Community

Community

Sharing the long-term benefits of responsible mining with all of our stakeholders

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

$1 Million
Sustainable Investments in 2017
(as determined by the communities)

$136 Million
Local Procurement in 2017
(Senegal)

Sharing the Benefits of Responsible Mining

woman

Sabodala (2017)

  • 10,000 Seedlings produced for rehabilitation
  • 500 Bags of seeds collected for forestry rehabilitation
  • 1,282 Trees planted for Gora rehabilitation
  • $1M Sustainable investments, as determined by the communities
  • +2000 Farmers directly and indirectly supported
  • $136M Local procurement
  • 94% National employees out of 1,158 site employees at Sabodala
  • 366 Progressions and promotions of national employees
  • +13,000 People benefiting from malaria spray program

Our Approach to Community Relations

Teranga is committed to making a positive difference in the communities in which we live and work. Our aim is to share the benefits of our mining operations, leaving a lasting, positive legacy that will continue to be enjoyed for generations to come. Through our community development work, Teranga’s host communities benefit from new job opportunities, education and training opportunities, expanded health care services, more secure sources of potable water, improved roads and infrastructure, and much more.

Teranga Priorities

In 2010, when Teranga first acquired Sabodala, our chairman and CEO had a shared vision of mining responsibly, which included mitigating environmental and community impacts and sharing the benefits of responsible mining o a standard that would establish the benchmark in Senegal. In 2014, we launched the Teranga Regional Development Strategy (TDS) in order to develop a sustainable framework for our CSR activities by way of a multi-stakeholder consultative approach. Following 18 months of consultation with relevant stakeholders, the development priorities for the region were defined, along with 78 action items to guide SGO’s support of socio-economic development in Kédougou. The list is broadly categorized as follows: education, health, water and sanitation, governance and planning, income generation, and sport and culture. As we scale our business beyond the borders of Senegal, Teranga is committed to expanding the mandate of the TDS to other regions in West Africa, including Burkina Faso and Côte d’Ivoire.

The TDS sets out our long-term vision for our operations, and how we will orient our operations to maximize the benefits for the local communities. It describes the role that we expect to play in regional development, and outlines the strategic actions required to achieve the communities' development goals. Specifically, the TDS is focused on three priority areas, which are in alignment with the 2030 United Nations Sustainable Development Goals:

Agriculture
& food security
Priority Icon 01
Youth education
& training
Priority Icon 02
Sustainable economic growth
Priority Icon 03

Agriculture and Food Securitye
Achieving food security is a significant and growing challenge in the areas in which we operate. A community’s health and education and its ability to learn, work and thrive are seriously compromised if they do not have food security. Agriculture is also a significant generator of employment and can drive economic growth in the areas in which we operate. Teranga is helping to support the agricultural economy and build food security through sustainable agricultural development, capacity building, and contribution to publicly accessible research and knowledge related to agricultural practices. Activities included to-date have included the support of 12 market gardens and roughly 2000 farmers, and agricultural intensification activities such as fertilizers, irrigated plots, chicken farming, water access points for cattle, and grazing.

Youth Education and Training
As a long term development partner in the region, Teranga sees its investments in the training and education of youth as one of its most important investments. Activities include the provision of schools and other educational infrastructure, training and development, and health education directed at children and mothers. In 2017, the Sabodala Social Fund resulted in institutional support for regional youth organizations, construction and rehabilitation of regional youth centres, and development of a youth soccer field and other sports provisions.

Sustainable Economic Growth
Teranga’s development efforts focus on stimulating sustainable long-term economic growth at the national, regional and local levels in the countries in which we operate. This, in turn, can generate the financial resources governments need to invest in their countries and communities. Teranga’s actions in the area of sustainable economic growth are intended to deliver the essential elements needed to achieve high rates of sustainable economic growth. For instance, Teranga has initiated a program of revitalization of Senegal’s cotton industry through our White Gold for Life initiative, with more than $150K spent on training, cotton production incentives and farming equipment, resulting in job creation of more than 500 farmers to date.

Our Environmental Performance at Sabodala

Pillar Theme Indicator Units 2015 2016 2017
Community Procurement Foreign suppliers US$000s 32,978 30,424 27,944
Local suppliers (registered in Senegal) total: US$000s 126,658 138,976 136,294
- including subsidiaries of foreign companies US$000s 93,449 99,828 97,619
- including suppliers with more than 50% capital from Senegal US$000s 33,209 39,148 38,675
Local procurement by sector Utilities US$000s 41,846 36,357 39,671
Mining services and mining equipment US$000s 49,715 54,809 53,978
General trade US$000s 9,011 9,930 9,160
Our Community Relations Performance at Sabodala US$000s 7,525 12,462 7,482
Staffing US$000s 5,542 6,722 8,120
Other B2B services US$000s 3,254 4,097 5,002
Industrial equipment, spare parts and maintenance US$000s 6,973 9,704 8,240
Vehicles: rental, spare parts and maintenance US$000s 701 1,030 526
Construction US$000s 1,876 3,590 2,985
Various US$000s 216 274 319
Social Fund Total Social Fund (of which): US$ 1,218,274 1,467,047 984,455
- Water and sanitation US$ 119,877 111,104 75,502
- Income generation US$ 458,290 152,652 73,708
- Health US$ 134,071 105,627 116,270
- Education US$ 229,700 270,925 302,206
- Governance and local planning US$ 231,174 614,555 257,943
- Sport and culture US$ 46,162 75,464 53,417
Gora Fund Gora Fund contributions US$ - 123,776 71,999
Donations Donations US$ 46,843 12,944 33,411

*Balance of $1.2M and $200K of Sabodala Social Fund and Gora Fund, respectively, are applied to subsequent years’ community development projects.