Teranga swings to Q1 profit, reports strong performance from new Burkina Faso mine

Teranga Gold has managed to swing from a net loss of $2.7-million in the first quarter of last year, to a net profit of $16.2-million in the first quarter of this year.

This equates to a $0.13 apiece gain for shareholders in the quarter under review, compared with a $0.02 loss a share in the prior corresponding quarter.

The gold miner reports that a strong performance from the Wahgnion project, in Burkina Faso, helped to boost the company’s consolidated gold production for the quarter under review by 27% year-on-year to 91 312 oz.

The company also recorded a 41% year-on-year increase in gross profit to almost $40-million in the quarter under review.

However, Teranga’s operating cash flows fell by 97% year-on-year to $1.5-million in the quarter, primarily owing to swings in inventory stockpile, supplies build-up and settlements of gold advances.

Teranga’s unsold gold bullion inventory increased to $38-million at the end of the quarter, owing to Covid-19-related delays in gold shipments.

“This was Teranga’s first full quarter with two operating mines and we are pleased to report strong revenues, profits and quarterly production.

“While about 23 600 oz of gold bullion inventory remained unsold at March 31, Covid-19-related shipping delays have since been addressed, and gold bullion is being shipped and sold on a regular basis,” says president and CEO Richard Young.

He adds that, barring any unforeseen issues related to the pandemic, the company expects to meet its original production guidance for 2020.

“We continued to be very pleased with the performance of the Wahgnion plant during the first quarter, its first full quarter of commercial production,” comments COO Paul Chawrun.

He explains that mill throughput at the plant continues to exceed the plant design and gold production plans.

“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,” Chawrun points out. The Sabodala gold mine is based in Senegal.

The company is progressing with development of a Sabodala-Massawa project – the company recently acquired the Massawa prospect adjacent to the Sabodala mine, with a definitive feasibility study on some Massawa deposits due to be completed in 2021.

Further, Teranga is doing exploration drilling at the Woulo Woulo and Niamienlessa prospects, near its Afema gold project, in Cote d’Ivoire.

The company is progressing towards publishing a technical report of the Golden Hill project, in Burkina Faso, following a 27 000 m drill programme that finishes at the end of the quarter.

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