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TGZ
January 28, 2016 17:59 ET
Teranga Gold Outperforms 2015 Cost Guidance
Production Shortfall Deferred to 2016
Replaces Reserves and Significantly Improves Life of Mine Cash Flows
http://www.marketwired.com/press-re...rforms-2015-cost-guidance-tsx-tgz-2092255.htm
TORONTO, ONTARIO--(Marketwired - Jan. 28, 2016) -
(All amounts are in U.S. dollars unless otherwise stated)
Teranga Gold Corporation ("Teranga" or the "Company") (TSX:TGZ)(ASX:TGZ) is pleased to report its fourth quarter and year-end 2015 operating results for ASX purposes.
"Underlying the achievement of record low unit costs in 2015 is our ongoing business improvement program, which we plan to continue in 2016 and beyond," stated Richard Young, President & Chief Executive Officer of Teranga. "Additional artisanal activity at Gora and unforeseen factors at Masato underlie our shortfall in 2015 production, although the majority of this production will be carried over into 2016."
Mr. Young also stated, "We enter 2016 with a significantly improved life of mine plan that reflects the replacement of reserves and improved free cash flow. Together with the strength of our balance sheet, we are well positioned for the future and to maximize long-term sustainable free cash flows."
2015 Highlights
Improved liquidity
Cash balance increased by $8.6 million to $44.4 million
Completed a $17.5 million private placement with new cornerstone investor
Improved liquidity with a $30.0 million Revolver Credit Facility, of which $15.0 million has been drawn down
Met or beat 2015 cost guidance
Delivered total cost savings $20+ million, or $100+ per ounce
Achieved record low unit mining and processing costs
Below 2015 production guidance
Majority of shortfall of 43,600 ounces originally planned for production in 2015 have been deferred into 2016
Highlighted as a potential risk in the third quarter, 2015 production was negatively impacted by 13,500 ounces due to the additional impact of artisanal activity at Gora, the only deposit in the Company's life of mine plan with artisanal mining risk
A localized rock fall at Masato in December resulted in a deferral of approximately 4,500 ounces to 2016
During the third quarter, production was negatively impacted by material handling issues at Masato (13,000 recovered ounces) and changes to the Gora mine plan to defer three benches into 2016 (15,000 recovered ounces)
Replaced proven and probable reserves and improved life of mine plan free cash flows
Added high grade mill feed through the conversion of high grade underground resources to reserves
Removed lower margin ounces to maximize long-term sustainable free cash flow
Reduced life of mine all-in sustaining costs to approximately $900 per ounce over the 13.5 year mine life (more than $200 per ounce lower than the all-in sustaining costs in the previous life of mine plan from 2016 onwards)
From the Company's 2.6 million ounce reserve base, production is expected to average approximately 200,000 ounces per year for nine years and 120,000 ounces per year for the remaining four and a half years of the improved life of mine plan before factoring in new exploration results or other growth options
Advanced high-return organic growth initiatives
Mill optimization project, which remains on track for completion in fourth quarter 2016, is expected to increase throughput by more than 10 percent and lower costs on an annualized basis
Completed an optimised pre-feasibility engineering study for heap leaching low grade oxide ore, which concludes the technical viability for processing Teranga's low-grade oxide and transitional ore
Continued to advance mine licence and regional exploration programs with some encouraging results as outlined in the Reserves and Resources section of this report.
Significant exploration work was completed on the ML during the 4th quarter, with encouraging DDH intercepts near surface on several additional prospects
Encouraging results were found near surface on the KA prospect from DDH intercepts following up on surface anomalies and trench results
Industry-leading health and safety record continues with 2.4 years without a lost time incident
2016 Outlook
The Company's outlook for 2016 is as follows:
Production: 200,000 to 215,000 ounces(1)
All-in sustaining costs (including all new project development costs): $900 to $975 per ounce(2)
In addition to sourcing ore from Masato, Gora and existing stockpiles, 2016 production will also be derived from Golouma (new deposit). The current phase of Masato will be completed in the first quarter of 2016, with Golouma production commencing in the first quarter of 2016. Kerekounda waste stripping is scheduled to commence in the third quarter of 2016.
The Company's 2016 production guidance reflects the build-up of higher grade stockpiles of approximately 40,000 ounces, which will assist in mitigating operating challenges in the future.
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