TORONTO, ONTARIO--(Marketwired - May 14, 2013) - Teranga Gold Corporation (TSX:TGZ)(ASX:TGZ) -
For a full explanation of Financial, Operating, Exploration and Development results please see the Interim Condensed Consolidated Financial Statements as at and for the period ended March 31, 2013 and the associated Management's Discussion & Analysis at www.terangagold.com.
Solid first quarter production and cash costs and hedge book eliminated.
1 Total cash costs per ounce sold is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. For a definition of this metric, please refer to page 11 of the Company's Management's Discussion and Analysis.
"Sabodala had another strong quarter, providing the foundation for a solid year. Beyond Sabodala, the Agreement in Principle signed between the Company and the Republic of Senegal paves the way for us to invest and develop in order to increase our reserves and production in Senegal for the long-term. Our ability to leverage off our existing mill and infrastructure should allow us to increase reserves, production, earnings, cash flow and free cash flow in the coming years," said Alan R. Hill, Executive Chairman.
Financial Highlights (details on Page 5)
"Now that we have eliminated the hedge book, our realized gold price should rise as we sell 100 percent of our production at spot gold prices. The higher realized gold price should result in higher cash margins and cash flows to further strengthen our balance sheet in 2013 and beyond. The free cash flow generated from Sabodala is expected to fund our growth initiatives through both exploration and consolidation," said Richard Young, President and CEO.
Operating Highlights (details on Page 5)
2013 Revised Guidance | ||||||
Revised Guidance | Original Guidance | |||||
Operating results | ||||||
Production (oz) | 190,000 - 210,000 | 190,000 - 210,000 | ||||
Total cash costs (incl. royalties)1,2 ($/oz sold) | 650 - 700 | 650 - 700 | ||||
Exploration and evaluation expense (Regional exploration) ($ millions) | 3.0 | 10.0 - 15.0 | ||||
Administration expenses ($ millions) | 13.0 | 15.0 - 20.0 | ||||
Capital expenditures ($ millions) | ||||||
Mine site | 20.0 | 20.0 - 25.0 | ||||
Capitalized reserve development (Mine License) | 5.0 | 5.0 - 10.0 | ||||
Gora development costs | ||||||
Mobile equipment | 5.0 | 30.0 - 35.0 | ||||
Site development | 5.0 | 15.0 - 20.0 | ||||
Total Gora development costs | 10.0 | 45.0 - 50.0 | ||||
Capitalized deferred stripping2 | 35.0 | 35.0 - 40.0 | ||||
Total capital expenditures | 70.0 | 105.0 - 125.0 | ||||
1 Total cash costs per ounce is a non-IFRS financial measure with standard meaning under IFRS. For definition of this metric, please see page 11 in Management's Discussion and Analysis. |
2 Includes the impact of adopting IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine. Refer to Adoption of New Accounting Standards in the Management's Discussion and Analysis. |
Development Highlights (Mine License)
Exploration Highlights (Regional Land Package)
Corporate Update
Review of First Quarter Financial Results | ||||||
(US$000's, except where indicated) | Three months ended March 31 | |||||
Financial Results | 2013 | 2012 | ||||
Revenue | 113,815 | 60,526 | ||||
Cost of sales | (55,971 | ) | (31,117 | ) | ||
Gross Profit | 57,844 | 29,409 | ||||
Exploration and evaluation expenditures | (2,027 | ) | (7,176 | ) | ||
Administration expenses | (3,830 | ) | (3,349 | ) | ||
Share based compensation | 73 | (1,755 | ) | |||
Finance costs | (2,696 | ) | (938 | ) | ||
Gains/(losses) on gold hedge contracts | 2,193 | (17,483 | ) | |||
Gains on oil hedge contracts | 31 | 615 | ||||
Net foreign exchange losses | (61 | ) | (369 | ) | ||
Impairment of available for sale financial asset | (962 | ) | - | |||
Other income | 9 | 8 | ||||
Profit/(loss) for the period | 50,574 | (1,038 | ) | |||
Profit attributable to non-controlling interest | 5,591 | 1,036 | ||||
Profit/(loss) attributable to shareholders of Teranga | 44,983 | (2,074 | ) | |||
Basic earnings/(losses) per share | 0.18 | (0.01 | ) | |||
Review of First Quarter Operating Results | |||
(US$000's, except where indicated) | Three months ended March 31 | ||
Operating Results | 2013 | 2012 | |
Ore mined | ('000t) | 1,312 | 1,117 |
Waste mined | ('000t) | 7,536 | 6,316 |
Total mined | ('000t) | 8,848 | 7,433 |
Grade mined | (g/t) | 1.87 | 1.38 |
Ounces mined | (oz) | 78,929 | 49,516 |
Strip ratio | waste/ore | 5.7 | 5.7 |
Ore milled | ('000t) | 696 | 573 |
Head grade | (g/t) | 3.31 | 2.52 |
Recovery rate | % | 92.1 | 90.0 |
Gold produced1 | (oz) | 68,301 | 41,904 |
Gold sold | (oz) | 69,667 | 35,268 |
Average price received | $/oz | 1,090 | 1,712 |
Total cash cost (incl. royalties)2 | $/oz sold | 535 | 650 |
Mining | ($/t mined) | 2.61 | 2.53 |
Milling | ($/t milled) | 22.47 | 17.19 |
G&A | ($/t milled) | 6.17 | 5.61 |
1 Gold produced represents change in gold in circuit inventory plus gold recovered during the period. |
2 Total cash costs per ounce is a non-IFRS financial measure with no standard meaning under IFRS. For definition of this metric, please see page 11 of the Management's Discussion and Analysis. |
First Quarter Cost of Sales | |||
(US$000's, except where indicated) | Three months ended March 31 | ||
Cost of Sales | 2013 | 2012 | |
Mine production costs | 28,340 | 25,528 | |
Depreciation and amortization | 20,319 | 9,002 | |
Royalties | 5,610 | 1,822 | |
Rehabilitation | 1 | 4 | |
Inventory movements | 1,701 | (5,239 | ) |
Total cost of sales | 55,971 | 31,117 | |
CORPORATE DIRECTORY |
Directors |
Alan Hill, Executive Chairman |
Richard Young, President and CEO |
Christopher Lattanzi, Non-Executive Director |
Oliver Lennox-King, Non-Executive Director |
Alan Thomas, Non-Executive Director |
Frank Wheatley, Non-Executive Director |
Jeff Williams, Non-Executive Director |
Senior Management |
Alan Hill, Executive Chairman |
Richard Young, President and CEO |
Mark English, Vice President, Sabodala Operations |
Paul Chawrun, Vice President, Technical Services |
Navin Dyal, Vice President and CFO |
David Savarie, Vice President, General Counsel & Corporate Secretary |
Kathy Sipos, Vice President, Investor & Stakeholder Relations |
Macoumba Diop, General Manager and Government Relations Manager, SGO |
Registered Office |
121 King Street West, Suite 2600 |
Toronto, Ontario, M5H 3T9, Canada |
T: +1 416-594-0000 |
F: +1 416-594-0088 |
E: investor@terangagold.com |
W: www.terangagold.com |
Senegal Office |
2K Plaza |
Suite B4, 1er Etage |
sis la Route due Meridien President |
Dakar Almadies |
T: +221 338 693 181 |
F: +221 338 603 683 |
Auditor |
Ernst & Young LLP |
Share Registries |
Canada: Computershare Trust Company of Canada |
T: +1 800 564 6253 |
Australia: Computershare Investor Services Pty Ltd |
T: 1 300 850 505 |
Stock Exchange Listings |
Toronto Stock Exchange, TSX symbol: TGZ |
Australian Securities Exchange, ASX symbol: TGZ |
FORWARD LOOKING STATEMENTS
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Teranga, or developments in Teranga's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, all disclosure regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. The risks and uncertainties that may affect forward-looking statements include, among others: the inherent risks involved in exploration and development of mineral properties, 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 the Company's Annual Information Form dated March 27, 2013, and in other company filings with securities and regulatory authorities which are available at www.sedar.com. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except as required by law, 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 news release should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities.
COMPETENT PERSONS STATEMENT
The technical information contained in this Report relating to the mineral reserve estimates within the Sabodala, Sutuba, Niakafiri and Gora deposits and the Stockpiles, is based on information compiled by Julia Martin, P.Eng., MAusIMM (CP), a full time employee with AMC Mining Consultants (Canada) Ltd., is independent of Teranga, is a "qualified person" as defined in NI 43-101 and 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 has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity 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 has reviewed and accepts responsibility for the reserve estimates disclosed above. Ms Martin has consented to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to the mineral resources is based on information compiled by Ms. Patti Nakai-Lajoie, who is a Member of the Association of Professional Geoscientists of Ontario. Ms. Patti Nakai-Lajoie is full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Patti Nakai-Lajoie 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. Patti Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects and she consents to the inclusion in the report of the matters based on her information in the form and context in which it appears in this Report.
The technical information contained in this Report relating to exploration results is based on information compiled by Mr. Martin Pawlitschek, who is a Member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a consultant of Teranga and is not "independent" within the meaning of National Instrument 43-101. Mr. Pawlitschek has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he 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". Mr. Pawlitschek is a "Qualified Person" in accordance with NI 43-101 and he consents to the inclusion in the report of the matters based on his information in the form and context in which it appears in this Report.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF | ||||||
TERANGA GOLD CORPORATION | ||||||
STATEMENTS OF COMPREHENSIVE INCOME / LOSS | ||||||
(Unaudited and in US$000's, except per share amounts) | ||||||
Three months ended |
Three months ended |
|||||
March 31, 2013 | March 31, 2012 | |||||
(Restated) | ||||||
Revenue | 113,815 | 60,526 | ||||
Cost of sales | (55,971 | ) | (31,117 | ) | ||
Gross profit | 57,844 | 29,409 | ||||
Exploration and evaluation expenditures | (2,027 | ) | (7,176 | ) | ||
Administration expenses | (3,830 | ) | (3,349 | ) | ||
Share based compensation | 73 | (1,755 | ) | |||
Finance costs | (2,696 | ) | (938 | ) | ||
Gain (losses) on gold hedge contracts | 2,193 | (17,483 | ) | |||
Gains on oil hedge contracts | 31 | 615 | ||||
Net foreign exchange (losses)/ gains | (61 | ) | (369 | ) | ||
Impairment of available for sale financial asset | (962 | ) | - | |||
Other income | 9 | 8 | ||||
(7,270 | ) | (30,447 | ) | |||
Profit/(loss) before income tax | 50,574 | (1,038 | ) | |||
Income tax benefit | - | - | ||||
Profit/(loss) for the period | 50,574 | (1,038 | ) | |||
Profit/(loss) attributable to: | ||||||
Shareholders | 44,983 | (2,074 | ) | |||
Non-controlling interests | 5,591 | 1,036 | ||||
Profit/(loss) for the period | 50,574 | (1,038 | ) | |||
Other comprehensive loss: | ||||||
Exchange differences arising on translation of Teranga corporate entity | - | (63 | ) | |||
Change in fair value of available for sale financial asset, net of tax | (5,456 | ) | (3,927 | ) | ||
Other comprehensive loss for the period | (5,456 | ) | (3,990 | ) | ||
Total comprehensive income/(loss) for the period | 45,118 | (5,028 | ) | |||
Total comprehensive income/(loss) attributable to: | ||||||
Shareholders | 39,527 | (6,064 | ) | |||
Non-controlling interests | 5,591 | 1,036 | ||||
Total comprehensive income/(loss) for the period | 45,118 | (5,028 | ) | |||
Earnings/(losses) per share from operations attributable to the shareholders of the Company during the period | ||||||
- basic earnings/(losses) per share | 0.18 | (0.01 | ) | |||
- diluted earnings/(losses) per share | 0.18 | (0.01 | ) | |||
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF | |||||
TERANGA GOLD CORPORATION | |||||
STATEMENTS OF FINANCIAL POSITION | |||||
(Unaudited and in US$000's) | |||||
As at March 31, 2013 | As at December 31, 2012 | ||||
(Restated) | |||||
Current assets | |||||
Cash and cash equivalents | 51,016 | 39,722 | |||
Trade and other receivables | 7,554 | 6,482 | |||
Inventories | 73,376 | 74,969 | |||
Financial derivative assets | - | 456 | |||
Other assets | 5,080 | 6,836 | |||
Available for sale financial assets | 8,273 | 15,010 | |||
Total current assets | 145,299 | 143,475 | |||
Non-current assets | |||||
Inventories | 35,650 | 32,700 | |||
Property, plant and equipment | 238,129 | 247,898 | |||
Mine development expenditures | 158,429 | 138,609 | |||
Intangible assets | 1,663 | 1,859 | |||
Total non-current assets | 433,871 | 421,066 | |||
Total assets | 579,170 | 564,541 | |||
Current liabilities | |||||
Trade and other payables | 40,920 | 44,823 | |||
Borrowings | 10,307 | 10,415 | |||
Financial derivative liabilities | 11,709 | 51,548 | |||
Provisions | 1,920 | 1,940 | |||
Total current liabilities | 64,856 | 108,726 | |||
Non-current liabilities | |||||
Borrowings | 69,037 | 58,193 | |||
Provisions | 9,750 | 10,312 | |||
Other non-current liabilities | 2,612 | - | |||
Total non-current liabilities | 81,399 | 68,505 | |||
Total liabilities | 146,255 | 177,231 | |||
Equity | |||||
Issued capital | 305,412 | 305,412 | |||
Foreign currency translation reserve | (998 | ) | (998 | ) | |
Equity-settled share based compensation reserve | 16,845 | 16,358 | |||
Investment revaluation reserve | - | 5,456 | |||
Accumulated income | 94,208 | 49,225 | |||
Equity attributable to shareholders | 415,467 | 375,453 | |||
Non-controlling interests | 17,448 | 11,857 | |||
Total equity | 432,915 | 387,310 | |||
Total equity and liabilities | 579,170 | 564,541 | |||
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF | ||||||
TERANGA GOLD CORPORATION | ||||||
STATEMENTS OF CHANGES IN EQUITY | ||||||
(Unaudited and in US$000's) | ||||||
Three months ended | Three months ended | |||||
March 31, 2013 | March 31, 2012 | |||||
(Restated) | ||||||
Issued capital | ||||||
End of period | 305,412 | 305,412 | ||||
Foreign currency translation reserve | ||||||
Beginning of period | (998 | ) | (935 | ) | ||
Exchange difference arising on translation of Teranga corporate entity | - | (63 | ) | |||
End of period | (998 | ) | (998 | ) | ||
Equity-settled share based compensation reserve | ||||||
Beginning of period | 16,358 | 12,599 | ||||
Equity-settled share based compensation reserve | 487 | 1,755 | ||||
End of period | 16,845 | 14,354 | ||||
Investment revaluation reserve | ||||||
Beginning of period | 5,456 | (1,319 | ) | |||
Change in fair value of available for sale financial asset, net of tax | (5,456 | ) | (3,927 | ) | ||
End of period | - | (5,246 | ) | |||
Accumulated income/(loss) | ||||||
Beginning of period | 49,225 | (43,375 | ) | |||
Profit/(Loss) attributable to shareholders | 44,983 | (2,074 | ) | |||
End of period | 94,208 | (45,449 | ) | |||
Non-controlling interest | ||||||
Beginning of period | 11,857 | (3,713 | ) | |||
Non-controlling interest - portion of profit for the period | 5,591 | 957 | ||||
End of period | 17,448 | (2,756 | ) | |||
Total shareholders' equity at March 31 | 432,915 | 265,317 | ||||
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF | |||||
TERANGA GOLD CORPORATION | |||||
STATEMENTS OF CASH FLOW | |||||
(Unaudited and in US$000's) | |||||
Three months ended | Three months ended | ||||
March 31, 2013 | March 31, 2012 | ||||
(Restated) | |||||
Cash flows related to operating activities | |||||
Profit/(loss) for the period | 50,574 | (1,038 | ) | ||
Depreciation of property, plant and equipment | 15,354 | 6,934 | |||
Depreciation of capitalized mine development costs | 4,996 | 2,103 | |||
Amortization of intangibles | 269 | 147 | |||
Amortization of borrowing costs | 350 | 107 | |||
Unwinding of discount | 24 | 23 | |||
Share based compensation | 487 | 1,755 | |||
Net change in losses on gold hedge | (39,839 | ) | 17,483 | ||
Net change in losses on oil hedge | 456 | 47 | |||
Impairment of available for sale financial asset | 962 | - | |||
Profit on disposal of property, plant and equipment | 99 | - | |||
Changes in working capital | (10,092 | ) | 8,366 | ||
Net cash provided by operating activities | 23,640 | 35,927 | |||
Cash flows related to investing activities | |||||
Increase in restricted cash | - | (348 | ) | ||
Redemption of short-term investments | - | 592 | |||
Expenditures for property, plant and equipment | (4,624 | ) | (15,491 | ) | |
Expenditures for mine development | (17,479 | ) | (15,995 | ) | |
Acquisition of intangibles | (73 | ) | (2 | ) | |
Proceeds on disposal of property, plant and equipment | 35 | - | |||
Net cash used in investing activities | (22,141 | ) | (31,244 | ) | |
Cash flows related to financing activities | |||||
Repayment of borrowings | - | (2,800 | ) | ||
Draw down from finance lease facility, net of financing cost paid | 11,146 | 2,862 | |||
Interest paid on borrowings | (1,670 | ) | (279 | ) | |
Net cash provided by (used in) financing activities | 9,476 | (217 | ) | ||
Effect of exchange rates on cash holdings in foreign currencies | 319 | (507 | ) | ||
Net increase in cash and cash equivalents held | 11,294 | 3,959 | |||
Cash and cash equivalents at the beginning of period | 39,722 | 7,470 | |||
Cash and cash equivalents at the end of period | 51,016 | 11,429 |
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