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Teranga to Enter into Stream Transaction with Franco-Nevada to Acquire Remaining Interest in OJVG and to Retire Half of Bank Debt

December 12, 2013

Combination expected to provide greater growth, flexibility and higher
free cash flows to Teranga and guaranteed ounce delivery to
Franco-Nevada with potential to share in Teranga’s exploration success

Highlights of Transactions for Teranga

        --  Enters into a stream transaction with Franco-Nevada to fund the
            acquisition and debt retirement
        --  Acquires the balance of Oromin Joint Venture Group Ltd.
            ("OJVG")
        --  Retires US$30 million of US$60 million bank debt facility
        --  Positions the Company to reach phase 1 growth objective of
            250,000 to 350,000 ounces of annual gold production in
            Senegal.1
        --  Provides for significant operating flexibility to maximize free
            cash flows
        --  Develops a pipeline of near, medium and long term production
            growth on an emerging gold belt
        --  Retains focus on protecting the balance sheet and best
            positions shareholders to benefit from a rise in gold prices

Highlights of Transaction for Franco-Nevada

        --  Attractive stream asset that is expected to be one of
            Franco-Nevada's top contributors
        --  Delivers stable and immediate cash flows and increases gold
            contribution within our portfolio
        --  Investment in a well-run operation with an established track
            record and favourable cost structure
        --  Excellent exploration potential on land covering a 70km strike
            extent on an emerging mineral belt

TORONTO, Dec. 12, 2013 /PRNewswire/ – Teranga Gold Corporation (“Teranga”)
(TSX/ASX:TGZ) and Franco-Nevada Corporation (“Franco-Nevada”)
(TSX/NYSE:FNV) are pleased to announce that they have agreed to enter
into a US$135 million stream transaction that has allowed Teranga to
enter into definitive share purchase agreements with Bendon
International Ltd. (“Bendon”) and Badr Investment & Finance Company
(“Badr”) to acquire the balance of the OJVG that it does not already
own and to retire US$30 million of its US$60 million debt facility with
Macquarie Bank Limited (“Macquarie”). On completion of these
transactions, the combination of Sabodala and the OJVG satellite
deposits is expected to allow Teranga to reach its phase 1 growth
objective of 250,000 to 350,000 ounces of gold production leveraging
off of its existing mill and infrastructure. The combination also
provides operating flexibility to sequence pits and phases of pit
development to maximize free cash flows. Overall, with the proximity
of the OJVG pits to the Sabodala mill and the Company’s ability to
optimize the ounces that are processed through the mill, the
transaction is expected to provide for near, medium and long term
growth in production and free cash flows.

“The acquisition of the OJVG is the most accretive and synergistic
transaction that I have ever seen in all my years of developing and
acquiring mining projects. The addition of the OJVG’s 1.45 million
ounces of open pit mineral reserves to Teranga’s existing mineral
reserves, will double our open pit reserve base, before we have even
commenced any optimization work, and we expect to see significant value
creation as we leverage off of our existing mill and infrastructure,”
said Alan R. Hill, Executive Chairman, Teranga Gold.

US$135 million streaming transaction with Franco-Nevada

        --  The stream transaction allows Teranga to acquire the balance of
            the OJVG and repay half of the Macquarie bank loan with minimal
            dilution to shareholders;
        --  Franco-Nevada will provide a US$135 million deposit of which
            US$105 million will be used to acquire Bendon's stake in the
            OJVG and US$30 million to retire half of the currently
            outstanding Macquarie bank loan;
        --  The stream agreement requires Teranga to deliver 22,500 ounces
            annually over the first six years followed by 6% of production
            thereafter.  Franco-Nevada's purchase price per ounce is set at
            20% of the spot gold price; and
        --  The stream agreement will have an initial 40 year term.

“We are pleased to support the Teranga management team in structuring a
transaction that is a win-win for all parties,” said David Harquail,
President and CEO, Franco-Nevada. “We believe Senegal will be a
growing mining investment destination with attractive geology and
secure mineral tenure”.

Acquisition of balance of OJVG interests not already owned

        --  Acquisition of Bendon's 43.5% participating interest for US$105
            million;
        --  Acquisition of Badr's 13% carried interest for US$7.5 million
            and further contingent consideration based on higher realized
            gold prices and increases to OJVG property reserves through
            2020; and
        --  The acquisition of Bendon's and Badr's interests in the OJVG
            increases Teranga's ownership to 100% and consolidates the
            Sabodala region which is anticipated to provide Teranga with
            the flexibility to integrate OJVG satellite deposits into
            Teranga's existing operations, thereby increasing earnings and
            free cash flow.

Retires US$30 million of US$60 million bank debt

        --  Retirement of half of the Macquarie's loan facility and
            retirement of the balance owing by the end of 2014 protects
            Teranga shareholders by the removal and reduction of potential
            financial covenant violations in a lower and more volatile gold
            price environment; and
        --  Increases Teranga's financial flexibility going forward and
            reduces balance sheet risk.

Expected benefits of the OJVG transaction

        --  Increased open pit reserves (Teranga 1.4 Moz2 & OJVG 1.45 Moz3
            proven and probable reserve);
        --  Increased production - positions Company to reach phase 1
            growth objective of between 250,000 to 350,000 ounces of annual
            gold production in Senegal4;
        --  Increased mine life;
        --  Increased resources and potential resource growth (Teranga M&I
            2.89 Moz, Inferred 1.87 Moz5; OJVG Indicated 3.78 Moz, Inferred
            0.96 Moz6) on significant land package;
        --  Increased operational flexibility with the ability to sequence
            pit and phase development by prioritizing ore from different
            deposits based on grade, strip ratio, ore hardness and
            development costs;
        --  Increased free cash flows - operating flexibility is key to
            generating higher free cash flows in 2014 as we defer phase 4
            waste stripping at Sabodala increasing our 2014 cash flows at
            lower gold prices.  And this is before incorporating additional
            production from the OJVG; and
        --  Most importantly, the combination will benefit from leveraging
            off the existing built mill and infrastructure resulting in
            modest sustaining capital going forward.

“We are pleased to have completed this long-awaited transaction with
minimal dilution to our shareholders while strengthening our balance
sheet by reducing our debt facility. Franco-Nevada’s support for the
management team’s vision and the promise of the project itself has come
after significant due diligence and is a meaningful endorsement from a
leader in our industry. Our shareholders are very well served by this
transaction,” said Richard Young, President and Chief Executive
Officer, Teranga Gold.

Mr. Young continued, “We would like to thank President Macky Sall and
Aly Ngouille Ndiaye, the Minister of Mines and all the Ministries that
have worked with us to develop a real partnership and trust between the
Senegalese Government and our Canadian Management team. The President
has stated the importance of the mining industry in Senegal and his
Government’s commitment to work towards growing domestic gold
production as quickly as possible. This has been demonstrated with the
signing of the Definitive Global Agreement earlier this year which
provided a formula to acquire the waiver option held by the Government
that has paved the way for the consolidation of the OJVG and the
ability to process these ounces through our central milling facility.”

The acquisition by Teranga of the remaining OJVG interests and the
completion of the stream transaction are inter-conditional. In
addition, the completion of the proposed transactions is, among other
things, conditional upon:

        --  Any required Australian Stock Exchange approvals;
        --  An amendment to the project finance facility with Macquarie and
            the signing of an Inter-Creditor Agreement among the Macquarie,
            Teranga and Franco-Nevada parties;
        --  The proposed transaction to be completed by January 17, 2014;
            and
        --  Other customary closing conditions.

There can be no assurance that any of the above noted conditions will be
satisfied, or that the proposed transactions will be completed.

Teranga’s and Franco-Nevada’s senior management team will host a
conference call and webcast on December 12, 2013 to discuss the details
of the transactions. The call will also be available on replay for
those who are not able to participate.

Conference Call and Webcast Details

Toronto: December 12, 2013 at 8:00 AM (EST)

London: December 12, 2013 at 1:00 PM (GMT)

Perth: December 12, 2013 at 9:00 PM (AWST)

Sydney: December 13, 2013 at 12:00 AM (AEDT)

Via Telephone:

To participate on the conference call, please see the dial-in details
below:

        --  Toronto: 416.340.8527
        --  North America toll-free: 1.800.766.6630
        --  International: 1.416.340.8527

Via Webcast:

A live audio webcast of the conference call will be available on the
Company’s website:

http://www.terangagold.com/English/Investors/Presentations-and-Webcasts/default.aspx

The webcast can also be accessed directly using the following link:

http://www.gowebcasting.com/5144

Replay archive:

Please dial 905.694.9451 or toll-free 1.800.408.3053, passcode: 6418574

The conference call replay will expire two weeks after the call.

Forward-Looking Information

This news release contains certain statements that constitute
forward-looking information and forward-looking statements within the
meaning of applicable securities laws (collectively, “forward-looking
statements”). All information contained in this news release, other
than statements of current and historical fact, is forward-looking
information. Forward-looking statements include, among other things,
all disclosure regarding the completion of the acquisition of the OJVG,
the retirement of the Macquarie debt facility and the stream
transaction, the proposed plans with respect to mine plan and
consolidation of the Sabodala Gold Project and OJVG Golouma Gold
Project, mineral reserves, future gold production, cash flows,
anticipated synergies, including higher free cash flows , possible
events, conditions or results of operations. Such statements are based
upon assumptions, opinions and analysis made by management of Teranga
and Franco-Nevada, as applicable, in light of their experience, current
conditions and expectations of future developments that management of
each believe to be reasonable and relevant. These assumptions include,
among other things, the ability to obtain any requisite Senegalese
governmental approvals to the proposed transactions and consolidation
of the projects, ASX approvals, the accuracy of mineral reserve and
mineral resource estimates, future economic conditions and courses of
action. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Teranga and Franco-Nevada, or
developments in Teranga’s or Franco-Nevada’s business or in the gold
industry, to differ materially from the anticipated results,
performance, achievements or developments expressed or implied by such
forward-looking statements. The risks and uncertainties that may affect
forward-looking statements include, among others: economic market
conditions, the inherent risks associated with mineral reserve and
mineral resource estimates, anticipated costs and expenditures,
government approvals and permitting, and other risks detailed from time
to time in Teranga’s and Franco-Nevada’s filings with applicable
securities regulators. Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially from
those expressed or implied in the forward-looking statements. Teranga
and Franco-Nevada cautions you not to place undue reliance upon any
such forward-looking statements, which speak only as of the date they
are made. Forward-looking statements included herein are based on
management’s current plans, estimates, projections, beliefs and
opinions, and, except as required by law, neither Teranga nor
Franco-Nevada undertake any obligation to update forward-looking
statements after the date of this news release or to explain any
material difference between subsequent actual events and any
forward-looking statements. Nothing in this news release should be
construed as either an offer to sell or a solicitation to buy or sell
Teranga securities.

Qualified Persons and Competent Persons Statement

The technical information contained in this press release is based on
information compiled by Mr. Paul Chawrun P. Eng and Ms. Patti
Nakai-Lajoie, P. Geo from the National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101“) technical report entitled Technical Report for the Sabodala Gold
Project Republic of Senegal, West Africa (with an effective date of
June 30, 2013) prepared for Teranga and the technical report entitled
OJVG Golouma Gold Project Updated FS Technical Report (with an
effective date of January 30, 2012), prepared for Teranga’s
wholly-owned subsidiary Oromin, each of which is available at
www.sedar.com. Mr. Chawrun is 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. Ms. Patti Nakai-Lajoie, P. Geo., is a Member of the
Association of Professional Geoscientists of Ontario.

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 2004 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 2004 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr. Chawrun has consented to the inclusion
in the press release of the matters based on his compiled information
in the form and context in which it appears.

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 the press release of the matters based on
her compiled information in the form and context in which it appears in
this document.

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.

ABOUT FRANCO-NEVADA

Franco-Nevada is a gold-focused royalty and stream company. The Company
has a diversified portfolio of cash-flow producing assets and interests
in some of the largest development projects in the world. Its business
model provides investors with exploration optionality while limiting
exposure to operating and capital cost risks. Franco-Nevada has
substantial cash with no debt and is generating cash flow from its
portfolio that is being used to expand its portfolio and pay monthly
dividends. Franco-Nevada’s common shares trade under the symbol FNV on
both the Toronto and New York stock exchanges.

_______________________________________

(1) This forecasted annual production target is based on the following
assumptions: (1) Disclosed mineral reserves (proven 12.87Mt @ 1.28 g/t
for 0.53Moz and probable 16.34Mt @ 1.64 g/t for 0.86Moz) as per the
Teranga’s NI 43-101 technical report entitled Technical Report for the
Sabodala Gold Project Republic of Senegal, West Africa (with an
effective date of June 30, 2013) (the “Sabodala Technical Report“); and (2) The addition of OJVG probable open pit mineral reserves of
21.89Mt @ 2.05 g/t for 1.45Moz as per the technical report entitled
OJVG Golouma Gold Project – Updated Feasibility Report, January 2013
(the “OJVG Technical Report“). Requires amendment to OJVG Gouloma Project’s existing permits
reflecting a reduced project footprint as ore is processed through
Sabodala mill.

(2) See note 1 above relating to Sabodala mineral reserves.

(3) See note 1 above relating to OJVG mineral reserves.

(4) See note 1 above for the assumptions for this forecasted annual
production target which is based on proven and probable reserves only.

(5) The figures above are “Total” Mineral Resources and include Mineral
Reserves for Measured and Indicated resources. Measured resources are
25.15Mt at 1.44 g/t and Indicated resources are 37.23Mt at 1.44 g/t as
per the Sabodala Technical Report. Inferred resources do not include
mineral as reserves and are 57.84Mt at 1.87 g/t as outlined in the
Sabodala Technical Report.

(6) The figures above are “Total” Mineral Resources and include Mineral
Reserves only for Indicated resources. Indicated resources are 75.2Mt
at 1.56 g/t as per the OJVG Technical Report. Inferred resources do
not include reserves and are 17.3Mt at 1.73 g/t as outlined in the OJVG
Technical Report.

SOURCE Franco-Nevada Corporation


Source: PR Newswire