Westgold Resources Limited Annual Report 2020

28 Westgold Resources Limited Annual Report 2020 Financial Report Director’s Report for the year ended 30 June 2020 SHARE ISSUES DURING THE YEAR The following share issues have been undertaken during the year: Date Number of shares Purpose 4 July 2019 15,603 Issued on conversion of options 4 September 2019 9,700,000 Issued on conversion of options 17 September 2019 300,000 Issued on conversion of options 18 September 2019 216,450 Issued on conversion of options 25 September 2019 83,550 Issued on conversion of options 5 December 2019 200,000 Purchase consideration for Peak Hill Royalty 24 February 2020 230,000 Issued on conversion of options 8 May 2020 330,313 Purchase consideration for Albury Heath Prospect 25 May 2020 20,000,000 Placement to supplement working capital Total 31,075,916 DIVIDENDS The Company’s dividend policy is to deliver superior shareholder value through the return of capital in the form of a reasonable dividend. Premised upon this objective, the Directors have set a discretionary target of 30% of net profit after tax as the maximum annual dividend with this target to be reviewed on an annual basis. During FY2020, the Directors acknowledge that the operations were transitioning from a development phase towards steady state operations and in combination with the uncertainties created by the COVD-19 pandemic, believed it was prudent to maintain balance sheet strength and elected not to distribute a dividend for this period. The Directors note however that during the year shareholders have received a demerger dividend of $13,051,549 in respect of the in specie distribution of shares in Castile Resources Limited, which held the Northern Territory polymetallic assets (Refer to Note 38). By coincidence, this demerger dividend was approximately equivalent to the expected yield under the dividend policy, supporting the bona fide intent of the Directors to reward shareholders. No dividends were paid to members for the 30 June 2019 financial year. REVIEW OF OPERATIONS Westgold remained the dominant gold company in the Central Murchison region and has aggregated approximately 350 mining titles covering 124,000 hectares in the region. Westgold demerged Castile Resources Ltd from the Group via a 1:4 in-specie distribution to its shareholders on 3 December 2019. Castile was a subsidiary that had held the Northern Territory exploration assets. Westgold owned numerous shareholding in unrelated entities which were liquidated during the year as a proactive measure to ensure fiscal strength as the uncertainty of the impacts of COVID-19 unraveled. As a result, Westgold now has substantial funds at its disposal to facilitate the expansion and integration of its Murchison assets. This will include future investment in both existing internal growth opportunities and further asset acquisitions. Fortnum Gold Operations (FGO) FGO is located in the Proterozoic age Bryah Basin stratigraphy approximately 150 km northwest of Meekatharra and and represents the northernmost group of assets in the Central Murchison region. These encapsulate the historic mining centres of Labouchere, Fortnum, Horseshoe and Peak Hill where aggregated gold production of approximately 2 million ounces has occurred. FGO comprises the Fortnum Plant, a 0.9 million tonne-per-annum carbon-in-leach (CIL) plant, a 175-person village and all the typical plant and infrastructure required to operate a remote FIFO site.