INVESTOR PRESENTATION Vancouver Marketing

Transcription

1 TSX:TGZ / ASX:TGZ INVESTOR PRESENTATION Vancouver Marketing May 12-13, 2016

2 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 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

3 YTD SHARE PRICE STRENGTHENS ON POSITIVE NEWS AND THE GOLD PRICE January 29: Issued Q4 operating results Released Life of Mine production schedule February 25: Released full life of mine opex and capex detail Hosted analyst workshop March 23: Filed new life of mine plan ( Technical Report) April 28: Released Q1 financial and operating results April 11: Pre-released Q1 production results 3 Data Source: Thomson Reuters as at May 10, 2016

4 RELATIVE UNDERVALUATION PROVIDES ATTRACTIVE INVESTMENT OPPORTUNITY Data Source: BMO GoldPages published May 2, 2016 Enterprise Value ($M) EV/Production (BMO based on gold sold) ($/oz) *Project Developers EV/2P Reserves ($/oz) EV/2016E EBITDA 4

5 SIGNIFICANT POTENTIAL UPSIDE REMAINS DESPITE SHARE PRICE APPRECIATION Data Source: BMO GoldPages published May 2, 2016 TGZ Trading at 0.7x NPV* (1) Teranga s Share Price vs. Teranga Net Present Value (NPV) (1) per Share (C$) Average NPV Multiple (1) for Medium Producers* 95% 35% 65% Share Price NPV per Share Share Revalued Price Share Price Share Price Revalued Share Price Share Price Revalued Share Price NPV Multiple 0.7x 0.9x 1.1x 1.3x Based on Teranga s updated NI and the 1.3x average NPV multiple for its peer group, Teranga s share price should be C$1.95 (1) 5 Refer to endnote (1) on slide 30

6 STRONG VALUE PROPOSITION EMERGING World-Class Gold Belt in a Safe & Stable Jurisdiction LARGE LONG-LIFE Reserve & Resource Base (4) STRONG Life of Mine Cash Flow (11) SIGNIFICANT Organic Growth Potential SOLID Balance Sheet & Significant Insider Ownership LOW All-in Sustaining Costs per Ounce (2) Strong value proposition and undervalued relative to peer group = compelling investment opportunity 6 Refer to endnotes (2) (4) and (11) on slide 30

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 (6) Only Commercial Gold Mill in Senegal Ability to process regional discoveries and enter into strategic combinations to process neighbouring deposits Safe, Stable, Mining-Friendly Jurisdiction Democratic government strongly supports mining and views it as a key pillar for Senegal s economic growth Senegal 12M+ ounces Au discovered in past 10 years Emerging Gold Belt Mali 40M+ ounces Au discovered over last 25 years Refer to endnote (6) on slide 30 Mine License Regional Land Package 7

8 INDEPENDENT AND INVESTED New Strategic Cornerstone Investor David Mimran (Tablo Corporation) completed strategic private placement for 39.2M shares in Q Alan Hill Board of Directors (as of May 7, 2016) Chairman Strong Partner With In-Depth Local Knowledge Mimran Group has a long history of operating successfully and responsibly in Africa and is the largest private sector employer in Senegal Strong & Experienced Board Extensive experience in mining, finance, legal, governance, government relations as well as on the ground working knowledge of Africa Richard Young Jendayi Frazer Edward Goldenberg Chris Lattanzi David Mimran Alan Thomas Frank Wheatley President, CEO & Director Independent Director Independent Director Independent Director Director & Largest Shareholder Independent Director Independent Director Insiders own ~15% of the Company 8

9 OFF TO A STRONG START IN 2016 Record Q1 Gold Production (oz) 45% Lower All-in Sustaining Costs (2) (per ounce sold) $841 2% $824 Administration expenses, regional admin costs, Development capex capitalized deferred stripping, capitalized Total cash costs (2) reserve development, and sustaining capital Refer to Endnote (2) on slide 30 9

10 IMPROVED CASH FLOW DRIVES STRONGER PROVIDES LIQUIDITY AND FLEXIBILITY Free Cash Flow (3) Pro Forma Cash Balance ($M) $57.6 $ % $131 /oz 10% $144 /oz 45% increase in cash flow from operations to $24.1 million in Q Refer to endnotes (3) on slide 30

11 TRACKING 2016 OUTLOOK 2016 Guidance Operating Results Ore mined ( 000t) 2,000-2,500 Waste mined ( 000t) 34,500-36,000 Total mined ( 000t) 36,500-38,500 Grade mined (g/t) Strip ratio waste/ore Ore milled ( 000t) 3,700-3,900 Head grade (g/t) Recovery rate % Gold produced (9)(10) (oz) 200, ,000 Total cash cost (incl. royalties) (2) $/oz sold Total all-in sustaining cash cost (2) $/oz sold Mining $/t mined Mining long haul $/t hauled Milling $/t milled G&A $/t milled Assumptions for 2016 (6) $1,100 average gold price per ounce Brent oil: $40/barrel Euro/USD exchange rate of 1.1:1 Franco-Nevada Streaming All-in sustaining costs exclude stream impact of ~$100/oz as stream is treated as deferred revenue under IFRS Mine Production Costs $ millions Regional Administration Costs (7) (included in Cost of Sales) $ millions 2 Capital Expenditures Mine site sustaining $ millions 8-10 Capitalized reserve development $ millions 7 Project development costs $ millions Total Capital Expenditures (8) $ millions Exploration (expensed) $ millions 5 Corporate Administration Expense (7) $ millions 8-9 CSR Expense (7) $ millions Refer to endnotes (2) (6) (7) (8) (9) and (10) on slide 30 11

12 TRANSFORMATIONAL ACQUISITION FINANCED BY FRANCO-NEVADA In connection with Teranga s transformational acquisition of OJVG in 2014, Franco-Nevada (FNV) invested $135 million in exchange for a fixed and floating stream on Teranga s future production Effective Cost of Franco-Nevada Stream on All-in Sustaining Costs per Ounce (based on $1,200/oz gold price) 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 12

13 LARGE, LONG-LIFE, LOW-COST RESERVE BASE UNDERPINS STRONG CASH FLOWS OVER LIFE OF MINE Increased Increasing Lower costs mill throughput long-term sustainable cash flow (11) Refer to endnote (11) on slide 30

14 000 s oz Au SOLID BASE CASE PRODUCTION PROFILE (10) 2016 Outlook 200K-215Koz Opportunity to grow production by increasing material movement Opportunity to increase production through resource conversion and new discoveries (5) +200Koz average annual production from (10) Significant potential upside to life of mine base case production profile 14 Refer to endnotes (5) and (10) on slide 30

15 ORGANIC GROWTH: SIGNIFICANT INCREASE IN THROUGHPUT DUE TO MILL OPTIMIZATION 2016 LOM Mill Rate vs 2014 LOM Mill Rate Up to 15% increase in throughput* 5% reduction in costs +50% IRR *15% increase in throughput compared to throughput levels prior to launch of mill optimization in mid 2015 Leveraging existing mill and related infrastructure to increase organic growth 15

16 DECLINING COSTS & ATTRACTIVE CASH FLOW PROFILE LOM Gold Price $ 1,200 $ 1,200 23% decrease in mining costs since % decrease in milling costs since 2014 All-in Sustaining Cost (2) $ 887 $ 914 $ 313 $ 286 Franco-Nevada Stream * $ 73 $ 92 Cash flow/oz (11) $ 240 $ 194 Benefitting from lower fuel prices, favourable FX rates and mill optimization 40%-50% of costs are Euro-denominated Life of Mine Cash Flow (11) $240/oz Cost saving initiatives are ongoing *Fixed portion of Franco-Nevada gold stream ends in 2019 and will be replaced by variable stream, estimated to be $58/oz life of mine 16 Refer to endnotes (2) and (11) on slide 30

17 SIGNIFICANT CUMULATIVE CASH FLOW BUILD Cumulative Cash Flow (11) Low Annual Sustaining Capex Less than $10M sustaining capital required on an annual basis Generating Ample Cash Flow to Fund Growth Cash flow expected to total $549 million (7) over life of mine based on current reserves as per NI Technical Report March 2016 One year of negative cash flow due to large capex associated with underground mine development High quality infrastructure requires moderate capex, allowing Teranga to build cash flow over LOM 17 Refer to endnote (11) on slide 30

18 LARGE RESERVE BASE WITH 13.5-YEAR MINE LIFE 2.6M Proven & Probable Reserves (4) at $1,100 gold. Average mined grade of 1.59 grams per tonne* (As at December 31, 2015) Proven & Probable Reserves (4) (in Moz) (8) *Not including stockpile of 0.39Moz 80% increase in reserves since IPO Increased reserve base by 80%, net of 5-years production, through acquisition and exploration 18 Refer to endnote (4) on slide 30

19 Refer to endnotes (4) on slide 30 GROWING RESERVES ON MINE LICENSE Mine License of 291km 2 Focus on increasing reserves on mine license, which are within close proximity to mill Reserves of 2.6Moz at $1,100 Gold (4) Average mined grade of 1.59 grams per tonne (not including stockpile of 0.39Moz) Multi-year Development Program Focused on adding higher grade mill material and lower grade material for potential heap leach Sabodala Au 180 (Koz) Niakafiri Main Au 260 (Koz) Niakafiri SW Au 10 (Koz) Maki Medina Au 30 (Koz) Masato Au 730 (Koz) Niakafiri SE Au 40 (Koz) Kerekounda Au 90 (Koz) Kerekounda Au 100 (Koz) Golouma West Au 200 (Koz) Golouma West 1 - Au 120 (Koz) 2- Au 60 (Koz) Golouma South Au 60 (Koz) Golouma South Au 130 (Koz) Reserves Open Pit Reserves U/G 19

20 FOCUSED ON BIG TARGETS ON LARGE REGIONAL LAND PACKAGE Nienienko Main RC Drilling Program ~1,000km² Regional Land Package Exploration permits encompassing large of land surrounding Teranga s mine license Leoba-Lerinde Granite DDH Program & Trenching Leocounda Prospect DDH Drilling Program & Trenching Soreto-Soreto North DDH Drilling Program & Trenching First Discovery: High-Grade Gora ~5 grams per tonne deposit developed in 2015 Increasing Exploration Spend & Bench Strength Focused on large discoveries Increased focus in the last six months has advanced a number of prospects that are currently in drilling phase Bransan Trenching & Drilling Program Marougou West Prospect Trenching & DDH Drilling Program KA Prospect DDH Drilling Program Cinnamon North Prospect Trenching & DDH Drilling Program Marougou Prospect DDH Drilling Program 20

21 FUTURE ORGANIC GROWTH: HEAP LEACHING Technically Viable For Processing Low-grade Ore Confirmed by pre-feasibility study, which was completed in Q Heap Leach Flow Sheet High Ore Recovery Range Oxide 78% - 83% Transition 61% - 66% Current Economic Estimates Capital cost: $40M + $10M contingency Processing costs: $7 - $8 per tonne Valuable Stockpile ~150,000 ounces of low-grade inventory available for heap leaching Heap leaching has potential to increase Teranga s annual production by 10% - 20% 21

22 SIGNIFICANT POTENTIAL UPSIDE REMAINS DESPITE SHARE PRICE APPRECIATION Data Source: BMO GoldPages published May 2, 2016 TGZ Trading at 0.7x NPV* (1) Teranga s Share Price vs. Teranga Net Present Value (NPV) (1) per Share (C$) Average NPV Multiple (1) for Medium Producers* 95% 35% 65% Share Price NPV per Share Share Revalued Price Share Price Share Price Revalued Share Price Share Price Revalued Share Price NPV Multiple 0.7x 0.9x 1.1x 1.3x Based on Teranga s updated NI and the 1.3x average NPV multiple for its peer group, Teranga s share price should be C$1.95 (1) 22 Refer to endnote (1) on slide 30

23 APPENDICES

24 LIFE OF MINE (Filed March 2016)

25 OPEN PIT AND UNDERGROUND MINERAL RESOURCES SUMMARY (12) As at December 31, 2015 Deposit Sabodala Gora Niakafiri Masato Golouma Kerekounda Maki Medina Niakafiri SW Niakafiri SE Others Total Measured Indicated Measured and Indicated Inferred Domain Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) Open Pit 13, , , , Underground 1, , Combined 13, , , ,021 2, Open Pit , , Underground Combined , , Open Pit 4, , , , Underground Combined 4, , , , Open Pit 5, , , Underground 1, , , Combined 5, , , ,097 1, Open Pit 6, , Underground 2, , Combined 8, , Open Pit 1, , Underground Combined 1, , Open Pit 2, , Underground Combined 2, , Open Pit Underground Combined Open Pit 4, , Underground Combined 4, , Open Pit 1, , , Underground , Combined 1, , , Open Pit 25, , ,777 79, ,703 10, Underground 5, , , Combined 25, , ,516 85, ,441 15, Refer to endnote (12) on slide 30 Notes for Mineral Resources Summary 1.CIM definitions were followed for Mineral Resources. 2.Open pit oxide Mineral Resources are estimated at a cut-off grade of 0.35 g/t Au, except for Gora at 0.48 g/t Au. 3.Open pit transition and fresh rock Mineral Resources are estimated at a cut-off grade of 0.40 g/t Au, except for Gora at 0.55 g/t Au. 4.Underground Mineral Resources are estimated at a cut-off grade of 2.00 g/t Au. 5.Measured Resources at Sabodala include stockpiles which total 9.2 Mt at 0.77 g/t Au for 229,000 oz... 6.Measured Resources at Gora include stockpiles which total 0.1 Mt at 1.30 g/t Au for 6,000 oz... 7.Measured Resources at Masato include stockpiles which total 5.9 Mt at 0.79 g/t Au for 150,000 oz... 8.High grade assays were capped at grades ranging from 1.5 g/t Au to 110 g/t Au. 9.The figures above are Total Mineral Resources and include Mineral Reserves. 10.Open pit shells were used to constrain open pit resources. 11.Mineral Resources are estimated using a gold price of US$1,450 per ounce. 12.Sum of individual amounts may not equal due to rounding. 25

26 OPEN PIT AND UNDERGROUND MINERAL RESERVES SUMMARY As at December 31, 2015 Deposits Tonnes (Mt) Proven Probable Proven and Probable Grade Au Tonnes Grade Au Tonnes Grade Au (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala Gora Niakafiri Main Subtotal ML Masato Golouma West Golouma South Kerekounda Maki Medina Niakafiri SE Niakafiri SW Subtotal SOMIGOL Subtotal Open Pit Golouma West Golouma West Golouma South Kerekounda Subtotal Underground Total Notes for Mineral Reserves Summary 1.CIM definitions were followed for Mineral Reserves. 2.Mineral Reserve cut off grades for range from are 0.35 g/t to 0.63 g/t Au for oxide and 0.42 g/t to 0.73 g/t Au for fresh based on a $1,100/oz gold price 3.Mineral Reserve cut off grades for Sabodala 0.45 g/t for oxide and 0.55 g/t for fresh based on a $1,100/oz gold price 4.Underground reserves cut-off grades ranged from g/t based on $1,200/oz gold price 5.Sum of individual amounts may not equal due to rounding. 6.The Niakafiri Main deposit is adjacent to the Sabodala village and relocation of at least some portion of the village will be required which will necessitate a negotiated resettlement program with the affected community members.. Stockpiles Total Including Stockpile

27 UPDATED LIFE OF MINE SCHEDULE Sabodala Masato Gora Kerekounda Golouma Niakafiri * Maki Medina Underground Summary LOM Average Ore Mined Mt Ore Grade Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Ore Mined Mt Ore Grade g/t Contained Oz Moz Ore Mined Mt Ore Grade g/t Contained Oz Moz Waste Mt Movement Mt Stockpile Ore Mt Balance Stockpile Grade g/t Contained Oz Moz Ore Milled Mt Head Grade g/t Oxide % 21% 27% 37% 25% 26% 31% 19% 28% 16% 29% 0% 17% 19% 18% 18% 18% Produced Oz Moz Notes: The estimated ore reserves underpinning the production targets set out in the following table, have been prepared by Mr. Paul Chawrun, who is a Competent Person, in accordance with the requirements of the 2012 JORC Code. This production guidance is based on existing proven and probable ore reserves from the Sabodala mining license as at December 31, 2015 Stockpile balances at January 1, 2016 included 15.3 Mt at 0.79 g/t for 0.39 million contained ounces * The schedule summarizes Niakafiri from Niakafiri Main and Niakafiri SE. The portion of Niakafiri SE to be mined lies outside of the Sabodala Village area and assumes relocation is not required. 27

28 UPDATED LIFE OF MINE CAPITAL EXPENDITURES Sustaining Capex Unit LOM AVG Open Pit Mining USDM Underground Mining USDM Processing USDM Admin & Other Sustaining USDM Community Relations USDM Total Sustaining Capex USDM Capital Projects & Development OJVG & Gora Development USDM Underground Equipment & Development USDM Other Projects & Development USDM Total Projects and Development USDM Combined Total (USDM) USDM

29 UPDATED LIFE OF MINE OPERATING COSTS Activity Unit LOM AVG Open Pit Mining USD/t mined Underground Mining USD/t milled Processing USD/t milled General & Admin. USD/t milled Mining USDM Underground Mining USDM Processing USDM General & Admin USDM Refining & Freight USDM Byproduct Credits USDM (4) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Total Operating Costs USDM 1, Deferred Stripping Adjustment USDM (129) (13) (26) (6) - - (35) (35) (25) (1) Royalties 1 USDM Total Cash Costs (2) USDM 1, Total Cash Costs (2) USD/oz Capex USDM Capitalized Deferred Stripping USDM Capitalized Reserve Development USDM Corporate Admin USDM All-In Sustaining Cash Costs (2) USDM 2, All-In Sustaining Cash Costs (2) USD/oz ,072 1,483 1, Franco Nevada Stream USDM Franco Nevada Stream USD/oz All-In Sustaining Cash Costs (2) plus stream USDM 2, All-In Sustaining Cash Costs (2) plus stream USD/oz 960 1,006 1, , ,129 1,541 1, Notes: 1 Royalties include Government of Senegal royalties on total production and the NSR royalty due to Axmin on Gora production. This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence as disclosed in the Reserves and Resources section of this Report. Key assumptions: Gold spot price/ounce - US$1,200, Light fuel oil - US$0.72/litre, Heavy fuel oil - US$0.43/litre, US/Euro exchange rate - $1.10 Refer to endnote (2) on slide 30 29

30 ENDNOTES 1. Net Present Value ( NPV ) per share is a Non-IFRS financial measure. NPV per share, average NPV multiple of medium producers, and Teranga s share price is as per BMO GoldPages published May 2, According to BMO GoldPages, NPV per share is calculated using the net present value of the life of mine cash flows based on the NI plan, less cash flow of corporate costs, less net debt per share, using the model at SPOT commodity prices and exchange rates. The Revalued Share Price is calculated using the NPV per share at SPOT times the NPV multiples as listed. The NPV calculation assumes a US$1,296 SPOT gold price per ounce, 5% discount, 0.80 USD/CAD exchange rate. For more information regarding Non-IFRS financial measures, please refer to Non-IFRS Performance Measures in the Company s Management s Discussion and Analysis for the three months ended March 31, 2016 accessible on the Company s website at 2. Total cash costs per ounce and all-in sustaining costs per ounce are non-ifrs financial measures and do not have standard meanings under IFRS. All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense), Regional Administration Costs, capitalized deferred stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council. For more information regarding these measures, please refer to Non-IFRS Performance Measures in the Company s Management s Discussion and Analysis for the three months ended March 31, 2016 accessible on the Company s website at 3. Free cash flow and free cash flow per ounce are defined as operating cash flow less capital expenditures. 4. Mineral Reserves and Mineral Resources estimates as at December 31, 2015 as per Company disclosure. For more information regarding Teranga Gold s Mineral Reserves and Resources, please refer to Teranga Gold s December Quarter and Year-end 2015 Report accessible on the Company's website at 5. Over the past several years more than twelve million ounces of measured and indicated resources have been identified within the south eastern Senegal region, including the Massawa, Golouma, Makabingui and Mako projects, along with the Company s own Sabodala gold mine. With exploration work completed to date and the prior exploration success seen in the area Management believes there is a reasonable basis to anticipate future resource to reserve conversion. 6. Key assumptions: This forecast financial information is based on the following material assumptions for 2016: gold price: $1,100 per ounce; Brent oil:$40/barrel; Euro:USD exchange rate of 1.1:1; USD:CAD exchange rate of 0.7:1. Other important assumptions include: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and recoveries will remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production. 7. To better align costs with industry peers, during the first quarter 2016 the Company began to present CSR Expense and Regional Administration Costs separately from Corporate Administration Expense. The Company's 2016 guidance has been updated to reflect this change in accounting presentation. 8. Excludes capitalized deferred stripping costs, included in mine production costs ,500 ounces of production are to be sold to Franco-Nevada at 20% of the spot gold price. 10. This production profile is based on existing proven and probable reserves only from the Sabodala mining license as disclosed in Teranga Gold s December Quarter and Year-end 2015 Report accessible on the Company's website at Cash flow is the Life of Mine net cash flow based on the Company s most recent NI Technical Report ( plan ) filed in March 2016, before income taxes, interest, debt repayments, closure costs, dividends and working capital. 12. There have been no revisions to the resource models for 2015, except for adjustments due to mining depletion and minor revisions to Niakafiri Main, Niakafiri SW, Maki Medina and Diadiako. For estimating 2015 Mineral Resources, Teranga has implemented a new reporting procedure, which includes the use of open pit shells to constrain open pit resources and reporting underground resources separately. For reporting of open pit Mineral Resources, open pit shells were produced for each of the resource models using Whittle open pit optimization software. Only classified blocks greater than or equal to the open pit cut-off grades and within the open pit shells were reported. This is in compliance with the CIM (2014) resource definition requirement of reasonable prospects for eventual economic extraction. For reporting of underground Mineral Resources, only classified blocks greater than or equal to the underground cut-off grade outside of the open pit shells were reported. This is in compliance with CIM (2014) resource definition requirements. In addition, Deswik Stope Optimizer software was used to generate wireframe models to constrain blocks satisfying minimum size and continuity criteria, which were used for reporting Sabodala underground Mineral Resources. The significant change between the Mineral Resources reported for 2014 and 2015 is due to this new reporting procedure, where the 2015 year end Mineral Resources have been constrained using open pit shells along with revised gold cut-off grades for both open pit and underground resources. Previously classified Mineral Resources that do not satisfy the revised reporting criteria for 2015 have been excluded, however, remain in the block models as mineralized material. 30

31 Trish Moran, Head of Investor Relations Telephone: TSX:TGZ / ASX:TGZ 121 King Street West, Suite 2600 Toronto, ON M5H 3T9