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TSX:TGZ / OTCQX:TGCDF
Building a
Multi-Asset Mid-Tier
West African Gold Producer
Investor Presentation
October 2019
2
Forward-Looking Statements
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 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.
3
Senegal
Côte d’Ivoire
Burkina Faso
Mali
Guinea
Guinea-
Bissau
The Gambia
GhanaBenin
Niger
Sierra
Leone
Liberia
Togo
Guitry
Dianra
Sangaredougou
Building a Multi-Asset Mid-Tier Gold Producer in Mining-Friendly West Africa
Afema
Golden Hill
Advanced Exploration ProjectMineral Resource: (3)
Indicated: 415koz @ 2.02 g/t Au
Inferred: 644koz @ 1.68 g/t Au
Sabodala Gold
Operations2P Reserves: 2.4Moz(2)
Miminvest & Afema
Exploration Permits
Refer to Endnotes (1), (2) and (3) in the Appendix
Ouagadougou
Abidjan
Dakar
Wahgnion Gold
Operations2P Reserves: 1.6Moz(1)
Birimian Greenstone Belt
4
SabodalaGold Mine(Senegal)
WahgnionGold Mine(Burkina Faso)
Golden HillProject(Burkina Faso)
Miminvest &Afema JVs(Côte d’Ivoire)
Exploration & Resource Conversion
Increasing Production, EBITDA, Earnings & Cash Flow
4
Annual production of 300-350koz Moving to feasibility
Strong Organic Growth Pipeline
1.0x 1.0x 1.0x0.9x
0.7x 0.7x0.6x 0.6x 0.6x
Centamin SEMAFO Endeavour Perseus Roxgold Resolute Teranga* GoldenStar
Asanko
Re-rating Opportunity When Teranga’s Second Gold Mine Achieves Commercial Production
5
Asset Diversification and Scale
Lead to Higher Valuation Multiples
• Teranga still trades as a single asset
producer
• Near-term re-rating opportunity for Teranga
once Wahgnion achieves commercial
production
• Typically assets that are part of a larger
diversified portfolio benefit from higher
valuations
*Broker estimate is the average broker estimates as per S&P Capital IQ (Teranga’s net asset value per share (NAVPS) is US$6.77/share)
Source: S&P Capital IQ as at October 10, 2019
Price/Consensus NAVPS of West African Peer Group
Average: ~1.0x Average: ~0.7xMid-Tier Gold Producers Junior Gold Producers
Liquidity
6
As at June 30, 2019
Cash & Cash Equivalents$41.4M
WAHGNION PROJECT CAPITAL SPEND AS AT JUNE 30, 2019: $207M
Equipment FacilityTotal drawdown: $6.8M (incl. $0.4M repayment)
Remaining balance: $5.3M
Wahgnion Debt FacilityTotal drawdown: $136.8M
Remaining balance: $28.2M
Golden Hill Debt FacilityTotal drawdown: $24M
Remaining balance: $11M
Teranga’s
Four
CSR Pillars
7 7
8
$139.7MLocal Procurement
$43.6MGovernment of Senegal
$1.1MDirect Community
Investment
$8.8MLocal Payroll
$193.2MTotal Economic Contributions
to Senegal in 2018
Unique Cornerstone Shareholder – Tablo Corporation – Currently Owns 22% of Teranga
9
Initial private placement
33%
Gryphon acquisition
8%
Secondary public
offering25%
On market purchases
34%
Tablo Corporation Owns 23.8 Million Shares of Teranga at an Average Price of C$3.88David Mimran, Director of Teranga, Controls Tablo Corporation
• President of the Mimran Group, a family conglomerate with a
long history of successful operations in West Africa in the agri-
foods industry
• Special advisor to the Government of the Republic of Côte
d'Ivoire where he led negotiations with the IMF, World Bank,
European Union, and Government of the Republic of France
Strong Cornerstone Investor with In-Depth Local Knowledge
• Long history of operating responsibly in West Africa
• Mimran Group was the largest private sector employer in both
Senegal and Côte d’Ivoire until the sale of its flour assets
Committed to Teranga’s Long-Term Growth
• November 2017: Tablo announced its intention increase its
holdings by acquiring up to 5% of Teranga’s issued and
outstanding common shares in the open market – this was
renewed in November 2018One-third of Tablo’s shares were purchased through exercise of
anti-dilution right relating to acquisition of Gryphon Minerals in
October 2016 and November 2016 secondary offering.
Initial private placement was made in October 2015.
• Ramp up to
commercial production
• Achieve 2019
production (30,000 to
40,000 ounces(7)) &
cost guidance
• Achieve 2019
production (215,000 to
230,000 ounces(4)) &
cost guidance
• Deliver strong free
cash flows* to support
growth initiatives
• Advance resettlement
and livelihood
restoration program
related to Niakafiri
deposit towards
completion in 2020
10
• Undertake 27,000-
metre drilling and
exploration program
in H2
• Advance engineering,
environmental and
social work to support
a preliminary
economic
assessment and
feasibility stage of
development
• Validate and increase
the Afema historical
resource
• Continue exploring
Miminvest properties
2019 Milestones & Goals Ahead
Refer to Endnotes (4) and (7) in the Appendix
SabodalaSenegal, West Africa
11
12
Life of Mine Summary(5) 5 Years2018-2022
Annual production(4) 213koz
All-in sustaining costs* $885/oz
Total free cash flow*(6) $230M
2019 Production Guidance 215 – 230koz
Strong 5-Year Profile with Potential to Increase Mine Life
Masato
Mamasato
Kouroundi
Kerekounda
Kourouloulou
Golouma South
Koulouqwinde
Koutoniokollo
Kinemba East
Kobokoto
Goumbati
West
Maki
Medina Golouma
West
Golouma
North
Soukhoto Niakafiri
EastNiakafiri
West
Diadiako Gora
Sabodala Gold Mine (Open Pit)
Senegal, West AfricaPermitted mining license: 291 km2
*Refer to Non-IFRS Performance Measures in the Appendix
Refer to Endnotes (2),(4),(5) and (6) in the Appendix
2.4Moz2P Reserves
at 1.35 g/t Au(2)
4.1MozM&I Resources
at 1.56 g/t Au(2)Mine Life(4)
Largest Gold Producer in Senegal
with Significant Resource Base & Long Mine Life
Sabodala
11-Year
13
17
131
214 207 212182
217233 245
2010 2011 2012 2013 2014 2015 2016 2017 2018
+5%
Record Annual Production 3-Years Running(Koz Au)
Improved Costs; Tracking 2019 Cost Guidance
*Refer to Non-IFRS Performance Measures in the Appendix
1.8Moz of Gold Produced at Sabodala Since IPO in December 2010
$/oz Au sold
H1
2018
H1
2019
2019
Consolidated
Guidance (Except for Cash Costs)
Cost of sales $909 $959 $1,050 - $1,125
Total cash costs* (Sabodala only) $644 $651 $725 - $775
All-in sustaining costs* $920 $956 $1,000 - $1,100
Non-cash inventory movements
and amortized advanced royalty costs (53) ($119) ($100)
All-in sustaining costs (excluding non-
cash inventory movements and
amortized advanced royalty costs)*
$867 $837 $900- $1,000
Track Record of Replacing Reserves at Sabodala
Sabodala Proven and Probable Reserves(2)
(Moz)
14
Significant Opportunity for Growth at
Sabodala
• Advancing the Sabodala village relocation to drill
out Niakafiri, the largest deposit on the mine
license, and to increase remaining mine life
• World-class resettlement of ~600 homes
according to IFC Performance Standards and
international best practices
• Full government and community support
Resettlement expected to be completed in 2020
1.4
1.71.6
2.82.6 2.6
2.7
2.4
2010 2011 2012 2013 2014 2015 2017 2018
Graph includes years for which there was a reserve updateRefer to Endnote (2) in the Appendix
Significant Opportunity
for Growth at Sabodala
• Advancing the Sabodala village relocation to drill
out Niakafiri, the largest deposit on the mine
license, and to increase remaining mine life
• Resettlement of ~600 homes according to IFC
Performance Standards and international best
practices
• Expected completion: 2020
WahgnionBurkina Faso, West Africa
15
Wahgnion: Construction Complete
5+ million hours worked without a lost time injury
Process plant successfully commissioned
First gold pour achieved in August
Commissioned two months ahead of the original schedule
Expected to come in below budget
Transitioned 70 local employees from construction to operational roles
Continued focus on social responsibility activities, such as housing and
livelihood restoration programs
16
Wahgnion: Ramping Up to Commercial Production
17
*Refer to Non-IFRS Performance Measures in the Appendix
**Pre-production capital costs of $240 million excludes $16 million in construction
readiness activities spent prior to major construction
Refer to Endnotes (1), (5), and (7) in the Appendix
Life of Mine Summary(5) Initial 5 Years2020-2024
Annual production(7) 132koz
All-in sustaining costs* $761/oz
Total free cash flow* $311M
2019 Production Guidance 30 – 40koz
Mine Life(7)
1.6Moz2P Reserves
at 1.62 g/t Au(1)
2.4MozM&I Resources
at 1.51 g/t Au(1)
Strong 5-Year Profile with Potential to Increase Mine Life
13-Year
Raul
17
Samavogo
Nogbele
FourkouraStinger
Plant
Reserve Deposits
Exploration Targets
Wahgnion Gold Mine (Open-pit)
Burkina Faso, West AfricaPermitted mining license: 89 km2
Kafina West
RaulHillside
18
Multi-Year Drilling Program
to Commence in 2020-2021
Samavogo
Nogbele
FourkouraStinger
Bagu Sud
Korindougou
Ouahiri
Sud
Regional Exploration Includes ~12 Drill-Ready Targets
• Targets have potential to become resources and are
within trucking distance of proposed plant site
• Konatvogo: 2,000-metre NW-trending anomaly
between Fourkoura and Nogbele deposits. Up to 21.6
g/t Au from altered shear-hosted quartz vein outcrops
• Bassongoro: 1,500-metre NNE-trending soil and auger
anomaly (up to 15g/t Au). Intersection of regional
Nianka and Fourkoura structures undrilled
Raul
Processing Plant
Kondandougoug
Konatvogo
Bazogo
Bassongoro
Samavogo North
MuddhiPetit Colline
Reserve Deposits
Exploration Targets
Wahgnion Gold Mine
Burkina Faso, West AfricaExploration licenses:+1,000 km2
Golden HillBurkina Faso, West Africa
19
Sources
¹ Press Release, SEMAFO (March 5, 2019)
² Press Release, Roxgold (July 11, 2019)
³ Annual Information Form, Endeavour Mining (March 26, 2019)
⁴ Press Release, Sarama Resources (September 4, 2019)
⁵ MD&A, Sarama Resources (August 27, 2019)6 MD&A, Sarama Resources (August 27, 2019)
M&I Resources are inclusive of P&P Reserves
Mana & Siou
M&I: 4.2Moz ¹
Houndé
M&I: 3.1 Moz ³
Yaramoko
M&I: 1.3Moz ²
Acacia JVs
South Houndé JV
Inferred: 2.1Moz ⁴
Interpreted Geology
Andesite
Basalt
Basin
Batholith
Chert
Granitoid
Tarkwaian
Houndé Belt Burkina Faso, West Africa
Teranga’s
Golden Hill ProjectMineral Resource: (3)
Indicated: 415koz @ 2.02 g/t Au
Inferred: 644koz @ 1.68 g/t Au
ACC
Holdings
Permits
Teranga/ACC
Holdings JV(Dossi Permit)
ThreeBee
Project
M&I: 0.3Moz 6
Karankasso JV
M&I: 0.7Moz ⁵
Early-Stage Initial Resource Provides Solid
Base From Which to Grow Golden Hill
20
415,000 oz
at 2.02 g/t(3)
Indicated
644,000 oz
at 1.68 g/t(3)
Inferred
Highlights of Initial Resource
• Excellent along trend and to-depth continuity of gold
mineralization at all prospects drilled
• Reaffirms interpretations that each prospect offers
substantial upside for size expansion
For full details on Golden Hill, please visit www.terangagold.com
Refer to Endnote (3) in the Appendix
21
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
Jackhammer Hill
Peksou North
PeksouC-Zone
B-ZoneA-Zone
Ma Far North
Ma South
Gogoba North
Sebe
Nahiri South
Intie
Copper
MA
IN S
HE
AR
ZO
NE
Rapidly Advancing Project
• Well advanced on the metallurgical test work to
commence technical and economic assessments and to
progress the project towards the feasibility stage of
development
H2 2019: 27,000-Metre Drilling & Exploration Program
• 11 separate drill targets identified for inclusion in drilling
evaluation program, including five with no previous
drilling
• Additional 15,000 metres of auger drilling and 10,000
metres of excavator trenching
• Focused on identifying additional structural trends that
could add resources
• Exploration budget of at least $5 million in H2 2019
Included in mineral resource estimate
Progressing Towards Feasibility
Stage of Development
Miminvest & Afema Exploration OpportunitiesCôte d’Ivoire, West Africa
22
Côte d’Ivoire: Future Value Resides with Miminvest and Afema Early-Stage Opportunities
23
Agbaou
Ity
Yaouré
Tongon
Côte d’Ivoire
Guitry Sangaredougou
Bonikro
Dianra
AfemaCôte d’Ivoire represents more
than one-third of the West African
Birimian Greenstone Belt
Operating Gold Mine/ Development Project
Miminvest Exploration Properties
(100% earning, 3% NSR; JV formed June 2016)
• Guitry complex (includes Sangaredougou):
Highly prospective and potential district
• Dianra: Initial phase of exploration outlines
favourable follow-up targets
Afema Mine Joint Venture (51%, earning 70%; JV formed December 2017)
• Two well mineralized greenstone belts underlie
mine license and regional land package
• Five major shear structures crossing the
regional land package with a combined strike
length exceeding 140 km
3
Miminvest Permits
4
Afema Permits
Côte d'Ivoire
35%
Burkina Faso21%
Ghana19%
Guinea11%
Mali10%
Other4%
Sissingué
High Priority Guitry District (including Sangaredougou)
• First-ever drilling program at Guitry consisted of a 68-hole,
3,320 metre air-core drilling program
• This program included a series of shallow, widely spaced,
multi-hole drill profiles designed to evaluate the central
1,000-metre strike extent within an extensive gold-in-soil
geochemical anomaly covering a 3 x 7 km area
• The most favourable results were:
– 24 metres grading 2.02 g/t Au (GUAC008)
– 20 metres grading 6.37 g/t Au (GUAC018)
– 4 metres grading 5.80 g/t Au (GUAC015)
– an additional +10 holes intersected 1.0-1.5 g/t over
lengths up to 10 metres
Tongon
Côte d’Ivoire
Sangaredougou
Operating Gold Mine/Development Project 24
Encouraging Early-Stage Results on Miminvest Permits
Guitry
Dianra
Afema
Sissingué
Agbaou
Ity
Yaouré
Bonikro
Numerous Structures Identified by Airborne Geophysical Survey of Afema
• 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
• Situated on two shear zones
extending down from Ghana
Afema Geophysical Survey: Reduced-to-Pole Magnetic Intensity
25
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
Golden 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
Appendix
27
Capital Structure and Top Shareholders
Source: Nasdaq IR Insight as at October 9, 2019
Teranga Gold Capital Structure (as at June 30, 2019)
Common shares outstanding 107.6M
Stock options granted 6.4M
Warrants (Taurus debt facility) 3.6M
Fully diluted 117.6M
Number of shares owned by insiders 24.5M
Market capitalization (as at Oct. 16, 2019) US$407M
Top 20 Shareholders% of o/s
Shares# of Shares
1 Tablo Corporation (David Mimran) 22.1 23,788,550
2 Ruffer LLP 6.0 6,474,593
3 Van Eck Associates Corporation 5.6 5,986,199
4 Dimensional Fund Advisors, L.P. 4.2 4,471,077
5 Heartland Advisors, Inc. 2.4 2,525,000
6 Konwave AG 1.9 2,024,500
7 Franklin Advisers, Inc. 1.6 1,664,553
8 Stabilitas GmbH 1.4 1,500,000
9 SSI Wealth Management 1.1 1,130,000
10 Invesco Advisers 1.0 1,110,000
11 Earth Resource Investment Group 0.9 1,000,000
12 AgaNola AG 0.7 860,000
13 AMG Fondsverwaltung AG 0.7 750,000
14 azValor Asset Management 0.7 735,330
15 Mackenzie Financial 0.6 661,410
16 U.S. Global Investors 0.6 626,550
17 LSV Asset Management 0.5 505,450
18 Ethenea Independent Investors S.A. 0.5 500,000
19 Gabelli Funds 0.4 450,000
20 Alan Hill (Chairman) 0.4 431,200
Total shares held by top 20 shareholders 53% 57,194,412
8.4%
4.8%
Implied Net Smelter Royalty
OJVG Acquisition Financed by Franco-Nevada
Fixed gold deliveries transition to trailing 6% gold stream
once fixed deliveries completed in 2019*
• In connection with Teranga’s acquisition of Oromin Joint
Venture Group in 2014, Franco-Nevada invested $135 million
in exchange for a fixed and floating stream on Teranga’s
future production at Sabodala
• Fixed gold deliveries of 22,500 ounces per year from
2014 to 2019 with trailing 6% gold stream once fixed
deliveries completed in 2019*
• Franco-Nevada to pay 20% of spot gold price per ounce
delivered (6% stream is equivalent to a 4.8% NSR royalty)
• Streaming agreement covers Teranga’s current mine license
and land package
Effective Cost of Franco-Nevada Stream on
All-in Sustaining Costs per Ounce(based on $1,200/ounce gold price)
$100
$58
2016E Post 2019
Eff
ective
Co
st
28
Executive Team
29
Richard Young, CPA
President & CEO
25+ years’ experience in gold
mining including 13 years at Barrick
Gold including finance and
corporate development
Paul Chawrun, P.Eng, MBA
Chief Operating Officer
25+ years’ experience in mining
including serving as Director,
Technical Services at Detour Gold
Navin Dyal, CPA
SVP & Chief Financial Officer
13 years’ experience in mining including
7 years at Barrick Gold as Head of
Finance in copper business unit
David Savarie, LL.B
SVP, General Counsel,
Corporate Affairs & People
11 years’ Corporate Counsel experience
in mining including Deputy General
Counsel and Corporate Secretary of
Gabriel Resources
Aziz Sy, P.Eng, M.Sc., MBA
Regional Manager, West Africa
17+ years’ experience in managing
gold exploration projects, including
his work as Vice President Senegal
Operations for the Oromin Joint
Venture Group until its acquisition in
2014 by Teranga Gold
David Mallo, B.Sc. Geology
VP, Exploration
35+ years’ mineral exploration in project
evaluation and program management,
playing an integral role in acquisition,
discovery, and exploration of world-class
deposits including Eskay Creek and
Cobre Panama
Leily Omoumi, MBA
VP, Corporate Development
15+ years’ experience in the mining
and financial services industries,
including buy-side and sell-side
analyst at two major Canadian banks
and at Hatch in a technical capacity
Nancy Lee, MA
VP, Human Resources
20 years’ experience in human
resources with a focus on talent
development across industries in
Canada, US and Asia, including
Director, Global Talent
Management at Manulife Financial
Chantal Da Silva, J.D., LL.L., BA
VP, Legal Affairs
15 years’ experience as a solicitor and
corporate counsel advising on global
finance transactions, M&A and
commercial matters in natural
resources and financial services
Gwennael Guillen
VP, Corporate Social Responsibility
25 years’ experience in health,
safety, environment and community
relations, including 12 years on
mining projects in South America and
West Africa
Trish Moran, BBM,
VP, Investor Relations &
Corporate Communications
25+ years’ experience in investor
relations and communications,
including the mining and financial
services industries
Alan Hill, M.Eng
Chairman
35+ years experience in
mining including 20 years at
Barrick Gold in project
evaluation and development
Christopher Lattanzi, B.Eng
Director
30 years experience in mining
property valuation, scoping, feasibility
studies and project monitoring on a
global basis. Founder of Micon
International
Richard Young, CPA
President & CEO
25+ years experience in gold
mining including 13 years at
Barrick Gold in finance and
corporate development
Jendayi Frazer, Ph.D.
Director
17 years experience in key roles
supporting initiatives and policies
to build Africa’s equity and commodity
markets. First woman U.S. Ambassador
to South Africa
William Biggar, MA, CPA
Director
25+ years experience in senior
executive positions in investment,
mining and real estate including
Barrick Gold and Merrill Lynch
Edward Goldenberg, MA, BCl
Director
Distinguished career in policy including
10 years as Senior Policy Advisor to the
Prime Minister of Canada and the Prime
Minister's Chief of Staff in 2003. Honourary
Doctorate of Laws from McGill University
David Mimran
Director & Teranga’s Largest Shareholder
CEO of Grands Moulins d’Abidjan and
Grands Moulins de Dakar, among the
largest producers of agri-food in West
Africa. Special Advisor to the Government
of the Republic of Côte d'Ivoire
Alan Thomas, CPA
Director
30+ years mining and energy
industry experience in senior
financial and director roles including
6 years as VP and CFO of ShawCor
and 11 years as CFO of Noranda
Frank Wheatley, LL.B
Director
28 years mining industry experience as
director, senior officer and legal counsel.
Extensive experience in public financing,
project debt financing, permitting of large-
scale mining projects and strategic M&A
Board of Directors
30
31
Refer to Endnotes (9), (10), (11), (12), (13),(14),
and (15) in the Appendix
Sabodala Wahgnion Consolidated(13)
Operating
Results
Total mined (‘000t) 37,000 – 39,500 8,000 – 10,000(14) -
Ore Mined (‘000t) 3,000 – 3,500 1,000 – 1,200(14) -
Grade mined (g/t) 1.50 – 2.00 1.80 – 2.00 -
Strip ratio waste/ore 9.5 – 12.0 - -
Ore milled (‘000t) 4,100 – 4,300 500 – 650 -
Head grade (g/t) 1.80 – 2.00 1.80 – 2.00 -
Recovery rate % 89.0 – 91.0 ~90.0 -
Gold produced(9) (oz) 215,000 – 230,000 30,000 – 40,000 245,000 – 270,000
Cost of sales per ounce sold $/oz sold 1,050 – 1,125 1,175 – 1,250(15) 1,050 – 1,125(15)
Total cash costs per ounce sold* $/oz sold 725 – 775 - -
All-in sustaining costs(10)* $/oz sold 900 – 975 1,050 – 1,125(15) 1,000 – 1,100(15)
Non-cash inventory movements and
amortized advanced royalty costs(10)$/oz sold (75) (300)(15) ~ (100)(15)
All-in sustaining costs (excluding non-
cash inventory movements and
amortized advanced royalty costs)(10)*
$/oz sold 825 – 900 750 – 825(15) 900 – 1,000(15)
Mine Production Costs $ millions 165 – 180 - -
Capital
Expenditures
Sustaining Capital(11) $ millions 10 – 15 - -
Resettlement Capital $ millions 15 – 20 - -
Wahgnion Construction $ millions - 115 – 120 -
Wahgnion Pre-Operating Costs $ millions - ~30 -
Corporate and
Other
Corporate Administration Expense $ millions - - 13.0 – 14.0
Share-Based Compensation Expense(12) $ millions - - 3.5 – 4.5
Regional Administration Costs $ millions - - 2.0 – 3.0
Community Social Responsibility $ millions - - 4 – 5
Exploration and Evaluation(13) $ millions - - 5 – 15*Refer to Non-IFRS Performance Measures in the
Appendix
2019 Guidance (Year Ending December 31, 2019)
Qualified Persons Statement
32
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 are being 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 samples are prepared at site and assayed in the SGS laboratory located at the site. Analysis for diamond drilling is sent
for fire assay analysis at ALS Johannesburg, South Africa. 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 20, 2017)
pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects (the “Technical Reports”), or 2019 second 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.
33
Non-IFRS Performance MeasuresThe Company provides some non-IFRS financial measures as supplementary information that management believes may be useful to investors to explain the Company’s financial results. Beginning in the second quarter of 2013, we adopted an “all-in sustaining costs” measure consistent with the guidance
issued by the World Gold Council (“WGC”) on June 27, 2013, of which Teranga became a member on November 27, 2018. The Company believes that the use of all-in sustaining costs is helpful to analysts, investors and other stakeholders of the Company in assessing its operating performance, its ability
to generate free cash flow from current operations and its overall value. This measure is helpful to governments and local communities in understanding the economics of gold mining. The “all-in sustaining costs” is an extension of existing “cash cost” metrics and incorporate costs related to sustaining
production.
“Total cash cost 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. We believe that, in addition to conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure,
along with sales, is considered to be a key indicator of a Company’s ability to generate operating profits and cash flow from its mining operations. 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.
The WGC definition of all-in sustaining costs 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. All-in sustaining costs exclude income tax payments, interest costs, costs related to business acquisitions and items needed to normalize profits. Consequently, this measure is not representative of all
of the Company’s cash expenditures. In addition, the calculation of all-in sustaining costs and all- in costs 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 all-in sustaining costs by presenting an additional measure of “All-in sustaining costs (excluding 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.
“Total cash costs per ounce”, “all-in sustaining costs per ounce” and “all-in sustaining costs (excluding non-cash inventory movements and amortized advanced royalty costs)” are intended to provide additional information only 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. 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.
“Average realized price” is a non-IFRS financial measure. 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.
EBITDA is a non-IFRS financial measure, which excludes income tax and related expenses, finance costs (including accretion expense), interest income and depreciation and amortization from net (loss)/profit for the period. 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. Beginning second quarter 2019, the Company adopted adjusted EBITDA as a new non-IFRS financial measure. Management believes that adjusted 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, after adjusting for factors not reflective of the underlying performance of the Company. Adjusted 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. The Company calculates adjusted EBITDA as EBITDA adjusted to exclude unrealized and realized foreign exchange gains and losses, gains and losses on derivative instruments, non-cash fair value
changes, impairment provisions and reversals thereof, and other unusual or non-recurring items.
“Free cash flow” is a non-IFRS financial measure. The Company calculates free cash flow 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. Other companies may
calculate this measure differently.
"Adjusted net profit attributable to shareholders” and “adjusted basic earnings per share” are financial measures with no standard meaning under IFRS. 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 for the period 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, the
impact of foreign exchange movements on deferred taxes, non-cash fair value changes, impairment provisions and reversals thereof, and other unusual or non- recurring items.
“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
34
1. Wahgnion’s Mineral Reserve and Mineral Resource estimates as at May 31, 2018. Mineral Reserves are estimated using a gold price of $1,250 per ounce. Mineral Resources are
estimated using a long-term gold price of $1,500 per ounce, adjusted to match existing industry standards. For more information regarding Wahgnion’s Mineral Reserves and Resources
and related notes, please refer to the amended NI 43-101 compliant technical report for the Wahgnion Gold Operations dated July 31, 2019 available on the Company’s website at
www.terangagold.com and SEDAR at www.sedar.com.
2. Sabodala’s Mineral Reserve and Mineral Resource estimates as at December 31, 2018. Open-pit Mineral Reserves are estimated using a gold price of $1,250 per ounce. Underground
Mineral Reserves are estimated using a gold price of $1,200 per ounce. Mineral Resources are estimated using a gold price of US$1,450 per ounce. For more information regarding
Sabodala’s Mineral Reserves and Resources and related notes, please refer to the amended and restated annual information form for the year ended December 31, 2018 dated July 31,
2019 available on the Company’s website at www.terangagold.com and SEDAR at www.sedar.com.
3. 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.
4. This production target is based on proven and probable reserves only from Teranga’s Sabodala Project as at December 31, 2018. For more information regarding Sabodala’s Mineral
Reserves and Resources and related notes, please refer to the amended and restated annual information form for the year ended December 31, 2018 dated July 31, 2019 available on the
Company’s website at www.terangagold.com and SEDAR at www.sedar.com.
5. LOM assumptions include: Gold Price $1,250 per ounce
Heavy Fuel Oil (HFO): Wahgnion - $0.59 per litre; Sabodala - $0.46 per litre
Light Fuel Oil (LFO):Wahgnion - $1.04 per litre ($0.88 per litre during construction period); Sabodala - $0.81 per litre
Euro to USD Exchange Rate: $1.10.
6. This Sabodala free cash flow is an estimate that is based on the updated life of mine plan and reserve estimate for the Sabodala project, as set out in the Technical Report of Teranga for
the Sabodala Project, Senegal, West Africa, dated August 30, 2017 (the “Sabodala Technical Report”). See in particular Section 21 of the Sabodala Technical Report - Capital and
Operating Costs.
7. This production target is based on proven and probable ore reserves only for Teranga’s Wahgnion Project as at May 31, 2018. For more information regarding the Wahgnion’s Mineral
Reserves and Resources and related notes, please refer to the amended NI 43-101 compliant technical report for the Wahgnion Gold Operations dated July 31, 2019 available on the
Company’s website at www.terangagold.com and SEDAR at www.sedar.com.
8. Net cash flow excludes Wahgnion financing, resource development and exploration expenditures.
Endnotes
35
9. 22,500 ounces of Sabodala gold production are to be sold to Franco-Nevada Corporation (“Franco-Nevada”) at 20 percent of the spot gold price. All Wahgnion gold production is subject to a
gold offtake payment agreement with Taurus Funds (“Offtake Agreement”) up to 1,075,000 ounces (see Financial Instruments section for more details).
10. All-in sustaining costs per ounce is a non-IFRS financial measure and does not have a standard meaning under IFRS. All-in sustaining costs per ounce sold calculated at the mine site level
includes only total cash costs per ounce and sustaining capital expenditures. All-in sustaining costs for Sabodala includes sustaining capital expenditures but excludes growth capital related
to the Sabodala village resettlement. Corporate administration and share-based compensation expense are presented separately in this table and are not allocated to the mine site level
costs. All-in sustaining costs presented on a consolidated basis includes corporate administration and share-based compensation expense. All-in sustaining costs also includes non-cash
inventory movements and non-cash amortization of advanced royalties.Excludes capitalized deferred stripping costs, included in mine production costs.
11. Share-based compensation expense assumes a constant share price of C$4.00 per Teranga share.
12. Exploration and evaluation costs includes both expensed exploration, primarily attributable to exploration work on exploration permits, and capitalized reserve development, which is work
performed on mine licenses. In the second quarter, we have increased the lower end of the range from $5 million to $10 million to reflect actual and expected spend. The higher end of the
range has not changed.
13. This forecast financial information is based on the following material assumptions for the remainder of 2019: gold price: $1,250 per ounce; Brent Crude Oil: $62 per barrel; Euro:USD
exchange rate of 1:1.15. Other important assumptions: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and
recoveries is expected to remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production.
14. These figures have been updated in the second quarter to reflect initial estimates based on new plan for Wahgnion that is being developed.
15. These amounts may change depending on the point at which commercial production is reached at Wahgnion. Until such point, all pre-operating costs are capitalized and proceeds from gold
ounces sold are recorded as a reduction to the Wahgnion development asset.
TSX:TGZ / OTCQX:TGCDF
Trish Moran
Vice President, Investor Relations &
Corporate Communications
77 King Street West, Suite 2110
Toronto, ON M5K 1A2
T: +1.416.607.4507
W: terangagold.com
