True Gold Mining Inc.
TSX VENTURE : TGM

True Gold Mining Inc.

November 17, 2015 06:30 ET

True Gold Mining Reports Q3 2015 Financial & Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 17, 2015) - True Gold Mining Inc. (TSX VENTURE:TGM) ("True Gold" or the "Company") reported the financial results and business highlights for the nine months ended September 30, 2015. The Company is focused on completing construction and operating the low cost Karma Mine with a strategy to become a mid-tier producer through organic and strategic growth opportunities.

"I am excited by the progress our team continues to make at Karma, most notably with the commencement of mining at the GGII deposit," stated Christian Milau, President & CEO of True Gold. "We are nearing the finish line, with the start of production only a handful of months away."

THIRD QUARTER HIGHLIGHTS AND SUBSEQUENT EVENTS

Over the third quarter the Company made significant progress at the Karma Mine.

Project Construction Update:

The Karma Mine is in full construction with over 1,100 staff and contractors on site, and on track for first gold pour by the end of Q1 2016. Overall the project is approximately 77% complete, and is on budget and on schedule. Noteworthy activities commenced or completed include:

Mine development

The first phase of grade control drilling is now complete and showing a positive reconciliation. Open pit mining has commenced at Goulagou II ("GGII"). The mine fleet was deployed to GGII after completing significant excavation of bulk earthworks at the mine's processing and storage ponds.

Excavation of Cells 1, 2 and 3 of the heap leach pad is complete. At Cell 2, the leak recovery system, HDPE liner, geotextile fabric, and piping have been installed. Laying of the aggregate for the drainage layer is now underway. Lining of Cell 3 is complete.

Earthworks and Civils

Earthworks within the process plant area are nearing completion with only some small plinths and surface beds left to pour. Excavation of the detox and barren ponds is complete, and the storm water pond is 85% complete.

The raw water, pregnant leach solution ("PLS") and intermediate leach solution ("ILS") ponds are complete and operational, and the previously completed four kilometre pipeline from the barrage to the site is now being used to pump water to these ponds, ensuring the processing plant start-up requirements are met. The raw water pond is full and the PLS pond is now receiving water. The barren solution pond is currently being lined.

Assembly of the grasshopper conveyors is in progress with five out of ten units completed and awaiting splicing of the conveyor belts.

Construction of the cyanide mixing area is complete. The foundations for the agglomeration area and gold room are complete and structural steel installation is nearing completion. The hard rock crusher has been commissioned and is producing aggregate for the drainage layer of the heap leach pads. The Adsorption, Desorption and Recovery ("ADR") building structural steel, siding and roofing are complete, and piping and electrical installation is progressing quickly.

Commissioning of the diesel generators is underway and the electrical and instrumentation contractor has been mobilized to site and has commenced work.

Logistics

Procurement is complete and deliveries to site are 94% complete.

Community Relations

In September, the Company inaugurated a Stability Forum led by True Gold's strategic advisor Mâitre Halidou Ouedraogo, a respected Magistrate and Human Rights advocate in Burkina Faso. The forum was organized to foster dialogue and discussion regarding how True Gold is perceived in Burkina society both regionally and nationally, with the additional expectation that the Forum would provide insight into the ongoing development and evolution of True Gold's activities in the country. Forum delegates represent a wide range of business, community and political backgrounds, including the leading parties in the upcoming elections. Me. Halidou was also recently appointed President of CODEL, an independent group appointed to monitor the presidential elections.

The Minister of Mines of Burkina Faso and Canadian Ambassador to the country visited the Karma Mine on November 12, 2015 where they attended a mine tour and meetings with the community, including regional leaders.

Approval of Mining Convention

The Burkina Faso Council of Ministers ratified the Mining Convention that sets out the fiscal and legal terms with respect to the operation of the Karma Mine. Final ministerial signature is expected during the fourth quarter of 2015. The purpose of the Mining Convention, along with the mining decree, is to provide the basis for True Gold to operate under the 2003 Mining Code, and as such would be subject to a 17.5% corporate tax rate. Once signed by the Minister, the Mining Convention is expected to be valid for 20 years and should be renewable for subsequent five year periods.

Project Finance - Karma Mine is Fully Funded:

Karma is forecast to be funded through to production. True Gold has $20.5 million in cash, and up to $48.4 million available under our finance facility with approximately $45.6 million of project cost left to spend, as at September 30, 2015.

Leadership Team:

Peter Hardie was appointed Chief Financial Officer of True Gold, further strengthening the Company's leadership as it transitions into a gold producer. Peter joins True Gold from Nevsun Resources Ltd., a gold-copper-zinc company with a flagship mine in Eritrea, East Africa, where he served as Vice President, Finance and as Chief Financial Officer. He brings a unique skillset to True Gold, having led the finance team at Nevsun as it grew from a junior developer to a producer. He was involved in the financing, construction and mine start-up, operations, government negotiations, and led all areas of finance, including treasury systems and reporting. Peter is also fluent in French and has West African experience from when Nevsun built and operated the Tabakoto mine in Mali.

On November 17, 2015, Mr. Hardie was issued 500,000 stock options at an exercise price of $0.21, pursuant to the terms of the Company's stock option plan.

FINANCIAL RESULTS

The following selected financial data is derived from the unaudited condensed interim consolidated financial statements and related notes thereto for the three and nine months ended September 30, 2015 (the "Interim Financial Statements"), as prepared in accordance with International Financial Reporting Standards. Details of these results are described in the Interim Financial Statements and related Management's Discussion and Analysis ("MD&A"). These documents can be found on the Company's website (www.truegoldmining.com) or on SEDAR at www.sedar.com. All amounts are presented in United States dollars, unless otherwise stated.

Three months ended Nine months ended
September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
Net income (loss) for the period $ 1,999 $ (2,747,787 ) $ (11,114,512 ) $ (12,724,373 )
Comprehensive income (loss) for the period $ 1,999 $ (6,118,982 ) $ (16,172,304 ) $ (15,022,284 )
Basic and diluted income (loss) per share $ 0.00 $ (0.01 ) $ (0.03 ) $ (0.03 )
As at
September 30, 2015 December 31, 2014
Cash and short term investments $ 20,691,368 $ 47,529,246
Working capital $ (2,032,432 ) $ 43,998,612
Total assets $ 115,251,463 $ 110,057,215
Current liabilities $ 24,403,067 $ 5,725,593
Non-current liabilities $ 44,207,785 $ 41,956,675
Shareholders' equity $ 46,640,611 $ 62,374,947

For the three and nine month periods ended September 30, 2015, the Company reported net income of $0.0 million and a net loss of $11.1 million respectively, compared to net losses of $2.7 million and $12.7 million for the three and nine month periods ended September 30, 2014. The most significant contributor to the loss for the nine months ended September 30, 2015 was a $5.1 million write-off of equipment damaged during a demonstration at the Karma Mine. Karma Mine exploration and evaluation expenditures contributed significantly to the losses for the comparative period in the prior year.

True Gold's primary activity for the nine months ended September 30, 2015 was the construction of the Karma Mine. While there was a small increase in total assets of $5.2 million over the first nine months of 2015, the construction activity is reflected in the increase in property, plant and equipment and the related deposits and advances on equipment and materials to $91.3 million at September 30, 2015, from the $58.6 million at the beginning of 2015. It is also reflected in the drawdown of cash and short term investments from the $47.5 million at December 31, 2014 to $20.7 million at September 30, 2015. The increase in non-current assets was offset by the previously mentioned write-off of $5.1 million of damaged equipment.

In August 2014, the Company entered into a $100 million definitive Agreement with Franco-Nevada Corporation (the "Franco-Nevada") and Sandstorm Gold Ltd. (the "Sandstorm") to fund the construction of the Karma Mine. In exchange for $100 million in funding, True Gold is obligated to deliver 100,000 ounces of gold over five years (20,000 ounces per year), and thereafter 6.5% of equivalent production at the Karma Mine. True Gold has the option to defer delivery of each months' ounces by up to one year. In addition, True Gold holds sole option to increase funding up to an additional $20 million, in consideration for delivery of an additional 30,000 ounces of gold. The Company will also receive 20% of the spot price of gold for every ounce delivered, under the agreement. As at September 30, 2015, the Company has drawn $71.6 million of the available funds, of which $13.9 million was drawn in Q3 2015. At September 30, 2015, $11.8 million of the fair value of the financial liability through profit and loss is classified as current, with the remaining balance of $44.2 million classified as non-current. During the nine month period ended September 30, 2015 the Company recorded a loss on the change in fair value of the liability of $0.1 million.

About True Gold

True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold production company, by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management and technical teams have proven track records in gold exploration, development, and production worldwide.

ON BEHALF OF THE BOARD

Christian Milau, President & CEO

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, copper, silver and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes, that the Company will receive additional drawdowns under the financing agreement with Franco-Nevada and Sandstorm and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of True Gold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Karma Project, reliance on technical information provided by third parties as related to the Karma Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; satisfaction of Burkina Faso requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, the potential for delays in exploration and permitting activities, uncertainties related to the Company's relationship with communities that surround its properties in Burkina Faso, risks related to the financing agreement with Franco-Nevada and Sandstorm, including the Company's ability to meet its scheduled delivery obligations, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk as well as those factors discussed in the Annual Information Form of the Company dated April 27, 2015 in the section entitled "Risk Factors", under True Gold's SEDAR profile at www.sedar.com.

Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

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