Wednesday 26th October 2016

Resource Clips

Teranga reports Senegal Gold Assays up to 3 g/t over 85m

Resource Clips - essential news on junior gold mining and junior silver miningTeranga Gold Corporation TSX:TGZ announced results from the Mine License area of the Sabodala Gold Mine in Senegal, West Africa. Assays include

3 g/t gold over 85 metres (including 6.5 g/t over 19 metres)
2.4 g/t over 10 metres
7.2 g/t over 11 metres
1.8 g/t over 15 metres
1.3 g/t over 99 metres
4.2 g/t over 11 metres
1.4 g/t over 29 metres
14.7 g/t over 6 metres
1.8 g/t over 43 metres (including 5.3 g/t over 6 metres)
2.5 g/t over 19 metres (including 6.1 g/t over 4 metres)

VP Investor Relations Kathy Sipos tells, “We have two distinct exploration programs, one being on our Regional Land Package—which is just over 1,500 square kilometres—the other on our Mine License, which is the 33-square-kilometre package around our mill. We’re spending $20 million on each program. All of those are permitted ounces on the Mine License, so it’s obviously advantageous to us when we do have good holes there because it’s all truckable to the mill; there’s no permitting required, etc. We’ve done a lot of drilling to the north of the current Sabodala pit, and we’re getting very good results that make it quite likely that we will be extending the current pit both to the north and to depth. We see adding potentially 250,000 to 500,000 ounces in this area as well as below this area.

We are very much looking forward to a good year ahead with both an increase in production and a significant reduction in our cash cost [per ounce gold] to $600 to $650 this year—Kathy Sipos

“We’re very excited that we’re getting a lot of great results which are outside of the current pit. Really this program is meant to find both new ounces altogether as well as take the ounces we have in the inferred category and get them into the measured and indicated and, ultimately, into the reserve category.”

Regarding the production schedule at Sabodala, Sipos says, “Through the course of last year we’ve worked on doubling our mill capacity from 2 million tonnes per annum to 4 million tonnes per annum. That [expansion] should be completed at the end of this quarter. They’ve just finished doing all the tie-ins—where they have to do the big shutdown in order to get everything hooked up—so everything’s online and on schedule, and the mill should be fully operational by the end of 1Q. That will allow us to have a base going through that mill of 200,000 ounces [gold] per year. We expect to produce between 210,000 and 225,000 ounces this calendar year, which is about a 60% increase from last year.”

Sipos updates the status of the hedge book which it inherited from Mineral Deposits TSX:MDM in 2010: “We had 174,000 ounces at the end of 2011. We have a specific delivery schedule, and we have announced that we will defer 1Q deliveries into the second half of the year, strictly as a cash-management tool. We do plan on delivering all the anticipated ounces that are in the schedule for this year, and I believe that means we’ll have about 66,000 ounces left at the end of 2012. We will have the program completely extinguished by August 2013, unless we speed up deliveries within this calendar year—which we very well could. We are very conscious of getting rid of the book as quickly and prudently as possible.

“We are very much looking forward to a good year ahead with both an increase in production and a significant reduction in our cash cost [per ounce] to $600 to $650 this year,” Sipos concludes. “We will see significant margin expansion this year, with cash costs coming down. When the hedge book has been eliminated next year we could get another doubling of our margins. With good drill results coming through, it’s certainly setting itself up to be a good year for us.”

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Kathy Sipos
VP Investor Relations

by Ted Niles

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