PRODUCING AND EXPLORING DENVER GOLD FORUM SEPTEMBER 2011

Transcription

1 PRODUCING AND EXPLORING DENVER GOLD FORUM SEPTEMBER

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. 2

3 CAPITALIZATION SUMMARY Ticker symbol: Shares outstanding (1) : Stock options outstanding: Share price (as at September 12, 2011): Market capitalization: Cash position (2)(3) : Debt position (2)(4) : Net cash position (2) : TGZ: TSX/ASX million 14.4 million C$2.28 C$560 million US$65.9 million US$20.1 million US$45.8 million FOCUSED ON GROWTH FOCUSED ON: GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH (1) As part of the demerger Mineral Deposits Ltd. retained 40 million TGZ shares and received C$50 million from the IPO proceeds. (2) As at June 30, 2011 (3) Includes short-term investments and restricted cash (4) US$23.6 MM drawn under the mining fleet finance lease facility with Societe Generale. 3

4 ASSETS Large exploration land package in Senegal, W.A. 1,488km 2 virtually unexplored land surrounding operating mill An emerging world class gold district Operating mine / mill Proven performance Only gold mining operation in the country Strong balance sheet Able to self-fund exploration & development Experienced management team Proven track record 4

5 SABODALA GOLD (SENEGAL) Sabodala is the only large scale gold mine in Senegal Senegal Mining Code passed in 2003 Successful democracy Stable political environment Population of ~13.7M Mining friendly regime Government holds 10% free-carried interest in Sabodala and 3% royalty Tax-free holiday that ends May 2015 Rated # 1 in Africa and #5 in the World in the World Bank s Doing Business Report 5

6 SABODALA GOLD (OPERATIONS) First gold pour in March 2009 Approx. cost of $330M Mill expansion from 2 MM tpa to ~4 MM tpa underway Est. 140,000 oz Au production 2011 expanding to >200,000 oz Au Expected to be completed early 2012 at a cost of $56 MM Well developed infrastructure Located 650 km east of the capital Dakar and 96 km north of the town Kedougou paved road within 56 km of mine site 30 MW heavy fuel oil power plant located on site (36 MW with mill expansion) 6

7 HIGHLIGHTS Addressing Investor concerns on IPO Short mine life Increased reserves and provided reserve guidance Committed to take Gora from exploration into development Ramped up exploration program Expect more discoveries on the Regional Land Package High cash costs Increased production and lowered cash cost guidance for 2011 and 2012 Redesigned pit Hedge book Delivery has been accelerated FOCUSED ON ADDING RESERVES 7

8 GROWTH STRATEGY FOCUSED ON GROWING RESERVES 1.5Moz currently to Objective: year mine life Growth through exploration extensive exploration program on 1,455km 2 Regional Land Package of virtually unexplored prolific land Growth through regional opportunities primary focus Senegal FOCUSED ON GROWING PRODUCTION 140,000oz currently to Leveraging off our existing mill land package all truckable Doubling mill capacity could increase further FOCUSED ON FINANCIAL STRENGTH Maintaining strong balance sheet to self-fund exploration Eliminating hedge book quickly but prudently Margin expansion (eliminate hedge and lower costs) Significant free cash flow to self-fund exploration strategy Manageable capex requirements 8

9 FOCUSED ON GROWING PRODUCTION Calendar Year 2011 Est. production 140,000 oz at $750 - $775/oz CapEx $75M (primarily for mill expansion, mobile equipment and capitalized Mine License exploration) Calendar Year 2012 Est. production 220,000 oz at $575-$625/oz CapEx ~ $25M (primarily for exploration) (1) Calendar Year 2013 Targeting 300,000 oz at $600 - $700/oz Production Profile ( 000 ozs) Production Exploration Success Assumes increased production from regional exploration success (1) Excludes capital cost to develop regional deposits. 9

10 FOCUSED ON FINANCIAL STRENGTH Cash Margin Expansion ($/oz) (1) Maintain strong balance sheet to self-fund exploration and development IPO recapitalization of balance sheet net cash position US$45.8M (2) Eliminating hedge book quickly but prudently YE 2011~ 150,00oz at ~ $829/oz (3) Margin expansion + increased production profile = significant free cash flow to self-fund exploration and development strategy Manageable capex requirements Rate of margin expansion is a function of increasing production through regional exploration success (1) Assumes $1500/oz gold price and cash cost of $600/oz (2) As at June 30, 2011 (3) Non-Deferred Hedge Schedule Appendix page 39 10

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12 FOCUSED ON GROWING RESERVES Kedougou-Kenieba Inlier A Birimian Greenstone Belt Gold Reserves and Resources (1) 2,400 2,100 1,800 1,500 1, ,51 (@1.47 g/t) 2,254 (@1.33 g/t) 774 (@1.06 g/t) 0 Proven and Probable Measured and Indicated(1)(2)(3) Inferred(1)(2) (1) See Appendix page 38 (2) M+I resources are inclusive of reserves (3) As at June 30, 2010, see Sabodala Technical Report 12

13 FOCUSED ON GROWING RESERVES Exploration Program (Calendar 2011) 1. Mine License Exploration: $8 MM (~60,000m) (YTD 30,000m)* 5 Drill Rigs 2. Regional Exploration: $25 MM (~80-90,000) (YTD 50,000m)* 12 Drill Rigs TOTAL: +$33 MM ( ,000m) (+180,000m RAB) 17 drill rigs * Majority of assays are pending 13

14 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION Budget: $8M 33km 2 Budget: $25M 1,455km 2 GOR A 35 km radius 14

15 1. SABODALA MINE LICENSE EXPLORATION $8 MM exploration program is underway on the Sabodala Mine License 10 targets identified for follow up Potential to expand proven and probable reserves from 1.5 Moz gold to 2 to 3 Moz gold over the next 12 to 24 months increasing the mine life to ~ 10 to 15 years 15

16 1. SABODALA MINE LICENSE EXPLORATION THE CORRIDOR Continuation of the main Sabodala structural trend to the north SAMBAYA HILL Confluence of Niakafiri Shear Zone with Main Flat from Sabodala and Masato Shear MASATO EXTENSION Continuation of Masato deposit NIAKAFIRI, NIAKAFIRI WEST & SOUKHOTO Down-dip extension of Niakafiri, strike extension of Niakafiri West and Soukhoto 16

17 SABODALA MINE LICENSE EXPLORATION THE CORRIDOR Ayoub s Thrust Mylonite Shear Zone Sabodala Structural Trend ( The Corridor ) Northerly trending extension of Sabodala pit Mineralization traced more than 200m north of the existing pit along trend Open to north and west Drilling intersected wide widths of alteration similar to Sabodala and Niakafiri Drilling 20m centres Plan is to conduct 10,800 metres of RC and Diamond drilling to test target at depth and along strike Expect resources defined to be converted to reserves in 2011 Sabodala Pit 17

18 SABODALA MINE LICENSE EXPLORATION MASATO / SAMBAYA HILL TARGET Sabodala Pit Masato Down Dip Sambaya Hill Masato Extensions MASATO / SAMBAYA HILL Masato structural trend (1.6 Moz on Oromin JV) strikes across onto our mine license Plan to conduct 5,000 metres of RC and Diamond drilling to define structural trend and test structure at depth Initially being tested over a 500 metre strike length, 20 drill holes totaling 6,150 metres of drilling First drill hole SMRC055 11m of 1.08 g/t from 234m down hole 20m of 3.53 g/t from 267m down hole Will be extended with core as part of program Multiple mineralized zones have been identified with high grade intervals apparent from aqua regia assays conducted on site Expect to define new resources in calendar 2011 Sambaya Hill Trend defined by an IP and geochemical anomaly 18

19 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION Budget: $8M 33km 2 Budget: $25M 1,455km 2 GOR A 35 km radius 19

20 2. REGIONAL EXPLORATION From , no significant drilling was done on the 1,455 km 2 Regional Land Package due to cash constraints There are 27 drill targets identified to drill by end of year; drilling program ($25M) currently underway 50,000m of DD and RC and 98,000m of RAB drilling completed June 30, drill rigs are currently on the Regional Land Package (2 more rigs are expected in Sept.) All targets in trucking distance of the existing mill 20

21 1. REGIONAL EXPLORATION THE DONUT GORA TOUROKHOTO TOUMBOUMBA 21

22 GORA HIGH-GRADE QUARTZ VEIN SYSTEM Most advanced target: moving from exploration to development Inferred resource of 106,000 6 g/t Au 22 km from Sabodala mill 800m strike length auriferous quartz vein, outcropping Deposit open in all directions 4 active drill rigs (3 DD, 1 RC/DD) Induced polarization ( IP ) survey has been completed over the Gora deposit and has identified gold anomalies along strike and parallel to Gora follow-up testing required Now understood to be a stacked vein system (vs. single-vein) Vein 1 extended (currently 8.8 g/t Au) Vein 2 now more continuous (3.0 g/t Au) Vein 3 now important mineralized body Vein 5 discovered just below Vein 1 Excellent potential for bulk style mineralization 22

23 GORA HIGH-GRADE QUARTZ VEIN SYSTEM 1. Drilling completed to date 144 RC and DD holes, 24,705m Current phase of 25,000m to test to vertical depth of 130m 2. Step-out program commenced Minimum 2,400m DD 9 hole program expanded to 11, 8 holes completed and confirmed presence of mineralized structure in all 8 True widths of up to 12 metres All assays pending but confirmed presence of mineralized structure 3. Exploration of immediate North and South 6,200m program RC program, late July to Sept (depending on rig availability and performance) 4. Further 10,000m of RC, 5,000m DD Test strike extent of Gora mineralized trend and nearby parallel IP anomalies Commencement of program likely early October (depending on rig availability) 23

24 Ongoing exploration, permitting, and feasibility Expect to bring resource to reserve by end of calendar 2011 with the goal of processing high-grade ore as soon as late 2012 Selected latest results include: JUNE 13, PRESS RELEASE JULY 11, PRESS RELEASE RECENT RESULTS 5m@33.7 g/t from 111m (Vein 1) 2m@20.6 g/t from 88m 1m@9.5 g/t from 23m 2m@61.3 g/t from 126 m (Vein 1) 2m@27.3 g/t from 108m 1m@3.6 g/t from 79m 3m@26.7 g/t from 154 m (Vein 1) 2m@20.7 g/t from 79m 1m@5.8 g/t from 28m 3m@47.7 g/t from 164 m (Vein 5) 1m@33.0 g/t from 156m (Vein 4) 4m@10.7 g/t from 145m (Vein 2) 4m@23.2 g/t from 132m 3m@24.1 g/t from 155m 4m@34.1 g/t from 155m 1m@51.8 g/t from 112m (Vein 2) 9m@3.2 g/t from 87m (Vein 1) 24

25 TOUMBOUMBA NEWEST TARGET Latest discovery, potential to become second regional deposit through the mill Located 10 km NW from Sabodala mill Alteration hosted mostly in granite (laterite cover) RAB drilling program commenced in April Expanded to encompass entire structural domain To date, 1,113 holes, 47,584m on a 100 x 50m grid Significant widths of ore mineralization were encountered in western portion of anomaly, RAB holes grading >0.5 g/t Targets identified by RAB program are the subject of the current RC program To date, 47 RC holes, 8,748m completed Continues to return wide auriferous zones Oxide mineralization of up to 50m in depth At minimum, potential for heap leaching Production could be fast tracked without displacing material from Sabodala mill Deeper drilled required 25

26 TOUMBOUMBA NEWEST TARGET JUNE 13, PRESS RELEASE EARLY RAB RESULTS JULY 11, PRESS RELEASE RAB RESULTS RECENT RESULTS RAB RESULTS 3m@6.13 g/t, including 1m@15.44 g/t 2m@6.65 g/t from 16m 4m@3.31 g/t from 26m 3m@11.99 g/t, including 1m@25.2 g/t 4m@6.06 g/t from 8m 2m@2.79 g/t from 20m 6m@18.85 g/t, including 4m@27.7 g/t 2m@32.87 g/t from 38m 2m@3.57 g/t from 12m 3m@6.34 g/t from 30m JUNE 13, PRESS RELEASE EARLY RC RESULTS 10m@2.35 g/t, including 2m@9.69 g/t 8m@5.45 g/t, including 2m@17.75 g/t JULY 11, PRESS RELEASE RC RESULTS 6m@1.91 g/t from 17m including 1m@8.07 g/t 3m@17.15 g/t from 39m including 1m@50 g/t 6m@2.68 g/t from 56m including 1m@8.79 g/t 3m@11.85 g/t from 36m including 1m@30.5 g/t 26

27 TOUMBOUMBA NEWEST TARGET RECENT RESULTS AQUA REGIA from 37m including and from 52m including from SNWRC016 f rom 125m from SNWRC017 f rom 21m from SNWRC023 f rom 52m from SNWRC027 f rom 180m from SNWRC029 27

28 DIEGOUN NORTH THE DONUT 7km x 4 Km complex of gold anomalism Contrasting rock types, porphyries, granites, Sabodala Ore Body dolerite & sediments Rock samples to 80 g/t Au RAB drilling has defined gold mineralization in bedrock 19,000m RAB drill program completed at Cinnamon, 663 holes 143 holes returned auriferous intersections above 0.5 g/t First pass RC program at Jam and Honey; 51 holes completed for just under 8,800m (40 holes anomalous levels of gold > 0.5 g/t) Recognition of a well-developed, auriferous north-east trending structure 28

29 TOUROKHOTO Sabodala Ore Body >5Km long, up to 1Km wide gold anomaly defined by termite sampling Parallels NE trending shears of the MTZ 3 Moz Massawa deposit hosted on MTZ about 25Km south >240 ppb Au contours coincide with areas where MTZ shears are intersected by later NE fault structures Rock sampling returned up to 10 g/t Au from sparse outcrop Wide zones of sheared sediments and quartz-feldspar porphyries observed Quartz tourmaline veining observed 23,416m RAB drill program completed with a total 1,006 holes Identified eight coherent zones of gold anomalism Early scout DD completed in Q1 identified significant structural zones which host auriferous alteration zones Targets up to 700m in strike length Follow up geophysical, RC and DD testing required 29

30 GOUNDAMEKHO EXTENSIVE SURFACE GOLD WORKINGS ON STRUCTURES 35 RC holes for 4,200m completed Multiple gold bearing structures warrant follow-up drilling Gold from trenches 75g nugget from artisan workings 30

31 EXPLORATION TEAM / ON SITE ASSAY LAB Mapping Trenches at Dembala Berola Part of team at Exploration Office Mapping at Makana Niang, Database and GIS Management Field Work Sounkounkou On Site Assay Lab Structural Mapping Geochem Sampling Team at Makana RC Drilling at Bransan 31

32 FOCUSED ON GROWTH Kedougou-Kenieba Inlier A Birimian Greenstone Belt An emerging world class gold district. 32

33 CORPORATE SOCIAL RESPONSIBILITY CSR is fundamental to our business strategy. We are committed to making a positive difference in the communities in which we live and work. Our aim is to share the benefits of mining with our employees and the community and contribute to economic and social development. 33

34 CORPORATE SOCIAL RESPONSIBILITY Teranga financed the construction of Khossanto College In partnership with the regional hydraulic department, providing financial and project management support to the upgrade water supply resulting in a positive impact on health and sanitation The Company-funded Sabodala Village Clinic treating 1,378 cases of Malaria (which untreated can lead to mortality); 7,235 patients were treated at the Clinic, representing a $30,000 investment in community health The Sabodala Mine provides direct contract employment and skill development to over 1,100 persons, with an additional 120 persons benefiting from casual employment each month. A further 3,600 persons are estimated to be indirectly employed through the provision of goods and services to the mine through our partners and suppliers Teranga is committed to the professional development of its local workforce through continuous training and skill development 34

35 SUMMARY FOCUSED ON GROWTH 1. Experienced Management Team 2. Largest land position in Senegal 3. Only mill in Senegal 4. Planned mill expansion 5. Extensive exploration program ~17 drill rigs 6. Strong Balance sheet increasing free cash flow with margin expansion 35

36 PRODUCING AND EXPLORING SEPTEMBER

37 APPENDICES Competent Persons Statement The scientific and technical information contained in this release relating to exploration activities within the mining license is based on information compiled by Mr. Bruce Van Brunt, who is a Fellow with The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. He is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as defined in NI Mr. Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Van Brunt is a full-time employee of Teranga and not independent of Teranga within the meaning of NI The scientific and technical information contained in this release relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a Qualified Person as defined in NI Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Pawlitschek is a full-time employee of Teranga and not independent of Teranga within the meaning of NI

38 SABODALA GOLD PROJECT: RESERVES & RESOURCES Ore (000 tonnes) Grade (g/t Au) Contained Gold (000 oz Au) Proven & Probable Sabodala 24, ,231 Niakafiri 7, Total 31, ,512 Measured & Indicated Sabodala 41, ,869 Niakafiri 10, Total 52, ,254 (1) Inferred Resources Sabodala 7, Niakafiri 7, Niakafiri West 7, Soukhoto Gora (2) Total 22, (1) (1) See the Sabodala Technical Report ; # s as at June 30, 2010 (2) Gora inferred resource updated to 543,000 tonnes at 6.08 g/t containing 106,000 ozs. Please see May 2, 2011 Press Release for further information. 38

39 NON-DEFERRED HEDGE SCHEDULE Delivery Date Price US$/oz Ounces 17-Nov , Feb , May , Aug , Nov , Feb , May , Aug ,000 Total 193,000 39

40 MANAGEMENT & BOARD Alan R. Hill Executive Chairman & CEO Richard S. Young President & CFO Christopher R. Lattanzi Director Oliver Lennox-King Director Alan R. Thomas Director Frank Wheatley Director Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold Currently a Director of Gold Fields Former President and CEO of Gabriel Resources ( ) and non-executive Chairman of Alamos Gold ( ) Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold Former VP and CFO of Gabriel Resources ( ) Mining engineer with over 20 years experience in property valuation, scoping, feasibility studies and project monitoring on a global basis Currently a Director of Argonaut Gold and Spanish Mountain Gold Founding member and former president of Micon International ( ) Over 30 years experience in the mineral resource industry with a wide range of experience in financing, research and marketing Non-Executive Chairman of Fronteer Gold and director of CGX Energy Instrumental in the formation of Southern Cross Resources (1997), former President of Tiomin Resources ( ) MDL Director not standing for re-election Director/Trustee and CFO of Labrador Iron Ore Royalty Former Director of Gabriel Resources ( ), CFO of ShawCor ( ), and CFO of Noranda ( ) Over 25 years experience as a director and senior officer of, and legal counsel to, a number of Canadian public mining companies and has extensive legal and business experience in the mineral industry, particularly in the areas of public financing, project debt financing, permitting of large scale mining projects, and strategic mergers and acquisitions in the international minerals industry Currently the Executive Director, Corporate Affairs and Strategy of Talison Lithium Limited Currently a director of Lithic Resources Ltd. and Portal Resources Ltd. Former Vice-President and General Counsel of Gabriel Resources Ltd. ( ) Former Vice President, Legal Affairs of Eldorado Gold Corporation 40