Terracom Limited · ASX:TER
Terracom — Investor Presentation (October 2018)
38 slides from Terracom's investor presentation, Oct 15, 2018
Slide 1: Investor Presentation October 2018
For personal use only Investor Presentation October 2018 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: Agenda
AGENDA For personal use only 1 Overview – Wal King, Chairman 2 Strategy 3 Project Updates 4 Appendix Photo: David Biggs CEO & Ian Bucknell CFO 3 3
Slide 4: Overview
For personal use only OVERVIEW
Slide 5: Overview
OVERVIEW For personal use only 2 Regions Capital Structure ASX listed coal producer with operations Shares on Issue (m) 380 in Australia and Mongolia Share Price 10/10/18 (ASX: TER) 0.74 Cash Generating Market Cap (m) A$281 $ Capitalising on strong coal market targeting 5.5Mtpa generating strong cas
Slide 6: Board of Directors
BOARD OF DIRECTORS For personal use only Wal King Hon. Craig Wallace Michael Avery Tsogt Togoo Chairman Deputy Chairman Executive Director Non-Executive Director • Wal holds a Bachelor and Masters • Hon. Craig Wallace served as the • Michael has extensive experience • Tsogt has two decades of in Eng
Slide 7: Highlights
HIGHLIGHTS FOCUS ON CASHFLOW AND GROWTH IN STRONG MARKET For personal use only 2019 Financial Year – Financial Highlights • EBITDA Forecast between $130 million and $150 million • Production from 2 mines producing high value product in 2 strong coal regions – 2.5Mt(1) from Blair Athol (BA) and 3.0
Slide 8: Coal Quality and Sales
COAL QUALITY AND SALES STRONG COAL BRANDS SOLD INTO ESTABLISHED MARKETS For personal use only Australia - Blair Athol Thermal Coal • Strong brand history with an estimated 250 million tonnes of BA Thermal Coal sold into Asian Markets • High Energy, Low Ash, Low sulfur coal with low trace element a
Slide 9: Earnings Analysis
EARNINGS ANALYSIS FULL YEAR EARNINGS OVERVIEW For personal use only Net Loss after Tax for period ending 30 June 2018 150 125 100 106 75 147 Value (A$ m) 50 12 25 41 18 29 0 36 (19) (25) 7 (50) Sales Revenue Cost of Sales Gross Profit Corp & Other EBITDA D&A Financing Tax NLAT 9
Slide 10: Debt Overview
DEBT OVERVIEW RAPID DEBT REDUCTION UNDERWAY For personal use only Borrowings Terms Repaid Listed Bond US$127.1m, 12.5% p.a. Due June 2021 Super Senior Note A US$7.5m, 15% p.a. 9th Aug 2018 Super Senior Note B US$3.125m, 15% p.a. Rolled to Listed Bond Fuel Facility US$1.4m, 12.5% p.a. st 21 Sep 2
Slide 11: Strategy
For personal use only STRATEGY
Slide 12: Strategic Outlook
STRATEGIC OUTLOOK FOCUSED ON BECOMING A MID-TIER COAL PRODUCER For personal use only 1 Maximise • BA – 2.5Mtpa production and • BNU – increasing from 1.5 Mtpa to 3Mtpa revenue • Reduce Debt through strong cash flow generation 2 Focus on • Near term brownfield and greenfield development expansion o
Slide 13: Guidance for FY19
GUIDANCE FOR FY19 For personal use only FY19 FY18 Guidance Actual Production (Mt) 4.0 1.9 EBITDA ($m) 130-150 28.6 EBITDA margin BA (A$/t) 50 27 EBITDA margin BNU (A$/t) 15 12 13
Slide 14: Project Updates
For personal use only PROJECT UPDATES
Slide 15: Queensland Blair Athol
1 For personal use only Queensland Blair Athol TER: BA Dragline 15
Slide 16: Significant Achievements: Blair Athol Mine
SIGNIFICANT ACHIEVEMENTS BLAIR ATHOL MINE IN AUSTRALIA For personal use only 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
Slide 17: Operational Performance: Blair Athol Mine
OPERATIONAL PERFORMANCE BLAIR ATHOL MINE IN AUSTRALIA For personal use only BA Rapidly Recommissioned and into Full Production • 31 May 2017 – Completion of the Sale and Purchase Agreement for mine acquisition • 13 August 2017 – First Coal Mined • 25 August 2017 – First Product Coal Crushed • 26 A
Slide 18: Rail Load-Out Facility (BA)
AUSTRALIA RAIL LOAD-OUT FACILITY (BA) For personal use only Existing Rail Line Connecting into Main Goonyella Line to DBCT BA Rail Load Out BA Coal Mine 18
Slide 19: Environment: Rehabilitation Work in BA
ENVIRONMENT SIGNIFICANT REHABILITATION WORK COMPLETED IN BA For personal use only 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
Slide 20: Mongolia Baruun Noyon Uul (BNU)
2 For personal use only Mongolia Baruun Noyon Uul (BNU) TER: BNU 20
Slide 21: 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 22: Significant Achievements: BNU Mine
SIGNIFICANT ACHIEVEMENTS BNU MINE IN MONGOLIA For personal use only Multi Pit Expansion Implemented • Progressive development of a multiple shallow pits on coal subcrop along 50km of Noyon Basin edge with planning underway to increase output to 3Mtpa (refer below) • All pits to be serviced by exis
Slide 23: Operational Performance: Mongolia and Consolidated
OPERATIONAL PERFORMANCE MONGOLIA AND CONSOLIDATED For personal use only MONGOLIA CONSOLIDATED 23
Slide 24: Environment: Rehabilitation Work in BNU
ENVIRONMENT SIGNIFICANT REHABILITATION WORK COMPLETED IN BNU For personal use only Significant progress of rehabilitation activities in BNU • The progressive rehabilitation of 9 exploration trenches and 1,027 exploration drill holes • Ongoing maintenance of tree planting program Image – local wild
Slide 25: Other Assets
For personal use only 3 Other Assets 25
Slide 26: Queensland Expansion
QUEENSLAND EXPANSION ORGANIC GROWTH FROM STRATEGICALLY LOCATED ASSETS For personal use only 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 coa
Slide 27: Queensland Expansion: Large Resource
QUEENSLAND EXPANSION 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 Northern Galilee Project - 133 1,076 1
Slide 28: South Gobi Expansion
SOUTH GOBI EXPANSION REGIONAL CONSOLIDATION For personal use only Opportunity to consolidate the South Gobi region through development of operatin g and marketing arrangements with surrounding Mines and Projects Utilises TerraCom existin g infrastructure including own coal haul road Applies Te
Slide 29: Appendix
For personal use only APPENDIX
Slide 30: Community
COMMUNITY COMMITMENT TO OUR COMMUNITIES For personal use only Sourcing People from and Living in Local Communities in Clermont • Completed the acquisition of the 41 properties located in Clermont Township (including 39 houses, Guest House and 40 Single Person Quarters) as part of the Company’s str
Slide 31: Health and Safety
HEALTH AND SAFETY STRONG FOCUS AND PERFORMANCE For personal use only BNU Lost Time Injury Free Record World Class • The BNU coking coal mine has maintained its excellent safety record, with operations continuing throughout the year without any Lost Time Injury (LTI) incidents occurring. • By 30 Ju
Slide 32: Financial Highlights: Full Year Earnings Overview
FINANCIAL HIGHLIGHTS FULL YEAR EARNINGS OVERVIEW For personal use only Million $ H1 2018 H2 2018 FY 2018 Comments Revenue 45.2 101.9 147.1 Record revenue on the back of record production. Cost of Sales (35.1) (71.2) (106.3) Substantial increase in COS refelcting BNU and BA ramp up production activit
Slide 33: Financial Highlights: Record Cash Generation
FINANCIAL HIGHLIGHTS RECORD CASH GENERATION FROM OPERATIONS For personal use only $M Key Financial Measures FY 2018 Comments EBITDA 28.6 FY 2018 EBITDA driven by record sales and margins. Cash generated from operations 34.3 FY2018 cash generation on the back of record sales at Blair Athol and BNU. C
Slide 34: BA Margin and Unit Costs
FINANCIAL HIGHLIGHTS BA (AUSTRALIA) – MARGIN AND UNIT COSTS For personal use only $/t $/t $/t H1 Q3 Q4 Dec Mar Jun Margins & Unit Costs - BA 2017 2018 2018 Comments Average sales price (A$/t) 70.6 71.0 102.2 44% increase in revenue per tonne on commissioning of the train load out. Unit cost per tonn
Slide 35: BNU Margin and Unit Costs
FINANCIAL HIGHLIGHTS BNU (MONGOLIA) – MARGIN AND UNIT COSTS For personal use only $/t $/t H1 H2 Dec Jun Margins & Unit Costs - BNU 2017 2018 Comments Average sales price (A$/t) 71.7 70.5 Coal sold raw at the mine gate Unit cost per tonne (A$/t) 63.5 55.3 Multi Pit expansion and cost reduction plan i
Slide 36: References
TERRACOM REFERENCES For personal use only (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 no
Slide 37: Competent Person Statement
TERRACOM COMPETENT PERSON STATEMENT For personal use only 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 basis that the information has not materially cha
Slide 38: Thank You
For personal use only THANK YOU info@terracomresources.com