Q1 2016 HIGHLIGHTS Friday, April 29, 2016 FORWARD-LOOKING - - PowerPoint PPT Presentation

Q1 2016 HIGHLIGHTS Friday, April 29, 2016

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This presentation 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 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”, “ability to” 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. 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. 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, 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 the Company’s Annual Information Form dated March 30, 2016 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. This presentation is dated as of the date on the front cover. All references to the Company 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.

FORWARD-LOOKING STATEMENTS

RICHARD YOUNG

PRESIDENT & CEO

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OFF TO A STRONG START IN 2016

Record Q1 production Record high mill throughput Lower unit costs in most categories Reduced corporate overhead by ~$1 million

Free Cash Flow per Ounce

• f Gold Sold(1)

($/oz) Q1 2015 Q1 2016

$131 $144

10%

Refer to Endnote (1) on slide 30

NAVIN DYAL

CFO

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GORA HIGH-GRADE MATERIAL DEFERRED FROM 2015 DRIVES RECORD Q1 PRODUCTION

Q1 2015 Q1 2016

48,643 70,727

Gold Production

(oz)

45%

Q1 2015 Q1 2016

1.90 2.23

Average Processed Grade

(grams per tonne)

17% Average processed grade for 2016 estimated to be in the range of 1.8 to 2.0 grams per tonne

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REVENUE REFLECTS HIGHER VOLUME OFFSET BY LOWER AVERAGE PRICE

Total Revenue

($M)

20% increase in gold sold 4% decrease in average realized gold price Hedged 28,000 ounces of 2016 production (including 3,000 in Q1) at an average price of $1,201 Q1 2015 Q1 2016 $68.5 $79.2

16%

Three months ended March 31 2016 2015 % Change Average realized gold price $1,169 $1,217 (4%) Average spot gold price $1,182 $1,218 (3%) Low $1,060 $1,147 (8%) High $1,271 $1,293 (2%)

Per Ounce

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Q1 2015 Q1 2016 $2.06 $2.15 Mining Costs

($/t mined)

Milling Costs

($/t milled)

Total Cash Costs Including Royalties(4)

($/oz)

Refer to Endnote (4) on slide 30

CONTINUING TO IMPROVE LONG-TERM COST STRUCTURE

4%

Q1 2015 Q1 2016 $609 $567 Q1 2015 Q1 2016 $14.64 $10.77

26% 7% Improving productivity and reducing costs remains a key priority

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Q1 2015 Q1 2016

$609 $567 $223 $127 $9 $130

LOWER CASH COSTS DRIVE IMPROVEMENT IN ALL-IN SUSTAINING COSTS

Refer to Endnote (4) on slide 30

All-in Sustaining Costs(4)

(per ounce sold)

2%

Administration expenses, regional admin costs, capitalized deferred stripping, capitalized reserve development, and sustaining capital Development capex Total cash costs(4)

$841

7% improvement in cash costs Significantly higher growth capex due to mill optimization

$824

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Corporate Social Responsibility $3 - $3.5M

Corporate G&A Regional G&A CSR

Regional Admin Original 2016 G&A Outlook $15 - $16 Million

A LEANER AND MORE COMPARABLE GENERAL & ADMINISTRATIVE COST BASE

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Corporate G&A Separated into Three Separate Components in Revised 2016 Outlook(2) Corporate CSR Corporate Administration $8 - $9M Regional Admin Expenses ~$2M

At an estimated range of $8 to $9 million, Teranga’s 2016 G&A is below the peer group average

Refer to Endnote (2) on slide 30

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Q1 2015 Q1 2016 $32.8 $29.0 EBITDA(3)

($M)

12%

$2.8 Million Net FX Swing Primarily due to realized and unrealized foreign exchange losses recorded as the Euro appreciated relative to the US dollar $2.7 Million Swing in Hedging Recognized gain of $1.8 million in Q1 2015 compared $0.9 million unrealized losses in Q1 2016 End of Tax Holiday Profit attributable to Teranga shareholders impacted by end of tax holiday

EBITDA & NET PROFIT IMPACTED BY VARIANCES IN FX AND HEDGING

Q1 2015 Q1 2016 $13.0 $7.8

40%

Profit Attributable to Shareholders of Teranga

($M)

Refer to Endnote (3) on slide 30

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Refer to Endnote (1) on slide 30

Cash Flow From Operations

($M)

SIGNIFICANT IMPROVEMENT IN CASH FLOWS

Free Cash Flow(1)

($M)

Free Cash Flow per Ounce

• f Gold Sold(1)

($/oz) Q1 2015 Q1 2016

$16.6 $24.1

Q1 2015 Q1 2016

$7.3 $9.8

Q1 2015 Q1 2016

$131 $144

45% 33% 10% Focused on maximizing sustainable free cash flow

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Received 6-Year VAT Exemption In February 2016 exemption from paying and collecting refundable VAT until 2022 Pro Forma March 31, 2016 Cash Balance: $70M Includes VAT certificates received to date and VAT recoverable from Senegalese government $30M Revolving Credit Facility Secured a $30 million revolving credit facility in 2015

• - $15 million remains undrawn

Pro Forma Cash Balance

($M)

STRONG BALANCE SHEET PROVIDES LIQUIDITY AND FLEXIBILITY

VAT exemption eliminates long-term drag on working capital

Pro forma December 31, 2015 Pro forma March 31, 2016 $44.4 $53.5 $13.2 VAT $16.5 VAT & Certificates $57.6 $70.0

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CSR Adding a separate line item for CSR with guidance range of $3 to $3.5 million Regional Administration Adding a separate line item for regional admin with guidance of ~$2.0 million Corporate G&A Lowering guidance to range of $8 to $9 million to reflect (i) a reduction of ~$1 million compared to budget and (ii) the reclassification of CSR and regional admin out of G&A Exploration Increasing exploration budget from $8 million to $12 million

UPDATED 2016 OUTLOOK

With a strong first quarter, on track for 2016 production between 200,000 and 215,000 ounces

Revisions to Original Outlook(2) New Line Items on Outlook(2)

RICHARD YOUNG

PRESIDENT & CEO

Lowering costs



Increasing mill throughput



Increasing long-term sustainable free cash flow(1)



UPDATED LIFE OF MINE: HIGHLIGHTS

Refer to endnote (1) on slide 30

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SOLID BASE CASE PRODUCTION PROFILE(5)

000’s oz Au Opportunity to grow production by increasing material movement Opportunity to increase production through resource conversion and new discoveries(6)

+200Koz average annual production from 2012- 2024

(5)

Significant potential upside to life of mine base case production profile(6)

Refer to endnotes (5) and (6) on slide 30

2016 Outlook 200K - 215Koz

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DECLINING COSTS & ATTRACTIVE CASH FLOW PROFILE

Life of Mine Cash Flow(7)

$240/oz

23% decrease in mining costs since 2014 40% decrease in milling costs since 2014 Benefitting from lower fuel prices, favourable FX rates and mill optimization 40%-50% of costs are Euro-denominated Cost saving initiatives are ongoing

LOM 2016 - 2020 Gold Price $ 1,200 $ 1,200 All-in Sustaining Cost(4) $ 887 $ 914 $ 313 $ 286 Franco-Nevada Stream* $ 73 $ 92 Cash flow/oz(7) $ 240 $ 194

*Fixed portion of Franco-Nevada gold stream ends in 2019 and will be replaced by variable stream, estimated to be $58/oz life of mine Refer to endnotes (4) and (7) on slide 30

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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

SIGNIFICANT CUMULATIVE CASH FLOW BUILD

One year of negative cash flow due to large capex associated with underground mine development

Low Annual Sustaining Capex Less than $10M sustaining capital required on an annual basis Generating Ample Cash Flow to Fund Growth Cash flow expected to total $549 million(7) over life of mine based on current reserves as per NI 43-101 Technical Report – March 2016

High quality infrastructure requires moderate capex, allowing Teranga to build cash flow over LOM

Refer to endnote (7) on slide 30

Cumulative Cash Flow(7)

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ORGANIC GROWTH: SIGNIFICANT INCREASE IN THROUGHPUT DUE TO MILL OPTIMIZATION

Project Milestones - Crusher

Leveraging existing mill and related infrastructure to increase organic growth Up to 15% increase in throughput*



5% reduction in costs



+50% IRR



Milestone Planned Date Status Engineering Complete Nov 2015 Completed on Schedule Commence Civil Works Nov 2015 Completed on Schedule Charter Vessel Arrives in Dakar Dec 2015 Completed on Schedule Complete Screen Civils Dec 2015 Completed (Delayed 4 Weeks) Commence SMP Works Jan 2016 Completed on Schedule Complete Screening CSMP Apr 2016 Completed on Schedule Complete Conveyors CSMP Jun 2016 On Schedule Complete Crusher CSMP Aug 2016 On Schedule Complete E, I and C Sep 2016 On Schedule Complete C2 Commissioning Oct 2016 On Schedule

*15% increase in throughput compared to throughput levels prior to launch of mill optimization in mid 2015

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FUTURE ORGANIC GROWTH: HEAP LEACHING

Heap Leach Flow Sheet Technically Viable For Processing Low-grade Ore Confirmed by pre-feasibility study, which was completed in Q4 2015 High Ore Recovery Range Oxide 78% - 83% Transition 61% - 66% Current Economic Estimates Capital cost: $40M + $10M contingency Processing costs: $7 - $8 per tonne Valuable Stockpile ~150,000 ounces of low-grade inventory available for heap leaching

Heap leaching has potential to increase Teranga’s annual production by 10% - 20%

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Strengthening Exploration Team As the former head of exploration for Oromin, new VP Exploration, David Mallo is very familiar with Teranga’s land package Channeling More Resources to Exploration Increasing 2016 exploration budget to $12 million

2010 IPO Exploration & Evaluation Acquisition Production 2015

2.6 1.1 0.9 1.3 1.5

2.6M Proven & Probable Reserves(8) at $1,100 gold. Average mined grade of 1.59 grams per tonne*

(As at December 31, 2015)

Refer to endnote (8) on slide 30

EXPLORATION SUCCESS TO DATE

Increased reserve base by 80%, net of 5-years’ production, through acquisition and exploration

80% increase in reserves since IPO

*Not including stockpile of 0.39Moz

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FOCUSED ON EXPLORATION

Mine License Highlights Two exploration prospects have yielded encouraging results during the ongoing 2016 trenching and diamond drilling program: (i) Golouma North and (ii) Goumbati West Regional Land Package Increased focus in the last six months has advanced a number of prospects that are currently in drilling phase

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Teranga Gold (TSX:TGZ): +90% Market Vectors Global Junior Gold Miners Index (MVGDXJ): +88%

February 25:  Released full Life of Mine

• pex and capex detail

 Hosted analyst workshop March 23:  Filed 43-101 Technical Report January 28:  Released Life of Mine production schedule

YTD TGZ Share Price Performance vs. Indices

(as at April 28, 2016)

TGZ SHARE PRICE STRENGTHENS ON UPDATED DETAILS OF LIFE OF MINE

Data Source: Thomson Reuters

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Teranga Endeavour Primero Acacia Semafo Golden Star Alacer B2Gold Roxgold Asanko

1.9x 3.5x 3.6x 5.7x 6.1x 7.9x 9.3x 10.4x 11.2x 13.7x

Asanko* Roxgold* Primero Golden Star Teranga Endeavour Alacer Acacia Semafo B2Gold

• $1,213

$1,242 $1,317 $1,507 $1,576 $2,327 $3,777 $4,571

Data Source: BMO GoldPages published April 25, 2016

RELATIVE UNDERVALUATION PROVIDES ATTRACTIVE INVESTMENT OPPORTUNITY

Enterprise Value ($M) EV/Production (BMO bases on gold sold) ($/oz) EV/2P Reserves ($/oz) EV/2016E EBITDA

*Project Developers

$0.88 $0.88 $0.88 $0.88 $1.30 $1.17 $1.43 $1.82

SIGNIFICANT POTENTIAL UPSIDE FROM NPV MULTIPLE EXPANSION

Based on Teranga’s updated NI 43-101 and the 1.4x average NPV multiple for its peer group, Teranga’s share price should be C$1.82(9) 33% 63%

Revalued Share Price

NPV Multiple 0.7x 0.9x 1.1x 1.4x

Teranga’s Share Price vs. Teranga Net Present Value (NPV)(9) per Share

(C$)

Share Price

107%

Revalued Share Price Share Price NPV per Share Share Price

Refer to endnote (9) on slide 30

Average NPV Multiple(9) for Medium Producers*

Revalued Share Price Share Price

Source: BMO GoldPages published April 25, 2016

TGZ Trading at 0.7x NPV*(9)

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EMERGING World-Class Gold Belt in a Safe & Stable Jurisdiction SOLID Balance Sheet & Significant Insider Ownership LARGE LONG-LIFE Reserve & Resource Base(8) LOW All-in Sustaining Costs per Ounce(4) SIGNIFICANT Organic Growth Potential STRONG Life of Mine Cash Flow(7)

Refer to endnotes (4) (7) and (8) on slide 30

STRONG VALUE PROPOSITION

Strong value proposition and undervalued relative to peer group = compelling investment opportunity

APPENDICES

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COMPETENT AND QUALIFIED PERSONS STATEMENT

The technical information contained in this document relating to the open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. William Paul Chawrun, P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Chawrun is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. However, he is a "Qualified Person" as defined in NI 43-101. Mr. Chawrun has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Chawrun has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in this Report. The technical information contained in this document relating to mineral resource estimates is based on, and fairly represents, information compiled by Ms. Patti Nakai-Lajoie. Ms. Nakai-Lajoie, P. Geo., is a Member of the Association of Professional Geoscientists of Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to

• time. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the

style of mineralization and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report. Teranga's exploration programs are being managed by Peter Mann, FAusIMM. Mr. Mann is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Mann has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Mann is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. The technical information contained in this document relating exploration results are based on, and fairly represents, information compiled by Mr. Mann. Mr. Mann has verified and approved the data disclosed in this document, including the sampling, analytical and test data underlying the information. The RC and initial diamond drill samples are prepared at site and assayed in the SGS laboratory located at the site. Analysis for elevated gold assays in the diamond drilling samples are sent for confirmatory fire assay analysis at ALS Johannesburg, South

• Africa. Mr. Mann has consented to the inclusion in this document of the matters based on his compiled information in the form and context in which it appears herein.

The technical information contained in this document relating to the underground ore reserves estimates is based on, and fairly represents, information compiled by Jeff Sepp, P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Sepp is independent of Teranga and is a "Qualified Person" as defined in NI 43-101 and a "competent person" as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Sepp 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 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Sepp has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in this Report. Teranga's disclosure of mineral reserve and mineral resource information is governed by NI 43-101 under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). CIM definitions of the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", are substantially similar to the 2012 JORC Code corresponding definitions of the terms "ore reserve", "proved ore reserve", "probable ore reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", respectively. Estimates of mineral resources and mineral reserves prepared in accordance with the 2012 JORC Code would not be materially different if prepared in accordance with the CIM definitions applicable under NI 43-101. There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.

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ENDNOTES

1) Free cash flow and free cash flow per ounce are defined as operating cash flow less capital expenditures. 2) To better align costs with industry peers, during the first quarter 2016 the Company began to present CSR Expense and Regional Administration Costs separately from Corporate Administration Expense. The Company's 2016 guidance has been updated to reflect this change in accounting presentation. 3) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a Non-IFRS performance measure. Please refer to Non-IFRS Performance Measures in the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2016 accessible on the Company’s website at www.terangagold.com. 4) Total cash costs per ounce and all-in sustaining costs per ounce are non-IFRS financial measures and do not have standard meanings under IFRS. All-in sustaining costs per

• unce sold include total cash costs per ounce, administration expenses (excluding Corporate depreciation expense), Regional Administration Costs, capitalized deferred

stripping, capitalized reserve development and mine site & development capital expenditures as defined by the World Gold Council. For more information regarding these measures, please refer to Non-IFRS Performance Measures in the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2016 accessible

• n the Company’s website at www.terangagold.com.

5) This production profile is based on existing proven and probable reserves only from the Sabodala mining license as disclosed in Teranga Gold’s December Quarter and Year- end 2015 Report accessible on the Company's website at www.terangagold.com. 6) Over the past several years more than twelve million ounces of measured and indicated resources have been identified within the south eastern Senegal region, including the Massawa, Golouma, Makabingui and Mako projects, along with the Company’s own Sabodala gold mine. With exploration work completed to date and the prior exploration success seen in the area Management believes there is a reasonable basis to anticipate future resource to reserve conversion. 7) Cash flow is the Life of Mine net cash flow based on the Company’s most recent NI 43-101 Technical Report (“43-101 plan”) filed in March 2016, before income taxes, interest, debt repayments, closure costs, dividends and working capital. 8) Mineral Reserves and Mineral Resources estimates as at December 31, 2015 as per Company disclosure. For more information regarding Teranga Gold’s Mineral Reserves and Resources, please refer to Teranga Gold’s December Quarter and Year-end 2015 Report accessible on the Company's website at www.terangagold.com. 9) Net Present Value (“NPV”) per share is a Non-IFRS financial measure. NPV per share, average NPV multiple of medium producers, and Teranga’s share price is as per BMO GoldPages published April 25, 2016. According to BMO GoldPages, NPV per share is calculated using the net present value of the life of mine cash flows based on the NI 43- 101 plan, less cash flow of corporate costs, less net debt per share, using the model at SPOT commodity prices and exchange rates. The “Revalued Share Price” is calculated using the NPV per share at SPOT times the NPV multiples as listed. The NPV calculation assumes a US$1,229 SPOT gold price per ounce, 5% discount, 0.79 USD/CAD exchange rate. For more information regarding Non-IFRS financial measures, please refer to Non-IFRS Performance Measures in the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2016 accessible on the Company’s website at www.terangagold.com.

Q&A

Trish Moran, Head of Investor Relations Telephone: +1.416.607.4507 Email: investor@terangagold.com TSX:TGZ / ASX:TGZ 121 King Street West, Suite 2600 Toronto, ON M5H 3T9 www.terangagold.com