PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST

Transcription

1 PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST 1

2 CAUTIONARY STATEMENT This presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation, which reflects management s expectations regarding Teranga Gold Corporation s ( Teranga or the Company ) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Wherever possible, words such as plans, expects, does not expect, budget, scheduled, estimates, forecasts, anticipate or does not anticipate, believe, intend and similar expressions or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved, have been used to identify such forward looking information. Although the forward looking information contained in this presentation reflect management s current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward looking information, including those listed in the Risk Factors section of the prospectus of Teranga, dated November 11, 2010 (the Prospectus ). These factors should be considered carefully and prospective investors should not place undue reliance on the forward looking information. Forward looking information necessarily involves significant known and unknown risks, assumptions and uncertainties that may cause Teranga s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward looking information. Although Teranga has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in the forward looking information, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on such forward looking information. Teranga expressly disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities law. Forward looking information and other information contained herein concerning mineral exploration and management s general expectations concerning the mineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware of any misstatements regarding any industry data presented herein, mineral exploration involves risks and uncertainties and industry data is subject to change based on various factors. In addition, please note that statements relating to reserves or resources are deemed to be forward looking information as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably mined in the future. While management has confidence in its projections based on exploration work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a mineral resource. 2

3 SEPTEMBER 2011 CONFERENCE CALL & WEBCAST Alan R. Hill Richard Young Chairman & CEO President & CFO FOCUSED ON GROWTH FOCUSED ON: Bruce Van Brunt Martin Pawlitschek Business Development Manager Regional Exploration Manager GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH 3

4 OPERATING HIGHLIGHTS Gold production for the Sept. quarter: 27,082 oz at $1,156/oz sold Mining through lower grade area of pit Higher costs due to higher fuel, labour and maintenance costs Gold Production for last 12 months: 130,640 oz at $841/oz sold Est. for December Quarter: 45,000 oz at ~ $775/oz sold Est. for 2011: 140,000 oz at ~ $850-$875 sold Est. for 2012: 220,000 oz at ~ $625-$675 sold 4

5 FINANCIAL HIGHLIGHTS Net loss for the quarter and twelve months: $25M or $0.10/share and $28.4M or $0.14/share Cash and cash equivalents*: $25.8M (as at Sept. 30, 2011) Revenue for the quarter: $32.5M for the quarter 16,615 oz delivered into forward sales contracts 10,959 oz sold at spot $1,174/oz average realized price * Including short term investments and restricted cash 5

6 FINANCIAL HIGHLIGHTS Hedge book: Accelerated deliveries Outstanding balance 181,885 oz (Sept. 30, 2011) Expect to end year 165,000 oz remaining Objective: eliminate book quickly but prudently Capital Expenditures: $24M for the quarter $34.4M to be spent in December quarter ~ $83M for calendar 2011 Primarily for mill expansion / mining equipment / Mine License exploration costs 6

7 EXPLORATION FOCUSED ON GROWING RESERVES Goal: Expand Proven and Probable reserves from 1.5 Moz to 3 Moz FOCUSED ON ADDING RESERVES On Mine License alone Over next months Similar or better grades than current reserve grade Increase mine life to ~ 15 years Run rate ~ 200,000 oz annually Solid production base to build on 7

8 MINE LICENSE EXPLORATION (ML)* Budget: $10M 33km 2 September quarter: 5 drill rigs RC and Diamond 13,000 metres drilled in quarter 43,000 metres drilled YTD Added 2 additional rigs = 7 * Full drill results are posted at terangagold.com 8

9 MINE LICENSE EXPLORATION THE CORRIDOR Continuation of the main Sabodala structural trend to the north MAIN FLAT EXTENSION One of the principal gold hosts of the Sabodala deposit immediately adjacent to the current ultimate pit MASATO EXTENSION Continuation of Masato deposit 9

10 MINE LICENSE EXPLORATION MAIN FLAT EXTENSION Potential for higher grades in expanded pit Significant widths intersected* 3.45 g/t 3.11 g/t From 4 mineralized zones Just outside current pit Depth ~ 300m Open down plunge and to NW * Full drill results are posted at terangagold.com Goal: to add 250,000 oz open pit reserves and similar amount in underground in

11 MINE LICENSE EXPLORATION THE CORRIDOR and AYOUB S Northerly trending extension of Sabodala pit Ayoub s Thrust Mylonite Shear Zone 1,700m completed in Sept. quarter Lower grade but continuous Sabodala style alteration Open down dip / along strike 1.34 g/t 2.1 g/t Sabodala Pit 11

12 MINE LICENSE EXPLORATION MASATO Outcrops on neighbour s property ~ 2 kilometres from the mill 6,100 metres drill in Sept. quarter* Drilling confirms mineralized strike length of 500 metres / dip 200 metres 4.5 g/t 2.0 g/t Deposit remains open in all directions * Full drill results are posted at terangagold.com 3 drills currently drilling 12

13 REGIONAL EXPLORATION Budget: $25M 1,455km 2 THE DONUT GORA TOUROKHOTO TOUMBOUMBA 13

14 GORA HIGH-GRADE QUARTZ VEIN SYSTEM Most advanced target: moving from exploration to development Inferred resource of 106,000 6 g/t Au (May 2, 2011) 22km from Sabodala mill 800m strike length auriferous quartz vein, outcropping Deposit open in all directions Induced polarization ( IP ) survey has been completed over the Gora deposit and has been shown to track veins to the south. Several look alike targets identified. Trace of blind veins from RC holes Projected to surface high correlation with IP trends. 14

15 GORA HIGH-GRADE QUARTZ VEIN SYSTEM 1. Systematic evaluation drilling began in February 40 x 40 metre grid pattern over the main open-pit resource area Designed to evaluate the resource to a depth of 130m along the strike extent All five rigs assigned to a program of 24 diamond holes 10 metre drill spacing Improve resource estimation and eventually reserve drilling 2. Step out exploration drilling Aims to test key structural intersections located down dip where mineralized structures are expected to intersect a major intrusive body 3. Further 10,000m of RC, 5,000m DD Test strike extent of Gora mineralized trend and nearby parallel IP anomalies Commenced program in early October 15

16 GORA HIGH-GRADE QUARTZ VEIN SYSTEM * Grades from Gora are at least four times our reserve grade We have a number of IP trends to target with exploration RC drilling The Company is running a number of processes in parallel to efficiently develop Gora as quickly as possible including: Ongoing exploration Permitting Feasibility level economic analysis * Full drill results are posted at terangagold.com 16

17 GORA INTERPRETED IP MAP SHOWING DRILLED AND PLANNED HOLE 17

18 GORA CROSS SECTION SHOWING INTERSECTION OF VEINS 18

19 TOUMBOUMBA NEWEST TARGET* Located 10km NW from Sabodala mill Latest discovery, potential to become second regional deposit through the mill Alteration hosted mostly in granite (laterite cover) RAB drilling program commenced in April Expanded to encompass entire structural domain To date, 1,150 holes, 49,000m on a 100m x 50m grid Significant widths of ore mineralization were encountered in western portion of anomaly 237 RAB out of 1,150 holes returned >0.1 g/t Multiple trends * Full drill results are posted at terangagold.com 19

20 TOUMBOUMBA* Targets identified by RAB program are the subject of the current RC program To date, 49 RC holes, 8,748m completed Continues to return wide auriferous zones Oxide mineralization of up to 60m in depth Significant results include*: 5.20 g/t g/t 6.32 g/t At minimum, potential for heap leaching Production could be fast tracked without displacing material from Sabodala mill Deeper drilled required * Full drill results are posted at terangagold.com 20

21 MAJIVA RC DRILLING Located along 12km strike between Majiva and Niakafiri (Mine License) Identified 5km strike length gold mineralized structure Will have 2 rigs operating (1 RC/DD, 1 RC) IP survey indicates several prospective zones 21

22 TOUROKHOTO Three main zones defined by RAB RC Program 10,000m scheduled to start late November Program: Additional 30,000m of RAB required to test 2nd order surface geochemical anomalies 65km line of IP to map alteration zones in more detail RAB defined Au Targets 22

23 DIEGOUN NORTH THE DONUT * The first pass RC program at Jam and Honey 51 holes, 8,800m Sabodala Ore Body 40 of 51 holes > 0.5 g/t Remaining holes g/t The mineralization at Jam is controlled by a series of north east trending structures that trend for several kms * Full drill results are posted at terangagold.com 23

24 DIEGOUN NORTH THE DONUT Another phase of RAB drilling is planned to test structure between Cinnamon and Jam First pass RC testing required to test the RAB anomalies at Cinnamon RC drilling at Jam Wide-spaced, reconnaissance nature with lines m Significant mineralized strike length between and along the mineralized structures remains untested Integrating the data to define a follow up program of drilling for the coming dry season The mineralization at Honey Narrow intervals of quartz veining and minor carbonate alteration hosted in sediments Mineralization also aligns with NE trending structures - Three RAB and RC drilling completed Led to the recognition of a well-developed, auriferous NE trending structure on the eastern side of the target area Structure trends for at least 4.5km from the Jam anomaly to the newly defined RAB gold anomalies at Cinnamon Further drilling required 24

25 DEMBALA HILL* Further to the south intrusion along the same structure host the 240,000 oz Makabingui Deposit Hosted in Southern outcropping gabbrodiorite intrusion Scout RAB drilling intersected 12.5 g/t If positive, more systematic RC drill testing * Full drill results are posted at terangagold.com 25

26 SAIENSOUTOU* Targeting a 3km x 1.5km Au-As anomaly on a NS trend Magnetics indicate a buried intrusive to the immediate north 110 RAB holes for 4,365m 2012 Program: Infill RAB RC drill testing * Full drill results are posted at terangagold.com 26

27 SUMMARY FOCUSED ON GROWTH 1. Toughest quarter operationally behind us 2. Extensive $35m exploration program 3. Exploration updates on a regular basis Est. 220,000 $625-$675/oz 5. Eliminate hedge book as quickly as possible 6. Significant free cash flow to self fund exploration and development of Gora 7. Focused on growing production and reserves 27

28 PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST 28