South Gobi and Indomet Coal Asset Strategic Overview
BNU OPERATIONS STATUS
ESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY
Mining operations were suspended in Q1 2016 due to depressed coal market, supply chain performance
issues and full ROM coal stockpiles at BNU Mine.
Mining operations recommenced in Q4 2016 with alternate supply chain established via the Kingho 5.5yr
offtake agreement for ~7.5Mt of coal sales over the life of the contract and delivering the following:
Underwrites a profitable Mongolian business unit establishing a platform from which further expansion and growth
Has a pricing mechanism with linkages to the seaborne market with payment terms in USD in the form of 100%
Irrevocable Letter of Credit issued by first class international bank
Confirms the strong BNU coal brand in China and recognition of the value-in-use of this coal when compared to
other HCC available in southern Mongolia and northern China
Shifts the point of sale for BNU coal to minegate which removes Terra from the supply chain management in
Mongolia and northern China allowing a focus on core competency of mining
Whilst Kingho which is one of the largest transporters and users of coal in northern China will manage the supply
chain from minegate to customers in Northern China - BNU Coal will be used primarily for Kingho Coking Plant feed
Terra plan to develop multiple pits to better manage complex geology, coal quality variations and unit
costs which when combined with on-site CHPP will deliver stable long term coal quantities and quality
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