Q1 2016 HIGHLIGHTS Friday, April 29, 2016
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 Annual Information Form dated March 30, 2016 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. 2
RICHARD YOUNG PRESIDENT & CEO
OFF TO A STRONG START IN 2016 Free Cash Flow per Ounce of Gold Sold (1) ($/oz) Record Q1 production Record high mill throughput 10% Lower unit costs in most categories $144 Reduced corporate overhead by ~$1 million $131 Q1 2015 Q1 2016 4 Refer to Endnote (1) on slide 30
NAVIN DYAL CFO
GORA HIGH-GRADE MATERIAL DEFERRED FROM 2015 DRIVES RECORD Q1 PRODUCTION Gold Production Average Processed Grade (oz) (grams per tonne) 45% 17% 2.23 70,727 48,643 1.90 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Average processed grade for 2016 estimated to be in the range of 1.8 to 2.0 grams per tonne 6
REVENUE REFLECTS HIGHER VOLUME OFFSET BY LOWER AVERAGE PRICE Total Revenue ($M) 16% 20% increase in gold sold 4% decrease in average realized gold price $79.2 $68.5 Hedged 28,000 ounces of 2016 production (including 3,000 in Q1) at an average price of $1,201 Q1 2015 Q1 2016 Three months ended March 31 Per Ounce 2016 2015 % Change Average realized gold price $1,169 $1,217 (4%) Average spot gold price $1,182 $1,218 (3%) Low $1,060 $1,147 (8%) High $1,271 $1,293 (2%) 7
CONTINUING TO IMPROVE LONG-TERM COST STRUCTURE Mining Costs Total Cash Costs Including Royalties (4) Milling Costs ($/t mined) ($/t milled) ($/oz) 7% 4% 26% $609 $567 $14.64 $2.15 $10.77 $2.06 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Improving productivity and reducing costs remains a key priority 8 Refer to Endnote (4) on slide 30
LOWER CASH COSTS DRIVE IMPROVEMENT IN ALL-IN SUSTAINING COSTS All-in Sustaining Costs (4) (per ounce sold) 2% $841 7% improvement in cash costs $824 $9 $130 Significantly higher growth capex due $223 to mill optimization $127 $567 $609 Q1 2015 Q1 2016 Administration expenses, regional admin costs, Total cash costs (4 ) capitalized deferred stripping, capitalized Development capex reserve development, and sustaining capital 9 Refer to Endnote (4) on slide 30
A LEANER AND MORE COMPARABLE GENERAL & ADMINISTRATIVE COST BASE Corporate G&A Separated into Three Separate Original 2016 G&A Outlook Components in Revised 2016 Outlook (2) $15 - $16 Million Corporate Social Responsibility Regional $3 - $3.5M Corporate Admin Administration Corporate $8 - $9M CSR Regional Admin Expenses ~$2M Corporate G&A Regional G&A CSR At an estimated range of $8 to $9 million, Teranga’s 2016 G&A is below the peer group average 10 Refer to Endnote (2) on slide 30 10
EBITDA & NET PROFIT IMPACTED BY VARIANCES IN FX AND HEDGING Profit Attributable to EBITDA (3) Shareholders of Teranga ($M) $2.8 Million Net FX Swing ($M) Primarily due to realized and unrealized foreign 12% exchange losses recorded as the Euro appreciated relative to the US dollar 40% $2.7 Million Swing in Hedging Recognized gain of $1.8 million in Q1 2015 compared $0.9 million unrealized losses in Q1 2016 $32.8 $29.0 $13.0 $7.8 End of Tax Holiday Profit attributable to Teranga shareholders impacted by end of tax holiday Q1 2015 Q1 2016 Q1 2015 Q1 2016 11 Refer to Endnote (3) on slide 30
SIGNIFICANT IMPROVEMENT IN CASH FLOWS Free Cash Flow (1) Cash Flow From Operations Free Cash Flow per Ounce ($M) ($M) of Gold Sold (1) ($/oz) 33% 45% 10% $9.8 $7.3 $24.1 $144 $16.6 $131 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Focused on maximizing sustainable free cash flow 12 Refer to Endnote (1) on slide 30
STRONG BALANCE SHEET PROVIDES LIQUIDITY AND FLEXIBILITY Pro Forma Cash Balance ($M) Received 6-Year VAT Exemption In February 2016 exemption from paying and collecting $70.0 refundable VAT until 2022 $57.6 $16.5 VAT & Pro Forma March 31, 2016 Cash Balance: $70M Certificates $13.2 Includes VAT certificates received to date and VAT VAT recoverable from Senegalese government $53.5 $44.4 $30M Revolving Credit Facility Secured a $30 million revolving credit facility in 2015 -- $15 million remains undrawn Pro forma Pro forma December 31, 2015 March 31, 2016 VAT exemption eliminates long-term drag on working capital 13
UPDATED 2016 OUTLOOK Revisions to Original Outlook (2) New Line Items on Outlook (2) Corporate G&A CSR Lowering guidance to range of $8 to $9 million Adding a separate line item for CSR with guidance to reflect (i) a reduction of ~$1 million compared to range of $3 to $3.5 million budget and (ii) the reclassification of CSR and regional admin out of G&A Regional Administration Adding a separate line item for regional admin with Exploration guidance of ~$2.0 million Increasing exploration budget from $8 million to $12 million With a strong first quarter, on track for 2016 production between 200,000 and 215,000 ounces 14
RICHARD YOUNG PRESIDENT & CEO
UPDATED LIFE OF MINE: HIGHLIGHTS Lowering costs Increasing mill throughput Increasing long-term sustainable free cash flow (1) Refer to endnote (1) on slide 30
SOLID BASE CASE PRODUCTION PROFILE (5) 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 (5) Significant potential upside to life of mine base case production profile (6) 17 Refer to endnotes (5) and (6) on slide 30
Recommend
More recommend
