Perseus Mining Ltd (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) (FRA:P4Q) has recorded a 61% increase in group net profit after tax to A$49.1 million in the first half of FY21 compared to the corresponding period in FY20, reflecting its successful transition to a multi-mine, multi-jurisdictional gold producer.
In the six months to December 31, 2020, it produced a total of 137,386 ounces of gold, 2% more than in the corresponding six-month period in 2019.
In the same period, the weighted average all-in site costs (AISC), including the costs of production, royalties and sustaining capital, increased by 6% relative to the December 2019 half-year, averaging US$1,000 per ounce of gold produced.
Strong Sissingué performance
The results reflected the strong operating performance at the low-cost Sissingué Gold Mine in Côte d’Ivoire, (55,909 ounces of gold at an AISC US$643 per ounce), combined with steady gold production at the Edikan Gold Mine (78,790 ounces of gold at US1,253 per ounce).
Perseus’s third gold mine, Yaouré, where first gold was poured in December 2020, contributed a total of 2,687 ounces to the group’s total half-yearly gold production although with net costs being capitalised until the declaration of commercial production, the mine’s activities did not contribute to the half-year earnings result.
Increasing earnings, cashflow to continue
Perseus Mining chief executive officer and managing director Jeff Quartermaine said: “The financial results released by Perseus today are further evidence of the continuing transition of our company from a junior gold producer to a multi-mine, multi-jurisdictional business.
“In coming periods, the trend of Perseus’s steadily increasing earnings and cash flow is expected to continue, boosted by a material contribution from our third mine, the Yaouré Gold Mine.
“The construction of Yaouré was completed late in the December half-year and operations are steadily ramping up to optimum performance levels.
"Heading into 2021, Perseus is in a strong financial position to continue the growth of our business through both organic means and by being positioned to take advantage of M&A opportunities that may present and offer attractive returns on our investment.
“The results that we have released today, and the strong financial position in which Perseus is now positioned, reflect the focused efforts of both our on-site and corporate office teams, all of whom have worked with dedication and commitment in a period of uncertainty and challenge brought about by the COVID-19 pandemic.
“I thank them sincerely for their efforts in delivering the results published today.”
Perseus’s net profit after tax of A$49.1 million or 3.0 cents per share attributable to the owners of the parent company, materially exceeded the net profit after tax of A$30.4 million or 2.6 cents per share earned in the previous corresponding half year.
It attributed the improved performance to:
- A period-on-period decrease of A$32.5 million in the depreciation and amortisation expense relating to gold production;
- Administration and other corporate expenses decreasing to A$9.8 million from A$11.5 million in the December 2019 half-year;
- A decrease in income tax expense to A$8.4 million, which compared favourably to the A$12.9 million incurred in the corresponding period in 2019.
- A foreign exchange loss of A$13.2 million, A$20.2 million more in the prior year when a foreign exchange gain of $7.0 million was recorded. The loss occurred due to an appreciation in the value of the Australian dollar against the US dollar and revaluation of intercompany loans.
As at December 31, 2020, the total value of cash (A$120.5 million) and bullion on hand (A$32.7 million) was A$153.2 million, or A$38.3 million more than at December 31, 2019.
Operating cash flows increased by A$30.4 million in the half-year to A$103.6 million, or 8.6 cents per share, as revenue increased and payments to suppliers and employees decreased.
A total of A$150.6 million of cash was invested during the period, including A$111.9 million on the development of the Yaouré Gold Mine and A$11 million on exploration.
A net total of A$27.6 million of borrowings were repaid in cash during the period and a further A$7.6 million was paid in cash for borrowing costs.
The company’s net tangible assets on December 31, 2020, were A$853.5 million or A$0.70 per share, including cash and bullion on hand.
Total interest-bearing liabilities stood at A$168.9 million, A$48.7 million less than on June 30, 2020.
Looking to the future, Perseus’s financial performance is expected to remain strong with continuing solid gold production and an improving cost structure at its two operating gold mines.
Development of Yaouré, Perseus’s third operation, will be a major focus in the 2021 financial year.
Production and cost guidance for the 2021 financial year is as follows: