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Teranga Gold Corporation: December Quarter and 2013 Year End Report

TORONTO, ONTARIO -- (Marketwired) -- 02/20/14 -- Teranga Gold Corporation (TSX: TGZ)(ASX: TGZ)

For a full explanation of Financial, Operating, Exploration and Development results please see the Audited Consolidated Financial Statements and Management's Discussion & Analysis for 2013 at www.terangagold.com.


--  Loss attributable to shareholders of $4.2 million ($0.01 loss per share)
    in fourth quarter 2013 compared to a profit of $54.2 million ($0.22 per
    share) resulting from transaction costs related to the acquisition of
    the Oromin Joint Venture Group Ltd. (OJVG) and lower gross profit

--  Profit attributable to shareholders of $47.5 million ($0.18 per share)
    in 2013 compared to a profit of $92.6 million ($0.38 per share) in 2012

--  Subsequent to year end, completed acquisition of remainder of interest
    in neighbouring property - OJVG - by way of stream transaction with
    Franco-Nevada to fund the completion of the acquisition and to retire
    $30 million of $60 million bank debt facility

--  Proven and Probable open pit Reserves on a combined basis with OJVG
    increased by 120 percent to 2.8 million ounces, Measured and Indicated
    Resources increased by 123 percent to 6.2 million ounces, and Inferred
    Resources increased by 42 percent to 2.6 million ounces(1)

--  Significant potential exists to add to gold inventory on both the Mine
    Licenses, as well as, large Regional Land Package - Company has approx.
    70Km of strike length on an emerging gold belt

--  Combined mine plan expected to balance gold production and cash flow
    generation with a base case average annual gold production of about
    250,000 ounces at all-in sustaining costs of about $900 per ounce
    between 2014 and 2019, based on existing proven and probable reserves
    only

--  Combined mine plan is "base case" and does not include potential from
    heap leaching; potential from infill drilling to bring back some reserve
    ounces that were excluded from the recently acquired OJVG; or the
    potential for additional Measured and Indicated resource conversion to
    Proven and Probable mineral reserves.  This work will be a priority for
    2014.

--  Gold production for 2014 is expected in the range of 220,000 to 240,000
    ounces(2) at total cash costs of $650 to $700 per ounce and all-in
    sustaining costs of $800 to $875 per ounce

"We emerged from 2013 stronger than ever, executing operationally and announcing a transformational acquisition of our neighbor. The life of mine plan we have prepared is a base case that we are well positioned to build on, and I have no doubt that our best years lay ahead," said Alan Hill, Executive Chairman.

DECEMBER QUARTER FINANCIAL HIGHLIGHTS


--  Gold revenue for the three months ended December 31, 2013 was $58.3
    million compared to gold revenue of $123.0 million for the same prior
    year period. The decrease in gold revenue for the fourth quarter 2013
    was driven by lower gold sales from lower production and lower spot gold
    prices.

--  Consolidated loss for the three months ended December 31, 2013 was $4.2
    million ($0.01 loss per share), compared to profit of $54.2 million
    ($0.22 per share) in the same prior year period. The decrease in profit
    and earnings per share over the prior year quarter were primarily due to
    higher transaction costs related to the acquisitions of Oromin and the
    remainder of the OJVG during the fourth quarter of 2013 and lower gross
    profit.

--  Operating cash flow for the three months ended December 31, 2013
    provided cash of $13.1 million compared to $59.7 million cash provided
    in the prior year. The decrease in operating cash flow compared to the
    prior year quarter was mainly due to a lower gross profit and a decrease
    in net working capital inflows during the fourth quarter of 2013.

--  Capital expenditures were $3.7 million for the three months ended
    December 31, 2013, compared to $28.5 million in the same prior year
    period. The decrease in capital expenditures over the prior year quarter
    was mainly due to lower sustaining and development expenditures and
    lower capitalized reserve development expenditures in the fourth quarter
    of 2013.

--  During the fourth quarter of 2013, 46,561 ounces were sold at an average
    gold price of $1,249 per ounce compared to 71,604 ounces sold at an
    average price of $1,296 per ounce in the same prior year period,
    including 33,606 ounces being delivered into gold hedge contracts at an
    average price of $833 per ounce.

DECEMBER QUARTER OPERATIONAL HIGHLIGHTS


--  Gold production for the three months ended December 31, 2013 was on plan
    at 52,368 ounces of gold and 27 percent lower than the same prior year
    period. Lower production was due to lower processed grades, partly
    offset by higher mill throughput.

--  Total cash costs for the three months ended December 31, 2013 totalled
    $711 per ounce sold, 34 percent higher than the same prior year period.
    Higher total cash costs per ounce were due to an increase in material
    mined and milled during the quarter compared to the year earlier period.
    Total cash costs have been adjusted for the adoption of IFRIC 20 for
    capitalization of a portion of production phase stripping costs.

--  All-in sustaining costs for the three months ended December 31, 2013
    were $850 per ounce sold compared to $1,004 per ounce sold in the same
    prior year period. The decrease compared to the prior year was due to
    lower capital expenditures and administration expenses in the current
    year period, partly offset by higher total cash costs.

--  Total tonnes mined for the three months ended December 31, 2013 were 24
    percent higher compared to the same prior year period. The increase in
    total tonnes mined was mainly due to improved productivities and shorter
    ore and waste haul distances.

--  During the quarter, mining activities were focused on the upper benches
    of phase 3 of the Sabodala pit, while in the same prior year period
    mining took place in a high grade ore zone on lower benches of phase 2.

--  Ore tonnes mined for the three months ended December 31, 2013 were 2
    percent lower compared to the same prior year period and ore grades
    mined were lower than the same prior year period, in line with plan.
    This resulted in 23 percent fewer ounces mined for the three months
    ended December 31, 2013 as mining activities were concentrated on waste
    stripping activities in phase 3 of the mine plan. Conversely, mining
    activities during the prior year period took place in lower benches of
    phase 2 and included a substantial amount of high-grade ore.

--  Unit mining costs for the fourth quarter of 2013 were $2.65 per tonne, a
    decrease of 15 percent compared to the same prior year period. Total
    mining costs were 5 percent higher than the same prior year period due
    to higher material movement.

--  Ore tonnes milled for the three months ended December 31, 2013 were 19
    percent higher than the same prior year period due to improvements made
    to reduce the frequency and duration of unplanned downtime and an
    increase in throughput in the crushing circuit to match mill capacity.

--  Processed grade for the three months ended December 31, 2013 was 38
    percent lower than the same prior year period, as planned. Mill feed
    during the fourth quarter 2013 was sourced from phase 3 of the Sabodala
    pit at grades closer to reserve grade. While in the year earlier period,
    mill feed was sourced from a high grade zone on the lower benches of
    phase 2 of the Sabodala pit.

--  Unit processing costs for the three month period ended December 31, 2013
    were 10 percent lower than the same prior year period at $17.96 per
    tonne, mainly due to an increase in throughput. Total processing costs
    for the three months ended December 31, 2013 were 7 percent higher than
    the same prior year period mainly due to an increase in material
    processed.

FULL YEAR FINANCIAL HIGHLIGHTS


--  Gold revenue for the twelve months ended December 31, 2013 was $297.9
    million compared to gold revenue of $350.5 million for the same prior
    year period. The decrease in gold revenue was due to lower spot gold
    prices in the current year.

--  Consolidated profit for the twelve months ended December 31, 2013 was
    $47.5 million ($0.18 per share), compared to profit of $92.6 million
    ($0.38 per share) in the same prior year period. The decrease in profit
    and earnings per share were primarily due to lower gross profit and
    higher other expenses related to transaction costs associated with the
    acquisitions of Oromin and the remainder of the OJVG.

--  Operating cash flow for the year ended December 31, 2013 provided cash
    of $74.3 million compared to $105.0 million cash provided in the prior
    year. The decrease in operating cash flow was mainly due lower revenue
    and gross profit in the current year. In the prior year period, the
    settlement of a large gold shipment made at the end of 2011 was received
    at the beginning of 2012.

--  Capital expenditures were $69.1 million for the twelve months ended
    December 31, 2013, compared to $115.8 million in the same prior year
    period. The decrease was due to lower development capital as the mill
    expansion was completed in 2012 and lower capitalized reserve
    development expenditures in the current year, partially offset by higher
    capitalized deferred stripping costs.

--  Net cash used by financing activities for the year ended December 31,
    2013 was $10.5 million compared to net cash provided by financing
    activities was $39.7 million for the prior year. 2013 includes proceeds
    of $12.8 million received from the finance lease facility, repayment of
    borrowings of $12.3 million and interest paid on borrowings of $7.1
    million. 2012 includes proceeds from the loan facility of $58.0 million,
    net of deferred financing costs, and proceeds from the finance lease
    facility of $2.9 million, partially offset by repayments of the finance
    lease facility of $16.8 million and interest paid on borrowings of $4.1
    million.

--  Gold sold for the year was 208,406 ounces at an average gold price of
    $1,246 per ounce, including 45,289 ounces being delivered into gold
    hedge contracts at an average price of $806 per ounce. This compares to
    207,814 ounces sold at an average price of $1,422 per ounce in the same
    prior year period, including 62,606 ounces being delivered into gold
    hedge contracts at an average price of $832 per ounce.

"Our recent acquisition more than doubles our reserve and resource base and mine life. While we are already one of the lowest all-in cost producers, this coupled with the operational flexibility to mine from several pits allows us to focus on maximizing free cash flow. We have a tremendous land package on an emerging gold belt and we are now well positioned to add profitable ounces in the short, medium and long term, all in Senegal", said Richard Young, President and CEO

FULL YEAR OPERATING HIGHLIGHTS


--  Gold production for the year was at the higher end of guidance of
    190,000 - 210,000 ounces, at 207,204 ounces, 3 percent lower than the
    same prior year period, mainly due to lower processed grades, partly
    offset by higher mill throughput.

--  Total cash costs for the year were below guidance of $650 - $700 per
    ounce, at $641 per ounce, compared to $556 per ounce in the same prior
    year period. The increase in total cash costs was mainly due to an
    increase in material processed and higher royalty costs in 2013 compared
    to 2012. Total cash costs have been adjusted for the adoption of IFRIC
    20 for capitalization of a portion of production phase stripping costs.

--  All-in sustaining costs for 2013 were at the low end of guidance, of
    $1,000 - $1,100 per ounce, at $1,033 per ounce, 14 percent lower than
    the same prior year period. Lower all-in sustaining costs were mainly
    due to lower capital expenditures, as result of the completion of the
    mill expansion in 2012, and a reduction in reserve development
    expenditures in 2013, partly offset by higher total cash costs and
    capitalized deferred stripping.

--  Total tonnes mined for the twelve months ended December 31, 2013 were 20
    percent higher compared to the same prior year period. The increase in
    total tonnes mined was mainly due to improved haul truck productivities
    as a result of shorter ore and waste haul distances, as well as,
    improved loading efficiencies.

--  Unit mining costs for the twelve months ended December 31, 2013 were 4
    percent lower than the same prior year period mainly due to improved
    truck and loading productivities.

--  Total mining costs were 15 percent higher than the same prior year
    period due to increased material movement.

--  Ore tonnes milled for the year ended December 31, 2013 were 29 percent
    higher than the same prior year period due to improvements made to
    reduce the frequency and duration of unplanned downtime and an increase
    in throughput in the crushing circuit to match mill capacity. These
    improvements were primarily accomplished during two planned major
    shutdowns in January and May with a third taking place in October. As a
    result of the work completed, mill throughput achieved annualized design
    capacity of 3.5 million tonnes of primarily hard ore in the second half
    of 2013.

--  Processed grade for the year ended December 31, 2013 was 27 percent
    lower than the same prior year period, as planned. Mill feed during the
    second quarter of 2013 onwards was sourced from a combination of lower
    grade stockpile material and ore from phase 3 of the Sabodala pit at
    grades closer to reserve grade. In the year earlier period, leading into
    the first quarter 2013, mill feed was sourced from a high grade zone on
    the lower benches of phase 2 of the Sabodala pit.

--  Unit processing costs for the year ended December 31, 2013 were in line
    with the prior year period at $20.15 per tonne, due to an increase in
    throughput partly offset by higher processing costs.

--  Total processing costs for the year ended December 31, 2013 were 28
    percent higher than the same prior year period, mainly due to higher
    overall throughput in the crushing circuit from mid-June onwards which
    resulted in an increase in consumption of heavy fuel oil (HFO) and
    cyanide as a result of higher tonnes milled and higher maintenance costs
    associated with the planned January, May and October shutdowns. These
    increases were partly offset by lower consumption of grinding media due
    to better management of recycled product.

OUTLOOK 2014



----------------------------------------------------------------------------
                                                      Year ended December 31
                                       -------------------------------------
                                       2013 Actuals      2014 Guidance Range
----------------------------------------------------------------------------
Operating Results
Ore mined                    ('000t)          4,540            5,300 - 6,000
Waste mined - operating      ('000t)         15,172          18,200 - 19,000
Waste mined - capitalized    ('000t)         15,066              500 - 1,000
                                       -------------------------------------
Total mined                  ('000t)         34,778          24,000 - 26,000
Grade mined                   (g/t)            1.62              1.60 - 1.70
Strip ratio                (waste/ore)          6.7              3.25 - 3.50
Ore milled                   ('000t)          3,152            3,400 - 3,600
Head grade                    (g/t)            2.24              2.20 - 2.40
Recovery rate                   %              91.4              90.0 - 91.0
Gold produced(1)              (oz)          207,204        220,000 - 240,000

Total cash cost (incl.
 royalties)(2,3)            $/oz sold           641                650 - 700
All-in sustaining
 costs(2,3)                 $/oz sold         1,033                800 - 875

Mining                     ($/t mined)         2.59              2.75 - 2.95
Milling                   ($/t milled)        20.15            18.00 - 19.00
G&A                       ($/t milled)         5.38              4.75 - 5.25

Gold sold to Franco-
 Nevada(1)                    (oz)                -                   22,500

Exploration and
 evaluation expense
 (Regional Land Package)  ($ millions)          5.4                4.0 - 6.0

Administration expenses
 and Social community
 costs (excluding
 depreciation)            ($ millions)         13.6              15.0 - 16.0

Mine production costs     ($ millions)        170.8            155.0 - 165.0

Capital expenditures
Mine site sustaining      ($ millions)          9.9                7.0 - 8.0
Capitalized reserve
 development (Mine
 License)                 ($ millions)          3.5                4.0 - 6.0
Project development costs
 Government payments      ($ millions)          3.5              12.0 - 14.0
 Development              ($ millions)          0.5                3.0 - 5.0
 Mobile equipment and
  other                   ($ millions)          8.4                        -
                                       -------------------------------------
Total project development
 costs                    ($ millions)         12.4              15.0 - 19.0
Capitalized deferred
 stripping(2)             ($ millions)         43.3                2.0 - 3.0
                                       -------------------------------------
Total capital
 expenditures             ($ millions)         69.1              28.0 - 33.0
----------------------------------------------------------------------------

(1) 22,500 ounces of production are to be sold to Franco Nevada at 20% of
 the spot gold price.
(2) Total cash costs per ounce and all-in sustaining costs per ounce are
 non-IFRS financial measures and do not have a standard meaning under IFRS.
 Please refer to Non-IFRS Performance Measures at the end of this report.
(3)Total cash costs per ounce sold for 2012 were restated to comply with the
 Company's adoption of IFRIC 20 - Stripping Costs in the Production Phase of
 a Surface Mine, in line with the Company's accounting policies and industry
 standards.
(4) All-in sustaining costs per ounce sold include total cash costs per
 ounce, administration expenses (excluding Corporate depreciation expense
 and social community costs not related to current operations), capitalized
 deferred stripping, capitalized reserve development and mine site
 sustaining capital expenditures (including project development costs) as
 defined by the World Gold Council.
Key assumptions: Gold spot price/ounce - US$1,250, Light fuel oil -
 US$1.15/litre, Heavy fuel oil - US$0.98/litre, US/Euro exchange rate -
 $1.325
Other important assumptions include: any political events are not expected
 to impact operations, including movement of people, supplies and gold
 shipments; grades and recoveries will remain consistent with the life-of-
 mine plan to achieve the forecast gold production; and no unplanned delays
 in or interruption of scheduled production.

--  The Company's 2014 operating budget has been designed to maximize free
    cash flow. Mining activity in 2014 is expected to focus on completing
    phase 3 of the Sabodala pit, as phase 4 of the Sabodala mine plan has
    been deferred to minimize material moved. Mining equipment freed up from
    the deferral of Sabodala phase 4 is anticipated to be used to begin
    mining activities at the Masato deposit in the fourth quarter of the
    year.

--  The higher processing rate in 2014 is a result of improvements made in
    the first half of 2013 to the crushing circuit and in line with
    throughput rates in the second half of 2013.

--  Total cash costs per ounce for 2014 are expected to be similar to 2013
    while all-in sustaining costs per ounce are expected to be lower than
    2013, mainly due to lower capital expenditures and deferred stripping
    costs.

--  Exploration and evaluation expenditures for 2014 are expected to total
    approximately $10 million for both the Mine License and Regional Land
    Package combined. The exploration program in 2014 will focus on the
    conversion of resources to reserves and extensions of existing deposits
    along strike on the Sabodala and OJVG mine licenses, as well as, the
    continuation of a systematic regional exploration program designed to
    identify satellite and standalone deposits.

--  Administrative and Corporate Social Responsibility expenses are expected
    to total $15 - $16 million, similar to 2013. Lower administrative costs
    at the corporate office are expected to be offset by higher social
    commitments related to the acquisition of the OJVG and additional
    staffing in the Dakar office. The 2014 plan has been designed to provide
    the necessary support for operations and development and includes
    corporate office costs, Dakar office costs and corporate responsibility
    costs, but excludes corporate depreciation, transaction costs and other
    non-recurring costs.

--  Capitalized expenditures, including sustaining mine site expenditures,
    project development expenditures, capitalized deferred stripping,
    reserve development expenditures and payments to the Government of
    Senegal are expected to total $28 - $33 million.

LIQUIDITY AND CAPITAL RESOURCES


--  During the first quarter of 2013, the Company entered into a new $50.0
    million finance lease facility with Macquarie ("Equipment Facility").
    The proceeds were put towards additional equipment for the Sabodala pit.
    During the fourth quarter of 2013, the Company cancelled the undrawn
    commitment from the Equipment Facility.

--  During the third quarter of 2013, the Company amended its existing $60.0
    million loan facility agreement with Macquarie ("Loan Facility"). The
    amended agreement had extended the final repayment date of its existing
    loan facility agreement by one year to June 30, 2015.

--  Subsequent to year end, on January 15, 2014, the Company amended the
    Macquarie Loan Facility ("Loan Facility") and retired half of the
    balance of $30.0 million. The remaining balance of $30.0 million is
    scheduled to be repaid in three quarterly instalments of $5.0 million
    beginning on March 31, 2014. The final $15.0 million will be repaid on
    December 31, 2014. The amended Loan Facility agreement replaced the
    restricted cash requirement with a minimum liquidity threshold of $15.0
    million and removes the Project Life Ratio financial covenant.

--  The Company's cash position at December 31, 2013 was $42.3 million,
    including bullion receivable and restricted cash of $20 million. At
    $1,250 per ounce gold, the Company expects to generate sufficient cash
    flow to retire the balance of the Loan Facility and the majority of the
    mobile equipment loan. However, the Company's cash position is highly
    dependent on the gold price. The Company is continually reviewing
    operating, development and exploration expenditures in order to ensure
    adequate liquidity and flexibility exists to support debt repayments.
    While our objective is to repay the outstanding balance of the Loan
    Facility in 2014, the Company may look to extend the repayment terms
    beyond 2014, should lower gold prices materialize or review other
    alternatives to ensure sufficient liquidity is maintained by the
    Company.

STRATEGY

Company performance in 2013


--  During 2013, the price of gold decreased 28 percent, its first annual
    decrease in 13 years. In light of this gold price weakness, Teranga
    quickly took steps in early 2013 to reduce discretionary spending while
    maintaining its production guidance. The Company's exploration team was
    consolidated into one exploration facility and the organizational design
    was revised for increased efficiencies. Additionally, the Company's
    technical team designed a new mine plan on a standalone basis, resulting
    in less material movement, lower reserves and production but higher free
    cash flows at current gold prices.

--  Despite the challenges faced, the Company was able to deliver on its
    plans and this included the following:

--  Met or exceeded production and cost guidance for the year;

--  Resolved the outstanding items to bring the expanded mill to design
    capacity;

--  Eliminated the inherited out of the money hedge contracts;

--  Established a long-term fiscal and investment agreement with the
    Senegalese government, which

    --  Reinforced Teranga's long-term commitment to the country; and
    --  Demonstrated Senegal's willingness to work with foreign investors in
        a fair and transparent manner; and

--  Completed the acquisition of the OJVG and prepared an initial integrated
    life of mine ("LOM") plan.

Strategy for 2014 and Beyond


--  The 2014 budget and integrated LOM plan for the combined operations have
    been designed to maximize free cash in the current gold price
    environment. The sequence of the pits can be optimized, as well as, the
    sequencing of phases within the pits, based not only on grade, but also
    on strip ratio, ore hardness, and the capital required to maximize free
    cash flows in different gold price environments. As a result, this LOM
    annual production profile represents an optimized cash flow for 2014 and
    a balance of gold production and cash flow generated in the subsequent
    five years. There are opportunities to increase gold production in years
    2015-2018 based on current reserves. With expectations for additional
    reserves, including infill drilling of the high grade zone at Masato,
    further mine plan optimization work is required. As a result, this LOM
    production schedule represents a "base case" scenario with flexibility
    to improve gold production and/or cash flows in subsequent years.

--  With the OJVG acquisition now complete, the Company can clearly outline
    its short, medium and long-term objectives:

--  In the Short-term (2014-2015):

    i. Integrate OJVG and Sabodala operations;

    ii. Increase free cash flow through higher production and lower material
    movement, in part
    to retire the balance of the debt facility outstanding; and

    iii. Increase reserves through the conversion of Measured, Indicated and
    Inferred Resources.

--  In the Medium-term (2014-2016):

    i. Evaluate the heap leach processing option (permit and build if the
    returns meet Teranga's hurdle rate);

    ii. Continue to look for ways to improve mill throughput; and

    iii. Optimize mine planning and grade.

--  In the Long-term (2015 onward):

    i. Remain disciplined about investments in exploration with a commitment
    to a modest, multi-year exploration program; and
    ii. Look to make exploration discoveries on the regional exploration
    land package by continuing to systematically work through the many
    targets and prospects.


--  The Company expects to create value for shareholders by maximizing free
    cash flows in the short-term by integrating the OJVG allowing for annual
    production of approximately 250,000 ounces at lower quartile all-in
    sustaining costs of about $900 per ounce and a high conversion of EBITDA
    into free cash flow.

--  In the longer term, the Company expects to create shareholder value by
    leveraging the existing processing infrastructure, while adding
    profitable reserves and potentially expanding its processing capacity.
    All capital projects will be evaluated based on a disciplined capital
    allocation strategy based on robust hurdle rates and quick payback
    periods. The Company is focused only on gold and only in Senegal.

--  Once the Loan Facility has been extinguished and there is sufficient
    cash to execute on the business plan, the Company will look to returning
    capital to shareholders when appropriate.

ACQUISITION OF OROMIN


--  On August 6, 2013, the Company acquired 78,985,388 common shares of
    Oromin Explorations Limited ("Oromin"), representing approximately 57.5
    percent of the Oromin shares that the Company did not already own.
    Together with the 18,699,500 Oromin shares owned by the Company and a
    further 2,091,013 shares obtained, this represented a total of
    99,775,901 Oromin shares or approximately 72.6 percent of the
    outstanding Oromin shares.

--  Former shareholders of Oromin were entitled to receive 0.6 of a common
    share of Teranga for each Oromin share. Total consideration paid of
    $24.1 million consisted of the issuance of 48,645,840 Teranga common
    shares at a price of $0.48 per share for consideration of $23.5 million
    and the fair value of Oromin stock options replaced by 7,911,600 Teranga
    stock options for consideration of $0.6 million. Share issue costs
    totaled $0.2 million.

--  On October 4, 2013, the Company completed the acquisition of all of the
    issued and outstanding common shares of Oromin that it did not already
    own (Oromin being one of the three joint venture partners holding 43.5
    percent of the OJVG), issuing 22,537,251 additional Teranga common
    shares at a price of $0.61 per share for consideration of $13.8 million.

--  In total, the Company issued 71,183,091 Teranga shares to acquire all of
    the Oromin shares for net consideration of $37.8 million, including the
    fair value of Oromin stock options replaced by 7,911,600 Teranga stock
    options. As a result, Teranga's total number of issued and outstanding
    shares increased to 316,801,091.

FRANCO-NEVADA GOLD STREAM AND ACQUISITION OF THE OJVG


--  On January 15, 2014, the Company completed a $135.0 million stream
    transaction with Franco-Nevada Corporation ("Franco-Nevada") to fund the
    acquisition of Bendon's interest in the OJVG for $105.0 million and
    retire half of the project finance facility with Macquarie of $30.0
    million. As a result of the two transactions, Teranga is required to
    deliver to Franco-Nevada 22,500 ounces annually over the first six years
    followed by 6 percent of production from the Company's existing
    properties, including those of the OJVG, thereafter. Franco-Nevada's
    purchase price per ounce is set at 20 percent of the spot price of gold.

--  The Company also acquired Badr's 13 percent carried interest for $7.5
    million and further contingent consideration based on higher realized
    gold prices and increases to OJVG reserves through 2020.

--  The acquisition of Bendon and Badr's interests in the OJVG increased
    Teranga's ownership to 100 percent and consolidates the Sabodala region,
    increasing the size of Teranga's interests in mine license from 33km2 to
    246km2 and more than doubling the Company's reserve base.

--  Acquisition related costs of approximately $11.0 million for Oromin and
    the OJVG have been paid during the year ended December 31, 2013.

--  Following the acquisition of Bendon's interests in the OJVG subsequent
    to year-end, the legal claim filed by Bendon was dismissed.

RESERVES AND RESOURCES


--  Mineral Resources at December 31, 2013 are presented in Table 1. Total
    open pit Proven and Probable Mineral Reserves at December 31, 2013 are
    set forth in Table 2. The reported Mineral Resources are inclusive of
    the Mineral Reserves.

--  The Proven and Probable Mineral Reserves were based on the Measured and
    Indicated Resources that fall within the designed open pits. The basis
    for the resources and reserves is consistent with the Canadian
    Securities Administrators National Instrument 43-101 Standards for
    Disclosure for Mineral Projects ("NI 43-101") regulations. The design
    for the open pit limits, related phasing and long term planning for the
    Sabodala open pit was carried out to maximize the economics under
    current market conditions by removing high cost (high strip) gold ounces
    in the Sabodala pit.

--  The Sabodala pit design is consistent with the Mineral Reserves reported
    for the third quarter 2013 results which are based on a $1,000 per ounce
    gold price pit shell for Phase 4. The cut off grades were established
    using an estimated gold price of $1,250 per ounce. Mining phases in the
    Sabodala pit have been determined similarly to the previous designs,
    where the mine sequencing is based on accessing the high grade Main Flat
    Extension ("MFE") through successive phases to balance waste stripping
    and optimize cash flows.

--  Dilution and ore recovery estimates for the Sabodala Mineral Reserves
    were based on a comparison of the resource model with actual production
    performance over a 24 month span using a 5 metre minimum mining width
    and 10 metre bench height.

--  The Niakafiri pit design remains unchanged from December 2012. The Gora
    pit design has been adjusted to reflect a pit shell at $1,200 per ounce
    and an updated dilution analysis.

--  The Masato, Golouma and Kerekounda pit designs have been based on a
    $1,250 per ounce pit shell. Geotechnical studies conducted previously by
    the OJVG were reviewed by independent consultants and were determined to
    be acceptable. Detailed dilution analyses were conducted on each of
    these deposits, ore cut-off grades were established using an estimated
    gold price of $1,250 per ounce.

--  As a result of the work we have conducted, overall reported open pit
    Mineral Reserves for the OJVG deposits have increased by approximately
    90,000 ounces as compared to the last technical report issued by the
    OJVG in January 2013. An increase in open pit Mineral Reserves was
    identified at the Golouma's and Kerekounda deposits, which was partially
    offset by a decrease at Masato. Analyses of high grade zones within the
    Masato ore body continue to be evaluated. Due to the manner of the
    interpretation of structural controls defining these high grade zones,
    management has determined that further work and infill drilling is
    necessary to accurately define these trends within the mineralized
    envelopes. For purposes of this updated reserve estimate, the Company
    has applied a conservative interpretation method resulting in
    approximately 300,000 ounces of high grade mineralization being excluded
    from Masato Mineral Reserves.

--  The following Mineral Reserves and Mineral Resources tables at December
    31, 2013 are inclusive of 100 percent of the OJVG Mineral Reserves and
    Mineral Resources. On January 15, 2014, the Company acquired the balance
    of the OJVG that it did not already own.


Table 1 Mineral Resources Summary as at December 31, 2013
---------------------------------------------------------------------------
                                                           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        24.28   1.32  1.03  22.95   1.29  0.95  47.23   1.31   1.98
Gora             0.49   5.27  0.08   1.84   4.93  0.29   2.32   5.00   0.37
Niakafiri        0.30   1.74  0.02  10.50   1.10  0.37  10.70   1.12   0.39
ML Other
---------------------------------------------------------------------------
Subtotal ML     25.07   1.40  1.13  35.29   1.42  1.61  60.25   1.42   2.74
---------------------------------------------------------------------------
Masato                              43.93   1.11  1.57  43.93   1.11   1.57
Goluma                              12.04   2.69  1.04  12.04   2.69   1.04
Kerekounda                           2.20   3.77  0.27   2.20   3.77   0.27
Somigol Other                       18.72   0.93  0.56  18.72   0.93   0.56
---------------------------------------------------------------------------
Subtotal
 Somigol         0.00   0.00  0.00  76.89   1.39  3.44  76.89   1.39   3.44
---------------------------------------------------------------------------
Total           25.07   1.40  1.13 112.18   1.40  5.05 137.14   1.40   6.18
---------------------------------------------------------------------------

Inferred Resources
-----------------------------------------------------
Area                     Tonnes         Au         Au
                           (Mt)        g/t        Moz
-----------------------------------------------------
Sabodala                  17.88       0.94       0.54
Gora                       0.21       3.38       0.02
Niakafiri                  7.20       0.88       0.21
ML Other                  10.60       0.97       0.33
-----------------------------------------------------
Subtotal ML               35.89       0.95       1.11
-----------------------------------------------------
Masato                    25.59       1.13       0.93
Goluma                     2.46       2.01       0.16
Kerekounda                 0.34       4.21       0.05
Somigol Other             12.87       0.84       0.35
-----------------------------------------------------
Subtotal Somigol          41.26       1.12       1.49
-----------------------------------------------------
Total                     77.16       1.04       2.59
-----------------------------------------------------

Notes for Mineral Resources Estimate:


1.  CIM definitions were followed for Mineral Resources.
2.  Mineral Resources for Sabodala include Sutuba.
3.  Mineral Resource cut-off grades for Sabodala, Masato, Golouma,
    Kerekounda and Somigol Other are 0.2 g/t Au for oxide and 0.35 g/t Au
    for fresh.
4.  Mineral Resource cut-off grades for Niakafiri are 0.3 g/t Au for oxide
    and 0.5 g/t Au for fresh.
5.  Mineral Resource cut-off grade for Gora is 0.5 g/t Au for oxide and
    fresh.
6.  Mineral Resource cut-off grade for Niakafiri West and Soukhoto is 0.3
    g/t Au for oxide and fresh.
7.  Mineral Resource cut-off grade for Diadiako is 0.2 g/t Au for oxide and
    fresh.
8.  Measured Resources include stockpiles which total 8.60 Mt at 0.86 g/t Au
    for 0.24 Mozs.
9.  High grade assays were capped at grades ranging from 10 g/t to 30 g/t Au
    at Sabodala, 20 g/t to 70 g/t Au at Gora, from 2 g/t to 30 g/t Au at
    Masato, from 5 g/t to 70 g/t for Golouma, from 11 g/t to 50 g/t at
    Kerekounda, and from 0.8 g/t to 110 g/t at Somigol Other.
10. Inferred resources at Majiva have been removed, as the Makana permit has
    been allowed to lapse.
11. The figures above are "Total" Mineral Resources and include Mineral
    Reserves.
12. Sum of individual amounts may not equal due to rounding.

For clarity, the Resource estimates disclosed above with respect to Niakafiri, Gora and ML Other (which includes Niakafiri, Niakafiri West, Soukhoto and Diadiako) were prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with JORC Code 2012 on the basis that the information has not materially changed since it was last reported. See Competent Person Statements.




Table 2 Mineral Reserves Summary as at December 31, 2013
---------------------------------------------------------------------------
                                                             Proven and
                         Proven            Probable           Probable
                   --------------------------------------------------------
                   Tonnes Grade    Au Tonnes Grade    Au Tonnes Grade    Au
                     (Mt) (g/t) (Moz)   (Mt) (g/t) (Moz)   (Mt) (g/t) (Moz)
---------------------------------------------------------------------------
Sabodala             3.45  1.64  0.18   5.53  1.58  0.28   8.98  1.60  0.46
Gora                 0.50  4.58  0.07   1.39  4.80  0.21   1.89  4.74  0.29
Niakafiri            0.23  1.69  0.01   7.58  1.12  0.27   7.81  1.14  0.29
Stockpiles           8.60  0.86  0.24                      8.60  0.86  0.24
---------------------------------------------------------------------------
Subtotal ML         12.78  1.23  0.51  14.50  1.65  0.77  27.28  1.45  1.27
---------------------------------------------------------------------------
Masato                                 25.24  1.21  0.98  25.24  1.21  0.98
Golouma                                 6.47  2.24  0.46   6.47  2.24  0.46
Kerekounda                              0.88  3.26  0.09   0.88  3.26  0.09
---------------------------------------------------------------------------
Subtotal Somigol     0.00  0.00  0.00  32.59  1.47  1.54  32.59  1.47  1.54
---------------------------------------------------------------------------
Total               12.78  1.23  0.51  47.09  1.52  2.31  59.87  1.46  2.81
---------------------------------------------------------------------------

Notes for Reserves Estimate:


1.  CIM definitions were followed for Mineral Reserves.
2.  Mineral Reserve cut off grades for Sabodala are 0.40 g/t Au for oxide
    and 0.5 g/t Au for fresh based on a $1,250/oz gold price and
    metallurgical recoveries between 90 percent and 93 percent.
3.  Mineral Reserve cut off grades for Niakafiri are 0.35 g/t Au for oxide
    and 0.5 g/t Au for fresh based on a $1,350/oz gold price and
    metallurgical recoveries between 90 percent and 92 percent.
4.  Mineral Reserve cut off grade for Gora is 0.76 g/t Au for oxide and
    fresh based on $1,200/oz gold price and metallurgical recovery of 95
    percent.
5.  Mineral Reserve cut off grade for Masato, Golouma, Kerekounda are 0.4
    g/t Au for oxide and 0.5 g/t for fresh based on $1,250/oz gold price and
    metallurgical between 90 percent and 93 percent.
6.  Sum of individual amounts may not equal due to rounding.
7.  The Niakafiri deposit is adjacent to the Sabodala village and relocation
    of at least some portion of the village will be required which will
    necessitate a negotiated resettlement program with the affected
    community members.
8.  The Gora deposit is intended to be merged into the Sabodala mining
    license which the State of Senegal has agreed to in principal subject to
    completion and receipt of an approved environmental and social impact
    assessment which is ongoing.
9.  The SOMIGOL deposits lie adjacent to the Sabodala mining license and it
    is intended that these licenses be merged which the State of Senegal has
    agreed to in principal under the terms of its previously announced
    global investment agreement in May of 2013. Any additional specific
    permits are anticipated to be minor given both licenses are already
    fully approved including environmental and social impact assessments.
10. There are no other known political, legal or environmental risks that
    could materially affect the potential development of the identified
    mineral resources or mineral reserves other than as already set out in
    the Company's Annual Information Form dated March 28, 2013 - see RISK
    FACTORS beginning on page 62.

For clarity, the Reserve estimates disclosed above with respect to Niakafiri and Gora were prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with JORC Code 2012 on the basis that the information has not materially changed since it was last reported. See Competent Person Statements.

OROMIN TECHNICAL INTEGRATION


--  The acquisition of Oromin in August 2013 provided access to the OJVG
    technical data. Since then, management has been evaluating and
    integrating the geological and technical databases to develop updated
    resources and reserves to establish a combined LOM plan that will be
    supported by a NI 43-101 compliant technical report, targeted for March
    2014.

--  The ongoing technical work for the OJVG integrated mine plan has
    included:

--  A comprehensive review of the Golouma, Masato and Kerekounda ore bodies
    including re-logging and re-assay of key drill intercepts, QA/QC checks
    and detailed interpretation to update these resource models;

--  Economic Lerchs-Grossman (LG) pit optimization and detailed pit designs
    to reflect the current gold price;

--  Preliminary Life of Mine (LOM) mine planning schedules for optimized
    cash flow analysis, detailed dilution analysis, pit designs, mine
    operating and capital estimates;

--  An updated tailings deposition and water balance model;

--  Ongoing analysis of the metallurgical test results for ore
    characterization studies of select areas within the Masato and Golouma
    ore bodies to increase understanding from Feasibility Study level and
    optimize feed and gold recovery to the Sabodala mill; and

--  Environmental and social impact reviews for a reduced footprint using
    the Sabodala operations.

--  In addition to development of an integrated LOM, the OJVG technical team
    was engaged with the Teranga technical teams both at site in Senegal and
    the corporate offices.

INTEGRATED LIFE OF MINE SCHEDULE


--  Table 3 represents a life of mine schedule developed from the proven and
    probable reserves listed in Table 2. The pit sequencing schedule is
    based on blending the material movement capability with the mine mobile
    fleet and the availability of high grade ore within the various ore
    bodies. This schedule represents one of a number of possibilities that
    can be adjusted as economic conditions change. Open pit mining methods
    similar to current operations at the Sabodala deposit were applied by
    providing the highest grade available for plant feed and stockpiling
    lower grade ore for processing at the end of mine life. A detailed mine
    dilution and ore recovery analysis was applied for the Masato, Golouma
    and Kerekounda deposits to determine mine operating parameters.

--  Capital and operating cost estimates for the LOM are provided in Table 4
    and Table 5 respectively. Sustaining capital estimates for mining were
    based on the major component and replacement schedule for the existing
    mobile equipment fleet, while the capital development costs for Gora and
    the OJVG deposit were based on additional mine mobile equipment and
    infrastructure for new pit development. Sustaining capital estimates are
    based on the existing schedules for the plant operations, including an
    additional tailings lift forecasted in approximately three years.
    Operating costs for the mine were calibrated to 2013 costs at Sabodala
    and then adjusted for percentage of oxide ore and average weighted haul
    distance to the various ore body locations.

Table 3: Life of Mine


-------------------------------------------------------------------------
                                  2014-
                                   2019
                              LOM   AVG 2014  2015 2016  2017  2018 2019
-------------------------------------------------------------------------
Sabodala   Ore Mined
 Phase 3                Mt    4.8        4.8     -    -     -     -    -

           Ore Grade   g/t   1.68       1.68     -    -     -     -    -
           Waste        Mt   16.5       16.5     -    -     -     -    -
           Contained
            Oz         Moz   0.26       0.26     -    -     -     -    -
-------------------------------------------------------------------------
Sabodala   Ore Mined
 Phase 4                Mt    4.1          -     -  0.5   1.7   1.9    -

           Ore Grade   g/t   1.51          -     - 1.01  1.53  1.61    -
           Waste        Mt   29.6          -     - 13.1  11.9   4.6    -
           Contained
            Oz         Moz   0.20          -     - 0.02  0.09  0.10    -
-------------------------------------------------------------------------
Masato     Ore Mined
 Phase 1                Mt   13.5        0.9  12.6    -     -     -    -

           Ore Grade   g/t   1.09       0.91  1.10    -     -     -    -
           Waste        Mt   32.3        3.4  28.9    -     -     -    -
           Contained
            Oz         Moz   0.47       0.03  0.44    -     -     -    -
-------------------------------------------------------------------------
Masato     Ore Mined
 Phase 2                Mt   11.8          -     -    -     -     -    -

           Ore Grade   g/t   1.37          -     -    -     -     -    -
           Waste        Mt  101.3          -     -    -     -     -    -
           Contained
            Oz         Moz   0.52          -     -    -     -     -    -
-------------------------------------------------------------------------
Gora       Ore Mined    Mt    1.9          -   0.2  0.7   0.3   0.4  0.2

           Ore Grade   g/t   4.74          -  3.80 4.15  6.55  3.75 6.99
           Waste        Mt   38.1          -   5.1 12.0   9.7   9.6  1.7
           Contained
            Oz         Moz   0.29          -  0.03 0.10  0.06  0.05 0.05
-------------------------------------------------------------------------
Golouma    Ore Mined    Mt    6.5          -     -  1.0   0.5   0.8  2.5

           Ore Grade   g/t   2.24          -     - 2.89  2.61  2.26 2.01
           Waste        Mt   89.8          -     - 16.1  15.7  17.0 35.0
           Contained
            Oz         Moz   0.46          -     - 0.09  0.04  0.06 0.16
-------------------------------------------------------------------------
Kerekounda Ore Mined    Mt    0.9          -     -  0.1   0.8     -    -

           Ore Grade   g/t   3.26          -     - 1.50  3.53     -    -
           Waste        Mt   18.0          -     -  7.4  10.6     -    -
           Contained
            Oz         Moz   0.09          -     - 0.01  0.09     -    -
-------------------------------------------------------------------------
Niakafiri  Ore Mined    Mt    7.8          -     -    -     -   4.6  3.2

           Ore Grade   g/t   1.14          -     -    -     -  1.14 1.14
           Waste        Mt   22.6          -     -    -     -  12.9  9.7
           Contained
            Oz         Moz   0.29          -     -    -     -  0.17 0.12
-------------------------------------------------------------------------
Total      Ore Mined    Mt   51.3   6.3  5.7  12.8  2.3   3.3   7.7  5.9

           Ore Grade   g/t   1.57  1.61 1.56  1.15 2.84  2.60  1.51 1.74
           Waste        Mt  348.0  40.1 19.9  33.9 48.6  47.8  44.1 46.4
           Contained
            Oz         Moz   2.58  0.33 0.29  0.47 0.21  0.27  0.37 0.33
-------------------------------------------------------------------------
           Stockpile
            Ore
            Balance     Mt              10.9  19.7 18.0  17.4  21.2 23.1
           Stockpile
            Grade      g/t              0.79  0.77 0.71  0.71  0.70 0.69
           Contained
            Oz         Moz              0.27  0.48 0.41  0.40  0.47 0.51
          ---------------------------------------------------------------

          ---------------------------------------------------------------
           Ore Milled   Mt   59.9   3.9  3.4   4.0  4.0   3.8   4.0  4.0
           Head Grade  g/t   1.46  2.24 2.25  2.05 2.21  2.35  2.31 2.27
           Oxide        %     13%   23%   6%   50%  34%    6%   26%  15%
           Rec. oz                      0.22       0.26             0.26
                       Moz  2.553 0.254    7 0.242    0 0.261 0.271    5
          ---------------------------------------------------------------


----------------------------------------------------------------------------
                           2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
----------------------------------------------------------------------------
Sabodala   Ore Mined
 Phase 3                Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Sabodala   Ore Mined
 Phase 4                Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Masato     Ore Mined
 Phase 1                Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Masato     Ore Mined
 Phase 2                Mt  0.3  2.5  9.0    -    -    -    -    -    -    -

           Ore Grade   g/t 0.60 0.98 1.50    -    -    -    -    -    -    -
           Waste        Mt 29.9 38.6 32.7    -    -    -    -    -    -    -
           Contained
            Oz         Moz 0.01 0.08 0.43    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Gora       Ore Mined    Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Golouma    Ore Mined    Mt  1.7    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t 2.07    -    -    -    -    -    -    -    -    -
           Waste        Mt  6.0    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz 0.11    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Kerekounda Ore Mined    Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Niakafiri  Ore Mined    Mt    -    -    -    -    -    -    -    -    -    -

           Ore Grade   g/t    -    -    -    -    -    -    -    -    -    -
           Waste        Mt    -    -    -    -    -    -    -    -    -    -
           Contained
            Oz         Moz    -    -    -    -    -    -    -    -    -    -
----------------------------------------------------------------------------
Total      Ore Mined    Mt  2.1  2.5  9.0    -    -    -    -    -    -    -

           Ore Grade   g/t 1.82 0.98 1.50    -    -    -    -    -    -    -
           Waste        Mt 35.9 38.6 32.7    -    -    -    -    -    -    -
           Contained
            Oz         Moz 0.12 0.08 0.43    -    -    -    -    -    -    -
----------------------------------------------------------------------------
           Stockpile
            Ore
            Balance     Mt 21.4 20.0 25.2 21.4 17.6 13.8 10.0  6.2  2.2  0.0
           Stockpile
            Grade      g/t 0.69 0.69 0.73 0.70 0.70 0.69 0.67 0.65 0.66    -
           Contained
            Oz         Moz 0.47 0.44 0.60 0.48 0.39 0.31 0.22 0.13 0.05 0.00
          ------------------------------------------------------------------

          ------------------------------------------------------------------
           Ore Milled   Mt  3.8  3.8  3.8  3.8  3.8  3.8  3.8  3.8  4.0  2.2
           Head Grade  g/t 1.32 0.89 2.29 0.93 0.71 0.71 0.74 0.71 0.64 0.62
           Oxide        %    0%   1%   0%   0%   0%   0%   0%   0%  36%  50%
           Rec. oz         0.14 0.09 0.25 0.10 0.07 0.07 0.08 0.07 0.07 0.04
                       Moz    5    7    4    2    8    8    1    8    5    0
          ------------------------------------------------------------------

Table 4: Capital Expenditures



--------------------------------------------------------------------------
                           2014-
Sustaining                  2019
 Capex          Unit   LOM   AVG  2014  2015  2016  2017  2018  2019  2020
--------------------------------------------------------------------------
Mining          USDM  25.5   3.6   3.5   3.5   3.5   3.5   3.5   4.0   3.5
Processing      USDM  29.5   2.2   3.0   2.0   2.0   2.0   2.0   2.0   2.0
Admin & Other
 Sustaining     USDM  11.3   1.0   1.0   1.0   1.0   1.0   1.0   1.0   1.0
Community
 Relations      USDM  25.0   4.2     -     -   8.3   8.3   8.3     -     -
--------------------------------------------------------------------------
Total
 Sustaining
 Capex          USDM  91.3  10.9   7.5   6.5  14.8  14.8  14.8   7.0   6.5
--------------------------------------------------------------------------
Capital
 Projects &
 Development    USDM
--------------------------------------------------------------------------
OJVG & Gora
 Development    USDM  62.1  10.3   7.0  42.0  12.2     -   0.9     -     -
Government
 Waiver
 Payments       USDM  16.9   2.8  10.0   4.2     -     -   2.7     -     -
Other Projects
 & Development  USDM   3.0   0.5     -     -   3.0     -     -     -     -
--------------------------------------------------------------------------
Total Projects
 and
 Development    USDM  82.0  13.7  17.0  46.2  15.2     -   3.6     -     -
--------------------------------------------------------------------------
Combined Total
 (USDM)         USDM 173.2  24.6  24.5  52.7  30.0  14.8  18.4   7.0   6.5
--------------------------------------------------------------------------


--------------------------------------------------------------------------
Sustaining
 Capex          Unit  2021  2022  2023  2024  2025  2026  2027  2028  2029
--------------------------------------------------------------------------
Mining          USDM   0.5     -     -     -     -     -     -     -     -
Processing      USDM   2.0   2.0   2.0   2.0   2.0   2.0   2.0   0.5     -
Admin & Other
 Sustaining     USDM   1.0   0.8   0.5   0.5   0.5   0.5   0.3   0.3     -
Community
 Relations      USDM     -     -     -     -     -     -     -     -     -
--------------------------------------------------------------------------
Total
 Sustaining
 Capex          USDM   3.5   2.8   2.5   2.5   2.5   2.5   2.3   0.8     -
--------------------------------------------------------------------------
Capital
 Projects &
 Development    USDM
--------------------------------------------------------------------------
OJVG & Gora
 Development    USDM     -     -     -     -     -     -     -     -     -
Government
 Waiver
 Payments       USDM     -     -     -     -     -     -     -     -     -
Other Projects
 & Development  USDM     -     -     -     -     -     -     -     -     -
--------------------------------------------------------------------------
Total Projects
 and
 Development    USDM     -     -     -     -     -     -     -     -     -
--------------------------------------------------------------------------
Combined Total
 (USDM)         USDM   3.5   2.8   2.5   2.5   2.5   2.5   2.3   0.8     -
--------------------------------------------------------------------------

Table 5: Operating Cost



----------------------------------------------------------------------------
                             2014-
                              2019
Activity         Unit    LOM   AVG  2014  2015  2016  2017  2018  2019  2020
----------------------------------------------------------------------------
Mining          USD/t
                 mined  2.55  2.53  2.85  2.39  2.51  2.54  2.49  2.55  2.50
Processing      USD/t
                milled 17.78 17.26 18.50 16.01 17.35 18.01 16.93 16.98 17.59
General &
 Admin.          USDM    165    15    18    16    15    14    14    14    14
----------------------------------------------------------------------------
Mining           USDM  1,014   117    71   112   128   130   129   134    95
Processing       USDM  1,072    67    65    64    70    68    68    68    67
General &
 Admin           USDM    165    15    18    16    15    14    14    14    14
Refining &
 Freight         USDM     13     1     1     1     1     1     1     1     1
Byproduct
 Credits         USDM    (5)   (0)   (0)   (0)   (0)   (0)   (1)   (0)   (0)
----------------------------------------------------------------------------
Total
 Operating
 Costs           USDM  2,259   200   154   193   213   213   212   216   176
----------------------------------------------------------------------------
Deferred
 Stripping
 Adjustment(2)   USDM    (3)   (1)   (3)     -     -     -     -     -     -
Inventory
 Adjustment      USDM     62  (26)  (17)  (52)  (30)  (17)  (17)  (22)  (28)
Royalty          USDM    154    15    12    15    16    16    17    17     9
----------------------------------------------------------------------------
Total Cash
 Costs(1)        USDM  2,472   190   146   156   200   213   212   211   157
----------------------------------------------------------------------------
Total Cash
 Costs(1)       USD/oz   968   745   675   645   768   814   781   796 1,085
----------------------------------------------------------------------------
Capex            USDM    173    25    25    53    30    15    18     7     7
Capitalized
 Deferred
 Stripping       USDM      3     1     3     -     -     -     -     -     -
Capitalized
 Reserve
 Development     USDM      9     2     5     4     -     -     -     -     -
Corporate
 Admin           USDM    142    14    16    15    14    14    14    14    14
----------------------------------------------------------------------------
All-In
 Sustaining
 Cash Costs(1)   USDM  2,799   231   194   227   244   242   245   232   178
----------------------------------------------------------------------------
All-In
 Sustaining
 Cash Costs(1)  USD/oz 1,096   906   838   941   937   925   901   875 1,226
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Activity         Unit   2021  2022  2023  2024  2025  2026  2027  2028  2029
----------------------------------------------------------------------------
Mining          USD/t
                 mined  2.53  2.66     -     -     -     -     -     -     -
Processing      USD/t
                milled 17.86 18.01 18.26 18.26 18.26 18.26 18.26 18.26 18.26
General &
 Admin.          USDM     14    10     6     6     6     6     6     4     2
----------------------------------------------------------------------------
Mining           USDM    104   112     -     -     -     -     -     -     -
Processing       USDM     68    68    69    70    69    69    69    73    46
General &
 Admin           USDM     14    10     6     6     6     6     6     4     2
Refining &
 Freight         USDM      1     1     1     0     0     0     0     0     0
Byproduct
 Credits         USDM    (0)   (0)   (0)   (0)   (0)   (0)   (0)   (0)   (0)
----------------------------------------------------------------------------
Total
 Operating
 Costs           USDM    186   191    76    76    76    76    76    77    48
----------------------------------------------------------------------------
Deferred
 Stripping
 Adjustment(2)   USDM      -     -     -     -     -     -     -     -     -
Inventory
 Adjustment      USDM   (48)    16    51    37    39    39    39    37    35
Royalty          USDM      6    15     6     5     5     5     5     4     3
----------------------------------------------------------------------------
Total Cash
 Costs(1)        USDM    144   221   133   118   119   119   119   119    86
----------------------------------------------------------------------------
Total Cash
 Costs(1)       USD/oz 1,479   873 1,307 1,512 1,533 1,535 1,535 1,589 1,935
----------------------------------------------------------------------------
Capex            USDM      4     3     3     3     3     3     2     1     -
Capitalized
 Deferred
 Stripping       USDM      -     -     -     -     -     -     -     -     -
Capitalized
 Reserve
 Development     USDM      -     -     -     -     -     -     -     -     -
Corporate
 Admin           USDM     14     8     4     4     3     2     2     2     2
----------------------------------------------------------------------------
All-In
 Sustaining
 Cash Costs(1)   USDM    161   232   140   124   124   123   123   121    88
----------------------------------------------------------------------------
All-In
 Sustaining
 Cash Costs(1)  USD/oz 1,659   915 1,371 1,595 1,604 1,593 1,590 1,626 1,980
----------------------------------------------------------------------------


(1) Total cash costs per ounce and all-in sustaining costs per ounce are
 non-IFRS financial measures and do not have a standard meaning under IFRS.
 Please refer to non-IFRS Performance Measures at the end of this report.
(2)Excludes any deferred stripping adjustment beyond 2014 as required by
 IFRIC20
The estimated ore reserves underpinning the production targetes (as defined
 in the ASX Listing Rules), set out in the table above, have been prepared
 by Mr Paul Chawrun, who is a Competent Person, in accordance with the
 requirements of the JORC Code 2012
This production guidance is based on existing proven and probable reserves
 only from both the Sabodala mining licence and OJVG mining license as
 disclosed in the Reserves and Resources section of this Report. This
 production guidance also assumes an amendment to OJVG mining license to
 reflect processing of OJVG ore through the Sabodala mill.
Key assumptions: Gold spot price/ounce - US$1,250, Light fuel oil -
 US$1.00/litre, Heavy fuel oil - US$0.98/litre, US/Euro exchange rate -
 $1.325

GORA DEVELOPMENT


--  Gora, hosting 0.29 million ounces of proven and probable reserves (see
    Table 2) at 4.74g/t is planned to be operated as a satellite to the
    Sabodala mine requiring 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 lower grade feed
    as required.

--  A technical report and an environmental and social impact assessment
    (ESIA) have been provided to the Senegalese government, and the permit
    approval process is ongoing.

--  Management expects the permit process to be completed in 2014 and
    construction to be initiated in 2015 based on the new integrated LOM
    plan with the OJVG.

SABODALA MINE LICENSE (ML) RESERVE DEVELOPMENT


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

--  The drill program on the ML was completed during the first quarter 2013
    with 11,700 metres drilled. The 2014 drill program will be integrated
    into the combined Sabodala/OJVG reserve delineation program.

Sabodala


--  The drill program at Sabodala was completed in the first quarter of
    2013, with results returned by mid-April 2013. Drilling targeted the MFE
    immediately adjacent to the current ultimate pit, as well as additional
    mineralization located below the MFE, to upgrade and increase mineral
    resources. Drilling successfully confirmed continuation of these zones,
    and updated resource and reserve models were generated.

--  Waste dump condemnation drilling to the southeast of the Sabodala pit
    was completed in the first quarter of 2013.

Niakafiri


--  The timing of a planned drill program at the Niakafiri deposit along
    strike is under review in light of both the decrease in gold prices and
    the acquisition of the OJVG, which has led to a re-evaluation of
    priorities.

--  Additional surface mapping was carried out at Niakafiri in conjunction
    with the re-logging of several diamond drill holes with a view to
    updating the geological model for the Niakafiri deposit.

Masato North


--  A preliminary drill program consisting of six holes was completed to
    test the northern extent of the Niakafiri Shear Zone, adjacent to the ML
    boundary. Narrow mineralized low grade zones were intersected, with
    future analysis planned.

OJVG MINE LICENSE


--  The OJVG mine license covers 213km2. As we have integrated the OJVG
    geological database into a combined LOM plan, a number of areas have
    been revealed as potential sources for reserves addition within the
    mining lease. These targets have been selected based on potential for
    discovery and inclusion into open pit reserves.

--  The high grade "cores" in Masato that were not included in the current
    reserves estimate will be targeted in 2014 so that the mineralization
    characteristics can be better understood and then modeled.

--  Additional areas targeted include additions to the measured resources at
    the Golouma and Kerekounda deposits for potential to extend the
    currently designed pit shells, and to explore near surface oxide targets
    along a 4km long mineralized trend that includes the existing resources
    of Niakafiri, Niakafiri SE and Maki Medina.

REGIONAL EXPLORATION


--  The Company currently has 9 exploration permits encompassing
    approximately 1,055km2 of land surrounding the Sabodala and OJVG mine
    licenses (246km2 exploitation permits). Over the last 3 years, 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 50 anomalies, targets and prospects and the Company expects that
    several of these areas will ultimately be developed into mineable
    deposits. The Company has identified 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
    mineable deposit takes time with a systematic approach to maximize
    potential for success.

--  The exploration team uses a disciplined screening process to optimize
    the potential for success in exploring the myriad of high potential
    anomalies located within the regional land package.

--  The Ninienko, Soreto/Diabougou and Garaboureya prospects all demonstrate
    significant surface mineralization, geochemical and geophysical markers
    within consistent geological zones for gold mineralization providing
    potential for significant discoveries. These prospects along with other
    smaller potentially satellite deposits are planned to undergo various
    stages of trenching, reverse circulation ("RC") and diamond drilling
    hole ("DDH") programs.

Review of Fourth Quarter and Year End Financial Results



---------------------------------------------------------------- -----------
                                                                    Fifteen
                                                                     months
                        Three months ended           Year ended       ended
(US$000's, except                                                  December
 where indicated)              December 31          December 31          31
                     --------------------- --------------------- -----------
Financial Data             2013       2012       2013      2012        2011
----------------------------------------------------------------------------
Revenue                  58,302    122,970    297,927   350,520     236,873
Profit (loss)
 attributable to
 shareholders of
 Teranga                 (4,220)    54,228     47,516    92,600     (16,040)
 Per share                (0.01)      0.22       0.18      0.38       (0.07)
Operating cash flow      13,137     59,670     74,307   104,982       5,132
Capital expenditures      3,725     28,521     69,056   115,785      76,392
Free cash flow1           9,412     31,149      5,251   (10,803)    (71,260)
Cash and cash
 equivalents
 (including
 restricted cash and
 bullion receivables)    42,301     44,974     42,301    44,974      24,549
Net debt2                32,068     75,182     32,068    75,182      95,748
Total assets                                  624,399   564,541     476,612
Total non-current
 financial
 liabilities                                   29,241    68,505      67,042
----------------------------------------------------------------------------
Note: December 31, 2012 values were restated due to the adoption of IFRIC
20. Refer to Adoption of New Accounting Standards.
Note: Results include the consolidation of 72.6% of Oromin's operating
results, cash flows and net assets from August 6, 2013 and 100% from October
4, 2013.
1 Free cash flow is defined as operating cash flow less capital
expenditures.
2 Net debt is defined as total borrowings and financial derivative
liabilities less cash and cash equivalents, restricted cash and bullion
receivables.

Review of Fourth Quarter and Year End Operating Results



----------------------------------------------------------------------------
                                    Three months ended   Year ended December
                                           December 31                    31
                                 -------------------------------------------
Operating Results                      2013       2012       2013       2012
----------------------------------------------------------------------------
Ore mined               ('000t)       1,993      2,038      4,540      5,916
Waste mined -
 operating              ('000t)       6,655      4,362     15,172     12,265
Waste mined -
 capitalized            ('000t)         420        912     15,066     10,696
                                 -------------------------------------------
Total mined             ('000t)       9,068      7,312     34,778     28,877
Grade mined              (g/t)         1.61       2.04       1.62       1.98
Ounces mined             (oz)       103,340    133,549    236,718    376,184
Strip ratio            waste/ore        3.6        2.6        6.7        3.9
Ore milled              ('000t)         860        725      3,152      2,439
Head grade               (g/t)         2.11       3.40       2.24       3.08
Recovery rate              %           89.7       90.7       91.4       88.7
Gold produced1           (oz)        52,368     71,804    207,204    214,310
Gold sold                (oz)        46,561     71,604    208,406    207,814

Average price
 received                $/oz         1,249      1,296      1,246      1,422
Total cash cost
 (incl. royalties)2    $/oz sold        711        532        641        556
All-in sustaining
 costs2                $/oz sold        850      1,004      1,033      1,200

Mining                   ($/t
                        mined)         2.65       3.11       2.59       2.71
Milling                  ($/t
                        milled)       17.96      19.88      20.15      20.39
G&A                      ($/t
                        milled)        4.84       6.35       5.38       6.12
----------------------------------------------------------------------------

1 Gold produced represents change in gold in circuit inventory plus gold
 recovered during the period.
2 Total cash costs per ounce and all-in sustaining costs per ounce are non-
 IFRS financial measures and do not have a standard meaning under IFRS.
 Please refer to Non-IFRS Performance Measures at the end of this report.

Review of Fourth Quarter and Year End Cost of Sales



----------------------------------------------------------------------------
                                 Three months ended
(US$000's)                              December 31  Year ended December 31
                             -----------------------------------------------
Cost of Sales                      2013        2012        2013        2012
----------------------------------------------------------------------------
Mine production costs -
 gross                           43,555      42,846     170,752     145,832
Capitalized deferred
 stripping                       (1,444)     (3,268)    (43,264)    (32,535)
                             -----------------------------------------------
                                 42,111      39,578     127,488     113,297

Depreciation and
 amortization                    26,702      20,534      77,902      55,645
Royalties                         2,890       3,689      14,755      10,491
Rehabilitation                        -          23           6          36

Inventory movements - cash      (11,945)     (4,126)     (8,552)     (5,409)
Inventory movements - non-
 cash                            (9,231)     (2,448)    (15,094)     (8,822)
                             -----------------------------------------------
                                (21,176)     (6,574)    (23,646)    (14,231)
                             -----------------------------------------------
Total cost of sales              50,527      57,250     196,505     165,238
----------------------------------------------------------------------------

Non-IFRS Financial Measures

The Company provides some non-IFRS measures as supplementary information that management believes may be useful to investors to explain the Company's financial results. Refer to the Company's Management's Discussion and Analysis for further details.



----------------------------------------------------------------------------
(US$000's, except where          Three months ended
 indicated)                             December 31  Year ended December 31
                             -----------------------------------------------
Cash costs per ounce sold          2013        2012        2013        2012
----------------------------------------------------------------------------
Gold produced(1)                 52,368      71,804     207,204     214,310
Gold sold                        46,561      71,604     208,406     207,814

Cash costs per ounce sold
Cost of sales                    50,527      57,250     196,505     165,238
Less: depreciation and
 amortization                   (26,702)    (20,534)    (77,902)    (55,645)
Less: realized oil hedge
 gain                                 -        (365)       (487)     (1,936)
Add: non-cash inventory
 movement                         9,231       2,448      15,094       8,822
Less: other adjustments              41        (737)        358        (893)
                             -----------------------------------------------
Total cash costs                 33,097      38,062     133,568     115,586
Total cash costs per ounce
 sold                               711         532         641         556

All-in sustaining costs
Total cash costs                 33,097      38,062     133,568     115,585
Administration expenses(2)        2,753       5,332      12,650      17,996
Capitalized deferred
 stripping                        1,444       3,268      43,264      32,535
Capitalized reserve
 development                        529       5,671       3,524      26,086
Mine site capital                 1,752      19,582      22,267      57,166
                             -----------------------------------------------
All-in sustaining costs          39,575      71,915     215,274     249,367
All-in sustaining costs per
 ounce sold                         850       1,004       1,033       1,200

All-in costs
All-in sustaining costs          39,575      71,915     215,274     249,367
Social community costs not
 related to current
 operations                         311         471       1,763       1,558
Exploration and evaluation
 expenditures                     1,043       2,699       5,405      16,657
                             -----------------------------------------------
All-in costs                     40,929      75,085     222,442     267,582
All-in costs per ounce sold         879       1,049       1,067       1,288

Depreciation and
 amortization                    26,702      20,534      77,902      55,645
Non - cash inventory
 movement                        (9,231)     (2,448)    (15,094)     (8,822)
                             -----------------------------------------------
Total depreciation and
 amortization                    17,471      18,086      62,808      46,823
Total depreciation and
 amortization per ounce sold        375         253         301         225
----------------------------------------------------------------------------

(1) Gold produced represents change in gold in circuit inventory plus gold
 recovered during the period.
(2) Administration expenses include share based compensation and exclude
 Corporate depreciation expense and social community costs not related to
 current operations.


TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(US$000's except per share amounts)

                                            For the years ended December 31
                                                      2013             2012
                                                                 (Restated)
----------------------------------------------------------------------------
Revenue                                            297,927          350,520
Cost of sales                                     (196,505)        (165,238)
----------------------------------------------------------------------------
Gross profit                                       101,422          185,282
----------------------------------------------------------------------------

Exploration and evaluation expenditures             (5,405)         (16,657)
Administration expenses                            (14,717)         (15,573)
Share based compensation                              (813)          (4,694)
Finance costs                                      (12,148)          (7,362)
Gains/(losses) on gold hedge contracts               5,308          (15,274)
Gains/(losses) on oil hedge contracts                   31             (427)
Net foreign exchange losses                         (1,233)          (2,574)
Loss on available for sale financial asset          (4,003)         (11,917)
Share of income from equity investment in
 OJVG                                                   52                -
Other expenses                                     (11,895)          (2,749)
----------------------------------------------------------------------------
                                                   (44,823)         (77,227)
----------------------------------------------------------------------------

Profit before income tax                            56,599          108,055
Income tax benefit                                       -              115
----------------------------------------------------------------------------
Net profit                                          56,599          108,170
----------------------------------------------------------------------------

Profit attributable to:
Shareholders                                        47,516           92,600
Non-controlling interests                            9,083           15,570
----------------------------------------------------------------------------
Profit for the year                                 56,599          108,170
----------------------------------------------------------------------------

Other comprehensive income/(loss):
Exchange differences arising on
 translation of Teranga corporate entity                 -              (63)
Change in fair value of available for sale
 financial asset, net of tax
 Gains (losses), net of tax                              -                -
 Reclassification to income, net of tax             (5,456)           6,775
----------------------------------------------------------------------------
Other comprehensive income/(loss) for the
 year                                               (5,456)           6,712
----------------------------------------------------------------------------
Total comprehensive income for the year             51,143          114,882
----------------------------------------------------------------------------

Total comprehensive income attributable
 to:
Shareholders                                        42,060           99,312
Non-controlling interests                            9,083           15,570
----------------------------------------------------------------------------
Total comprehensive income for the year             51,143          114,882
----------------------------------------------------------------------------

Earnings per share from operations
 attributable to the shareholders of the
 Company during the year

 - basic earnings per share                           0.18             0.38
 - diluted earnings per share                         0.18             0.38

TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(US$000's)

                                   As at December 31,    As at December 31,
                                                 2013                  2012
                                                                 (Restated)
----------------------------------------------------------------------------
Current assets
Cash and cash equivalents                      14,961                39,722
Restricted cash                                20,000                     -
Trade and other receivables                     7,999                 6,482
Inventories                                    67,432                74,969
Financial derivative assets                         -                   456
Other assets                                    5,756                 6,836
Available for sale financial
 assets                                             6                15,010
----------------------------------------------------------------------------
Total current assets                          116,154               143,475
----------------------------------------------------------------------------
Non-current assets
Inventories                                    63,740                32,700
Equity investment                              47,627                     -
Property, plant and equipment                 222,487               247,898
Mine development expenditures                 173,444               138,609
Intangible assets                                 947                 1,859
----------------------------------------------------------------------------
Total non-current assets                      508,245               421,066
----------------------------------------------------------------------------
Total assets                                  624,399               564,541
----------------------------------------------------------------------------
Current liabilities
Trade and other payables                       56,891                44,823
Borrowings                                     70,423                10,415
Financial derivative liabilities                    -                51,548
Provisions                                      1,751                 1,940
----------------------------------------------------------------------------
Total current liabilities                     129,065               108,726
----------------------------------------------------------------------------
Non-current liabilities
Borrowings                                      3,946                58,193
Provisions                                     14,336                10,312
Other non-current liabilities                  10,959                     -
----------------------------------------------------------------------------
Total non-current liabilities                  29,241                68,505
----------------------------------------------------------------------------
Total liabilities                             158,306               177,231
----------------------------------------------------------------------------
Equity
Issued capital                                342,470               305,412
Foreign currency translation
 reserve                                         (998)                 (998)
Other components of equity                     15,776                16,358
Investment revaluation reserve                      -                 5,456
Retained earnings                              96,741                49,225
----------------------------------------------------------------------------
Equity attributable to
 shareholders                                 453,989               375,453
Non-controlling interests                      12,104                11,857
----------------------------------------------------------------------------
Total equity                                  466,093               387,310
----------------------------------------------------------------------------
Total equity and liabilities                  624,399               564,541
----------------------------------------------------------------------------

TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(US$000's)

                                            For the years ended December 31
                                                      2013             2012
                                                                 (Restated)
----------------------------------------------------------------------------
Issued capital
Beginning of year                                  305,412          305,412
 Shares issued from public offerings                37,264                -
 Less: Share issue costs                              (206)               -
----------------------------------------------------------------------------
End of year                                        342,470          305,412
----------------------------------------------------------------------------
Foreign currency translation reserve
Beginning of year                                     (998)            (935)
 Exchange difference arising on
  translation of Teranga corporate entity                -              (63)
----------------------------------------------------------------------------
End of year                                           (998)            (998)
----------------------------------------------------------------------------
Other components of equity
Beginning of year                                   16,358           12,599
 Equity-settled share based compensation
  reserve                                            1,605            3,759
 Stock options to Oromin Explorations Ltd.
  ("Oromin") employees                                 585                -
 Acquisition of non-controlling interest
  in Oromin                                         (2,772)               -
----------------------------------------------------------------------------
End of year                                         15,776           16,358
----------------------------------------------------------------------------
Investment revaluation reserve
Beginning of year                                    5,456           (1,319)
 Change in fair value of available for
  sale financial asset, net of tax                  (5,456)           5,456
 Impairment                                              -            1,319
----------------------------------------------------------------------------
End of year                                              -            5,456
----------------------------------------------------------------------------
Retained earnings
Beginning of year                                   49,225          (43,375)
 Profit attributable to shareholders                47,516           92,600
----------------------------------------------------------------------------
End of year                                         96,741           49,225
----------------------------------------------------------------------------
Non-controlling interest
Beginning of year                                   11,857           (3,713)
 Non-controlling interest - portion of
  profit for the period                              9,083           15,570
 Dividends paid and accrued                         (8,836)               -
----------------------------------------------------------------------------
End of year                                         12,104           11,857
----------------------------------------------------------------------------
Total shareholders' equity at December 31          466,093          387,310
----------------------------------------------------------------------------

TERANGA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(US$000's)

                                            For the years ended December 31
                                                      2013             2012
                                                                 (Restated)
----------------------------------------------------------------------------
Cash flows related to operating activities
Profit for the year                                 56,599          108,170
Depreciation of property, plant and
 equipment                                          48,185           41,999
Depreciation of capitalized mine
 development costs                                  30,091           14,127
Amortization of intangibles                          1,021              650
Amortization of borrowing costs                      3,120              877
Unwinding of discount on mine restoration
 and rehabilitation provision                          156               53
Share based compensation                               813            3,759
Net change in gains on gold forward sales
 contracts                                         (42,955)         (39,010)
Net change in losses on oil contracts                  456            2,364
Buyback of gold forward sales contracts             (8,593)         (39,000)
Loss on available for sale financial asset           4,003           11,917
Loss/(gain) on disposal of property, plant
 and equipment                                         102             (131)
Increase in inventories                            (23,503)         (27,363)
Changes in working capital other than
 inventory                                           4,812           26,570
----------------------------------------------------------------------------
Net cash provided by operating activities           74,307          104,982

Cash flows related to investing activities
(Increase)/decrease in restricted cash             (20,000)           3,004
Redemption of short-term investments                     -              593
Expenditures for property, plant and
 equipment                                         (17,344)         (51,451)
Expenditures for mine development                  (51,603)         (62,910)
Acquisition of intangibles                            (109)          (1,424)
Proceeds on disposal of property, plant
 and equipment                                          38              195
----------------------------------------------------------------------------
Net cash used in investing activities              (89,018)        (111,993)

Cash flows related to financing activities
Loan facility, net of borrowing cost paid           (1,200)          57,695
Repayment of borrowings                            (12,282)         (16,799)
Drawdown from finance lease facility, net
 of financing costs paid                            12,755            2,857
Interest paid on borrowings                         (7,054)          (4,075)
Dividend payment to government of Senegal           (2,700)               -
----------------------------------------------------------------------------
Net cash provided by (used in) financing
 activities                                        (10,481)          39,678

Effect of exchange rates on cash holdings
 in foreign currencies                                 431             (415)
----------------------------------------------------------------------------

Net (decrease) increase in cash and cash
 equivalents                                       (24,761)          32,252
Cash and cash equivalents at the beginning
 of year                                            39,722            7,470
----------------------------------------------------------------------------
Cash and cash equivalents at the end of
 year                                               14,961           39,722
----------------------------------------------------------------------------


CORPORATE DIRECTORY

Directors
Alan Hill, Executive Chairman
Richard Young, President and CEO
Christopher Lattanzi, Non-Executive Director
Edward Goldenberg, 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
Aziz Sy, Vice President, Development Senegal
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: [email protected]
W: http://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, future economic conditions and courses of action, the proposed plans with respect to mine plan and consolidation of the Sabodala Gold Project and OJVG Golouma Gold Project, mineral reserve and mineral resource estimates, anticipated life of mine operating and financial results, targeted date for a NI 43-101 compliant technical report, amendment to the OJVG mining license, the approval of the Gora ESIA and permitting and the completion of construction related thereto. Such 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. These assumptions include, among other things, the ability to obtain any requisite Senegalese governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, 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, 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 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. 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

The technical information contained in this document relating to the mineral reserve estimates for Sabodala, the stockpiles, Masato, Golouma and Kerekounda is based on information compiled by Mr. William Paul Chawrun, P. Eng who is a member of the Professional Engineers Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Mr. Chawrun is a full-time employee of Teranga and is a "qualified person" as defined in NI 43-101 and a "competent person" as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Chawrun has consented to the inclusion in this Report of the matters based on his compiled information in the form and context in which it appears in this Report.

The technical information contained in this document relating to the mineral reserve estimates for Gora and Niakafiri is based on, and fairly represents, information and supporting documentation prepared by Julia Martin, P.Eng. who is a member of the Professional Engineers of Ontario and a Member of AusIMM (CP). Ms. Martin is 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 is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Martin has reviewed and accepts responsibility for the Mineral Reserve estimates for Gora and Niakafiri disclosed in this document and has consented to the inclusion 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 mineral resource estimates for Niakafiri, Gora, Niakafiri West, Soukhoto, and Diadiako is based on information compiled by Ms. Nakai-Lajoie. Ms. Patti Nakai-Lajoie, P. Geo., is a Member of the Association of Professional Geoscientists of Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralization 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. Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report.

The technical information contained in this Report relating to mineral resource estimates for Sabodala, Masato, Golouma, Kerekounda, and Somgol Other are based on information compiled by Ms. Nakai-Lajoie. Ms. Patti Nakai-Lajoie, P. Geo., is a Member of the Association of Professional Geoscientists of Ontario, which is currently included as a "Recognized Overseas Professional Organization" in a list promulgated by the ASX from time to time. Ms. Nakai-Lajoie is a full time employee of Teranga and is not "independent" within the meaning of National Instrument 43-101. Ms. Nakai-Lajoie has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ms. Nakai-Lajoie is a "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Ms. Nakai-Lajoie has consented to the inclusion in this Report of the matters based on her compiled information in the form and context in which it appears in this Report.

Teranga's disclosure of mineral reserve and mineral resource information is governed by NI 43-101 under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). CIM definitions of the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", are substantially similar to the JORC Code corresponding definitions of the terms "ore reserve", "proved ore reserve", "probable ore reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", respectively. Estimates of mineral resources and mineral reserves prepared in accordance with the JORC Code would not be materially different if prepared in accordance with the CIM definitions applicable under NI 43-101. There can be no assurance that those portions of mineral resources that are not mineral reserves will ultimately be converted into mineral reserves.

ABOUT TERANGA

Teranga 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's mission is to create value for all of its stakeholders through responsible mining. Its vision is to explore, discover and develop gold mines in West Africa, in accordance with the highest international standards, and to be a catalyst for sustainable economic, environmental and community development. All of its actions from exploration, through development, operations and closure will be based on the best available techniques.

(1) See table 1 and 2 on page 8 of this Report for detailed breakdown of this resource and reserve estimates.

(2) This production guidance is based on existing proven and probable reserves only from both the Sabodala mining licence and OJVG mining license as disclosed in Table 2 on page 8 of this Report. The estimated ore reserves underpinning this production guidance have been prepared by a competent person in accordance with the requirements of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"). This production guidance also assumes an amendment to OJVG mining license to reflect processing of OJVG ore through the Sabodala mill.

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