Q2 2016 HIGHLIGHTS Thursday, July 28, 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”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “forecasts”, “focused on”, “anticipate” or “does not anticipate”, “believe”, “intend”, “ability to” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are “likely” to be taken, occur or be achieved, have been used to identify such forward looking information. Specific forward-looking statements in this presentation include a future All-in Sustaining Cost estimated to remain low in the US$900/oz of gold range, anticipated future life of mine cash flows, anticipated future interests in Joint Venture projects, the anticipated completion of construction of the Banfora project - including the first gold pour, the completion of the Arrangement and the Acquisition, the anticipated conversion of resources into reserves at the Banfora project, the timing of completion of an updated 2Mtpa Feasibility Study for the Banfora project, and Teranga’s estimated full year production total. 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 but that may prove to be incorrect. 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 Teranga’s Annual Information Form dated March 30, 2016, and in other filings of Teranga 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 Teranga 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
STRONG QUARTER AND FIRST HALF Record Q2 and H1 production & mill throughput 17% cash margin expansion Free cash flow of $97/oz ~$14 million increase in cash position United Nations Global Compact Network Canada Sustainability Award 4
MAXIMIZING FREE CASH FLOW OVER SABODALA’S LIFE OF MINE LOM 2016 - 2020 Gold Price $ 1,200 $ 1,200 All-in Sustaining Costs (1) $ 887 $ 914 $ 313 $ 286 23% decrease in mining costs since 2014 Franco-Nevada Stream * $ 73 $ 92 Cash Flow/oz (2) $ 240 $ 194 40% decrease in milling costs since 2014 Benefitting from lower fuel prices, favourable FX rates and mill optimization Life of Mine Cash Flow (2) 40-50% of costs are Euro-denominated $240/oz Cost saving initiatives are ongoing at $1,200 gold *Fixed portion of Franco-Nevada gold stream ends in 2019 and will be replaced by 5 variable stream, estimated to be $58/oz Life of Mine Refer to Endnotes (1) and (2) on the second last slide
NEXT MULTI-JURISDICTIONAL MID-TIER WEST AFRICAN GOLD COMPANY Measured and Indicated Resources (M&I) inclusive of Proven and Probable Reserves Sabodala Mine (90%) Sabodala Regional Land Package (100%) Status: Producing Status: Exploration Reserves: 2.6Moz (3) Pending completion of proposed Gourma Joint Venture Gryphon Minerals acquisition 4.4Moz (3) M&I Resources: (51% moving to 80%) Status: Exploration Senegal Niger The Gambia Mali Guinea- Burkina Faso Bissau Golden Hill Joint Venture (51% moving to 80%) Guinea Status: Exploration Benin Ghana Côte d’Ivoire Miminvest Joint Venture (100%) Sierra Togo Banfora Project (90%) Leone Status: Development Explore and acquire exploration stage mining opportunities 1.05Moz (4) Reserves: M&I Resources: 3.0Moz (4) 6 Refer to Endnotes (3) and (4) on the second last slide
PAUL CHAWRUN CHIEF OPERATING OFFICER Q2 Operating Highlights & Next Steps at Banfora DAVID MALLO VICE PRESIDENT, EXPLORATION Exploration Update NAVIN DYAL CHIEF FINANCIAL OFFICER Financial Highlights
PAUL CHAWRUN CHIEF OPERATING OFFICER
SOLID EXECUTION DRIVES STRONG RESULTS H1 2016 Achievements Achieved record production and successfully developed our third deposit in just over a year Mill throughput milestone of over 2 million tonnes 10M Dramatically reduced unit costs 6.5M 3.5M 2.9M 3.2M Mining ahead of reserve models in each deposit being mined this year 2012 2013 2014 2015 2016 9
RECORD Q2 PRODUCTION & MILL THROUGHPUT Gold Production (oz) 6% Q2 Mining & Milling Mining higher grade / higher strip ratio deposits and leveraging medium grade inventory built up at Masato in 2015 for mill feed 52,540 Throughput of +1 Million Tonnes 49,392 for Only Third Time in Our History Benefitted from a high blend of soft oxide ore and improved production with certain elements of the mill optimization now complete Q2 2015 Q2 2016 Ore Milled (‘000 tonnes) Preparations Made for Rainy Season Shifted to harder blend of low oxide mill feed 6% and dewatering systems 1,006 951 10 Q2 2015 Q2 2016
UNIT COSTS ARE IN LINE WITH UPDATED LIFE OF MINE PLAN Milling Costs Total Cash Costs Including Royalties (1) Mining Costs ($/t milled) ($/t mined) ($/oz) 3% 15% 6% $12.37 $619 $2.40 $2.25 $10.46 $602 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 2% 21% 1% $606 $2.22 $591 $10.62 $13.45 $2.20 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 11 Refer to endnote (1) on the second last slide
DRAMATIC 2-YEAR REDUCTION IN KEY UNIT COSTS Mining Costs Total Cash Costs Including Royalties (1) Milling Costs ($/t mined) ($/oz) ($/t milled) 24% 22% 51% $815 $2.90 $21.29 $619 $602 $2.40 $12.37 $2.25 $10.46 Q2 2014 Q2 2015 Q2 2016 Q2 2014 Q2 2015 Q2 2016 Q2 2014 Q2 2015 Q2 2016 12 Refer to endnote (1) on the second last slide
MILL OPTIMIZATION IN COMMISSIONING PHASE – WELL AHEAD OF SCHEDULE Project Milestones - Crusher Milestone Planned Date Status Up to 15% increase in throughput Engineering Complete Nov 2015 Completed on Schedule compared to levels prior to project Commence Civil Works Nov 2015 Completed on Schedule launch in mid-2015 Charter Vessel Arrives in Dakar Dec 2015 Completed on Schedule Complete Screen Civils Dec 2015 Completed (Delayed 4 Weeks) 5% reduction in unit costs Commence SMP Works Jan 2016 Completed on Schedule Complete Screening CSMP Apr 2016 Completed on Schedule Complete Conveyors CSMP Jun 2016 Completed on Schedule Complete Crusher CSMP Aug 2016 July 2016 Ahead of Schedule +50% IRR at $1,200 gold price Complete E, I and C Sept 2016 Aug 2016 Ahead of Schedule Complete C2 Commissioning Oct 2016 Sept 2016 Ahead of Schedule Anticipated to come in below the $20M budget 13
Recommend
More recommend
