Terracom Limited · ASX:TER
Terracom — Investor Presentation (April 2017)
37 slides from Terracom's investor presentation, Apr 6, 2017
Slide 1: Focus on Cashflow & Organic Growth
For personal use only FOCUS ON CASHFLOW & ORGANIC GROWTH INVESTOR UPDATE PRESENTATION APRIL 2017
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: FY 2017 Report Card
OVERVIEW FY 2017 REPORT CARD For personal use only Restructured balance sheet • Successfully replaced short term debt through the issue of 5-year interest only EuroClear traded bonds Restructured Board and Management Team • Increased capability to deliver • Rationalised and reduced corporate ove
Slide 4: FY 2017 Work in Progress
OVERVIEW FY 2017 WORK IN PROGRESS For personal use only Organic Expansion of BA in Australia • Complete work required to convert some of the BA 44Mt JORC 2012 resource# into reserve and extend the production profile beyond 7 years# • Complete evaluations and secure most prospective satellite coal
Slide 5: Focus on Cashflow and Growth in Strong Market
OVERVIEW FOCUS ON CASHFLOW AND GROWTH IN STRONG MARKET Independent coking coal and high quality thermal coal producer For personal use only • Targeting production from 3 mines in 3 regions with a total target 3 Regions output rate of 5Mtpa* by end of 2017 and all mines are forecast to Operations i
Slide 6: Management Team
MANAGEMENT TEAM +120 YEARS OF EXPERIENCE IN COAL For personal use only Cameron Michael David Nathan Sam Jonathon McRae Avery Stone Boom Bowles McCarthy Executive Director Executive Director CFO & Company Head of Operations Head of Operations Executive Chairman Vice President, Vice President, Secreta
Slide 7: Australia
AUSTRALIA BLAIR ATHOL MINE ACQUISITION AND RESTART For personal use only ORGANIC EXPANSION OF BLAIR ATHOL EXPLORATION & DEVELOPMENT OF NORTHERN GALILEE PROJECT EXPLORATION & DEVELOPMENT OF SPRINGSURE PROJECT
Slide 8: Blair Athol Thermal Coal Mine (BA)
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Final stages of acquiring mothballed Blair Athol Mine^ in Australia for $1 which includes: World class mine infrastructure capable of supporting 12Mtpa including workshops, stores and offices Dragline and all mining plant and e
Slide 9: Queensland Expansion
QUEENSLAND EXPANSION ORGANIC GROWTH FROM STRATEGICALLY LOCATED ASSETS For personal use only Zone 1 – Northern Galilee Hub Zone 2 – Central Bowen Hub * Zone 3 – Central Western Hub The BA acquisition revalues TerraCom’s Australian portfolio through providing a hub for their development across major c
Slide 10: 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 11: BNU Hard Coking Coal Mine
MONGOLIA BNU HARD COKING COAL MINE For personal use only Operate, optimise and expand BNU coking coal operations in South Gobi Ramping up to 1.5Mtpa of sales* generating strong estimated margins Capitalise on softer but still strong HCC prices through 5.5 year offtake agreement linked to seabo
Slide 12: South Gobi Expansion
SOUTH GOBI EXPANSION ORGANIC GROWTH THROUGH REGIONAL EXPANSION For personal use only 12
Slide 13: Strong Local Experience and Asset Portfolio
MONGOLIA STRONG LOCAL EXPERIENCE AND ASSET PORTFOLIO For personal use only Strong local history and experience operating in Mongolia since 2011 Large portfolio of Mining and Exploration Licences in strategic positions with links to large markets South Gobi Project (JORC 83Mt JORC 2004*) of har
Slide 14: Indonesia
For personal use only INDONESIA CENTRAL KALIMANTAN POTENTIAL ACQUISITION CASHFLOW POSITIVE COKING COAL MINE SIGNIFICANT EXPANSION POTENTIAL
Slide 15: Indomet Hard Coking Coal Mine
INDONESIA INDOMET HARD COKING COAL MINE For personal use only Due diligence being conducted on an operational hard coking coal mine in Central Kalimantan (Indomet) with target acquisition completion in Q3 2017 Should be immediately cash generative at time of completion with strong cash margins f
Slide 16: Thank You
For personal use only THANK YOU Cameron McRae Mick Avery Executive Chairman Executive Director info@terracomresources.com
Slide 17: Appendix
For personal use only APPENDIX • CORPORATE MORE INFORMATION • AUSTRALIA MORE INFORMATION • MONGOLIA MORE INFORMATION • COMPETENT PERSONS STATEMENTS
Slide 18: Corporate
For personal use only CORPORATE
Slide 19: 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 Note *: Blair Athol Mine acquisition is subject to relev
Slide 20: 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% (P
Slide 21: Capital Structure
CAPITAL STRUCTURE MAJOR SHAREHOLDERS COMMITTED TO BUILDING VALUE For personal use only Trading Summary (3 Apr 17) Share Price Performance ASX Code TER Share Price A$0.032 Shares 2.7B Market Cap A$86.88M Ownership Summary (%) Financial Instruments Other Share Holders Finance Instruments in Place 15%
Slide 22: Australia
For personal use only AUSTRALIA
Slide 23: 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 7 year mining life at 2Mtpa*
Slide 24: 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 24 Note: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
Slide 25: 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 2004 Resources (Mt) Potential coal Independent Tenement Measured Indicated Inferred Total type geologist Hughenden - 133 1,076 1,209 Therm
Slide 26: Mongolia
For personal use only MONGOLIA
Slide 27: 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
Slide 28: 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 29: South Gobi Expansion: Regional Consolidation
SOUTH GOBI EXPANSION REGIONAL CONSOLIDATION For personal use only Opportunity to consolidate the South Gobi region through development of operating and marketing arrangements with surrounding Mines and Projects Utilises TerraCom existing infrastructure including own coal haul road Applies Terr
Slide 30: Terra Energy BNU Mine
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 31: BNU Operations Status
BNU OPERATIONS STATUS ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY Mining operations were suspended in Q1 2016 due to depressed coal market, supply chain performance For personal use only issues and full ROM coal stockpiles at BNU Mine. Mining operations recommenced in Q4 2016 with alt
Slide 32: 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 33: BNU CHPP to Be Constructed in 2017
BNU CHPP TO BE CONSTRUCTED IN 2017 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 34: Transport Infrastructure Developments
TRANSPORT INFRASTRUCTURE DEVELOPMENTS TERRA 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 all
Slide 35: 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 36: 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 C
Slide 37: Competent Person Statement
TERRACOM COMPETENT PERSON STATEMENT Several JORC Resource estimates disclosed in this presentation were prepared and first disclosed under the JORC Code 2004. None have been updated since to comply with the JORC Code 2012 on the For personal use only basis that the information has not materially cha