Slide 1: FY20 Results
FY20 Results 1 September 2020 For personal use only www.terracomresources.com 1
Slide 2: Disclaimer
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 Presentatio
Slide 3: Contents
For personal use only 01 Company Overview 4 CONTENTS 02 03 FY20 Highlights FY20 Operational Performance 6 11 04 FY20 Financial Performance 14 05 Our Response to COVID-19 17 06 Strategy and Outlook 20 07 Opportunities 27 08 Appendices 31 www.terracomresources.com 3
Slide 4: Company Overview
For personal use only COMPANY OVERVIEW 4
Slide 5: Company Overview
COMPANY OVERVIEW For personal use only Country Diversification ASX listed coal producer with operations in Australia and South Africa ASX : TER (as at 30 June 2020 unless stated) Market Capitalisation (A$ million) 97.0 (as at 28 August 2020) Shares on Issue (million) 753.6 Options and Warrants on Is
Slide 6: FY20 Highlights
For personal use only FY20 HIGHLIGHTS 6
Slide 7: FY20 Highlights
FY20 HIGHLIGHTS For personal use only EARNINGS #^ MAIDEN DIVIDEND DECLARED • $79.6m Underlying EBITDA • Interim Dividend of 1c per share declared and paid in November 2019. COAL SALES # MAJOR ACQUISITIONS • Record Coal Sales 9.98Mt, up 11% • Acquired 100% of Universal Coal plc COAL PRODUCTION # • Re
Slide 8: Universal Coal Acquisition
For personal use only UNIVERSAL COAL ACQUISITION 8
Slide 9: Universal Coal – Proven Performance
UNIVERSAL COAL – PROVEN PERFORMANCE For personal use only • Strong cash flow generation underwritten by South Africa’s largest power producer. • Strong history of shareholder returns, distributing approximately A$44m over the last 4 years. • Strong year on year sales growth and strong cash margin. C
Slide 10: Universal Coal – Trading Analysis
UNIVERSAL COAL – TRADING ANALYSIS For personal use only 0.45 19.9% interest Market Cap acquired in (After Universal Universal Coal plc 0.40 Coal plc Acquisition) -- 754m shares on 0.35 issue at $0.150 per share = $113m 0.30 Control achieved -- 0.25 Market Cap 77% shares owned in (Before Universal Un
Slide 11: FY2020 Operational Performance
For personal use only FY2020 OPERATIONAL PERFORMANCE 11
Slide 12: Operational Performance
OPERATIONAL PERFORMANCE For personal use only ROM RODUCTION COAL SALES Year on Year increase of 12.3Mt or 365% Year on Year increase of 7.3Mt or 240% www.terracomresources.com 12
Slide 13: Operational Performance
OPERATIONAL PERFORMANCE For personal use only Assuming Universal-owned MANAGED TONNES EQUITY TONNES for the entire financial year: ROM Tonnes Coal Sales ROM Tonnes Coal Sales ROM Production 2020FY 2019FY 2020FY 2019FY 2020FY 2019FY 2020FY 2019FY 3.0Mt Australia 3,052 2,647 2,589 2,298 3,052 2,647 2,
Slide 14: FY2020 Financial Performance
For personal use only FY2020 FINANCIAL PERFORMANCE 14
Slide 15: Financial Performance
FINANCIAL PERFORMANCE For personal use only FY2020 FY2019 Group Profit and Loss $M $M EBITDA $4.5 $96.9 Adjustments: Add: BA Transition write-offs. $14.5 Add: UNV generated EBITDA during July 2019 to March 2020. $61.0 Add: Transaction costs (TER + UNV costs). $9.7 Less: Gain on acquisition. ($10.1)
Slide 16: Financial Performance
FINANCIAL PERFORMANCE For personal use only FY2020 FY2019 Group Profit and Loss $M $M Net loss after tax (NPAT) ($146.1) ($11.3) Adjustments: Add: BA Transition write-offs. $14.5 Add: UNV generated NPAT during July 2019 to March 2020. $21.2 Add: Transaction costs (TER + UNV costs). $9.7 Add: Disposa
Slide 17: Our Response to COVID-19
For personal use only OUR RESPONSE TO COVID-19 17
Slide 18: Our Response to COVID-19
For personal use only OUR RESPONSE TO COVID-19 “ TerraCom is committed to safeguarding the health, safety, and wellbeing of all our employees, contractors, suppliers, and local communities during this uncertain time, as the resources sector is essential to maintaining a strong economy. ” 18
Slide 19: Protocols Implemented
For personal use only Protocols Implemented • Increased personal hygiene; • Safe travel management plans; • Social distancing; • Working remotely; • Strict site access and entry; • Increased cleaning and sanitising of all sites; • Safety of our older workers and • Communication and education. www.te
Slide 20: FY2021 and Beyond: Strategic Outlook
For personal use only FY2021 AND BEYOND STRATEGIC OUTLOOK 20
Slide 21: Strategic Outlook 2021
STRATEGIC OUTLOOK 2021 For personal use only • Consolidate and grow existing thermal coal Significant Growth Platform producing assets within South Africa 1 1 Maximise production and and Commodity Diversification • Diversify commodity base with a focus on bulk resultant revenue commodities such as G
Slide 22: Project Overview
PROJECT OVERVIEW For personal use only Production Project Product Life of mine Comment profile Australia LoM extension to +25 years Up to 10 years at current Blair Athol 1,2 Thermal Coal 2.4 Mtpa ROM with adjacent Moorlands lease operational run rate (not owned by TerraCom). South Africa 9 months wi
Slide 23: 2021 Production and Sales
2021 PRODUCTION AND SALES For personal use only ROM PRODUCTION COST PER TONNE FY2020 FY2021 FY2020 FY2021 Project Comment Actual Range Actual Range Australia 49 AUD - FOR 35 AUD - FOR Blair Athol 1,2 3.0 2.4 76 AUD - FOB 59 AUD - FOB Owner operator from 31 July 2020 South Africa Universal Coal – His
Slide 24: Corporate Structure
CORPORATE STRUCTURE # For personal use only Board of Directors Wal King Chairman Craig Ransley Executive Deputy Chairman Matthew Hunter Non-Executive Director Glen Lewis Non-Executive Director Craig Lyons Non-Executive Director Chief Executive Officer Danny McCarthy Chief Commercial Company Secretar
Slide 25: Board of Directors
BOARD OF DIRECTORS For personal use only Wal King - Chairman, Craig Ransley - Deputy Matthew Hunter - Non- Glen Lewis - Non-Executive Craig Lyons - Non-Executive, Independent Director Chairman, Executive Director Executive Director Director Independent Director • Wal holds a Bachelor and Masters in
Slide 26: Executive Leadership Team
EXECUTIVE LEADERSHIP TEAM For personal use only Danny McCarthy - Chief Executive Officer Celeste Van Tonder - Chief Financial Officer • Danny McCarthy is a highly experienced mining executive having • Celeste van Tonder is a Chartered Accountant with over 10 years of held senior roles with Mineral R
Slide 27: Opportunities
For personal use only OPPORTUNITIES 27
Slide 28: Commodity Diversification: Anglo African Minerals plc
For personal use only COMMODITY DIVERSIFICATION ANGLO AFRICAN MINERALS plc 28
Slide 29: Anglo African Minerals plc Summary
ANGLO AFRICAN MINERALS PLC For personal use only SUMMARY AAM’s bauxite resources are located in the Republic of Guinea, one of the world’s leading countries in Resources Table 6 terms of proven bauxite reserves (~25%) FAR Somalu Toubal Alumina 39.9% 44.1% 42.6% PROJECTS Silica 4.8% 1.6% 3.2% • Forwa
Slide 30: Forward Africa Resources "FAR"
FORWARD AFRICA RESOURCES “FAR” For personal use only Total Mineral Resource 6 73.0 million metric tonnes Laden barge transit ▹ Measured 26.0 million metric tonnes ▹ Indicated 11.0 million metric tonnes Ballast barge transit ▹ Inferred 36.0 million metric tonnes A Feasibility Study and Environmental
Slide 31: Appendices
For personal use only APPENDICES 31
Slide 32: Australian Business Unit
For personal use only AUSTRALIAN BUSINESS UNIT Queensland, Australia 32
Slide 33: Queensland Operations and Projects
QUEENSLAND OPERATIONS AND PROJECTS For personal use only OPERATIONS 1. Blair Athol Mine (BA) PROJECTS 1. Northern Galilee 2. Springsure www.terracomresources.com 33
Slide 34: Blair Athol Coal Mine
For personal use only BLAIR ATHOL COAL MINE Clermont, Central Queensland 34
Slide 35: Coal Production
For personal use only COAL PRODUCTION Run of Mine Coal Coal Sales 3.1 2.7 2.6 2.3 1.5 1.0 2018FY 2019FY 2020FY THERMAL COAL 2.4 Mtpa ROM BLAIR ATHOL Export 2 Mtpa export, primarily to Japan and South Korea customers Exported through Dalrymple Bay and Abbott Point Coal Terminals Ownership 100% owners
Slide 36: JORC Resource and Reserves
JORC RESOURCE AND RESERVES For personal use only Resource 1 Mt JORC Resources JORC Reserves Measured 30.2 50 50 Indicated 11.6 45 45 Inferred 2.0 40 40 Total 43.8 35 35 Reserve 2 Mt 30 30 Proved 15.3 25 25 Probable 12.1 20 20 Total 27.4 15 15 10 10 Marketable Reserve 2 Mt 5 5 Proved 12.7 0 0 Probabl
Slide 37: Blair Athol Rehabilitation Performance
BLAIR ATHOL REHABILITATION PERFORMANCE For personal use only ✓ 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 1 June 2020, being an amount of $72.1 million (approximately
Slide 38: Projects: Northern Galilee, Springsure
For personal use only PROJECTS Northern Galilee Springsure 38
Slide 39: Strategic Assets and Organic Growth
STRATEGIC ASSETS AND ORGANIC GROWTH For personal use only The BA acquisition revalues TerraCom’s Australian portfolio through providing a hub for their development across major coal basins in Queensland including: • Northern Galilee Project (1.9Bt JORC 20043) is large thermal resource with multi pit
Slide 40: QLD Expansion | Northern Galilee
QLD EXPANSION | NORTHERN GALILEE For personal use only www.terracomresources.com 40
Slide 41: QLD Expansion | Springsure Project
QLD EXPANSION | SPRINGSURE PROJECT For personal use only www.terracomresources.com 41
Slide 42: South Africa
For personal use only SOUTH AFRICA Four Operating Coal Mines Two Thermal Coal Projects One Coking Coal Project 42
Slide 43: South Africa Operations and Projects
SOUTH AFRICA OPERATIONS AND PROJECTS For personal use only www.terracomresources.com 43
Slide 44: Operations
For personal use only OPERATIONS Kangala New Clydesdale Colliery (NCC) North Block Complex (NBC) Ubuntu Colliery 44
Slide 45: Coal Sales – Kangala Colliery
For personal use only COAL SALES Domestic Export 0.2 0.3 0.1 0.3 - 0.2 2.4 2.6 2.4 2.0 2.0 0.1 1.6 0.7 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY THERMAL COAL 2.2 Mtpa ROM KANGALA Domestic 2Mtpa off-take contract Sales to Eskom 2.0Mtpa Ownership 70.5% with operational control COLLIERY OPEN PIT
Slide 46: Coal Sales – New Clydesdale Colliery
For personal use only COAL SALES Domestic Export 0.8 0.8 0.8 1.7 1.8 1.4 0.3 0.2 2017FY 2018FY 2019FY 2020FY THERMAL COAL 4.1 Mtpa ROM 65%, 1.6 Mtpa to 2023 at negotiated pricing NEW CLYDESDALE Domestic 35% API4-linked Contracted ~650Ktpa to 2021 Export 6,000Kcal API4 spot market pricing Ore Reserve
Slide 47: Coal Sales – North Block Complex
For personal use only COAL SALES Domestic Export 0.2 - 2.4 1.7 2019FY 2020FY THERMAL COAL 4.2 Mtpa ROM from 2020 1.2 Mtpa 15% ash, 5500Kcal Export coal NORTH BLOCK Long term (2020) continuation/extension of current Eskom offtake 2.4Mtpa Short term contract negotiating longer term offtake COMPLEX Ore
Slide 48: Ubuntu Colliery
• Project fully regulated • Surface Rights acquired • CSA signed with Eskom for 1.2 Mtpa • First coal delivery to Eskom in February 2020 For personal use only • 100kt of coal sales in April 2020 COAL SALES Domestic Export - 0.6 2020FY JORC 2012-compliant Resource 75.8 Mt UBUNTU Ore Reserves 9.15 Mt
Slide 49: Projects
For personal use only PROJECTS Thermal Coal Projects • - Eloff • - Arnot South Coking Coal Project • - Berenice Cygnus 49
Slide 50: Eloff - Kangala
ELOFF - KANGALA For personal use only www.terracomresources.com 50
Slide 51: Arnot South and Berenice Cygnus
ARNOT SOUTH AND BERENICE CYGNUS For personal use only www.terracomresources.com 51
Slide 52: Resources and Reserve Statement
For personal use only RESOURCES AND RESERVE STATEMENT 52
Slide 53: Resources and Reserve Statement
RESOURCES AND RESERVE STATEMENT For personal use only RESERVES RESOURCES RESERVES RESOURCES Attributable to Attributable to Proved Probable Total Measured Indicated Inferred Total TerraCom TerraCom Tenement Mt Mt Mt Mt Mt Mt Mt Mt Mt AUSTRALIA 15.3 12.1 27.4 30.2 238.6 1,903.0 2,171.8 27.4 2,171.8 B
Slide 54: References
REFERENCES For personal use only 1 – Refer to ASX Announcement on 30 September 2019 for further information and clarification on the Blair Athol JORC Resource. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original an
Slide 55: Thank You
For personal use only THANK YOU 55