Terracom Limited · ASX:TER
Terracom — ShareCafe Hidden Gems Webinar 2021
32 slides from Terracom's conference presentation, Apr 23, 2021
Slide 1: Investor Webinar Presentation
TerraCom Limited Blair Athol Mine Access Road Clermont, Queensland, 4721 +61 7 4983 2038 ABN 35 143 533 537 For personal use only 23 April 2021 INVESTOR WEBINAR PRESENTATION TerraCom Limited (TerraCom or Company) is pleased to announce that Managing Director, Danny McCarthy and Executive Chairman, C
Slide 2: Investor Presentation – ShareCafe Hidden Gems Webinar
Investor Presentation ShareCafe Hidden Gems Webinar – 23 April 2021 For personal use only Presenters: Danny McCarthy, Managing Director & Craig Ransley, Executive Chairman www.terracomresources.com 1
Slide 3: Disclaimer – Important Notice
DISCLAIMER For personal use only IMPORTANT NOTICE This non-deal investor roadshow 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
Slide 4: Disclaimer – Important Notice (Continued)
DISCLAIMER For personal use only IMPORTANT NOTICE (CONTINUED) Nothing in this document should be construed as authorising the distribution of this Presentation outside of the Commonwealth of Australia. The law in or from certain jurisdictions may restrict the distribution or possession of this Prese
Slide 5: Contents
For personal use only 01 Corporate Overview 5 CONTENTS 02 03 Operational Control – South Africa Key Management Changes – South Africa 9 13 04 Business Overview and Outlook 15 05 Coal Sales 17 06 Refinance Update 24 07 Commodity Diversification 27 08 Appendices 30 www.terracomresources.com 4
Slide 6: Corporate Overview
For personal use only OVERVIEW CORPORATE 5
Slide 7: Corporate Overview
CORPORATE OVERVIEW For personal use only ASX : TER (as at 22 April 2021) Market Capitalisation (A$ million) 69.4 Substantial Shares on Issue (million) 754.6 Shareholders Options and Warrants on Issue (million) ^ 41.0 ^ 41.0M shares from US$20M Convertible Note at strike price of $0.696. www.terracom
Slide 8: Strategic Outlook
STRATEGIC OUTLOOK For personal use only • Consolidate and grow existing thermal coal Significant Growth Platform producing assets within South Africa and Australia 1 1 Maximise production and and Commodity Diversification • Diversify commodity base with a focus on bulk resultant revenue commodities
Slide 9: Global Footprint
GLOBAL FOOTPRINT For personal use only AUSTRALIA - Blair Athol (t coal) - Springsure (t coal) - Northern Galilee (t coal) - Moorlands (t coal)* GUINEA * - FAR (bauxite) SOUTH AFRICA - Somalu (bauxite) - Kangala (t coal) - Toubal (bauxite) - NCC (t coal) - NBC (t coal) - Ubuntu (t coal) LEGEND - Elof
Slide 10: Operational Control – South Africa
For personal use only OPERATIONAL CONTROL – SOUTH AFRICA 9
Slide 11: For personal use only
For personal use only www.terracomresources.com 10
Slide 12: JORC Reserves and Resources by Operation
For personal use only JORC RESERVE: 47.6Mt JORC RESERVE: 48.2Mt JORC RESERVE: 9Mt JORC RESOURCE: 1,350.1Mt • 41.7Mt Proved • 48.2Mt Proved • 9Mt Proved • 424.9Mt Measured • 5.9Mt Probable JORC RESOURCE: JORC RESOURCE: • 800.9Mt Indicated 79.4Mt 75.5Mt JORC RESOURCE: • 124.3Mt Inferred 120.3Mt • 56.0
Slide 13: Operational Management Control
OPERATIONAL MANAGEMENT CONTROL For personal use only • Operational control has been re-established over the Company’s South African operations to immediately: • deliver operational improvements, and • bolster financial performance. • Critical analysis of each operation has been completed and the ide
Slide 14: Key Management Changes – South Africa
For personal use only KEY MANAGEMENT CHANGES - SOUTH AFRICA 13
Slide 15: Key Management Changes
KEY MANAGEMENT CHANGES For personal use only Chief Executive Officer (South Africa) – Mr. Shammy Luvhengo has tendered his resignation and will leave the business at the end of April 2021, remaining involved with the business in his capacity as a Director of Ndalamo Resources (Pty) Ltd – the partner
Slide 16: Business Overview & Outlook
For personal use only BUSINESS OVERVIEW & OUTLOOK 15
Slide 17: Operations Outlook – 16Mtpa ROM
OPERATIONS OUTLOOK – 16MTPA ROM For personal use only Refer page 28 regarding specific JORC details www.terracomresources.com 16
Slide 18: Outlook
OUTLOOK For personal use only • Consistent FOB cash costs for BA at approximately A$60 per tonne provide a platform to achieve strong margins for the remainder of FY2021 and beyond. • Based on average export coal pricing achieved throughout Q1 FY2021, the calculated margin is approximately A$17 per
Slide 19: Coal Sales
For personal use only COAL SALES 18
Slide 20: Coal Sales
COAL SALES For personal use only Coal sales for the 9 month period 1 July 2020 to 31 March 2021 are as follows: MANAGED TONNES EQUITY TONNES 2021FY 2021FY Export Domestic Total Export Domestic Total Forecast Forecast (000’s) (000’s) (000’s) (000’s) (000’s) (000’s) (Millions) (Millions) Australia 1,7
Slide 21: Coal Sales – South Africa
COAL SALES – SOUTH AFRICA For personal use only ESKOM COAL SALES EXPORT COAL SALES 200% 200% 150% 150% 100% 100% 50% 50% 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ESKOM % BUDGET BUDGET EXPORT % BUDGET BUDGET www.terracomresources.com 20
Slide 22: Domestic Sales – South Africa
DOMESTIC SALES – SOUTH AFRICA For personal use only GENERAL • The demand levels for Eskom have stabilised and the Company is forecasting that all South African operations should deliver according to contracted quantities for the remainder of the 2021 financial year. • The primary reason for the decl
Slide 23: Domestic Sales – South Africa Forecast
DOMESTIC SALES – SOUTH AFRICA For personal use only FORECAST • Some of Eskom coal supply contracts have come to their end of life which has opened a greater avenue for potential new coal supply contracts. • Even with renewable sources of energy, South Africa has a social responsibility to ensure tha
Slide 24: Export Sales – South Africa
EXPORT SALES – SOUTH AFRICA For personal use only • The implementation of the export strategy in South Africa has been a key focus of the Company’s commercial and marketing team since the Company acquired Universal Coal plc in June 2020. • The coal quality from several of the South African operation
Slide 25: Refinance Update
For personal use only UPDATE REFINANCE 24
Slide 26: Benefits and Use of Funds
BENEFITS AND USE OF FUNDS For personal use only BENEFITS Improved Balance Sheet. Significant reduction in interest charges which will represent real cash cost savings for TerraCom shareholders. Flexible and efficient platform catering for future funding needs and cash surpluses. Well over 4
Slide 27: Key Terms
KEY TERMS For personal use only • The refinance process is well advanced, and a combined pre-payment and term loan structure is being considered at terms of between 5-7 years and interest rates at less than 10%. • Management is working towards completion of binding arrangements, long form documents
Slide 28: Commodity Diversification – Anglo African Minerals plc
For personal use only COMMODITY DIVERSIFICATION ANGLO AFRICAN MINERALS (AAM) plc 27
Slide 29: Global Bauxite Economic Reserves
GLOBAL BAUXITE ECONOMIC RESERVES For personal use only Guinea is home to at least 27% of the world’s known bauxite reserves, more than any other country. OTHERS CHINA 20% GUINEA GUINEA 27% VIETNAM JAMAICA INDIA INDIA GUYANA 3% INDONESIA INDONESIA BRAZIL 4% JAMAICA AUSTRALIA 7% AUSTRALIA VIETNAM 22%
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 Ballast barge transit ▹ Indicated 11.0 million metric tonnes ▹ Inferred 36.0 million metric tonnes A Feasibility Study and Environmenta
Slide 31: Appendices
For personal use only APPENDICES 30
Slide 32: Resources and Reserves Statement
RESOURCES AND RESERVES STATEMENT (BY PROJECT, AS AT 30 JUNE 2020) For personal use only RESERVES RESOURCES Proved Probable Total Measured Indicated Inferred Total Tenement Mt Mt Mt Mt Mt Mt Mt AUSTRALIA 12.8 11.7 24.5 27.7 238.3 1,903.0 2,169.0 Blair Athol1 12.8 11.7 24.5 27.7 11.3 2.0 41.0 Springsu