Thundelarra : Annual Report 2016

Annual Report 2016

CONTENTS
DIRECTORS Philip G Crabb Non-Executive Chairman Frank DeMarte Executive Director Malcolm R J Randall Non-Executive Director CHIEF EXECUTIVE OFFICER Antony Lofthouse	CHAIRMAN'S LETTER 1 CEO'S REVIEW OF OPERATIONS 3 CORPORATE GOVERNANCE STATEMENT 18 DIRECTORS' REPORT 24 REMUNERATION REPORT 27 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 38 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 39 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 40 CONSOLIDATED STATEMENT OF CASH FLOWS 41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 42 DIRECTORS' DECLARATION 72 INDEPENDENT AUDIT REPORT TO THE MEMBERS 73 AUDITOR'S INDEPENDENCE DECLARATION 75 ASX ADDITIONAL INFORMATION 76 ASX ADDITIONAL INFORMATION The Annual Report covers both Thundelarra Limited as an individual entity and the Consolidated Entity consisting of Thundelarra Limited and its controlled entities.
SECRETARY Frank DeMarte
REGISTERED OFFICE AND BUSINESS ADDRESS Suite 8, Level 1, 186 Hampden Road NEDLANDS WA 6009 Telephone: [phone] Facsimile: [phone] Email: [e-mail] Web: www.thundelarra.com Australian Business Number: 74 950 465 654
AUDITOR Stantons International Level 2, 1 Walker Avenue WEST PERTH WA 6005
SHARE REGISTRY Computershare Investor Services Pty Limited Level 11 172 St Georges Terrace PERTH WA 6000 Telephone: [phone] (within Australia) Telephone: [phone] (outside Australia) Facsimile: 1300 783 2555 (within Australia) Facsimile: [phone] (outside Australia)
STOCK EXCHANGE Australian Securities Exchange Limited Home Branch Perth Level 40, Central Park 152-158 St Georges Terrace PERTH WA 6000
ASX CODE THX

CHAIRMAN'S LETTER

Dear Shareholder

It gives me great pleasure to present the 2016 annual report for Thundelarra. Our business and exploration strategies continue to leave your Company well-placed for 2017. The decision in December 2015 to acquire Red Dragon's portfolio of gold assets near Meekatharra in the Murchison district of Western Australia proved to be a wise one: hitting 7m at 24.5 gpt gold from 11m downhole in the first round of drilling at a project is always a good way to start! And when that is followed up with 80m at 1.9 gpt gold from 79m downhole then the signs are very positive for 2017 being an exciting year.

Shareholders in exploration companies recognise that exploration is a high risk game, but it is the potential for high rewards that attracts both investors and explorers. To have any chance of delivering such rewards, explorers MUST put money into the ground to test geologically solid concepts and targets in a systematic and technically rigorous fashion. Your Company recognises this and so manages your cash reserves prudently, while ensuring that at least two thirds of every dollar spent is spent on active exploration - "dollars in the ground".

A total of nine drilling programmes carried out during the year (three diamond and six reverse circulation) tested targets at six separate projects. Your Company drilled 66 holes for a total advance of 11,837m. Geophysical surveys (both surface and downhole) were also conducted at all six of the projects drilled. This is a significant performance for a junior exploration company and clearly demonstrates our commitment to aggressive exploration, especially during such depressed market conditions.

That said, it was very gratifying to see that in 2016, after several years of market downturn, we finally began to see signs of a long-awaited recovery in the resources sector, particularly for gold and lithium explorers. There is still a lot of uncertainty around overall market and investor sentiment for the exploration sector, but there are definitely some green shoots out there and there is money available for exploration stories with some substance. Thundelarra is one such story, as was amply demonstrated by the successful Share Purchase Plan and Placement that raised $4.3 million at 5 cents in June to fund aggressive exploration programmes at our gold projects - particularly Garden Gully, northwest of Meekatharra in Western Australia.

Garden Gully and our other gold projects remain our current principal exploration focus for 2017. This is a direct reflection of the prevailing market sentiment, plus your Board's recognition, that the greatest likelihood for market success and share price appreciation lies with a gold discovery. However, this does NOT mean that we no longer have any faith in the potential of Red Bore. Far from it. The exploration carried out there in 2106 confirmed our geological models and we continue to believe that further VHMS-style mineralisation, of the DeGrussa style, is present there. However, everything we have learned from our exploration results to date points to such a prize sitting at some considerable depth below surface. The issue is therefore one of efficient use of your Company's cash reserves in the hunt for that prize. Until we have evaluated and interpreted all the data in sufficient detail to define a clear target at depth that we can test with follow-up drilling, it makes more sense to direct our exploration dollars towards the exciting new gold discoveries that the initial drilling has already delivered at Garden Gully.

Thundelarra has exciting exploration targets and has the money to be able to explore them effectively and efficiently for the coming year. This maintains our position as one of a relatively select group of companies that continue to be active explorers.

All the Thundelarra management team are shareholders in the Company. During the year we invested more of our own money into the Company through participation in the Share Purchase Plan, with some also making additional on-market purchases. We all have the same desire for exploration success as has every other shareholder.

Our exploration successes continue to be testament to the technical rigour applied by our geological team. Our prospects are not located in simple geological settings. If they were, it is unlikely that they would offer the exploration potential that they do. Exploration success will come from persistence and from patience. Whether it is assays, or geological mapping, or geophysical surveys, or petrological studies of the rock types found and the relationships between them, each successive set of exploration results gives us another piece of the jigsaw puzzle and takes us one step closer to completing the puzzle and making that discovery that we all want. Every shareholder wants quicker results and that is understandable.

CHAIRMAN'S LETTER

But we ask shareholders to remember that we must continue to use our cash reserves wisely. If, as we believe, there is a substantial gold discovery to be made on our ground, and significant VHMS base metal mineralisation at depth below Red Bore, then it is not going anywhere. Our best chance of finding it is to be systematic and patient in our approach. Every exploration dollar must be made to count.

As I've said previously, innovation and creative thinking is the lifeblood of a junior exploration company, and this remains our mantra. Failure is not an option. Thundelarra's commitment to systematic and aggressive exploration will continue unabated in 2017. We will continue to pursue our dreams of exploration success, whether it be at one of our Garden Gully, Mooloogool, White Well or Payne's Find gold projects; or at one of our base metals projects Red Bore, Curara Well, Allamber or Sophie Downs.

As the nickel price begins to show signs of life too, perhaps drilling success at Panoramic's Keller Creek tenement in the East Kimberley may translate to share price rises for Thundelarra. We hold a 20% free-carried interest in that nickel tenement, which hosts the extensions to the Savannah North mineralisation and hence the long-term future of Panoramic's Savannah nickel operations.

I would like to take this opportunity to thank our hard working CEO Tony Lofthouse; Director and Company Secretary Frank DeMarte; fellow Director Mal Randall; and our staff including Bridget Reid and new arrival Jenny Jones, for their dedication and efforts during another challenging year. Particular mention again needs to made of the commitment of our Chief Geologist Costica Vieru. His technical expertise and rigorous evaluation of the geological data garnered from our exploration efforts have been of paramount importance to the exploration successes we have enjoyed this year.

Last but no means least, thank you to you our loyal Shareholders for your continued faith in what we are trying to achieve. I ask that you support the resolutions proposed for the Annual General Meeting and respond by having your proxies voting in favour of those resolutions lodged at an early date.

2017 is showing promise: we have exciting projects and the money to explore them and we will continue to do everything within our power to ensure that your continuing confidence is not misplaced.

Philip G Crabb Chairman