viewPerseus Mining Ltd

Perseus Mining completes FEED milestone on Yaouré Gold Project development path

Lycopodium studies confirm DFS cost estimates for what will be company’s third operating mine in West Africa.

Edikan gold plant in Ghana
The company is producing gold from two mines, including Edikan in Ghana

Perseus Mining Limited (ASX:PRU) (TSE:PRU) has completed engineering and design studies that confirm cost estimates for the Yaouré Gold Project, which is set to become its third operating mine in West Africa.

A value engineering assessment (VEA) and the front-end engineering and design (FEED) study has been completed by independent consultant Lycopodium Minerals Pty Ltd for the project in Côte d’Ivoire.

This work confirmed cost estimates in the October 2017 definitive feasibility study (DFS) that demonstrated the quality and strength of Yaouré.

READ: Perseus Mining boosts gold production by 45%, lowers costs by 22% in FY18

Managing director Jeff Quartermaine said, “The completion of the FEED study is an important milestone on the path to delivering Yaouré, our third gold mine.

“The study was completed on schedule and on budget and has delivered a satisfactory outcome with the capital cost less than 0.5% greater than the cost originally estimated in the Yaouré DFS.”

Perseus Mining’s operating and development projects in West Africa.

Studies completed on budget

These studies were started by Lycopodium in June 2018 and work was completed on time and on budget on October 6.

Lycopodium is well qualified to undertake the studies having played a critical role in the successful engineering, procurement and construction of several high-profile West African gold mines in the last three years.

This includes Perseus’s Sissingué Gold Mine, also in Côte d’Ivoire, that was developed and commissioned earlier this year.

READ: Perseus Mining farm-in partner has drill spinning at Côte d’Ivoire gold project

Lycopodium's VEA scope included evaluation of opportunities to improve plant design and optimise the estimated capital expenditure.

The FEED study focused on progressing the design of the processing plant and infrastructure to enable a detailed capital cost estimate to be prepared to a level of accuracy of plus or minus 10%.

Based on the FEED study, the total capital cost estimate for the development is US$264 million, including a contingency allowance of about 8%, which is within 0.5% of the DFS estimate.

FEED capital cost estimate breakdown.

The FEED study assumes that the process plant is developed under an engineering, procurement and construction (EPC) contract.

Moving to finance plan

Quartermaine said, “With this estimate now in hand we can confidently advance the implementation of our finance plan.

“This involves deployment of a debt funding package to complement a combination of existing cash reserves and expected future cash flow from our two existing operations, both of which are performing in line with internal expectations and contributing to a steady build in net cash reserves.”

Planned infrastucture layout for the Yaouré Gold Project.

First gold expected in December 2020

Based on current plans, first gold is expected to be produced at Yaouré in December 2020.

During the 2018 financial year, Perseus produced 255,916 ounces of gold, an increase of 45% on the previous financial year.

READ: Perseus Mining drill results look to extend gold mining life

Sustaining capital average cost was lowered by 22% to US$1,039 per ounce with royalties also lower.

The increased production resulted in 36.5% higher revenue to $378.1 million.

Perseus is producing from Sissingué as well as from Edikan in Ghana.

Quick facts: Perseus Mining Ltd

Price: 1.295 AUD

Market: ASX
Market Cap: $1.51 billion

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