Westgold Resources Limited Annual Report 2020

93 Westgold Resources Limited Annual Report 2020 29. SHARE-BASED PAYMENTS (CONTINUED) (d) Share options (continued) The following table gives the assumptions made in determining the fair value of the options granted in Tranche 3: Grant date 7 May 2020 7 May 2020 RTSR ROCE Expected volatility (%) 60% 60% Risk-free interest rate (%) 0.15% 0.15% Expected life of options (years) 2.0 2.0 Options exercise price ($) $0.00 $0.00 Share price at grant date ($) $2.15 $2.15 Fair value at grant date ($) $1.44 $2.15 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. Tranche 3 Options issued to the Executive Chairman are subject to shareholder approval which will be sought at the upcoming Annual General Meeting. 30. COMMITMENTS (a) Capital commitments At 30 June 2020, the Group has capital commitments that relate principally to the purchase and maintenance of plant and equipment for its mining operations. Capital expenditure commitments 2020 2019 - Within one year 10,098,601 8,996,852 (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. 2020 2019 Mineral tenement leases: - Within one year 3,921,796 3,898,504 - After one year but not more than five years 15,431,391 15,319,776 - After more than five years 27,470,108 30,556,302 46,823,295 49,774,582 (c) Operating leases Prior to the adoption of AASB16 Leases , minimum payments under lease agreements were as follows: 2019 Within one year 5,433,524 After one year but not more than five years 7,740,774 13,174,298