Investor Presentation

Transcription

1 TSX:TGZ / OTCQX:TGCDF Building a Multi-Asset Mid-Tier West African Gold Producer Investor Presentation August 2018

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 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. 2

3 Building a Multi-Asset Mid-Tier Gold Producer in Mining-Friendly West Africa Senegal The Gambia Sabodala Gold Mine Long life mine More than 1.5Moz 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 Secured financing and commenced construction in Q2 Resources updated in Q2 Reserve update expected in Q3 Mahepleu Liberia Dianra Guitry Côte d Ivoire Golden Hill Exploration JV Initial resource expected by end of 2018 Fully funded to feasibility Tiassale Ghana Afema Togo Benin Gourma Exploration JV Refer to Appendix Endnotes (1) and (2) Sangaredougou 3

4 Deep Value and Growth with Assets in Production, Development and Exploration (C$) $7.89 NPV* Per Share based on cash & 2P reserves (1)(2) $4.39 TGZ Current Share Price (closing price August 1, 2018) Excludes potential value from: Wahgnion infill drill program Golden Hill Afema and Côte d Ivoire assets $1.11 $1.47 $5.31 Cash balance as at June 30, 2018 Wahgnion Project NPV 5% based on 2P (1) Sabodala NPV 5% based on 2P (2) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (1) and (2) USD/CAD FX rate 0.77 $1,300 Gold Price per Ounce Assumption 4

5 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* (5)(6)(11) ~$70M annual free cash flow* (5) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (3), (4), (5), (6), (7) and (11) 5

6 Leading With Our Strong Social License Shareholder Value Risk Management Improve Local Livelihoods Deliver projects on time and on budget Trust-based relationship with all stakeholders Safeguard reputation Ability to grow footprint in West Africa Avoid community unrest & conflict Avoid work stoppages Avoid legal action Avoid withdrawal of operating licenses Local recruitment Local progression & promotion Local procurement & other capacity building 6

7 Sabodala Senegal, West Africa 7

8 Largest Gold Producer in Senegal: Strong 5-Year Profile Mali 2.7Moz 2P Reserves (2) 4.4Moz M&I Resources (9) 13-Year Mine Life (3) Life of Mine Summary (2)(3)(5)(6) 5 years ( ) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (2),(3),(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 8

9 Replacing Reserves & Increasing Production and Cash Flow Proven and Probable Reserves (2) (Moz) 250, , , ,000 5-Year Production Profile (oz) Maki Medina , June Dec (8) 5-Year Cash Flow (6) Before Taxes and Other ($1,250/oz) Updated Sabodala Technical Report: Annual Average Production of 176Koz at AISC* of Less Than $900/oz $80 $60 $40 $20 $0 ($20) ($40) *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnotes (2) and (6) June Dec

10 Increasing FY2018 Production Guidance to at Least 230,000 Ounces Production (oz Au) Increased FY 2018 Production Guidance to at Least 230koz 13% Increase 14% Increase 233,267 At least 230,000 57,557 65, , ,412 Q Q H H FY Outlook 10

11 Wahgnion Project Burkina Faso, West Africa 11

12 Solid Start to Teranga s Second Mine Wahgnion 1.2Moz 2P Reserves (1) 2.4Moz M&I Resources (10) 0.2Moz 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) Annual production (4)(5)(7) 131koz 119koz All-in sustaining costs* $807/oz $843/oz Total free cash flow* $302M $409M Nogbele Fourkoura 6km from plant Stinger 15km from plant 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), (7) and (10) Proposed Processing Plant Four initial deposits at Wahgnion (Nogbele, Samavogo, Fourkoura & Stinger) located in close proximity to proposed plant site 12

13 Increased Wahgnion M&I Resources by 33% to 2.4 Million Ounces 2017 Mineral Resources (13) (14) Measured Resources Indicated Resources Measured + Indicated Resources Inferred Resources Deposit MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) Nogbele Samavogo Stinger Fourkoura Total Wahgnion Deposit MTonnes 2018 Mineral Resources (13) (15) Measured Resources Indicated Resources Measured + Indicated Resources Inferred Resources Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) MOunces MTonnes Grade (Au g/t) Nogbele N/Nangolo Samavogo Stinger Nogbele S Fourkoura Total MOunces MOunces 2018 Update Converted 87% (617koz) of Inferred to M&I Notes: Totals may not equal due to rounding. Refer to Appendix Endnotes (13), (14) and (15) 13

14 Significant Mid to Long-Term Upside Potential Kondandougoug Regional Exploration Includes ~12 Drill-Ready Targets Targets have potential to become resources and are within trucking distance of proposed plant site Bagu Sud Korindougou Samavogo North 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 Samavogo 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 Proposed Plant Site Reserve Deposits Exploration Targets 14

15 Golden Hill Burkina Faso 15

16 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 Interpreted Geology Andesite Houndé M&I: 2.55 Moz ³ Yaramoko M&I: 0.81 Moz ² One of the Most Exciting Exploration 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 through to feasibility study Basalt Basin Batholith Chert Granitoid Tarkwaian Acacia JVs ⁴ 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 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) Karankasso JV Inf: 0.67 Moz ⁵ M&I Resources are inclusive of P&P Reserves Sarama Permits South Houndé JV Inf: 2.10 Moz ⁴ 16

17 Active and Aggressive Exploration Program Golden Hill Burkina Faso, West Africa Q Drilling Activity Ma North Peksou 17 holes 2,156 metres Jackhammer Hill 8 holes 1,318 metres Ma Main Ma East C-Zone 10 holes 1,086 metres Ma North 8 holes 947 metres Peksou North 4 holes 675 metres Nahiri Plateau Nahiri Nahiri 4 holes 485 metres Peksou Basin 3 holes 420 metres B-Zone 3 holes 397 metres A-Zone 1 hole 101 metres TOTAL 58 holes 7,581 metres GEOLOGY Tarkwaian Type Sediments Volcano Sediments Jackhammer Hill C-Zone Peksou Peksou North For full details on Golden Hill, please visit Mixed Volcano Sediments & Volcanics Basalt Grantoid A-Zone B-Zone Batholith 17

18 Peksou Intrusive Complex: Discovery Opportunity Jackhammer Hill Similar to Structural Inter-Relationships Observed at Ma Complex The Peksou intrusive complex displays lithologic and structural commonality as well in a number of our advanced prospects: Jackhammer Hill, Peksou and C-Zone Jackhammer Hill Diorite Peksou Granodiorite Basalt In-situ RAB, auger or trench anomaly Drill Hole Peksou Intrusive Complex Two new drill discoveries at Peksou North and Peksou Basin demonstrate that new exploration opportunities within and adjacent to the Peksou intrusive complex still exist and further evaluation will be prioritized here Peksou Basin Peksou North Peksou C-Zone 18

19 Excellent Grades Near Surface and to Depth at Ma Structural Complex Ma Structural Complex Highlights Extensive structural complex consisting of numerous mineralized structures in close proximity Ma Prospect Representative Drill Section Mineralization remains open for all components of Ma in all directions, including down-plunge of better grade and width components: GHDD-047: g/t gold, including g/t gold from 45 m downhole depth (DHD) GHDD-080: g/t gold from 87 m DHD and g/t gold, including g/t gold from 122 m DHD Newest addition to the Ma area is Ma North, with latest results confirming the presence of a third mineralized breccia zone at the Ma Complex 19

20 High-Grade Central Core Area at Jackhammer Hill Prospect Jackhammer Hill Highlights Jackhammer Hill Representative Drill Section Three phases of early-stage drilling have been completed in multiple altered shear zones demonstrating continuity and depth extent: GHDD-319: g/t gold, including g/t gold from 41 m DHD GHDD-320: g/t gold, including g/t gold uncut grade from 115 m DHD GHDD-334: g/t gold, including g/t gold from 138 m DHD 20

21 Strong Gold Mineralization in Correlated Zones at C-Zone Prospect C-Zone Highlights C-Zone Representative Drill Section Gold mineralization is localized in a discrete, mafic volcanic hosted shear zone system displaying alteration, veining and brecciation characteristics similar to those observed at Ma prospect Three phases of drilling completed, with recent results confirming the C-zone remains open to depth and intersects with the southeastern portion of the Peksou prospect: GHDD-308: g/t gold, including g/t gold from 120 m DHD GHDD-312: g/t gold, including g/t gold from 21 m DHD, and g/t gold, including g/t gold from 89 m DHD 21

22 New Near-Surface Discoveries at Peksou North and Peksou Basin Peksou North / Basin Highlights Peksou North Representative Drill Section Favourable early-stage near-surface results from the first few holes from a series of scout holes at two separate locations: Peksou Basin (GHDD-349): g/t gold, including g/t gold uncut grade from 27 m DHD Peksou North (GHDD-346): g/t gold from 24 m DHD Further drilling is planned to follow-up on these initial positive results 22

23 Côte d Ivoire Exploration Guitry & Afema 23

24 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 24

25 Afema: Situated on Two Prolific Gold Belts Trending from Ghana Highly Prospective 1,400 km 2 Land Package Large land package includes one mining license and three exploration permits JV With Sodim Limited (51%, earning 70%) Côte d Ivoire Represents Significant Portion of West African Birimian Greenstone Belt Burkina Faso 21% Côte d'ivoire 35% Other 4% Mali 10% Guinée 11% Ghana 19% Côte d Ivoire 3 Afema Exploration Permits Afema Mining Permit Ghana Ahafo 17 Moz Newmont Chirano 5 Moz Kinross Bibiani 7 Moz Resolute Bogoso/Prestea 18 Moz Gold Star Sefwi-Bibiani Gold Belt Edikan 6.6 Moz Perseus Essase 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 Asankrangwa Gold Belt Kumasi Ashanti Gold Belt Konogo 1.4 Moz Signature Metals Akyem Newmont Winneba-Kibi Gold Belt Cape Coast 25

26 Afema Structural and Geological Compilation Favourably Situated Within Greenstone Belt Afema is situated within the southern extension of the prolific Sefwi-Bibiana greenstone belt, which hosts more than 35Moz of gold resources within the Ghana portion alone Numerous, widely-distributed, historical gold occurrences Five recognized regional shear structures with a combined strike length of 144 km H Planned Exploration Drilling at the Afema mine license Property-wide airborne geophysics and stream sediment (BLEG) programs 26

27 Summary 27

28 Capital Structure and Recent Share Price Performance Capital Structure (at July 31, 2018 unless otherwise noted) Common shares outstanding 107.6M Stock options outstanding 9.6M Fully diluted 113.0M Number of shares owned by insiders 24.0M Market capitalization (August 1, 2018) C$472M Cash / Net cash (June 30, 2018) US$92M / US$22M Share Price Performance (TSX: TGZ) (Closing price on December 12, 2017 August 1, 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) Top 10 Shareholders % of o/s Shareholdings Filed shares as at August 1, Tablo Corporation 21.7% 23,322,400 2 Van Eck Associates Corporation 6.4% 6,855,022 3 Ruffer LLP 4.7% 5,076,743 4 Dimensional Fund Advisors, L.P. 3.4% 3,649,839 5 Heartland Advisors, Inc. 2.7% 2,900,000 6 Franklin Advisers, Inc. 2.6% 2,807,200 7 Connor, Clark & Lunn Inv Mgmt 2.0% 2,175,000 8 LSV Asset Management 2.0% 2,144,540 9 Konwave AG 1.9% 2,062, MMCAP Asset Management 1.6% 1,673,116 Source: IR Insight on August 1, % +4% -2% 28

29 Unique Cornerstone Shareholder Tablo Corporation Currently Owns 22% of Teranga David Mimran, Director of Teranga, Controls Tablo Corporation Mr. Mimran is CEO of Grands Moulins d Abidjan and Grands Moulins de Dakar, one of the largest producers of flour and agrifood in West Africa He is Special Advisor to the government of the Republic of Cote d'ivoire where he has led negotiations with the International Monetary Fund, the World Bank, the European Union, and the Government of the Republic of France Strong Cornerstone Investor with In-Depth Local Knowledge Long history of operating responsibly in Africa Mimran Group is the largest private sector employer in both Senegal and Côte d Ivoire David Mimran / Tablo Committed to Long-Term Growth of Teranga Last November, Tablo announced its intention to add to its holdings by acquiring up to 5% of Teranga s issued and outstanding common shares over the next twelve months Tablo Corporation Owns 23.3 Million Shares of Teranga at an Average Price of $3.94 On market purchases 33% Secondary public offering 25% Initial private placement 34% Gryphon acquisition 8% 1/3 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 29

30 2018 News Flow and Milestones Sabodala FY 2018 gold production of at least 230koz Continue to advance Niakafiri resettlement Golden Hill Regular exploration updates Initial resource estimation by year end Wahgnion Côte d Ivoire Update reserves in Q3 Update NI technical report in Q3 Project updates from Guitry and Afema 30

31 Potential for Significant Share Price Appreciation Teranga s Share Price (C$) vs. Net Present Value* (NPV) (12) per Share Data Source: BMO GoldPages published July 30, 2018 EV/2P Reserves ($/oz) Roxgold B2Gold Endeavour % Semafo Golden Star $9.44 Alacer Teranga $4.39 $5.55 Perseus 40 EV/2018E EBITDA Share Price 0.8x Current TGZ NPV Trading Multiple (12) BMO NPV per Share (Spot) Revalued Share Price 1.7x Average NPV Multiple for Medium Producers (12) Alacer Perseus Semafo Endeavour B2Gold Teranga Roxgold 2.9 *Refer to Appendix Non-IFRS Performance Measures Refer to Appendix Endnote (12) Golden Star

32 Appendix

33 2018 Outlook: Increased Production 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) ~230,000 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 Non-cash inventory movements and amortized advanced royalty costs C $/oz sold (50) All-in sustaining costs (excluding 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 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 resettlement costs for the Sabodala village. F. Excludes capitalized deferred stripping costs, included in mine production costs. G. Early works expenditures for 2018 includes anticipated expenditures for the construction of Wahgnion prior to initial drawdown under the Taurus Facility which was executed in May H. Wahgnion construction expenditures for 2018 include anticipated expenditures for Wahgnion post completion of the Taurus Facility. Other This forecast financial information is based on the following material assumptions for the remainder of 2018: gold price: $1,250 per ounce; light fuel oil price $0.87/L; heavy fuel oil price $0.60/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. 33

34 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. 34

35 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 is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized price is calculated on revenue and ounces sold to all customers, except Franco-Nevada, as gold ounces sold to Franco-Nevada is recognized in revenue at 20 percent of the prevailing gold spot price on the date of delivery and 80 percent at $1,250 per ounce. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently. 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 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 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. During the second quarter of 2018, the Company also excluded the impact of foreign exchange movements on deferred taxes and other non-cash fair value changes from adjusted net profit attributable to shareholders as management does not believe these factors to be reflective of the underlying performance of the Company. For more information regarding these measures, please refer to the Company s management s discussion and analysis accessible on the Company s website at 35

36 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 Teranga expects to release an updated mineral reserve estimate and related NI technical report for Wahgnion in the third quarter of 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, acquisition costs to acquire an interest in the Afema project, discretionary exploration expenditures, financing costs and costs to secure the Taurus Facility. 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 Resources estimates as at May 31, For more information regarding Wahgnion s Mineral Resources and related notes, please refer to the press release dated June 7, 2018 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 July 30, 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$1,223 SPOT gold price per ounce, 5% discount, 0.77 USD/CAD exchange rate. 36

37 Endnotes (continued) 13. CIM definitions were followed for Mineral Resources. Mineral Resources are inclusive of Mineral Reserves and are constrained by resource pit shells. A minimum thickness of two metres was applied. 14. Notes for historical Wahgnion 2017 Mineral Resources Estimate: Open pit oxide Mineral Resources are estimated at cut-off grades ranging from 0.35 g/t Au to 0.45 g/t Au; open pit transition and fresh rock Mineral Resources are estimated at cut-off grades ranging from 0.45 g/t Au to 0.55 g/t Au; high grade assays were capped at grades ranging from 2.5 g/t Au to 48.0 g/t Au; and, Mineral Resources are estimated using a gold price of $1,450 per ounce. 15. Notes for Wahgnion 2018 Mineral Resources Estimate (effective May 31, 2018): Mineral Resources are reported at cut-off grades ranging from g/t Au to g/t Au in oxide, and at cut-off grades ranging from g/t Au to g/t Au in transition and primary rock; high grade assays were capped at grades ranging from 5 to 48 g/t Au; and, Mineral Resources are estimated using a long-term gold price of US$1,500 per ounce, adjusted to match existing industry standards. 37

38 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