Q1 2019 Highlights Multi-Asset Mid-Tier TSX:TGZ / OTCQX:TGCDF - - PowerPoint PPT Presentation

Q1 2019 Highlights

Friday, May 3, 2019

TSX:TGZ / OTCQX:TGCDF

Building a Multi-Asset Mid-Tier West African Gold Producer

Forward-Looking Statements

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All information included in this presentation, including any information as to Teranga’s future financial or operating performance and other statements that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are "likely" to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, economic conditions and anticipated courses of action. Although the forward-looking statements contained herein reflect management's current beliefs and reasonable assumptions based upon information available to management as

• f the date hereof, Teranga cannot be certain that actual results will be consistent with such forward-looking information. Such assumptions include, among others, the ability to
• btain 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. For a more comprehensive discussion of the risks faced by Teranga, and which may cause the actual financial results, performance or achievements of Teranga to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to Teranga’s latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on Teranga’s website at www.terangagold.com. The risks described in the current Annual Information Form (filed and viewable on www.sedar.com and on Teranga’s website at www.terangagold.com) are hereby incorporated by reference herein. Teranga 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 as required by applicable law. Nothing herein should be construed as either an offer to sell

• r a solicitation to buy or sell Teranga securities.

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.

Richard Young

President & CEO

• Record quarterly

gold production of 71,946 ounces

• Per ounce cost

metrics improved YoY

• On track to achieve

2019 production & cost guidance

• On budget and well
• n schedule
• On track for

commissioning in Q3 and ramp-up of production in Q4

• Completed first of

two resettlement areas

2019 Has All The Makings of Another Good Year

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• Released early-

stage initial resource estimate

• Ongoing studies to

advance towards feasibility stage

• Completed Afema

economic evaluation for government

• Conducted

airborne magnetic and radiometrics survey

Paul Chawrun

Chief Operating Officer

Highest Ever Quarterly Gold Production at Sabodala

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Quarterly Production

(koz Au)

57 58 51 68 64 65 56 59 72 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

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Strong Operational Quarter

Niakafiri Golouma West Koulouqwinde Sabodala Kerekounda

Plant Haul Road Mineral Resources Golouma Style High Grade Gold Trend Masato Style Bulk Tonnage Gold Trend Mining Concession Exploration Permit

….

Mining



Moved almost 9 million tonnes – a 1% increase



15% increase in head grade YoY to 2.33 g/t Au Milling



Milled more than one million tonnes



Gold recovery rate of 92% Sabodala Village Resettlement



New village construction and related infrastructure

• n target for H1 2020 completion



Drilling of Niakafiri deposit to commence in 2020 Sabodala Mine License Senegal, West Africa

Grade Mined Q1 Actual FY Guidance NI 43-101 Mine Plan(1) 2019 2.23 g/t 1.50 g/t – 2.00 g/t 1.41 g/t

Positive Grade Reconciliation to Reserves

8 Refer to Endnote (1) in Appendix

Unit Costs Running Within or Below Guidance Ranges

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Mining Costs ($/t mined) $2.79 $2.60 Q1 2018 Q1 2019 Milling Costs ($/t milled) $11.52 $11.53 Q1 2018 Q1 2019

2019 Guidance: $2.50 - $2.75

Total Cash Costs* ($/oz Au) $659 $627 Q1 2018 Q1 2019

*Refer to Appendix – Non-IFRS Performance Measures

2019 Guidance: $12 - $13 2019 Guidance: $725 - $775

7%

Decrease

5%

Decrease

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Power Station – Bulk Fuel Facility, April 2019

Wahgnion: On Budget & Well on Schedule

 4 million man hours worked without a Lost Time Injury  98% of concrete poured  70% of structural steel installed  35% of mechanical equipment completed including SAG and Ball mills  15% of electrical and instrumentation completed  Tailings storage facility near done including outer embankments and liner installation  Main camp area, mine services area, plant & admin building completed  Completed first of two resettlement sites

For full details on Golden Hill, please visit www.terangagold.com

Golden Hill: Moving Towards a Feasibility Study

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Geology

Tarkwaian Type Sediments Volcano Sediments Mixed Volcano Sediments & Volcanics Basalt Grantoid Batholith

Ma North

Golden Hill (Burkina Faso, West Africa)

Exploration licenses:468 km2 Ma Main Ma East Nahiri Gogoba West Nahiri Plateau Jack Hammer Hill Peksou North Peksou C-Zone B-Zone A-Zone

415,000 oz at 2.02 g/t

(2) Indicated

644,000 oz at 1.68 g/t

(2) Inferred

Refer to Endnote to (2) in the Appendix

Initial Resource Highlights



Excellent along trend and to-depth continuity of gold mineralization at all prospects drilled



Provides solid base from which to grow Golden Hill



Reaffirms interpretations that each prospect offers substantial upside for size expansion



To move into feasibility stage, preliminary technical, environmental and social studies are being conducted to serve as basis for an eventual environmental and social impact assessment in support of a preliminary economic estimate

Numerous Structures Identified by Airborne Geophysical Survey of Afema

Afema Q1 2019 Exploration Update

• Completed high-definition airborne

magnetic and radiometric survey of both the mine license and regional permits

• High quality survey data outlines

numerous fault zones, cross-structures, lithologic contacts and areas of folded stratigraphy on mince license

• Compelling imagery worthy of extensive

follow-up

Reduced-to-Pole Magnetic Intensity 12 Ahafo 17 Moz Newmont

3 Afema Exploration Permits Afema Mining Permit

Bibiani 7 Moz Resolute Chirano 5 Moz Kinross Edikan 6.6 Moz Perseus Bogoso/Prestea 18 Moz Gold Star Konogo 1.4 Moz Signature Metals Akyem Newmont Esaase 5.19 Moz Obotan 5.5 Moz Asanko Obuasi 41 Moz Anglo Gold Ashanti Kubi 0.9 Moz Asaute Gold Corporation Damang 7.1 Moz Goldfields Tarkwa 24 Moz Iduapriem 8.2 Moz AngloGold Ashanti Kumasi Cape Coast

Sefwi-Bibiani Gold Belt Asankrangwa Gold Belt Ashanti Gold Belt Winneba-Kibi Gold Belt

Côte d’Ivoire Ghana

Encouraging Results Warrant Ongoing Follow-up at Miminvest Properties

13 Endeavour Endeavour Perseus Randgold

Côte d’Ivoire

Guitry Sangaredougou

Newcrest

Dianra Afema

Operating Gold Mine/ Development Project

Guitry Complex (includes Sangaredougou)

• Completed a mechanical trenching program where we

discovered an extensive 3x7 kilometre gold-in-soil geochemical anomaly in 2018

• Encouraging results warrant further trenching and follow-up
• RC and diamond drilling planned late 2019

Dianra

• Initial phase of exploration outlines follow-up targets

Navin Dyal

Chief Financial Officer

Higher Number of Ounces Sold Drives Revenue

Three months ended March 31 Per ounce 2019 2018 % Change Average realized gold price* $1,307 $1,325 (1%) Average spot gold price $1,304 $1,329 (2%) Low $1,280 $1,308 (2%) High $1,344 $1,355 (1%)

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$86.2 $92.1

Q1 2018 Q1 2019

Revenue

($ millions)

*Refer to Non-IFRS Performance Measures in Appendix

7%

Increase

2019E additional free cash flow from hedge program

…………………………….. AT AVERAGE PRICE OF $1,250/OZ

$9.0M

16 (Per Ounce)

Q1 2019 Q1 2018 Change 2019 Guidance Cost of sales $907 $912 (1%) $1,050 – $1,125 All-in sustaining costs* $972 $957 2% $1,000 – $1,100 Non-cash inventory movements and amortized advanced royalty costs ($166) ($69) 141% ($100) All-in sustaining costs (excluding non- cash inventory movements and amortized advanced royalty costs)* $806 $888 (9%) $900 – $1,000

Continued Improvement in Costs Per Ounce

*Refer to Non-IFRS Performance Measures in Appendix

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$26.9 $36.9 Q1 2018 Q1 2019

EBITDA*

($ millions)

Increased Profit Metrics: Gross Profit and EBITDA*

Gross Profit

($ millions) $26.8 $28.1 Q1 2018 Q1 2019

37%

Increase

5%

Increase

*Refer to Non-IFRS Performance Measures in Appendix

$0.03

• $0.03

Q1 2018 Q1 2019

Net (Loss) Profit Attributable to Shareholders Impacted by Pending Tax Assessment

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Net (Loss) Profit Attributable to Shareholders

($ millions) $9.1 $2.2 Q1 2018 Q1 2019

Earnings per Share (Basic)

$0.08 $0.02 Q1 2018 Q1 2019

Adjusted Net Profit Attributable to Shareholders*

($ millions)

Adjusted Earnings per Share* (Basic)

$3.0

• $2.7

Q1 2018 Q1 2019 Adjusting for items not reflective

• f underlying performance:

1. $0.9M losses from gold forward sales contracts 2. $2.7M accretion expense 3. $0.7 net foreign exchange losses 4. $1.3M impact of foreign exchange

• n deferred taxes

5. $0.7M non-cash fair value changes

*Refer to Non-IFRS Performance Measures in Appendix

Operating Cash Flow Benefits From $11.8 Million Gold Prepayment

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$24.9 $26.3 Q1 2018 Q1 2019

Operating Cash Flow Before Changes in Working Capital Excluding Inventories ($ millions)

6%

Increase $13.7 $49.6 Q1 2018 Q1 2019

Operating Cash Flow ($ millions)

261%

Increase

Liquidity

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As at March 31, 2019

Cash & Cash Equivalents: $56.2M Wahgnion Debt Facility

Total drawdown: $136.8M Remaining balance: $28.2M

Golden Hill Debt Facility

Total drawdown: $10M Remaining balance: $25M

Subsequent to Quarter

Equipment Facility

Total drawdown: $7.2M Remaining balance: $5.3M

WGO project capital spend at March 31, 2019

……………………………………..

OF $224M TOTAL COMMITMENT VALUE

$176M

Q&A

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Sabodala Gold Mine

(Senegal)

Wahgnion Gold Mine

(Burkina Faso)

Golden Hill Project

(Burkina Faso)

Miminvest & Afema JVs

(Côte d’Ivoire)

Exploration & Resource Conversion

Mid-Tier Producer with Scale and Diversification

Strong Organic Growth Pipeline

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Appendix

Qualified Persons Statement

24 The technical information contained in this document relating to the Sabodala and Wahgnion open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. Stephen Ling, P. Eng who is a member of the Professional Engineers Ontario. Mr. Ling is a full time employee of Teranga and is not "independent" within the meaning of NI 43-101. Mr. Ling has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Qualified Person" under NI 43- 101 Standards of Disclosure for Mineral Projects. Mr. Ling 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 in this document. 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. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of NI 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a "Qualified Person" under NI 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this document of the matters based on her compiled information in the form and context in which it appears in this document. The technical information contained in this document relating to the Sabodala underground ore reserves estimates is based on, and fairly represents, information compiled by Jeff Sepp, P. Eng., of Roscoe Postle Associates Inc. (“RPA”), who is a member of the Professional Engineers Ontario. Mr. Sepp is “independent” within the meaning of NI 43-101. Mr. Sepp has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a “Qualified Person” under NI 43-101 Standards of Disclosure for Mineral Projects. Mr. Sepp 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 in this document. Teranga's exploration programs were managed by Peter Mann, FAusIMM. Mr. Mann was a full time employee of Teranga, during the period of this resource update and is not "independent" within the meaning of NI 43-101. Mr. Mann has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a “Qualified Person” as under NI 43-101 Standards of Disclosure for Mineral Projects. The technical information contained in this document relating to exploration results are based on, and fairly represents, information compiled by Mr. Mann. Mr. Mann has verified and approved the data disclosed in this release, including the sampling, analytical and test data underlying the

• information. The RC and diamond core samples are assayed in the BIGS Global Laboratory in Ouagadougou, Burkina Faso. 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 in this document. 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"). There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves. Teranga confirms that it is not aware of any new information or data that materially affects the information included in the technical reports for the Sabodala Project (August 30, 2017) and the Wahgnion Project (October 31, 2018) pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects (the “Technical Reports”), or first quarter results, market announcements and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements concerning the Technical Reports continue to apply and have not materially changed.

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Non-IFRS Performance Measures

The Company has included non-IFRS measures in this document, including “total cash costs”, “total cash costs per ounce sold”, “all-in sustaining costs” (“AISC”), “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs)”, “AISC per ounce”, “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs) per ounce”, “earnings before interest, taxes, depreciation and amortization” (“EBITDA”), “free cash flow”, “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share”. These measures are intended to provide additional information only and do not have any standardized meaning under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flow from

• perations as determined under IFRS. Other companies may calculate these measures differently.

“Total cash costs” figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold

• producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures

presented may not be comparable to other similarly titled measure of other companies. “Total cash costs per ounce sold” is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. The Company reports total cash costs on a sales basis. The World Gold Council (“WGC”) definition of AISC seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. AISC excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize earnings. Consequently, this measure is not representative of all

• f the Company’s cash expenditures. In addition, the calculation of AISC does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the

Company’s overall profitability. The Company also expands upon the WGC definition of AISC by presenting an additional measure of “AISC (excluding cash / (non-cash) inventory movements and amortized advanced royalty costs)”. This measure excludes cash and non-cash inventory movements and amortized advanced royalty costs which management does not believe to be true cash costs and are not fully indicative of performance for the period. For Sabodala and Wahgnion, life of mine total cash costs and AISC figures used in this presentation are before cash/non-cash inventory movements and exclude any allocation of corporate overheads. Consolidated total cash costs and all-in sustaining cost figures add corporate overhead costs. “Average realized price” is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized price is calculated on revenue and ounces sold to all customers, except Franco-Nevada, as gold ounces sold to Franco-Nevada is recognized in revenue at 20 percent of the prevailing gold spot price on the date of delivery and 80 percent at $1,250 per ounce. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently. “Earnings before interest, taxes, depreciation and amortization” (“EBITDA”) is a non-IFRS financial measure, which excludes income tax, finance costs (including accretion expense), interest income and depreciation and amortization from net (loss)/profit. In 2019, Teranga amended the definition of EBITDA to exclude accretion expense to improve comparability of this non-IFRS financial measure with its peers. The comparative 2018 EBITDA has been restated to conform to the new presentation. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation

• r as a substitute for measures of performance prepared in accordance with IFRS. Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working

capital needs, service debt obligations, and fund capital expenditures. “Free cash flow” is calculated as net cash flow provided by operating activities less sustaining capital expenditures. The Company believes this to be a useful indicator of our ability generate cash for growth initiatives. Starting in 2018, the Company adopted “adjusted net profit attributable to shareholders” and “adjusted basic earnings per share” as new non-IFRS financial measures. These non-IFRS financial measures are used by management and investors to measure the underlying operating performance of the Company. Presenting these measures from period to period is expected to help management and investors evaluate earnings trends more readily in comparison with results from prior periods. The Company calculates “adjusted net profit attributable to shareholders” as net (loss)/profit attributable to shareholders adjusted to exclude specific items that are significant, but not reflective of the underlying operations of the Company, including: the impact of unrealized and realized foreign exchange gains and losses, gains and losses on derivative instruments, accretion expense on long-term

• bligations, impairment provisions and reversals thereof, and other unusual or non-recurring items. Commencing the second quarter 2018, the Company also excluded the impact of foreign exchange movements on deferred

taxes and other non-cash fair value changes from adjusted net profit attributable to shareholders as management does not believe these factors to be reflective of the underlying performance of the Company. “Adjusted basic earnings per share” is calculated using the weighted average number of shares outstanding under the basic method of earnings per share as determined under IFRS For more information and the reconciliation of these measures, please refer to the Company’s latest management’s discussion and analysis accessible on the Company’s website at www.terangagold.com.

Endnotes

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1. Sabodala’s Mineral Reserve and Mineral Resource estimates as at June 30, 2017. For more information regarding Sabodala’s Mineral Reserves and Resources and related notes, please refer to the NI 43-101 compliant technical report for the Sabodala Project dated August 30, 2017 accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com. 2. Golden Hill’s Mineral Resource estimate as at November 30, 2018. For more information regarding Golden Hill’s Mineral Resource and related notes, please refer to the press release dated February 21, 2019 available on the Company’s website at www.terangagold.com and SEDAR at www.sedar.com.

Trish Moran Head of Investor Relations 77 King Street West, Suite 2110 Toronto, ON M5K 2A1 T: +1.416.607.4507 E: investor@terangagold.com W: terangagold.com

TSX:TGZ / OTCQX: TGCDF