Teranga rare gainer today, New Tech Report
http://www.terangagold.com/English/investors/news/newsreleasedetails/2016/Teranga-Gold-Files-Technical-Report-for-Sabodala/default.aspx
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
Large, 13.5-year mine life
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
Open Pit* 1.90 1.41
Underground* 0.35 5.01
Stockpiles 0.39 0.79
Measured and Indicated Resources (inclusive of Reserves) 4.44 1.62
Inferred Resources 0.94 1.92
*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.
Solid LOM production profile with gold production expected to average over 200,000 ounces per annum through 2024. Sequencing of multiple open pits designed to maximize annual cash flow at an $1,100 gold price per ounce(3).
LOM all-in sustaining costs of $887 per ounce(4) and, when including the cost of the Franco-Nevada gold stream, $960 per ounce(4). Low sustaining capex of less than $10 million per annum over LOM.
Strong cash flow of $240 per ounce(5) at a $1,200 per ounce gold price.
Significant organic growth potential on emerging world-class gold belt where more than 50 million ounces have been identified(6).
Endnotes
For Teranga, life of mine cash flows from the Sabodala project are derived from the Company's NI 43-101 Technical Report filed on Sedar as of March 23, 2016 and are determined as follows: Forecasted revenues from production over the life of mine total $2,830 million (See Appendix 3 - Life of Mine Plan - 215,000 ounces at $1,100 per ounce and 2,154,000 ounces at $1,200 per ounce, see also Table 16-8 of the Technical Report on page 16-14) less anticipated life of mine all-in sustaining cash costs of $2,281 million (See Appendix 5 herein and Table 21-8 on page 21-15 of the Technical Report) for undiscounted cash flows totalling $549 million before interest payments, income tax payments, repayment of debt, working capital, closure costs and dividends. On a discounted basis the present value of these life of mine cash flows would be $376 million at 5% and $307 million at 8%. Using an exchange rate of 0.7USD:1CAD, undiscounted life of mine cash flows total C$784 million, and on a discounted basis, C$537 million at 5% and C$439 million at 8%.
Mineral Reserves and Mineral Resources estimates as at December 31, 2015 as per Company disclosure. For more information regarding Teranga Gold's Mineral Reserves and Resources, please refer to Teranga Gold's December Quarter and Year-end 2015 Report accessible on the Company's website at www.terangagold.com.
This production guidance is based on existing proven and probable reserves only from the Sabodala mining license as disclosed in Teranga Gold's December Quarter and Year-end 2015 Report accessible on the Company's website at www.terangagold.com.
Total cash costs figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measure of other companies. The World Gold Council ("WGC") definition of all-in sustaining costs seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. All-in sustaining cost excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize earnings. Consequently, this measure is not representative of all of the Company's cash expenditures. In addition, the calculation of all-in sustaining costs does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the Company's overall profitability. Life of mine total cash costs and all-in sustaining costs figures used in this release are before stockpile inventory value adjustments and government waiver accruals. For more information regarding these measures, please refer to the Company's 2015 Annual Management's Discussion and Analysis accessible on the Company's website at www.terangagold.com.
Cash flow per ounce is based on the Company's life of mine average all-in sustaining costs as set out in the Company's most recent NI 43-101 Technical Report before income tax payments, interest payments, debt repayments, closure costs, dividends and working capital deducted against a forecast gold price of $1,200 per ounce for 2017 and beyond.
Identified ounces on the Birimian greenstone belt, which straddles the border of Senegal and Mali, West Africa, refers to gold ounces historically mined in addition to gold ounces currently reported as Measured and Indicated Resources, as available on GFMS Thomson Reuters and the latest company reserve and resource statements as of March 23, 2016.
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