ABN 51 109 426 502
Financial Statements
For the year ended 30 June 2016
Contents PageDirectors' Report 1
Auditor's Independence Declaration 17
Directors and Management 18
Sustainability, Environmental Management and Community Engagement 21
Consolidated Income Statement 23
Consolidated Statement of Financial Position 24
Consolidated Statement of Cash Flows 25
Consolidated Statement of Changes in Equity 26
Notes to the Accounts 27
Directors' Declaration 49
Independent Auditor's Report 50
Corporate Directory
Directors Robert H Duffin - Executive Chairman Martin C Jacobsen - Managing Director Gary J Jones - Technical Director (Executive) Leonard A Dean - Non-executive Director Lim See Yong - Non-executive Director Dennis R Mutton - Non-executive Director Company Secretary Larissa Brown Registered Office and Principal Place of Business: Address Level 9, Kyle House27-31 Macquarie Place
Sydney NSW 2000 PO Box N239
Grosvenor Place NSW 1220
Telephone +61 2 9251 1044 Facsimile +61 2 9247 3434E-mail info@wpgresources.com.au
Website www.wpgresources.com.au
Share registry Boardroom Pty Limited Address Grosvenor PlaceLevel 12, 225 George Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
Telephone +61 2 9290 9600 Facsimile +61 2 9279 0664 Auditors Grant Thornton Audit Pty Ltd Bankers Westpac Banking Corporation Securities Exchange Listing Listed on Australian Securities Exchange Limited ASX Code: WPGDirectors' Report
for the year ended 30 June 2016
Your Directors present their report on the consolidated entity, consisting of WPG Resources Ltd (WPG or the Company) and the entities it controlled (Group) for the financial year ended 30 June 2016.
DirectorsThe following persons held office as Directors at the date of this report and throughout the financial year:
Name | Position | Qualifications |
Bob Duffin | Executive Chairman | BSc (Hons), MSc (Hons), Grad Dip Mgt, FAusIMM |
Martin Jacobsen | Managing Director & CEO | MSCC, MDP (Unisa) |
Gary Jones | Technical Director (Executive) | BSc (Auckland), FAusIMM, MSEG |
Len Dean | Non-Executive Director | BSc (Metallurgy) |
Lim See Yong | Non-Executive Director | BBA (Singapore) |
Dennis Mutton | Non-Executive Director | BSc (Hons), Grad Dip Mgt, JP, FAIM, FAICD |
No Directors were appointed or resigned during or since the end of the financial year. A biography and statutory disclosures regarding each Director are provided in the Directors and Management section of this report.
No Directors held Directorships of Other Listed Companies in the last 3 years.
Meetings of DirectorsAttendances at the Company's Board and Committee meetings held during the year are summarised as follows:
Director | Board | Audit & Risk | Corporate Governance & Nomination | Remuneration |
Total meetings - 12 | Total Meetings - 2 | Total meetings - 2 | Total meetings - 2 | |
Bob Duffin | 11 of 12 | N/A | N/A | N/A |
Martin Jacobsen | 10 of 12 | N/A | N/A | N/A |
Gary Jones | 12 of 12 | N/A | N/A | N/A |
Len Dean | 11 of 12 | 2 of 2 | 1 of 2 | 1 of 2 |
Lim See Yong | 12 of 12 | 2 of 2 | 2 of 2 | 2 of 2 |
Dennis Mutton | 11 of 12 | 1 of 2 | 2 of 2 | 2 of 2 |
There was one circular resolution passed by the Board during the year.
Directors' Interests in Shares, Options and RightsDirectors' interests in shares and rights as at the date of this report are set out below:
Director | No. Shares | No. Options | No. Rights * |
Bob Duffin | 51,445,068 | 11,023,942 | - |
Martin Jacobsen | 5,220,266 | 630,511 | 7,428,594 |
Gary Jones Len Dean | 1,871,441 2,333,333 | 279,157 500,000 | 1,748,634 - |
Lim See Yong | - | - | - |
Dennis Mutton | 297,666 | 63,666 | - |
* 3,170,178 of these incentive rights were granted to executive directors on 1 July 2016 and are subject to shareholder approval at the 30 November 2016 Annual General Meeting.
Principal ActivitiesThe principal activities of the Group are mining, exploration, evaluation and development of its precious metal, base metal, iron ore and coal projects located in South Australia as well as the pursuit of new mining opportunities in any jurisdiction. During the year, the Group acquired the Challenger gold mine (then on a period of temporary suspension), and brought it back into production. The Group also made great progress on the development of its Tarcoola gold project, and continued with the exploration of its third major gold project in South Australia, Tunkillia.
Further details are provided in the Review of Operations.
Directors' Report
for the year ended 30 June 2016
ResultsThe net result of operations after applicable income tax expense was a loss of $8,281,304 (2015 - loss of $3,327,699). This result includes WPG's share of the operating loss associated with costs incurred on the due diligence, acquisition, temporary suspension of activities and re-start of the Challenger gold mine up to 30 June 2016 totalling $2,126,378 (2015 - nil). In addition an impairment charge was booked of $2,371,729 (2015 - $382,000), primarily in relation to the Penrhyn coal project, reflective of the diminished valuations attributable to coal assets in the current market and the Company's new focus on gold activities. The prior year charge relates to the impairment loss on the Port Pirie property. A deferred acquisition charge of $1,817,389 (2015 - Nil) was booked which was largely due to the recognition of payments that will become crystallised upon both the decision to mine and commencement of commercial production at the Tarcoola gold mine.
Review of OperationsWPG has deliberately focussed on its three South Australian gold projects (Challenger, Tarcoola and Tunkillia) during this financial year. During the period under review the Company has become a gold producer after acquiring and bringing the Challenger gold mine back into production, and will expand its operating profile with the anticipated imminent commencement of mining operations at the Tarcoola gold project which is scheduled for later this calendar year.
Challenger Gold Mine
During the year, the Group acquired the Challenger gold mine and associated exploration assets, entered into a 50/50 joint venture over these projects, and brought the Challenger gold mine back into production.
The Challenger mine has been in operation under two previous owners since April 2002. Open pit mining commenced in mid-2002 with the first shipment of gold bullion on 24 October 2002. Underground development commenced in 2004 and full-scale underground production began in mid-2005.
The pouring of the one millionth ounce of gold at Challenger was achieved in November 2014.
Challenger is located in the northwestern part of the Gawler Craton, within the Woomera Prohibited Area in South Australia. It is situated approximately 250 km north of Ceduna and 730 km northwest of Adelaide, and is 130 km northwest of WPG's Tarcoola gold project. The Challenger mine and key infrastructure, including the accommodation village, airstrip, CIP treatment plant, tailings dam, two open pit mines, and underground workings are located on ML 6103. Native Title is held by the Antakirinja Matu- Yankunytjatjara people represented by the Antakirinja Matu-Yankunytjatjara Aboriginal Corporation (AMYAC). A Native Title Mining Agreement was entered into by a previous owner covering ML 6103 and a new Native Title Mining Agreement has been successfully negotiated for the new ML 6457.
The project was acquired when WPG purchased Challenger Gold Operations Pty Ltd (CGO), and various exploration assets in South Australia from Kingsgate Consolidated Limited, the former owner of the Challenger mine. Concurrent to the acquisition of CGO, Diversified Minerals Pty Ltd (DMPL), an entity within the PYBAR Group (PYBAR), entered into a 50/50 joint venture with WPG to operate the Challenger mining and exploration joint ventures (CJVs), with WPG appointed as manager.
Assets acquired include the Challenger mine and key infrastructure and approximately $2.7 million of bonds lodged with the South Australian government, the former owner's interests in the gold exploration tenement package surrounding the mine, and the Barton West mineral sands project tenement. The acquisition of Challenger and the South Australian exploration assets was finalised on 15 March 2016.
The purchase price for the mine and associated infrastructure and exploration assets was $1 million to be equally shared by the joint venture partners. Of this amount, $25,000 was paid on executing an option agreement, $75,000 was paid on execution of final transaction documents, and the remaining $900,000 is to be paid in a staged manner after the recommencement of milling operations. As at 30 June 2016, a total of $250,000 had been paid, leaving a balance of $750,000 yet to be paid. In addition, a royalty is payable on potential future production from the new Challenger South South West (CSSW) discovery. This royalty of $25 per ounce becomes payable after the first 30,000 ounces of gold production from this defined zone.
A number of essential site maintenance works were undertaken while operations were temporarily suspended, and the CJV recommenced site operations on 16 May 2016 with crushing and milling of low grade stockpiled ore. The first gold bar produced under the mine's new ownership was poured from treatment of this material on 31 May. Milling of this material and production of gold continued with a combination of stoping ore and low grade stockpile delivered to the mill during commissioning.
Partial mobilisation of the underground mining contractor's personnel and equipment commenced in late May and underground activities commenced on 26 May with the first stope ore being delivered to the ROM pad on 30 May. Underground mining was confined initially to low grade stopes that were left by the mine's previous owner.
On 6 June 2016, WPG announced that a new Mineral Lease (ML 6457) was granted at Challenger. The new lease lies alongside the older ML 6103 to the north east (shown in Figure 1) and covers the down plunge extension of the Challenger gold lodes into an area known as "Challenger Deeps". This new lease will facilitate further drilling in this area and mining methods will be developed to extract the M2 lode and other mineralised zones in Challenger Deeps.
WPG Resources Ltd. published this content on 26 September 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 September 2016 03:30:06 UTC.
Original documenthttp://wpgresources.com.au/wp-content/uploads/2015/01/2016-09-26-2016-Financial-Statements.pdf
Public permalinkhttp://www.publicnow.com/view/13BBEFA8C58DA039C03CBEF514C6D77B89E92764