TERRACOM LIMITED — Capital/Financing Update 2016

Sep 5, 2016

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6[th] September 2016

ASX Announcement

Finalisation of Placements

TerraCom Limited ( TerraCom or the Company) (ASX: TER) is pleased to announce the finalisation of the AUD$ 1.1 million placement to three large and prominent Eastern European based private investment companies, led by Light Speed Commercial Inc. (Light Speed Commercial). The final issue price calculated was $0.0206469 (rounded to 7 decimal places) which has resulted in 55,407,834 fully paid ordinary shares being issued (including 2,131,071 issued in lieu of cash commissions).

TerraCom is also pleased to announce the finalisation of the AUD$ 1.0 million placement to private and institutional clients of Fosters Stockbroking Pty Ltd (FSB) . The final issue price was $0.0215 which has resulted in 44,411,629 fully paid ordinary shares being issued.

Further to the announcement released on 29 August 2016, the Company has issued FSB with 30,000,000 unlisted options in 2 equal tranches of:

• 15,000,000 options with a strike price equal to $0.03 and with an expiry date of 31 August 2018; and

• 15,000,000 options with a strike price equal to $0.045 and with an expiry date of 31 August 2018.

The shares and options have been issued utilising the current entity’s capacity under listing rule 7.1 and 7.1A.

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ABOUT TERRACOM – www.terracomresources.com

TerraCom has fully commissioned the Baruun Noyon Uul (BNU) coking coal mine in the South Gobi Mongolia. The Company’s goal is to become one of the largest and highest quality coking coal producers in Mongolia, providing exceptional value for its steel-producing customers.

TerraCom is also focused on developing two priority projects in Queensland, Australia: the large thermal coal Northern Galilee Project and the high energy prime thermal coal Springsure Project.

In order to support further growth and expansion, TerraCom continues to evaluate cash generative assets for potential acquisition. In this regard, the Company recently announced that it has entered into an agreement to acquire the Blair Athol Coal Mine in Queensland, Australia from the Blair Athol Joint Venture, with production scheduled to recommence in 2016. The Company is also evaluating the acquisition of a hard coking coal mine in Kalimantan, Indonesia, a 500,000 tpa operation located in close proximity to road, barge and port infrastructure connecting it to the seaborne coal market.

Please contact Nathan Boom, on +61 2 4268 6258 or at info@terracomresources.com for

further information.

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Cameron McRae Executive Chairman

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