PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL - - PowerPoint PPT Presentation

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PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL - - PowerPoint PPT Presentation

PRODUCING AND EXPLORING SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST 1 CAUTIONARY STATEMENT This presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking


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PRODUCING AND EXPLORING

SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST

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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. 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.

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SEPTEMBER 2011 CONFERENCE CALL & WEBCAST

Alan R. Hill Chairman & CEO Richard Young President & CFO Bruce Van Brunt Business Development Manager Martin Pawlitschek Regional Exploration Manager FOCUSED ON GROWTH

FOCUSED ON: GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH

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OPERATING HIGHLIGHTS

Gold production for the Sept. quarter:

  • 27,082 oz at $1,156/oz sold
  • Mining through lower grade area of pit
  • Higher costs due to higher fuel, labour and

maintenance costs Gold Production for last 12 months:

  • 130,640 oz at $841/oz sold
  • Est. for December Quarter:
  • 45,000 oz at ~ $775/oz sold
  • Est. for 2011:
  • 140,000 oz at ~ $850-$875 sold
  • Est. for 2012:
  • 220,000 oz at ~ $625-$675 sold
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Net loss for the quarter and twelve months:

  • $25M or $0.10/share and $28.4M or $0.14/share

Cash and cash equivalents*:

  • $25.8M (as at Sept. 30, 2011)

Revenue for the quarter:

  • $32.5M for the quarter
  • 16,615 oz delivered into forward sales contracts
  • 10,959 oz sold at spot
  • $1,174/oz – average realized price

FINANCIAL HIGHLIGHTS

* Including short term investments and restricted cash

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Hedge book:

  • Accelerated deliveries
  • Outstanding balance – 181,885 oz (Sept. 30, 2011)
  • Expect to end year – 165,000 oz remaining
  • Objective: eliminate book quickly but prudently

Capital Expenditures:

  • $24M for the quarter
  • $34.4M to be spent in December quarter
  • ~ $83M for calendar 2011
  • Primarily for mill expansion / mining equipment

/ Mine License exploration costs

FINANCIAL HIGHLIGHTS

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FOCUSED ON GROWING RESERVES

Goal:

  • Expand Proven and Probable reserves from

1.5 Moz to 3 Moz

  • On Mine License alone
  • Over next 12-18 months
  • Similar or better grades than current

reserve grade

  • Increase mine life to ~ 15 years
  • Run rate ~ 200,000 oz annually
  • Solid production base to build on

FOCUSED ON ADDING RESERVES

EXPLORATION

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MINE LICENSE EXPLORATION (ML)*

Budget: $10M 33km2

September quarter:

  • 5 drill rigs RC and Diamond
  • 13,000 metres drilled in quarter
  • 43,000 metres drilled YTD
  • Added 2 additional rigs = 7

* Full drill results are posted at terangagold.com

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“THE CORRIDOR”

Continuation of the main Sabodala structural trend to the north

MAIN FLAT EXTENSION

One of the principal gold hosts of the Sabodala deposit immediately adjacent to the current ultimate pit

MASATO EXTENSION

Continuation of Masato deposit

MINE LICENSE EXPLORATION

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MINE LICENSE EXPLORATION

MAIN FLAT EXTENSION

  • Potential for higher grades in

expanded pit

  • Significant widths intersected*
  • 131m @ 3.45 g/t
  • 87m @ 3.11 g/t
  • From 4 mineralized zones
  • Just outside current pit
  • Depth ~ 300m
  • Open down plunge and to NW
  • Goal: to add 250,000 oz open pit

reserves and similar amount in underground in 2012

* Full drill results are posted at terangagold.com

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MINE LICENSE EXPLORATION

THE CORRIDOR and AYOUB’S

  • Northerly trending extension of Sabodala

pit

  • 1,700m completed in Sept. quarter
  • Lower grade but continuous
  • Sabodala style alteration
  • Open down dip / along strike
  • 15m @ 1.34 g/t
  • 20m @ 2.1 g/t

Mylonite Shear Zone Ayoub’s Thrust Sabodala Pit

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MINE LICENSE EXPLORATION

MASATO

  • Outcrops on neighbour’s property
  • ~ 2 kilometres from the mill
  • 6,100 metres drill in Sept. quarter*
  • Drilling confirms mineralized strike

length of 500 metres / dip 200 metres

  • 37m @ 4.5 g/t
  • 44m @ 2.0 g/t
  • Deposit remains open in all directions
  • 3 drills currently drilling

* Full drill results are posted at terangagold.com

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“THE DONUT” GORA TOUROKHOTO TOUMBOUMBA

REGIONAL EXPLORATION

Budget: $25M 1,455km2

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GORA – HIGH-GRADE QUARTZ VEIN

SYSTEM

  • Most advanced target: moving from

exploration to development

  • Inferred resource of 106,000 oz @ 6 g/t Au

(May 2, 2011)

  • 22km from Sabodala mill
  • 800m strike length auriferous quartz vein,
  • utcropping
  • Deposit open in all directions
  • Induced polarization (“IP”) survey has been

completed over the Gora deposit and has been shown to track veins to the south. Several look alike targets identified.

Trace of blind veins from RC holes Projected to surface – high correlation with IP trends.

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GORA – HIGH-GRADE QUARTZ VEIN SYSTEM

  • 1. Systematic evaluation drilling began in February
  • 40 x 40 metre grid pattern over the main open-pit

resource area

  • Designed to evaluate the resource to a depth of

130m along the strike extent

  • All five rigs assigned to a program of 24 diamond

holes

  • 10 metre drill spacing
  • Improve resource estimation and eventually

reserve drilling

  • 2. Step out exploration drilling
  • Aims to test key structural intersections located

down dip where mineralized structures are expected to intersect a major intrusive body

  • 3. Further 10,000m of RC, 5,000m DD
  • Test strike extent of Gora mineralized trend and

nearby parallel IP anomalies

  • Commenced program in early October
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GORA – HIGH-GRADE QUARTZ VEIN SYSTEM *

  • Grades from Gora are at least four times our reserve grade
  • We have a number of IP trends to target with exploration RC drilling
  • The Company is running a number of processes in parallel to efficiently develop

Gora as quickly as possible including:

  • Ongoing exploration
  • Permitting
  • Feasibility level economic analysis

* Full drill results are posted at terangagold.com

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GORA – INTERPRETED IP MAP SHOWING DRILLED

AND PLANNED HOLE

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GORA – CROSS SECTION SHOWING INTERSECTION

OF VEINS

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TOUMBOUMBA – NEWEST

TARGET*

  • Located 10km NW from Sabodala mill
  • Latest discovery, potential to become second

regional deposit through the mill

  • Alteration hosted mostly in granite (laterite

cover)

  • RAB drilling program commenced in April
  • Expanded to encompass entire

structural domain

  • To date, 1,150 holes, 49,000m on a

100m x 50m grid

  • Significant widths of ore mineralization were

encountered in western portion of anomaly

  • 237 RAB out of 1,150 holes returned >0.1 g/t
  • Multiple trends

* Full drill results are posted at terangagold.com

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TOUMBOUMBA*

  • Targets identified by RAB program

are the subject of the current RC program

  • To date, 49 RC holes, 8,748m

completed

  • Continues to return wide

auriferous zones

  • Oxide mineralization of up to 60m

in depth

  • Significant results include*:
  • 11m @ 5.20 g/t
  • 2m @ 21.45 g/t
  • 4m @ 6.32 g/t
  • At minimum, potential for heap

leaching

  • Production could be fast

tracked without displacing material from Sabodala mill

  • Deeper drilled required

* Full drill results are posted at terangagold.com

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MAJIVA – RC DRILLING

  • Located along 12km strike between Majiva and

Niakafiri (Mine License)

  • Identified 5km strike length – gold mineralized

structure

  • Will have 2 rigs operating (1 RC/DD, 1 RC)
  • IP survey indicates several prospective zones
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  • Three main zones defined by RAB
  • RC Program – 10,000m scheduled

to start late November.

  • 2012 Program:
  • Additional 30,000m of RAB

required to test 2nd order surface geochemical anomalies

  • 65km line of IP to map

alteration zones in more detail

TOUROKHOTO

RAB defined Au Targets

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DIEGOUN NORTH – “THE DONUT”*

  • The first pass RC program at Jam and Honey
  • 51 holes, 8,800m
  • 40 of 51 holes > 0.5 g/t
  • Remaining holes 0.1-0.5 g/t
  • The mineralization at Jam is controlled by a series of

north east trending structures that trend for several kms

Sabodala Ore Body

* Full drill results are posted at terangagold.com

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  • Three
  • Another phase of RAB drilling is planned to test structure between Cinnamon and Jam
  • First pass RC testing required to test the RAB anomalies at Cinnamon
  • RC drilling at Jam
  • Wide-spaced, reconnaissance nature with lines 200-400m
  • Significant mineralized strike length between and along the mineralized structures

remains untested

  • Integrating the data to define a follow up program of drilling for the coming dry

season

  • The mineralization at Honey
  • Narrow intervals of quartz veining and minor carbonate alteration hosted in

sediments

  • Mineralization also aligns with NE trending structures
  • RAB and RC drilling completed
  • Led to the recognition of a well-developed, auriferous NE trending structure on the

eastern side of the target area

  • Structure trends for at least 4.5km from the Jam anomaly to the newly defined RAB

gold anomalies at Cinnamon

  • Further drilling required

DIEGOUN NORTH – “THE DONUT”

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DEMBALA HILL*

  • Further to the south intrusion along the

same structure host the 240,000 oz Makabingui Deposit

  • Hosted in Southern outcropping gabbro-

diorite intrusion

  • Scout RAB drilling intersected 2m @ 12.5

g/t

  • If positive, more systematic RC drill testing

* Full drill results are posted at terangagold.com

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SAIENSOUTOU*

  • Targeting a 3km x 1.5km Au-As

anomaly on a NS trend

  • Magnetics indicate a buried intrusive

to the immediate north

  • 110 RAB holes for 4,365m
  • 2012 Program:
  • Infill RAB
  • RC drill testing

* Full drill results are posted at terangagold.com

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SUMMARY – FOCUSED ON GROWTH

1. Toughest quarter operationally behind us 2. Extensive $35m exploration program 3. Exploration updates on a regular basis 4. 2012 Est. 220,000 oz @ $625-$675/oz 5. Eliminate hedge book as quickly as possible 6. Significant free cash flow to self fund exploration and development of Gora 7. Focused on growing production and reserves

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PRODUCING AND EXPLORING

SEPTEMBER QUARTER 2011 CONFERENCE CALL & WEBCAST