Terra Energy controls tenements contained in two projects. These projects are located in the coal bearing basins of the South Gobi and Middle Gobi which contain thermal and coking coals.

Production activities commenced in early 2013 in the South Gobi. In the half year to December 2013, development activities advanced significantly, financing requirements were achieved and key approvals obtained.

The 98klm haul road was completed in late 2013.

Check here for the company’s recent Financing and Mongolian Update, released by TerraCom Ltd (formerly Guildford Coal Ltd), 23 December 2013.

In July, 2014, the company secured a haulage permit from the Mongolian Ministry of Roads and Transport, which allows transport of coal from its Baruun Noyon Uul (BNU) Mine in the South Gobi Region of Mongolia.

Check here for the ASX announcement by TerraCom Ltd (formerly Guildford Coal Ltd) on the haulage permit.

The mine is now fully commissioned and coal is being transported along the new road, and subsequently passes through the Shivee Khuren border crossing in Mongolia and then onto Ceke in China.

Commercial arrangements are in place for a Mongolian company to transport the coal.

The BNU Mine has generated widespread interest from potential customers and investors.

The first 8000 tonne shipment of coal occurred on 25 August and a ceremony, attended by the senior company and Mongolian Government officials, took place to mark this milestone.

Check here for the ASX and media announcements regarding this event.

This shipment will also confirm the down-stream logistics and processing performance of the BNU coal product. There has been early interest in the product by companies including:

  • Shenhua Wuhai
  • Taixi Wuhai
  • Jiuquan Iron and Steel Group (JISCO) Gansu
  • Qunhua Inner Mongolia
  • Jinda Wuhai.

The next priority for Terra Energy will be to finalise negotiations with a number of these companies in China, in order to secure long-term offtake agreements for the BNU coking coal brand.

In mid October, 2014, the BNU mine commenced its second shipment of 14,300t of coal. Testing of this batch was due to be completed by 30 October. Check here for the latest ASX announcement and media on the BNU Mine.