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PRODUCING AND EXPLORING
2012 ANNUAL GENERAL MEETING OF SHAREHOLDERS
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2012 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Alan R. Hill Chairman & CEO
Richard Young President & CFO
FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
GROWING PRODUCTION
FINANCIAL STRENGTH
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CAUTIONARY STATEMENT This presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation, which reflects management’s expectations regarding Teranga Gold Corporation’s (“Teranga” or the “Company”) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Wherever possible, words such as “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, have been used to identify such forward looking information. Although the forward looking information contained in this presentation reflect management’s current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward looking information, including those listed in the “Risk Factors” section of the prospectus of Teranga, dated November 11, 2010 (the “Prospectus”). These factors should be considered carefully and prospective investors should not place undue reliance on the forward looking information. Forward looking information necessarily involves significant known and unknown risks, assumptions and uncertainties that may cause Teranga’s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward looking information. Although Teranga has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in the forward looking information, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on such forward looking information. 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 law. Forward looking information and other information contained herein concerning mineral exploration and management’s general expectations concerning the mineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware of any misstatements regarding any industry data presented herein, mineral exploration involves risks and uncertainties and industry data is subject to change based on various factors. In addition, please note that statements relating to “reserves” or “resources” are deemed to be forward looking information as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably mined in the future. While management has confidence in its projections based on exploration work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a mineral resource. This presentation does not constitute in any way an offer or invitation to subscribe for securities in Teranga pursuant to the Corporations Act 2001 (Cth) and has not been lodged with the Australian Securities and Investment Commission.
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
GROWING PRODUCTION
FINANCIAL STRENGTH
TERANGA – YEAR ONE
• 2011 prepared us for increasing production and lowering costs and increasing cash margins as we move forward
• Continue to self-fund extensive exploration
program
• Very encouraging drill results on Mine License
• Goal: double gold inventory on Mine License alone
• Promising results on Regional Exploration
Program
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OPERATING HIGHLIGHTS Fiscal 2011(1)
• 147,728 oz’s produced
• 153,728 oz’s sold at cash cost of $872/oz
Calendar 2011
• 131,461 oz’s produced
• 137,136 oz’s sold at cash cost of $900/oz
• In line with revised guidance
• Costs affected by higher fuel, labour and maintenance costs
(1) Fiscal year is from October 1, 2010 to December 31, 2011, a 15 month year. Teranga has converted from a June 30 to calendar year end.
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Revenue for the fiscal 2011: • $187M
• 47% of oz’s delivered into the forward
sales contracts at $846/oz
• 53% of oz’s delivered into the spot market at an average priced of $1,537/oz
• $1,213/oz – average realized price
FINANCIAL HIGHLIGHTS
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Net loss for the fiscal 2011: • $15.8M or $0.09/share
• Affected by deliveries into hedge book,
high exploration costs, and stock based compensation expense
Capital expenditure:
• For the fiscal year: $76.4M
• Primarily for mill expansion, mobile equipment, and capitalized mine site exploration
FINANCIAL HIGHLIGHTS
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Cash position*: • $11M at December 31, 2011 • $26.5M at January 31, 2012
• Sufficient cash + expected future cash
flows support liquidity requirements
• Additional flexibility – deferred delivery of 28,000 oz’s due in Q1 to second half ‘12
• Rebuild cash balance • Maintain cash balance of ~$20M
• Consider revolving finance facility
FINANCIAL HIGHLIGHTS
*Cash, cash equivalents and short term investments including restricted cash
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Plant expansion:
• Doubling mill capacity to ~4 Mtpa • The new mill will be commissioned in the
second week of April
• Expected total cost of $62M • $15M remaining to be spent in 2012
FINANCIAL HIGHLIGHTS
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Gold Sales Contracts:
• Unrealized non-cash gain of $1.8M for the 15 months ended December 31, 2011
• 174,500 oz’s remain under hedge contract
• Expect to have 66,000 oz’s remaining at
year end (final delivery August 2013)
• Objective to eliminate hedge position as quickly but prudently as possible
FINANCIAL HIGHLIGHTS
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Mobile equipment loan facility:
• December quarter – expansion of mobile equipment loan with Société Générale – additional $12.8M
• Final payment on September 30, 2013
• Currently drawn down to $24.4M
FINANCIAL HIGHLIGHTS
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FOCUSED ON BUILDING FINANCIAL STRENGTH Outlook – 2012
• 210,000 – 225,000 oz’s at cash costs of $600 - $650/oz(1)
• Rising production, lowering costs
• Margin expansion + increased production
profile = significant free cash flow to self-fund exploration and development strategy
• Manageable capex requirements in 2012: $30M*
(1) This production target is based on existing proven and probable reserves only. (2) Assumes $1600/oz gold price and cash cost of $625/oz (3) Non-Deferred Hedge Schedule page 39 *Excluding Mine License exploration costs
Rate of margin expansion is a function of increasing production through regional exploration success *After eliminating hedge position
0
200
400
600
800
1000
1200
2011 2012 2013* 2014
Cash Margin ($/oz)(2,3)
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
GROWING PRODUCTION
FINANCIAL STRENGTH
2011 OPERATIONAL HIGHLIGHTS Changes made to reduce operating risks:
• Automated controls for better blending to
increase throughput
• Second access ramp to the pit
• Revised drilling, blasting, and maintenance contracts in order to increase mining rate
• Improvements to employee compensation
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FOCUSED ON GROWING RESERVES
(1) See page 38 (2) M+I Resources are inclusive of reserves
Kedougou-Kenieba Inlier – A Birimian Greenstone Belt
1.66
2.14
1.51
0.00
0.50
1.00
1.50
2.00
2.50
Proven andProbableReserves
Measured andIndicated
Resources
InferredResources
M o
z
Reserves and Resources(1,2) December 31, 2011
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2012 Exploration Program 1. Mine License Exploration: $20M (77,000m) 2. Regional Exploration: $20M (90,000m) TOTAL: $40M (167,000m) (+140,000m RAB) 2011 Exploration Program: $46M
FOCUSED ON GROWING RESERVES
Full drill results are posted at terangagold.com
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35 km radius
1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION
33km2 1,500km2
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1. SABODALA MINE LICENSE EXPLORATION • $20M exploration program underway on
the Sabodala Mine License
• Potential to expand gold inventory on the ML from 1.55M oz to 2.5 – 3.5M oz(1,2,3)
over 12 to 18 months increasing the mine life to ~ 10 to 15 years
From: • Deepening the Sabodala pit to the north along the
Main Flat Extension
• Continuation of the Masato deposit
• Conversion of Niakafiri resources to reserves
(1) Potential to expand existing gold mineralization to between 40 and 50 M
tonnes at grades of between 1.5 to 2.0 gpt Au for a total inventory of 2.5 to 3.5M oz
(2) 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.
(3) See Key Assumptions on page 37
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
2011 MINE LICENSE EXPLORATION HIGHLIGHTS
• Intersection of significant widths of high grade
mineralization outside the Sabodala ultimate pit limit as part of MFE drill program
• Discovery of multiple high-grade zones in the LFZ just below the MFE area
• Successful intersection and extension of the Masato deposit down dip onto our Mine License and 200m down dip and 500m along strike with potentially underground mineable high-grade ore
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
2012 MINE LICENSE EXPLORATION
• Minimum 6 drill rigs
• $20M
• 77,000m of diamond and RC drilling
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MINE LICENSE EXPLORATION – SABODALA
Main Flat Extension (“MFE”) – principal gold hosts of Sabodala deposit • MFE program is designed to test the continuity of
this structure to the north beginning with infilling holes
• Significant widths of high grade mineralization: SBDH141D – 131m at 3.45 gpt SBDH143D – 87m at 3.11 gpt SBDH147D – 49m at 2.2 gpt SBDH157D – 53m at 4.5 gpt SBDH160DD – 70m at 3.0 gpt SBDH161D – 85m at 3.0 gpt
Lower Flat Zone (“LFZ”) – deeper zone below MFE • Drilling confirms multiple flat zones immediately
below Sabodala ultimate pit: SBDH160DD – 27m at 3.6 gpt SBDH161D – 11m at 7.2 gpt SBDH170DD – 34m at 6.3 gpt SBDH171DD – 46m at 9.8 gpt
Full drill results are posted at terangagold.com
(1) MFE - open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, LFZ potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012
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LONG SECTION OF SABODALA GOLD DEPOSIT
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
MINE LICENSE EXPLORATION – SABODALA PIT INCREASED OBJECTIVES:
• Sabodala pit (MFE/LFZ) objective over next 18
months
• Previous open pit objective • To add 250,000 – 500,000 oz’s
• New open pit objective • To add 500,000 – 1,000,000 oz’s
• Larger pit
• Add to underground gold inventory
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Sabodala Pit
Masato Extensions
Sambaya Hill
Masato Down Dip
MINE LICENSE EXPLORATION – MASATO
Masato structural trend strikes across onto our Mine License • Oromin Joint Venture has identified open pit
reserves of 0.5M oz about 2km from our mill • Tracking the deposit as it crosses onto our
property
• Multiple mineralized zones have been identified with high grade intervals apparent
• Confirmed strike length of 500m, a dip extent of 200m, and a band of about 40m of solid grade mineralization
• 2km of strike length still to be tested
• Recent results from Masato Down Dip include: 37m at 4.5 gpt 44m at 2.0 gpt
Full drill results are posted at terangagold.com
Main Flat Extension
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MINE LICENSE EXPLORATION – NIAKAFIRI
Niakafiri area has ~300,000 oz’s in reserves in a mineralized envelope of about ~800,000 oz’s
• Deposit remains open below 200m level
• Potential 2H 2012 drilling with intentions of adding
to reserves
• Ongoing community discussions
Full drill results are posted at terangagold.com
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35 km radius
1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION
33km2 1,500km2
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2. REGIONAL EXPLORATION
• From 2007 – 2009, no significant drilling was done on the 1,455km2 Regional Land Package due to cash constraints
• There are ~40 drill targets identified; $32M spent in 2011 and $20M planned for 2012
• Addition of Garaboureya North exploration permit, land package increases to ~1,500km2
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GORA • Current reserves of 114,000 oz’s at 5 gpt
• Most advanced target: moving from exploration to
development • Objective of having production in early 2013
permitting dependent
• 22km from Sabodala mill, truckable • High grade-drill intersections continue to expand the
potential footprint of the deposit
Trace of blind veins from RC holes Projected to surface – high correlation with IP trends.
Full drill results are posted at terangagold.com
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TOUMBOUMBA – NEWEST TARGET
• Latest discovery, potential to become second regional deposit through the mill
• Located 10km NW from Sabodala mill
• High grade, lower grade halo, and oxide material • Easily processing at minimum, potential
for heap leaching • Alteration hosted mostly in granite (laterite
cover)
• Oxide mineralization of up to 60m in depth
• RAB results: • 6m at 18.54 gpt • 4m at 3.31 gpt • 8m at 5.46 gpt
• RC results:
• 1m at 5.20 gpt • 2m at 21.45 gpt • 4m at 6.32 gpt
Full drill results are posted at terangagold.com
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DIEGOUN NORTH – “THE DONUT” • 7km x 4km complex of gold anomalism • Contrasting rock types, porphyries, granites,
dolerite & sediments • Rock samples to 80 gpt Au • RAB drilling has defined gold mineralization in bedrock
• Honey and Jam • First pass RC program at Honey and Jam; 51 holes
completed for just under 8,800m (51 holes anomalous levels of gold > 0.1 gpt; 40 holes were >0.5 gpt)
• Recognition of a well-developed, auriferous NE trending structure
• 2012 drilling to focus on understanding ore-grade structural controls and orientations
Sabodala Ore Body
Full drill results are posted at terangagold.com
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• >5km long, up to 1 km wide gold anomaly defined by termite sampling, similar geology as Loulo across the border (12M oz resource)
• Drilling to date has identified a substantial, mineralization system
• Potential to host-ore grade shoots within
• First pass drill program is designed to test for large, near surface open-pitable resource
• Parallels NE trending shears of the MTZ
• 3M oz Massawa deposit hosted on MTZ about
25km south
TOUROKHOTO Sabodala Ore Body
Full drill results are posted at terangagold.com
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OUR VISION
To become a preeminent gold producer in West Africa while setting the benchmark for responsible mining Phase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 ounces(1) of annual gold production with existing infrastructure Phase 2: Increase annual gold production to 400,000 to 500,000 ounces(1)
(1) See page 37 and 38
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CORPORATE SOCIAL RESPONSIBILITY • CSR is fundamental to the success of our business
• Healthy, safety, education, sustainability
• Developing schools, health clinics, and improving access to
potable water
• Engaged a renowned Canadian group to assist us in putting together a comprehensive regional development plan
• Along with local, regional, and national government
• Improve the livelihoods of those in the communities in which we operate
• A key component of our vision is to set the benchmark in
Senegal for responsible mining Mining Responsibly and Sharing the Benefits
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FOCUSED ON GROWTH
FOCUSED ON:
GROWING RESERVES
GROWING PRODUCTION
FINANCIAL STRENGTH 400
600
800
1000
1200
1400
1600
1800
2000
2007 2008 2009 2010 2011
$/oz
5 YEAR GOLD PRICE
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SUMMARY – FOCUSED ON GROWTH
1. Only mill in Senegal – expansion almost complete
2. Largest land position in Senegal
3. Rising production, declining costs
4. Building a stronger balance sheet – increasing production and free cash flow with margin expansion
5. Extensive exploration program
6. Experienced management team
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PRODUCING AND EXPLORING
2012 ANNUAL GENERAL MEETING OF SHAREHOLDERS
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APPENDICES
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Basis for 2.5 – 3.5M oz gold inventory from Mine License Expand upon existing gold mineralization by an additional 20M to 30M tonnes at grades of between 1.5 and 2.0 gpt for a total
inventory of 2.5 to 3.5M oz from the Sabodala Mining License (“ML”) over the next 12 to 18 months. The larger gold inventory base is expected to result from the success of deepening the Sabodala pit to the north along the
MFE/LFZ, extension of the Masato pit onto the ML, potential conversion of Niakafiri resources to reserves as well as adding to the gold mineralization inventory below these three large open pits.
This exploration target is not a Mineral Resource. The potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource, therefore it is uncertain if further exploration will result in the targets being delineated as a Mineral Resource.
The goal of the MFE/LFZ programs is to add 500,000 to 1,000,000 ounces of gold to the open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, as well as adding underground gold inventory at an average grade between 3.0 and 4.0 gpt.
Rationale: Recent drilling confirms extension of mineralization to the north of the existing pit Potential for identification of additional ounces through infill drilling within area of existing resources under the ML Minimum 5 drill rigs and exploration budget of US$20M dedicated to ML alone in 2012 Program to continue to test similar geophysical anomalies and identified structures within the ML
KEY ASSUMPTIONS
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SABODALA GOLD PROJECT: RESERVES & RESOURCES (DECEMBER 31, 2011)
M Grade M oztonnes g/t Au Au
Proven and ProbableSabodala 19.89 1.54 0.987Niakafiri 7.814 1.14 0.287Stockpile 4.211 0.94 0.128Subtotal 31.915 1.37 1.402Sutuba 0.353 1.06 0.012Gora 0.709 5.01 0.114Sabodala - additional 3.232 1.26 0.131Total 36.209 1.43 1.659Measured and IndicatedSabodala 44.371 1.07 1.525Niakafiri 10.741 1.12 0.386Gora 1.282 5.22 0.215Sutuba 0.353 1.06 0.012Total 56.747 1.17 2.138InferredSabodala 26.205 1.01 0.848Niakafiri 7.248 0.88 0.205Niakafiri West 7.144 0.82 0.188Soukhoto 0.566 1.32 0.024Gora 0.286 4.16 0.038Diadiako 2.917 1.49 0.119Majiva 2.593 0.64 0.047Toumboumba 0.855 1.5 0.041Total 47.814 0.98 1.51
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NON-DEFERRED HEDGE SCHEDULE
DELIVERY DATE PRICE U.S.$/OZ OUNCES
17-May-12 846 28,000
15-Aug-12 838.33 41,500
21-Nov-12 829.45 39,000
20-Feb-13 832.92 25,000
17-May-13 790.66 25,000
21-Aug-13 791.5 16,000
TOTAL 826 174,500
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MANAGEMENT Alan R. Hill Executive Chairman & CEO
• Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick Gold
• Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold
(2004 – 2007)
Richard S. Young President & CFO
• Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick Gold
• Former VP and CFO of Gabriel Resources (2005 – 2010)
Yani Roditis Vice President, Operations
• Over 10 years experience in mine development and operations with Barrick Gold (1994 – 2005) • Former Chief Operating Officer of Gabriel Resources (2005 – 2010)
Kathy Sipos Vice President, Investor & Stakeholder Relations
• 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009)
David Savarie Vice President, General Counsel & Corporate Secretary
• Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel Resources • Previously in private practice at Miller Thomson LLP
Mark English General Manager
• Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating mines
and development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006
Bruce Van Brunt Business Development Manager
• Mining engineer and geologist with over 20 years experience • Previously worked in a number of technical capacities with Placer Dome and Echo Bay Mines • Joined Mineral Deposits Ltd. in March 2006
Martin Pawlitschek Regional Exploration Manager
• Geologist with over 15 years experience in the mining industry • Previously spent 11 years at BHP and a number of smaller exploration companies, working in Australia, South
East Asia and Africa • Joined Mineral Deposits Ltd. in July 2007
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COMPETENT PERSONS STATEMENT The information in this presentation relating to the reserve estimate associated with the Sabodala and Niakafiri pits as well as the Stockpiles is based on information compiled by Ms. Julia Martin, PEng, MAusIMM (CP) who is a full time employee of AMC Mining Consultants Canada and 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. Martin is a Qualified Person in accordance with NI 43-101 and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this presentation relating to the reserve estimate for Sutuba, Gora and the additional reserves from the Sabodala pit as well as information in this presentation relating to exploration results and targets on the Sabodala Mining License are 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 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 of Report of exploration Results, Mineral Resources and Ore Reserves” and as defined in NI 43-101. Mr. Van Brunt consents to the inclusion of this information in the form and context in which it appears in this presentation. The information in this presentation relating 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 not independent. 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 of Report of exploration Results, Mineral Resources and Ore Reserves” and as defined in NI 43-101. Mr. Pawlitschek consents to the inclusion of this information in the form and context in which it appears in this presentation.
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