Why the TerraCom (ASX:TER) share price is soaring 19% today

The TerraCom (ASX: TER) share price is soaring almost 19% today following the company's release of an operational update. Here's the lowdown.

| More on:
A miner reacts to a positive company report mobile phone representing rising iron ore price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

TerraCom Ltd (ASX: TER) shares are soaring today after the company provided investors with an operational update. At the time of writing, the TerraCom share price is up a whopping 18.75% to 19 cents.

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

What's driving the TerraCom share price?

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

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

Following the transition in July to become owner-operator of the mine, TerraCom highlighted that free on board (FOB) costs have significantly reduced. Original forecasts estimated that FOB costs would decrease by 17% to $59 per tonne. The company revealed that these savings have been achieved and maintained over the last four months. In perspective, this places the Blair Athol mine within the first quartile of seaborne export FOB operating costs per tonne.

TerraCom noted that the thermal coal market has experienced some challenges in recent times. In light of this, the company said its hard work to deliver cost savings has paid off as the demand and price for coal recovers. Since 1 July, the Newcastle thermal coal index has advanced by more than 45% to register at US$76 on Wednesday.

As a result of the improving conditions, TerraCom anticipates recording strong earnings before interest, tax, depreciation and amortisation (EBITDA) margins for Blair Athol.

Across the Pacific in South Africa, the company discussed its strategic acquisition of Universal Coal in June. TerraCom highlighted that the takeover allowed it to diversify its coal sales mix from the domestic market to international exports.

Furthermore, TerraCom is projecting its first full shipment of thermal coal from South Africa to an overseas buyer next month. The milestone achievement is expected to mark the beginning of increased export sales for the company.

What did the CEO say?

TerraCom CEO Mr Danny McCarthy commented on the company's coal sales. He said:

The coal sales achieved year to date continue to be positive regardless of the ongoing market challenges. Based on an annualised assessment the Company is well positioned to achieve annual coal sales of approximately 9.9 Mt, consistent with FY2020.

With low-cost mining already implemented at Blair Athol, the Company is well positioned to deliver stronger EBITDA results as coal pricing continues to improve.

TerraCom share price summary

The TerraCom share price reached a 6-month high today, hitting the 20-cent mark in earlier trade. Despite this positive milestone, TerraCom shares remain almost 50% lower in year-to-date trading. 

Based on the current TerraCom share price, the company has a market capitalisation of around $124 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Aaron Teboneras 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.

More on Share Market News

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares finished the trading week on a high this Friday.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

Broker looking at the share price.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ARB, Block, Mayne Pharma, and Paladin Energy shares are charging higher today

These shares are having a strong finish to the week. But why?

Read more »

A woman puts her hands up as she smashes and breaks through a glass ceiling.
Share Gainers

How these 5 ASX 200 stocks are smashing the benchmark this week

These fives ASX 200 stocks have made some very happy shareholders this week. Here’s how.

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A smiling woman at a hardware shop selects paint colours from a wall display.
Broker Notes

After its strategy day, what does Macquarie think Wesfarmers shares are worth?

Let's see what the broker is saying about this blue chip.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Technology Shares

After surging 13% yesterday, are TechnologyOne shares a buy, hold or sell according to Macquarie?

Valuations matter when investing, and Macquarie feels no different.

Read more »