(All amounts are in U.S. dollars unless otherwise stated)
TORONTO, Sept. 14, 2020 (GLOBE NEWSWIRE) -- Teranga Gold Corporation ("Teranga" or the "Company") (TSX:TGZ; OTCQX:TGCDF) is pleased to provide an update on the progression of its pipeline of assets and reaffirm 2020 production guidance as it grows into a low-cost, mid-tier West African gold producer.
“We are on track to meet our 2020 company-wide production guidance of 375,000 to 400,000 ounces of gold1 – a record-breaking number for Teranga as we advance towards mid-tier status. Beginning in 2021, our annual company-wide production for the next five years is expected to average 533,000 ounces1 at an all-in sustaining cost of $785 per ounce2, one of the lowest cost profiles in the industry,” stated Richard Young, President & CEO.
Added Mr. Young, “At current gold prices, we expect to generate significant cash flows over the next 18 months, which will materially improve our balance sheet. At the end of the second quarter, we had over $350 million in net debt2 and we expect to be firmly in a net cash2 position by the end of next year.”
Sabodala-Massawa Gold Complex: Processing of Massawa Ore Begins
The Company recently announced the results of the pre-feasibility study for its Sabodala-Massawa gold complex (“Sabodala-Massawa”), including a mine plan for the combined assets. Sabodala-Massawa is a top-tier gold mine with a proven and probable reserve base of 4.8 million ounces1.
The integration of the Massawa gold project (“Massawa”) into Sabodala’s operations continues to advance. The Company began processing ore from the first Massawa deposit, Sofia, through the Sabodala mill at the end of August. The mining and processing of this higher-grade ore is expected to ramp up through the fourth quarter. Teranga expects to meet its 2020 production guidance for Sabodala-Massawa of 225,000 to 235,000 ounces of gold1. The new mine plan for the combined complex indicates that average annual production for the first five years will be 384,000 ounces of gold at an all-in-sustaining cost of $671 per ounce2 starting in 2021.
Wahgnion Gold Operations: Demonstrating Teranga’s Technical Expertise
The mill at Wahgnion Gold Operations (“Wahgnion”) has been operating at approximately 25% above nameplate throughput capacity since achieving commercial production in November 2019. This outperformance was reflected in Wahgnion’s updated life of mine plan. Wahgnion is well on track to achieve its updated 2020 production guidance of 150,000 to 165,000 ounces of gold1. In August, the Company released a new mine plan for Wahgnion, which increased average annual production by 25% to 149,000 ounces of gold1 per year at an all-in sustaining cost of $920 per ounce2 for the next five years commencing in 2021.
Exploration activities at Wahgnion were curtailed late in the first quarter due to the impact of the COVID-19 pandemic. The exploration program has recommenced with the intent of replacing reserves and extending the mine life.
Golden Hill: Mine License Application Underway and Exploration Program to Restart in Q4 2020
After the completion of a 27,000-metre drilling program in April 2020, the Teranga team temporarily demobilized personnel and equipment from the Golden Hill advanced exploration project in response to pandemic-related travel restrictions and for the health and safety of its employees, contractors, and the local community. The Company plans to restart the exploration drill program at Golden Hill in the fourth quarter and continue drilling into 2021. Teranga is compiling a mine license application, which is expected to be completed in the fourth quarter.
Afema Exploration Project: Positive Early-Stage Results Drive Aggressive Program
After initial positive field observations and results from an early-stage campaign, the Company is undertaking further excavator trenching and expansion of the drilling evaluations in the third quarter at the Woulo Woulo structural trend, a new discovery. The exploration budget for Afema is $10 million in 2020 and Teranga intends to provide an update on Afema by the end of September 2020.
Strong health and safety protocols have been established at both Sabodala-Massawa and Wahgnion, including testing employees twice with polymerase chain reaction tests as part of our isolation procedures before entering site. Despite these measures, there is currently a number of confirmed cases at Sabodala-Massawa. A few employees at site displayed mild symptoms and were tested. The positive results prompted an extensive contact tracing program and a number of asymptomatic cases were confirmed. All identified cases are recovering under medical supervision. The safety and well-being of Teranga’s workforce is the Company’s highest priority and Sabodala-Massawa continues to operate with additional safety measures in place.
These production targets are based on proven and probable minerals reserves for Sabodala-Massawa and Wahgnion as at December 31, 2019 as disclosed on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com. The estimated reserves underpinning these production targets have been prepared by a competent and qualified person or persons (see Competent and Qualified Persons Statement in Management’s Discussion and Analysis for the three and six months ended June 30, 2020).
This is a non-IFRS financial measure and does not have a standard meaning under IFRS. Please refer to the sections titled, “Non-IFRS Financial Measures” and “Reconciliation of Non-IFRS Financial Measures” in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2020. Net debt (cash) is calculated by subtracting cash and cash equivalents from the principal outstanding under borrowings.
Forward Looking Statements
This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"), which reflects management's expectations regarding Teranga’s future growth opportunities, results of operations, performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and other opportunities. Wherever possible, words such as "plans", "expects", "does not expect", "scheduled", "trends", "indications", "potential", "estimates", "predicts", "anticipate", “to establish”, "does not anticipate", "believe", "intend", "ability to" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might", "will", or are "likely" to be taken, occur or be achieved, have been used to identify such forward looking information. Specific forward-looking statements in this press release include, but are not limited to, the results of the PFS and the anticipated capital and operating costs, the timeline for completing a DFS, average annual gold production, proposed PFS production schedule and gold production profile, future financial or operating performance of the Company and its projects, estimation of mineral resources, exploration results, opportunities for exploration, development and expansion of the Massawa Project, its potential mineralization, the realization of mineral reserve estimates and the costs and timing of future exploration. Although the forward-looking information contained in this press release 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. Such forward-looking 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 but that may prove to be incorrect. These assumptions include, among other things, the closing and timing of financing, the ability to obtain any requisite governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements.
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 Teranga's 2019 Annual Information Form dated March 30, 2020, and in other filings of Teranga with securities and regulatory authorities which are available on SEDAR 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 document should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. All references to Teranga include its subsidiaries unless the context requires otherwise.
Teranga Gold is transitioning into a mid-tier gold producer operating long-life, low-cost mines and advancing prospective exploration properties across West Africa, one of the world’s fastest growing gold jurisdictions. The top-tier gold complex created by integrating the recently acquired high-grade Massawa Project with the Company’s Sabodala mine, the successful commissioning of Wahgnion, Teranga’s second gold mine and a strong pipeline of early to advanced-stage exploration assets support the continued growth of Teranga’s reserves, production and cash flow. Through its continued success and commitment to responsible mining, Teranga creates sustainable value for all stakeholders and acts as a catalyst for social, economic, and environmental development.