Saracen Mineral : Annual Report 2017

ANNUAL REPORT

ABN: 52 009 215 347

CORPORATE DIRECTORY

Board of Directors

Mr Geoffrey Clifford (Non-Executive Chairman) Mr Raleigh Finlayson (Managing Director)

Mr Mark Connelly (Non-Executive Director) Mr Martin Reed (Non-Executive Director) Dr Roric Smith (Non-Executive Director) Ms Samantha Tough (Non-Executive Director)

Secretary

Mr Jeremy Ryan

Registered Office and Business Address

Level 11, 40 The Esplanade

Perth WA 6000

Telephone: 08 6229 9100

Facsimile: 08 6229 9199 Website: saracen.com.au

Stock Exchange Listing

Listed on the Australian Securities Exchange (ASX Code: SAR)

Auditors

BDO Audit (WA) Pty Ltd

38 Station Street, Subiaco WA 6008

Telephone: +61 8 6382 4600

Facsimile: +61 8 6382 4601

Solicitors

DLA Piper

Level 31, Central Park

152 - 158 St Georges Tce, Perth WA 6000

Bankers

Commonwealth Bank of Australia Limited 367 Collins Street, Melbourne VIC 3000

Share Registry

Computershare Investor Services Pty Limited 452 Johnston Street, Abbotsford VIC 3067

Telephone: 1300 787 272

or: 03 9415 5000

Facsimile: 03 9473 2500

CONTENTS

Managing Director's Report 2

Review of Operations 4

Mineral Resources and Ore Reserves Statement 27

Corporate Governance Statement 31

Directors' Report 42

Auditor's Independence Declaration 74

Financial Statements

• Consolidated Statement of Profit or Loss and Other Comprehensive Income 75

• Consolidated Statement of Financial Position 76

• Consolidated Statement of Changes In Equity 77

• Consolidated Statement of Cash Flows 78

• Notes to the Financial Statements 79

Directors' Declaration 113

Independent Auditor's Report 114

Shareholder Information 119

SARACEN MINERAL HOLDINGS LIMITED I ANNUAL REPORT 2017

Cover image: Drilling beneath the Thunderbox pit.

This page: Commissioning a new excavator. 1

MANAGING DIRECTOR'S REPORT

Dear Shareholders,

It is with great pleasure I report that the 2017 financial year (FY2017) heralded the arrival of Australia's newest 300,000 ounce per annum gold producer - Saracen!

The 300,000 ounce milestone was delivered on time and ahead of budget after first being announced back in March 2015. Our cornerstone value is delivery, and I would like to acknowledge the contribution of all of our employees, contractors, project partners, and stakeholders for their contribution towards achieving this longstanding goal.

Leading a proactive safety culture underpins our delivery, and pleasingly I can report our total incident frequency rate (TIFR) declined from 348 to 281 during FY2017. I am also pleased to report that there were no significant environmental incidents during the year at our operations.

Organic growth was a key focus for Saracen in FY2017, with record exploration funding of $31m (up significantly from a total spend of $25m over the previous two years). This investment delivered excellent results, boosting reserves and growing the mine life at both Carosue Dam and Thunderbox. The deeper drilling at the Karari underground mine is particularly encouraging, with each additional hole not only growing the deposit, but also pointing to higher grades in the future. With Karari located immediately adjacent to the Carosue Dam mill, there is no better place to find more high grade ore. Karari (and indeed all of our active mines) remain open along strike and at depth.

In addition to exploration drilling, we invested in several new growth projects. In response to the growing mine life at Thunderbox we constructed a pipeline to ensure reliable long term water supply to the mill. We commenced mining at the Kailis open pit which will boost the head grade and boost milling rates at Thunderbox. We have also developed an exploration drive at Whirling Dervish, Karari's sister deposit which is adjacent to the Carosue Dam mill.

Saracen is an enthusiastic promoter of our local communities in the Eastern Goldfields of Western Australia, providing funding to numerous community groups including The Leonora Golden Gift, Ride to Conquer Cancer, Perth Special Children's Christmas Parties, Movember, Curtin University students and The Kalgoorlie City Football Club. We continue to provide strong support to the iconic West Australian School of Mines in Kalgoorlie (WASM) and its commitment to provide the world's finest mining and mineral education facilities.

In FY2018 we will be focused on increasing profits and cash generation. Our expanded production will bring in more revenue in a positive gold price environment, and our costs are anticipated to decline significantly. We will also continue to grow our mine life.

RALEIGH FINLAYSON

Managing Director