PDAC Conference The Next March 4-7, 2018 Multi-Asset Mid-Tier TSX:TGZ / OTCQX:TGCDF West African Gold Producer
Forward-Looking Statements This document contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"), which reflects management's expectations regarding Teranga's future growth opportunities, results of operations, performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and other opportunities. Wherever possible, words such as “plans”, “expects”, “does not expect”, “scheduled”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish” or “does not anticipate”, “believe”, “intend”, “ability to” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are "likely" to be taken, occur or be achieved, have been used to identify such forward looking information. Specific forward-looking statements include, without limitation, all disclosure regarding possible events, conditions or results of operations, future economic conditions and anticipated courses of action. Although the forward-looking statements contained in this document 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. Such forward-looking 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 but that may prove to be incorrect. These assumptions include, among other things, the ability to obtain any requisite governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements. 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 Teranga's Annual Information Form dated March 30, 2017, and in other filings of Teranga 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 document should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. All references to Teranga include its subsidiaries unless the context requires otherwise. This presentation is as of February 23, 2018. All references to Teranga include its subsidiaries unless the context requires otherwise. This presentation contains references to Teranga using the words “we”, “us”, “our” and similar words and the reader is referred to using the words “you”, “your” and similar words. All dollar amounts stated are denominated in U.S. dollars unless specified otherwise. 2
Deep Value: A Re-Rating Opportunity (C$) Excludes potential value from: • Wahgnion infill drill program $7.54 • Golden Hill NPV* • Afema and Côte d’Ivoire assets Per Share based on cash & $1.02 2P reserves (1)(2) $1.41 Cash balance as at December 31, 2017 $5.11 Wahgnion Project NPV 5% based on 2P (1) $3.50 TGZ Current Sabodala NPV 5% based on 2P (2) Share Price (closing price Feb 26, 2018) $1,300 Gold Price per Ounce Assumption *Refer to Appendix – Non-IFRS Performance Measures 3 Refer to Appendix – Endnotes (1) and (2)
Potential for a Major Rate Reset EV/2P Reserves ($/oz) Teranga’s Share Price B2Gold 508 vs. Net Present Value* (NPV) (12) per Share Roxgold 441 Data Source: BMO GoldPages published February 26, 2018 Endeavour 309 Golden Star 254 75% Semafo 239 Alacer 94 Teranga 86 C$6.11 Asanko 57 C$5.09 Perseus 52 C$3.50 EV/2018E EBITDA Share Price BMO NPV per Share Revalued Share Price Alacer 30.0 (Spot) B2Gold 6.3 0.50x 1.2x Endeavour 6.0 Current TGZ Average NPV Multiple Semafo 5.0 NPV Trading for Medium Producers (12) Multiple (12) Golden Star 4.3 Roxgold 4.1 Teranga 3.5 *Refer to Appendix – Non-IFRS Performance Measures 4 Refer to Appendix – Endnote (12) Asanko 3.4
Capital Structure and Recent Share Price Performance Share Price Performance (TSX: TGZ) Capital Structure (at December 31, 2017 unless otherwise noted) (Closing price on December 12, 2017 – February 26, 2018) Common shares outstanding 107.3M TGZ-TSX Stock options outstanding 4.5M GDXJ 60% Fully diluted 111.8M Gold Price Number of shares owned by insiders 23.8M ASX Delisting 50% Market capitalization (February 26, 2018) C$376M/ US$294M Completed Compulsory Sale +45% Facility before markets open Cash / net cash $88M / $70M on December 13 – stock 40% price hit low of $2.30 (compared to $2.42 closing % of o/s As at price on December 12) Top shareholders 30% shares Jan 31, 2018 1 Tablo Corporation 21.5% 23,128,900 2 Van Eck Associates Corporation 6.1% 7,573,022 20% 3 Heartland Advisors 4.5% 4,800,000 4 Ruffer LLP 4.3% 4,607,243 10% +7% 5 Oppenheimer Funds 3.2% 3,460,828 +7% 6 Dimensional Fund Advisors 2.9% 3,100,539 0% 7 Franklin Advisers 2.5% 2,707,200 8 Universal-Investment Gesellschaft 1.6% 1,735,000 9 LSV Asset Management 1.6% 1,719,540 10 Konwave AG 1.6% 1,698,197 Source: IR Insight on February 26, 2018 5
Building The Next Multi-Asset Mid-Tier West African Gold Producer Senegal Sabodala Gold Mine Mali 1.4Moz production since IPO in late 2010 Niger Burkina Faso The Gambia Guinea- Wahgnion Development Project Bisseau Expect to close financing and commence construction in Q2 2018 Guinea Gourma Exploration JV Golden Hill Exploration JV Dianra Teranga has nearly Sierra Benin 4.0 million ounces of Leone Ghana gold reserves from Côte d’Ivoire Togo Mahepleu its Sabodala Gold Mine and its Wahgnion Tiassale Liberia Development Project (1)(2) Afema Guitry Sangaredougou 6 Refer to Appendix – Endnotes (1) and (2)
FY2017 Highlights Achieved record Increased Announced More positive drill production of Sabodala reserves positive feasibility results from 233,267 oz by 400,000 oz for Wahgnion Golden Hill of gold and filed updated Project including NI 43-101 (2) reserves of 1.2 million oz (1) Refer to Appendix – Endnotes (1) and (2) 7
Significantly Increasing Production and Improving Free Cash Flow Teranga Consolidated Production Profile (koz) (3),(4),(7) Opportunities to maintain 2020 – 2022 Sabodala + Wahgnion production and free cash flow through resource conversion & ~350Koz annual discoveries at Sabodala & production Wahgnion 350Koz ~$100M annual free cash flow* (11) ~$70M annual free cash flow* (5) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 *Refer to Appendix – Non-IFRS Performance Measures 8 Refer to Appendix – Endnotes (3), (4), (5), (7) and (11)
Extensive Organic Growth Pipeline 2018 Exploration Budget Burkina Faso $9M-10M Senegal Senegal ~$1M ~$ 15 Wahgnion MILLION Gold Project Côte d’Ivoire ~$3M Burkina Faso Senegal Côte d'lvoire Operating Gold Mine/ Development Project 9
Strong Financial Position Solid Financial $88 Million +$90 Million (6) Net $150 Million Position to fund pre-production Cash balance Estimated cash flow from Net $150M project debt facility capital cost as at December 31, 2017 Sabodala 2018-2019 expected to close in Q2 2018 of building second mine (Wahgnion) Refer to Appendix – Endnote (6) 10
2018 News Flow and Milestones Wahgnion Golden Hill Announcement and closing project financing Regular exploration updates starting in Q1 Commence mill construction Maiden resource Update reserves Update NI 43-101 technical report Senegal Côte d’Ivoire Project updates from Guitry and Afema Production of 210Koz-225Koz Commence Niakafiri relocation 11
Sabodala Senegal, West Africa 12
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