Senegal

Senegal

An underexplored jurisdiction

Historic Exploration Results

Disclaimer

Please note that you are about to enter a website directly or indirectly maintained by a third party (the "External Site") and that you do so at your own risk.

Teranga Gold Corporation (“Teranga”) has no control over the External Site, any data or other content contained therein or any additional linked websites. The link to the External Site is provided for convenience purposes only.

By clicking “Accept” you acknowledge and agree that neither Teranga nor the third-party provider of the External Site (the “Provider”) is responsible, or accepts or assumes any responsibility or liability whatsoever for, the content, the data or the technical operation of the External Site. Further, by entering the External Site, you also acknowledge and agree that you completely and irrevocably waive any and all rights and claims against Teranga and the Provider and further acknowledge and agree that in no event shall Teranga or the Provider, its officers, employees, directors and agents be liable for any (i) indirect, consequential, incidental, special, compensatory or punitive damages, (ii) damages for loss of income, loss of business profits, business interruption, loss of data or business information, loss of or damage to property, (iii) claims of third parties, or (iv) other pecuniary loss, arising out of or related to this disclaimer or the External Site.

By entering the External Site, you further acknowledge and agree that the disclaimer of warranties and limitations of liability set out in this disclaimer shall apply regardless of the causes, circumstances or form of action giving rise to the loss, damage, claim or liability. The waiver and release specifically includes, without limitation, any and all rights and claims pertaining to the processing of personal data, including, but not limited to, any rights under any applicable data protection statute(s).

If in any jurisdiction, any part of this disclaimer is held to be unenforceable by a court of competent jurisdiction, such part of this disclaimer shall be restricted or eliminated to the minimum extent and the remaining disclaimer shall otherwise remain in full force and effect.

Non-IFRS Financial Measures

This Interactive Data Centre includes measures that do have a standard meaning under International Financial Reporting Standards (“IFRS”) to serve as supplementary information that management believes may be useful to investors to explain Teranga’s financial results. These measures are intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Such non-IFRS measures include, “total cash costs”, “total cash costs per ounce sold”, “all-in sustaining costs” (“AISC”), “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs)”, “AISC per ounce”, “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs) per ounce”, “average realized gold price”, “earnings before interest, taxes, depreciation and amortization” (“EBITDA”), “free cash flow”, “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share”. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently.

Beginning in the second quarter of 2013, we adopted an “all-in sustaining costs” measure consistent with the guidance issued by the World Gold Council (“WGC”) on June 27, 2013. Teranga believes that the use of all-in sustaining costs is helpful to analysts, investors and other stakeholders of Teranga in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value. This measure is helpful to governments and local communities in understanding the economics of gold mining. The “all-in sustaining costs” is an extension of existing “cash cost” metrics and incorporate costs related to sustaining production.

“Total cash costs per ounce sold” is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. Teranga reports total cash costs on a sales basis. We believe that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate Teranga’s performance and ability to generate cash flow. Accordingly, it is 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. The measure, along with sales, is considered to be a key indicator of a Company’s ability to generate operating profits and cash flow from its mining operations.

Total cash costs figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measure of other companies.

The WGC definition of all-in sustaining costs seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. All-in sustaining costs exclude income tax payments, interest costs, costs related to business acquisitions and items needed to normalize profits. Consequently, this measure is not representative of all of Teranga’s cash expenditures. In addition, the calculation of all-in sustaining costs and all in costs does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of Teranga’s overall profitability.

Teranga also expands upon the WGC definition of all-in sustaining costs by presenting an additional measure of “all-in sustaining costs (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs)”. This measure excludes cash and non-cash inventory movements and amortized advanced royalty costs which management does not believe to be true cash costs and are not fully indicative of performance for the period.

“Total cash costs per ounce”, “all-in sustaining costs per ounce” and “all-in sustaining costs (excluding cash / (noncash) inventory movements and amortized advanced royalty costs)” are intended to provide additional information only and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently. The following tables reconcile these non-IFRS measures to the most directly comparable IFRS measure.

“Average realized price” is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized price is calculated on revenue and ounces sold to all customers, except Franco-Nevada, as gold ounces sold to Franco-Nevada is recognized in revenue at 20 percent of the prevailing gold spot price on the date of delivery and 80 percent at $1,250 per ounce. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently.

“Earnings before interest, taxes, depreciation and amortization” (“EBITDA”) is a non-IFRS financial measure, which excludes income tax, finance costs (before accretion expense), interest income and depreciation and amortization from net profits. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working capital needs, service debt obligations, and fund capital expenditures.

“Free cash flow” is a non-IFRS financial measure. Teranga calculates free cash flow as net cash flow provided by operating activities less sustaining capital expenditures. Teranga believes this to be a useful indicator of our ability generate cash for growth initiatives. Other companies may calculate this measure differently.

Starting in 2018, Teranga adopted “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share” as new non-IFRS financial measures. These non-IFRS financial measures are used by management and investors to measure the underlying operating performance of Teranga. Presenting these measures from period to period is expected to help management and investors evaluate earnings trends more readily in comparison with results from prior periods.

Teranga calculates “adjusted net profit attributable to shareholders” as net profit attributable to shareholders adjusted to exclude specific items that are significant, but not reflective of the underlying operations of Teranga, including: the impact of unrealized and realized foreign exchange gains and losses, gains and losses on derivative instruments, accretion expense on long-term obligations, impairment provisions and reversals thereof, and other unusual or non-recurring items. During the second quarter of 2018, Teranga also excluded the impact of foreign exchange movements on deferred taxes and other non-cash fair value changes from adjusted net profit attributable to shareholders as management does not believe these factors to be reflective of the underlying performance of Teranga.

“Adjusted basic earnings per share” is calculated using the weighted average number of shares outstanding under the basic method of earnings per share as determined under IFRS.

Accept Decline

Overview

The Sabodala Mine License covers 291 km2 and provides great potential for both near-term reserve and production growth opportunities by increasing millable reserves on existing deposits that are within close proximity to the central processing facility.

An updated mineral resource and reserve summary was released July 2017, where proven and probable reserves increased to 2.7 million ounces of gold representing an increase of more than 400,000 ounces over the previous mineral reserves estimate.

On the mine license, exploration continues to focus on a multi-year drilling program intended to further define near surface resources and reserves at both the highly propspective Niakafiri deposit and Goumbati West deposit over the next several years.

Niakafiri Deposit

The Niakafiri deposit is considered the most prospective target on the mine license, located within 5 km of the Sabodala mill.

A two-phase advanced drilling program commenced on the deposit in Q4 2016, where phase 2 continued throughout the first half of 2017. A total of 173 drill holes (19,538 m) were completed for inclusion in the most current resource estimation for all components of the deposit.

Drill program objectives were to confirm model interpretations, upgrade the resource classifications, fill-in gaps between current pit outlines, and test mineralization extents both along trend and to depth.

Results from the first half of 2017 were reported for the initial 60 of the planned 115 drill holes. These results represented some of the widest mineralised intervals encountered within Niakafiri to date and confirm that there is considerable opportunity to extend the mineralisation both along strike and to depth.

An updated mineral resource estimate incorporating these results was released in July 2017 where majority of added reserves came from Niakafiri. As at June 30, 2017, Niakafiri has measured and indicated resources of approximately 850,000 ounces, and 205,000 ounces of inferred, inclusive of 590,000 ounces in proven and probable reserves.

Due to encouraging results, Teranga re-sequenced the Sabodala mine plan to bring forward the development of the Niakafiri open pit and defer underground production at Sabodala until 2023.

Niakafiri remains a priority area. Teranga plans to continue drilling the deposit following completion of the Sabodala Village resettlement which is currently ongoing. The resource definition drill program is expected to reinitiate in the second half of 2019. With a focus on extending the mineralisation along trend and to-depth.

Niakafiri Deposit

Goumbati West Deposit

The Goumbati West deposit is located southwest of the Maki Medina and Kobokoto south gold deposits and is an extension of the Niakafiri West Shear. The gold mineralization at Goumbati West occurs within a 1.2 km long north-northeast trending shear structure. Goumbati West is a north-northeast trending gold in quartz vein system comprised of several zones (A, B, C and D) occurring in a sequence of epiclastics and basalt. Drilling in the northeast extent of Goumbati West suggests a direct linkage of the Goumbati West deposit with the Kobokoto South deposit.

A resource estimation update for a combined Goumbati West-Kobokoto deposit was completed in mid 2017 which included these additional drill hole results. The update produced an estimated indicated resource figure of 2,678,000 t grading 1.35 g/t Au representing 116,000 oz and an inferred resource of 489,000 t grading 0.81 g/t Au representing 13,000 oz.

Kobokoto South Deposit

The Kobokoto deposit is located to the southwest of Maki Medina, along the same steeply west dipping north-northeast trending structural zone that hosts Masato. At Kobokoto, the host mafic metavolcanics and tuffaceous volcanoclastic sediments are strongly sheared and carbonate dominated alteration is widespread. The main mineralized zone extends to a depth of 100 m and 800 m along strike, and consists of a shallow west dipping, variably sheared zone of quartz-carbonate alteration and quartz-carbonate-tourmaline veining.

Geology & Mineralization

The Sabodala mine license and the surrounding exploration permits are located within the highly prospective Kedougou-Kenieba Inlier, which forms part of the Paleoproterozoic age Birimian Terrane of the West African Craton. The permits straddle the volcanic-dominated Mako Supergroup in the west and the sediment-dominated Diale-Dalema Supergroup to the east.

The Mako and Diale-Dalema supracrustal sequences are intruded by a series of variably deformed granitoid intrusions. Lithologies in the region are affected mainly by lower green schist grade metamorphism. Northeast trending intermediate to felsic and later, post-tectonic mafic dykes are present throughout the region, the latter forming prominent linear magnetic features. Felsic and intermediate composition dykes are often spatially associated with shear zones hosting gold mineralization, and locally are host to significant gold mineralization themselves.

Principal structures on the Sabodala property form a steeply west-northwest dipping, north-northeast trending shear zone network previously referred to as the “Sabodala Shear Zone”. This includes the Niakafiri and Masato shear zones, which are high strain zones developed in altered mafic and ultramafic units. There are also shear zones that are linked to them by north to northwest trending splays. These include the “Ayoub’s Thrust”, which is focused along the ultramafic sill that lies on the west side (hanging wall) of the Sabodala deposit.

Mineralization is generally associated with highly strained steeply dipping north-northeast or east-west trending shear zones, quartz–carbonate-sericite-tourmaline-pyrite shear veins, highly altered quartz-carbonate-albite-pyrite zones, and often spatially associated with felsic and mafic dykes.