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Indaba conf feb2013 final

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Teranga Gold
Teranga Gold

Teranga Gold Corporation is a gold mining and exploration company focused on growing production and cash margins through its Sabodala gold mine in Senegal. In 2012, Teranga achieved record gold production of 214,310 ounces at total cash costs of $627 per ounce. Teranga's vision is to become a preeminent gold producer in West Africa through responsible mining practices. The company is focused on growing reserves through exploration and regional opportunities to extend mine life to 2020-2025 and increase annual production to 400,000-500,000 ounces.

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PRODUCING AND EXPLORING INDABA – FEBRUARY 2013 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
CAPITALIZATION SUMMARY Ticker symbol: TGZ: TSX/ASX FOCUSED ON GROWTH Shares outstanding(1): 245.6M THROUGH: Stock options outstanding: 17.1M Share price (as at Jan. 25, 2013): C$2.31 GROWING Market capitalization : (as at Jan. 25, 2013) C$567M RESERVES Cash position(2): US$45.0M GROWING PRODUCTION Project finance outstanding(3) US$60M FINANCIAL Mining fleet loan facility(4): US$10.5M STRENGTH Hedge balance (as at Jan. 29, 2013): 38,105oz. (1) As part of the demerger Mineral Deposits Ltd. retained 40M TGZ shares and received C$50M from the IPO proceeds (2) Includes cash, cash equivalents and $5.3M bullion receivable as at December 31, 2012. Numbers unaudited. (3) 2-Year Project Finance Facility with Macquarie Bank – repaid on or before June 30, 2014 (4) Outstanding under the mining fleet finance loan facility with Société Générale as at December 31, 2012 3
OUR VISION To become a preeminent gold producer in West Africa while setting the benchmark for responsible mining in Senegal Phase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 oz. of annual gold production leveraging off existing infrastructure • 2011 production of 131,461oz. • 2012 production of 214,310oz. at cash costs of $627/oz. • 2013 forecast production of 190,000 – 210,000oz. at cash costs of $650-$700/oz. Phase 2: Increase annual gold production to 400,000 to 500,000 oz. with mill expansion as reserves increase 4
SABODALA IS SENEGAL’S ONLY LARGE-SCALE GOLD MINE Population of ~12.8M Democratic Government • Smooth process and power transition in 2012 elections • Peaceful democracy since independence from France in 1960 • Use of the eight-country West African CFA France currency fully guaranteed by the French treasury and pegged to the Euro (WAEMU) • Sabodala is the only large-scale gold mine in Senegal Government has vested interest in Sabodala’s success given: • 10% free-carried interest • 3% gross production royalty • 25% income tax (after tax holiday expires in 2015) • Employment and regional development opportunities Sovereign Long Term Credit Ratings • One of only seven African countries rated by Moody’s and S&P • Moody’s: B1 • S&P: B+ 5
TERANGA IS MINING RESPONSIBLY AND SHARING THE BENEFITS • Corporate Social Responsibility is fundamental to the success of our business • Health, safety, education and sustainability are all priorities • Developing schools, health clinics, and improving access to potable water • Have engaged a renowned Canadian group to assist in putting together a comprehensive Regional Development Plan in partnership with the local, regional, and national government • Committed to improving the livelihoods of those in the communities in which we operate • A key component of our vision is to set the benchmark for responsible mining in Senegal 6
SABODALA GOLD OPERATION IS PRODUCING CONSISTANTLY Gold Production Since 2009 • First gold pour in March ‘09 with over $500M invested to date Well Developed Infrastructure • Located 650 km east of the capital Dakar and ~100 km north of the town Kedougou – paved road within 56 km of mine site • 36 MW heavy fuel oil power plant located on site Completed Mill Expansion • New ball mill and downstream plant, secondary crusher and new stockpile/reclaim facility commissioned • Expands annual production base to ~200,000 oz. • Mill capacity increases to ~3.5Mtpa of fresh (hard) ore or ~6Mtpa of oxide (soft) ore Modest Incremental Sustaining Capital Going Forward • US$125M – $150M LOM • Includes Gora, community relocations, further mobile equipment expenditure and pit delineation 7
2012 ANNUAL GUIDANCE MET WITH RECORD PRODUCTION & PROFITS Increased Gold Production • FY‘12 214,310oz. – Company record and 63% higher than calendar year 2011 and within guidance Reduced Total Cash Costs • FY‘12 cash costs of $627/oz. – 20% lower than calendar year 2011 and within guidance Reduced Gold Hedge Book • Gold hedges reduced to 38,105oz. as at Jan. 29, 2013 • Expect position to be fully extinguished by Aug’13 Increased Cash and Cash Equivalents(1) • $45.0M at FYE’12 as compared to $24.6M at FYE’11 (1) Includes cash, cash equivalents and $5.3M bullion receivable (unaudited). 8
CONTINUING TO STRENGTHEN THE ASSET BASE AND THE TEAM Capital Expenditure • 2012 - $83M including mill expansion and ML exploration • 2013 - $25M-$35M planned Capex in addition to $45M - $50M for Gora development • Capitalized deferred stripping - $35M - $40M Larger Gold Inventory Base • Sabodala: M&I increased to 2.09 Moz. • Gora: M&I increased to 0.37 Moz. at 5.0gpt • Niakafiri: M&I increased to 0.39 Moz. • Mine Licence: Total inferred resources rose to 1.48Moz. Added Depth to Management Team in Q4‘12 • Mark English: VP, Sabodala Gold Operations • Paul Chawrun: VP, Technical Services • Navin Dyal: VP & CFO 9
MOST ADVANCED SATELLITE DEPOSIT - GORA Open Pit • 26km from mill • Technical Study and ESIA complete – initiating permitting Q1’13 • M&I of 374,000 oz. at 5.0gpt • Proven & Probable reserves of 285,000oz. at 4.2gpt. (2.1M tonnes of ore) • Estimated 4 year mine life • Stripping ratio of 19:1 Economics • Capital cost est. $45M-$50M Source – Typical section of Gora looking South West, 2012. • Est. total cash cost to average $675-$700/oz. • NPV (5%) at $1500/oz. of $105 million • IRR 69% 10
FOCUSED ON GROWING PRODUCTION AND CASH MARGINS Production Profile ('000oz.)(1) Cash Margin ($/oz)(2) 300,000 1000 250,000 800 200,000 600 150,000 400 100,000 200 50,000 - 0 2011 2012 2013 2014 2015 2011 2012 2013* 2014 2015 Rate of margin expansion is a function of increasing Gora Production ML Production production through regional exploration success * After eliminating hedge position • 2012 Production Results: 214,310oz. at cash costs of $627/oz. • Jan. 29th, 2013 hedge position 38,105oz., management expects to be hedge free Aug. 2013 (1) Assumes increased production from regional exploration success (2) Assumes $1600/oz. gold price and cash cost of $675/oz. after the elimination of the gold hedge position 11
FOCUSED ON GROWING RESERVES Reserves and Resources(1,2,3) December 31, 2012 3.50 3.00 2.50 2.87 2.00 Moz. 1.50 1.67 1.59 1.00 0.50 0.00 Proven and Measured and Inferred Resources Probable Reserves Indicated Resources (1) See pages 21/22 (2) M+I Resources are inclusive of reserves (3) Includes Sabodala, Niakafiri, Niakafiri West, Soukhoto, Diadiako, Majiva, Masato and Gora 12
FOCUSED ON GROWING RESERVES 2013 Exploration Program(1) Mine Licence Exploration (ML) $5-10M 13,000m RAB 32,400m RC 13,100m DD Regional Exploration (RLP) $10-15M 82,000m RAB 32,600m RC 14,500m DD TOTAL ~$20M 2012 Exploration Program(2) Mine Licence Exploration $26M 104,400m (RC/DD) Regional Exploration(3) $20M 62,500 RAB 42,300 RC 2,400 DD TOTAL $46M (1) Additional funding allocated on a priority basis for prospects with clear potential for reserve definition (2) Full drill results are posted at terangagold.com (3) Includes ~$3M for Gora exploration 13
MINE LICENCE MAKES UP ~3% OF TERANGA’S TOTAL LAND PACKAGE Mine Licence Exploration (ML) Regional Land Package (RLP) 33km2 1,200km2 14
POTENTIAL TO EXPAND THE ML GOLD MINERALIZATION INVENTORY • Potential to expand gold inventory on ML with the 33km2 objective of increasing mine life to the year 2020/25 SABODALA PIT – MAIN FLAT EXTENSION / LOWER FLAT ZONE SAMBAYA HILL SUTUBA DINKOKHONO NIAKAFIRI / NIAKAFIRI WEST / SOUKHOTO 15
PROPERTIES IN VARYING STAGES OF ASSESSMENT WITHIN RLP 1,200km2 NINYENKO / SORETO DIABOUGOU SAIENSOUTOU TOUROKHOTO (Main and Marougou) 35km from Mill GOUMBOU GAMBA GORA 16
FOCUS IS ON CONTINUED GROWTH Focused on Growing Reserves • To secure a reserve life to year 2020/25 • Growth through exploration • Growth through regional opportunities (JV’s, acquisitions) Focused on Growing Production • Phase 1: 250,000 – 350,000oz. annual production by leveraging existing mill and land package • Phase 2: 400,000 – 500,000oz. annual production, will require another mill expansion Focused on Building Financial Strength • Eliminating hedge book • Expanding cash margins • Increasing cash balance • Use free cash flow to self-fund growth strategy • Focusing on the ounces that provide the best returns • Increase earning and cash flow per share (minimize dilution) 17
APPENDICES 18
OPERATING STATISTICS Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 Quarter Quarter Quarter Quarter Quarter Ore mined (‘000t) 2,038 655 2,105 1,117 1,715 Waste mined (‘000t) 5,274 6,242 5,130 6,316 4,736 Total mined (‘000t) 7,312 6,897 7,235 7,433 6,451 Grade mined (g/t) 2.04 1.92 2.25 1.38 1.50 Ounces mined (oz) 133,549 40,516 152,603 49,517 82,710 Strip ratio w aste/ore 2.6 9.5 2.4 5.7 2.8 Ore processed (‘000t) 725 650 491 573 604 Head grade (g/t) 3.40 3.11 3.22 2.52 2.10 Gold recovery (%) 90.7 84.6 89.6 90.0 89.8 (1) Gold produced (oz) 71,804 55,107 45,495 41,904 36,695 Gold sold (oz) 71,604 62,439 38,503 35,268 34,665 Average price received $/oz 1,296 1,290 1,608 1,712 1,482 Total cash costs per ounce sold (2) $/oz 623 594 645 673 809 (including royalties) (1) Gold produced includes change in gold in circuit inventory plus gold recovered during the period. (2) Total cash costs per ounce sold for 2011 were restated to comply with the Company’s new accounting policy for measuring and recording ore stockpile costs, as well as reporting total cash costs after inventory movement, in line with the Company’s accounting policies and industry standards. 19
2013 GUIDANCE Year ending Decem ber 31, 2012 2013 Actuals Guidance Range • Mining and processing more tonnes at Operating results Ore mined (‘000t) 5,915 4,000 - 4,500 lower grade to maintain ~200,000oz. Waste mined (‘000t) 22,962 31,000 - 32,000 Total mined (‘000t) 28,877 35,000 - 36,500 Production Grade mined (g/t) 1.98 1.40 - 1.60 Strip ratio w aste/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 • Gross costs have increased but unit Recovery rate Gold produced % (oz) 88.7 214,310 89.0 190,000 - - 91.0 210,000 costs are expected to decline Gold sold (oz) 207,814 190,000 - 210,000 Total cash cost (incl. royalties) (1)(2) $/oz sold 627 650 - 700 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 Capital Expenditures Mine site $ millions 20.00 - 25.00 Capitalized reserve development $ millions 5.00 - 10.00 Gora development costs $ millions 45.00 - 50.00 Mobile equipment $ millions 30.00 - 35.00 Site development $ millions 15.00 - 20.00 Capitalized deferred stripping(2) $ millions 35.00 - 40.00 Exploration (expensed) $ millions 10.00 - 15.00 Adm inistration expense $ millions 15.00 - 20.00 Hedge deliveries (oz) 59,789 (1) Total cash cost per ounce is a non-IFRS financial measure with no standard meaning under IFRS (2) For 2013, reflects impact of new IFRS standard for deferred stripping 20
RESOURCE ESTIMATES – YE 2012 Measured Indicated Measured and Indicated Deposit Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 28.06 1.24 1.12 31.47 0.96 0.97 59.53 1.09 2.09 Sutuba - - - 0.50 1.27 0.02 0.50 1.27 0.02 Niakafiri 0.30 1.74 0.02 10.50 1.10 0.37 10.70 1.12 0.39 Gora 0.49 5.27 0.08 1.84 4.93 0.29 2.32 5.00 0.37 Total 28.85 1.32 1.22 44.31 1.16 1.65 73.05 1.22 2.87 Inferred Area Tonnes Grade Au (Mt) g/t (Moz) Sabodala 12.36 0.87 0.35 Niakifiri 7.20 0.88 0.21 Niakifiri West 7.10 0.82 0.19 Soukhoto 0.60 1.32 0.02 Gora 0.21 3.38 0.02 Diadiako 2.90 1.27 0.12 Majiva 2.60 0.64 0.05 Masato 19.18 1.15 0.71 Total 52.15 1.00 1.67 Note: Please see page 26 for Competent Persons Statement relating to this reserves estimate. 21
RESERVE ESTIMATES – YE 2012 Proven Probable Proven and Probable Deposit Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 6.55 1.5 0.315 11.07 1.24 0.443 17.62 1.34 0.758 Sutuba - - - 0.37 1.4 0.017 0.37 1.40 0.017 Niakafiri 0.23 1.69 0.013 7.58 1.12 0.274 7.81 1.14 0.287 Gora 0.57 4.07 0.074 1.53 4.27 0.21 2.1 4.22 0.284 Stockpiles 7.32 1.02 0.24 - - - 7.32 1.02 0.24 Total 14.67 1.36 0.642 20.56 1.43 0.944 35.23 1.40 1.586 Note: Please see page 26 for Competent Persons Statement relating to this reserves estimate. 22
2013 PLANNED MINE LICENCE EXPLORATION PROGRAM Target RAB RC DD (metres) (metres) (metres) Sabodala Pit 3,000 9,000 1,500 Niakafiri - 1,500 2,800 Niakafiri West 5,000 5,000 3,000 Niakafiri East - 1,000 - Dinkokhono - 6,600 - Dinkokhono North - 800 800 Sutuba South - 2,000 1,000 Masato North - 1,500 - Sambaya Hill - 2,500 2,500 Soukhoto 5,000 2,500 1,500 23
2013 PLANNED REGIONAL EXPLORATION PROGRAM Target RAB RC DD (metres) (metres) (metres) Goumbou gamba 6,000 3,600 1,200 Diabougou 16,000 5,000 2,000 Soreto North 22,000 3,000 2,000 Soreto 9,500 4,000 6,300 Ninyenko 5,500 3,000 2,000 Saiensoutou East 15,000 7,500 - Tourokhoto Main 8,000 2,500 - Tourokhoto Marougou - 4,000 1,000 24
MANAGEMENT Alan R. Hill • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold Executive Chairman • Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007) Richard S. Young • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold President & CEO • Former VP and CFO of Gabriel Resources (2005 – 2010) Mark English • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating mines and VP, Sabodala Operations development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006 Paul Chawrun • Mining Engineer and geologist with over 24 years experience • Former EVP Corporate Development for Chieftain Metals VP, Technical Services • Former Director, Technical Services Detour Gold Navin Dyal • Over 13 years in finance, most recently 7 years with Barrick Gold (2005 - 2012) • Former Director of Finance, Global Copper Business Unit – Barrick Gold VP & CFO • Chartered Accountant – Four years at major public accounting firm David Savarie • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel Resources VP, General Counsel & Corporate • Previously in private practice at Miller Thomson LLP Secretary Kathy Sipos • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009) VP, Investor & Stakeholder Relations Macoumba Diop • Geological Engineer, Master of Science in Finance with over 12 years experience in mining industry • Previously spent 11 years in a consulting business and mineral project marketing and development General Manager & Government • Joined SGO in July 2011. Relations Manager 25
COMPETENT PERSONS STATEMENT Julia Martin, P.Eng., MAusIMM (CP), with AMC Mining Consultants (Canada) Ltd., who 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 reviewed and accepts responsibility for the reserve estimate disclosed above. Ms Martin has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. The technical information contained in this Quarterly 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. She is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Ms.Nakai-Lajoie is a full-time employee of Teranga and not considered to be independent of Teranga. The technical information contained in this Quarterly Report relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientist. 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 is a ”qualified person” as defined in NI 43- 101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Mr. Pawlitschek is a full-time employee of Teranga and not considered to be independent of Teranga. Generally Ms. is used in reporting, and is consistent with other sections of the document. 26

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Indaba conf feb2013 final

  • 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 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
  • 3. CAPITALIZATION SUMMARY Ticker symbol: TGZ: TSX/ASX FOCUSED ON GROWTH Shares outstanding(1): 245.6M THROUGH: Stock options outstanding: 17.1M Share price (as at Jan. 25, 2013): C$2.31 GROWING Market capitalization : (as at Jan. 25, 2013) C$567M RESERVES Cash position(2): US$45.0M GROWING PRODUCTION Project finance outstanding(3) US$60M FINANCIAL Mining fleet loan facility(4): US$10.5M STRENGTH Hedge balance (as at Jan. 29, 2013): 38,105oz. (1) As part of the demerger Mineral Deposits Ltd. retained 40M TGZ shares and received C$50M from the IPO proceeds (2) Includes cash, cash equivalents and $5.3M bullion receivable as at December 31, 2012. Numbers unaudited. (3) 2-Year Project Finance Facility with Macquarie Bank – repaid on or before June 30, 2014 (4) Outstanding under the mining fleet finance loan facility with Société Générale as at December 31, 2012 3
  • 4. OUR VISION To become a preeminent gold producer in West Africa while setting the benchmark for responsible mining in Senegal Phase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 oz. of annual gold production leveraging off existing infrastructure • 2011 production of 131,461oz. • 2012 production of 214,310oz. at cash costs of $627/oz. • 2013 forecast production of 190,000 – 210,000oz. at cash costs of $650-$700/oz. Phase 2: Increase annual gold production to 400,000 to 500,000 oz. with mill expansion as reserves increase 4
  • 5. SABODALA IS SENEGAL’S ONLY LARGE-SCALE GOLD MINE Population of ~12.8M Democratic Government • Smooth process and power transition in 2012 elections • Peaceful democracy since independence from France in 1960 • Use of the eight-country West African CFA France currency fully guaranteed by the French treasury and pegged to the Euro (WAEMU) • Sabodala is the only large-scale gold mine in Senegal Government has vested interest in Sabodala’s success given: • 10% free-carried interest • 3% gross production royalty • 25% income tax (after tax holiday expires in 2015) • Employment and regional development opportunities Sovereign Long Term Credit Ratings • One of only seven African countries rated by Moody’s and S&P • Moody’s: B1 • S&P: B+ 5
  • 6. TERANGA IS MINING RESPONSIBLY AND SHARING THE BENEFITS • Corporate Social Responsibility is fundamental to the success of our business • Health, safety, education and sustainability are all priorities • Developing schools, health clinics, and improving access to potable water • Have engaged a renowned Canadian group to assist in putting together a comprehensive Regional Development Plan in partnership with the local, regional, and national government • Committed to improving the livelihoods of those in the communities in which we operate • A key component of our vision is to set the benchmark for responsible mining in Senegal 6
  • 7. SABODALA GOLD OPERATION IS PRODUCING CONSISTANTLY Gold Production Since 2009 • First gold pour in March ‘09 with over $500M invested to date Well Developed Infrastructure • Located 650 km east of the capital Dakar and ~100 km north of the town Kedougou – paved road within 56 km of mine site • 36 MW heavy fuel oil power plant located on site Completed Mill Expansion • New ball mill and downstream plant, secondary crusher and new stockpile/reclaim facility commissioned • Expands annual production base to ~200,000 oz. • Mill capacity increases to ~3.5Mtpa of fresh (hard) ore or ~6Mtpa of oxide (soft) ore Modest Incremental Sustaining Capital Going Forward • US$125M – $150M LOM • Includes Gora, community relocations, further mobile equipment expenditure and pit delineation 7
  • 8. 2012 ANNUAL GUIDANCE MET WITH RECORD PRODUCTION & PROFITS Increased Gold Production • FY‘12 214,310oz. – Company record and 63% higher than calendar year 2011 and within guidance Reduced Total Cash Costs • FY‘12 cash costs of $627/oz. – 20% lower than calendar year 2011 and within guidance Reduced Gold Hedge Book • Gold hedges reduced to 38,105oz. as at Jan. 29, 2013 • Expect position to be fully extinguished by Aug’13 Increased Cash and Cash Equivalents(1) • $45.0M at FYE’12 as compared to $24.6M at FYE’11 (1) Includes cash, cash equivalents and $5.3M bullion receivable (unaudited). 8
  • 9. CONTINUING TO STRENGTHEN THE ASSET BASE AND THE TEAM Capital Expenditure • 2012 - $83M including mill expansion and ML exploration • 2013 - $25M-$35M planned Capex in addition to $45M - $50M for Gora development • Capitalized deferred stripping - $35M - $40M Larger Gold Inventory Base • Sabodala: M&I increased to 2.09 Moz. • Gora: M&I increased to 0.37 Moz. at 5.0gpt • Niakafiri: M&I increased to 0.39 Moz. • Mine Licence: Total inferred resources rose to 1.48Moz. Added Depth to Management Team in Q4‘12 • Mark English: VP, Sabodala Gold Operations • Paul Chawrun: VP, Technical Services • Navin Dyal: VP & CFO 9
  • 10. MOST ADVANCED SATELLITE DEPOSIT - GORA Open Pit • 26km from mill • Technical Study and ESIA complete – initiating permitting Q1’13 • M&I of 374,000 oz. at 5.0gpt • Proven & Probable reserves of 285,000oz. at 4.2gpt. (2.1M tonnes of ore) • Estimated 4 year mine life • Stripping ratio of 19:1 Economics • Capital cost est. $45M-$50M Source – Typical section of Gora looking South West, 2012. • Est. total cash cost to average $675-$700/oz. • NPV (5%) at $1500/oz. of $105 million • IRR 69% 10
  • 11. FOCUSED ON GROWING PRODUCTION AND CASH MARGINS Production Profile ('000oz.)(1) Cash Margin ($/oz)(2) 300,000 1000 250,000 800 200,000 600 150,000 400 100,000 200 50,000 - 0 2011 2012 2013 2014 2015 2011 2012 2013* 2014 2015 Rate of margin expansion is a function of increasing Gora Production ML Production production through regional exploration success * After eliminating hedge position • 2012 Production Results: 214,310oz. at cash costs of $627/oz. • Jan. 29th, 2013 hedge position 38,105oz., management expects to be hedge free Aug. 2013 (1) Assumes increased production from regional exploration success (2) Assumes $1600/oz. gold price and cash cost of $675/oz. after the elimination of the gold hedge position 11
  • 12. FOCUSED ON GROWING RESERVES Reserves and Resources(1,2,3) December 31, 2012 3.50 3.00 2.50 2.87 2.00 Moz. 1.50 1.67 1.59 1.00 0.50 0.00 Proven and Measured and Inferred Resources Probable Reserves Indicated Resources (1) See pages 21/22 (2) M+I Resources are inclusive of reserves (3) Includes Sabodala, Niakafiri, Niakafiri West, Soukhoto, Diadiako, Majiva, Masato and Gora 12
  • 13. FOCUSED ON GROWING RESERVES 2013 Exploration Program(1) Mine Licence Exploration (ML) $5-10M 13,000m RAB 32,400m RC 13,100m DD Regional Exploration (RLP) $10-15M 82,000m RAB 32,600m RC 14,500m DD TOTAL ~$20M 2012 Exploration Program(2) Mine Licence Exploration $26M 104,400m (RC/DD) Regional Exploration(3) $20M 62,500 RAB 42,300 RC 2,400 DD TOTAL $46M (1) Additional funding allocated on a priority basis for prospects with clear potential for reserve definition (2) Full drill results are posted at terangagold.com (3) Includes ~$3M for Gora exploration 13
  • 14. MINE LICENCE MAKES UP ~3% OF TERANGA’S TOTAL LAND PACKAGE Mine Licence Exploration (ML) Regional Land Package (RLP) 33km2 1,200km2 14
  • 15. POTENTIAL TO EXPAND THE ML GOLD MINERALIZATION INVENTORY • Potential to expand gold inventory on ML with the 33km2 objective of increasing mine life to the year 2020/25 SABODALA PIT – MAIN FLAT EXTENSION / LOWER FLAT ZONE SAMBAYA HILL SUTUBA DINKOKHONO NIAKAFIRI / NIAKAFIRI WEST / SOUKHOTO 15
  • 16. PROPERTIES IN VARYING STAGES OF ASSESSMENT WITHIN RLP 1,200km2 NINYENKO / SORETO DIABOUGOU SAIENSOUTOU TOUROKHOTO (Main and Marougou) 35km from Mill GOUMBOU GAMBA GORA 16
  • 17. FOCUS IS ON CONTINUED GROWTH Focused on Growing Reserves • To secure a reserve life to year 2020/25 • Growth through exploration • Growth through regional opportunities (JV’s, acquisitions) Focused on Growing Production • Phase 1: 250,000 – 350,000oz. annual production by leveraging existing mill and land package • Phase 2: 400,000 – 500,000oz. annual production, will require another mill expansion Focused on Building Financial Strength • Eliminating hedge book • Expanding cash margins • Increasing cash balance • Use free cash flow to self-fund growth strategy • Focusing on the ounces that provide the best returns • Increase earning and cash flow per share (minimize dilution) 17
  • 19. OPERATING STATISTICS Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 Quarter Quarter Quarter Quarter Quarter Ore mined (‘000t) 2,038 655 2,105 1,117 1,715 Waste mined (‘000t) 5,274 6,242 5,130 6,316 4,736 Total mined (‘000t) 7,312 6,897 7,235 7,433 6,451 Grade mined (g/t) 2.04 1.92 2.25 1.38 1.50 Ounces mined (oz) 133,549 40,516 152,603 49,517 82,710 Strip ratio w aste/ore 2.6 9.5 2.4 5.7 2.8 Ore processed (‘000t) 725 650 491 573 604 Head grade (g/t) 3.40 3.11 3.22 2.52 2.10 Gold recovery (%) 90.7 84.6 89.6 90.0 89.8 (1) Gold produced (oz) 71,804 55,107 45,495 41,904 36,695 Gold sold (oz) 71,604 62,439 38,503 35,268 34,665 Average price received $/oz 1,296 1,290 1,608 1,712 1,482 Total cash costs per ounce sold (2) $/oz 623 594 645 673 809 (including royalties) (1) Gold produced includes change in gold in circuit inventory plus gold recovered during the period. (2) Total cash costs per ounce sold for 2011 were restated to comply with the Company’s new accounting policy for measuring and recording ore stockpile costs, as well as reporting total cash costs after inventory movement, in line with the Company’s accounting policies and industry standards. 19
  • 20. 2013 GUIDANCE Year ending Decem ber 31, 2012 2013 Actuals Guidance Range • Mining and processing more tonnes at Operating results Ore mined (‘000t) 5,915 4,000 - 4,500 lower grade to maintain ~200,000oz. Waste mined (‘000t) 22,962 31,000 - 32,000 Total mined (‘000t) 28,877 35,000 - 36,500 Production Grade mined (g/t) 1.98 1.40 - 1.60 Strip ratio w aste/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 • Gross costs have increased but unit Recovery rate Gold produced % (oz) 88.7 214,310 89.0 190,000 - - 91.0 210,000 costs are expected to decline Gold sold (oz) 207,814 190,000 - 210,000 Total cash cost (incl. royalties) (1)(2) $/oz sold 627 650 - 700 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 Capital Expenditures Mine site $ millions 20.00 - 25.00 Capitalized reserve development $ millions 5.00 - 10.00 Gora development costs $ millions 45.00 - 50.00 Mobile equipment $ millions 30.00 - 35.00 Site development $ millions 15.00 - 20.00 Capitalized deferred stripping(2) $ millions 35.00 - 40.00 Exploration (expensed) $ millions 10.00 - 15.00 Adm inistration expense $ millions 15.00 - 20.00 Hedge deliveries (oz) 59,789 (1) Total cash cost per ounce is a non-IFRS financial measure with no standard meaning under IFRS (2) For 2013, reflects impact of new IFRS standard for deferred stripping 20
  • 21. RESOURCE ESTIMATES – YE 2012 Measured Indicated Measured and Indicated Deposit Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 28.06 1.24 1.12 31.47 0.96 0.97 59.53 1.09 2.09 Sutuba - - - 0.50 1.27 0.02 0.50 1.27 0.02 Niakafiri 0.30 1.74 0.02 10.50 1.10 0.37 10.70 1.12 0.39 Gora 0.49 5.27 0.08 1.84 4.93 0.29 2.32 5.00 0.37 Total 28.85 1.32 1.22 44.31 1.16 1.65 73.05 1.22 2.87 Inferred Area Tonnes Grade Au (Mt) g/t (Moz) Sabodala 12.36 0.87 0.35 Niakifiri 7.20 0.88 0.21 Niakifiri West 7.10 0.82 0.19 Soukhoto 0.60 1.32 0.02 Gora 0.21 3.38 0.02 Diadiako 2.90 1.27 0.12 Majiva 2.60 0.64 0.05 Masato 19.18 1.15 0.71 Total 52.15 1.00 1.67 Note: Please see page 26 for Competent Persons Statement relating to this reserves estimate. 21
  • 22. RESERVE ESTIMATES – YE 2012 Proven Probable Proven and Probable Deposit Tonnes Grade Au Tonnes Grade Au Tonnes Grade Au (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) Sabodala 6.55 1.5 0.315 11.07 1.24 0.443 17.62 1.34 0.758 Sutuba - - - 0.37 1.4 0.017 0.37 1.40 0.017 Niakafiri 0.23 1.69 0.013 7.58 1.12 0.274 7.81 1.14 0.287 Gora 0.57 4.07 0.074 1.53 4.27 0.21 2.1 4.22 0.284 Stockpiles 7.32 1.02 0.24 - - - 7.32 1.02 0.24 Total 14.67 1.36 0.642 20.56 1.43 0.944 35.23 1.40 1.586 Note: Please see page 26 for Competent Persons Statement relating to this reserves estimate. 22
  • 23. 2013 PLANNED MINE LICENCE EXPLORATION PROGRAM Target RAB RC DD (metres) (metres) (metres) Sabodala Pit 3,000 9,000 1,500 Niakafiri - 1,500 2,800 Niakafiri West 5,000 5,000 3,000 Niakafiri East - 1,000 - Dinkokhono - 6,600 - Dinkokhono North - 800 800 Sutuba South - 2,000 1,000 Masato North - 1,500 - Sambaya Hill - 2,500 2,500 Soukhoto 5,000 2,500 1,500 23
  • 24. 2013 PLANNED REGIONAL EXPLORATION PROGRAM Target RAB RC DD (metres) (metres) (metres) Goumbou gamba 6,000 3,600 1,200 Diabougou 16,000 5,000 2,000 Soreto North 22,000 3,000 2,000 Soreto 9,500 4,000 6,300 Ninyenko 5,500 3,000 2,000 Saiensoutou East 15,000 7,500 - Tourokhoto Main 8,000 2,500 - Tourokhoto Marougou - 4,000 1,000 24
  • 25. MANAGEMENT Alan R. Hill • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold Executive Chairman • Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007) Richard S. Young • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold President & CEO • Former VP and CFO of Gabriel Resources (2005 – 2010) Mark English • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating mines and VP, Sabodala Operations development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006 Paul Chawrun • Mining Engineer and geologist with over 24 years experience • Former EVP Corporate Development for Chieftain Metals VP, Technical Services • Former Director, Technical Services Detour Gold Navin Dyal • Over 13 years in finance, most recently 7 years with Barrick Gold (2005 - 2012) • Former Director of Finance, Global Copper Business Unit – Barrick Gold VP & CFO • Chartered Accountant – Four years at major public accounting firm David Savarie • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel Resources VP, General Counsel & Corporate • Previously in private practice at Miller Thomson LLP Secretary Kathy Sipos • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009) VP, Investor & Stakeholder Relations Macoumba Diop • Geological Engineer, Master of Science in Finance with over 12 years experience in mining industry • Previously spent 11 years in a consulting business and mineral project marketing and development General Manager & Government • Joined SGO in July 2011. Relations Manager 25
  • 26. COMPETENT PERSONS STATEMENT Julia Martin, P.Eng., MAusIMM (CP), with AMC Mining Consultants (Canada) Ltd., who 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 reviewed and accepts responsibility for the reserve estimate disclosed above. Ms Martin has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. The technical information contained in this Quarterly 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. She is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Ms.Nakai-Lajoie is a full-time employee of Teranga and not considered to be independent of Teranga. The technical information contained in this Quarterly Report relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientist. 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 is a ”qualified person” as defined in NI 43- 101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Mr. Pawlitschek is a full-time employee of Teranga and not considered to be independent of Teranga. Generally Ms. is used in reporting, and is consistent with other sections of the document. 26