Slide 1: Focus on Growth: Investor Roadshow Presentation
For personal use only FOCUS ON GROWTH INVESTOR ROADSHOW PRESENTATION 23 SEPTEMBER 2016
Slide 2: Disclaimer
TERRACOM DISCLAIMER For personal use only 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 Pr
Slide 3: Overview: Focus on Growth
OVERVIEW FOCUS ON GROWTH For personal use only Independent hard coking coal producer • Production recommencing in Q4 2016 on back of strong HCC prices 3 Regions with efficiencies of newly commissioned supply chain Of operations in Australia, Geographically diversified Mongolia & Indonesia • Larg
Slide 4: Coal markets have turned around strongly this year
OVERVIEW COAL MARKETS HAVE TURNED AROUND STRONGLY THIS YEAR For personal use only Thermal Coal The thermal coal price has reached over US$69/t in September 2016, up 37% year- to-date from US$50/t Coking Coal The coking coal price has reached over US$181/t in September 2016, up 138% year-to-date from
Slide 5: Australian based and ASX listed company
For personal use only AUSTRALIAN BASED AND ASX LISTED COMPANY
Slide 6: Growth strategy: geographically diversified coal producer
GROWTH STATEGY GEOGRAPHICALLY DIVERSIFIED COAL PRODUCER WITHIN THE NEXT 3-6 MONTHS For personal use only Mongolia Australia Indonesia Operate, optimise and expand Acquiring mothballed Blair Athol Due diligence being conducted hard coking coal operations in thermal coal mine in Australia on an
Slide 7: Strong development pipeline
STRONG DEVELOPMENT PIPLELINE LARGE PORTFOLIO OF HIGH QUALITY ASSETS BEING PROGRESSED For personal use only Development Production Exploration South Gobi BNU Uvs INDOMET Middle Gobi Blair Athol Northern Galilee Complex Springsure Sierra Kolan 7 Note: Blair Athol Mine acquisition is subject to relevan
Slide 8: Asset portfolio in three countries
ASSET PORTFOLIO IN 3 COUNTRIES For personal use only MONGOLIA AUSTRALIA INDONESIA Strong local history and experience Large portfolio of mining and Located in Central Kalimantan, operating in Mongolia since 2011 exploration licenses in Queensland approximately 30 km from the Large portfolio
Slide 9: Management team
MANAGEMENT TEAM +150 YEARS OF COAL EXPLORATION, DEVELOPMENT & OPERATIONAL EXPERIENCE For personal use only Cameron Michael David Julien Karl Mark Nathan McRae Avery Stone Lawrence Arnold Reynolds Boom Executive Executive Executive Chief Chief Financial GM Corporate Financial Chairman Director Direct
Slide 10: Debt restructuring complete
DEBT RESTRUCTURING COMPLETE GIVES COMPANY CASHFLOW HEADROOM, STABILITY AND FLEXIBILITY For personal use only Old Structure New Structure Secured Bond Amortising Notes US$124mn face value (US$129mn US$55mn from 30 June 2017) OCP Asia 5 years, interest-only (12.5% p.a.) Revenue share of 0.75-1.7
Slide 11: Capital structure
CAPITAL STRUCTURE MAJOR SHAREHOLDERS COMMITTED TO BUILDING VALUE For personal use only Trading Summary (19-Sep-16) Share Price Performance ASX Code TER Share Price A$0.036 Shares 2.6B Market Cap A$92.9M Ownership Summary (%) Financial Instruments Other Share Holders Finance Instruments in Place 15%
Slide 12: Mongolia
For personal use only MONGOLIA SOUTH GOBI COKING COAL ASSETS BNU COKING COAL MINE BNU CHPP DEVELOPMENT UVS COKING COAL AND POTASH/BRINES ASSETS MID GOBI THERMAL COAL ASSETS
Slide 13: South Gobi Project
SOUTH GOBI PROJECT NOYON BASIN – MULTIPLE MINING AND EXPLORATION LICENCES For personal use only The South Gobi Project comprises contiguous South Gobi Project JORC Resources mining and exploration licenses covering 696 Measured Indicated Inferred Total sq km in the Noyon Coal Basin North 15 Mt 9 M
Slide 14: South Gobi expansion: multi pit strategy
SOUTH GOBI EXPANSION STRONG MULTI PIT EXPANSION STRATEGY IN NOYON BASIN For personal use only South Gobi Project consists of tenements which cover most of north western extent of the Noyon coal basin Contains an estimated 50km of basin edge which contains near surface coal bearing stratigraphy
Slide 15: South Gobi expansion: regional consolidation
SOUTH GOBI EXPANSION REGIONAL CONSOLIDATION For personal use only Plan to consolidate the South Gobi region through development of operating and marketing arrangements with surrounding Mines and Projects Utilises TerraCom existing infrastructure including owncoal haul road Applies TerraCom min
Slide 16: Terra Energy BNU mine: world class operation
TERRA ENERGY BNU MINE WORLD CLASS OPERATION IN MONGOLIA For personal use only Delivering not only Mongolian productivity records but world class productivity from its mining fleet Asset utilisation in Mongolia is higher than other major producing basins Have developed this capability in a syst
Slide 17: BNU operations status
BNU OPERATIONS STATUS ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY For personal use only Commissioned new supply chain into Chinese hard coking coal markets in H1 2016 Delivered improved yield results, middling’s recovery and ash control on BNU Coal to enhance additional value within t
Slide 18: BNU coal quality
BNU COAL QUALITY COAL QUALITY SUPERIOR TO OTHER PRODUCERS IN REGION For personal use only BNU BNU MMC MMC Ceke SouthGobi SouthGobi Washed Raw Ganqimaodu Ganqimaodu 1/3 Coking (Targeted) (Targeted) Pit 3 Washed Pit 4 Raw Coal Product B Product F Ash (%)db <10.5 20 10.5 23 8-10 12.5 25 VM (%) db 23-27
Slide 19: BNU CHPP to be constructed in 2016
BNU CHPP TO BE CONSTRUCTED IN 2016 SIGNIFICANT YIELD, QUALITY AND COMMERCIAL BENEFITS For personal use only Noyon Basin Coal Specification Issues Coal is soft and friable resulting in high proportion of fines The coal fines contains a large proportion of vitrinite and hence coking properties C
Slide 20: Transport infrastructure developments
TRANSPORT INFRASTRUCTURE DEVELOPMENTS TERRA ROAD HAS BUILT ROAD TO CHINA For personal use only June 2013, entered into a 20 year contract: • With the Mongolian government for the construction and use of wholly-owned haul road connecting BNU to the Chinese border at Ceke • The road is accessible by
Slide 21: Uvs Project
UVS PROJECT COKING COAL AND POTASH ASSETS IN NORTHERN MONGOLIA For personal use only Uvs basin is prospective for coal, evapourite salts (potash), Uranium, associated brines and clays (Li and Mg) Mining of coking coal and potash occurs in neighbouring areas Located close to a 220Kw power line
Slide 22: Mid Gobi Project
MID GOBI PROJECT EXPLORATION TENEMENTS WITH SUBSTANTIAL THERMAL COAL RESOURCES For personal use only Potential for large scale open cut operations Mid Gobi Project – JORC Resources to supply power producers in China and Measured Indicated Inferred Total Mongolia Mid Gobi - 32 Mt 189 Mt 221 Mt Co
Slide 23: Australia
AUSTRALIA For personal use only BLAIR ATHOL MINE ACQUISITION AND RESTART EXPLORATION & DEVELOPMENT OF NORTHERN GALILEE PROJECT EXPLORATION & DEVELOPMENT OF SPRINGSURE PROJECT
Slide 24: Blair Athol coal mine acquisition
BLAIR ATHOL COAL MINE ACQUISITION PROGRESSING THROUGH FINAL APPROVALS For personal use only ACQUISITION Acquisition of coal mine in care and Location maintenance PRICE C.20 km north west of Clermont in A$1 Mine plan capable of delivering a the Bowen Basin of Central 5 year mining life at 2Mtpa Q
Slide 25: Queensland project pipeline
QUEENSLAND PROJECT PIPELINE STRATEGICALLY LOCATED ASSETS For personal use only Zone 1 – Northern Galilee Hub Zone 2 – Central Bowen Hub * Zone 3 – Central Western Hub 25 Note: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
Slide 26: Queensland project pipeline: large resource
QUEENSLAND PROJECT PIPELINE LARGE RESOURCE WITH SIGNIFICANT EXPANSION POTENTIAL For personal use only Australian JORC Resource Table (excluding Blair Athol) JORC Resources (Mt) Potential coal Independent Tenement Measured Indicated Inferred Total type geologist Hughenden - 133 1,076 1,209 Thermal MD
Slide 27: Indonesia
For personal use only INDONESIA CENTRAL KALIMANTAN ACQUISITION OPERATING CASHFLOW POSITIVE COKING COAL MINE SIGNIFICANT EXPANSION POTENTIAL
Slide 28: Kalimantan coking coal opportunity
KALIMANTAN COKING COAL OPPORTUNITY EXCLUSIVITY WITH DUE DILIGENCE IN PROGRESS For personal use only Located in Central Kalimantan: • Approx’ 28 km from the Barito River • Close to Muara Teweh Town • Approx’ 400km upstream of Taboneo Trans- shipment Port (2kt to 10kt Barges) JORC Resource of 3.5
Slide 29: Thank you
For personal use only THANK YOU Cameron McRae Mick Avery Executive Chairman Executive Director info@terracomresources.com
Slide 30: Competent Person Statement
TERRACOM COMPETENT PERSON STATEMENT For personal use only Technical Information on Clyde Park & Springsure JORC has been prepared by Kim Maloney who has over 10 years of experience in coal mining and extractive industry throughout Australia. Kim has experience within the Central Queensland coal mine
Slide 31: Competent Person Statement (cont'd)
TERRACOM COMPETENT PERSON STATEMENT (CONT’D) For personal use only South Gobi North Technical information in this report in relation to coal quality and washability analysis of South Gobi Project and fluorite mineralisation on Mid Gobi Project has been compiled by Mr Peter Goodman, who is a Member o