Terracom Limited · ASX:TER
Terracom — FY2019 Earnings Presentation
44 slides from Terracom's earnings presentation, Aug 30, 2019
Slide 1: 2019 FY Results Presentation
2019 FY Results Presentation A PRIL 20 1 9 FY19 R DANNY MCCARTHY, CEO ASX: TER WWW.TERRACOMRESOURCES.COM 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this document (“Presentation”) has been prepared by TerraCom Limited (the “Company”). This Presentation does not constitute an offer or invitation to any person to subscribe for or apply for any securities in the Company. This Presentation contains summary inf
Slide 3: Financial Year 2019
FINANACIAL YEAR 2019 3
Slide 4: Highlights and Milestones Achieved – 2019 Financial Year
HIGHLIGHTS AND MILESTONES ACHIEVED – 2019 FINANCIAL YEAR • ROM Coal – increased by 35% to 3.4Mt 1 1 Record Coal Maximise Production production and • Saleable Production – increased by 35% to 3.0Mt resultant revenue • Coal Sales – increased by 59% to 3.0Mt • Operating EBITDA – increased by 245% to 2
Slide 5: Highlights and Milestones Achieved – 2019 Financial Year
HIGHLIGHTS AND MILESTONES ACHIEVED – 2019 FINANCIAL YEAR • Group – June 2019 Quarter record of 1.04Mt, implying an annualized run rate of 4.15Mt 4 1 ROM Coalproduction Maximise Production and • Blair Athol – June 2019 Quarter record of 795kt, resultant revenue implying an annualized run rate of 3.18
Slide 6: Financial Year 2019 Scorecard
FINANCIAL YEAR 2019 SCORECARD Actual Actual Forecast Significant Year on Year Growth .... FY17 FY18 FY19 Coal Sales (Mt) 0.3 1.9 3.0 Revenue (A$m) 23 147 338 EBITDA (A$m) (23) 27 94 ASX: TER WWW.TERRACOMRESOURCES.COM 6
Slide 7: Operational Performance
OPERATIONAL PERFORMANCE FY17H1 FY17H2 FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Group Production Unit Group Group Group Group Group Group change Run of Mine (tonnes) Mt - 246 871 1,628 1,441 1,927 869 35% Overburden (bcm) Mbcm 288 2,772 12,822 13,890 10,787 19,807 3,882 15% Strip Ratio Mt 0.0 11.3 14.7
Slide 8: Financial Performance
FINANCIAL PERFORMANCE FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Group Financials Unit Group Group Group Group change Revenue A$ k 45,205 101,936 171,949 166,373 191,181 130% Operating EBITDA A$ k 5,536 21,616 52,591 41,299 66,738 246% Profit After Tax A$ k (14,142) (4,993) 3,235 (14,540) 7,830 41% Compr
Slide 9: Debt Reduction – As at June 2019
DEBT REDUCTION – AS AT 30 JUNE 2019 Reduced debt by US$25.6 million – <---------- Facilities Fully Repaid ----------> <--- Facilities Part Repaid ---> representing 14% reduction in the debt’s face value Existing Facilities USD$ M Euroclear Bond 145.2 Mobile Fleet 0.1 State Bank of India 9.3 EO Loan
Slide 10: Debt Reduction – Post Refinance
DEBT REDUCTION – POST REFINANCE Refinance on track to be Refinance reduces debt by a further US$45.3 million – completed in September 2019. representing 29% reduction in the debt’s face value. Refinance provides the opportunity for the Board in due course to deliver on its short term goal of paying
Slide 11: Term Loan – Fully Underwritten by OCP Asia
TERM LOAN – FULLY UNDERWRITTEN BY OCP ASIA Term Loan: Fully Underwritten By OCP Asia Facility Size: US$ 80 million Tenure: 3 years 3 months Interest Rate: 8.5% per annum payable 6 monthly on 30 June and 31 December each year Special Interest of 1% of revenue from Blair Athol and BNU payable 6 monthl
Slide 12: Corporate Overview
CORPORATE OVERVIEW 12
Slide 13: TerraCom Snapshot
TERRACOM SNAPSHOT 2 Regions ASX: TER ASX listed coal producer with operations in Australia and Mongolia Shares on issue Cash as at 30 June 2019 467m________ _______________A$57m Cash Generating $ Capitalising on strong coal market targeting 6.0Mtpa generating strong cash flows 3.0Mt BA1 (Qld) & 3.0M
Slide 14: Share Trading Analysis
SHARE TRADING ANALYSIS Over the past 3 months (June 2019 to August 2019) there has been A$77 million or 30% of Market Value eroded through a total of only 7 million shares traded (1.5% of shares on issue) Traded Shares vs Non-Traded Shares Market Value Fluctuation 3 ASX: TER WWW.TERRACOMRESOURCES.CO
Slide 15: Strategy | Unlocking Value | Focused on becoming a Mid-Tier Coal Producer
STRATEGY | UNLOCKING VALUE | Focused on becoming a Mid-Tier Coal Producer • BA – increase from 2.5 to 3Mtpa1 1 Maximiseproduction Maximise productionand and • BNU – increase from 1.5 to 3Mtpa2 1 revenue resultant revenue • Reduce debt through strong cash flow generation • Near term brownfield and gr
Slide 16: Board of Directors
BOARD OF DIRECTORS Wal King Hon. Craig Wallace Philip Forrest Tsogt Togoo Chairman Deputy Chairman Independent Non-Executive Director Independent Director Independent Director Non-Executive Director • Wal holds a Bachelor and Masters in • Hon. Craig Wallace served as the State Minister • Philip has
Slide 17: Board of Directors
BOARD OF DIRECTORS Jim Soorley Matthew Hunter Paul Anderson Independent Non-Executive Director Non-Executive Director Non-Executive Director • Jim served as the Lord Mayor of Brisbane from • Matthew has more than 20 years’ experience in • Paul has over 30 years’ experience in senior 1991-2003, presi
Slide 18: Executive Management Team
EXECUTIVE MANAGEMENT TEAM Danny McCarthy Nathan Boom Shaun Lucas Sam Bowles CEO CFO & Company Secretary Australian Business Unit Head Mongolia Business Unit Head • Mr McCarthy is a highly experienced mining • Nathan Boom holds a Bachelor of Commerce • Shaun Lucas has held operational, and • Since gr
Slide 19: Operations and Projects
OPERATIONS AND PROJECTS ASX: TER WWW.TERRACOMRESOURCES.COM 19
Slide 20: Operations and Projects
OPERATIONS AND PROJECTS ASX: TER WWW.TERRACOMRESOURCES.COM 20
Slide 21: Queensland – Blair Athol (BA)
Queensland Blair Athol (BA) 21
Slide 22: Operational Performance
OPERATIONAL PERFORMANCE Blair Athol (BA) Production FY17H1 FY17H2 FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Unit BA BA BA BA BA BA change Run of Mine (tonnes) Mt 0 0 442 1,133 1,193 1,454 1,072 68% Overburden (bcm) Mbcm 0 0 5,961 8,288 7,329 10,535 3,615 25% Strip Ratio 0.0 0.0 13.5 7.3 6.1 7.2 2.3 11%
Slide 23: Financial Performance
FINANCIAL PERFORMANCE Blair Athol (BA) Financials FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Unit BA BA BA BA change Revenue A$ k 14,448 67,971 153,589 121,469 192,639 234% Costs A$ k (11,473) (43,731) (92,629) (73,416) (110,841) 201% Operating EBITDA A$ k 2,975 24,240 60,960 48,053 81,798 301% Revenue A
Slide 24: Rehabilitation and Environment
REHABILITATION AND ENVIRONMENT Significant progress of rehabilitation activities at Blair Athol • Queensland’s Department of Science (DES) issued its Financial Assurance decision for the Blair Athol Mine on 2 July 2019. The Financial Assurance was reduced by a further $701,943 to $71,791,440. • Th
Slide 25: Rehabilitation and Environment
REHABILITATION AND ENVIRONMENT Advancing Face Rehabilitation – West Pit (including topsoil Tailings Dam (post-mulch application) from July 2019 stockpiled ready for spreading to 12 hectares) ASX: TER WWW.TERRACOMRESOURCES.COM 25
Slide 26: Blair Athol – Fully Ramped Up, Milestones Achieved
BLAIR ATHOL – FULLY RAMPED UP, MILESTONES ACHIEVED ASX: TER WWW.TERRACOMRESOURCES.COM 26
Slide 27: JORC Resources and Reserves
JORC RESOURCES AND RESERVES Resource 3 Mt JORC Resources JORC Reserves Measured 31.5 50 50 Indicated 11.6 45 45 Inferred 1.9 40 40 Total 45.0 35 35 Note – after mining depletion of 2.2Mt, updated 6 December 20183. 30 30 Reserve 4 Mt 25 25 Proved 16.6 20 20 Probable 12.1 15 15 Total 28.7 10 10 5 5 Ma
Slide 28: Thermal Coal Product Specification
THERMAL COAL PRODUCT SPECIFICATION ASX: TER WWW.TERRACOMRESOURCES.COM 28
Slide 29: Thermal Coal – Extract from Certificate of Analysis
THERMAL COAL – EXTRACT FROM CERTIFICATE OF ANALYSIS ASX: TER WWW.TERRACOMRESOURCES.COM 29
Slide 30: Mongolia – Baruun Noyon Uul (BNU)
Mongolia Baruun Noyon Uul (BNU) 30
Slide 31: South Gobi Project | Noyon Basin | Multiple Mining & Exploration Licences
SOUTH GOBI PROJECT | NOYON BASIN | Multiple Mining & Exploration Licences The South Gobi Project comprises contiguous mining and South Gobi Project JORC Resources6 exploration licenses covering 696 sq km in the Noyon Coal Measured Indicated Inferred Total Basin North 14 Mt 8 Mt 3 Mt 25 Mt • c.850
Slide 32: Operational Performance
OPERATIONAL PERFORMANCE Baruun Noyon Uul (BNU) FY17H1 FY17H2 FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Production Unit BNU BNU BNU BNU BNU BNU change Run of Mine (tonnes) Mt 0 246 429 495 248 473 204 -22% Overburden (bcm) Mbcm 288 2,772 6,861 5,602 3,458 267 2% 9,272 Strip Ratio 0.0 11.3 16.0 11.3 14.0
Slide 33: Financial Performance
FINANCIAL PERFORMANCE Baruun Noyon Uul (BNU) FY18H1 FY18H2 FY19H1 FY19H2 FY18-FY19 Financials Unit BNU BNU BNU BNU change Revenue A$ k 30,757 33,965 18,360 44,904 (1,458) -2% Costs A$ k (27,234) (30,454) (22,257) (44,043) (8,612) 15% Operating EBITDA A$ k 3,523 3,511 (3,897) 861 (10,070) -143% Reven
Slide 34: BNU Mongolia
BNU MONGOLIA Operating Cost Rationalisation: Have engaged one of the loading Mining Equipment and Services Contractors in Mongolia. Forecast to Implementation Plan in the process of being enacted. Once fully implemented forecasted to reduce mine operating costs by up to 20%. Restructuring of
Slide 35: Other Projects
Other Projects 35
Slide 36: Queensland Expansion | Organic Growth from Strategically Located Assets
QUEENSLAND EXPANSION | Organic Growth from Strategically Located Assets The BA acquisition revalues TerraCom’s Australian portfolio through providing a hub for their development across major coal basins in Queensland including: œ Northern Galilee Project (1.9Bt JORC 20045) is large thermal resource
Slide 37: Queensland Expansion | Northern Galilee Project
QUEENSLAND EXPANSION | Northern Galilee Project Clyde Park Project* Hughenden Project * Note Clyde Park Project is 64% owned by TerraCom ASX: TER WWW.TERRACOMRESOURCES.COM 37
Slide 38: Queensland Expansion | Springsure Project
QUEENSLAND EXPANSION | Springsure Project ASX: TER WWW.TERRACOMRESOURCES.COM 38
Slide 39: Resources and Reserves
RESOURCES AND RESERVES RESERVES RESOURCES Tenement Proved Probable Total Measured Indicated Inferred Total Mt Mt Mt Mt Mt Mt Mt Springsure5 - - - - 43 148 191 Northern Galilee – - - - - 133 1,076 1,209 Hughenden Project5 Northern Galilee – - - - - 51 677 728 Clyde Park Project5 TOTAL - - - - 227 1,9
Slide 40: Financial Statements
FINANCIAL STATEMENTS 40
Slide 41: Financial Statements
FINANCIAL STATEMENTS ASX: TER WWW.TERRACOMRESOURCES.COM 41
Slide 42: Financial Statements
FINANCIAL STATEMENTS ASX: TER WWW.TERRACOMRESOURCES.COM 42
Slide 43: References
REFERENCES 1 – Refer to ASX Announcement on 13 February 2018 for further information and clarification on the Blair Athol production forecast. The material assumptions underpinning the Blair Athol production target in this ASX Announcement continues to apply and has not materially changed. 2 – Refer
Slide 44: Thank You
THANKYOU 44