Perseus Mining Limited (ASX:PRU) (TSE:PRU) continues trending higher on the back of strong gold prices, improved operational stability and a diversified production base with the price reaching $1.00 today.
This not only represents a new 12-month high for the West African gold producer, it also is the highest price for more than six years.
PRU's 5-year price chart (image from Commsec).
Perseus operates two gold mines in West Africa, Edikan and Sissingué, is developing its third mine Yaouré and is leveraged to the growing resource at Mako Gold Ltd’s (ASX:MKG) Napié project through its 49% ownership.
Outperforms most peers
The company’s share price has outperformed most of its gold producer peers in recent months and today’s increase of up to 8% was supported by a 1% rally in the gold price overnight.
Gold price movements since July (image from TradingView.com).
Since the 2018 annual general meeting, the company’s share price has risen 50 cents and the market cap has gone from $394 million to $1.08 billion.
The net cash position has improved from $68 million at the 2018 AGM to $125 million which positions the company to continue its growth story in 2020.
PRU's 6-month price and volume charts (image from Commsec).
On track for guidance
Perseus is on track to meet its 2020 financial year guidance of 260,000 to 300,000 ounces at an AISC of US$800-975 per ounce.
It has set a target of annual production of 500,000 ounces which will be made possible when Yaouré comes online by the end of 2020 along with ongoing and successful exploration in West Africa.
The Yaouré project in Côte d'Ivoire is expected to produce at least 228,000 ounces annually.
$1.20 target within sight
In a research report released in late October, Cannacord Genuity increased its price target for Perseus to $1.20 per share from $1.05 per share.
“We continue to see PRU as undervalued on both an absolute and relative basis, and maintain our BUY rating,” Canaccord stated.