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Exploration in Cote d’Ivoire

Mining-friendly Jurisdiction in French West Africa with Modern Mining Code

Mining friendly Côte d’Ivoire continues to be considered to be a prolific untapped frontier for gold, although there have been many discoveries to date. Teranga Gold first entered Cote d’Ivoire in 2016, with a joint venture agreement with its cornerstone shareholder, Tablo Corporation, to acquire a large prospective land package of 1,380 km2 consisting of four greenfield exploration permits in Côte d'Ivoire: Guitry, Mahepleu, Dianra and Tiassale. Later, the joint venture was expanded to total more than 1,800 km2 with the addition of the Sangaredougou prospect.

In December 2017, Teranga entered into a memorandum of understanding (MOU) with a private investment company to establish a second joint venture, for the exploration and development of the Afema land package in southeast Côte d’IvoireCovering more than 1,400 km2, the Afema land package consists of the Afema mining license and three exploration permits – Ayame, Mafere and Aboisso. The addition of the Afema joint venture assets to our growth pipeline is an important step towards delivering organically on our vision of becoming a multi-asset, mid-tier West African gold producer. Under the terms of the joint venture, Teranga retains its current 51% joint venture interest through the completion of a three-year $11M exploration and community development work program, earning into a 70% interest on the Afema mining lease through the delivery of a positive study. Teranga will sole fund and manage the exploration programs and feasibility studies.

Afema Mine License

The Afema mine license has a near-surface oxide and sulphide historical resource of 2M oz of gold * within an area hosting several gold mineralized structures on extensions from prolific Ghanaian gold belts.

A number of economic and technical studies have been prepared on the Afema project prior to Teranga’s entry into the Afema joint venture. The most recent study was issued by RockRidge Consulting Services Geologists in June 2016 and includes the following mineral resource estimate for the Afema mine license (using a cut-off grade of 0.5 g/t Au):

Indicated resources of 1.0Moz (combined)

  • Oxide: 2.7Mt at 1.26 g/t Au
  • Transitional: 1.3Mt at 1.39 g/t Au
  • Sulphide: 17.3Mt at 1.55 g/t Au

Inferred resources of 956Koz (combined)

  • Oxide: 3.0Mt at 1.26 g/t Au
  • Transitional: 0.8Mt at 1.11 g/t Au
  • Sulphide: 17.8Mt at 1.40 g/t Au

Teranga’s first priority will be to conduct a detailed review and update of the June 2016 Historical Estimate in order to deliver an optimized project that maximizes the value of the Afema mine license.

*Historic Resource: A number of economic and technical studies have been prepared on the Afema project prior to Teranga’s entry into the Afema JV with Sodim. The most recent study, which included a mineral resource estimate for the Afema mine license, was issued by RockRidge Consulting Services Geologists for and on behalf of TGL and is dated as of June 27, 2016 (the “June 2016 Historical Estimate”). The June 2016 Historical Estimate includes an Indicated oxide resource estimate of 110Koz (comprised of 2.7Mt at an average grade of 1.26 g/t Au) and Inferred oxide resources of 122Koz (comprised of 3.0Mt at an average grade of 1.26 g/t Au). In addition, it includes an Indicated transitional resource estimate of 59Koz (comprised of 1.3Mt at an average grade of 1.39 g/t Au) and an Inferred transitional resource of 28Koz (comprised of 0.8Mt at an average grade of 1.11 g/t Au). Finally, the June 2016 Historical Estimate provides a sulphide resource estimate as follows: 865Koz Indicated ounces (comprised of 17.3Mt at an average grade of 1.55 g/t Au) and 806Koz inferred ounces (comprised of 17.8Mt at an average grade of 1.40 g/t Au). This historical estimate is reported as using a cut-off grade of 0.5 g/t Au.
RockRidge further states that it reviewed the geological and grade continuity to supplement the review of data quality in order to confirm the CIM mineral resource classification categories used. As well, the June 2016 Historical Estimate states the following with respect to the basis of the mineral resource estimate:
  • mineralized volumes were received for oxide, transitional and sulphide modelled volumes;
  • gold grades were determined using ordinary kriging and Inverse distance squared interpolation (depending on data density) into a 3-dimensional block model constrained by mineralization wireframes;
  • the block models comprised sub-celled block dimensions of 5m x 5m x 1m and 5m x 5m x 2m (depending on data sampling interval);
  • mineralized wireframes were truncated to the topographic surface reflecting the mining that had previously occurred on the property;
  • gold values were investigated for outlier values and put though two statistical capping/cutting routines;
  • Datamine Studio 3 was the modelling package; and
  • relationship between geology and preliminary mining and economic factors was taken into account at all times.
Teranga considers the June 2016 Historical Estimate to be a “historical estimate” as defined under NI 43-101 and relevant as the most recent resource estimate on the Afema project. Further drilling, resource modelling and updates to key economic assumptions would be required to upgrade or verify these historical estimates as current mineral resources and accordingly they should be relied upon only as a historical resource estimate. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and Teranga is not treating the historical estimate as current mineral resources or mineral reserves.

Afema Exploration

In addition to the mining license, the Afema land package comprises approximately 1,200 km2 of land along trend and within the Sefwi-Bibiani and Asankrangwa gold belts, extensive strike lengths of known mineralized structures hosting a number of high profile producing mines in Ghana.

The Afema land package in Cote d’Ivoire includes large exploration targets of differing styles across three permitted exploration properties – Ayame, Mafere and Aboisso.

Based on the historical identification of a large gold-in-soil anomaly along gold-arsenic coincident anomalies and initiated positive yet incomplete exploration on many prospects, a comprehensive exploration and community development program will begin in 2018.