TERRACOM LIMITED — Capital/Financing Update 2018

Feb 15, 2018

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

TerraCom Limited (ASX Code: TER )

ABN

35 143 533 537

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to Fully paid ordinary shares (Shares) be issued

2 Number of[+] securities issued or 55,339,160 Shares issued under the retail to be issued (if known) or component of the pro rata accelerated non maximum number which may renounceable entitlement offer ( Retail be issued Entitlement Offer ) announced to ASX on 23 January 2018. 3,488,372 Shares issued to Sub-Underwriter in lieu of paying the Sub-Underwriters Fee. 1,162,791 Shares issued to Sub-Underwriter as Placement.

• See chapter 19 for defined terms.

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3 Principal terms of the The Shares will have the same terms as existing +securities (e.g. if options, fully paid ordinary shares in TER. exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1	Yes, the Shares will rank equally with existing fully paid ordinary shares.
	$0.215 per Share
	Please refer to ASX Materials.
	Not applicable.
	Not applicable.
	4,651,163

• See chapter 19 for defined terms.

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6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	Not applicable.	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Under LR 7.1 – 40,547,561 Under LR 7.1A – 30,132,483
	16 February 2018.
	Number	+Class
	376,469,413	Fully paid ordinary shares

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	12,630,833 1,500,000 1,500,000	Detachable warrants (exercisable for 5 years from 26 February 2016) Unlisted Ordinary Share Options (with a strike price equal to $0.30 and with an expiry date of 31 August 2018) Unlisted Ordinary Share Options (with a strike price equal to $0.45 and with an expiry date of 31 August 2018)
	There has been no change to TER's dividend policy.

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.

• See chapter 19 for defined terms.

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18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable)	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 for details.
	Refer to the Appendix 3B lodged on 23 January 2018 fordetails.
	Refer to the Appendix 3B lodged on 23 January 2018for details.
	Refer to the Appendix 3B lodged on 23 January 2018fordetails.

• See chapter 19 for defined terms.

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30 How do security holders sell Refer to the Appendix 3B lodged on 23 January their entitlements in full through 2018 for details. a broker? 31 How do security holders sell part Refer to the Appendix 3B lodged on 23 January of their entitlements through a 2018 for details. broker and accept for the balance? 32 How do security holders dispose Refer to the Appendix 5B lodged on 23 January of their entitlements (except by 2018 for new shares to be issued under the sale through a broker)? Retail Entitlement Offer. 33 +Issue date Refer to the Appendix 3B lodged on 23 January 2018 for details.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a)  +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000

• See chapter 19 for defined terms.

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100,001 and over

37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of[+] securities for which Not applicable. +quotation is sought 39 +Class of +securities for which Not applicable. quotation is sought 40 Do the[+] securities rank equally in Not applicable. all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation Not applicable. now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and +class of all Not applicable. Not applicable. +securities quoted on ASX ( including the +securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

16 February 2018 Sign here: ............................................................ Date: ......................... ----------(Director/Company secretary)

Nathan Boom Print name: .........................................................

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

==> picture [414 x 405] intentionally omitted <==

----- Start of picture text -----

Insert number of fully paid [+] ordinary 271,493,356
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid [+] ordinary securities 29,831,477
issued in that 12 month period with
shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary 0
securities cancelled during that 12 month
period
“A” 301,324,833
----- End of picture text -----

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	45,198,724
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	3,488,372 Shares issued to Sub-Underwriter in lieu of paying the Sub-Underwriters Fee. 1,162,791 Shares issued to Sub-Underwriter as Placement.
“C”	4,651,163
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	45,198,724
Subtract“C” Note: number must be same as shown in Step 3	4,651.163
Total[“A” x 0.15] – “C”	40,547,561 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	45,198,724
Note: number must be same as shown in
Step 2
Subtract“C”	4,651.163
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	40,547,561
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 301,324,833 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 30,132,483 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

• Insert number of[+] equity securities issued 0 or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” 0

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	30,132,483
Subtract“E” Note: number must be same as shown in Step 3	0
Total[“A” x 0.10] – “E”	30,132,483 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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