Teranga Gold Hedges ~50% of Sabodala Production at $1,336 per Ounce Through 2018, Providing Greater Cash Flow Certainty Durin...
September 11 2017 - 06:00AM
(All amounts are in U.S. dollars unless otherwise
stated)
Teranga Gold Corporation ("Teranga" or the "Company") (TSX:TGZ) is
pleased to announce that it has entered into forward gold sales
contracts with Macquarie Bank Limited for a total of
131,000 ounces of gold commencing October 1, 2017 through December
31, 2018, at a gold price of $1,336 per ounce.
As outlined in the updated technical report for
its Sabodala operation in Senegal filed on August 30, 2017, the
Company anticipates production of up to 111,000 ounces in the
second half of 2017 and 213,000 ounces in 2018. The forward
sales contracts represent approximately 50% of the production
expected over the five quarters to the end of 2018.
“Our objective is to put an optimal financing
plan in place that eliminates or at least minimizes the requirement
to issue new equity to fund the development of our Banfora Project
in Burkina Faso, as well as, our other growth initiatives. A
key component of the financing plan is the anticipated cash flows
from our flagship Sabodala mine during the construction of the
Banfora Project, anticipated to commence in the second quarter of
2018. The execution of the forward sales contracts provides greater
cash flow certainty from Sabodala through to the end of 2018,
moving us one step closer to an optimal financing plan,” stated Mr.
Richard Young, President and Chief Executive Officer of
Teranga.
The forward sale contracts can be settled either
in cash or by physical delivery at the option of Teranga. As
part of the forward sales program, 25,000 ounces are due during the
fourth quarter of 2017, with 26,500 ounces due in each of the four
quarters of 2018 for a total of 131,000 ounces.
Added Mr. Young: “Looking ahead, depending on
gold prices, we may extend the hedging program into 2019 to add
further certainty of Sabodala cash flows during construction of the
Banfora Project.”
Forward-Looking Statements
This news release contains certain statements
that constitute forward-looking information within the meaning of
applicable securities laws ("forward-looking statements"), which
reflects management's expectations regarding Teranga's 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 “anticipates”, “potential”, “belief”, “believe”,
“expected”, “expects”, “estimates”, “plans”, “anticipated”,
“ability” and similar expressions or statements that certain
actions, events or results “may”, “should”, “work to” or "will"
have been used to identify such forward looking information.
Forward-looking statements include, without limitation, all
disclosure regarding possible events, conditions or results of
operations, future economic conditions and anticipated courses of
action. Although the forward-looking statements contained in this
news release 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 statements. Such forward-looking statements are based upon
assumptions, opinions and analysis made by management in light of
its experience, current conditions and its expectations of future
developments that management believe to be reasonable and relevant
but that may prove to be incorrect. These assumptions include,
among other things, the ability to obtain any requisite
governmental approvals, the accuracy of mineral reserves and
mineral resources estimates, gold price, exchange rates, fuel and
energy costs, future economic conditions, community resettlement
within anticipated timeline, anticipated future estimates of free
cash flow, and courses of action. Teranga cautions you not to place
undue reliance upon any such forward-looking statements.
The forward-looking statements and
forward-looking information in this news release include without
limitation, statements regarding (i) the financing plan, the
development of Banfora; (ii) the need to raise additional capital;
(iii) future cash flows from Sabodala; (iv) impact of gold forward
sales contracts; (v) anticipated timing of Banfora construction;
(vi) entering into of debt facility; and (vii) the extension of the
gold hedging program.
Readers are cautioned that actual results may vary from those
presented.
The risks and uncertainties that may affect
forward-looking statements include, among others: the inherent
risks involved in exploration and development of mineral
properties, including government approvals and permitting, changes
in economic conditions, changes in the worldwide price of gold and
other key inputs, changes in mine plans and other factors, such as
project execution delays, many of which are beyond the control of
Teranga, as well as other risks and uncertainties which are more
fully described in Teranga's Annual Information Form
dated March 30, 2017, and in other filings of Teranga with
securities and regulatory authorities which are available
at www.sedar.com. Teranga does not undertake any obligation to
update forward-looking statements should assumptions related to
these plans, estimates, projections, beliefs and opinions change.
Nothing in this report should be construed as either an offer to
sell or a solicitation to buy or sell Teranga securities. All
references to Teranga include its subsidiaries unless the context
requires otherwise.
About Teranga
Teranga is a multi-jurisdictional West African
gold company focused on production and development as well as the
exploration of more than 5,000km2 of land located on prospective
gold belts. Since its initial public offering in 2010,
Teranga has produced more than 1.2 million ounces of gold from its
operations in Senegal, which as of June 30, 2017 had a reserve base
of 2.7 million ounces of gold. Focused on diversification and
growth, the Company is advancing its Banfora development project
and conducting extensive exploration programs in three countries:
Burkina Faso, Senegal and Côte d’Ivoire. Teranga has a strong
balance sheet and the financial flexibility to grow its
business.
Steadfast in its commitment to set the benchmark
for responsible mining, Teranga operates in accordance with the
highest international standards and aims to act as a catalyst for
sustainable economic, environmental, and community development as
it strives to create value for all of its stakeholders.
Teranga is a member of the United Nations Global Compact and a
leading member of the multi-stakeholder group responsible for the
submission of the first Senegalese Extractive Industries
Transparency Initiative revenue report. The Company's
responsibility report, is available at
www.terangagold.com/responsibilityreport and is prepared in
accordance with its commitments under the United Nations Global
Compact and in alignment with the Global Reporting Initiative
guidelines.
Contact Information
Richard Young
President &
CEO
T: +1 416-594-0000 | E:
ryoung@terangagold.com
Trish Moran Head of Investor Relations T: +1 416-607-4507 | E:
tmoran@terangagold.com