Q1 2019 HighlightsFriday, May 3, 2019TSX:TGZ / OTCQX:TGCDF
Building a
Multi-Asset Mid-Tier
West African Gold Producer
Forward-Looking Statements
2
All information included in this presentation, including any information as to Teranga’s future financial or operating performance and other statements that express management’s
expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of
applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing
information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “indications”,
“potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “could”, “would”, “might”,
“will”, or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information.
Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, economic conditions and anticipated courses of action.
Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as
of the date hereof, Teranga cannot be certain that actual results will be consistent with such forward-looking information. Such assumptions include, among others, the ability to
obtain any requisite 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. For a more comprehensive discussion of the risks faced by Teranga, and which may
cause the actual financial results, performance or achievements of Teranga to be materially different from estimated future results, performance or achievements expressed or
implied by forward-looking information or forward-looking statements, please refer to Teranga’s latest Annual Information Form filed with Canadian securities regulatory authorities
at www.sedar.com or on Teranga’s website at www.terangagold.com. The risks described in the current Annual Information Form (filed and viewable on www.sedar.com and on
Teranga’s website at www.terangagold.com) are hereby incorporated by reference herein. Teranga disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell
or a solicitation to buy or sell Teranga securities.
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.
Richard YoungPresident & CEO
• Record quarterly
gold production of
71,946 ounces
• Per ounce cost
metrics improved
YoY
• On track to achieve
2019 production &
cost guidance
• On budget and well
on schedule
• On track for
commissioning in
Q3 and ramp-up of
production in Q4
• Completed first of
two resettlement
areas
2019 Has All The Makings of Another Good Year
4
• Released early-
stage initial
resource estimate
• Ongoing studies to
advance towards
feasibility stage
• Completed Afema
economic
evaluation for
government
• Conducted
airborne magnetic
and radiometrics
survey
Paul ChawrunChief Operating Officer
Highest Ever Quarterly Gold Production at Sabodala
6
Quarterly Production (koz Au)
57 58
51
68
6465
56
59
72
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
7
Strong Operational Quarter
Niakafiri
GoloumaWest Koulouqwinde
Sabodala
Kerekounda
Plant
Haul Road
Mineral Resources
Golouma Style High Grade Gold Trend
Masato Style Bulk Tonnage Gold Trend
Mining Concession
Exploration Permit
….
Mining
Moved almost 9 million tonnes – a 1% increase
15% increase in head grade YoY to 2.33 g/t Au
Milling
Milled more than one million tonnes
Gold recovery rate of 92%
Sabodala Village Resettlement
New village construction and related infrastructure
on target for H1 2020 completion
Drilling of Niakafiri deposit to commence in 2020
Sabodala
Mine License
Senegal, West Africa
Grade Mined
Q1
Actual
FY
Guidance
NI 43-101
Mine Plan(1)
2019 2.23 g/t 1.50 g/t – 2.00 g/t 1.41 g/t
Positive Grade Reconciliation to Reserves
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Refer to Endnote (1) in Appendix
Unit Costs Running Within or Below Guidance Ranges
9
Mining Costs ($/t mined)
$2.79 $2.60
Q1 2018 Q1 2019
Milling Costs ($/t milled)
$11.52 $11.53
Q1 2018 Q1 2019
2019 Guidance: $2.50 - $2.75
Total Cash Costs* ($/oz Au)
$659$627
Q1 2018 Q1 2019
*Refer to Appendix – Non-IFRS Performance Measures
2019 Guidance: $12 - $13 2019 Guidance: $725 - $775
7% Decrease
5% Decrease
10Power Station – Bulk Fuel Facility, April 2019
Wahgnion: On Budget & Well on Schedule
4 million man hours worked without a Lost Time Injury
98% of concrete poured
70% of structural steel installed
35% of mechanical equipment completed including SAG and Ball mills
15% of electrical and instrumentation completed
Tailings storage facility near done including outer embankments and liner installation
Main camp area, mine services area, plant & admin building completed
Completed first of two resettlement sites
For full details on Golden Hill, please visit www.terangagold.com
Golden Hill: Moving Towards a Feasibility Study
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Geology
Tarkwaian Type Sediments
Volcano Sediments
Mixed Volcano Sediments & Volcanics
Basalt
Grantoid
Batholith
Ma North
Golden Hill
(Burkina Faso, West Africa)Exploration licenses:468 km2
Ma Main
Ma East
Nahiri
Gogoba West
Nahiri Plateau
Jack Hammer Hill
Peksou North
PeksouC-Zone
B-Zone
A-Zone
415,000 oz
at 2.02 g/t(2)
Indicated
644,000 oz
at 1.68 g/t(2)
Inferred
Refer to Endnote to (2) in the Appendix
Initial Resource Highlights
Excellent along trend and to-depth continuity of gold mineralization
at all prospects drilled
Provides solid base from which to grow Golden Hill
Reaffirms interpretations that each prospect offers substantial upside
for size expansion
To move into feasibility stage, preliminary technical, environmental
and social studies are being conducted to serve as basis for an
eventual environmental and social impact assessment in support of
a preliminary economic estimate
Numerous Structures Identified by Airborne Geophysical Survey of Afema
Afema Q1 2019 Exploration Update
• Completed high-definition airborne
magnetic and radiometric survey of both
the mine license and regional permits
• High quality survey data outlines
numerous fault zones, cross-structures,
lithologic contacts and areas of folded
stratigraphy on mince license
• Compelling imagery worthy of extensive
follow-up
Reduced-to-Pole Magnetic Intensity
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Ahafo
17 Moz
Newmont
3 Afema
Exploration
Permits
Afema
Mining Permit
Bibiani
7 Moz
Resolute
Chirano
5 Moz
Kinross
Edikan
6.6 Moz
Perseus
Bogoso/Prestea
18 Moz
Gold Star
Konogo
1.4 Moz
Signature Metals
Akyem
Newmont
Esaase
5.19 Moz
Obotan
5.5 Moz
Asanko
Obuasi 41 Moz
Anglo Gold Ashanti
Kubi 0.9 Moz
Asaute Gold Corporation
Damang 7.1 Moz
Goldfields
Tarkwa 24 Moz
Iduapriem
8.2 Moz
AngloGold Ashanti
Kumasi
Cape Coast
Sefwi-Bibiani
Gold Belt Asankrangwa
Gold BeltAshanti
Gold Belt
Winneba-Kibi
Gold Belt
Côte d’Ivoire Ghana
Encouraging Results Warrant Ongoing Follow-up at Miminvest Properties
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Endeavour
Endeavour
Perseus
Randgold
Côte d’Ivoire
Guitry Sangaredougou
Newcrest
Dianra
Afema
Operating Gold Mine/ Development Project
Guitry Complex (includes Sangaredougou)
• Completed a mechanical trenching program where we
discovered an extensive 3x7 kilometre gold-in-soil
geochemical anomaly in 2018
• Encouraging results warrant further trenching and follow-up
• RC and diamond drilling planned late 2019
Dianra
• Initial phase of exploration outlines follow-up targets
Navin DyalChief Financial Officer
Higher Number of Ounces Sold Drives Revenue
Three months ended March 31
Per ounce 2019 2018 % Change
Average realized gold price* $1,307 $1,325 (1%)
Average spot gold price $1,304 $1,329 (2%)
Low $1,280 $1,308 (2%)
High $1,344 $1,355 (1%)
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$86.2$92.1
Q1 2018 Q1 2019
Revenue ($ millions)
*Refer to Non-IFRS Performance Measures in Appendix
7% Increase
2019E additional free cash flow from hedge program
……………………………..
AT AVERAGE PRICE OF $1,250/OZ
$9.0M
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(Per Ounce)
Q1
2019
Q1
2018Change
2019
Guidance
Cost of sales $907 $912 (1%) $1,050 – $1,125
All-in sustaining costs* $972 $957 2% $1,000 – $1,100
Non-cash inventory movements
and amortized advanced royalty costs ($166) ($69) 141% ($100)
All-in sustaining costs (excluding non-
cash inventory movements and
amortized advanced royalty costs)*
$806 $888 (9%) $900 – $1,000
Continued Improvement in Costs Per Ounce
*Refer to Non-IFRS Performance Measures in Appendix
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$26.9
$36.9
Q1 2018 Q1 2019
EBITDA*($ millions)
Increased Profit Metrics: Gross Profit and EBITDA*
Gross Profit($ millions)
$26.8 $28.1
Q1 2018 Q1 2019
37% Increase
5% Increase
*Refer to Non-IFRS Performance Measures in Appendix
$0.03
-$0.03
Q1 2018 Q1 2019
Net (Loss) Profit Attributable to Shareholders Impacted by Pending Tax Assessment
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Net (Loss) Profit Attributable to Shareholders($ millions)
$9.1
$2.2
Q1 2018 Q1 2019
Earnings per Share (Basic)
$0.08
$0.02
Q1 2018 Q1 2019
Adjusted Net Profit Attributable to Shareholders*($ millions)
Adjusted Earnings per Share* (Basic)
$3.0
-$2.7
Q1 2018 Q1 2019
Adjusting for items not reflective
of underlying performance:
1. $0.9M losses from gold forward
sales contracts
2. $2.7M accretion expense
3. $0.7 net foreign exchange losses
4. $1.3M impact of foreign exchange
on deferred taxes
5. $0.7M non-cash fair value changes
*Refer to Non-IFRS Performance Measures in Appendix
Operating Cash Flow Benefits From $11.8 Million Gold Prepayment
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$24.9 $26.3
Q1 2018 Q1 2019
Operating Cash Flow
Before Changes in Working Capital Excluding Inventories
($ millions)
6% Increase
$13.7
$49.6
Q1 2018 Q1 2019
Operating Cash Flow
($ millions)
261% Increase
Liquidity
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As at March 31, 2019
Cash & Cash Equivalents: $56.2M
Wahgnion Debt FacilityTotal drawdown: $136.8M
Remaining balance: $28.2M
Golden Hill Debt FacilityTotal drawdown: $10M
Remaining balance: $25M
Subsequent to Quarter
Equipment FacilityTotal drawdown: $7.2M
Remaining balance: $5.3M
WGO project capital spend
at March 31, 2019……………………………………..
OF $224M TOTAL COMMITMENT VALUE
$176M
Q&A
22
SabodalaGold Mine(Senegal)
WahgnionGold Mine(Burkina Faso)
Golden HillProject(Burkina Faso)
Miminvest &Afema JVs(Côte d’Ivoire)
Exploration & Resource Conversion
Mid-Tier Producer with Scale and Diversification
Strong Organic Growth Pipeline
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Appendix
Qualified Persons Statement
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The technical information contained in this document relating to the Sabodala and Wahgnion open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr.
Stephen Ling, P. Eng who is a member of the Professional Engineers Ontario. Mr. Ling is a full time employee of Teranga and is not "independent" within the meaning of NI 43-101. Mr. Ling has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Qualified Person" under NI 43-
101 Standards of Disclosure for Mineral Projects. Mr. Ling has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it
appears in this document.
The technical information contained in this document relating to mineral resource estimates is based on, and fairly represents, information compiled by Ms. Patti Nakai-Lajoie. Ms. Nakai-Lajoie, P.
Geo., is a Member of the Association of Professional Geoscientists of Ontario. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of NI 43-101. Ms.
Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a "Qualified
Person" under NI 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this document of the matters based on her compiled information in the
form and context in which it appears in this document.
The technical information contained in this document relating to the Sabodala underground ore reserves estimates is based on, and fairly represents, information compiled by Jeff Sepp, P. Eng., of
Roscoe Postle Associates Inc. (“RPA”), who is a member of the Professional Engineers Ontario. Mr. Sepp is “independent” within the meaning of NI 43-101. Mr. Sepp has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a “Qualified Person” under NI 43-101 Standards of Disclosure
for Mineral Projects. Mr. Sepp has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears in this document.
Teranga's exploration programs were managed by Peter Mann, FAusIMM. Mr. Mann was a full time employee of Teranga, during the period of this resource update and is not "independent" within
the meaning of NI 43-101. Mr. Mann has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a “Qualified Person” as under NI 43-101 Standards of Disclosure for Mineral Projects. The technical information contained in this document relating to exploration results are based on,
and fairly represents, information compiled by Mr. Mann. Mr. Mann has verified and approved the data disclosed in this release, including the sampling, analytical and test data underlying the
information. The RC and diamond core samples are assayed in the BIGS Global Laboratory in Ouagadougou, Burkina Faso. Mr. Mann has consented to the inclusion in this document of the
matters based on his compiled information in the form and context in which it appears in this document.
Teranga's disclosure of mineral reserve and mineral resource information is governed by NI 43-101 under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). There can be no assurance that
those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.
Teranga confirms that it is not aware of any new information or data that materially affects the information included in the technical reports for the Sabodala Project (August 30, 2017) and the
Wahgnion Project (October 31, 2018) pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects (the “Technical Reports”), or first quarter results, market announcements
and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements concerning the
Technical Reports continue to apply and have not materially changed.
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Non-IFRS Performance MeasuresThe Company has included non-IFRS measures in this document, including “total cash costs”, “total cash costs per ounce sold”, “all-in sustaining costs” (“AISC”), “AISC (excluding cash / (non-cash) inventory movements and
amortized advanced royalty costs)”, “AISC per ounce”, “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs) per ounce”, “earnings before interest, taxes, depreciation and amortization”
(“EBITDA”), “free cash flow”, “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share”. These measures are intended to provide additional information only and do not have any standardized
meaning under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flow from
operations as determined under IFRS. Other companies may calculate these measures differently.
“Total cash costs” figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold
producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures
presented may not be comparable to other similarly titled measure of other companies. “Total cash costs per ounce sold” is a common financial performance measure in the gold mining industry but has no standard meaning
under IFRS. The Company reports total cash costs on a sales basis. The World Gold Council (“WGC”) definition of AISC seeks to extend the definition of total cash costs by adding corporate general and administrative costs,
reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of
producing gold from current operations. AISC excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize earnings. Consequently, this measure is not representative of all
of the Company’s cash expenditures. In addition, the calculation of AISC does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the
Company’s overall profitability. The Company also expands upon the WGC definition of AISC by presenting an additional measure of “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty
costs)”. This measure excludes cash and non-cash inventory movements and amortized advanced royalty costs which management does not believe to be true cash costs and are not fully indicative of performance for the period.
For Sabodala and Wahgnion, life of mine total cash costs and AISC figures used in this presentation are before cash/non-cash inventory movements and exclude any allocation of corporate overheads. Consolidated total cash
costs and all-in sustaining cost figures add corporate overhead costs.
“Average realized price” is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized
price is calculated on revenue and ounces sold to all customers, except Franco-Nevada, as gold ounces sold to Franco-Nevada is recognized in revenue at 20 percent of the prevailing gold spot price on the date of delivery and
80 percent at $1,250 per ounce. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently.
“Earnings before interest, taxes, depreciation and amortization” (“EBITDA”) is a non-IFRS financial measure, which excludes income tax, finance costs (including accretion expense), interest income and depreciation and
amortization from net (loss)/profit. In 2019, Teranga amended the definition of EBITDA to exclude accretion expense to improve comparability of this non-IFRS financial measure with its peers. The comparative 2018 EBITDA has
been restated to conform to the new presentation. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working
capital needs, service debt obligations, and fund capital expenditures.
“Free cash flow” is calculated as net cash flow provided by operating activities less sustaining capital expenditures. The Company believes this to be a useful indicator of our ability generate cash for growth initiatives.
Starting in 2018, the Company adopted “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share” as new non-IFRS financial measures. These non-IFRS financial measures are used by
management and investors to measure the underlying operating performance of the Company. Presenting these measures from period to period is expected to help management and investors evaluate earnings trends more
readily in comparison with results from prior periods. The Company calculates “adjusted net profit attributable to shareholders” as net (loss)/profit attributable to shareholders adjusted to exclude specific items that are significant,
but not reflective of the underlying operations of the Company, including: the impact of unrealized and realized foreign exchange gains and losses, gains and losses on derivative instruments, accretion expense on long-term
obligations, impairment provisions and reversals thereof, and other unusual or non-recurring items. Commencing the second quarter 2018, the Company also excluded the impact of foreign exchange movements on deferred
taxes and other non-cash fair value changes from adjusted net profit attributable to shareholders as management does not believe these factors to be reflective of the underlying performance of the Company. “Adjusted basic
earnings per share” is calculated using the weighted average number of shares outstanding under the basic method of earnings per share as determined under IFRS
For more information and the reconciliation of these measures, please refer to the Company’s latest management’s discussion and analysis accessible on the Company’s website at www.terangagold.com.
Endnotes
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1. Sabodala’s Mineral Reserve and Mineral Resource estimates as at June 30, 2017. For more information regarding Sabodala’s Mineral Reserves and Resources and related notes,
please refer to the NI 43-101 compliant technical report for the Sabodala Project dated August 30, 2017 accessible on the Company’s website at www.terangagold.com and on
SEDAR at www.sedar.com.
2. Golden Hill’s Mineral Resource estimate as at November 30, 2018. For more information regarding Golden Hill’s Mineral Resource and related notes, please refer to the press
release dated February 21, 2019 available on the Company’s website at www.terangagold.com and SEDAR at www.sedar.com.
Trish Moran
Head of Investor Relations
77 King Street West, Suite 2110
Toronto, ON M5K 2A1
T: +1.416.607.4507
W: terangagold.com
TSX:TGZ / OTCQX: TGCDF