Teranga Gold's Drill Results Confirm Banfora Reserve Model and Potential for Reserve Expansion

TORONTO, ONTARIO--(Marketwired - Oct. 26, 2016) -

(All amounts are in U.S. dollars unless otherwise stated)

Teranga Gold Corporation ('Teranga' or the 'Company') (TSX:TGZ)(ASX:TGZ) provided an update on its exploration activities in Burkina Faso, West Africa.

'We have just completed the first phase of a substantial exploration program undertaken to support our three growth objectives for the newly acquired Gryphon assets,' stated Paul Chawrun, Chief Operating Officer of Teranga. 'The first objective is to confirm and increase the resource base of the Banfora gold project, which includes both a mine license with an area of 89km and a regional land package surrounding the mine license comprised of five exploration permits totaling 933km. The second is to commence exploration programs at both Golden Hill and Gourma. The third and final objective is to complete an updated feasibility study by the end of the second quarter of 2017, which would put us on track for construction start-up in the second half of 2017 and production as early as 2019.'

Added, Mr. Chawrun, 'Commencing next month, extensive exploration programs are planned across our prospective exploration portfolio in Burkina Faso, Côte d'Ivoire and in Senegal, utilizing the combined experience and expertise of both the Teranga and Gryphon teams.'

HIGHLIGHTS

The recent drilling results have been favorable in confirming mineralisation in three of the four deposits defined by previous geological modeling through extension of high-grade shoots from infill drilling and potential expansion of the near-surface resource along strike and at depth in areas.

• At the Nogbele deposit, a minimum 200-metre strike extent of broad, shallow, oxide mineralisation has been confirmed at the Tahiti structure.
• Also at Nogbele, a new parallel zone to the Nogbele Central pit area demonstrates the potential for a 400-metre strike length of near surface oxide mineralisation.
• At the Fourkoura deposit, initial diamond core results are confirming the mineralisation defined by the previous geological models developed predominantly from reverse circulation ('RC') drilling.
• At the Samavogo deposit, drilling has been successful in extending a zone of mineralisation in the central part of the deposit and outlining up-dip mineralisation in the south.

'The drill program results at our Banfora gold project are continuing to confirm mineralisation identified within the geological resource models in the areas of the reserve deposits while step out drilling has shown continuity of several deposits both along strike and at depth, giving the potential to increase resources,' stated David Mallo, Vice President, Exploration. 'While our primary focus up to this point has been on Nogbele, Samavogo, Stinger and Fourkoura, we are set to begin testing eleven advanced stage prospects within trucking distance of the proposed mill, which have the potential for reserve expansion.'

DRILLING UPDATE

A total of 6,000 metres of diamond core and 11,500 metres of RC drilling have been completed during the 2016 calendar year at the Banfora gold project, the majority of which was undertaken over the past three months.

The focus of this intensive drilling campaign was to explore strike extensions of mineralized zones, to add shallow oxide resource ounces, to test high-grade plunging shoots and to increase modeling confidence at the deposits comprising the upcoming feasibility study resource estimate. Results are being utilized in updating the geological models as well as deposit wireframes and will be incorporated into the new independent resource update due for delivery in second quarter 2017.

A partial program of confirmatory drilling has now been completed at three of the four deposits which comprised the January 31, 2013 Gryphon Feasibility Study: Nogbele, Samavogo and Fourkoura (see Figure 1 in Appendix 1). At the fourth deposit, Stinger, an independent detailed structural evaluation was undertaken to confirm the geologic model and to guide future drilling. It is expected that drilling will commence at Stinger in fourth quarter 2016.

In addition to the recently completed drilling campaign, considerable progress continues on updating and optimizing the January 31, 2013 Gryphon Feasibility Study. Updates will include a revised process design with updated capital and operating costs. Further metallurgical test work is ongoing to assist in the optimisation of the process design. An independent resource and reserves estimate, which is anticipated to be complete in second quarter 2017, will be included in an updated National Instrument 43-101 Technical Report. The new feasibility study will embed Teranga's extensive operational and construction experience in West Africa.

All significant drill hole intersections are presented in Table 1 in Appendix 1.

Nogbele Deposit

The recent drilling results at the Nogbele deposit (see Figure 2 in Appendix 1), the largest of the four deposits in the January 31, 2013 Gryphon Feasibility Study, have been favourable in confirming the geological resource model and identifying extensions along trend, including the Tahiti structure which is a minimum 200-metre strike extension to a broad shallow oxide zone (see Figures 3 & 4 in Appendix 1). Tahiti remains open to the northwest beyond drill hole BNDD3827 which intersected 1.82 g/t Au over 16m (66-82m).

Examples of the favorable drilling results from the recent drilling campaign at the Nogbele deposit:

2.48 g/t Au over 16m (12-28m) in Hole BNRC4840 including 22.5g/t Au over 1m (15-16m)

2.98 g/t Au over 9m (32-41m) in Hole BNRC4925

3.57 g/t Au over 6m (13-19m) in Hole BNRC4926

3.17 g/t Au over 6m (16-22m) in Hole BNRC4928

2.69 g/t Au over 29m (21-50m) in Hole BNDD3826 including 6.3g/t Au over 6m (42-48m)

1.82 g/t Au over 16m (66-82m) in Hole BNDD3827

1. True widths are unknown.

2. Intercept gold values are determined from uncapped assays.

Samavogo Deposit

Recent drill results at the second largest deposit, Samavogo, have confirmed mineralization, outlined up-dip gold mineralization at the southern end of the deposit and successfully extended a mineralized zone in the central portion of the deposit (see Figure 5 in Appendix 1).

Examples of the favorable drilling results from the recent drilling campaign at Samavogo deposit:

3.28 g/t Au over 7m (62-69m) in Hole BNRC4853

3.93 g/t Au over 5m (34-39m) in Hole BNRC4862

3.15 g/t Au over 6m (82-88m) in Hole BNRC4873

5.46 g/t Au over 6m (106-112m) in Hole BNDD3831

5.52 g/t Au over 14m (43-57m) in BNDD3833 including 11.00 g/t Au over 3m (43-46m)

1. True widths are unknown.

2. Intercept gold values are determined from uncapped assays.

Fourkoura Deposit

Recent drilling at the Fourkoura deposit was predominantly diamond core designed to reinforce the geological model previously heavily weighted on RC results (see Figure 6 in Appendix 1). Results received to-date are providing confidence for the modeling and encouragement for potential near-surface strike extensions.

A step-out exploration hole 200 metres north of the Fourkoura deposit has successfully intersected anomalous gold mineralization within the same Gabbro-hosting shear zone as at Fourkoura. Follow-up drilling will be undertaken to substantiate this potential strike extension.

Examples of the favorable drilling results from the recent drilling campaign at Fourkoura deposit:

6.56 g/t Au over 4m (99-103m) in Hole BNRC4821

4.43 g/t Au over 3m (44-47m) in Hole BNRC4823

2.52 g/t Au over 6m (84-90m) in Hole BNDD3593

2.72 g/t Au over 6m (23-29m) in Hole BNDD3595

2.90 g/t Au over 12.4m (28-40.4m) in Hole BNDD3590

1. True widths are unknown.

2. Intercept gold values are determined from uncapped assays.

Additional Prospects Within Trucking Distance to the Proposed Mill

Outside of the current Banfora mine license, and within trucking distance to the proposed mill, there are eleven advanced prospects that have considerable upside potential.

Of these targets, the highest priority is the Ouahiri prospect (see Figure 7 in Appendix 1), which displays a similar geochemical footprint in both size (2.5km across) and tenor as that outlining the large Nogbele deposit. Very limited drilling to-date has intersected some favorable results requiring considerable follow-up evaluation. Auger, RC and diamond core drilling supported by ground geophysics to highlight the most favourable bedrock anomalism is expected to commence in fourth quarter 2016.

The remaining ten priority prospects at Banfora are to be systematically explored during the upcoming field season, including those along strike of the four deposits and in the under explored western half of Banfora, including Kafina West and Bagu Sud / Weah prospects where previous work has identified strong gold anomalism (see Figure 8 in Appendix 1).

Golden Hill (51%, Earn-in 80%) & Gourma (51%, Earn-in 80%)

Field work is scheduled to recommence at Golden Hill and Gourma during November 2016 with greater emphasis on the more advanced and prospective Golden Hill project.

As shown in Figure 9 in Appendix 1, Golden Hill is located on the Houndé Belt along strike of the recently completed high-grade Yaramoko Mine (with a measured and indicated resource base of 0.81Moz grading 15.8 g/t Au) and only 15km from the recently commenced mine construction at the Houndé project (with measured and indicated resources of 2.55Moz grading 2.09 g/t Au). Exploration work performed by Gryphon and previous explorers on Golden Hill has defined a number of robust, high-quality prospects (see Figure 10 in Appendix 1). Teranga has prioritised ten of these prospects for the 2016/2017 exploration field season, which is expected to include: ground geophysics, fit-for-purpose ground geochemistry and extensive auger, RAB, RC and diamond core drilling with potential for an initial resource estimate.

Gourma (see Figure 11in Appendix 1) covers more than 1,300km of prospective greenstone belt in Eastern Burkina Faso that prior to 2010 had received no modern exploration. The project contains numerous artisanal gold workings and covers a nearly 60km strike length of a crustal scale shear zone. The work to date has utilised a combination of field and desktop work using a range of data including high quality airborne geophysics and remote sensing data. Teranga has identified six prospects within Gourma on which to continue this highly effective exploration approach during the first half of the 2017 field season.

Teranga, through its Gryphon subsidiary, holds a 51% equity interest in the joint venture agreements with Boss Resources Ltd. ('Boss') covering both the Golden Hill and Gourma gold exploration projects. Teranga has the right to earn a further 19% interest upon delivery of a bankable feasibility study regarding a potential deposit within any of the permits comprising the joint ventures. At that point, Boss must participate on a pro-rata basis for all costs associated with the development of the project or default to 1.5% net smelter royalty interest. In addition, upon attaining a 70% equity interest, Teranga has the option to acquire a further 10% in the joint venture upon payment of AU$2.5 million dollars within 60 days of delivery of the relevant feasibility study.

NEXT STEPS

• An updated feasibility study for the Banfora gold project is well underway with a revised resources and reserves estimate, which will be included in a National Instrument 43-101 Technical Report, and is targeted for completion in the second quarter of 2017.
• A comprehensive 15-month exploration program has been designed for each of the Banfora, Golden Hill and Gourma gold projects and is scheduled to begin in November with the following expectations:
  • to continue to convert resources within the four previously identified deposits at the Banfora gold project
  • to begin testing of 11 advanced stage targets within trucking distance of the proposed mill
  • to initiate exploration programs on the Golden Hill property located within the highly prospective Houndé Greenstone Belt, and the Gourma property located 125km southeast of Ouagadougou.

Competent Persons Statements

The information in this news release that relates to Banfora is based on and fairly represents information which has been compiled by Mr. Sam Brooks who is a member of the Australian Institute of Geoscientists. Mr. Brooks has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as a Competent Person, as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Brooks is a full-time employee of Teranga, and has consented to the inclusion of the matters in this news release based on his information in the form and context in which it appears.

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.

Reserve estimates for Banfora gold project

(as per January 31, 2013 Gryphon Minerals press release for 2Mtpa CIL Feasibility Study)

The initial ore reserves for the Banfora gold project have been derived by Cube Consulting under the direction of Quinton de Klerk to a standard reportable in accordance with the 'Australasian Code for Reporting of Exploration Results, Mineral Resources (JORC Code 2004 & NI43-101) and Ore Reserves' (JORC Code 2004) and are based on the Mineral Resource Models estimated by CSA Global in this announcement. The Ore Reserve estimate is based on the Mineral Resources classified as 'Measured' and 'Indicated' after consideration of all mining, metallurgical, social, environmental and financial aspects of the operation. The Proved Ore Reserve has been derived from the Measured Mineral Resource, and the Probable Ore Reserve has been derived from the Indicated Mineral Resource. The cut-off grades used in the estimation of the Banfora Ore Reserves are the non-mining, break-even gold grade taking into account mining recovery and dilution, metallurgical recovery, site operating costs, royalties and revenues. For reporting of Ore Reserves the calculated cut-off grades were rounded to the first decimal gram per tonne of gold. The cut-off grades vary depending on the material type and the pit location. The grades and metal stated in the Ore Reserves Estimate include mining recovery and dilution estimates. The Ore Reserve Estimate is reported within the open pit designs prepared as part of the January 31, 2013 Gryphon Feasibility Study.

Forward-Looking Statements

This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ('forward-looking statements'), which reflects management's expectations regarding Teranga Gold Corporation's ('Teranga' or the 'Company') future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Wherever possible, words such as 'plans', 'expects', 'does not expect', 'budget', 'scheduled', 'trends', 'indications', 'potential', 'estimates', 'predicts', 'forecasts', 'anticipate' or 'does not anticipate', 'believe', 'intend', 'ability to' and similar expressions or statements that certain actions, events or results 'may', 'could', 'would', 'might', 'will', or are 'likely' to be taken, occur or be achieved, have been used to identify such forward looking information. Specific forward-looking statements in this press release include commencement of expected drill programs, the anticipated exploration spend for 2017, the anticipated conversion of resources into reserves at Banfora, the timing and the completion of the updated 2Mtpa Feasibility Study for Banfora, the timing of completion of construction of Banfora including first gold pour, and anticipated future development and interest in joint venture projects. Although the forward-looking information contained in this press release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certain that actual results will be consistent with such forward looking information. Such forward-looking statements are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments that management believe to be reasonable and relevant but that may prove to be incorrect. These assumptions include, among other things, the ability to obtain any requisite governmental approvals, the accuracy of mineral reserve and mineral resource estimates, gold price, exchange rates, fuel and energy costs, future economic conditions, anticipated future estimates of free cash flow, and courses of action. Teranga cautions you not to place undue reliance upon any such forward-looking statements.

The risks and uncertainties that may affect forward-looking statements include, among others: the inherent risks involved in exploration and development of mineral properties, including government approvals and permitting, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Teranga, as well as other risks and uncertainties which are more fully described in Teranga's Annual Information Form dated March 30, 2016, and in other filings of Teranga with securities and regulatory authorities which are available at www.sedar.com. Teranga does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities. All references to Teranga include its subsidiaries unless the context requires otherwise.

Endnotes

(1) As of the date of the acquisition of Gryphon Minerals Limited (October 13, 2016), the most recent Gryphon Reserve Estimate for the Banfora gold project was 826,000 ounces (17.4 Mt at 1.5 g/t) based on a lower capital cost heap leach processing option (see the Scheme Booklet for further details). However, as noted in Teranga's press release dated June 19, 2016 and re-confirmed herein, Teranga's preferred development path for the Banfora gold project is an optimized CIL flowsheet. The pro forma Combined Group Proven and Probable Mineral Reserve estimate of 3.7 million ounces as at December 31, 2015 included in Teranga's press release dated June 19, 2016 was based on Gryphon's CIL feasibility study Mineral Reserve estimate of 1.05 million ounces (16.7 Mt at 1.95 g/t) issued in January 2013. A number of relevant factors have changed since this estimate was issued by Gryphon Minerals in 2013, and as such and benefitting from an optimization study to be completed by Teranga, we anticipate updating the feasibility study and the resource and reserve estimates in the first half of 2017. The Mineral resources are as per Gryphon Minerals 2Mtpa Heap Leach Feasibility Study (JORC) released August 4, 2014. Complete information is available on Gryphon's website at www.gryphonminerals.com.au and filed on the ASX at www.asx.com.au.

(2) Deposits were previously identified in a CIL Feasibility Study disclosed by Gryphon Minerals Limited on January 31, 2013.

About Teranga Gold

Teranga is a multi-jurisdictional West African gold company focused on production and development as well as the exploration of more than 5,000km of land located on prospective gold belts.

Since its initial public offering in 2010, Teranga has produced more than 1.2 million ounces of gold from its operations in Senegal where it is uniquely positioned with the only commercial gold mill in country. Following its recent acquisition of Gryphon, the Company is fast-tracking the development of Banfora, which is expected to commence production in 2019. Concurrent with its production and development activities, exploration programs are underway to increase its reserve base through resource conversion and making major new discoveries. Teranga has a strong balance sheet and the financial flexibility to continue to grow its business.

Steadfast in its commitment to set the benchmark for responsible mining, Teranga operates in accordance with the highest international standards and aims to act as a catalyst for sustainable economic, environmental, and community development as it strives to create value for all of its stakeholders.

APPENDIX 1

To view Figures 1 to 11 please visit: http://media3.marketwire.com/docs/teranga_gold_oct26_appendix1.pdf

Table 1: Summary of Drilling Results