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The TerraCom (ASX:TER) share price is up 7% on Monday. Here’s why

The company is on track for a bumper end to the 2021 calendar year.
The post The TerraCom (ASX:TER) share price is up 7% on Monday. Here’s why appeared first on The Motley Fool Australia. –

The TerraCom Ltd (ASX: TER) share price is roaring higher during late morning trade on Monday. This comes after the resource company provided investors with a coal sales update from its wholly-owned Blair Athol mine.

At the time of writing, TerraCom shares are swapping hands for 22.5 cents, up 7.14%. Just last week, its shares reached a new 52-week high of 25.5 cents before some profit-taking occurred.

TerraCom hits sales targets

The TerraCom share price is rocketing today with investors clearly happy about the way the company is performing.

According to its announcement, TerraCom is continuing to deliver a robust performance at its Blair Athol coal mine in Australia.

All cargoes containing coal from the company’s Blair Athol mine have now been fully sold until the end of January 2022.

The primary markets TerraCom services are the Japanese and South Korean energy markets and the Indian sponge iron market. The latter is made by directly reducing iron ore through the use of thermal coal in an electric arc furnace.

Coal sold from Blair Athol for the December 2021 quarter came to 575,000 tonnes. This represents an annualised run rate of 2.3 million tonnes per annum.

TerraCom is forecasting revenue of $224 per tonne in the December quarter. Should this be achieved, the operating cash margin is anticipated to be approximately $134 per tonne. Based on the 575,000 tonnes sold, the company will have operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $77 million.

About the TerraCom share price

TerraCom is a resource company with a large portfolio of assets in Queensland as well as South Africa. The business is currently undergoing a growth strategy to become a mid-tier player in the coal industry.

The TerraCom share price has continued its upwards trajectory, reflecting positive investor sentiment in the company. Over the past 12 months, its shares have risen by more than 66% with year-to-date up 32%.

On valuation grounds, TerraCom has a market capitalisation of around $169.5 million and roughly 753.6 million shares on issue.

The post The TerraCom (ASX:TER) share price is up 7% on Monday. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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