teranga gold

Toronto-listed gold miner Teranga Gold Corporation is on track to start commissioning its second mine, Wahgnion, in the third quarter of this year.

Located in south-west Burkina Faso, the mine will move into production ramp-up in the fourth quarter says Paul Chawrun, Teranga COO.

“Based on our progress to date, we expect Wahgnion will produce between 30 000 and 40 000 oz of gold in 2019, which exceeds the original estimate of 18 000 oz released in the October 2018 technical report.”

During the first five years of its mine life, Wahgnion is expected to increase Teranga’s current consolidated annual gold production by approximately 50%, or more than 130 000 oz.

“2019 is off to a strong start for Teranga across our portfolio, with record operational results from Sabodala, good construction progress at Wahgnion and an initial resource at Golden Hill,” says Richard Young, Teranga President and CEO.

“Our 10-year-old cornerstone asset, Sabodala, set a record for quarterly production in the first quarter. With over 12 years of mine life remaining, Sabodala is delivering solid free cash flow to support our growth initiatives.”

“During this first quarter, we continued to make meaningful progress towards achieving our vision of building a multi-asset, mid-tier gold producer in West Africa,” adds Young.

“By year end, we will have two gold mines in operation capable of producing between 300 000 and 350 000 oz in 2020 and generating strong free cash flows.”

“Golden Hill also continues to show that it has the potential to be our third gold mine. In less than two years, we have advanced it from an early-stage exploration project to an initial mineral resource estimate. Going forward, our priority is to increase the mineral resources estimate and advance Golden Hill into the feasibility stage of development.”

First quarter highlights (Q1, 2019 vs Q1, 2018)

  • Record quarterly gold production of 71 946 oz, an increase of 12%
  • Per ounce cost metrics decreased by up to 9% and were below the respective full-year guidance ranges, including all-in sustaining costs (excluding non-cash inventory movements and amortized advanced royalty costs) of US$806/oz
  • Company is on track to meet full year production and cost guidance
  • Benefitting from an advance gold prepayment of $11.8 million, operating cash flow before changes in working capital excluding inventories rose 6% to $26.3 million and operating cash flow increased by 261% to $49.6 million
  • EBITDA increased by 37% to $36.9 million
  • Net income attributable to shareholders decreased to a loss of $2.7 million, or $0.03 per share while adjusted net income attributable to shareholders was $2.2 million, or $0.2 per share. Net income and adjusted net income was negatively impacted by a pending tax assessment for $10 million
  • Issued initial mineral resources estimate for Golden Hill, Teranga’s most advanced exploration project