Sign up Australia
Proactive Investors - Run By Investors For Investors

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.

Proactive Investors is a global leader in financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

View full TER profile View Profile

TerraCom Timeline

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

Related Articles

Drilling at an Aspire coal project in Mongolia
August 29 2018
The Ovoot Early Development Plan has been formulated and related funding commitments have been arranged.
May 03 2018
One of the highlights for Oracle last year was signing a memorandum of understanding with Sichuan Provincial Investment and Power China for the Thar project

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use