Perseus Mining Limited (ASX:PRU) is on track to achieve its objective of sustaining annual gold production at 500,000 ounces at a cash margin of not less than US$400 per ounce from 2022.
The company’s gold operations in West Africa have performed strongly in FY2020 to date, at the end of June group production was 257,639 ounces at AISC US$972 per ounce, including:
- Edikan (Ghana) gold production of 171,638 ounces at AISC US$1,082 per ounce; and
- Sissingué (Côte d’Ivoire) gold production of 86,001 ounces at AISC US$753 per ounce.
Group gold sales totalled 272,778 ounces at a weighted average sale price of US$1,457 per ounce resulting in a cash margin of US$485 per ounce.
Perseus also enjoyed US$125 million of notional cashflow from operations, a 55% increase year-on-year.
December 2020 market guidance is 125,500 to 139,000 ounces of gold at AISC of between US$940 to US$1,025 per ounce, conditional on no interruption to business.
This includes Edikan guidance of between 77,500-82,500 ounces at AISC of US$1,150-1,250/ounce and Sissingué guidance of between 48,000-56,500 ounces at AISC of US$600-700/ounce.
This is assuming the company experiences no material impact on operations due to COVID-19.
Yaouré fully funded
At June 30, 2020, the company was in a strong position with cash and bullion at US$164 million, a total of US$150 million corporate debt was drawn and net cash of US$14 million, despite spending US$145 million on the Yaouré development in Côte d’Ivoire during the period.
In fact, the development of the company’s third gold mine is fully funded, with its capital cost of US$265 million, funded with US$150 million corporate facility, cash and cash flow.
Development on track
Yaouré development is around 67% complete and remains on schedule and on budget, with first gold expected in December 2020, contracted date January 2021.
To date, the following works have been completed:
- Plant construction 72%, concrete 85%, SAG and ball mill installation scheduled for July;
- Tailings Storage Facility 75% complete, bulk earthworks 98% complete with lining activities commenced targeting completion in late September;
- Power supply on track for completion in early December;
- Perimeter fence complete, water line complete with water intake 88% complete;
- Permanent Camp accommodation complete (capacity for 637 in construction phase and 227 during operations); and
- EPSA mining fleet being mobilised to site and operational readiness well advanced.
The company's West African Projects
Potential to extend mine life
The open pit mine is expected to have a mine life of 8.5 years with a measured and indicated mineral resource of 2.1 million ounces, an ore reserve of 1.6 million ounces.
Additionally, the underground scoping study showed there is the potential for underground development in the future with an inferred underground resource of 0.6 million ounces.
The project is technically robust, with the planned 3.3 million tonnes per annum plant expecting an average annual gold production of 215,000 ounces at an AISC of US$734/ounce for the first five years.
Perseus is also undertaking exploration along high prospectivity corridors around Yaouré, with priority targets including:
- CMA Underground extensions;
- Extensions of CMA and basin boundary to the NE and NW;
- Angovia 2;
- Kongonza; and
- SE trend.
The company is also exploring around Edikan with a focus on targets within trucking distance that have the potential to increase the LOM.
Exploration at Sissingué is also focused on LOM extensions, with the recent acquisition of Exore Resources Ltd (ASX:ERX) to provide access to near mine Bagoé JORC resource and 2,000 square kilometres of prospective exploration ground within trucking distance to the Sissingué operations.