Terracom Limited · ASX:TER
Terracom — Non-Deal Roadshow (October 2016)
37 slides from Terracom's roadshow presentation, Oct 6, 2016
Slide 1: Focus on Cashflow & Growth: Investor Roadshow Presentation
FOCUS ON For personal use only CASHFLOW & GROWTH INVESTOR ROADSHOW PRESENTATION OCTOBER 2016
Slide 2: Disclaimer
TERRACOM 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 Pr
Slide 3: Overview: Focus on Cashflow and Growth
OVERVIEW FOCUS ON CASHFLOW AND GROWTH Independent hard coking coal and high quality thermal coal producer For personal use only • Targeting production from 3 mines in 3 regions with a total target 3 Regions output of 5Mtpa in 2017 and all mines are estimated to deliver strong Of operations in Aust
Slide 4: Coal Markets Have Turned Around Strongly This Year
OVERVIEW COAL MARKETS HAVE TURNED AROUND STRONGLY THIS YEAR For personal use only Thermal Coal • The thermal coal price has reached over US$69/t in September 2016, up 37% year-to-date from US$50/t • Spot Price at US$70.80/t on 16/9/16 Coking Coal • The coking coal price has reached over US$181/t in
Slide 5: Australian Based and ASX Listed Company
For personal use only AUSTRALIAN BASED AND ASX LISTED COMPANY
Slide 6: Australia
AUSTRALIA BLAIR ATHOL MINE ACQUISITION AND RESTART For personal use only ORGANIC EXPANSION OF BLAIR ATHOL EXPLORATION & DEVELOPMENT OF NORTHERN GALILEE PROJECT EXPLORATION & DEVELOPMENT OF SPRINGSURE PROJECT
Slide 7: Australia: BA Thermal Coal Mine
AUSTRALIA BA THERMAL COAL MINE Final stages of acquiring mothballed Blair Athol Mine in Australia for $1 which includes: For personal use only World class mine infrastructure capable of supporting 12Mtpa including workshops, stores and offices Dragline and all mining plant and equipment requir
Slide 8: Queensland Expansion: Organic Growth from Strategically Located Assets
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 8 Note: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
Slide 9: Mongolia
For personal use only MONGOLIA SOUTH GOBI COKING COAL ASSETS BNU COKING COAL MINE BNU CHPP DEVELOPMENT UVS COKING COAL AND POTASH/BRINES ASSETS MID GOBI THERMAL COAL ASSETS
Slide 10: Mongolia: BNU Hard Coking Coal Mine
MONGOLIA BNU HARD COKING COAL MINE For personal use only Operate, optimise and expand BNU hard coking coal operations in South Gobi 1.1Mt target for 2017 generating strong estimated margins of up to US$27 p/t Set to capitalise on strong HCC prices through offtake agreement linked to seaborne p
Slide 11: Mongolia: Strong Local Experience and Asset Portfolio
MONGOLIA STRONG LOCAL EXPERIENCE AND ASSET PORTFOLIO For personal use only Strong local history and experience operating in Mongolia since 2011 Large portfolio of Mining and Exploration Licences in strategic positions with links to large markets South Gobi Project (JORC 83Mt) of hard coking co
Slide 12: South Gobi Expansion: Organic Growth Through Regional Expansion
SOUTH GOBI EXPANSION ORGANIC GROWTH THROUGH REGIONAL EXPANSION For personal use only 12
Slide 13: Indonesia
For personal use only INDONESIA CENTRAL KALIMANTAN ACQUISITION OPERATING CASHFLOW POSITIVE COKING COAL MINE SIGNIFICANT EXPANSION POTENTIAL
Slide 14: Indonesia: Indomet Hard Coking Coal Mine
INDONESIA INDOMET HARD COKING COAL MINE For personal use only Due diligence being conducted on an operational hard coking coal mine in Central Kalimantan (Indomet) with estimated completion late 2016 All share transaction which should be immediately cash generative with estimated cash margin of
Slide 15: Strong Development Pipeline
STRONG DEVELOPMENT PIPLELINE LARGE PORTFOLIO OF HIGH QUALITY ASSETS BEING PROGRESSED For personal use only Development Production Exploration South Gobi BNU Uvs INDOMET Middle Gobi Blair Athol Northern Galilee Complex Springsure Sierra Kolan 15 Note: Blair Athol Mine acquisition is subject to releva
Slide 16: Management Team
MANAGEMENT TEAM +150 YEARS OF COAL EXPLORATION, DEVELOPMENT & OPERATIONAL EXPERIENCE For personal use only Cameron Michael David Julien Karl Mark Nathan McRae Avery Stone Lawrence Arnold Reynolds Boom Executive Executive Executive Chief Chief Financial GM Corporate Financial Chairman Director Direct
Slide 17: Debt Restructuring Complete
DEBT RESTRUCTURING COMPLETE GIVES COMPANY CASHFLOW HEADROOM, STABILITY AND FLEXIBILITY For personal use only Old Structure New Structure Secured Bond Amortising Notes US$124mn face value (US$129mn US$55mn from 30 June 2017) OCP Asia 5 years, interest-only (12.5% p.a.) Revenue share of 0.75% (P
Slide 18: Capital Structure
CAPITAL STRUCTURE MAJOR SHAREHOLDERS COMMITTED TO BUILDING VALUE For personal use only Trading Summary (19-Sep-16) Share Price Performance ASX Code TER Share Price A$0.036 Shares 2.6B Market Cap A$92.9M Ownership Summary (%) Financial Instruments Other Share Holders Finance Instruments in Place 15%
Slide 19: Thank You
For personal use only THANK YOU Cameron McRae Mick Avery Executive Chairman Executive Director info@terracomresources.com
Slide 20: Appendix
For personal use only APPENDIX • AUSTRALIA MORE INFORMATION • MONGOLIA MORE INFORMATION • COMPETENT PERSONS STATEMENTS
Slide 21: Australia
For personal use only AUSTRALIA
Slide 22: Blair Athol Coal Mine Acquisition
BLAIR ATHOL COAL MINE ACQUISITION PROGRESSING THROUGH FINAL APPROVALS For personal use only ACQUISITION Acquisition of coal mine in care and Location maintenance PRICE C.20 km north west of Clermont in A$1 Mine plan capable of delivering a the Bowen Basin of Central 5 year mining life at 2Mtpa Q
Slide 23: Queensland Project Pipeline: Strategically Located Assets
QUEENSLAND PROJECT PIPELINE STRATEGICALLY LOCATED ASSETS For personal use only Zone 1 – Northern Galilee Hub Zone 2 – Central Bowen Hub * Zone 3 – Central Western Hub 23 Note: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
Slide 24: Queensland Project Pipeline: Large Resource with Expansion Potential
QUEENSLAND PROJECT PIPELINE LARGE RESOURCE WITH SIGNIFICANT EXPANSION POTENTIAL For personal use only Australian JORC Resource Table (excluding Blair Athol) JORC Resources (Mt) Potential coal Independent Tenement Measured Indicated Inferred Total type geologist Hughenden - 133 1,076 1,209 Thermal MD
Slide 25: Mongolia
For personal use only MONGOLIA
Slide 26: 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 M
Slide 27: South Gobi Expansion: Multi Pit Expansion Strategy
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 28: 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 owncoal haul road Applies Terra
Slide 29: Terra Energy BNU Mine: World Class Operation
TERRA ENERGY BNU MINE WORLD CLASS OPERATION IN MONGOLIA For personal use only Delivering not only Mongolian productivity records but world class productivity from its mining fleet Asset utilisation in Mongolia is higher than other major producing basins Have developed this capability in a syst
Slide 30: BNU Operations Status
BNU OPERATIONS STATUS ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY For personal use only Commissioned new supply chain into Chinese hard coking coal markets in H1 2016 Delivered improved yield results, middling’s recovery and ash control on BNU Coal to enhance additional value within t
Slide 31: BNU Coal Quality
BNU COAL QUALITY COAL QUALITY SUPERIOR TO OTHER PRODUCERS IN REGION 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 23-27
Slide 32: BNU CHPP to Be Constructed in 2016
BNU CHPP TO BE CONSTRUCTED IN 2016 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 33: Transport Infrastructure Developments
TRANSPORT INFRASTRUCTURE DEVELOPMENTS TERRA ROAD HAS BUILT ROAD TO CHINA For personal use only June 2013, entered into a 20 year contract: • With the Mongolian government for the construction and use of wholly-owned haul road connecting BNU to the Chinese border at Ceke • The road is accessible by
Slide 34: Uvs Project
UVS PROJECT COKING COAL AND POTASH ASSETS IN NORTHERN MONGOLIA For personal use only Uvs basin is prospective for coal, evapourite salts (potash), Uranium, associated brines and clays (Li and Mg) Mining of coking coal and potash occurs in neighbouring areas Located close to a 220Kw power line
Slide 35: Mid Gobi Project
MID GOBI PROJECT EXPLORATION TENEMENTS WITH SUBSTANTIAL THERMAL COAL RESOURCES For personal use only Potential for large scale open cut operations Mid Gobi Project – JORC Resources to supply power producers in China and Measured Indicated Inferred Total Mongolia Mid Gobi - 32 Mt 189 Mt 221 Mt Co
Slide 36: Competent Person Statement
TERRACOM COMPETENT PERSON STATEMENT For personal use only Technical Information on Clyde Park & Springsure JORC has been prepared by Kim Maloney who has over 10 years of experience in coal mining and extractive industry throughout Australia. Kim has experience within the Central Queensland coal mine
Slide 37: Competent Person Statement (Cont'd)
TERRACOM COMPETENT PERSON STATEMENT (CONT’D) For personal use only South Gobi North Technical information in this report in relation to coal quality and washability analysis of South Gobi Project and fluorite mineralisation on Mid Gobi Project has been compiled by Mr Peter Goodman, who is a Member o