TORONTO, ONTARIO–(Marketwired – Sept. 21, 2015) – Richard Young, President and CEO of Teranga Gold Corporation (“Teranga” or the “Company”) (TSX:TGZ) (ASX:TGZ) will present at the Denver Gold Forum on Tuesday, September 22, 2015 at 3:20 p.m. MDT / 5:20 p.m. EDT. The conference will take place at the Hyatt Regency in Denver, Colorado. A live webcast of Mr. Young’s presentation and slides for simultaneous viewing will be available on Teranga’s website at www.terangagold.com/events. The key issues to be discussed during the presentation include an update of the Company’s third quarter operating results and strategic growth initiatives as outlined in more detail in the corporate update below.
On Track to Achieve 2015 Outlook
With Gora up and running and mined tonnage and grade from Masato reconciling well to the reserve model, Teranga reaffirms its 2015 production outlook of between 200,000 and 230,000 ounces.
Production is expected to be in the lower half of the guidance range as a result of changes made during the third quarter to the Gora mine plan to enlarge the phase one pit to optimize operating efficiencies. The result of these modifications is the deferral into 2016 of three benches containing approximately 100,000 tonnes of ore at over six grams of gold per tonne.
Third quarter and full year production will also be impacted by heavy rainfall that has caused material handling issues with the oxide material being mined at Masato, which in turn has negatively impacted throughput. As a result, this higher grade oxide material from Masato, which was mined and scheduled to be processed during the quarter, has been stockpiled and will be processed after the rainy season ends in October.
Despite the deferral of the three benches into 2016, high-grade Gora material, together with the higher grade Masato material stockpiled from the third quarter, are expected to result in a significant increase in fourth quarter production and the achievement of the Company’s 2015 production outlook.
Management also reaffirms that mine production costs and unit mining, milling and G&A costs are expected to come in at the lower end of cost guidance, primarily driven by a reduction in fuel prices, favourable variances in currency and a company-wide focus on cost management in connection with its comprehensive business performance improvement programme launched in 2014. To further enhance this programme, Teranga has retained Partners in Performance International, a company with a proven track record of identifying cost and efficiency improvements for mining companies across the globe.
While the Company’s cash balance is expected to decline in the third quarter due to the delay in processing higher grade Masato oxide material and planned capital spending, Teranga expects to generate free cash flow in the fourth quarter and end 2015 with a strong cash balance.
Reserve Development Programs Underway
Teranga has several reserve development initiatives underway, including a program to convert open pit resources on its mine license and a study to convert high grade underground resources at depth. This past August, Teranga and the Government of Senegal launched the resettlement process related to the nearby village of Sabodala, adjacent to the Niakafiri deposit. A drill program to convert resources to reserves at Niakafiri is expected to commence in due course while drilling on the Company’s regional land package is expected to resume following the end of the rainy season.
OSC Comment on Disclosure Record
As part of its normal course review, the OSC has requested Teranga to retract a statement which disclosed an aspirational future production objective set out in a press release dated February 23, 2015. The statement in question suggested a future “Phase 2 organic growth target of 400,000 to 500,000 ounces of annual production” based on a number of assumptions. However, this production target was not described in terms of quantity and grade within ranges in a manner that would support this production target in order to comply with the provisions of NI 43-101 s 2.3(2). Further, the Company did not intend to imply that the existing regional exploration package had already identified sufficient mineralization that could be economically exploited to bridge the gap from current production levels to this aspirational objective. With the Company’s update to its strategy in July to focus on the maximization of sustainable cash flows, it no longer refers to aspirational phases of production, and the Company is hereby retracting earlier statements made regarding phased production rates.
Forward Looking Statements
This release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Teranga, or developments in Teranga’s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, all disclosure regarding possible events, conditions or results of operations, future economic conditions and courses of action, the proposed plans with respect to mine plan, anticipated 2015 results, mineral reserve and mineral resource estimates, anticipated life of mine operating and financial results, and the completion of construction of the Gora deposit related thereto. Such statements are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments that management believe to be reasonable and relevant. These assumptions include, among other things, the ability to obtain any requisite Senegalese governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. The risks and uncertainties that may affect forward-looking statements include, among others. the inherent risks involved in exploration and development of mineral properties, including government approvals and permitting, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Teranga, as well as other risks and uncertainties which are more fully described in the Company’s Annual Information Form dated March 30, 2015, and in other company filings with securities and regulatory authorities which are available at www.sedar.com. Teranga does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities.
About Teranga Gold
Teranga is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development in Senegal, West Africa.
Teranga’s mission is to create value for all of its stakeholders through responsible mining. Its vision is to explore, discover and develop gold mines in Senegal and West Africa, in accordance with the highest international standards, and to be a catalyst for sustainable economic, environmental and community development. All of its actions from exploration, through development, operations and closure will be based on the best available techniques.
Senegal, which is located in West Africa, has a stable democracy, a very progressive mining code and is a member of the West African Economic and Monetary Union. The Senegalese government views mining as a pillar of growth and supports mining companies by offering attractive royalty and ownership structures. Teranga operates the only gold mine and mill in Senegal. For more information, please refer to www.terangagold.com.
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