for the year ended 30 June 2022 FINANCIAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 72 Westgold Resources Limited Annual Report 2022 7. EXPENSES 2022 2021 (a) Cost of sales Gold production Salaries, wages expense and other employee benefits 175,906,269 158,441,833 Other production costs 218,314,978 129,580,548 Write down in value of inventories to estimated net realisable value 10,252,203 6,175,664 Royalty expense 23,537,397 21,922,481 Contract mining services Salaries, wages expense and other employee benefits – 54,126 Mining and contracting service costs – 3,155 Depreciation and amortisation expense Depreciation of non-current assets: Property, plant and equipment 54,409,633 52,350,718 Buildings 2,095,532 1,883,586 Right-of-use assets 8,249,706 7,482,892 Amortisation of non-current assets: Mine properties and development costs 127,535,100 77,561,033 Total cost of sales 620,300,818 455,456,036 (b) Finance costs Interest expense 1,648,881 1,587,326 Capitalised borrowing costs to qualifying asset (1,145,680) (1,587,326) Unwinding of rehabilitation provision discount 895,459 347,475 Total finance costs 1,398,660 347,475 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%).
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