Entering text into the input field will update the search result below

Teranga Gold: Digging Into The Q4 Results

Mar. 03, 2020 4:03 PM ETTeranga Gold Corporation (TGCDF)12 Comments
Taylor Dart profile picture
Taylor Dart


  • Teranga Gold released its Q4 results in late February, with another year of record production, and solid production growth expected in FY-2020.
  • The company managed to easily beat both output and cost guidance for FY-2019, with over 289,000 ounces of total gold production as Wahgnion commercial production began ahead of schedule.
  • The next significant catalyst for Teranga Gold is the combined pre-feasibility study for Massawa and Sabodala, after the transaction which was completed last year.
  • Based on a solid year operationally and further production growth expected in FY-2020, I see Teranga Gold as a Hold.

We're now more than three-quarters of the way through the Q4 earnings season for gold miners (GDX), and it's been a solid quarter for the majority of companies. Of the gold miners that have reported to date, we've seen 27% revenue growth year-over-year, and over 50% of companies beating earnings estimates. Teranga Gold (OTCQX:TGCDF) was one of the more recent names to report earnings and had a strong year operationally across the board. The company managed to beat production and cost guidance by 3% and 12%, respectively and is in the process of completing a significant acquisition to beef up all-in margins at their Sabodala Mine. Based on strong forward guidance and a potential game-changing purchase of the Massawa Gold Project, I see the stock as a Hold. However, I would view any pullbacks to the C$6.00 level as low-risk buying opportunities.

(Source: Author's Table)

Teranga Gold released its Q4 and FY-2019 results just over a week ago and managed to trounce both production and cost guidance for the year. Annual gold production came in at 289,000 ounces, well above the high end of guidance of 270,000 ounces, helped by the company's Wahgnion Mine beginning commercial production ahead of schedule. Meanwhile, all-in sustaining costs also came in much better than planned, at $917/oz vs. a guidance mid-point of $950/oz. Finally, the big news for the year was the acquisition of the Massawa Gold Project from Barrick Gold (GOLD), which has the potential to transform Teranga Gold from a mid-tier gold producer with industry average costs, to a mid-tier gold producer with slightly better than average costs. While we still do not have a detailed look at what the project's integration will look like, the early look at the project is encouraging. Let's take a closer look at the company's operations below:

This article was written by

Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.