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Teranga Gold's Fourth Quarter Marks Strong End to a Successful Year

Jan 29, 2015

TORONTO, ONTARIO--(Marketwired - Jan. 29, 2015) - (All amounts are in U.S. dollars unless otherwise stated)

Teranga Gold Corporation ("Teranga" or the "Company") (TSX:TGZ)(ASX:TGZ) is pleased to report its fourth quarter and year-end 2014 operating results for ASX purposes.

"2014 was a successful year and I am pleased to say that it finished up on a high note with a robust fourth quarter, reflecting significantly higher production and lower costs," stated Richard Young , President and Chief Executive Officer of Teranga. "Despite lower gold prices in 2014, we generated higher free cash flow, which in turn was used to pay down debt and strengthen our balance sheet."

Mr. Young also stated, "One of our key objectives is to invest in organic growth initiatives to increase our production and mine life. Our existing mill and related infrastructure, together with our large mine license and regional land package, which we believe has significant exploration upside, gives us organic growth opportunities that most companies just do not have today."

Key Highlights

Three months ended December 31 Year ended December 31
2014 2013 Change 2014 2013 Change
Gold production (ounces) 71,278 52,368 36% 211,823 207,204 2%
Total cash costs per ounce sold2 598 711 (16% ) 710 641 11%
All-in sustaining costs per ounce sold2 711 850 (16% ) 865 1,033 (16% )
  • Cash balance at December 31, 2104 increased by $7.8 million to $35.8 million from third quarter of 2014
  • The Company retired the outstanding balance of its loan facility on December 31, 2014
  • Proven and Probable open pit Reserves at Masato increased by 72,000 ounces
  • Encouraging exploration results on Mine License targets
  • Environmental permits for the Gora project, the first satellite deposit to be developed, are expected mid-February. Planned production to commence early fourth quarter 2015
  • The Company expects to generate positive free cash flow in 2015 based on 2015 production in the range of 200,000 to 230,000 ounces1 at total cash costs of $650 to $700 per ounce2 and all-in sustaining costs (including all new project development costs) of $900 to $975 per ounce2

1 This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence and OJVG mining license as disclosed in Table 2 on page 8 of this Report. The estimated ore reserves underpinning this production guidance have been prepared by a competent person in accordance with the requirements of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"). Please refer to the Competent Persons Statement on page 13 of this Report.

2 Total cash costs per ounce and all-in sustaining costs per ounce of gold sold are non-IFRS measures which do not have standard meanings under IFRS. Please refer to Non-IFRS Performance Measures at the end of this Report.

OPERATIONAL OVERVIEW

Sabodala Gold Operation

Fourth Quarter 2014

  • Gold production during the fourth quarter of 2014 increased by 47 percent and 36 percent versus the third quarter of 2014 and the fourth quarter of 2013, respectively. Production was higher in the last three months of 2014 due to higher processed grade and improved mill throughput. Production was slightly lower than fourth quarter guidance primarily due to marginally lower recovery rates than planned.
  • Total cash costs per ounce for the three months ended December 31, 2014, excluding the reversal of non-cash inventory write-downs to Net Realizable Value ("NRV"), totalled $598 per ounce compared to $711 per ounce in the same prior year quarter mainly due to lower mining and processing costs and higher gold production in the current year quarter.
  • All-in sustaining costs for the three months ended December 31, 2014, excluding the reversal of non-cash inventory write-downs to NRV, totalled $711 per ounce, compared to $850 per ounce in the prior year. All-in sustaining costs were lower due to a decline in total cash costs and lower capital expenditures.
  • Total tonnes mined for the three months ended December 31, 2014 were 4 percent lower year-over-year. Mining activities in the current period were mainly focused on the upper benches of Masato and the lower benches of phase 3 of the Sabodala pit, while in the same prior year period, mining was focused on the upper benches of phase 3 of the Sabodala pit which resulted in shorter ore and waste haul distances.
  • The changes in the mine department made during the year in terms of people and procedures resulted in much improved grade control during the fourth quarter. Mining at Masato included 371,000 tonnes at 2.41 gpt and mining at Sabodala included 353,000 tonnes at 3.16 gpt, both reconciling well to the reserve models.
  • Total mining costs for the three months ended December 31, 2014 were 6 percent lower than the same prior year period mainly due to lower material movement and higher productivity at Masato due to mining softer material. Unit mining costs for the three months ended December 31, 2014 were $2.58 per tonne, a decrease of 2 percent compared to the same prior year period.
  • Ore tonnes milled for the three months ended December 31, 2014 were 17 percent higher than the same prior year period. The Company set a quarterly record for total tonnes milled during the fourth quarter of 2014. As anticipated, the introduction of softer oxide ore from Masato has had a positive impact on crushing and milling rates. In the same prior year period, mill feed was sourced from phase 3 of the Sabodala pit containing harder ore.
  • Processed grade for the three months ended December 31, 2014 was 16 percent higher than the same prior year period. Mill feed during the fourth quarter 2014 included significant high grade ore that was sourced from the upper benches of Masato and the lower benches of the Sabodala pit. While in the prior year period, mill feed was sourced from phase 3 of the Sabodala pit at grades closer to average reserve grade.
  • Total processing costs for the three months ended December 31, 2014 were 9 percent lower than the same prior year period, mainly due to timing of maintenance activities and lower consumption of grinding media with the softer ore from Masato. Unit processing costs for the three months ended December 31, 2014 were 23 percent lower than the prior year period due to lower total processing costs and higher tonnes milled.
  • During the third quarter of 2014, the Company experienced a discrepancy of approximately 5,000 ounces between the predicted gold production based on the daily production report assays and reconciled gold poured and gold in circuit production at quarter end. Management concluded its investigation of the source of the discrepancy during the fourth quarter 2014. Based on the final assessment, it was determined this discrepancy was caused by a high bias of approximately 10 percent in the assays during the third quarter by the independent assay lab on site. The high bias was caused by degradation in the gold calibration standard due to poor storage of the solutions employed by the independent lab. The bias was corrected in October 2014 and steps have been taken by the independent lab to improve quality control including changes to their senior personnel, retraining of their local technical staff, duplicate testing conducted by their lab in Mali and more senior level oversight to ensure quality and adherence to standard practices.
  • Reconciliation of the metallurgical accounting for the fourth quarter 2014 with daily production was within acceptable standards, as has been the case on average for the duration of operations for the Sabodala mill.

Full Year 2014

  • Gold production for the year increased marginally from the year earlier to 211,823 ounces and was the second highest production total in Company history. However, production fell short of the revised guidance estimate of 215,000 ounces primarily due to lower than planned recovery rates in the fourth quarter.
  • Total cash costs per ounce for the year ended December 31, 2014 of $710 per ounce were at the higher end of guidance of $650 to $700 per ounce. This compares to $641 per ounce in 2013. The increase in total cash costs was mainly due to lower capitalized deferred stripping, partly offset by lower mining and processing costs compared to the prior year.
  • All-in sustaining costs per ounce for the year ended December 31, 2014 were $865 per ounce, within the original guidance range of $800 to $875 per ounce and 16 percent lower than the prior year. Lower all-in sustaining costs were mainly due to lower capital expenditures in the current year period.

PRODUCTION STATISTICS

Dec-14
Quarter
Sep-14
Quarter
Jun-14
Quarter

Mar-14
Quarter
Dec-13
Quarter
Variance
Dec-14
to
Dec-13
Ore mined ('000t) 2,666 1,272 974 1,262 1,993 34%
Waste mined - operating ('000t) 5,594 4,201 5,233 6,151 6,655 (16%)
Waste mined - capitalized ('000t) 490 524 458 497 420 17%
Total mined ('000t) 8,750 5,997 6,665 7,910 9,068 (4%)
Grade Mined (g/t) 1.47 1.71 1.39 1.61 1.61 (9%)
Ounces Mined (oz) 126,334 69,805 43,601 65,452 103,340 22%
Strip ratio waste/ore 2.3 3.7 5.8 5.3 3.6 (36%)
Ore processed ('000t) 1,009 903 817 893 860 17%
Head grade (g/t) 2.44 1.89 1.69 2.01 2.11 16%
Gold recovery (%) 90% 89% 90% 90% 90% -
Gold produced1 (oz) 71,278 48,598 39,857 52,090 52,368 36%
Gold sold (oz) 63,711 44,573 44,285 53,767 46,561 37%
Average price received $/oz 1,199 1,269 1,295 1,293 1,249 (4%)
Total cash costs per ounce sold2,3 (including Royalties) $/oz 598 781 815 696 711 (16%)
All-in sustaining costs per ounce sold2,3 (including Royalties) $/oz 711 954 1,060 813 850 (16%)
Mining ($/t mined) 2.58 3.12 2.90 2.81 2.65 (2%)
Milling ($/t milled) 13.91 15.96 21.29 18.20 17.96 (23%)
G&A ($/t milled) 4.27 4.46 4.92 4.85 4.84 (12%)
1 Gold produced includes change in gold in circuit inventory plus gold recovered during the period.
2 Total cash costs per ounce and all-in sustaining costs per ounce are non-IFRS financial measures and do not have a standard meaning under IFRS. Please refer to non-IFRS Financial Performance Measures at the end of this report.
3 All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense and social community costs not related to current operations), capitalized deferred stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council.

OUTLOOK 2015

The following table outlines the Company's estimated 2015 summary production and cost guidance:

Year ended December 31
2014 Actuals 2015 Guidance Range
Operating Results
Ore mined ('000t) 6,174 6,500 - 7,500
Waste mined - operating ('000t) 21,179 ~19,500
Waste mined - capitalized ('000t) 1,969 2,500 - 3,500
Total mined ('000t) 29,321 28,500 - 30,500
Grade mined (g/t) 1.54 1.40 - 1.60
Strip ratio (waste/ore) 3.7 3.00 - 3.50
Ore milled ('000t) 3,622 3,600 - 3,800
Head grade (g/t) 2.03 2.00 - 2.20
Recovery rate % 89.7 90.0 - 91.0
Gold produced1 (oz) 211,823 200,000 - 230,000
Total cash cost (incl. royalties)2 $/oz sold 710 650 - 700
All-in sustaining costs2,3 $/oz sold 865 900 - 975
Mining ($/t mined) 2.83 2.75 - 2.90
Mining long haul (cost/t hauled) ($/t milled) - 5.00 - 6.00
Milling ($/t milled) 17.15 15.50 - 17.50
G&A ($/t milled) 4.61 5.25 - 5.75
Gold sold to Franco-Nevada1 (oz) 20,625 24,375
Exploration and evaluation expense (Regional Land Package) ($ millions) 2.8 1.0 - 2.0
Administration expenses and Social community costs (excluding depreciation) ($ millions) 14.8 15.0 - 16.0
Mine production costs ($ millions) 161.3 155.0 - 165.0
Capitalized deferred stripping ($ millions) 6.0 8.0 - 10.0
Net mine production costs ($ millions) 155.3 147.0 - 155.0
Capital expenditures
Mine site sustaining ($ millions) 5.0 6.0 - 8.0
Capitalized reserve development (Mine License) ($ millions) 4.0 6.0 - 8.0
Project development costs (Gora/ Kerekounda)
Mill optimization ($ millions) - 5.0 - 6.0
Development ($ millions) 3.9 16.5 - 17.5
Mobile equipment and other ($ millions) - 7.5 - 8.5
Total project development costs ($ millions) 3.9 29.0 - 32.0
Capitalized deferred stripping ($ millions) 6.0 8.0 - 10.0
Total capital expenditures ($ millions) 18.9 49.0 - 58.0
1 22,500 ounces of production are to be sold to Franco Nevada at 20% of the spot gold price. 1,875 ounces were deferred from 2014 to 2015.
2 Total cash costs per ounce and all-in sustaining costs per ounce are non-IFRS financial measures and do not have a standard meaning under IFRS. Please refer to Non-IFRS Performance Measures at the end of this report.
3 All-in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense and social community costs not related to current operations), capitalized deferred stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council.
Key assumptions: Gold spot price/ounce - US$1,200, Light fuel oil - US$0.95/litre, Heavy fuel oil - US$0.76/litre, US/Euro exchange rate - $1.20, USD/CAD exchange rate - $0.85.
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.

The Company's mine plans are designed to maximize free cash flow. In 2015, the Company expects to generate free cash flow at $1,200 per ounce gold even after funding its organic growth initiatives. Mining activity in 2015 will continue in the Masato pit, as well as completing phase 3 of the Sabodala pit. Development of Gora is expected to be complete during the third quarter, with mining expected by late in the third quarter and production from Gora commencing in the fourth quarter of the year.

The Company expects to produce between 200,000 and 230,000 ounces of gold in 2015. The quarterly production profile in 2015 is expected to look similar to the 2014 quarterly production profile with higher production in the fourth quarter once Gora ore is processed through the mill. In total, the second half of 2015 is expected to account for approximately 55 percent of total gold production as Gora comes into production. The Gora development schedule is aggressive but Management believes it is achievable. The delay in the Gora permitting process has delayed road construction which was to start at the beginning of the year but is now expected to begin in early February. Any further delays are likely to impact the timing of commencement of mining at Gora resulting in production at the lower end of our 2015 production guidance range.

The Company's tax exempt status ends on May 2, 2015. From this point forward, the Company will be subject to a 25 percent income tax rate as well as customs duties and non-refundable value-added tax on certain expenditures. Any income tax incurred in 2015 will not be paid until 2016 and the other taxes are built into our unit cost guidance.

Total mine production costs for 2015 are expected to fall in the range of $147.0 to $155.0 million, similar to 2014 (net of capitalized deferred stripping). The increase in taxes and duties for consumables of about $5.5 million is expected to be offset by the decline in costs for light fuel oil ("LFO"), heavy fuel oil ("HFO") and weaker local and Euro denominated costs relative to the US dollar. A $0.10 variance from the current HFO/LFO assumptions would result in approximately a $5.0 million change to mine production costs. A 10 percent variance from the current Euro/USD exchange rate assumption would result in approximately a $9.0 million change to mine production costs. The Government of Senegal sets the price of petroleum products monthly. In late December 2014, these prices were reduced on average 15 percent, the first reduction in 2014. The Company's 2015 assumptions for LFO and HFO reflect these most recent price reductions and do not reflect any potential further reductions that the Government of Senegal may choose to enact.

Administrative expenses and social community costs relate to the corporate office, the Dakar and regional office and the Company's corporate social responsibility initiatives, and exclude corporate depreciation, transaction costs and other non-recurring costs. For 2015, these costs are estimated to be between $15.0 million and $16.0 million, including approximately $3.5 million for corporate social responsibility ("CSR") activities.

Sustaining capital expenditures for the mine site are expected to be between $6.0 and $8.0 million, capitalized deferred stripping costs are expected to total $8.0 to $10.0 million and reserve development expenditures are expected to total $6.0 to $8.0 million. Project development expenditures for growth initiatives including the cost to develop the Gora and Kerekounda deposits and costs to optimize the mill are expected to total $29.0 to $32.0 million.

Total cash costs per ounce for 2015 are expected to be between $650 and $700 per ounce, in line with 2014. All-in sustaining costs are expected to be between $900 and $975 per ounce, higher than 2014 due to an increase in development spending on new deposits and expansion of the mill of approximately $125 per ounce.

In 2015, the majority of the capital to be spent on the Company's exploration program will be focused on organic growth through (i) the conversion of resources to reserves; and (ii) extensions of existing deposits along strike on the Sabodala and OJVG mine licenses. As well, a modest amount of capital has been budgeted for the continuation of a systematic regional exploration program designed to identify high-grade satellite and standalone deposits.

FINANCE

At December 31, 2014:

  • Cash and cash equivalents - $35.8 million
  • Loan Facility (balance outstanding) - $nil
  • Equipment Facility (balance outstanding) - $4.2 million

In January 2015, the Company entered into forward gold sales contracts with Macquarie Bank Limited with maturities ending in February and March 2015. In total, 15,000 ounces of gold were sold forward at a gold price of $1,297 per ounce.

MANAGEMENT CHANGE

Kathy Sipos , Vice President, Investor and Stakeholder Relations has left the Company to pursue a career change. As an integral part of the Teranga team since the initial public offering, Ms. Sipos was instrumental in the development of the investor relations program and established the Company's CSR platform including the development of the Teranga development strategy ("TDS").

The TDS sets out Teranga's plan to ensure our actions and investments are oriented towards the long-term, sustainable development of the region surrounding our Sabodala Gold Operation. It further underscores our commitment to a company-wide culture of CSR. Under Ms. Sipos' leadership, the TDS has provided the foundation for a number of innovative partnerships with government agencies and several international and local non-government organizations to provide a range of programs in education, skills training, agriculture, health and education for the benefit of the communities and region in which we operate.

Richard Young , President and CEO and Khalid Elhaj , Director of Corporate Development and Investor Relations will be assuming Ms. Sipos' investor relations responsibilities, while the CSR team will oversee our programs until a replacement is found.

BUSINESS AND PROJECT DEVELOPMENT

Reserves and Resources

Mineral Resources at December 31, 2014 are presented in Table 1. Total open pit Proven and Probable Mineral Reserves at December 31, 2014 are set forth in Table 2. The reported Mineral Resources are inclusive of the Mineral Reserves.

The Proven and Probable Mineral Reserves were based on the Measured and Indicated Resources that fall within the designed open pits. The basis for the resources and reserves is consistent with the Canadian Securities Administrators National Instrument 43-101 Standards for Disclosure for Mineral Projects ("NI 43-101") regulations.

The Sabodala pit design, which remains unchanged and is consistent with the Mineral Reserves reported previously, is based on a $1,000 per ounce gold price pit shell for Phase 4. A re-evaluation of the final pit limits of Sabodala (Phase 4) will be completed prior to mining and will use updated economic parameters at that time. Currently, the plan to mine Phase 4 in Sabodala is estimated to begin in 2016.

The Niakafiri and Gora pit designs remain unchanged from December 2012.

The Masato pit design has been updated and is based on an updated resource model, using a $1,200 gold price with mine operating costs reflecting current conditions.

The Golouma and Kerekounda pit designs remain unchanged from December, 2013. Resource models are expected to be updated based on drill programs recently completed, with subsequent pit designs and revised reserves estimates expected later in 2015. These have been based on a $1,250 per ounce pit shell, however, when comparing to adjusted cut-off grades to match current operating costs, minimal adjustments were required to match a $1,200 per ounce pit shell.

Masato Resource Model Update

Drill hole assays and surface trenching results from the 2014 advanced exploration program were incorporated into an updated Masato mineral resource model during the fourth quarter 2014. A total of 2,900 metres in 22 diamond drill holes ("DDH") and 6,000 metres in 98 reverse circulation ("RC") holes were completed in 2014.

DDH confirmed the interpretation of mineralized zones and infilled gaps to upgrade resource classification of Inferred Resources.

RC holes were drilled at 10 metre spacing in 2 separate test block areas in oxide ore to test the continuity of portions of the high-grade sub-domains. Results confirm the nature of high grade mineralization in these areas, as well as overall shallower dipping zones than was previously interpreted.

Due to the complex nature of mineralization, a total of 11 mineralization models were generated following non-linear trending structures. Mineral resources were estimated using locally varying anisotropies respecting local trends. Oxide densities were revised to reflect the gradational density difference associated with increasing depth from surface. Fresh rock densities were revised and averaged for mineralized and non-mineralized areas.

A comparison of the reserve model against actual mined in 2014 indicates 2 percent higher tonnes, 5 percent higher grade and 8 percent higher ounces mined. This can be attributed to a shallower higher grade mineralization trend in oxides in areas delineated with wider spaced drilling.

Overall, 72,000 ounces were added at Masato during 2014 including 16,000 ounces in the high-grade test blocks drilled. Due to the complexity of the high grade zones revealed from the 10 metre test block areas, extension of high grade intercepts will need to be continually updated as mining advances with 10 metre spacing from the RC grade control process. As a result, the high grade added in the updated model was in the near surface areas in Phase 1 where 10 metre spacing drilling occurred.

Table 1 Minerals Resources Summary

Measured Indicated Measured and
Indicated
Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au
(Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz)
Sabodala 23.73 1.21 0.92 19.55 1.23 0.77 43.28 1.22 1.70
Gora 0.49 5.27 0.08 1.84 4.93 0.29 2.32 5.00 0.37
Niakafiri 0.30 1.74 0.02 10.50 1.10 0.37 10.70 1.12 0.39
ML Other
Subtotal Sabodala 24.52 1.30 1.02 31.89 1.40 1.43 56.41 1.36 2.46
Masato 1.55 0.96 0.05 50.26 1.04 1.67 51.81 1.03 1.72
Golouma 12.04 2.69 1.04 12.04 2.69 1.04
Kerekounda 2.20 3.77 0.27 2.20 3.77 0.27
Somigol Other 18.72 0.93 0.56 18.72 0.93 0.56
Subtotal Somigol 1.55 0.96 0.05 83.22 1.33 3.54 84.77 1.32 3.59
Total 26.07 1.28 1.07 115.11 1.35 4.97 141.18 1.33 6.05
Inferred Resources
Area Tonnes Au Au
(Mt) (g/t) (Moz)
Sabodala 18.42 0.93 0.55
Gora 0.21 3.38 0.02
Niakafiri 7.20 0.88 0.21
ML Other 10.60 0.97 0.33
Subtotal Sabodala 36.43 0.94 1.11
Masato 19.18 1.15 0.71
Golouma 2.46 2.01 0.16
Kerekounda 0.34 4.21 0.05
Somigol Other 12.87 0.84 0.35
Subtotal Somigol 34.86 1.13 1.26
Total 71.29 1.03 2.37

Notes for Table 1: Mineral Resources Summary:

  1. CIM definitions were followed for Mineral Resources.
  2. Mineral Resource cut-off grades for Sabodala, Masato, Golouma, Kerekounda and Somigol Other are 0.2 g/t Au for oxide and 0.35 g/t Au for fresh.
  3. Mineral Resource cut-off grades for Niakafiri are 0.3 g/t Au for oxide and 0.5 g/t Au for fresh.
  4. Mineral Resource cut-off grade for Gora is 0.5 g/t Au for oxide and fresh.
  5. Mineral Resource cut-off grade for Niakafiri West and Soukhoto is 0.3 g/t Au for oxide and fresh.
  6. Mineral Resource cut-off grade for Diadiako is 0.2 g/t Au for oxide and fresh.
  7. Measured Resources include stockpiles which total 11.30 Mt at 0.82 g/t Au for 0.30 Mozs.
  8. 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, from 4 g/t to 25 g/t Au at Masato, from 5 g/t to 70 g/t for Golouma, from 11 g/t to 50 g/t at Kerekounda, and from 0.8 g/t to 110 g/t at Somigol Other.
  9. The figures above are "Total" Mineral Resources and include Mineral Reserves.
  10. Neither underground Mineral Resources nor Mineral Reserves have been generated by the Company, therefore global Mineral Resources have been reported at the determined cut-off grades. A detailed underground analysis will be undertaken to follow-up on the underground resource potential; however, this is not a priority in the near term.
  11. Sum of individual amounts may not equal due to rounding.

For clarity, the Resource estimates disclosed above with respect to Niakafiri, Gora and ML Other (which includes Niakafiri, Niakafiri West, Soukhoto and Diadiako) were prepared and first disclosed under the JORC Code 2004. See Competent Person Statements on page 13 for further details. It has not been updated since to comply with JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All material assumptions and technical parameters previously disclosed continue to be applicable and have not materially changed. Refer to Teranga Gold Corporation ASX Quarterly December 31, 2013 report filed on January 30, 2014.

Table 2 Mineral Reserves Summary

Proven Probable Proven and Probable
Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au
(Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz)
Sabodala 1.98 1.52 0.10 2.48 1.48 0.12 4.45 1.50 0.21
Gora 0.48 4.66 0.07 1.35 4.79 0.21 1.83 4.76 0.28
Niakafiri 0.23 1.69 0.01 7.58 1.12 0.27 7.81 1.14 0.29
Stockpiles 11.30 0.82 0.30 11.30 0.82 0.30
Subtotal Sabodala 13.99 1.07 0.48 11.41 1.63 0.60 25.40 1.32 1.09
Masato 26.93 1.13 0.98 26.93 1.13 0.98
Golouma 6.47 2.24 0.46 6.47 2.24 0.46
Kerekounda 0.88 3.26 0.09 0.88 3.26 0.09
Subtotal Somigol 34.28 1.39 1.53 34.28 1.39 1.53
Total 13.99 1.07 0.48 45.69 1.45 2.12 59.68 1.36 2.62

Notes for Table 2: Reserves Summary:

  1. CIM definitions were followed for Mineral Reserves.
  2. Mineral Reserve cut off grades for Sabodala are 0.40 g/t Au for oxide and 0.5 g/t Au for fresh based on a $1,250/oz gold price and metallurgical recoveries between 90 percent and 93 percent.
  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 $1,350/oz gold price and metallurgical recoveries between 90 percent and 92 percent.
  4. Mineral Reserve cut off grade for Gora is 0.76 g/t Au for oxide and fresh based on $1,200/oz gold price and metallurgical recovery of 95 percent.
  5. Mineral Reserve cut off grades for Masato are 0.4 g/t Au for oxide and 0.5 g/t for fresh based on $1,200/oz gold price and metallurgical between 90 percent and 93 percent.
  6. Mineral reserve cut off grades for Golouma and Kerekounda are 0.4 g/t Au for oxide and 0.5 g/t for fresh based on $1,250/oz gold price and metallurgical between 90 percent and 93 percent.
  7. Sum of individual amounts may not equal due to rounding.
  8. The Niakafiri 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.
  9. The Gora deposit is intended to be merged into the Sabodala mining license which the State of Senegal has agreed to in principal subject to completion and receipt of an approved environmental and social impact assessment which is ongoing.
  10. There are no other known political, legal or environmental risks that could materially affect the potential development of the identified mineral resources or mineral reserves other than as already set out in the Company's Annual Information Form dated March 31, 2014 (revised April 24, 2014). Refer to RISK FACTORS beginning on page 60.

For clarity, the Reserve estimates disclosed above with respect to Niakafiri and Gora was prepared and first disclosed under the JORC Code 2004. See Competent Person Statements on pages 28 and 29 for further details. It has not been updated since to comply with JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All material assumptions and technical parameters previously disclosed continue to be applicable and have not materially changed. Refer to Teranga Gold Corporation ASX Quarterly December 31, 2013 report filed on January 30, 2014.

Masato Development and OJVG Integration

Development of the Masato deposit is complete and mining commenced during the third quarter of 2014. First ore delivery was completed in third quarter 2014, with a gradual ramping up of production rates throughout fourth quarter 2014. The heavily oxidized upper ore zones did not create significant materials handling issues in the plant and the total blend of oxide with fresh Sabodala ore was increased throughout fourth quarter 2014. The gold recovery from Masato met expectations, demonstrated by the metallurgical accounting for the year as well as results from an individual bulk test in the plant. The softer oxidized ore from Masato provided for an increase in mill throughput and lower overall plant unit operating costs.

Base-Case Life of Mine

During the first quarter 2014, the Company filed a National Instrument - Standards of Disclosures for Mineral Projects ("NI 43-101") technical report which included an integrated life of mine ("LOM") plan for the combined operations of Sabodala and the OJVG. The integrated LOM plan had been designed to maximize free cash flow in the prevailing gold price environment. The sequence of the pits can be optimized, as well as the sequencing of phases within the pits, based not only on grade, but also on strip ratio, ore hardness, and the capital required to maximize free cash flows in different gold price environments. As a result, the integrated LOM annual production profile represented an optimized cash flow for 2014 and a balance of gold production and cash flow generated in the subsequent five years. Based on the current reserve base of $1,200 per ounce gold the Company has the flexibility to reduce material movement and capital costs which reduces production by about 5 percent but expects to generate free cash flow over the period 2015-2017.1 At the same time, as gold prices increase, the Company has the ability to increase material movement and gold production. One of the strategic alternatives available to the Company, should materially lower gold prices arise, is to supplement feed to the mill with low-grade ore stockpiles on hand thus significantly reducing or eliminating material movement costs.

With expectations for additional reserves based on drilling in Niakafiri, Masato, Golouma, Kerekounda and further discoveries on the land acquired from the OJVG, further mine plan optimization work will continue. As a result, the integrated LOM production schedule represents a "base case" scenario with flexibility to improve cash flows in subsequent years.

1 This forecast financial information is based on the following material assumptions: Gold price: $1,200 per ounce; average annual gold production (2015-2017) of approximately 240,000 ounces; and total mine production costs assumed for the 2015 Outlook. The production guidance is based on existing proven and probable reserves only from both the Sabodala mining license and OJVG mining license as disclosed in Table 2 on page 8 of this Report.

Mill Enhancements

A study to quantify and optimize the relationship between an increase in crusher availability to the SAG and Ball Mill system, as well as other design enhancements within the crushing and grinding system was completed during the third quarter 2014.

Improvements to the SAG mill as part of sustaining capital include adjustments made to mill liners along with installation of a discharge head and trommel screen to improve throughput. Increased throughput in the ball mills will result from new gear boxes which will increase power to the ball mills thereby increasing throughput.

The largest capital component of the mill upgrade will consist of adding a second primary jaw crusher to operate in parallel with the existing unit. This will (i) increase availability to the live storage for the mill circuit, and (ii) provide the ability to reduce the top size primary crusher feed. Basic engineering was initiated in the fourth quarter of 2014 to finalize design, layout, material quantities, procurement packages and an execution plan for construction.

The parallel crusher construction is expected to be operational over a span of approximately 18 months, with continual improvement realized earlier on from the sustaining capital initiatives. The Company has budgeted approximately $6.0 million in 2015, however, detailed engineering is ongoing to determine the final cost estimate. A decision to proceed to construction will depend on the prevailing gold price environment, the Company's available cash flow and heap leach results. Simulations have demonstrated that production potential exists beyond 480 tonnes per operating hour with these new configurations once commissioning has been completed after installation.

Heap Leach Project

The LOM plan shows a significant amount of both oxide and sulphide low grade reserves that are mined during the operating period but not processed until the end of the mine life. There also exists significant potential along an 8km mineralized structural trend covering both mine leases to increase the known reserves with near surface, oxidized ore.

The potential benefit to accelerating value from this ore earlier by feeding it through a heap leach process was evaluated during 2014. Phase 1 of the testwork (various stages of the soft and hard oxidized transition zones) has been completed. Based on positive results of this testwork, Phase 2 (analysis of sulphide ore on the ROM stockpile) has been initiated.

The ongoing testwork is being completed by Klappes, Cassidy and Associates at their facilities in Reno, Nevada, who are experienced in testing and designing heap leach facilities throughout the world, including West Africa.

Key milestones for the project are as follows:

  • Complete Phase 1 testwork, economic analysis and initiate engineering design to pre-feasibility study ("PFS") level - completed fourth quarter of 2014;
  • Complete additional follow up optimization testwork and, initiate Phase 2 testwork on the ROM stockpiles - ongoing through to first half of 2015;
  • Initiate design concepts and proceed with PFS level engineering design study - initiated in first quarter of 2015; and
  • Initiate advanced level engineering design, initiate targeted resource drilling and environmental studies to support an environmental and social impact assessment ("ESIA") submission - second half of 2015.

The Company is encouraged by the Phase 1 test results. Key variables (recovery rates, agglomeration and cyanide consumption of the oxide ore zones) are in line with the Company's initial expectations.

The hard transition oxide ore, (representing approximately 40 percent) is being tested at a top size of 12.5 mm crush with 8 kg/t of cement addition that passed percolation tests representing a lift height to 16 metres. Preliminary results from the column leach tests indicate an average recovery of approximately 75 to 80 percent. The optimal cyanide consumption versus maximum leach will be determined in the PFS and is expected to be in the range of 0.5-0.7 kg/t cyanide consumption after approximately 40 to 70 days of leach time.

Additional testwork is ongoing for the saprolite ore (representing approximately 10 percent) and for several bulk samples representing approximately 11Mt of low grade ROM stockpile.

The Company is targeting production from heap leach commencing in 2017, with the quantities and scale of operation to be defined upon the completion of Phase 2 and completion of drilling of potential low-grade heap leach material on the combined mine licenses. At this point, the Company anticipates that heap leach could account for an incremental 10 to 20 percent of annual production once fully operational.

Gora Development

The high-grade Gora deposit will be operated as a satellite deposit to the Sabodala mine, requiring limited local infrastructure and development. Ore will be hauled to the Sabodala processing plant by a dedicated fleet of trucks and processed on a priority basis, displacing lower grade feed as required.

The environmental approval for the Gora project, the final phase of the permitting process, has now received validation by both the technical and public enquiry committees charged with its review. The final step in the process is a public hearing to inform local stakeholders of this pre-validated project. The public hearing is currently scheduled for early February. The Company expects to receive the environmental certificate for the Gora project from the Ministry of Environment in mid-February.

Planning and engineering for the access road are ongoing with initial centreline construction expected to commence in early February. Due to excess equipment available from the lower material movement rates, mine operations will initiate construction with a complement of contractors required to complete the road during the second quarter of 2015. Infrastructure to support mine operations, a small water retention structure and pit preparations are expected to commence during the second quarter 2015 with ore to be stockpiled and delivered to the plant by a contractor in the fourth quarter 2015.

Sabodala and OJVG Mine License Reserve Development

The Sabodala combined mine license covers 246km2. In addition to the mine related infrastructure, it contains the Sabodala, Masato, Niakafiri, Niakafiri West, Soukhoto and Dinkokhono deposits on the former Sabodala 33km2 license area, and the Masato, Golouma and Kerekounda deposits on the OJVG mine license area of 213km2. As we have integrated the OJVG geological database into a combined LOM plan, a number of areas have been revealed as potential sources for reserve additions within the mining lease. These targets have been selected based on potential for discovery and inclusion into open pit reserves.

In total, the combined mine license includes 5.7 million ounces of Measured and Indicated Resources and a further 2.35 million ounces of Inferred Resources.2 A significant multiyear reserve development program is under way to add high-grade mill feed and low-grade heap leach feed to the open pit reserve base, which should allow the Company to further increase production toward its phase 1 organic growth target of 250,000 to 350,000 ounces of annual production. In addition, exploration programs are underway on the combined mine license to make new discoveries that may further enhance both the phase 1 and phase 2 organic growth targets.

2 Analysis to determine underground potential for a portion of the reported resources is planned to be completed by the Company this year.

Niakafiri

In 2013, further surface mapping was completed at Niakafiri in conjunction with the re-logging of several DDH, which were incorporated into the geological model for the Niakafiri deposit. Further exploration work, including additional drilling, is targeted for 2015 following discussions with the Sabodala village.

In addition to the potential expansion of hard ore reserves at Niakafiri, the Company is exploring for potential softer ore that may be conducive to heap leach, with emphasis on the mineralized trend to the north and south of the current reserves at Niakafiri.

Masato

An advanced exploration program began at Masato during the second quarter of 2014 and continued into the third quarter 2014 to inter alia test the continuity of portions of the high-grade sub-domains, which were removed from the Masato reserve base after the acquisition of OJVG in 2014.

The overall program consisted of drilling and trenching to confirm interpretation of domains and high-grade sub-domains, infill gaps and upgrading Inferred Resources, determining optimal RC grade control drill spacing and obtaining additional geotechnical data for pit slope analysis. Overall, the program confirms the Company's interpretation of the resource model and provides additional confidence in the nature of the high-grade mineralization within the deposit.

Surface trenching and RC drilling revealed additional ore zones not modelled in the supergene enriched laterite ore near surface during mining of the uppermost benches in the third quarter 2014. RC drilling in advance of mining in 10 metre spacing of the ore zones will be ongoing as part of a comprehensive grade control program for mine operations.

All drill hole assay data for the 2014 Masato exploration program, including drill hole locations and a location map, are available on the Company's website at www.terangagold.com under "Exploration".

Golouma NW Extension

Infill drilling was undertaken for potential conversion of inferred resources outside of the existing pit limits to the northwest of the current Golouma orebody to evaluate the mineralization potential of structural features along strike to the existing reserves. By the end of the fourth quarter of 2014, 26 diamond drill holes, totaling 3,100 metres were completed. Encouraging gold values were reported from several holes. The presence of two gold mineralized shear structures (north south shear and northwest shear) within metavolcanic units located to the north and northwest of the existing reserves has been confirmed, with continued mineralization to the north where these features intersect. An updated resource model and subsequent reserves evaluation will be completed based on the drilling completed in the fourth quarter of 2014. Additional drilling is ongoing to test mineralization potential to the north and infill drilling along the northwest shear.

Masato Northeast

Detailed mapping and trenching (4,300 metres) were completed on the Masato Northeast prospect which is situated 1km northeast along strike of the Masato deposit. The prospect overlies a sequence of mafic volcanics within which there is a 2.5 km long structural splay off the main Masato structural trend. Trenching has defined a north-northeast trending shear zone with distinctive quartz-carbonate-sericite alteration features. Assay results received to date indicate elevated gold values are developed along the length of the shear structure. A 10-hole DDH drilling program is ongoing to test the gold mineralized zones at depth in sections of the shear. Additional drilling in addition to this program is expected to continue through the first half of 2015, with potential for a yearlong campaign pending initial results.

Kerekounda

An 11-hole, 1,200 metres DDH drilling program was completed in the fourth quarter 2014 with the aim of determining the extent of mineralization further along strike of the existing reserves to the south of the existing reserves pit. Assay results are awaited and pending results, an updated resource model with subsequent reserves evaluation will be completed in the first half of 2015.

Niakafiri SE and Maki Medina

Both RC and DDH drilling is planned for potential conversion of inferred resources, geotechnical holes for pit wall determination and exploratory holes to the north toward the Niakafiri deposit to evaluate extension along strike. Additional drilling to determine near surface oxide resources will also be evaluated. Due to the positive results for the heap leach tests, work in these areas is expected to commence in the first quarter 2015, but may be deferred later into 2015 to coincide with drilling near Sabodala village on the Niakafiri reserves.

Regional Exploration

The Company currently has 9 exploration permits encompassing approximately 1,055km² of land surrounding the Sabodala and OJVG mine licenses (246km2 exploitation permits). Over the past four years, with the initiation of a regional exploration program on this significant land package, a tremendous amount of exploration data has been systematically collected and interpreted to implement methodical and cost-effective follow-up programs. Targets are in various stages of advancement and are prioritized for follow-up work and drilling. Early geophysical and geochemical analysis of these areas has led to the demarcation of at least 50 anomalies, targets and prospects and the Company expects that several of these areas will ultimately be developed into mineable deposits. The Company has identified some key targets that, though early stage, display significant potential. However, due to the sheer size of the land position, the process of advancing an anomaly through to a mineable deposit takes time using a disciplined screening process to maximize the potential for success.

Ninienko

An extensive mapping and trenching program covering 1,500 metres which was conducted during the second and third quarters of 2014 at the Ninienko prospect, is ongoing. This work outlined a 500 metre-plus wide zone with gold mineralization occurring in flat-lying, near surface (0-2 metres) quartz vein and felsic breccia units developed over a strike length of 1,500 metres.

An isopach plan of the mineralized quartz vein and felsic breccia systems is in progress, and will be used to develop a plan for DDH and a possible RC drill program. Due to the limitation of surface trenching and mapping used to develop the flat lying mineralized zone at surface, additional trenching and mapping will also be undertaken in prospective zones near to the area to expand on the currently defined zone and to further develop an understanding of the source of mineralization zones for potential drill targets at depth.

A detailed geochemical soil sampling program commenced in the fourth quarter of 2014 to follow up and test co-incident gold-molybdenum-copper and potassium anomalies identified by an earlier regional termite mound sampling program. The sampling program has led to the discovery of two separate shear zones both following the north-northeast regional scale structural trend, which is host to other gold deposits in the region. The shear zones are characterized by quartz-carbonate alteration zones 10-20m in width with quartz veining and gossan development. These zones and other gold soil anomalies will be tested by a trenching program in 2015. A DDH program will follow later in 2015.

Soreto

Following up on a small 5-hole DDH program at the Soreto prospect in 2013, a 15-hole DDH program for 2014 was primarily completed during the fourth quarter of 2014, with the remainder during early 2015. These were located along two fence lines placed 150 metres on either side of the 2013 fence that intersected reasonable gold values. At least three continuous shear zones were intercepted along strike. These featured west dipping (25 - 35º) altered shear zones with felsic dyke, sheared and brecciated silicified metasediments containing quartz-carbonate veins with disseminated pyrite and visible gold in places. The shear zones coincide with the major north-northeast regional shear structure with an associated 6km long geochemical soil anomaly and when projected to surface, align with the surface workings from artisanal mining.

Further infill drilling (13 DDHs) was undertaken in the fourth quarter 2014 to further extend these mineralized shear zones along strike and infill drill to 50 metre spacing between the fence lines. The Company is awaiting assay results from the infill drilling program.

Gora Northeast Extension and Zone ABC

Trenching and mapping programs are being planned for the first quarter of 2015 to investigate potential gold mineralized extensions of the Gora gold deposit into the Zone ABC prospect, which has significant gold soil anomalies co-incident with regional structural trends.

KD Prospect

Mapping and outcrop sampling programs were undertaken on KD during the fourth quarter 2014. The programs are investigating and following gold in soil anomalies identified in regional termite mound sampling surveys. The anomalies coincide with northeast and northwest trending regional scale structures. Rock chip sampling of outcrop within a northwest trending shear zone in metasediments yielded a number of elevated gold values including 40 gpt and 83 gpt gold. Trenching programs to follow up on these anomalies have been planned for the first quarter 2015.

KC Prospect

Approximately 3,200 metres of trenching was completed across a mineralized structural trend with intense quartz veining and brecciated felsic intrusives developed over a strike length of approximately 1,800 metres. Sampling of the trenches yielded elevated gold values in the overburden of up to 18.45 gpt over 0.4 metres and 6.27 gpt over 0.6 metres. The quartz vein and breccia zone yielded elevated gold values in the range of 1.95 gpt over 0.3 metres true width and 1.41 gpt over 0.2 metres true width with limited continuity along strike. Due to limited mineralization in the in situ rock, it was determined that follow up drilling was not likely to produce results and resources were best allocated to higher prospective targets.

A follow-up soil sampling and trenching program is planned in first quarter 2015 to evaluate a large soil anomaly (peak values of 2.64 gpt and 2.38 gpt) located 800 metres to the west of workings which may account for the elevated gold anomalies identified in overburden in the trenches. A limited trenching program to test a coincident IP resistivity and chargeability high in the eastern portion of the prospect will also be undertaken in the first quarter of 2015.

The Company expects to issue an exploration update in February 2015 reviewing the most recent results of its exploration activities.

Renewal of Heremakono Exploration Permit

The Heremakono exploration permit is host to a series of exploration targets, most notably Ninienko, Soreto, and Soreto North. This permit was originally awarded in October of 2005 and, absent an extraordinary request for an extension, would have expired in October 2014. A lack of safe and secure access to certain exploration permits was an issue raised with the Government of Senegal and the State agreed to grant extraordinary extensions upon the expiry of their customary 9 year terms to address the Company's concerns. During the fourth quarter 2014, the renewal of this significant exploration permit was granted, extending its term to October 25, 2016.

Non-IFRS Financial Performance Measures

The Company has included non-IFRS measures in this Report, including "total cash cost per ounce of gold sold" and "all-in sustaining costs per ounce". The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.

The Company reports total cash costs on a sales basis. Total cash costs per gold ounce include production costs such as mining, processing, refining and site administration, net of silver sales, divided by gold ounces sold to arrive at total cash costs per gold ounce sold. Production costs are exclusive of depreciation and depletion. Other companies may calculate this measure differently.

All in sustaining costs per ounce sold include total cash costs per ounce, administration expenses (excluding corporate depreciation expense and social community costs not related to current operations), capitalized deferred stripping, capitalized reserve development and mine site sustaining capital expenditures (including project development costs) as defined by the World Gold Council. Other companies may calculate this measure differently.

Competent Persons Statement

The technical information contained in this document relating to the mineral reserve estimates for Sabodala, the ore stockpiles, Masato, Golouma and Kerekounda is based on, and fairly represents, information compiled by Mr. William Paul Chawrun , P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Chawrun is a full-time employee of Teranga and is a "qualified person" as defined in NI 43-101 and a "competent person" as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in this Report.

The technical information contained in this document relating to the mineral reserve estimates for Gora and Niakafiri is based on, and fairly represents, information and supporting documentation prepared by Julia Martin , P.Eng. who is a member of the Professional Engineers of Ontario and a Member of AusIMM (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 Report.

The technical information contained in this Report relating to mineral resource estimates for Niakafiri, Gora, Niakafiri West, Soukhoto, and Diadiako 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, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. 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 consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report.

The technical information contained in this Report relating to mineral resource estimates for Sabodala, Masato, Golouma, Kerekounda, and Somigol Other are 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, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. 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 2012 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 consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report.

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 National Instrument 43-101. Mr. Mann 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 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Mann is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. The technical information contained in this news release relating 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 RC 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 news release of the matters based on his compiled information in the form and context in which it appears herein.

Teranga's disclosure of mineral reserve and mineral resource information is governed by NI 43-101 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"). CIM definitions of the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", are substantially similar to the JORC Code corresponding definitions of the terms "ore reserve", "proved ore reserve", "probable ore reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", respectively. Estimates of mineral resources and mineral reserves prepared in accordance with the JORC Code would not be materially different if prepared in accordance with the CIM definitions applicable under NI 43-101. There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.

CORPORATE DIRECTORY

Directors
Alan Hill, Chairman
Richard Young, President and CEO
Jendayi Frazer, Non-Executive Director
Edward Goldenberg, Non-Executive Director
Christopher Lattanzi, Non-Executive Director
Alan Thomas, Non-Executive Director
Frank Wheatley, Non-Executive Director
Senior Management
Richard Young, President and CEO
Mark English, Vice President, Sabodala Operations
Paul Chawrun, Vice President, Technical Services
Navin Dyal, Vice President and CFO
David Savarie, Vice President, General Counsel & Corporate Secretary
Aziz Sy, General Manager, Sabodala Gold Operations & Vice President, Development Senegal
Registered Office
121 King Street West, Suite 2600
Toronto, Ontario, Canada M5H 3T9
T: +1 416-594-0000 F: +1 416-594-0088
E: investor@terangagold.com
W: www.terangagold.com
Senegal Office
2K Plaza
Suite B4, 1er Etage
sis Route du Méridien Président
Dakar Almadies
T: +221 338 693 181 F: +221 338 603 683
Auditor
Ernst & Young LLP
Share Registries
Canada: Computershare Trust Company of Canada
T: +1 800 564 6253
Australia: Computershare Investor Services Pty Ltd
T: 1 300 850 505
Stock Exchange Listings
Toronto Stock Exchange, TSX symbol: TGZ
Australian Securities Exchange, ASX symbol: TGZ
Issued Capital
As of December 31, 2014
Issued shares 352,801,091
Stock options 21,470,489
Stock Options - Exercise Profile
Exercise Price (C$) Options
$3.00 13,723,889
$1.09 - $2.171 7,746,600
1 Options expire February 6, 2015.

Forward Looking Statements

This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Teranga, or developments in Teranga's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, all disclosure regarding possible events, conditions or results of operations, future economic conditions and courses of action, the proposed plans with respect to mine plan, anticipated fourth quarter results and consolidation of the Sabodala Gold Project and OJVG Golouma Gold Project, mineral reserve and mineral resource estimates, anticipated life of mine operating and financial results, the approval of the Gora ESIA and permitting and the completion of construction related thereto. Such 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 and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. 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 Annual Information Form dated March 31, 2014 (as revised April 24, 2014), and in other company filings with securities and regulatory authorities which are available at www.sedar.com. 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.

About TERANGA

Teranga is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

Teranga's mission is to create value for all of its stakeholders through responsible mining. Its vision is to explore, discover and develop gold mines in West Africa, in accordance with the highest international standards, and to be a catalyst for sustainable economic, environmental and community development. All of its actions from exploration, through development, operations and closure will be based on the best available techniques.

 
Contact Information:
Teranga Gold Corporation
Richard Young
President & CEO
+1 416-594-0000
ryoung@terangagold.com
www.terangagold.com