Slide 1: FY19 Half-Year Results Presentation
FY19 HALF-YEAR RESULTS PRESENTATION MARCH 2019 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: Agenda
AGENDA 1 Overview 2 Financials 3 Project Updates 4 Summary Photo: David Biggs CEO & Ian Bucknell CFO 3 3
Slide 4: Overview
OVERVIEW
Slide 5: Strategy – Unlocking Value
STRATEGY – UNLOCKING VALUE FOCUSED ON BECOMING A MID-TIER COAL PRODUCER 1 • BA – increase from 2.5 to 3Mtpa1 Maximise • BNU – increase from 1.5 to 3Mtpa2 production and • Reduce debt through strong cash revenue flow generation 2 • Near term brownfield and greenfield Focus on expansion opportunities
Slide 6: Overview
OVERVIEW 2 Regions Capital Structure ASX listed coal producer with operations in Australia and Mongolia Shares on Issue (m) 397 Share Price 27/02/18 (ASX: TER) 0.62 Cash Generating $ Capitalising on strong coal market targeting Market Cap (m) A$246 6.0Mtpa generating strong cash flows Options (m) 14
Slide 7: 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 • Hon. Craig Wallace served as the • Philip has been in South East
Slide 8: 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 • Nathan Boom holds a Bachelor of • Shaun Lucas has held operational, • Since graduating from the mi
Slide 9: Financials
FINANCIALS
Slide 10: FY19 – H1 Highlights
FY19 – H1 HIGHLIGHTS FINANCIAL & OPERATING PERFORMANCE 2019 Financial Year – H1 2019 Financial Year – H1 Financial Highlights Operation Highlights • Group EBITDA $52.6m • Production 1.4Mt – 1.2Mt BA, • Blair Athol (BA) $61m 0.2Mt BNU • Baruun Noyon Uul (BNU) • Sales 1.5Mt – 1.2Mt BA, 0.3Mt -$3.9
Slide 11: FY19 – H1 Highlights
FY19 – H1 HIGHLIGHTS FINANCIAL & OPERATING PERFORMANCE H1 FY19 H1 FY18 Change H1 FY19 H2 FY18 Change Production ROM Production (Mt) 1.4 0.9 65% 1.4 1.6 -11% Saleable Production (Mt) 1.4 0.8 67% 1.4 1.4 1% Coal Sales (Mt) 1.5 0.6 134% 1.5 1.3 16% Financial Revenue 171.9 45.2 280% 171.9 101.9 69% Oper
Slide 12: FY19 – H1 Highlights: Debt Overview
FY19 – H1 HIGHLIGHTS DEBT OVERVIEW Face value of debt reduced by US$23.6 million FY19YTD, including extinguishment of the following facilities: Facility Currency $M Blair Athol USD $9.0 Prepayment Super Senior Note A USD $7.5 Blair Athol Working USD $0.8 Capital Facility Name Security US$ mill
Slide 13: Coal Quality and Sales
COAL QUALITY AND SALES STRONG COAL BRANDS SOLD INTO ESTABLISHED MARKETS Australia - Blair Athol Thermal Coal • Strong brand history with an estimated 250 million tonnes of BA Thermal Coal sold into Asian Markets • High Energy, Low Ash, Low sulfur coal with low trace element attractive to Japanese
Slide 14: Project Updates
PROJECT UPDATES
Slide 15: Queensland – Blair Athol (BA)
Queensland Blair Athol (BA) 15
Slide 16: Operational Performance
OPERATIONAL PERFORMANCE BLAIR ATHOL MINE IN AUSTRALIA May August August August October October 2017 2017 2017 2017 2017 2017 Completion First Coal First First First First Coal of the Sale Mined Product Dragline Product Trucked to and Coal Swing Coal Third Party Purchase Crushed Washed TL
Slide 17: Significant Achievements
SIGNIFICANT ACHIEVEMENTS BLAIR ATHOL MINE IN AUSTRALIA Recommissioned BA Mine • World class infrastructure capable of supporting 12Mtpa • Ramped up to in excess of 2.5Mtpa annualised production rate within 12 months of taking ownership • Re-established BA strong coal brand in strong Japanese and K
Slide 18: Australia: Rail Load-Out Facility (BA)
AUSTRALIA RAIL LOAD-OUT FACILITY (BA) Existing Rail Line Connecting into Main Goonyella Line to DBCT BA Rail Load Out BA Coal Mine 18
Slide 19: Operational Performance
OPERATIONAL PERFORMANCE BLAIR ATHOL MINE IN AUSTRALIA July to January to June July to January to June July to Detail December 2016 2017 December 2017 2018 December 2018 Run of Mine (tonnes) 441,996 1,132,924 1,193,179 Overburden (bcm) 5,961,281 8,287,764 7,328,915 Saleable Production (tonnes) 406,04
Slide 20: Contractor Engagements
CONTRACTOR ENGAGEMENTS BLAIR ATHOL MINE IN AUSTRALIA Link Mining Services o Principal Contractor o Statutory Positions (Coal Mine Operator, SSE, OCE, etc) o Overburden Removal (including Drill & Blast, and Dragline) o Mining of ROM Coal o Washing and Crushing of ROM Coal Toll o Hauling of Clean
Slide 21: Resource and Reserves
RESOURCE AND RESERVES JORC 2012 Resource 3 Mt 50 50 45 Measured 31.5 45 40 40 Indicated 11.6 35 35 Inferred 1.9 30 30 Total 45.0 25 25 Note – after mining depletion of 2.2Mt, updated 6 December 20183. 20 20 15 15 Reserve 4 Mt 10 10 14 Proved 14.0 5 5 Probable 2.5 0 0 RESOURCE RESERVE Total 16.5 Meas
Slide 22: Thermal Coal Product Specification
THERMAL COAL PRODUCT PRODUCT SPECIFICATION 22
Slide 23: Environment
ENVIRONMENT SIGNIFICANT REHABILITATION WORK COMPLETED IN BA Significant progress of rehabilitation activities in BA • The capping of the old tailings storage facility completed ahead of schedule as part of the mining operations process. • The completion of the rehabilitation of 58 hectares as part
Slide 24: Mongolia – Baruun Noyon Uul (BNU)
Mongolia Baruun Noyon Uul (BNU) 24
Slide 25: South Gobi Project
SOUTH GOBI PROJECT NOYON BASIN – MULTIPLE MINING AND EXPLORATION LICENCES The South Gobi Project comprises contiguous South Gobi Project JORC Resources6 mining and exploration licenses covering 696 Measured Indicated Inferred Total sq km in the Noyon Coal Basin North 15 Mt 9 Mt 3 Mt 27 Mt • c.850
Slide 26: South Gobi Project: Regional Mining Licence Layout
SOUTH GOBI PROJECT REGIONAL MINING LICENCE LAYOUT 26
Slide 27: South Gobi Project: Delivery of Implementation Plan
SOUTH GOBI PROJECT DELIVERY OF IMPLEMENTATION PLAN2 Operating Cost Rationalisation: Delivery of Coal Plan2: Have engaged the Number 1 The border crossing that is utilised Mining Equipment and Services to transport our coal from Contractor in Mongolia. Mongolia to China has opened up Implem
Slide 28: South Gobi Project: Delivery of Implementation Plan
SOUTH GOBI PROJECT DELIVERY OF IMPLEMENTATION PLAN2 28
Slide 29: Other Projects
Other Projects % ’ > ®29
Slide 30: Queensland Expansion
QUEENSLAND EXPANSION ORGANIC GROWTH FROM STRATEGICALLY LOCATED ASSETS Zone 1 – Northern Galilee Hub Zone 2 – Central BowenHub * Zone 3 – Central WesternHub The BA acquisition revalues TerraCom’s Australian portfolio through providing a hub for their development across major coal basins in Queensland
Slide 31: Queensland Expansion: Large Resource with Expansion Potential
QUEENSLAND EXPANSION LARGE RESOURCE WITH SIGNIFICANT EXPANSION POTENTIAL Australian JORC Resource Table (excluding Blair Athol)5 JORC 2004 Resources (Mt) Potential coal Independent Tenement Measured Indicated Inferred Total type geologist Northern Galilee Project - 133 1,076 1,209 Thermal MDM - Hugh
Slide 32: Queensland Expansion: Northern Galilee Project
QUEENSLAND EXPANSION NORTHERN GALILEE PROJECT * 32
Slide 33: Queensland Expansion: Springsure Project
QUEENSLAND EXPANSION SPRINGSURE PROJECT * 33
Slide 34: 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 35: Thank You
© THANK YOU TERRACO
Slide 36: Financial Highlights
FINANCIAL HIGHLIGHTS 6M ENDED 31 DECEMBER 2018 – FINANCIALS 36
Slide 37: Financial Highlights
FINANCIAL HIGHLIGHTS 6M ENDED 31 DECEMBER 2018 – FINANCIALS 37