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Teranga Gold Corporation: ASX Fourth Quarter Report

TORONTO, ONTARIO -- (Marketwire) -- 01/30/13 -- Teranga Gold Corporation (TSX:TGZ)(ASX:TGZ) -

KEY POINTS


--  Record production and cash costs for 2012 
--  Fourth quarter 2012 production totalled 71,804 ounces of gold, a Company
    record, and a 96 percent increase over the same quarter in 2011 
--  Fourth quarter 2012 total cash costs of $623 per ounce were 23 percent
    lower than the same quarter in 2011 
--  Gold production for 2012 was up 63 percent totalling 214,310 ounces at
    total cash costs per ounce sold of $627, down 20 percent year over year
    - production and cash costs were in line with guidance for the year 
--  Production for 2013 is expected in the range of 190,000 to 210,000
    ounces of gold at total cash costs of between $650 and $700 per ounce(1)
--  As at January 29, 2013 the balance of forward sales contracts
    outstanding totalled 38,105 ounces, a reduction of 136,395 ounces from
    December 31, 2011 
--  The Company's cash balance at December 31, 2012 increased to $45.0
    million, including $5.3 million in bullion receivables 
--  Gora technical study confirms reserves of 285,000 ounces to be mined
    over 4 years at total cash costs of $675 to $700 per ounce 
--  Measured and Indicated resources increased 34 percent to 2.9 million
    ounces, while gold reserves decreased marginally to 1.6 million ounces 

OPERATIONAL OVERVIEW

Sabodala Gold Operation

(All amounts are in US$ unless otherwise stated)


--  Gold production for the three months ended December 31, 2012 was 71,804
    ounces, 96 percent higher than the same prior year period due to the
    processing of higher grade ore combined with higher mill throughput as a
    result of the completion of the mill expansion. 
--  Gold production for the year was within guidance, of 210,000 - 225,000
    ounces, at 214,310 ounces, 63 percent higher than the twelve months
    ended December 31, 2011 due to higher grade ore processed. 
--  Gold sold for the three months ended December 31, 2012 totalled 71,604
    ounces compared to 34,665 ounces sold in the same prior year period, an
    increase of 107 percent. Ounces sold during the fourth quarter of 2012
    were in line with production for the period. At December 31, 2012, gold
    in circuit and gold bullion inventory amounted to 13,221 ounces. 
--  Total cash costs for the three months ended December 31, 2012 were $623
    per ounce sold compared to $809 per ounce in the same prior year period,
    a reduction of 23 percent. The decrease in total cash costs per ounce
    was mainly due to higher gold ounces sold, partially offset by higher
    mining and processing costs. 
--  Total cash costs for 2012 were within guidance, of $600 - $650 per
    ounce, at $627 per ounce sold compared to $782 per ounce for the twelve
    months ended December 31, 2011, a reduction of 20 percent. The decrease
    in cash costs was mainly due to higher ounces produced. 
--  Total tonnes mined for the three months ended December 31, 2012 were 13
    percent higher compared to the same prior year period due to increased
    fleet capacity and improved productivity in the mining operation.
    Drilling and loading availabilities in 2012 benefited from the addition
    of three new blast hole drill rigs, four new haul trucks, and the
    implementation of better maintenance practices, resulting in improved
    loading and hauling efficiencies from improved availability of the
    mobile equipment fleet. 
--  Ore tonnes mined were lower than plan but at better grades resulting in
    similar ounces mined compared to plan. In calculating 2011 year end
    reserves, Management lowered the capping level on high grade
    intersections, which resulted in an underestimation of grade in this
    high grade area of the ore body. In addition, better dilution control in
    the pit led to better grades mined than plan. 
--  Ore tonnes milled for the three months ended December 31, 2012 were 20
    percent higher than the same prior year period mainly due to an increase
    in mill capacity as a result of the completion of the mill expansion.
    Mill throughput for the fourth quarter was lower than plan due to the
    ramp up and optimization of the new crushing circuit which was part of
    the mill expansion, as well as higher than expected wear rates in
    transfer chutes and feeders in the crushing circuit. The majority of
    these issues were rectified during a comprehensive planned shutdown in
    January 2013. 
--  During the fourth quarter 2012, the average realized gold price was
    $1,296 per ounce with 33,606 ounces delivered into gold hedge contracts
    at an average price of $833 per ounce and 37,998 ounces sold at an
    average spot price of $1,705 per ounce. During the same prior year
    period, the average realized gold price was $1,482 per ounce with 7,385
    ounces delivered into gold hedge contracts at $846 per ounce and 27,280
    ounces sold into the spot market at an average spot price of $1,654 per
    ounce. 
--  The gold forward sales contracts declined during the fourth quarter 2012
    to 59,789 ounces at December 31, 2012. Forward sales contracts have
    declined by an additional 21,684 ounces to 38,105 ounces at January 29,
    2013 and are scheduled to be fully extinguished by August 2013. In
    total, forward sales contracts outstanding have declined by 136,395
    ounces since December 31, 2011. 
--  Gold production for 2013 is expected to total between 190,000 to 210,000
    ounces.(2) See "2013 Guidance" table included in this Report. 
--  Total mine site cash production costs for 2013 are expected to rise by
    between $30 and $35 million compared to 2012 due to an increase in
    mining (up 24 percent) and processing (up 37 percent) rates. However,
    reported total cash costs for 2013 are expected to rise marginally to
    between $650 and $700 per ounce due to the adoption of a new accounting
    standard for deferred stripping (IFRIC 20) that results in approximately
    $75 to $100 per ounce being capitalized to deferred stripping net of
    inventory movement costs.(3) 
--  During the fourth quarter 2012, the Company purchased additional mining
    equipment to increase the mining rate in the Sabodala pit in the amount
    of $13.4 million, of which approximately $6 million was spent in 2012.
    The equipment is intended to be financed by a new equipment lease
    facility with Macquarie Bank Limited ("Macquarie") which is expected to
    be finalized in the first quarter of 2013. The new facility is expected
    to provide $50 million of equipment financing and will be used to
    refinance the existing Societe Generale lease facility. 
--  In addition, the Company continues to review the merits of various debt
    facilities to provide additional flexibility to execute its growth
    strategy. Such incurrence of debt may be in the form of one or more
    borrowings of bank or other similar loans. There can, however, be no
    assurance that the Company will find the terms on such debt reasonable
    and therefore may not put a new facility in place. 

CORPORATE

Teranga Gold Corporation ("Teranga or the Company") is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

Finance

At December 31, 2012:


--  Cash and cash equivalents - $39.7 million 
--  Trade Receivables (bullion) - $5.3 million 
--  Project Finance Facility (balance outstanding) - $60.0 million 
--  Mining Fleet Lease Facility (balance outstanding) - $10.5 million 
--  Hedge Facility = as of January 29, 2013 - 38,105 oz remain to be
    delivered at an average price of $791/oz (59,789 oz at December 31,
    2012) 

Production Statistics


----------------------------------------------------------------------------
                                      Dec-12  Sep-12  Jun-12  Mar-12  Dec-11
                                     Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------------
Ore mined                    ('000t)   2,038     655   2,105   1,117   1,715
----------------------------------------------------------------------------
Waste mined                  ('000t)   5,274   6,242   5,130   6,316   4,736
----------------------------------------------------------------------------
Total mined                  ('000t)   7,312   6,897   7,235   7,433   6,451
----------------------------------------------------------------------------
Grade mined                    (g/t)    2.04    1.92    2.25    1.38    1.50
----------------------------------------------------------------------------
Ounces mined                    (oz) 133,549  40,516 152,603  49,517  82,710
----------------------------------------------------------------------------
Strip ratio                waste/ore     2.6     9.5     2.4     5.7     2.8
----------------------------------------------------------------------------
Ore processed                ('000t)     725     650     491     573     604
----------------------------------------------------------------------------
Head grade                     (g/t)    3.40    3.11    3.22    2.52    2.10
----------------------------------------------------------------------------
Gold recovery                    (%)    90.7    84.6    89.6    90.0    89.8
----------------------------------------------------------------------------
Gold produced(1)                (oz)  71,804  55,107  45,495  41,904  36,695
----------------------------------------------------------------------------
Gold sold                       (oz)  71,604  62,439  38,503  35,268  34,665
----------------------------------------------------------------------------
Average price received          $/oz   1,296   1,290   1,608   1,712   1,482
----------------------------------------------------------------------------
Total cash costs per                                                        
 ounce sold (including                                                      
 royalties)(2)                  $/oz     623     594     645     673     809
----------------------------------------------------------------------------

Notes:


(1)  Gold produced includes change in gold in circuit inventory plus gold   
     recovered during the period.                                           
(2)  Total cash costs per ounce sold for 2011 were restated to comply with  
     the Company's new accounting policy for measuring and recording ore    
     stockpile costs, as well as reporting total cash costs after inventory 
     movement, in line with the Company's accounting policies and industry  
     standards.                                                             

EXPLORATION AND RESERVE UPDATE

Technical Services

A technical services team has been established at the corporate office in Toronto to focus on optimizing strategic growth initiatives and to provide technical support to our operations.

Technical support for the growth initiatives includes resource modelling for existing mine licence (ML) prospects including the Sabodala pit, strategic optimization of the regional land package, engineering support for potential project development, evaluating merger and acquisition (M&A) targets and corporate reporting for resources and reserves.

Technical support for our existing operations includes engineering and geology for the development of the Gora project, continual improvement initiatives at our operations and technical support for site specific projects.

Gora Development

At the Gora deposit, a combination of receipt of final assays, re-modelling and application of geo-statistics resulted in an increase in the Measured and Indicated Resource to 374,000 ounces of gold at 5.0 gpt. Technical and environmental work continued during 2012 and has progressed to initiate the permitting process in the first quarter of 2013.

The Gora site is planned to be operated as a satellite to the Sabodala mine with limited local infrastructure and development. Ore will be hauled to the Sabodala processing plant by a dedicated fleet of trucks and processed on a priority basis, displacing Sabodala feed as required.

Mining by open pit methods will produce approximately 500,000 tonnes of ore per year for four years, averaging a feed grade of 4.22 gpt gold, containing 285,000 ounces of gold.(4) Metallurgical testing has revealed that Gora ore has similar properties to the Sabodala ore body and therefore blending will not impact overall gold recovery.

A series of environmental and pre-development technical studies as well as local consultation have been undertaken to support the development proposal.

The project capital cost is estimated to be $48 million. The primary cost is the purchase of the mobile equipment fleet, which will be utilized as part of Teranga's long term mine plan upon completion of Gora. Additional costs include installation of the required infrastructure and project execution costs.

Total cash costs for Gora are estimated to average $675 to $700 per ounce sold on a life-of-mine basis. The Project economics based on the proposed operating scenario and a discount rate of 5 percent return an after tax net present value (NPV 5 percent) of $105 million and an internal rate return (IRR) of 69 percent.(5)

Mine License (ML) Exploration

The Sabodala Mine License covers 33 km2 and, in addition to the mine related infrastructure, contains the Sabodala, Masato, Niakafiri, Niakafiri West, Soukhoto and Dinkokhono deposits.

Total reserves as of December 31, 2012 on the ML were 33.13 million tonnes at 1.22 gpt totalling 1.30 million ounces, a decrease of 235,000 ounces or 15 percent. Since the updated reserves reflect drill assay results through August 2012, all drill results after August 20, 2012 will be included in an updated reserve in 2013.

As at August 20, 2012, Measured and Indicated Resources at Sabodala increased by approximately 0.7 million ounces to 2.1 million ounces, a 43 percent increase over Measured and Indicated Resources as at December 31, 2011, net of production.

Drilling in 2012 successfully extended the Masato mineralized limits to the south and down dip onto Teranga's ML defining approximately 700,000 ounces Inferred Resource.

The overall objective of the ML exploration program is to extend the life of mine, at a production rate of approximately 200,000 ounces per year at grades between 1.5 and 2.5 gpt, to the year 2020 to 2025, which would result in a 10 to 15 year mine life since the IPO in 2010.(6) While we had targeted to reach this reserve level by mid-2013, based on our exploration results in 2012 and the plan to drill more of our high potential areas on the ML in 2013, it will likely require at least another year to extend the mine life to at least 2020 and beyond at current production rates.

Sabodala - Main Flat Extension (MFE) / Lower Flat Zone (LFZ)

The Sabodala Pit optimization work completed in the first quarter of 2012, based on the high grade drill results from the fourth quarter of 2011, defined a projected pit shell that included the LFZ at depth. More than 75,000 metres of drilling was completed at Sabodala in 2012 to define this section of the ore body.

Drilling targeted the MFE immediately adjacent to the current ultimate pit, as well as the LFZ located below and to the north of the MFE, confirming the continuation of these zones. The targeted zones are positioned between 250 metres and 450 metres below the surface. The MFE and LFZ remain open down plunge and to the northwest.

The MFE down dip to the SW and SE of the existing open pit operations at Sabodala was also successfully drilled in 2012. These targets range from 60 metres to 250 metres below the surface and are open down dip.

Conversion of a large portion of these resources to reserves will likely require higher gold prices as the orientation of both the MFE and LFZ appear to be more steeply dipping than originally anticipated, negatively affecting the economics of an enlarged pit shell.

Drilling is currently underway from within the pit to test the MFE as it dips to the north and in more shallow areas along the perimeter to the west and east of the current pit. If the mineralization in the extended areas of the known MFE is not sufficient to support the economics of a larger pit, a separate underground analysis will be undertaken in 2013 on the LFZ where a majority of the increase in Measured and Indicated Resources were defined in the September 1, 2012 update.

Waste dump condemnation drilling to the SE of the Sabodala open pit encountered a zone of mineralization within the general trend of the NW Shear projected to the SE near to the base of Sambaya Hill. Drilling late in the year targeted this area and results are pending.

The 2013 drill program for Sabodala is expected to be completed in the first quarter of 2013. At that time Management will assess the economics of both a larger open pit as well as evaluate an underground development option in the LFZ.

Niakafiri

Expectations are to increase reserves and resources in 2013 at Niakafiri. A drill program is planned at the Niakafiri deposit immediately below the current open pit reserve to further delineate mineralization at depth, where the deposit remains open at 200 metres. In addition, drilling will target the area immediately to the north where the remainder of the resource has been defined, and pending positive results, potentially expand the Niakafiri reserves estimate to include this area. Drilling is planned to begin in the second quarter 2013 pending community discussions.

Niakafiri West and Soukhoto

Gold mineralization at Soukhoto and Niakafiri West is hosted in multiple shallow dipping zones with more steeply dipping high-grade zones located in crossing structures. The Soukhoto and Niakafiri West targets are positioned from 30 metres to 200 metres below surface. Niakafiri West remains open to depth.

Masato

The Masato deposit outcrops on the neighbouring Oromin Joint Venture Group ("OJVG") property to the east of the ML approximately 2 km from the Sabodala mill. The OJVG has defined an open pit mineable reserve at Masato. The deposit has a strike length of over 2 km. Gold is hosted in a shear zone that strikes north and sits immediately east of the Teranga/OJVG property boundary in the main deposit area.

Dinkokhono

The Dinkokhono deposit is part of the Niakafiri Shear system located about 1 km north of the Niakafiri deposit. Some of the mineralization defined by earlier drilling is included in the Inferred Resource reported from Niakafiri. Drilling in 2012 was intended to infill previous drilling and test for crossing structures, however, this was deferred to 2013.

Mamasato

Drilling in 2012 established the continuation of the Mamasato deposit located directly across the boundary on the OJVG property onto the Sabodala ML. Gold mineralization is contained in veins with variable strike orientations. Additional drilling is planned to delineate this potential resource in 2013.

In total, we drilled 104,400 metres at a cost of $26 million on the ML in 2012. The original ML budget was $20 million for 2012 but was expanded during the year to follow up on positive drill results at Sabodala.

Regional Exploration

We continue to methodically explore our large Regional Land Package (RLP) and are in the process of systematically building a pipeline of prospects. Unlike other West African nations, Senegal is a relative newcomer to gold mining and exploration and we look forward to discovering world-class deposits and establishing Senegal as a regional mining leader.

We currently have 10 exploration permits encompassing approximately 1,200 km2 of land surrounding the Sabodala ML (33 km2 exploitation permit). Over the past 24 months, with the initiation of a regional exploration program on this significant land package, a tremendous amount of exploration data has been systematically collected and interpreted to prudently implement follow-up programs. Targets are therefore in various stages of advancement and are then prioritized for follow-up work and drilling. Early geophysical and geochemical analysis of these areas has led to the demarcation of at least 40 anomalies, targets and prospects and we expect that several of these areas will ultimately be developed into mineable deposits. Through 2012 we were able to identify some key targets that though early stage, display significant potential. However, due to the sheer size of the land position, the process of advancing an anomaly through to a deposit takes time as it is imperative that work is done systematically.

During 2012 we completed 62,500 metres of RAB drilling, 42,300 metres of RC and 2,400 metres of diamond drilling on 25 of our anomalies and targets, at a cost of $19.1 million. Highlights from the 2012 drilling program are:


--  The discovery of a new prospect at Tourokhoto-Marougou with a minimum
    strike length of 1,200 metres. 
--  Identification of significant mineralization from RAB drilling at
    Saiensoutou extending for at least 1,400 metres in strike length. 

A 4,500 metre program of infill RC drilling commenced at Marougou in the fourth quarter of which 2,900 metres were completed at the end of the year. The program was designed to infill drill on 200 metres spaced lines to establish the continuity of the mineralization discovered earlier in the year. The remainder of the program will be completed in the first quarter of 2013.

On the non-drilling front significant developments on key targets include:


--  Receipt of assays for detailed termite mound sampling over the Soreto
    and Diabougou prospects. This work highlighted that the artisanal mine
    workings in the area which extend for over one kilometre in strike
    length are part of a 4 km long gold anomaly coincident with a NE
    trending shear system. 
--  Receipt of multi-element geochemistry for detailed termite mound
    sampling over the Nienyenko prospect. This work highlighted an extensive
    alteration-related multi-element footprint centred on the known gold
    anomalies and mineralization previously identified in trenches, thus
    significantly enlarging the potential size of the prospect. 
--  First pass data collection was completed at Garaboureya, consisting of
    termite mound geochemistry, mapping, rock chip sampling and acquisition
    of high-resolution aeromagnetics. This data resulted in the delineation
    of a significant gold anomaly coincident with a permissive structural
    setting. Interpretation work is continuing to define the drilling
    testing program on this target for 2013. 

The program for 2013 has been budgeted and will focus on fast-tracking work on our current priority targets at Nienyenko, Soreto, Diabougou, Tourokhoto-Marougou and Saiensoutou. Other targets will be followed up as work progresses on the RLP. A minimum budget of $20 million is allocated for the combined exploration programs on the RLP and ML. Additional funding is available and will be allocated on a priority basis for prospects with clear potential for reserves definition.

RESERVES AND RESOURCES

The proven and probable mineral reserves for the Sabodala and Niakafiri deposits were based on the Measured and Indicated resources that fall within the designed pits. The bases for the reserves are consistent with the Canadian Securities Administrators National Instrument 43-101 ("NI 43-101") report. The design for the open pit limits, related phasing and long term planning for the Sabodala open pit were updated from assay and drilling results as at August 20, 2012. Updated resource block models were completed for Sabodala and Gora deposits.

The updated Sabodala pit design is larger than the 2011 design. The new design uses similar geotechnical parameters as in past designs and uses a slightly higher gold price for the Lerchs-Grossman (LG) pit optimization routine to reflect the three year trailing average gold price. Mining phases were designed similarly to the previous designs, where the mine sequencing is based on accessing the high grade MFE through successive phases to balance waste stripping and optimize cash flow.

The updated Gora pit design and reserve estimate was based on the LG pit optimizer and geotechnical pit wall assumptions similar to the Sabodala pit, however, a higher cut-off was used to reflect the ore haul to Sabodala. Dilution and ore recovery estimates were based on an estimated minimum mine width of 4 metres with separability optimised for 5 metre benches in ore and 10 metres benches in waste.

The Niakafiri pit design remains unchanged from 2011.

The total proven and probable mineral reserves at December 3, 2012 are set forth in Table 2 below.

Table 1: Resources Estimate


----------------------------------------------------------------------------
                                                                Measured and
                          Measured            Indicated            Indicated
             ---------------------------------------------------------------
              Tonnes  Grade     Au Tonnes  Grade     Au Tonnes  Grade     Au
                (Mt)  (g/t)  (Moz)   (Mt)  (g/t)  (Moz)   (Mt)  (g/t)  (Moz)
----------------------------------------------------------------------------
Sabodala       28.06   1.24   1.12  31.47   0.96   0.97  59.53   1.09   2.09
Sutuba                               0.50   1.27   0.02   0.50   1.27   0.02
Niakafiri       0.30   1.74   0.02  10.50   1.10   0.37  10.70   1.12   0.39
Gora            0.49   5.27   0.08   1.84   4.93   0.29   2.32   5.00   0.37
----------------------------------------------------------------------------
Total          28.85   1.32   1.22  44.31   1.16   1.65  73.05   1.22   2.87
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Area                                                     Inferred           
                                              ------------------------------
                                                  Tonnes     Grade        Au
                                                    (Mt)       g/t       Moz
----------------------------------------------------------------------------
Sabodala                                           12.36      0.87      0.35
Niakafiri                                           7.20      0.88      0.21
Niakafiri West                                      7.10      0.82      0.19
Soukhoto                                            0.60      1.32      0.02
Gora                                                0.21      3.38      0.02
Diadiako                                            2.90      1.27      0.12
Majiva                                              2.60      0.64      0.05
Masato                                             19.18      1.15      0.71
----------------------------------------------------------------------------
Total                                              52.15      1.00      1.67
----------------------------------------------------------------------------

Table 2: Reserves Estimate


----------------------------------------------------------------------------
Deposit                     Proven             Probable  Proven and Probable
             ---------------------------------------------------------------
              Tonnes  Grade     Au Tonnes  Grade     Au Tonnes  Grade     Au
                (Mt)  (g/t)  (Moz)   (Mt)  (g/t)  (Moz)   (Mt)  (g/t)  (Moz)
----------------------------------------------------------------------------
Sabodala        6.55    1.5  0.315  11.07   1.24  0.443  17.62   1.34  0.758
Sutuba                               0.37   1.40  0.017   0.37   1.40  0.017
Niakafiri       0.23   1.69  0.013   7.58   1.12  0.274   7.81   1.14  0.287
Gora            0.57   4.07  0.074   1.53   4.27   0.21    2.1   4.22  0.284
Stockpiles      7.32   1.02   0.24                        7.32   1.02   0.24
----------------------------------------------------------------------------
Total          14.67   1.36  0.642  20.56   1.43  0.944  35.23   1.40  1.586
----------------------------------------------------------------------------
Notes:                                                                      
1)  CIM definitions were used for Mineral Reserves.                         
2)  Mineral Reserve cut off grades for Niakafiri are 0.35 g/t Au for oxide  
    and 0.50 g/t Au for fresh.                                              
3)  Mineral Reserve cut off grade for Sabodala, Sutuba and Gora is 0.50 g/t 
    Au.                                                                     
4)  Gold price of USD 1,500 per ounce used.                                 
5)  Proven include stockpiles which total 7.32 Mt at 1.02 g/t Au for 0.24   
    Mozs.                                                                   
6)  Sum of individual amounts may not equal the total due to rounding.      

Julia Martin, P.Eng., MAusIMM (CP), with AMC Mining Consultants (Canada) Ltd., who 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 reviewed and accepts responsibility for the reserve estimate disclosed above. Ms Martin has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report.

The technical information contained in this Quarterly 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. She is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Ms.Nakai-Lajoie is a full-time employee of Teranga and not considered to be independent of Teranga.

The technical information contained in this Quarterly Report relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientist. He is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "qualified person" as defined in NI 43-101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Mr. Pawlitschek is a full-time employee of Teranga and not considered to be independent of Teranga.

2013 GUIDANCE


                                                    Year ending December 31,
                                                ----------------------------
                                                      2012              2013
                                                   Actuals    Guidance Range
Operating results                                                           
  Ore mined                              ('000t)     5,915       4,000-4,500
  Waste mined                            ('000t)    22,962     31,000-32,000
  Total mined                            ('000t)    28,877     35,000-36,500
  Grade mined                              (g/t)      1.98         1.40-1.60
  Strip ratio                          waste/ore       3.9         7.00-7.75
  Ore milled                             ('000t)     2,439       3,300-3,400
  Head grade                               (g/t)      3.08         2.00-2.15
  Recovery rate                                %      88.7         89.0-91.0
  Gold produced                             (oz)   214,310   190,000-210,000
  Gold sold                                 (oz)   207,814   190,000-210,000
  Total cash cost (incl. royalties)                                         
   (1)(2)                              $/oz sold       627           650-700
                                                                            
  Mining (cost/t mined)                               2.71         2.50-2.70
  Milling (cost/t milled)                            20.39       19.00-20.00
  G&A (cost/t milled)                                 6.16         5.00-6.00
                                                                            
Capital Expenditures                                                        
  Mine site                           $ millions                 20.00-25.00
  Capitalized reserve development     $ millions                  5.00-10.00
  Gora development costs              $ millions                 45.00-50.00
    Mobile equipment                  $ millions                 30.00-35.00
    Site development                  $ millions                 15.00-20.00
  Capitalized deferred stripping(2)   $ millions                 35.00-40.00
                                                                            
Exploration (expensed)                $ millions                 10.00-15.00
Administration expense                $ millions                 15.00-20.00
Hedge deliveries                            (oz)                      59,789

Note (1) Total cash cost per ounce is a non-IFRS financial measure with no standard meaning under IFRS

Note (2) For 2013, reflects impact of new IFRS standard for deferred stripping


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                                      
                                                                            
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: generalmailbox@terangagold.com                                           
W: www.terangagold.com                                                      
                                                                            
Senegal Office                                                              
2K Plaza                                                                    
Suite B4, 1er Etage                                                         
sis Route du Meridien President                                             
Dakar Almadies                                                              
T: +221 338 693 181                                                         
F: +221 338 603 683                                                         
                                                                            
Auditor                                                                     
Deloitte & Touche 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 code: TGZ                                       
Australian Securities Exchange, ASX code: TGZ                               

Issued Capital


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Issued shares                                                    245,618,000
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Stock options                                                     17,139,167
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Stock Options - Exercise Profile


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Exercise Price (C$)                                                  Options
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$3.00                                                             17,139,167
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ABOUT TERANGA

Teranga Gold Corporation is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX:TGZ) and Australian Securities Exchange (ASX:TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

Teranga was created to acquire the Sabodala gold mine and a large regional exploration land package, located in Senegal, West Africa, within the West African Birimian geological belt. Management believes the mine operation, together with the Company's prospective 1,200 km2 land package, provides the basis for growth in reserves, production, earnings and cash flow as new discoveries are made and processed through the Company's existing mill. The Company is focused on growth - growth in reserves, growth in production - while building a strong balance sheet to facilitate its actions.

Forward-Looking Statements

This report 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 all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Teranga cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, the expected use of proceeds of the offering and the expected closing date of the offering. The risks and uncertainties that may affect forward-looking statements include, among others: economic market conditions; and other risks detailed from time to time in Teranga's filings with Canadian provincial securities regulators. 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 report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities.

Competent Persons Statement

Julia Martin, P.Eng., MAusIMM (CP), with AMC Mining Consultants (Canada) Ltd., who 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 reviewed and accepts responsibility for the reserve estimate disclosed above. Ms Martin has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report.

The technical information contained in this Quarterly 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. She is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Ms.Nakai-Lajoie is a full-time employee of Teranga and not considered to be independent of Teranga.

The technical information contained in this Quarterly Report relating to the regional exploration is based on information compiled by Mr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientist. He is qualified as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "qualified person" as defined in NI 43-101. Mr. Pawlitschek has consented to the inclusion of this information in the form and context in which it appears in this Quarterly Report. Mr. Pawlitschek is a full-time employee of Teranga and not considered to be independent of Teranga.


(1)  This production target is based on existing proven and probable        
     reserves only.                                                         
(2)  This production target is based on existing proven and probable        
     reserves only.                                                         
(3)  Total cash costs per ounce is a common financial performance measure in
     the gold mining industry but has no standard meaning under IFRS. Total 
     cash costs per ounce includes royalties paid to the local government   
     and reflects inventory movements, in line with the Company's accounting
     policies and industry standards.                                       
(4)  This production target is based on existing proven and probable        
     reserves only.                                                         
(5)  Gold price assumed is $1500 per ounce.                                 
(6)  This exploration target is not a Mineral Resource. The potential       
     quality and grade is conceptual in nature and there has been           
     insufficient exploration to define a Mineral Resource. It is uncertain 
     if further exploration will result in the determination of a Mineral   
     Resource.                                                              

Contacts:
Teranga Gold Corporation
Kathy Sipos
Vice-President of Investor & Stakeholder Relations
+1 416-594-0000
ksipos@terangagold.com
www.terangagold.com

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