Teranga

Website: www.terangagold.com
Primary ticker: TSX:TGZ
Stage of development: Exploration, Development, Production
Commodity: Gold
Project to promote: Sabodala Gold Mine, Wahgnion Gold Mine, Massawa Gold Project, and Golden Hill Exploration Project
Project location: Burkina Faso, Senegal, Côte d’Ivoire
Company presentation: Click here

Live financials

Cash: USD$29.7M (31 December 2019)
Debt: USD$181.8M (31 December 2019)

Major shareholders:
Tablo Corporation – 21%
Barrick Gold Corporation – 11%
Van Eck Associates Corporation – 4%
Ruffer LLP – 3%
Dimensional Fund Advisors, L.P – 3%
Management ownership – 23%

Teranga Gold (TSX:TGZ/OTCQX:TGCDF) is a Canadian-based gold producer with a pipeline of West African assets and a vision of becoming a low-cost multi-asset mid-tier gold producer. Since its initial public offering in 2010, Teranga has produced more than 2 million ounces of gold from Sabodala, its flagship operation in Senegal, which is expected to transform into a top tier gold complex upon the integration of the recently acquired high-grade Massawa gold project. Focused on diversification and growth, the Company recently announced commercial production at its second gold mine, Wahgnion, which is located in Burkina Faso, and is carrying out extensive exploration programs in three West African countries: Burkina Faso, Côte d’Ivoire and Senegal.

Steadfast in its commitment to set the benchmark for responsible mining, Teranga operates in accordance with international standards and aims to act as a catalyst for sustainable economic, environmental, and social development as it strives to create value for all of its stakeholders.

Management Profile

Richard Young, President & CEO

Richard Young is the President and Chief Executive Officer of Teranga Gold. Mr. Young is on the board of the World Gold Council. He culminates 25-years of extensive experience in the gold industry. A Chartered Professional Accountant, Mr. Young joined Barrick Gold Corporation (ABX-T) in 1991 and served in a series of positions of increasing responsibility in finance, corporate development, investor relations and mine development.

Prior to joining Teranga in 2010, Mr. Young served as Vice President and Chief Financial Officer of Gabriel Resources Ltd. for five years. Mr. Young holds a Bachelor of Economics from the University of Western Ontario as well as a Graduate Diploma in Public Accountancy from McGill University.


What is your rationale for attending 121 Mining Investment?

Teranga has grown significantly and is a different company than it was when it started attending 121 events 3-4 years ago. Attending 121 mining investments provides Teranga with the opportunity to update investors on its achievements, future growth plans, as well as its repositioning as a low-cost, mid-tier producer, focusing principally on upcoming plans to transform its flagship Sabodala operation into a top tier gold complex with the integration of the recently acquired Massawa project.


What recent news would you like to highlight to investors attending?

On 4 March 2020, Teranga announced that it completed the previously announced acquisition of a 90% interest in the Massawa Gold Project from Barrick Gold.

On 25 March 2020, Teranga Gold announced its Q1 2020 consolidated gold production for Q1 is expected to be in the range of 85,000 to 90,000 ounces. Teranga also highlighted that the integration of the high-grade Massawa project is proceeding on schedule, and Massawa ore is expected to be processed through the Sabodala mill in Q3 of 2020. Furthermore, Teranga Gold confirmed that its Sabodala and Wahgnion gold operations continued to operate under strict measures in response to the current COVID-19 pandemic.


What are your key goals for the next 3, 6 and 12 months?

3 Months:
Continue to operate both Sabodala and Wahgnion gold mines, advance the development work required to integrate the Massawa high-grade ore into Sabodala, and continue Teranga’s 2020 exploration activities during the COVID-19 pandemic.

6 Months:
Complete a pre-feasibility study highlighting improved operating metrics for the combined Sabodala-Massawa gold complex.

Commence production of Massawa’s free-milling ore at Sabodala’s existing carbon-in-leach plant.

Continue the village resettlement related to the Niakafiri deposit (at Sabodala) and recommence drilling.

Complete engineering, environmental, and social work at Golden Hill to support the preliminary economic assessment required to convert the exploration license to a mine license in Q3 2020.

12 Months:
Demonstrate several consecutive quarters of stable operating performance at the new mine – Wahgnion.

Issue ongoing updates on the company’s exploration programs in Burkina Faso, Côte d’Ivoire, and Senegal.


What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

The current challenge we face is the COVID-19 pandemic. We are working with the employees at Sabodala, Wahgnion and our various exploration sites to ensure continuity of operations while admittance to sites is being restricted. To minimize the impact of any potential supply chain disruptions, we have been building an inventory of critical supplies since January with supplies continuing to arrive at both sites. Gold continues to be sent to the refineries.


What do you think makes your company such a compelling investment?

Teranga is approaching mid-tier status and is expected to generate significant free cash flow in the coming years. While Teranga’s share price has increased significantly over the last two years, our valuation is lagging. It still does not fully reflect our prospective growth opportunities and expectations for increased production and cash flow.

Analyst Insight – provided by Independent Investment Research

Teranga Gold is a TSX-listed Canadian-based gold producer, with a diversified pipeline of West African assets in production, development and exploration on more than 5,000 sq km of acreage within prospective gold belts.

The company’s key producing asset, Sabodala, is the only large-scale gold mine to come into operation in Senegal. In Burkina Faso, the company’s second mine at Wahgnion, achieved commercial production during November 2019.

For calendar 2019, Teranga achieved record consolidated gold production of 288,768 ounces, exceeding the top end of its full-year production guidance at both Sabodala in Senegal and at Wahgnion in Burkina Faso. Annual production increased by 18% over the 245,230 ounces of gold produced in 2018.

Wahgnion achieved commercial production effective November 1, 2019 and surpassed the high-end of its production guidance of 30,000-40,000 ounces with a total of 47,492 ounces of gold. Sabodala topped its 2019 anticipated production guidance of 215,000-230,000 ounces with a total of 241,276 ounces of gold produced.

Prior to announcing its acquisition of the Massawa gold project from Barrick Gold, closed during Q1 2020, the company had been targeting 2020 gold production of between 300,000 and 350,000 ounces, based on the latest technical reports filed for each of its Sabodala and Wahgnion gold mines.

However, with production of Massawa’s free-milling ore expected to commence at Sabodala’s existing carbon-in-leach plant in the second half of this year, 2020 production is expected to increase beyond the previously anticipated range. Within six months of closing the Massawa acquisition, Teranga plans to complete a pre-feasibility study highlighting updated production and costs for the integrated Sabodala-Massawa gold complex.

The historical mineral reserves base of the Massawa project is 2.6Moz from 20.9Mt at 3.94 g/t Au and is one of the highest-grade undeveloped open-pit gold reserves in Africa. This will augment Sabodala’s mineral reserves base of 2.4Moz from 55.7Mt at 1.35 g/t Au. Massawa’s reserves are located within 30 km of the Sabodala plant, thereby reducing initial phase 1 and phase 2 capital costs included in the Massawa Feasibility Study.