Terracom Limited · ASX:TER
Terracom — Investor Presentation (January 2018)
48 slides from Terracom's investor presentation, Jan 23, 2018
Slide 1: Strong December 2017 Quarter and Focus on Cashflow
For personal use only STRONG DECEMBER 2017 QUARTER AND FOCUS ON CASHFLOW 23 JANAURY 2018
Slide 2: Disclaimer
TERRACOM DISCLAIMER This document has been prepared by TerraCom Limited (TerraCom or the Company) in relation to its capital raising proposal, as described in its For personal use only ASX announcement (“Fully Underwritten Non-Renounceable Pro-Rata Accelerated Rights Issue”). This document contains
Slide 3: For personal use only
For personal use only
Slide 4: Capital Structure
CAPITAL STRUCTURE MAJOR SHAREHOLDERS COMMITTED TO BUILDING VALUE For personal use only Trading Summary (18 Jan 2018) Share Price Performance ASX Code TER Share Price A$0.215 Shares 302.1m Market Cap A$64.95M Finance Instruments in Place Warrants OCP Asia hold 12,630,833 Detachable Warrants with an E
Slide 5: Fully Underwritten Rights Issue Structure
FULLY UNDERWRITTEN RIGHTS ISSUE STRUCTURE For personal use only Rights Issue: Fully Underwritten Pro-Rata Accelerated Rights Issue Rights Issue Participation: Three (3) new ordinary shares (New Shares) for every thirteen (13) existing ordinary shares held (Existing Shares) to raise gross proceeds up
Slide 6: Fully Underwritten Rights Issue Structure (Cont.)
FULLY UNDERWRITTEN RIGHTS ISSUE STRUCTURE (CONT.) For personal use only Rights Issue: Fully Underwritten Pro-Rata Accelerated Rights Issue Existing Shares on Issue: ~302.1 million New Shares to be Issued: ~69.7 million* Total Shares on Issue (post Rights Issue): ~371.8 million * 18.75% new shares as
Slide 7: Fully Underwritten Rights Issue Additional Details
FULLY UNDERWRITTEN RIGHTS ISSUE ADDITIONAL DETAILS For personal use only Rights Issue: Fully Underwritten Pro-Rata Accelerated Rights Issue Eligible Institutional Registered address in Australia, New Zealand, Shareholders: Singapore, United Arab Emirates, Hong Kong, Cayman Islands and Malaysia only.
Slide 8: Fully Underwritten Rights Issue Use of Funds
FULLY UNDERWRITTEN RIGHTS ISSUE USE OF FUNDS For personal use only The net proceeds of the funds raised under the Rights Issue will be used to strengthen the Company’s financial position: Working capital to deliver the 3.5mtpa1,2 production for 2018 calendar year Expedite the Blair Athol rail
Slide 9: Fully Underwritten Rights Issue Timetable
FULLY UNDERWRITTEN RIGHTS ISSUE TIMETABLE For personal use only 9
Slide 10: Fully Underwritten Rights Issue Timetable (Cont.)
FULLY UNDERWRITTEN RIGHTS ISSUE TIMETABLE (CONT.) For personal use only 10
Slide 11: Fully Underwritten Rights Issue Additional Information
FULLY UNDERWRITTEN RIGHTS ISSUE ADDITIONAL INFORMATION For personal use only The Underwriter will receive a fee for acting and that fee comprises (in the case of the Underwriter only) an underwriting fee of 2.5% of the total Institutional Entitlement Offer amount and the total Retail Entitlement O
Slide 12: Key Risks
KEY RISKS For personal use only Notice: There are a number of risks, both specific to TerraCom and of a general nature, which may, either individually or in combination, affect the future operational and financial performance of TerraCom, and the industries in which TerraCom operates. The following
Slide 13: Key Risks (Cont.)
KEY RISKS CONT. For personal use only Mongolia TerraCom’s BNU Mine is located in Mongolia. Whilst Mongolia is, at present, a stable democracy, in recent history it has experienced greater economic, social and political volatility than developed Western countries and there is therefore a higher degre
Slide 14: Key Risks (Cont.)
KEY RISKS CONT. For personal use only Mineral Resource and Ore Reserve estimates Mineral Resource and Ore Reserve estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new informa
Slide 15: Key Risks (Cont.)
KEY RISKS CONT. For personal use only General risks General The value of TerraCom shares and prices at which they trade in the market are affected by a number of general factors which are beyond the control of TerraCom and its directors. Factors such as inflation, currency fluctuation, interest rate
Slide 16: Key Risks (Cont.)
KEY RISKS CONT. For personal use only Liquidity risk There can be no guarantee that there will always be an active market for TerraCom’s shares or that the price of TerraCom shares will increase. There may be relatively few buyers or sellers of shares on the ASX at any given time. This may affect th
Slide 17: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be o
Slide 18: International Offer Restrictions (Cont.)
INTERNATIONAL OFFER RESTRICTIONS CONT. For personal use only New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered to the public within New Z
Slide 19: International Offer Restrictions (Cont.)
INTERNATIONAL OFFER RESTRICTIONS CONT. For personal use only United Arab Emirates Neither this document nor the New Shares have been approved, disapproved or passed on in any way by the Emirates Securities and Commodities Authority ("ESCA") or any other governmental authority in the United Arab Emir
Slide 20: Key Terms of Underwriting Agreement
KEY TERMS OF UNDERWRITING AGREEMENT For personal use only The Entitlement Offer is fully underwritten on the terms and conditions set out in an underwriting agreement executed by TerraCom and Gleneagle Securities (Aust) Pty Limited (the Underwriter) (Underwriting Agreement). Bonython Coal No 1 Pty L
Slide 21: Key Terms of Underwriting Agreement (Cont.)
KEY TERMS OF UNDERWRITING AGREEMENT CONT. For personal use only • a representation or warranty on the part of TerraCom was or is untrue or incorrect when given or becomes untrue, incorrect or misleading; • a certificate required to be given by TerraCom (certifying TerraCom's compliance with its obli
Slide 22: Debt Overview
DEBT OVERVIEW GIVES COMPANY CASHFLOW HEADROOM, STABILITY AND FLEXIBILITY TERRACOM ORION MINING (BLAIR ATHOL) For personal use only Secured Bond Working Capital Facilities US$131.75mn face value Facility A US$1. 5mn outstanding 5 years, interest-only (12.5% p.a.) Repayment US$0.25mn per month
Slide 23: Australia: Blair Athol Mine Operation
For personal use only AUSTRALIA BLAIR ATHOL MINE OPERATION ORGANIC EXPANSION OF BLAIR ATHOL
Slide 24: Blair Athol Thermal Coal Mine
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Blair Athol Mine has now been recommissioned and is fully operational World class mine infrastructure capable of supporting 12Mtpa including workshops, stores and offices First Coal Mined – 13th August 2017 First Product Coal
Slide 25: Blair Athol Thermal Coal Mine – Rehabilitation
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) – REHABILITATION For personal use only Rehabilitation is progressing as planned at Blair Athol. The first 58 hectares of rehabilitation has been successfully completed as per forecast. 25
Slide 26: Blair Athol Thermal Coal Mine
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Dragline and Coal Pit. Dragline in operation. 26
Slide 27: Blair Athol Thermal Coal Mine
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Recently completed rehabilitation. CHPP in operation. 27
Slide 28: Blair Athol Thermal Coal Mine
AUSTRALIA BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Blair Athol - Coal Truck Being Loaded Blair Athol – CHPP and Stockpile. with Stockpile in view. 28
Slide 29: Rail Load-Out Facility (BA)
AUSTRALIA RAIL LOAD-OUT FACILITY (BA) For personal use only The next critical activity for the Blair Athol Mine is the Construction and Commissioning of a dedicated rail load-out facility. Planning is well advanced and construction work has commenced, and it is expected the facility will be comm
Slide 30: 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 30
Slide 31: JORC – Blair Athol Thermal Coal Mine
AUSTRALIA JORC – BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only Upgrade of the total Blair Athol Mine JORC Reserves to 15.6mt and increase the JORC Measured Resource to 21.9mt#. Increased the Reserves by 2.1mt adding one extra year to mine life, which now totals 8 years based on ~2 mil
Slide 32: JORC – Blair Athol Thermal Coal Mine
AUSTRALIA JORC – BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only # Note no change to this information from previous disclosures and see competent person statement at end of presentation. 32
Slide 33: JORC – Blair Athol Thermal Coal Mine
AUSTRALIA JORC – BLAIR ATHOL THERMAL COAL MINE (BA) For personal use only # Note no change to this information from previous disclosures and see competent person statement at end of presentation. 33
Slide 34: 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 35: Queensland Expansion: Large Resource with Expansion Potential
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 36: Mongolia: South Gobi Coking Coal Assets
For personal use only MONGOLIA SOUTH GOBI COKING COAL ASSETS BNU COKING COAL MINE BNU CHPP DEVELOPMENT
Slide 37: 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 38: South Gobi Expansion
SOUTH GOBI EXPANSION ORGANIC GROWTH THROUGH REGIONAL EXPANSION For personal use only 38
Slide 39: BNU Mine Production Overview
BNU MINE PRODUCTION OVERVIEW For personal use only 39
Slide 40: BNU Operations Status
BNU OPERATIONS STATUS ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY For personal use only 40
Slide 41: BNU Operations Status
BNU OPERATIONS STATUS ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY For personal use only 41
Slide 42: BNU Coal Quality
BNU COAL QUALITY ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY 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 2
Slide 43: South Gobi Expansion
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 44: BNU CHPP to Be Constructed in 2018
BNU CHPP TO BE CONSTRUCTED IN 2018 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 45: 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 46: Thank You
For personal use only THANK YOU info@terracomresources.com
Slide 47: 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
Slide 48: Competent Person Statement (Cont.)
TERRACOM COMPETENT PERSON STATEMENT (CONT.) 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 materi