121 Singapore. Building a Multi-Asset Mid-Tier West African Gold Producer. May 23-24, 2018 TSX:TGZ / OTCQX:TGCDF

Transcription

1 TSX:TGZ / OTCQX:TGCDF Building a Multi-Asset Mid-Tier West African Gold Producer 121 Singapore May 23-24, 2018

2 Richard Young President & Chief Executive Officer 2

3 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 or on Teranga s website at The risks described in the Annual Information Form (filed and viewable on and on Teranga s website at 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

4 Deep Value Based on Cash and 2P Reserves (C$) $7.42 NPV* Per Share based on cash & 2P reserves (1)(2) $5.37 TGZ Current Share Price (closing price May 10, 2018) Excludes potential value from: Wahgnion infill drill program Golden Hill Afema and Côte d Ivoire assets $0.72 $1.45 $5.25 Cash balance as at March 31, 2018 Wahgnion Project NPV 5% based on 2P (1) Sabodala NPV 5% based on 2P (2) $1,300 Gold Price per Ounce Assumption *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (1) and (2) USD/CAD FX rate

5 Building a Multi-Asset Mid-Tier Gold Producer in Mining-Friendly West Africa Senegal The Gambia Sabodala Gold Mine Long-life mine More than 1.4Moz production since late 2010 Mali Burkina Faso Niger Guinea- Bisseau Teranga has nearly 4.0 million ounces of gold reserves from its Sabodala Gold Mine and its Wahgnion Development Project (1)(2) Guinea Sierra Leone Wahgnion Development Project Expect to close financing and commence construction in Q Reserve update expected by mid-year Mahepleu Liberia Dianra Guitry Côte d Ivoire Golden Hill Exploration JV Initial resource expected in 2018 Fully funded to feasibility Tiassale Ghana Afema Togo Benin Gourma Exploration JV Refer to Appendix Endnotes (1) and (2) Sangaredougou 5

6 FY2017 Highlights Achieved record production of 233,267 oz of gold Announced positive feasibility for Wahgnion Project including reserves of 1.2Moz (1) Positive drill results from Golden Hill Entered into joint venture on Afema land package in Côte d lvoire Refer to Appendix Endnote (1) 6

7 Leading With Our Social License United Nations Global Compact Network Canada Sustainability Award 3X Winner of Corporate Knights Future 40 Responsible Corporate Leaders in Canada Capital Finance International: Best ESG Responsible Mining Management West Africa Prospectors & Developers Association of Canada 2017 Environmental & Social Responsibility Award 7

8 Sabodala Senegal, West Africa 8

9 Largest Gold Producer in Senegal: Continuing to Replace Reserves, Strong 5-Year Profile Mali 2.7Moz 2P Reserves (2) 4.4Moz M&I Resources (9) 13-Year Mine Life (9) Life of Mine Summary (2)(5)(6) 5 years ( ) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (2),(5),(6) and (9) 13 years ( ) Annual production 213koz 176koz All-in sustaining costs* $885/oz $893/oz Total free cash flow* $230M $556M Sabodala Mill Niakafiri Goumbati West Sabodala Mine License & Regional Land Package Exploration Prospects Mineral Resources Masato Style Bulk Tonnage Gold Trend Golouma Style High- Grade Gold Trend Mining Concession Exploration Permits Previous Mine License 9

10 Wahgnion Project Burkina Faso, West Africa 10

11 Solid Start to Teranga s Second Mine Wahgnion 1.2Moz 2P Reserves (1) 1.8Moz M&I Resources (10) 0.7Moz Inferred Resources (10) Wahgnion Development Project Permitted mining license: 89 km 2 Exploration licenses:+1,000 km 2 Samavogo 25km from plant Life of Mine Summary Initial 5.5 years LOM (9 years) Nogbele Fourkoura 6km from plant Annual production (4)(5) 131koz 119koz All-in Sustaining Costs* $807/oz $843/oz Stinger 15km from plant Total free cash flow* $302M $409M Pre-production capital** ($232M) Net cash flow $176M *Refer to Appendix Non-IFRS Performance Measures **Pre-production capital costs of $232 million excludes $12 million in construction readiness activities spent prior to major construction Refer to Appendix Endnotes (1), (4), (5) and (10) Proposed Processing Plant Four initial deposits at Wahgnion (Nogbele, Samavogo, Fourkoura & Stinger) located in close proximity to proposed plant site 11

12 Significant Upside Potential at Wahgnion Near-Term Upside: Mid-2018 Reserve Update Proposed Plant Site Reserve Deposits Exploration Targets Kondandougoug 73,000-metre infill drill program targeted inferred resources located near to the current reserve pits Objective is to increase drill hole density within the existing inferred resources Targeting to convert 25%-50% of inferred resources Bagu Sud Korindougou Samavogo North Mid to Long-Term Upside: ~12 Drill-Ready Targets Samavogo 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 Kafina West Bazogo Ouahiri Bassongoro Raul Raul Nogbele Konatvogo Fourkoura Petit Colline Sud Hillside Stinger Muddhi 12

13 Golden Hill Burkina Faso 13

14 Uniquely Positioned: High-Grade, Big Potential Siou Pit M&I: 0.89 Moz ¹ Situated in the Heart of the Houndé Belt (Burkina Faso) Mana M&I: 3.63 Moz ¹ 468 km 2 situated ~250 km NE of Wahgnion One of the most prospective gold belts in the world In close proximity and along strike to other deposits One of the Best High-Grade Projects in West Africa Plan to release an initial resource for Golden Hill s most advanced prospects by end of 2018 $25 million financing secured for the future advancement of Golden Hill feasibility study Acacia JVs ⁴ Houndé M&I: 2.55 Moz ³ Yaramoko M&I: 0.81 Moz ² Teranga s Golden Hill JV Joint Venture with Boss Resources (51%, earning 80%) Teranga, as the operator, can earn an 80% interest in the JV upon delivery of a feasibility study and the payment of AUD2.5 million Karankasso JV Inf: 0.67 Moz ⁵ South Houndé JV Inf: 2.10 Moz ⁴ Sarama Permits Sources ¹ Semafo Corporate Presentation (Mar 2017) ² Roxgold Corporate Presentation (Feb 2017) ³ Endeavour Corporate Presentation (Feb 2017) ⁴ Acacia Preliminary Results (Feb 2017) ⁵ Savary Corporate Presentation (Mar 2017) M&I Resources are inclusive of P&P Reserves 14

15 Rapidly Progressing Towards an Initial Resource Five Prospects Within ~6-Kilometre Radius of Central Point In just one year, there have been three discoveries at Golden Hill To date Golden Hill has produced a series of high-grade, near-surface drill results at the first five prospects: Ma Jackhammer Hill Peksou C-Zone Nahiri The close proximity of these targets and prospects lends itself to a central mill/multi-deposit operation similar to Sabodala and Wahgnion GEOLOGY Tarkwaian Type Sediments Volcano Sediments Mixed Volcano Sediments & Volcanics Basalt Grantoid Ma North Ma Main Ma East Nahiri Jackhammer Hill C-Zone Peksou B-Zone A-Zone For full details on Golden Hill, please visit Batholith 15

16 Côte d Ivoire Exploration Guitry & Afema 16

17 Exciting Opportunities in Côte d Ivoire Dianra Randgold Guitry Completed the first-ever drilling program on the property 68 shallow air-core sectional profile holes comprising 3,300 metres over the central 1 km extent of our current 7 km strike length gold-in-soil geochem anomaly Mahepleu Côte d Ivoire Perseus Results from this first pass, near-surface drilling program, will help us determine where to focus subsequent exploration within this large target Endeavour Newcrest Endeavour Tiassale Guitry Sangaredougou Afema Operating Gold Mine/ Development Project 17

18 Afema: Historical Resource* of 2Moz of Gold Well Located Geologically Along trend and within the same gold belts of a number of high profile producing mines in Ghana Q Activities Finalized Afema joint venture with Sodim Limited (51%, earning 70%) Côte d Ivoire 3 Afema Exploration Permits Ghana Ahafo 17 Moz Newmont Chirano 5 Moz Kinross Sefwi-Bibiani Gold Belt Bibiani 7 Moz Resolute Edikan 6.6 Moz Perseus Essase 5.19 Moz Obotan 5.5 Moz Asanko Asankrangwa Gold Belt Kumasi Obuasi 41 Moz Anglo Gold Ashanti Kubi 0.9 Moz Asaute Gold Corporation Ashanti Gold Belt Konogo 1.4 Moz Signature Metals Akyem Newmont Initiated early-stage field exploration at both the mine license and regional land package totaling 1,400 km 2 Afema Mining Permit Bogoso/Prestea18 Moz Gold Star Damang 7.1 Moz Goldfields Tarkwa 24 Moz Winneba-Kibi Gold Belt Iduapriem 8.2 Moz AngloGold Ashanti Cape Coast *Refer to Appendix Afema Mine License Historical Resource Estimate 18

19 Afema Joint Venture Next Steps Ayamé Gold Horizon (33k Strike Length) Bafla Gold Horizon (34 km Strike Length) Sefwi-Bibiani Gold Belt (34 km Strike Length) Asankrangwa Gold Belt (30 km Strike Length) Compile and review previous technical data to assist in guiding exploration programs Re-model historic resources to identify areas for initial drilling evaluation Anticipate initiation of a propertywide stream-sediment BLEG sampling program, soil sampling and drilling during Q Afema Exploration Permit Afema Exploration Permit Afema Exploration Permit Afema Mine License Andina Gold Horizon (13 km Strike Length) 19

20 Wrap-Up 20

21 Significantly Increasing Production and Improving Free Cash Flow Teranga Consolidated Production Profile (koz) (3),(4),(7) Sabodala + Wahgnion ~350Koz annual production Opportunities to maintain production and free cash flow through resource conversion & discoveries at Sabodala & Wahgnion 350Koz ~$100M annual free cash flow* (11) ~$70M annual free cash flow* (5) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (3), (4), (5), (7) and (11) 21

22 Strong Financial Position $60 Million Cash balance as at March 31, $90 Million (6) Estimated cash flow from Sabodala $190 Million Wahgnion Project debt + Golden Hill facility Solid Financial Position to optimize our Sabodala Operations, bring Wahgnion into production and to advance Golden Hill through feasibility Refer to Appendix Endnote (6) 22

23 Capital Structure and Recent Share Price Performance Capital Structure (at March 31, 2018 unless otherwise noted) Common shares outstanding 107.3M Stock options outstanding 5.7M Fully diluted 113.0M Number of shares owned by insiders 23.8M Market capitalization (May 10, 2018) Cash / Net cash Top 10 Shareholders % of o/s Shares Owned shares as at May 10, Tablo Corporation 21.7% 23,322,400 2 Van Eck Associates Corporation 6.2% 6,683,022 3 Ruffer LLP 4.8% 5,176,743 4 Heartland Advisors 4.1% 4,350,000 5 Oppenheimer Funds 3.2% 3,380,828 6 Dimensional Fund Advisors 2.9% 3,100,539 7 Franklin Advisers 2.5% 2,707,200 8 Connor, Clark & Lunn Inv Mgmt 1.8% 1,875,000 9 Universal-Investment Gesellschaft 1.6% 1,735, LSV Asset Management 1.6% 1,719,540 Source: IR Insight on May 10, 2018 C$576M US$60M / US$45M Share Price Performance (TSX: TGZ) (Closing price on December 12, 2017 May 10, 2018) TGZ-TSX GDXJ Gold Price ASX Delisting Completed Compulsory Sale Facility before markets open on December 13 stock price hit low of C$2.30 (compared to C$2.42 closing price on December 12) +122% +12% +6% 23

24 2018 News Flow and Milestones Sabodala Golden Hill Production of 210Koz-225Koz Regular exploration updates Initial resource estimations by year end Wahgnion Commence mill construction in Q2 Update resources in Q2 Update reserves in Q3 Update NI technical report Côte d Ivoire Project updates from Guitry and Afema 24

25 Potential for Significant Share Price Appreciation Teranga s Share Price (C$) vs. Net Present Value* (NPV) (12) per Share Data Source: BMO GoldPages published May 7, 2018 EV/2P Reserves ($/oz) Roxgold B2Gold Semafo % Golden Star Endeavour Teranga 165 $5.37 $7.02 $8.42 Alacer 143 Perseus 88 EV/2018E EBITDA Share Price (May 10, 2018 close) 0.9x Current TGZ NPV Trading Multiple (12) BMO NPV per Share (Spot) Revalued Share Price 1.2x Average NPV Multiple for Medium Producers (12) Alacer Endeavour Semafo B2Gold Teranga Roxgold 3.4 *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnote (12) Golden Star

26 Appendix 26

27 2018 Outlook 2018 Guidance Operating Results Ore mined ( 000t) 2,000 2,500 Waste mined ( 000t) 35,000 37,000 Total mined ( 000t) 37,000 39,500 Grade mined (g/t) Strip ratio waste/ore Ore milled ( 000t) 4,200 4,400 Head grade (g/t) Recovery rate % Gold produced A (oz) 210, ,000 Cost of sales per ounce sold $/oz sold 950 1,025 Total cash cost per ounce sold B $/oz sold All-in sustaining costs C $/oz sold 1,000 1,075 Cash / (non-cash) inventory movements and amortized advanced royalty costs C $/oz sold -50 All-in sustaining costs (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs) C $/oz sold 950 1,025 Mining ($/t mined) Mining long haul ($/t hauled) Milling ($/t milled) General and Administration ($/t milled) Mine Production Costs $ millions Corporate Administration Expense $ millions Regional Administration Costs $ millions ~2.0 Community Social Responsibility Expense $ millions Exploration and Evaluation D $ millions ~15.0 Sabodala Capital Expenditures Mine site sustaining $ millions Site development costs E $ millions Total Sabodala Capital Expenditures F $ millions Growth Capital Expenditures Wahgnion early works G $ millions ~30.0 Wahgnion construction H $ millions Total Growth Capital Expenditures $ millions Notes to 2018 Guidance A. 22,500 ounces of gold production are to be sold to Franco-Nevada Corporation at 20% of the spot gold price. B. Total cash cost per ounce sold is a non-ifrs financial measure and does not have a standard meaning under IFRS. C. 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 include total cash costs per ounce, administration expenses, share based compensation and sustaining capital expenditures as defined by the World Gold Council. All-in sustaining costs also include cash / (non-cash) inventory movements and non-cash amortization of advanced royalties. D. 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. E. Site development costs for 2018 include village relocation costs for the Sabodala village. F. Excludes capitalized deferred stripping costs, included in mine production costs. G. Construction readiness / early works expenditures for 2018 includes anticipated expenditures for the construction of the Wahgnion Gold Project prior to completion of a debt facility agreement. Other This forecast financial information is based on the following material assumptions for 2018: gold price: $1,250 per ounce; light fuel oil price $0.87/L; heavy fuel oil price $0.50/L; Euro:USD exchange rate of 1:1.17 Other important assumptions: 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. 27

28 Excellent Grades Near Surface and to Depth at Ma Structural Complex Ma Prospect Drill Plan Ma Prospect Representative Drill Section 28

29 High-Grade, All Along Strike at Jackhammer Hill Prospect Jackhammer Hill Prospect Drill Plan Jackhammer Hill Prospect Representative Drill Section 29

30 Executive Team 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 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 General Counsel & Corporate Secretary 11 years of Corporate Counsel experience in mining including his role as Deputy General Counsel and Corporate Secretary of Gabriel Resources Sepanta Dorri, MAcc, MBA, CPA VP, Corporate and Stakeholder Development 10 years experience in mining including 5 years at Xstrata Nickel in Strategic Planning and M&A winner of the WXN Top 100 Canada's Most Powerful Women award, Trailblazers and Trendsetters Category David Mallo, B.Sc. Geology VP, Exploration 35+ years of 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 Aziz Sy, P.Eng, M.Sc., MBA General Manager, SGO 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 30

31 Board of Directors Alan Hill, M.Eng Chairman 35+ years experience in mining including 20 years at Barrick Gold in project evaluation and development Richard Young, CPA President & CEO 25+ years experience in gold mining including 13 years at Barrick Gold in finance and corporate development William Biggar, MA, CPA Director 25+ years experience in senior executive positions in investment, mining and real estate including Barrick Gold and Merrill Lynch 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 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 Honourary Doctorate of Laws from McGill University 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 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 largescale mining projects and strategic M&A 31

32 Qualified Persons Statement The technical information contained in this document relating to the Sabodala 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 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 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 Sabodala 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 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 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 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 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. The technical information contained in this document relating to the Wahgnion open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. Glen Ehasoo, P. Eng., of RPA, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Ehasoo is "independent" within the meaning of NI Mr. Ehasoo 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 Standards of Disclosure for Mineral Projects. Mr. Ehasoo 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 Wahgnion mineral resource estimates is based on, and fairly represents, information compiled by Mr. David Ross, P.Geo., of RPA, who is a Member of the Association of Professional Geoscientists of Ontario. Mr. Ross is "independent" within the meaning of NI Mr. Ross 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 Standards of Disclosure for Mineral Projects. Mr. Ross 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 is a full time employee of Teranga and is not "independent" within the meaning of NI 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 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 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 Standards of Disclosure for Mineral Projects (the Technical Reports ), or year end 2017 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. 32

33 Non-IFRS Performance Measures The 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, average realized gold price, 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 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. 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 excludes from revenues unrealized gains and losses on non-hedge derivative contracts. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. EBITDA excludes income tax, finance costs (before accretion expense), interest income, depreciation and amortization, and non-cash impairment charges from net profits. 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 will 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 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. 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 regarding these measures, please refer to the Company s management s discussion and analysis accessible on the Company s website at 33

34 Afema Mine License Historical Resource Estimate A number of economic and technical studies have been prepared on the Afema project prior to Teranga s entry into the Afema JV with Sodim. The most recent study, which included a mineral resource estimate for the Afema mine license, was issued by RockRidge Consulting Services Geologists for and on behalf of TGL and is dated as of June 27, 2016 (the June 2016 Historical Estimate ). The June 2016 Historical Estimate includes an Indicated oxide resource estimate of 110Koz (comprised of 2.7Mt at an average grade of 1.26 g/t Au) and Inferred oxide resources of 122Koz (comprised of 3.0Mt at an average grade of 1.26 g/t Au). In addition, it includes an Indicated transitional resource estimate of 59Koz (comprised of 1.3Mt at an average grade of 1.39 g/t Au) and an Inferred transitional resource of 28Koz (comprised of 0.8Mt at an average grade of 1.11 g/t Au). Finally, the June 2016 Historical Estimate provides a sulphide resource estimate as follows: 865Koz Indicated ounces (comprised of 17.3Mt at an average grade of 1.55 g/t Au) and 806Koz inferred ounces (comprised of 17.8Mt at an average grade of 1.40 g/t Au). This historical estimate is reported as using a cut-off grade of 0.5 g/t Au. RockRidge further states that it reviewed the geological and grade continuity to supplement the review of data quality in order to confirm the CIM mineral resource classification categories used. As well, the June 2016 Historical Estimate states the following with respect to the basis of the mineral resource estimate: mineralized volumes were received for oxide, transitional and sulphide modelled volumes; gold grades were determined using ordinary kriging and Inverse distance squared interpolation (depending on data density) into a 3-dimensional block model constrained by mineralization wireframes; the block models comprised sub-celled block dimensions of 5m x 5m x 1m and 5m x 5m x 2m (depending on data sampling interval); mineralized wireframes were truncated to the topographic surface reflecting the mining that had previously occurred on the property; gold values were investigated for outlier values and put though two statistical capping/cutting routines; Datamine Studio 3 was the modelling package; and relationship between geology and preliminary mining and economic factors was taken into account at all times. Teranga considers the June 2016 Historical Estimate to be a historical estimate as defined under NI and relevant as the most recent resource estimate on the Afema project. Further drilling, resource modelling and updates to key economic assumptions would be required to upgrade or verify these historical estimates as current mineral resources and accordingly they should be relied upon only as a historical resource estimate. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and Teranga is not treating the historical estimate as current mineral resources or mineral reserves. 34

35 Endnotes 1. Refers to proven and probable reserves of 1.2Moz for the Wahgnion project as per reserve estimate as of September 7, 2017 included in the Wahgnion technical report dated October 20, 2017 available on the Company s website at and SEDAR at 2. Refers to proven and probable reserves of 2.7Moz for the Sabodala project as per reserve estimate as of June 30, 2017 included in the Sabodala NI technical report dated August 30, 2017 available on the Company s website at and SEDAR at 3. This production target is based on proven and probable reserves only from Teranga s Sabodala Project as at June 30, For more information regarding Teranga Gold s Mineral Reserves and Resources and related notes, please refer to the NI compliant technical report for the Sabodala Project dated August 30, 2017 available on the Company s website at and on SEDAR at 4. This production target is based on proven and probable ore reserves only for Teranga s Wahgnion Project as at September 7, For more information regarding the Wahgnion s Mineral Reserves and Resources and related notes, please refer to the NI compliant technical report for the Wahgnion Project dated October 20, 2017 accessible on the Company s website at and on SEDAR at 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: $ 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. See the NI compliant technical report for the Wahgnion Project. This LOM production plan assumes that the Wahgnion Project plant construction will commence in Q If the Wahgnion plant construction commences in Q instead, the LOM production plan is expected to shift by several months. 8. Other considerations (uses) is an estimate of potential other uses of the Company s cash during the period, including, but not limited to, discretionary exploration expenditures, financing costs and any cost overrun or minimum cash requirements that might be contained in any completed debt financing agreement. Actual amounts may total more or less than the aggregate amount specified. 9. Teranga s Sabodala Mineral Reserves and Mineral Resources estimates as at June 30, For more information regarding Sabodala s Mineral Reserves and Resources and related notes, please refer to the NI compliant technical report for the Sabodala Project dated August 30, 2017 accessible on the Company s website at and on SEDAR at Teranga s Wahgnion Mineral Reserves and Mineral Resources estimates as at September 7, For more information regarding Wahgnion s Mineral Reserves and Resources and related notes, please refer to the NI compliant technical report for the Wahgnion Project dated October 20, 2017 accessible on the Company s website at and on SEDAR at Free cash flow excludes Wahgnion financing and corporate-wide resource development and exploration expenditures. Please see table on slide 7 of the Company s Investor & Analyst Workshop presentation dated September 14, 2017, which was filed on 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 7, 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 BMO NPV calculation assumes a US$1,345 SPOT gold price per ounce, 5% discount, 0.79 USD/CAD exchange rate. 35

36 TSX:TGZ / OTCQX:TGCDF Trish Moran Head of Investor Relations 77 King Street West, Suite 2110 Toronto, ON M5K 2A1 T: E: investor@terangagold.com W: terangagold.com