Teranga Gold Corporation: High-Grade Gora Deposit on Regional Land Package Moving Into Development/Increase in Reserves and Production on the Sabodala Mine License

TORONTO, ONTARIO--(Marketwire - May 2, 2011) - Teranga Gold Corporation ("Teranga" or "the Company") (TSX:TGZ)(ASX:TGZ) is pleased to provide an update of its Mine License and Regional Exploration programs through the first quarter of 2011, as well as an increase in the Sabodala Mine License reserves and higher production in 2011 and 2012.

Highlights:

• High-grade Gora deposit on Regional Land Package – to move from an exploration to a development project – early results identify inferred resource of 100,000 plus contained ounces of gold at 6 grams per tonne – remains open in all directions
• Sabodala proven and probable reserves increased by 123,000 ounces to 1.51 million ounces of gold at December 31, 2010¹ – the Company believes there is potential to expand proven and probable reserves to 2 to 3 million ounces of gold, at similar grade to the current reserve (1.5 grams per tonne) from the Sabodala Mining License over the next 12 to 24 months – increasing the mine life to approximately 10 to 15 years
• Based on a pit redesign, higher production and lower cash costs are expected for 2011 and 2012
• Preliminary exploration results from the Mine Licence and Regional Land Package are very encouraging

High-Grade Gora Deposit on Regional Land Package Moving into Development

Initial exploration results from the Gora Project, located 22km from the Company's Sabodala gold mine confirm a high-grade gold deposit. As a result of the exploration success to date, the Company is increasing its exploration budget for the Gora Project for 2011 to complete exploration drilling at depth as well as along strike as the deposit remains open in all directions. In addition, the Company is beginning a feasibility study and permitting. A resource estimate is expected by the end of summer 2011 once the current phase of drilling is complete with a goal of processing the high-grade ore through the Sabodala mill as early as late 2012.

"While the Gora Project has not been fully delineated, exploration results to date confirm the potential for high-grade deposits on the Regional Land Package that will allow us to leverage our existing processing facilities by putting higher grade material through the mill, increasing production and potentially lowering our cost profile at the same time," said Alan R. Hill, Chairman and CEO. "I am very pleased with the early stage results of our exploration program, and believe we have a very exciting road ahead."

Drilling of the Gora Project began in early February. Three drill rigs are active on the Project (two diamond and one dual purpose reverse circulation/diamond drill rig). Inferred resources at Gora now stand at 543,000 tonnes at an average grade of 6.08 grams per tonne ("gpt") containing 106,000 ounces of gold. To date, the following has been completed under the current drill program:

• 26 reverse circulation ("RC") holes for a total of 2,802 metres
• Three diamond drill ("DD") holes for a total of 662 metres
  46 combination RC pre-collars with DD tails totalling 4,186 metres of RC drilling and a total of 1,829 metres of DD tails
• In total 6,989 metres of RC drilling and 2,491 metres of DD has been completed

An additional 6,000 metres of RC and 5,500 metres of DD are planned to complete the current phase of drilling. The current drill program is designed to evaluate the size of the deposit to a vertical depth of 120 metres and along strike, where it is open in all directions. In addition, several holes will be used to test the mineralized structure at depth where it is projected to intersect an intrusive unit. The current phase of the drill program is expected to be completed by the end of June 2011.

A plan of drill hole placing, both drilled and planned can be seen in Figure 1. Fire assay drill results from the 2011 drilling program are contained in Table 1. Due to the large volume of drilling underway on both the Mine License and on the Regional Land Package, the Company is encountering a back log of confirmatory fire assay results from a third party SGS laboratory in Kayes, Mali. For this reason, the Company has chosen to provide a further twenty-two significant intersections obtained by aqua regia analysis at the SGS managed laboratory at Sabodala, which are currently awaiting confirmation by fire assay. The results are listed in Table 2. A large number of samples are currently at the laboratory awaiting assay. Experience has shown that the aqua regia and fire assay results are generally comparable, although some variation can occur between assay pairs, which are considered to be due to the presence of coarse gold particles. Fire assay and screen fire assay checks will be routinely carried out on mineralized sample intervals to ensure optimal data quality for resource estimation.

To view Figure 1: GORA Plan, please visit the following link: http://media3.marketwire.com/docs/figure1_tgz_0502.pdf.

To view Table 1: GORA Fire Assay confirmed drill results^2, please visit the following link: http://media3.marketwire.com/docs/table1_tgz_0502.pdf.

To view Table 2: GORA Aqua Regia results³ (awaiting confirmatory fire assay),please visit the following link: http://media3.marketwire.com/docs/table2_tgz_0502.pdf.

The 2011 exploration program is a follow up to a phase 1 RC drill program completed in 2010 that identified two sub parallel auriferous veins between 10 and 40 metres apart. Vein 1 averaged 8.8gpt while Vein 2 averaged 3.0gpt.

The program in 2010 resulted in an inferred resource of 387,000 tonnes containing 70,000 ounces of gold at an average grade of 5.6gpt, about four times higher than the average reserve grade of the Sabodala deposit.

The 2011 drill program has resulted in a significant increase in the mineralized envelopes relative to the 2010 RC drill program. What was first thought to be a single-vein system is now understood to be a stacked vein system with excellent potential for additional veins and bulk-style mineralization at vein intersections and intersections with intrusive units. In addition to having extended the size of Vein 1 particularly down dip, Vein 2 is now more continuous. New veins, including Vein 3, had not previously been recognized as significant from the 2010 drilling, but now forms an important mineralized body and Vein 5 has been discovered just below Vein 1. This indicates that the mineralization consists of a stacked zone of shear veins, leaving opportunity to find additional mineralized bodies.

Based on the positive drill results, the Company has initiated a feasibility study and permitting of the Gora Project with a goal of processing high-grade Gora ore through the Sabodala mill as early as the second half of 2012. An updated resource estimate is planned for this summer once the current phase of drilling is complete. Once the boundaries of the deposit have been delineated, an infill drill program to bring the resource to reserve status will be completed, which is expected by the end of this calendar year.

"We believe this is the first of potentially several satellite deposits that will be able to feed through our mill," said Richard S. Young, President and CFO. "Leveraging off our existing mill simplifies the permitting process and significantly lower the capital cost to bring new discoveries into production."

Sabodala Reserves Increase

The design for the open pit limits, related phasing and long term planning for the Sabodala open pit were updated as at December 31, 2010. As a result, 123,000 ounces of gold were added to proven and probable reserves while all parameters were still maintained as per the Company's NI 43-101 report with the exception of the average long term gold price which was increased from $900 per ounce to $1,000 per ounce. The updated reserves do not yet reflect any of the result of the current drill program underway.

After the redesign of the Sabodala pit, the new pit limit is larger by approximately 22 million tonnes compared to the previous design. The new design provides a secondary ramp access to ensure flexibility and improved productivity. New mining phases were designed and the mine sequencing was modified with the objectives of mining the softer oxide material preferentially in the dry season, deepening the pit bottom in the dry season, minimizing interaction of operations between successive phases and presenting the higher grade, lower stripping ratio portion of the reserve as early as possible. As a result, gold production from the Sabodala mine should increase by an additional 10,000 ounces in 2011 (production est. 140,000 ounces) and 20,000 ounces in 2012 (production est. 220,000 ounces) at lower costs than provided in the guidance included in the prospectus filed with the Initial Public Offering last fall.

Dr. A. Ebrahimi, P.Eng. of AnoMine Tech, and a subconsultant to AMC Mining, who is independent of Teranga, and is a "qualified person" (within the meaning of NI 43-101) has reviewed and accepts responsibility for the reserve estimate contained in the Technical Report filed in November, 2011. Mr. Bruce Van Brunt is not independent of Teranga, and is a "qualified person" (within the meaning of NI 43-101) who has reviewed and accepts responsibility for the increased reserve estimate contained in Table 3 above. Mr. Van Brunt is a member of The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. He is also qualified 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. Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Van Brunt is a full-time employee of Teranga.

Drilling on Mine License (ML) Extends Sabodala Pit over 100 metres North

The Company believes there is potential to expand proven and probable reserves from 1.51 million ounces of gold to 2 to 3 million ounces of gold, at similar grade to the current reserve (1.5gpt) from the Sabodala Mining License over the next 12 to 24 months, which would increase the mine life to approximately 10 to 15 years, providing a solid production base to build on through the regional exploration program. In order to increase reserves on the Sabodala Mine License a total of 5 drill rigs will be testing new targets as well as converting existing resources to reserves at an estimated cost of $8 million in 2011 as part of the $25M exploration program for the year.

During the quarter, the focus was on "the Corridor", the northerly extension of the structural system that defines the limits of the Sabodala gold deposit and the down dip extension of the Masato deposit positioned less than one kilometre east from the Sabodala mine.

"The Corridor"

Drilling continued in the structural corridor progressing outward and north from the Sabodala open pit. It produced ore grade near surface results along Ayoub's Thrust, a feature that defines the western limit of the Corridor. Mineralization has been traced more than 100 metres north of the existing Sabodala open pit along trend and remains open to the north and west. The orientation of the mineralization is understood to be flat and stacked in multiple zones.

The drilling has intersected wide widths of alteration similar to Sabodala and Niakafiri deposits and the on-site aqua regia based laboratory has confirmed the presence of gold over mineable widths. Sample intervals are being selected for fire assay at an independent laboratory for confirmation. Drill holes have been spaced at 20 metres centres, so given the proximity of this mineralization along Ayoub's to the existing open pit at Sabodala and its near surface position, management expects that resources defined here will be converted to reserves in 2011. The program will continue with step out drilling to the north and the west along trend where the mineralization remains open. True widths are to be determined.

Masato

The Masato deposit, discovered on a property contiguous with our Mine License and which is dipping onto the Mine License one kilometre east of the Sabodala open pit is being tested initially over a 500 metre strike length by 20 drill holes totalling 6,150 metres of drilling. Initial results from Masato are very encouraging; multiple mineralized zones have been identified with high grade intervals apparent from preliminary aqua regia assays conducted on site. Management expects that new resources will be defined this year on Masato as DD tails are drilled on the RC pre-collars.

Aqua regia assay results at the site laboratory from the first drill hole SMRC055 drilled vertically intersected 11 metres of 1.08gpt mineralization from 234 metres down the hole and 20 metres of 3.53gpt from 267 metres down the hole. SMRC055 bottomed in gold mineralization and will be extended with core as part of the continuation of the current drill program.

ML Drilling Identifies Near-Surface Deposit at Sutuba

Numerous significant intercepts were drilled at Sutuba. Drilling on the target is focused on defining gold mineralization in high grade NW-trending zones. The close proximity of this mineralization to the Sabodala pit and to the surface makes it an opportunity in the short-term for higher grade mill feed.

To view a figure of the Geology of the Sabodala Pit and Sutuba prospect area, please visit the following link: http://media3.marketwire.com/docs/figure2_tgz_0502.pdf.

A total of 10 targets are expected to be drilled on the Sabodala Mine License in 2011 to expand reserves and resources.

Management believes that all new ounces found on the Mine License can quickly be converted to production as they can be fed directly through the mill without any permitting requirements. Permitting ounces found on the Regional Land Package should also move relatively quickly as these ounces will be processed through the existing Sabodala mill.

Exploration Update – Regional Land Package

In addition to the exploration program on the Company's 33km² Sabodala Mine License, management believes that the Regional Land Package has significant prospective potential for satellite high-grade deposits similar to Gora as we know it today, as well as the potential for world-class (+ 5 million ounces) discoveries similar to those found on the same gold belt in Mali, approximately 90km from the Sabodala mine. Therefore, management intends to pursue an extensive multi-year exploration program designed to test a number of targets that have already been identified as requiring additional analysis, as well as identify new targets for testing.

There are 27 targets that have been identified on the Company's 1,455km² regional land package, all within trucking distance of the mill, that are expected to be drill tested through the end of calendar 2011. In total, 10 drill rigs are expected to be active on the Regional Land Package in 2011at a total cost of approximately $17 million. Extensive rotary air blast ("RAB") drilling completed to date has confirmed that a large proportion of the surface gold anomalies can be traced back to gold bearing structures in the bedrock. Thorough testing evaluation of these structures requires RC and DD. During the quarter first pass RC and DD testing has commenced on 5 of the twenty-seven target areas identified on the regional land package.

Tourokhoto

• A 23,000 metres RAB drill program commenced with one rig over the extensive Tourokhoto surface gold geochemical anomaly. This program will define the bedrock gold bearing zones responsible for the wide geochemical gold anomalies and provide targets for additional follow up DD and RC drilling. A total 13,000 metres of RAB drilling has been completed to date.
• Also at Tourokhoto, an initial scout diamond drilling program commenced with a program of five holes for 1,600 metres over the key structural positions on the Tourokhoto prospect area. The holes identified a significant gold-bearing structure and alteration system that will need to be further evaluated.

Diegoun ("the Donut")

• A 19,000 metre RAB drill program also commenced at Cinnamon on the northern portion of the Diegoun target area. At the end of the quarter 11,000 metres of this program have been completed.
• A 10,000 metre first pass RC drilling program commenced on the Diegoun target with 17 RC holes completed for 2,300 metres. Geological core-logging has identified structures with extensive pyrite-silica-carbonate-albite alteration which has returned several intervals of anomalous gold over widths of up to 40 metres. Most gold assays are pending.

Dembala Hill

• An initial 24 hole, 2,700 metre RC program commenced at Dembala Hill during the December quarter and was completed during the March quarter. The drill program identified a gold bearing structure, which will require follow-up drilling over the coming months.

Goundamehko

• During the December quarter a total of 35 RC holes for 4,200 metres were completed. Data compilation during this quarter outlined a number of gold bearing structures that warrant follow-up drilling.

Diadiako

• A 7,000 metre first phase RC drill program commenced at Diadiako during the quarter with a total of 18 holes for 2,600 metres completed. Drilling results to date have identified a 1km, shallow dipping gold bearing structure with Sabodala type quartz-albite-carbonate alteration. This program is being executed over two phases to allow for the evaluation of results and drilling of other prospects prior to the on-set of the wet season.

Bransan and Sabodala North West

• A RAB drill program totalling 23,000 metres was completed over several prospects on the Bransan and Sabodala North West permits during the quarter. A large number of assays for these programs are pending.

This update is part of the Company's $25 million exploration program planned for 2011, covering both the Mine License and Regional Land Package, representing the first phase of a multi-year exploration program to test the approximate 100 geochemical anomalies contained in 37 drill targets (10 on the Mine License and 27 on the Regional Land Package) identified to date as well as to identify new targets.

About TERANGA

Teranga Gold Corporation is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

Teranga was created to acquire the Sabodala gold mine and a large regional exploration land package, located in Senegal, West Africa, from Mineral Deposits Limited. Management believes the mine operation, together with the Company's prospective 1,488 km² land package, provides the basis for growth in reserves, production, earnings and cash flow as new discoveries are made and processed through the Company's existing mill.

The Sabodala Gold Operation, which came into operation in 2009, is located 650 kilometres east of the capital Dakar within the West African Birimian geological belt in Senegal, and about 90 kilometres from major gold mines and discoveries in Mali.

The Company's mission is to create value for all of its stakeholders through responsible mining. Its vision is to explore, discover and develop gold mines in West Africa, in accordance with the highest international standards, and to be a catalyst for sustainable economic, environmental and community development. All of its actions from exploration, through development, operations and closure will be based on the best available techniques.

Forward Looking Statements

Certain information included in this press release, 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", "plan", "estimate" 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 licenses 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 prospectus dated November 11, 2010 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 release relating to exploration activities within the mining license is based on information compiled by Mr. Bruce Van Brunt, who is a member of The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. He is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as defined in NI43-101. Mr. Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this release. Mr. Van Brunt is a full-time employee of Teranga.

The technical information contained in this release relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a Qualified Person as defined in NI43-101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this release. Pawlitschek is a full-time employee of Teranga.

The latest grade estimates as presented have been classified as a combination of Measured, Indicated and Inferred Mineral Resources in accordance with CIM Definitions (2005) resource reporting classification guidelines and reconciled to the JORC Code (2004).

Mssrs. Van Brunt and Pawlitschek have reviewed and verified the data contained in this press release, including sampling, analytical and test data underlying the estimates provided. Verification of the data included numerous site visits, database validation of historical drill results and review of sampling and assaying protocols.