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ABN 51 000 617 176

2016 ANNUAL FINANCIAL REPORT

TANAMI GOLD NL ANNUAL FINANCIAL REPORT TABLE OF CONTENTS

DIRECTORS’ REPORT...............................................................................................................................................3 LEAD AUDITOR’S INDEPENDENCE STATEMENT.................................................................................................14 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.....................................................................................................................................................................15 CONSOLIDATED STATEMENT OF FINANCIAL POSITION....................................................................................16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY....................................................................................17 CONSOLIDATED STATEMENT OF CASH FLOWS.................................................................................................18 NOTES TO THE FINANCIAL STATEMENTS............................................................................................................19 DIRECTORS’ DECLARATION...................................................................................................................................43 INDEPENDENT AUDITOR’S REPORT.....................................................................................................................44

TANAMI GOLD NL DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2016

The Directors present their report together with the consolidated financial report of the Consolidated Entity, being the Company and its subsidiaries for the year ended 30 June 2016 and the auditor’s report thereon.

1. Directors

The Directors of the Company at any time during or since the end of the financial year are:

Non-Executive Chairman – Gerard J McMahon (appointed 23 April 2013 as a Non-Executive Director and Chairman as of 6 June 2013)

Mr Gerard McMahon is admitted as a Barrister in Hong Kong and New South Wales and has been living and working in Hong Kong for over 35 years. He is a Non-Executive Chairman of ASX listed Oriental Technologies Investment Limited (appointed 1999), Non-Executive Director of Hong Kong listed Guangnan (Holdings) Limited (appointed 2000), and Non-Executive Director of Indonesian Investment Fund Limited (appointed 2001) a company listed on the Irish Stock Exchange. Mr McMahon is also a consultant to Asian Capital (Corporate Finance) Limited, a Hong Kong based corporate finance and advisory firm which he co-founded. Over the past 30 years, Mr McMahon has been a Director of other listed Companies in the Asia Pacific region which are involved in the banking, manufacturing, retailing, information technology, medical, telecoms & mining industries. Mr McMahon’s past experience includes extensive involvement in Hong Kong’s Securities and Futures Commission as Chief Counsel, Member and Executive Director and is specialised in Hong Kong company law, securities and banking law and takeovers and mergers regulations.

Special responsibilities - Member of the Audit Committee and the Remuneration and Nomination Committee.

Non-Executive Director – Arthur G Dew, B.A., L.L.B. (appointed 2 December 2011)

Mr Dew is a non-practising Barrister with a broad range of corporate and business experience and has served as a Director, and in some instances Chairman of the Board of Directors, of a number of publicly listed companies in Australia, Hong Kong and elsewhere. He is Chairman and NonExecutive Director of Hong Kong listed companies Allied Group Limited, Allied Properties (H.K) Limited and APAC Resources Limited and is a NonExecutive Director of Hong Kong listed SHK Hong Kong Industries Limited. He is also Non-Executive Chairman of ASX listed company’s Dragon Mining Limited and Tian An Australian (previously known as PBD Developments Limited) (appointed 3 December 2015).

Special responsibilities – Mr Dew was a Member of the Audit Committee and the Remuneration and Nomination Committee until 6 June 2013.

Non-Executive Director – Carlisle C Procter, B.Ec, M.Ec, FFin, (appointed 9 December 2011)

Mr Carlisle Procter graduated from the University of Sydney with a Bachelor's Degree and a Master's Degree in Economics. He is a fellow of the Financial Services Institute of Australasia (FFin.). Based in Australia, Mr Procter worked in the Reserve Bank of Australia for over 30 years, holding various senior management positions. Since leaving the Reserve Bank, he has worked as a consultant to the International Monetary Fund and the Asian Development Bank, and has also undertaken private consulting work in the Philippines, Indonesia and Papua New Guinea. Mr Procter has been a Non-Executive Director of a number of public companies. He is a Non-Executive Director of ASX listed company Dragon Mining Limited.

Special responsibilities – Chairman of the Audit Committee and Member Remuneration and Nomination Committee.

Non-Executive Director – Brett Montgomery (appointed 6 February 2013)

Mr Brett Montgomery has extensive experience in the management of publicly listed mining companies having previously been the Managing Director of Kalimantan Gold NL, a Director of Grants Patch Mining Limited and Chairman and Joint Managing Director of Eurogold Limited. Mr Montgomery was appointed a Non-Executive Director of Magnum Gas and Power Limited on 9 October 2008 (resigned 19 August 2016) and NonExecutive Director of EZA Corporation Ltd on 19 November 2014 (resigned 18 January 2016) and Non-Executive Director of Bard1 Life Sciences Limited (formerly Eurogold Limited) on 17 November 2014.

Special responsibilities - Member of the Audit Committee and Chairman of the Remuneration and Nomination Committee.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

2. Company Secretary

Pauline Collinson was appointed Company Secretary on 18 July 2013 and has over 25 years’ experience in the mining industry.

3. Directors’ Meetings

Director	Board Meetings	Board Meetings	Audit Committee Meetings	Audit Committee Meetings	Remuneration and Nomination Committee Meetings	Remuneration and Nomination Committee Meetings
	Eligible to Attend	Attended	Eligible to Attend	Attended	Eligible to Attend	Attended
Mr G McMahon Mr A Dew Mr C Procter Mr B Montgomery Mr M Wong*	3 3 3 3 -	3 3 3 3 -	2 - 2 2 -	2 - 2 2 -	- - - - -	- - - - -

Alternate for Mr Dew

4. Nature of Operations and Principal Activities

The Company is a no liability company and is domiciled and incorporated in Australia. The principal activity of the Consolidated Entity during the course of the financial year was gold exploration. The Company’s exploration centres are situated in the Tanami Desert straddling the Western Australian and Northern Territory border. The Company’s Coyote Gold Project (“Coyote”), placed on care and maintenance in April 2013, is located in Western Australia and consists of a 350,000 tonnes per annum carbon-in-leach treatment plant, leased to ABM Resources NL for 12 months commencing 14 July 2015, and the surrounding Western Tanami Tenements. The Company’s principal asset, the Central Tanami Project (“CTP”) in the Northern Territory is located adjacent to the Tanami Track approximately 90 kilometres east of Coyote and is the subject of an unincorporated joint venture with Northern Star Resources NL.

5. Operating and Financial Review

Joint Venture with Northern Star Resources Limited

On 3 August 2015, the Company announced that the conditions precedent to the Northern Star Resources Limited (“NST”) Heads of Agreement (“NST HoA”) for the CTP had been satisfied and Completion had occurred resulting in the formation of an unincorporated joint venture (“JV”) between the Company (75%) and NST (25%). In accordance with the NST HoA:

NST paid the Company $11.0 million in cash and issued 4,290,228 NST shares to the Company (the shares are not subject to escrow provisions);
NST became the Manager of all JV activities and will sole fund all JV expenditure during the Sole Funding Period; and
JV expenditure includes all costs in connection with the JV activities, including management, exploration, evaluation, assessment, development, mining the tenements which are subject of the JV and, in addition, refurbishing the CTP process plant and associated infrastructure.

The Sole Funding Period will expire on the date on which the process plant at the CTP has been refurbished to operating condition and has operated for a continuous 30 day period or has produced 5,000 ounces of gold ore (whichever occurs first). On the expiry of the Sole Funding Period, NST will have earned a further 35% undivided interest in the CTP (taking NST’s total JV Interest to 60%).

Coyote Plant Agreement with ABM Resources NL

The Coyote Plant Agreement (“Agreement”) with ABM Resources NL (“ABM”) Initial Lease Term (“Lease”) was for 12 months commencing 14 July 2015.

On 13 April 2016, the Company received formal notification from ABM in accordance with the Agreement advising ABM would not be renewing the Lease for a further term of 12 months or exercising an option to purchase Coyote.

ABM remained solely responsible for the management and maintenance of Coyote in accordance with the Agreement up to 13 July 2016 at which point the management and maintenance of Coyote was passed back to the Company.

Refer to section 9 Events Subsequent to Reporting Date for further information.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

Exploration

Western Tanami (100% Tanami)

Activities during 2015 – 2016 have focused on regional exploration of the currently held 533sq km of Western Tanami tenements. Assessment of all previous exploration programs, methods and data, led to the identification of targets in areas of limited surface exploration and the requirement for geological mapping.

Previous studies at Coyote indicate that arsenic provides a broad exploration target for gold even though the relationship can be complicated by multiple partially overlapping geological events. The use of portable XRF arsenic readings was investigated as a low cost and rapid method to vector in on hydrothermal alteration.

Orientation surveys were completed over areas of known mineralisation where comparison with existing multi-element aqua-regia ICPMS results was possible. These included a 400m x 200m survey of soil samples over the Fremlin Trend and a 400m x 200m spaced termite mound survey covering a 2km radius of Coyote Mine Site, including partial coverage of a traverse that had been completed as part of a Ph.D. research project in 2009 (A.Petts; Termitaria as regolith landscape attributes and sampling media in northern Australia. University of Adelaide. 2009). Notwithstanding the presence of contamination and lack of coverage over the open pit and plant area, the survey clearly demonstrated that the use of portable XRF termite mound surveys would identify a concentrated arsenic zone over the Coyote ore body. Studies were also made using different soil, termite and lag size fractions. The use of auger samples in deeper cover areas is currently being trialled.

Portable XRF surveys have been combined with regional interpretation and mapping, either as broad spaced grids over specific regions, or as reconnaissance traverses. During the year, 857 soils, 230 lag, 1820 termite mounds, 121 auger and 239 rock chip samples have been taken (Figure 1). All readings were taken with the same instrument, a Niton xl3t goldd+, and strictly controlled with the use of certified reference materials. No samples have been sent to a commercial laboratory for analysis and verification.

Figure 1: Portable XRF sample locations

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TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

Following a reconnaissance traverse across the sparsely explored region between Fremlin Trend and Rabies Mineralisation, anomalous arsenic values were detected south west of Rabies and immediately south of the Tanami Fault (Rabid South) which was subsequently expanded on a 100m X 100m grid. Discontinuous arsenic anomalism within termite mounds has now been defined for over 2km in a NW trend from Rabid south, and although no samples have been sent to a laboratory for analysis, visible gold has been detected at surface within the defined arsenic anomaly at an area now known as the Nugget Patch (Figure 2). Geological mapping indicates the area is underlain by multi-generational quartz veining; folding and faulting that could represent structural splays off the Tanami Fault. Aircore drilling is due to commence early in the second half of 2016.

Figure 2: Rabid South Area showing arsenic contours

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Central Tanami Exploration (75% Tanami)

NST continues to advance activities at the CTP in the Northern Territory.

During the year, NST as Manager of the CTP JV completed the drilling of 118 holes with over 27,000 metres of Diamond Drilling and 11,000 metres of RC Drilling at the Groundrush Deposit. The following significant intercepts highlight the potential of the Groundrush Deposit:

NGRCD00002 0.3m @ 486.0 g/t Au NGRCD00002 12.7m @ 3.8 g/t Au NGRCD00008 1.8m @ 13.2 g/t Au NGRCD00018 6.9m @ 8.6 g/t Au NGRCD00023 2m @ 26.5 g/t Au NGRCD00023 4.9m @ 11.2 g/t Au NGRCD00037 12m @ 2.6 g/t Au NGRCD00037 0.3m @ 99.7 g/t Au NGRCD00040 0.4m @ 228.0 g/t Au NGRCD00040 2.1m @ 10.9 g/t Au NGRCD00045 2m @ 18.1 g/t Au NGRCD00056 0.3m @ 267.0 g/t Au NGRCD00056 5m @ 5.4 g/t Au NGRCD00062 2.4m @ 36.0 g/t Au NGRCD00067 0.3m @ 87.7 g/t Au NGRCD00071 4.2m @ 13.8 g/t Au NGRCD00077 1m @ 38.2 g/t Au NGRCD00078 0.5m @ 78.7 g/t Au NGRCD00080 0.3m @ 168.0 g/t Au

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

NGRCD00080 9.8m @ 4.2 g/t Au NGRCD00084 0.9m @ 31.0 g/t Au NGRCD00088 0.3m @ 68.6 g/t Au NGRCD00098 1.6m @ 139.6 g/t Au NGRCD00101 3.1m @ 12.9 g/t Au NGRCD00112 1.6m @ 18.6 g/t Au NGRCD00112 0.3m @ 78.5 g/t Au NGRCD00114 19.5m @ 2.5 g/t Au NGRCD00122 1.8m @ 17.8 g/t Au NGRCD00123 1.4m @ 14.8 g/t Au NGRCD00130 3.7m @ 6.0 g/t Au NGRCD00131 11m @ 4.7 g/t Au NGRCD00133 24.6m @ 5.7 g/t Au NGRCD00134 7.7m @ 3.1 g/t Au

Development studies for the CTP are progressing.

Financial Overview

The Consolidated Entity generated a total comprehensive profit for the financial year ended 30 June 2016 of $14,559,000 (2015: Loss $6,612,000).

Notable items during the financial year included:

A profit of $14.8 million on the (25%) sale of the CTP to NST before tax;
Exploration expenditure of $0.7 million (2015: $2.3 million);
A $2.0 million receipt for the initial Term of the Lease for the Coyote gold plant and associated infrastructure from ABM;
A $12.0 million voluntary repayment of Loan Facility with Sun Hung Kai International Bank (Brunei) Limited as detailed below; and
The sale of 3,290,228 shares in NST at an average price of $3.08 per share receiving approximately $10.08 million (net of transactions costs).

A$15.0 Million Loan Facility with Sun Hung Kai International Bank [Brunei] Limited Repaid

On 6 July 2015, the Company made an A$1.0 million drawdown from its unsecured A$15.0 Loan Facility (“Loan Facility”) with Sun Hung Kai International Bank (Brunei) Limited (“SHKIBBL”) leaving A$3.0 million in undrawn funds remaining. The drawdown was used to provide the Company with additional working capital.

On 17 July 2015 and 12 August 2015, the Company made two voluntary prepayments totalling A$12.0 million (plus accrued interest and facility fees to that date) to fully repay its Loan Facility with SHKIBBL. The Loan Facility expired on 30 September 2015.

Loan Facility with AP Finance Limited Expired

The legally binding letter of support from AP Finance Limited to provide an unsecured Loan Facility of A$12 million expired 31 March 2016 and was not renewed by the Company.

Business Strategies and Prospects

As the Company holds a 75% interest in the CTP JV, the Board monitors and provides assistance to the JV Manager NST whilst it is earning its further interest (see CTP Exploration above).

At Western Tanami, the Company is carrying out exploration in accordance with the Mines Department expenditure commitment required to maintain its tenements. With regard to Coyote, the Board will examine other options following the termination of the Coyote Lease with ABM.

Risks

During 2015, the Company advised there was a risk that ABM would not renew the Coyote Lease for a further term of 12 months and/or exercise an option to purchase Coyote. On 13 April 2016, the Company received formal notification confirming this, and on 14 July 2016 management and maintenance of Coyote was handed back to the Company.

As reported above, the Company has entered into the NST HoA. Whilst the Board believes, the CTP will be returned to commercial production, there are risks and uncertainties. These include, but are not limited to, the gold price and a risk that the CTP exploration programme being undertaken by NST does not produce a commercial outcome.

Other risks are set out in note 28 of the financial statements.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

Community Relations

The Company recognises the importance of developing relationships with the Traditional Owners that are based on trust and mutual advantage and of are respectful of the needs and concerns of the communities located within the regions in which it operates. The Company has agreements in place with the Traditional Owners and is committed to building strong relationships by:

Being open and transparent in its communications;
Improving cross-cultural awareness through training and education;
Developing community relations management procedures that include business alliances;
Being sensitive to the values and heritage issues of the local communities; and
Being a good neighbour.

During the year, one meeting was held with the Central Land Council, representing the Traditional Owners. As a consequence of the NST JV, NST now communicates with the Central Land Council.

6. Environmental Regulation

The Consolidated Entity’s operations are subject to environmental regulations under Commonwealth and State legislation. The Directors believe that the Consolidated Entity has adequate systems in place for the management of the requirements under those regulations, and are not aware of any breach of such requirements as they apply to the Consolidated Entity.

7. Significant Changes in the Company’s State of Affairs

Significant changes to the Company’s State of Affairs have been set out in the Operating and Financial Review above and in the Events Subsequent to Reporting Date below.

8. Dividends

The Directors have not recommended the declaration of a dividend. No dividends were paid or declared during the year.

9. Events Subsequent to Reporting Date

On 4 July 2016, the Company sold 250,000 shares in NST at an average price of $5.53 per share receiving approximately $1.37 million (net of costs).

On 14 July 2016, the Coyote Plant Agreement with ABM Resources NL Initial Lease Term expired and on that date, the management and maintenance of Coyote was handed back to the Company.

On 23 September 2016, the Company announced that it had reached agreement with Metals X Limited (“MLX”) that ends the legal proceedings (the “Proceedings”) between the parties. The terms of the settlement are that:

(a) each party provides and receives a full discharge and release from any and all claims in respect of, or arising out of or in connection with the subject matter of the Proceedings,
(b) each party will no longer pursue its claims against the other;
(c) the Proceedings will be dismissed on a no admission of liability basis;
(d) each party will bear its own legal costs; and
(e) the Company will (jointly and severally with Tanami (NT) Pty Ltd) make payment to MLX of $3,000,000.

In reaching this settlement with MLX, the Company has taken into account its legal advice together with the significant costs and inherent uncertainty of litigation, and the substantial time commitments and distraction that the litigation presents for the board and management. The settlement amount has been provided for as at 30 June 2016 (refer note 17) and expensed to the Statement of Consolidated Profit or Loss within corporate and other expenses.

10. Likely Developments

Following on from the NST HoA, the Company expects that NST will continue with its drilling programme at the CTP and refurbishment of the processing facilities.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

11. Directors’ Interests

The relevant interest of each director in shares and options of the Company, as notified by the directors to the Australian Securities Exchange in accordance with section S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Directors	Relevant Interest of Directors in Securities of Tanami Gold NL	Relevant Interest of Directors in Securities of Tanami Gold NL
	Fully Paid Shares	Unquoted Options
Mr G McMahon	1,500,000	-
Mr A Dew	-	-
Mr C Procter	-	-
Mr B Montgomery	20,000,000	-

12. Share Options

Options granted to Directors and Executives of the Company

During or since the end of the financial year, the Company has not granted any options over unissued ordinary shares in the Company to any of the directors as part of their remuneration.

Unissued shares under option

At the date of this report the unissued ordinary shares in the Company under option are:

Number	Type	Exercise Price	Expiry Date
*300,000	Unquoted	$1.34	21 December 2016

The 300,000 options granted to Mr Alan Senior, a former Director of the Company will expire on 21 December 2016 and not before.

During the year, there were no options forfeited due to performance criteria not being achieved or cessation of employment.

Shares issued

Since the end of the financial year, there were no shares issued.

Shares issued on exercise of options

During the financial year no shares were issued by the Company as a result of the exercise of options.

13. Remuneration Report – audited

Remuneration is referred to as compensation throughout this report.

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the Consolidated Entity. Key management personnel comprise the directors of the Company and executives of the Company and the Consolidated Entity.

Compensation levels for key management personnel of the Company and relevant key management personnel of the Consolidated Entity are competitively set to attract and retain appropriately qualified and experienced directors and executives.

The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and to achieve the broader outcome of creation of value for shareholders. Compensation packages include a mix of fixed compensation and equity-based compensation as well as employer contributions to superannuation funds.

Shares and options may only be issued to directors subject to approval by shareholders in a general meeting.

The Board has no established retirement or redundancy schemes.

13.1.1 Fixed Compensation

Fixed compensation consists of base compensation (which is calculated on a total cost basis and includes any FBT charges related to employee benefits), as well as employer contributions to superannuation funds.

Compensation levels are reviewed annually through a process that considers individual performance and the overall performance of the Consolidated Entity.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

13. Remuneration Report – audited (continued)

13.1.2 Performance-linked Compensation (short-term incentive bonus)

Performance linked compensation includes both short-term and long-term incentives, and is designed to reward senior executives for meeting or exceeding their financial and personal objectives.

The Company has not paid any performance linked short-term incentives to key management personnel during the financial year ended 30 June 2016.

13.1.3 Equity-based Compensation (long-term incentive bonus)

The Company has in place an Option and Performance Rights Plan. Options may only be issued to directors subject to approval by shareholders in a general meeting.

The Remuneration and Nomination Committee uses equity-based long-term incentives (LTIs) where appropriate to promote continuity of employment and to provide additional incentive to increase shareholder wealth. LTIs are provided as options over ordinary shares of the Company and are provided to key management personnel and employees based on their level of seniority and position within the Company and are exercisable on various dates.

LTIs shall be in such form and content and with such terms and conditions as the Board determines, including exercise price, vesting conditions, disposal conditions and terms of expiry.

If the option holder ceases to be a director and/or employee of the Company during the vesting period for any reason, the options will expire six months after cessation (subject to the exercise of discretion by the Board) and cease to carry any rights or benefits unless otherwise approved by the Remuneration and Nomination Committee.

There are no voting or dividend rights attached to the options. Voting rights will be attached to the ordinary issued shares when the options have been exercised.

There were no LTI granted during the year.

On 20 September 2012 the Company introduced a policy that prohibits those that are granted share-based payments as part of their remuneration from entering into other arrangements that limit their exposure to losses that would result from share price decreases. Entering into such arrangements has been prohibited by law since 1 July 2011.

13.1.4 Consequences of Performance on Shareholder Wealth

The Company continues to focus on enhancing shareholder value through the leasing of Coyote and the Farm-Out and Joint Venture Agreement with NST at Central Tanami Project outlined previously. To assist shareholders in assessing the Consolidated Entity’s performance and benefits for shareholder wealth, the Company reports the following data for the current financial year and the previous five financial years:

	2016	2015	2014	2013	2012
Profit/(loss) attributable to owners of the Company	$12,568,827	($6,611,780)	($19,627,687)	($68,032,870)	($27,162,014)
Dividendspaid	-	-	-	-	-
Shareprice as at 30 June	$0.049	$0.028	$0.016	$0.054	$0.730

13.1.5 Service Contracts

Compensation and other terms of employment for directors and key management personnel are formalised in contracts of employment. The major provisions of the agreements relating to compensation are set out below.

Mr Daniel Broughton – Chief Financial Officer

Mr Broughton is employed on a contract basis as Chief Financial Officer. The arrangement can be terminated by either party without notice and without a termination payment. Mr Broughton has been Chief Financial Officer since 8 September 2014.

No remuneration consultants were engaged by the Company during the year.

13.2 Non-executive directors

Non-executive directors do not receive performance related compensation. Directors' fees cover all main board activities and membership of any committee. The Board has not established retirement or redundancy schemes in relation to non-executive directors. During the year two of the Non-Executive Directors, Mr Gerard McMahon and Mr Brett Montgomery, each continued their significantly expanded roles in the day-to-day running of the Company. As a result, their contracted remuneration is increased above the base director fees.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

13. Remuneration Report – audited (continued)

13.3 Directors’ and executive officers’ remuneration

Details of the nature and amounts of each major element of the remuneration of each director of the Company and each of the named officers of the Company and the Consolidated Entity receiving the highest remuneration are:

In dollars	In dollars	Short Term	Short Term	Post Employment	Termination Benefits	Share Based Payments
		Salary & Fees	Other Long Term Benefits	Super- annuation Benefits		Calculated Value of Options (Non Cash)	Total Remuneration	Proportion of Remuneration Performance Related %	Value of Options as a Proportion of Total Remuneration
Directors		$	$	$	$	$	$	%	%
G McMahon	2016	100,000	-	9,500	-	-	109,500	-	-
(Non-Executive Chairman)	2015	100,000	-	9,500	-	-	109,500	-	-
A Dew	2016	25,000	-	2,375	-	-	27,375	-	-
(Non-Executive Director)	2015	25,000	-	2,375	-	-	27,375	-	-
C Procter	2016	29,275	-	2,781	-	-	32,056	-	-
(Non-Executive Director)	2015	40,000	-	3,800	-	-	43,800	-	-
B Montgomery	2016	120,000	-	-	-	-	120,000	-	-
(Non-Executive Director)	2015	120,000	-	-	-	-	120,000	-	-

Total all specified Directors	2016	274,275	-	14,656	-	-	288,931	-	-
	2015	285,000	-	15,675	-	-	300,675	-	-
Executives
D Broughton	2016	99,000	-	-	-	-	99,000	-	-
(Chief Financial Officer)	2015	80,300	-	-	-	-	80,300	-	-


Total all named Executives	2016	99,000	-	-	-	-	99,000	-	-
	2015	80,300	-	-	-	-	80,300	-	-

Total all specified Directors	2016	373,275	-	14,656	-	-	387,931	-	-
and Executives	2015	365,300	-	15,675	-	-	380,975	-	-

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

13. Remuneration Report – audited (continued)

13.4 Equity instruments - audited

13.4.1 Options over equity instruments granted as compensation - audited

No options over ordinary shares in the Company were granted as compensation to key management personnel during the reporting period and no options vested during the reporting period.

13.4.2 Modifications of terms of equity-settled share-based payment transactions

No terms of equity-settled share-based payment transactions (including options and rights granted as compensation to key management personnel) have been altered or modified by the issuing entity during the reporting period or the prior period.

13.4.3 Exercise of options granted as compensation

During the financial year, no shares were issued on the exercise of options previously granted as compensation to key management personnel.

13.4.4 Analysis of options and rights over equity instruments granted as compensation - audited

No options have been issued, granted or will vest to key management personnel of the Company.

13.4.5 Analysis of movements in options and rights

There were no options granted during the financial year ended 30 June 2016 to key management personnel.

13.4.6 Shareholdings of Directors and Key Management Personnel

2016

2016
Ordinary Fully Paid Shares	Balance 1 July 2015	Granted as Remuneration	On Market Purchases/ (Sales)	Net change other	Balance 30 June 2016
Directors
Mr G McMahon	-	-	1,500,000	-	1,500,000
Mr A Dew	-	-	-	-	-
Mr C Procter	-	-	-	-	-
Mr B Montgomery	20,000,000	-	-	-	20,000,000
Key Management Personnel
Mr Daniel Broughton	-	-	-	-	-
Total	20,000,000	-	1,500,000	-	21,500,000

2015

Ordinary Fully Paid Shares	Balance 1 July 2014	Granted as Remuneration	On Market Purchases/ (Sales)	Net change other	Balance 30 June 2015
Directors
Mr G McMahon	-	-	-	-	-
Mr A Dew	-	-	-	-	-
Mr C Procter	-	-	-	-	-
Mr B Montgomery	20,000,000	-	-	-	20,000,000
Key Management Personnel
Mr Daniel Broughton	-	-	-	-	-
Total	20,000,000	-	-	-	20,000,000

13.4.7 Options of Directors and Key Management Personnel

2016

No options were issued during the year.

2015

No options were issued during the year.

TANAMI GOLD NL DIRECTORS’ REPORT CONTINUED FOR THE YEAR ENDED 30 JUNE 2016

14. Non-Audit Services

During the year KPMG, the Consolidated Entity’s auditor, performed certain other services in addition to their statutory duties.

The Board has established certain procedures to ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor independence requirements of the Corporations Act 2001. These procedures include:

a. Non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed by the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor.
b. Ensuring non-audit services do not involve the auditors reviewing or auditing their own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amounts paid or payable to the auditor of the Company, KPMG, and its related practices for audit and non-audit services provided during the year are set out below.

provided during the year are set out below.
		Consolidated
	2016		2015
	$		$
Audit services
*Auditors of the Company:*
Audit and review of financial reports	40,000		40,000
Other services (accounting advice)	24,000		-

15. Indemnification and Insurance of Officers

Indemnification

The Company has agreed to indemnify both the current directors of the Company and former directors against liability incurred to a third party (not being the Company or any related company) that may arise from their positions as directors or officers of the Company and its controlled entities, unless the liability arises out of conduct involving a lack of good faith.

The Company has also agreed to cover the costs and expenses incurred in successfully defending civil or criminal proceedings, or in connection with a successful application for relief under the Corporations Act 2001. The Company also provides indemnity against costs and expenses in connection with an application where a court grants relief to a director or officer under the Corporations Act 2001.

Insurance Premiums

Since the end of the 2012 financial year, the Company has paid insurance premiums in respect of directors' and officers' liability insurance, for the directors of the controlled entity. In accordance with subsection 300(9) of the Corporations Act 2001, further details have not been disclosed due to confidentiality provisions of the insurance contracts.

16. Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

The lead auditor's independence declaration is set out on page 14 and forms part of the directors' report for the financial year ended 30 June 2016.

17. Rounding off

The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) and where noted ($’000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors Report) Instrument 2016/191. The Company is an entity to which the instrument applies.

Dated at Perth, Western Australia this 23rd day of September 2016.

Signed in accordance with a resolution of the Directors.

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Gerard McMahon Non-Executive Chairman Perth, Western Australia 23 September 2016

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Tanami Gold NL

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2016 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

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KPMG

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R Gambitta Partner

Perth

23 September 2016

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

TANAMI GOLD NL CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016

Note Revenue from operating activities 2 Other income 2 Profit on sale of assets 3 Care and maintenance costs (includes depreciation, amortisation and impairment) 4 Exploration and evaluation expenses 14 Corporate and other expenses Results from operating activities Financial income 6 Financial expenses 6 Net finance expense Profit/(loss) before income tax Income tax benefit 7 Profit/(loss) from operations Profit/(loss) for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss: Net gain on financial assets classified as available for sale (net of tax) 12 Other comprehensive gain for the year (net of income tax) Total comprehensive profit/(loss) for the year attributable to owners of the Company Earnings per share Basic profit/(loss) per share 25 Diluted profit/(loss) per share 25	2016 2015 $'000 $'000 39 30 2,158 1,355 18,040 263 (2,943) (2,955) (704) (2,296) (4,724) (1,587) 11,866 (5,190) 162 57 (312) (1,479) (150) (1,422) 11,716 (6,612) 853 - 12,569 (6,612) 12,569 (6,612) 1,990 - 1,990 - 14,559 (6,612) 0.011 (0.006) 0.011 (0.006) Consolidated	2016 2015 $'000 $'000 39 30 2,158 1,355 18,040 263 (2,943) (2,955) (704) (2,296) (4,724) (1,587) 11,866 (5,190) 162 57 (312) (1,479) (150) (1,422) 11,716 (6,612) 853 - 12,569 (6,612) 12,569 (6,612) 1,990 - 1,990 - 14,559 (6,612) 0.011 (0.006) 0.011 (0.006) Consolidated
		(5,190) 57 (1,479)
		(1,422)

		(6,612) -
		(6,612)
		(6,612)
		-
		-
		(6,612)
		(0.006)
		(0.006)

The consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes to the financial statements.

TANAMI GOLD NL CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2016

Assets Note Current assets Cash and cash equivalents 9 Other receivables 10 Inventories 11 Available for sale financial assets 12 Total current assets Non-current assets Other receivables 10 Property, plant and equipment 13 Acquired exploration and evaluation 14 Total non-current assets Total assets Liabilities Current liabilities Interest-bearing liabilities 15 Trade and other payables 16 Provisions 17 Deferred revenue 2 Total current liabilities Non-current liabilities Provisions 17 Total non-current liabilities Total liabilities Net assets Equity Issued capital 18 Accumulated losses 19 Reserves Total equity attributable to equity holders of the Company	2016 2015 $'000 $'000 9,180 196 314 378 128 852 4,940 - 14,562 1,426 2,513 2,513 2,646 4,784 15,539 20,719 20,698 28,016 35,260 29,442 - 11,231 411 989 3,018 47 83 - 3,512 12,267 10,090 10,076 10,090 10,076 13,602 22,343 21,658 7,099 317,637 317,637 (298,099) (310,668) 2,120 130 21,658 7,099 Consolidated	2016 2015 $'000 $'000 9,180 196 314 378 128 852 4,940 - 14,562 1,426 2,513 2,513 2,646 4,784 15,539 20,719 20,698 28,016 35,260 29,442 - 11,231 411 989 3,018 47 83 - 3,512 12,267 10,090 10,076 10,090 10,076 13,602 22,343 21,658 7,099 317,637 317,637 (298,099) (310,668) 2,120 130 21,658 7,099 Consolidated
		1,426
		2,513 4,784 20,719
		28,016

		29,442
		11,231 989 47 -
		12,267
		10,076
		10,076

		22,343

		7,099
		317,637 (310,668) 130
		7,099

The consolidated statement of financial position is to be read in conjunction with the accompanying notes to the financial statements.

TANAMI GOLD NL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016

Consolidated Balance at 1 July 2014 Total comprehensive income for the year Loss for the year Total comprehensive loss for the year Transactions with owners, recorded direct to equity Contributions by and distributions to owners Share based payments transactions Total contributions by and distributions to owners Total transaction with owners Balance at 30 June 2015 Consolidated Balance at 1 July 2015 Total comprehensive income for the year Profit for the year Net change in fair value of available for sale financial assets Total comprehensive profit for the year Transactions with owners, recorded direct to equity Balance at 30 June 2016	Issued Capital Accumulated Losses Share Based Payment Reserve Available For Sale Fair Value Reserve Total $'000 $'000 $'000 $'000 $'000 317,637 (305,800) 1,873 - 13,710 - - - (6,612) - - (6,612)
	- (6,612) - - (6,612)
	- 1,743 (1,743) - -
	- 1,743 (1,743) - -
	- 1,743 (1,743) - -
	317,637 (310,668) 130 - 7,099
	317,637 (310,668) 130 - 7,099 - - 12,569 - - 12,569 - - - 1,990 1,990
	- 12,569 - 1,990 14,559
	317,637 (298,099) 130 1,990 21,658

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes to the financial statements.

TANAMI GOLD NL CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016

Cash flows from operating activities Note Cash receipts from customers Cash receipts from ABM lease and dividends Cash payments in the course of operations Cash payments for withholding tax Interest received Interest paid Payments for exploration and evaluation Proceeds from exploration security deposit refunds Net cash used by operating activities 26(b) Cash flows from investing activities Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Proceeds from sale of financial assets Net cash from investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Repayment of finance lease liabilities Net cash (used)/provided from financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of the financial year Cash and cash equivalents at the end of the financial year 26(a)	For year ended 30 Jun 2016 For year ended 30 Jun 2015 $'000 $'000 39 30 2,192 1,301 (2,445) (3,758) (43) (59) 164 63 (195) (500) (848) (2,296) - 201 (1,136) (5,018) - (45) 11,000 664 10,120 - 21,120 619 1,000 4,000 (12,000) - - (330) (11,000) 3,670 8,984 (729) 196 925 9,180 196 Consolidated	For year ended 30 Jun 2016 For year ended 30 Jun 2015 $'000 $'000 39 30 2,192 1,301 (2,445) (3,758) (43) (59) 164 63 (195) (500) (848) (2,296) - 201 (1,136) (5,018) - (45) 11,000 664 10,120 - 21,120 619 1,000 4,000 (12,000) - - (330) (11,000) 3,670 8,984 (729) 196 925 9,180 196 Consolidated
		(5,018)
		(45) 664 -
		619
		4,000 - (330)
		3,670
		(729) 925
		196

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes to the financial statements.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Reporting Entity

Tanami Gold NL (‘the Company’) is a company domiciled in Australia. The address of the Company’s registered office is Unit B1, 431 Roberts Road, Subiaco Western Australia 6008. The consolidated financial statements of the Company as at and for the year ended 30 June 2016 comprise the Company and its subsidiaries (together referred to as the “Consolidated Entity”) and the Consolidated Entity’s interest in associates. The Consolidated Entity is a for profit entity and is primarily involved in gold exploration.

(b) Basis of Preparation

Statement of Compliance

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorised for issue by the Board of Directors on 23 September 2016.

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis.

Functional and Presentation Currency

These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.

Use of estimates and judgements

The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Judgements made by management in the application of the Australian Accounting Standards that have significant effect on the financial report and estimates with a significant risk of material adjustment in the next year are discussed below.

Accounting estimates and judgements

Management discussed with the Audit Committee the development, selection and disclosure of the Consolidated Entity's critical accounting policies and estimates and the application of these policies, estimates and judgements. The estimates and judgements that may have a significant impact on the carrying amount of assets and liabilities are discussed below:

(i) Mine rehabilitation and site restoration provision

The Consolidated Entity assesses its mine rehabilitation and site restoration provision at each balance date in accordance with accounting policy note 1(i). Significant judgement is required in determining the provision for mine rehabilitation and site restoration as there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate and restore the mine sites and related assets. Factors that will affect this liability include future development, changes in technology, price increases and changes in interest rates. When these factors change or become known in the future, such differences will impact the site restoration provision and asset in the period in which they change or become known.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(b) Basis of Preparation (continued)

(ii) Impairment

In accordance with accounting policy note 1(h), the Consolidated Entity, in determining whether the recoverable amount of its cash generating unit is the higher of fair value less costs to sell or value-in-use against which asset impairment is to be considered, undertakes future cash flow calculations which are based on a number of critical estimates and assumptions including, for its mine properties, forward estimates of:

mine life, including quantities of mineral reserves and resources for which there is a high degree of confidence of economic extraction with given technology;
production levels and demand;
metal price;
inflation;
cash costs of production; and
discount rates applicable to the cash generating unit; and or
offers to purchase the CGU.
(iii) Impairment of exploration and evaluation of assets, investment in subsidiary and loans to subsidiary

The ultimate recoupment of the value of exploration and evaluation assets, the Company’s investment in its subsidiaries and loans to its subsidiaries is dependent on successful development and commercial exploitation, or alternatively, sale, of the underlying mineral exploration properties. The Consolidated Entity undertakes at least on an annual basis, a comprehensive review of indicators of impairment of these assets. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts where there are impairment indicators.

The key areas of estimation and judgement that are considered in this review include:

recent drilling results and reserves and resource estimates;
environmental issues that may impact the underlying tenements;
the estimated market value of assets at the review date;
independent valuation of underlying assets that may be available;
fundamental economic factors such as the gold price, exchange rates and current and anticipated operating costs in the industry; and
the Consolidated Entity’s market capitalisation compared to its net assets.

Information used in the review process is tested against externally available information as appropriate.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

(c) Removal of Parent Entity Financial Statements

The Consolidated Entity has applied amendments to the Corporations Act (2001) that remove the requirement for the Consolidated Entity to lodge parent entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosure in note 29.

(d) Basis of Consolidation

(i) Subsidiaries

The consolidated financial statements comprise the separate financial statements of Tanami Gold NL and its subsidiaries (including structured entities) as at 30 June each year (the “Group”). Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically the Group controls an investee if and only if the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.

The Group reassesses whether or not it controls a subsidiary if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the date the Group gains control until the date the Group ceases to control the subsidiary.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(d) Basis of Consolidation (continued)

(i) Subsidiaries (continued)

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the noncontrolling interests, even if this results in the non-controlling interest having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

de-recognises the assets (including goodwill) and liabilities of the subsidiary;
de-recognises the carrying amount of any non-controlling interests;
de-recognises the cumulative translation differences recorded in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss; and
reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss of retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.

(e) Available For Sale Financial Assets

Available for sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in another category of financial assets. Available for sale financial assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses are recognised in other comprehensive income and presented in the available for sale fair value reserve in equity. When an investment is derecognised, the cumulative gain or loss in equity is reclassified to profit or loss.

Available for sale financial assets comprise equity securities. The fair value of investments in quoted equity securities is determined by reference to their quoted closing bid price at the reporting date.

(f) Property, Plant and Equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

All such assets, except freehold land, are depreciated over their estimated useful lives on a straight line, reducing balance or production output basis, as considered appropriate, commencing from the time the asset is held ready for use.

Cost includes expenditures that are directly attributable to the acquisition of the asset.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “Profit on Sale of Assets” in profit or loss.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Consolidated Entity and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

The estimated depreciation rates for the current and comparative periods are as follows:

Major depreciation periods are:	2016	2015
Buildings	2.5%	2.5%
Plant and equipment	15–33%	15–33%
Motor vehicles	13-33%	13-25%
Furniture and fittings	7.5-40%	7.5-40%

Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate.

(i) Useful lives

Mine development costs are depreciated or amortised over the lower of their estimated useful lives and the estimated remaining life of the mine. The estimated remaining life of the mine is based upon geological resources. Assets not linked to the mining operation are depreciated over their estimated useful lives.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(f) Property, Plant and Equipment (continued)

(ii) Amortisation

Amortisation is charged to the income statement, except to the extent that it is included in the carrying amount of another asset as an allocation of production overheads.

Any rehabilitation asset is amortised on a straight line basis over the life of the mine.

Amortisation is not charged on costs carried forward in respect of interest in the development phase until commercial production commences.

Mining properties in production (including exploration, evaluation and development expenditure) are accumulated and brought to account at cost less accumulated amortisation in respect of each identifiable area of interest. Amortisation of capitalised costs is provided on the production output basis, proportional to the depletion of the mineral resource of each area of interest expected to be ultimately economically recoverable.

(g) Exploration and Evaluation

Acquisition costs and acquired exploration and evaluation expenditure which are acquired are capitalised, until such times as an impairment is considered.

Pre-licence costs are expensed in the period in which they are incurred. Once the legal right to explore has been acquired, exploration and evaluation expenditure incurred on licenses where the technical feasibility and commercial viability of extracting mineral resources has not yet been established is expensed as incurred. The directors of the Company generally consider a project to be economically viable on the satisfactory completion of a feasibility study and a JORC reserve estimate.

Exploration and evaluation expenditure incudes the costs of acquiring and maintaining the rights to explore, investigate, examine and evaluate an area of mineralisation, and assessing the technical feasibility and commercial viability of extracting the mineral resources from that area.

(h) Acquisition of Assets

Assets acquired are recognised at cost. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition. When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Where settlement of any part of cash consideration is deferred, the amounts payable are recorded at their present value, discounted at the rate applicable to the Company if a similar borrowing were obtained from an independent financier under comparable terms and conditions.

Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the original performance of the asset will flow to the Company in future years. Costs that do not meet the criteria for capitalisation are expensed as incurred.

(i) Impairment

The carrying amounts of the Consolidated Entity’s assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(j) Provision

A provision is recognised if, as a result of a past event, the Consolidated Entity has a present legal or constructive obligation that can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

A provision is made for the estimated cost of rehabilitation relating to areas disturbed during the mine's operation up to reporting date but not yet rehabilitated. Provision has been made in full for all disturbed areas at the reporting date based on current estimates of costs to rehabilitate such areas, discounted to their present value based on expected future cash flows. The estimated cost of rehabilitation includes the current cost of recontouring, topsoiling and revegetation, employing legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise.

Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation. The amount of the provision relating to rehabilitation of mine infrastructure and dismantling obligations is recognised at the commencement of the mining project and/or construction of the assets where a legal or constructive obligation exists at that time. The provision is recognised as a noncurrent liability with a corresponding asset included in property, plant and equipment.

At each reporting date the rehabilitation liability is re-measured in line with changes in discount rates and timing or amount of costs to be incurred. Changes in the liability relating to rehabilitation of mine infrastructure and dismantling obligations are added to or deducted from the related asset, other than the unwinding of the discount which is recognised as finance costs in profit or loss as it occurs.

If the change in liability results in a decrease in the liability that exceeds the carrying amount of the asset, the asset is written-down to nil and the excess is recognised immediately in the income statement. If the change in the liability results in an addition to the cost of the asset, the recoverability of the new carrying amount is considered. Where there is an indication that the new carrying amount is not fully recoverable, an impairment test is performed with the write-down recognised in profit or loss in the period in which it occurs.

(k) Expenses

(i) Operating lease payments Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense and spread over the lease term.

(ii) Net financing costs Net financing costs comprise interest payable on borrowings calculated using the effective interest method, finance establishment costs, discount unwind on the restoration and rehabilitation provision, interest receivable on funds invested, foreign exchange gains and losses, gains and losses on sale of financial assets, and gains and losses on hedging instruments that are recognised in the income statement.

Interest income is recognised in the income statement as it accrues, using the effective interest method. The interest expense component of finance lease payments is recognised in the income statement using the effective interest method.

(l) Inventories

Raw materials and stores, work in progress (stockpiles and gold in circuit) and finished goods (bullion) are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Costs are assigned to individual items of inventory on the basis of weighted average costs. Cost includes direct material, overburden removal, mining, processing, labour related transportation cost to the point of sale, mine rehabilitation costs incurred in the extraction process and other fixed and variable costs directly related to mining activities.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(m) Investments

All investments are initially recognised at cost, being the fair value of the consideration given and acquisition charges associated with the investment.

After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair value. Gains or losses on investments held for trading are recognised in the income statement. Gains or losses on available for sale investments (which comprise equity securities) are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement.

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Consolidated Entity has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification.

Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method.

Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity.

For investments carried at amortised cost, gains and losses are recognised in income when the investments are derecognised or impaired, as well as through the amortisation process.

For investments that are actively traded in organised financial markets, fair value is determined by reference to ASX quoted market bid prices at the close of business on the balance sheet date.

For investments where there is not a quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

(n) Other Receivables

Other receivables are initially recorded at the amount of proceeds due and are subsequently measured at amortised cost.

(o) Cash and Cash Equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(p) Interest-Bearing Liabilities

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discounts or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as through the amortisation process.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(q) Employee Benefits

Short-term benefits

Liabilities for employee benefits for wages, salaries and annual leave represent present obligations resulting from employees’ services provided to reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax.

No provision is made for non-vesting sick leave as the anticipated pattern of future sick leave taken indicates that accumulated non-vesting leave will never be paid.

Other long-term benefits

The Consolidated Entity’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs. Provision for long service leave together with the associated employment on-costs are measured at their nominal amounts based on remuneration rates expected to be paid when the liability is settled. The non-current portions of long service leave and its associated employment on-costs are measured at the present value of estimated future cash flows.

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as a personnel expense in profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Contributions to defined contribution superannuation plans are expensed as incurred.

(r) Leases

Finance leases, which transfer to the Consolidated Entity substantially all the risks and benefits incidental to ownership of the leased item, 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 against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

Determining whether an arrangement contains a lease

At inception of an arrangement, the Consolidated Entity determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of the specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Consolidated Entity the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Consolidated Entity separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Consolidated Entity concludes for a finance lease that it is impracticable to separate the payment reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Consolidated Entity’s incremental borrowing rate.

(s) Revenue

Goods sold

Revenue from the sale of gold is measured at the fair value of the consideration received or receivable, net of returns and allowances. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of consideration is probable, the associated costs and possible return of goods can be measured reliably which is generally on receipt of funds from gold sales, and there is no continuing management involvement with the goods.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(t) Income Tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or substantively enacted by the reporting date.

In determining the amount of current and deferred tax, the Consolidated Entity takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Consolidated Entity believes its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Consolidated Entity to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the asset can be utilised.

Tax Consolidation

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2002 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is Tanami Gold NL.

(u)

Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.

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

(v) Issued Capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds received.

(w) Trade and Other Payables

Trade and other payables are stated at their amortised cost.

(x) Earnings Per Share

The Consolidated Entity presents basic earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for shares held by the Company’s sponsored employee share plan trust, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(y) Segment Reporting

An operating segment is a component of the Consolidated Entity that engages in business activities from which it may earn revenues and incur expenses. The Consolidated Entity operates in Western Australia and the Northern Territory, in the gold exploration industry. All operating segments’ operating results are regularly reviewed by the Consolidated Entity’s Managing Director/CEO (or equivalent) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Managing Director/CEO (or equivalent) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total costs incurred during the period to acquire property, plant and equipment.

(z) Financial Instruments

Derivative financial instruments

Derivatives are recognised initially at fair value and attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes therein are accounted for as described below.

Non-trading derivatives

When a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognised immediately in profit or loss.

(aa) New Accounting Standards and Interpretations

In the year ended 30 June 2016, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to the Group and effective for the current annual reporting period.

As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting policies.

(ab) Accounting 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 and have not been adopted by the Group for the year ended 30 June 2016. These are outlined in the table below are outlined below.

(i) AASB 9 Financial Instruments (effective from 1 January 2018) AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities and introduces new rules for hedge accounting. The Group is assessing the potential impact on its consolidated financial statements resulting from the application of AASB 9.
(ii) AASB 15 Revenue from contracts with customers (effective from 1 January 2018) AASB 15 introduces a new framework for accounting for revenue and will replace AASB 118 Revenue, AASB 111 Construction Contracts and IFRIC 13 Customer Loyalty Programs. AASB 15 establishes principals for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The new standard is based on the principal that revenue is recognised when control of a good or service transfers to a customer, therefore the notion of control replaces the exiting notion of risks and rewards. The Group is assessing the potential impact on its consolidated financial statements resulting from the application of AASB 15. The changes to the standard do not have a material impact on the Group.
(iii) AASB 16 Leases (effective from 1 January 2019) One of the key changes to AASB 16 Leases is that lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. AASB 16 will result in lessees recognising most leases on the balance sheet. The Group has not yet determined the extent of the impact of this standard.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

2. REVENUE & OTHER INCOME

From operating activities Gold sales Other income Other income Dividends received Lease payment from ABM* Other receipts	2016 2015 $'000 $'000 39 30 39 30 2,158 1,355 2,197 1,385 191 - 1,967 - - 1,355 2,158 1,355 Consolidated	2016 2015 $'000 $'000 39 30 39 30 2,158 1,355 2,197 1,385 191 - 1,967 - - 1,355 2,158 1,355 Consolidated
		30
		1,355
		1,385
		- - 1,355
		1,355

For the year ended 30 June 2016, the Company was a gold exploration company. Gold sales during the year were from the successful recovery of approximately 16.8 ounces of gold through continued clean-up of the Coyote processing plant.

*On 6 July 2016, the Company announced that the conditions precedent to the Coyote Plant Agreement with ABM Resources NL (“ABM”) had been met and consequently ABM had made a $2.0 million payment for the Initial Term of the Lease (“Term”) for the Coyote gold plant and associated infrastructure. The Term is for 12 months expiring 13 July 2016. The Company has recognised $83,333 as current deferred revenue as at 30 June 2016 to be recognised in the following 2016/17 year.

3. PROFIT ON SALE OF ASSETS

3. PROFIT ON SALE OF ASSETS
Profit on sale of assets Which includes: Profit on sale of other assets Profit on sale of NST shares (a) Profit on sale of 25% interest in CTP (b)	Consolidated 2016 2015 $'000 $'000 18,040 263 - 263 3,218 - 14,822 - 18,040 263
		263 - -
		263

(a) During the year, the Company sold 3,290,228 NST shares at a weighted average price of $3.08 per share. The shares were initially recognised at $2.10 per share.

(b) On 3 August 2015, the Company announced that the conditions precedent to the NST Heads of Agreement (“NST HoA”) for the Central Tanami Project (“CTP”) had been satisfied and Completion had occurred resulting in the formation of an unincorporated joint venture between the Company (75%) and NST (25%). In accordance with the NST HoA, the Company received consideration of $11.0 million in cash and 4,290,228 NST shares (valued at $2.10 per share based on the VWAP prior to the date of the announcement of the NST HoA on 26 February 2015). A reconciliation of the transaction is as follows:

Consideration received: Cash consideration 4,290,228 NST shares at $2.10 per share Total consideration		2016 $'000 11,000 9,000
		20,000

Assets and liability disposal (25%) of CTP: Exploration and evaluation asset Property, plant and equipment Rehabilitation liability Carrying value of CTP assets and liabilities	100% 20,719 1,760 (1,769) 20,710	25% (5,180) (440) 442
		(5,178)
Profit on sale of 25% interest in CTP		14,822

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

4. CARE AND MAINTENANCE EXPENSES

4. CARE AND MAINTENANCE EXPENSES
Care and maintenance costs which includes: Site administration Depreciation - plant and equipment Rehabilitation expense Impairment - inventory	2016 2015 $'000 $'000 2,943 2,955 630 1,862 1,699 1,947 286 (1,240) 328 386 2,943 2,955 Consolidated
		2,955
		1,862 1,947 (1,240) 386
		2,955

Management of the Group has identified one Cash Generating Unit (‘CGU’), the Coyote Gold Project. The Company carried out impairment testing by comparing the CGU recoverable amount (fair value less costs to sell) represented by current market prices (such as the NST transaction) against the carrying value of the CGU net assets. As a result, the Company determined no impairment should be reflected in the Consolidated Statement of Profit or Loss and Other Comprehensive Income for the full year ending 30 June 2016 (2015: nil).

5. PERSONNEL EXPENSES

	2016 2015 $'000 $'000 Consolidated	2016 2015 $'000 $'000 Consolidated
Wages and salaries Redundancy costs Superannuation costs Decrease in liability for annual leave Total personal expenses	443 59 42 - 544	1,097 124 114 (23)
		1,312

6. FINANCE INCOME AND EXPENSE

Finance income: Interest income Finance income Finance expense: Interest - borrowings Borrowing costs Unwind of discount on site restoration provision Finance expense Net finance expense	2016 2015 $'000 $'000 162 57 162 57 (79) (579) (40) (650) (193) (250) (312) (1,479) (150) (1,422) Consolidated	2016 2015 $'000 $'000 162 57 162 57 (79) (579) (40) (650) (193) (250) (312) (1,479) (150) (1,422) Consolidated
		57
		(579) (650) (250)
		(1,479)
		(1,422)

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

7. TAXATION

Major components of income tax expense are as follows:
Income statement
Current income tax expense/(benefit)
Deferred income tax expense
Relating to origination and reversal of temporary differences
Deferred tax assets not recognised in the current period
Income tax expense not reported in income statement
The components of recognised deferred tax balance are as follows:
CONSOLIDATED
Deferred tax liabilities
Consumables
Investments
Deferred tax asset offset against deferred tax liability
Gross deferred income tax liabilities
Deferred tax assets
Provisions
Accruals
Deferred tax asset offset against deferred tax liability
Gross deferred income tax assets
Reconciliation to income tax expense/(benefit) on account profit/(loss)
Profit/(loss) before income tax
Prima facie tax payable/(receivable) at the statutory income tax rate
Non-deductible expenses
Non-taxable franked dividend
Prior period adjustment
Deferred tax assets not recognised
Deferred tax assets not previously recognised
Income tax (benefit)/expense
Deferred tax asset (30%) not recognised arising on:
Tax losses
Temporary differences

2016
2015
$'000
$'000
3,425
(2,045)
(4,278)
2,045
(853)
-
39
372
853
-
(892)
(372)
-
-
877
312
14
60
(891)
(372)
-
-
11,716
(6,612)
3,477
(1,984)
(52)
-
-
(61)
-
2,045
(4,278)
-
(853)
-
64,969
64,370
25,948
30,825
90,917
95,195
Consolidated

8. AUDITOR’S REMUNERATION

Audit services Amounts paid, or due and payable, to the auditor KPMG for: Audit and review of the financial statements Other services Accounting advice	2016 2015 $ $ 40,000 40,000 40,000 40,000 24,000 - 24,000 - Consolidated	2016 2015 $ $ 40,000 40,000 40,000 40,000 24,000 - 24,000 - Consolidated
		40,000
		-
		-

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

9. CASH AND CASH EQUIVALENTS

Cash at bank and on hand	2016 2015 $'000 $'000 9,180 196 9,180 196 Consolidated	2016 2015 $'000 $'000 9,180 196 9,180 196 Consolidated
		196

The Consolidated Entity’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 28.

10. OTHER RECEIVABLES

10. OTHER RECEIVABLES
	2016 2015 $'000 $'000 Consolidated
Current
GST receivable Prepayments Other debtors Interest receivable Non-current Other debtors (a)	21 - 292 1 314 2,513 2,513	44 61 273 -
		378
		2,513
		2,513

(a) Non-current other debtors represent term deposits placed in support of environmental performance bonds lodged with Newmont Australia Limited $850,000 (2015: $850,000) and the Department of Resources (NT) $1,663,000 (2015: $1,663,000).

11. INVENTORIES

Current Raw material and stores (net of impairment)	2016 2015 $'000 $'000 128 852 128 852 Consolidated	2016 2015 $'000 $'000 128 852 128 852 Consolidated
		852

In line with accounting policy note 1(l), the Company has stated inventory at the lower of cost or net realisable value. An impairment loss of $308,000 (2015: $386,000) has been recognised against its Coyote stores inventory at 30 June 2016. The impairment loss was triggered by ABM’s decision not to renew the Coyote Lease and or exercise an option to purchase Coyote.

12. AVAILABLE FOR SALE FINANCIAL ASSETS

Available for sale financial assets:	2016 2015 $'000 $'000 Consolidated	2016 2015 $'000 $'000 Consolidated
Quoted equityshares	4,940	-

At 30 June 2016, the Company has a remaining investment of 1,000,000 listed equity shares in NST. Subsequent to initial recognition, these shares are measured at fair value being the published price quotation in an active market. Changes therein are recognised in Other Comprehensive Income (unless it represents impairment) and presented as an unrealised gain/(loss) reserve in equity. The fair value movement in the asset during the period was a gain of $1,990,000 (less the recognition of a DTL) which has been recognised as the net change in the fair value of Available for Sale Financial Assets in Other Comprehensive Income. As a result of the Company’s carry forward tax losses, a corresponding $853,000 DTA has been recognised with the associated tax benefit reflected in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Refer to note 27 Events Subsequent to Balance Date for changes post reporting date.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

13. PROPERTY, PLANT AND EQUIPMENT

13. PROPERTY, PLANT AND EQUIPMENT
	2016 2015 Consolidated
	$'000	$'000
Buildings at cost Less: accumulated depreciation Less: accumulated impairment Plant and equipment at cost Less: accumulated depreciation Less: accumulated impairment Motor vehicles at cost Less: accumulated depreciation Less: accumulated impairment Furniture and fittings at cost Less: accumulated depreciation Less: accumulated impairment Mine development costs Less: accumulated depreciation Less: accumulated impairment Rehabilitation asset Less: accumulated amortisation Capital works in progress	7,321 (80) (6,429) 812 44,673 (13,688) (29,248) 1,737 1,301 (1,057) (214) 30 1,070 (936) (124) 10 67,481 (61,693) (5,788) - 5,627 (5,627) - 57	7,373 (64) (6,429) 880 45,689 (12,701) (29,248) 3,740 1,352 (1,051) (214) 87 1,103 (959) (124) 20 67,481 (61,693) (5,788) - 5,627 (5,627) - 57
Total property, plant and equipment	2,646	4,784

Reconciliation

Reconciliation of carrying amounts for each class of property, plant and equipment are set out below:

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

13. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

13. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
	2016 2015 Consolidated
	$'000	$'000
Buildings Carrying amount at beginning of financial year Transfers/depreciation Disposals Accumulated depreciation on disposals Carrying amount at end of financial year Plant and equipment Carrying amount at beginning of financial year Transfers/additions Disposals Accumulated depreciation on disposals Depreciation	880 (22) (53) 7 812 3,740 - (1,016) 637 (1,624)	903 (23) - - 880 5,957 45 (2,928) 2,529 (1,862)
Carrying amount at end of financial year	1,737	3,741
Motor vehicles Carrying amount at beginning of financial year Disposals Accumulated depreciation on disposals Depreciation Carrying amount at end of financial year Furniture and fittings Carrying amount at beginning of financial year Disposals Accumulated depreciation on disposals Depreciation Carrying amount at end of financial year Capital works in progress Carrying amount at beginning of financial year Additions Transfers to other asset classes Carrying amount at end of financial year Total property plant and equipment	87 (51) 39 (45) 30 20 (33) 30 (7) 10 57 - - 57	141 (240) 240 (54) 87 28 - - (8) 20 57 45 (45) 57
Carrying amount at beginning of financial year Additions Disposals Accumulated depreciation on disposals Depreciation Depreciation capitalised in exploration and evaluation asset	4,784 - (1,153) 713 (1,698) -	7,086 45 (3,168) 2,768 (1,947) -
Carrying amount at end of financial year	2,646	4,784

* On 3 August 2015, the Company announced that the conditions precedent to the NST HoA for the CTP had been satisfied and Completion had occurred. In accordance with the NST HoA, NST acquired a 25% interest in the CTP (refer to note 3).

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

14. EXPLORATION AND EVALUATION EXPENDITURE

Acquired exploration and evaluation costs carried forward Reconciliation of movement during the period Carrying amount at beginning of the period Current period expenditure Exploration expensed during the period Carrying value representing (25%) CTP sold to NST	2016 2015 $'000 $'000 15,539 20,719 20,719 20,719 704 2,996 (704) (2,996) (5,180) - 15,539 20,719 Consolidated	2016 2015 $'000 $'000 15,539 20,719 20,719 20,719 704 2,996 (704) (2,996) (5,180) - 15,539 20,719 Consolidated
		20,719 2,996 (2,996) -
		20,719

The acquired exploration and evaluation costs carried forward in respect of areas of interest represents the purchase price for Central Tanami.

15. INTEREST BEARING LIABILITIES

Non-Current Sun Hung Kai International Bank [Brunei] Limited Loan	2016 2015 $'000 $'000 - 11,231 - 11,231 Consolidated	2016 2015 $'000 $'000 - 11,231 - 11,231 Consolidated
		11,231

On 12 August 2015, the Company announced that it had made a final voluntary prepayment of A$11.0 million (plus accrued interest and facility fees of $50,959 to that date) to fully repay the Sun Hung Kai International Bank [Brunei] Limited Loan Facility. The Loan Facility expired on 30 September 2015.

16. TRADE AND OTHER PAYABLES

Current Trade creditors Other creditors and accruals	2016 2015 $'000 $'000 308 650 103 339 411 989 Consolidated	2016 2015 $'000 $'000 308 650 103 339 411 989 Consolidated
		989

The Consolidated Entity’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 28.

17. PROVISIONS

Current Employee entitlements Other provisions (a) Non-current Employee entitlements Site and mine restoration Reconciliation of site and mine restoration Opening Balance at 1 July Increase/(reduction) in provision made during year Unwind of discount Carrying value of mine restoration (25%) sold to NST (b) Balance at 30 June	18 3,000 3,018 - 10,090 10,090 10,054 285 193 (442) 10,090	47 -
		47
		22 10,054
		10,076
		11,044 (1,240) 250 -
		10,054

(a) Refer to note 27 and (b) Refer to note 3.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

17. PROVISIONS (CONTINUED)

Annual Leave

Current employee entitlements comprise annual leave that is expected to be settled within 12 months of the reporting date and represents present obligations resulting from employees' services provided to reporting date. Current employee entitlements are calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax.

Site and mine restoration

In accordance with the Consolidated Entity's environmental policy and applicable legal requirements, a provision for site restoration and mine rehabilitation is recognised when the land is disturbed. The basis of accounting is set out in note 1(i) of the significant policies.

Long service leave

Long service leave that is due and payable is disclosed as a non-current employee provision.

18. ISSUED CAPITAL

Share capital 1,175,097,046 (2014: 1,175,097,046) ordinary shares, fully paid Movements in issued capital Balance at 1 July Balance at 30 June	2016 2015 $'000 $'000 317,637 317,637 317,637 317,637 317,637 317,637 317,637 317,637 Consolidated	2016 2015 $'000 $'000 317,637 317,637 317,637 317,637 317,637 317,637 317,637 317,637 Consolidated
		317,637
		317,637
		317,637
19. ACCUMULATED LOSSES
Balance at 1 July Net profit/(loss) for the year Transfer of share option reserve Balance at 30 June	(310,668) 12,569 - (298,099)	(305,800) (6,612) 1,744
		(310,668)

20. COMMITMENTS

a) Exploration Expenditure

The Consolidated Entity has certain obligations to perform minimum exploration work on mineral leases held. These obligations may vary over time, depending on the Consolidated Entity’s exploration program and priorities. These obligations are also subject to variations by negotiation, joint venturing or relinquishing some of the relevant tenements. As at balance date, total exploration expenditure commitments of the Consolidated Entity which have not been provided for in the financial statements are outlined below. The Consolidated Entity’s tenement commitment can be reduced by obtaining expenditure exemptions, joint venturing and/or relinquishment of tenements.

Exploration Expenditure Commitments

	2016 2015 $'000 $'000 Consolidated	2016 2015 $'000 $'000 Consolidated
Within one year	824	713

b) Operating lease

The Consolidated Entity sub-leases the corporate office under an operating lease. The Company has a new operating sub-lease arrangement which runs for 3 years commencing 12 December 2015. Lease payments are adjusted annually to reflect market rentals. During the year ended 30 June 2016 $61,012 (2015: $40,929) was recognised as an expense in the Statement of Profit or Loss and Other Comprehensive Income in respect to the operating lease.

Within one year Between two and five years	2016 2015 $'000 $'000 20 41 79 166 99 206 Consolidated

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

21. SHARE BASED PAYMENTS

Options

During the year no options were issued, exercised, forfeited or lapsed unexercised.

At 30 June 2016, there were 300,000 unissued ordinary shares, in respect of unquoted options, remaining:

Grant Date	Expiry Date	Type	Exercise Price	2016 Number	2015 Number
22 December 2011	21 December 2016	Unquoted	$1.34	300,000	300,000
				300,000 300,000

On 22 December 2011, 300,000 options were granted to Mr Alan Senior, a former Director of the Company.

Summary of option movements for the financial year:

Number of options at 30 June 2015

Grant Date	Exercise Date on or after	Expiry Date	Exercise Price	Number of options at beginning ofyear	Options Granted	Options Expired/ Forfeited	Options Exercised	On Issue	Vested
22 Dec 2011	22 Dec 2011	21 Dec 2016	$1.34	300,000	-	-	-	300,000	300,000

22. KEY MANAGEMENT PERSONNEL DISCLOSURES

a) Details of Key Management Personnel

(i) Specified Directors

Gerard McMahon (Non-Executive Chairman) Arthur Dew (Non-Executive Director) Carlisle Procter (Non-Executive Director) Brett Montgomery (Non-Executive Director)

(appointed April 2013) (appointed December 2011) (appointed December 2011) (appointed February 2013)

(ii) Specified Executives

Daniel Broughton (Chief Financial Officer)

(appointed 8 September 2014)

The key management personnel compensation included in 'Personnel Expenses' (see note 5) is as follows: In AUD Short-term employee benefits Post-employment benefits Total	2016 2015 $ $ 373,275 365,300 14,656 15,675 387,931 380,975 Consolidated	2016 2015 $ $ 373,275 365,300 14,656 15,675 387,931 380,975 Consolidated
		380,975

(i) Individual directors and executives compensation disclosures

Information regarding individual director’s and executive’s compensation and some equity instruments disclosures as required by Corporations Regulations 2M.3.03 and 2M.6.04 is provided in the Remuneration Report section of the Directors’ Report.

b) Other transactions with the Company or its controlled entities

Specified directors hold positions in other entities that resulted in them having control or significant influence over the financial or operating policies of those entities. These entities transacted with the Company or its subsidiaries during the financial year. The terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm’s length basis.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

23. NON-KEY MANAGEMENT PERSONNEL RELATED PARTIES DISCLOSURES

Wholly-Owned Group

Tanami Exploration NL and Tanami (NT) Pty Ltd are both wholly owned subsidiaries of Tanami Gold NL.

Loan from Related Parties

During the year ended 30 June 2016, the Company continued to use its unsecured $15.0 million Loan Facility with Sun Hung Kai International Bank (Brunei) Limited (‘SHKIBBL’) to assist with funding its working capital needs. On 12 August 2015, the Company had fully repaid the Loan Facility by making two voluntary repayments totalling $12.0 million. During the year the Company paid $197,260 interest and $199,972 by way of facility fees to SHKIBBL.

The ultimate holding company of SHKIBBL is Allied Group Limited (“AGL”) (also the holding company of the Company’s largest indirect shareholder Allied Properties (H.K.) Ltd (“APL”)). Mr Arthur Dew, a Director of the Company, is also Non-Executive Director and Chairman of AGL and APL.

24. SEGMENT INFORMATION

The Consolidated Entity operates predominantly in the gold exploration and gold mining industry.

Information about reportable segments

	Gold Production	Gold Production	Exploration	Exploration	Total	Total
	2016	2015	2016	2015	2016	2015
	$'000	$'000	$'000	$'000	$'000	$'000
Revenues	39	30	-	-	39	30
Depreciation and amortisation	-	-	(2,138)	(707)	(2,138)	(707)
Impairment	-	-	(328)	(386)	(328)	(386)
Reportable segment loss before income tax (excluding profit on sale of CTP 25% and other income)	39	30	(3,776)	(5,455)	(3,737)	(5,425)
Reportable segmentprofit on sale of CTP 25%	-	-	14,822	263	14,822	263
Reportable segment other income	-	-	2,158	1,355	2,158	1,355
Reportable segment assets	-	-	21,013	29,245	21,013	29,245
Reportable segment liabilities	-	-	10,564	22,280	10,564	22,280
Capital Expenditure	-	-	-	(45)	-	(45)

Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items Revenue and other income Total revenue and other income for reportable segments Consolidated revenue and other income Profit or loss Total loss for reportable segments Profit on sale of CTP 25% Profit on sale of other assets/NST shares Other income Unallocated amounts: other corporate expenses Consolidated profit/(loss) before income tax Assets Total assets for reportable segments Other unallocated amounts Consolidated total assets Liabilities Total liabilities for reportable segments Other unallocated amounts Consolidated total liabilities	2016 2015 $'000 $'000 39 30 39 30 (3,737) (5,425) 14,822 263 3,218 - 2,158 1,355 (4,745) (2,805) 11,716 (6,612) 21,013 29,245 14,247 197 35,260 29,443 10,564 22,280 3,038 63 13,602 22,343 Consolidated	2016 2015 $'000 $'000 39 30 39 30 (3,737) (5,425) 14,822 263 3,218 - 2,158 1,355 (4,745) (2,805) 11,716 (6,612) 21,013 29,245 14,247 197 35,260 29,443 10,564 22,280 3,038 63 13,602 22,343 Consolidated
		30
		(5,425) 263 - 1,355 (2,805)
		(6,612)
		29,245 197
		29,443
		22,280 63
		22,343

Major customer

During the year ended 30 June 2016, the Company sold gold on-market through third parties and is not able to identify the end customer.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

25. EARNINGS PER SHARE

	Number	of shares
	2016	2015
Weighted average number of ordinary shares used as the denominator in the calculation of basic earnings per share	1,175,097,046	1,175,097,046

Basic earnings/(loss) per share

The calculation of basic earnings per share at 30 June 2016 was based on the profit attributable to ordinary shareholders of $12,568,827 (2015: Loss $6,611,780) and a weighted average number of ordinary shares outstanding of 1,175,097,046 (2015: 1,175,097,046), calculated as follows.

Diluted earnings/(loss) per share

Diluted earnings per share for 2016 equals’ basic earnings per share as the options on issue are considered anti-dilutive.

26. NOTES TO STATEMENT OF CASHFLOWS

a) Reconciliation of cash and cash equivalents

For the purpose of the Consolidated Statement of Cash Flows, cash includes cash on hand and at bank and short term deposits at call, net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related items in the Consolidated Statement of Financial Position as follows:

Cash assets
b) Reconciliation of net cash flow from operating activities to net loss
Net profit/(loss)
Add/(less) non-cash items
Provision for rehabilitation
Income tax benefit
Inventory impairment
Depreciation
Unwinding of interest rate on provision for rehabilitation
Deferred revenue
Add/(less) items classified as investing/financing activities
Gain on disposal of 25% CTP
Gain on sale of Available for Sale Financial Assets
SHK loan accrued interest and facility fee payment
Net cash used by operating activities before changes in assets and liabilities
Changes in assets and liabilities during the financial year:
Decrease/(Increase) in receivables
Decrease in inventories
Decrease in prepayments
Increase/(decrease) in provisions
Decrease/increase in payables
Net cash used by operating activities

For the
year ended
30 Jun
2016
For the
year ended
30 Jun
2015
$'000
$'000
9,180
196
12,569
(6,612)
286
(1,240)
(853)
-
328
386
1,699
1,949
193
250
83
-
(14,822)
(370)
(3,218)
-
(231)
-
(3,966)
(5,637)
5
(40)
396
350
61
93
2,950
(128)
(582)
344
(1,136)
(5,018)
Consolidated

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

27. EVENTS SUBSEQUENT TO BALANCE DATE

On 4 July 2016, the Company sold 250,000 shares in NST at an average price of $5.53 per share receiving approximately $1.37 million (net of costs).

On 14 July 2016, the Coyote Plant Agreement with ABM Resources NL Initial Lease Term expired and on that date, the management and maintenance of Coyote was handed back to the Company. The Company intends to continue with care and maintenance activities for the foreseeable future.

(a) each party provides and receives a full discharge and release from any and all claims in respect of, or arising out of or in connection with the subject matter of the Proceedings,
(b) each party will no longer pursue its claims against the other;
(c) the Proceedings will be dismissed on a no admission of liability basis;
(d) each party will bear its own legal costs; and
(e) the Company will (jointly and severally with Tanami (NT) Pty Ltd) make payment to MLX of $3,000,000.

28. FINANCIAL RISK MANAGEMENT

Overview

This note presents information about the Consolidated Entity’s exposure to credit, liquidity and market risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

(a) Credit Risk

Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Consolidated Entity is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Presently, the Consolidated Entity undertakes exploration and evaluation activities exclusively in Australia. At the balance sheet date there were no significant concentrations of credit risk.

Cash and cash equivalents

The Consolidated Entity limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have an acceptable credit rating.

Other receivables

Other receivables includes term deposits place in support of environmental performance bonds lodged with Newmont Australia Limited and the Department of Resources (NT). Management does not consider either of these amounts to be subject to credit risk.

Exposure to credit risk

The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit exposure. The Consolidated Entity’s maximum exposure to credit risk at the reporting date is:

		2016	2015
	Note	$’000	$’000
Cash and cash equivalents	9	9,180	196
Other receivables	10	2,827	2,891

The Consolidated Entity is exposed to minimal credit risk in relation to the cash and cash equivalents or other receivables in the preceding table because:

The Consolidated Entity invests in or deposits cash with counterparties that have an acceptable credit risk rating, and as a result, Management consider that there is minimal credit risk attached to the Consolidated Entity's cash and cash equivalents balances;
The Consolidated Entity's other receivables predominantly relate to amounts payable from Government institutions which management consider is risk free. Of the $2,828,000 in other receivables, $2,513,000 relates to environmental performance bonds lodged with the Northern Territory Department Resources – Mineral and Energy and Newmont Australia Limited, $21,000 relates to GST receivables and diesel fuel rebates; and
Of the remaining $293,000 of the Consolidated Entity's other receivables, $150,000 relates to recharges to contractors engaged at the Coyote Gold Project and the Central Tanami Gold Project and $141,000 relates to normal Trade Debtors.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

28. FINANCIAL RISK MANAGEMENT (CONTINUED)

(b) Liquidity risk

Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as and when they fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.

The Consolidated Entity manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Consolidated 30 June 2016

Consolidated 30 June 2016
	Carrying Amount $’000	Contractual Cash Flows $’000	6 Months Or Less $’000	6-12 Months $’000	1-2 Years $’000	2-5 Years $’000	More Than 5 Years $’000
Cash and cash equivalents	9,180	9,180	9,180
Available for sale financial assets	4,940	4,940	-	4,940
Trade and otherpayables	(411)	(411)	(411)	-	-	-	-
Net inflow/(outflow)	13,709	13,709	8,769	4,940	-	-	-
Consolidated 30 June 2015
	Carrying Amount $’000	Contractual Cash Flows $’000	6 Months Or Less $’000	6-12 Months $’000	1-2 Years $’000	2-5 Years $’000	More Than 5 Years $’000
Cash and cash equivalents	196	196	196
Loans	(11,335)	(11,335)	(11,335)	-	-	-	-
Trade and otherpayables	(989)	(989)	(989)	-	-	-	-
Net inflow/(outflow)	(12,128)	(12,128)	(12,128)	-	-	-	-

(c) Market Risk

Market risk is the risk that changes in market prices, such as interest rates, commodity prices and equity prices will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. Financial instruments affected by market risk include loans and borrowings, deposits, available for sale financial assets and derivative financial instruments.

(d) Currency Risk

The Consolidated Entity has no foreign denominated debt or cash.

(e) Interest Rate Risk

The Consolidated Entity 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 rate on interest-bearing financial instruments. The Consolidated Entity does not use derivatives to mitigate these exposures.

	Consolidated	Carrying Amount
	2016	2015
Fixed rate instruments	$’000	$’000
Finance lease liability	-	-
Loans	-	11,231
	-	11,231
Variable rate instruments
Cash and cash equivalents	9,180	196
Other receivables*	2,513	2,513
	11,693	2,709

Other receivables which are variable rate instruments includes Newmont Australia Limited $850,000 (2015: $850,000), and the NT Department of Resources $1,663,371 (2015: $1,663,371). The term deposits mature on a monthly basis and their value is dependent on a variable interest rate.

Fair value sensitivity analysis for fixed instruments

The Consolidated Entity 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.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

28. FINANCIAL RISK MANAGEMENT (CONTINUED)

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2016.

30 June 2016 Interest income on cash balance Interest income on other receivables (term deposits) Cash flow sensitivity (net) 30 June 2015 Interest income on cash balance Interest income on other receivables (term deposits) Cash flow sensitivity (net)	Profit or Loss Equity 100bp increase 100bp decrease 100bp increase 100bp decrease $’000 $’000 $’000 $’000 92 (92) 92 (92) 25 (25) 25 (25)
	117 (117) 117 (117)
	Profit or loss Equity 100bp increase 100bp decrease 100bp increase 100bp decrease $’000 $’000 $’000 $’000 2 (2) 2 (2) 25 (25) 25 (25)
	27 (27) 27 (27)

(f) Fair Value

Fair value versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:

Consolidated	30 June 2016		30 June 2015
	Carrying amount	Fair value	Carrying amount	Fair value
	$’000	$’000	$’000	$’000
Cash and cash equivalents	9,180	9,180	196	196
Available for sale financial assets	4,940	4,940	-	-
Other receivables	2,828	2,828	2,891	2,891
Trade and other payables	411	411	989	989
Loans	-	-	11,231	11,231

(g) Fair Value Hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted market prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

30 June 2016	Level 1	Level 2	Level 3	Total
	$’000	$’000	$’000	$’000
Available for sale financial assets	4,940	-	-	4,940

30 June 2016

The Company did not carry any financial instruments at 30 June 2015

(h) Commodity Price Risk

The Consolidated Entity is a gold exploration company which has an indirect exposure to the gold price.

(i) Equity Risk

The Consolidated Entity is exposed to equity price risk, which arises from the remaining 1,000,000 NST shares at 30 June 2016.

These shares are listed on the ASX and classified as Available for Sale Financial Assets with which are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses are recognised in other comprehensive income and presented in the Available for Sale Fair Value Reserve in equity. When an investment is derecognised, the cumulative gain or loss in equity is reclassified to the Consolidated Statement of Profit or Loss. A 10% movement in the 30 June 2016 share price would result in a +/- $494,000 movement in the value of the Available for Sale Financial Assets.

TANAMI GOLD NL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

28. FINANCIAL RISK MANAGEMENT (CONTINUED)

(j) Capital Management

The Consolidated Entity’s objectives when managing capital are to safeguard the Consolidated Entity’s ability to continue as a going concern, so as to maintain a strong capital base sufficient for future exploration and development of its projects. In order to maintain or adjust the capital structure, the Consolidated Entity may return capital to shareholders, issue new shares or sell assets to reduce debt. The Consolidated Entity’s focus has been to raise sufficient funds through debt and or equity to fund development, exploration and evaluation activities.

There were no changes in the Consolidated Entity’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

The Consolidated Entity's debt-to-adjusted capital ratio at the end of the reporting period was as follows:

Consolidated Total liabilities Less: Cash and cash equivalents Total equity Adjusted capital Debt-to-adjusted capital ratio at 30 June	2016 2015 $’000 $’000 10,602 22,343 (9,180) (196)
	1,422 22,147
	24,658 7,486
	24,658 7,486
	0.06 2.96

29. PARENT ENTITY DISCLOSURES

As at, and throughout, the financial year ended 30 June 2016 the parent company of the Consolidated Entity was Tanami Gold NL.

Result of the parent entity Profit/(loss) for the year Total comprehensive loss for the year Financial position of the parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising of: Issued capital Accumulated losses Share based payment reserve Total equity	2016 $'000 (99) (99) 9,117 7,001 - - 317,637 (310,766) 130 7,001	2015 $'000 462
		462 114
		10,006 (11,293)
		(11,293) 317,637 (319,054) 130
		(1,287)

TANAMI GOLD NL DIRECTORS’ DECLARATION FOR THE YEAR ENDED 30 JUNE 2016

In accordance with a resolution of the Directors of Tanami Gold NL (the Company), I state that:

In the opinion of the directors:
a) the consolidated financial statements and notes and the Remuneration report set out in note 13 in the Directors’ report are 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 2016 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 the Corporations Regulations 2001; and
b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1(b)
c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.

On behalf of the board

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Gerard McMahon Non-Executive Chairman Perth, Western Australia 23 September 2016

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Independent auditor’s report to the members of Tanami Gold NL

Report on the financial report

We have audited the accompanying financial report of Tanami Gold NL (the company), which comprises the consolidated statement of financial position as at 30 June 2016, and consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, notes 1 to 29 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group 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 control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. In note 1(b) the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements of the Group 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. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance 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 judgement, 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 control relevant to the entity’s preparation of the financial report that gives a true and fair view 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 control . 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 performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Group’s financial position and of its performance.

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 .

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative Liability limited by a scheme approved under (“KPMG International”), a Swiss entity. Professional Standards Legislation.

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Auditor’s opinion

In our opinion:

(a) the financial report of the Group is 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 2016 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1(b)

Report on the remuneration report

We have audited the Remuneration Report included in section 13 of the directors’ report for the year ended 30 June 2016. 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 auditing standards.

Auditor’s opinion

In our opinion, the remuneration report of Tanami Gold NL for the year ended 30 June 2016, complies with Section 300A of the Corporations Act 2001 .

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KPMG

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R Gambitta Partner

Perth

23 September 2016

AI assistant

TANAMI GOLD NL — Annual Report 2016

65894_rns_2016-09-22_db0d80fc-b50d-4a20-a32c-176c051a6471.pdf

ABN 51 000 617 176

2016 ANNUAL FINANCIAL REPORT

1. Directors

2. Company Secretary

3. Directors’ Meetings

4. Nature of Operations and Principal Activities

5. Operating and Financial Review

Joint Venture with Northern Star Resources Limited

Coyote Plant Agreement with ABM Resources NL

Exploration

Western Tanami (100% Tanami)

Central Tanami Exploration (75% Tanami)

Financial Overview

A$15.0 Million Loan Facility with Sun Hung Kai International Bank [Brunei] Limited Repaid

Loan Facility with AP Finance Limited Expired

Business Strategies and Prospects

Risks

Community Relations

6. Environmental Regulation

7. Significant Changes in the Company’s State of Affairs

8. Dividends

9. Events Subsequent to Reporting Date

10. Likely Developments

11. Directors’ Interests

12. Share Options

Options granted to Directors and Executives of the Company

Unissued shares under option

Shares issued

Shares issued on exercise of options

13. Remuneration Report – audited

13.1.1 Fixed Compensation

13. Remuneration Report – audited (continued)

13.1.2 Performance-linked Compensation (short-term incentive bonus)

13.1.3 Equity-based Compensation (long-term incentive bonus)

13.1.4 Consequences of Performance on Shareholder Wealth

13.1.5 Service Contracts

Mr Daniel Broughton – Chief Financial Officer

13.2 Non-executive directors

13. Remuneration Report – audited (continued)

13.3 Directors’ and executive officers’ remuneration

13. Remuneration Report – audited (continued)

13.4 Equity instruments - audited

13.4.1 Options over equity instruments granted as compensation - audited

13.4.2 Modifications of terms of equity-settled share-based payment transactions

13.4.3 Exercise of options granted as compensation

13.4.4 Analysis of options and rights over equity instruments granted as compensation - audited

13.4.5 Analysis of movements in options and rights

13.4.6 Shareholdings of Directors and Key Management Personnel

2016

2015

13.4.7 Options of Directors and Key Management Personnel

2016

2015

14. Non-Audit Services

15. Indemnification and Insurance of Officers

Indemnification

Insurance Premiums

16. Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

17. Rounding off

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Tanami Gold NL

TANAMI GOLD NL CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016

TANAMI GOLD NL CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2016

TANAMI GOLD NL CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Reporting Entity

(b) Basis of Preparation

Statement of Compliance

Basis of Measurement

Functional and Presentation Currency

Use of estimates and judgements

Accounting estimates and judgements

(i) Mine rehabilitation and site restoration provision

1. SIGNFIICANT ACCOUNTING POLICIES (CONTINUED)

(b) Basis of Preparation (continued)

(c) Removal of Parent Entity Financial Statements

(d) Basis of Consolidation

TANAMI GOLD NL Annual Report 2016