Page 1

For personal use only QUARTERLY REPORT TERRACOM QUARTERLY REPORT DECEMBER 2020 ( Q2 FY21 ) TerraCom Limited ( TerraCom or Company ) ( ASX : TER ) presents its quarterly production activities report for the 3 months ending 31 December 2020 ( December Quarter ) . Q2 HIGHLIGHTS Positive coal sales continue to be achieved for the financial year to date , despite the ongoing market challenges the Company has achieved an annualised run rate for the 6 months ended December 2020 of 9.23 million tonnes¹ . With the expected increased demand from Eskom in 2H FY2021 and the delivery of the South African export strategy , the Company is well positioned to achieve annualised managed coal sales of approximately 9.9 Mt , consistent with FY2020 . The Company has executed its export strategy for its South African operations and the first full shipment of thermal coal is planned to sail during the first week of February 2021. This is a significant milestone for the South African operations and the Company looks forward to leveraging this achievement to increase its export coal sales in line with its strategic objectives . The Blair Athol mine has operated as owner operator since transitioning in July 2020 and continues to achieve the projected Free on Board ( FOB ) operating costs forecast of sub AU $ 60 per tonne since that time . FOB costs are projected to remain at this level for the remainder of FY2021 and beyond . Continued strong operational performance has been delivered from the Company's Blair Athol mine in Queensland , with achievement of an annualised coal sales run rate for 6 months ended December 2020 of 2.41 million tonnes per annum . Comparatively to the 2020 financial year , this is only a minor 7 % reduction in coal sales whilst at the same time the FOB operating cost per tonne has reduced by a margin of more than 15 % . Significantly improved export coal pricing relative to the beginning of the financial year , coupled with refined operating costs in Australia and an implemented export strategy in South Africa , provides the platform for the Company to deliver stronger EBITDA results during 2H FY2021 . GROUP COAL SALES FOR THE QUARTER MANAGED TONNES EQUITY TONNES Export Domestic ( 000's ) ( 000's ) Total ( 000's ) Export ( 000's ) Domestic ( 000's ) Total ( 000's ) Australia 585 585 585 585 South Africa 286 1,350 1,635 140 646 786 Total 870 1,350 2,220 725 646 1,371 1 Represents managed tonnes TerraCom Ltd - ABN 35 143 533 537 Quarterly Report - For the quarter ended 31 December 2020