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Perseus Mining Ltd: DEEP DIVE

Perseus Mining produces gold ounces in Ghana and Cote d’Ivoire

The company is expected to post its latest production figures later this month.
Yaouré Gold Project in Côte d’Ivoire
OVERVIEW: PRU The Big Picture
Y-structures are typically massive at the Yaouré Gold Project in Côte d’Ivoire
  • Perseus is producing gold at the Edikan mine in Ghana and Sissingué mine in Cote d’Ivoire
  • The company achieved its corporate strategy to be a producer-operator of multiple gold mines in a number of jurisdictions
  • The next gold mine Perseus hopes to add to the mix is Yaouré in Cote d’Ivoire

What does Perseus Mining do?

Perseus Mining Limited (ASX:PRU) (TSX:PRU) (OTCMKTS:PMNXF) specialises in gold production and project development in West Africa. It is run by Jeff Quartermaine, a Certified Practising Accountant with an MBA and an undergraduate engineering degree. Quartermaine joined Perseus nine years ago and has more than 25 years of experience in senior financial and strategic management roles.

What does Perseus Mining own?

The key producing assets are the Edikan Gold Project in Ghana and Sissingué Gold Project in Cote d’Ivoire.

Perseus has achieved its corporate strategy to be a producer operating multiple gold mines in a number of jurisdictions.

A development asset Perseus hopes to start developing by the September quarter of 2019 is the Yaouré Gold Project, also in Cote d’Ivoire.

Perseus produced 140,555 ounces of gold at its Edikan and Sissingue mines in the December 2018 half-year, a 30% increase on the corresponding period in 2017.

The company hopes to reach a 500,000 ounces of gold a year production target by 2022 while achieving an all-in sustaining cost (AISC) of US$850.

In the December quarter, the company produced 68,078 ounces of gold at an AISC of about $1,050 an ounce.

The spot gold price per ounce was about US$1,292 an ounce overnight.

Perseus’ weighted average all-in site cost, including the costs of production, royalties and sustaining capital, was US$999 an ounce, a 10% cost contraction on the December 2017 half-year.

A $10.4 million or 1 cents a share net profit after tax was achieved in the December 2018 half-year, compared to a net loss after tax of $13.9 million in the six months to December 31, 2017.

The profit was achieved off the back of a 69% increase in revenue to $281.6 million after a 59% increase in gold sales to 165,066 ounces at a 3% lower weighted average gold sales price of US$1,236 an ounce.

Earnings before interest, tax, depreciation and amortisation (EBITDA) earnings had increased by $55.9 million, or 80%, to $87 million.

The company had $92 million cash and bullion on hand at the end of 2018.

Inflection points

  • Yaouré project development start, targeted to be achieved by the September 2019 quarter

  • Yaouré mine building which has been envisaged for 2019-20

  • Yaouré on-boarding about 2020-21 and ramp-up about 2021-22

  • Continued production output increases

  • Global gold market sentiment

  • West African investment market dynamics

Chief executive Jeff Quartermaine highlights production strength

“We’ve produced strongly at both of our mines, Edikan and Sissingue,” Perseus Mining managing director and CEO Jeff Quartermaine told Proactive Investors in January.

“Between the two mines we’ve produced about 68,000 ounces at about ten-fifty [$1,052] an ounce all-in site costs between the two.

“Where that puts us, though, on a half-year, we’re about 140,000 ounces and a touch under a thousand dollars and on a full year, 288,000 ounces and also a touch under a thousand.

“What that means is Edikan and Sissingue are both producing very strongly, the company is performing exceptionally well and we’re setting ourselves very nicely for a new year.”

Perseus is expected to post its next quarterly production results by the end of April 2019.



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