Successfully reported this slideshow.

Final teranga-investor-presentation-august-2011-081620111


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Final teranga-investor-presentation-august-2011-081620111

  1. 1. Producing and Exploring August 2011
  2. 2. Cautionary StatementThis presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward lookingstatements, within the meaning of applicable United States securities legislation, which reflects management’s expectations regardingTeranga Gold Corporation’s (“Teranga” or the “Company”) future growth, results of operations (including, without limitation, future productionand capital expenditures), performance (both operational and financial) and business prospects (including the timing and development ofnew deposits and the success of exploration activities) and opportunities. Wherever possible, words such as “plans”, “expects”, “does notexpect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions orstatements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, have been used toidentify such forward looking information. Although the forward looking information contained in this presentation reflect management’scurrent beliefs based upon information currently available to management and based upon what management believes to be reasonableassumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. A number of factorscould cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward lookinginformation, 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 causeTeranga’s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied bysuch 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 causeactions, events or results not to be as anticipated, estimated or intended. There can be no assurance that the forward looking informationwill 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. The forward looking information is stated as ofthe date of the Prospectus and, except as required under applicable laws, Teranga assumes no obligation to update or revise suchinformation to reflect new events or circumstances.Forward looking information and other information contained herein concerning mineral exploration and management’s general expectationsconcerning the mineral exploration industry are based on estimates prepared by management using data from publicly available industrysources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry whichmanagement 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 datapresented 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 involvethe implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably mined inthe future. 2
  3. 3. Capitalization Summary Ticker symbol: TGZ: TSX/ASX Shares outstanding (1): 245.6 million Stock options outstanding: 14.4 million Share price (as at August 10, 2011): C$2.44 Market capitalization: C$599million Focused on GROWTH 40 MM Cash position(2): US$65.9 million(3) 20% • Focused on Growing Reserves Debt position (2)(4): US$20.1 million • Focused on Growing Production • Focused on Financial Strength Net cash position (2): US$45.1 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 June 30, 2011 3(3) Includes short-term investments and restricted cash(4) US$23.6 MM drawn under the mining fleet finance lease facility with Societe Generale.
  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 Experienced management team • Proven track record 4
  5. 5. Sabodala Gold (Senegal)• Sabodala is the only large scale gold mine in Senegal• Senegal – Mining Code passed in November 2003 – Successful democracy – Stable political environment – Estimated population of 13.7 million – Mining friendly regime – Government holds 10% free-carried interest in Sabodala and 3% royalty – Tax-free holiday that ends May 2015 5
  6. 6. Sabodala Gold Operations• 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 US$56 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) 6
  7. 7. HighlightsInvestor concerns during the IPO (Nov. 2010): Short mine life High cash costs Hedge bookDuring the first half, the Company: Increased reserves and provided reserve guidance Increase production and lowered cash cost guidance for 2011 and 2012 Redesigned pit Committed to take Gora from exploration into development Ramped up exploration program  Expect consistent news flow  Expect more discoveries on the Regional Land Package Accelerated delivery against hedge Focused on adding reserves 7
  8. 8. Growth Strategy Focused on Growing Reserves - 1.5Moz currently to … • Objective: 10-15+ year mine life • Growth through exploration – aggressive 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 current to … • Leveraging off our existing mill – land package all truckable • Doubling mill capacity – could increase further Focused on Financial Strength – maintain 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 8
  9. 9. Focused on Growing Production Production Profile („000 ozs) 500 • Assumes increased 450 production from regional 400 exploration success 350 300 250 200 150 100 50 0 2011 2012 2013 2014 Production Exploration Success Calendar Year 2011 •Est. production 140,000 oz at $750 - $775/oz •CapEx $75M (primarily for mill expansion and capitalized Mine License exploration) Calendar Year 2012 •Est. production 220,000 oz at $575-$625/oz •CapEx ~ $25M (primarily for exploration) (1) Post 2012 cash costs are expected to remain around the $600-650/oz level (1) Excludes capital costs to develop regional deposits 9
  10. 10. Focused on Financial Strength Cash Margin - expansion ($/oz) 1,000 • Assumes $1500/oz spot gold price 900 • Rate of margin expansion 800 is a function of increasing Cash Margin ($/oz) production through regional 700 exploration success 600 500 400 300 200 2011 2012 2013 2014Maintain strong balance sheet to self-fund exploration • IPO recapitalization of balance sheet – net cash position US$45.1M(2) • Eliminating hedge book – quickly but prudently – YE 2011~ 150,00oz at ~ $829/oz(3) Book to be eliminated by mid 2013 if not sooner • Margin expansion + increased production profile = significant free cash flow • Manageable capex requirements(1) Assumes $1500/oz gold price and cash cost of $600/oz(2) As at June 30, 2011 10(3) Non-Deferred Hedge Schedule Appendix page 34
  11. 11. Focused on Growing Reserves West Africa: Prolific, Under Explored Gold Belt 11
  12. 12. Focused on Growing Reserves Gold Reserves and Resources(1) 2,100 Reserve/Resource (000s oz) 1,800 2,254 1,500 (@1.33 g/t) 1,200 1,51 900 (@1.47 g/t) 600 774 300 (@1.06 g/t) 0 (3) Proven and Measured and Inferred (2)(3) Probable Indicated Kedougou-Kenieba Inlier – A Birimian Greenstone Belt(1) See Appendix page 33(2) M+I resources are inclusive of reserves 12(3) As at June 30, 2010, see Sabodala Technical Report
  13. 13. Focused on Growing ReservesExploration Program (Calendar 2011) SSC1. Mine License Exploration: $8 MM (~60,000m) (YTD 30,000m)* 5 Drill Rigs2. Regional Exploration: $25 MM (~80-90,000) ( YTD 50,000m)* 12 Drill RigsTOTAL: + US$33 MM (140-150,000m) (+180,000m RAB) 17 drill rigs * Majority of assays are pending – as at June 30, 2011 13
  14. 14. 1. Mine License Exploration 2. Regional Exploration Budget: $8 M Budget: $25M 1,455km2 33km2 35 km radius GORA 14
  15. 15. 1. Sabodala Mine License Exploration• US$8 MM exploration program is underway on the Sabodala Mine License• 10 targets identified for follow up• Potential to expand proven and probable reserves from 1.51 Moz gold to 2 to 3 Moz gold over the next 12 to 24 months increasing the mine life to ~ 10 to 15 years “The Corridor”: • Continuation of the main Sabodala structural trend to the north Sambaya Hill: • Confluence of Niakafiri Shear Zone with Main Flat from Sabodala and Masato Shear Masato Extension: • Continuation of Masato deposit Niakafiri, Niakafiri West & Soukhoto: • Down-dip extension of Niakafiri, strike extension of Niakafiri West and Soukhoto 15
  16. 16. Sabodala Mine License – “The Corridor” SABODALA STRUCTURAL TREND (“The Corridor”) •Northerly trending extension of Sabodala pit •Mineralization traced more than 200m north of the existing pit along trend Ayoub’s Mylonite •Open to north and west Shear Zone Thrust •Drilling intersected wide widths of alteration similar to Sabodala and Niakafiri •Drilling 20m centres •Plan is to conduct 10,800 metres of RC and Diamond drilling to test target at depth and along strike •Expect resources defined to be converted to reserves in 2011 Sabodala Pit 16
  17. 17. Sabodala Mine License – Masato / Sambaya Hill Target MASATO / SAMBAYA HILL •Masato structural trend (1.6 Moz on Oromin JV) strikes across onto our mine license •Plan to conduct 5,000 metres of RC and Diamond drilling to define structural trend and test structure at depth •Initially being tested over a 500 metre strike length, 20 drill Sabodala Pit Masato Down Dip holes totaling 6,150 metres of drilling Sambaya Hill •First drill hole SMRC055 • 11m of 1.08 g/t from 234m down hole • 20m of 3.53 g/t from 267m down hole • Will be extended with core as part of program •Multiple mineralized zones have been identified with high Masato Extensions grade intervals apparent from aqua regia assays conducted on site •Expect to define new resources in calendar 2011 • Sambaya Hill - Trend defined by an IP and geochemical anomaly 17
  18. 18. 1. Mine License Exploration 2. Regional Exploration Budget: $8 M Budget: $25M 1,455km2 33km2 35 KM radius GORA 18
  19. 19. 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 27 drill targets identified to drill by end of year; drilling program (US$25M) 35km radius currently underway “The Donut”• 50,000m of DD and RC and 98,000m of RAB drilling completed June 30, 2011 Gora GORA• 10 drill rigs are currently on the Regional Land Package (2 more rigs are expected in Sept.)• All targets in trucking distance of the existing mill Tourokhoto Toumboumba 19
  20. 20. Gora – High-Grade Quartz Vein System •Most advanced target: moving from exploration to development •Inferred resource of 106,000 oz @ 6 g/t Au •22 km from Sabodala mill •800m strike length auriferous quartz vein, outcropping •Deposit open in all directions •4 active drill rigs (3 DD, 1 RC/DD) •Induced polarization (“IP”) survey has been completed over the Gora deposit and has identified gold anomalies along strike and parallel to Gora – follow-up testing required •Now understood to be a stacked vein system (vs. single-vein) • Vein 1 extended (currently 8.8 g/t Au) • Vein 2 now more continuous (3.0 g/t Au) • Vein 3 now important mineralized body • Vein 5 discovered just below Vein 1 •Excellent potential for bulk style mineralization 20
  21. 21. Gora – High-Grade Quartz Vein System1. Drilling completed to date – 144 RC and DD holes, 24,705m • Current phase of 25,000m to be completed by August 2011, test to vertical depth of 130m2. Step-out program commenced • Minimum 2,400m DD • 9 hole program expanded to 11, 8 holes completed and confirmed presence of mineralized structure in all 8 • True widths of up to 12 metres • All assays pending but confirmed presence of mineralized structure3. Exploration of immediate North and South – 6,200m program • RC program, late July to Sept (depending on rig availability and performance)4. Further 10,000m of RC, 5,000m DD • Test strike extent of Gora mineralized trend and nearby parallel IP anomalies • Commencement of program likely early October (depending on rig availability)•Selected latest results include: June 13, 2011 - pr e s s r e le as e July 11, 2011 - p r e s s r e le as e Re ce nt r e s ults 5m @ 33.7 g/t f rom 111m (V ein 1) 2m @ 20.6 g/t f rom 88m 1m @ 9.5 g/t f rom 23m 2m @ 61.3 g/t f rom 126 m (V ein 1) 2m @ 27.3 g/t f rom 108m 1m @ 3.6 g/t f rom 79m 3m @ 26.7 g/t f rom 154 m (V ein 1) 2m @ 20.7 g/t f rom 79m 1m @ 5.8 g/t f rom 28m 3m @ 47.7 g/t f rom 164 m (V ein 5) 4m @ 23.2 g/t f rom 132m 1m @ 33.0 g/t f rom 156m (V ein 4) 3m @ 24.1 g/t f rom 155m 4m @ 10.7 g/t f rom 145m (V ein 2) 4m @ 34.1 g/t f rom 155m 1m @ 51.8 g/t f rom 112m (V ein 2 9m @ 3.2 g/t f rom 87m (V ein 1)•Ongoing exploration, permitting, and feasibility•Expect to bring resource to reserve by end of calendar 2011 with the goal of processing high-grade ore as soon as late 2012 21
  22. 22. Toumboumba – Newest Target •Latest discovery, potential to become second regional deposit through the mill •Located 10 km NW from Sabodala mill •Alteration hosted mostly in granite (laterite cover) •RAB drilling program commenced in April •Expanded to encompass entire structural domain •To date, 1,113 holes, 47,584m on a 100 x 50m grid •Significant widths of ore mineralization were encountered in western portion of anomaly, RAB holes grading >0.5 g/t •Targets identified by RAB program are the subject of the current RC program •To date, 47 RC holes, 8,748m completed •Continues to return wide auriferous zones •Oxide mineralization of up to 50m in depth •At minimum, potential for heap leaching •Production could be fast tracked without displacing material from Sabodala mill •Deeper drilled required 22
  23. 23. Toumboumba – Newest Target June 13, 2011 - pr e s s r e le as e July 11, 2011 - pr e s s r e le as e Re ce nt r e s ults -e ar ly RAB r e s ults -RAB r e s ults -RAB r e s ults 3m @ 6.13 g/t, inc luding 1m @ 15.44 g/t 2m @ 6.65 g/t f rom 16m 4m @ 3.31 g/t f rom 26m 3m @ 11.99 g/t, inc luding 1m @ 25.2 g/t 4m @ 6.06 g/t f rom 8m 2m @ 2.79 g/t f rom 20m 6m @ 18.85 g/t, inc luding 4m @ 27.7 g/t 2m @ 32.87 g/t f rom 38m 2m @ 3.57 g/t f rom 12m 3m @ 6.34 g/t f rom 30m June 13, 2011 - pr e s s r e le as e July 11, 2011 - pr e s s r e le as e -e ar ly RC r e s ults -RC r e s ults 10m @ 2.35 g/t, inc luding 2m @ 9.69 g/t 6m @ 1.91 g/t f rom 17m inc luding 1m @ 8.07 g/t 8m @ 5.45 g/t, inc luding 2m @ 17.75 g/t 3m @ 17.15 g/t f rom 39m inc luding 1m @ 50 g/t 6m @ 2.68 g/t f rom 56m inc luding 1m @ 8.79 g/t 3m @ 11.85 g/t f rom 36m inc luding 1m @ 30.5 g/t Re ce nt r e s ults -RC r e s ults - Aqua Re gia 11m@5.18g/t f rom 37m inc luding 1m@37.6g/t and 4m@6.23g/t f rom 52m inc luding 1m@21.8g/t f rom SNWRC016 6m@1.24g/t f rom 125m f rom SNWRC017 4m@4.46g/t f rom 21m f rom SNWRC023 11m@1.29g/t f rom 52m f rom SNWRC027 3m@4.24g/t f rom 180m f rom SNWRC029 23
  24. 24. Toumboumba – Newest Target 24
  25. 25. Diegoun North – “THE DONUT” Sabodala Ore Body •7km 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 CINNAMON JAM JAM HONEYHONEY •19,000m RAB drill program completed at Cinnamon, 663 holes •143 holes returned auriferous intersections above 0.5 g/t •First pass RC program at Jam and Honey; 51 holes completed for just under 8,800m (40 holes anomalous levels of gold > 0.5 g/t) •Recognition of a well-developed, auriferous north-east trending structure 25
  26. 26. Tourokhoto •>5Km long, up to 1Km wide gold anomaly defined by termite sampling •Parallels NE trending shears of the MTZ •3 Moz Massawa deposit hosted on MTZ about 25Km south •>240 ppb Au contours coincide with areas where MTZ shears are intersected by later NE fault structures •Rock sampling returned up to 10 g/t Au from sparse outcrop •Wide zones of sheared sediments and quartz-feldspar porphyries observed •Quartz tourmaline veining observed •23,416m RAB drill program completed with a total 1,006 holes •Identified eight coherent zones of gold anomalism •Early scout DD completed in Q1 identified significant structural zones which host auriferous alteration zones •Targets up to 700m in strike length •Follow up geophysical, RC and DD testing required 26
  27. 27. Goundamekho - Extensive Surface Gold Workings on Structures • 35 RC holes for 4,200m completed • Multiple gold bearing structures warrant follow-up drilling Gold from Trenches 75g nugget from artisan workings 27
  28. 28. Exploration Team / On Site Assay LabMapping Trenches at Dembala Berola Part of team at Exploration Office Mapping at Makana Niang, Database and GIS Management Field Work Sounkounkou On site assay lab Structural Mapping Geochem Sampling Team at Makana RC Drilling at Bransan 28
  29. 29. Focused on GROWTH Kedougou-Kenieba Inlier – A Birimian Greenstone Belt An emerging world class gold district. 29
  30. 30. Summary - Focused on GROWTH 1. Experienced Management Team 2. Senegal West Africa – 1,488km2 land position • Largest land position in Senegal 3. Operating mine and mill – only mill in Senegal 4. Mill expansion underway • from 2Mtpa to ~4Mtpa - increasing gold production profile 5. Aggressive exploration program • US$33M to be spent in calendar 2011 • ~17 drill rigs 6. Strong Balance sheet – increasing free cash flow – with margin expansion 30 World-class asset in its early stages
  31. 31. Producing and Exploring August 2011
  32. 32. AppendicesCompetent Persons StatementThe scientific and technical information contained in this release relating to exploration activities within the mining license is based oninformation compiled by Mr. Bruce Van Brunt, who is a Fellow with The Australasian Institute of Mining and Metallurgy and is also a registeredprofessional 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 Brunthas 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-timeemployee 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 asdefined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” and as aQualified Person as defined in NI43-101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which itappears in this release. Pawlitschek is a full-time employee of Teranga and not independent of Teranga within the meaning of NI43-101.The latest grade estimates as presented have been classified as a combination of Measured, Indicated and Inferred Mineral Resources inaccordance with CIM Definitions (2005) resource reporting classification guidelines and reconciled to the JORC Code (2004).Mssrs. Van Brunt and Pawlitschek have reviewed and verified the data contained in this press release, including sampling, analytical and testdata underlying the estimates provided. Verification of the data included numerous site visits, database validation of historical drill results andreview of sampling and assaying protocols.
  33. 33. Sabodala Gold Project: Reserves & Resources Ore Grade Contained Gold (000 tonnes) (g/t Au) (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 Niakifiri 7,248 0.88 205 Niakifiri West 7,144 0.82 188 Soukhoto 566 1.32 24 Gora 387 5.60 70 Total 22,655 1.06 774(1)(1) See the Sabodala Technical Report ; #’s as at June 30, 2010 33
  34. 34. Non-Deferred Hedge Schedule Delivery Date Price US$/oz Ounces 17-Aug-2011 846.00 5,500 17-Nov-2011 846.00 18,500 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 198,500Note: See page 40 of the Prospectus 34
  35. 35. Management & Board • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick GoldAlan R. Hill • Currently a Director of Gold FieldsExecutive Chairman & CEO • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007) • Over 10 years experience in mining finance, development, corporate development, and investorRichard S. Young relations with Barrick GoldPresident & CFO • Former VP and CFO of Gabriel Resources (2005 – 2010) • Mining engineer with over 20 years experience in property valuation, scoping, feasibility studies andChristopher R. Lattanzi project monitoring on a global basisDirector • Currently a Director of Argonaut Gold and Spanish Mountain Gold • Founding member and former president of Micon International (1988 – 2005) • Over 30 years experience in the mineral resource industry with a wide range of experience in financing, research and marketingOliver Lennox-King • Non-Executive Chairman of Fronteer Gold and director of CGX EnergyDirector • Instrumental in the formation of Southern Cross Resources (1997), former President of Tiomin Resources (1992 – 1997) • MDL Director not standing for re-election • Director/Trustee and CFO of Labrador Iron Ore RoyaltyAlan R. Thomas • Former Director of Gabriel Resources (2006 – 2010), CFO of ShawCor (2000 – 2006), and CFO ofDirector Noranda (1987 – 1998) • Over 25 years experience as a director and senior officer of, and legal counsel to, a number of Canadian public mining companies and has extensive legal and business experience in the mineral industry, particularly in the areas of public financing, project debt financing, permitting of large scale mining projects, and strategic mergers and acquisitions in the international minerals industryFrank Wheatley • Currently the Executive Director, Corporate Affairs and Strategy of Talison Lithium LimitedDirector • Currently a director of Lithic Resources Ltd. and Portal Resources Ltd. • Former Vice-President and General Counsel of Gabriel Resources Ltd. (2000 - 2009) • Former Vice President, Legal Affairs of Eldorado Gold Corporation 35