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TerraCom to tighten finances as Mongolian coal plans unfold

TerraCom to tighten finances as Mongolian coal plans unfold

TerraCom (ASX:TER) has advanced two debt restructuring options during a balance sheet recalibration process expected to secure funding as the company’s Baruun Noyon Uul (BNU) project aims to become one of the largest and highest quality coking coal producers in Mongolia.

The company formerly known as Guildford Coal has recently confirmed the ongoing support of its major financial backers, including the execution of a term sheet with OCP and continued discussions with Noble Group regarding a US$115 million five year interest-only bond.

This is expected to give the TerraCom significantly greater flexibility to manage its cash flows going forward and enable implementation of the growth strategy.

Plans are also developing for a strategic placement of A$7 million in the company by SPG Holdings.

Meanwhile, TerraCom is considering the issue of shares to SPG associate Morning Crest Capital Management pursuant to the conversion of convertible notes first issued by the company in December 2013.

Morning Crest Capital has entered into an agreement to acquire 50% of the convertible notes and intends to convert those notes into equity in TerraCom.

These financing plans are expected to support the company’s Mongolian subsidiary Terra Energy, which was granted a new exploration licence last month.

Terra Energy now holds 15 mineral licences in Mongolia across three project areas in the South Gobi, Middle Gobi and Uvs provinces.

The new licence is located 81.5 kilometres east of BNU, providing access to the mine’s infrastructure.

Volume increases at BNU in recent weeks have placed stress on third party road transport capabilities and actions are being implemented to optimise to ‘pit to end user’ supply chain.

Last month, TerraCom also decided to modify its board composition to ensure clear separation and focus on the differing functions and requirements in the areas of effective corporate governance delineated from strategic development and associated implementation.

While Michael Avery remains on the TerraCom board as an executive director with a principal focus on strategy, corporate governance, marketing and stakeholder relations, David Stone will no longer be a director.

Stone will instead remain in a senior executive role reporting to the board and focused on the strategic development and implementation of TerraCom business strategy.


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TerraCom Timeline

Newswire
May 15 2017
Newswire
February 01 2017
Newswire
June 30 2016
Newswire
February 01 2016

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