TSX-listed Teranga has posted an updated, shorter life-of-mine (LoM) plan for the Wahgnion gold project, in Burkina Faso, on the back of increased production, which has also led to a higher set production guidance for 2020.

Since achieving commercial production at the start of November last year, Wahgnion’s processing plant has performed about 25% above nameplate capacity for throughput and gold recovery, resulting in higher than planned production.

As such, Teranga has updated the LoM plan to accommodate the higher plant throughput capability, increasing Wahgnion’s average production by 25% a year and reducing the mine life to ten years.

However, Teranga intends to extend the mine life to 15 years and will start with a multiyear drilling and exploration campaign around three of the existing deposit areas and at more than a dozen promising targets around the Wahgnion mine.

The yearly gold production guidance for Wahgnion has been increased to between 150 000 oz and 165 000 oz, from the prior guidance of between 130 000 oz and 140 000 oz.

Teranga explains the higher guidance for 2020 is based on mill throughput of between 3-million and 3.2-million tonnes a year.

“The updated LoM plan is very good news for Wahgnion, and for Teranga overall. With production averaging about 150 000 oz/y of gold through 2025 at reasonable costs and at current gold prices, we expect to generate significantly more net cash flow from Wahgnion in the coming years, compared to the original feasibility study,” states Teranga president and CEO Richard Young.

Young adds that the Wahgnion update further demonstrates the team’s exploration, development and operating expertise, which the company will leverage at the newly integrated Sabodala-Massawa complex and across Teranga’s pipeline of early to advanced stage exploration properties in West Africa.

Meanwhile, the company reported a 40% year-on-year increase in consolidated gold production to 89 011 oz in the three months ended June 30, compared with the three months ended June 30, 2019. Young says production was driven by the strong contribution from Wahgnion and slightly offset lower production from the Sabodala mine, owing to lower grades and diversion of equipment to start mining at the Sofia deposit, which sits within the Massawa licence area, in Senegal.

Teranga's gross profits generated in the quarter increased to $56.4-million, which was a 209% increase compared with the prior corresponding quarter.

The company's adjusted net profit attributable to shareholders was $27-million, or $0.17 apiece in the quarter under review, against an adjusted net profit attributable to shareholders of $2.9-million, or $0.03 apiece, in the prior corresponding quarter.

Teranga's unsold gold bullion inventory stands at $36-million.

Considering the updated yearly guidance for the Wahgnion project, the company's total 2020 production guidance has been increased to between 375 000 oz and 400 000 oz, from an earlier guidance of between 345 000 oz and 355 000 oz.