TORONTO, ONTARIO--(Marketwire - Feb. 20, 2013) - Teranga Gold Corporation (TSX:TGZ)(ASX:TGZ) -
(All amounts are in US$ unless otherwise stated)
For a full explanation of Financial, Operating, Exploration and Development results please see the Audited Consolidated Financial Statements and Management's Discussion & Analysis for 2012 at www.terangagold.com.
2012 Annual Guidance Met With Record Production & Profits
- Record annual profit of $79.9 million ($0.33 per share) in 2012 up from a loss of $16.0 million ($0.07 loss per share) in 2011. Record fourth quarter profit of $48.8 million ($0.20 per share) or 106 percent higher than the same prior year period.
- Gold production for 2012 was within original guidance of 210,000 - 225,000 ounces at 214,310 ounces, a Company record and 63 percent higher than for the same 2011 period. Gold production for the three months ended December 31, 2012 was 71,804 ounces, 96 percent higher than the same prior year period.
- Total cash costs for 2012 were within guidance, of $600 - $650 per ounce, at $6271 per ounce sold compared to $782 per ounce for the twelve months ended December 31, 2011, a reduction of 20 percent. Fourth quarter total cash costs were $623 per ounce sold, compared to $809 per ounce in the same prior year period, a reduction of 23 percent.
- Gold hedge book reduced to 59,789 ounces at year end and further reduced to 38,105 ounces as at January 29, 2013. Management expects the hedge book to be extinguished by June 2013.
- The Company's cash, cash equivalents and bullion receivables at December 31, 2012 increased to $45.0 million, including $5.3 million in bullion receivables.
- Gold production for 2013 is expected to be in the range of 190,000 - 210,000 ounces at total cash costs of $650 to $700 per ounce.1
- Gora technical study confirmed reserves of 285,000 ounces to be mined over 4-years at total cash costs of $675 to $700 ounce.
- Measured & Indicated resources increased 34 percent to 2.9 million ounces, while reserves remain similar to 2011 net of production.
"With the mill expansion complete and optimization work well underway we expect to be able to maintain an annual production profile of about 200,000 ounces from our mine licence alone. We expect Gora, the most advanced in our exploration pipeline, will be additive to this production base leveraging off of our central milling facility as we target our first phase growth of 250,000 to 350,000 ounces of annual production," said Alan R. Hill, Executive Chairman.
Financial Highlights
- Gold revenue for the twelve months ended December 31, 2012 was $350.5 million compared to gold revenue of $236.9 million for the fifteen months ended December 31, 2011. The increase in gold revenue was driven by higher gold sales and spot gold prices. Revenues exclude the impact of realized losses on ounces delivered into forward sales contracts which are classified within losses on gold hedge contracts.
- Consolidated profit for 2012 was $79.9 million ($0.33 per share) up from a loss of $16.0 million ($0.07 loss per share) during the fifteen months ended December 31, 2011. The increase in profit was primarily due to an increase in gross profit from higher revenues, lower regional exploration expenditures and lower gold hedge losses, partly offset by a non-cash impairment charge recorded in 2012, related to an available for sale financial asset.
"As we eliminate the hedge book by mid-year, we anticipate that the increased cash margins and cash flows will provide us with a stronger balance sheet that should be able to fund our organic growth through our extensive exploration program, while at the same time minimizing shareholder dilution," said Richard Young, President and CEO.
- Capital expenditures for 2012, excluding reserve development expenditures, were $52.9 million, higher than the revised guidance of $50 million, and $9.2 million lower than the fifteen months ended December 31, 2011. Capitalized reserve development costs for the year were $30.4 million, higher than the revised guidance of $25 million, and $16.0 million higher than the fifteen months ended December 31, 2011. The increase over 2011 was the result of a focus on expanding resources within the Sabodala pit and converting resources to reserves.
- Total cash costs for 2012 were within guidance, of $600 - $650 per ounce, at $627 per ounce sold compared to $782 per ounce for the twelve months ended December 31, 2011, a reduction of 20 percent. The decrease in cash costs were mainly due to higher ounces produced.
- Total production costs, comprised of total cash costs including total depreciation and amortization, for the year were $850 per ounce sold, down from $1,031 per ounce sold for the twelve months ended December 31, 2011.
- Realized gold price for 2012 was $1,422 per ounce sold compared to $1,236 per ounce sold for the twelve months ended December 31, 2011. The higher realized gold price for 2012 reflects a lower percentage of gold delivered into forward sales contracts due to the buyback of 52,105 ounces during the second quarter of 2012, as well as higher gold prices in 2012.
Operating Highlights
- Total tonnes mined for 2012 were 12 percent higher than the twelve months ended December 31, 2011 and 4 percent higher than planned. Ore tonnes mined were lower than plan but at better grades resulting in similar ounces mined compared to plan.
- Mill throughput for the twelve months ended December 31, 2012 was similar to the same prior year period as an increase in the milling capacity with the completion of the mill expansion in the third quarter 2012, was offset by lower throughput rates from harder ore processed in 2012 compared to the softer material that was available in 2011. Compared to budget, mill throughput for 2012 was approximately 20 percent lower than plan due to delays in commissioning the crushing circuit as part of the mill expansion.
- In the third quarter of 2012, the Company added depth to its management team to focus on growth. Alan Hill was appointed Executive Chairman, formerly Chairman and Chief Executive Officer and Richard Young was appointed President and Chief Executive Officer, formerly President and Chief Financial Officer. Mark English was also promoted to Vice President, Sabodala Operations, formerly Manager, Sabodala Gold Operations. In addition, Navin Dyal and Paul Chawrun were appointed Vice President and Chief Financial Officer and Vice President, Technical Services, respectively.
Exploration Highlights
- The Sabodala Pit optimization work completed in the first quarter of 2012, based on the high grade drill results from the fourth quarter of 2011, defined a projected pit shell that included the Lower Flat Zone ("LFZ") at depth.
- Conversion of a large portion of these resources to open pit reserves will likely require higher gold prices as the orientation of both the Main Flat Extension ("MFE") and LFZ appear to be more steeply dipping than originally anticipated, negatively affecting the economics of an enlarged pit shell.
- The 2013 drill program for Sabodala is expected to be completed in the first quarter of 2013. At that time Management will assess the economics of both a larger open pit as well as evaluate an underground development option in the LFZ.
- Drilling in 2012 successfully extended the Masato mineralized limits to the south and down dip onto Teranga's mine licence ("ML") defining approximately 700,000 ounces of Inferred Resource.
- In 2012, we drilled 104,400 metres at a cost of $26 million on the ML. The original ML budget was $20 million but was expanded during the year to follow up on positive drill results at Sabodala.
- Within the regional land package ("RLP") we completed 62,500 metres of RAB drilling, 42,300 metres of RC and 2,400 metres of diamond drilling on 25 of our anomalies and targets, at a cost of $20 million, including Gora.
- The program for 2013 has been budgeted and will focus on fast-tracking work on our current priority targets at Nienyenko, Soreto, Diabougou, Tourokhoto-Marougou and Saiensoutou. Other targets will be followed up as work progresses on the RLP. A minimum budget of $20 million is allocated for the combined exploration programs on the RLP and ML. Additional funding is available and will be allocated on a priority basis for prospects with clear potential for reserves definition.
Development Highlights
- At the Gora deposit, a combination of receipt of final assays, re-modelling and application of geo-statistics resulted in an increase in the Measured and Indicated Resource to 374,000 ounces of gold at 5.0 gpt. Technical and environmental work continued during 2012 and has progressed to initiate the permitting process in the first quarter of 2013.
- Gora is planned to be operated as a satellite to the Sabodala mine with limited local infrastructure and development. Ore will be trucked to, and processed at, our existing mill on a priority basis, displacing Sabodala feed as required.
- Mining by open pit methods will produce approximately 500,000 tonnes of ore per year for four years with a grade ranging from 2.8 gpt to 4.9 gpt, with an average mined feed grade of 4.22 gpt gold, containing 285,000 ounces2 of gold. Metallurgical testing has revealed that Gora ore has similar properties to the Sabodala ore body and therefore blending will not impact overall gold recovery.
- The primary cost is the purchase of the mobile equipment fleet, which will be utilized as part of Teranga's long term mine plan upon completion of Gora. Additional costs include installation of the required infrastructure and project execution costs. The project capital cost is estimated to be $45 to $50 million.
- Total cash costs for Gora are estimated to average $675 to $700 per ounce sold on a life-of-mine basis. The Project economics based on the proposed operating scenario and a discount rate of 5 percent, return an after tax net present value (NPV 5 percent) of $105 million and an internal rate return (IRR) of 69 percent at an assumed gold price of $1500 per ounce.
Reserves
- Total reserves as of December 31, 2012 on the ML were 33.13 million tonnes at 1.22 gpt totalling 1.30 million ounces, a decrease of 235,000 ounces or 15 percent. Since the updated reserves reflect drill assay results through August 2012, all drill results after August 20, 2012 will be included in an updated reserve in 2013.
- As at August 20, 2012, Measured and Indicated Resources at Sabodala increased by approximately 0.7 million ounces to 2.1 million ounces, a 43 percent increase over Measured and Indicated Resources as at December 31, 2011, before production.
- Full details regarding our Reserves and Resources as of December 31, 2012 (based upon August 2012 assay results) can be found in the Reserves & Resources section of the Management Discussion and Analysis.
Review of Financial Results
| (US$000's) | Twelve months ended December | Fifteen months ended December | ||||
| 2012 | 2011 | |||||
| Current | Restated (i) | |||||
| Revenue | 350,520 | 236,873 | ||||
| Cost of sales | (179,323 | ) | (148,812 | ) | ||
| 171,197 | 88,061 | |||||
| Exploration and evaluation expenditures | (16,657 | ) | (31,659 | ) | ||
| Administration expenses | (17,931 | ) | (13,448 | ) | ||
| Share based compensation | (4,694 | ) | (12,411 | ) | ||
| Finance costs | (7,789 | ) | (2,946 | ) | ||
| Losses on gold hedge contracts | (15,274 | ) | (47,943 | ) | ||
| Gains/(losses) on oil hedge contracts | (427 | ) | 2,203 | |||
| Net foreign exchange (losses)/gains | (2,574 | ) | 4,486 | |||
| Impairment of available for sale financial asset | (11,917 | ) | - | |||
| Other income | 36 | 848 | ||||
| Profit/(loss) before income tax | 93,970 | (12,809 | ) | |||
| Income tax benefit | 115 | 92 | ||||
| Profit/(loss) for the period | 94,085 | (12,717 | ) | |||
| Profit/(loss)attributable to non-controlling interest | 14,161 | 3,323 | ||||
| Profit/(loss) attributable to shareholders of Teranga | 79,924 | (16,040 | ) | |||
| Basic earnings/(losses) per share | 0.33 | (0.07 | ) |
Review of Operational Results
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||
| restated | restated | ||||||||||
| Operating results | |||||||||||
| Ore mined | ('000t) | 2,038 | 1,715 | 5,915 | 3,973 | ||||||
| Waste mined | ('000t) | 5,274 | 4,736 | 22,962 | 21,818 | ||||||
| Total mined | ('000t) | 7,312 | 6,451 | 28,877 | 25,791 | ||||||
| Grade mined | (g/t) | 2.04 | 1.50 | 1.98 | 1.39 | ||||||
| Ounces mined | (oz) | 133,549 | 82,710 | 376,185 | 177,362 | ||||||
| Strip ratio | waste/ore | 2.6 | 2.8 | 3.9 | 5.5 | ||||||
| Ore milled | ('000t) | 725 | 604 | 2,439 | 2,444 | ||||||
| Head grade | (g/t) | 3.40 | 2.10 | 3.08 | 1.87 | ||||||
| Recovery rate | % | 90.7 | 89.8 | 88.7 | 89.5 | ||||||
| Gold produced1 | (oz) | 71,804 | 36,695 | 214,310 | 131,461 | ||||||
| Gold sold | (oz) | 71,604 | 34,665 | 207,814 | 137,136 | ||||||
| Average price received | $/oz | 1,296 | 1,482 | 1,422 | 1,236 | ||||||
| Total cash cost (incl. royalties)2 | $/oz sold | 623 | 809 | 627 | 782 | ||||||
| Mining (cost/t mined) | 3.1 | 2.5 | 2.7 | 2.3 | |||||||
| Milling (cost/t milled) | 19.9 | 17.3 | 20.4 | 16.8 | |||||||
| G&A (cost/t milled) | 6.4 | 6.2 | 6.2 | 5.8 | |||||||
| Note (1) Gold produced represents change in gold in circuit inventory plus gold recovered during the period | |||||||||||
| Note (2) Cash cost per ounce is a non-IFRS financial measure with no standard meaning under IFRS | |||||||||||
Cost of Sales
| Twelve months ended December 31, | Fifteen months ended December 31, | |||||
| (US$000s) | ||||||
| 2012 | 2011 | |||||
| Current | Restated (i) | |||||
| Mine production costs | 145,831 | 126,125 | ||||
| Depreciation and amortization | 52,660 | 40,077 | ||||
| Royalties | 10,491 | 7,035 | ||||
| Rehabilitation | 36 | 9 | ||||
| Inventory movements | (29,695 | ) | (24,434 | ) | ||
| Total cost of sales | 179,323 | 148,812 |
2013 Guidance
| Year ending December 31, | |||||||
| 2012 | 2013 | ||||||
| Actuals | Guidance Range | ||||||
| Operating results | |||||||
| Ore mined | ('000t) | 5,915 | 4,000 | - | 4,500 | ||
| Waste mined | ('000t) | 22,962 | 31,000 | - | 32,000 | ||
| Total mined | ('000t) | 28,877 | 35,000 | - | 36,500 | ||
| Grade mined | (g/t) | 1.98 | 1.40 | - | 1.60 | ||
| Strip ratio | waste/ore | 3.9 | 7.00 | - | 7.75 | ||
| Ore milled | ('000t) | 2,439 | 3,300 | - | 3,400 | ||
| Head grade | (g/t) | 3.08 | 2.00 | - | 2.15 | ||
| Recovery rate | % | 88.7 | 89.0 | - | 91.0 | ||
| Gold produced | (oz) | 214,310 | 190,000 | - | 210,000 | ||
| Gold sold | (oz) | 207,814 | 190,000 | - | 210,000 | ||
| Total cash cost (incl. royalties)1,2 | $/oz sold | 627 | 650 | - | 700 | ||
| Total production cost1 | $/oz sold | 850 | 950 | - | 1,000 | ||
| Mining (cost/t mined) | 2.71 | 2.50 | - | 2.70 | |||
| Milling (cost/t milled) | 20.39 | 19.00 | - | 20.00 | |||
| G&A (cost/t milled) | 6.16 | 5.00 | - | 6.00 | |||
| Mine production costs | $ millions | 145.8 | 170.0 | - | 180.0 | ||
| Capital Expenditures | |||||||
| Mine site | $ millions | 52.9 | 20.0 | - | 25.0 | ||
| Capitalized reserve development | $ millions | 26.1 | 5.0 | - | 10.0 | ||
| Gora development costs | |||||||
| Mobile equipment | $ millions | - | 30.0 | - | 35.0 | ||
| Site development | $ millions | 4.3 | 15.0 | - | 20.0 | ||
| Total Gora development costs | $ millions | 4.3 | 45.0 | - | 50.0 | ||
| Capitalized deferred stripping2 | $ millions | N/A | 35.0 | - | 40.0 | ||
| Total Capital Expenditures | $ millions | 83.3 | 105.0 | - | 125.0 | ||
| Exploration (expensed) | $ millions | 16.7 | 10.0 | - | 15.0 | ||
| Administration expense | $ millions | 17.9 | 15.0 | - | 20.0 | ||
| Hedge close-outs / deliveries | (oz) | 136,395 | 59,789 | ||||
| 1 Total cash cost per ounce and total production cost per ounce are non-IFRS financial measures with no standard meaning under IFRS. For definitions of these metrics, please see page 26 of the Management Discussion and Analysis on www.terangagold.com. | |||||||
| 2 For 2013, reflects the impact of adoption of a new IFRS standard for deferred stripping. Please see page 25 of the Management Discussion and Analysis on www.terangagold.com. | |||||||
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / LOSS
(US$000's, except per share amounts)
| Twelve months ended | Fifteen months ended | |||||
| December 31, 2012 | December 31, 2011 | |||||
| Revenue | 350,520 | 236,873 | ||||
| Cost of sales | (179,323 | ) | (148,812 | ) | ||
| Gross profit | 171,197 | 88,061 | ||||
| Exploration and evaluation expenditures | (16,657 | ) | (31,659 | ) | ||
| Administration expenses | (17,931 | ) | (13,448 | ) | ||
| Share based compensation | (4,694 | ) | (12,411 | ) | ||
| Finance costs | (7,789 | ) | (2,946 | ) | ||
| Losses on gold hedge contracts | (15,274 | ) | (47,943 | ) | ||
| (Losses)/gains on oil hedge contracts | (427 | ) | 2,203 | |||
| Net foreign exchange (losses)/gains | (2,574 | ) | 4,486 | |||
| Impairment of available for sale financial asset | (11,917 | ) | - | |||
| Other income | 36 | 848 | ||||
| (77,227 | ) | (100,870 | ) | |||
| Profit/(loss) before income tax | 93,970 | (12,809 | ) | |||
| Income tax benefit | 115 | 92 | ||||
| Profit/(loss) for the period | 94,085 | (12,717 | ) | |||
| Profit/(loss) attributable to: | ||||||
| Shareholders | 79,924 | (16,040 | ) | |||
| Non-controlling interests | 14,161 | 3,323 | ||||
| Profit/(loss) for the period | 94,085 | (12,717 | ) | |||
| Other comprehensive income/(loss): | ||||||
| Exchange differences arising on translation of Teranga corporate entity | (63 | ) | (935 | ) | ||
| Change in fair value of available for sale financial asset, net of tax | 6,775 | (1,319 | ) | |||
| Other comprehensive income/(loss) for the period | 6,712 | (2,254 | ) | |||
| Total comprehensive income/(loss) for the period | 100,797 | (14,971 | ) | |||
| Total comprehensive income/(loss) attributable to: | ||||||
| Shareholders | 86,636 | (18,294 | ) | |||
| Non-controlling interests | 14,161 | 3,323 | ||||
| Total comprehensive income/(loss) for the period | 100,797 | (14,971 | ) | |||
| Earnings/(losses) per share from operations attributable to the shareholders of the Company during the period | ||||||
| - basic earnings/(losses) per share | 0.33 | (0.07 | ) | |||
| - diluted earnings/(losses) per share | 0.33 | (0.07 | ) | |||
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(US$000's)
| As at December 31, 2012 | As at December 31, 2011 | |||||
| Current assets | ||||||
| Cash and cash equivalents | 39,722 | 7,470 | ||||
| Short-term investments | - | 593 | ||||
| Restricted cash | - | 3,004 | ||||
| Trade and other receivables | 6,482 | 20,447 | ||||
| Inventories | 82,474 | 48,365 | ||||
| Financial derivative assets | 456 | 2,288 | ||||
| Other assets | 12,896 | 12,751 | ||||
| Available for sale financial assets | 15,010 | 19,800 | ||||
| Total current assets | 157,040 | 114,718 | ||||
| Non-current assets | ||||||
| Inventories | 40,659 | 31,942 | ||||
| Financial derivative assets | - | 532 | ||||
| Property, plant and equipment | 241,838 | 238,510 | ||||
| Mine development expenditures | 109,060 | 89,825 | ||||
| Intangible assets | 1,859 | 1,085 | ||||
| Total non-current assets | 393,416 | 361,894 | ||||
| Total assets | 550,456 | 476,612 | ||||
| Current liabilities | ||||||
| Trade and other payables | 44,823 | 43,238 | ||||
| Borrowings | 10,415 | 16,468 | ||||
| Financial derivative liabilities | 51,548 | 79,241 | ||||
| Provisions | 1,940 | 1,954 | ||||
| Total current liabilities | 108,726 | 140,901 | ||||
| Non-current liabilities | ||||||
| Financial derivative liabilities | - | 50,318 | ||||
| Provisions | 10,312 | 9,215 | ||||
| Borrowings | 58,193 | 7,509 | ||||
| Total non-current liabilities | 68,505 | 67,042 | ||||
| Total liabilities | 177,231 | 207,943 | ||||
| Equity | ||||||
| Issued capital | 305,412 | 305,412 | ||||
| Foreign currency translation reserve | (998 | ) | (935 | ) | ||
| Equity-settled share based compensation reserve | 16,358 | 12,599 | ||||
| Investment revaluation reserve | 5,456 | (1,319 | ) | |||
| Accumulated income/(loss) | 36,549 | (43,375 | ) | |||
| Equity attributable to shareholders | 362,777 | 272,382 | ||||
| Non-controlling interests | 10,448 | (3,713 | ) | |||
| Total equity | 373,225 | 268,669 | ||||
| Total equity and liabilities | 550,456 | 476,612 | ||||
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(US$000's)
| Twelve months ended | Fifteen months ended | |||||||
| December 31, 2012 | December 31, 2011 | |||||||
| Issued capital | ||||||||
| At January 1, 2012 / October 1, 2010 | 305,412 | |||||||
| Shares issued on incorporation of the Company | - | - | ||||||
| Shares issued on the acquisition of the Sabodala gold mine and a regional exploration package | - | 186,665 | ||||||
| Shares issued from public and private offerings | - | 135,005 | ||||||
| Less: Share issue costs | - | (16,258 | ) | |||||
| At December 31 | 305,412 | 305,412 | ||||||
| Foreign currency translation reserve | ||||||||
| At January 1, 2012 / October 1, 2010 | (935 | ) | - | |||||
| Exchange difference arising on translation of Teranga corporate entity | (63 | ) | (935 | ) | ||||
| At December 31 | (998 | ) | (935 | ) | ||||
| Equity-settled share based compensation reserve | ||||||||
| At January 1, 2012 / October 1, 2010 | 12,599 | - | ||||||
| Equity-settled share based compensation reserve | 3,759 | 12,599 | ||||||
| At December 31 | 16,358 | 12,599 | ||||||
| Investment revaluation reserve | ||||||||
| At January 1, 2012 / October 1, 2010 | (1,319 | ) | - | |||||
| Impairment of available for sale financial asset | 1,319 | - | ||||||
| Change in fair value of available for sale financial asset, net of tax | 5,456 | (1,319 | ) | |||||
| At December 31 | 5,456 | (1,319 | ) | |||||
| Accumulated income/(loss) | ||||||||
| At January 1, 2012 / October 1, 2010 | (43,375 | ) | - | |||||
| Profit/(Loss) attributable to shareholders | 79,924 | (16,040 | ) | |||||
| Impact of change in accounting policy | - | (27,335 | ) | |||||
| At December 31 | 36,549 | (43,375 | ) | |||||
| Non-controlling interest | ||||||||
| At January 1, 2012 / October 1, 2010 | (3,713 | ) | - | |||||
| Non-controlling interest arising from demerger - November 23, 2010 | - | (7,036 | ) | |||||
| Non-controlling interest - portion of profit for the period | 14,161 | 3,323 | ||||||
| At December 31 | 10,448 | (3,713 | ) | |||||
| Total shareholders' equity at December 31 | 373,225 | 268,669 | ||||||
TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(US$000's)
| Twelve months ended | Fifteen months ended | |||||||
| December 31, 2012 | December 31, 2011 | |||||||
| Cash flows related to operating activities | ||||||||
| Profit/(loss) for the period | 94,085 | (12,717 | ) | |||||
| Depreciation of property, plant and equipment | 41,999 | 29,541 | ||||||
| Depreciation of capitalized mine development costs | 11,142 | 10,200 | ||||||
| Amortization of intangibles | 650 | 490 | ||||||
| Amortization of borrowing costs | 877 | 328 | ||||||
| Unwinding of discount | 53 | 47 | ||||||
| Share based compensation | 3,759 | 12,411 | ||||||
| Net change in losses on gold hedge | (39,010 | ) | (1,789 | ) | ||||
| Net change in losses on oil hedge | 2,364 | 113 | ||||||
| Buyback of gold hedge sales contracts | (39,000 | ) | - | |||||
| Income tax paid | - | (638 | ) | |||||
| Mine restoration and rehabilitation provision | - | 425 | ||||||
| Deferred income tax benefit on reversal of temporary differences | - | (231 | ) | |||||
| Impairment of available for sale financial asset | 11,917 | - | ||||||
| Profit on disposal of property, plant and equipment | (131 | ) | - | |||||
| Changes in working capital | (16,256 | ) | (33,048 | ) | ||||
| Net cash provided by operating activities | 72,449 | 5,132 | ||||||
| Cash flows related to investing activities | ||||||||
| Decrease/(Increase) in restricted cash | 3,004 | (3,004 | ) | |||||
| Redemption of short-term investments | 593 | 181 | ||||||
| Expenditures for property, plant and equipment | (51,451 | ) | (60,825 | ) | ||||
| Expenditures for mine development | (30,377 | ) | (14,359 | ) | ||||
| Acquisition of intangibles | (1,424 | ) | (1,208 | ) | ||||
| Proceeds on disposal of property, plant and equipment | 195 | - | ||||||
| Payment for acquisition of Sabodala gold mine and regional land package net of cash acquired | - | (34,307 | ) | |||||
| Net cash used in investing activities | (79,460 | ) | (113,522 | ) | ||||
| Cash flows related to financing activities | ||||||||
| Proceeds from issuance of capital stock, net of issue costs | - | 118,747 | ||||||
| Loan facility, net of borrowing cost paid | 57,695 | - | ||||||
| Repayment of borrowings | (16,799 | ) | (10,849 | ) | ||||
| Drawdown from finance lease facility, net of financing cost paid | 2,857 | 9,612 | ||||||
| Interest paid on borrowings | (4,075 | ) | (2,248 | ) | ||||
| Net cash provided by financing activities | 39,678 | 115,262 | ||||||
| Effect of exchange rates on cash holdings in foreign currencies | (415 | ) | 598 | |||||
| Net increase in cash and cash equivalents held | 32,252 | 7,470 | ||||||
| Cash and cash equivalents at the beginning of financial period | 7,470 | - | ||||||
| Cash and cash equivalents at the end of financial period | 39,722 | 7,470 | ||||||
| CORPORATE DIRECTORY |
| Directors |
| Alan Hill, Executive Chairman |
| Richard Young, President and CEO |
| Christopher Lattanzi, Non-Executive Director |
| Oliver Lennox-King, Non-Executive Director |
| Alan Thomas, Non-Executive Director |
| Frank Wheatley, Non-Executive Director |
| Senior Management |
| Alan Hill, Executive Chairman |
| Richard Young, President and CEO |
| Mark English, Vice President, Sabodala Operations |
| Paul Chawrun, Vice President, Technical Services |
| Navin Dyal, Vice President and CFO |
| David Savarie, Vice President, General Counsel & Corporate Secretary |
| Kathy Sipos, Vice President, Investor & Stakeholder Relations |
| Macoumba Diop, General Manager and Government Relations Manager, SGO |
| Registered Office |
| 121 King Street West, Suite 2600 |
| Toronto, Ontario, M5H 3T9, Canada |
| T: +1 416-594-0000 |
| F: +1 416-594-0088 |
| E: generalmailbox@terangagold.com |
| W: www.terangagold.com |
| Senegal Office |
| 2K Plaza |
| Suite B4, 1er Etage |
| sis la Route due Meridien President |
| Dakar Almadies |
| T: +221 338 693 181 |
| F: +221 338 603 683 |
| Auditor |
| Deloitte & Touche LLP |
| Share Registries |
| Canada: Computershare Trust Company of Canada |
| T: +1 800 564 6253 |
| Australia: Computershare Investor Services Pty Ltd |
| T: 1 300 850 505 |
| Stock Exchange Listings |
| Toronto Stock Exchange, TSX symbol: TGZ |
| Australian Securities Exchange, ASX symbol: TGZ |
Non-IFRS Financial Measures
The Company provides some non-IFRS measures as supplementary information that management believes may be useful to investors to explain Teranga's financial results.
"Average realized price" is a financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold and silver sales. Average realized price excludes from revenues unrealized gains and losses on non-hedge derivative contracts. The average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently.
"Total cash cost per ounce sold" is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. The Company reports total cash costs on a sales basis. We believe that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure, along with sales, is considered to be a key indicator of a Company's ability to generate operating earnings and cash flow from its mining operations.
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.
"Total depreciation and amortization per ounce sold" is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. It is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
FORWARD LOOKING STATEMENTS
Certain information included in this announcement, including any information as to the Company's strategy, projects, exploration programs, joint venture ownership positions, plans, future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". The words "believe", "expect", "will", "intend", "anticipate", "project", "plan", "estimate", "on track" and similar expressions identify forward looking statements. Such forward-looking statements are necessarily based upon a number of estimates, assumptions, opinions and analysis made by management in light of its experience that, while considered reasonable, may turn out to be incorrect and involve known and unknown risks, uncertainties and other factors, in each case that may cause the actual financial results, performance or achievements of the Company to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. Such forward-looking statements are not guarantees of future performance. These assumptions, risks, uncertainties and other factors include, but are not limited to: assumptions regarding general business and economic conditions; conditions in financial markets and the future financial performance of the company;
the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the supply and demand for, deliveries of, and the level and volatility of the worldwide price of gold or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets, including changes in U.S. dollar and CFA Franc interest rates; risks arising from holding derivative instruments; adverse changes in our credit rating; level of indebtedness and liquidity; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business, as well as other risks and uncertainties which are more fully described in the Company's A.I.F. and in other Company filings with securities and regulatory authorities which are available at www.sedar.com. Accordingly, readers should not place undue reliance on such forward looking statements. Teranga expressly disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
COMPETENT PERSONS STATEMENT
The technical information contained in this Report relating to the mineral reserve estimates within the Sabodala, Sutuba, Niakafiri and Gora deposits and the Stockpiles, is based on information compiled by Julia Martin, P.Eng., MAusIMM (CP), a full time employee with AMC Mining Consultants (Canada) Ltd., is independent of Teranga, is a "qualified person" as defined in NI 43-101 and a "competent person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Martin has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms Martin has reviewed and accepts responsibility for the reserve estimates disclosed above. Ms Martin has consented to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to the mineral resources is based on information compiled by Ms. Patti Nakai-Lajoie, who is a Member of the Association of Professional Geoscientists of Ontario. Ms. Patti Nakai-Lajoie is full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Patti Nakai-Lajoie has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Patti Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects and she consents to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to exploration results is based on information compiled by Mr. Martin Pawlitschek, who is a Member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a consultant of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Pawlitschek has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Pawlitschek is a "Qualified Person" in accordance with NI 43-101 and he consents to the inclusion in the report of the matters based on his information in the form and context in which it appears in this Report.
1 Total cash costs per ounce sold is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS.
2 This production target is based on proven and probable reserves only.
Contact Information:
Kathy Sipos
Vice-President, Investor & Stakeholder Relations
+1 416-594-0000
ksipos@terangagold.com
www.terangagold.com