Ann: December 2017 Quarterly Report and Appendix 5B, page-2

$25.2M in sales from 474kT of saleable coal has us achieving an average price of $53/T of coal sold (low, thermal spot price is ~$100/T). However keep in mind we are selling a raw coal at BNU and trucking and using someone else's TLO at BA...

The estimated cash outflows next quarter are $40.7M which means we'll need a 62% increase in sales to be cash flow neutral... 3.5MT/pa is 875kT quarterly so although they have stated they have hit the 3.5MT/pa in the figures for this quarter they are still off the mark, they produced 563.8kT this quarter...

So for assumption sake lets assume they increase production by 20% to 676kT (still below the 3.5MT annually) @ a sale price of $55/T (thermal coal price edging higher) = $37.2M - potentially negative cash flow next quarter...

Looking medium term - considering $20/T uplift at BA....
BNU - 1.5MTpa = 375kT/quarter @ $53 = $19.9M
BA - 2.0MTpa = 500kT/quarter @ $73 = $36.5M
Total sales of $56.4M with estimated outflows of $24M ($40M - $16M spent on BA TLO) will mean TER could be $32M cash flow positive each quarter = well on track to be able to pay down the mountains of debt.

The next quarter is crucial - still on a knife edge, but surely with the above figures funding to get through next 6 months will be able to be secured... This 4C definitely makes me feel better, as we had zero sales information to this date! Changed sentiment to spec buy for me.