PRODUCING AND EXPLORING Q1 2012 WEBCAST 1
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 Teranga s Annual Information Form, dated March 28, 2012 (the AIF ). 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. This presentation does not constitute in any way an offer or invitation to subscribe for securities in Teranga pursuant to the Corporations Act 2001 (Cth) and has not been lodged with the Australian Securities and Investment Commission. 2
2012 Q1 WEBCAST Alan R. Hill Richard Young Chairman & CEO President & CFO FOCUSED ON GROWTH FOCUSED ON: GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH 3
OPERATING HIGHLIGHTS Q1 2012 41,904 oz s produced 22% higher than Q1 2011 14% higher than Q4 2011 35,268 oz s sold at cash cost of $673/oz Cash cost 17% lower than Q4 2011 Mill expansion tie-in reduced capacity to pour gold Increase to gold in circuit / gold bullion inventory to 13,262 oz s 4
OPERATING HIGHLIGHTS Q1 2012 Total tonnes mined 7% higher than Q1 2011 Improved productivity and efficiency in mining operations Drilling and loading 3 new blast hole drill rigs Two new Gora haul trucks in use 5
OPERATING HIGHLIGHTS Q1 2012 Unit mining cost $2.50/t mined Mill throughput Harder ore Grades of 2.52 gpt grade Unit processing cost $17.20/t milled Q2 2012 Expect similar production to Q1 Guidance 210,000 225,000 oz s at cash costs of $600 - $650/oz 6
FINANCIAL HIGHLIGHTS Q1 2012: Revenue of $60.5M 10% higher than Q1 2011 Higher realized gold prices All ounces sold in spot market $1,712/oz average realized price Loss of $1.8M Capital expenditure planned for 2012 expected to be $50M ~$25M remains to be spent in 2012 7
FINANCIAL HIGHLIGHTS Cash position*: $14.8M at March 31, 2012 Sufficient cash + expected future cash flows + ability to modify hedge deliveries support minimum liquidity requirements Additional flexibility deferred delivery of 28,000 oz s due in Q1 to second half 2012 Rebuild cash balance Maintain cash balance of ~$20M 2012 to deliver 108,500 oz s into hedge book Year end balance expected to be 66,000 oz s *Cash and cash equivalents, including restricted cash 8
FOCUSED ON BUILDING FINANCIAL STRENGTH Rising production, lowering costs Improved cash margins Expect to increase cash balance throughout 2012 1200 1000 800 600 400 Cash Margin ($/oz) (1) 200 0 2011 2012 2013* 2014 Rate of margin expansion is a function of increasing production through regional exploration success *After eliminating hedge position (1) Assumes $1600/oz gold price and cash cost of $625/oz *Excluding Mine License exploration costs 9
FINANCIAL HIGHLIGHTS Potential debt facility Provide working capital cushion Expand mining fleet to increase production rate Accelerate Mine License exploration Conversion of resources to reserves 10
GOVERNMENT RELATIONS Senegalese elections Smooth democratic process New President supportive of mining industry Previously served as President of National Assembly, Prime Minister, and Minister of Mines Teranga to work in Partnership with Senegal to help address Senegal s immediate financial needs 11
MILL EXPANSION New mill and downstream plant commissioned in April Completion scheduled for end of Q2 Secondary crusher New stockpile/reclaim facility Full capacity scheduled for end of Q2 12
SABODALA MINE LICENSE EXPLORATION Q1 Highlights: $7.1M spent in Q1 25,000m RC/DD drilling Intersections of significant widths of high grade mineralization outside Sabodala ultimate pit Part of Main Flat Extension (MFE) drill program Lead to an expansion of final pit design and increased reserves Drilling of MFE and Lower Flat Zone (LFZ) confirm the continuation of the mineralized zone with further drilling planned MFE and LFZ remain open down plunge and to the northwest 13
MINE LICENSE EXPLORATION Main Flat Extension / Lower Flat Zone ( MFE/LFZ ) program: Convert inferred resources north of current ultimate pit Extend MFE zone M&I down dip to the west (1) Additional deep drilling to develop LFZ mineable resource to depth Test for extensions of the LFZ to the east Test for parallel zones beneath the Sabodala pit Full drill results are posted at terangagold.com (1) MFE - open pit mineable gold inventory at an average grade between 1.5 2.0 gpt, LFZ potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012. This exploration target is not a Mineral Resource. 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. It is uncertain if further exploration will result in the determination of a Mineral Resource. 14
MINE LICENSE EXPLORATION SABODALA PIT Q1 2012 9,500m drilled at Sabodala Primarily MFE Recent results include: 43m at 2.4 gpt from 123m 19m at 2.5 gpt from 177m Deeper (~300m level): 12m at 7.5 gpt 29m at 3.6 gpt 11m at 4.2 gpt FOCUSED ON GROWTH FOCUSED ON: GROWING RESERVES New open pit objective (MFE/LFZ) by mid-year 2013 To add 500,000 1,000,000 oz s* (1) At grades of between 1.5 to 2.0 gpt to gold inventory (1) Proximate Statement: This exploration target is not a Mineral Resource. 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. It is uncertain if further exploration will result in the determination of a Mineral Resource. 15
MINE LICENSE EXPLORATION MASATO Main Flat Extension Sabodala Pit Sambaya Hill Masato Down Dip 2011 Confirmed strike length of 500m and dip extent of 200m Q1 2012 Strike length extended to 1,600m and dip extent expanded to 300m Masato remains opens to depth and along strike Drill testing in both directions 10,000m drilled, assays being compiled, geologic interpretation in progress Masato Extensions 2012 Objectives Infilling 200m x 500m zone identified in 2011 in preparation for resource estimate Further definition drilling on the high grade pod of gold mineralization Locate southern extension of Masato that strikes toward our ML Full drill results are posted at terangagold.com 16
MINE LICENSE EXPLORATION NIAKAFIRI Deposit remains open at depth Drilling planned for second half of the year pending community discussions Expect gold inventory to increase Full drill results are posted at terangagold.com 17
MINE LICENSE EXPLORATION SOUKHOTO Infill and extending the current resources Separated by 500m of undrilled strike length Soukhoto drilling is scheduled to begin in Q2 Updated resource expected at end of year NIAKAFIRI WEST Full drill results are posted at terangagold.com 18
MINE LICENSE EXPLORATION Located 1 km north of Niakafiri, 1 km south of Sambaya Hill and on the Niakafiri shear system Q1 2012 600m of drilling With new information, plan to drill but also reinterpret previous drilling Potentially add gold inventory in 2012 DINKOKHONO Full drill results are posted at terangagold.com 19
MINE LICENSE EXPLORATION - 2012 FOCUSED ON GROWTH Minimum 8 drill rigs testing targets 2012 Budget of $20M 77,000m RR/DD drilling 10 drill rigs currently operating 8 DD rigs 2 RC rigs FOCUSED ON: GROWING RESERVES 20
1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km 2 1,465km 2 35 km radius 21
REGIONAL EXPLORATION 1,465km 2 Regional Land Package ~40 drill targets to be drill tested in 2012/2013 All truckable to mill Further 20 targets to be evaluated with surface sampling or trenching 22
Q1 2012 REGIONAL EXPLORATION 4 rigs RAB 31,500m RC 26,000m RC focused on Tourokhoto, Saiensoutou, Jam, KB DD 2,400m Several RAB programs $8.5M spent during Q1 Including $1.6M for Gora 2012 Budget of $20M 90,000m RC/DD 140,000m RAB 23
TOUMBOUMBA NEWEST TARGET Shear vein system, potential for a small, oxide deposit Located 10 km from the Sabodala mill 18 close trending gold anomalous zones identified from RAB drilling during 2011 Q1 2012 Potential for near surface oxide deposit on main Toumboumba mineralized zone In April, commenced a 10,000m RC program on a 25m x 25m grid Numerous high grade intersections including 4m at 33.9 gpt At minimum, potential for economic mill feed Full drill results are posted at terangagold.com 24
TOUROKHOTO Sabodala Ore Body Q1 2012 RC program 50 holes, 10,000m completed Confirmed several zones of sub-parallel mineralization with results up to 2m at 4.5 gpt Also wider zones at lower grades Majority of samples pending Full drill results are posted at terangagold.com 25
DIEGOUN NORTH THE DONUT Q1 2012 Sabodala Ore Body Cinnamon northern portion of Donut 14 RC holes, 2,500m Encouraging results at >0.2 gpt gold level Many samples, assays pending Jam southern portion of Donut 14 RC holes, 2,700m, 9 DD holes, 2,100m Designed to test NW trending structures defined and follow-up on previous anomalous RC holes Additional 13,000m of RAB drilling completed Awaiting final assay Full drill results are posted at terangagold.com 26
SUMMARY FOCUSED ON DELIVERING Growing production Reducing costs Executing on our vision to grow the company 27
PRODUCING AND EXPLORING Q1 2012 WEBCAST 28
COMPETENT PERSONS STATEMENT The technical information in this presentation that relates to mineral resource estimates within the Mining License is based on information compiled by Mr. Bruce Van Brunt, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee of Teranga and not independent. Mr. Van Brunt has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a "Competent Person" as defined in the 2004 Edition of the Australasian Code of Reporting of exploration Results, Mineral Resources and Ore Reserves. Mr. Van Brunt is a "Qualified Person" in accordance with National Instrument 43-101 and he consents to the inclusion of this information in the form and context in which it appears in this announcement. The technical information in this presentation that relates to the exploration results and targets within the regional exploration program are based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is our full time employee and is not independent within the meaning of National Instrument 43-101. Mr. Pawlitschek has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity 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 of this information in the form and context in which it appears in this offering memorandum. 29