TerraCom’s Coal Sales Drop 16% as A$60M Capital Raise Strengthens Balance Sheet

Stable Operations Amid External Challenges

TerraCom Limited (ASX – TER) delivered a solid quarterly performance for the period ending 31 December 2025, navigating a complex landscape of logistical constraints that affected coal shipments and cash flow timing. Despite these external pressures, mining and processing activities at the Blair Athol mine in Queensland remained uninterrupted, with production aligned to plan.

However, rail and port bottlenecks, particularly delays at the Dalrymple Bay Coal Terminal, disrupted the timing of coal deliveries and vessel loading. This led to elevated coal stockpiles both on-site and at port, temporarily impacting working capital and cash receipts. The company shipped five vessels during the quarter, with further shipments delayed into January due to ongoing supply chain issues and severe weather events.

Financial Strengthening Through Capital Raise

In response to these cash flow challenges, TerraCom announced a partially underwritten renounceable entitlement offer in December 2025, aiming to raise up to A$60 million. The offer was oversubscribed, reflecting strong shareholder confidence and participation from directors and management. Proceeds are earmarked to reduce creditor balances, enhance liquidity, and provide balance sheet flexibility amid ongoing market uncertainties.

The company’s closing cash position stood at A$6.4 million, supplemented by A$54.4 million in restricted cash held for rehabilitation bonding related to Blair Athol. This capital injection positions TerraCom to better manage short-term shipment variability while maintaining disciplined cost control.

Operational Highlights and Market Outlook

Blair Athol’s mine life extension to 2033, based on an updated independent JORC Code Resources and Reserves statement, underscores the asset’s long-term value and resilience. The mine produced 429,000 tonnes of run-of-mine coal during the quarter, down 34% from the previous quarter, with saleable coal production at 373,000 tonnes. Coal sales declined 16% quarter-on-quarter, reflecting shipment delays rather than operational issues.

Meanwhile, TerraCom’s South African operations continued steady performance, supported by improved plant availability and cost discipline. Combined coal sales in the region were 996,000 tonnes, down 28% from the prior quarter but maintaining operational stability.

Thermal coal prices remained stable, with the NEWC benchmark trading between US$105 and US$110 per tonne. Demand from North Asian utilities and Indian power generation sectors remains robust, favouring producers like TerraCom with consistent product quality and reliable supply chains.

Strategic Growth and Future Focus

TerraCom is advancing key development projects, notably the Moorlands project, with commercial negotiations progressing and regulatory approvals pending. Discussions continue regarding potential divestments in South Africa, reflecting a strategic portfolio review. The company remains committed to disciplined growth, targeting opportunities that complement its existing assets and enhance geographic diversity without compromising safety or financial discipline.

Managing Director Danny McCarthy emphasised the company’s focus on converting stable operational performance into improved cash flow as logistics normalise, while maintaining a lean cost base and strong safety standards.