The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Teranga Gold Corporation: Company Announces the Commencement of a Diamond Drilling Program at Tourokhoto-The First of Its 39 Drill Targets as Part of a US$19M Exploration Program

Thursday, December 16, 2010

Teranga Gold Corporation: Company Announces the Commencement of a Diamond Drilling Program at Tourokhoto-The First of Its 39 Drill Targets as Part of a US$19M Exploration Program06:30 EST Thursday, December 16, 2010TORONTO, ONTARIO--(Marketwire - Dec. 16, 2010) - Teranga Gold Corporation (TSX:TGZ)(ASX:TGZ) ("Teranga") is pleased to announce that with the closing of the Initial Public Offering ("IPO") on December 7th, 2010 and the receipt of the proceeds, drilling has now begun on Tourokhoto. This is part of a 108,000 metre diamond and reveres circulation drill program to be completed by the end of September 2011. As the program ramps up, the Company expects to have 12 drills on the property to further explore the 39 drill targets identified on its regional exploration and mining licenses as outlined in the prospectus(1). The Company holds the largest land position in Senegal with a total land package comprising, 1,488 km2. Until now, all efforts have been focused on developing the Sabodala gold mine and repaying the project loan. As a result, drilling at Sabodala was suspended in 2007 once sufficient reserves were identified to support the building of a mill. Since that time, only basic exploration work has been carried out on the entire land package, with the sole purpose of identifying drill targets. This limited work has found more than 100 significant geochemical anomalies."Teranga is now in an exciting position to initiate the first phase of an ongoing aggressive exploration program to follow up on targets identified in earlier exploration work," said Alan R. Hill Chairman and Chief Executive Officer of Teranga. "We have a great land position in Senegal, an emerging world class gold district, where more than 10 million ounces have been discovered over the past five years."The first phase of the exploration program plans for US$13.5M to be spent on the regional exploration concessions, consisting of 8 drills totalling 67,000 metres of diamond and reverse circulation drilling. US$5.5M will be spent on the mine license exploration program, consisting of 4 drills totalling 41,000 metres of diamond and reverse circulation drilling. In addition, a further 130,000 metres of rotary air blast drilling will be done. The program should be completed by the end of September 2011.The gold mine at Sabodala, as well as, the regional land package was acquired by Teranga as part of the IPO and the demerger of Mineral Deposits Limited's Senegalese gold assets. To view Figure 1: Teranga's Exploration land package and priority target area, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_1.pdfRegional Exploration Program:The regional land package comprising 1,455km2 has only seen early stage exploration activity over the previous four years, consisting of airborne geophysical surveying, geochemical and geological mapping, trenching, rotary air blast (RAB) drilling and only limited reverse circulation (RC) and diamond drill (DD) testing. To date less than 20,000m of RC and DD have been completed for a total expenditure of only US$13.2 million. However, despite the limited activity, over 100 gold anomalies in geologically favorable settings have been found, as recently as April 2010. From these settings, 27 target areas have been identified as the first phase of Teranga's upcoming drilling program (Figure 2).Teranga's program to September 2011 will include 10,000m of DD, 60,000m of RC drilling and 130,000m of RAB drilling. The budget for this first phase is US$13.5 million. Two rigs have already commenced drilling operations and a diamond drill is mobilizing to site during the week of December 12, 2010. An additional 5 rigs are scheduled to commence drilling in the January to March 2011 quarter. TourokhotoThe 27 targets have now been prioritized, with Tourokhoto, Diegoun North, and Gora being the first three to be drilled. The first of these is Tourokhoto, which is situated to the north east of the Sabodala mine adjacent to the Senegal Mali border. Tourokhoto consists of a 5km x 2km area of extensive surface gold geochemistry identified by a 200 x 50m termite sampling grid (Figure 3). The gold anomalies are closely associated with a set of sub-parallel shear zones, which form part of the Main Transcurrent Shear Zone (MTZ), a substantial shear zone that trends NE and is persistent throughout the gold bearing provinces of Senegal and Mali. At Tourokhoto the MTZ shears are intersected by NE trending fault structures. In these locations gold geochemistry can be mapped out at the >240ppb gold level. Individual termite mound samples have reported up to 10,000 ppb gold (10g/t gold). A diamond drill rig is now mobilizing to this target area to test several of the coincident gold anomalies over the structural intersections with a series of drill fences. In addition to this, a systematic RAB drilling program is envisaged to better locate the bedrock source of the surface gold anomalies, prior to further RC and diamond drilling.To view Figure 2: Regional surface gold anomalies on regolith map, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_2.pdfTo view Figure 3: Tourokhoto surface gold geochemistry and structures, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_3.pdfDiegoun North – "The Donut"The Diegoun North target area consists of a 7 x 4km complex of extensive elevated surface geochemical anomalies. These anomalies form a ring around a central felsic intrusion and have therefore been nick-named "The Donut". The complex is coincident with a set of NNE trending shears which are considered splays off the MTZ to the east. A number of NE cross-cutting structures are also present. The local geology consists of fine to medium grained sediments intruded by small granodiorite plugs, porphyries and gabbro's. Such a setting is conducive to the structural preparation required for gold mineralization to develop. Past rock chip sampling has returned values of up to 80 g/t gold. More recently RAB drilling in the southern portion of The Donut has identified many NE trending zones of gold mineralization in the bedrock. Bedrock mineralization in the SW quadrant is contained within a 700 x 2,000m area and in the SE within 2,000 x 2,000m area.To view Figure 4: Diegoun North target area, surface geochemistry, simplified geology and structures, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_4.pdfA drill program will commence shortly to test this southern bedrock mineralization identified in the RAB program so far. In addition, systematic program of RAB drilling will commence on the northern half of the target area. GoraThe Gora prospect was evaluated during the first half of 2010, with a systematic RC drilling program consisting of 51 holes for a total of 7,172m (Figure 5). This work delineated two sub-parallel, shallow SE dipping, gold bearing quartz veins, Vein 1 and Vein 2. These veins are separated by 10 to 20m of country-rock sediments. Vein 1 averages 8.8 g/t gold with an average width of 2.5m. Vein 2 averages at 3g/t gold with an average width of 2.7m (Table 1). An inferred resource of 70,000 ounces at 5.6 g/t gold has been calculated. Table 1: Summary of inferred resource parameters for the Gora veins at the 0.5g/t Au cut off. 2Mineralisation Envelope Intercepts Number of Assays Volume (m3) Tonnage (t) at SG 2.58 Average Thickness (m) Bottom Cut (g/t Au) Top Cut (g/t Au) Average Grade(g/t Au) Estimated Contained Ounces (Oz)Vein 1194867,000173,0002.50.5208.849,000Vein 2267783,000214,0002.70.510321,000Totals:387,0005.670,000The 7,000m (RC and DD Core) follow up drill program will commence in early January and with three main goals:Lateral resource extension along strike to the north and south Shallow resource extension down dip by following up a number of high grade intersections. e.g. SKRC044 7m @ 32 g/t gold from 110m Resource definition by completing the initial systematic 40 x 40m drill grid in the central portions of the prospect Exploration at depth to test for wider zones of mineralization where the vein system is projected to intersect a number of intrusive rocks to the south east To view Figure 5: Gora surface outcrop and drilling to date, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_5.pdfMine License Exploration ProgramSimilar to the regional land package, development opportunities beyond delineation of the existing ore reserves on the 33km2 Mining License have been limited due to funds being focused on the construction of the mine itself. Nevertheless, the work completed to date has provided a good structural understanding within the mining license and therefore has provided exploration opportunities (Figure 6). These opportunities will be followed up in the near term with a US$5.5M program which will be completed by mid year. The plan calls for four drills and 41,000m of drilling.The mine license exploration program is designed to:Expand the resource/reserve base to the south of the Sabodala deposit at Nakafiri and Nakafiri South; Identify near surface, potentially higher grade, material for near term mill feed; and Test new targets with the potential to add significantly to the resource/reserve base. Nakafiri, Nakafiri West and Soukhoto targets are located to the south of the Sabodala deposit. A program has been designed to examine the expansion of the resource/reserve base of these deposits by testing if the large, complex shear system of Nakafiri and Nakafiri West is structurally connected to Soukhoto.Near surface opportunities include Sutuba, Dinkokhoto and Soukhoto where previous exploration has identified NW trending outcropping of high grade shear zones which may host small scale, shallow ore bodies. Collectively these may provide significant ore feed.New targets with the potential for bulk tonnage discoveries will be tested. These include Sambaya Hill, Masato Extension, the Sabodala Structural Corridor (The Corridor) and The Main Flat Extension. Sambaya Hill is a 1km long geochemical anomaly (>100 ppb gold) with anomalous rock chip results of >1.0 g/t gold. IP also indicates favourable structural complexity. It is located between the Sabodala deposit and the neighbouring Masato deposit, which is contiguous with our mining license and on the same structure as the Niakifiri deposit. The Masato Extension is a natural extension of the ore body adjacent to the mining lease. The Corridor is a 2.5km extension north from the Sabodala pit and has already been defined by RAB drilling anomalies which coincide with aeromagnetic anomalies. In addition, early results from the drilling program now underway have returned near surface gold intercepts in the bounding structures of The Corridor. These will be investigated further. The Main Flat Extension, located down dip from the Sabodala pit, has already been defined by 4 deep holes up to 650 metres in depth. These have established continuity in gold mineralization over 300 metres of strike, but plunging to depth. The program here is to test the system for significant zones of mineralization should the system flatten and reopen. To view Figure 6: Exploration Targets on the Mining License, please visit the following link: http://media3.marketwire.com/docs/tgz_12_16_2010_fig_6.pdfTeranga Gold Corporation ProfileTeranga Gold Corporation is a Toronto-based gold company which was created to acquire the Sabodala gold mine and a large regional exploration land package, located in Senegal, West Africa from Mineral Deposits Limited. Management believes that the mine operation, together with the Company's prospective 1,488 km2 land package, provides the basis for growth in reserves, production, earnings and cash flow as new discoveries are made and processed through the Company's existing mill. One of the Company's key strengths is its corporate and operating team, which has extensive experience exploring, developing and operating gold mines in Africa. Teranga means hospitality and friendliness in Wolof, the main local language of Senegal. The Company wanted a name that would reflect its actions.Forward Looking StatementsCertain information contained in this release, including any information on Teranga's plans or future financial or operating performance and other statements that express Teranga's management expectations or estimates of future performance constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management of Teranga at the time, are subject to significant business, economic and competitive uncertainties. Teranga cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Teranga to be materially different from Teranga's estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, 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. Nothing in this release should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities or any other securities.(1) The Prospectus can be obtained on the Company's website at www.terangagold.com or on SEDAR at www.sedar.com.(2) For details please see the Technical Report dated October 7, 2010 on the Company's website www.terangagold.com or on SEDAR at www.sedar.com.FOR FURTHER INFORMATION PLEASE CONTACT: Kathy SiposTeranga Gold CorporationVice-President, Investor Relations+ 1 416 594 9547ksipos@terangagold.comwww.terangagold.com