800
$ 1,649 /oz
$ 1,496 /oz
$ 1,393 /oz
It incorporates the 1.2-1.4Mtpa Tuckabianna processing hub, a 148-person village at Big Bell, a 266-person village at Cue
and associated mining infrastructure to support a large FIFO and DIDO mining operation.
15,000
1,400
In FY22, the Tuckabianna plant received underground ore from the large Big Bell underground and the smaller Comet
underground mine as well ore from the Cuddingwarra open pits.
10,000
The Tuckabianna processing hub treated 1,345,015 tonnes of ore, at the upper range of the plants operating capacity and in
line with expectations. The metallurgical recoveries rate for the ore blend was 88.6%.
15,636 oz
16,125 oz
800
16,397 oz
17,789 oz
While Big Bell was the primary producer of ore to the Tuckabianna mill, the Comet underground mine provided
supplementary feed during the year.
400
.
z
o
n
o
i
t
c
u
d
o
r
P
d
o
G
l
5,000
.
z
o
r
e
p
t
s
o
C
1,600
1,200
1,000
600
200
0
-
Sep Q 2021
Dec Q 2021
Mar Q 2022
Jun Q 2022
8
Westgold Resources Limited Annual Report 2022
Gold Produced
AISC $/oz
After four years of dewatering,
mine rehabilitation,
refurbishment and ramp up,
the Big Bell mine achieved
commercial production in April
2022 and production rates
have been growing since.
Several open pits were mined
around Cue in FY22. With large
stockpiles accumulated, the
open pit program ceased at the
end of the financial year.
Exploration and viability
studies were carried out
during FY22 at the previously
mined Fender open pit mine
on the southern limits of the
Big Bell shear to evaluate the
economics of an underground
operation. An exploration
decline was commenced then
paused due with the higher
tonnages coming from Big Bell.
In addition to the mining operations, the Company is accelerating exploration activities across Cue with the primary
focus being the Day Dawn and Tuckabianna mining centres. This work has been based on new geophysical datasets and
geological re-interpretations in early FY22, leading to the discovery of the Sovereign target, between Great Fingall and
Golden Crown.
Follow up drilling will occur in early FY23, along with definition drilling into Great Fingall at depth and testing of Caustons,
right at the doorstep of the Tuckabianna plant.
Westgold Resources Limited Annual Report 2022
9
OUR OPERATIONS
REVIEW OF OPERATIONS
(CONTINUED)
MEEKATHARRA
Our Meekatharra operation 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.
Our Meekatharra assets
include the 1.6-1.8Mtpa
Bluebird processing hub,
a 420-person village,
and associated mining
infrastructure required to
support a large FIFO and
DIDO mining operation. For
FY22, the Bluebird plant
received underground
ore from the Paddy’s Flat,
South Emu - Triton and
Bluebird underground mines
and supplementary low
grade stockpiles.
The Bluebird underground
mine has been
expanding rapidly since
recommencement of mining
in mid FY22, with further
extensions and opportunities
being identified. Overall
expansion plans are being
developed to determine the
true potential of this asset.
With the expansion of Bluebird
underground, at the end
of FY22 Westgold paused
operations at South Emu -
Triton in the Reedy’s area to
reassess its economics.
The Bluebird processing plant
processes both underground
and open pit ore, performing
strongly for the year treating
more than 1,527,840 tonnes,
slightly below the plant’s
capacity of 1.6-1.8 million
tonnes, with remedial works
well underway to increase
throughput. The metallurgical
recoveries rate for the ore
blend was 89.6%.
In-mine exploration at and around Meekatharra focused on the extension of
the Paddy’s Flat, Bluebird and Reedy’s ore systems:
– At Paddy’s Flat the Prohibition lodes continued to return excellent drill
results. These baseload results were complemented by numerous high-
grade intersections in spur and channel lodes form the Consols lodes which
were accessed for the first time in a material way during the year;
– Deep drilling under the Triton orebody remains in progress at years end.
Initial results have underscored the potential of the Triton deposit at depth,
with multiple high-grade lodes intersected;
– The footprint of the Bluebird deposit continued to be increased via drilling
during the year. A number of strong results have expanded the Bluebird
mine plan significantly, with the deposit remaining open to both the south
and north.
10
Westgold Resources Limited Annual Report 2022
BRYAH OPERATIONS
The Bryah operations are centred upon the Fortnum processing hub. This operation is forecast to produce
≈60,000 oz in FY23.
FORTNUM
The Fortnum operations are located in the Proterozoic age Bryah Basin stratigraphy approximately 150km 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 have delivered approximately 2 million ounces
of reported gold production.
The processing hub incorporates the 0.8-0.9Mtpa 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.
Fortnum continues to deliver strong results from the Starlight underground mine and additional mill feed sourced from
large, existing low-grade surface stockpiles. This year saw strong production in the Starlight mine including the Moonlight,
Twilight North, Galaxy and Trev’s lodes.
Westgold Resources Limited Annual Report 2022
11
OUR OPERATIONS
REVIEW OF OPERATIONS
(CONTINUED)
60,000
$ 1,781 /oz
$ 1,640 /oz
MMuurrcchhiissoonn GGoolldd PPrroodduuccttiioonn aanndd AA$$ CCoossttss
$ 1,795 /oz
$ 1,896 /oz
2,000
1,800
1,600
1,000
z
o
r
e
p
t
s
o
C
50,000
30,000
z
o
n
o
i
t
c
u
d
o
r
P
d
o
G
.
40,000
The processing plant performed well given the hard ore and limited grind capacity, achieving more than 825,070 tonnes for
the year with metallurgical recoveries at 95.5%. A new pebble crusher has been ordered for installation mid FY23 which will
help manage the hard ores and increase throughput.
1,200
.
1,400
20,000
50,537 oz
A major extensional drilling program was being planned at years end at the Starlight mine, with the view to testing the
mineralised footprint of the Starlight lodes over a multi-year mining horizon. This work program will utilise additional
resources over and above the two drilling rigs and support staff currently on site at Starlight, and as such will allow the day-
to-day resource definition and grade control activities of the mine to continue unabated whilst the expansion potential of
Starlight is defined.
10,000
50,291 oz
49,301 oz
600
800
400
l
54,808 oz
In addition, Westgold continues to evaluate potential open pit opportunities to supplement underground ore sources
across the Bryah tenure. Not only will this work increase ore optionality and mine life across this under explored tenement
Mar Q 2022
package, it may provide the catalyst for process plant expansion works at scale.
Jun Q 2022
Dec Q 2021
Sep Q 2021
0
-
200
BRYAH GOLD PRODUCTION AND A$ COSTS
Gold Produced
AISC $/oz
20,000
15,000
10,000
5,000
0
.
z
o
n
o
i
t
c
u
d
o
r
P
d
o
G
l
BBrryyaahh GGoolldd PPrroodduuccttiioonn aanndd AA$$ CCoossttss
$ 1,393 /oz
$ 1,496 /oz
$ 1,649 /oz
$ 1,683 /oz
15,636 oz
16,397 oz
16,125 oz
17,789 oz
Sep Q 2021
Dec Q 2021
Mar Q 2022
Jun Q 2022
Gold Produced
AISC $/oz
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
-
.
z
o
r
e
p
t
s
o
C
12
Westgold Resources Limited Annual Report 2022
13
Westgold Resources Limited Annual Report 2022 OUR OPERATIONS
MINERAL RESOURCES
& ORE RESERVES
Westgold released its annual update of Mineral Resource and Ore Reserve Estimates on the ASX on 23 September
2022. Shareholders should refer to that announcement for full detail including JORC 2012 appendices. The tables below
summarise them by operational area.
MINERAL RESOURCE STATEMENT – ROUNDED FOR REPORTING 30 JUNE 2022
Project
Measured
Murchison
Bryah
Sub-Total
Indicated
Murchison
Bryah
Sub-Total
Inferred
Murchison
Bryah
Sub-Total
Total
Murchison
Bryah
Grand Total
Tonnes (‘000s)
Grade (g/t)
Ounces Au (‘000s)
8,942
2,137
11,078
45,722
14,042
59,764
34,916
4,473
39,389
89,579
20,651
110,231
3.13
2.86
3.08
2.21
1.85
2.13
2.19
2.08
2.18
2.29
2.01
2.24
901
197
1,097
3,249
836
4,085
2,458
300
2,758
6,608
1,332
7,940
ORE RESERVE STATEMENT – ROUNDED FOR REPORTING 30 JUNE 2022
Project
Proven
Murchison
Bryah
Sub-Total
Probable
Murchison
Bryah
Sub-Total
Total
Murchison
Bryah
Grand Total
Tonnes (‘000s)
Grade (g/t)
Ounces Au (‘000s)
5,867
1,166
7,033
14,542
4,347
18,889
20,410
5,512
25,922
2.72
1.81
2.57
2.73
1.84
2.53
2.73
1.84
2.54
513
68
581
1,278
258
1,536
1,791
325
2,116
Glossary:
Murchison incorporates the Meekatharra and Cue business units.
Bryah incorporates the Fortnum business unit.
14
Westgold Resources Limited Annual Report 2022
The Mineral Resources by mining project are tabulated below:
MURCHISON OPERATIONS
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2022
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)
3.27
2.09
1.73
4.09
1.32
0.00
2.55
4.29
3.82
3.33
1.25
3.13
3,792
0.70
552
9,860
8
3
39
24
0
6
1,708
3,501
3,781
97
1,293
2.61
1.82
4.42
2.66
1.98
2.17
1.74
125
10,618
59
59
26
3,062
2.56
8,010
1.83
0
0.00
828
100
497
323
86
6
90
595
252
473
0
4,976
994
3,089
6,765
0
75
534
2,490
8,883
7,110
2.64
1.57
2.57
2.32
0.00
2.11
2.15
1.90
2.44
1.46
0
0.00
422
20,085
2.79
1,802
50
256
505
0
5
37
152
698
334
0
2,820
1.74
6,648
3.54
10,842
2.49
4,358
172
1,895
14,013
0.78
2.04
2.18
1.93
158
756
867
110
11
132
871
12,426
2.53
1,009
15,672
648
1.72
1.25
865
26
901
45,722
2.21
3,249
34,916
2.19
2,458
89,579
2.29
6,608
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna
Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
5,249
118
58
295
567
0
68
906
481
552
648
Total
8,942
BRYAH OPERATIONS
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2022
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
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)
1,316
4.05
171
4,764
364
2,436
2.38
2.09
1.55
0.70
1,266
7,547
464
2.37
1.43
1.78
186
8
8,515
1,449
105
9,385
2.64
2.01
1.60
183
1,838
16
0.54
0
1,302
0.86
721
93
481
36
85
376
10
0
0
821
2,137
0.00
0.00
0.96
2.86
0
0
25
197
14,042
1.85
836
4,473
2.08
300
20,651
2.01
1,332
Westgold Resources Limited Annual Report 2022
15
OUR OPERATIONS
MINERAL RESOURCES & ORE
RESERVES (CONTINUED)
The Mineral Resources by mining project are tabulated below:
MURCHISON OPERATIONS
MINERAL RESOURCE STATEMENT COMPARISON
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
Total
2021
2022
Change
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
1,868
20,085
2.79
1,802
-958
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
171
756
762
92
18
130
921
2,820
1.74
6,648
10,842
4,358
172
1,895
14,013
3.54
2.49
0.78
2.04
2.18
1.93
158
756
867
110
11
132
871
1,000
12,426
2.53
1,009
840
15,672
31
648
1.72
1.25
865
26
89,363
2.29
6,589
89,579
2.29
6,608
0
0
0
0
0
0
0
0
0
0
0
2.66
-66
-13
0
104
17
-6
2
-49
9
25
-5
19
-195
0
1,428
525
-150
40
-395
51
35
-166
216
BRYAH OPERATIONS
MINERAL RESOURCE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2022
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
2021
2022
Change
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
9,857
1,449
9,385
2.37
2.01
1.60
1,194
0.85
750
93
481
32
8,515
1,449
9,385
2.64
2.01
1.60
1,302
0.86
721
93
481
36
-1,342
0
0
108
0
0
0
0
Ounces
Au
(‘000s)
-29
0
0
3
21,886
1.92
1,357
20,651
2.01
1,332
-1,234
0.64
-25
16
Westgold Resources Limited Annual Report 2022
Probable
Total
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
The Ore Reserves by mining project are tabulated below:
MURCHISON OPERATIONS
ORE RESERVE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2022
Proven
Grade
(g/t)
2.94
0.00
0.00
4.09
1.32
0.00
0.00
4.84
4.40
3.97
1.25
2.72
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
Tonnes
(‘000s)
4,170
0
0
42
567
0
0
230
55
155
648
Total
5,867
BRYAH OPERATIONS
Ounces
Au
(‘000s)
394
0
0
5
24
0
0
36
8
20
26
4,641
710
1,289
1,034
3,758
0
718
659
888
845
0
513
14,542
3.08
1.75
6.92
2.48
0.70
0.00
1.82
4.21
3.27
3.65
0.00
2.73
460
40
287
82
85
0
42
89
93
99
0
8,811
710
1,289
1,075
4,324
0
718
889
943
1,000
648
1,278
20,410
ORE RESERVE STATEMENT - ROUNDED FOR REPORTING 30 JUNE 2022
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
Proven
Probable
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
344
0
0
821
1,166
3.83
0.00
0.00
0.96
1.81
42
0
0
25
68
Tonnes
(‘000s)
2,541
761
581
464
4,347
Grade
(g/t)
Ounces
Au
(‘000s)
1.97
1.84
2.21
0.70
1.84
161
45
41
10
258
Tonnes
(‘000s)
2,886
761
581
1,285
5,512
3.01
1.75
6.92
2.54
0.79
0.00
1.82
4.37
3.34
3.70
1.25
2.73
Total
Grade
(g/t)
2.19
1.84
2.21
0.86
1.84
854
40
287
88
109
0
42
125
101
119
26
1,791
Ounces
Au
(‘000s)
204
45
41
36
325
Westgold Resources Limited Annual Report 2022
17
OUR OPERATIONS
MINERAL RESOURCES & ORE
RESERVES (CONTINUED)
The movement in Ore Reserves over the past year are tabulated below:
MURCHISON OPERATIONS
ORE RESERVE STATEMENT COMPARISON
Project
Big Bell
Cuddingwarra
Day Dawn
Tuckabianna
Tuckabianna Stockpiles
Meekatharra North
Nannine
Paddy's Flat
Reedy's
Yaloginda
Bluebird Stockpiles
Total
2021
2022
Change
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
9,879
1,074
1,398
889
3,823
169
1,074
2.79
1.71
6.55
2.39
0.75
1.12
1.49
1,090
3.64
922
1,065
814
3.17
3.15
1.19
887
59
294
68
92
6
51
128
94
108
31
8,811
710
1,289
1,075
4,324
0
718
889
943
1,000
648
3.01
1.75
6.92
2.54
0.79
0.00
1.82
4.37
3.34
3.70
1.25
854
-1,069
40
287
88
109
0
42
125
101
119
26
-364
-108
186
501
-169
-356
-201
22
-65
-166
0
0
0
0
0
-1
0
1
0
1
0
-34
-19
-7
20
17
-6
-9
-3
7
11
-5
22,198
2.55
1,819
20,410
2.73
1,791
-1,788
0.48
-28
BRYAH OPERATIONS
ORE RESERVE STATEMENT COMPARISON
2021
2022
Change
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
Tonnes
(‘000s)
Grade
(g/t)
Ounces
Au
(‘000s)
3,572
2.02
232
2,886
761
1,122
1,178
1.84
1.95
0.85
45
70
32
2.19
1.84
2.21
761
581
1,285
0.86
204
-686
45
41
36
0
-542
108
0
0
0
0
6,633
1.78
379
5,512
1.84
325
-1,120
1.50
-28
0
-29
3
-54
Project
Fortnum
Horseshoe
Peak Hill
Stockpiles
Total
18
Westgold Resources Limited Annual Report 2022
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 Reserve Estimates is based on information compiled by Mr Leigh Devlin,
B.Eng MAusIMM. Mr Devlin 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 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Devlin
consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Mr Devlin 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.
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 2022
19
DIRECTORS’ 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 2022.
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
Hon. Cheryl L Edwardes AM - Non-Executive Chair
(Appointed 28 March 2022)
Ms Edwardes is a highly credentialed and experienced
company director and Chair. A solicitor by profession and
former Minister in the Court Government, Ms Edwardes
has extensive experience and knowledge of WA’s legal
and regulatory framework relating to mining projects,
environmental, native title, heritage, and land access.
During her political career, Ms Edwardes held positions
including WA Attorney General, Minister for the
Environment and Minister for Labour Relations.
During the past three years, she has also served as a
director of the following public listed companies:
– Flinders Mines Limited (Appointed 17 June 2019)
– Nuheara Limited (Appointed 2 January 2020)
– Vimy Resources Limited (Appointed 26 May 2014,
Resigned 4 August 2022)
Wayne C Bramwell - Managing Director
(Appointed Non-Executive Director 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).
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)
– Vimy Resources Limited (Appointed 18 October 2021,
Resigned 4 August 2022)
– Deep Yellow Limited (Appointed 4 August 2022)
20
Westgold Resources Limited Annual Report 2022
Fiona J 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 and Compliance Committee and Remuneration and
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)
Gary R 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 and Compliance Committee and
Remuneration and 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)
Julius L Matthys - Non-Executive Director
(Appointed 28 March 2022)
Mr Matthys has substantial corporate experience having
spent 36 years in the resources sector. He has senior
executive roles in large corporate entities including
President of Worsley Alumina JV, Marketing Director at
BHP Iron Ore, Alumina and Aluminium. Mr Matthys was
previously Chair of gold producer Doray Minerals Limited,
managing its merger with Silver Lake Resources. He
currently serves as a Non-Executive Director of Quintis.
Mr Matthys held no public company directorships in the
past three years.
Peter Cook - Non-Executive Chair
(Appointed 19 March 2007, Resigned 28 March 2022)
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:
– Castile Resources Limited (Appointed 7 June 2011)
–
Titan Minerals Limited (Appointed 30 August 2021)
– Breaker Resources NL (Appointed 6 September 2021)
for the year ended 30 June 2022FINANCIAL REPORT Peter Schwann - Non-Executive Director
(Appointed 2 February 2017, Resigned 26 July 2022)
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 served on the Company’s Audit, Risk and Compliance Committee
and Remuneration and 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)
COMPANY SECRETARY
Lisa Smith (Appointed 20 December 2019)
Ms Smith holds a Bachelor of Laws and a Bachelor of Commerce and brings over 17 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.
Susan Park (Appointed 5 April 2022)
Ms Park is a governance professional with over 25 years’ experience in the corporate finance industry and extensive
experience in Company Secretary and Non-Executive Director roles in ASX, AIM and TSX listed companies. Ms Park holds
a Bachelor of Commerce from the University of Western Australia, is a Member of the Institute of Chartered Accountants
Australia and New Zealand, a Fellow of the Financial Services Institute of Australasia, a Graduate Member of the Australian
Institute of Company Directors and a Fellow of the Governance Institute of Australia. She is currently Company Secretary of
several ASX listed companies.
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
Hon. CL Edwardes AM1
WC Bramwell
FJ Van Maanen
GR Davison
JL Matthys1
PG Cook2
PB Schwann3
Total
Fully Paid
Ordinary
Shares
Options/
Rights
6,122
–
50,000
202,435
435,521
–
112,658
8,915,579
–
–
–
–
–
–
9,519,880
202,435
1.
2.
3.
Appointed on 28 March 2022.
Resigned on 28 March 2022 (balances provided as at his resignation date).
Resigned on 26 July 2022 (balances provided as at his resignation date).
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 1,077 employees at 30 June 2022 (2021: 1,051).
Westgold Resources Limited Annual Report 2022
21
CORPORATE OVERVIEW
Westgold is an explorer and gold producer with a large and strategic land package in the Murchison and Bryah regions of
Western Australia. After listing on the ASX in December 2016 the company has consolidated over 1,300 km2 of mining titles
that encompass the Fortnum operations (the Bryah region in the north), the Meekatharra operations (in the centre of our
tenure) 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 7.9 million ounces with 2.2 million ounces of gold in Ore Reserves (refer ASX announcement 29 September
2021).
During FY22 Westgold operated six underground mines, several open pits and three processing plants (currently with an
installed processing capacity of ≈4 Mtpa) and continued to build its production profile since listing with gold output totalled
270,884 ounces from its Bryah and Murchison operations in FY22.
CORPORATE STRUCTURE
Westgold’s corporate structure is depicted below.
WESTGOLD
RESOURCES LIMITED
ACN 009 260 306
ARAGON RESOURCES
PTY LTD
BIG BELL GOLD OPERATIONS
PTY LTD
WESTGOLD MINING
SERVICES PTY LTD
ACN 114 714 662
ACN 090 642 809
ACN 080 756 172
Bryah
Operations
Murchison
Operations
Mining
Services
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 FY22.
Westgold utilises a predominantly fly-in, fly-out (FIFO) and drive-in, drive-out (DIDO) workforce to operate its Western
Australian gold assets. Ongoing state and regional border closures in early FY22, followed by the opening of the Western
Australian border in late FY22, continued to disrupt labour availability during the year.
The direct financial impact of COVID-19 is difficult to estimate but it is clear that the disruptive nature on labour availability
across the world has materially impacted energy, consumables and reagent supply across the mining sector.
Westgold continues to closely monitor the health advice across Australia and work cooperatively with government
departments and other stakeholders and has proactively worker to mitigate impacts of COVID-19.
22
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT DIRECTORS’ REPORT OPERATING RESULTS
The Group’s full year gold production was a record of 270,884 ounces compared to the previous year (245,411 ounces).
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 13% to $647,576,618 (2021: $571,170,198);
– Consolidated total cost of sales increased by 36% to $620,300,818 (2021: $455,456,036);
–
–
Profit before income tax and non-cash impairment decreased by 86% to $15,448,892 (2021: $111,893,067);
Non-cash impairment charge of $175,535,410 (2021: $Nil) is a result of the cost pressures, the Big Bell mine carrying
value being significantly greater than the initial expected project development costs, the South Emu Triton and Starlight
underground mines not producing the required economic returns coupled with the cessation of open pit mining; and
Profit after income tax and non-cash impairment decreased by 245% to a loss of $111,119,291 (2021: profit $76,751,880).
–
REVIEW OF FINANCIAL CONDITION
The Consolidated Statement of Cash Flows reflects a closing cash and cash equivalents of $182,701,502
(2021: $150,684,029).
Operating Activities
Group cash flow generated by operating activities decreased on that of the previous year with a total inflow of $179,855,454
(2021: $249,141,949).
Investing Activities
Cash flows used in investing activities across the Group increased on that of the previous year with a total outflow of
$201,009,289 (2021: $213,805,325).
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 $239,019,046 (2021: $266,190,255), broken into key operations as follows:
– Murchison $201,562,547 (2021: $228,372,804);
– Bryah $37,456,499 (2021: $37,817,451); and
Capital commitments of $17,715,233 (2021: $19,360,999) existed at the reporting date, principally relating to the purchase of
plant and equipment.
Exploration activities continued at all operations during the year with $18,190,290 (2021: $14,249,778) expended.
A review of accumulated land titles was completed resulting in a write-off of $110,165 (2021: $86,058) of carrying values.
Financing Activities
Net cash flows from financing activities amounted to $53,171,308 (2021: Outflow of $22,217,509).
–
–
The Group received $100,800,000 from the placement of 48,000,000 ordinary shares at $2.10(2021: nil);
The Group’s interest-bearing loans and borrowings decreased to $42,959,811 (2021: $45,075,838) with marginal additions
to the mobile mining fleet with the expanded growth activities.
Westgold Resources Limited Annual Report 2022
23
SHARE ISSUES DURING THE YEAR
The following share issues have been undertaken during the year:
Date
2 July 2021
15 October 2021
18 March 2022
30 June 2022
Total
Number of
shares
Purpose
205,768
Issued on conversion of options
1,365,192
Issued on dividend reinvestment plan
48,000,000
Placement to supplement working capital
126,564
Issued on conversion of options
49,697,524
DIVIDENDS
No dividend will be paid to members in respect of the year ended 30 June 2022.
Westgold’s key financial objective is to deliver superior shareholder value. One mechanism is by a potential return of capital
to our shareholders in the form of a reasonable dividend. Premised upon this the Board has set the dividend policy as a
maximum annual dividend of 30% of net profit after tax (NPAT), with the policy reviewed annually. Any payment is at the full
discretion of the Board and will be considered in light of market conditions, balance sheet strength and Company growth
plans.
The Board did not declare a dividend for the 2022 reporting year. The decision was made in order for Westgold to maintain
its balance sheet strength during a period of increasing operational costs, and to support the Company’s growth strategy.
This position will be reviewed by the Board next reporting period.
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 seven
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 its underground and open pit mines and as such this vertical
integration provides greater cost control and operating flexibility across the Company’s assets.
The Group’s production profile continued to grow and in FY2022 Westgold delivered a record 270,884 ounces from its
Bryah and Murchison operations with the Company continuing to grow the Exploration and Growth unit to define, explore
and develop the next suite of mineral assets within the Westgold landholding.
Bryah Operations
The Bryah Operations are centred upon the Fortnum Gold Operation (FGO). FGO is located within 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 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 65,947 ounces at a C1 Cash Cost of $1,294 per ounce and an all-in sustaining cost (AISC) of
$1,525 per ounce as disclosed in the table on page 26.
24
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT DIRECTORS’ REPORT The increase in the gold output and associated increase in the gold price resulted in an increase in revenue to $158,218,086
(2021: $140,661,201). Segment profits decreased to $17,702,894 (2021: $42,842,540).
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;
–
– new targets within the proximate Peak Hill tenements.
the Regent and Messiah deposits; and
This procession of potential open pit mines can replace the low-grade feedstock and extend the current mine life
expectation to in excess of seven years.
Murchison Operations
The Murchison Operations is located around the regional towns of Meekatharra and Cue in the mid-west region of Western
Australia.
Gold output increased and revenue improved to $489,358,532 (2021: $430,439,928). Segment profits decreased to
$9,462,740 (2021: $72,773,776).
Gold output from the operation for the year was 204,937 ounces at a C1 Cash Cost of $1,487 per ounce and an AISC of
$1,748 per ounce as disclosed in the table on page 26.
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.
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 Bluebird and Paddy’s Flat Mines;
–
Triton Deeps, 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 Western 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 148-person village at Big Bell,
a 266-person village 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 four years of de-watering, mine rehabilitation and refurbishment, Big Bell mine production continued to rise in
FY2022 with steady state operations announced in April 2022.
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.
Westgold Resources Limited Annual Report 2022
25
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);
– Caustons – on the Tuckabianna trend, close to the mill and high potential for underground mining;
– 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.
Mining Services Division
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.
Westgold Operating Performance by Operation
Year Ended 30 June 2022
MURCHISON
BRYAH
GROUP
Units
t
g/t
t
g/t
2,433,591
705,868
3,139,459
2.7
669,454
1.6
2.9
–
–
2.8
669,454
1.6
t
2,872,855
825,070
3,697,925
g/t
%
oz
oz
2.5
89
204,937
203,986
$/oz
2,399
1,158
406
88
(165)
2.6
95
65,947
65,719
2,408
822
370
76
26
2.5
90
270,884
269,705
2,401
1,076
397
84
(119)
1,487
1,294
1,438
95
20
146
62
36
133
87
24
143
1,748
1,525
1,692
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
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
Corporate Costs
Sustaining Capital
All-in Sustaining Costs2
26
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT DIRECTORS’ REPORT
Year Ended 30 June 2021
MURCHISON
BRYAH
GROUP
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
Corporate Costs
Sustaining Capital
All-in Sustaining Costs2
Units
t
g/t
t
g/t
t
g/t
%
oz
oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
$/oz
1,838,171
703,508
2,541,679
2.76
641,962
1.64
2.71
-
-
2.75
641,962
1.65
2,945,619
822,326
3,767,945
2.26
86.49
185,146
185,055
2,326
2.40
95.21
2.29
88.40
60,265
245,411
60,011
2,344
245,066
2,330
791
376
74
(34)
647
347
71
(56)
755
369
73
(39)
1,207
1,009
1,158
96
12
132
1,447
68
22
205
1,304
89
14
150
1,411
1.
2.
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.
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.
C1 and AISC 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 148,000 ounces at an average price of
$2,396 per ounce ending in July 2023, which the Group will deliver physical gold to settle (refer to Note 5).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Total equity decreased to $587,767,457 (2021: $607,360,307). This included the issue of 48,000,000 ordinary shares
equating to cash proceeds of $100,800,000 and an impairment write down of $175,535,410.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There have been no other significant events after the balance date.
Westgold Resources Limited Annual Report 2022
27
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 management and
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 zero significant environmental incidents, material breaches of the
Group’s environmental 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 2022, the Company granted 2,126,401 unlisted Performance Rights (WGXAF) to senior
management under the Employee Share Option Plan. Included in this issue were 202,435 Performance Rights granted to
the Managing Director.
The principal terms of the Employee Rights are:
The Performance Rights have been issued for nil consideration;
–
– Each Performance Right carries an entitlement to one fully paid ordinary share in the Company for each Performance
–
Right vested;
Vesting only occurs after the end of the Performance Periods (30 June 2024) and the number of Performance Rights that
vest (if any) will depend on:
– Relative Total Shareholder Return;
– Absolute Total Shareholder Return;
–
–
Absolute Earnings Per Share;
Operational Growth;
– Any Performance Rights that do not vest after the end of the Performance Periods will automatically lapse; and
– No amount is payable by a holder of Performance Rights in respect of the shares allocated upon vesting.
Unissued shares
As at the date of this report, unissued ordinary shares under share based payment arrangements are:
Performance Rights (Rights)
Rights – Tranche 4 - Employees
Rights – Tranche 5 - Directors
Rights – Tranche 5 - Employees
Total
Number of
shares
Exercise
Price
Expiry Date
762,080
202,435
1,367,993
2,332,508
Zero
Zero
Zero
30 June 2023
30 June 2024
30 June 2024
Holders of these instruments do not have any right, by virtue of the 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 332,332 listed options were converted to acquire fully paid ordinary shares in the Company, refer
to Note 26 for further details.
28
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT DIRECTORS’ REPORT 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:
Directors
Audit, Risk and Compliance
Committee
Remuneration and
Nomination Committee
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
3
13
13
13
3
10
13
3
13
13
12
3
10
12
–
–
3
3
1
–
3
–
–
3
3
1
–
3
–
–
4
4
1
–
4
–
–
4
4
1
–
4
Hon. CL Edwardes AM1
WC Bramwell
FJ Van Maanen
GR Davison
JL Matthys1
PG Cook2
PB Schwann3
1.
2.
3.
Appointed on 28 March 2022.
Resigned on 28 March 2022.
Resigned on 26 July 2022.
Committee Membership
As at the date of this report, the Company had an Audit, Risk and Compliance Committee and a Remuneration and
Nomination Committee of the Board of Directors. Members acting on these committees during the year were:
Audit, Risk and Compliance Committee
Remuneration and Nomination Committee
FJ Van Maanen – Chair
PB Schwann – Chair4
PB Schwann
WC Bramwell1
GR Davison2
JL Matthys3
FJ Van Maanen
WC Bramwell1
GR Davison2
JL Matthys3
1.
2.
3.
4.
Resigned as a member of the Committee on 1 August 2021.
Appointed to the Committee on 1 August 2021.
Appointed to the Committee on 2 June 2022. Mr Matthys was appointed Chair of the Remuneration and Nomination Committee on
28 July 2022.
Resigned on 26 July 2022.
Westgold Resources Limited Annual Report 2022
29
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 2022 (FY2022). 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 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:
Name
(i)
Non-Executive
Directors
Position
Appointed
Resigned
Hon. CL Edwardes AM
Non-Executive Chair
WC Bramwell
Non-Executive Director
FJ Van Maanen
Non-Executive Director
GR Davison
JL Matthys
PG Cook
Non-Executive Director
Non-Executive Director
Non-Executive Chair
PB Schwann1
Non-Executive Director
(ii)
Executive Director
WC Bramwell
WC Bramwell
PG Cook
Executive Director
Managing Director
Executive Chair
(iii)
Senior Executives
SH Heng
PW Wilding
L Smith
DA Fullarton
Chief Financial Officer
A/Chief Operating Officer
Chief Executive Officer
28/03/2022
03/02/2020
06/10/2016
01/06/2021
28/03/2022
01/08/2021
02/02/2017
01/08/2021
24/05/2022
19/03/2007
02/08/2021
24/05/2022
–
31/07/2021
–
–
–
28/03/2022
–
23/05/2022
-
31/07/2021
–
–
–
Company Secretary & General Counsel
20/12/2019
01/07/2020
01/10/2019
23/05/2022
23/05/2022
A Buckingham
Chief Operating Officer
1.
PB Schwann resigned as an Independent Non-Executive Director on 26 July 2022.
30
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) REMUNERATION AND NOMINATION COMMITTEE RESPONSIBILITIES
2.
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 Chair in advising Directors about their performance and possible retirement.
Remuneration report at FY2021 AGM
The FY2021 remuneration report received positive shareholder support at the FY2021 AGM with a vote of 100% 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 the Hon. CL Edwardes AM as Non-Executive Chair on 28 March 2022, and
JL Matthys as a Non-Executive Director on 28 March 2022.
The Board structure as at 30 June 2022 is as follows:
Name
Hon. CL Edwardes AM
WC Bramwell
FJ Van Maanen
GR Davison
JL Matthys
PB Schwann
Position
Non-Executive Chair
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
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 29 of this financial
report.
Use of remuneration advisors
The Remuneration and Nomination Committee did not engage any remuneration advisors during the current year.
Westgold Resources Limited Annual Report 2022
31
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 at the Annual General Meeting of shareholders on 26 November 2021 with
an aggregate fee pool of $750,000 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 were paid to NEDs in
FY2022 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 Chair
Non-Executive Director
Chair of Audit, Risk and Compliance Committee
Member of Audit, Risk and Compliance Committee
Chair 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
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); and
long-term incentives (LTI).
32
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) 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 FY2022 potential total remuneration
packages split between the fixed and variable remuneration is shown below:
Executive
Executive Director
Other Executives
Elements of remuneration
Fixed
remuneration
75%
75%
STI
14%
9%
LTI
11%
16%
Fixed remuneration
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.
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 FY2022, the STI dollar values that executives are entitled to receive as a percentage
of their fixed remuneration would not exceed 50% for the Managing Director 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 2022 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 (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 2022
33
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
Score
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
Environmental
5
No serious breaches of environmental management
Exceptional environmental management performance
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
10
5
0
10
5
0
5
2.5
0
25
20
15
10
5
0
25
20
15
10
5
0
25
20
15
10
5
34
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) STI outcomes
Performance against those measure is as follows for FY2022:
Name
Position
WC Bramwell
WC Bramwell
Managing Director
Executive Director
SH Heng
Chief Financial Officer
PW Wilding
A/Chief Operating Officer
L Smith
Total
Company Secretary & General Counsel
STI Achieved
%
STI Awarded1
$
Maximum
potential
award
$
43
53
32
42
43
11,062
26,027
77,548
145,973
34,897
109,479
7,433
17,490
35,063
82,500
166,003
381,469
1.
Performance is measured based on a combination of the operational segment performance as well as overall Group performance. The
FY2022 STI awards were paid in August 2022.
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.
How is it paid?
Executives are eligible to receive Performance Rights (Performance Rights).
Are options eligible for
dividends?
How much can executives earn?
In FY2022 Performance Rights were issued, being a conditional right issued to receive
a share subject to the terms of the offer.
Executives are not eligible to receive dividends on unvested rights.
The LTI dollar values that executives are entitled to receive as a percentage of their
fixed remuneration would not exceed 80% (FY2021: 80%) for the Managing Director
and 60% (FY2021: 60%) 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 5 Performance 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 2021 to 30 June 2024.
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 2022
35
How is performance measured? Relative Total Shareholder Return Performance Condition
The Relative TSR Performance 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:
Relative TSR Performance
Below 50th percentile
At 50th percentile
% Contribution to the Number of
Employee Rights to Vest
0%
50%
Above 50th percentile and below 75th
percentile
Pro-rata from 50% to 100%
75th percentile and above
100%
Absolute Total Shareholder Return Performance Condition
The ATSR Performance 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 date to the 30 day VWAP at vesting date
(30 June 2024).
The vesting schedule for the ATSR measure is as follows:
Absolute TSR Performance
Below 15%
Between 15% and up to 25%
Between 25% and up to 50%
Greater than 50%
% Contribution to the Number of
Employee Rights to Vest
0%
Pro-rata from 50% to 75%
Pro-rata from 75% to 100%
100%
Absolute Earnings Per Share Performance Condition
The AEPS Performance 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 to the EPS
(excluding any non-recurring items) at vesting date (30 June 2024).
The vesting schedule for the AEPS measure is as follows:
Absolute EPS Performance
Below 15%
Between 15% and up to 25%
Between 25% and up to 50%
Greater than 50%
% Contribution to the Number of
Employee Rights to Vest
0%
Pro-rata from 50% to 75%
Pro-rata from 75% to 100%
100%
36
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) How is performance measured? Operational Growth Performance Conditions
The Operation Growth Performance 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 FY2022 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
Pro-rata from 50% to 100%
Depletion replaced and 10% increase or
greater
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%
Tranche 5
The measurement date is 31 March 2024 unless otherwise determined by the Board.
Where executives cease to be an employee of the Group:
–
due to resignation or termination for cause, then any unvested Performance 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
Performance Rights based on achievement of the performance measures over the
performance period up to the date of cessation of employment;
– unless the Board determines otherwise.
When is performance
measured?
What happens if an executive
leaves?
Westgold Resources Limited Annual Report 2022
37
6. PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES
Remuneration earned by executives in 2022
The actual remuneration earned by executives in the year ended 30 June 2022 is set out in the Table on page 40. This
provides shareholders with a view of the remuneration paid to executives for performance in FY2021 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 FY2022 as disclosed in the Table on page 34, were paid
in August 2022.
LTI performance and outcomes
Performance Rights were granted in FY2021 (Tranche 4) and FY2022 (Tranche 5). All LTI’s are subject to performance
hurdles.
–
–
Tranche 4 has a three-year vesting period ending in June 2023.
Tranche 5 has a three-year vesting period ending in June 2024.
The Managing Director WC Bramwell was granted 202,435 Tranche 5 LTI’s in October 2021.
Senior Executives were granted a total 697,172 Tranche 5 LTI’s in October 2021.
For further details of Performance Rights granted, cancelled, lapsed 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 six years
up to and including the current financial year.
30 June 173
30 June 183
30 June 193
30 June 20
30 June 21
30 June 22
Closing share price
Profit (loss) per share (cents)
Net tangible assets per share1
Dividend paid per shares (cents)2
$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
2
$1.19
(25.32)
$1.24
–
1.
2.
3.
Net tangible assets per share include right of use assets and lease liabilities.
FY21 cash dividend of 2 cents per share declared on 30 August 2021 and paid on 15 October 2021.
The comparatives have not been adjusted for changes due to the adoption of AASB 15, AASB 16 and AASB 9.
Securities Trading Policy
The Westgold Securities Trading Policy applies to all employees and directors. The policy prohibits employees from dealing
in Westgold securities while in possession price sensitive information regarding the Company that is not generally available.
38
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) 7. EXECUTIVE EMPLOYMENT ARRANGEMENTS
A summary of the key terms of employment agreements for executives in place at 30 June 2022 is set out below. There is no
fixed term for executive service agreements and all executives are entitled to participate in the Company’s STI and LTI plans.
The Company may terminate employment agreements immediately for cause, in which the executive is not entitled to any
payment other than the value of fixed remuneration and accrued leave entitlements up to the termination date.
Name
Base Salary $ Superannuation
WC Bramwell (Managing Director)
SH Heng (Chief Financial Officer)
PW Wilding (A/Chief Operating Officer)
L Smith (Company Secretary & General Counsel)
500,000
300,000
420,000
275,000
10%
10%
10%
10%
Notice
Period
3 months
3 months
3 months
3 months
Termination Payment
Per Nes
Per NES
Per NES
Per NES
–
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.
– WC Bramwell resigned as Non-Executive Director on 31 July 2021 and was appointed as an Executive Director on
1 August 2021.
– WC Bramwell resigned as Executive Director on 23 May 2022 and was appointed as Managing Director on 24 May 2022.
–
– PW Wilding was appointed as A/Chief Operating Officer on 24 May 2022.
SH Heng appointed as Chief Financial Officer on 2 August 2021.
Westgold Resources Limited Annual Report 2022
39
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for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED)
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42
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED)
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Westgold Resources Limited Annual Report 2022
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1
for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED)
Table 2: Shareholdings of key management personnel (including nominees)
Directors
Hon. CL Edwardes AM1
WC Bramwell
FJ Van Maanen
GR Davison
JL Matthys1
PG Cook2
PB Schwann3
Executives
SH Heng4
PW Wilding5
L Smith
DA Fullarton6
A Buckingham6
Total
Balance
held at
1 July 2021
On exercise
of options
Net change
other7
Balance
held at
30 June
2022
–
34,150
435,521
–
–
10,596,241
–
–
51,344
5,985
10,000
–
–
–
–
–
–
–
–
–
6,122
6,122
15,850
50,000
–
–
435,521
–
112,658
112,658
(785,126)
9,811,115
–
–
10,000
10,000
51,001
(74,868)
27,477
16,840
42,501
57,785
(15)
22,810
(4,889)
47,612
(57,785)
–
11,133,241
168,127
(778,053)
10,523,315
1.
2.
3.
4.
5.
6.
7.
Appointed on 28 March 2022.
Resigned on 28 March 2022 (balances provided as at his resignation date).
Resigned on 26 July 2022.
Appointed on 2 August 2021.
Appointed on 24 May 2022.
Resigned on 24 May 2022.
Represents acquisition or disposal of shares on market.
Westgold Resources Limited Annual Report 2022
45
Table 3: Option holdings of key management personnel (including nominees)
Balance at
beginning of
year
1 July 2021
Granted as
remuneration
Exercised
Lapsed
Balance at
end of year
30 June
2022
Not vested
and not
exercisable
Vested and
exercisable
Options
Directors
Hon. CL Edwardes
AM
WC Bramwell
FJ Van Maanen
GR Davison
JL Matthys
PG Cook
PB Schwann
Executives
SH Heng
PW Wilding
L Smith
DA Fullarton
A Buckingham
–
–
–
–
–
387,316
–
–
–
202,435
–
–
–
–
–
101,123
–
–
–
–
–
–
–
–
–
–
–
–
–
(387,316)
–
–
–
–
202,435
202,435
–
–
–
–
–
–
–
–
–
–
101,123
101,123
165,452
102,428
(51,001)
(23,867)
193,012
193,012
109,168
95,484
(16,841)
(16,840)
170,971
170,971
231,480
203,698
(42,501)
(392,677)
242,690
194,439
(57,785)
(379,344)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
1,136,106
899,607
(168,127)
(1,200,045)
667,541
667,541
Loans to key management personnel and their related parties
There were no loans to key management personnel during the years ended 30 June 2022 and 30 June 2021.
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 2022 and
30 June 2021.
End of Audited Remuneration Report.
46
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL 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 a Sustainability Report in October 2022 outlining the impacts, footprint and achievements
of the Group during 2022.
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
$
2,200
Signed in accordance with a resolution of the Directors.
Hon. Cheryl Edwardes AM
Independent Non-Executive Chair
Perth, 25 August 2022
Westgold Resources Limited Annual Report 2022
47
AUDITOR’S 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 2022, 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;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene 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
T S Hammond
Partner
Perth
25 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:LT:WGX:010
48
Westgold Resources Limited Annual Report 2022
FINANCIAL REPORT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Finance costs
Other expenses
Impairment of mine properties and property plant and equipment
Net (loss) gain on fair value changes of financial assets
Exploration and evaluation expenditure written off
Profit (loss) before income tax from continuing operations
Income tax benefit (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
2022
2021
5
7(a)
6
7(b)
7(c)
17
15
18
8
647,576,618
571,170,198
(620,300,818)
(455,456,036)
27,275,800
115,714,162
4,663,417
2,292,234
(1,398,660)
(347,475)
(12,967,460)
(10,881,936)
(175,535,410)
–
(2,014,040)
5,202,140
(110,165)
(86,058)
(160,086,518)
111,893,067
48,967,227
(35,141,187)
(111,119,291)
76,751,880
–
–
(111,119,291)
76,751,880
(111,119,291)
76,751,880
(111,119,291)
76,751,880
9
9
(25.32)
18.16
(25.32)
18.12
Westgold Resources Limited Annual Report 2022
49
for the year ended 30 June 2022FINANCIAL REPORT FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes
2022
2021
10
11
12
13
14
15
16
17
18
19
20
21
23
25
22
24
8
26
27
28
28
182,701,502
150,684,029
7,122,734
7,466,095
96,082,089
59,129,368
5,427,078
1,930,033
4,035,977
1,149,449
293,263,436
222,464,918
6,799,309
6,423,091
147,916,103
166,748,178
263,803,557
407,335,920
104,577,467
89,738,936
10,814,702
7,258,887
533,911,138
677,505,012
827,174,574
899,969,930
88,017,524
83,783,431
13,066,226
11,405,262
22,842,019
22,962,067
–
–
123,925,769
118,150,760
69,669,839
20,117,792
77,118,556
22,113,771
25,693,717
75,226,536
115,481,348
174,458,863
239,407,117
292,609,623
587,767,457
607,360,307
463,468,148
364,077,523
(73,079,253)
46,522,657
15,884,931
15,266,496
181,493,631
181,493,631
587,767,457
607,360,307
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 2022
as at 30 June 2022FINANCIAL 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
Notes
2022
2021
647,576,036
570,971,358
220,263
3,080,832
333,794
1,957,496
(469,372,796)
(322,933,634)
(1,648,881)
(1,240,191)
–
53,126
Net cash flows from operating activities
10
179,855,454
249,141,949
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
Payments for performance bond facility
Proceeds from sale of property, plant and equipment
Net cash flows used in investing activities
FINANCING ACTIVITIES
(37,738,519)
(32,351,779)
(150,540,448)
(182,395,512)
(18,190,290)
(14,249,778)
(2,390,258)
(5,986,129)
15
–
17,765,178
(780,584)
–
8,630,810
3,412,695
(201,009,289)
(213,805,325)
Payment of hire purchase arrangements
4(f)
(28,133,801)
(22,245,203)
Payment for lease liabilities
Proceeds from share issue
Payments for share issue costs
Payments for dividends
Net cash flows from (used in) financing activities
Net increase in cash and cash equivalents
(9,037,306)
(8,346,056)
26(b)
100,800,000
8,373,750
(4,132,800)
(6,324,785)
–
–
53,171,308
(22,217,509)
32,017,473
13,119,115
Cash and cash equivalents at the beginning of the financial year
150,684,029
137,564,914
Cash and cash equivalents at the end of the year
10
182,701,502
150,684,029
Westgold Resources Limited Annual Report 2022
51
for the year ended 30 June 2022FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Retained
Earnings
(accumulated
losses)
(Note 27)
Share-based
payments
reserve
(Note 28)
Issued
capital
(Note 26)
Equity
reserve
(Note 28)
Total Equity
364,077,523 46,522,657
15,266,496 181,493,631 607,360,307
–
–
–
–
102,957,835
(3,567,210)
(111,119,291)
–
(111,119,291)
–
–
–
–
–
–
618,435
–
–
–
–
(8,482,619)
–
–
–
–
(111,119,291)
–
(111,119,291)
618,435
– 102,957,835
–
–
(3,567,210)
(8,482,619)
463,468,148 (73,079,253)
15,884,931
181,493,631 587,767,457
356,130,055 (30,229,223)
14,466,364
181,493,631 521,860,827
–
–
–
–
8,373,750
(426,282)
76,751,880
–
76,751,880
–
–
–
–
–
–
800,132
–
–
–
–
–
–
–
–
76,751,880
–
76,751,880
800,132
8,373,750
(426,282)
364,077,523
46,522,657
15,266,496
181,493,631 607,360,307
2022
At 1 July 2021
Loss for the year
Other comprehensive income, net of tax
Total comprehensive loss 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
Dividends paid
At 30 June 2022
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
52
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of Westgold Resources Limited for
the year ended 30 June 2022 was authorised for issue
in accordance with a resolution of the Directors on
25 August 2022.
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,
200 St Georges Terrace, Perth WA 6000.
2.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(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 2021. Other than the changes
described in Note 38, 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, 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:
–
The contractual arrangement with the other vote
holders of the investee;
– 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 2022
53
for the year ended 30 June 2022FINANCIAL 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 2022
for the year ended 30 June 2022FINANCIAL 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 2022
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.
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.
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.
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 2022
for the year ended 30 June 2022FINANCIAL 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.
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.
(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.
Westgold Resources Limited Annual Report 2022
57
2.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
(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.
(n) Non-current assets and disposal groups
held for sale and discontinued operations
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 2022
for the year ended 30 June 2022FINANCIAL 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.
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.
(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.
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
(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 and forward sale agreements
with 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 2022
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 2022
for the year ended 30 June 2022FINANCIAL 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:
–
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
Westgold Resources Limited Annual Report 2022
61
2.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
(y) Income tax (continued)
–
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.
3.
SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
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.
62
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.
SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS (CONTINUED)
Significant judgements (continued)
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.
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 2.5% (2021: 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.
Westgold Resources Limited Annual Report 2022
63
3.
SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS (CONTINUED)
Significant accounting estimates and
assumptions (continued)
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.
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.
From 1 January 2022, the Group has used total ounces
produced in calculating its amortisation of mine properties,
which was previously calculated based on production from
reserves. The change coincides with the development of
the Big Bell underground mine which reached commercial
production during the second half of the year. The change
resulted in an increase to amortisation of $25,131,673
compared to the amortisation that would have been
recorded under the approach previously used and is
considered to more accurately reflect the future pattern
of usage of the mine development assets for the Group’s
current operations.
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.
64
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.
SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS (CONTINUED)
Significant accounting estimates and
assumptions (continued)
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.
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 2022
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.
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit and loss
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing liabilities
Net financial assets
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit and loss
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing liabilities
Net financial assets
Floating
interest rate
Fixed interest
Non-interest
bearing
Total carrying
amount
142,701,502
40,000,000
–
182,701,502
–
–
–
–
–
7,122,734
7,122,734
6,799,309
6,799,309
1,930,033
–
1,930,033
142,701,502
41,930,033 13,922,043
198,553,578
–
–
–
–
– (88,017,524)
(88,017,524)
(10,909,353)
(32,050,458)
–
–
(10,909,353)
(32,050,458)
(42,959,811) (88,017,524)
(130,977,335)
67,576,243
150,684,029
–
–
–
–
–
–
–
150,684,029
7,466,095
7,466,095
6,423,091
6,423,091
1,149,449
–
1,149,449
150,684,029
1,149,449
13,889,186
165,722,664
–
–
–
–
–
(83,783,431)
(83,783,431)
(7,338,534)
(37,737,304)
–
–
(7,338,534)
(37,737,304)
(45,075,838)
(83,783,431)
(128,859,269)
36,863,395
66
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Interest rate risk exposure
Judgements of reasonably possible movements:
+ 1.0% (100 basis points)
- 1.0% (100 basis points)
Post tax profit higher (lower)
Other Comprehensive Income
higher (lower)
30 June
2022
30 June
2021
30 June
2022
30 June
2021
1,278,911
1,054,788
(1,278,911)
(1,054,788)
–
–
–
–
(b) Credit risk
Credit risk arises from the financial assets of the Group, which comprises cash and cash equivalents, trade and other
receivables, financial assets representing listed shares 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 2022.
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%
Post tax profit higher (lower)
Other Comprehensive Income
higher (lower)
30 June
2022
30 June
2021
30 June
2022
30 June
2021
951,903
899,233
(951,903)
(899,233)
–
–
–
–
(d) 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 2022. Cash flows for financial liabilities without fixed amount or timing are based on the
conditions existing as 30 June.
Westgold Resources Limited Annual Report 2022
67
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
4.
The remaining contractual maturities of the Group’s financial liabilities are:
6 months or less
6 - 12 months
1 - 5 years
Over 5 years
2022
2021
(100,990,852) (97,943,429)
(11,321,798)
(9,402,276)
(21,558,211) (22,875,599)
–
–
(133,870,861) (130,221,304)
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
2022
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing loans
183,178,708
7,122,734
1,930,033
192,231,475
(88,017,524)
–
–
–
–
–
–
–
–
–
–
(3,685,953)
(2,887,530)
(5,879,451)
–
–
–
–
–
–
183,178,708
7,122,734
1,930,033
192,231,475
(88,017,524)
(12,452,934)
(9,287,375)
(8,434,268) (15,678,760)
– (33,400,403)
Net inflow/(outflow)
91,240,623
(11,321,798)
(21,558,211)
(100,990,852)
(11,321,798)
(21,558,211)
2021
Financial assets
Cash and equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest-bearing loans
Net inflow/(outflow)
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)
(97,943,429)
(9,402,276)
(22,875,599)
61,746,884
(9,402,276)
(22,875,599)
–
–
–
–
–
–
–
–
–
–
–
(133,870,861)
58,360,614
151,074,769
7,466,095
1,149,449
159,690,313
(83,783,431)
(7,565,282)
(38,872,591)
(130,221,304)
29,469,009
68
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(e) 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.
2022
Financial assets
Instruments carried at fair value
Listed investments
2021
Financial assets
Instruments carried at fair value
Listed investments
Valuation
technique
market
observable
inputs
(Level 2)
Valuation
technique
non-market
observable
inputs
(Level 3)
Quoted
market price
(Level 1)
Total
6,799,309
6,799,309
6,423,091
6,423,091
–
–
–
–
–
–
–
–
6,799,309
6,799,309
6,423,091
6,423,091
Westgold Resources Limited Annual Report 2022
69
4.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(f) Changes in liabilities arising from financing activities
Opening
Cash flows
New leases
Reclassi-
fication
adjustment
Closing
Lease liability
2022
Current obligations
Non-current obligations
Total liabilities
2021
Current obligations
Non-current obligations
Total liabilities
Interest bearing liability
2022
Current obligations
Non-current obligations
Total liabilities
2021
Current obligations
Non-current obligations
Total liabilities
5,469,969
(9,037,306)
3,567,337
6,004,390 6,004,390
1,868,565
–
9,040,788 (6,004,390) 4,904,963
7,338,534
(9,037,306)
12,608,125
–
10,909,353
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
Opening
Cash flows
Additions
Reclassi-
fication
adjustment
Closing
17,492,098 (28,133,801)
10,641,703
16,837,629
16,837,629
20,245,206
–
11,805,252 (16,837,629)
15,212,829
37,737,304 (28,133,801) 22,446,955
– 32,050,458
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
70
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. REVENUE
Sale of gold at spot
Sale of gold under forward contracts(1)
Mining and contracting services
Total revenue from contracts with customers
2022
2021
336,730,400 386,888,429
310,846,218
184,212,700
–
69,069
647,576,618
571,170,198
Disaggregated revenue per segment has been disclosed in Note 33.
No revenue was recognised during the year for performance obligations satisfied in previous periods.
1.
Gold sold under forward contracts
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 148,000 ounces at an average price of
$2,396 per ounce ending in July 2023, under which the Group will deliver physical gold to settle.
The transaction price allocated to remaining performance obligations under forward contracts not recognised at the
balance sheet date at 30 June 2022 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
2022
2021
330,707,005
179,148,738
23,964,276
153,556,062
354,671,281 332,704,800
2022
2021
266,150
334,738
1,316,434
–
3,080,833
1,957,496
4,663,417
2,292,234
Westgold Resources Limited Annual Report 2022
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
2022
2021
175,906,269
158,441,833
218,314,978
129,580,548
10,252,203
6,175,664
23,537,397
21,922,481
–
–
54,126
3,155
54,409,633
52,350,718
2,095,532
1,883,586
8,249,706
7,482,892
127,535,100
77,561,033
620,300,818 455,456,036
1,648,881
1,587,326
(1,145,680)
(1,587,326)
895,459
1,398,660
347,475
347,475
The development of the Big Bell Underground Mine is deemed to be a qualifying asset and interest expenses of $1,145,680
(2021: $1,587,326) have therefore been capitalised to the underlying qualifying asset. The rate used to determine the
amount of borrowing costs eligible for capitalisation was 3.91% (2021: 4.16%).
72
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL 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 (benefit) 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
2022
2021
6,555,882
5,171,086
377,746
477,552
87,033
71,664
618,435
800,132
7,639,096
6,520,434
2,170,807
1,477,317
92,200
83,184
2,174,658
895,838
4,437,665
2,456,339
374,671
335,981
516,028
516,028
890,699
852,009
12,967,460
9,828,782
–
–
1,053,154
1,053,154
12,967,460
10,881,936
2022
2021
(10,632,327)
8,157,254
–
–
(39,878,133)
26,811,823
1,543,233
172,111
(48,967,227)
35,141,188
(565,590)
426,282
(565,590)
426,282
Westgold Resources Limited Annual Report 2022
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
Total accounting profit (loss) before income tax
At statutory income tax rate of 30% (2021: 30%)
Non-assessable income
Under (over) in respect of prior years
Income tax (benefit) expense reported in the income statement
Tax expense from continuing operations
Income tax (benefit) expense reported in the income statement
(d) Deferred income tax at 30 June relates to the following:
2022
2021
(160,086,518)
111,893,067
(160,086,518)
111,893,067
(48,025,955)
33,567,920
(459,389)
(124,779)
(481,883)
1,698,047
(48,967,227)
35,141,188
(48,967,227)
35,141,188
(48,967,227)
35,141,188
Deferred tax liabilities
Exploration
Consolidated Statement of
Financial Position
Consolidated Statement of
Comprehensive Income
2022
2021
2022
2021
(16,538,683)
(11,469,917) 5,068,766
3,645,931
Trade and other receivables
(341,375)
(676,017)
(334,642)
67,278
Net gain on financial assets AFVTP
423,071
(181,141)
(604,212)
(3,718,859)
Prepayments
Deferred mining
Inventories
(16,394)
(11,839)
4,555
(6,991)
(32,761,755)
(76,471,436) (44,697,446)
15,875,854
(10,964,932)
(8,703,078)
2,261,854
3,011,739
Property plant and equipment
(7,729,115)
(5,986,013)
2,730,867
6,277,076
Gross deferred tax liabilities
(67,929,183) (103,499,441)
Deferred tax assets
Accrued expenses
718,292
834,674
116,382
(300,557)
Provision for employee entitlements
4,820,069
4,104,863
(715,206)
(617,029)
Provision for rehabilitation
Business related costs
Capital raising costs
Recognised tax losses
Gross deferred tax assets
Net deferred tax liabilities
Deferred tax expense
17,696,605
14,086,706 (3,609,899)
2,557,203
162,179
63,028
(99,151)
20,177
1,367,076
801,486
(565,590)
426,282
17,471,245
8,382,148
(9,089,097)
8,329,365
42,235,466
28,272,905
(25,693,717) (75,226,536)
(49,532,819) 35,567,469
(e) Unrecognised losses
At 30 June 2022, there are no unrecognised losses for the Group (2021: nil).
74
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL 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 (loss) attributable to ordinary equity holders of the parent
Net profit attributable to ordinary equity holders of the parent
Basic earnings (loss) per share (cents)
Earnings used in calculating earnings per share
For diluted earnings per share:
2022
2021
(111,119,291)
76,751,880
(111,119,291)
76,751,880
(25.32)
(25.32)
18.16
18.16
Net profit (loss) attributable to ordinary equity holders of the parent (from basic EPS)
Net profit attributable to ordinary equity holders of the parent
(111,119,291)
76,751,880
(111,119,291)
76,751,880
Diluted profit (loss) per share (cents)
Continuing operations
(b) Weighted average number of shares
(25.32)
(25.32)
18.12
18.12
Weighted average number of ordinary shares for basic earnings per share
438,907,701 422,637,346
Effect of dilution:
Share options
Rights1
–
–
441,278
557,582
Weighted average number of ordinary shares adjusted for the effect of dilution
438,907,701 423,636,207
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 rights on issue in the calculation of dilutive earnings per share for the current financial period.
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.
1.
The Company had 2,332,508 share options on issue that are excluded from the calculation of diluted loss per share for the current
financial period.
Westgold Resources Limited Annual Report 2022
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 (loss) after income tax
Amortisation and depreciation
Provisional gold sales (refer to Note 25)
Income tax (benefit) 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)
Impairment of mine properties and property plant and equipment (refer to Note 17)
Exploration and evaluation expenditure written off (refer to Note 18)
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
2022
2021
142,701,502 150,684,029
40,000,000
–
182,701,502 150,684,029
(111,119,291)
76,751,880
193,180,670 140,130,238
–
(198,841)
(48,967,227)
35,141,187
618,435
800,132
895,459
347,475
(1,316,434)
1,053,154
2,014,040
(5,202,140)
175,535,410
–
110,165
86,058
210,951,227
248,909,143
(36,952,721)
(15,181,202)
(1,047,740)
(954,066)
4,520,668
14,258,184
2,384,020
2,109,890
179,855,454
249,141,949
At 30 June 2022, the Group had available $3,156,781 (2021: $5,988,078) of undrawn borrowing facilities.
11. TRADE AND OTHER RECEIVABLES (current)
Statutory receivables
Other debtors
Total trade and other receivables
2022
2021
6,453,347
6,738,159
669,387
727,936
7,122,734
7,466,095
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 2022
for the year ended 30 June 2022FINANCIAL 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
2022
2021
37,699,414
13,906,060
20,870,066
15,529,300
–
161,235
44,208,485
34,250,915
(6,695,876)
(4,718,142)
96,082,089
59,129,368
During the year there were write-downs in inventories of $10,252,203 (2021: $6,175,664) 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
Movement in Listed Shares
At 1 July
Additions of listed shares
Proceeds on disposal of financial assets
Net gain (loss) 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
2022
2021
5,427,078
4,035,977
5,427,078
4,035,977
2022
2021
1,930,033
1,149,449
1,930,033
1,149,449
2022
2021
6,799,309
6,423,091
6,799,309
6,423,091
6,423,091
–
2,390,258
5,986,129
–
(265,178)
(2,014,040)
702,140
6,799,309
6,423,091
– 13,000,000
–
4,500,000
– (17,500,000)
–
–
–
–
Westgold Resources Limited Annual Report 2022
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 2022 are as follows:
–
–
The Group has a 1.01% (30 June 2021: 0.26%) interest in Musgrave Minerals Limited, 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 $1,335,747 (30 June 2021: $513,889) which is based on the quoted
share price.
The Group has a 14.78% (2021: 14.11%) interest in Alto Metals Limited 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 $5,463,561 (2021: $5,909,201) which is based on the quoted share price.
16. PROPERTY, PLANT & EQUIPMENT
Plant and equipment
Gross carrying amount at cost
Accumulated depreciation
Impairment write down
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
Impairment write-down (refer to Note 17)
Depreciation charge for the year
At 30 June net of accumulated depreciation
78
Westgold Resources Limited Annual Report 2022
2022
2021
377,434,401 349,487,807
(259,429,136) (208,263,726)
(12,401,251)
112,948,563
141,224,081
26,474,862
24,398,325
(9,121,579)
(7,026,047)
17,353,283
17,372,278
17,614,257
8,151,819
147,916,103
166,748,178
141,224,081
135,415,999
46,224,414
62,953,599
(7,314,376)
(4,458,817)
(12,401,251)
–
(54,784,305) (52,686,700)
112,948,563
141,224,081
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. PROPERTY, PLANT & EQUIPMENT (CONTINUED)
Land and buildings
At 1 July net of accumulated depreciation
Transfer from capital works in progress
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
2022
2021
17,372,278
17,911,488
2,076,537
1,344,375
(2,095,532)
(1,883,585)
17,353,283
17,372,278
8,151,819
8,565,545
60,185,474 66,730,495
(898,122)
(1,687,813)
(1,523,963)
(1,158,434)
(46,224,414) (62,953,599)
(2,076,537)
(1,344,375)
17,614,257
8,151,819
The carrying value of plant and equipment purchase under financing arrangements at 30 June 2022 is $34,874,588
(2021: $43,054,511).
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
Impairment write down
Net carrying amount
Mine capital development
Gross carrying amount at cost
Accumulated amortisation
Impairment write down
Net carrying amount
Total mine properties and development costs
Movement in mine properties and development
Development areas
At 1 July
At 30 June
2022
2021
–
–
–
–
363,637,652
314,945,512
(71,721,289)
(42,821,170)
(118,667,668)
–
173,248,695 272,124,342
492,782,758 394,338,003
(357,761,405) (259,126,425)
(44,466,491)
–
90,554,862
135,211,578
263,803,557 407,335,920
–
–
–
–
Westgold Resources Limited Annual Report 2022
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 in rehabilitation provision
Amortisation charge for the year
Impairment write-down
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
Impairment write-down
At 30 June net of accumulated amortisation
IMPAIRMENT OF MINE PROPERTIES AND DEVELOPMENT
Murchison CGO CGU
Mine properties
Mine capital development
Murchison MGO CGU
Mine properties
Mine capital development
Property Plant and Equipment (refer to Note 16)
Bryah FGO CGU
Mine properties
Mine capital development
Property Plant and Equipment (refer to Note 16)
Impairment loss before income tax
2022
2021
272,124,342 188,949,938
51,886,544
92,956,156
898,122
1,687,813
3,455,983
1,851,824
1,518,725
1,051,234
(9,067,232)
(2,157,420)
(28,900,121)
(12,215,203)
(118,667,667)
–
173,248,695 272,124,342
135,211,578
109,563,191
98,653,906
89,439,356
1,523,963
1,158,434
1,722,869
2,248,251
(3,455,983)
(1,851,824)
(98,634,979) (65,345,830)
(44,466,492)
–
90,554,862
135,211,578
2022
2021
107,892,672
1,530,969
5,815,456
19,833,030
10,637,100
4,959,539
23,102,493
1,764,151
175,535,410
-
-
-
-
-
-
-
-
-
80
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. MINE PROPERTIES AND DEVELOPMENT (CONTINUED)
Results of impairment testing
Mine Properties and development
Westgold is a dynamic, growth oriented Western Australian gold miner and is unique in the Australian gold sector as an
owner operator. Westgold’s operations are comprised of:
–
–
the Bryah Operations at Fortnum (FGO)
the Murchison Operations at Meekatharra (MGO) and Cue (CGO)
These operations are the Cash Generating Units of the Group as they each operate independent of the other. A Cash
Generating Unit (CGU) is defined as the smallest group of assets that includes the assets and generates cash flows that are
largely independent of the cash inflows from other assets or group of assets.
In assessing whether an impairment is required, the carrying value of the asset or CGU is compared with its recoverable
amount. The recoverable amount is the higher of the CGU’s fair value less costs of disposal (FVLCD) and value in use
(VIU). Given the nature of the Group’s activities, information on the fair value of an asset is usually difficult to obtain unless
negotiations with potential purchasers or similar transactions are taking place. Consequently, the VIU for each CGU has
been estimated based on discounted future estimated cash flows (expressed in real terms) expected to be generated
from the continued use of the CGUs using market-based commodity price and exchange assumptions. Production and
cost assumptions were derived from estimated quantities of recoverable minerals, production levels, operating costs and
capital requirements, and its eventual disposal, based on the CGU latest life of mine (LOM) plans. These cash flows were
discounted using a real post-tax discount rate that reflects the weighted average cost of capital of the Group.
Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are generated
as part of the Group’s planning process, including LOM plans, one-year budgets and CGU-specific studies.
This assessment is in accordance with the relevant accounting standards taking into consideration the current outlook for
gold prices, increasing supply chain cost pressures including diesel fuel, consumables, labour costs and interest rates while
maintaining the production, processing and recovery assumptions.
The non-cash impairment charge of $175,535,410 (2021: $Nil) is a result of the cost pressures described above, the Big Bell
mine carrying value being significantly greater than the initial expected project development costs, the South Emu Triton
and Starlight underground mines not producing the required economic returns coupled with the cessation of open pit
mining.
Key Assumptions
The table below summarises the key assumptions used in the 2022 year end carrying value assessments.
Assumption
Gold price ($/oz)
Inflation rate
Discount rate
Value
A$2,400/oz nominal
2.5% per annum
5.5% real post tax
Gold prices
The gold price assumption of A$2,400/oz nominal was estimated with reference to the FY23 Budget gold price which took
into consideration the average hedge price for Westgold and the current spot price including ranges of external market
forecasts for USD gold and FX rate based on a consensus view of market experts.
Inflation rate
The long-term inflation rate used to convert the nominal AUD gold price to real was 2.5% which is based on the RBA target
for monetary policy in Australia to achieve an inflation rate within the range of 2% to 3% on average, over time.
Westgold Resources Limited Annual Report 2022
81
17. MINE PROPERTIES AND DEVELOPMENT (CONTINUED)
Discount rate
In determining the fair value of CGU’s, the future real cashflows are discounted using rates based on the Group’s estimated
after tax real weighted average cost of capital with a mid-point of 5.5%.
Operating and capital costs
Life of mine operating and capital cost assumption are based on the Group’s latest budget and life-of-mine plans.
Sensitivity Analysis
After recognising the asset impairment and write down for the Murchison and Bryah, and using the assumption and
methodology above, the recoverable value of the Murchison and Bryah have been assessed as being equal to their carrying
amount at 30 June 2022.
Any variation in the key assumptions going forward will impact the recoverable value of the CGU’s. If the variation in an
assumption has a negative impact on recoverable value, it could indicate a requirement for additional impairment of
non-current assets for either or both the Murchison and Bryah CGU’s.
Murchison CGO Sensitivity Analysis
It is estimated that changes in key assumptions, in isolation, would have the following approximate (increase or decrease) on
the recoverable amount of the Murchison CGO CGU as at 30 June 2022.
Murchison CGO
10% change in gold price ($/oz.)
1% change in inflation rate
1% change in discount rate
10% change in operating cost
Increase in key assumption
$m
Decrease in key assumption
$m
138
(50)
(14)
(92)
(138)
53
14
92
Murchison MGO Sensitivity Analysis
It is estimated that changes in key assumptions, in isolation, would have the following approximate (increase or decrease) on
the recoverable amount of the Murchison MGO CGU as at 30 June 2022.
Murchison MGO
10% change in gold price ($/oz.)
1% change in inflation rate
1% change in discount rate
10% change in operating cost
Increase in key assumption
$m
Decrease in key assumption
$m
89
(19)
(4)
(82)
(89)
20
4
82
82
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17. MINE PROPERTIES AND DEVELOPMENT (CONTINUED)
Bryah Sensitivity Analysis
It is estimated that changes in key assumptions, in isolation, would have the following approximate (increase or decrease) on
the recoverable amount of the Bryah FGO CGU as at 30 June 2022
Bryah -FGO
10% change in gold price ($/oz.)
1% change in inflation rate
1% change in discount rate
10% change in operating cost
Increase in key assumption
$m
Decrease in key assumption
$m
44
(10)
(2)
(36)
(44)
11
2
36
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
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
2022
2021
104,577,467
89,738,936
104,577,467
89,738,936
89,738,936
78,874,701
18,190,290
14,249,778
(1,518,725)
(1,051,234)
(1,722,869)
(2,248,251)
(110,165)
(86,058)
104,577,467
89,738,936
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 $110,165 (2021: $86,058) 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.
Westgold Resources Limited Annual Report 2022
83
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 2021
Additions
Disposals
Depreciation expense
As at 30 June 2022
Power
Stations
Premises
Mining
Equipment
Total
4,399,668
2,033,218
826,001
7,258,887
8,632,818
3,494,392
194,339
12,321,549
–
–
–
–
(7,282,955)
(924,880)
(557,899)
(8,765,734)
5,749,531
4,602,730
462,441
10,814,702
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 (refer to Note 7)
Interest expense on lease liabilities
Less interest expense capitalised to qualifying asset
Total amount recognised in profit or loss
The interest expense of these lease liabilities has been capitalised to the qualifying assets.
2022
2021
7,258,887
11,942,577
12,321,549
3,322,262
–
(7,032)
271,572
347,136
(9,037,306)
(8,346,056)
10,814,702
7,258,887
8,249,706
7,482,892
516,028
516,028
271,572
347,136
(158,195)
(347,136)
8,879,111
7,998,920
84
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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)
2022
2021
47,637,236 44,573,485
40,380,288
39,209,946
88,017,524
83,783,431
2022
2021
10,865,164
9,262,707
2,201,062
2,142,555
13,066,226
11,405,262
2022
2021
3,000,672
2,277,616
66,669,167
74,840,940
69,669,839
77,118,556
(a) Provision for rehabilitation
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 2022 range from 3.34% to 3.58% (2021: range from
0.90% to 1.37%). Refer to Note 3 for further detail.
(b) Current and non-current movements in provision for rehabilitation
At 1 July
Adjustment due to revised conditions
Unwind of discount
At 30 June
2022
2021
74,840,940 76,650,886
(9,067,232)
(2,157,420)
895,459
347,474
66,669,167
74,840,940
Westgold Resources Limited Annual Report 2022
85
23. INTEREST-BEARING LOANS AND BORROWINGS (current)
Lease liabilities
Hire purchase arrangements
At 30 June
2022
2021
6,004,390
5,469,969
16,837,629
17,492,098
22,842,019
22,962,067
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
2022
2021
4,904,963
1,868,565
15,212,829 20,245,206
20,117,792
22,113,771
Represents non-current portion of hire purchase arrangements which have repayment terms of 36 months from inception.
The weighted average interest rate is 3.91% per annum (2021: 4.16%).
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
2022
2021
34,874,588
49,177,558
34,874,588
49,177,558
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
2022
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
86
Westgold Resources Limited Annual Report 2022
Minimum
payments
Present value
of payments
17,721,643
16,837,629
15,678,760 15,212,829
33,400,403 32,050,458
(1,349,945)
–
32,050,458 32,050,458
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24. INTEREST-BEARING LOANS AND BORROWINGS (non-current) (CONTINUED)
Non-current (continued)
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
Lease liabilities
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
2022
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
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
25. UNEARNED INCOME
Provisional gold sales
Movement in provisional gold sales
At 1 July
Provisional gold sales at 30 June
At 30 June
Minimum
lease
payments
Present
value of lease
payments
6,573,483
6,004,390
5,879,451
4,904,963
12,452,934 10,909,353
(1,543,581)
-
10,909,353 10,909,353
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
2022
2021
–
–
–
–
–
–
–
198,841
(198,841)
–
This represents gold sold on provisional outturns on 30 June 2021.
Westgold Resources Limited Annual Report 2022
87
26. ISSUED CAPITAL
(a) Ordinary Shares
Issued and fully paid
(b) Movements in ordinary shares on issue
At 1 July 2020
Issued share capital on conversion of listed options
Share issue costs, net of tax
At 30 June 2021
Issued share capital on conversion of listed options
Issued share capital under dividend reinvestment plan
Issued share capital
Share issue costs, net of tax
At 30 June 2022
2022
2021
463,468,148
364,077,523
Number
$
420,230,270
356,130,055
3,694,936
8,373,750
–
(426,282)
423,925,206
364,077,523
332,332
–
1,365,192
2,157,835
48,000,000 100,800,000
–
(3,567,210)
473,622,730
463,468,148
(c) Terms and conditions of contributed equity
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.
(e) Options on issue
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Type
Unlisted - Tranche 4(i)
Unlisted - Tranche 5(i)
Unlisted - Tranche 5(i)
Total
Expiry Date
30/06/2023
30/06/2024
30/06/2024
(i)
Rights issued pursuant to the Westgold Resources Limited Employee Share and Option Plan.
Exercise
Price
Number of
options
Nil
Nil
Nil
762,080
202,435
1,367,993
2,332,508
88
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. ISSUED CAPITAL (CONTINUED)
(f) Option conversions
332,332 listed options were exercised during the financial year (2021: 3,694,936).
(g) Capital management - gearing ratio
Gearing ratio
Debt
Capital
2022
2021
7.31%
7.42%
42,959,811
45,075,838
587,767,457 607,360,307
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 2022 and 30 June 2021. 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 (loss) in current year attributable to members of the parent entity
Dividends paid
At 30 June
28. RESERVES
At 30 June 2020
Share-based payments
At 30 June 2021
Share-based payments
At 30 June 2022
2022
2021
46,522,657 (30,229,223)
(111,119,291)
76,751,880
(8,482,619)
–
(73,079,253) 46,522,657
Share-based
payments
reserve
Equity
reserve
Total
14,466,364
181,493,631
195,959,995
800,132
–
800,132
15,266,496
181,493,631
196,760,127
618,435
–
618,435
15,884,931
181,493,631 197,378,562
Equity reserve
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.
Westgold Resources Limited Annual Report 2022
89
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
2022
2021
618,435
800,132
The share-based payment plan is described below. There have been no cancellations or modifications to the plan during
2022, 2021, 2020 and 2019.
(b) Transactions settled using shares
There were no transactions settled using shares in the year ending 30 June 2022.
(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.
(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 and 31 March 2024
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.
90
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29. SHARE-BASED PAYMENTS (CONTINUED)
(d) Share options and performance rights (continued)
– 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 reorganisations,
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
2022
Number
2022
WAEP
2021
Number
2021
WAEP
2,213,898
2,128,138
(205,768)
(1,677,196)
2,459,072
–
0.00
0.00
0.00
0.00
0.00
0.00
5,107,698
1,520,181
(3,694,936)
(719,045)
2,213,898
–
1.64
0.00
2.29
0.00
0.00
0.00
The following table represents the outstanding balance as at 30 June 2022:
Grant Date Vesting date Expiry date
ZEPO - Tranche 2
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
10/05/2019 30/06/2021 30/06/2023
$0.00
205,768
–
(205,768)
ZEPO - Tranche 3
07/05/2020 30/06/2022 30/06/2022
07/05/2020 30/06/2022 30/06/2022
$0.00
$0.00
153,810
(153,810)
–
367,820
(241,256)
(126,564)
Rights - Tranche 4
24/11/2020 30/06/2023 30/06/2023
$0.00
233,506
(233,506)
24/11/2020 30/06/2023 30/06/2023
$0.00
1,252,994
(490,914)
–
–
–
–
–
–
762,080
Rights - Tranche 5
11/10/2021
30/06/2024 30/06/2024
11/10/2021
30/06/2024 30/06/2024
$0.00
$0.00
–
–
–
202,435
202,435
(557,710)
1,925,703
1,367,993
205,768
–
126,564
-
–
–
–
Total
2,213,898
(1,677,196)
1,795,806
2,332,508
332,332
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 2022 is 1.68 years
(2021: 1.76 years).
Westgold Resources Limited Annual Report 2022
91
29. SHARE-BASED PAYMENTS (CONTINUED)
(d) Share options and performance rights (continued)
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 (2021: $0.00).
Weighted average fair value of share-based payments
The weighted average fair value of share-based payments granted during the year was $1.43 (2021: $1.77).
Valuation of share-based payments
The fair value of the equity-settled share-based payments granted under the ESOP is estimated at the date of grant using
either a Black & Scholes or a Monte Carlo model, which takes into account factors including the exercise price, the volatility
of the underlying share price, the risk-free interest rate, the market price of the underlying share at grant date, historical and
expected dividends and the expected life of the option or right, and the probability of fulfilling the required hurdles.
–
–
–
Tranche 3 Options vest subject to performance hurdles, measured for the period 1 July 2019 to 30 June 2022
Tranche 4 Rights vest subject to performance hurdles, measured for the period 1 July 2020 to 30 June 2023
Tranche 5 Rights vest subject to performance hurdles, measured for the period 1 July 2021 to 30 June 2024
The following table gives the assumptions made in determining the fair value of the rights granted in Tranche 5.
Grant date
11/10/2021
11/10/2021
11/10/2021
11/10/2021
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Options exercise price ($)
Share price at grant date ($)
Fair value at grant date ($)
RTSR
54%
ATSR
54%
Operational
Growth
54%
AEPS
54%
0.24%
0.24%
0.24%
0.24%
2.7
2.7
2.7
2.7
$0.00
$0.00
$0.00
$0.00
$1.84
$1.20
$1.84
$0.95
$1.84
$1.79
$1.84
$1.79
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.
92
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30. COMMITMENTS
(a) Capital commitments
At 30 June 2022, 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
2022
2021
17,715,233
19,360,999
(b) Mineral tenement lease commitments
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
2022
2021
4,395,253
4,158,593
17,132,795
16,361,419
23,423,341
25,743,066
44,951,389
46,263,078
(c) Other commitments
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
31. CONTINGENT ASSETS AND LIABILITIES
2022
2021
23,537,397
21,922,481
(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 $1,930,033 (2021: $1,149,449). The bank guarantees are fully
secured by term deposits (refer to Note 14).
Westgold Resources Limited Annual Report 2022
93
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
282,825
280,800
2022
2021
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.
Fees for other services:
- Tax compliance
Total auditor’s remuneration
–
3,640
2,200
22,174
285,025
306,614
33. OPERATING SEGMENTS
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
Bryah Operations
Mining, treatment, exploration and development of gold assets
MGO & CGO Murchison Operations
Mining, treatment, exploration and development of gold assets
Other
Other
Exploration and development of other mineral assets and contract mining
services
General
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.
94
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2022 and
30 June 2021.
Murchison
Bryah
Other
Total
Year ended 30 June 2022
External revenue
Sale of gold at spot
247,763,992
88,966,408
Sale of gold under forward contracts
241,594,540
69,251,678
Mining and contracting services
–
–
Total segment revenue
489,358,532
158,218,086
Results
–
–
–
-
336,730,400
310,846,218
–
647,576,618
Depreciation and amortisation
(143,564,220)
(48,725,750)
(890,699)
(193,180,669)
Exploration and evaluation expenditure written off
(89,016)
(21,149)
–
(110,165)
Segment profit (loss) before impairment
9,462,740
17,702,894
(1,398,659)
25,766,975
557,446,050
73,580,723
44,059
631,070,832
(167,705,275)
(35,871,982)
(42,705)
(203,619,962)
(201,562,547)
(37,456,499)
–
(239,019,046)
Total assets
Total liabilities
Capital expenditure
Year ended 30 June 2021
External revenue
Sale of gold at spot
288,031,479
98,856,950
Sale of gold under forward contracts
142,408,449
41,804,251
Mining and contracting services
–
–
Total segment revenue
430,439,928
140,661,201
Results
–
–
386,888,429
184,212,700
69,069
69,069
69,069
571,170,198
Depreciation and amortisation
(107,864,453)
(31,413,778)
(852,009)
(140,130,240)
Exploration and evaluation expenditure written off
(76,635)
(9,423)
–
(86,058)
Segment profit (loss)
Total assets
Total liabilities
Capital expenditure
72,773,776
42,842,540
(335,687)
115,280,629
617,171,498
123,621,044
32,465
740,825,007
(174,222,689)
(36,025,281)
(14,632)
(210,262,602)
(228,372,804)
(37,817,451)
–
(266,190,255)
Westgold Resources Limited Annual Report 2022
95
33. OPERATING SEGMENTS (CONTINUED)
(a) Reconciliation of profit (loss)
Segment profit (loss)
Corporate administration expenses
Corporate interest income
Corporate other income
Net gain (loss) on fair value changes of financial assets
Net gain (loss) on disposal of assets
2022
2021
25,766,975
115,280,629
(12,967,460)
(9,828,782)
266,150
334,738
3,080,833
1,957,496
(2,014,040)
5,202,140
1,316,434
(1,053,154)
Impairment of mine properties and property plant and equipment
(175,535,410)
Total consolidated profit (loss) from continuing operations before income tax
(160,086,518)
111,893,067
(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
96
Westgold Resources Limited Annual Report 2022
631,070,832
740,825,007
181,738,509
149,545,568
458,822
912,144
1,326,174
57,478
700,969
795,590
6,799,309
6,423,091
1,374,246
1,106,052
3,494,538
516,175
827,174,574
899,969,930
203,619,962
210,262,602
4,045,805
3,914,097
2,482,343
2,644,100
3,565,290
562,288
25,693,717
75,226,536
239,407,117
292,609,623
647,576,618
571,170,198
647,576,618
571,170,198
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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
2022
2021
647,576,618
571,170,198
647,576,618
571,170,198
The Group has two customers to which it sells gold and each account for 52% and 48% of this external revenue respectively
(2021: 68% and 32%).
(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)
Hon. CL Edwardes AM
Non-Executive Chair
28/03/2022
–
WC Bramwell
Non-Executive Director
03/02/2020
31/07/2021
Appointed
Resigned
FJ Van Maanen
Non-Executive Director
GR Davison
JL Matthys
PG Cook
Non-Executive Director
Non-Executive Director
Non-Executive Chair
PB Schwann1
Non-Executive Director
(ii) Executive Directors
WC Bramwell
WC Bramwell
PG Cook
Executive Director
Managing Director
Executive Chair
(iii) Other Executives (KMPs)
SH Heng
PW Wilding
L Smith
DA Fullarton
Chief Financial Officer
A/Chief Operating Officer
Company Secretary
Chief Executive Officer
A Buckingham
Chief Operating Officer
06/10/2016
01/06/2021
28/03/2022
01/08/2021
02/02/2017
01/08/2021
24/05/2022
19/03/2007
02/08/2021
24/05/2022
30/12/2019
01/07/2020
01/10/2019
–
–
–
28/03/2022
–
23/05/2022
–
31/07/2021
–
–
–
24/05/2022
24/05/2022
1.
PB Schwann resigned as an Independent Non-Executive Director on 26 July 2022.
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.
Westgold Resources Limited Annual Report 2022
97
34. KEY MANAGEMENT PERSONNEL (CONTINUED)
(b) Compensation of Key Management Personnel
Short term benefits
Other fees
Termination payments
Post-employment benefits
Other long-term benefits
Share-based payment
2022
2021
2,664,040
2,470,589
14,373
135,820
728,876
–
208,138
129,445
40,498
(130,843)
41,250
441,116
3,525,082
3,218,220
(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
Performance Rights held by key management personnel under the long-term incentive plan to purchase ordinary shares:
Grant date
10/05/2019
07/05/2020
24/11/2020
11/10/2021
Total
Expiry date
30/06/2023
30/06/2022
30/06/2023
30/06/2024
Exercise price $
2022
2021
0.00
0.00
0.00
0.00
–
–
56,530
275,003
166,071
639,121
501,470
–
667,541
970,654
35. RELATED PARTY DISCLOSURES
(a) Subsidiaries
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
Westgold Mining Services Pty Ltd1
1.
Previously Minterra Pty Ltd
Country of
incorporation
Australia
Australia
Australia
Ownership interest
2022
100%
100%
100%
2021
100%
100%
100%
98
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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
PG Cook was the non-executive chair of Castile Resources Ltd during the financial period.
There were no other related party transactions for the year ending 30 June 2022.
2022
4,967
490
2021
14,000
4,730
–
–
(104,869)
(12,286)
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
1.
Includes $27m elimination of intercompany receivable on sale of subsidiary.
2022
2021
184,435,649
151,099,603
462,571,498
378,493,869
6,680,412
7,115,222
10,093,436
7,120,484
463,468,149
364,077,524
(31,431,802)
(12,527,418)
15,884,932
15,266,496
4,556,783
4,556,783
452,478,062
371,373,385
(11,379,797)
(21,867,361)
(11,379,797)
(21,867,361)
Westgold Resources Limited Annual Report 2022
99
36. INFORMATION RELATING TO WESTGOLD RESOURCES LIMITED (THE PARENT ENTITY)
(CONTINUED)
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 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
37. EVENTS AFTER THE BALANCE SHEET DATE
There have been no other significant events after the balance date.
38. ACCOUNTING STANDARDS
New and amended standards and interpretations
The Group has adopted all Accounting Standards and Interpretations effective from 1 July 2021. 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 2021 but did not
have an impact on the consolidated financial statements of the Group and, hence, have not been disclosed.
100
Westgold Resources Limited Annual Report 2022
for the year ended 30 June 2022FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2022 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 2022.
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.
Hon. Cheryl L Edwardes AM
Non-Executive Chair
Perth, 25 August 2022
Westgold Resources Limited Annual Report 2022
101
for the year ended 30 June 2022FINANCIAL REPORT DIRECTORS’ DECLARATION
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 2022, 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 2022
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.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:LT:WGX:009
102
Westgold Resources Limited Annual Report 2022
FINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
Page 2 2
1. Impairment assessment of non-current assets
Why significant
How our audit addressed the key audit matter
At 30 June 2022, the Group had non-current assets
of $422,534,362 comprising capitalised development
and mine properties expenditure, property, plant and
equipment and right of use assets (refer to Notes 16,
17 and 19 of the financial report).
At the end of each reporting period, the Group
exercises judgment in determining whether there is
any indication of impairment of these assets. If any
such indicators exist, the Group estimates the
recoverable amount of the applicable assets. The
Group assessed whether any indicators of impairment
were present at 30 June 2022 and concluded that an
indicator or indicators of impairment were present in
respect of its Murchison CGO, Murchison MGO and
Bryah FGO cash generating units (CGUs). An
impairment loss of $109,423,641 for the Murchison
CGO CGU, $36,285,586 for the Murchison MGO CGU
and $29,826,183 for the Bryah FGO CGU was
recognised for the year ended 30 June 2022 (refer to
Note 17 of the financial report).
We considered this to be a key audit matter because
of the:
► Significant judgment involved in determining
whether indicators of impairment were present.
► Significant judgment and estimates involved in
the determination of the recoverable amount of
the CGUs, including assumptions relating to
future gold prices, operating and capital costs,
the discount rate used to reflect the risks
associated with the forecast cash flows having
regard to the current status of the CGUs and the
reserves and resources included in the life of
mine plans.
We evaluated the Group’s assessment as to the
presence of any indicators of impairment. Our audit
procedures included the following:
► Comparison of the Group’s market
capitalisation relative to its net assets.
► Reading operational reports, board reports,
minutes and market announcements.
► Consideration of changes to reserves and
resources and other macro-economic factors
including the gold price and discount rates.
Our audit procedures related to the impairment
assessment made by the Group following the
identification of impairment indicators included the
following:
► Ensured the Group's impairment methodology
was in accordance with the requirements of
Australian Accounting Standards.
► Evaluated the assumptions and methodologies
used by the Group, in particular, those relating
to forecast cash flows, including the inputs used
to formulate them. This included assessing, with
involvement from our valuation specialists,
where appropriate, the gold prices with
reference to market prices (where available),
market research, market practice, market
indices, broker consensus, historical
performance, discount rates and resource
valuation multiples.
► Tested the mathematical accuracy of the
Group's discounted cash flow impairment
models and agreed relevant data, including
assumptions on timing and future capital and
operating expenditure, to the latest Board
approved budgets and life of mine plans (as
appropriate).
► Assessed the work of the Group's internal
experts with respect to the capital and
operating assumptions used in the cash flow
forecasts. We also considered the competence,
qualifications and objectivity of the experts and
assessed whether key capital and operating
expenditure assumptions were consistent with
information in Board reports and releases to the
market.
► Assessed the work of the Group's experts with
respect to the reserve and resource
assumptions used in the cash flow forecasts.
This included understanding the estimation
process. We also examined the competence,
qualifications and objectivity of the Group's
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Westgold Resources Limited Annual Report 2022
103
Page 3 3
Why significant
How our audit addressed the key audit matter
experts, and assessed whether key economic
assumptions were consistent with those used
elsewhere in the financial report.
► Assessed the impact of a range of sensitivities
to the economic assumptions underpinning the
Group's impairment assessment.
► Assessed the adequacy of the Group's
disclosures in the financial report relating to
impairment.
2. Amortisation of mine properties and development costs
Why significant
How our audit addressed the key audit matter
As at 30 June 2022 the Group had capitalised mine
properties and development costs amounting to
$263,803,557 (refer to Note 17 of the financial
report).
We evaluated the assumptions and methodologies
used by the Group in their calculations of
amortisation of capitalised mine properties and
development costs.
As disclosed in Note 3 of the financial report, these
costs are amortised on a units of production basis,
based on production during the period and an
estimate of the remaining reserves and resources to
be mined.
The amortisation calculations require considerable
judgement and estimation in relation to the estimated
reserves and resources (used as the denominator in a
“actual tonnes mined” calculation) of the mines and
the estimate of future costs (included in the
numerator in a “actual tonnes mined” calculation)
required to extract these reserves and resources for
each underground mine.
Accordingly, this creates a risk the amortisation rates
are inappropriate, resulting in an 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.
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
calculations.
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 amortisation calculations 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
in the financial report relating to amortisation.
3. 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 at its mine sites. Rehabilitation activities
are governed by local legislative requirements. As at
30 June 2022 the Group’s consolidated statement of
financial position includes provisions of $66,669,167
We evaluated the assumptions and methodologies
used by the Group in determining their rehabilitation
obligations. Our audit procedures included the
following:
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Liability limited by a scheme approved under Professional Standards Legislation
104
Westgold Resources Limited Annual Report 2022
continuedFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
Page 4 4
Why significant
How our audit addressed the key audit matter
in respect of such obligations (refer to Note 22 of the
financial report).
•
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.
Assessed the qualifications, competence and
objectivity of the Group’s experts, the work of
whom, formed the basis of the Group’s
rehabilitation cost estimates.
• With the assistance of our subject matter
specialists, we assessed the appropriateness of
the rehabilitation cost estimates
•
•
Tested the Group’s calculation of the present
values of the rehabilitation 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
in the financial report 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 2022 annual report other than the financial report and our
auditor’s report thereon. We obtained the corporate directory, the directors’ report and the letter
from the chair that are 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.
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
A member firm of Ernst & Young Global Limited
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Westgold Resources Limited Annual Report 2022
105
Page 5 5
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.
► 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
106
Westgold Resources Limited Annual Report 2022
continuedFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
Page 6 6
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
2022.
In our opinion, the Remuneration Report of Westgold Resources Limited for the year ended 30 June
2022, 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
T S Hammond
Partner
Perth
25 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Westgold Resources Limited Annual Report 2022
107
SHAREHOLDER INFORMATION
as at 19 September 2022
(A) TOP 20 QUOTED SHAREHOLDERS
Name
Units
% Units
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
201,353,227
2 CITICORP NOMINEES PTY LIMITED
3
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
5 BNP PARIBAS NOMS PTY LTD
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