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    Teranga q4 year end webcast fina lv2 website Teranga q4 year end webcast fina lv2 website Presentation Transcript

    • PRODUCINGANDEXPLORINGDECEMBER QUARTER AND2011 YEAR ENDCONFERENCE CALL &WEBCAST 1
    • CAUTIONARY STATEMENTThis presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within themeaning 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 andfinancial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Whereverpossible, 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, havebeen used to identify such forward looking information. Although the forward looking information contained in this presentation reflect management’s current beliefsbased upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certainthat actual results will be consistent with such forward looking information. A number of factors could cause actual results, performance or achievements to differmaterially 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 theforward looking information. Forward looking information necessarily involves significant known and unknown risks, assumptions and uncertainties that may causeTeranga’s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward lookinginformation. Although Teranga has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from thosedescribed in the forward looking information, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated orintended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially fromthose anticipated in such statements. Accordingly, prospective investors should not place undue reliance on such forward looking information. Teranga expresslydisclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, exceptin accordance with applicable securities law.Forward looking information and other information contained herein concerning mineral exploration and management’s general expectations concerning themineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market researchand industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data isinherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware ofany misstatements regarding any industry data presented herein, mineral exploration involves risks and uncertainties and industry data is subject to change basedon 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 confidencein its projections based on exploration work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficientexploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a mineral resource.This presentation does not constitute in any way an offer or invitation to subscribe for securities in Teranga pursuant to the Corporations Act 2001 (Cth) and hasnot been lodged with the Australian Securities and Investment Commission. 2
    • COMPETENT PERSONS STATEMENTThe information in this presentation that relates to exploration results, targets, mineral resources or ore reserves within the SGO Mining License is based oninformation compiled by Mr. Bruce Van Brunt, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee ofTeranga and therefore not independent. Mr. Van Brunt has sufficient experience relevant to the style of mineralization and type of deposit under consideration andto the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code of Reporting of exploration Results,Mineral Resources and Ore Reserves”. Mr. Van Brunt consents to the inclusion of this information in the form and context in which it appears in this presentation.The information in this document that relates to exploration results, targets, mineral resources or ore reserves within the Regional Exploration Package is based oninformation compiled by Mr. Martin Pawlitschek, who is a member of the Australasian Institute of Geoscientists. Mr. Pawlitschek is a full time employee of Terangaand therefore not independent. Mr. Pawlitschek has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to theactivity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code of Reporting of exploration Results, MineralResources and Ore Reserves”. Mr. Pawlitschek consents to the inclusion of this information in the form and context in which it appears in this presentation. 3
    • DECEMBER QUARTER / YEAR END 2011CONFERENCE CALL & WEBCAST FOCUSED ON GROWTHAlan R. Hill Chairman & CEO FOCUSED ON:Richard Young President & CFO GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH 4
    • TERANGA – YEAR ONE FOCUSED ON GROWTH • 2011 prepared us for increasing production and lowering costs and increasing cash margins as we move forward FOCUSED ON: • Continue to self-fund extensive exploration program GROWING RESERVES • Very encouraging drill results on Mine License GROWING PRODUCTION • Plans to double gold inventory on Mine License alone FINANCIAL STRENGTH • Promising results on Regional Exploration Program 5
    • OPERATING HIGHLIGHTSDecember quarter: • Gold produced – 36,695 oz’s • Highest quarterly production but delay in accessing higher grade zone • ~17,000 oz’s at 2.37 gpt stockpiled (processing postponed to Q1’12) • Gold sold – 34,665 oz’s at cash costs of $902/oz • Decreasing cash costs as production increases • Largely fixed cost operation 6
    • OPERATING HIGHLIGHTS Fiscal 2011(1) • 147,728 oz’s produced • 153,728 oz’s sold at cash cost of $872/oz Calendar 2011 • 131,461 oz’s produced • 137,136 oz’s sold at cash cost of $900/oz • In line with revised guidance • Costs affected by higher fuel, labour and maintenance costs(1) Fiscal year is from October 1, 2010 to December 31, 2011, a 15 month year. Teranga is converting from a June30 to calendar year end. 7
    • FINANCIAL HIGHLIGHTSRevenue for the December quarter: • $51.5M • 7,385 oz’s delivered into forward sales contracts at $846/oz • 27,280 oz’s sold in the spot market at an average of $1,654/oz • $1,482/oz – average realized priceRevenue for the fiscal 2011: • $187M • 47% of oz’s delivered into the forward sales contracts at $846/oz • 53% of oz’s delivered into the spot market at an average priced of $1,537/oz • $1,213/oz – average realized price 8
    • FINANCIAL HIGHLIGHTSNet profit for the December quarter: • $12.6M or $0.09/shareNet loss for the fiscal 2011: • $15.8M or $0.09/share • Affected by deliveries into hedge book, high exploration costs, and stock based compensation expenseCapital expenditure: • For the quarter: $27.3M • For the fiscal year: $76.4M • Primarily for mill expansion, mobile equipment, and capitalized mine site exploration 9
    • FINANCIAL HIGHLIGHTSCash position at December 31, 2011: • $11M in cash, cash equivalents and short term investment including restricted cash • Sufficient cash liquidity from current cash plus expected future cash flows to support our liquidity requirements • Additional flexibility provided by deferring delivery of 28,000 ounces due in Q1 until later in 2012 • Rebuild cash balance ($26.5M at January 31, 2012) • Maintain cash balance of ~$20M • Excess cash flow reinvested in exploration or used to accelerate hedge deliveries 10
    • FINANCIAL HIGHLIGHTSPlant expansion: • On schedule to be completed by the end of Q1 • Expected total cost of $62M • 10% higher than budget relating to scope changes, and an increase in the price for structural steel fabrication, and higher foreign currency costs • $15M remaining to be spent in 2012 11
    • FINANCIAL HIGHLIGHTSNet change in unrealized gold hedge gain: • Unrealized non-cash gain of $1.8M for the 15 months ended December 31, 2011 • Reduction in financial derivative liability due to 72,000 oz’s delivered into the hedge book • Mark-to-market loss on remaining 174,500 oz’s under hedge contract decreased to $129.6M 12
    • FINANCIAL HIGHLIGHTSNew fleet loan facility: • In December quarter, expansion of mobile equipment loan finalized with Société Générale by an additional $12.8M • Quarterly repayments • Final payment on September 30, 2013 • Currently drawn down to $24.4M 13
    • FOCUSED ON BUILDING Cash Margin ($/oz)(1,2)FINANCIAL STRENGTH 1200Building stronger balance sheet to 1000self-fund exploration and development 800 • 2012 Production and Cash Cost Guidance: 600 • 210,000 – 225,000 oz’s at $600 - $650/oz 400 • Rising production, lowering costs 200 • Margin expansion + increased production 0 2011 2012 2013* 2014 profile = significant free cash flow to self-fund exploration and development strategy Rate of margin expansion is a function of increasing production through regional exploration success • Manageable capex requirements in 2012: $30M *After eliminating hedge position(1) Assumes $1600/oz gold price and cash cost of $625/oz (2) Non-Deferred Hedge Schedule page 39 14
    • 2011Changes made to reduce operating risks: FOCUSED ON GROWTH • Mill expansion FOCUSED ON: • Automated controls for better blending to increase throughput GROWING • Second access ramp to the pit RESERVES • Revised drilling, blasting, and maintenance GROWING PRODUCTION contracts in order to increase mining rate FINANCIAL • Improvements to employee compensation STRENGTH 15
    • FOCUSED ON Kedougou-Kenieba Inlier – A Birimian Greenstone BeltGROWING RESERVES Reserves and Resources(1,2) December 31, 2011 2.50 2.00 1.50 Moz 1.00 2.138 1.659 1.51 0.50 0.00 Proven and Measured and Inferred Probable Indicated Resources Reserves Resources(1) See page 38 (2) M+I Resources are inclusive of reserves 16
    • FOCUSED ONGROWING RESERVES2012 Exploration Program1. Mine License Exploration: $20M (77,000m)2. Regional Exploration: $20M (90,000m) TOTAL: $40M (167,000m) (+140,000m RAB)2011 Exploration Program: $46MFull drill results are posted at terangagold.com 17
    • 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 18
    • 1. SABODALA MINE LICENSEEXPLORATION• $20M exploration program is underway on the Sabodala Mine License• Potential to expand existing gold inventory on the ML from 1.55Moz to 2.5 – 3.5Moz(1,2,3) over the next 12 to 18 months increasing the mine life to ~ 10 to 15 years • From deepening the Sabodala pit to the north along the Main Flat Extension • From continuation of the Masato deposit • From conversion of Niakafiri resources to reserves(1) Potential to expand existing gold mineralization to between 40 and 50 M tonnes at grades of between 1.5 to 1.9 gpt Au for a total inventory of 2.5 to 3.5Moz(2) This exploration target is not a Mineral Resource. The potential quality and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. 19(3) See Key Assumptions on page 37
    • 2011 MINE LICENSEHIGHLIGHTS FOCUSED ON GROWTH• Intersection of significant wide widths of high grade mineralization outside the Sabodala ultimate pit limit as part of MFE drill program FOCUSED ON:• Discovery of multiple high-grade zones in the LFZ just below the MFE area GROWING RESERVES• Successful intersection and extension of the Masato deposit down dip onto our Mine License and 500m along strike with potentially underground mineable high-grade ore 20
    • 2012 MINE LICENSE FOCUSED ON GROWTH• Minimum 6 drill rigs FOCUSED ON:• $20M GROWING• 77,000m of diamond and RC drilling RESERVES 21
    • MINE LICENSE EXPLORATION – MAIN FLAT EXTENSION (“MFE”) Main Flat Extension – principal gold hosts of Sabodala deposit • MFE program is designed to test the continuity of this structure to the north beginning with infilling holes • Significant widths of high grade mineralization: 131m at 3.45 gpt 87m at 3.11 gpt 70m at 3.0 gpt 53m at 4.5 gpt Lower Flat Zone (“LFZ”) – deeper zone below MFE • Drilling confirms multiple flat zones immediately below Sabodala ultimate pit: 46m at 9.8 gpt 34m at 6.3 gpt (1) MFE - open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, LFZ potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012Full drill results are posted at terangagold.com 22
    • CROSS SECTION OF SABODALA GOLD DEPOSIT 23
    • 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 Mylonite Shear • Drilling intersected wide widths of alteration similar to Ayoub’s Zone Sabodala and Niakafiri Thrust 15m @ 1.34 gpt 20m @ 2.10 gpt • 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 sharingSabodala Pit stripping for including deeper MFE mineralization into the ultimate pit Full drill results are posted at terangagold.com 24
    • MINE LICENSE EXPLORATION – MASATO Masato structural trend strikes across onto our Mine License Main Flat Extension • Oromin Joint Venture has identified open pit reserves of 0.5Moz about 2km from our mill • Tracking the deposit as it crosses onto our Masato Down Dip property Sabodala Pit • Multiple mineralized zones have been identified Sambaya Hill with high grade intervals apparent • Confirmed strike length of 500m, a dip extent of Masato Extensions 200m, and a band of about 40m of solid grade mineralization • 2km of strike length still to be tested • Recent results from Masato Down Dip include: 37m at 4.5 gpt 44m at 2.0 gpt Full drill results are posted at terangagold.com 25
    • MINE LICENSE EXPLORATION – NIAKAFIRI Niakafiri area has ~300,000 oz’s in reserves in a mineralized envelope of about ~800,000 oz’s • Deposit remains open below 200m level • Potential 2H 2012 drilling with intentions of adding to reserves • Ongoing community discussions Full drill results are posted at terangagold.com 26
    • 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 27
    • 2. REGIONAL EXPLORATION• From 2007 – 2009, no significant drilling was done on the 1,455km2 Regional Land Package due to cash constraints• There are ~40 drill targets identified; $32M spent in 2011 and $20M planned for 2012• Addition of Garaboureya North exploration permit, land package increases to over 1,500km2 28
    • GORA • 2011: 115,000m RC/DD, 150,000m RAB • Current reserves of 114,000 oz’s @ 5 gpt • Most advanced target: moving from exploration to development • Objective of having production in early 2013 permitting dependent • 22km from Sabodala mill, truckable • High grade-drill intersections continue to expand the potential footprint of the deposit Trace of blind veins from RC holes Projected to surface – high correlation with IP trends.Full drill results are posted at terangagold.com 29
    • TOUMBOUMBA – NEWEST TARGET • Latest discovery, potential to become second regional deposit through the mill • Located 10km NW from Sabodala mill • High grade, lower grade halo, and oxide material • Easily processing at minimum, potential for heap leaching • Alteration hosted mostly in granite (laterite cover) • Oxide mineralization of up to 60m in depth • RAB results: • 6m @ 18.54 gpt • 4m @ 3.31 gpt • 8m @ 5.46 gpt • RC results: • 1m @ 5.20 gpt • 2m @ 21.45 gpt Full drill results are posted at terangagold.com • 4m @ 6.32 gpt 30
    • DIEGOUN NORTH – “THE DONUT” • 7km x 4km complex of gold anomalism • Contrasting rock types, porphyries, granites, dolerite & sediments Sabodala Ore Body • Rock samples to 80 gpt Au • RAB drilling has defined gold mineralization in bedrock • Honey and Jam • First pass RC program at Honey and Jam; 51 holes completed for just under 8,800m (51 holes anomalous levels of gold > 0.1 gpt; 40 holes were >0.5 gpt) • Recognition of a well-developed, auriferous NE trending structureFull drill results are posted at terangagold.com • 2012 drilling to focus on understanding ore-grade structural controls and orientations 31
    • • >5km long, up to 1 km wide gold anomaly defined byTOUROKHOTO termite sampling, similar geology as Loulo across the border (12Moz resource) Sabodala Ore Body • Drilling to date has identified a substantial, mineralization system • Potential to host-ore grade shoots within • First pass drill program is designed to test for large, near surface open-pitable resource • Current program is 60% with most assays and interpretation pending • Parallels NE trending shears of the MTZ • 3Moz Massawa deposit hosted on MTZ about 25km south Full drill results are posted at terangagold.com 32
    • CORPORATESOCIAL RESPONSIBILITY• CSR is fundamental to the success of our business• Healthy, safety, education, sustainability• Developing schools, health clinics, and improving access to potable water• Engaged a renowned Canadian group to assist us in putting together a comprehensive regional development plan • Along with local, regional, and national government• Improve the livelihoods of those in the communities in which we operate• A key component of our vision is to set the benchmark in Senegal for responsible miningMining Responsibly and Sharing theBenefits 33
    • SUMMARY –FOCUSED ONGROWTH1. Only mill in Senegal – expansion almost complete2. Largest land position in Senegal3. Rising production, declining costs4. Building a stronger balance sheet – increasing production and free cash flow with margin expansion5. Extensive exploration program6. Experienced management team 34
    • PRODUCINGANDEXPLORINGDECEMBER QUARTER AND2011 YEAR ENDCONFERENCE CALL &WEBCAST 35
    • APPENDICES 36
    • KEY ASSUMPTIONSBasis for 2.5 – 3.5Moz gold inventory from Mine License Expand upon existing gold mineralization by an additional 20M to 30M tonnes at grades of between 1.5 and 1.9 gpt for a total inventory of 2.5 to 3.5Moz from the Sabodala Mining License (“ML”) over the next 12 to 18 months. The larger gold inventory base is expected to result from the success of deepening the Sabodala pit to the north along the MFE/LFZ, extension of the Masato pit onto the ML, potential conversion of Niakafiri resources to reserves as well as adding to the gold mineralization inventory below these three large open pits. This exploration target is not a Mineral Resource. 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. The goal of the MFE/LFZ programs is to add 250,000 to 500,000 ounces of gold to the open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, as well as potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012.Rationale: Recent drilling confirms extension of mineralization to the north of the existing pit Potential for identification of additional ounces through infill drilling within area of existing resources under the ML Minimum 5 drill rigs and exploration budget of US$20M dedicated to ML alone in 2012 Program to continue to test similar geophysical anomalies and identified structures within the ML 37
    • SABODALA GOLD PROJECT: RESERVES & RESOURCES(DECEMBER 31, 2012) M Grade M oz tonnes g/t Au Au Proven and Probable Sabodala 19.89 1.54 0.987 Niakafiri 7.814 1.14 0.287 Stockpile 4.211 0.94 0.128 Subtotal 31.915 1.37 1.402 Sutuba 0.353 1.06 0.012 Gora 0.709 5.01 0.114 Sabodala - additional 3.232 1.26 0.131 Total 36.209 1.43 1.659 Measured and Indicated Sabodala 44.371 1.07 1.525 Niakafiri 10.741 1.12 0.386 Gora 1.282 5.22 0.215 Sutuba 0.353 1.06 0.012 Total 56.747 1.17 2.138 Inferred Sabodala 26.205 1.01 0.848 Niakafiri 7.248 0.88 0.205 Niakafiri West 7.144 0.82 0.188 Soukhoto 0.566 1.32 0.024 Gora 0.286 4.16 0.038 Diadiako 2.917 1.49 0.119 Majiva 2.593 0.64 0.047 Toumboumba 0.855 1.5 0.041 Total 47.814 0.98 1.51 38
    • NON-DEFERRED HEDGE SCHEDULEDelivery Date Price US$/oz Ounces17-Feb-2012 846.00 28,00017-May-2012 846.00 28,00015-Aug-2012 846.00 27,50021-Nov-2012 832.92 25,00020-Feb-2013 832.92 25,00017-May-2013 790.66 25,00021-Aug-2013 791.50 16,000Total 174,500 39
    • MANAGEMENTAlan R. Hill • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick GoldExecutive Chairman & CEO • 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 • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick GoldPresident & CFO • Former VP and CFO of Gabriel Resources (2005 – 2010)Yani Roditis • Over 10 years experience in mine development and operations with Barrick Gold (1994 – 2005) • Former Chief Operating Officer of Gabriel Resources (2005 – 2010)Vice President, OperationsKathy Sipos • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009)Vice President, Investor &Stakeholder RelationsDavid Savarie • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel ResourcesVice President, General Counsel & • Previously in private practice at Miller Thomson LLPCorporate SecretaryMark English • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating minesGeneral Manager and development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006Bruce Van Brunt • Mining engineer and geologist with over 20 years experience • Previously worked in a number of technical capacities with Placer Dome and Echo Bay MinesBusiness Development Manager • Joined Mineral Deposits Ltd. in March 2006Martin Pawlitschek • 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, SouthRegional Exploration Manager East Asia and Africa • Joined Mineral Deposits Ltd. in July 2007 40