Teranga lifts 2020 Wahgnion production guidance after out-performance of plant

TERANGA Gold Corporation, the West African gold producer, increased production guidance for its Wahgnion mine in 2020 to between 150,000 and 165,000 ounces – up to 27% more than estimated in previous guidance.

The increase is in line with the performance of Wahgnion’s processing plant performance which has been 25% above nameplate capacity, the company said. The mine – which is situated in Burkina Faso – will have a shorter life of mine of 10 years owing to the production increase. However, Teranga believes it can find new resources by means of exploration that could extend the life of mine to 15 years.

“The updated life of mine plan is very good news for Wahgnion, and for Teranga overall,” said Richard Young, president and CEO of Teranga in a statement.

“With production averaging about 150,000 oz of gold per year through 2025 at reasonable costs and at current gold prices, we expect to generate significantly more net cash flow from Wahgnion in the coming years, compared to the original feasibility study,” he said.

Teranga said in July that its other operating asset, Sabodala which is in Senegal, would take total group annual production to about 500,000 oz when fully combined with Massawa, the mine Teranga bought from Barrick Gold last year.

Based on a pre-feasibility study, average production from the newly named Massawa-Sabodala would be 384,000 oz at an all-in sustaining cost of $671/oz over the first five years of operation.

The pre-feasibility study found that total net cash flow of $1.1bn would be collected assuming $1,600/oz. This compares to spot gold of $2,061/oz at the time of writing. A definitive feasibility study is expected to be completed in 2021.

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