Afema

Afema Joint Venture

High profile target located at the union of two
well mineralized greenstone belts trending from Ghana,
with five major shear structures crossing the regional land package.

Afema Exploration Update

Video Update

Quick Facts: Afema JV

Location
Southeast Côte d’Ivoire at the intersection of two gold-enriched Ghanaian greenstone belts

Land Area
Covers more than 1,400 km² including the
Afema mine license, which covers 227 km2 and three exploration permits (Ayame, Aboisso and Mafere)

Joint Venture Partner
Sodim Limited

Joint Venture Agreement Terms

51% joint venture interest through the completion of a three-year $11M exploration and community development work program
Earning 70% interest through delivery of positive study
Sole fund and manage exploration programs and feasibility studies

Afema Mine License

On April 25, 2019, the Company completed and submitted an economic evaluation reviewing the previously defined historical oxide resource, historical metallurgical test work, processing alternatives and baseline environmental work. Further exploration and engineering optimization test work is required in order to confirm the historical mineral resource as a current mineral resource in accordance with NI 43-101.

As a result of the conclusions reached in the economic evaluation, the Company is executing upon a work plan designed to:

Continue geological and structural evaluations to expand oxide mineralization along the Afema shear zone and exploration at existing target areas and newly identified targets to delineate a current NI 43-101 resource;
Continue metallurgical testing currently underway at KCA Laboratories in order to optimize heap leach design requirements; and
Investigate alternative material treatment processes.

Based on the early stage results suggesting a large mineralized system worth of a significant exploration and drilling evaluation, Afema is becoming an increasing focus for the Company.

Highlights

Preliminary field exploration programs are ongoing at a series of historic and new targets throughout the Afema mine license.
In Q3 2018, geological and structural evaluations continued focusing on oxide mineralization expansion opportunities along the Afema Shear Zone as well as the separate and distinct Niamienlessa and Woulo Woulo structural trends.
Starting in Q4 2018 through Q1 2019, initial drilling commenced to evaluate numerous quality oxide-bearing structural targets. In addition, the mine license was also covered by regional airborne geophysical and stream sediment bulk leach extractable gold (BLEG) programs.
In Q2 and Q3 2019, geological and structural evaluations continued, as well as detailed evaluation of the magnetic and radiometric data obtained from the Airborne Survey. Additionally, a comprehensive review of all geochemical data received from BLEG survey results was undertaken. Infill and step-out soil sampling program was completed over a comprehensive set of sample grids across the mine license.
In September 2020, initial drill results from an expanded multi-drill exploration campaign, which began, in Q1 2020, demonstrated extensive gold mineralization starting at surface. Numerous high-grade gold intercepts over substantive widths were returned from an New Discovery at the Woulo Woulo prospect. Drilling highlights include:

80.5 m @ 1.64 g/t gold, including 21 m @ 2.79 g/t gold and 13 m @ 2.75 g/t gold from 48.5 m downhole depth (“DHD”)
41 m @ 1.97 g/t gold, including 11 m @ 3.96 g/t gold from 119 m DHD
35 m @ 1.64 g/t gold, including 15 m @ 2.23 g/t gold from 18 m DHD
20 m @ 1.59 g/t gold, including 7 m @ 2.52 g/t gold from 0 m
83 m @ 1.10 g/t gold, including 10 m @ 1.77 g/t gold and 15 m @ 1.70 g/t gold from 10 m DHD

Next Steps

Continue the 2020 $10 million multi-drill exploration campaign at the Woulo Woulo prospect, the Niamienlessa structural trend and the Afema shear.
Expand trenching and drilling to new areas of interest within both the Afema mining license as well as outward onto the three regional exploration permits.
Conduct early-stage metallurgical test work as well as environmental and social assessments.
Update the Afema shear oxide-resource estimate.
Continue the drilling evaluation and assessment/interpretation of the assay results from the ongoing drilling campaign at Woulo Woulo, towards completing an initial resource estimation for all of, the Woulo Woulo prospect, multiple Afema Shear prospects and the Niamienlessa structural trend.

Based on the early stage results, Afema Mining Lease, especially the Woulo Woulo prospect area, is becoming an increasing focus for the Company.

Afema Regional Exploration

In addition to the mine license, the Afema land package comprises approximately 1,200 km2 of land within three exploration permits located along trend and within the Sefwi-Bibiani and Asankrangwa gold belts. The exploration permits, Ayame, Aboisso and Mafere, include extensive strike lengths of these well-defined mineralized structures which are host to a number of high-profile producing mines in adjacent Ghana.

Regional Exploration Highlights

In Q3 2018, data accumulation, compilation and re-interpretation of historical information provided positive indications that would guide future exploration efforts.
In Q4 2018, a property-wide stream sediment sampling (BLEG) analytical program and a property-wide airborne geophysical survey (magnetic and radiometric systems) were initiated. Both of these large surveys were completed in Q1 2019.
In Q2 and Q3 2019, detailed interpretations and evaluations of the recently flown magnetic and radiometric data were undertaken. A comprehensive review of all geochemical data received from the stream sediment BLEG survey results was completed with an aim to identify favorable target areas for future evaluation.
In Q2 2020, filed evaluation programs comprising grid-based soil sampling, prospecting and mapping were initiated at a number of priority rated prospect areas.
In Q3 2020, and continuing, an excavator trenching program was initiated at the southern extension of the Niamienlessa Structural Trend where it crosses onto the Exploration Permit contiguous to the Afema Mining Lease.

Afema - airborne geophysical survey

Afema Mine License Historical Resource Estimate

The Afema mine license has a near-surface oxide and sulphide historical gold resource of 2 million ounces^* 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 project prior to Teranga’s entry into the joint venture. The most recent study was issued in June 2016 by RockRidge Consulting Services Geologists 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

*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.