PRODUCING AND EXPLORING MARCH 2013 EUROZ ROTTNEST CONFERENCE

Transcription

1 PRODUCING AND EXPLORING MARCH 2013 EUROZ ROTTNEST CONFERENCE 1

2 FORWARD LOOKING STATEMENTS Certain information included in this presentation, including any information as to the Company s strategy, projects, exploration programs, joint venture ownership positions, plans, future financial or operating performance and other statements that express management s expectations or estimates of future performance, constitute forward-looking statements. The words believe, expect, will, intend, anticipate, project, plan, estimate, on track and similar expressions identify forward looking statements. Such forward-looking statements are necessarily based upon a number of estimates, assumptions, opinions and analysis made by management in light of its experience that, while considered reasonable, may turn out to be incorrect and involve known and unknown risks, uncertainties and other factors, in each case that may cause the actual financial results, performance or achievements of the Company to be materially different from the Company s estimated future results, performance or achievements expressed or implied by those forward-looking statements. Such forward-looking statements are not guarantees of future performance. These assumptions, risks, uncertainties and other factors include, but are not limited to: assumptions regarding general business and economic conditions; conditions in financial markets and the future financial performance of the company; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the supply and demand for, deliveries of, and the level and volatility of the worldwide price of gold or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets, including changes in U.S. dollar and CFA Franc interest rates; risks arising from holding derivative instruments; adverse changes in our credit rating; level of indebtedness and liquidity; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labour; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business, as well as other risks and uncertainties which are more fully described in the Company's prospectus dated November 11, 2010 and in other Company filings with securities and regulatory authorities which are available at Accordingly, readers should not place undue reliance on such forward looking statements. Teranga expressly 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 in accordance with applicable securities laws. This presentation is dated as of February 27, 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. 2

3 CAPITALIZATION SUMMARY Ticker symbol TGZ: TSX/ASX Shares outstanding (1) 245.6M Stock options outstanding 17.1M FOCUSED ON GROWTH THROUGH: Share price (as at Feb. 27, 2013) Market capitalization (as at Feb. 27, 2013) Cash position (2) Hedge balance (as at Jan. 29, 2013) Project finance outstanding (3) Mining fleet loan facility (4) C$1.49 C$366M US$45.0M 38,105oz. US$60M US$10.5M GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH (1) As part of the demerger Mineral Deposits Ltd. retained 40M TGZ shares and received C$50M from the IPO proceeds (2) Includes cash, cash equivalents and $5.3M bullion receivable as at December 31, (3) 2-Year Project Finance Facility with Macquarie Bank repaid on or before June 30, 2014 (4) Outstanding under the mining fleet finance loan facility with Société Générale as at December 31,

4 OUR VISION To become a preeminent gold producer in West Africa while setting the benchmark for responsible mining in Senegal Phase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 oz. of annual gold production leveraging off existing infrastructure 2011 production of 131,461oz production of 214,310oz. at cash costs of $627/oz forecast production of 190, ,000oz. at cash costs of $650-$700/oz forecast production of 200,00 250,000oz. depending on the timing of Gora Phase 2: Increase annual gold production to 400,000 to 500,000 oz. with mill expansion as reserves increase 4

5 SABODALA IS SENEGAL S ONLY LARGE-SCALE GOLD MINE Population of ~ 12.8M Democratic Government Smooth process and power transition in 2012 elections Peaceful democracy since independence from France in 1960 Use of the eight-country West African CFA France currency fully guaranteed by the French treasury and pegged to the Euro (WAEMU) Sabodala is the only large-scale gold mine in Senegal Government has vested interest in Sabodala s success given: 10% free-carried interest 3% gross production royalty 25% income tax (after tax holiday expires in 2015) Employment and regional development opportunities Sovereign Long Term Credit Ratings One of only seven African countries rated by Moody s and S&P Moody s: B1 S&P: B+ 5

6 TERANGA IS MINING RESPONSIBLY AND SHARING THE BENEFITS Corporate Social Responsibility is fundamental to the success of our business Health, safety, education and sustainability are all priorities Developing schools, health clinics, and improving access to potable water Have engaged a renowned Canadian group to assist in putting together a comprehensive Regional Development Plan in partnership with the local, regional, and national government Committed to improving the livelihoods of those in the communities in which we operate A key component of our vision is to set the benchmark for responsible mining in Senegal 6

7 SABODALA GOLD OPERATION IS PRODUCING CONSISTENTLY Gold Production Since 2009 First gold pour in March 09 with over $500M invested to date Well Developed Infrastructure Located 650 km east of the capital Dakar and ~100 km north of the town Kedougou paved road within 56 km of mine site 36 MW heavy fuel oil power plant located on site Completed Mill Expansion New ball mill and downstream plant, secondary crusher and new stockpile/reclaim facility commissioned Expands annual production base to ~200,000 oz. Mill capacity increased to ~3.5Mtpa of fresh (hard) ore or ~6Mtpa of oxide (soft) ore Modest Incremental Sustaining Capital Going Forward US$125M $150M LOM Includes Gora, community relocations, further mobile equipment expenditure and pit delineation 7

8 2012 ANNUAL GUIDANCE MET WITH RECORD PRODUCTION & PROFITS Increased Profit FY 12 $79.9M as compared to the FY 11 loss of $16.0M Increased Cash Balance (1) $45.0M at FYE 12 as compared to $24.6M at FYE 11 Reduced Gold Hedge Book Gold hedges reduced to 38,105oz. as at Jan. 29, 2013 Expect position to be fully extinguished by Jun 13 Increased Revenue $350.5M for FY 12 Company record and 48% higher than FY 11 (1) Includes cash, cash equivalents and $5.3M bullion receivable. 8

9 2012 ANNUAL GUIDANCE MET WITH RECORD PRODUCTION & PROFITS Increased Gold Production FY ,310oz. a Company record and 63% higher than calendar year 2011 and within guidance Reduced Total Cash Costs FY 12 $627/oz. and 20% lower than calendar year 2011 and within guidance Reduced Production Costs FY 12 $850/oz. and18% lower than calendar year 2011 Reduced Capital Expenditure (1) $52.9M in FY 12 and 17% lower than calendar year 2011 Increased Capitalized Reserve Development Expenditure $30.4M in FY 12, over double that of calendar year 2011 (1) Excluding capitalized reserve development expenditure. 9

10 CONTINUING TO STRENGTHEN THE ASSET BASE AND THE TEAM Capital Expenditure $25M-$35M planned Capex in addition to $45M - $50M for Gora development Capitalized deferred stripping - $35M - $40M Larger Gold Inventory Base Sabodala: M&I increased to 2.09 Moz. Gora: M&I increased to 0.37 Moz. at 5.0gpt Niakafiri: M&I increased to 0.39 Moz. Mine Licence: Total inferred resources rose to 1.48Moz. Added Depth to Management Team in Q4 12 Mark English: VP, Sabodala Gold Operations Paul Chawrun: VP, Technical Services Navin Dyal: VP & CFO 10

11 MOST ADVANCED SATELLITE DEPOSIT - GORA Economics Capital cost est. $45M-$50M Est. total cash cost to average $675-$700/oz. NPV (5%) at $1500/oz. of $105 million IRR 69% Open Pit 26km from mill Technical Study and ESIA complete initiating permitting Q1 13 M&I of 374,000 oz. at 5.0gpt Proven & Probable reserves of 285,000oz. at 4.2gpt. (2.1M tonnes of ore) Estimated 4-year mine life Stripping ratio of 19:1 Estimated production start in 2014 Source Teranga Gold Corporation: Typical section of Gora looking South West,

12 FOCUSED ON GROWING PRODUCTION AND CASH MARGINS 300,000 Production Profile ('000oz.) (1) 1000 Cash Margin ($/oz.) (2) 250, , , , , Gora Production ML Production Rate of margin expansion is a function of increasing production through regional exploration success * After eliminating hedge position 2012 Production Results: 214,310oz. at cash costs of $627/oz. Jan. 29 th, 2013 hedge position 38,105oz., management expects to be hedge free Jun * (1) Assumes increased production from regional exploration success (2) Assumes $1600/oz. gold price and cash cost of $675/oz. after the elimination of the gold hedge position 12

13 FOCUSED ON GROWING RESERVES 3.50 Reserves and Resources (1,2,3) December 31, Moz Proven and Probable Reserves Measured and Indicated Resources Inferred Resources (1) See pages 22/23 (2) M+I Resources are inclusive of reserves (3) Includes Sabodala, Niakafiri, Niakafiri West, Soukhoto, Diadiako, Majiva, Masato and Gora 13

14 FOCUSED ON GROWING RESERVES 2013 Exploration Program (1) Mine Licence Exploration (ML) 13,000m RAB 32,400m RC 13,100m DD Regional Exploration (RLP) 82,000m RAB 32,600m RC 14,500m DD TOTAL $5-10M $10-15M ~$20M 2012 Exploration Program (2) Mine Licence Exploration $26M 104,400m (RC/DD) Regional Exploration (3) $20M 62,500 RAB 42,300 RC 2,400 DD TOTAL $46M (1) Additional funding allocated on a priority basis for prospects with clear potential for reserve definition (2) Full drill results are posted at terangagold.com (3) Includes ~$3M for Gora exploration 14

15 MINE LICENCE MAKES UP ~3% OF TERANGA S TOTAL LAND PACKAGE Mine Licence Exploration (ML) Regional Land Package (RLP) 33km 2 1,200km 2 15

16 POTENTIAL TO EXPAND THE ML GOLD MINERALIZATION INVENTORY 33km 2 Potential to expand gold inventory on ML with the objective of increasing mine life to the year 2020/25 SABODALA PIT MAIN FLAT EXTENSION / LOWER FLAT ZONE SAMBAYA HILL SUTUBA DINKOKHONO NIAKAFIRI / NIAKAFIRI WEST / SOUKHOTO 16

17 PROPERTIES IN VARYING STAGES OF ASSESSMENT WITHIN RLP 1,200km 2 NINYENKO / SORETO DIABOUGOU SAIENSOUTOU 35km from Mill TOUROKHOTO (Main and Marougou) GOUMBOU GAMBA GORA 17

18 FOCUS IS ON CONTINUED GROWTH Focused on Growing Reserves To secure a reserve life to year 2020/25 Growth through exploration Growth through regional opportunities (JV s, acquisitions) Focused on Growing Production Phase 1: 250, ,000oz. annual production by leveraging existing mill and land package Phase 2: 400, ,000oz. annual production, will require another mill expansion Focused on Building Financial Strength Eliminating hedge book Expanding cash margins Increasing cash balance Use free cash flow to self-fund growth strategy Focusing on the ounces that provide the best returns Increase earning and cash flow per share (minimize dilution) 18

19 APPENDICES 19

20 OPERATING STATISTICS Operating results Three months ended December 31, Twelve months ended December 31, restated restated Ore mined ( 000t) 2,038 1,715 5,914 3,973 Waste mined ( 000t) 5,274 4,736 22,964 21,818 Total mined ( 000t) 7,312 6,451 28,878 25,791 Grade mined (g/t) Ounces mined (oz) 133,549 82, , ,362 Strip ratio w aste/ore Ore milled ( 000t) ,439 2,444 Head grade (g/t) Recovery rate % Gold produced (1) (oz) 71,804 36, , ,461 Gold sold (oz) 71,604 34, , ,136 Average price received $/oz 1,296 1,482 1,422 1,236 Total cash cost (incl. royalties) (2) $/oz sold Mining (cost/t mined) Milling (cost/t milled) G&A (cost/t milled) (1) Gold produced includes change in gold in circuit inventory plus gold recovered during the period. (2) Cash cost per ounce is a non-ifrs financial measure with no standard meaning under IFRS. 20

21 2013 GUIDANCE Year ending December 31, 2012 Actuals 2013 Guidance Range Operating results Ore mined ( 000t) 5,915 4,000-4,500 Waste mined ( 000t) 22,962 31,000-32,000 Total mined ( 000t) 28,877 35,000-36,500 Grade mined (g/t) Strip ratio waste/ore Ore milled ( 000t) 2,439 3,300-3,400 Head grade (g/t) Recovery rate % Gold produced (oz) 214, , ,000 Gold sold (oz) 207, , ,000 Total cash cost (incl. royalties) (1)(2) $/oz sold Total production cost (1) $/oz sold ,000 Mining and processing more tonnes at lower grade to maintain ~200,000oz. production Gross costs have increased but unit costs are expected to decline Mining (cost/t mined) Milling (cost/t milled) G&A (cost/t milled) Mine production costs $ millions Capital Expenditures Mine site $ millions Capitalized reserve development $ millions Gora development costs Mobile equipment $ millions Site development $ millions Total Gora development costs $ millions Capitalized deferred stripping (2) $ millions N/A Total Capital Expenditures $ millions Exploration (expensed) $ millions Administration expense $ millions Hedge close-outs / deliveries (oz) 136,395 59,789 1 Total cash cost per ounce and total production cost per ounce are non-ifrs financial measures with no standard meaning under IFRS. For definitions of these metrics, please see page 26 of the Management Discussion and Analysis. 2 For 2013, reflects the impact of adoption of a new IFRS standard for deferred stripping. Please see page 25 of the Management Discussion and Analysis. 21

22 RESERVES & RESOURCES (1,2) Reserves remain similar to that of 2011 net of production Focused on growing our reserves and are confident that we will add reserves on the ML M&I resources increased 34% to 2.9Moz. Deposit Tonne s Proven Probable Proven and Probable Grade Au Tonne s Grade Au Tonne s Grade (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala Sutuba Niakafiri Gora Stockpiles Total Deposit Measured Tonnes Grade Au Tonne s Indicated Grad e Au Au Measured and Indicated Tonne Grad Au s e (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala Sutuba Niakafiri Gora Total (1) Please see page 25 for Competent Persons Statement relating to this reserves estimate. (2) Based on assays received as of August

23 RESERVES & RESOURCES (1,2) Inferred Area Tonnes Grade Au (Mt) g/t (Moz) Sabodala Niakifiri Niakifiri West Soukhoto Gora Diadiako Majiva Masato Total (1) Please see page 25 for Competent Persons Statement relating to this reserves estimate. (2) Based on assays received as of August

24 MANAGEMENT Alan R. Hill Executive Chairman Richard S. Young President & CEO Mark English VP, Sabodala Operations Paul Chawrun VP, Technical Services Navin Dyal VP & CFO David Savarie VP, General Counsel & Corporate Secretary Kathy Sipos VP, Investor & Stakeholder Relations Macoumba Diop General Manager & Government Relations Manager Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold Currently a Director of Gold Fields Former President and CEO of Gabriel Resources ( ) and non-executive Chairman of Alamos Gold ( ) Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold Former VP and CFO of Gabriel Resources ( ) Over 24 years experience in the gold mining industry Previously worked for several companies in Australia, East and West Africa being involved in operating mines and development, inclusive of greenfield start-ups Joined Mineral Deposits Ltd. in June 2006 Mining Engineer and geologist with over 24 years experience Former EVP Corporate Development for Chieftain Metals Former Director, Technical Services Detour Gold Over 13 years in finance, most recently 7 years with Barrick Gold ( ) Former Director of Finance, Global Copper Business Unit Barrick Gold Chartered Accountant Four years at major public accounting firm Over 10 years experience in the legal industry Former Deputy General Counsel and Corporate Secretary of Gabriel Resources Previously in private practice at Miller Thomson LLP 10 years experience in Corporate Communications and Investor Relations with Barrick Gold ( ) Former VP of Corporate Communications and Investor Relations of Gabriel Resources ( ) Geological Engineer, Master of Science in Finance with over 12 years experience in the mining industry Previously spent 11 years in a consulting business and mineral project marketing and development Joined SGO in July

25 COMPETENT PERSONS STATEMENT The technical information contained in this presentation relating to the mineral reserve estimates within the Sabodala, Sutuba, Niakafiri and Gora deposits and the Stockpiles, is based on information compiled by Julia Martin, P.Eng., MAusIMM (CP), a full time employee with AMC Mining Consultants (Canada) Ltd., is independent of Teranga, is a qualified person as defined in NI and a competent person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms. Martin has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms Martin has reviewed and accepts responsibility for the reserve estimates disclosed above. Ms Martin has consented to the inclusion in the report of the matters based on her information in the form and context in which it appears in this presentation. The technical information contained in this presentation relating to the mineral resources is based on information compiled by Ms. Patti Nakai-Lajoie, who is a Member of the Association of Professional Geoscientists of Ontario. Ms. Patti Nakai-Lajoie is full time employee of Teranga and is not independent within the meaning of National Instrument Ms. Patti 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 Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms. Patti Nakai-Lajoie is a Qualified Person under National Instrument Standards of Disclosure for Mineral Projects.and she consents to the inclusion in the report of the matters based on her information in the form and context in which it appears in this presentation. The technical information contained in this presentation relating to exploration results is based on information compiled by Mr. Martin Pawlitschek, who is a Member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a consultant of Teranga and is not independent within the meaning of National Instrument Mr. Pawlitschek 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 Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Pawlitschek is a Qualified Person in accordance with NI and he consents to the inclusion in the report of the matters based on his information in the form and context in which it appears in this presentation. 25