Perseus expects strong operating performance to continue
Wed April 24 2024
ASX- and TSX-listed Perseus Mining has reported gold sales of 115 648 oz in the March quarter – a 19 489 oz decrease on sales in the December 2023 quarter, owing to the timing of gold sales.
The weighted average gold price realised was $2 025/oz, $62/oz more than the December 2023 quarter price of $1 963/oz.
Perseus’ average cash margin for the March quarter was $934/oz, resulting in notional operating cash flow from operations of $119-million, $3-million less than in the December quarter.
The company notes that this slight decrease was driven by higher all-in site costs (AISC), particularly at the Yaouré gold mine, in Côte d’Ivoire, where increased material movements from the openpit resulted in a higher unit cost per ounce.
Perseus’ three operating gold mines, Yaouré and Sissingué, in Côte d’Ivoire, and Edikan, in Ghana, produced a combined 127 471 oz of gold in the March quarter.
“These strong operating results . . . confirm Perseus’ position as one of the world’s better-performing midtier gold producers in 2024,” the company says.
Further, Perseus says it has achieved another strong quarter of cash generation, with a $60-million net increase in its overall net cash position compared with the prior quarter. This included an $11-million dividend payment.
Based on a spot gold price of $2 214.35/oz at March 31, the total value of cash and bullion on hand at the end of the quarter was $702-million, including cash of $608-million and 42 088 oz of bullion on hand, valued at $93-million.
Additionally, the business has access to its revolving corporate credit facility of up to $300-million, which has not yet been drawn upon.
As at March 31, Perseus also owned $74-million of investments in listed securities – $60-million at December 31 – including but not limited to 19.9% of OreCorp and 13.7% of Montage Gold Corporation.
At the end of the quarter, Perseus’ hedged position was 352 000 oz at a weighted average sales price of $2 101/oz. The company says these hedges are designated for delivery progressively over the period up to June 30, 2026.
Perseus’ hedge position has not changed since the end of the December 2023 quarter.
The weighted average sales price of the hedge book increased by $39/oz, or 1.9%, during the quarter.
The company notes that hedging contracts currently provide downside price protection to about 25% of Perseus’ currently forecast gold production for the next three years, leaving 75% of forecast production potentially exposed to movements – both up and down – in the gold price.
Perseus says its strong operating performance is expected to continue for the remainder of the half-year to June 30, with gold production guidance unchanged at 226 000 oz to 254 000 oz at an AISC of $1 180/oz to $1 340/oz.
Meanwhile, a cooperation agreement was signed with Ajlan & Bros Mining & Metals Company, the mining division of a Kingdom of Saudi Arabia-based investment conglomerate company, Ajlan & Bros, to investigate exploration and development opportunities on the Nubian and Arabian Shield regions.
Further, Perseus’ takeover offer for OreCorp advanced materially during the quarter with the OreCorp board having endorsed its takeover offer.
Subsequent to quarter-end, Perseus’ ownership of OreCorp advanced beyond 90%, enabling compulsory acquisition of outstanding shares to begin.
GOLD MINES
During the quarter under review, Yaouré produced 61 283 oz of gold at a production cost of $874/oz and an AISC of $1 025/oz.
The company notes that the operating performance at Yaouré during the quarter was generally consistent with that of the prior quarter, with only minor variations in key performance indicators.
As previously reported, Perseus reiterates that wet weather in the September 2023 quarter materially reduced ore and waste movements relative to targets in this period, delaying access to higher-grade ore scheduled for mining in the December quarter and again in the March quarter.
An accelerated mining programme was implemented in the December quarter, once weather improved, and this has continued in the quarter under review with the cooperation of Perseus’ mining contractor.
The accelerated mining programme is expected to continue until mid-year, at which time material movements are expected to return to plan.
The increase in material movements during the quarter negatively impacted on AISC as predicted in the December 2023 quarterly report.
“It is expected that this trend of elevated AISC will continue for the balance of this financial year as the mining shortfall incurred in prior periods is eliminated and work to plan is restored,” the company says.
Meanwhile, the company says Edikan’s operating performance in the March quarter was in line with that of the prior quarter, with 49 096 oz of gold recovered at a production cost of $788/oz and an AISC of $982/oz.
Additionally, during the March quarter, Sissingué produced 17 092 oz of gold at a production cost of $1 475/oz and an AISC of $1 628/oz.
“The overall production performance for the mine during the quarter was reasonably in line with the previous quarter,” the company says.
The AISC for the quarter of $1 628/oz was $130/oz higher than the AISC of $1 498/oz achieved last quarter. This increase was driven mainly by 5% lower gold production, as well as higher grade control and drill and blast costs incurred in an effort to increase mine movements.
Source: https://www.miningweekly.com/