viewPerseus Mining Ltd

Perseus Mining updates life of mine plan for Edikan Gold Mine

The updated LOMP involves mining and processing of ore from three open pits and one underground mine.

Perseus Mining Ltd - Perseus Mining Limited updates life of mine plan for Edikan Gold Mine
The project has a 6.2 year mine life

Perseus Mining Limited (ASX:PRU) has updated the life of mine plan (LOMP) for its Edikan Gold Mine in Ghana, West Africa.

The LOMP is based on the company’s revised mining strategy that was implemented in January 2019 involving use of a single mining contractor, mining at a reduced rate of total material movement.

The mining sequence of the pits along with mill feed profile has been optimised and scheduled with the Esuajah South deposit now included in Edikan’s production profile.

Updated ore reserves

The LOMP is based on the revised ore reserves reported on February 20, 2020, which included proved and probable ore reserves of 45.7 million tonnes of ore, grading 1.10 g/t gold and containing 1.608 million ounces.

The updated ore reserve is based on:

  • A gold price of US$1,300 per ounce (up from $1,200 per ounce in the previous LOMP),
  • An updated pit optimisation, design and schedule on the new Bokitsi South open pit mineral resource,
  • Updated pit optimisation, design and scheduling of the AFG and Fetish deposits based on reduced operating costs, and
  • A new Esuajah South Underground ore reserve following an update of the feasibility study for the deposit.

The Esuajah North pit is due to be mined out completely before the commencement of the LOMP in July 2020.

Gold production

Annual gold production is now averaging 212,000 ounces, including production of around 231,000 ounces per annum on average over the next four years.

The total estimated gold production of 1.307 million ounces over the life of mine is 95% higher than the amount estimated in the previous LOMP.

Head grade has increased 16% from 0.94 g/t to 1.09 g/t with contained gold up 94% from 764,000 ounces to 1.483 million ounces and gold recovery has increased 1%, from 87.7% to 88.2%.

These production improvements are largely due to the addition of Esuajah South Underground and a significantly larger AG open pit.

Esujah South will employ a sub-level stoping under rock fill (SURF) mining method with an expected development capital cost of US$31 million.

Edikan Gold Mine layout

Cost comparisons

The forecast weighted average all-in site costs, including all direct production costs, royalties, waste stripping costs and sustaining capital expenditure (AISC), range from US$870-US$890 per ounce over the remaining life of mine.

This represents a 5% decrease in average AISC compared to the previous LOMP.

While average mining costs have increased by 20% (up from US$3.86/tonne mined to US$4.62/tonne mined) the average processing costs have decreased by 10%, down from US$9.63/tonne processed to US$8.67/tonne processed.

Production costs have also decreased 10%, from US$813 per ounce to US$763, and average site general and administration costs have increased 5% - up from US$2.34/tonne processed to US$2.45/tonne processed.

Royalty costs remain unchanged at US$88/ounce.

Spot gold price

Edikan’s revised LOMP forecasts strong positive after-tax cash flows totalling around US$356 million (or 51 cents per share at an A$:US$ exchange rate of 0.60), assuming a flat spot gold price of US$1,300 per ounce for the remaining mine life.

Within an expected short-term gold price trading range of US$1,200 per ounce to US$1,350 per ounce, the projected cash flows of the mine remain robust and capable of materially contributing to the development funding of Perseus’ current project in construction, the Yaouré Gold Mine, located in Côte d’Ivoire.

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Market: ASX
Market Cap: $1.43 billion

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