Teranga Gold Corporation has notched up record quarterly gold production of 71,946 ounces at the Sabodala Gold Project in Senegal. This represents a 12% increase on the same period of 2018 and the company is on track to meet full--year production and cost guidance.
Per ounce cost metrics decreased by up to 9% in the quarter and were below the respective full-year guidance ranges, including all-in sustaining costs, excluding non-cash inventory movements and amortised advanced royalty costs, of $806 per ounce.
Benefitting from an advance gold prepayment of $11.8 million, operating cash flow before changes in working capital excluding inventories rose 6% in the three months to $26.3 million and operating cash flow increased by 261% to $49.6 million. EBITDA increased by 37% to $36.9 million.
The net income attributable to shareholders decreased to a loss of $2.7 million, or $0.03 per share while adjusted net income attributable to shareholders was $2.2 million, or $0.2 per share. Net income and adjusted net income were negatively impacted by a pending tax assessment for $10 million.
At the company's Wahgnion project in southwest Burkina Faso, which will be its second mine, construction is on budget and on track for commissioning in the September quarter.
During the period the company also issued an initial mineral resource estimate for Golden Hill in Burkina Faso, its most advanced exploration project.
President and chief executive officer Richard Young said: "2019 is off to a strong start for Teranga across our portfolio, with record operational results from Sabodala, good construction progress at Wahgnion and an initial resource at Golden Hill.
"Our 10-year-old cornerstone asset, Sabodala, set a record for quarterly production in the first quarter. With over 12 years of mine life remaining, Sabodala is delivering solid free cash flow to support our growth initiatives."
Meanwhile, the construction schedule for the company's second mine, Wahgnion, is on track and entering its final phases.
"I am pleased to report that we expect to begin commissioning the processing plant in the third quarter and production ramp-up during the fourth quarter, said chief operating officer Paul Chawrun.
"Based on our progress to date, we expect Wahgnion will produce between 30,000 and 40,000 ounces of gold in 2019, which exceeds the original estimate of 18,000 ounces released in the October 2018 technical report," he said.
During the first five years of its mine life, Wahgnion is expected to increase Teranga's current consolidated annual gold production by approximately 50%, or more than 130,000 ounces.
Richard Young added: "During the first quarter, we continued to make meaningful progress towards achieving our vision of building a multi-asset, mid-tier gold producer in West Africa.
"By year-end, we will have two gold mines in operation capable of producing between 300,000 and 350,000 ounces in 2020 and generating strong free cash flows.
"As well, Golden Hill continues to show that it has the potential to be our third gold mine. In less than two years, we have advanced it from an early-stage exploration project to an initial mineral resource estimate. Going forward, our priority is to increase the mineral resources estimate and advance Golden Hill into the feasibility stage of development."