TERANGA GOLD CORPORATION

2600 – 121 King Street West Toronto ~ Ontario ~ M5H 3T9 ~ Canada

T: 416-594-0000 F: 416-594-0088 E: investor@terangagold.com

www.terangagold.com PRESS RELEASE For Immediate Release TSX Trading Symbol: TGZ ASX Trading Symbol: TGZ

Drilling north of pit intersects significant widths of high grade mineralization:

70 metres at 3.0 gpt gold,

53 metres at 4.5 gpt gold,

34 metres at 6.3 gpt gold

27 metres at 3.6 gpt gold, and

46 metres at 9.8 gpt gold.

January 17, 2012: Toronto, Canada – Teranga Gold Corporation (“Teranga” or “the Company”) is

pleased to provide an update of its ongoing drill program underway on the 33km2 Mine License,

specifically an area to the north of the Sabodala pit referred to as the Main Flat Extension (“MFE”) and the

Lower Flat Zone (“LFZ”) located under the MFE.

Highlights:

Exploration at the Sabodala Pit continues to confirm the potential for higher grades in an expanded pit to depth and to the north. Drilling intersected significant widths of mineralization outside the current pit design, including holes SBDH160DD of 70 metres at 3.0 grams of gold per tonne (“gpt”) and SBDH157D of 53 metres at 4.5 gpt, both on the MFE – the zones remain open down plunge and to the northwest. These grades are twice the average reserve grade of 1.5 gpt at Sabodala.

A deeper zone, the LFZ, is taking shape with 46 metres at 9.8 gpt from hole SBDH171DD, 34 metres at 6.3 gpt from hole SBDH170DD and 27 meters at 3.6 gpt cut in the lower portion of hole SBDH160DD.

More than 10,000 metres of drilling is planned on the MFE through Q1 2012.

“We continue to be encouraged by both the high grades and significant widths of mineralization seen in our recent drill results on the Mine License. These results provide further encouragement that our exploration program may produce promising results in 2012” said Mr. Alan R. Hill, Chairman and Chief Executive Officer.

Mine License Exploration – (See Diagram on Company website - Homepage “Sabodala Cross Section”) Exploration results in 2011 support management’s belief of the potential to expand upon existing gold mineralization by an additional 20 to 30 tonnes at grades of between 1.5 and 1.9 g/t for a total inventory of 2.5 to 3.5Moz from the Sabodala Mining License (“ML”) over the next 12 to 18 months.

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The larger gold inventory base is expected to result from the success of deepening the Sabodala pit to the north along the MFE, extension of the Masato pit onto the ML, potential conversion of Niakafiri resources to reserves as well as adding to the gold mineralization inventory below these three large open pits. A minimum of 5 drill rigs are expected to be testing new targets at an estimated cost of $10 – $20 million in 2012. Teranga will also attempt to convert existing resources into reserves. There are 7 drills

1 This “exploration target” is not a Mineral Resource. The potential quantity and grade disclosed herein is conceptual in nature, and

there has been insufficient exploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a Mineral Resource.

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operating on the ML at the present time (6 DD and 1 RC) and pending rig availability this number may increase to expedite resource expansion and reserve definition drilling into 2012.

Main Flat Extension (“MFE”) and Lower Flat Zone (“LFZ”) The MFE is one of the principal gold hosts in the Sabodala deposit. In the southern part of the deposit this structure dips shallowly to the west, rolls flat and then rolls to a moderate northerly dip as it exits the ultimate pit. The drill program is designed to test the continuity of this structure to the north beginning with in-filling holes in the deepest part of the current mine design then stepping out to the north.

Drilling program has the following objectives to support resource and reserve expansion:

Convert Inferred Resources north of current ultimate pit;

Extend MFE zone M&I resources down dip to the west;

Develop the Lower Flat Zone mineable resources to depth as mineralization plunges to the north;

Test for extension of Lower Flat Zone to the east; and

Test for parallel zones beneath the Sabodala pit.

Main Flat Extension Latest results include drill hole SBDH160DD, a vertical diamond hole collared on section 20650N at Sabodala has intersected 70m of 3.0 gpt from 175m down the hole. Drill hole SBDH157D, a vertical hole collared on section 20630N at Sabodala has intersected 53m of 4.5 gpt from 125m down the hole. Both holes were collared on the 650RL bench within the Sabodala pit. These results continue to in-fill and extend a broad zone of mineralization related to the MFE part of which is classified as Indicated in the current Sabodala resource.

The 70m 3 gpt intercept cut by SBDH160DD lies immediately west of the ultimate pit on section 20650N and extends 45m below the pit on that section, 40m to the north a similar size intersection was cut by SBDH147DD (49m at 2.2 gpt from 249m).

Results also include vertical drill holes SBDH170DD and SBDH171DD which were collared on the north haul ramp into the Sabodala pit on section 20750N. SBDH170DD returned 50m at 2.2 gpt from 252m and 23m at 1.4 gpt from 324m in a part of the deposit that contains a significant quantity of Inferred Resource. The intersection connects mineralization between holes SBRC747D (33m at 1.2 gpt from 360m) 65m to the west and SBRC308D (80m at 1.3 gpt from 334m) 40m to the east. Hole SBDH171DD intersected 32m at 1.45 gpt from 263m in three mineralized zones down to 312m.

Lower Flat Zone Further to depth, hole SBDH171DD cut 46m at 9.8 gpt beginning 420m down the hole in the LFZ including 20m at 20.0 gpt from 430m. Also further to depth, hole SBDH160DD cut 27m at 3.6 gpt beginning 420m down the hole and hole SBDH170DD cut 34m at 6.3 gpt beginning 415m down the hole including 12m at 9.9 gpt. The same hole also cut 24m at 2.8 gpt beginning at 459m down the hole. These intersections confirm the interpretation that multiple flat zones exist and that there is potential for significant mineralization immediately beneath the Sabodala ultimate pit in what is currently referred to as the LFZ that sits outside the current Sabodala resource. (See Diagram on Company website- Homepage “Sabodala

Cross Section”) The depth of this deeper intercept coincides with a similar intercept (24m at 3.2 gpt from 431m) cut by SBDH141D 70m to the north. In what is interpreted to be the same deep zone SBDH157D intersected 20m averaging 1.7 gpt at 353m down the hole. No drilling has tested this zone to the south to date.

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The goal of the MFE/LFZ programs is to add 250,000 to 500,000 ounces of gold to the open pit mineable

gold inventory at an average grade between 1.5 – 2.0 gpt, as well as potentially a similar amount to

lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012.2

MAIN FLAT EXTENSION: RC & DIAMOND DRILLING, AQUA REGIA RESULTS

Intercept with cut-off 0.2 g/t Au and max 2m internal dilution

HOLE ID FROM (m) INTERSECTION1

SBDH157D

125 53m @ 4.5 g/t

150 Incl. 12m @ 8.6 g/t

173 Incl. 5m @ 8.9 g/t

353 20m @ 1.7 g/t

SBDH160DD

175 70m @ 3 g/t

175 Incl. 12m @ 0.9 g/t

189 Incl. 22m @ 3.5 g/t

214 Incl. 24m @ 4.4 g/t

345 10m @ 0.9 g/t

420 27m @ 3.6 g/t

SBDH171DD

263 8m @ 1.3 g/t

274 12m @ 1.4 g/t

300 12m @ 1.6 g/t

420 46m @ 9.8 g/t

430 Incl. 20m @ 20.0 g/t

477 1m @ 5.6 g/t

492 6m @ 1.8 g/t

SBDH170DD**

252 50m @ 2.2 g/t

324 23m @ 1.4 g/t

415 34m @ 6.3 g/t

426 Incl. 12m @ 9.9 g/t

459 24m @ 2.8 g/t

SBDH162D**

49 5m @ 0.5 g/t

58 6m @ 0.2 g/t

77 5m @ 0.5 g/t

SBDH151D 246 4m @ 2.6 g/t

279 1m @ 7.5 g/t

2 This “exploration target” is not a Mineral Resource. While management has confidence in its projections based on exploration

work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a Mineral Resource.

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MAIN FLAT EXTENSION: RC & DIAMOND DRILLING, AQUA REGIA RESULTS

Intercept with cut-off 0.2 g/t Au and max 2m internal dilution

SBDH168* 257 16m @ 0.9 g/t

SBDH145D 549 12m @ 2.7 g/t

SBDH148DD 119 12m @ 2.4 g/t

281 18m @ 2.3 g/t

SBDH156D

300 6.8m @ 0.9 g/t

311 10m @ 1.2 g/t

324 13m @ 0.7 g/t

341 4m @ 0.8 g/t

SBDH179DD

338 67m @ 0.8 g/t

424 8m @ 3.6 g/t

466 11m @ 2.5 g/t

483 4m @ 2.1 g/t

SBDH154DD

292 11m @ 1.5 g/t

361 32m @ 1 g/t

437 8m @ 1.7 g/t

SBDH141D*** 352 131m @ 3.5 g/t

SBDH143D*** 339 87m @ 3.1 g/t

SBDH153D*** 246 45m @ 1.6 g/t

SBRC308D*** 334 80m @ 1.3 g/t

SBDH150DD*** 331 130m @ 1.2 g/t

SBRC1081D*** 509 67m @ 1.2 g/t

SBRC895D*** 371 36m @ 1.6 g/t

SBRC1082D*** 443 160m @ 1.1 g/t

1 True widths to be determined

All assays are determined using aqua regia in the on-site SGS lab at Sabodala. Pulps are being systematically sent to Kayes, Mali for fire assay as confirmation of the Sabodala lab results. * waiting diamond tail ** assays pending *** previously released

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About TERANGA Teranga Gold Corporation is a Canadian-based gold company listed on the Toronto Stock Exchange (TSX: TGZ) and Australian Securities Exchange (ASX: TGZ). Teranga is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development.

Teranga was created to acquire the Sabodala gold mine and a large regional exploration land package, located in Senegal, West Africa, within the West African Birimian geological belt. Management believes the mine operation, together with the Company’s prospective 1,488 km

2 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. The Company is focused on growth - growth in reserves, growth in production - while maintaining a strong balance sheet to facilitate its actions.

Forward Looking Statements

Certain information contained in this report, including any information on Teranga’s plans or anticipated future results, future financial or operating performance and other statements that express management’s 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 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 the company’s estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration, development and operations of mineral properties, changes in economic conditions, changes in the worldwide price of gold, silver fuel, electricity 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 report should be construed as either an offer to sell or a solicitation to buy or sell Teranga securities.

Accordingly, readers should not place undue reliance on such forward looking statements. Teranga expressly disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

Competent Persons Statement

The information in this release that relates to exploration results, targets, mineral resources or ore reserves within the SGO Mining License is based on information compiled by Mr. Bruce Van Brunt, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee of Teranga and not independent. Mr. Van Brunt has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code of Report of exploration Results, Mineral Resources and Ore Reserves” and as defined in NI43-101. Mr. Van Brunt consents to the inclusion of this information in the form and context in which it appears in this presentation.

Mr. Van Brunt has reviewed and verified the data contained in this press release, including sampling, analytical and test data underlying the estimates provided. Verification of the data included numerous site visits, database validation of historical drill results and review of sampling and assaying protocols.

For further information please contact: Kathy Sipos, Vice-President of Investor Relations T: +1 416-594-0000 | E: ksipos@terangagold.com