Teranga november presentation 11 11 11 final

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Teranga november presentation 11 11 11 final

  1. 1. 1 PRODUCING AND EXPLORING NOVEMBER 2011
  2. 2. 2 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.
  3. 3. 3 CAPITALIZATION SUMMARY Ticker symbol: TGZ: TSX/ASX Shares outstanding(1): 245.6 million Stock options outstanding: 15.4 million Share price (as at November 8, 2011): C$2.43 Market capitalization: C$597 million Cash position(2)(3): US$25.8 million Debt position(2)(4): US$17.3 million (1) As part of the demerger Mineral Deposits Ltd. retained 40 million TGZ shares and received C$50 million from the IPO proceeds. (2) As at September 30, 2011 (3) Includes short-term investments and restricted cash (4) Drawn under the mining fleet finance lease facility with Societe Generale. FOCUSED ON GROWTH FOCUSED ON: GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH
  4. 4. 4 ASSETS Large exploration land package in Senegal, W.A. • 1,488km2 virtually unexplored land surrounding operating mill • An emerging world class gold district Operating mine / mill • Proven performance • Only gold mining operation in the country Strong balance sheet • Able to self-fund exploration & development Experienced management team • Proven track record
  5. 5. 5 Sabodala is the only large scale gold mine in Senegal Senegal • Mining Code passed in 2003 • Successful democracy • Stable political environment • Population of ~13.7M • Mining friendly regime • Government holds 10% free-carried interest in Sabodala and 3% royalty • Tax-free holiday that ends May 2015 SABODALA GOLD (SENEGAL)
  6. 6. 6 First gold pour in March 2009 • Approx. cost of $330M Mill expansion from 2 MM tpa to ~4 MM tpa underway • Est. 140,000 oz Au production 2011 expanding to >200,000 oz Au • Expected to be completed early 2012 at a cost of $60 MM Well developed infrastructure • Located 650 km east of the capital Dakar and 96 km north of the town Kedougou – paved road within 56 km of mine site • 30 MW heavy fuel oil power plant located on site (36 MW with mill expansion) SABODALA GOLD (OPERATIONS)
  7. 7. 7 FOCUSED ON GROWING RESERVES 1.5Moz currently to … • Objective: 10-15+ year mine life • Growth through exploration – extensive exploration program on 1,455km2 Regional Land Package of virtually unexplored prolific land • Growth through regional opportunities – primary focus Senegal FOCUSED ON GROWING PRODUCTION 140,000oz currently to … • Leveraging off our existing mill – land package all truckable • Doubling mill capacity – could increase further FOCUSED ON FINANCIAL STRENGTH Maintaining strong balance sheet to self-fund exploration… • Eliminating hedge book – quickly but prudently • Margin expansion (eliminate hedge and lower costs) • Significant free cash flow to self-fund exploration strategy • Manageable capex requirements GROWTH STRATEGY
  8. 8. 8 FOCUSED ON GROWING PRODUCTION Calendar Year 2011 • Est. production 140,000 oz at $850 - $875/oz • Capex $83M (primarily for mill expansion, mobile equipment and capitalized Mine License exploration) Calendar Year 2012 • Est. production 220,000 oz at $625-$675/oz • Capex ~ $25M (primarily for exploration)(1) (1) Excludes capital cost to develop regional deposits. Assumes increased production from regional exploration success 0 50 100 150 200 250 300 350 400 450 500 2011 2012 2013 2014 Production Profile („000 oz) Production Exploration Success
  9. 9. 9 FOCUSED ON FINANCIAL STRENGTH Maintain strong balance sheet to self-fund exploration and development • Eliminating hedge book – quickly but prudently ~ 165,00oz at ~ $829/oz(2) year end 2011 • Margin expansion + increased production profile = significant free cash flow to self-fund exploration and development strategy • Manageable capex requirements (1) Assumes $1500/oz gold price and cash cost of $600/oz (2) Non-Deferred Hedge Schedule Appendix page 33 Rate of margin expansion is a function of increasing production through regional exploration success 0 100 200 300 400 500 600 700 800 900 1000 2011 2012 2013 2014 Cash Margin ($/oz)1
  10. 10. 10
  11. 11. 11 FOCUSED ON GROWING RESERVES 1,51 (@1.47 g/t) 2,254 (@1.33 g/t) 774 (@1.06 g/t) 0 300 600 900 1,200 1,500 1,800 2,100 2,400 Proven and Probable Measured and Indicated(1)(2)(3) Inferred(1)(2) Gold Reserves and Resources (‟000‟s oz)(1) (1) See Appendix page 32 (2) M+I resources are inclusive of reserves (3) As at June 30, 2010, see Sabodala Technical Report Kedougou-Kenieba Inlier – A Birimian Greenstone Belt
  12. 12. 12 Exploration Program (Calendar 2011) 1. Mine License Exploration: $10 MM (~60,000m) (YTD 43,000m) 7 Drill Rigs 2. Regional Exploration: $25 MM (~80-90,000) (YTD 78,000m) 11 Drill Rigs TOTAL: $35 MM (140-150,000m) (+180,000m RAB) 18 drill rigs FOCUSED ON GROWING RESERVES Full drill results are posted at terangagold.com
  13. 13. 13 GOR A 35 km radius 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION Budget: $25M 1,455km2Budget: $10M 33km2
  14. 14. 14 1. SABODALA MINE LICENSE EXPLORATION • $10 MM exploration program is underway on the Sabodala Mine License • 10 targets identified for follow up • Potential to expand proven and probable reserves from 1.5 Moz gold to 3 Moz gold over the next 12 to 18 months increasing the mine life to ~ 10 to 15 years
  15. 15. 15 “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
  16. 16. 16 MINE LICENSE EXPLORATION – MAIN FLAT EXTENSION (“MFE”) • Main Flat Extension is one of the principal gold hosts in the Sabodala pit • Southern part of the deposit and dips shallowly to the west, rolls flat, and then rolls to a moderate northerly dip as it exits the ultimate pit • MFE program is designed to test the continuity of this structure to the north beginning with in-filling holes • Drilling targeting the MFE at a depth of 300m confirms the continuation of the mineralized zone with further drilling planned • 5,400m of drilling completed in the September quarter • Long intervals of high grades seen including: • 131m at 3.45 g/t • 87m at 3.11 g/t • The goal is to reach 250,000 oz into open pit mineable reserves in addition to a similar amount in underground reserves in 2012 • The MFE remains open down plunge and to the northwest Full drill results are posted at terangagold.com
  17. 17. 17 MINE LICENSE EXPLORATION – “THE CORRIDOR” and AYOUB‟S • Northerly trending extension of Sabodala pit • Mineralization traced more than 200m north of the existing pit along trend • Drilling intersected wide widths of alteration similar to Sabodala and Niakafiri • 15m @ 1.34 g/t • 20m @ 2.10 g/t • The system is continuous and is showing Sabodala style albitic alteration to the north where the target remains open down dip and along strike • The position of Ayoub‟s lends itself to sharing stripping for including deeper MFE mineralization into the ultimate pit Mylonite Shear Zone Ayoub‟s Thrust Sabodala Pit Full drill results are posted at terangagold.com
  18. 18. 18 Sabodala Pit Masato Extensions Sambaya Hill Masato Down Dip MINE LICENSE EXPLORATION – MASATO • Masato structural trend strikes across onto our mine license • Multiple mineralized zones have been identified with high grade intervals apparent • In the September quarter, a total of 6,100m of drilling was completed at Masato confirming a strike length of 500m and a dip extent of 200m • Recent results from Masato Down Dip include: • 37m at 4.5 g/t • 44m at 2.0 g/t • Expect to define mineable reserves at Masato in 2012 Full drill results are posted at terangagold.com
  19. 19. 19 GOR A 35 km radius 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION Budget: $25M 1,455km2Budget: $10M 33km2
  20. 20. 20 2. REGIONAL EXPLORATION • From 2007 – 2009, no significant drilling was done on the 1,455 km2 Regional Land Package due to cash constraints • There are 28 drill targets identified; $25M drilling program currently underway • 56,000m of RC, 22,000m of DD, and 140,000m of RAB drilling completed September 30, 2011 • 11 drill rigs are currently on the Regional Land Package • All targets in trucking distance of the existing mill
  21. 21. 21 “THE DONUT” GORA TOUROKHOTO TOUMBOUMBA REGIONAL EXPLORATION Budget: $25M 1,455km2
  22. 22. 22 GORA – HIGH-GRADE QUARTZ VEIN SYSTEM • Most advanced target: moving from exploration to development • Inferred resource of 106,000 oz @ 6 g/t (May 2, 2011) • 22 km from Sabodala mill • 5 drill rigs (2 DD, 3 RC) • 3m @ 14.58 g/t • 5m @ 11.58 g/t • 1m @ 48.50 g/t • High grade-drill intersections continue to expand the potential footprint of the deposit • Running number of processes in parallel to efficiently develop Gora as quickly as possible including exploration, permitting, and feasibility level economic analysis • Production objective: late 2012 • Deposit open in all directions Trace of blind veins from RC holes Projected to surface – high correlation with IP trends. Full drill results are posted at terangagold.com
  23. 23. 23 TOUMBOUMBA – NEWEST TARGET • Latest discovery, potential to become second regional deposit through the mill • Located 10km NW from Sabodala mill • At minimum, potential for heap leaching • Alteration hosted mostly in granite (laterite cover) • Oxide mineralization of up to 60m in depth Full drill results are posted at terangagold.com
  24. 24. 24 TOUMBOUMBA – NEWEST TARGET • RAB drilling program commenced in April • Expanded to encompass entire structural domain • Complete: 1,150 RAB holes, 49,000m • 6m @ 18.54 g/t • 4m @ 3.31 g/t • 8m @ 5.46 g/t • Subsequent RC program • 49 RC holes, 8,748m completed • 1m @ 5.20 g/t • 2m @ 21.45 g/t • 4m @ 6.32 g/t
  25. 25. 25 DIEGOUN NORTH – “THE DONUT” • 7 km x 4 km complex of gold anomalism • Contrasting rock types, porphyries, granites, dolerite & sediments • Rock samples to 80 g/t Au • RAB drilling has defined gold mineralization in bedrock • First pass RC program at Jam and Honey; 51 holes completed for just under 8,800m (51 holes anomalous levels of gold > 0.1 g/t) • Recognition of a well-developed, auriferous north-east trending structure Sabodala Ore Body Full drill results are posted at terangagold.com
  26. 26. 26 • Cinnamon • Newly defined gold anomalies (RAB) • 19,000m RAB drill program completed, 663 holes • Structure defined as continuous through to Jam (aeromagnetics) • Several kms of structure Full drill results are posted at terangagold.com HONEY JAM CINNAMON DIEGOUN NORTH – “THE DONUT”
  27. 27. 27 • >5 km long, up to 1 km wide gold anomaly defined by termite sampling • Parallels NE trending shears of the MTZ • 3 Moz Massawa deposit hosted on MTZ about 25 km south • Zone 1: large area of surface gold anomalism defined from 2011 termite mound geochemistry • Coincides with a structural intersection of the MTZ and a N070 trend • Zone 2 & 3: sit on a NE trend paralleling the MTZ and are weak surface gold anomalies with coincident arsenic anomalism defined by recent XRF multi- element geochemistry • All three zones highlighted by the RAB gold results to date will be subject to RC drilling in the coming dry season • Targets up to 700m in strike length • Follow up geophysical, RC and DD testing required TOUROKHOTO Sabodala Ore Body Full drill results are posted at terangagold.com
  28. 28. 28 FOCUSED ON GROWTH Kedougou-Kenieba Inlier – A Birimian Greenstone Belt An emerging world class gold district.
  29. 29. 29 SUMMARY – FOCUSED ON GROWTH 1. Experienced Management Team 2. Largest land position in Senegal 3. Only mill in Senegal 4. Planned mill expansion 5. Extensive exploration program – ~18 drill rigs 6. Strong Balance sheet – increasing free cash flow with margin expansion
  30. 30. 30 PRODUCING AND EXPLORING NOVEMBER 2011
  31. 31. 31 APPENDICES Competent Persons Statement The scientific and technical information contained in this release relating to exploration activities within the mining license is based on information compiled by Mr. Bruce Van Brunt, who is a Fellow with The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. He is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as defined in NI43- 101. Mr. Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Van Brunt is a full-time employee of Teranga and not independent of Teranga within the meaning of NI43-101. The scientific and technical information contained in this release relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a Qualified Person as defined in NI43-101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Pawlitschek is a full-time employee of Teranga and not independent of Teranga within the meaning of NI43-101.
  32. 32. 32 SABODALA GOLD PROJECT: RESERVES & RESOURCES Ore (000 tonnes) Grade (g/t Au) Contained Gold (000 oz Au) Proven & Probable Sabodala 24,350 1.57 1,231 Niakafiri 7,623 1.15 281 Total 31,973 1.47 1,512 Measured & Indicated Sabodala 41,892 1.39 1,869 Niakafiri 10,741 1.12 386 Total 52,633 1.33 2,254(1) Inferred Resources Sabodala 7,310 1.22 287 Niakafiri 7,248 .88 205 Niakafiri West 7,144 .82 188 Soukhoto 566 1.32 24 Gora(2) 387 5.6 70 Total 22,655 1.06 774(1) (1) See the Sabodala Technical Report ; #‟s as at June 30, 2010 (2) Gora inferred resource updated to 543,000 tonnes at 6.08 g/t containing 106,000 oz. Please see May 2, 2011 Press Release for further information.
  33. 33. 33 NON-DEFERRED HEDGE SCHEDULE Delivery Date Price US$/oz Ounces 17-Nov-2011 846.00 7,355 17-Feb-2012 846.00 28,000 17-May-2012 846.00 28,000 15-Aug-2012 846.00 27,500 21-Nov-2012 832.92 25,000 20-Feb-2013 832.92 25,000 17-May-2013 790.66 25,000 21-Aug-2013 791.50 16,000 Total 181,855
  34. 34. 34 MANAGEMENT Alan R. Hill Executive Chairman & CEO • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold • Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007) Richard S. Young President & CFO • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold • Former VP and CFO of Gabriel Resources (2005 – 2010) Yani Roditis Vice President, Operations • Over 10 years experience in mine development and operations with Barrick Gold • Former Chief Operating Officer of Gabriel Resources Kathy Sipos Vice President, Investor Relations • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold • Former VP of Corporate Communications and Investor Relations of Gabriel Resources David Savarie Vice President, Legal & Corporate Secretary • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel Resources • Previously in private practice at Miller Thomson LLP Bruce Van Brunt Business Development Manager • Mining engineer and geologist with over 20 years experience • Previously worked in a number of technical capacities with Placer Dome and Echo Bay Mines • Joined Mineral Deposits Ltd. in March 2006 Martin Pawlitschek Regional Exploration Manager • Geologist with over 15 years experience in the mining industry • Previously spent 11 years at BHP and a number of smaller exploration companies, working in Australia, South East Asia and Africa • Joined Mineral Deposits Ltd. in July 2007 Mark English General Manager • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating mines and development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006

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