Sabodala

Sabodala Gold Operations

The largest producing gold mine in Senegal, West Africa.
Expected to produce over 1 Moz of gold and generate free cash flow of $230M between 2018 and 2022, providing strong cash flow to support Teranga's rapidly advancing organic growth pipeline.

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

2.4 Moz
Proven & Probable
Gold Reserves(1)

4.1 Moz
Measured & Indicated
Gold Resources(1)

11-Year
Mine Life

Quick Facts: Sabodala Gold Mine

Location
Located in southeast Senegal near Mali border 650 km east of Dakar (capital city)

Land Area
291 km2 mine license and
629 km2 exploration land package

Geology
West African Birimian Greenstone Belt

First Gold Pour
2009

Gold Produced Since IPO
1.8 Moz

Number of Employees
2,293 (as at May 2019)

Ownership
90% Teranga / 10% Government of
Senegal free carried interest

Mining License
Expires January 2025 and is renewable for successive 5-year terms

Mining Method
Multiple deposits feeding into central mill; owner-operated conventional truck and shovel open-pit mining

Plant
4.3 Mtpa – 4.5 Mtpa carbon-in-leach

Recovery
89%-92%

Power
36 megawatt low speed heavy fuel generators

Government Royalty
5% (as per 2013 Global Agreement)

Proven 10-Year Track Record

2019

Key Highlight
Updated proven and probable mineral reserves effective December 31, 2018

Gold Reserves
2.4Moz

Gold Resources
4.1Moz

2019 Production Guidance
215,000 - 230,000 oz

2018

Key Highlight
Commenced resettlement of village surrounding Niakafiri deposit

CSR Achievement
Successfully implemented the Resettlement Action Plan for Niakafiri deposit

Gold Reserves
2.7Moz

Gold Resources
4.4Moz

Production(2)
245,230 oz

2017

Key Highlight
Received approvals required to commence drilling at Niakafiri deposit

CSR Achievement
Honoured with several awards including PDAC Environmental & Social Responsibility Award, UN Global Compact Award & Corporate Knights Future 40

Gold Reserves
2.7Moz

Gold Resources
4.4Moz

Production
233,267 oz

2016

Key Highlight
Completed second mill expansion, increasing capacity to 4.3-4.5Mt

CSR Achievement
Started the Gora community investment fund to mitigate the loss of illegal artisanal mining with long-term solutions

Gold Reserves
2.6Moz

Gold Resources
3.7Moz

Production
216,735 oz

2015

Key Highlight
Initiated mill expansion project to add secondary crusher

CSR Achievement
Submitted the first Senegalese Extractive Industries Transparency Initiative report to improve in-country transparency of industry revenues

Gold Reserves
2.6Moz

Gold Resources
4.4Moz

Production
182,282 oz

2014

Key Highlight
Acquired remaining stake in Oromin Joint Venture Group

CSR Achievement
Launched regional development strategy setting out long-term priorities and areas of development

Gold Reserves
2.6Moz

Gold Resources
6.1Moz

Production
211,823 oz

2013

Key Highlight
Acquired 43.5% of Oromin Joint Venture Group

CSR Achievement
Established long-term fiscal and investment agreement with Government of Senegal

Gold Reserves
2.8Moz

Gold Resources
6.2Moz

Production
207,204 oz

2012

Key Highlight
Completed mill expansion

CSR Achievement
Began reporting according to Global Reporting Initiative standards & implemented ISO 14001 compliant environmental management system

Gold Reserves
1.6Moz

Gold Resources
2.9Moz

Production 214,310 oz

2011

Key Highlight

Commenced mill expansion to double milling capacity

CSR Achievement

Launched corporate social responsibility program

Gold Reserves
1.7Moz

Gold Resources
2.1Moz

Production
131,641 oz

2010

Key Highlight
Teranga acquired Sabodala gold mine and completed IPO

CSR Achievement
Established vision to set the benchmark for responsible mining in the Senegal

Gold Reserves
1.46Moz

Gold Resources
2.3Moz

Production
16,267 oz

Mining and Processing

The Sabodala Gold Mine has been in operation since 2009.

Open-pit mining at Sabodala is carried out by owner-operated conventional truck and shovel. Sabodala operates a multi-pit central mill operation that includes an efficient carbon-in-leach (CIL) processing plant using a conventional flowsheet. The major equipment comprises two-stage crushing with a primary jaw and a secondary cone crushing system.

The Sabodala mill was the first industrial gold processing facility to operate in Senegal and, to this day, it remains the largest gold operation in the country. The mill has undergone two expansions – the first one was completed in late 2012 while the second was commissioned in the fall of 2016. Able to process up to 4.5 Mtpa, the plant operates at nearly double its initial capacity when it commenced operation in 2009.

For further information on Sabodala's mining and mineral processing activities, please refer the Sabodala Technical Report.

5-Year Life of Mine Profile(3)

2018 to 2022

Average Annual
Gold Production(2)

213koz

Average Annual
All-in Sustaining Costs(5)

$885/oz

Total
Free Cash Flow(4)(5)

$230M

Life of Mine Profile(3)

2018 to 2030

Average Annual
Gold Production(2)

176koz

Average Annual
All-in Sustaining Costs(5)

$893/oz

Total
Free Cash Flow(4)(5)

$556M

Annual Gold Production (oz Au)

Proven and Probable Reserves(1) (Moz)

Graph includes years for which there was a reserve update.

(1) Sabodala’s Mineral Reserve and Mineral Resource estimates as at December 31, 2018. For more information regarding Sabodala’s Mineral Reserves and Resources and related notes, please refer to the amended and restated annual information form for the year ended December 31, 2018 dated July 31, 2019  accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com.

(2) This production target is based on proven and probable reserves only from Teranga’s Sabodala Project as of December 31, 2018. For more information regarding Teranga Gold’s Mineral Reserves and Resources and related notes, please refer to the amended and restated annual information form for the year ended December 31, 2018 dated July 31, 2019  accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com.

(3) LOM assumptions include:
Gold Price $1,250 per ounce
Heavy Fuel Oil (HFO): Sabodala - $0.46 per litre
Light Fuel Oil (LFO): Sabodala - $0.81 per litre
Euro to USD Exchange Rate: $1.10

(4) This Sabodala free cash flow is an estimate that is based on the updated life of mine plan and reserve estimate for the Sabodala project, as set out in the Technical Report of Teranga for the Sabodala Project, Senegal, West Africa, dated August 30, 2017 (the “Sabodala Technical Report”). See in particular Section 21 of the Sabodala Technical Report - Capital and Operating Costs.

(5) This is a non-IFRS financial measure and does not have a standard meaning under IFRS. Please refer to the section regarding Non-IFRS Performance Measures within the website’s Legal Disclaimer by clicking here.