Basic Terracom Financial Model

Given its a lazy Sunday night, and that no one at Fosters or for that matter any broker can be bothered to do any work, I put together a v basic financial model for a full financial year of production from BNU and Blair Atholl. This is all based on publically available info from their last investor presentation, and some very conservative assumptions about margins.

	Column 1	Column 2	Column 3
0	Pricing	US$m
1	Market Cap	84.0
2
3	Production	mtpa
4		Blair Athol (Australia - Thermal)	2.0
5		BNU (Mongolia - Coking)	1.5
6		Total	3.5
7
8	Margin	US$/t
9		Blair Athol (Australia - Thermal)	26
10		BNU (Mongolia - Coking)	32
11
12	Cashflow before interest	US$
13		Blair Athol (Australia - Thermal)	52.0
14		BNU (Mongolia - Coking)	48.0
15			100.0
16
17	Interest cost
18		Principal (US$m)	129.0
19		Interest cost	12.50%
20		Cash cost (US$m)	16.13
21
22	Metrics
23		Cash flow after interest	83.88
24		Mkt Cap/CF	1.00

Now this is obv not an EV/EBITDA multiple, as we can't forget about the debt.......... but at the same time I'm not sure EV/EBITDA is really the right metric to use for a company that is generating this much cashflow and that will be able to pay down debt so fast - if they want to or if Bond holders will allow them to !!

Anyway - bear in mind this is a model based on only really what they have in the bag volumes wise....... plenty of huge upside to come from production volumes as new pits at BNU come on stream and hopefully as BA surprises on the upside.