Teranga Reaffirms Production, Cost and Reserve Guidance

TORONTO, ONTARIO--(Marketwire - July 17, 2012) - Teranga Gold Corporation (TSX:TGZ)(ASX:TGZ)

Senior management is meeting with investors in Australia this week to provide an update on the Company's activities. During these upcoming meetings, management will be discussing the progress the Company has made in strengthening its balance sheet, executing on its 2012 operating plan and mill expansion, as well as discussing recent exploration results.

Strengthening Balance Sheet

The recent amendment to the Macquarie Bank Facility Agreement increased the quarter end cash balance to $35.6 million, as well as increasing operating cash flow in the second half of 2012 as a higher percentage of production can now be sold at higher spot gold prices. In addition, at June 30, 2012 the gold forward sales program declined by 52,105 ounces to 122,395 ounces from the previous quarter end. Forward sales contracts are expected to total 66,000 ounces at year end and are scheduled to be fully extinguished by August 2013, at which point the Company would be hedge free.

Executing on 2012 Operating Plan and Mill Expansion

The mine is working well, exceeding budget in terms of material moved and ore stockpiled with more than one quarter production, at the expanded mill rate, already stockpiled. The steps taken in 2011 to increase mobile equipment availability have resulted in higher availability across all equipment types, especially drilling equipment, resulting in higher mining rates.

Second quarter production totaled 45,495 ounces, a 9 percent increase over first quarter 2012, and the highest in Company history despite down time as part of the mill expansion tie-ins and commissioning activities.

Construction of the mill expansion to double capacity is done and commissioning is largely complete. With the higher throughput rate in the second half of the year, the Company is on track to meet its full year production guidance of 210,000 to 225,000 ounces of gold at total cash costs of $600 to $650 per ounce.¹

Recent Exploration Results²

Mine License Exploration Program

The primary objective of the $20 million 2012 drill program on the Sabodala Mine License is to expand the Sabodala Mine open pit reserves. Pit optimization work completed in February 2012 defined a $1,550 per ounce pit shell containing over 2 million ounces that serves as a guide to our current drill program (2011 proven and probable reserves in the Sabodala pit contained approximately 1 million ounces).³ The ultimate pit limits at Sabodala are driven laterally by the extent of the Main Flat zone which dips gently away from the center of the deposit to both the east and west. To the east the Main Flat dips into Sambaya Hill towards the Masato deposit. To the north, the economic limit to mine the plunging Main Flat and sub parallel Lower Flat Zones is defined by the strip ratio.

The 2012 drill program is designed to take the ultimate pit about 100 metres deeper and, if successful, to add upwards of 500,000 to 1 million, based on drilling intercepts to date, ounces at grades of between 1.5 gpt and 2 gpt this year.⁴

Recent results advance the mineralized extents at Sabodala to the NE in drill hole SBDH291 and SE in drill hole SBDH259DD (Figure 1). In-fill drilling under the main haulage ramp on the north end of the pit is on‐going with a high grade intercept down dip at depth from drill hole SBDH254D which intersected a series of higher grade zones including 31 metres of 6.0 grams per tonne ("gpt") from 385 metres. Vertical drilling from the north end of the pit on the 20850N section returned 95 metres of 1.3 gpt from 358 metres in SBDH262D including internal dilution between mineralized zones.

TABLE 1: SELECTED ASSAY RESULTS FROM SABODALA IN JUNE5
MAIN FLAT EXTENSION: DIAMOND DRILLING, AQUA REGIA RESULTS
Intercept with cut-off 0.2gpt Au and max 2m internal dilution
HOLE ID6	FROM (m)	INTERSECTION7
SBDH176D	490	4m @ 2.4 g/t
	543	4m @ 3.8 g/t
	566	14m @ 2.2 g/t
SBDH253D	241	3m @ 2.3 g/t
SBDH254D	341	12m @ 1.6 g/t
	385	31m @ 6.0 g/t
	473	5m @ 1.6 g/t
	480	4m @ 3.1 g/t
	495	5m @ 0.9 g/t
SBDH259DD	139	16m @ 4.1 g/t
	157	4m @ 0.8 g/t
SBDH262D	363	22m @ 1.9 g/t
	396	39m @ 1.3 g/t
	439	4m @ 2.0 g/t
	447	6m @ 2.2 g/t
	473	5m @ 1.5 g/t
	550	4m @ 1.9 g/t
SBDH264DD	88	4m @ 1.0 g/t
	95	18m @ 2.2 g/t
	119	17m @ 1.7 g/t
SBDH269	254	5m @ 0.9 g/t
SBDH291	164	20m @ 3.2 g/t

To view Figure 1 - Sabodala Project, please visit the following link: http://media3.marketwire.com/docs/Figure1-Sabodala.pdf.

Regional Exploration Program

Toumboumba (Sabodala NW)

Toumboumba is a shear vein system hosted in the Falombou granite and has the potential for a small, shallow, oxide deposit, located 10 km from the Sabodala mill. This prospect consists of 18 north-south to north-east trending gold anomalous zones identified from RAB drilling during 2011.

During the quarter a program of 129 reverse circulation ("RC") holes for 12,000 metres was completed on a systematic 25 x 25 metre grid over the oxide resource area, targeting the main mineralized trends. The mineralization was confirmed as consisting of three principal, sub-parallel NS trending shallowly - east dipping shear veins hosted in granite. The upper portions of the granite are oxidized to saprolite to a depth of around 50 metres. The mineralized system continues down dip into the fresh rock. Assays are pending for eight holes. Interpretation and three-dimensional modeling of the mineralization has commenced, with the objective of calculating an updated mineral resource estimate and determining the mining potential of this deposit by year end.

TABLE 2: SELECTED ASSAY RESULTS FOR THE QUARTER
TOUMBOUMBA: RC DRILLING, AQUA REGIA RESULTS
RC intersections, >0.5g/t Au with max 2m internal dilution/no internal dilution
HOLE ID8	FROM (m)	INTERSECTION9
SNWRC053	31	4m @ 33.9 g/t
SNWRC053R	32	3m @ 38 g/t
	39	1m @ 5.8 g/t
	47	6m @ 3.5 g/t
	56	1m @ 4.6 g/t
SNWRC055	31	2m @ 9.7 g/t
SNWRC074	45	9m @ 5.6 g/t
SNWRC075	79	9m @ 1.43 g/t
SNWRC078	11	5m @ 2.7 g/t
	19	22m @ 1.1 g/t
	45	3m @ 1.2 g/t
SNWRC084	15	1m @ 5.8 g/t
	25	1m @ 1.0 g/t
	29	5m @ 3.2 g/t
SNWRC085	28	1m @ 16.9 g/t
	46	2m @ 12.0 g/t
SNWRC090	4	8m @ 1.0 g/t
SNWRC093	107	7m @ 1.3 g/t
SNWRC099	62	3m @ 6.5 g/t
SNWRC100	74	2m @ 4.6 g/t
SNWRC101	50	7m @ 3.6 g/t
	85	3m @ 2.0 g/t
SNWRC102	91	3m @ 5.8 g/t
	126	4m @ 4.8 g/t
	145	2m @ 3.23 g/t
SNWRC104	7	3m @ 3.5 g/t
SNWRC106	39	3m @ 3.3 g/t
SNWRC107	61	2m @ 2.0 g/t

Full assay results are included on Teranga's website.

Tourokhoto

The bulk of the results for the previous RC program completed at Tourokhoto were received during the second quarter 2012, with assays only pending for one remaining hole. The RC drilling program at Tourokhoto comprised 27 holes for a total of 14,000 metres, which commenced in December 2011 and was completed during the first quarter of 2012. The drilling over Tourokhoto can be grouped into six geographically/geologically distinct areas, comprising the Main Trend Central Area, Northern Area, NE Area, and Southern Area as well as the Marougou and Segoto Areas.

The most promising drill results were returned from the Marougou area. This area is located south of the Tourokhoto Main Trend Central area. RC holes were drilled on three lines spaced 600 metres apart for a total of 3,000 metres. The drilling identified large widths and grades of mineralization on each line. The highlights from this include:

• 12m @ 13.2 g/t Au from 6m in DBRC0138
• 4m @ 1.9 g/t Au from 88m in DBRC0139
• 10m @ 1.2 g/t Au from surface in DBRC0140
• 7m @ 1.3 g/t Au from 185m in DBRC141
• 8m @ 3.6 g/t Au from 144m in DBRC0143
• 6m @ 2.0 g/t Au from 194m in DBRC0144
• 3m @ 1.2 g/t Au from 3m and 4m @ 1.0 g/t Au from 16m in DBRC0148
• 14m @ 3.3 g/t Au from 31m in DBRC0149

The full listing of intersections can be found in Table 3 below. The mineralization highlights a trend of at least 1,200 metres in length extending across the lines in a NE direction with a westerly dip and represents the discovery of a new prospect. This prospect is open to the north and south and some extension of the trend in both directions is supported by surface gold anomalism along strike of the existing drilling. A new drill program to infill and extend the zone along strike will begin in the fourth quarter, after the rainy season, to further evaluate this discovery.

TABLE 3
TOUROKHOTO: RC DRILLING, FAA515 (Marougou Area)
RC intersections, >0.5g/t Au with max 2m internal dilution/no internal dilution. Gold determined by FAA515
HOLE ID	FROM (m)	INTERSECTION10
DBRC0138	6	12m @ 13.18 g/t
	27	1m @ 0.69 g/t
	71	1m @ 0.74 g/t
DBRC0139	21	3m @ 0.53 g/t
	88	4m @ 1.94 g/t
	123	1m @ 1.46 g/t
DBRC0140	0	10m @ 1.18 g/t
	132	1m @ 1.06 g/t
	143	1m @ 2.30 g/t
DBRC0141	5	1m @ 1.15 g/t
	123	1m @ 1.09 g/t
	185	7m @ 1.33 g/t
DBRC0142	45	5m @ 1.16 g/t
	97	4m @ 1.21 g/t
DBRC0143	73	1m @ 0.77 g/t
	144	8m @ 3.59 g/t
DBRC0144	13	1m @ 0.53 g/t
	37	1m @ 0.82 g/t
	87	1m @ 0.56 g/t
	99	2m @ 0.93 g/t
	194	6m @ 2.03 g/t
DBRC0145	113	1m @ 0.78 g/t
	153	1m @ 1.00 g/t
DBRC0146		No significant Intersection
DBRC0147		No significant Intersection
DBRC0148	3	3m @ 1.16 g/t
	11	1m @ 0.55 g/t
	16	4m @ 1.01 g/t
	44	1m @ 0.86 g/t
	73	1m @ 0.54 g/t
DBRC0149	31	14m @ 3.25 g/t
	53	3m @ 0.74 g/t
	141	1m @ 0.57 g/t
DBRC0150	85	3m @ 0.90 g/t
	160	2m @ 0.99 g/t
DBRC0151	123	1m @ 1.86 g/t
	127	1m @ 0.98 g/t
	137	2m @ 1.10 g/t
DBRC0152		No significant Intersection
DBRC0153		No significant Intersection
DBRC0154	184	3m @ 0.73 g/t
DBRC0155	56	1m @ 1.13 g/t

About TERANGA

Teranga 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.

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.

COMPETENT PERSONS STATEMENT

The technical information in this press release that relates to exploration results and mineral resource estimates within the Mining License is based on information compiled by Mr. Bruce Van Brunt, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee of Teranga and not independent. Mr. Van Brunt has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a "Competent Person" as defined in the 2004 Edition of the "Australasian Code of Reporting of exploration Results, Mineral Resources and Ore Reserves". Mr. Van Brunt is a "Qualified Person" in accordance with National Instrument 43-101 and he consents to the inclusion of this information in the form and context in which it appears in this announcement.

The technical information in this press release that relates to the exploration results and targets within the regional exploration program are based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Pawlitschek has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity 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 of this information in the form and context in which it appears in this announcement.

Forward-Looking Statements

This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). 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 Teranga's business or in its industry, 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 future economic conditions and courses of action. 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. Forward-looking statements relate to, among other things, the expected use of proceeds of the offering and the expected closing date of the offering. The risks and uncertainties that may affect forward-looking statements include, among others: economic market conditions; and other risks detailed from time to time in Teranga's 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.

¹ This production target is based on existing proven and probable reserves only.

² A full list of assay results can be found on Teranga's website.

³ Pit optimization work, which included a Lerchs-Grossman (Whittle) run resulting in a shell containing 2 million ounces based on Measured, Indicated and Inferred resource material using comparable costs as reported in the December 31, 2011 Sabodala Technical Report.

⁴ This exploration target is not a Mineral Resource. The potential quality and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.

⁵ Full assay results are included on Teranga's website.

⁶ Drill hole results are disclosed as they are received and, due to location and depth of holes not all results are available at the same time nor are they processed sequentially.

⁷ True widths to be determined.

⁸ Drill hole results are disclosed as they are received and, due to location and depth of holes not all results are available at the same time nor are they processed sequentially.

⁹ True widths to be determined.

¹⁰ True widths to be determined.