TORONTO, ONTARIO -- (Marketwire) -- 02/20/13 -- Teranga Gold Corporation (TSX: TGZ)(ASX: TGZ) -
(All amounts are in US$ unless otherwise stated)
For a full explanation of Financial, Operating, Exploration and Development results please see the Audited Consolidated Financial Statements and Management's Discussion & Analysis for 2012 at www.terangagold.com.
2012 Annual Guidance Met With Record Production & Profits
-- Record annual profit of $79.9 million ($0.33 per share) in 2012 up from
a loss of $16.0 million ($0.07 loss per share) in 2011. Record fourth
quarter profit of $48.8 million ($0.20 per share) or 106 percent higher
than the same prior year period.
-- Gold production for 2012 was within original guidance of 210,000 -
225,000 ounces at 214,310 ounces, a Company record and 63 percent higher
than for the same 2011 period. Gold production for the three months
ended December 31, 2012 was 71,804 ounces, 96 percent higher than the
same prior year period.
-- Total cash costs for 2012 were within guidance, of $600 - $650 per
ounce, at $627(1) per ounce sold compared to $782 per ounce for the
twelve months ended December 31, 2011, a reduction of 20 percent. Fourth
quarter total cash costs were $623 per ounce sold, compared to $809 per
ounce in the same prior year period, a reduction of 23 percent.
-- Gold hedge book reduced to 59,789 ounces at year end and further reduced
to 38,105 ounces as at January 29, 2013. Management expects the hedge
book to be extinguished by June 2013.
-- The Company's cash, cash equivalents and bullion receivables at December
31, 2012 increased to $45.0 million, including $5.3 million in bullion
receivables.
-- Gold production for 2013 is expected to be in the range of 190,000 -
210,000 ounces at total cash costs of $650 to $700 per ounce.(1)
-- Gora technical study confirmed reserves of 285,000 ounces to be mined
over 4-years at total cash costs of $675 to $700 ounce.
-- Measured & Indicated resources increased 34 percent to 2.9 million
ounces, while reserves remain similar to 2011 net of production.
"With the mill expansion complete and optimization work well underway we expect to be able to maintain an annual production profile of about 200,000 ounces from our mine licence alone. We expect Gora, the most advanced in our exploration pipeline, will be additive to this production base leveraging off of our central milling facility as we target our first phase growth of 250,000 to 350,000 ounces of annual production," said Alan R. Hill, Executive Chairman.
Financial Highlights
-- Gold revenue for the twelve months ended December 31, 2012 was $350.5
million compared to gold revenue of $236.9 million for the fifteen
months ended December 31, 2011. The increase in gold revenue was driven
by higher gold sales and spot gold prices. Revenues exclude the impact
of realized losses on ounces delivered into forward sales contracts
which are classified within losses on gold hedge contracts.
-- Consolidated profit for 2012 was $79.9 million ($0.33 per share) up from
a loss of $16.0 million ($0.07 loss per share) during the fifteen months
ended December 31, 2011. The increase in profit was primarily due to an
increase in gross profit from higher revenues, lower regional
exploration expenditures and lower gold hedge losses, partly offset by a
non-cash impairment charge recorded in 2012, related to an available for
sale financial asset.
"As we eliminate the hedge book by mid-year, we anticipate that the increased cash margins and cash flows will provide us with a stronger balance sheet that should be able to fund our organic growth through our extensive exploration program, while at the same time minimizing shareholder dilution," said Richard Young, President and CEO.
-- Capital expenditures for 2012, excluding reserve development
expenditures, were $52.9 million, higher than the revised guidance of
$50 million, and $9.2 million lower than the fifteen months ended
December 31, 2011. Capitalized reserve development costs for the year
were $30.4 million, higher than the revised guidance of $25 million, and
$16.0 million higher than the fifteen months ended December 31, 2011.
The increase over 2011 was the result of a focus on expanding resources
within the Sabodala pit and converting resources to reserves.
-- Total cash costs for 2012 were within guidance, of $600 - $650 per
ounce, at $627 per ounce sold compared to $782 per ounce for the twelve
months ended December 31, 2011, a reduction of 20 percent. The decrease
in cash costs were mainly due to higher ounces produced.
-- Total production costs, comprised of total cash costs including total
depreciation and amortization, for the year were $850 per ounce sold,
down from $1,031 per ounce sold for the twelve months ended December 31,
2011.
-- Realized gold price for 2012 was $1,422 per ounce sold compared to
$1,236 per ounce sold for the twelve months ended December 31, 2011. The
higher realized gold price for 2012 reflects a lower percentage of gold
delivered into forward sales contracts due to the buyback of 52,105
ounces during the second quarter of 2012, as well as higher gold prices
in 2012.
Operating Highlights
-- Total tonnes mined for 2012 were 12 percent higher than the twelve
months ended December 31, 2011 and 4 percent higher than planned. Ore
tonnes mined were lower than plan but at better grades resulting in
similar ounces mined compared to plan.
-- Mill throughput for the twelve months ended December 31, 2012 was
similar to the same prior year period as an increase in the milling
capacity with the completion of the mill expansion in the third quarter
2012, was offset by lower throughput rates from harder ore processed in
2012 compared to the softer material that was available in 2011.
Compared to budget, mill throughput for 2012 was approximately 20
percent lower than plan due to delays in commissioning the crushing
circuit as part of the mill expansion.
-- In the third quarter of 2012, the Company added depth to its management
team to focus on growth. Alan Hill was appointed Executive Chairman,
formerly Chairman and Chief Executive Officer and Richard Young was
appointed President and Chief Executive Officer, formerly President and
Chief Financial Officer. Mark English was also promoted to Vice
President, Sabodala Operations, formerly Manager, Sabodala Gold
Operations. In addition, Navin Dyal and Paul Chawrun were appointed Vice
President and Chief Financial Officer and Vice President, Technical
Services, respectively.
Exploration Highlights
-- The Sabodala Pit optimization work completed in the first quarter of
2012, based on the high grade drill results from the fourth quarter of
2011, defined a projected pit shell that included the Lower Flat Zone
("LFZ") at depth.
-- Conversion of a large portion of these resources to open pit reserves
will likely require higher gold prices as the orientation of both the
Main Flat Extension ("MFE") and LFZ appear to be more steeply dipping
than originally anticipated, negatively affecting the economics of an
enlarged pit shell.
-- The 2013 drill program for Sabodala is expected to be completed in the
first quarter of 2013. At that time Management will assess the economics
of both a larger open pit as well as evaluate an underground development
option in the LFZ.
-- Drilling in 2012 successfully extended the Masato mineralized limits to
the south and down dip onto Teranga's mine licence ("ML") defining
approximately 700,000 ounces of Inferred Resource.
-- In 2012, we drilled 104,400 metres at a cost of $26 million on the ML.
The original ML budget was $20 million but was expanded during the year
to follow up on positive drill results at Sabodala.
-- Within the regional land package ("RLP") we completed 62,500 metres of
RAB drilling, 42,300 metres of RC and 2,400 metres of diamond drilling
on 25 of our anomalies and targets, at a cost of $20 million, including
Gora.
-- The program for 2013 has been budgeted and will focus on fast-tracking
work on our current priority targets at Nienyenko, Soreto, Diabougou,
Tourokhoto-Marougou and Saiensoutou. Other targets will be followed up
as work progresses on the RLP. A minimum budget of $20 million is
allocated for the combined exploration programs on the RLP and ML.
Additional funding is available and will be allocated on a priority
basis for prospects with clear potential for reserves definition.
Development Highlights
-- At the Gora deposit, a combination of receipt of final assays, re-
modelling and application of geo-statistics resulted in an increase in
the Measured and Indicated Resource to 374,000 ounces of gold at 5.0
gpt. Technical and environmental work continued during 2012 and has
progressed to initiate the permitting process in the first quarter of
2013.
-- Gora is planned to be operated as a satellite to the Sabodala mine with
limited local infrastructure and development. Ore will be trucked to,
and processed at, our existing mill on a priority basis, displacing
Sabodala feed as required.
-- Mining by open pit methods will produce approximately 500,000 tonnes of
ore per year for four years with a grade ranging from 2.8 gpt to 4.9
gpt, with an average mined feed grade of 4.22 gpt gold, containing
285,000 ounces(2) of gold. Metallurgical testing has revealed that Gora
ore has similar properties to the Sabodala ore body and therefore
blending will not impact overall gold recovery.
-- The primary cost is the purchase of the mobile equipment fleet, which
will be utilized as part of Teranga's long term mine plan upon
completion of Gora. Additional costs include installation of the
required infrastructure and project execution costs. The project capital
cost is estimated to be $45 to $50 million.
-- Total cash costs for Gora are estimated to average $675 to $700 per
ounce sold on a life-of-mine basis. The Project economics based on the
proposed operating scenario and a discount rate of 5 percent, return an
after tax net present value (NPV 5 percent) of $105 million and an
internal rate return (IRR) of 69 percent at an assumed gold price of
$1500 per ounce.
Reserves
-- Total reserves as of December 31, 2012 on the ML were 33.13 million
tonnes at 1.22 gpt totalling 1.30 million ounces, a decrease of 235,000
ounces or 15 percent. Since the updated reserves reflect drill assay
results through August 2012, all drill results after August 20, 2012
will be included in an updated reserve in 2013.
-- As at August 20, 2012, Measured and Indicated Resources at Sabodala
increased by approximately 0.7 million ounces to 2.1 million ounces, a
43 percent increase over Measured and Indicated Resources as at December
31, 2011, before production.
-- Full details regarding our Reserves and Resources as of December 31,
2012 (based upon August 2012 assay results) can be found in the Reserves
& Resources section of the Management Discussion and Analysis.
Review of Financial Results
----------------------------------------------------------------------------
Twelve months Fifteen months
(US$000's) ended December ended December
---------------------------------
2012 2011
---------------------------------
Current Restated (i)
----------------------------------------------------------------------------
Revenue 350,520 236,873
Cost of sales (179,323) (148,812)
---------------------------------
171,197 88,061
Exploration and evaluation expenditures (16,657) (31,659)
Administration expenses (17,931) (13,448)
Share based compensation (4,694) (12,411)
Finance costs (7,789) (2,946)
Losses on gold hedge contracts (15,274) (47,943)
Gains/(losses) on oil hedge contracts (427) 2,203
Net foreign exchange (losses)/gains (2,574) 4,486
Impairment of available for sale financial
asset (11,917) -
Other income 36 848
---------------------------------
Profit/(loss) before income tax 93,970 (12,809)
Income tax benefit 115 92
---------------------------------
Profit/(loss) for the period 94,085 (12,717)
Profit/(loss)attributable to non-
controlling interest 14,161 3,323
---------------------------------
Profit/(loss) attributable to shareholders
of Teranga 79,924 (16,040)
Basic earnings/(losses) per share 0.33 (0.07)
Review of Operational Results
----------------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
-----------------------------------------
2012 2011 2012 2011
----------------------------------------------------------------------------
restated restated
Operating results
Ore mined ('000t) 2,038 1,715 5,915 3,973
Waste mined ('000t) 5,274 4,736 22,962 21,818
Total mined ('000t) 7,312 6,451 28,877 25,791
Grade mined (g/t) 2.04 1.50 1.98 1.39
Ounces mined (oz) 133,549 82,710 376,185 177,362
Strip ratio waste/ore 2.6 2.8 3.9 5.5
Ore milled ('000t) 725 604 2,439 2,444
Head grade (g/t) 3.40 2.10 3.08 1.87
Recovery rate % 90.7 89.8 88.7 89.5
Gold produced(1) (oz) 71,804 36,695 214,310 131,461
Gold sold (oz) 71,604 34,665 207,814 137,136
Average price
received $/oz 1,296 1,482 1,422 1,236
Total cash cost
(incl.
royalties)(2) $/oz sold 623 809 627 782
Mining (cost/t
mined) 3.1 2.5 2.7 2.3
Milling (cost/t
milled) 19.9 17.3 20.4 16.8
G&A (cost/t milled) 6.4 6.2 6.2 5.8
Note (1) Gold produced represents change in gold in circuit inventory plus
gold recovered during the period
Note (2) Cash cost per ounce is a non-IFRS financial measure with no
standard meaning under IFRS
Cost of Sales
Twelve months Fifteen months
ended December ended December
31, 31,
(US$000s)
2012 2011
---------------------------------
Current Restated (i)
Mine production costs 145,831 126,125
Depreciation and amortization 52,660 40,077
Royalties 10,491 7,035
Rehabilitation 36 9
Inventory movements (29,695) (24,434)
---------------------------------
Total cost of sales 179,323 148,812
---------------------------------
2013 Guidance
----------------------------------------------------------------------------
Year ending December 31,
---------------------------------
2012 2013
Actuals Guidance Range
Operating results
Ore mined ('000t) 5,915 4,000 - 4,500
Waste mined ('000t) 22,962 31,000 - 32,000
---------------------------------
Total mined ('000t) 28,877 35,000 - 36,500
Grade mined (g/t) 1.98 1.40 - 1.60
Strip ratio waste/ore 3.9 7.00 - 7.75
Ore milled ('000t) 2,439 3,300 - 3,400
Head grade (g/t) 3.08 2.00 - 2.15
Recovery rate % 88.7 89.0 - 91.0
Gold produced (oz) 214,310 190,000 - 210,000
Gold sold (oz) 207,814 190,000 - 210,000
Total cash cost (incl.
royalties)(1,2) $/oz sold 627 650 - 700
Total production cost(1) $/oz sold 850 950 - 1,000
Mining (cost/t mined) 2.71 2.50 - 2.70
Milling (cost/t milled) 20.39 19.00 - 20.00
G&A (cost/t milled) 6.16 5.00 - 6.00
Mine production costs $ millions 145.8 170.0 - 180.0
Capital Expenditures
Mine site $ millions 52.9 20.0 - 25.0
Capitalized reserve development $ millions 26.1 5.0 - 10.0
Gora development costs
Mobile equipment $ millions - 30.0 - 35.0
Site development $ millions 4.3 15.0 - 20.0
---------------------------------
Total Gora development costs $ millions 4.3 45.0 - 50.0
Capitalized deferred
stripping(2) $ millions N/A 35.0 - 40.0
---------------------------------
Total Capital Expenditures $ millions 83.3 105.0 - 125.0
Exploration (expensed) $ millions 16.7 10.0 - 15.0
Administration expense $ millions 17.9 15.0 - 20.0
Hedge close-outs / deliveries (oz) 136,395 59,789
(1) Total cash cost per ounce and total production cost per ounce are non-
IFRS financial measures with no standard meaning under IFRS. For
definitions of these metrics, please see page 26 of the Management
Discussion and Analysis on www.terangagold.com.
(2) For 2013, reflects the impact of adoption of a new IFRS standard for
deferred stripping. Please see page 25 of the Management Discussion and
Analysis on www.terangagold.com.
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / LOSS
(US$000's, except per share amounts)
----------------------------------------------------------------------------
Twelve months Fifteen months
ended ended
---------------- ----------------
December 31, December 31,
2012 2011
----------------------------------------------------------------------------
Revenue 350,520 236,873
Cost of sales (179,323) (148,812)
---------------- ----------------
Gross profit 171,197 88,061
Exploration and evaluation expenditures (16,657) (31,659)
Administration expenses (17,931) (13,448)
Share based compensation (4,694) (12,411)
Finance costs (7,789) (2,946)
Losses on gold hedge contracts (15,274) (47,943)
(Losses)/gains on oil hedge contracts (427) 2,203
Net foreign exchange (losses)/gains (2,574) 4,486
Impairment of available for sale financial
asset (11,917) -
Other income 36 848
---------------- ----------------
(77,227) (100,870)
Profit/(loss) before income tax 93,970 (12,809)
Income tax benefit 115 92
---------------- ----------------
Profit/(loss) for the period 94,085 (12,717)
---------------- ----------------
Profit/(loss) attributable to:
Shareholders 79,924 (16,040)
Non-controlling interests 14,161 3,323
---------------- ----------------
Profit/(loss) for the period 94,085 (12,717)
---------------- ----------------
Other comprehensive income/(loss):
Exchange differences arising on
translation of Teranga corporate entity (63) (935)
Change in fair value of available for sale
financial asset, net of tax 6,775 (1,319)
---------------- ----------------
Other comprehensive income/(loss) for the
period 6,712 (2,254)
---------------- ----------------
Total comprehensive income/(loss) for the
period 100,797 (14,971)
---------------- ----------------
Total comprehensive income/(loss)
attributable to:
Shareholders 86,636 (18,294)
Non-controlling interests 14,161 3,323
---------------- ----------------
Total comprehensive income/(loss) for the
period 100,797 (14,971)
---------------- ----------------
Earnings/(losses) per share from
operations attributable to the
shareholders of the Company during the
period
- basic earnings/(losses) per share 0.33 (0.07)
- diluted earnings/(losses) per share 0.33 (0.07)
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(US$000's)
----------------------------------------------------------------------------
As at December As at December
31, 2012 31, 2011
----------------------------------------------------------------------------
Current assets
Cash and cash equivalents 39,722 7,470
Short-term investments - 593
Restricted cash - 3,004
Trade and other receivables 6,482 20,447
Inventories 82,474 48,365
Financial derivative assets 456 2,288
Other assets 12,896 12,751
Available for sale financial assets 15,010 19,800
---------------- ----------------
Total current assets 157,040 114,718
---------------- ----------------
Non-current assets
Inventories 40,659 31,942
Financial derivative assets - 532
Property, plant and equipment 241,838 238,510
Mine development expenditures 109,060 89,825
Intangible assets 1,859 1,085
---------------- ----------------
Total non-current assets 393,416 361,894
---------------- ----------------
Total assets 550,456 476,612
---------------- ----------------
Current liabilities
Trade and other payables 44,823 43,238
Borrowings 10,415 16,468
Financial derivative liabilities 51,548 79,241
Provisions 1,940 1,954
---------------- ----------------
Total current liabilities 108,726 140,901
---------------- ----------------
Non-current liabilities
Financial derivative liabilities - 50,318
Provisions 10,312 9,215
Borrowings 58,193 7,509
---------------- ----------------
Total non-current liabilities 68,505 67,042
---------------- ----------------
Total liabilities 177,231 207,943
---------------- ----------------
Equity
Issued capital 305,412 305,412
Foreign currency translation reserve (998) (935)
Equity-settled share based compensation
reserve 16,358 12,599
Investment revaluation reserve 5,456 (1,319)
Accumulated income/(loss) 36,549 (43,375)
---------------- ----------------
Equity attributable to shareholders 362,777 272,382
Non-controlling interests 10,448 (3,713)
---------------- ----------------
Total equity 373,225 268,669
---------------- ----------------
Total equity and liabilities 550,456 476,612
---------------- ----------------
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(US$000's)
Twelve months Fifteen months
ended ended
December 31, December 31,
2012 2011
----------------------------------------------------------------------------
Issued capital
At January 1, 2012 / October 1, 2010 305,412
Shares issued on incorporation of the
Company - -
Shares issued on the acquisition of the
Sabodala gold mine and a regional
exploration package - 186,665
Shares issued from public and private
offerings - 135,005
Less: Share issue costs - (16,258)
----------------------------------------------------------------------------
At December 31 305,412 305,412
----------------------------------------------------------------------------
Foreign currency translation reserve
At January 1, 2012 / October 1, 2010 (935) -
Exchange difference arising on
translation of Teranga corporate entity (63) (935)
----------------------------------------------------------------------------
At December 31 (998) (935)
----------------------------------------------------------------------------
Equity-settled share based compensation
reserve
At January 1, 2012 / October 1, 2010 12,599 -
Equity-settled share based compensation
reserve 3,759 12,599
----------------------------------------------------------------------------
At December 31 16,358 12,599
----------------------------------------------------------------------------
Investment revaluation reserve
At January 1, 2012 / October 1, 2010 (1,319) -
Impairment of available for sale
financial asset 1,319 -
Change in fair value of available for
sale financial asset, net of tax 5,456 (1,319)
----------------------------------------------------------------------------
At December 31 5,456 (1,319)
----------------------------------------------------------------------------
Accumulated income/(loss)
At January 1, 2012 / October 1, 2010 (43,375) -
Profit/(Loss) attributable to
shareholders 79,924 (16,040)
Impact of change in accounting policy - (27,335)
----------------------------------------------------------------------------
At December 31 36,549 (43,375)
----------------------------------------------------------------------------
Non-controlling interest
At January 1, 2012 / October 1, 2010 (3,713) -
Non-controlling interest arising from
demerger - November 23, 2010 - (7,036)
Non-controlling interest - portion of
profit for the period 14,161 3,323
----------------------------------------------------------------------------
At December 31 10,448 (3,713)
----------------------------------------------------------------------------
Total shareholders' equity at December 31 373,225 268,669
----------------------------------------------------------------------------
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(US$000's)
----------------------------------------------------------------------------
Twelve months Fifteen months
ended ended
---------------- ---------------
December 31, December 31,
2012 2011
----------------------------------------------------------------------------
Cash flows related to operating activities
Profit/(loss) for the period 94,085 (12,717)
Depreciation of property, plant and
equipment 41,999 29,541
Depreciation of capitalized mine
development costs 11,142 10,200
Amortization of intangibles 650 490
Amortization of borrowing costs 877 328
Unwinding of discount 53 47
Share based compensation 3,759 12,411
Net change in losses on gold hedge (39,010) (1,789)
Net change in losses on oil hedge 2,364 113
Buyback of gold hedge sales contracts (39,000) -
Income tax paid - (638)
Mine restoration and rehabilitation
provision - 425
Deferred income tax benefit on reversal of
temporary differences - (231)
Impairment of available for sale financial
asset 11,917 -
Profit on disposal of property, plant and
equipment (131) -
Changes in working capital (16,256) (33,048)
----------------------------------------------------------------------------
Net cash provided by operating activities 72,449 5,132
Cash flows related to investing activities
Decrease/(Increase) in restricted cash 3,004 (3,004)
Redemption of short-term investments 593 181
Expenditures for property, plant and
equipment (51,451) (60,825)
Expenditures for mine development (30,377) (14,359)
Acquisition of intangibles (1,424) (1,208)
Proceeds on disposal of property, plant
and equipment 195 -
Payment for acquisition of Sabodala gold
mine and regional land package net of
cash acquired - (34,307)
----------------------------------------------------------------------------
Net cash used in investing activities (79,460) (113,522)
Cash flows related to financing activities
Proceeds from issuance of capital stock,
net of issue costs - 118,747
Loan facility, net of borrowing cost paid 57,695 -
Repayment of borrowings (16,799) (10,849)
Drawdown from finance lease facility, net
of financing cost paid 2,857 9,612
Interest paid on borrowings (4,075) (2,248)
----------------------------------------------------------------------------
Net cash provided by financing activities 39,678 115,262
Effect of exchange rates on cash holdings
in foreign currencies (415) 598
----------------------------------------------------------------------------
Net increase in cash and cash equivalents
held 32,252 7,470
Cash and cash equivalents at the beginning
of financial period 7,470 -
----------------------------------------------------------------------------
Cash and cash equivalents at the end of
financial period 39,722 7,470
----------------------------------------------------------------------------
CORPORATE DIRECTORY
Directors
Alan Hill, Executive Chairman
Richard Young, President and CEO
Christopher Lattanzi, Non-Executive Director
Oliver Lennox-King, Non-Executive Director
Alan Thomas, Non-Executive Director
Frank Wheatley, Non-Executive Director
Senior Management
Alan Hill, Executive Chairman
Richard Young, President and CEO
Mark English, Vice President, Sabodala Operations
Paul Chawrun, Vice President, Technical Services
Navin Dyal, Vice President and CFO
David Savarie, Vice President, General Counsel & Corporate Secretary
Kathy Sipos, Vice President, Investor & Stakeholder Relations
Macoumba Diop, General Manager and Government Relations Manager, SGO
Registered Office
121 King Street West, Suite 2600
Toronto, Ontario, M5H 3T9, Canada
T: +1 416-594-0000
F: +1 416-594-0088
E: generalmailbox@terangagold.com
W: www.terangagold.com
Senegal Office
2K Plaza
Suite B4, 1er Etage
sis la Route due Meridien President
Dakar Almadies
T: +221 338 693 181
F: +221 338 603 683
Auditor
Deloitte & Touche LLP
Share Registries
Canada: Computershare Trust Company of Canada
T: +1 800 564 6253
Australia: Computershare Investor Services Pty Ltd
T: 1 300 850 505
Stock Exchange Listings
Toronto Stock Exchange, TSX symbol: TGZ
Australian Securities Exchange, ASX symbol: TGZ
Non-IFRS Financial Measures
The Company provides some non-IFRS measures as supplementary information that management believes may be useful to investors to explain Teranga's financial results.
"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 excludes from revenues unrealized gains and losses on non-hedge derivative contracts. 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.
"Total cash cost per ounce sold" is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. The Company 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 the Company'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 earnings 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.
"Total depreciation and amortization per ounce sold" is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. 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.
FORWARD LOOKING STATEMENTS
Certain information included in this announcement, including any information as to the Company's strategy, projects, exploration programs, joint venture ownership positions, plans, future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". The words "believe", "expect", "will", "intend", "anticipate", "project", "plan", "estimate", "on track" and similar expressions identify forward looking statements. Such forward-looking statements are necessarily based upon a number of estimates, assumptions, opinions and analysis made by management in light of its experience that, while considered reasonable, may turn out to be incorrect and involve known and unknown risks, uncertainties and other factors, in each case that may cause the actual financial results, performance or achievements of the Company to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. Such forward-looking statements are not guarantees of future performance. These assumptions, risks, uncertainties and other factors include, but are not limited to: assumptions regarding general business and economic conditions; conditions in financial markets and the future financial performance of the company;
the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the supply and demand for, deliveries of, and the level and volatility of the worldwide price of gold or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets, including changes in U.S. dollar and CFA Franc interest rates; risks arising from holding derivative instruments; adverse changes in our credit rating; level of indebtedness and liquidity; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business, as well as other risks and uncertainties which are more fully described in the Company's A.I.F. and in other Company filings with securities and regulatory authorities which are available at www.sedar.com. Accordingly, readers should not place undue reliance on such forward looking statements. 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 laws.
COMPETENT PERSONS STATEMENT
The technical information contained in this Report relating to the mineral reserve estimates within the Sabodala, Sutuba, Niakafiri and Gora deposits and the Stockpiles, is based on information compiled by Julia Martin, P.Eng., MAusIMM (CP), a full time employee with AMC Mining Consultants (Canada) Ltd., is independent of Teranga, is a "qualified person" as defined in NI 43-101 and a "competent person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Martin has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms Martin has reviewed and accepts responsibility for the reserve estimates disclosed above. Ms Martin has consented to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to the mineral resources is based on information compiled by Ms. Patti Nakai-Lajoie, who is a Member of the Association of Professional Geoscientists of Ontario. Ms. Patti Nakai-Lajoie is full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Patti Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Patti Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects and she consents to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to exploration results is based on information compiled by Mr. Martin Pawlitschek, who is a Member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a consultant of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Pawlitschek has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Pawlitschek is a "Qualified Person" in accordance with NI 43-101 and he consents to the inclusion in the report of the matters based on his information in the form and context in which it appears in this Report.
(1) Total cash costs per ounce sold is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS.
(2) This production target is based on proven and probable reserves only.
Contacts:
Teranga Gold Corporation
Kathy Sipos
Vice-President, Investor & Stakeholder Relations
+1 416-594-0000
ksipos@terangagold.com
www.terangagold.com
