TerraCom has moved ahead with its plans to exit Mongolia, inking a binding term sheet to divest of its Baruun Noyon Uul (BNU) coal mine for $2.
Under the terms of the agreement, Singapore-based buyer Bridge Resources will also accept a net $15-million of existing liabilities within the BNU business structure.“TerraCom is pleased with the execution of this binding term sheet to divest its non-core operating asset, the BNU coal mining business, in line with the company’s strategic business plan,” said chairperson Wal King on Monday.
“The divestment will relieve the company’s balance sheet of $15-million of current liabilities and will enable TerraCom to continue its transition to a profitable major global thermal coal producer with a clear focus now on the company’s Blair Athol mine, in Queensland, and the more recently acquired Universal Coal mines, in South Africa.”BNU, which started operations in 2014, has a resource of some 15.26-million tonnes.
The company still retains ownership of the Enkhutunkh Orchlon (EO) operation, where it is currently negotiating a divestment, which if successful, would see TerraCom completely exit from Mongolia.
The company said that the divestment of the Mongolian assets would provide TerraCom with a net current asset improvement.