Terracom Limited · ASX:TER
Terracom — Ord Minnett East Coast Mining Conference 2023
48 slides from Terracom's conference presentation, Mar 22, 2023
Slide 1: Ord Minnett East Coast Mining Conference
Ord Minnett East Coast Mining Conference March 2023 ASX : TER
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation (Presentation) has been prepared to provide prospective investors (Recipients) with information about TerraCom Limited ACN 143 533 537 (TerraCom) and its business of being a resource explorer with a large portfolio of operating assets in Australia and So
Slide 3: Disclaimer (continued)
Disclaimer IMPORTANT NOTICE (CONTINUED) This Presentation should not be relied upon as the sole representation of any matter that a Recipient should consider when evaluating TerraCom or the Business. Nothing in this document should be construed as authorising the distribution of this Presentation ou
Slide 4: Contents
Contents 1 About TerraCom 2 Company Overview 3 Performance 4 Market 5 Current Operations 6 Questions 4 Contents Ord Minnett East Coast Mining Conference March 2023
Slide 5: About TerraCom
About TerraCom TerraCom Limited (ASX: TER) is an Australian based mining resources company with a global footprint, comprising a large portfolio of operating assets in Australia and South Africa within the coal sectors. We are a renowned low-cost producer focused on delivering exceptional outcomes f
Slide 6: Company Overview
Company Overview 6 Company Overview Ord Minnett East Coast Mining Conference March 2023
Slide 7: Board and Executive
Board and Executive Graeme Campbell Glen Lewis Mark Lochtenberg Craig Lyons Mark Ludski Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Independent Independent Director Independent Director Independent Director Independent Director Chairman Danny McCarthy Megan Etcell Nathan Bo
Slide 8: Our Company at a glance
Our Company at a glance Country Three Producing Mining South Africa Diversification Operations A stable fixed margin ASX listed coal Australia – 1 business producer with South Africa – 2 75% of coal is sold domestically operations in Australia Eloff Mine shovel ready (South and South Africa Africa),
Slide 9: HY2023 Highlights
HY2023 Highlights Employees & Contractors Operating EBITDA 1 Total 2 ROM Production ~3,600 A$330M 6.2Mt Total 2 coal sales BA Record coal price per Low-Cost Producer sold tonne Proven Track 4.4Mt A$450 Record (1) Non IFRS measure. Based on management accounts and reflects 100% ownership of the South
Slide 10: Overview and Shareholder Base
Overview and Shareholder Base Bonython: 9.84% ASX : TER (as at 31 December 2022 unless stated) Market Capitalisation (A$ million) 1 460.5 Thorney: 6.88% Share Price (A$) 1 0.575 Fred Bart: 3.52% Shares on Issue (million) 1 800.9 Performance Rights on issue (million) 1 1.5 Other: 56.42% Debt (A$ mill
Slide 11: The TerraCom Journey
The TerraCom Journey Jul May Jan Jun June Aug May Aug Nov Feb 2010 2017 2018 2019 2020 2021 2022 2022 2022 2023 TerraCom Limited listed on the Acquisition of ASX Blair Athol Blair Athol Repositioned Declaration of Declaration of Declaration of (listed as operation Rights Issue to Rights Issue to Acq
Slide 12: Corporate Overview
Global Shipping to Customers Worldwide 12 Corporate Overview Ord Minnett East Coast Mining Conference March 2023
Slide 13: Balance Sheet Transformation
Balance Sheet Transformation Historical Closing Debt Position TerraCom successfully transformed its 350 balance sheet via the repayment of its Euroclear Bond during FY2022 (US$198 million 300 including principal, interest and fees during a 250 9-month period). AUD (millions) Deleveraged position res
Slide 14: Capital Management Framework
Capital Management Framework Reliable and consistent operations Capital productivity Net operating cashflow Maintain and Optimise operations Working and sustaining capital Resilient balance sheet Dividend policy payout ratio of 40–90% NPAT1 Surplus cashflow External Growth investments Internal Growt
Slide 15: Capital Allocation
Capital Allocation “The Company is committed to responsible Capital returned to shareholders 1 capital management, maintaining a resilient 140 balance sheet and delivering returns to shareholders.” 120 A$220 100 AUD (millions) 80 million 60 40 20 Being returned to shareholders between - FY2020 FY202
Slide 16: Prospective Yield
Blair Athol Yield “We are a renowned low-cost producer focused on delivering exceptional Prospective cashflow based on share price (per share) outcomes from our high-yielding diversified $0.45 asset portfolio for investors.” 2023 Calendar Year $0.40 gcNewc Index Forecast 1 $0.35 Prospective yield ba
Slide 17: Strategic Outlook
Strategic Outlook Capital • Responsible balance sheet management management • Dividend returns to shareholders framework • Maintaining a capital position that allows for fluctuation in coal price Expanding • Blair Athol processing precinct with near mine expansion opportunities our • Identification
Slide 18: Australia
Australia TerraCom acquired its flagship Blair Athol Coal Mine, located in Clermont Queensland, in 2017. Since the acquisition, the Company has successfully restarted operations and now exports approximately 2.2 million tonnes per annum of high quality thermal coal. Rehabilitation at the site is pro
Slide 19: Blair Athol – Bedrock of the Group
Blair Athol – Bedrock of the Group Mine Life Premium Thermal Product Annual Coal Sales 8+ years 2.2Mt (5500 NAR) — High energy — Low ash — Low sulphur Offtake agreements Strong Brand History Open Cut Operation >250Mt with major Japanese — Owner Operator model power utilities — Low-Cost Producer — St
Slide 20: Blair Athol Product Sales Information
Blair Athol Product Sales Information Thermal Coal Quality 70.00 60.00 High Energy Low Ash 50.00 Low Sulphur 40.00 Global Range NEWC Bench (6000 basis) 30.00 Blair Athol 20.00 10.00 0.00 NCV Total Sulphur Ash (% ad) Volatile Matter Total Moisture (kcal/kg/100) (x10 % ad) (% ad) (%ar) 20 Company Over
Slide 21: South Africa
South Africa TerraCom, via its 100% ownership of Universal Coal Plc (Universal), holds an interest in a portfolio of producing, development and exploration assets located across South Africa’s major coalfields. The South African operations provide domestic quality coal to Eskom (South Africa’s gover
Slide 22: South Africa — A Solid Contributor
South Africa — A Solid Contributor Operational Consistent Strong financial consistency dividend return performance 22 Company Overview Ord Minnett East Coast Mining Conference March 2023
Slide 23: Performance
Performance 23 Performance Ord Minnett East Coast Mining Conference March 2023
Slide 24: FY2023 ROM Production and Coal Sales Outlook
FY2023 ROM Production and Coal Sales Outlook 16,000 14,000 12.2Mt 12,000 ROM Production Forecast Total Tonnes (kt) 10,000 8,000 6,000 8.7Mt Coal Sales Forecast 4,000 FY2023 2,000 14,000 12,000 Total Tonnes (kt) - 10,000 2020 2021 2022 2023 (Forecast) 8,000 6,000 ROM Production Coal Sales 4,000 2,000
Slide 25: Market
Market 25 Market Ord Minnett East Coast Mining Conference March 2023
Slide 26: Forecast Thermal Coal Pricing
Forecast Thermal Coal Pricing Pricing seems to have stabilised and is $500 supported into the near future. $450 | | • The average price for 2011 – 2020 was $400 | | US$83 per tonne. $350 | | • The average price for Jan 2020 – Feb USD (millions) $300 $250 | | 2023 was US$191 per tonne. $200 | | • The
Slide 27: Thermal Coal Demand
Short Term Thermal Coal Demand • Demand for seaborne thermal coal is expected to be higher than last year, particularly as China reopens its economy and demand in the high-CV market remains Wood Mackenzie forecasts global demand to largely remain flat to strong. 2030. Advanced economies face structu
Slide 28: Sustainability
Sustainability 28 Sustainability Ord Minnett East Coast Mining Conference March 2023
Slide 29: Safety Matters
Safety is a Core Value The safety and wellbeing of our people is fundamental to our success. Our evolving safety culture is consistent with the Company’s core values, and through strong safety leadership we create and maintain a safe workplace for all our people. 2.0 TRIFR As at 31 December 2022 0.8
Slide 30: Environmental, Social and Governance (ESG) Policy
Environmental, Social and Governance (ESG) Policy Environmental Social Governance Responsible coal mining and Safety is a core value that Strong focus on corporate progressive rehabilitation to underpins our culture. governance principles and minimise the impact from our management with integrity to
Slide 31: Current Operations
Current Operations Ord Minnett East Coast Mining Conference March 2023 31 Current Operations
Slide 32: TerraCom Limited (ASX: TER)
TerraCom Limited (ASX : TER) South Africa Australia Operations Projects Operations Projects New Clydesdale Colliery Berenice/Cygnus Project Blair Athol Northern Galilee North Block Complex Eloff Colliery Springsure Kangala Processing and Infrastructure Ubuntu Colliery 32 Current Operations Ord Minne
Slide 33: Coal Reserves
Coal Reserves JORC Production JORC Operations Commodity Life of Mine Marketable Mtpa ROM Reserve Reserve Australia 8+ years at current run rate. Potential near mine expansion Blair Athol Thermal Coal 2.9 23.0 18.1 opportunities with BA as a processing precinct. South Africa # NCC Thermal Coal 4.4 11
Slide 34: Path to Market
Path to Market Mine Export Rail Port Ship Power Station Mine to customer 34 Current Operations Ord Minnett East Coast Mining Conference March 2023
Slide 35: Path to Market
Path to Market Truck Export Port Ship Power Station (RB1 & RB3) Rail Domestic Truck Power Station Mine to customer 35 Current Operations Ord Minnett East Coast Mining Conference March 2023
Slide 36: Australia
Australia 36 Current Operations Ord Minnett East Coast Mining Conference March 2023
Slide 37: Blair Athol Timeline
Blair Athol Timeline May Apr Aug Jul Aug Aug 2017 2018 2018 2019 2020 2021 Current Constructed, Successfully Acquisition of Blair commissioned transitioned to full Athol and funded mine Blair Athol Life of 2.2Mt forecast Successfully Recommissioning Blair Athol Mine dedicated Train transitioned CHPP
Slide 38: Blair Athol
Blair Athol The Australian Business Unit comprises one operational mine, JORC Resources 0.2 the flagship Blair Athol Coal Mine located in Clermont, 3.6 Queensland (as well as a large portfolio of exploration and evaluation assets predominantly located in the Northern Galilee coal region). Title ML18
Slide 39: Rehabilitation
Rehabilitation Significant progress of rehabilitation activities at Blair Athol • The capping of the old tailing storage facility has been completed ahead of schedule as part of the mining operations process. • Advancing face rehabilitation is being completed progressively, which is aimed at signifi
Slide 40: Key Infrastructure
Key Infrastructure INFRASTRUCTURE • Power • Water • Workshops and service bays • Secure stores • Administration buildings • Safety and training centre • Train loadout facility ACCOMMODATION • 40 Houses • 42 Single Persons Quarters 40 Current Operations Ord Minnett East Coast Mining Conference March
Slide 41: Key Equipment
Key Equipment • BE1370 Dragline • 400T and 360T Hydraulic Excavators • 180T Rear Dump Trucks • D11 Dozer Fleet • Wheel loaders (WA500 to WA900 size) • Ancillary equipment (graders, watercarts) • 330 wmt per hour DMC / spirals plant • Bypass crushing and screening equipment • Road trains for product
Slide 42: South Africa
South Africa 42 Current Operations Ord Minnett East Coast Mining Conference March 2023
Slide 43: South Africa – Product Sales Information
South Africa – Product Sales Information Product Index Calorific Value Operations Sales Basis Ash (ARB) Sulphur (ADB) Type Benchmark (NAR CV) NBC RB1 Index Linked API4 6,000 11.5% 0.40% (3.2Mtpa) RB3 Index Linked API4 5,500 13.5% 0.40% Fixed Eskom * N/A 4,800 22.0% 0.45% Contract NCC RB1 Index Linke
Slide 44: New Clydesdale Colliery
New Clydesdale Colliery JORC Resources 7.7 New Clydesdale Colliery (NCC) is a multi-product open cast and underground mine with the ability to produce domestic and export quality product. 31.4 NCC has a 1.6Mt per annum offtake agreement with Eskom, 70.6 South Africa’s largest power generator, until
Slide 45: North Block Complex
North Block Complex JORC Resources 5.3 North Block Complex (NBC) is a multi-product open cast 8.5 operation that has solidified itself as a reliable supplier of high- quality export thermal coal for the export market and domestic coal for Eskom, South Africa’s power generator. The multiple establish
Slide 46: Ubuntu
Ubuntu The energy content under the Coal Supply Agreement (CSA) between Ubuntu and Eskom concluded end February 2023. The JORC Resources CSA has not been renewed and the colliery is now on care and 4.7 maintenance. Given the level of production and sales, the shifting of Ubuntu 28.6 into care and ma
Slide 47: Ord Minnett East Coast Mining Conference March 2023
Ord Minnett East Coast Mining Conference March 2023
Slide 48: Questions
Questions 48 Questions Ord Minnett East Coast Mining Conference March 2023
TerraCom — Ord Minnett East Coast Mining Conference 2023 on 6ix