INVESTOR PRESENTATION Swiss Mining Institute TSX:TGZ / ASX:TGZ March 22-23, 2016
RICHARD YOUNG PRESIDENT & CEO
FORWARD-LOOKING STATEMENTS This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (“forward -looking statements”), which reflects management’s expectations regarding Teranga Gold Corporation’s (“ Teranga ” or the “ Company ” ) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Wherever possible, words such as “ plans ” , “ expects ” , “ does not expect ” , “ budget ” , “ scheduled ” , “ estimates ” , “ forecasts ” , “ anticipate ” or “ does not anticipate ” , “ believe ” , “ intend ”, “ability to” and similar expressions or statements that certain actions, events or results “ may ” , “ could ” , “ would ” , “ might ” or “ will ” be taken, occur or be achieved, have been used to identify such forward looking information. Although the forward-looking information contained in this presentation reflect management ’ s current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. Such forward-looking statements are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments that management believe to be reasonable and relevant. These assumptions include, among other things, the ability to obtain any requisite Senegalese governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements The risks and uncertainties that may affect forward-looking statements include, among others: the inherent risks involved in exploration and development of mineral properties, including government approvals and permitting, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Teranga, as well as other risks and uncertainties which are more fully described in the Company’s Revised Annual Information Form dated September 1, 2015, and in other company filings with securities and regulatory authorities which are available at www.sedar.com. Teranga does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. This presentation is dated as of the date on the front cover. All references to the Company include its subsidiaries unless the context requires otherwise. This presentation contains references to Teranga using the words “we”, “us”, “our” and similar words and the reader is referred to using the words “you”, “your” and similar words. All dollar amounts stated are denominated in U.S. dollars unless specified otherwise. 3
DECLINING GLOBAL GOLD DISCOVERIES & PRODUCTION Global Gold Discoveries Global Gold Production 100 160 Peak 3-year Running Avg Au Discovered (Moz) Peak Discovery 140 95 Production Annual Production (Moz) 120 90 100 85 80 60 80 40 75 20 70 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Figure Source: Consensus estimates which include CPM Group, GFMS, and Metals Focus Figure Source: SNL Metals Economics Group Teranga’s production profile is bucking industry trends 4
STRONG VALUE PROPOSITION EMERGING LARGE LONG-LIFE STRONG World-Class Gold Belt Reserve & Resource Life of Mine in a Safe & Stable Base (1) Cash Flow (3) Jurisdiction SOLID LOW SIGNIFICANT Balance Sheet & All-in Sustaining Organic Growth Significant Insider Costs per Ounce (2) Potential Ownership Strong value proposition and undervalued relative to peer group = compelling investment opportunity Refer to endnotes (1) (2) and (3) on slide 35 5
SIGNIFICANT POTENTIAL UPSIDE FROM MULTIPLE EXPANSION Average NAV Multiple of Medium Producers: 1.2x Teranga’s Share Price vs. Teranga Net Asset Value (NAV) (4) Per Share Source: BMO GoldPages, March 14, 2016 (C$) 300% 150% 100% 50% Share Share Share Share NAV per NAV per NAV per NAV per Price Price Share Share Price Price Share Share 1.2x NAV Multiple 0.6x 0.8x 1.0x Teranga current share price based on closing share price (C$) on March 15, 2016 Based on the Company’s updated NI 43 -101 and the 1.2x average NAV multiple for the peer group, Teranga’s share price should be C$1.80 Refer to endnote (4) on slide 35 6
MAJOR ACHIEVEMENTS IN 2015 . . . BUT MISSED PRODUCTION GUIDANCE Replaced reserves & improved mine life Missed 2015 guidance of Advanced organic growth initiatives 200K-230Koz Surpassed 2.5 years without a lost time injury Reduced costs by $20 million Strengthened balance sheet & improved liquidity Majority of 2015 production shortfall deferred to 2016 -- Q1 2016 expected to be strongest quarter since 2014 Refer to endnote (7) on slide 35 7
EARLY DAYS ON EMERGING WORLD-CLASS GOLD BELT Africa Potential for Major Discoveries Emerging gold belt straddles border between Senegal and Mali where +50 million ounces have been discovered Only Commercial Gold Mill in Senegal Ability to process regional discoveries and enter into strategic combinations to process neighbouring deposits Senegal Emerging 12M+ ounces Au Mali Gold Belt discovered 40M+ ounces Au Safe, Stable, Mining-Friendly Jurisdiction in past 10 years Democratic government strongly supports mining discovered over and views it as a key pillar for Senegal’s last 25 years economic growth Mine License Regional Land Package 8
INDEPENDENT AND INVESTED Board of Directors (as of March 11, 2016) New Strategic Cornerstone Investor David Mimran (Tablo Corporation) completed strategic Alan Hill Chairman private placement for 39.2M shares in Q4 2015 Richard Young President, CEO & Director Strong Partner with In-depth Local Knowledge Jendayi Frazer Independent Director Mimran Group has a long history of operating successfully and responsibly in Africa and is the largest Edward Goldenberg Independent Director private sector employer in Senegal Chris Lattanzi Independent Director Strong & Experienced Board Extensive experience in mining, finance, legal, David Mimran Director & Largest Shareholder governance, government relations as well as on the ground working knowledge of Africa Alan Thomas Independent Director Frank Wheatley Independent Director Insiders own more than 12% of Teranga’s issued and outstanding common shares 9
LARGE RESERVE BASE WITH 13.5-YEAR MINE LIFE 2.6M Proven & Probable Reserves (1) at $1,100 gold. Average mined grade of 1.59 grams per tonne* (As at December 31, 2015) Proven & Probable Reserves (1) (in Moz) 30 90 (8) 180 220 310 330 350 390 730 80% increase in reserves since IPO Increased reserve base by 80%, net of 5- years’ production, through acquisition and exploration *Not including stockpile of 0.39Moz Refer to endnote (1) on slide 35 10
LARGE, LONG-LIFE, LOW-COST RESERVE BASE UNDERPINS STRONG CASH FLOWS OVER LIFE OF MINE Lower costs Increased mill throughput Long-term sustainable cash flow Updated mine plan released January 29, 2016 followed by a NI 43-101 Technical Report March 21, 2016.
SOLID BASE CASE PRODUCTION PROFILE (7) Opportunity to increase production through Opportunity to grow production by 2016 Outlook resource conversion and new discoveries (6) increasing material movement 200K-215Koz 000’s oz Au +200Koz average annual production from 2012- 2024 (7) Significant potential upside to life of mine base case production profile (6) 12 Refer to endnotes (6) (7) on slide 35
ORGANIC GROWTH: SIGNIFICANT INCREASE IN THROUGHPUT DUE TO MILL OPTIMIZATION 2016 LOM Mill Rate vs 2014 LOM Mill Rate 15% increase in throughput 5% reduction in costs +50% IRR Leveraging existing mill and related infrastructure to increase organic growth 13
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