Westgold Resources Limited
Annual Report 2022

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WESTGOLD 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 – – – – – – – – 2 1 5 1 9 2 1 8 – – . % d e t a l e r e c n a m r o f r e P l a t o T s t h g R i e c n a m r o f r e P g n o L e v a e l e c i v r e s - r e p u S n o i t a u n n a d e s a b - e r a h S 9 t n e m y a p m r e t g n o L s t i f e n e b - t s o P t n e m y o l p m e 8 t n e m y a P n o i t a n m r e T i ) D E U N I T N O C ( S T N E M E G N A R R A T N E M Y O L P M E E V I T U C E X E . 7 s e e F r e h t O r e h t O m r e t t r o h S - n o N s t i f e n e b y r a t e n o m e v a e l l a u n n A t i f e n e b h s a C s u n o b s e e f d n a y r a l a S e v i t u c e x e - n o N s r o t c e r i D 2 2 0 2 0 1 2 0 5 , 1 9 7 , 4 2 0 5 7 , 2 1 1 7 1 4 , 6 1 1 0 4 5 , 6 2 – – – – 1 1 5 , 6 ) 4 8 4 , 5 6 ( ) 4 5 7 8 9 1 ( , 1 2 5 , 2 1 1 – 5 4 7 7 7 3 , ) 3 4 2 , 2 9 1 ( – – – – – – – – 5 6 5 , 4 2 1 5 , 1 0 5 2 0 1 , 3 8 5 0 1 , 3 1 4 , 2 7 6 6 , 1 1 9 2 2 0 1 , 9 1 2 , 1 5 – – – – – – – – , 5 1 6 0 0 6 8 6 1 , 2 6 8 2 9 3 2 , 9 9 8 7 3 , 6 0 9 5 8 2 , – – 3 3 8 , 4 , 2 6 2 0 3 2 7 4 7 , 1 7 1 8 9 7 , 5 2 8 , 2 0 4 4 9 2 , 8 3 2 2 3 , 2 6 6 1 8 , 2 6 4 9 7 7 9 , 1 1 7 9 8 , 5 9 1 , 1 6 5 ) 1 7 3 , 4 7 ( 7 5 2 , 2 5 6 ) 2 6 1 , 2 7 ( – – 8 3 0 , 1 2 2 8 6 , 2 7 8 7 3 8 7 , 9 5 3 , 4 0 0 5 7 2 , 7 7 7 , 3 2 9 4 7 2 , 9 2 5 , 5 2 0 3 5 , 5 2 – – – – 2 4 0 5 9 1 , 3 7 5 , 3 0 3 , 4 8 6 9 9 0 3 , 0 0 4 , 1 6 7 9 4 0 4 , , 9 1 9 6 5 1 , 7 7 8 8 2 7 0 3 4 7 7 4 , , 3 ) 3 4 8 0 3 1 ( , 7 9 4 0 4 , 8 3 1 , 8 0 2 , 7 7 8 8 2 7 – – – – – – – – – – – – – – – – – – – – – 9 4 6 , 1 – 7 3 9 4 , 6 8 5 , 6 0 7 7 , 2 8 7 4 , 2 3 1 5 2 3 9 4 , – 5 1 4 7 , 5 1 4 7 , 5 1 4 7 , – – – – – – – – – – – – – – – – 6 4 6 5 4 , 1 M A s e d r a w d E L C . n o H 9 1 1 , 5 1 7 2 1 , 4 2 0 0 5 , 2 0 1 3 3 8 5 0 1 , 7 6 6 6 1 1 , 2 9 2 , 2 0 1 4 8 1 , 2 1 5 2 l l e w m a r B C W n e n a a M n a V J F n o s i v a D R G 1 s y h t t a M L J n n a w h c S B P 4 k o o C G P 2 0 3 , 1 2 8 4 5 7 7 , 0 0 0 5 7 3 , 2 l l e w m a r B C W – – 3 3 3 , 8 4 4 k o o C G P r o t c e r i D e v i t u c e x E 5 0 2 , 3 2 6 0 , 1 1 9 8 5 , 3 4 5 l l e w m a r B C W 0 8 3 , 5 1 7 9 8 , 4 3 0 0 0 5 7 2 , g n e H H S s e v i t u c e x E r o n e S i 8 3 9 2 3 , 4 2 5 9 3 , 2 8 6 9 5 , 2 8 6 9 5 , 3 0 0 6 6 1 , 8 6 3 , 3 5 8 , 1 3 0 0 6 6 1 , 2 5 5 , 5 6 3 , 2 2 9 6 , 2 2 0 1 , 7 1 3 3 4 7 , 9 6 7 7 3 , 3 6 0 5 3 , 6 9 1 , 8 7 2 – – – – 0 8 5 7 0 4 , , 1 0 9 7 8 3 7 , 3 i m a h g n k c u B A 7 , 3 n o t r a l l u F A D h t i m S L s l a t o T i l i 6 g n d W W P s t n e m u r t s n i t n e m y a p d e s a b - e r a h s r i e h t s t i e f r o f e e y o p m e n a e r e h w s n o i t a u t i s n l I . s d r a d n a t s g n i t n u o c c a e h t r e d n u d e s n e p x e s e c n a l a b e h t s t n e s e r p e r n o i t a r e n u m e r t n e m y a p d e s a b - e r a h S o t e v i t a e r l , s l a s r e v e r e s e h t s t n e s e r p e r e b a t s i h t n l i n o i t a r e n u m e r e v i t a g e n , e r o f e r e h T . s s o l r o t i f o r p n i d e s r e v e r e r a s t n u o m a d e s n e p x e y i l s u o v e r p , s n o i t i d n o c e c i v r e s t e e m o t e r u l i a f o t e u d . i e t a d n o i t a n m r e t n o s e c n a l a b e v a e l e c i v r e s g n o l d n a e v a e l l a u n n a d e u r c c a y n a s u p l , e v o b a 7 n o i t c e s n i d e s i r a m m u s s t n e m e g n a r r a e h t h t i w e n i l n i e d a m e r e w s t n e m y a p n o i t a n m r e T i . s t n u o m a d e s n e p x e y i l s u o v e r p ’ l s e e y o p m e e h t . 2 2 0 2 y a M 4 2 n o d e n g i s e r i m a h g n k c u B A d n a n o t r a l l u F A D . 2 2 0 2 y a M 4 2 n o r e c i f f O g n i t a r e p O i i f e h C / A d e t n o p p a s a w g n d W W P l i i ’ l n o i t c e e s e e y o p m e e h t l t a y r a l i a s s a t u o d a p s a w m u m x a m e h t i f o s s e c x e n i r e p u s d e m e e d f o t n u o m a e h t , e s a b n o i t u b i r t n o c r e p u s i m u m x a m e h t d e h c a e r e v a h s e e y o p m e e r e h W l . 2 2 0 2 h c r a M 8 2 n o n a m r i a h C e v i t u c e x E - n o N s a d n a 1 2 0 2 y u J 1 3 n o n a m l r i a h C e v i t u c e x E s a d e n g i s e r k o o C G P . ) r o t c e r i D e v i t u c e x e - n o n a f o n o i t i s o p e h t d e h y l i l s u o v e r p e h ( 2 2 0 2 y a M 3 2 n o d e n g i s e r d n a 1 2 0 2 t s u g u A 1 n o r o t c e r i D e v i t u c e x E o t d e t n o p p a s a w i l l e w m a r B C W . i 2 2 0 2 h c r a M 8 2 n o d e t n o p p a e r e w s y h t t a M L J d n a M A s e d r a w d E L C . n o H . 2 2 0 2 y a M 4 2 n o r o t c e r i i D g n g a n a M o t d e t n o p p a s a w i l l e w m a r B C W . 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 40 Westgold Resources Limited Annual Report 2022 for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) % d e t a l e r e c n a m r o f r e P l a t o T s n o i t p O g n o L e v a e l e c i v r e s - r e p u S n o i t a u n n a t n e m y a P n o i t a n m r e T i s e e F r e h t O - n o N s t i f e n e b y r a t e n o m e v a e l l a u n n A t i f e n e b h s a C s u n o b s e e f d n a y r a l a S d e s a b - e r a h S m r e t g n o L - t s o P t n e m y a p s t i f e n e b t n e m y o l p m e r e h t O m r e t t r o h S – – – – 2 1 0 1 0 1 9 . 8 5 0 8 4 2 , 6 5 7 7 , 8 3 2 , 2 1 1 0 0 5 9 0 1 , 2 5 5 7 7 4 , – – – – – – – – – – 8 3 7 9 , 8 3 7 9 , 3 7 6 0 0 5 9 , 9 4 6 9 2 , 8 8 5 , 1 3 0 , 1 , 7 9 5 6 0 2 0 0 5 4 1 , 9 9 9 4 2 , 6 8 1 , 4 8 6 2 5 5 2 0 1 , 0 0 5 0 1 , 0 9 9 4 2 , 6 6 3 , 3 6 6 , 1 7 0 9 0 1 0 0 0 0 1 , 9 9 9 4 2 , 8 2 5 , 1 6 3 , 8 6 6 0 4 7 2 , 6 9 8 2 2 , 6 1 1 , 1 4 4 0 2 2 8 1 2 , , 3 6 1 1 , 1 4 4 0 5 2 6 , 0 5 2 , 1 4 0 5 2 , 1 4 8 0 8 4 2 , 6 9 7 9 9 , 5 4 4 9 2 1 , – – – – – – – – – – – – – – 0 2 8 5 3 1 , 0 2 8 5 3 1 , – – – – – – – – – – – – – – – 3 8 0 7 , 0 0 5 2 0 1 , 0 0 5 2 0 1 , 0 0 0 0 0 1 , 3 8 0 2 1 3 , – – – – – 0 2 8 5 3 1 , 4 0 1 , 0 3 6 2 5 7 , 6 2 5 7 , 6 2 5 7 , 4 0 1 , 0 3 8 0 3 2 3 , 9 6 7 0 3 , 1 3 2 9 1 , 3 2 9 6 2 1 , 3 2 9 6 2 1 , 0 0 4 , 1 7 , 0 1 9 4 3 4 0 0 0 8 6 , 1 0 0 3 1 4 , 5 7 8 , 1 3 , 2 4 9 8 4 2 5 2 5 4 9 2 , , 4 5 9 6 0 7 , 1 5 2 5 4 9 2 , , 7 3 0 9 1 0 2 , s e v i t u c e x E r o n e S i 4 i m a h g n k c u B A 4 n o t r a l l u F A D h t i m S L s l a t o T 6 2 5 7 , 5 1 6 4 4 , 0 5 2 , 3 2 1 1 0 1 , 0 1 6 3 k o o C G P e v i t u c e x e - n o N s r o t c e r i D 1 l l e w m a r B C W n e n a a M n a V J F 2 n o s i v a D R G n n a w h c S B P 1 2 0 2 r o t c e r i D e v i t u c e x E ’ l n o i t c e e s e e y o p m e e h t l t a y r a l i a s s a t u o d a p s a w m u m x a m e h t i f o s s e c x e n i r e p u s d e m e e d f o t n u o m a e h t , e s a b n o i t u b i r t n o c r e p u s i m u m x a m e h t d e h c a e r e v a h s e e y o p m e e r e h W l . ) r o t c e r i D e v i t u c e x e - n o n a f o n o i t i s o p e h t d e h y l i l s u o v e r p e h ( 1 2 0 2 t s u g u A 1 n o r o t c e r i D e v i t u c e x E o t d e t n o p p a s a w i l l e w m a r B C W . 1 2 0 2 t s u g u A 1 m o r f t c e f f e h t i w n a m r i a h C e v i t u c e x e - n o N s a d r a o b e h t n o d e n a m e r k o o C G P i . 1 2 0 2 e n u J 1 n o r o t c e r i D e v i t u c e x e - n o N a s a d e t n o p p a s a w n o s i i v a D R G . 1 . 2 . 3 . 4 Westgold Resources Limited Annual Report 2022 41 / d e s p a L d e t i e f r o f t a e u l a v l a t o T r o n o i t p o r e p e u l a v r i a F d e t s e V e t a d y r i p x E e t a d g n i t s e V e t a d t n a r g t h g i r e t a d t n a r G d e t n a r G e h c n a r T e v i t u c e x E e h t g n i r u d d e s p a l r o d e t s e v , d e t n a r g ) s t h g i R ( s t h g i R e c n a m r o f r e P d n a ) s ’ O P E Z ( s n o i t p o e c i r p e s i c r e x e o r e z d l o g t s e W : 1 e l b a T d o i r e p S E R U S O L C S I D Y R O T U T A T S L A N O I T I D D A . 8 6 3 9 9 6 , – 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 , 9 3 9 2 2 $ – 5 0 9 6 7 , 5 0 9 6 7 , 7 7 3 8 5 , 7 7 3 8 5 , 7 7 3 8 5 , 7 7 3 8 5 , – – – – – 1 1 6 , 2 2 6 3 9 9 6 , 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 3 4 4 4 3 $ , – – – – – – – – – – – 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 , 3 4 7 0 1 1 $ 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 , 3 7 6 2 8 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 1 3 6 6 8 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 4 0 2 , 3 7 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 2 0 5 6 2 1 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 2 0 5 6 2 1 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 8 2 5 0 6 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 9 2 1 , 8 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 9 3 5 0 9 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 9 3 5 0 9 $ 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 9 1 9 6 $ , 2 1 6 , 2 2 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 7 0 2 , 5 1 $ 9 8 8 9 1 , – 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 0 4 6 8 2 $ , – ) 1 ( 9 8 8 9 1 , 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 1 8 3 , 1 2 $ 3 7 2 , 2 4 3 7 2 , 2 4 3 7 2 , 2 4 3 7 2 , 2 4 5 2 9 0 5 , 5 2 9 0 5 , 5 2 9 0 5 , 5 2 9 0 5 , – – – – – – – – 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 2 3 7 2 6 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 0 1 0 3 5 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 5 0 6 , 1 9 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 5 0 6 , 1 9 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 6 0 9 0 6 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 9 2 4 , 8 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 4 0 1 , 1 9 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 4 0 1 , 1 9 $ . 3 3 0 $ . 9 9 0 $ 4 4 . 1 $ 5 1 . 2 $ 8 4 . 1 $ 5 2 . 1 $ 7 1 . 2 $ 7 1 . 2 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ . 1 3 0 $ 5 3 . 1 $ 4 4 . 1 $ 5 1 . 2 $ 8 4 . 1 $ 5 2 . 1 $ 7 1 . 2 $ 7 1 . 2 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ 8 1 0 2 / 1 1 / 8 2 6 3 9 9 6 , 8 1 0 2 / 1 1 / 8 2 6 3 9 9 6 , 0 2 0 2 / 5 0 / 7 5 0 9 6 7 , 0 2 0 2 / 5 0 / 7 5 0 9 6 7 , 0 2 0 2 / 1 1 / 4 2 7 7 3 8 5 , 0 2 0 2 / 1 1 / 4 2 7 7 3 8 5 , 0 2 0 2 / 1 1 / 4 2 7 7 3 8 5 , 0 2 0 2 / 1 1 / 4 2 7 7 3 8 5 , 1 2 0 2 / 0 1 / 1 1 9 0 6 0 5 , 1 2 0 2 / 0 1 / 1 1 9 0 6 0 5 , 1 2 0 2 / 0 1 / 1 1 9 0 6 0 5 , 1 2 0 2 / 0 1 / 1 1 9 0 6 0 5 , 9 1 0 2 / 5 0 / 3 2 1 1 6 , 2 2 9 1 0 2 / 5 0 / 3 2 2 1 6 , 2 2 0 2 0 2 / 5 0 / 7 9 8 8 9 1 , 0 2 0 2 / 5 0 / 7 9 8 8 9 1 , 0 2 0 2 / 1 1 / 4 2 3 7 2 , 2 4 0 2 0 2 / 1 1 / 4 2 3 7 2 , 2 4 0 2 0 2 / 1 1 / 4 2 3 7 2 , 2 4 0 2 0 2 / 1 1 / 4 2 3 7 2 , 2 4 1 2 0 2 / 0 1 / 1 1 5 2 9 0 5 , 1 2 0 2 / 0 1 / 1 1 5 2 9 0 5 , 1 2 0 2 / 0 1 / 1 1 5 2 9 0 5 , 1 2 0 2 / 0 1 / 1 1 5 2 9 0 5 , 2 2 3 3 4 4 4 4 5 5 5 5 2 2 3 3 4 4 4 4 5 5 5 5 k o o C G P l l e w m a r B C W n o t r a l l u F A D 42 Westgold Resources Limited Annual Report 2022 for the year ended 30 June 2022FINANCIAL REPORT REMUNERATION REPORT (AUDITED) 8 1 9 3 3 , / d e s p a L d e t i e f r o f 7 6 8 3 2 , – 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 8 6 3 4 3 $ , 0 6 2 0 4 , 0 6 2 0 4 , 0 6 2 0 4 , 0 6 2 0 4 , 0 1 6 8 4 , 0 1 6 8 4 , 0 1 6 8 4 , 0 1 6 8 4 , 4 3 1 , 7 2 – – – – – – – – – – ) 1 ( 7 6 8 3 2 , 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 , 7 5 6 5 2 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 5 4 7 9 5 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 5 8 4 0 5 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 2 4 2 7 8 $ , 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 2 4 2 7 8 $ , 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 7 3 1 , 8 5 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 8 2 2 , 6 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 3 6 9 6 8 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 3 6 9 6 8 $ 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 3 0 3 8 $ , 4 3 1 , 7 2 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 7 4 2 8 1 $ , 7 6 8 3 2 , – 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 , 7 3 7 8 6 $ – – – – – – – – – 7 6 8 3 2 , 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 4 1 3 , 1 5 $ – – – – – – – – 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 7 0 6 3 3 $ , 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 8 9 3 8 2 $ , 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 4 7 0 9 4 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 4 7 0 9 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 6 2 6 0 3 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 2 5 3 , 4 2 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 1 1 8 5 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 1 1 8 5 4 $ – 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 9 7 3 0 1 $ , 8 1 9 3 3 , 1 2 0 2 / 6 0 / 0 3 1 2 0 2 / 6 0 / 0 3 , 0 1 8 2 2 $ . 1 3 0 $ 5 3 . 1 $ 4 4 . 1 $ 5 1 . 2 $ 8 4 . 1 $ 5 2 . 1 $ 7 1 . 2 $ 7 1 . 2 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ . 1 3 0 $ 5 3 . 1 $ 4 4 . 1 $ 5 1 . 2 $ 8 4 . 1 $ 5 2 . 1 $ 7 1 . 2 $ 7 1 . 2 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ 9 1 0 2 / 5 0 / 3 2 8 1 9 3 3 , 9 1 0 2 / 5 0 / 3 2 8 1 9 3 3 , 0 2 0 2 / 5 0 / 7 7 6 8 3 2 , 0 2 0 2 / 5 0 / 7 7 6 8 3 2 , 0 2 0 2 / 1 1 / 4 2 0 6 2 0 4 , 0 2 0 2 / 1 1 / 4 2 0 6 2 0 4 , 0 2 0 2 / 1 1 / 4 2 0 6 2 0 4 , 0 2 0 2 / 1 1 / 4 2 0 6 2 0 4 , 1 2 0 2 / 0 1 / 1 1 0 1 6 8 4 , 1 2 0 2 / 0 1 / 1 1 0 1 6 8 4 , 1 2 0 2 / 0 1 / 1 1 0 1 6 8 4 , 1 2 0 2 / 0 1 / 1 1 0 1 6 8 4 , 9 1 0 2 / 5 0 / 3 2 4 3 1 , 7 2 9 1 0 2 / 5 0 / 3 2 4 3 1 , 7 2 0 2 0 2 / 5 0 / 7 7 6 8 3 2 , 0 2 0 2 / 5 0 / 7 7 6 8 3 2 , 0 2 0 2 / 1 1 / 4 2 6 4 6 2 2 , 0 2 0 2 / 1 1 / 4 2 6 4 6 2 2 , 0 2 0 2 / 1 1 / 4 2 6 4 6 2 2 , 0 2 0 2 / 1 1 / 4 2 6 4 6 2 2 , 1 2 0 2 / 0 1 / 1 1 7 0 6 5 2 , 1 2 0 2 / 0 1 / 1 1 7 0 6 5 2 , 1 2 0 2 / 0 1 / 1 1 7 0 6 5 2 , 1 2 0 2 / 0 1 / 1 1 7 0 6 5 2 , 2 2 3 3 4 4 4 4 5 5 5 5 2 2 3 3 4 4 4 4 5 5 5 5 i m a h g n k c u B A i l i g n d W W P Westgold Resources Limited Annual Report 2022 43 t a e u l a v l a t o T r o n o i t p o r e p e u l a v r i a F d e t s e V e t a d y r i p x E e t a d g n i t s e V e t a d t n a r g t h g i r e t a d t n a r G d e t n a r G e h c n a r T e v i t u c e x E – – – – – – – – – – – – – 1 4 8 6 1 , / d e s p a L d e t i e f r o f t a e u l a v l a t o T r o n o i t p o r e p e u l a v r i a F d e t s e V e t a d y r i p x E e t a d g n i t s e V e t a d t n a r g t h g i r e t a d t n a r G d e t n a r G e h c n a r T e v i t u c e x E – 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 0 5 2 , 4 2 $ 1 4 8 6 1 , 2 2 0 2 / 6 0 / 0 3 2 2 0 2 / 6 0 / 0 3 4 0 1 , 8 1 $ – – – – – – – – – – – – 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 6 0 0 8 2 $ , 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 5 6 6 3 2 $ , 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 5 9 8 0 4 $ 3 2 0 2 / 6 0 / 0 3 3 2 0 2 / 6 0 / 0 3 , 5 9 8 0 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 0 5 5 , 8 2 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 1 0 7 , 2 2 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 5 0 7 , 2 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 5 0 7 , 2 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 , 6 3 2 0 3 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 2 4 0 4 2 $ , 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 7 2 2 , 5 4 $ 4 2 0 2 / 6 0 / 0 3 4 2 0 2 / 6 0 / 0 3 7 2 2 , 5 4 $ 4 4 . 1 $ 5 1 . 2 $ 8 4 . 1 $ 5 2 . 1 $ 7 1 . 2 $ 7 1 . 2 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ 0 2 . 1 $ . 5 9 0 $ 9 7 . 1 $ 9 7 . 1 $ 0 2 0 2 / 1 1 / 4 2 1 4 8 6 1 , 0 2 0 2 / 1 1 / 4 2 1 4 8 6 1 , 0 2 0 2 / 1 1 / 4 2 2 7 8 8 1 , 0 2 0 2 / 1 1 / 4 2 2 7 8 8 1 , 0 2 0 2 / 1 1 / 4 2 2 7 8 8 1 , 0 2 0 2 / 1 1 / 4 2 2 7 8 8 1 , 1 2 0 2 / 0 1 / 1 1 1 7 8 , 3 2 1 2 0 2 / 0 1 / 1 1 1 7 8 , 3 2 1 2 0 2 / 0 1 / 1 1 1 7 8 , 3 2 1 2 0 2 / 0 1 / 1 1 1 7 8 , 3 2 1 2 0 2 / 0 1 / 1 1 1 8 2 , 5 2 1 2 0 2 / 0 1 / 1 1 1 8 2 , 5 2 1 2 0 2 / 0 1 / 1 1 1 8 2 , 5 2 1 2 0 2 / 0 1 / 1 1 1 8 2 , 5 2 3 3 4 4 4 4 5 5 5 5 5 5 5 5 h t i m S L g n e H H S 44 Westgold Resources Limited Annual Report 2022 t n e m y a p d e s a b - e r a h s s ’ l e n n o s r e p t n e m e g a n a m y e k e h t f o t r a p s a d e d u c n l i n e e b s a h d o i r e p e h t g n i r u d s t n e m u r t s n i i i e s e h t o t g n n a t r e p e s n e p x e g n i t n u o c c a e h T . i n o i t a n m r e t n o p u s e r a h s . 9 1 0 2 Y F n i d e t n a r g e r e w 2 e h c n a r T s o p e Z – ’ . 0 2 0 2 Y F n i d e t n a r g e r e w 3 e h c n a r T s o p e Z – ’ 1 2 0 2 Y F n i d e t n a r g e r e w 4 e h c n a r T s t h g R – i 2 2 0 2 Y F n i d e t n a r g e r e w 5 e h c n a r T s t h g R – i s e t o N . e v o b a 1 e b a t n l i n o i t a r e n u m e r . t s e v o t s ’ I T L e s e h t w o l l a d n a s n o i t i d n o c e c i i v r e s e h t e v a w o t n o i t e r c s i d e h t s a h d r a o B e h t r e v e w o h , l n o i t a n g i s e r n o y e t a d e m m e s p a i i l s ’ I T L y l l a r e n e G – l f o n o i t a u a v e h t n o s l i a t e d r o F . t n a r g e h t f o d o i r e p g n i t s e v e h t r e v o n o i t a s n e p m o c n i d e s i n g o c e r s i d o i r e p e h t g n i r u d d e t n a r g s t n e m y a p d e s a b - e r a h s e h t l f o e u a v e h T . 9 2 e t o N o t r e f e r e s a e p l , d e s u s n o i t p m u s s a d n a s l e d o m g n d u c n l i i , s n o i t p o e h t l e h t e e y o p m e e h t d r a w a d n a n o i t i d n o c e c i i v r e s e h t e v a w o t n o i t e r c s i d r i e h t d e s i c r e x e s r o t c e r i D f o d r a o B e h t n e h w d e u s s i e r e w s e r a h s e h t d n a t s e v o t d e n m r e t e d e r e w s t h g R e s e h T i i . 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 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 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: A member firm of Ernst & Young Global Limited 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 Liability limited by a scheme approved under Professional Standards Legislation 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 6 MR COLIN PETROULAS 7 NATIONAL NOMINEES LIMITED 8 AJAVA HOLDINGS PTY LTD 9 BNP PARIBAS NOMINEES PTY LTD 10 MR RICHARD FARLEIGH 11 MR PETER GERARD COOK 12 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM 13 BNP PARIBAS NOMS PTY LTD 14 SUN HUNG KAI INVESTMENT SERVICES LIMITED 15 UBS NOMINEES PTY LTD 16 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 17 ALL-STATES FINANCE PTY LIMITED 18 AJAVA HOLDINGS PTY LTD 19 DEBORTOLI WINES PTY LIMITED 20 OAKSOUTH PTY LTD (B) DISTRIBUTION OF QUOTED ORDINARY SHARES 59,435,213 46,818,126 27,196,563 18,049,724 7,125,000 6,122,550 6,003,812 4,989,320 4,578,597 2,727,848 2,259,717 2,085,954 2,000,000 1,953,854 1,786,128 1,711,670 1,545,536 1,421,111 1,191,250 42.51 12.55 9.89 5.74 3.81 1.50 1.29 1.27 1.05 0.97 0.58 0.48 0.44 0.42 0.41 0.38 0.36 0.33 0.30 0.25 Range (size of parcel) 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over TOTAL Total holders Units 2,715 1,380,133 3,164 8,232,727 1,003 7,646,708 1,210 31,254,195 123 425,108,967 8,215 473,622,730 (C) NUMBER OF HOLDERS WITH LESS THAN A MARKETABLE PARCEL OF ORDINARY SHARES Total unmarketable parcels at $500 parcel at $0.8200 per unit 610 552,668 108 Westgold Resources Limited Annual Report 2022 (D) SUBSTANTIAL SHAREHOLDERS Ruffer (London) L1 Capital (Melbourne) Global Alpha Capital Management (Montreal) Invesco (Oppenheimer Funds) (New York) * As at 6 September 2022 (E) VOTING RIGHTS The voting rights for each class of security on issue are: Number of Shares 35,290,111 32,818,175 32,277,129 26,648,560 % 7.45 6.93 6.81 5.63 Ordinary Fully Paid Shares – Each ordinary shareholder is entitled to one vote for each share held. Unquoted Employee Options – The holders of options have no rights to vote at a general meeting of the Company. (F) UNQUOTED EQUITY SECURITIES ASX Code WGXAE WGXAF TOTAL Security Description Number of Securities Performance Rights Expiring 30 June 2023 762,080 Performance Rights Expiring 30 June 2024 1,570,428 2,332,508 Westgold Resources Limited Annual Report 2022 109 CORPORATE DIRECTORY DIRECTORS Hon. Cheryl L Edwardes AM (Non-Executive Chair) Wayne C Bramwell (Managing Director) Fiona J Van Maanen (Non-Executive Director) Gary R Davison (Non-Executive Director) Julius L Matthys (Non-Executive Director) COMPANY SECRETARY Lisa Smith Susan Park (Joint Company Secretary) SENIOR EXECUTIVES Su Hau Heng (Chief Financial Officer) Phillip Wilding (A/Chief Operating Officer) REGISTERED OFFICE Level 6, 200 St Georges Terrace Perth WA 6000 Phone: +61 8 9462 3400 Email: reception@westgold.com.au Website: www.westgold.com.au POSTAL ADDRESS PO Box 7068 Cloisters Square WA 6850 SECURITIES EXCHANGE Listed on the Australian Securities Exchange ASX Code: WGX SHARE REGISTRY Computershare Investors Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000 Phone: +61 3 9415 4000 Fax: +61 3 6473 2500 Website: www.computershare.com DOMICILE AND COUNTRY OF INCORPORATION Australia ABN ABN 60 009 260 306 110 Westgold Resources Limited Annual Report 2022 CORPORATE DIRECTORY www.westgold.com.au

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