Teranga says on track to meet 2014 output guidance
JOHANNESBURG (miningweekly.com) – TSX- and ASX-listed Teranga Gold was confident of meeting the lower end of its targeted full-year output of between 220 000 oz and 240 000 oz of gold, with the company expecting a “strong” fourth quarter, with production of between 75 000 oz and 80 000 oz.
This would follow on expected production of between 50 000 oz and 55 000 oz in the third quarter.
The Masato mine, in Senegal, was expected to make a significant contribution of 20 000 oz of gold to overall fourth-quarter output, and would be the main source of production for the company in 2015.
Ore mining started at Masato on September 2, with this operation being the first of the deposits held under the Oromin Joint Venture Group (OJVG) to be developed.
Teranga had, in December 2013, entered into a $135-million streaming deal with TSX-listed Franco-Nevada Corporation to acquire the balance of the OJVG deposits.
Meanwhile, the company was working to strengthen its balance sheet and expected to be debt free by the end of 2014, with cash of between $25-million and $35-million.
This would follow on $80-million in one-off payments in 2014, including costs related to the agreement signed with the government of Senegal in 2013 that paved the way for Teranga to buy the remaining stake in the OJVG, as well as the repayment of a debt facility and a mobile equipment loan.
While the company expected to generate sufficient free cash flow from operations to fund its growth initiatives in 2015, it would put a standby facility in place by year-end to provide additional financial flexibility.
Teranga had set itself a goal of increasing its free cash flow by between $40-million and $60-million, compared with previous estimates, by reducing the amount of material moved at Masato.
This would free up mobile equipment required for operation at its Gora project, thereby reducing 2015 capital expenditure.
Production at Gora was set to start in the third quarter of 2015.
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