AMN - BURKINA FASO: Wahgnion drives strong gold quarter

Teranga Gold Corporation has achieved a 27% increase in consolidated gold production to 91,312 ounces during the March quarter. This was driven by a strong first full quarter of production from the Wahgnion project in Burkina Faso.

The company also achieved a 46% increase in revenue to US$134.1 million over the corresponding quarter of 2019 as well as a 41% increase in gross profit to US$39.5 million.

Consolidated net profit attributable to shareholders increased to US$16.2 million, or $0.13 per share, compared to a net loss of US$2.7 million or $0.03 per share in the 2019 period. Net profit attributable to shareholders was US$7 million, or $0.06 per share, compared to US$2.2 million or $0.02 per share.

There was a 70% and 36% increase in EBITDA and adjusted EBITDA, respectively, a 9% increase in operating cash flows before changes in working capital, excluding inventories, and operating cash flows decreased 97% primarily due to swings in inventory stockpile, supplies build-up and settlements of gold advances.

At March 31, the unsold bullion inventory increased to US$38 million (using a period-end spot gold price), due to coronavirus-related delays in gold shipments in late March.

"This was Teranga's first full quarter with two operating mines and we are pleased to report strong revenues, profits and quarterly production," said president and CEO Richard Young.

"While approximately 23,600 ounces of gold bullion inventory remained unsold at March 31, 2020, COVID-19 related shipping delays have since been addressed, and gold bullion is being shipped and sold on a regular basis.

"I would like to thank our team members for their dedication in resolving these challenges while delivering a solid quarter and strong start to the fiscal year. "Barring any unforeseen issues related to the pandemic, we expect to meet our original production guidance for 2020."

Chief Operating Officer Paul Chawrun said: "We continued to be very pleased with the performance of the Wahgnion plant during the first quarter, its first full quarter of commercial production.

"Mill throughput continues to exceed the plant design and gold production at 51,306 ounces was above plan. Wahgnion delivered what will be its strongest quarter of the year, offsetting an expected soft quarter from Sabodala as we progress through a lower grade phase of the mine plan.

"The development of the Sabodala-Massawa complex is underway with integration activities proceeding as planned. We are on track to initiate mining at the Sofia deposit, complete the pre-feasibility study, and issue the NI 43-101 Technical Report in the third quarter."

Teranga's 2020 guidance has been updated to include COVID-19 related costs, which reflects incremental costs, primarily relating to personnel, camp and transportation costs.

The 2020 guidance does not currently include production from any of Massawa's high-grade deposits and expects to provide updated production and cost guidance once the NI 43-101 compliant pre-feasibility study (PFS) for the Sabodala-Massawa Complex is filed, likely early in the third quarter of this year.

Mining and processing of high-grade ore from the first of the Massawa deposits, Sofia, is on track to begin in the third quarter of 2020.

www.terangagold.com