Agm july 2013 final

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  • 3 This presentation contains certain statements that constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws (collectively, forward-looking statements) and includes statements relating to the timing and the terms and benefits of the offer (the Offer) to acquire all of the outstanding common shares of Oromin Explorations Ltd. 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 Terangas business or in its industry, or with respect to the Offer, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about, among other things, future economic conditions and courses of action, and assumptions related to government approvals, the co-operation of the other OJVG shareholders and anticipated costs and expenditures. The words poised, gives, expect, its vision, plan, support, assist, commit to, will not, intend, intends to and similar expressions identify forward looking statements. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. There is no guarantee that the terms and conditions to the Offer will be met or that the anticipated benefits of the Offer will be achieved. The risks and uncertainties that may affect forward-looking statements include, among others: economic market conditions, anticipated costs and expenditures, government approvals, co-operation of each of the OJVG shareholders; and other risks detailed from time to time in Terangas filings with Canadian provincial securities regulators. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except as required by law, 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 presentation should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. Forward looking information and other information contained herein concerning mineral exploration and managements general expectations concerning the mineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which management 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 data presented 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 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 confidence in its projections based on exploration work done to date, 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. 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). NOTICE TO U.S. SHAREHOLDERS: Please see important information contained in the section labeled "Jurisdictions" at the back of this presentation. Note: any terms not defined herein have the meaning ascribed thereto in the press release of the Company dated June 20, 2013. CAUTIONARY STATEMENT
  • 4 OUR VISION To become a preeminent gold producer in West Africa while setting the benchmark for responsible mining in Senegal Phase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000oz. of annual gold production leveraging off existing infrastructure 2011 production of 131,000oz. at cash costs of $782/oz. 2012 production of 214,000oz. at cash costs of $627/oz. 2013 forecast production of 190,000 210,000oz. at cash costs of $650-$700/oz. 2014 forecast production of 200,000 250,000oz. pending the timing of Gora production 2015 - 2020 the Sabodala mill has design capacity to produce 275,000 - 300,000oz. per year based on the combined P&P open pit reserves of TGZ and OJVG (based on TGZ and OJVG NI 43-101 reports) assuming a toll milling arrangement is reached with the other OJVG partners Phase 2: Increase annual gold production to 400,000 - 500,000oz. Note: Please see Sabodala Technical Report, June 7, 2012 and Competent Persons Statement on page 21 of this presentation
  • 5 2012 2011 Completed Mill Expansion Record Production 214koz. 131koz. Record Revenues $350.5M $187.1M Record Profits $79.9M -$16.0M Record Total Cash Costs $627/oz. $782/oz. Reduced Hedge Book 60koz. 175koz. Increased Cash Balance $45.0M(1) $24.6M Increased Measured and Indicated resources 2.9Moz. 2.16Moz. Reserves remained similar to 2011 net of production 1.59Moz. 1.66Moz. Gora Added depth to Management (1) Includes cash, cash equivalents and $5.3M bullion receivable (2) Excludes capitalized reserve development expenditure Note: Please see Sabodala Technical Report, June 7, 2012 and Competent Persons Statement on page 21 of this presentation 2012 CHALLENGES & ACHIEVEMENTS
  • 6 MINING RESPONSIBLY AND SHARING THE BENEFITS A strong relationship with our stakeholders is fundamental to the success of our business. In 2012 we: Provided financial support in the areas of healthcare, water, sanitation, youth programs and education Developed a Livelihood Restoration and Resettlement Plan approved by community Noted by the Minister of Mines Significantly progressed the Regional Development Plan and hosted a series of community round tables A key component of our vision is to set the benchmark for responsible mining in Senegal Our 2012 Responsibility Report can be found on our website.
  • 7 Reduced discretionary expenditure Strong Q113 producing 68,301oz. at $535/oz. cash costs Expanded reserves Eliminated hedge book and strengthened the balance sheet Completed $50M mobile equipment facility Restructured $60M Macquarie debt facility Negotiated global agreement with the new Government to allow among other items asset consolidation Advanced the Oromin transaction ACHIEVEMENTS TO DATE IN 2013
  • 8 OPERATIONAL RESULTS AND 2013 GUIDANCE Units 2011 Actuals (1) 2012 Actuals (1) 2013 Original Guidance 2013 Revised Guidance Reduction from Original Guidance (4) Gold Production (koz.) 131.5 214.3 190 210 190 - 210 0% Total Cash Cost (incl. royalties) $/oz. sold 782 627 650 700 650 700 0% Mine Production Costs $ millions 126.1 145.8 170 180 170 180 0% Exploration Expenditure $ millions 31.7 (2) 16.7 10 15 3 -76% Capitalized Reserve Development $ millions 14.4 (2) 26.1 5 - 10 5 -33% Total Capital Expenditure $ millions 76.4 (2) 83.3 105 125 70 -39% Administration Expenditure $ millions 13.4 (2) 17.9 (3) 15 - 20 13 -26% Teranga is on track to meet its annual production and cash cost guidance (1) As reported (2) For the 15 months ended December 31, 2011 (3) Includes ~$4M of non-recurring costs of which ~$3M was related to the acquisition and financing of OJVG (4) Taken from midpoint of original 2013 guidance Note: Please see Sabodala Technical Report, June 7, 2012 and Competent Persons Statement on page 21 of this presentation
  • 9 THE FOCUS IS ON CASH IN LOWER GOLD PRICE ENVIRONMENT Optimizing mine plans Re-sequencing pits Reviewing contractor and supplier contracts Reviewing employment levels Reducing discretionary spending Delaying new mine developments Reducing sustaining capital Reducing exploration expenditure Reducing corporate costs
  • 10 RESERVES AND RESOURCES ARE GREATER THAN AT IPO (1) As of March 31, 2013 (2) See page 18 (3) M+I Resources are inclusive of reserves (4) Includes Sabodala, Niakafiri, Niakafiri West, Soukhoto, Diadiako, Majiva, Masato and Gora Note: Please see Sabodala Technical Report, June 7, 2012 and Competent Persons Statement on page 21 of this presentation 539koz. produced since IPO(1) Addition of ~729koz. to reserves ~ $90/oz. Addition of 1.2Moz. to M&I resources Addition of 1.1Moz to inferred Over 50 regional targets drilled creating pip