INVESTOR PRESENTATION John Tumazos Very Independent Research Conference New York

Transcription

1 TSX:TGZ / ASX:TGZ INVESTOR PRESENTATION John Tumazos Very Independent Research Conference New York March 31, 2016

2 RICHARD YOUNG PRESIDENT & CEO

3 FORWARD-LOOKING STATEMENTS This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ( forward-looking statements ), which reflects management s expectations regarding Teranga Gold Corporation s ( Teranga or the Company ) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Wherever possible, words such as plans, expects, does not expect, budget, scheduled, estimates, forecasts, anticipate or does not anticipate, believe, intend, ability to and similar expressions or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved, have been used to identify such forward looking information. Although the forward-looking information contained in this presentation reflect management s current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. Such forward-looking statements are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments that management believe to be reasonable and relevant. These assumptions include, among other things, the ability to obtain any requisite Senegalese governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements The risks and uncertainties that may affect forward-looking statements include, among others: the inherent risks involved in exploration and development of mineral properties, including government approvals and permitting, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Teranga, as well as other risks and uncertainties which are more fully described in the Company s Revised Annual Information Form dated September 1, 2015, and in other company filings with securities and regulatory authorities which are available at Teranga does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. This presentation is dated as of the date on the front cover. All references to the Company include its subsidiaries unless the context requires otherwise. This presentation contains references to Teranga using the words we, us, our and similar words and the reader is referred to using the words you, your and similar words. All dollar amounts stated are denominated in U.S. dollars unless specified otherwise. 3

4 year Running Avg Au Discovered (Moz) Annual Production (Moz) DECLINING GLOBAL GOLD DISCOVERIES & PRODUCTION Global Gold Discoveries Peak Discovery Global Gold Production Peak Production Figure Source: SNL Metals Economics Group Figure Source: Consensus estimates which include CPM Group, GFMS, and Metals Focus Teranga s production profile is bucking industry trends 4

5 STRONG VALUE PROPOSITION EMERGING World-Class Gold Belt in a Safe & Stable Jurisdiction LARGE LONG-LIFE Reserve & Resource Base (1) STRONG Life of Mine Cash Flow (3) SIGNIFICANT Organic Growth Potential SOLID Balance Sheet & Significant Insider Ownership LOW All-in Sustaining Costs per Ounce (2) Strong value proposition and undervalued relative to peer group = compelling investment opportunity Refer to endnotes (1) (2) and (3) on slide 35 5

6 SIGNIFICANT POTENTIAL UPSIDE FROM MULTIPLE EXPANSION Teranga s Share Price* vs. Teranga Net Asset Value (NAV) (4) Per Share (C$) Average NAV Multiple of Medium Producers: 1.2x Source: BMO GoldPages, March 28, % 100% 150% 300% Share Price NAV per Share Share Price NAV per Share *Teranga current share price based on closing share price (C$) on March 22, 2016 NAV per Share NAV Multiple 0.6x 0.8x 1.0x 1.2x NAV per Share Based on Teranga s updated NI and the 1.2x average NAV multiple for its peer group, Teranga s share price should be C$1.80 Share Price Share Price Refer to endnote (4) on slide 35 6

7 MAJOR ACHIEVEMENTS IN BUT MISSED PRODUCTION GUIDANCE Replaced reserves & improved mine life Advanced organic growth initiatives Surpassed 2.5 years without a lost time injury Reduced costs by $20 million Strengthened balance sheet & improved liquidity Majority of 2015 production shortfall deferred to Q expected to be strongest quarter since 2014 Missed 2015 guidance of 200K-230Koz Refer to endnote (7) on slide 35 7

8 EARLY DAYS ON EMERGING WORLD-CLASS GOLD BELT Africa Potential for Major Discoveries Emerging gold belt straddles border between Senegal and Mali where +50 million ounces have been discovered Only Commercial Gold Mill in Senegal Ability to process regional discoveries and enter into strategic combinations to process neighbouring deposits Safe, Stable, Mining-Friendly Jurisdiction Democratic government strongly supports mining and views it as a key pillar for Senegal s economic growth Senegal 12M+ ounces Au discovered in past 10 years Emerging Gold Belt Mali 40M+ ounces Au discovered over last 25 years Mine License Regional Land Package 8

9 INDEPENDENT AND INVESTED New Strategic Cornerstone Investor David Mimran (Tablo Corporation) completed strategic private placement for 39.2M shares in Q Alan Hill Board of Directors (as of March 11, 2016) Chairman Strong Partner with In-depth Local Knowledge Mimran Group has a long history of operating successfully and responsibly in Africa and is the largest private sector employer in Senegal Strong & Experienced Board Extensive experience in mining, finance, legal, governance, government relations as well as on the ground working knowledge of Africa Richard Young Jendayi Frazer Edward Goldenberg Chris Lattanzi David Mimran Alan Thomas Frank Wheatley President, CEO & Director Independent Director Independent Director Independent Director Director & Largest Shareholder Independent Director Independent Director Insiders own more than 12% of Teranga s issued and outstanding common shares 9

10 LARGE RESERVE BASE WITH 13.5-YEAR MINE LIFE Proven & Probable Reserves (1) (in Moz) 2.6M Proven & Probable Reserves (1) at $1,100 gold. Average mined grade of 1.59 grams per tonne* (As at December 31, 2015) (8) % increase in reserves since IPO 730 Increased reserve base by 80%, net of 5-years production, through acquisition and exploration *Not including stockpile of 0.39Moz Refer to endnote (1) on slide 35 10

11 LARGE, LONG-LIFE, LOW-COST RESERVE BASE UNDERPINS STRONG CASH FLOWS OVER LIFE OF MINE Increased Long-term Lower costs mill throughput sustainable cash flow Updated mine plan released January 29, 2016 followed by a NI Technical Report March 23, 2016.

12 000 s oz Au SOLID BASE CASE PRODUCTION PROFILE (7) 2016 Outlook 200K-215Koz Opportunity to grow production by increasing material movement Opportunity to increase production through resource conversion and new discoveries (6) +200Koz average annual production from (7) Significant potential upside to life of mine base case production profile (6) Refer to endnotes (6) (7) on slide 35 12

13 ORGANIC GROWTH: SIGNIFICANT INCREASE IN THROUGHPUT DUE TO MILL OPTIMIZATION 2016 LOM Mill Rate vs 2014 LOM Mill Rate 15% increase in throughput 5% reduction in costs +50% IRR Leveraging existing mill and related infrastructure to increase organic growth 13

14 DECLINING COSTS & ATTRACTIVE CASH FLOW PROFILE LOM Gold Price $ 1,200 $ 1,200 23% decrease in mining costs since % decrease in milling costs since 2014 All-in Sustaining Cost (2) $ 887 $ 914 $ 313 $ 286 Franco-Nevada Stream * $ 73 $ 92 Cash flow/oz (3) $ 240 $ 194 Benefitting from lower fuel prices, favourable FX rates and mill optimization 40%-50% of costs are Euro-denominated Life of Mine Cash Flow (3) $240/oz Cost saving initiatives are ongoing *Fixed portion of Franco-Nevada gold stream ends in 2019 and will be replaced by variable stream, estimated to be $58/oz life of mine Refer to endnotes (2) and (3) on slide 35 14

15 SIGNIFICANT CUMULATIVE CASH FLOW BUILD Low Annual Sustaining Capex Less than $10M sustaining capital required on an annual basis Generating Ample Cash Flow to Fund Growth Cash flow (1) expected to total $549 million over life of mine based on current reserves as per NI Technical Report March 2016 One year of negative cash flow due to large capex associated with underground mine development High quality infrastructure requires moderate capex, allowing Teranga to build cash flow over LOM Refer to endnote (3) on slide 35 15

16 STRONG BALANCE SHEET PROVIDES LIQUIDITY AND FLEXIBILITY Received 6-Year VAT Exemption In February 2016 exemption from paying and collecting refundable VAT until 2022 Year-end Cash Balance $30M Revolving Credit Facility Secured a $30 million revolving credit facility in $15 million remains undrawn $17M Private Placement with Cornerstone Investor Capital used to fund organic growth initiatives Judiciously deploying capital on high return organic growth initiatives 16

17 ADVANCING EXPLORATION PROGRAM: PHASE 1 TARGET GENERATION COMPLETED Three-Phase Exploration Approach Phase 1 Phase 2 Phase 3 Target Generation Identifying Resources Converting to Reserves (6) $8M exploration budget for 2016 potential to increase with exploration success Refer to endnote (6) on slide 35 17

18 GROWING RESERVES ON MINE LICENSE Mine License of 291km 2 Focus on increasing reserves on mine license, which are within close proximity to mill Reserves of 2.6Moz at $1,100 Gold (1) Average mined grade of 1.59 grams per tonne* Multi-year Development Program (6) Focused on adding higher grade mill material and lower grade material for potential heap leach Sabodala Au 180 (Koz) Niakafiri Main Au 260 (Koz) Niakafiri SW Au 10 (Koz) Maki Medina Au 30 (Koz) Masato Au 730 (Koz) Niakafiri SE Au 40 (Koz) Kerekounda Au 90 (Koz) Kerekounda Au 100 (Koz) Golouma West Au 200 (Koz) Golouma West 1 - Au 120 (Koz) 2- Au 60 (Koz) Golouma South Au 60 (Koz) Golouma South Au 130 (Koz) Reserves Open Pit Reserves U/G *Not including stockpile of 0.39Moz Refer to endnotes (1) and (6) on slide 35 18

19 FOCUSED ON BIG TARGETS ON LARGE REGIONAL LAND PACKAGE Nienienko Main RC Drilling Program ~1,000km² Regional Land Package Exploration permits encompassing large of land surrounding Teranga s mine license Leoba-Lerinde Granite DDH Program & Trenching Leocounda Prospect DDH Drilling Program & Trenching Soreto-Soreto North DDH Drilling Program & Trenching First Discovery: High-Grade Gora ~5 grams per tonne deposit developed in 2015 Increasing Exploration Spend & Bench Strength Focused on large discoveries numerous prospects with potential to extend up to 5km in strike length Bransan Trenching & Drilling Program Marougou West Prospect Trenching & DDH Drilling Program KA Prospect DDH Drilling Program Cinnamon North Prospect Trenching & DDH Drilling Program Marougou Prospect DDH Drilling Program 19

20 FUTURE ORGANIC GROWTH: HEAP LEACHING Technically Viable For Processing Low-grade Ore Confirmed by pre-feasibility study, which was completed in Q Heap Leach Flow Sheet High Ore Recovery Range Oxide 78% - 83% Transition 61% - 66% Valuable Stockpile +400,000 ounces of low-grade inventory provides operating flexibility Heap leaching has potential to increase Teranga s annual production by 10% - 20% 20

21 UNDERVALUATION PROVIDES ATTRACTIVE INVESTMENT OPPORTUNITY Enterprise Value ($M) Source: BMO GoldPages March 28, 2016 *Market capitalization based on March 28, 2016 closing share prices 21

22 SIGNIFICANT POTENTIAL UPSIDE FROM MULTIPLE EXPANSION Teranga s Share Price* vs. Teranga Net Asset Value (NAV) (4) Per Share (C$) Average NAV Multiple of Medium Producers: 1.2x Source: BMO GoldPages, March 28, % 100% 150% 300% Share Price NAV per Share Share Price NAV per Share NAV per Share NAV Multiple 0.6x 0.8x 1.0x 1.2x *Teranga current share price based on closing share price (C$) on March 22, 2016 NAV per Share Based on Teranga s updated NI and the 1.2x average NAV multiple for its peer group, Teranga s share price should be C$1.80 Share Price Share Price Refer to endnote (4) on slide 35 22

23 STRONG VALUE PROPOSITION EMERGING World-Class Gold Belt in a Safe & Stable Jurisdiction Potential for discoveries on prolific West African gold belt where +50Moz Au have been discovered Senegal is a safe, stable and mining-friendly, democratic jurisdiction Teranga has only commercial gold mill in country SIGNIFICANT Organic Growth Potential Increased reserves by 80% since IPO focused on converting resources and large discoveries (6) Increasing exploration spend and bench strength Pursuing mill optimization and heap leaching to increase throughput LARGE LONG-LIFE Reserve & Resource Base (1) Solid production profile over 13.5-year mine life average production: +200Koz (7) LOM base case production has upside potential (6) Reserves of 2.6M ounces (1) Average mined grade of 1.59gpt* SOLID Balance Sheet & Significant Insider Ownership Ample liquidity with pro forma December 31, 2015 cash balance of $57.6M plus $15M undrawn credit facility Independent and invested board of directors insiders own +12% of Teranga s issued and outstanding common shares STRONG Cash Flow Over Life of Mine (3) LOM designed to build $549 million in cash flow (3) over life of mine at $1,200 gold Cash margin of $240/oz at $1,200 gold LOW All-in Sustaining Costs per Ounce (2) Significantly improved mining and milling cost bases LOM all-in sustaining costs of $887/oz, including Franco-Nevada stream ~$960/oz (2) Low sustaining capex of less than $10M per year Strong value proposition and undervalued relative to peer group = compelling investment opportunity *Not including stockpile of 0.39Moz Refer to endnotes (1) (2) (3) (6) and (7) on slide 35 23

24 Q&A

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

26 APPENDICES

27 LEAN CORPORATE GENERAL & ADMINISTRATIVE COST BASE Breakdown of G&A and CSR Expenses 2016 Outlook: $15-$16 million (11) Corporate Social Responsibility & Government Relations Represents 31% of G&A Comprehensive social responsibility program and strong government affairs is imperative to longterm success in Senegal G&A structure provides support for Teranga s cost efficient fly in fly out expatriate workforce at site 27

28 2016 OUTLOOK Year Ended December 31, Actual Guidance Operating Results Ore mined ( 000t) 7,748 2,000-2,500 Waste mined ( 000t) 23,883 34,500-36,000 Total mined ( 000t) 31,631 36,500-38,500 Grade mined (g/t) Strip ratio waste/ore Ore milled ( 000t) 3,421 3,700-3,900 Head grade (g/t) Recovery rate % Gold produced (5)(7) (oz) 182, , ,000 Total cash costs (incl. royalties) (2)(8) $/oz sold All-in sustaining cash cost (2) $/oz sold Mining ($/t mined) Mining long haul ($/t hauled) Milling ($/t milled) G&A ($/t milled) Assumptions for 2016 (11) $1,100 average gold price per ounce Brent oil: $40/barrel Euro/USD exchange rate of 1.1:1 Franco-Nevada Streaming All-in sustaining costs exclude stream impact of ~$100/oz as stream is treated as deferred revenue under IFRS Mine Production Costs $ millions Capital Expenditures Mine site sustaining $ millions Capitalized reserve development $ millions Project development costs $ millions Total Capital Expenditures (9) $ millions Exploration (Expensed) $ millions (11) Administration & CSR Expense $ millions Refer to endnotes (2) (5) (7) (8) (9) and (11) on slide 35 28

29 LIFE OF MINE (March 2016)

30 OPEN PIT AND UNDERGROUND MINERAL RESOURCES SUMMARY (10) As at December 31, 2015 Deposit Sabodala Gora Niakafiri Masato Golouma Kerekounda Maki Medina Niakafiri SW Niakafiri SE Others Total Measured Indicated Measured and Indicated Inferred Domain Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) ('000s) (g/t Au) ('000s) Open Pit 13, , , , Underground 1, , Combined 13, , , ,021 2, Open Pit , , Underground Combined , , Open Pit 4, , , , Underground Combined 4, , , , Open Pit 5, , , Underground 1, , , Combined 5, , , ,097 1, Open Pit 6, , Underground 2, , Combined 8, , Open Pit 1, , Underground Combined 1, , Open Pit 2, , Underground Combined 2, , Open Pit Underground Combined Open Pit 4, , Underground Combined 4, , Open Pit 1, , , Underground , Combined 1, , , Open Pit 25, , ,777 79, ,703 10, Underground 5, , , Combined 25, , ,516 85, ,441 15, Notes for Mineral Resources Summary 1.CIM definitions were followed for Mineral Resources. 2.Open pit oxide Mineral Resources are estimated at a cut-off grade of 0.35 g/t Au, except for Gora at 0.48 g/t Au. 3.Open pit transition and fresh rock Mineral Resources are estimated at a cut-off grade of 0.40 g/t Au, except for Gora at 0.55 g/t Au. 4.Underground Mineral Resources are estimated at a cut-off grade of 2.00 g/t Au. 5.Measured Resources at Sabodala include stockpiles which total 9.2 Mt at 0.77 g/t Au for 229,000 oz... 6.Measured Resources at Gora include stockpiles which total 0.1 Mt at 1.30 g/t Au for 6,000 oz... 7.Measured Resources at Masato include stockpiles which total 5.9 Mt at 0.79 g/t Au for 150,000 oz... 8.High grade assays were capped at grades ranging from 1.5 g/t Au to 110 g/t Au. 9.The figures above are Total Mineral Resources and include Mineral Reserves. 10.Open pit shells were used to constrain open pit resources. 11.Mineral Resources are estimated using a gold price of US$1,450 per ounce. 12.Sum of individual amounts may not equal due to rounding. Refer to endnote (10) on slide 35 30

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

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

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

34 UPDATED LIFE OF MINE OPERATING COSTS Activity Unit LOM AVG Open Pit Mining USD/t mined Underground Mining USD/t milled Processing USD/t milled General & Admin. USD/t milled Mining USDM Underground Mining USDM Processing USDM General & Admin USDM Refining & Freight USDM Byproduct Credits USDM (4) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Total Operating Costs USDM 1, Deferred Stripping Adjustment USDM (129) (13) (26) (6) - - (35) (35) (25) (1) Royalties 1 USDM Total Cash Costs (2) USDM 1, Total Cash Costs (2) USD/oz Capex USDM Capitalized Deferred Stripping USDM Capitalized Reserve Development USDM Corporate Admin USDM All-In Sustaining Cash Costs (2) USDM 2, All-In Sustaining Cash Costs (2) USD/oz ,072 1,483 1, Franco Nevada Stream USDM Franco Nevada Stream USD/oz All-In Sustaining Cash Costs (2) plus stream USDM 2, All-In Sustaining Cash Costs (2) plus stream USD/oz 960 1,006 1, , ,129 1,541 1, Notes: 1 Royalties include Government of Senegal royalties on total production and the NSR royalty due to Axmin on Gora production. This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence as disclosed in the Reserves and Resources section of this Report. Key assumptions: Gold spot price/ounce - US$1,200, Light fuel oil - US$0.72/litre, Heavy fuel oil - US$0.43/litre, US/Euro exchange rate - $1.10 Refer to endnote (2) on slide 35 34

35 ENDNOTES 1. Mineral Reserves and Mineral Resources estimates as at December 31, 2015 as per Company disclosure. For more information regarding Teranga Gold s Mineral Reserves and Resources, please refer to Teranga Gold s December Quarter and Year-end 2015 Report accessible on the Company's website at 2. Total cash costs figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measure of other companies. The World Gold Council ( WGC ) definition of all-in sustaining costs seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. All-in sustaining cost 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 all-in sustaining costs does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the Company s overall profitability. LOM total cash costs and all-in sustaining costs figures used in this presentation are before stockpile inventory value adjustments and government waiver accruals. For more information regarding these measures, please refer to the Company s 2015 Annual Management s Discussion and Analysis accessible on the Company s website at 3. Cash flow is the LOM net cash flow based on the Company s most recent NI Technical Report ( plan ) filed in March 2016, before income taxes, interest, debt repayments, closure costs, dividends and working capital. 4. Net Asset Value ( NAV ) per share is a Non-IFRS financial measure. NAV per share is equal to Net Present Value ( NPV ) per share times the multiple as listed. NPV per share is a Non-IFRS financial measure and is calculated using the net present value of the LOM cash flows based on the plan. The NPV calculation assumes $1,100 gold price in 2016 and $1,200 gold price in 2017 and forward, 5% discount, 0.7 CAD/USD. It includes three years of corporate administration, debt repayment, interest, income taxes, dividends and changes in working capital, net of cash on hand ,500 ounces of production are to be sold to Franco-Nevada at 20% of the spot gold price. 6. Over the past several years more than twelve million ounces of measured and indicated resources have been identified within the south eastern Senegal region, including the Massawa, Golouma, Makabingui and Mako projects, along with the Company s own Sabodala gold mine. With exploration work completed to date and the prior exploration success seen in the area Management believes there is a reasonable basis to anticipate future resource to reserve conversion. 7. This production guidance is based on existing proven and probable reserves only from the Sabodala mining license as disclosed in Teranga Gold s December Quarter and Year-end 2015 Report accessible on the Company's website at 8. Royalties include Government of Senegal royalties on total production and the NSR royalty due to Axmin on Gora production. 9. Excludes capitalized deferred stripping costs, included in mine production costs. 10. There have been no revisions to the resource models for 2015, except for adjustments due to mining depletion and minor revisions to Niakafiri Main, Niakafiri SW, Maki Medina and Diadiako. For estimating 2015 Mineral Resources, Teranga has implemented a new reporting procedure, which includes the use of open pit shells to constrain open pit resources and reporting underground resources separately. For reporting of open pit Mineral Resources, open pit shells were produced for each of the resource models using Whittle open pit optimization software. Only classified blocks greater than or equal to the open pit cut-off grades and within the open pit shells were reported. This is in compliance with the CIM (2014) resource definition requirement of reasonable prospects for eventual economic extraction. For reporting of underground Mineral Resources, only classified blocks greater than or equal to the underground cut-off grade outside of the open pit shells were reported. This is in compliance with CIM (2014) resource definition requirements. In addition, Deswik Stope Optimizer software was used to generate wireframe models to constrain blocks satisfying minimum size and continuity criteria, which were used for reporting Sabodala underground Mineral Resources. The significant change between the Mineral Resources reported for 2014 and 2015 is due to this new reporting procedure, where the 2015 year end Mineral Resources have been constrained using open pit shells along with revised gold cut-off grades for both open pit and underground resources. Previously classified Mineral Resources that do not satisfy the revised reporting criteria for 2015 have been excluded, however, remain in the block models as mineralized material. 11. Key assumptions: This forecast financial information is based on the following material assumptions for 2016: gold price: $1,100 per ounce; Brent oil:$40/barrel; Euro:USD exchange rate of 1.1:1; USD:CAD exchange rate of 0.7:1. Other important assumptions include: any political events are not expected to impact operations, including movement of people, supplies and gold shipments; grades and recoveries will remain consistent with the life-of-mine plan to achieve the forecast gold production; and no unplanned delays in or interruption of scheduled production. 35

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