Perseus Mining Limited (ASX:PRU) has met quarterly guidance for gold production at its Edikan and Sissingué mines in West Africa.
The company is also advancing development of its Yaouré Gold Project in Cote d’Ivoire with construction expected to start in the March quarter 2019 and first gold scheduled in late 2020.
Cashflow from operations during the December quarter amounted to $18.8 million and Perseus had $92 million cash and bullion on hand at the end of 2018.
Bank debt was reduced during the quarter by US$3.9 million to US$48.5 million, leaving the company in a net position of $23.3 million.
Quarterly production comprised 68,078 ounces of gold at an average all-in sustaining cost (AISC) of $1,052.
Production at Edikan in Ghana was 50,141 ounces at an AISC of $1,151 while the remaining 17,937 ounces came from Sissingué at an AISC of $776.
Gold sales for the quarter totalled 66,705 ounces at an average sales price of $1,250 an ounce.
Total production for the December 2018 half year and full 2018 calendar year of 140,555 and 288,463 ounces, respectively, was in line with market guidance.
The AISC achieved over the calendar year was $994 an ounce, within the guidance of $950-$1,100.
Monthly balance of cash and bullion and interest-bearing liabilities
Both gold mines experienced heavier-than-usual rainfall during the quarter which impacted on costs and production compared to previous periods.
Costs at Edikan were affected by Perseus’ decision in August to transition from two mining contractors to just one.
One-off demobilisation costs were recorded in the quarter, but the company expects the revised life-of-mine plan being implemented this month to deliver overall cost reductions.
While the rain abated at Sissingué early in the quarter, pit access for grade control and mining was progressively restored but not in the sequence originally set out in the mine plan.
This led to a reduction in the head grade of processed ore as lower-grade material was mined instead of inaccessible higher-grade ore from the pit bottom.
Since quarter-end access to all areas of the mine have been restored and production has returned to above budgeted levels.
Perseus continued development of its Yaouré project during the quarter, with an exploitation permit application advancing through required government approvals.
The company expects the Cote d’Ivoire government to grant the permit soon and has confirmed that a tax exoneration status will apply to the project company.
A front-end engineering and design (FEED) study was completed early in the quarter, estimating a total capital cost of US$264 million for Yaouré, plus-minus 10%.
This figure is within 0.5% of the definitive feasibility study estimate and assumes the process plant will be developed under an engineering, procurement and construction-style contract.
The contracts are subject to finalisation of formal contract documentation, full project funding and granting of the exploitation permit.
Lycopodium was contracted by Perseus to develop the Sissingué mine which commissioned in early 2018 and came online ahead of time and on budget.
Preliminary site works at Yaouré will begin in the March quarter managed by Perseus’ in-house development team and funded from existing cash reserves.
Full-scale construction of the mine and associated infrastructure is expected to start shortly after, with first gold anticipated for December 2020.