Teranga Gold Corp. expects its fourth-quarter fold production to be lower and more costly than expected, causing its full-year output to be 130,000 ounces to 135,000 ounces rather than the 140,000 ounces previously anticipated.

The reduced production is due to delayed access to high-grade zones at its Sabodala gold mine in Senegal because of lower than planned drill and loading availability for the quarter, Teranga said in a statement late Wednesday.

The Toronto-based miner, which has ordered three new drill rigs in response to the delays, now expects gold production this year between 130,000 ounces and 135,000 ounces and total 2011 cash costs of $875 to $925 per ounce compared to previous guidance of $850 to $875 per ounce.

Access to the higher grade ore scheduled for December is now expected to occur later in the month than anticipated, resulting in 8,000 ounces to 12,000 ounces at an estimated 2.5 grams to 2.8 grams per metric ton of ore being stockpiled rather than processed before the end of the quarter. The high grade stockpiles are expected to be processed in the first quarter of next year, Teranga said.

As a result, the company intends to deliver into the hedge book at its contractually scheduled rate and not to accelerate deliveries during the December quarter. The company expects the hedge position to be at 174,500 ounces at year end. The company intends to manage hedge deliveries to ensure it is sufficiently funded to complete the mill expansion and its ongoing aggressive mine license and regional exploration programs.