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- Coal miner TerraCom (TER) trades green after bolstering the predicted revenue from its Blair Athol project in light of strong coal prices
- The company says key coal indexes are approaching all-time highs, currently at levels not seen in over a decade
- As such, TerraCom says it is set to capitalise on “exceptional seaborne coal pricing” which is expected to remain sturdy through FY22
- TerraCom forecasts revenue of $178 per tonne for September 2021, with an expected operating cash margin of more than $100 per tonne of coal
- Shares in TerraCom are up 4.37 per cent and trading at 17 cents each at 3:38 pm AEST
Coal miner TerraCom (TER) is trading green this afternoon after bolstering the predicted revenue from its Blair Athol project in light of strong coal prices.
The company said it was set to capitalise on “exceptional seaborne coal pricing” from September 2021, with thermal coal from the Blair Athol project in Queensland being sold into premium Asian markets.
According to TerraCom, Japan and Korea, as well as Indian sponge iron, are some of the biggest markets for the type of coal produced from Blair Atholl.
What’s more, with key coal indexes approaching all-time highs, TerraCom is predicting some strong operating cash flows from its Queensland project all throughout the 2022 financial year.
The benchmark Newcastle weekly coal index, for example, sat at around $176 on Wednesday compared to around $46 at the same time in 2020. The index’s all-time high was just over $195 in July 2008.
Similarly, the API4 index, which is the benchmark price reference for the type of coal exported from TerraCom’s South African operations, is also approaching levels not seen in over a decade.
In light of all this, TerraCom forecasted revenue of $178 per tonne for September 2021, which the company said will generate an operating cash margin of more than $100 per tonne of coal.
TerraCom said based on economic forecasts, these indexes are expected to remain sturdy through the 2022 financial year, but no guidance information is available beyond the end of the financial year.
Shares in TerraCom were up 4.37 per cent and trading at 17 cents each at 3:38 pm AEST. The company has a $122 million market cap.
