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 www.sedar.com. 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 November 6, 2013. 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. THIRD QUARTER RESULTS
CONFERENCE CALL
Alan R. Hill
Executive Chairman
Richard Young
FOCUSED
ON GROWTH
THROUGH:
President & CEO
Agenda:
•
Q3 2013 operational and financial results
•
GROWING
RESERVES
New optimized, Sabodala (standalone) mine plan
•
Oromin acquisition
•
GROWING
PRODUCTION
FINANCIAL
STRENGTH
Our focus for Q4 2013
3
4. Q3 2013 UPDATE
Operations running well
Mining and processing rates up 26% & 36% respectively
over Q3’12
Processing plant operating at design capacity
Unit costs down
Mining focused on waste stripping of phase 3
Providing access to higher grade, expect to mine in Q4
Lower grade mill feed in Q3, higher mill feed expected in
Q4
Production: Q3: 37,000 oz., YTD: 155,000 oz.
As per plan, quarterly production fluctuations
Manage to full-year guidance
On track to meet 2013 production and cost guidance
4
5. Q3 RESULTS
Cash and all-in sustaining costs
•
•
$748/oz cash costs, $1,289/oz all-in sustaining costs
Increase from Q3’12 due to lower grades processed
Mining costs
•
•
$2.48/t, 7% decrease from Q3’12
Shorter haul distances, improved loading efficiencies
Processing costs
•
•
$17.56/t, 20% below Q3’12
Increased throughput in crushing circuit
YTD production and cash costs
•
•
155,000 oz. produced at cash costs of $621/oz
All-in sustaining costs of $1,086/oz
Re-affirming 2013 Guidance:
•
Production: 190,000 – 210,000oz.; Cash Costs: $650 $700/oz. , All-in Sustaining Costs: $1,000 - $1,100/oz.
5
6. Q3 RESULTS
Gold sold
•
•
37,600 oz. at $1,339/oz
All ounces sold at spot
Gold revenue
•
•
$50.6M
Lower gold sales versus Q3’12
Profit/(Loss)
•
$0.4M Loss
Cash balance
•
$36.2M (net of $9.6M in Oromin-related payments)
Operating cash flow
•
Q3: $17M, YTD: $61M
6
7. FINANCIAL STRENGTH
Extended the payment terms of the Macquarie $60M
finance facility:
Final repayment date extended one year to June 30, 2015
Require a restricted cash balance of up to $20M
$40M repaid through five equal quarterly payments starting June
30, 2014
Remaining $20M due on June 30, 2015
Reduced discretionary expenditures in Q1’13
Operations, exploration, administration, sustaining & new capital
development
Spending reductions on track
7
8. BASE CASE
NEW LIFE OF MINE PLAN (STANDALONE)
200.00
250
240koz
240
150.00
230koz
$M
220
215koz
50.00
210koz
koz
230
100.00
210
0.00
2013
2014
2015
2016
-50.00
200
190
Free cash flow after debt payments ($M)
Cumulative Free Cash Flow after debt payments ($M)
Production (koz)
Capital expenditures ($M)
Debt repayments ($M)
•
•
•
2014-2016:
• Production of 210-240 koz.
• All-in sustaining costs of ~$1,000/oz (including Gora development costs)
• Capital expenditures: ~$80M
• Free cash flow: ~$150 - $200M at $1,350/oz gold price (after debt repayments)
• Less waste moved = decrease in high cost ounces = additional free cash flows
New Plan:
• LOM all-in sustaining costs ~$1,000/oz
• Objective: maximize free cash flow, minimize expenditures
Current cash + (2014 to 2016 free cash flows)
>
current market cap.
8
9. DEAL CREATES SIGNIFICANT VALUE
FOR ALL SHAREHOLDERS
•
Acquired Oromin Explorations, gained access to Oromin Joint Venture Group (“OJVG”)
data room
•
Technical services team currently integrating OJVG deposits into Teranga operations
•
Release of technical report in Q1’14
•
•
•
Development strategy / combined mine plan
Update to reserves, resources
The combination is expected to result in:
•
An increase in annual production and mine life
•
Higher free cash flow, net asset value and earnings
•
An increase in operational flexibility
•
Capital and operating synergies, low incremental capital required
•
A seamless integration
9
10. THE COMBINED ASSET BASE
•
Multiple deposits allows operational flexibility
•
Allows for optimal sequencing of deposits based on:
•
1) grade 2) ore hardness 3) distance to mill 4) incremental capital requirements
• Processing OJVG ore is expected to establish Sabodala as a 275,000 – 300,000 oz/yr producer
• The Republic of Senegal supports a consolidation and are in favour of development of resources
10km
(1)
Based on total proven and probable reserves of Teranga and of the OJVG (based on the open-pit mineral reserve estimates contained in the OJVG 43-101 Report). Based on
life of mine cash flows at a US$1,400/oz gold price assumption .
Note: Please see Sabodala Technical Report, June 7, 2012 and Competent Persons Statement on page 13 of this presentation
10
11. THIRD QUARTER 2013
•
Operations running well
•
Acquisition of Oromin complete
•
Working towards agreement with joint venture
partners
•
•
Integrating OJVG deposits into Teranga operations
•
•
Targeting YE resolution
Targeting Q1’14 for combined plan
Reaffirm production and cost guidance
11
13. COMPETENT PERSON STATEMENTS
Teranga:
The technical information contained in this document relating to the mineral reserve estimates for Gora and Niakafiri is based on information compiled by Julia
Martin, P.Eng., MAusIMM (CP). Ms. Martin is a full time employee with AMC Mining Consultants (Canada) Ltd., is independent of Teranga, is a “qualified person”
as defined in NI 43-101 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 is a “Qualified Person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Martin has reviewed
and accepts responsibility for the Mineral Reserve estimates for Gora and Niakafiri disclosed in this document and has consented to the inclusion of the matters
based on her information in the form and context in which it appears in this document.
The technical information contained in this document relating to the Mineral Resource estimate is based on information compiled by Patti Nakai-Lajoie, P. Geo.,
who 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 National Instrument 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralization 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. Nakai-Lajoie is a “Qualified Person” under National Instrument 43-101 Standards of Disclosure
for Mineral Projects. Ms. Nakai-Lajoie has reviewed and accepts responsibility for the Mineral Resource estimate disclosed in this document and has consented to
the inclusion of the matters based on her information in the form and context in which it appears in this document.
The technical information contained in this document relating to the Mineral Reserve estimate for Sabodala is based on information compiled by Paul Chawrun, P.
Eng., who is a member of the Professional Engineers of Ontario. Mr. Chawrun is a full time employee of Teranga and is not “independent” within the meaning of
National Instrument 43-101. Mr. Chawrun has sufficient experience which is relevant to the style of mineralization 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. Chawrun is a “Qualified Person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr.
Chawrun has reviewed and accepts responsibility for the Mineral Reserve estimate for Sabodala disclosed in this document and has consented to the inclusion of
the matters based on his information in the form and context in which it appears in this document.
Oromin:
The information in this presentation that relates to the exploration results, mineral resources or ore reserves of Oromin is based on information compiled by Mr.
Doug Turnbull, P. Geo., who is a Member of the Association of Professional Engineers & Geoscientists of Ontario. Mr. Turnbull is a full-time employee of 2104244
Ontario Ltd. and has sufficient experience which is relevant to the style of mineralization 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 “Australian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves” . Mr. Turnbull is a Qualified Person in accordance with NI 43-101 and consents to the inclusion in the presentation of the matters based on his
information in the form and context in which it appears.
13
14. 2013 DISCRETIONARY SPEND
REDUCED
For the year ended December 31, 2013
Revised Guidance
Original Guidance
190,000 - 210,000
190,000 - 210,000
650 – 700
650 – 700
3.0
10.0 – 15.0
13.0
15.0 – 20.0
20.0
20.0 - 25.0
5.0
5.0 - 10.0
5.0
30.0 - 35.0
5.0
15.0 - 20.0
10.0
45.0 - 50.0
Operating results
Production (oz)
Total cash cost (incl. royalties)
1,2
($/oz sold)
Exploration and evaluation expense ($ millions)
Administration expenses ($ millions)
Capital expenditures ($ millions)
Mine site
Capitalized reserve development
Gora development costs
Mobile equipment
Site development
Total Gora development costs
Capitalized deferred stripping
2
Total capital expenditures
1
35.0 - 40.0
70.0
105.0 - 125.0
T otal cash cost per ounce is a non-IFRS financial measures with standard meaning under IFRS.
2
35.0
Includes the impact of adopting IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine.
14
15. TERANGA RESOURCE SUMMARY
Table 1: Mineral Reserves as at 30 June 2013
SABODALA
NIAKAFIRI
STOCKPILE
GORA
TOTAL
MM
tonnes
4.26
0.23
7.88
0.50
12.87
PROVEN
Grade
g/t Au
1.57
1.69
0.90
4.58
1.28
MM oz
Au
0.21
0.01
0.23
0.07
0.53
MM
tonnes
7.37
7.58
PROBABLE
Grade
g/t Au
1.59
1.12
MM oz
Au
0.38
0.27
1.39
16.34
4.80
1.64
0.21
0.86
PROVEN AND PROBABLE
MM
Grade
MM oz
tonnes
g/t Au
Au
11.63
1.58
0.59
7.81
1.14
0.29
7.88
0.90
0.23
1.89
4.74
0.29
29.21
1.48
1.40
INDICATED
Grade
g/t Au
1.33
1.10
4.93
1.44
MM oz
Au
1.06
0.37
0.29
1.72
MEASURED AND INDICATED
MM
Grade
MM oz
tonnes
g/t Au
Au
49.26
1.34
2.12
10.70
1.12
0.39
2.32
5.00
0.37
62.38
1.44
2.89
Notes for Reserves:
1. CIM definitions were followed for Mineral Reserves.
2. Mineral Reserve cut off grades for Sabodala are 0.30 g/t Au for oxide and 0.5 g/t Au for fresh based on a $1350/oz gold price and metallurgical recoveries between 90% and 93%.
3. Mineral Reserve cut off grades for Niakafiri are 0.35 g/t Au for oxide and 0.5 g/t Au for fresh based on a $1350/oz gold price and metallurgical recoveries between 90% and 92%.
4. Mineral Reserve cut off grade for Gora is 0.76 g/t Au for oxide and fresh based on $1200/oz gold price and metallurgical recovery of 95%.
5. Sum of individual amounts may not equal due to rounding.
Table 2: Measured and Indicated Mineral Resources as at 30 June 2013
MEASURED
MM
Grade
tonnes
g/t Au
SABODALA
24.36
1.36
NIAKAFIRI
0.30
1.74
GORA
0.49
5.27
TOTAL
25.15
1.44
MM oz
Au
1.06
0.02
0.08
1.16
Notes for Resources:
1. CIM definitions were followed for Mineral Resources.
2. Mineral Resources for Sabodala include Sutuba.
3. Mineral Resource cut-off grades for Sabodala are 0.2 g/t Au for oxide and 0.35 g/t Au for fresh.
4. Mineral Resource cut-off grades for Niakafiri are 0.3 g/t Au for oxide and 0.5 g/t Au for fresh.
5. Mineral Resource cut-off grade for Gora is 0.5 g/t Au for oxide and fresh.
6. Mineral Resource cut-off grade for Niakafiri West and Soukhoto is 0.3 g/t Au for oxide and fresh.
MM
tonnes
24.90
10.50
1.84
37.23
7. Mineral Resource cut-off grade for Diadiako and Majiva is 0.2 g/t Au for oxide and fresh.
8. Mineral Resource cut-off grade for Masato is 0.35 g/t for fresh.
9. Measured Resources include stockpiles which total 7.88 Mt at 0.90 g/t Au for 0.23 Mozs.
10. High grade assays were capped at grades ranging from 10 g/t to 30 g/t Au at Sabodala, 20 g/t to 70 g/t Au at Gora, 10 g/t Au at Soukhoto and 20
g/t Au at Masato.
11. The figures above are "Total" Mineral Resources and include Mineral Reserves.
12. Sum of individual amounts may not equal due to rounding.
Table 3: Inferred Mineral Resources as at 30 June 2013
INFERRED
SABODALA
NIAKAFIRI
NIAKAFIRI WEST
SOUKHOTO
GORA
DIADIAKO
MAJIVA
MASATO
TOTAL
MM tonnes
18.05
7.20
7.10
0.60
0.21
2.9
2.6
19.18
57.84
Grade g/t Au
0.95
0.88
0.82
1.32
3.38
1.27
0.64
1.15
1.01
MM oz Au
0.55
0.21
0.19
0.02
0.02
0.12
0.05
0.71
1.87
Note: Please see Sabodala Technical Report, June 30, 2013 and Competent Persons Statement on page 13 of this presentation
15
16. OJVG RESOURCE SUMMARY
Mineral Reserves
MM
Tonnes
PROVEN
Grade
g/t Au
MM oz
Au
MM
Tonnes
75.2
17.3
Grade
g/t Au
1.56
1.73
MM oz
Au
3.78
0.96
GOLOUMA DEPOSITS (OPEN PIT)
GOLOUMA DEPOSITS (UNDERGROUND)
MASATO DEPOSIT
TOTAL
MM
Tonnes
2.902
6.122
18.987
28.011
PROBABLE
Grade
g/t Au
2.38
4.52
2.00
2.59
MM oz
Au
0.222
0.890
1.223
2.335
PROVEN AND PROBABLE
MM
Grade
MM oz
Tonnes
g/t Au
Au
2.902
2.38
0.222
6.122
4.52
0.890
18.987
2.00
1.223
28.011
2.59
2.335
Mineral Resources
MEASURED
INDICATED
INFERRED
Sources: For resources - OJVG Golouma Project Exploration Program Technical Report, Senegal, West Africa, dated, Effective Date January 30, 2012 (please see Oromin press release dated October 1, 2012;
For reserves - OJVG Sabodala Feasibility Study, dated January 30, 2013 (please see Oromin press release dated January 31, 2013)
16
17. MANAGEMENT
Alan R. Hill
Executive Chairman
• 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 (2005 – 2009) and non-Executive Chairman of Alamos Gold
(2004 – 2007)
Richard S. Young
President & CEO
• Over 10 years experience in mining finance, development, corporate development, and investor relations with
Barrick Gold
• Former VP and CFO of Gabriel Resources (2005 – 2010)
Mark English
VP, Sabodala Operations
• 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
Paul Chawrun
VP, Technical Services
• Mining Engineer and geologist with over 23 years experience
• Former EVP Corporate Development for Chieftain Metals
• Former Director, Technical Services Detour Gold
Navin Dyal
VP & CFO
• Over 13 years in finance, most recently 7 years with Barrick Gold (2005 - 2012)
• Former Director of Finance, Global Copper Business Unit – Barrick Gold
• Chartered Accountant – Four years at major public accounting firm
David Savarie
VP, General Counsel & Corporate
Secretary
• 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 (1996 – 2006)
Kathy Sipos
• Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009)
VP, Investor & Stakeholder Relations
Macoumba Diop
General Manager & Government
Relations Manager
• 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 in mineral project marketing and development
• Joined SGO in July 2011.
17
