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Lower Costs and Stronger Cash Flows Underpin New Life of Mine
TORONTO, ONTARIO--(Marketwired - Mar 23, 2016) -
(All amounts are in U.S. dollars unless otherwise stated)
Teranga Gold Corporation ("Teranga" or the "Company") (TSX:TGZ)(ASX:TGZ) announces the filing of a National Instrument 43-101 Technical Report (the "Technical Report"), supporting the Company's updated life of mine ("LOM") plan released on January 29, 2016. The Technical Report titled "Technical Report on the Sabodala Project, Senegal, West Africa", which was prepared by Teranga and RPA Inc. and conforms to National Instrument 43-101 Standards of Disclosure for Mineral Projects, has been filed on SEDAR at www.sedar.com and on the Company's website at www.terangagold.com.
"A long-life, low-cost reserve base and strong cash flow underpin our new updated life of mine plan which projects undiscounted cash flows of $549 million(1)," said Richard Young, President and Chief Executive Officer. "We believe the upside potential on this base case plan is significant. With the only operating mill in Senegal and a large land package on an emerging world-class gold belt, we are focused on continuing to convert resources to reserves and to make new discoveries. Since our IPO at the end of 2010, we have increased our reserve base net of five years' production, by 80 per cent, through acquisition and exploration."
Highlights of the Technical Report
|Open pit and underground mineral resources and reserves summary||Au||Grade|
|(December 31, 2015)(2)||(Moz)||(g/t Au)|
|Proven and Probable Reserves (2P) at $1,100/oz Au||2.63||1.38|
|Measured and Indicated Resources (inclusive of Reserves)||4.44||1.62|
|*Average mined grade is 1.59 g/t Au for both open pit and underground reserves.|
|Note: Refer to Appendix 1 and Appendix 2 for full Mineral Reserve and Resource tables.|
Competent and Qualified Persons Statement
The technical information contained in this document relating to the open pit mineral reserve estimates is based on, and fairly represents, information compiled by Mr. William Paul Chawrun, P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Chawrun is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. However, he is a "Qualified Person" as defined in NI 43-101. Mr. Chawrun has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Chawrun has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in this Report.
The technical information contained in this Report 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, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report.
Teranga's exploration programs are being managed by Peter Mann, FAusIMM. Mr. Mann is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Mann has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Mann is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. The technical information contained in this news release relating 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 samples are prepared at site and assayed in the SGS laboratory located at the site. Analysis for diamond drilling is sent for fire assay analysis at ALS Johannesburg, South Africa. Mr. Mann has consented to the inclusion in this news release of the matters based on his compiled information in the form and context in which it appears herein.
The technical information contained in this document relating to the underground mineral reserves estimates is based on, and fairly represents, information compiled by Jeff Sepp, P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Sepp is independent of Teranga and is a "Qualified Person" as defined in NI 43-101 and a "competent person" as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Sepp has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Sepp has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in the Technical Report.
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"). CIM definitions of the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", are substantially similar to the 2012 JORC Code corresponding definitions of the terms "ore reserve", "proved ore reserve", "probable ore reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", respectively. Estimates of mineral resources and mineral reserves prepared in accordance with the 2012 JORC Code would not be materially different if prepared in accordance with the CIM definitions applicable under NI 43-101. There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.
Forward Looking Statements
This release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Teranga, or developments in Teranga's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, all disclosure regarding possible events, conditions or results of operations, future economic conditions and courses of action, the proposed plans with respect to mine plan, anticipated 2016 results, mineral reserve and mineral resource estimates, anticipated life of mine operating and financial results, and the completion of construction of the Gora deposit related thereto. Such statements are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments that management believe to be reasonable and relevant. These assumptions include, among other things, the ability to obtain any requisite Senegalese governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. 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, as well as other risks and uncertainties which are more fully described in the revised Company's Annual Information Form dated September 1, 2015, and in other company filings with securities and regulatory authorities which are available at www.sedar.com. Teranga does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities.
Teranga is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development in Senegal, West Africa.
Teranga's mission is to create value for all of its stakeholders through responsible mining. Its vision is to explore, discover and develop gold mines in Senegal and West Africa, in accordance with the highest international standards, and to be a catalyst for sustainable economic, environmental and community development. All of its actions from exploration, through development, operations and closure will be based on the best available techniques. For more information, please refer to www.terangagold.com.
APPENDIX 1: Open Pit and Underground Mineral Resources Summary as at December 31, 2015
|Deposit||Domain||Measured||Indicated||Measured and Indicated||Inferred|
|('000s)||(g/t Au)||('000s)||('000s)||(g/t Au)||('000s)||('000s)||(g/t Au)||('000s)||('000s)||(g/t Au)||('000s)|
|Niakafiri Main||Open Pit||4,909||1.33||210||7,222||0.98||228||12,131||1.12||438||2,472||1.09||87|
|Niakafiri West||Open Pit||2,566||1.29||107|
|Subtotal Sabodala ML||Open Pit||19,117||1.26||776||14,793||1.62||773||33,910||1.42||1,548||8,344||1.25||335|
|Maki Medina||Open Pit||2,112||1.22||83||2,112||1.22||83||114||0.81||3|
|Niakafiri SW||Open Pit||770||0.81||20||770||0.81||20||30||0.67||1|
|Niakafiri SE||Open Pit||4,439||0.98||140||4,439||0.98||140||162||0.96||5|
|Subtotal Somigol ML||Open Pit||5,894||0.79||150||39,584||1.58||2,005||45,478||1.47||2,155||1,989||1.16||74|
|Total Sabodala + Somigol||Open Pit||25,011||1.15||926||54,377||1.59||2,777||79,388||1.45||3,703||10,333||1.23||409|
Notes for Mineral Resources Summary:
There have been no revisions to the resource models for 2015, except for adjustments due to mining depletion and minor revisions to Niakafiri Main, Niakafiri SW, Maki Medina and Diadiako. For estimating 2015 Mineral Resources, Teranga has implemented a new reporting procedure, which includes the use of open pit shells to constrain open pit resources and reporting underground resources separately.
For reporting of open pit Mineral Resources, open pit shells were produced for each of the resource models using Whittle open pit optimization software. Only classified blocks greater than or equal to the open pit cut-off grades and within the open pit shells were reported. This is in compliance with the CIM (2014) resource definition requirement of "reasonable prospects for eventual economic extraction".
For reporting of underground Mineral Resources, only classified blocks greater than or equal to the underground cut-off grade outside of the open pit shells were reported. This is in compliance with CIM (2014) resource definition requirements. In addition, Deswik Stope Optimizer software was used to generate wireframe models to constrain blocks satisfying minimum size and continuity criteria, which were used for reporting Sabodala underground Mineral Resources.
The significant change between the Mineral Resources reported for 2014 and 2015 is due to this new reporting procedure, where the 2015 year end Mineral Resources have been constrained using open pit shells along with revised gold cut-off grades for both open pit and underground resources. Previously classified Mineral Resources that do not satisfy the revised reporting criteria for 2015 have been excluded, however, remain in the block models as mineralized material.
APPENDIX 2: Open Pit and Underground Mineral Reserves Summary
|Deposits||Proven||Probable||Proven and Probable|
|Tonnes (Mt)||Grade (g/t)||Au (Moz)||Tonnes (Mt)||Grade (g/t)||Au (Moz)||Tonnes (Mt)||Grade (g/t)||Au (Moz)|
|Subtotal Open Pit||5.95||1.52||0.29||35.96||1.39||1.61||41.92||1.41||1.90|
|Golouma West 1||-||-||-||0.62||6.07||0.12||0.62||6.07||0.12|
|Golouma West 2||-||-||-||0.45||4.39||0.06||0.45||4.39||0.06|
|Total Including Stockpile||21.23||0.99||0.68||38.11||1.60||1.96||59.34||1.38||2.63|
Notes for Mineral Reserves Summary:
APPENDIX 3: Life of Mine (2016 to 2029)
|Niakafiri 1||Ore Mined||Mt||9.0||1.5||4.0||3.5|
|Maki Medina||Ore Mined||Mt||0.9||0.9|
|Stockpile Ore Balance||Mt||13.7||11.1||10.1||10.4||9.4||7.9||8.7||12.9||18.9||14.5||10.2||6.2||2.1|
1 The schedule summarized Niakafiri from "Niakafiri Main" and "Niakafiri SE". The portion of Niakafiri SE to be mined lies outside of the Sabodala Village area and assumes relocation is not required.
Sum of individual amounts may not equal due to rounding.
The estimated ore reserves underpinning the production targets (as defined in the ASX Listing Rules) set out in Appendix 1 above, have been prepared by Mr. Paul Chawrun, who is a Competent Person, in accordance with the requirements of the 2012 JORC Code.
This production guidance is based on existing proven and probable ore reserves from the Sabodala mining license as at December 31, 2015.
Stockpile balances at January 1, 2016 included 15.3 Mt at 0.79 g/t for 0.39 million contained ounces
APPENDIX 4: Life of Mine Capital Expenditures
|Sustaining Capex||Unit||LOM||2016-2020 AVG||2016||2017||2018||2019||2020||2021||2022||2023||2024||2025||2026||2027||2028||2029|
|Open Pit Mining||USDM||29.9||3.7||4.9||3.5||4.0||1.5||4.7||6.0||3.0||1.5||0.8||-||-||-||-||-|
|Admin & Other Sustaining||USDM||8.8||1.3||2.8||1.0||1.0||1.0||0.5||0.5||0.5||0.3||0.3||0.3||0.3||0.3||0.3||-|
|Total Sustaining Capex||USDM||82.5||7.2||11.0||6.5||7.0||4.5||7.2||10.5||20.5||9.8||2.1||1.3||0.8||0.8||0.8||-|
|Capital Projects & Development|
|OJVG & Gora Development||USDM||4.3||0.9||3.3||0.8||0.3||-||-||-||-||-||-||-||-||-||-||-|
|Underground Equipment & Development||USDM||102.1||4.9||-||-||-||-||24.4||23.4||8.9||2.4||0.8||8.5||18.2||10.4||4.1||0.9|
|Other Projects & Development||USDM||21.8||2.9||11.3||1.9||1.4||-||-||7.2||-||-||-||-||-||-||-||-|
|Total Projects & Development||USDM||128.2||8.7||14.6||2.7||1.7||-||24.4||30.6||8.9||2.4||0.8||8.5||18.2||10.4||4.1||0.9|
|Combined Total (USDM)||USDM||210.8||15.9||25.7||9.2||8.7||4.5||31.6||41.1||29.4||12.2||2.9||9.8||18.9||11.1||4.9||0.9|
APPENDIX 5: Life of Mine Operating Costs
|Open Pit Mining||USD/t mined||2.25||2.25||2.24||2.27||2.25||2.20||2.29||2.19||2.31||2.17||2.36||-||-||-||-||-|
|Underground Mining||USD/t milled||72.23||-||-||-||-||-||-||76.30||74.94||73.32||77.25||79.72||76.46||66.49||64.35||78.11|
|General & Admin.||USD/t milled||2.56||3.39||3.81||3.47||3.29||3.28||3.15||3.12||3.06||3.08||2.01||1.88||1.43||1.23||1.00||1.81|
|General & Admin||USDM||144||14||14||14||14||14||14||14||13||13||8||8||6||5||4||4|
|Refining & Freight||USDM||12||1||1||1||1||1||1||1||1||1||1||1||1||1||1||0|
|Total Operating Costs||USDM||1,622||147||142||148||148||146||148||132||141||154||139||63||66||77||76||41|
|Deferred Stripping Adjustment||USDM||(129)||(13)||(26)||(6)||-||-||(35)||(35)||(25)||(1)||-||-||-||-||-||-|
|Total Cash Costs 2||USDM||1,639||146||130||158||161||159||124||104||127||167||154||69||73||85||85||45|
|Total Cash Costs 2||USD/oz||690||706||602||691||798||792||655||810||730||741||587||660||668||629||607||711|
|Capitalized Deferred Stripping||USDM||129||13||26||6||-||-||35||35||25||1||-||-||-||-||-||-|
|Capitalized Reserve Development||USDM||-||-||-||-||-||-||-||-||-||-||-||-||-||-||-||-|
|All-In Sustaining Cash Costs 2||USDM||2,108||189||196||187||183||177||203||190||191||190||163||85||98||101||94||50|
|All-In Sustaining Cash Costs 2||USD/oz||887||914||912||819||908||882||1,072||1,483||1,103||843||621||812||897||748||671||788|
|Franco Nevada Stream||USDM||173||19||20||22||22||22||11||7||10||13||15||6||6||8||8||4|
|Franco Nevada Stream||USD/oz||73||92||92||94||107||108||58||58||58||58||58||58||58||58||58||58|
|All-In Sustaining Cash Costs 2 plus stream||USDM||2,281||208||216||209||205||198||214||198||201||203||178||91||104||109||102||53|
|All-In Sustaining Cash Costs 2 plus stream||USD/oz||960||1,006||1,004||914||1,015||990||1,129||1,541||1,161||900||678||870||955||806||729||846|
|1 Royalties include Government of Senegal royalties on total production and the NSR royalty due to Axmin on Gora production.|
|2 Refer to endnote (4) on page 2 of this press release concerning the definition of total cash costs and all-in sustaining costs.|
|This production guidance is based on existing proven and probable reserves only from both the Sabodala mining license as disclosed in the Reserves and Resources section of this Report.|
|Key assumptions: Gold spot price/ounce - US$1,200, Light fuel oil - US$0.72/litre, Heavy fuel oil - US$0.43/litre, US/Euro exchange rate - $1.10|