TER UNDERVALUED FAIR VALUE $1.20, page-18

If TER sold their coal for US$100 / t, it would be approx AU$150 / t.

Using the half year accounts and Dec-22 quarter report, TER averaged AU$220 / t in Australia and Corporate Costs (including depreciation). I have ignored RSA operations as not material. If these costs were to stay the same, TER would be making a loss before tax of AU$70 / t or around $161 million if they sold 2.3 million (Blair Athol benchmark) tonnes p.a.

However included in the costs above was the Qld Royalty of around $100m, or approx AU$105 / t. If TER were to sell at AU$150 / t, the royalty should come down to around AU$13 / t. Therefore costs per tonne would be around AU$129, assuming no major changes in other costs.

TER will still make a small profit if they sold at US$100 / t (assuming no major FX changes). Following is a summary based on TER selling 2,300 kt a year (note TER only sold 952 kt for the HY), first column is based on the reported half year numbers averages and annual sales of 2,300 kt, second column is based on selling at US$150/t.