Q1 conference call  29042013 final
Upcoming SlideShare
Loading in...5
×
 

Q1 conference call 29042013 final

on

  • 247 views

 

Statistics

Views

Total Views
247
Views on SlideShare
161
Embed Views
86

Actions

Likes
0
Downloads
0
Comments
0

2 Embeds 86

http://www.terangagold.com 85
http://terangagold.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Q1 conference call  29042013 final Q1 conference call 29042013 final Presentation Transcript

  • 1PRODUCINGANDEXPLORINGASX FIRST QUARTEROPERATIONAL RESULTSCONFERENCE CALLAPRIL 29, 2013
  • 2FORWARD LOOKING STATEMENTSCertain information included in this presentation, including any information as to the Company’s strategy, projects, exploration programs, joint venture ownershippositions, plans, future financial or operating performance and other statements that express management’s expectations or estimates of future performance,constitute “forward-looking statements”. The words “believe”, “expect”, “will”, “intend”, ”anticipate”, “project”, ”plan”, “estimate”, “on track” and similar expressionsidentify forward looking statements. Such forward-looking statements are necessarily based upon a number of estimates, assumptions, opinions and analysis madeby management in light of its experience that, while considered reasonable, may turn out to be incorrect and involve known and unknown risks, uncertainties andother factors, in each case that may cause the actual financial results, performance or achievements of the Company to be materially different from the Company’sestimated future results, performance or achievements expressed or implied by those forward-looking statements. Such forward-looking statements are notguarantees of future performance. These assumptions, risks, uncertainties and other factors include, but are not limited to: assumptions regarding general businessand economic conditions; conditions in financial markets and the future financial performance of the company; the impact of global liquidity and credit availability onthe timing of cash flows and the values of assets and liabilities based on projected future cash flows; the supply and demand for, deliveries of, and the level andvolatility of the worldwide price of gold or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets, including changes in U.S.dollar and CFA Franc interest rates; risks arising from holding derivative instruments; adverse changes in our credit rating; level of indebtedness and liquidity; abilityto successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which theCompany carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costsassociated with mining inputs and labour; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits anddiminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; the accuracy of our reserve estimates (including withrespect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; contests over title to properties,particularly title to undeveloped properties; the risks involved in the exploration, development and mining business, as well as other risks and uncertainties which aremore fully described in the Companys prospectus dated November 11, 2010 and in other Company filings with securities and regulatory authorities which areavailable at www.sedar.com. Accordingly, readers should not place undue reliance on such forward looking statements. Teranga expressly disclaims any intention orobligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except in accordance withapplicable securities laws.This presentation is dated as of April 29, 2013. 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” andsimilar words.
  • 3FOCUSEDON GROWTHTHROUGH:GROWINGRESERVESGROWINGPRODUCTIONFINANCIALSTRENGTHAlan R. Hill Executive ChairmanRichard Young President & CEOConference Call Agenda:• Q1 2013 Operational Results• New Equipment Finance Facility and 100% Hedge Free• Government Agreement• Revised 2013 Capex GuidanceASX FIRST QUARTER OPERATIONALRESULTS CONFERENCE CALL
  • 4FOCUSEDON GROWTHTHROUGH:GROWINGRESERVESGROWINGPRODUCTIONFINANCIALSTRENGTHQ1 2013 OPERATIONAL RESULTSProduction - 68,301oz. - 63% higher than Q1 2012due to higher grade & higher throughputCash Costs - $535/oz - 18% lower than Q1 2012while gross costs increased by 14% dueto higher mining and processing ratesCash Position(1) - $57.1M – 27% higher than FYE 2012Tonnes Mined - 18% higher than Q1 2012Ounces Mined - 60% higher than Q1 2012Tonnes Milled - 21% higher than Q1 2012(1) Includes cash, cash receivable and $6.1 million of bullion receivable.
  • 5Finalized $50M equipment finance facility with Macquarie:• Replaces the Societé Generalé finance lease facility• Provides financing for equipment at Sabodala pit and Gora• $22.7M outstanding at March 31, 2013 with a further $4.3M tobe drawn down in Q2 at final delivery of Sabodala equipment• Remaining $23M reserved for future equipment drawn-downs asrequiredHedge free as of April 15, 2013:• Enables Teranga to maximize cash margins on each ounceproducedSTRENGTHENING THE BALANCE SHEET
  • 6Provides for long-term partnership through:• Price and formula to acquire Government’s additional option onsatellite deposits and to incorporate these into the existing ML andfiscal regime• Supporting drilling of the Niakafiri deposit on the ML• Extending the ML by five years to 2022 and five key explorationlicenses by 18 months• Ensuring full access to exploration targets currently occupied byartisanal miners• Settling all outstanding tax assessments• Resolve the Special Contribution Tax of 5% through an increase inroyalties to 5% and accelerated dividend paymentsAGREEMENT WITH GOVERNMENT
  • 7GOVERNMENT OPTION FORMULA - GORAInitial Payment Example GoraReserves per feasibility study (oz.) 285,000Recovery rate 95%Recovered reserves (oz.) 270,750Less government royalties 13,538Recovered ounces to shareholders (oz.) 257,213Average realized gold price last 12 months $ 1,650Reserve payment percentage 1.00%Reserve payment dollars per ounce $ 16.50Payment due on production maximum $10 million $ 4,244,006Additional payments required when:1. Increase in the gold price2. Increase in production3. Exceeds $10 million cap
  • 8WHAT IF PRODUCTION/PRICE CHANGES?No Change in Production/Gold PriceYear 1 Year 2 Year 3 Year 4Cumulative production (oz.) 67,500 135,000 202,500 270,750Less government royalties 3,375 6,750 10,125 13,538Cumulative production to shareholders 64,125 128,250 192,375 257,213Weighted average realized gold price ($/oz.) $ 1,650 $ 1,650 $ 1,650 $ 1,650Reserve payment percentage 1.00% 1.00% 1.00% 1.00%Reserve payment dollars per ounce $ 16.50 $ 16.50 $ 16.50 $ 16.50Cumulative payment due $ 1,058,063 $ 2,116,125 $ 3,174,188 $ 4,244,006Initial Payment / Subsequent Payments $ 4,244,006 $ 4,244,006 $ 4,244,006 $ 4,244,006Payment due $ - $ - $ - $ -* Cumulative production calculation performed annually after year end and if payment due, paid by June 30th of the following year.Change Gold PriceYear 1 Year 2 Year 3 Year 4Cumulative production (oz.) 67,500 135,000 202,500 270,750Less government royalties 3,375 6,750 10,125 13,538Cumulative production to shareholders 64,125 128,250 192,375 257,213Weighted average realized gold price ($/oz.) - increase gold price $ 1,650 $ 1,700 $ 1,750 $ 1,800Reserve payment percentage 1.00% 1.00% 1.00% 1.00%Reserve payment dollars per ounce $ 16.50 $ 17.00 $ 17.50 $ 18.00Cumulative payment due $ 1,058,063 $ 2,180,250 $ 3,366,563 $ 4,629,825Initial Payment / Subsequent Payments $ 4,244,006 $ 4,244,006 $ 4,244,006 $ 4,244,006Payment due $ - $ - $ - $ 385,819* Cumulative production calculation performed annually after year end and if payment due, paid by June 30th of the following year.Change in ProductionYear 1 Year 2 Year 3 Year 4Cumulative production (oz.) - increase in production 75,000 150,000 225,000 300,000Less government royalties 3,750 7,500 11,250 15,000Cumulative production to shareholders 71,250 142,500 213,750 285,000Weighted average realized gold price ($/oz.) $ 1,650 $ 1,650 $ 1,650 $ 1,650Reserve payment percentage 1.00% 1.00% 1.00% 1.00%Reserve payment dollars per ounce $ 16.50 $ 16.50 $ 16.50 $ 16.50Cumulative payment due $ 1,175,625 $ 2,351,250 $ 3,526,875 $ 4,702,500Initial Payment / Subsequent Payments $ 4,244,006 $ 4,244,006 $ 4,244,006 $ 4,244,006Payment due $ - $ - $ - $ 458,494* Cumulative production calculation performed annually after year end and if payment due, paid by June 30th of the following year.
  • 9WHAT IF WE EXCEED THE $10M CAP?Exceeds $10 million over time with gold price constant Still under cap First pay over cap Subsequent pay Subsequent payCumulative production (oz.) 600,000 700,000 800,000 950,000Less government royalties 30,000 35,000 40,000 47,500Cumulative production to shareholders (oz.) 570,000 665,000 760,000 902,500Weighted average realized gold price ($/oz.) $ 1,650 $ 1,650 $ 1,650 $ 1,650Reserve payment percentage 1.00% 1.00% 1.00% 1.00%Reserve payment dollars per ounce $ 16.50 $ 16.50 $ 16.50 $ 16.50Cumulative payment due $ 9,405,000 $ 10,972,500 $ 12,540,000 $ 14,891,250Initial Payment / Subsequent Payments $ 10,000,000 $ 10,000,000 $ 10,972,500 $ 12,540,000Payment due $ - $ 972,500 $ 1,567,500 $ 2,351,250* Cumulative production calculation performed annually after year end and if payment due, paid by June 30th of the following year.Exceeds $10 million over time gold price increases Still under cap First pay over cap Subsequent pay Subsequent payCumulative production (oz.) 600,000 700,000 800,000 950,000Less government royalties 30,000 35,000 40,000 47,500Cumulative production to shareholders (oz.) 570,000 665,000 760,000 902,500Weighted average realized gold price ($/oz.) $ 1,650 $ 1,700 $ 1,750 $ 1,800Reserve payment percentage 1.00% 1.00% 1.00% 1.00%Reserve payment dollars per ounce $ 16.50 $ 17.00 $ 17.50 $ 18.00Cumulative payment due $ 9,405,000 $ 11,305,000 $ 13,300,000 $ 16,245,000Initial Payment / Subsequent Payments $ 10,000,000 $ 10,000,000 $ 11,305,000 $ 13,300,000Payment due $ - $ 1,305,000 $ 1,995,000 $ 2,945,000* Cumulative production calculation performed annually after year end and if payment due, paid by June 30th of the following year.
  • 10Reduced discretionary spending in 2013:• Exploration expense (Regional Land Package) explorationreduced to $3M from $10 - $15M• Capitalized reserve development (Mine Licence) explorationexpense expected at the low end of $5 - $10M• General & Administrative reduced to $13M from $15 - $20M• Gora development expenditure reduced to $5 - $10M from$45 - $50M, of which $23M was to be financed via the newmobile equipment loan• Capitalized deferred stripping at the Sabodala pit nowexpected at the bottom end of the original range of $35 - $40M• Mine site capex at the low end of guidance range $20 - $25MReiterating 2013 Guidance:• Production: 190,000 – 210,000oz.• Cash Costs: $650 - $700/oz.GENERATING FREE CASH FLOW IN 2013
  • 11SABODALA PIT –MAIN FLAT EXTENSION /LOWER FLAT ZONEDINKOKHONO• Potential to expand gold inventory onML with the objective of increasingmine life to the year 2020/25ML EXPLORATION $5 MILLION33km2NIAKAFIRI & NIAKAFIRIWESTSOUKHOTO
  • 12NINYENKOSORETO /DIABOUGOU1,200km235km from MillRLP EXPLORATION $3 MILLIONGOUMBOU GAMBATOUROKHOTO(Main and Marougou)
  • 13• Agreement in Principle signed with Government• Good first quarter operationally and financially• Reduction in discretionary spending in 2013 to producefree cash flow• 100% hedge free, expect margin expansion andincreased earnings, cash flow and free cash flow• Retaining our focus on extension of reserve lifeSUMMARY SLIDE
  • 14COMPETENT PERSONS STATEMENTThe technical information contained in this presentation relating to the mineral reserve estimates within the Sabodala, Sutuba, Niakafiri and Gora deposits and theStockpiles, is based on information compiled by Julia Martin, P.Eng., MAusIMM (CP), a full time employee with AMC Mining Consultants (Canada) Ltd., is independent ofTeranga, 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 ExplorationResults, Mineral Resources and Ore Reserves”. Ms. Martin has sufficient experience relevant to the style of mineralization and type of deposit under consideration and tothe activity she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves”. Ms Martin has reviewed and accepts responsibility for the reserve estimates disclosed above. Ms Martin has consented to the inclusion inthe report of the matters based on her information in the form and context in which it appears in this presentation.The technical information contained in this presentation relating to the mineral resources is based on information compiled by Ms. Patti Nakai-Lajoie, who is a Member ofthe Association of Professional Geoscientists of Ontario. Ms. Patti Nakai-Lajoie is full time employee of Teranga and is not “independent” within the meaning of NationalInstrument 43-101. Ms. Patti Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to theactivity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves”. Ms. Patti Nakai-Lajoie is a “Qualified Person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects.and sheconsents to the inclusion in the report of the matters based on her information in the form and context in which it appears in this presentation.The technical information contained in this presentation relating to exploration results is based on information compiled by Mr. Martin Pawlitschek, who is a Member of theAustralian Institute of Geoscientists. Mr. Pawlitschek is a consultant of Teranga and is not “independent” within the meaning of National Instrument 43-101. Mr.Pawlitschek 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 toqualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr.Pawlitschek is a “Qualified Person” in accordance with NI 43-101 and he consents to the inclusion in the report of the matters based on his information in the form andcontext in which it appears in this presentation.
  • 15APPENDIX - 2013 DISCRETIONARY SPENDREDUCED TO GENERATE FREE CASH FLOWRevised Guidance Original GuidanceOperating resultsProduction (oz) 190,000 - 210,000 190,000 - 210,000Total cash cost (incl. royalties)1,2($/oz sold) 650 – 700 650 – 700Exploration and evaluation expense ($ millions) 3.0 10.0 – 15.0Administration expenses ($ millions) 13.0 15.0 – 20.0Capital expenditures ($ millions)Mine site 20.0 20.0 - 25.0Capitalized reserve development 5.0 5.0 - 10.0Gora development costsMobile equipment 5.0 30.0 - 35.0Site development 5.0 15.0 - 20.0Total Gora development costs 10.0 45.0 - 50.0Capitalized deferred stripping235.0 35.0 - 40.0Total capital expenditures 70.0 105.0 - 125.02Includes the impact of adopting IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine.For the year ended December 31, 20131Total cash cost per ounce is a non-IFRS financial measures with standard meaning under IFRS.