121 Conference London UK TSX:TGZ November 27-28, 2017 - - PowerPoint PPT Presentation

121 Conference – London UK

November 27-28, 2017

TSX:TGZ

Forward-Looking Statements

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This presentation 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 Gold Corporation’s (“Teranga” or the “Company”) 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 “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “forecasts”, “focused on”, “anticipate” or “does not anticipate”, “believe”, “intend”, “ability to”, “intended to”, “objective to” and similar expressions

• r statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are “likely” to be taken, occur or be achieved, have been used to identify such forward

looking information. Specific forward-looking statements in this presentation include the commencement of expected drill programs, net present value, anticipated future cash flows, anticipated construction readiness activities for the Company’s Banfora gold project in Burkina Faso as well as the anticipated completion of construction of the Banfora project - including the first gold pour, the anticipated discovery of reserves at the Banfora project, and Teranga’s estimated full year financial and operating totals, as well as anticipated 2017 operating results. Although the forward-looking information contained in this presentation 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 information. 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 reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, 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 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 29, 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. This presentation is as of November 27, 2017. All references to Teranga include its subsidiaries unless the context requires otherwise. This presentation contains references to Teranga using the words “we”, “us”, “our” and similar words and the reader is referred to using the words “you”, “your” and similar words. All dollar amounts stated are denominated in U.S. dollars unless specified otherwise.

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Deep Value: A Re-Rating Opportunity

(C$)

Gold Price per Ounce Assumption Cash balance as at September 30, 2017 Banfora Project NPV5% based on 2P(1) Sabodala NPV5% based on 2P(2)

$5.38 $1.44 $0.69 $1,300

$2.65

TGZ Current Share Price

(closing price Nov 23, 2017)

$7.51

NPV* Per Share

(based on cash & 2P reserves(1)(2))

Excludes potential value from Banfora infill drill program and Golden Hill

*Refer to Non-IFRS Performance Measures on slide 20 Refer to Endnotes (1) and (2) on slide 21

Exploration

• Senegal
• Burkina Faso
• Côte d’Ivoire

Development

• Completed Banfora project feasibility study
• Obtained board approval to proceed
• Announced construction and funding plans

Production

• Targeting upper end of 2017 production guidance range of 205,000 – 225,000 ounces(3)
• Generating free cash flow from Sabodala*

Checking Off the Boxes

Refer to Endnote (3) on slide 21

 

*Refer to Non-IFRS Performance Measures on slide 20 4

Golden Hill

Burkina Faso

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Golden Hill: High-Grade, Big Potential

Golden Hill (Houndé Belt – Burkina Faso) Situated in the Heart of Houndé Belt in Burkina Faso  One of the most prospective gold belts in the world today  Golden Hill is along trend with the Mana project to the north, next to Yaramoko and adjacent to the Houndé Project; to the south is a JV where +2 million ounces have already been discovered First Four Prospects Within 5 km Radius of Central Point

• In just one year, Golden Hill has produced a series of high-

grade, near-surface drill results at the first four prospects: Ma, Nahiri, Peksou, and Jackhammer Hill

• Core drilling results at Jackhammer Hill included 110 grams

per tonne of gold over 14 metres

• The close proximity of these targets and prospects lends

itself to a central mill/multi-deposit operation similar to Sabodala and Banfora

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Ma Prospect – Drill Plan

For full details, please visit www.terangagold.com

Ma Prospect  2.3 kilometre long mineralized system  Comprises multiple mineralized zones within a broad regional structural complex  Ma prospect remains open to the east and the west and to depth Recent Drilling Highlights at Ma  High-grade results confirm continuity of grade and width from surface to depths now approaching 125 metres  15 m @ 4.22 g/t Au including 7 m @ 7.89 g/t Au including 2 m @ 17.6 g/t Au (GHDD-067)  16 m @ 3.20 g/t Au including 1 m @ 15.7 g/t Au, and 3 m @ 6.14 g/t Au (GHDD-078)  6 m @ 5.79 g/t Au and 17 m @ 3.45 g/t Au including 6 m @ 6.32 g/t Au (GHDD-080)

Ma Prospect: The Most Advanced of Four Prospects at Golden Hill

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Ma Prospect – Representative Drill Section

For full details, please visit www.terangagold.com

Ma Prospect – Representative Drill Section

Rapidly Progressing Towards an Initial Resource for Golden Hill in 2018

Banfora Project

Burkina Faso, West Africa

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Banfora Project: A Strategic Pillar of Teranga’s Growth Plan

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Infill Drill Program Scheduled for November Completion

• 75,000-metre infill drill program is targeting inferred

resources located near to the current reserve pits

• Objective is to increase drill hole density within the

existing inferred resources Aiming for a Conversion Rate of 25%-50% of Inferred

• Given demonstrated continuity of mineralization of the

inferred resources, 25%-50% of inferred resources is targeted to be converted to indicated Near-Term Upside Expected to Improve Economics

• Reserves update expected in H1 2018

Target Area Along Strike Target Area at Depth $1,450 Resource Pit Limit $1,200 Reserves Pit Limit

Kafina West

Raul

Hillside 11

Drill-Ready Targets Underlie Multi-Year Regional Exploration Program at Banfora Project

Samavogo Nogbele Fourkoura Stinger

Bagu Sud Korindougou Ouahiri

Sud

Prospective Banfora Land Package

• ~12 targets identified
• Targets are within trucking distance of proposed plant site

Targets Have Potential to Become Resources

• Kafina West: 1,000 metre NE-trending soil and auger anomaly.

Drill results of 8 m @ 2.2 g/t Au and 11 m @ 3.2 g/t Au

• Konatvogo: 2,000-metre NW-trending soil and auger anomaly

between the Fourkoura and Nogbele deposits. Up to 21.6 g/t Au from altered shear-hosted quartz vein outcrops

• Bassongoro: 1,500-metre NNE-trending soil and auger

anomaly (up to 15g/t Au). Intersection of regional Nianka and Fourkoura structures undrilled

Raul

Proposed Plant Site

Kondandougoug Konatvogo Bazogo Bassongoro Samavogo North

Muddhi Petit Colline

Reserve Deposits Exploration Targets

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Sabodala Banfora ~$100M annual free cash flow*(11)

Banfora Expected to Significantly Increase Production and Improve Cash Flow

12 *Refer to Non-IFRS Performance Measures on slide 20 Refer to Endnotes (3), (4), (5), (7) and (11) on slide 21

Teranga Consolidated Production Profile (koz)(3),(4),(7)

350Koz

~$70M annual free cash flow*(5)

2020 – 2022 Sabodala + Banfora ~350Koz annual production Opportunities to improve reserves, production and free cash flow through resource conversion & discoveries

Sabodala

Senegal, West Africa

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14 Exploration Prospects Mineral Resources Masato Style Bulk Tonnage Gold Trend Golouma Style High- Grade Gold Trend Mining Concession Exploration Permits Previous Mine License

Sabodala Mill

Sabodala Mine License & Regional Land Package (Senegal) 2.7 Million Ounces in Proven & Probable Reserves

• 4.4 million ounces in measured and indicated resources

(inclusive of proven and probable reserves) at an average grade of 1.59 g/t(9) Mine License Reserve Development

• Focused on resource definition and converting resources

at Niakafiri

• Continued delineation of Goumbati West

Regional Land Package

• Property-wide bulk leach extractable gold (BLEG)

sampling program completed to identify new exploration targets

Large Land Package in Mining-Friendly Senegal

Refer to Endnote (9) on slide 21

Mali

Niakafiri Goumbati West

(8)

Proven and Probable Reserves(2) (Moz)

Replacing Reserves & Increasing Production and Cash Flow

1.7 1.6 2.8 2.6 2.6 2.7 2011 2012 2013 2014 2015 2017

Updated Sabodala Technical Report: Annual Average Production of 176Koz at AISC* of Less Than $900/oz

Maki Medina

15 *Refer to Non-IFRS Performance Measures on slide 20 Refer to Endnote (2) on slide 21

($40) ($20) $0 $20 $40 $60 $80

2018 2019 2020 2021 2022

Cash Flow Before Taxes and Other ($1,250/oz)

June 2017 43-101 Dec 2015 43-101

• 50,000

100,000 150,000 200,000 250,000

2018 2019 2020 2021 2022

Production (oz)

June 2017 43-101 Dec 2015 43-101

Prudent Approach to Capital Allocation Drives Solid Financial Position

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$75-80 Million

Expected cash balance December 31, 2017

+$90 Million

Estimated cash flow from Sabodala 2018-2019

$150 Million

Signed mandate letter for $150M project debt facility

Solid Financial Position to Fund $232 Million Banfora Project

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Senegal Côte d’Ivoire Burkina Faso Mali Guinea Guinea- Bisseau The Gambia Ghana Benin Niger Sierra Leone Liberia Togo Sabodala Gold Mine Producing Since 2009 Reserves: 2.7Moz(8) M&I: 4.4Moz(8) Banfora Project Construction Q2 2018 Reserves: 1.2Moz (9) M&I: 1.8Moz (9) Golden Hill Exploration JV Gourma Exploration JV Guitry Dianra Mahepleu Tiassale Sangaredougou

Organic Growth Sabodala VISION

Building The Next Multi-Asset Mid-Tier West African Gold Producer

Pro Forma Consolidated Average Annual Production(3),(4),(6) 300Koz – 350Koz Banfora Project

Refer to Endnotes (3), (4), (6), (8) and (9) on slide 21

Appendix

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Non-IFRS Performance Measures

The Company has included non-IFRS measures in this document, including “total cash cost per ounce of gold sold”, “all-in sustaining costs per ounce”, “free cash flow from operations” and “EBITDA”. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Total cash costs figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is considered the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measure of other companies. The World Gold Council (“WGC”) definition of all-in sustaining costs seeks to extend the definition of total cash costs by adding corporate general and administrative costs, reclamation and remediation costs (including accretion and amortization), exploration and study costs (capital and expensed), capitalized stripping costs and sustaining capital expenditures and represents the total costs of producing gold from current operations. All-in sustaining cost excludes income tax payments, interest costs, costs related to business acquisitions and items needed to normalize earnings. Consequently, this measure is not representative of all of the Company’s cash expenditures. In addition, the calculation of all-in sustaining costs does not include depreciation expense as it does not reflect the impact of expenditures incurred in prior periods. Therefore, it is not indicative of the Company’s overall profitability. For Sabodala and Banfora, life of mine total cash costs and all-in sustaining costs figures used in this presentation are before cash/non-cash inventory movements and exclude any allocation of corporate

• verheads. Total cash costs and all-in sustaining costs figures for Sabodala further excludes amortized advanced royalty costs. Other companies may calculate this measure differently. Consolidated total cash

costs and all-in sustaining cost figures add corporate overhead costs. Other companies may calculate this measure differently. The Company calculates free cash flow from operations as net cash flow provided by operating activities less sustaining capital expenditures. The Company believes this to be a useful indicator of its ability to generate cash for growth initiatives. “Earnings before interest, taxes, depreciation and amortization” (“EBITDA”) is a non-IFRS financial measure, which excludes income tax, finance costs (before unwinding of discounts), interest income, depreciation and amortization, and non-cash impairment charges from net earnings. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working capital needs, service debt obligations, and fund capital expenditures. Net asset value (“NAV”) per share and net present value (“NPV”) per share are non-IFRS financial measures. NAV per share is equal to NPV per share and is calculated using the NPV of the life of mine (“LOM”) cash flows based on the Banfora and Sabodala 43-101 technical reports. The NPV calculation assumes a long-term gold price of $1,300 per ounce, a 5% discount rate, a 0.79 CAD/USD exchange rate, a 1.10 Euro/USD exchange rate, and current cash on hand. It includes interest, income taxes, and changes in working capital and excludes corporate administration, exploration expenditures, minority interest payments and debt repayments. The Banfora and Sabodala NPV are based on reserves only. For more information regarding these measures, please refer to the Company’s management’s discussion and analysis accessible on the Company’s website at www.terangagold.com.

Endnotes

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1. Refers to proven and probable reserves of 1.2Moz for the Banfora project as per reserve estimate as of September 7, 2017 included in the Banfora technical report dated October 20, 2017 available on the Company’s website at www.terangagold.com and SEDAR www.sedar.com. 2. Refers to proven and probable reserves of 2.7Moz for the Sabodala project as per reserve estimate as of June 30, 2017 included in the Sabodala technical report dated August 30, 2017 available on the Company’s website at www.terangagold.com and SEDAR www.sedar.com. 3. This production target is based on proven and probable reserves only from Teranga’s Sabodala Project as at June 30, 2017. For more information regarding Teranga Gold’s Mineral Reserves and Resources and related notes, please refer to the NI 43-101 compliant technical report for the Sabodala Project dated August 30, 2017 accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com. 4. This production target is based on proven and probable ore reserves only for Teranga’s Banfora Project as at September 7, 2017. For more information regarding the Banfora’s Mineral Reserves and Resources and related notes, please refer to the NI 43-101 compliant technical report for the Banfora Project dated October 20, 2017 accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com. 5. LOM assumptions include: Gold Price $1,250 per ounce Heavy Fuel Oil (HFO): Banfora – $0.59 per litre Sabodala - $0.46 per litre Light Fuel Oil (LFO): Banfora - $1.04 per litre ($0.88 per litre during construction period) Sabodala - $0.81 per litre Euro to USD Exchange Rate: $1.10 6. This Sabodala free cash flow is an estimate that is based on the updated life of mine plan and reserve estimate for the Sabodala project, as set out in the Technical Report of Teranga for the Sabodala Project, Senegal, West Africa, dated August 30, 2017 (the “Sabodala Technical Report”). See in particular Section 21 of the Sabodala Technical Report - Capital and Operating Costs. 7. See the NI 43-101 compliant technical report for the Banfora Project. This LOM production plan assumes that the Banfora Project plant construction will commence in Q1 2018. If the Banfora plant construction commences in Q2 2018 instead, the LOM production plan is expected to shift by several months. 8. Other considerations (uses) is an estimate of potential other uses of the Company’s cash during the period, including, but not limited to, discretionary exploration expenditures, financing costs and any cost overrun or minimum cash requirements that might be contained in any completed debt financing agreement. Actual amounts may total more or less than the aggregate amount specified. 9. Teranga’s Sabodala Mineral Reserves and Mineral Resources estimates as at June 30, 2017. For more information regarding Sabodala’s Mineral Reserves and Resources and related notes, please refer to the NI 43- 101 compliant technical report for the Sabodala Project dated August 30, 2017 accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com.

• 10. Teranga’s Banfora Mineral Reserves and Mineral Resources estimates as at September 7, 2017. For more information regarding Banfora’s Mineral Reserves and Resources and related notes, please refer to the NI

43-101 compliant technical report for the Banfora Project dated October 20, 2017 accessible on the Company’s website at www.terangagold.com and on SEDAR at www.sedar.com.

• 11. Free cash flow excludes Banfora financing and corporate-wide resource development and exploration expenditures. Please see table on slide 7 of the Company’s Investor & Analyst Workshop presentation dated

September 14, 2017, which was filed on www.sedar.com..

Trish Moran Head of Investor Relations 121 King Street West, Suite 2600 Toronto, ON M5H 3T9 T: +1.416.607.4507 E: investor@terangagold.com W: terangagold.com

TSX:TGZ