Your Directors present their report on the consolidated entity, consisting of Thundelarra Exploration Limited and the entity it controlled at the end of, or during, the year ended 30 September 2003

Annual Report 2015

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 REVIEW OF OPERATIONS 3 CORPORATE GOVERNANCE STATEMENT 9 DIRECTORS' REPORT 15 REMUNERATION REPORT 18 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 28 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 29 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 30 CONSOLIDATED STATEMENT OF CASH FLOWS 31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 32 DIRECTORS' DECLARATION 65 INDEPENDENT AUDIT REPORT TO THE MEMBERS 66 AUDITOR'S INDEPENDENCE DECLARATION 68 ASX ADDITIONAL INFORMATION 69 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: +618 9389 6927 Facsimile: +618 9389 5593 Email: [email protected] 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: 1300 850 505 (within Australia) Telephone: +61 3 9473 2555 (outside Australia) Facsimile: 1300 783 2555 (within Australia) Facsimile: +61 3 9415 4000 (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 pleasure to present the 2015 annual report for Thundelarra and to be able to say that the hard decisions made in previous years, together with careful cash management practised by all the Thundelarra team, and further outstanding exploration results at our flagship Red Bore copper-gold project, continue to leave your Company well-placed for the coming year.

Like the previous year, 2015 has again failed to deliver the much hoped-for recovery in the resources sector. And indeed many pundits are forecasting no material change to the status quo in 2016. Exploration companies continue to find life in the resources sector extremely challenging and indeed many are either leaving of their own accord to follow a different path or are being forced to shut their doors.

A recent review of the sector noted "…over 700 junior mining and exploration companies in Australia……with 29% having less than $500,000 of cash". A rule of thumb for the sector is that it requires $1,000,000 per annum to keep the doors open of a company that is actively exploring. So that's over 200 companies with nowhere near enough cash to last calendar 2016, even if they just sit on what cash they do have and carry out no exploration. Not much hope of reward for shareholders if your company isn't even drilling holes. Fortunately Thundelarra does not fall into this category and remains an active explorer for copper and gold, having carried out seven drilling programmes during the year, as well as several airborne and ground-based geophysical surveys, over four separate projects.

I have said this before and I have no qualms in repeating it as I believe it is important to highlight this situation. Irrespective of the state of the market - and it is unquestionably still a depressing picture for the overall Australian exploration sector

- if you invest in junior companies you do so because you want them to explore. And that is what Thundelarra continues to do. We are able to do this as a direct result of the successful strategies that we have put in place and the hard decisions we have had to make over the past three years to do our level best to ensure that your Company is in the best possible position to take fullest advantage of the recovery that will eventually come.

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.

The Red Bore granted Mining Lease, located just 500m from Sandfire Resources NL's DeGrussa copper-gold mine in the Doolgunna area of Western Australia, remains our flagship exploration project and we remain irrevocably committed to pursuing the potential that we are convinced it contains - despite assertions to the contrary that we see posted anonymously on share market forums from time to time. All the Thundelarra team are shareholders in the company and so we all have the same desire for exploration success that every other shareholder has.

Our exploration successes at Red Bore are testament to the technical rigour applied by our geological team. The Doolgunna region is not simple - if it was, then it wouldn't offer the exploration potential that it does. Exploration success will come from persistence and from patience. Each successive exploration success is a small step forward towards unlocking the key to the mineral riches that we firmly believe lie somewhere deep below the surface. We know that many shareholders want things to happen quicker, seeing the volume and frequency of drilling results that our neighbours Sandfire release from their Monty discovery in Joint Venture with Talisman. But we ask shareholders to remember that we don't have the balance sheet that they have: they just announced completion of their earn-in of 70% of the JV, having spent $15 million on exploring there in just the past two years. Plus they intend to spend a further $7.5 million there in the next 3 months. Our approach must necessarily be slower so that we don't drain our bank balance in the blink of an eye.

Once again, particular mention needs to made of the dedication and commitment of our Chief Geologist Costica Vieru. His technical expertise and rigorous evaluation of the geological data have been of paramount importance to the exploration successes we have enjoyed this year.

In the past two years I've said that innovation and creative thinking is the lifeblood of a junior exploration company, and this remains our mantra. Failure is not an option. We will continue to pursue our dreams of exploration success, whether it be at Red Bore, Curara Well, Allamber, Sophie Downs, or one of our new gold projects that were added to our portfolio following the post-balance date acquisition of Red Dragon Mines. Thundelarra is a committed explorer and fully intends to remain so during 2016.

Also, don't forget to keep an eye on any drilling results that Panoramic may report for the Keller Creek tenement in the East Kimberley. We hold high hopes for our 20% free-carried interest in that nickel tenement!

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 Costica Vieru and Bridget Reid for their continued support and efforts during another difficult year.

CHAIRMAN'S LETTER

And last but not 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.

Don't forget - 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