Perseus Mining Ltd (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) is on the cusp of reaching its goal of becoming a 500,000-ounce per year gold producer as it brings its third gold mine into production within the next few months.
The company has kept to its timeframe for first gold to pour at its Yaouré gold project in Côte d’Ivoire in December 2020 despite the impact of COVID-19.
Chairman Sean Harvey said: “The project was 67 per cent complete by year-end [FY20] and we are confident that we can maintain our momentum on the project and commence commissioning there soon.
“The coming year also looks to be busy, as we bring Yaouré online, finalise arrangements with Exore and ramp-up exploration across our projects as we eye further resource growth.
“However, I have confidence that we will achieve what we set out to do, and I look forward to updating you of our progress during FY2021.”
Extending life of operating mines
The company has also outlined plans to extend the future of both its operating mines in West Africa.
To extend the life of Sissingué mine in Côte d’Ivoire, Perseus has acquired Exore Resources, an exploration company that owns 2,000 square kilometres of very prospective land adjacent to Sissingué.
At Edikan in Ghana, Perseus has identified potential for underground mining at the Esuajah South deposit, which has a measured and indicated resource of more than 500,000 ounces of gold.
Subject to confirming acceptable prices, it plans to award an underground mining services contract in the December 2020 quarter with mobilisation and site establishment to take place shortly thereafter.
If it proceeds as planned, this project will be Perseus’ first underground mining development.
Busy year ahead
Looking ahead to 2021, commissioning and ramp-up of production at Yaouré is a major milestone for the coming months, as well as undertaking exploration and feasibility work on the Bagoé project near Sissingué.
Managing director and chief executive officer Jeff Quartermaine added: “We also expect to further optimise production at Edikan and Sissingué with continuous improvement initiatives aimed at increasing gold production and reducing our AISC.
“We have several exploration programs planned to roll out across all three properties as we look to add to our gold inventory. “
The company will also be looking further afield to assess other opportunities that might be available to continue to create value for shareholders.
Negate effects of COVID-19
The company said it had done its best to negate the effects of the COVID-19 virus on its operations, emerging from the crisis “relatively unscathed”.
It moved into tight lockdowns under ‘island mode’, based on its experience in managing the Ebola outbreak across Africa earlier this decade.
“Our ability to meet and overcome hurdles on the way to achieving our goal has demonstrated our resilience and our determination to deliver on our promises,” Harvey added.
The company produced nearly 260,000 ounces of gold at its two mines during the financial year 2020, with its all-in site costs stable compared to the previous year, at US$972 per ounce.
Costs were impacted by its COVID-19 measures in the second half of the year, adding about US$18/ounce to production costs.
However, it was still able to generate a very strong cashflow from operations amounting to around $212.8 million through the year.
Yaouré Gold Project
By the end of the financial year, the engineering was finished, construction more than two-thirds complete and all equipment needed to finalise the development of Yaouré was either on-site or headed that way.
Since then, almost everything has moved according to plan, with the company very much on track to achieve the target of first gold by year-end.
When fully commissioned, Yaouré is expected to produce 215,000 ounces of gold per year on average in its first five years of operation at an all-in site cost of less than $850 per ounce, with a current mine life of more than eight years.
It said bringing in Exore’s highly prospective land package in northern Côte d’Ivoire, including the Bagoé project, which has a maiden JORC-compliant resource, is a logical way of extending the mine life of Sissingué or alternatively, developing a new mine once Sissingué’s resources are exhausted.
Exore’s landholding contains a mineral resource which if proven to be economically mineable can either be trucked to Sissingué for processing, or alternatively can be developed into a standalone mining operation using infrastructure from Sissingué.
Exploration work and work required for the preparation of an ESIA is due to start on the ground at the Bagoé Project in October 2020.