Revised mine planTERANGA GOLD CORPORATION: REVISED MINE PLAN EXPECTED TO GENERATE SIGNIFICANT FREE CASH FLOWS As part of Teranga Gold Corp.'s continuing effort to maximize free cash flows during this period of lower and more volatile gold prices, management has designed a new mine plan on a stand-alone basis maximizing gold production while minimizing operating, sustaining, new project development, corporate and other costs. The new mine plan is expected to deliver between 210,000 and 240,000 ounces(1) of annual gold production over the period 2014 to 2016 at all in sustaining cash costs estimated at between $800 and $1,000 per ounce. As a result, at $1,350 per ounce gold, the Company expects to generate between $150 and $200 million in free cash flow after $85 million in debt repayments over the period.
"This optimized mine plan allows us to generate significant free cash flows that strengthen our balance sheet and improve our financial flexibility as we move forward in this volatile gold price environment," said Richard Young, President and Chief Executive Officer.
The new optimized mine plan has been designed to provide earlier access to higher grade material within the Sabodala pit and reduce waste material moved, freeing up mobile equipment for the development of OJVG satellite deposits. Another key element of this new mine plan is sequencing the commencement of Gora development to late 2014. This allows us to utilize mobile equipment from Sabodala, which is expected to result in $20 to $25 million in reduced capital costs for mobile equipment compared to our previous mine plan. Under this revised mine plan, Gora production start-up is now anticipated in early 2015.
"The Company's free cash flow generating ability should be further enhanced once we complete an integrated mine plan including production from OJVG satellite deposits and a toll milling agreement with our joint venture partners, which we are targeting for completion by year end," said Alan R. Hill, Executive Chairman.