continued FINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT 104 Westgold Resources Limited Annual Report 2022 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Page 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). 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. We evaluated the assumptions and methodologies used by the Group in their calculations of amortisation of capitalised mine properties and development costs. Our audit procedures included the following: • Assessed the qualifications, competence and objectivity of the Group’s internal experts, the work of whom, formed the basis of the Group’s estimates on the reserves and resources and the future costs used in the amortisation calculations. • Assessed the application of reserves and resources in the amortisation models by comparing them to the latest published statement and underlying mining records. • Assessed the reasonableness of the future costs included in the amortisation calculations with reference to historical costs incurred and the mine plans approved by the Group’s internal experts. • Evaluated the consistency of application of the Group’s amortisation methodology on its capitalised mine properties and development assets across the mine sites. • Tested the mathematical accuracy of the amortisation models. • Assessed the adequacy of the Group's disclosures in the financial report relating to amortisation. 3. Rehabilitation and restoration provisions Why significant How our audit addressed the key audit matter As a consequence of its operations, the Group incurs obligations to restore and rehabilitate the environment at its mine sites. Rehabilitation activities are governed by local legislative requirements. As at 30 June 2022 the Group’s consolidated statement of financial position includes provisions of $66,669,167 We evaluated the assumptions and methodologies used by the Group in determining their rehabilitation obligations. Our audit procedures included the following:
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