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WESTGOLD RESOURCES LIMITED ABN 60 009 260 306

ANNUAL REPORT 2012

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CONTENTS

CORPORATE DIRECTORY ...................................................................................................... 1 OPERATIONS REVIEW ............................................................................................................ 2 DIRECTORS’ REPORT ............................................................................................................. 8 AUDITOR’S INDEPENDENCE DECLARATION ..................................................................... 22 CORPORATE GOVERNANCE STATEMENT ......................................................................... 23 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ......................................... 34 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................. 35 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................... 36 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................... 37 NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS .. 38 DIRECTORS’ DECLARATION ................................................................................................ 87 INDEPENDENT AUDIT REPORT ............................................................................................ 88 SHAREHOLDER INFORMATION ........................................................................................... 95

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CORPORATE DIRECTORY

Directors: Michael Atkins (Chairman) Scott Huffadine Andrew Beckwith Peter Cook Warren Hallam Company Secretary: Andrew Chapman Solicitors: Jackson McDonald Level 25 140 St Georges Terrace Perth WA 6000 Tel: +61 8 9426 6611 Fax: +61 8 9321 2002 Bankers: Commonwealth Bank of Australia Limited 150 St Georges Terrace Perth WA 6000 For Shareholder information contact: Share Registry: Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace Perth WA 6000 Telephone: (08) 9323 2000 Facsimile: (08) 9323 2033

Auditors: Ernst & Young Ernst & Young Building 11 Mounts Bay Road Perth WA 6000 Telephone: +61 8 9429 2222 Facsimile: +61 8 9429 2436 Stock Exchange Listing: Australian Securities Exchange Limited Australian Securities Exchange Code: WGR For information on your Company contact: Registered Office: Level 3 123 Adelaide Terrace East Perth WA 6004 Telephone: (08) 9326 5700 Facsimile: (08) 9326 5799

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OPERATIONS REVIEW

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ABOUT WESTGOLD

Westgold’s focus is on development and production from its key projects, the Central Murchison Gold Project (CMGP) in Western Australia and the Rover Project in the Northern Territory (Figure 1), which contain a combined 3.92 million ounce Gold Equivalent JORC resource base. The projects are located within two geological provinces that have historical combined production in excess of 10 million ounces of gold. Westgold also holds interests in a number of greenfields exploration projects which comprise a balanced portfolio of assets and provide the opportunity for organic growth.

CENTRAL MURCHISON GOLD (CMG) PROJECT The CMGP is located south of Cue in Western Australia where the Company holds 313km2 of predominantly granted mining tenements which have produced 5 million ounces of gold over the last three centuries. The project, which hosts Mineral Resources containing 2,753,800 ounces of gold (Table 1) and Ore Reserves containing 855,300 ounces of gold (Table 2), are contained within three historic goldfields:

• the Day Dawn Goldfield which has historically produced approximately 1.6Moz Au from underground and open pit, is hosted within the Great Fingall Dolerite and includes the Great Fingall and Golden Crown mines;

• Big Bell, which has historically produced approximately 2.6Moz Au from ore bodies within the Big Bell Shear Zone which hosts the gold mineralisation; and

• Cuddingwarra, which has historically produced approximately 800,000 oz Au predominantly from open pits.

Westgold is focussed on advancing the significant resource base from these historic production areas to target a sustainable production profile of 120,000 ounces per annum with an initial 8 year mine life supported by current Ore Reserves. The Company continues to progress development of the project with a definitive feasibility study nearing completion and the recent announcement of a significant upgrade in the resource base. This upgrade included additional open pit Probable Ore Reserves, which were incorporated together with the existing underground Ore Reserves.

Westgold intends to construct a new processing plant with capacity of approximately 1 million-1.2 million tonnes per annum. Initial gold production will target 50,000-60,000 ounces per annum building up to a steady state production rate of 120,000 ounces per annum when the higher grade underground ores are introduced. An initial project term of 8 years is expected from commencement. The key attributes of the project are:

• A proven past gold production centre with historical production +5 million ounces of gold.

• 330 km2 of contiguous predominantly granted mining tenements, with significant infrastructure in place on site.

• A current total JORC resource aggregating more than 2.7 million ounces of gold.

• Total mining reserves of 855,000 ounces of gold incorporating three underground gold mines with initial mining reserves of 614,000 ounces and open pit and historic tailings reserves of 241,000 ounces.

During the year period the Company completed a detailed review incorporating additional drilling over the groups assets which culminated in a maiden open pit Probable reserve for the project of 2,734,000t at 1.86 g/t Au for 163,000oz. This represents a 29% increase in Mining Reserves and delivers on the stated milestone to develop 3 years of open pit reserves and an overall 8 year mine life. This initial reserve is focused in 2 main mining centres around the extensions to the significant historical producers of Great Fingall and Big Bell Trend, which have a combined past production in excess of 3.2Moz.

Following a review of recent test-work and a significant body of historical operating data a Probable reserve of 3,400,000 t @ 0.7 g/t for 72,000oz has been defined for the remaining historic tails located 500m from the proposed processing facility.

The Total Mineral Resource estimate for all sources, including low grade is 31.4 million tonnes at 2.67 g/t Au containing 2.7 million ounces of gold which represents a 32% increase in Mineral Resource.

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OPERATIONS REVIEW

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Westgold is working to complete a Definitive Feasibility Study (“DFS”). During the period the Company completed the following major steps:

1. Specialist metallurgical and construction engineering group, GR Engineering Services (GRES) was appointed to manage the processing and infrastructure design and construction aspects of the DFS.

2. A consolidated production schedule which provides a framework for the DFS has been completed. 3. Process Plant design and additional confirmatory metallurgical test work was initiated to enable

modelling of blended ore sources and materials handling aspects of design. 4. Works on operating and capital cost estimates commenced. 5. Power, water and service provision studies for the project were initiated. 6. Completed Underground mine dewatering and re-establishment studies were reviewed. 7. Geotechnical engineering studies, specifically stress management modelling works for underground

extraction was undertaken. 8. A number of longer lead environmental projects required for Works Approval were completed during the

period. These include flora and fauna surveys over all proposed mining areas and a detailed aquatic survey of a nearby lake system which has been utilised historically for excess water discharge.

9. A site hydrology report was completed, and the water extraction license for the Day Dawn mineral field, which encompasses the Great Fingall and Golden Crown undergrounds and planned open pits, was approved.

A number of these studies remained ongoing at the end of the period with further work being completed based on the following findings:

• Since retaining GR Engineering Services in December 2011, additional test work and financial analysis indicate that reprocessing of the historic tailings supports an option to increase the mill capacity to 1.5 Mtpa.

• At the Big Bell underground mine, cut-off grade reviews and design work already undertaken indicates the potential for a higher production rate over a longer duration than previously contemplated at a lower head grade.

• At the Great Fingall ore body, analysis has demonstrated significant scope for improved economics by the inclusion of the remnant material immediately above the current Probable Reserves.

• The operating and capital estimates for the processing facility and supporting infrastructure are yet to be finalized by the Company’s consultants and reports remain outstanding.

Completion of the DFS remains Westgold’s key operational focus. While the study is well advanced, a number of areas remain to be sufficiently investigated in order to support a 1.5Mtpa processing plant, and to enable completion. These include: operating and capital costs; geotechnical evaluations on underground sequencing at Big Bell; and inclusion of the Great Fingall remnant material.

Approvals

The Company advanced various environmental and hydrological studies at CMGP to the point that:

• Applications have been submitted for clearing permits for all proposed surface mining activities and infrastructure.

• A license to abstract water in the Day Dawn area has been secured. • Applications have been submitted for water abstraction from the Big Bell borefields. • Approvals will be lodged during the September quarter to enable mine dewatering activities.

The Company continued to review options for funding the development of the project in parallel with the ongoing DFS and to that end signed a non binding conditional agreement to mandate leading international investment bank Credit Suisse acting as exclusive lead arranger to provide a project-secured loan facility of up to A$80M and an associated hedging facility to assist with the development of the CMGP.

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OPERATIONS REVIEW

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Exploration

Exploration activity during the period was focused on a program of works aimed at defining additional near-surface open pittable deposits, able to be integrated into the production profile for the first two years of the project.

Drilling focussed on the Big Bell shear zone at Big Bell South, Jims Find, South Fingall, Yellow Taxi, Lady Rosie, South Victory and the Indicator prospects. There were a number of strong initial results received in these areas and follow-up drilling will occur where necessary to identify additional economic deposits and allow for resource estimation. In the case of Jim’s Find a maiden resource was completed and contributed to a re-estimation of the mineral resource at the City of Chester area (including Jim’s Find) to 54,790 ounces, an increase of 646% in contained gold.

As part of the evaluation of the remnant opportunities a sampling program of historic drill core including zones of remnant mineralisation at Great Fingall have been identified adjacent to historic stopes voids in several drillholes completed by the project’s previous operators. GFD026 returned - 6m @ 4.12 g/t Au (including 1.9m @ 7.1 g/t Au) immediately adjacent to the historic mining void . This mineralization, which is related to wallrock alteration, may have been left insitu as it is less visually distinct in many instances than the heavily mineralised Great Fingall Reef. There are currently no Mineral Resource estimates attributed to this area of interest.

ROVER PROJECT (NORTHERN TERRITORY)

The Rover Project consists of 1,172 square kilometres of contiguous granted tenements over stratigraphy considered to be an under-cover repetition of the rich Tennant Creek goldfield 80 km to the north-east. Westgold has so far fully tested three blind targets within the project, each of which has defined significant mineralised systems at the Rover 1, Explorer 108 and Explorer 142 prospects. The key focus has been Rover 1 where Westgold has a development-ready project. The key elements to the future success of the project are:

• New gold province analog to the historic Tennant Creek Gold field which produced in excess of 5.5M ounces Gold and 0.5Mt Copper;

• Three successful discoveries Rover 1 (Au-Cu), Explorer 108 (Pb-Zn-Ag) and Explorer 142 (Cu-Au);

• 1.22Moz gold equivalent total identified mineral resource (JORC) at Rover 1;

• Explorer 108 - 490Kt Pb-Zn, 5.6M oz Ag and 71Koz Au total identified mineral resource;

• A commercially positive outcome from the Rover 1 development studies with the project areas being proximal to a major infrastructure corridor adjacent to the Central Australian Railway, gas pipeline and Stuart Hwy;

• Exploration upside in multiple coincident magnetic and gravity anomalies considered to be look-alikes to the Rover 1 anomaly.

During the period the Mine Management Plan (MMP) for the Rover 1 Decline was submitted to the relevant Northern Territory regulatory authorities in April to determine whether the application required formal assessment under the Environmental Assessment Act. Westgold has been formally advised that this level of assessment is not required.

A request for supplementary information has been requested by the Department of Resources and the provision of this information is nearing completion. Once all elements are satisfied, a further 28 days are required to meet the department’s final review and approval timelines.

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OPERATIONS REVIEW

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The primary aim of the Rover 1 decline is to provide an effective drill platform which will allow for the following:

1. Conversion of the current resources to reserves between 300 and 600 vertical metres. 2. Detailed definition of the proposed mining blocks. 3. Identification of shallower resources/reserves above 300 vertical metres. 4. Infill drilling of the existing resource below 600 vertical metres. 5. Resource extensions along strike and at depth.

In July 2011 Westgold announced an updated resource estimate showing an overall increase of 28% in tonnage, and an overall increase of 18% in gold equivalent ounces. This is tabulated below for comparison purposes:

Classification Updated Resource Estimate (at 2.5% gold eq.* cut-off)

Maiden Resource Estimate (as at February 2010)

(at 2.5% gold eq.* cut-off)

Indicated 2,740,700t @ 6.59 g/t Au eq. 580,700 oz Au eq.

588,000t @ 14.6g/t Au eq. 276,000 oz Au eq.

Inferred 4,073,400t @ 4.89 g/t Au eq 640,400 oz Au eq.

4,742,000t @ 5.0g/t Au eq. 761,000 oz Au eq.

Total 6,814,000t @ 5.57g/t Au eq. 1,220,300 oz Au eq.

5,330,000 @ 6.1 g/t Au eq. 1,037,000 oz Au eq.

Exploration

The known deposits in the Rover field are defined by strong magnetic and gravity anomalies which represents iron oxide commonly with copper-gold mineralisation like that of the nearby Tennant Creek deposits. Unlike the Tennant Creek deposits, the Rover deposits are blind to surface overlain by up to 200m of younger sedimentary rocks of the Wiso basin.

Westgold has completed detailed geophysical surveys which have outlined over twenty untested coincident magnetic and gravity targets. These anomalies have been further enhanced with the application of “state of the art” high powered Heli-TEM data which has provided an additional targeting tool not previously available.

Numerous other magnetic and gravity targets remain to be tested and during the first half exploration focused on initial drill testing of three of these targets, Rover 7, Pathfinder 1 and Pathfinder 7 with additional drilling completed at Explorer 142. No significant assays were returned from this drilling however a number of strongly altered systems were defined

In conjunction with this and further refining the targeting by integrating the supporting geophysical datasets, the Company conducted a deep penetrating IP (Induced Polarisation) survey with the objective of defining potential sulphide-rich drill targets in conjunction with the previously Heli-TEM data.

During the March quarter approximately 25.6 line kilometres of deep penetrating IP was completed over the known Au-Cu systems of Rover 1 and Explorer 142 and also at the Pb-Zn mineralisation at Explorer 108, together with a selected number of other untested EM targets in the region. This work has highlighted a number of coincident targets at the Explorer 142 and Explorer 108 prospects.

A large non-magnetic IP anomaly was identified 350m east of the Rover 1 resource. A drill was mobilised to site in the June quarter and two holes were drilled aimed at testing the target.

Drilling intercepted an interpreted shear zone and areas of significant alteration with minor sulphides, (predominantly pyrite) present in the target zone. No significant assays were received.

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OPERATIONS REVIEW

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Warumpi Joint Venture

During the period, Westgold entered into an option and joint venture agreement to explore and ultimately earn up to 80% equity in five tenements (3 granted, 2 applications) within the essentially unexplored Warumpi Province, located approximately 300km west of Alice Springs in the Northern Territory. Initial reconnaissance work was completed in two separate field visits, during the March quarter 2012, Westgold completed a geological inspection and “first ever” reconnaissance sampling within the granted tenements EL6732, EL6861 and EL10379. The field inspection included an assessment of the regolith and potential sampling media throughout the tenement areas.

In total 39 rock chip samples from the limited outcrops and 38 LAG samples (residual fine rock fragments, refer to photo) were collected during the field activities and submitted to the laboratory for multi-element analysis.

The most encouraging results received to date include elevated nickel assays from rock chips in the south central portion of EL 6861. Results to date include: 0.19%Ni, 0.18%Ni and 0.84%Ni.

An initial programme of systematic regional LAG sampling covering a proportion of the accessible tenements was iniated during the June quarter, with additional fieldwork expected to be completed this in December quarter.

The Warumpi project presents a unique and excellent opportunity to build the Company’s growth profile with the addition of a grassroots exploration project. It is located in a newly recognised geological belt, with limited previous exploration, which is considered to have excellent potential to host structurally controlled gold and copper, stratabound lead-zinc and intrusive related nickel-copper mineralisation.

Westgold considers the region has affinities to the Tropicana Belt and therefore potential for gold mineralisation associated with the many large scale regional thrusts and faults evident in the regional geophysical data. There are also limited historical (and potentially unreliable) gold and copper anomalous rock chip samples along these interpreted structures which provide additional incentive to explore the region.

The terms of the agreement are summarized as follows:

Stage 1

$600,000 Expenditure within 2 years to earn 51% equity Minimum expenditure of $250,000 in first year before withdrawal.

Stage 2

$2,000,000 Total Expenditure (including Stage 1) within 4 years to earn 80% equity.

McArthur Basin Joint Venture (MMG Earning 60%)

The joint venture managers (MMG) have now completed aboriginal heritage negotiations and plan to commence geochemical sampling on a number of defined targets as soon as access is available after the wet season.

The McArthur Basin tenements are considered prospective for large scale copper and lead-zinc deposits.

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CORPORATE

Scheme Of Arrangement

Westgold announced on 14 May 2012 a proposed merger by Westgold with its largest shareholder, Metals X Limited via a scheme of arrangement. This recommendation is in the absence of a superior offer. The independent expert, BDO Corporate Finance (WA) Pty Ltd (“BDO Corporate Finance”) has concluded that the Merger is in the best interests of Westgold Shareholders and the independent directors recommendation is to accept the offer in the absence of a superior offer.

The scheme of arrangement is to be approved by a meeting of Shareholders on the 3rd October 2012 (“Scheme Meeting”).

Implementation of the Scheme is subject to various conditions being satisfied, including customary regulatory and court approvals, and the Scheme being approved at the Scheme Meeting by 75% of the shares voted and 50% of Shareholders voting (either in person or by proxy). If approved, it is anticipated the Merger will be completed by mid-October 2012.

Great Fingall JV

During the period, Westgold successfully completed the acquisition of the remaining 49% in the Joint Venture which historically existed over the the Great Fingall orebody from the Great Fingall Mining Company NL.

Management Appointments

On 28th September 2011, Westgold announced the appointment of Paul Hucker as Chief Operating Officer, effective 31st October. Mr Hucker is a Mining Engineer with more than 17 years’ experience. He has held numerous senior operational management roles within Australia and internationally, in both underground and open pit operations. Most recently, Mr Hucker held the position of General Manager of Alacer Gold, at its South Kalgoorlie Operation.

Investments

During the period Westgold disposed of 100% of its holdings in Rum Jungle Resources (ASX:RUM), for a gross consideration of $5.2 million.

Competent Persons Statements Competent Persons Statements - Rover 1

The information in this report that relates to exploration, mineral resources or ore reserves is based on information compiled by Mr Andrew Beckwith

(B.AppSc.) who is a Non-Executive Director of Westgold Resources Limited, is a member of the AusIMM. Mr Beckwith has sufficient experience which is

relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent person

as described by the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Beckwith

consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Competent Persons Statement - Central Murchison Gold Project

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Jake Russell B.Sc. (Hons), who is a Member of the Australian Institute of Geoscientists. Mr Russell is a full-time employee of the company. Mr Russell has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Russell consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Ore Reserves is based on information compiled under the direction of Mr. Paul Hucker B. Eng (Hons), who is a Member of the AusIMM. Mr Hucker is a full-time employee of the company. Mr Hucker has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Hucker consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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DIRECTORS’ REPORT

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The Directors submit their report for the year ended 30 June 2012. This report is to be read in conjunction with the Review of Operations and other information contained in the 2012 Annual Report of Westgold Resources Limited (“Westgold”, “Company” or “chief entity”) and its controlled entities (“Group”).

DIRECTORS

The Directors of Westgold during the financial year and as at the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Names, Qualification, Experience and Special Responsibilities

Michael William Atkins – Non Executive Chairman

Mr Atkins is a Fellow of the Australian Institute of Company Directors. Mr Atkins was a founding partner of a national Chartered Accounting practice from 1979 to 1987 and was a Fellow of the Institute of Chartered Accountants in Australia until resigning in June 2011.

Between 1987 and 1998 he was a director of, and involved in the executive management of, several publicly listed resource companies with operations in Australia, USA, South East Asia and Africa. From 1990 to 1995 he was Managing Director and later a non-executive director of Claremont Petroleum NL and Beach Petroleum NL during their reconstruction, and then remained as a Non Executive Director until 1995. He was also founding Executive Chairman of Gallery Gold Ltd until 1998, and remained a Non Executive Director until 2000.

Since February 2009 Mr Atkins has been a Director - Corporate Finance at Patersons Securities Limited where he advises on the formation of, and capital raising for, emerging companies in the Australian resources sector.

He is currently non-executive Chairman of Australian listed companies Westgold Resources Limited, Legend Mining Limited and Azumah Resources Limited.

During the past three years, Mr Atkins has also served as a Director of the following publicly listed companies:

Legend Mining Limited * (Appointed 14 February 2003) Azumah Resources Limited * (Appointed 20 October 2009) Matsa Resources Limited (Appointed 15 March 2007, resigned 30 November 2009)

Scott James Huffadine – Managing Director

Mr Huffadine is a Geologist (BSc. (Hons)) with over 18 years’ experience in the resources industry, specifically in mining project management and geology. He was an Executive Director of Metals X Limited since June 2009, and was the Chief Operating Officer of the same company for the two years prior to this. Prior to joining Metals X, he was employed by Harmony Gold Australia Pty Ltd as the General Manager of the Hill 50 Gold project for 4 years which included the assets that encompass the current Central Murchison Gold Project.

Mr Huffadine’s previous roles have seen him manage operational start-ups for open pit and underground mining operations, as well as the operational management of large scale going concerns in a number of regulatory environments and commodities. His appointment and background in project development and production reflects the Company’s clear focus on building the next mid tier Australian gold producer through the development of the Central Murchison Gold Project (CMGP) and Rover 1.

During the past three years, Mr Huffadine has also served as a Director of the following publicly listed companies:

Metals X Limited (Resigned 31 May 2011)

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Andrew Francis Beckwith – Non-Executive Director (Executive Director-Exploration until 1 July 2012)

Mr Beckwith is a geologist with over 25 years experience in the Australian exploration and mining industry, having previously held the position of Managing Director of Westgold Resources and other senior roles including with Aragon Resources Limited (formerly Navarre Resources Pty Ltd), AngloGold Ashanti Australia, Acacia Resources, Helix Resources, Normandy NFM and BP Minerals and is a Member of the Australasian Institute of Mining and Metallurgy and the Society of Economic Geologists.

During the past three years, Mr Beckwith has not served as a Director of any other publicly listed company.

Peter Gerard Cook – Non-Executive Director

Mr Cook is a Geologist (BSc (Applied Geology)) and Mineral Economist (MSc (Min. Econ)). In recent years he has been the Managing Director of Hill 50 Limited, the Chief Executive Officer of Harmony Gold Australia Pty Ltd, the Managing Director of Abelle Limited and the Chairman of Metals Exploration Limited. He has considerable experience in the fields of exploration and project and corporate management of mining companies.

He is currently the Chairman of Metals X Limited, Pacific Nuiguni Limited, Aziana Limited and formerly the Chairman of Aragon Resources Limited and was previously a non-executive director of Kingrose Mining Limited.

During the past three years, Mr Cook has also served as a Director of the following publicly listed companies:

Metals X Limited * (Appointed 23 June 2004) Aragon Resources Limited * (Appointed 18 May 2007; delisted 6 May 2011) Pacific Niugini Limited * (Appointed 21 August 2009) Kingsrose Mining Limited (Appointed 1 October 2010; resigned 21 October 2012) Aziana Limited * (Appointed 30 May 2011)

Warren Hallam – Non-Executive Director

Mr Hallam is a Metallurgist (BSc (Applied Metallurgy)). Mineral Economist (MSc (Min. Econ) and holds a finance degree (G. Dip. Finance). Mr Hallam has over 25 years experience across a range of business and commodity markets and brings to Westgold both his extensive commercial experience and his involvement with the development and commissioning of processing plants specifically within the gold industry. Mr Hallam’s commercial acumen and technical expertise compliments the current skill set of the Westgold board.

In recent years Mr Hallam has been the Managing Director of Metals Exploration Limited, an Executive Director of Metals X Limited and is currently the Managing Director of Westgold’s major shareholder, Metals X Limited and is a non-executive director of Aziana Limited.

During the past three years, Mr Hallam has also served as a Director of the following publicly listed companies:

Metals X Limited * (Appointed 1 March 2005) Aziana Limited * (Appointed 30 May 2011)

* denotes current directorship

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COMPANY SECRETARY Andrew Chapman is a chartered accountant with over 19 years experience with publicly listed companies where he has held positions as Company Secretary and Chief Financial Officer and has experience in the areas of corporate acquisitions, divestments and capital raisings. He has worked for a number of public companies in the mineral resources, oil and gas and technology sectors.

Mr Chapman is also a director & company secretary of Matsa Resources Limited. He is an associate member of the Institute of Chartered Accountants (ICAA) and a Fellow of the Financial Services Institute of Australasia (Finsia).

PRINCIPAL ACTIVITIES

The principal activity of the Group during the financial year was the exploration for minerals.

OPERATING RESULTS

The consolidated loss of the Group for the year ended 30 June 2012, after income tax, amounted to $10,928,443 (2011: profit of $4,670,268).

DIVIDENDS

No dividend was paid or declared by Westgold in the period since the end of the previous financial year, and up to the date of this report. The Directors do not recommend that any amount be paid by way of dividend.

CORPORATE STRUCTURE

Westgold is a company limited by shares, which is incorporated and domiciled in Australia.

EMPLOYEES

The Group had 21 employees of which 16 were full-time as at 30 June 2012 (2011: 19 full-time equivalent employees).

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REVIEW OF OPERATIONS

A full review of the operations of the consolidated entity during the year ended 30 June 2012 is included on pages 2 to 7.

Summary of Financial Performance

Westgold made a net loss for the year of $10,928,443 (2011: profit of $4,670,268) predominantly as a result of:

(i) A loss on the sale of its available-for-sale investment in Rum Jungle Limited during the year of $3,308,600;

(ii) Share based payments expense of $639,999 incurred during the year (2011: $1,907); (iii) Interest income of $478,431 (2011: $587,883) being less than that of the previous year due to an

decrease in the cash held during the year; (iv) Exploration costs of $3,138,938 (2011: $450,413) were written off during the year; and (v) Impairment of goodwill originally associated with the takeover of Aragon Resources Limited of

$1,509,845 (2011: nil). (vi) Costs incurred in relation the proposed merger between the Company and Metals X Limited via way of

Scheme of Arrangement of approximately $355,623 at 30 June 2012.

Summary of Financial Position The Group’s financial position changed in 2012 with its net asset position decreasing from $110.0 million in 2011 to $104.4 million this financial year primarily due to the writeoff of exploration expenditure incurred on the takeover of Aragon Resources Limited, impairment of goodwill carried in the balance sheet in the 2011 financial year and the loss on sale of its investment in Rum Jungle Limited during the year. The Company funded its exploration activities from its existing cash reserves.

Cash reserves at 30 June 2012 were $3.7 million compared to $11.2 million in the previous financial year.

Exploration Activities

During the financial year Westgold continued its exploration activities in both Western Australia and the Northern Territory, spending approximately $10.9 million on exploration with the predominant focus being on the Central Murchison Gold Project including the commencement of a definitive feasibility study, and to a lesser extent the Rover Project.

Corporate Activities Merger via Scheme of Arrangement

On 14 May 2012 Westgold announced that it proposed to merge with its major shareholder, Metals X Limited, to be implemented via a Scheme of Arrangement where Metals X would acquire all the issued shares and options in Westgold. The merger is subject to the satisfaction of a number of conditions including Westgold shareholder approval and final Court approval. A Merger Implementation Agreement was entered into between the parties to enact the proposed merger.

Under the terms of the merger eligible Westgold shareholders will receive 11 Metals X shares for every 10 Westgold shares hled and Westgold option holders will receive 11 new Metals X options for every 10 Westgold options held.

Acquisition of Great Fingall Joint Venture

On 24 April 2012 Westgold advised that it has acquired the 49% relevant interest in the Great Fingall Deeps it did not own from Great Fingall Mining Company NL. This interest contains 52,000oz of Probable Reserves and 132,000 ounces at 9.1 g/t Au of Identified mineral resource. The consideration for the relevant interest is as follows:

1. AUD $150,000 in cash

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2. The allotment of 3.0 million fully paid ordinary shares in Westgold, of which1.0 million ordinary

shares will be subject to a 12 month voluntary escrow period.

3. A deferred payment of AUD$5 per ounce for all ounces produced from the Defined Area in the Great Fingall Farm-in Agreement.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during the financial year other than as disclosed in this report or the consolidated financial statements.

AFTER BALANCE DATE EVENTS

On 17 July 2012 Westgold announced that it had lodged the Scheme booklet pertaining to its proposed merger with Metals X Limited with ASIC for review. Westgold has subsequently received both ASIC and Court approval to convene a meeting of Westgold shareholders and option holders which be be held on 3 October 2012. Westgold despatched the Scheme booklet and meeting materials to all shareholders and option holders on 31 August 2012.

It is not possible at the date of this report to determine whether or not the proposed merger will be approved by Westgold shareholders and option holders at the respective meetings. Should the merger be approved it will require final Court approval before the merger can be finalised. Once all conditions have been met and the merger finalised Westgold will become a wholly-owned subsidiary of Metals X and Westgold shareholders will hold approximately 20.9% of the new merged entity.

ENVIRONMENTAL REGULATION AND PERFORMANCE The Group’s operations are subject to various environmental regulations in respect of its exploration activities. The Group aims to ensure that an appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors have complied with these regulations and are not aware of any breaches of the legislation during the financial year which are material in nature.

FUTURE DEVELOPMENTS AND EXPECTED RESULTS

It is expected that the Group will continue with its exploration and development activities within Australia. The Company is currently subject to a merger by Scheme of Arrangment with its major shareholder Metals X Limited, which is subject to a number of conditions including shareholder approval. The shareholder meeting is to be held on 3 October 2012 and therefore it is unknown at the date of this report the outcome of the proposed merger.

Further information on likely developments and the expected results are not included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.

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DIRECTORS’ MEETINGS The number of meetings of the Board of Directors held during the period each Director held office during the year and the number of meetings attended are as follows:

Director Directors’ Meetings

Attended Eligible to attend

Michael Atkins 6 6 Scott Huffadine 6 6 Andrew Beckwith 6 6 Peter Cook 4 4 Warren Hallam 3 4 In view of the size of the Company the Directors do not consider it necessary to establish separate nomination, remuneration or audit committees to deal with subjects that the Board currently presides over. DIRECTORS’ INTERESTS IN SHARES AND OPTIONS OF THE COMPANY The relevant interest of each director in the shares and options issued by the Company or other related body corporate, as notified to the Australian Securities Exchange in accordance with S.205G(1) of the Corporations Act 2001, at the date of this report is as follows: Note Ordinary Shares

Westgold Resources Limited

Options over Ordinary Shares

Performance Rights

M Atkins 3,704,250 250,000 - S Huffadine 297,000 2,600,000 2,000,000 A Beckwith 9,269,250 1,000,000 - P Cook (1) 842,277 750,000 - W Hallam (1) - - -

(1) Mr Cook and Mr Hallam are directors of Metals X Limited which holds 112,539,730 fully paid

ordinary shares in the Company. Options and performance rights No options or performance rights were granted to directors or officers of the Company subsequent to year end. During the financial year, the Company granted options and performance rights for no consideration over unissued ordinary shares in the Company to the following directors and executives of the Company as part of their remuneration:

Directors Number of Options Granted Exercise Price Expiry Date

Number of Performance

Rights Granted S Huffadine S Huffadine

2,000,000 -

$0.29 -

15 August 2014 15 August 2014

- 2,000,000

A Beckwith A Beckwith*

1,000,000 -

$0.29 -

15 August 2014 15 August 2014

- 750,000

Executive P Hucker P Hucker

1,000,000 -

$0.23 -

2 November 2014 2 November 2014

- 300,000

A Chapman A Chapman

375,000 -

$0.29 -

4 July 2014 -

- -

*Refer to page 15 for discussion on the treatment of these rights.

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SHARE OPTIONS AND PERFORMANCE RIGHTS Unissued Shares under Options At the date of this report unissued ordinary shares of the Company under option are:

Expiry Date Exercise Price Number 8 November 2012 $0.45 250,000

30 November 2012 $0.21 2,500,000 7 January 2013 $0.20 1,000,000

30 November 2013 $0.21 500,000 31 December 2013 $0.20 17,500,00

11 January 2014 $0.32 1,025,000 4 July 2014 $0.29 1,825,000

15 August 2014 $0.29 3,000,000 24 August 2014 $0.22 400,000

2 November 2014 $0.23 1,000,000 25 March 2015 $0.48 650,000

All options expire on the earlier of their expiry date or termination of the employee’s employment. These options do not entitle the holder to participate in any share issue of the Company or any other body corporate. Unissued Shares under Performance Rights At the date of this report unissued ordinary shares of the Company under performance rights are:

Expiry Date Number 15 August 2014 2,000,000

2 November 2014 300,000 Shares Issued on Exercise of Options and Performance Rights During or since the end of the financial year, the Company issued no ordinary shares as a result of the exercise of options or performance rights. REMUNERATION REPORT - Audited Principles of Compensation

This remuneration report for the year ended 30 June 2012 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (“the Act”) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration arrangements for Key Management Personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.

For the purposes of this remuneration report, the term ‘executive’ includes the Executive Directors, Senior Executives and Secretary of the Consolidated Entity.

The remuneration report is presented under the following sections:

1. Individual key management personnel disclosures

2. Board oversight of remuneration

3. Non-executive Director remuneration arrangements

4. Executive remuneration arrangements

5. Company performance and the link to remuneration

6. Executive contractual arrangements 7. Equity instruments disclosures

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Individual Key Management Personnel Disclosures

Details of KMP of the Group are set out below:

Key Management Personnel

Name Position Date of Appointment Date of Resignation

Directors M Atkins Non- Executive Chairman 18 September 2003 - S Huffadine Managing Director 1 June 2011 - A Beckwith Executive Director – Exploration* 18 January 2008 - P Cook Non-Exective Director 19 March 2007 - W Hallam Non-Exective Director 18 March 2010 - Executives P Hucker Chief Operating Officer 31 October 2011 - A Chapman Company Secretary 22 March 2000 - D Stephens Exploration Manager 5 October 2009 2 September 2011

*A Beckwith became a non-executive director from 1 July 2012. There were no other changes to key management personnel after reporting date and before the date the financial report was authorised for issue.

Board Oversight of Remuneration

Remuneration Committee

In the opinion of the directors the Company is not of sufficient size to warrant the formation of a remuneration committee. It is the board of directors’ responsibility for determining and reviewing compensation arrangements for the directors and the senior executives.

The Board assesses the appropriateness of the nature and amount of remuneration of Non-Executive Directors and Executives on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing Director and executive team.

Remuneration approval process

The Board approves the remuneration arrangements of the Executive Directors and Executives and all awards made under the long-term incentive plan. The Board also sets the aggregate remuneration of non-executive directors which is then subject to shareholder approval.

Remuneration Strategy

The Company’s remuneration strategy is designed to attract, motivate and retain employees and non-executive directors by identifying and rewarding high performers and recognising the contribution of each employee to the continued growth and success of the Group.

To this end, the Company embodies the following principles in its remuneration framework:

• retention and motivation of key executives;

• attraction of quality management to the Company; and

• performance incentives which allow executives to share the rewards of the success of the Company.

Remuneration Structure

In accordance with best practice corporate governance, the structure of Non-Executive Director and Senior Management remuneration is separate and distinct.

Non-Executive Director Remuneration

Objective

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

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REMUNERATION REPORT – Audited (Continued)

Remuneration Policy

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The current aggregate remuneration is $300,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers external factors from time to time as well as the fees paid to non-executive Directors of comparable companies when undertaking the annual review process. Each Director receives a fee for being a Director of the Company.

Non-Executive Directors are encouraged by the Board to hold shares in the Company (purchased by the Director on market). It is considered good governance for Directors to have a stake in the Company whose Board he or she sits.

Structure

The remuneration of Non-Executive Directors consists of director’s fees. Non-Executives are entitled to receive retirement benefits and to participate in any incentive programs. There are currently no specific incentive programs.

The non-executive Chairman receives a base fee of $72,000 and each other non-executive director receives a base fee of $42,000 for being a director of the Group. There are no additional fees for serving on any board committees. Non-executive directors can receive additional fees for work conducted for the Company outside the scope of their normal duties subject to being authorised by the Board.

Non-Executive directors are encouraged by the Board to hold shares in the Company. The shares are purchased by the directors at the prevailing market share price.

The remuneration report for the Non-Executive Directors for the year ending 30 June 2012 and 30 June 2011 is detailed in this report.

Managing Director and Executive Remuneration Structure

Remuneration Policy

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company. The current remuneration policy adopted is that no element of any executive package be directly related to the Company’s financial performance other than performance rights. Performace rights issued are the only element of any executive remuneration that are dependent upon the satisfaction of any specific condition. Remuneration is not linked to the performance of the Company but rather to the ability to attract and retain executives of the highest calibre. The overall remuneration policy framework however is structured in an endeavour to advance/create shareholder wealth.

Structure

In determining the level and make-up of executive remuneration, the Board may engage external consultants as needed to provide independent advice. No external consultants were used in the current period.

Remuneration consists of the following key elements:

• Fixed remuneration (base salary and superannuation); and

• Variable remuneration (short and long term incentives).

The proportion of fixed remuneration and variable remuneration for each executive for the period ending 30 June 2012 and 30 June 2011 is detailed in this report.

Fixed Remuneration

Executive contracts of employment do not include any guaranteed base pay increase. Fixed remuneration is reviewed annually by the Board. The process consists of a review of the Company, business unit and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external advice independent of management mat be sought.

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Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company.

The fixed remuneration component for executives for the period ending 30 June 2012 and 30 June 2011 is detailed in this report.

Variable Remuneration – Short Term Incentive (STI) The objective of the STI is to link the increase in shareholder value over the year with the remuneration received by the Executives charged with achieving that increase. The total potential STI available is set at a level so as to provide sufficient incentive to the Executives to achieve the performance goals and such that the cost to the Group is reasonable in the circumstances.

Annual STI awards granted to each Executive depend on their performance over the preceding year and are based on recommendations from the Managing Director following collaboration with the Board. Typically included are measures such as contribution to strategic initiatives, risk management and leadership/team contribution.

The aggregate of annual STI awards available for Executives across the Group is subject to the approval of the Board. Payments are usually delivered as a cash bonus. There were no STI awards granted during the financial year ending 30 June 2012.

Variable Remuneration – Long Term Incentive Plan (LTI) The objective of the LTI plan is to reward Executives in a manner which aligns the element of remuneration with the creation of shareholder wealth. As such LTI’s are made to Executives who are able to influence the generation of shareholder wealth and thus have an impact on the Group’s performance.

The level of LTI granted is determined by the policy determined by the Board and is based on the seniority of the Executive and the responsibilities the Executive assumes in the Group.

The Company, following shareholder approval, adopted a new Long Term Incentive Plan (LTIP) which allowed for the issue of both options and performance rights. Options are issued at an exercise price determined by the Board at the time of issue and performance rights can have performance hurdles set at the time of the issue. Employee share options and performance rights were issued in accordance with the Company’s LTIP. Where a participant ceases employment before the vesting of their LTI’s, the LTI’s forfeited immediately. Where a participant ceases employment after the vesting of their LTI’s, the LTI’s automatically lapse after one month of ceasing employment or such longer periods as determined by the Board of Directors.

The Group has a policy to prohibit executives from entering into arrangements to protect the value of unvested LTI awards.

Company Performance and the Link to Remuneration

Remuneration is generally not linked to the performance of the Company but based on the ability to attract and retain executives of the highest calibre. Within the setting of remuneraton there is the ability to set performance conditions should the Board decide to do so. The overall remuneration policy framework however is structured in an endeavour to advance/create shareholder wealth. The Westgold Resources Limited Long Term Incentive Plan has no direct performance requirements but has specified time restrictions on the exercise of options. There are specific performance conditions associated with the issue of performance rights (refer Note 25(n) for further details) as well as specified time restictions. The granting of options and performance rights is in substance a performance incentive which allows executives to share the rewards of the success of the Company.

The Consolidated Entity’s performance is reflected in the following table:

30 June 2012

30 June 2011

30 June 2010 30 June 2009 30 June 2008

Closing share price $0.14 $0.22 $0.28 $0.23 $0.40 Profit/(loss) per share (cents) (2.64) 1.72 (0.63) (2.19) (1.79) Net tangible assets per share 0.25 0.26 0.21 0.15 0.17 Total shareholder return -36.4% -26.7% 21.4% -42.5% 25%

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REMUNERATION REPORT – Audited (Continued) Remuneration of Key Management Personnel

Short term benefits Post Employment

Long Term Benefits

Share based payments

Non-Executive Directors Salary & Fees

Non Monetary Benefits Superannuation

Long Service Leave

Termination Payments Securities Total

Value of securities as a proportion of total remuneration

% Performance

related M Atkins

2012 84,000 - 7,560 - - - 91,560 - - 2011 70,000 - 6,300 - - - 76,300 - -

P Cook

2012 42,000 - 3,780 - - - 45,780 - - 2011 45,780 - - - - - 45,780 - -

W Hallam *

2012 45,780 - - - - - 45,780 - - 2011 38,000 - - - - - 38,000 - -

P Cmrlec 1

2011 34,877 - - - - - 34,877 - -

Executive Directors S Huffadine2

2012 338,553 1,649 25,000 2,377 - 323,6656 691,244 46.82 20.96 2011 29,067 - 2,616 - - - 31,683 - -

A Beckwith

2012 303,832 12,097 23,400 9,799 208,9895 142,118 700,235 20.29 7.53 2011 252,936 9,451 22,764 22,005 - - 307,156 - -

Executives P Hucker3

2012 184,945 824 15,213 983 - 84,5846 286,549 29.52 5.33 D Stephens 4

2012 48,441 - 2,825 - - - 51,266 - - 2011 160,000 - 14,400 - - 42,521 216,921 19.60 -

A Chapman

2012 175,055 8,471 14,509 12,700 - 29,250 239,985 12.19 - 2011 153,294 5,907 13,796 13,152 - - 186,149 - -

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REMUNERATION REPORT – Audited (Continued) * Directors fees for Mr Hallam are paid to Bluestone Australia Limited, a wholly owned subsidiary of

Metals X Limited of which Mr Hallam and Mr Cook are directors 1 Resigned 31 May 2011 2 Appointed 1 June 2011 3 Appointed 31 October 2011 4 Resigned 2 September 2011 5 Mr Beckwith became a non-executive director from 1 July 2012 at which time he received an eligible

termination payment of $295,000 relating to ceasing his executive role. This includes the payment of annual and long service leave. At that time 750,000 performance rights held by Mr Beckwith were forfeited.

6 Performance rights issued to Mr Huffadine and Mr Hucker will be cancelled upon the successful merger by scheme of arrangement between the Company and Metals X Limited. Should this occur Mr Huffadine will receive a cash payment of $115,000 and Mr Hucker a cash payment of $30,000.

There were no short term incentives paid in either financial year.

Compensation Options and Performance Rights Granted and Vested during the year

The table below sets out options and performance rights granted during the year to Directors and Executives during the year. There were no options or performance rights that were granted in previous years that vested during the year The options and performance rights were issued free of charge and entitle the holder to subscribe for one fully paid ordinary share in the Company.

2012 Number granted Grant date

Value of each

Security at grant date $

Exercise price

$

First exercise

date

Last exercise

date/expiry date

Number vested

during the year

% vested during

the year Directors S Huffadine - Rights 2,000,000 15/08/11 0.235 n/a 15/08/14 - - - Options 2,000,000 15/08/11 0.0894 0.29 15/08/11 15/08/14 2,000,000 100

A Beckwith - Rights 750,000 15/08/11 0.128 n/a 15/08/14 - - - Options 1,000,000 15/08/11 0.0894 0.29 15/08/11 15/08/14 1,000,000 100

Executives P Hucker - Rights 300,000 2/11/11 0.175 n/a 2/11/14 - - - Options 1,000,000 2/11/11 0.0693 0.23 2/11/11 2/11/14 1,000,000 100

A Chapman - Options 375,000 4/07/11 0.078 0.29 4/07/11 4/0/14 375,000 100

For details on the valuation of the options and performance rights, including models and assumptions used, please refer to Note 26.

Mr Beckwith became a non-executive director from 1 July 2012 at which time he received an eligible termination payment relating to ceasing his executive role. At that time 750,000 performance rights held by Mr Beckwith expired. F

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Value of Options and Performance Rights Granted as part of remuneration

2012

Value of performance

rights granted

during the year $


rights exercised during the

year $


rights lapsed

during the year $

Remuneration consisting of performance rights during

the year %

Value of options granted during

the year $

Value of options exercise during

the year

Value of

options lapsed during

the year $

Remuneration consisting of

options during the

year %

Directors S Huffadine 144,865 - - 20.96 178,800 - - 25.86 A Beckwith* 52,718 - (52,718) 7.53 89,400 - - 12.76 Executives P Hucker 15,284 - - 5.33 69,300 - - 24.18 A Chapman - - - - 29,250 - - 12.19

In the financial year ended 30 June 2011 options held by Mr Beckwith to the value of $129,825 lapsed. There were no options or performance rights granted as part of remuneration to Directors or Executives in the financial year ended 30 June 2011.

On 1 July 2012 Mr Beckwith became a non-executive director and ceased his executive duties. In doing so Mr Beckwith forfeited all of his performance rights. The value of the performance rights forfeited is $52,718.

Performance rights issued to Mr Huffadine and Mr Hucker will be cancelled upon the successful merger by scheme of arrangement between the Company and Metals X Limited. Should this occur Mr Huffadine will receive a cash payment of $115,000 and Mr Hucker a cash payment of $30,000.

There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

The maximum value of the award is equal to the number of options granted multiplied by the fair value at the grant date. The minimum value of the award in the event of forfeiture is zero.

There were no shares issued on exercise of compensation options during the year. Service Contracts

It is the Board’s policy that services contracts are entered into with all executive key management personnel and that these contracts have no termination date.

Mr Scott Huffadine, Managing Director, has a contract of employment with the Company. Mr Huffadine receives a salary of $320,000 (excluding superannuation) per annum effective from 1 June 2011. This contract is for an unlimited term and is capable of termination on three months notice. The Group retains the right to terminate the contract immediately, by making payment equal to three months pay in lieu of notice.

Mr Andrew Beckwith, Executive Director - Exploration, had a contract of employment with the Company where Mr Beckwith received a salary of $260,000 (excluding superannuation) per annum effective from 1 June 2011. This contract was for an unlimited term and capable of termination on three months notice. The Group retained the right to terminate the contract immediately, by making payment equal to three months pay in lieu of notice. On 1 July 2012 Mr Beckwith became a non-executive director and ceased his contract of employment.

Mr Paul Hucker, Chief Operation Officer, has a contract of employment with the Company. Mr Hucker receives a salary of $275,000 (excluding superannuation) per annum effective from 31 October 2011. This contract is for an unlimited term and is capable of termination on three months notice. The Group retains the right to terminate the contract immediately, by making payment equal to three months pay in lieu of notice.

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Mr Damien Stephens, Exploration Manager, had a contract of employment with the Company. Mr Stephens received a salary of $160,000 (excluding superannuation) per annum. This contract is for an unlimited term and was capable of termination on one month’s notice. The Group retains the right to terminate the contract immediately, by making payment equal to one month’s pay in lieu of notice. Mr Stephens resigned with effect from 2 September 2011.

Mr Andrew Chapman, Company Secretary, has a contract of employment with the Company. Mr Chapman receives a salary of $120,000 (including superannuation) based on a minimum 2.5 days work per week. An equivalent hourly rate is payable for additional time worked. This contract is for an unlimited term and is capable of termination on one month’s notice. The Group retains the right to terminate the contract immediately, by making payment equal to one month’s pay in lieu of notice.

End of Audited Remuneration Report

INDEMNIFICATION OF OFFICERS

An indemnity agreement has been entered into between the Company and each of the Directors of the Company named earlier in this report and with each full-time executive officer who acts as a Director on behalf of the Company on the boards of any company the Company has a financial interest in. Under the agreement, the Company has agreed to indemnify those officers against any claim or for any expenses or costs, to the extent permitted by law, which may arise as a result of work performed in their respective capacities. In addition, the agreement provides for the Company to procure and pay the premium for an insurance policy to cover, to the extent permitted by law, such claims and expenses, and to continue maintaining an insurance policy for a period of seven years after an officer has ceased to act in that capacity.

INSURANCE PREMIUM PAID FOR OFFICERS

The Company has paid an insurance premium in respect of a contract insuring each of the Directors of the Company named earlier in this report and the executive officers of the Group against liabilities and expenses, to the extent permitted by law, arising from claims made against them in their capacity as Directors and officers of the Group, other than conduct involving a wilful breach of duty in relation to the Group. Due to confidentiality restrictions in the insurance policy the premium paid has not been disclosed.

AUDITOR INDEPENDENCE

The auditor’s independence declaration for the year end 30 June 2012 is on page 22. This declaration forms part of this director’s report.

NON-AUDIT SERVICES

During the financial year Ernst & Young, the Group’s auditor, has performed certain other services in addition to their statutory duties.

The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of those non-audit services is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001.

Ernst & Young received or are due to receive the following amount for the provision of non-audit services:

Tax compliance and advice services $138,022 This report is signed for and on behalf of the Directors in accordance with a resolution of the Directors.

SCOTT HUFFADINE Managing Director Perth, 28 September 2012

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Liability limited by a scheme approved under Professional Standards Legislation

GHM:MJ:westgold:2012:004

Auditor’s Independence Declaration to the Directors of Westgold Resources Limited

In relation to our review of the financial report of Westgold Resources Limited for the year ended 30 June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young G H Meyerowitz Partner 28 September 2012

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CORPORATE GOVERNANCE STATEMENT

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Since the introduction of the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (ASX Principles and Recommendations), and the revised second edition of the ASX Principles and Recommendations, Westgold Resources Limited has made it a priority to adopt systems of control and accountability as the basis for the administration of corporate governance. The Company’s corporate governance practices for the year ending 30 June 2012 and as at the date of this report are outlined in this corporate governance statement.

The Company has considered each recommendation provided in the ASX Principles and Recommendations, taking into account factors such as the size of the Company and the Board, resources available and activities of the Company. Where, after due consideration, the Company’s corporate governance practices depart from the ASX Principles and Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.

For further information on corporate governance policies adopted by the Company, refer to the corporate governance section of our website: www.westgold.com.au.

1. Compliance with Best Practice Recommendations

The table below summaries the Company’s compliance with the Corporate Governance Council’s Recommendations:

Principle # ASX Corporate Governance Council Recommendations Reference Comply

Principle 1 Lay solid foundations for management and oversight 1.1 Establish the functions reserved to the Board and those delegated

to senior executives and disclose those functions. 2(a) Yes

1.2 Disclose the process for evaluating the performance of senior executives.

2(h), 3(b), Remuneration

Report

Yes

1.3 Provide the information indicated in the Guide to reporting on principle 1.

2(a), 2(h), 3(b), Remuneration

Report

Yes

Principle 2 Structure the Board to add value

2.1 A majority of the Board should be independent directors. 2(e) No 2.2 The chair should be an independent director. 2(c), 2(e) Yes 2.3 The roles of chair and chief executive officer should not be

exercised by the same individual. 2(b), 2(c) Yes

2.4 The Board should establish a nomination committee. 2(d) No 2.5 Disclose the process for evaluating the performance of the Board,

its committees and individual directors. 2(h) Yes


2(b), 2(c), 2(d), 2(e), 2(h)

Yes

Principle 3 Promote ethical and responsible decision-making

3.1 Establish a code of conduct and disclose the code or a summary as to: • the practices necessary to maintain confidence in the

company’s integrity; • the practices necessary to take into account the company’s

legal obligations and the reasonable expectations of its stakeholders; and

• the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

4(a) Yes

3.2 Establish a policy concerning diversity and disclose the policy or a summary. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them.

4(c) Yes

3.3 Disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.

4(c) Yes

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Principle # ASX Corporate Governance Council Recommendations Reference Comply

3.4 Disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.

4(c) Yes


4(a), 4(c) Yes

Principle 4 Safeguard integrity in financial reporting 4.1 The Board should establish an audit committee. 3(a) Yes 4.2 The audit committee should be structured so that it: 3(a) No

• consists only of non-executive directors; • consists of a majority of independent directors; • is chaired by an independent chair, who is not chair of the

Board; and

• has at least three members. 4.3 The audit committee should have a formal charter 3(a) Yes 4.4 Provide the information indicated in the Guide to reporting on

principle 4. 3(a) Yes

Principle 5 Make timely and balanced disclosure

5.1 Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior executive level for that compliance and disclose those policies or a summary of those policies.

5(a), 5(b) Yes


5(a), 5(b) Yes

Principle 6 Respect the rights of shareholders

6.1 Design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose the policy or a summary of that policy.

5(a), 5(b) Yes


5(a), 5(b) Yes

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Principle # ASX Corporate Governance Council Recommendations Reference Comply Principle 7 Recognise and manage risk

7.1 Establish policies for the oversight and management of material business risks and disclose a summary of those policies.

6(a) Yes

7.2 The Board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.

6(a), 6(b), 6(d) Yes

7.3 The Board should disclose whether it had received assurance from the chief executive officer and the chief financial officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

6(c) Yes


6(a), 6(b), 6(c), 6(d) Yes

Principle 8 Remunerate fairly and responsibly

8.1 The Board should establish a remuneration committee. 3(b) No 8.2 The Remuneration Committee should be structured so that it is:

• consists of a majority of independent directors; • is chaired by an independent chair; and • has at least 3 members.

3(b) No

8.3 Clearly distinguish the structure on non-executive directors’ remuneration from that of executive directors and senior executives.

3(b), Remuneration Report

Yes


3(b), Yes

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2. THE BOARD OF DIRECTORS 2(a) Roles and Responsibilities of the Board

The role of the Board is to be accountable to the shareholders and investors for the overall performance of the Company and takes responsibility for monitoring the Company’s business and affairs and setting its strategic direction, establishing and overseeing the Company’s financial position provide leadership for and the supervision of the Company’s senior management.

The Board is responsible for:

• Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer ("CEO") and senior management;

• Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;

• Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;

• Assessing the effectiveness of senior management’s implementation of systems and the management of business risks, safety and occupational health, environmental issues and community development;

• Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;

• Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control process are in place and functioning appropriately.

• Approving and monitoring financial and other reporting; • Assuring itself that appropriate audit arrangements are in place; • Ensuring that the Company acts legally and responsibly on all matters and approving the

Company’s policies on risk oversight and management, internal compliance and control, Code of Conduct, and legal compliance and assuring itself that the Company practice is consistent with that Code; and other policies; and

• Reporting to and advising shareholders.

Other than as specifically reserved to the Board, responsibility for the day-to-day management of the Company’s business activities is delegated to the Chief Executive Officer and Executive Management.

2(b) Board Composition

The Directors determine the composition of the Board employing the following principles:

• the Board, in accordance with the Company’s constitution must comprise a minimum of three Directors;

• the roles of the Chairman of the Board and of the Chief Executive Officer should be exercised by different individuals;

• the majority of the Board should comprise Directors who are non-executive; • the Board should represent a broad range of qualifications, experience and expertise

considered of benefit to the Company; and • the Board must be structured in such a way that it has a proper understanding of, and

competency in, the current and emerging issues facing the Company, and can effectively review management’s decisions.

The Board is currently comprised of three non-executive Directors and two executive Directors. Details of the members of the Board, their experience, expertise, qualifications, terms of office and independent status are set out in the Directors’ Report of the Annual Report under the heading “Directors”.

There have been no changes to the board since 1 July 2011.

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2. THE BOARD OF DIRECTORS (Continued)

The Company’s constitution requires one-third of the Directors (or the next lowest whole number) to retire by rotation at each Annual General Meeting (AGM). The Directors to retire at each AGM are those who have been longest in office since their last election. Where Directors have served for equal periods, they may agree amongst themselves or determine by lot who will retire. A Director must retire in any event at the third AGM since he or she was last elected or re-elected. Retiring Directors may offer themselves for re-election.

A Director appointed as an additional or casual Director by the Board will hold office until the next AGM when they may be re-elected.

The Chief Executive Officer is not subject to retirement by rotation and, along with any Director appointed as an additional or casual Director, is not to be taken into account in determining the number of Directors required to retire by rotation.

2(c) Chairman and Chief Executive Officer

The Chairman is responsible for:

• leadership of the Board; • the efficient organisation and conduct of the Board’s functions; • the promotion of constructive and respectful relations between Board members and between the

Board and management; • contributing to the briefing of Directors in relation to issues arising at Board meetings; • facilitating the effective contribution of all Board members; and • committing the time necessary to effectively discharge the role of the Chairman. The Chief Executive Officer is responsible for:

• implementing the Company’s strategies and policies; and • running the affairs of the Company under the delegated authority from the Board. The Board specifies that the roles of the Chairman and the Chief Executive Officer are separate roles to be undertaken by separate people.

2(d) Nomination Committee

The Company does not comply with ASX Recommendation 2.4. The Company is not of a relevant size to consider formation of a nomination committee to deal with the selection and appointment of new Directors and as such a nomination committee has not been formed.

Nominations of new Directors are considered by the full Board in accordance with the Company’s “Selection of New Directors Policy”.

2(e) Independent Directors

The Company recognises that independent directors are important in assuring shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance. The Board assesses each of the directors against specific criteria to decide whether they are in a position to exercise independent judgment.

Directors of Westgold Resources Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a Director:

• is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

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2. THE BOARD OF DIRECTORS (Continued) 2(e) Independent Directors (Continued)

• is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;

• has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;

• is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or

• has a material contractual relationship with the Company or another Company member other than as a Director.

The Company does not comply with ASX Recommendation 2.1. While there is a majority of non-executive Directors there is not a majority of independent Directors on the Board. In accordance with the definition of independence above, only one of the Directors (Mr Atkins) of the Company is considered to be independent.

The Board believes that the Company is not of sufficient size to warrant the inclusion of more independent non-executive Directors in order to meet the ASX recommendation of maintaining a majority of independent non-executive Directors. The Company maintains a mix of Directors from different backgrounds with complementary skills and experience.

In recognition of the importance of independent views and the Board’s role in supervising the activities of management the Chairman must be a non-executive director.

2(f) Avoidance of conflicts of interest by a Director

In order to ensure that any interests of a Director in a particular matter to be considered by the Board are known by each Director, each Director is required by the Company to disclose any relationships, duties or interests held that may give rise to a potential conflict. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matters in which they may have an interest.

2(g) Board access to information and independent advice

Directors are able to access members of the management team at any time to request relevant information. There are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the company’s expense.

2(h) Review of Board performance

The performance of the Board is reviewed regularly by the Chairman. The Chairman conducts performance evaluations which involve an assessment of each Board member’s performance against specific and measurable qualitative and quantitative performance criteria. The performance criteria against which directors and executives are assessed is aligned with the financial and non-financial objectives of Westgold Resources Limited. Directors whose performance is consistently unsatisfactory may be asked to retire.

3. BOARD COMMITTEES 3(a) Audit Committee

Given the size and scale of the Company’s operations the full Board undertakes the role of the Audit Committee. The Audit Committee does not comply with ASX Recommendation 4.2 as only three of the five members are non-executive Directors and only one is considered to be an independent Director (refer 2(e)). The role and responsibilities of the Audit Committee are summarised below.

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3. BOARD COMMITTEES (Continued) 3(a) Audit Committee (Continued)

The Board is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. The Board sets aside time to deal with issues and responsibilities usually delegated to the Audit Committee to ensure the integrity of the financial statements of the Consolidated Entity and the independence of the auditor.

The Board reviews the audited annual and half-year financial statements and any reports which accompany published financial statements and recommends their approval to the members. The Board also reviews annually the appointment of the external auditor, their independence and their fees.

The Board is also responsible for establishing policies on risk oversight and management. The Company has not formed a separate Risk Management Committee due to the size and scale of its operations.

External Auditors

The Company’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. It is Ernst & Young's policy to rotate engagement partners on listed companies at least every five years.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the notes to the financial statements in the Annual Report.

There is no indemnity provided by the Company to the auditor in respect of any potential liability to third parties.

The external auditor is requested to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and preparation and content of the audit report.

The directors are satisfied that the provision of any non-audit services during the year by the auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act.

The directors are satisfied that the provision of any non-audit services does not compromise the auditor’s independence requirements of the Corporations Act because the services were provided by persons who were not involved in the audit.

3(b) Remuneration Committee

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

The Board has not established a separate Remuneration Committee due to the size and scale of its operations. This does not comply with Recommendation 8.1 however the Board as a whole takes responsibility for such issues.

The responsibilities include setting policies for senior officers remuneration, setting the terms and conditions for the CEO, reviewing and making recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration of both executive and non-executive directors and undertaking reviews of the CEO’s performance.

The Company has structured the remuneration of its senior executives such that it comprises a fixed salary, statutory superannuation and participation in the Company’s Long Term Incentive Plan. The Company believes that by remunerating senior executives in this manner it rewards them for performance and aligns their interests with those of shareholders and increases the Company’s performance.

Non-executive directors are paid their fees out of the maximum aggregate amount approved by shareholders for non-executive director remuneration.

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3. BOARD COMMITTEES (Continued) 3(b) Remuneration Committee (Continued)

The remuneration received by directors and executives in the current period is contained in the “Remuneration Report” within the Directors’ Report of the Annual Report.

4. ETHICAL AND RESPONSIBLE DECISION MAKING 4(a) Code of Ethics and Conduct

The Board endeavours to ensure that the Directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities. The “Code of Conduct” sets out the principles, practices, and standards of personal behaviour the Company expects people to adopt in their daily business activities.

All Directors, officers and employees are required to comply with the Code of Conduct. Senior managers are expected to ensure that employees, contractors, consultants, agents and partners under their supervision are aware of the Company’s expectations as set out in the Code of Conduct.

All Directors, officers and employees are expected to:

• comply with the law; • act in the best interests of the Company; • be responsible and accountable for their actions; and • observe the ethical principles of fairness, honesty and truthfulness, including prompt disclosure

of potential conflicts. 4(b) Policy concerning trading in Company securities

The Company’s “Securities Trading Policy” applies to all directors, officers and employees. This policy sets out the restrictions on dealing in securities by people who work for, or are associated with the Company and is intended to assist in maintaining market confidence in the integrity of dealings in the Company’s securities. The policy stipulates that the only appropriate time for a Director, officer or employee to deal in the Company’s securities is when they are not in possession of price sensitive information that is not generally available to the market. As a matter of practice, Company shares may only be dealt with by Directors and officers of the Company under the following guidelines:

• No trading is permitted in the period of two weeks prior to the announcement to the ASX of the Company's full year, half year and quarterly results or any other designated blackout period;

• Guidelines are to be considered complementary to and not replace the various sections of the Corporations Act 2001 dealing with insider trading; and

• Obtain the prior written consent of the Chairman (or two of the other Directors/Board if you are the Chairman).

4(c) Policy concerning diversity

The Company encourages diversity in employment throughout the Company and in the composition of the Board, as a mechanism to ensure that the Company is able to draw on a variety of skill, talent and previous experiences in order to maximise the Company’s performance. The Company’s “Diversity Policy” has been implemented to ensure the Company has the benefit of a diverse range of employees with different skills, experience, age, gender, race and cultural backgrounds, and that the Company reports its results on an annual basis in achieving measurable targets which are set by the Board as part of implementation of the Diversity Policy. The Diversity Policy is available on the Corporate Governance section of the Company’s website.

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4. ETHICAL AND RESPONSIBLE DECISION MAKING (Continued)

The table below outlines the diversity objectives established by the Board, the steps taken during the year to achieve these objectives, and the outcomes.

Objectives Position

Increase the number of women in the workforce, including management and at board level.

There were no key senior female appointments made during the year.

As at 30 June 2012, women represented 30% in the Consolidated Entity’s workforce (2011: 33%), nil in key management positions (2011: nil) and Nil at board level (2011: Nil).

Review gender pay gaps on an annual basis and implement actions to address any variances.

As a part of the annual remuneration review, the Board assesses the performance and salaries of all key management personnel and executive directors. Any gender pay disparities are addressed.

Provide flexible workplace arrangements. During the year Westgold employed 2 employees on flexible work arrangements (2011: 2).

Provide career development opportunities for every employee, irrespective of any cultural, gender and other differences.

Whilst Westgold places special focus on gender diversity, career development opportunities are equal for all employees. Employees are encouraged to attend professional development courses/workshops throughout the year.

Promote an inclusive culture that treats the workforce with fairness and respect.

Westgold has set a zero tolerance policy against discrimination of employees at all levels. The Company provides avenues to employees to voice their concerns or report any discrimination. No cases of discrimination were reported during the year (2011: Nil).

5. TIMELY AND BALANCED DISCLOSURE 5(a) Shareholder communication

The Company believes that all shareholders should have equal and timely access to material information about the Company including its financial situation, performance, ownership and governance. The Company’s “ASX Disclosure Policy” encourages effective communication with its shareholders by requiring that Company announcements:

• be factual and subject to internal vetting and authorisation before issue; • be made in a timely manner; • not omit material information; • be expressed in a clear and objective manner to allow investors to assess the impact of the

information when making investment decisions; • be in compliance with ASX Listing Rules continuous disclosure requirements; and • be placed on the Company’s website promptly following release.

Shareholders are encouraged to participate in general meetings. Copies of addresses by the Chairman or Chief Executive Officer are disclosed to the market and posted on the Company’s website. The Company’s external auditor attends the Company’s annual general meeting to answer shareholder questions about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.

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5. TIMELY AND BALANCED DISCLOSURE (Continue) 5(b) Continuous disclosure policy

The Company is committed to ensuring that shareholders and the market are provided with full and timely information and that all stakeholders have equal opportunities to receive externally available information issued by the Company. The Company’s “ASX Disclosure Policy” described in 5(a) reinforces the Company’s commitment to continuous disclosure and outline management’s accountabilities and the processes to be followed for ensuring compliance.

The policy also contains guidelines on information that may be price sensitive. The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements with the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX.

6. RECOGNISING AND MANAGING RISK

The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. The Company’s policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives. A written policy in relation to risk oversight and management has been established (“Risk Management Policy”). Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn responsibilities.

6(a) Board oversight of the risk management system

The Board is responsible for approving and overseeing the risk management system. The Board reviews, at least annually, the effectiveness of the implementation of the risk management controls and procedures.

The principle aim of the system of internal control is the management of business risks, with a view to enhancing the value of shareholders' investments and safeguarding assets. Although no system of internal control can provide absolute assurance that the business risks will be fully mitigated, the internal control systems have been designed to meet the Company's specific needs and the risks to which it is exposed.

Annually, the Board is responsible for identifying the risks facing the Company, assessing the risks and ensuring that there are controls for these risks, which are to be designed to ensure that any identified risk is reduced to an acceptable level.

The Board is also responsible for identifying and monitoring areas of significant business risk. Internal control measures currently adopted by the Board include:

• monthly reporting to the Board in respect of operations and the Company’s financial position, with a comparison of actual results against budget; and

• regular reports to the Board by appropriate members of the management team and/or independent advisers, outlining the nature of particular risks and highlighting measures which are either in place or can be adopted to manage or mitigate those risks.

The Company’s risk management system is evolving. It is an on-going process and it is recognised that the level and extent of the risk management system will evolve commensurate with the development and growth of the Company’s activities.

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6. RECOGNISING AND MANAGING RISK (Continued) 6(b) Risk management roles and responsibilities

The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Executive management is responsible for implementing the Board approved risk management strategy and developing policies, controls, processes and procedures to identify and manage risks in all of the Company’s activities. The Board is responsible for satisfying itself that management has developed and implemented a sound system of risk management and internal control.

6(c) Chief Executive Officer and Chief Financial Officer/Company Secretary Certification

The Chief Executive Officer and Chief Financial Officer provide to the Board written certification that in all material respects:

• The Company’s financial statements present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards;

• The statement given to the Board on the integrity of the Company’s financial statements is founded on a sound system of risk management and internal compliance and controls which implements the policies adopted by the Board; and

• The Company’s risk management an internal compliance and control system is operating efficiently and effectively in all material respects.

6(d) Internal review and risk evaluation

Assurance is provided to the Board by executive management on the adequacy and effectiveness of management controls for risk on a regular basis.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2012

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Note2012

$2011

$

Interest revenue 4 (b) 478,431 587,883 Other income 4 (a) 358,620 1,850

Depreciation expense 5(a) (284,390) (214,317) Other expenses 5(b) (3,523,721) (2,305,436) Exploration expenditure written off 13 (3,138,938) (450,413) Stamp duty - (2,000,000) Impairment of goodwill (1,509,845) - Loss on disposal of available-for-sale financial assets (3,308,600) - Gain on remeasurement of existing interest in controlled entity at date of acquisition - 5,560,181

(Loss)/Profit before income tax (10,928,443) 1,179,748

Income tax (expense)/benefit 6 - 3,490,520

Net (Loss)/profit for the period attributable toequity holders of the Company (10,928,443) 4,670,268

Other comprehensive income

Net change in fair value of available-for-sale investment - (4,160,000)

Reclassification adjustment on disposal of available-for-sale financial investment (reclassification of assets) 4,160,000 (800,000) Other comprehensive income/(loss) for the period, net of tax 4,160,000 (4,960,000)

Total comprehensive (loss) for the period (6,768,443) (289,732)

2012cents

2011cents

Basic (loss/earnings) per share (cents per share) 7 (2.64) 1.72

Diluted (loss/earnings) per share (cents per share) 7 (2.64) 1.72

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION for the Year Ended 30 June 2012

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ASSETS Note2012

$2011

$CURRENT ASSETSCash and cash equivalents 8 3,680,012 11,255,181 Other receivables 9 25,015 87,156 Other assets 10 17,033 22,393

TOTAL CURRENT ASSETS 3,722,060 11,364,730

NON-CURRENT ASSETSOther Receivables 9 3,438,218 3,443,225 Available-for-sale financial assets 11 - 4,320,000 Property, plant and equipment 12 1,096,601 1,254,784 Deferred Exploration and evaluation expenditure 13 103,564,171 95,741,565 Goodwill 14 - 1,509,845

TOTAL NON-CURRENT ASSETS 108,098,990 106,269,419

TOTAL ASSETS 111,821,050 117,634,149

LIABILITIESCURRENT LIABILITIESTrade and other payables 15 3,992,807 4,184,408 Provisions 16 160,471 186,297

TOTAL CURRENT LIABILITIES 4,153,278 4,370,705

NON-CURRENT LIABILITIESTrade and other payables 15 6,708 - Employee benefits provisions 16 54,311 53,247 Provision for rehabilitation 16 3,149,000 3,149,000

TOTAL NON-CURRENT LIABILITIES 3,210,019 3,202,247

TOTAL LIABILITIES 7,363,297 7,572,952

NET ASSETS 104,457,753 110,061,197

EQUITYIssued capital 17 171,644,902 171,119,902 Reserves 18 5,299,340 499,341 Accumulated losses 18 (72,486,489) (61,558,046)

TOTAL EQUITY 104,457,753 110,061,197


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CONSOLIDATED STATEMENT OF CASH FLOWS for the Year Ended 30 June 2012

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Note2012

$2011

$

CASH FLOWS FROM OPERATING ACTIVITIESPayments to suppliers and employees (2,858,540) (2,484,844) Interest received 478,431 564,383 Other income 358,552 1,850

NET CASH FLOWS USED IN OPERATING ACTIVITIES 21 (2,021,557) (1,918,611)

CASH FLOWS FROM INVESTING ACTIVITIESPayments for exploration and evaluation expenditure (10,614,020) (9,558,789) Proceeds from the sale of available-for-sale financial assets 5,171,400 - Payments for available-for-sale financial assets - (1,709,819) Cash acquired on purchase of subsidiary - 9,780,816 Proceeds form sale of plant and equipment - 20 Purchase of property, plant and equipment (126,207) (319,661) Payments for security deposit 5,007 (45,010)

NET CASH FLOWS USED IN INVESTING ACTIVITIES (5,563,820) (1,852,444)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings 10,500 - Repayment of finance lease liabilities (292) -

NET CASH FLOWS FROM FINANCING ACTIVITIES 10,208 -

NET DECREASE IN CASH AND CASH EQUIVALENTS HELD (7,575,169) (3,771,055) Cash and cash equivalents at the beginning of the financial period 11,255,181 15,026,236

CASH AND CASH EQUIVALENTS AT THE END OF YEAR 21 3,680,012 11,255,181


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the Year Ended 30 June 2012

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Issued capital

$

Other reserve

$

Option reserve

$

Accumulated losses

$

Total equity

$

At 1 July 2010 113,384,013 598,788 718,751 (66,228,314) 48,473,238 Profit for the period - - - 4,670,268 4,670,268 Transfer of net gain on available-for-sale financial asset transferred to income statement - (800,000) - - (800,000)

Net movement in available-for-sale investments - (4,160,000) - - (4,160,000) Total comprehensive income for the period - (4,960,000) - 4,670,268 (289,732) Shares issued on acquisition of subsidiary 57,735,889 - - - 57,735,889 Options issued on acquisition of subsidiary - - 3,967,093 - 3,967,093 Share-based payment - - 174,709 - 174,709

At 30 June 2011 171,119,902 (4,361,212) 4,860,553 (61,558,046) 110,061,197

At 1 July 2011 171,119,902 (4,361,212) 4,860,553 (61,558,046) 110,061,197 Loss for the period - - - (10,928,443) (10,928,443)

Net movement in available-for-sale investments - 4,160,000 - - 4,160,000 Total comprehensive income for the period - 4,160,000 - (10,928,443) (6,768,443) Acquisition of joint venture interest 525,000 - - - 525,000 Share-based payment - - 639,999 - 639,999

At 30 June 2012 171,644,902 (201,212) 5,500,552 (72,486,489) 104,457,753


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NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

for the Year Ended 30 June 2012

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1. CORPORATE INFORMATION

The consolidated financial statements of Westgold Resources Limited for the year ended 30 June 2012 were authorised for issue in accordance with a resolution of the Board of Directors on 27 September 2012.

Westgold Resources Limited (the “Company”) is a company limited by shares incorporate and domiciled in Australia whose shares ar publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group are described in the Directors’ Report.

The consolidated financial statements of the Company as at and for the year ended 30 June 2012 comprise the Company, its subsidiaries (together referred to as the “Group” or “Consolidated Entity”) and the Group’s interest in associates.

2. SIGNIFICANT ACCOUNTING POLICIES Summary

(a) Basis of Preparation

The financial report is a general purpose financial report which has been prepared in accordance with the requiremnents of the Corporations Act 2001, Australian Accounting Standards and other authoritive pronouncements of the Australian Accounting Standards Board.

The consolidated financial statements have been prepared on the historical cost basis except for the available-for-sale financial assets which have been measured at fair value.

The financial report is presented in Australian dollars. The Company is a for profit entity. (b) Going Concern

As at 30 June 2012, the Group has a cash balance of $7.1 million (including $3.4 million in performance bonds) and has utilised approximately $7.6 million of cash during the year as part of its operating and investing activities. Commitments as at 30 June 2012 are $2.66 million. The Group has currently available a $2.5 million cash facility from converting performance bonds provided by Macquarie Bank of which no amount has yet been drawndown. The Directors are satisfied the Group can continue as a going concern. This opinion is based on the following matters;

(i) On 14 May 2012 Westgold announced that it proposed to merge with its major shareholder, Metals X Limited, to be implemented via a Scheme of Arrangement subject to satisfaction of a number of conditions including Westgold shareholder approval and final Court approval. Under the terms of the merger eligible Westgold shareholders will receive 11 Metals X shares for every 10 Westgold shares hled and Westgold option holders will receive 11 new Metals X options for every 10 Westgold options held. A Merger Implementation Agreement was entered into between the parties to enact the proposed merger. The shareholder meeting to approve the merger is to be held on 3 October 2012 with finalisation expected to occur shortly thereafter should a positive result occur.

(ii) The Board will continue to monitor cash reserves and will take appropriate actions to curtail any

shortfall by means of a fresh capital raising should the need arise. (ii) The Board believe they have the ongoing support of the Groups major shareholder. Given the firm level of support indicated by the market, its major shareholder, mandate with Credit Suisse and the ongoing definitive feasibility study, combined with a proven and economic reserve, the Board is confident of the Group continuing as a going concern.

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2. SIGNIFICANT ACCOUNTING POLICIES (Continued) (b) Going Concern (continued)

Should the Group be unable to materially achieve the matters set out above or complete any other alternative forms of fund raisings there is significant uncertainty as to whether the Group will be able to meet its debts as and when they fall due and thus continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

(c) Compliance with IFRS The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board which include International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Adoption of new accounting standards The accounting policies adopted are consistent with those of prior periods. In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on 1 July 2011. The adoption of these new and revised Standards and Interpretations did not have any effect on the financial position or performance of the Group. The Australian Standards and Interpretations mandatory for reporting periods beginning on or after 1 July 2011, adopted include:

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2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reference Title Application Date of Standard

Application Date for

Consolidated Entity

AASB 124 (Revised)

The revised AASB 124 Related Party Disclosures (December 2009) simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition, including: (a) The definition now identifies a subsidiary and an associate with

the same investor as related parties of each other (b) Entities significantly influenced by one person and entities

significantly influenced by a close member of the family of that person are no longer related parties of each other

(c) The definition now identifies that, whenever a person or entity has both joint control over a second entity and joint control or significant influence over a third party, the second and third entities are related to each other

A partial exemption is also provided from the disclosure requirements for government-related entities. Entities that are related by virtue of being controlled by the same government can provide reduced related party disclosures.

1 January 2011 1 July 2011

AASB 2009-12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] Makes numerous editorial changes to a range of Australian Accounting Standards and Interpretations. In particular, it amends AASB 8 Operating Segments to require an entity to exercise judgement in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. It also makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRS by the IASB.


AASB 2010-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13] Emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with financial instruments. Clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. Provides guidance to illustrate how to apply disclosure principles in AASB 134 for significant events and transactions. Clarifies that when the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme, is to be taken into account.


AASB 2010-5 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRS by the IASB. These amendments have no major impact on the requirements of the amended pronouncements.


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Reference Title Application Date of Standard

Application Date for

Consolidated Entity

AASB 1054

Australian Additional Disclosures This standard is as a consequence of phase 1 of the joint Trans-Tasman Convergence project of the AASB and FRSB. This standard, with AASB 2011-1 relocates all Australian specific disclosures from other standards to one place and revises disclosures in the following areas: (a) Compliance with Australian Accounting Standards (b) The statutory basis or reporting framework for financial statements (c) Whether the entity is a for-profit or not-for-profit entity (d) Whether the financial statements are general purpose or special

purpose (e) Audit fees (f) Imputation credits

1 July 2011 1 July 2011

AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] The amendments increase the disclosure requirements for transactions involving transfers of financial assets but which are not derecognised and introduce new disclosures for assets that are derecognised but the entity continues to have a continuing exposure to the asset after the sale.

1 July 2011 1 July 2011

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New and xxx Standards and Interpretations Issued but not yet effective

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Consolidated Entity for the annual reporting period ending 30 June 2012. A full assessment has not yet been completed of the impact of all the new or amended Accounting Standards and interpretations issued but not effective. These are outlined in the table below:

Reference Title Summary Application Date of Standard

Application Date for Consolidated

Entity AASB 2011-9 Amendments to

Australian Accounting Standards – Presentation of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]

This Standard requires entities to group items presented in other comprehensive income on the basis of whether they might be reclassified subsequently to profit or loss and those that will not.

1 July 2012 1 July 2012

AASB 10 Consolidated Financial Statements

AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112 Consolidation – Special Purpose Entities.

The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. Consequential amendments were also made to other standards via AASB 2011-7.


AASB 12 Disclosure of Interests in Other Entities

AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgments made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.

1 January 2013

1 July 2013

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Entity AASB 13 Fair Value

Measurement AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. Consequential amendments were also made to other standards via AASB 2011-8.


Interpretation 20

Stripping Costs in the Production Phase of a Surface Mine

This interpretation applies to stripping costs incurred during the production phase of a surface mine. Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate that it is probable future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of an ore body for which access has been improved. This asset is to be called the “stripping activity asset”. The stripping activity asset shall be depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied unless another method is more appropriate. Consequential amendments were also made to other standards via AASB 2011-12.

1 January 2013

1 July 2013

AASB 119 Employee Benefits The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment removes the options for accounting for the liability, and requires that the liabilities arising from such plans is recognized in full with actuarial gains and losses being recognized in other comprehensive income. It also revised the method of calculating the return on plan assets. The revised standard changes the definition of short-term employee benefits. The distinction between short-term and other long-term employee benefits is now based on whether the benefits are expected to be settled wholly within 12 months after the reporting date. Consequential amendments were also made to other standards via AASB 2011-10.


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Entity AASB 1053 Application of Tiers

of Australian Accounting Standards

This Standard establishes a differential financial reporting framework consisting of two Tiers of reporting requirements for preparing general purpose financial statements: (a) Tier 1: Australian Accounting Standards (b) Tier 2: Australian Accounting Standards –

Reduced Disclosure Requirements Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and substantially reduced disclosures corresponding to those requirements. The following entities apply Tier 1 requirements in preparing general purpose financial statements: (a) For-profit entities in the private sector that

have public accountability (as defined in this Standard)

(b) The Australian Government and State, Territory and Local Governments

The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements: (a) For-profit private sector entities that do not

have public accountability (b) All not-for-profit private sector entities (c) Public sector entities other than the

Australian Government and State, Territory and Local Governments.

Consequential amendments to other standards to implement the regime were introduced by AASB 2010-2, 2011-2, 2011-6, 2011-11 and 2012-1.

1 July 2013 1 July 2013

AASB 2012-2

Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities

AASB 2012-2 principally amends AASB 7 Financial Instruments: Disclosures to require disclosure of information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position.


AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124]

This Amendment deletes from AASB 124 individual key management personnel disclosure requirements for disclosing entities that are not companies.

1 July 2013 1 July 2013

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Entity AASB 2012-5 Amendments to

Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle; and

AASB 2012-5 makes amendments resulting from the 2009-2011 Annual Improvements Cycle. The Standard addresses a range of improvements, including the following: • repeat application of AASB 1 is permitted (AASB 1); and • clarification of the comparative information requirements when an entity provides a third balance sheet (AASB 101 Presentation of Financial Statements).


AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities;

AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement.


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Entity AASB 9 Financial

Instruments AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are described below. (a) Financial assets that are debt instruments

will be classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows.

(b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.

(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

(d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: ► The change attributable to changes in

credit risk are presented in other comprehensive income (OCI)

► The remaining change is presented in profit or loss

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7 and 2010-10.

1 January 2013* 1 July 2013

AASB ED 215 Mandatory effective date of IFRS 9 proposes to defer the mandatory effective date of

AASB 9 from annual periods beginning 1 January 2013 to annual periods beginning on or after 1 January 2015, with early application permitted. At the time of preparation, finalisation of ED 215 is still pending by the AASB. However, the IASB has deferred the mandatory effective date of IFRS 9 to annual periods beginning on or after 1 January 2015, with early application permitted.

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(c) Basis of Consolidation

The consolidated financial statements comprise the financial statements of the parent entity and its subsidiaries (‘the Consolidated Entity’) as at 30 June each year.

Subsidiaries are all those entities over which the Consolidated Entity has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a consolidated entity controls another entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions, have been eliminated in full.

Subsidiaries are fully consolidated from the date on which control is obtained by the Consolidated Entity and cease to be consolidated from the date on which control is transferred out of the Consolidated Entity.

Where there is loss of control of a controlled entity, the consolidated financial statements include the results for the part of the reporting period during which the Company has control.

Changes in ownership interest of a subsidiary (without a change in control) is accounted for as a transaction with owners in their capacity as owners.

(d) Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of AASB 139, it is measured in accordance with the appropriate IFRS.

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(e) Segment Reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors.

(f) Foreign currency translation

Both the functional and presentation currency of Westgold Resources Limited and its Australian subsidiaries is Australian dollars (A$).

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

All exchange differences in the consolidated financial report are recorded in profit and loss.

(g) Plant and Equipment

Plant and equipment is stated at historical cost less accumulated depreciation.

Capital work-in-progress is stated at cost and comprises all costs directly attributable to bringing the assets under construction ready to their intended use. Capital work-in-progress is transferred to property, plant and equipment at cost on completion.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset which ranges between 3 and 5 years.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of comprehensive income in the period the item is derecognised.

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(h) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are repared separately for each of the Group’s CGUs to which the individual assets are allocated.

These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the income statement in expense categories consistent with the function of the impaired asset, except for a property previously revalued and the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

(i) Financial Instruments

Non derivative financial instruments Non derivative financial instruments comprise investments in equity securities, other receivables, cash and cash equivalents and trade and other payables.

Investments are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When non-derivative financial instruments are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs.

A financial instrument is recognised if the Group becomes a party to the contracted provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from that financial asset expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset.

All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace. F

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Other Receivables: Other non-derivative financial instruments are measured at amortised cost using the effective interest method.

Available-for-sale investments The Group’s investment in equity securities are classified as available-for-sale financial assets. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity other than impairment losses. When an investment is derecognised the cumulative gain or loss previously reported in equity is transferred to profit or loss.

(j) Impairment of financial assets

The Group assesses, at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ”loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and when observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

(k) Exploration and evaluation expenditure

Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward at cost where rights to tenure of the area of interest are current and:

i) it is expected that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively by its sale; and/or

ii) exploration and evaluation activities are continuing in an area of interest but at balance date have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Where uncertainty exists as to the future viability of certain areas, the value of the area of interest is written off to the statement of comprehensive income or provided against.

Impairment

The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in the statement of comprehensive income.

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(l) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purposes of the Statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest bearing loans and borrowings in the current liabilities on the statement of financial position.

(m) Trade and other receivables

Trade and other receivables, which generally have 30-60 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less an allowance for impairment.

Collectibility of trade and other receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

(n) Trade and other payables

Trade payables and other payables are carried at amortised cost and due to their short-term nature they are not discounted. They represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial year that are unpaid and arise when the Consolidated Entity becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and usually paid within 30 days of recognition.

(o) Provisions

Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.

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(p) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured regardless of when the payment is being made. The following specific recognition criteria must also be met before revenue is recognised:

Interest Income

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(q) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(r) Earnings Per Share

Basic earnings per share is calculated as net profit attributable to members, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members, adjusted for:

• Costs of servicing equity (other than dividends) and preference share dividends;

• The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(s) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating Leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis.

Finance Leases

Leases which effectively transfer substantially all the risks and benefits incidental to ownership of the leased item to the Consolidated Entity are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of comprehensive income.

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(t) Income tax

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, and where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except:

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised income taxes are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

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Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of amounts of GST recoverable from, or payable to, the taxation authority.

Employees benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave due to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts due to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(iii) Superannuation

Contributions made by the Consolidated Entity to employee superannuation funds, which are defined contribution plans, are charged as an expense when incurred.

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Share based payment transactions

The Consolidated Entity provides benefits to employees (including Directors) in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

The Consolidated Entity has one plan in place that provides these benefits. It is the Long Term Incentive Plan (“LTIP”) which provides benefits to all employees including Directors. The scheme has no direct performance requirements. The terms of the share options and performance rights are as determined by the Board. Where a participant ceases employment prior to the vesting of their share options or performance rights, the share options or performance rights are forfeited. Where a participant ceases employment after the vesting of their share options or performance rights, the share options or performance rights automatically lapse after one month of ceasing employment unless the Board decides otherwise at its discretion.

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using a Black & Scholes model or Monte Carlo simulation. Further details of which are given in note 25.

In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of the Company (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income is the product of (i) the grant date fair value of the award; (ii) the current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and (iii) the expired portion of the vesting period. The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding credit to equity.

Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so. Any award subject to a market condition is considered to vest irrespective of whether or not the market condition is fulfilled, provided that all other conditions are satisfied.

If a non-vesting condition is within the control of the Consolidated Entity, Company or the employee, the failure to satisfy the condition is treated as a cancellation. If a non-vesting condition within the control of neither the Consolidated Entity, Company nor employee is not satisfied during the vesting period, any expense for the award not previously recognised is recognised over the remaining vesting period, unless the award is forfeited.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

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3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources.

Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.

(i) Significant accounting estimates and assumptions

Share-based payment transactions

The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black & Scholes model and Monte Carlo simulation, using the assumptions as discussed in note 25. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities in the next annual reporting period but may impact expenses and equity.

Impairment of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Consolidated Entity decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination is made.

Impairment of property, plant and equipment

Property, plant and equipment is reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of “value in use” (being net present value of expected future cash flows of the relevant cash generating unit) and “fair value less costs to sell”.

In determining the value in use, future cash flows are based on: • estimates of the quantities of ore reserves and mineral resources for which there is a high degree of

confidence of economic extraction; • future production levels; • future commodity prices; and • future cash costs of production.

Variations to the expected cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which in turn could impact future financial results.

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2012

$ 2011

$ 4. REVENUES

The loss before income tax includes the following revenues whose disclosure is relevant in explaining the performance of the entity.

(a) Other incomeOther income 358,620 1,850

(b) Interest revenueInterest received - other parties 478,431 587,883

5. EXPENSES AND LOSSES

(a) DepreciationDepreciation of plant & equipment 284,390 214,317

284,390 214,317 (b) Other expenses

(i) Employee benefits expenseWages and salaries 1,443,399 950,848 Superannuation expenses 78,675 45,756 Other employee benefits 51,795 25,286 Share based payments 639,999 1,907 Total employee benefits 2,213,868 1,023,797

(ii) Administration and other expensesOperating lease rentals 161,609 91,867 Legal and professional fees 384,557 150,527 Administration expenses 763,687 1,025,035 Loss on disposal of property plant and equipment - 14,210 Total administration and other expenses 1,309,853 1,281,639 Total administration and other expenses 3,523,721 2,305,436

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2012

$ 2011

$ 6. INCOME TAX

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the applicable income tax rate is as follows:

(a) Numerical reconciliation between aggregate tax expense recognised in the income statement and tax expense calculated per the statutory income rate Accounting (loss)/profit before income tax (10,928,443) 1,179,748

At the Group’s statutory income rate 30% (2010: 30%) (3,278,533) 353,294

Adjustments in respect of current year income tax Share-based payments expense 192,000 572 Other non-deductible items 1,611 88,466 Goodwill impaiment 452,954 - Loss on sale of investments not recognised 992,580 - Gain realised on consolidation - (1,668,054) Stamp duty on acquisition - 600,000

(1,639,388) (625,092)

Unrecognised tax losses 1,639,388 625,092 Deferred Tax Asset on temporary differences and tax losses brought to account at balance date - 3,490,520 Income tax benefit for the year - 3,490,520

Deferred income tax Deferred income tax at 30 June relates to the following: Deferred tax liabilities Capitalised mining and exploration expenditure (19,446,652) (14,581,297) Property, plant and equipment (27,092) (27,092)

Available-for-sale financial assets - Gross deferred tax liabilities (19,473,744) (14,608,389)

Deferred tax assets - Income tax losses 23,374,830 17,657,692 Rehabilitations provisions 960,993 944,700 Available-for-sale financial assets - 600,000 Other temporary differences 467,612 24,844 Deferred tax assets not recognised (5,329,691) (4,618,847) Gross deferred tax assets 19,473,743 (14,608,389)

Deferred tax income/(expense) - -

Net deferred tax recognised in the statement of financial position - -

The deferred tax assets not recognised have not been brought to account at balance date as the realisation of these is not probable.

This benefit (which has been calculated as 30% of losses and deductions available) will only be obtained if:

(i) The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;

(ii) The Group continues to comply with the conditions for deductibility imposed by the tax legislation; and (iii) No changes in tax legislation adversely affect the Company in realising the benefit from the deduction for

the losses.

The Group’s carried forward tax losses at balance date are $77,916,099 (2011: $58,858,972).

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6. INCOME TAX (Continued)

Tax consolidation

Effective 1 July 2002, for the purposes of income taxation, Westgold Resources Limited and its 100% owned subsidiaries have formed a tax consolidated group. Members of the group have entered into a tax funding agreement in order to allocate income tax expense to the wholly-owned subsidiaries on a pro-rata basis. In addition, the agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At the balance date, the possibility of default is remote. The head entity of the tax consolidated group is Westgold Resources Limited.

7. EARNINGS PER SHARE

2012

$ 2011

$ Net (loss)/profit attributable to ordinary equity holders (10,928,443) 4,670,268

Net (loss)/profit attributable to ordinary equity holders for diluted earnings per share (10,928,443) 4,670,268

Basic (loss)/profit per share (cents) (2.64) 1.72 Fully diluted (loss)/profit per share (cents) (2.64) 1.72

Weighted average number of ordinary shares for basic earnings per share 414,663,583 270,795,664

Effect of dilution:Share options - 302,544

Weighted average number of ordinary shares adjusted for the effect of dilution 414,663,583 271,098,208

The Company had 29,650,000 (2011: 3,050,000) potential ordinary shares (options and performancerights) on issue that are excluded from the calculation of diluted loss per share for the current financialperiod because they were anti-dilutive as their inclusion reduced the loss per share.

There have been no transactions involving ordinary shares or potential ordinary shares since that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and before the completion of these financial statements.

8. CASH AND CASH EQUIVALENTSCash at bank and in hand 26,311 161,656 Short term deposits 3,653,701 11,093,525

3,680,012 11,255,181

Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short term deposit are made for varying periods of between one day and one month depending on the immediate cash requirements of the Company and earns interest at the respective short term deposit rates. Short term deposits have an average maturity of 30 days and have a floating interest rate which has averaged 4.55% (2011: 5.35%).

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2012

$ 2011

$ 9. OTHER RECEIVABLES

CURRENTOther debtors (a) 25,015 87,156

25,015 87,156

NON CURRENTSecurity deposits (b) 3,438,218 3,443,225

3,438,218 3,443,225

(a) Other receivables are non-interest bearing and are generally on 30 - 90 day terms. (b) The security deposits are interest bearing and are used as security for government performance bonds.

10. OTHER ASSETSCURRENTPrepayments 17,033 22,393

17,033 22,393 11. OTHER INVESTMENTS

Available-for-sale financial assets - 4,320,000 - 4,320,000

(i) During the year the Company sold its 9.74% (2011 9.74%) interest in Rum Jungle Limited in two transactions for a total cash consideration of $5,171,400.

12. PROPERTY, PLANT AND EQUIPMENT

Land and buildings 601,936 601,936 Accumulated depreciation (54,167) (36,039)

547,769 565,897

Plant and equipment 1,413,763 1,289,869 Accumulated depreciation (864,931) (600,982)

548,832 688,887 1,096,601 1,254,784

ReconciliationLand and bulidings:Carrying amount at beginning 565,897 310,174 Acquisition of subsidiary - 239,378 Additions - 33,227 Depreciation charge for year (18,128) (16,882)

547,769 565,897

Plant and equipment:Carrying amount at beginning 688,887 445,109 Acquisition of subsidiary - 169,009 Additions 126,207 286,431 Disposals - (14,227) Depreciation charge for year (266,262) (197,435)

548,832 688,887

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2012

$ 2011

$

13. DEFERRED EXPLORATION AND EVALUATION EXPENDITURECosts carried forward in respect of areas of interest in:Carrying amount of exploration and evaluation 103,564,171 95,741,565

ReconciliationA reconciliation of the carrying amounts of exploration and evaluation expenditure is set out below.

Exploration and/or evaluation expenditureCarrying amount at the beginning of year 95,741,565 26,205,695 Acquisition of subsidiary - 59,950,000 Additions 10,961,544 10,036,283 Expenditure written off (3,138,938) (450,413)

Carrying amount at the end of year 103,564,171 95,741,565 Ultimate recoupment of costs carried forward in respect of areas of interest in the exploration and evaluation phases is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas. The consolidated entity has an interest in certain exploration tenements and the amounts shown above include amounts expended to date in the acquisition and/or exploration of those tenements. Please refer to Note 20 for details on the AngloGold Ashanti Clawback Agreement.

Impairment - During the year a review was undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Where uncertainty existed as to the future viability of certain areas, the value of that area of interest was written off to the statement of comprehensive income. In assessing the carrying value of each area of interest certain expenditure on exploration and evaluation of mineral resources at these specific areas have not led to the discovery of commercially viable quantities of mineral resources. As a result exploration and evaluation expenditure of $3,138,938 (2011: $450,413) was written off to the statement of comprehensive income.

14. INTANGIBLE ASSETSGoodwill - 1,509,845

On 7 April 2011 Westgold completed its acquisition of Aragon Resources Limited, a publicly listed Australian company which owns the Central Murchison Gold Project near Cue Western Australia. Westgold provisionally calculated the fair value of the deferred exploration and evaluation expenditure on Central Murchison Gold Project tenements acquired as $57,969,325. However its fair value as at the acquisition date was subsequently determined to be $59,950,000.

As a result, the goodwill (exploration potential) balance in the comparative period has been adjusted by $1,980,675 to $1,509,845 at 30 June 2012.The goodwill acquired represents the premium arising as a result of accounting for the acquisition. The directors have determined that there is no future benefit arising from this asset and accordingly have recognised an impairment loss for this goodwill amount. The recoverable amount used to determine the impairment loss was the estimated fair value less costs to sell.

15. TRADE AND OTHER PAYABLESCURRENTTrade creditors and accruals (a) 3,989,307 4,184,408 Lease liability 3,500 -

3,992,807 4,184,408 (a) Trade creditors are non-interest bearing and generally on 30 day terms.

NON CURRENTLease liability 6,708 -

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2012

$ 2011

$

16. PROVISIONSCURRENTProvision for annual leave 160,471 186,297

NON CURRENTProvision for long service leave 54,311 53,247 Provision for rehabilitation (a) 3,149,000 3,149,000

3,203,311 3,202,247

(a) Movement in provision for rehabilitationAt 1 July 3,149,000 - Arising during the year - - Arising from acquisition - 3,149,000 Unwind of discount - -

Environmental obligations associated with the retirement or disposal of mining properties and/or of exploration activities are recognised when the disturbance occurs and are based on the extent of the damage incurred. The provision is measured as the present value of the future expenditure. It is expected that this obligation will be satisfied at the end of any future mining operations on the relevant tenements.

17. CONTRIBUTED EQUITY

Ordinary SharesIssued and fully paid 171,644,902 171,119,902

Number of shares $

At 1 July 2010 227,933,846 113,384,013 Issued during the year

- acquisition of subsidiary 1 186,244,805 57,735,889 At 30 June 2011 414,178,651 171,119,902

Issued during the year- acquisition of interest in joint venture 2 3,000,000 525,000

At 30 June 2012 417,178,651 171,644,902

1 In the previous financial year the Company issued 186,244,805 fully paid ordinary shares as partial consideration for the acquisition of Aragon Resources Limited at a deemed acquisition date of 7 April 2 On 3 May 2012 the Company issue 3,000,000 shares and paid $150,000 cash to acquire the 49% relevant interest in the Great Fingall Deeps from Great Fingall Mining Company NL.

(a) Terms and conditions of contributed equity Ordinary Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of, and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

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17. CONTRIBUTED EQUITY (continued)

(b) Escrow Restrictions There are 1,000,000 shares with escrow restrictions in the issued capital of the Company.

(c) Capital management Capital managed by the Board includes shareholder equity, which was $171,644,902 at 30 June 2012 (2011: $171,119,902). When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity. Managed capital is disclosed on the face of the statement of financial position and comprises shareholder equity, accumulated losses and reserves. Management may adjust the capital structure to take advantage of favourable costs of capital or higher returns on assets. As the market is constantly changing, management may issue new shares or sell assets to raise cash, change the amount of dividends to be paid to shareholders (if at all) or return capital to shareholders. During the financial year ending 30 June 2012, management did not pay a dividend and does not expect to pay a dividend in the foreseeable future. The Consolidated Entity monitors the adequacy of capital by analysing cash flow forecasts for each of its projects. To a lesser extent, gearing ratios are also used to monitor capital. Appropriate capital levels are maintained to ensure that all approved expenditure programs are adequately funded. This funding is derived from equity.

2012

$ 2011

$

18. RESERVES AND ACCUMULATED LOSSESOther reserve (201,212) (201,212) Options reserve 5,500,552 4,860,553 Net unrealised gains reserve - (4,160,000)

(a) Nature and purpose of reserves

Other reserve - The other reserve is used to record movements that are not attributed to a directly recognised reserve.

Option reserve - The option reserve is used to record the value of the share based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 25 for further details of the Employee Share Option Plan.

Net unrealised gains reserve - This reserve records the movements in the fair value of available-for-sale investments. F

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2012 $

2011 $

19. CAPITAL AND OTHER COMMITMENTSOperating lease commitmentsFuture operating lease rentals of office space provided for in the financial statements and payable:- not later than one year - - - later than one year but not later than five years - -

- -

(a) Remuneration commitmentsCommitments for the payment of salaries and other remuneration under long term contracts in existence at reporting date but not recognised as liabilities, payable:- not later than one year 214,805 169,174

Amounts disclosed are remuneration commitments that relate to termination payments arising from employment agreements of Directors and Executives referred to in the Remuneration Report. The amounts are not recognised as liabilities and are not included in the Directors or Executive Remuneration. - -

(b) Exploration commitmentsIn order to maintain current rights of tenure to exploration permits, the consolidated entity has certain obligations to expend minimum amounts of money. The following exploration expenditure requirements have not been provided for in the financial report and are payable:- not later than one year 697,736 1,849,359 - later than one year but not later than five years 1,970,001 1,533,477

2,667,737 3,382,836

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20. CONTINGENT LIABILITIES AND ASSETS

(a) As at 30 June 2012, the Company had a bank guarantee outstanding of $50,000 (2011: $50,000) in favour of the Central Land Council over tenements in the Northern Territory. This guarantee will only be called upon if the Group fails to meet its environmental obligations in respect of certain mining leases, as if it fails to meet its obligations under the agreement with the Central Land Council. The bank guarantee is secured against a cash deposit with the bank that has issued the guarantee (refer to Note 9).

(b) As at 30 June 2012, the Group had bank guarantees outstanding totalling $nil (2011: $10,000) in favour of the Minister for Mines. These guarantees will only be called upon if the Group fails to meet its environmental obligations in respect of certain mining leases, or if it fails to meet its obligations under the lease. All of the bank guarantees are secured against cash deposits with the bank that has issued the guarantees.

(c) As at 30 June 2012, the Group had bank guarantees outstanding totalling $111,129 (2011: $51,140) in favour of the Northern Territory Department of Resources. These guarantees will only be called upon if the Group fails to meet its environmental obligations in respect of certain mining leases, or if it fails to meet its obligations under the lease. All of the bank guarantees are secured against cash deposits with the bank that has issued the guarantees.

(d) As at 30 June 2012, the Group had several performance bonds outstanding for a total of $3,149,000 (2011: $3,149,000) in favour of the Department of Mines and Petroleum over tenements in Western Australia. These performance bonds will only be called upon if the Group fails to meet its environmental obligations in respect of certain mining leases, or if it fails to meet its obligations under the agreement with the Department of Mines and Petroleum. The performance bonds are secured against a cash deposit with the bank has issued the performance bonds.

(e) AngloGold Ashanti Clawback Agreement - AngloGold holds the right to earn back a 75% interest in any individual resource defined within the tenements acquired from AngloGold (with the exception of Rover 1 and Explorer 108), under specific terms, conditions, specified payments and performance hurdles. On 1 September 2010 Westgold announced it had agreed with AngloGold various amendments to the Clawback Agreement for future prospects.

1. If Westgold define a JORC compliant resource of 500,000 AuEq ounces or more within the defined tenements then:

(a) Westgold must advise AngloGold within 7 days of the resource estimate;

(b) AngloGold must define an area of interest (“AOI”) of no less than 20 sq km’s and up to 150 sq km centred on the JORC compliant resource; and

(c) AngloGold has 9 months to notify Westgold whether it wishes to exercise its claw-back option to proceed with the claw-back of a 75% interest.

2. Should AngloGold exercise its claw-back option it must fulfil all of the following obligations to earn its 75% claw-back interest:

(a) Reimburse Westgold three times (3x) its past expenditure on the tenement containing the AOI the subject of the claw-back (but excluding any expenditure relating to previous AOI’s on the same tenement whether or not the option to claw-back was exercised in respect to such AOI);

(b) Define a JORC compliant resource of at least 2 million AuEq ounces within 30 months from the date of the exercise of the claw-back option; and

(c) Complete a detailed feasibility study on the AOI within 5 years from the date of exercising the option (i.e. Inclusive of the 30 months to define the 2 million AuEq ounces), although AngloGold may request that Westgold agree to an extension of time to complete the feasibility study and such an extension shall not be unreasonably withheld by Westgold.

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20. CONTINGENT LIABILITIES AND ASSETS (Continued)

In addition, the parties have agreed:

1. The measure for AuEq to be related to the primary commodity and the next most valuable co-commodity only and using commodity prices at the time of notification.

2. If Westgold makes an application for a Mineral Lease (“MLA”) over an area which contains a JORC compliant resource of less than 500,000 AuEq ounces it will trigger an equivalent claw-back right by AngloGold within that area of the MLA only.

3. AngloGold may conduct sole risk exploration on any part of the tenement areas for the purposes of making a decision with respect to a claw-back.

(a) As part consideration for the acquisition of the 49% of the Great Fingall Deeps interest Westgold has agreed to a deferred payment of AUD $5 per ounce for all ounces produced from the AOI in the Great Fingall Farm-in Agreement.

2012

$ 2011

$

21. STATEMENT OF CASH FLOWS

(a) Reconcilation of the net profit/(loss) after income tax to the net cash flow of the operationsNet profit/(loss) (10,928,443) 4,670,268

Non-cash items:- Depreciation 284,390 214,317 - Loss on sale of plant and equipment - 14,210 - Share based payments 639,999 1,907 - Write off exploration expenditure 3,138,938 450,413 - Provision for stamp duty - (2,000,000) - (Loss)/gain on realisation of available-for-sale financial assets 3,308,600 (5,560,181) - Impairment of goodwill 1,509,845 - - Income tax benefit recognised - 3,490,520

(2,046,671) 1,281,454

Changes in assets and liabilities:- (Increase)/decrease in receivables 62,141 (85,666) - (Increase)/decrease in prepayments (5,360) (22,393) - Increase/(decrease) in trade and other creditors (6,905) (3,219,068) - Increase/(decrease) in employment entitlements (24,762) 127,062 Net cash used in operating activities (2,021,557) (1,918,611)

(b) Reconciliation of Cash

Cash balance comprises: Cash 3,680,012 11,255,181

For the purposes of the cash flow statements, cash includes cash on hand and in banks and investments in money market instruments, net of outsourcing bank overdrafts and performance bonds. Cash at bank earns interest at floating interest rates based on daily bank deposit rates.

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22. SEGMENT INFORMATION

Identification of reportable segment

The Group identifies its operating segments based on the internal reports that are reviewed and used by the executive management team (chief operating decision makers) in assessing performance and determining the allocation of resources.

The operating segments are identified by management based on the manner in which resources are allocated. Discrete financial information about each of these operating businesses is reported to the executive management team on at least a monthly basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the mineral being mined or explored and their location, as these are the sources of the Group’s major risks and have the most effect on rates of return.

The Group comprises the following reportable segments:

- Rover Project Exploration for gold/copper in the Northern Territory

- Central Murchison Gold Project (CMGP) Exploration and development of gold assets located at Cue, Western Australia

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the executive management team and Board of Directors as the chief operating decision makers is in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

The Group does not have any inter-entity sales. Corporate charges comprise non-segmental expenses such as head office expenses and interest. Corporate charges are not allocated to operating segments.

It’s the Group’s policy that if items of revenue and expense are not allocated to operating segments then any associated assets and liabilities are not allocated to segments. This is to avoid allocations within segments which management believe would be inconsistent.

The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• Fair value gains/losses on financial instruments. • Net gains on disposal of available-for-sale investments. • Finance costs.

The following table presents revenue and profit/(loss) information for reportable segments for the years ended 30 June 2012 and 30 June 2011.

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22. SEGMENT INFORMATION (Continued)

Year ended 30 June 2012

Rover $

CMGP $

Total segments

$

Unallocated adjustments

and eliminations

$

Consolidated $

RevenueInterest revenue 2,299 138 2,437 475,994 478,431 Total revenue 2,299 138 2,437 475,994 478,431

ResultsDepreciation (183,834) (51,655) (235,489) (48,901) (284,390) Exploration expenditure written off (11,377) (93,516) (104,893) (3,034,045) (3,138,938)

Segment result (157,138) (93,368) (250,506) (10,677,937) (10,928,443)

Segment assets 38,357,330 66,572,859 104,930,189 6,890,861 111,821,050

Capital expenditure 24,730 42,749 67,479 58,728 126,207

Segment liabilities 39,131,472 19,945,766 59,077,238 (51,713,941) 7,363,297

Year ended 30 June 2011Rover

$CMGP

$

Total segments

$

Adjustments and

eliminations $

Consolidated $

RevenueInterest revenue 2,223 4 2,227 585,656 587,883 Total revenue 2,223 4 2,227 585,656 587,883

ResultsDepreciation (173,771) (7,035) (180,806) (33,511) (214,317) Exploration expenditure written off (171,106) (110,777) (281,883) (168,530) (450,413)

Segment result (312,390) (116,032) (428,422) 1,608,170 1,179,748

Segment assets 33,417,148 58,691,711 92,108,859 25,525,290 117,634,149

Capital expenditure 312,401 - 312,401 1,118 313,519

Segment liabilities 34,034,150 11,971,250 46,005,400 (38,432,448) 7,572,952

Exploration expenditure written off adjustments relate to exploration expenditure not specifically identifiable to either the Rover or CMGP projects. Segment assets, liabilities and results are eliminated where they relate to intercompany balances and do not form part of either identified segment.

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22. SEGMENT INFORMATION (Continued)

2012

$ 2011

$

Reconciliation of Profit

Segment profit/(loss) (250,506) (428,422) Interest income 475,994 585,656 Loss on disposal of available-for-sale financial assets (3,308,600) - Gain on revaluation of existing interest in controlled entity at date of acquisition - 5,560,181 Stamp duty - (2,000,000) Impairment of goodwill (1,509,845) - Corporate (expenses)/income (6,335,486) (2,537,667)

Total net profit/(loss) before tax per statement of comprehensive income (10,928,443) 1,179,748

Reconciliation of Assets2012

$2011

$Segment operating assets 104,930,189 92,108,859 Unallocated cash and receivables 6,795,145 15,575,445 Available-for-sale financial assets - 4,320,000 Property, plant and equipment 95,716 1,254,784 Unallocated exploration and evaluation - 2,865,216 Intangible assets - 1,509,845 Group operating assets 111,821,050 117,634,149

2012$

2011$

Segment operating liabilities 59,077,238 46,005,400 Trade and other payables 2,794,215 2,685,455 Elimination of intercompany loans (54,722,938) (41,357,447) Provision 214,782 239,544 Group operating liabilities 7,363,297 7,572,952

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23. BUSINESS COMBINATION

(a) Summary of Acquisition

On 7 February 2011 Westgold Resources Limited announced an off-market takeover offer for all of the issued share capital of Aragon Resources Limited, a publicly listed Australian company which owns the Central Murchison Gold Project near Cue Western Australia. The consideration for the offer was on a scrip for scrip basis, being one Westgold share for every one Aragon share held and one new option for every one Aragon option. The offer was successful and resulted in Westgold increasing its ownership of Aragon from 19.75% to 100%. The deemed date for the acquisition is 7 April 2011.

Taking control of Aragon has enabled Westgold to create a substantial mid-tier mining house with combined resources of 3 million Oz gold equivalent and annual production potential of 200,000 ounce gold equivalent within five years.

The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

Equity instruments issued (186,244,805 ordinary shares) 57,735,890

Replacement options issued 4,139,896 61,875,786

As a result of the off-market takeover Westgold realised a gain on its original investment in Aragon of $5,560,181 in the year ended 30 June 2011 which is reflected in the statement of comprehensive income.

Westgold provisionally calculated the fair value of the deferred exploration and evaluation expenditure on Central Murchison Gold Project tenements acquired as $57,969,325. However its fair value as at the acquisition date was subsequently determined to be $59,950,000. As a result, the goodwill (exploration potential) balance in the comparative period has been adjusted by $1,980,675 to $1,509,845 at 30 June 2012.

The goodwill acquired represents the premium arising as a result of accounting for the acquisition. The directors have determined that there is no future benefit arising from this asset and accordingly have recognised an impairment loss for this goodwill amount. The recoverable amount used to determine the impairment loss was the estimated fair value less costs to sell.

Acquisition-related costs

The Group incurred acquisition-related costs of $2,275,950 relating to stamp duty, external legal fees, technical fees and due diligence costs. The legal fees, technical fees and due diligence costs have been included in administration expenses in the Group’s consolidated statement of comprehensive income.

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23. EMPLOYMENT BENEFITS AND SUPERANNUATION COMMITMENTS

2012

$ 2011

$ (a) Employee Benefits

The aggregate employee benefit liability is comprised of:

Provisions (current) 160,471 186,297

(b) The consolidated entity contributes at least 9% of each employee’s gross salary to the employee’s nominated plan in accordance with the superannuation guarantee legislation. In addition, employees may contribute further amounts by way of salary sacrifice.

24. SHARE BASED PAYMENTS

(a) Employee Share Option Plan

The Group has an Employee Share Option Plan (ESOP) for the granting of options to staff members. Options issued under the ESOP have all vested.

Other relevant terms and conditions applicable to options granted under the ESOP include:

(a) Options issued pursuant to the plan will be issued free of charge. (b) The exercise price of the options shall be as the Directors in their absolute discretion determine,

provided the exercise price shall not be less than the weighted average of the last sale price of the Company’s shares on ASX at the close of business on each of the 5 business days immediately preceding the date on which the Directors resolve to grant the options.

(c) Subject to the above, the options may be exercised at any time prior to the expiration of 60 months from the issue date.

(d) The Directors may limit the total number of options which may be exercised under the plan in any year.

(e) Options with a common expiry date may have a different exercise price and exercise date. (f) Options shall lapse upon the earlier of:

(i) The expiry of the exercise period; and (ii) The expiry of 30 days after the option holder ceases to be an employee by reason of dismissal,

resignation or termination of employment, office or services for any reason, except the Directors may resolve within 30 days of such dismissal, resignation or termination, that the options shall lapse on any other terms they consider appropriate.

(g) Upon exercise the options will be settled in ordinary shares of Westgold Resources Limited.

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25. SHARE BASED PAYMENTS (Continued)

(b) Long Term Incentive Plan

The Group adapted a Long Term Incentive Plan (LTIP) that allows for the issue of both performance rights and options to staff members that was approved by shareholders on 24 November 2010. There have been 1,450,000 options issued to staff members during the year ended 30 June 2012.

Options issued under the LTIP have the following relevant terms and conditions:

(a) Options issued pursuant to the plan will be issued free of charge. (b) The exercise price of the options shall be as the Directors in their absolute discretion determine,

provided the exercise price shall not be less than the weighted average of the last sale price of the Company’s shares on ASX at the close of business on each of the 5 business days immediately preceding the date on which the Directors resolve to grant the options.

(c) Subject to the above, the options may be exercised at any time prior to the expiration of 60 months from the issue date.

(d) The Directors may limit the total number of options which may be exercised under the plan in any year. (e) Options with a common expiry date may have a different exercise price and exercise date. (f) Options shall lapse upon the earlier of:

(i) The expiry of the exercise period; and (ii) The expiry of 30 days after the option holder ceases to be an employee by reason of dismissal,

resignation or termination of employment, office or services for any reason, except the Directors may resolve within 30 days of such dismissal, resignation or termination, that the options shall lapse on other terms they consider appropriate.

Performance rights issued under the LTIP have the following relevant terms and conditions:

(a) Performance rights issued pursuant to the plan will be issued free of charge. (b) The performance rights may have performance hurdles attached to them and are therefore not able to

be exercised until those dates that the performance hurdles have been met. (c) Subject to the above, the performance rights may be exercised at any time prior to the expiration of 3

years from the issue date. (d) The Directors may limit the total number of performance rights which may be exercised under the plan in

any year. (e) Performance rights shall lapse upon the earlier of:

(i) The expiry of the exercise period; and (ii) The expiry of 30 days after the performance rights holder ceases to be an employee by reason

of dismissal, resignation or termination of employment, office or services for any reason, except the Directors may resolve within 30 days of such dismissal, resignation or termination, that the performance rights shall lapse on other terms they consider appropriate.

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25. SHARE BASED PAYMENTS (Continued) (c) Summary of options issued under the Employee Share Option Plan

The following table summarises the number (No.) and the weighted average exercise price (WAEP) of, and movements in, share options issued during the year to employees other than to key management personnel which have been disclosed in Note 26.

2012 No.

2012 WAEP

$ 2011 No.

2011 WAEP

$ Outstanding at 1 July 1,175,000 0.46 1,725,000 0.46 Granted during the year 1,450,000 0.29 - - Forfeited during the year (375,000) 0.45 (550,000) 0.46

Outstanding at 30 June 2,250,000 0.35 1,175,000 0.46

Exercisable at 30 June 2,250,000 0.35 1,175,000 0.46 (d) Summary of options issued under the Employee Share Option Plan (Continued)

The outstanding balance as at 30 June 2012 is represented by the following options over ordinary shares, exercisable upon meeting the above terms and conditions:

(a) 250,000 options with an exercise price of $0.45 each, and with an expiry date of 8 November 2012, each with a vesting period of twelve months. All have vested and are exercisable at balance date.

(b) 550,000 options with an exercise price of $0.48 each, and with an expiry date of 25 March 2015, each with a vesting period of twelve months. All have vested and are exercisable at balance date.

(c) 1,450,000 options with an exercise price of $0.29 each, and with an expiry date of 3 July 2014. All vested immediately and are exercisable at reporting date.

(e) Weighted average remaining contract life

The weighted average remaining contract life for the share options outstanding at the end of the year is 2.0 years (2011: 2.2 years).

(f) Weighted average fair value of options granted The weighted average fair value for the share options outstanding at the end of the year is $0.13 (2011: $0.22).

(g) Exercise prices

The range of exercise price for options outstanding at the end of the year was $0.29 to $0.48 (2011: $0.46).

(h) Valuation models of options issued under the Employee Share Option Plan

The fair value of the options is estimated at the date of grant using a Black Scholes model. There were 1,450,000 options issued to employees during the year. 30 June 2012 Grant Date 4 July 2011 Dividend yield (%) - Expected volatility (%) 59.67 Risk-free interest rate (%) 4.78 Expected life of options (years) 3 Option exercise price ($) 0.29 Share price at grant date ($) 0.22 Fair value at grant date ($) 0.078 Number of Options 1,450,000 The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.

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(i) Directors and Executives Options and Performance Rights

In addition to the ESOP, the Company has issued options and performance rights to Directors and Executives from time to time. The terms and conditions of those options and performance rights vary between option holders and performance rights holders. There were 4,375,000 options and 3,050,000 performance rights issued to Director or Executives during the financial year.

Other relevant terms and conditions applicable to options and performance rights granted as above include:

(a) any Directors or Executives vested options and performance rights that are unexercised by the anniversary of their grant date will expire; and

(b) upon exercise, these options and performance rights will be settled in ordinary shares of Westgold Resources Limited.

(j) Summary of options and performance rights issued to Directors and Executives

(i) The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share options issued.

2012 No.

2012 WAEP

$ 2011 No.

2011 WAEP

$ Outstanding at 1 July 850,000 0.57 2,350,000 0.46 Granted during the year 4,375,000 0.28 - - Exercised during the year - - - -

Forfeited during the year (750,000) 0.58 (1,500,000) 0.40

Outstanding at 30 June 4,475,000 0.29 850,000 0.57

Exercisable at 30 June 4,475,000 0.29 850,000 0.57

(ii) The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of performance rights issued.

2012 No.

2011 No.

Outstanding at 1 July - - Granted during the year 3,050,000 - Exercised during the year - - Expired during the year - -

Outstanding at 30 June 3,050,000 -

Exercisable at 30 June - -

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The outstanding balance at 30 June 2012 is represented by the following options and performance rights over ordinary shares, exercisable upon meeting the terms and conditions:

a. 100,000 options over ordinary shares with an exercise price of $0.48 each, expiring 25 March 2015. b. 375,000 options over ordinary shares with an exercise price of $0.29 each expiring 3 July 2014. c. 3,000,000 options over ordinary shares with an exercise price of $0.29 each, expiring 15 August 2014. d. 1,000,000 options over ordinary shares with an exercise price of $0.23 each, expiring 2 November

2014. e. Issued on 15 August 2011 were 2,750,000 performance rights with no exercise price, and an expiry

date of 15 August 2014. Vesting of the performance rights is subject to achieving specific milestones. f. Issued on 2 November 2011 were 300,000 performance rights with no exercise price, and an expiry

date of 2 November 2014. Vesting of the performance rights is subject to achieving specific milestones.

(k) Summary of weighted average remaining contract life of options and performance rights issued to Directors and Executives

The weighted average contractual life for the options outstanding at 30 June 2012 is 2.10 years (2011: 2.52 years) and performance rights outstanding at 30 June 2012 is 2.51 years (2011: nil).

(l) Range of exercise price of options and performance rights issued to Directors and Executives

The range of exercise prices for options outstanding the end of the year was $0.23 to $0.48 (2011: $0.45 - $0.65). The performance rights have no exercise price.

(m) Weighted average fair value of options and performance rights granted to Directors and Executives

The weighted average fair value of options outstanding at the end of the year was $0.08 (2011: $0.27). The weighted average fair value of performance rights outstanding at the end of the year was $0.21 (2011: nil).

(n) Valuation models of options and performance rights issued to Directors and Executives

The fair value of the options is estimated at the date of grant using a Black Scholes model. There were 4,375,000 options issued to directors or executives during the year. 30 June 2012 Grant Date 4 July 2011 15 August 2011 2 November 2011 Dividend yield (%) - - - Expected volatility (%) 59.67 61.91 64.57 Risk-free interest rate (%) 4.78 3.89 3.68 Expected life of options (years) 3 3 3 Option exercise price ($) 0.29 0.29 0.23 Share price at grant date ($) 0.22 0.235 0.18 Fair value at grant date ($) 0.078 0.089 0.069 Number of Options 375,000 3,000,000 1,000,000 The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.

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The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

No other features of options granted were incorporated into the measurement of fair value.

The fair value of the performance rights is estimated at the date of grant using a Monte Carlo simulation model. The following table gives the assumptions made in determining the fair value of the performance rights granted in the year.

30 June 2012 Grant Date 15 August 2011 2 November 2011 Dividend yield (%) - - Expected volatility (%) 70 70 Risk-free interest rate (%) 0 - 3.89 - Expected life of performance rights (years) 3 3 Exercise price ($) - - Share price at grant date ($) 0.235 0.175

The risk free rate is the yield on Australian Government Bonds with a 3 year life which is the effective life of the performance rights at the assumed grant date.

The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

750,000 performance rights have a market capitalisation performance hurdle before they vest and this has been taken into account in determining the fair value.

There is no dividend yield included in the calculation of the fair value as the holders are not entitled to any dividends until the performance rights have vested.

Employee Expenses and Performance Rights 2012

$ 2011

$ Share options granted in 2011 - equity settled

- -

Share options and performance rights granted in 2012 - equity settled

639,999 -

Total expense recognised as employee costs 639,999 - Conditions of vesting for performance rights

(a) 500,000 performance rights vest on achieving first commercial gold production. (b) 500,000 performance rights vest on achieving gold production of more than 50,000 ounces. (c) 150,000 performance rights vest on achieving first commercial gold production from an underground

operation. (d) 650,000 performance rights vest on achieving gold production from a second mining centre. (e) 250,000 performance rights vest for each new discovery that exceeds 500,000 gold equivalent

ounces in JORC compliant measured and/or indicated category. (f) 250,000 performance rights vest for each new gold discovery that translates to 50,000 ounces or

more open-pittable mining reserve; (g) 750,000 performance rights vest when the Company’s market capitalisation exceeds $200 million.

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26. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Details of Key Management Personnel

(i) Directors M Atkins Chairman (non-executive) S Huffadine Managing Director A Beckwith Director (non-executive from 1 July 2012) P Cook Director (non-executive) W Hallam Director (non-executive)

(ii) Executives P Hucker Chief Operating Officer, appointed 31 October 2011 A Chapman Company Secretary D Stephens Exploration Manager, resigned 2 September 2011

(b) Compensation of Key Management Personnel

2012

$ 2011

$ Short-term employment benefits 1,245,647 799,312 Post-employment benefits 118,146 95,033 Termination benefits 208,989 - Share-based payment 579,617 42,521

2,152,399 936,866

The Key management personnel receive no compensation in relation to the management of the Company. The compensation disclosed above represents an allocation of the key management personnel’s estimated compensation from the Group in relation to their services rendered to the Company.

Individual directors and executives compensation disclosure

Information regarding individual directors and executives compensation and some equity instruments disclosures as permitted is provided in the remuneration report section of the directors’ report.

No director has entered into a material contract with the Company or the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year-end.

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26. KEY MANAGEMENT PERSONNEL DISCLOSURES (Continued)

(c) Option holdings of Key Management Personnel

2012 Balance at 1 July 2011

Granted as Remuneration

Options Exercised

Net Change Other

Balance at 30 June 2012

Vested and exercisable

Not vested and not

exercisable Directors M Atkins 250,000 - - - 250,000 250,000 - S Huffadine 600,000 2,000,000 - - 2,600,000 2,600,000 - P Cook 750,000 - - - 750,000 750,000 - W Hallam - - - - - - - A Beckwith - 1,000,000 - - 1,000,000 1,000,000 -

Executives P Hucker - 1,000,000 - - 1,000,000 1,000,000 - A Chapman 350,000 375,000 - (250,000) 475,000 475,000 - D Stephens 500,000 - - (500,000) -

Total 2,450,000 4,375,000 - (750,000) 6,075,000 6,075,000 -



Options Exercised

Net Change Other



Not vested and not

exercisable Directors M Atkins - - - 250,0001 250,000 250,000 - S Huffadine - - - 600,0001 600,000 600,000 - P Cook - - - 750,0001 750,000 750,000 - W Hallam - - - - - - - A Beckwith 1,500,000 - - (1,500,000) - - - P Cmrlec * - - - - - -

Executives - D Stephens 500,000 - - - 500,000 500,000 - A Chapman 350,000 - - - 350,000 350,000 -

Total 2,350,000 - - 100,000 2,450,000 2,450,000 - * P Cmrlec resigned as a director on 31 May 2011.

(d) Performance rights holdings of Key Management Personnel



Net Change Other



Not vested and not

exercisable Directors S Huffadine - 2,000,000 - 2,000,000 - 2,000,000 A Beckwith - 750,000 - 750,000^ - 750,000^

Executives P Hucker - 300,000 - 300,000 - 300,000

Total - 3,050,000 3,050,000 - 3,050,000 ^ Performance rights held by A Beckwith expired on 1 July 2012 upon his termination as an executive director.

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26. KEY MANAGEMENT PERSONNEL DISCLOSURES (Continued)

(e) Shareholdings of Key Management Personnel

2012 Balance at 1 July 2011 Purchases

Received on Exercise of

Options Sales Net Change

Other Balance at

30 June 2012

Directors M Atkins 3,704,520 - - - - 3,704,520 S Huffadine 297,000 - - - - 297,000 A Beckwith 9,269,250 - - - - 9,269,250 P Cook (i) 842,277 - - - - 842,277 W Hallam (i) - - - - - - Executive P Hucker - - - - 25,000 25,000 D Stephens - - - - - - A Chapman 327,500 - - - - 327,500

Total 14,440,547 - - - 25,000 14,465,547

2011 Balance at 1 July 2010 Purchases

Received on Exercise of

Options Sales Net Change

Other Balance at

30 June 2011

Directors M Atkins 3,075,000 - - - 629,5201 3,704,520 S Huffadine - 197,000 - - 100,0001 297,000 A Beckwith 9,125,000 - - - 144,2501 9,269,250 P Cook (i) 750,000 - - - 92,277*1 842,277 W Hallam (i) - - - - * - P Cmrlec (i) 25,000 - - - (25,000) - Executives D Stephens - - - - - - A Chapman 287,500 - - - 40,0001 327,500

Total 13,262,500 197,000 - - 981,047 14,440,547

(i) Mr Cook and Mr Hallam are directors of Metals X Limited which owns 112,539,730 (2011: 103,644,644) fully paid ordinary shares in the Company. Mr Cmrlec was an executive of Metals X Limited.

*Metals X Limited held 20,271,858 shares in Aragon Resources Limited at the time of the off-market takeover and as a result increased the number of shares they hold in the Group.

No shares were granted to key management personnel during the reporting period as remuneration in 2011 and 2012. 1 Shares and options were issued to these key management personnel who held shares and options in Aragon Resources Limited at the time of the off-market takeover by the Company. These share and options were issued on the same terms and conditions as all other Aragon shareholders and option holders.

All equity transactions with specified Directors and specified executives other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arms length.

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27. RELATED PARTY TRANSACTIONS

(a) Subsidiaries

The following were controlled entities during the financial year, and have been included in the consolidated financial statements. The financial years of all controlled entities are the same as that of the Company.

Place of Incorporation and Operation

Type of Shares

Book Value of Investment

% of Shares Held

2012 $

2011 $

2012 %

2011 %

Controlled Entities: Castle Hill Resources NL Australia Ordinary - - 100 100 Delta Oil & Gas Pty Ltd Australia Ordinary 25 25 100 100 Saracen Management Pty Ltd Australia Ordinary 1 1 100 100 Castile Resources Pty Ltd Australia Ordinary 2 2 100 100 Aragon Resources Pty Ltd Australia Ordinary 75,945,786 75,945,786 100 100

75,945,814 75,945,814 Subsidiary Companies of AAG Fulcrum Resources Pty Ltd Australia Ordinary 3,171,607 3,171,607 100 100 Big Bell Gold Operations Pty Ltd Australia Ordinary 8,006,080 8,006,080 100 100

11,177,687 11,177,687

(b) Ultimate parent

Westgold Resources Limited is the ultimate Australian parent company.

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27. RELATED PARTY TRANSACTIONS (Continued) (c) Key Management Personnel

Details of transactions with key management personnel are disclosed in note 26(e).

(d) Transactions with Related Parties

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year:

2012$

2011$

2012$

2011$

Entity with significant influence over the Group:Metals X Limited 20,790 - 447,907 111,593

Aragon Resources Limited * - 2,846 - 4,265 Aziana Limited 2,525 - - -

Bluestone Mines Tasmania Joint Venture Pty Ltd 48,708 - - -

Entity with significant influence over the Group:Metals X Limited 13,662 - 71,736 56,165

Associates:Aziana Limited 297 - - -

Bluestone Mines Tasmania Joint Venture Pty Ltd 4,901 - - -

* Aragon Resources Ltd became part of the Westgold Group on 7 April 2011.

Sales to related parties (inc. GST)

Purchases from related parties (inc. GST)

Amounts owed by related parties (inc. GST)

Amounts owed to related parties (inc. GST)

These transaction relate to costs on-charged to or from Westgold to the above listed entities for services provided.

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28. PARENT ENTITY DISCLOSURES

As at, and throughout, the financial year ending 30 June 2012 the parent company of the Group was Westgold Resources Limited.

Company

2012

$ 2011

$ Current assets 33,943,878 2,374,393 Total assets 111,080,678 112,545,341 Current Liabilities 3,069,531 2,421,337 Total Liabilities 3,123,842 2,486,155

Issued capital 171,644,902 171,119,902 Accumulated losses (70,814,017) (67,546,670) Reserves 7,125,952 6,485,953 Total Equity 107,956,837 110,059,185

(Loss)/profit of the parent entity (3,267,347) (355,853) Total comprehensive income of the parent entity - -

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

Nil

Contingent liabilities of the parent entity

Nil

Contractual commitments by the parent entity for the acquisition of property, plant or equipment

Nil

29. FINANCIAL INSTRUMENTS

Overview

This note presents information about the Group’s exposure to credit, liquidity and market risks, its objectives, policies and processes for measuring and managing risk, and the management of capital.

The Group does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s cash and cash equivalents, receivables from customers and investment securities.

Presently, the Group undertakes exploration and evaluation activities exclusively in Australia. At the reporting date there were no significant concentrations of credit risk.

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29. FINANCIAL INSTRUMENTS (Continued)

Cash and cash equivalents and investment securities

The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have an acceptable credit rating.

Trade and other receivables

As the Group operates primarily in exploration activities, it does not have trade receivables and therefore is not exposed to significant credit risk in relation to trade and other receivables.

Exposure to credit risk

The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was:

Note 2012$

2011$

Other receivables 9 25,015 87,156 Cash and cash equivalents 8 3,680,012 11,255,181 Security desposits 9 3,438,218 3,443,225

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual cash flows. The Group does not have any external borrowings.

The Group may need to raise additional capital in the next 12 months to meet forecast operational and exploration activities. The decision on how the Group will raise future capital will depend on market conditions existing at that time.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Carrying amount

Contractual cash flows

6 mths or less 6-12 mths 1-5 years 5+ years

30 June 2012Trade and other payables 3,989,307 3,989,307 3,878,728 110,579 - -

3,989,307 3,989,307 3,878,728 110,579 - -

30 June 2011Trade and other payables 4,184,408 4,184,408 3,960,226 224,182 - -

4,184,408 4,184,408 3,960,226 224,182 - -

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Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group is not exposed to currency risk and at reporting date the Group holds no financial assets or liabilities which are exposed to foreign currency risk.

Interest rate risk

The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.

The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in short terms deposit at interest rates maturing over 30 day rolling periods or less.

Profile

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

2012$

2011$

Variable rate instrumentsCash at bank and on hand 26,311 161,655 Short term deposits 3,653,701 11,093,526

3,680,012 11,255,181

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased or decreased the Group’s equity and profit or loss by $3,680 (2011: $112,552). This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2011.

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Fair values

Fair values versus carrying amounts

The carrying amounts of financial assets and liabilities approximate fair value. The basis for the assessment of fair values versus carrying value of financial instruments not carried at fair value is described below.

(i) Other receivables, trade and other payables

Other receivables, trade and other payables are short term in nature. As a result, the fair value of these instruments is considered to approximate its fair value.

Fair value hierarchy

The Group uses the following hierarchy for stermining and disclosing the fair value of financial instruments by valuation technique:

Level 1 – quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 – other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly,

Level 3 – techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Available-for-sale investments are categorised as Level 1.

Other Market Price Risk

Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market.Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors.

The primary goal of the Group’s investment strategy is to maximise investment returns.The Group’s investments are solely in equity instruments.

These instruments are classified as available-for-sale and carried at fair value with fair value changes recognised directly in equity until derecognised.The following table details the breakdown of the investment assets and liabilities held by the Group:

Note 2012$

2011$

Listed equities 10 - 4,320,000

Sensitivity analysis

The Group’s equity investments are listed on the Australian Stock Exchange. A 3% increase in stock prices at 30 June 2012 would have increased equity by $nil (2011: $129,600), an equal change in the opposite direction would have decreased equity by an equal but opposite amount.

Commodity Price Risk

The Group operates primarily in the exploration and evaluation phase and accordingly the Group’s financial assets and liabilities are subject to minimal commodity price risk.

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Capital Management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to raise sufficient funds through equity to fund exploration and evaluation activities. The Group monitors capital on the basis of the gearing ratio, however there are no external borrowings as at balance date.

The Group encourages employees to be shareholders through the Executive Share Option Plan and the Long Term Incentive Plan.

There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

30. EVENTS AFTER THE REPORTING PERIOD

On 17 July 2012 Westgold announced that it had lodged the Scheme booklet pertaining to its proposed merger with Metals X Limited with ASIC for review. Westgold has subsequently received both ASIC and Court approval to convene a meeting of Westgold shareholders and option holders which be be held on 3 October 2012. Westgold despatched the Scheme booklet and meeting materials to all shareholders and option holders on 31 August 2012.

It is not possible at the date of this report to determine whether or not the proposed merger will be approved by Westgold shareholders and option holders at the respective meetings. Should the merger be approved it will require final Court approval before the merger can be finalised. Once all conditions have been met and the merger finalised Westgold will become a wholly-owned subsidiary of Metals X and Westgold shareholders will hold approximately 20.9% of the new merged entity.

Should the merger be successful the performance rights held by key management personnel will be cancelled in exchange for a cash payment at that time.

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DIRECTORS’ DECLARATION

1. In the opinion of the directors of Westgold Resources Limited (the “Company”):

(a) the consolidated financial statements and notes and the Remuneration report in the Directors’ report, set out on pages 14 to 21, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2012 and of its performance, for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001;

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a);

(c) there are reasonable grounds, subject to the matters set out in Note 2(a)(ii), to believe that the Company will be able to pay its debts as and when they become due and payable.

2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive officer and chief financial officer for the financial year ended 30 June 2012.

Signed in accordance with a resolution of the directors;

Scott Huffadine Managing Director Perth, 28 September 2012

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Liability limited by a scheme approved under Professional Standards Legislation

GHM:MJ:Westgold:2012:005

Independent auditor's report to the members of Westgold Resources Limited

Report on the financial report

We have audited the accompanying financial report of Westgold Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

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GHM:MJ:Westgold:2012:005

Opinion

In our opinion:

a. the financial report of Westgold Resources Limited is in accordance with the Corporations Act 2001, including:

i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the year ended on that date; and

ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and

b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 2 of the financial report. As a result of these matters there is material uncertainty whether the consolidated entity will continue as a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

Report on the Remuneration Report

We have audited the Remuneration Report included in the Directors' Report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Westgold Resources Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001. Ernst & Young G H Meyerowitz Partner Perth 28 September 2012

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INTERESTS IN MINING TENEMENTS as 19 September 2012

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PROJECT PARTICULARS

TENEMENT NUMBER STATUS WESTGOLD'S INTEREST

Northern Territory McArthur Basin3 EL26028 Granted 100%

EL26029 Granted 100%













Rover EL24541 * Granted 100% EL24989 * 1 Granted 100% EL25343 Application 100% EL25344 Application 100% EL25345 Application 100% EL25427 Granted 100% EL25506 Application 100% EL25507 Application 100% EL25511 * Granted 100% EL25522 Application 100% EL25523 Application 100% EL25524 Application 100% EL25525 Application 100% EL26242 * Application - Vetoed 100% EL26537 * Application 100% EL26538 * Application 100% SEL27039 * 2 Granted 100% Tennant Creek EL25372 Granted 100% EL26033 Granted 100% EL26034 Granted 100% EL28906 Application Refused 100%

Warampi

EL24825 Application 0%5

EL10379 Granted 0%5

EL26527 Granted 0%5

EL6732 Granted 0%5

EL6861 Granted 0%5

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PROJECT PARTICULARS


Western Australia Central Murchison Gold Project (CMGP) E20/216 Granted 100%

E20/505 Granted 100%

G20/1 Granted 100%

G20/11 Granted 100%

G20/2 Granted 100%

G20/3 Granted 100%

G20/4 Granted 100%

L20/21 Granted 100%

L20/39 Granted 100%

M20/17 Granted 100%

M20/192 Granted 100%



M20/333 Application 100%





M20/50 Granted 100%

M20/98 Granted 100%

M20/99 Granted 100%

P20/1578 Granted 100%





E21/153 Application 100%

L20/40 Granted 100%

L20/41 Granted 100%

L21/14 Application 100%







M20/21 Granted 100%


M20/22 Granted 100%




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PROJECT PARTICULARS


(CMGP) M20/298 Granted 100%








M20/78 Granted 100%



P20/1505 Granted 100%

P20/1506 Granted 100%

P20/1735 Granted 100%

P20/1737 Granted 100%

P20/1951 Granted 100%

P20/1964 Granted 100%

P20/1965 Granted 100%

P20/1966 Granted 100%

P20/1967 Granted 100%

P20/1968 Granted 100%

P20/1969 Granted 100%

P20/1970 Granted 100%

P20/1976 Granted 100%

P20/1991 Granted 100%

P20/1992 Granted 100%

P20/1993 Granted 100%

P20/1994 Granted 100%

P20/1995 Granted 100%

P20/1996 Granted 100%

P20/1997 Granted 100%

P20/1998 Granted 70%




P20/2011 Granted 100%

P20/2133 Granted 100%

P20/2158 Granted 100%

P20/2210 Granted 100%





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PROJECT PARTICULARS


(CMGP) P21/688 Granted 100%



P21/714 Application 100%


P20/1842 Granted 100%



E21/37 Granted 60%

L20/29 Granted 100%

L20/38 Granted 100%

L21/11 Granted 100%


M21/10 Granted 100%







M21/14 Granted 100%


M21/24 Granted 100%

M21/44 Granted 100%

M21/49 Granted 100%

M21/55 Granted 100%

M21/56 Granted 100%

M21/65 Granted 100%

M21/69 Granted 100%

M21/7 Granted 100%

M21/74 Granted 100%

M21/75 Granted 100%

M21/83 Granted 100%

M21/89 Granted 100%

M21/93 Granted 100%









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PROJECT PARTICULARS


(CMGP) P21/584 Granted 100%


















M21/110 Granted 60%




Lake Lefroy E15/1152 Granted 100%


Yandal4 E53/1202 Granted 49%










P53/1468 Granted 100%


* These tenements are subject to a Clawback Agreement with AngloGold Ashanti Australia Limited 1 As of 1 September 2010 this tenement is now subject to the Clawback Agreement with AngloGold Ashanti Australia Limited 2 Excludes the Explorer 108 deposit and surrounding 12km2. Now 100% owned by Westgold without any clawback rights to

AngloGold Ashanti Australia Limited 3 These tenements are held 100% by Westgold but are subject to a joint venture with MMG Exploration Ltd. 4 These tenements are held in joint venture with Mongolian Resource Corporation Ltd (formerly Alamar Resources Limited) 5 Westgold is earning a 51% interest in these tenements under a joint venture agreement.

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SHAREHOLDER INFORMATION

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The following additional information was applicable as at 19 September 2012.

1. SUBSTANTIAL SHAREHOLDERS

The names of the substantial shareholders and the number of shares to which they are entitled are:

Name Number of Shares Percentage

Metals X Limited 112,539,730 26.97% SG Hiscock & Company Limited 22,674,363 5.47%

2. FULLY PAID ORDINARY SHARES

(a) The number of holders of fully paid ordinary shares is 2,543. Holders of fully paid ordinary shares are entitled to one vote per fully paid ordinary share.

(b) Distribution of fully paid ordinary shareholders:

Category (Size of Holding)

Number of Fully Paid Ordinary Shareholders

1 - 1,000 179 1,001 - 5,000 602

5,001 - 10,000 418 10,001 - 100,000 1,028 100,001 and over 316

2,543 (c) The number of fully paid ordinary shareholdings held in less than marketable parcels is 555. (d) The 20 largest fully paid ordinary shareholders together held 61.01% of the securities in this

class.

20 LARGEST FULLY PAID ORDINARY SHAREHOLDERS Name Number %

1. Metals X Limited 112,539,730 26.97 2. National Nominees Limited 35,300,610 8.46 3. Bell Potter Nominees Ltd <BB Nominees A/C> 30,414,529 7.29 4. Fitel Nominees Limited 19,281,139 4.62 5. Mr Andrew Francis Beckwith 6,425,000 1.54 6. Whittingham Securities Pty Limited 5,800,000 1.39 7. Colbern Fiduciary Nominees Pty Ltd 5,050,689 1.21 8. J P Morgan Nominees Australia Limited 4,851,265 1.16 9. Equity Trustees Limited <SGH Tiger A/C> 4,576,924 1.10 10. Kurraba Investments Pty Ltd 3,290,000 0.79 11. Mr Anthony Richard Martin 3,250,000 0.78 12. Ms Sabina Marie Schlink <Hensman Family A/C> 3,000,000 0.72 13. Six Fingers Pty Ltd <Six Fingers Disc A/C> 3,000,000 0.72 14. B&M Jackson Pty Ltd <Jackson Superfund A/C> 2,850,000 0.68 15. Mr Simon Robert Evans + Mrs Kathryn Margaret Evans

<Kamiyacho Super Fund A/C> 2,657,520 0.64

16. Six Fingers Pty Ltd <Six Fingers Disc A/C> 2,560,333 0.61 17. Rask Pty Ltd 2,500,000 0.60 18. BMBH Pty Ltd <BM Bulk Haulage PL SF A/C> 2,400,000 0.58 19. Penand Pty Ltd <Beckwith Super Fund A/C> 2,375,000 0.57 20. Mr Keith E Lindner <Keith E Lindner Living A/C> 2,372,590 0.57

246,074,772 61.01%

There are a total of 417,178,651 fully paid ordinary shares on issue, all of which are listed on Australian Securities Exchange Limited.

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SHAREHOLDER INFORMATION

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3. UNQUOTED EQUITY SECURITIES

As at 19 September 2012 there were 29,650,000 unlisted options and 2,300,000 performance rights outstanding. The holders do not have any voting rights. Of these 6,725,000 options and 2,750,000 performance rights were issued pursuant to the Company’s Long Term Incentive Plan or its Employee Share Option Plan.

Number of Options Exercise Price Expire Date Number of Holders

250,000 $0.45 8 November 2012 1 650,000 $0.48 25 March 2015 5

2,500,000 $0.21 30 November 2012 3 1,000,000 $0.20 7 January 2013 3

500,000 $0.21 30 November 2013 1 17,500,000 $0.20 31 December 2013 12

1,025,000 $0.32 11 January 2014 9 400,000 $0.22 24 August 2014 1

1,825,000 $0.29 4 July 2014 6 3,000,000 $0.29 15 August 2014 2 1,000,000 $0.23 1 November 2014 1

There are 2 holders of performance rights with specific performance hurdles of which 2,000,000 are expiring 15 August 2014 and 300,000 expiring 2 November 2014.

4. REGISTERED AND PRINCIPAL OFFICE

The address of the registered and principal office in Australia is Level 3, 123 Adelaide Terrace, East Perth WA 6004. The telephone number is (61 8) 9326 5700 and the facsimile number is (61 8) 9326 5799.

5. REGISTERS OF SECURITIES

Held at the following address:

Perth: Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace Perth, WA 6000 Telephone: (61 8) 9323 2000 Facsimile: (61 8) 9323 2033

6. RESTRICTED SECURITIES

The Company has 1,000,000 ordinary fully paid shares that are under voluntary ecrow until 3 May 2013.

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