Hi everyone, I’ve been following TER for a while and the...

Hi everyone,

I’ve been following TER for a while and the dramatic SP drop last week (after sustained deterioration) drew my attention as a potential BUY opportunity, however something didn’t smell right. After doing some further research today I draw the conclusion that NQSpirit is onto something here. I think TER have made a major mistake and their announcement quite cleverly masks the severity and impact.

Glencore own and operate the TLO at Blair Athol and they have NO obligation to allow access to any other company. This is fact and public knowledge.
I believe the announcement conveniently fails to point out that TER have failed to reach agreement with Glencore to use this facility, which was part of TER’s original plan (why else would they be seeking an alternative?) I dare say TER’s feasibility studies would have been based using the Glencore facility also. Suffice to say it would be safe to conclude that no coal from TER’s Blair Athol will ever go through this facility. This is a major setback IMO.

As for their short term solution of a “nearby train loading facility”….OK but where is it? what agreements have been made? and who with? This reeks of a knee jerk reaction that hasn’t been thought through. The nearest load out facility to my knowledge is in Moranbah, some 110km away. Trucking and rehandling coal this far will add significant cost and I’d expect it to erode most, if not all of the margin.

Also the volumes they expect to haul for that distance and duration are ridiculous. At 2Mt pa this would be more than 5000t per day. That is a significant amount of trucks. What will the local authorities have to say about that?

The expected duration of 6 to 9 months to design, gain approvals, procure, construct and commission a new facility is just pure fantasy IMO. I concur with NQSpirit’s estimates.

The absence of any advice or details in this announcement which gives shareholders the ability to make their own judgements about margin impact is concerning.

Before you shoot the messenger people DYOR, this could be a disaster in the making.