Westgold Resources Limited Annual Report 2020

30 Westgold Resources Limited Annual Report 2020 Financial Report Director’s Report for the year ended 30 June 2020 Cue Gold Operations (CGO) CGO is located around the regional town of Cue and, represents the southern-most group of assets in the Central Murchison region. Regionally the project covers the historic mining centres of Big Bell, Cuddingwarra, Day Dawn, Tuckabianna and Pinnacles and include two of Australia’s most prolific past producers in the Big Bell mine (2.6 million oz) and the Great Fingall mine (1.2 million oz). CGO has been heavily focused on the re-start of the long-life Big Bell mine. After 3 years of de-watering, mine rehabilitation and refurbishment ore has begun to flow from Big Bell. Over FY2021 this will build to steady state output and dominate ore feed for the Tuckabianna plant, a 1.2 - 1.4 mtpa processing plant. Whilst Big Bell builds to full production, the plant has been filled with various ore sources from small open pits at Day Dawn, low grade stockpiles and the small Comet underground mine at Pinnacles. CGO is expected to produce 100,000 - 110,000oz per annum for Westgold over the long-term which is essentially underwritten by output from the Big Bell mine. During the year gold output remained stable and revenue increased to $148,830,137 (2019: $120,694,689). Gold output was focused on minor short-term open pit mines to build capacity, whilst the major Big Bell mine rehabilitation and development works were completed, resulting in a segment loss of $12,641,721 (2019: $1,047,700). Gold output for CGO was 70,223 ounces at a C1 Cash Cost of $1,549 per ounce and an all-in sustaining cost of $1,729 per ounce as disclosed in the table on page 31. Exploration and resource development work at Cue has two separate thrusts; – An emphasis on developing high grade ore sources which can offset a small volume of Big Bell production whilst materially improving the grade profile through the Tuckabianna mill. In particular there is a focus on high-grade quartz reef-hosted mineralisation in the Day Dawn region, which have hosted the significant past producers of Great Fingall and Golden Crown (head grades of 19.5g/t and 14g/t respectively). Great Fingall is expected to become Westgold’s latest underground mine adding to the regions overall gold output – A focus on the Tuckabianna and Cuddingwarra mining centers which are dominated by more recent shallow open pit mining. These area can support a renewed open pit mining phase and eventual underground extraction. Whilst spatially these areas are adjacent to the Tuckabianna mill, the inherent flexibility offered by the owner - operator mining model and multiple processing hubs in the district means that futures mines in either of these centers can be directed to the most commercially attractive of either the Tuckabianna or Bluebird processing plants.