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Perseus Mining delivers robust June quarter with gold production up and costs down

The company’s Edikan and Sissingué operations performed strongly over the quarter and development at Yaouré is progressing on schedule and on budget.

Perseus Mining Ltd - Perseus Mining reports robust June quarter, on track for first gold pour at Yaouré in December
Yaouré remains on budget despite COVID-19 measures implemented

Perseus Mining Limited (ASX:PRU) enjoyed a productive June quarter, with its Edikan (Ghana) and Sissingué operations (Côte d’Ivoire) continuing to perform strongly.

Managing director and CEO Jeff Quartermaine told Proactive: “It has been a strong period for us, we produced 64,676 ounces for the quarter, which is about 12% up on where we were in the previous period.”

Of that production, about 64% came from Edikan (41,281 ounces) and 36% from came Sissingué (23,395 ounces).

Costs reduced

Quartermaine said that production costs were also reduced during the quarter.

He said: “The production costs were down by 15% coming in at around US$805/ounce across the board which translated to all-in site costs of around US$935/ounce which is 14% up on the previous period.

“What’s meritorious about that is that included in those all-in site costs were higher royalties as a result of the high gold price.

“Across the group, we managed to generate around US$609 per ounce for each ounce that we produced which gave rise to notional cash flow for the quarter of roughly US$40 million, which is about 66% up on the previous quarter.

“All of those things combined meant that it was a good quarter for us and set us up very very well for the year to come.”

Bagoé project potential

During the quarter, Perseus and Exore Resources Ltd (ASX:ERX) entered a scheme implementation deed for Perseus to acquire 100% of the issued share capital of Exore by way of scheme of arrangement.

Perseus will gain ownership of around 2,000 square kilometres of geologically prospective land close to Sissingué, including defined mineral resources at the Bagoé project, which could increase the mine life of Sissingué beyond the current three years.

The company will be able to either develop the Bagoé project into a new gold mine potentially using Sissingué infrastructure, or alternatively, delineate further mineral resources at Bagoé that can be economically mined and trucked to the Sissingué plant for processing.

Quartermaine said: “We would expect that in a couple of weeks from now the regulators will give the go ahead for Exore shareholders to meet and consider the offer that we have made.”

Esuajah South Underground Project

Perseus made strong progress with the implementation of the Esuajah South Underground Project at Edikan during the quarter.

Approvals from Mincom and the EPA were received for the exploration phase of the project, which allows the development of the decline and establishment of ore drives on the first three sub-levels of the orebody.

The exploration phase extends to September 2021 and during this period, the approvals process for the production phase will be completed in anticipation of positive results.

Mill structure, and CIL tanks at Yaouré.

Yaouré on schedule and budget

Following the end of the quarter, three employees at the Yaouré development project were diagnosed with the COVID-19 virus and were successfully treated offsite in Abidjan where they are all recovering at home.

Despite the cases, the impact of COVID-19 has been negligible on the progress made to date at the Yaouré development project.

Quartermaine said: “We’re very much within our target of pouring first gold towards the end of the year.

“At this point we’re about 65% of the way through the construction, the engineering is complete, almost all procurement and everything we need to build the project is either on site or heading our way.”

Additional development costs of approximately US$1.12 million have been incurred in implementing measures to ensure full business continuity at Yaouré, but this amount is well within the contingency sum included in the budget and is not expected to result in a cost overrun of the original construction budget of US$265 million.

September 2020 quarter

The company aims to produce gold at an ASIC in line with the recently published LOMP and to continue planning and implementing continuous improvement initiatives aimed at increasing gold production and reducing AISC at Edikan and Sissingué.

Additionally, at Edikan the program for the September 2020 quarter includes:

  • Commence drilling at the Breman prospect on the Agyakusu permit, and;
  • Commence soil sampling and mapping on the recently optioned Dompoase permit.

The September program at Sissingué includes:

  • Continue work on licensing development of the Fimbiasso deposit;
  • Continue drilling at the various prospects within trucking distance of Sissingué, with the aim of identifying the potential for additional mineral resources that can be processed at the Sissingué processing facility, and;
  • Complete implementation of the Exore scheme of arrangement.

At Yaouré, Perseus plans to:

  • Continue full-scale construction in line with approved schedule and budget;
  • Complete land and crop compensation payments to affected land holders and farmers;
  • Complete diamond and RC drilling over the Sayikro, Akakro and Angovia 2 prospects on the Yaouré permit;
  • Commence AC drilling over the Allekran and Degbezere prospects (Yaouré West), and;
  • Process, analyse and interpret data from the 3D and 2D seismic surveys on the Yaouré concessions.

Perseus guidance. 

December 2020 guidance

The December 2020 half year, production and AISC guidance has been set at 139,000 to 125,500 ounces at an AISC of US$940 to US$1,025 per ounce.

This guidance comes with the caveat that this is subject to Perseus’ operations remaining largely unaffected by the COVID-19 crisis.

Quick facts: Perseus Mining Ltd

Price: 1.565 AUD

ASX:PRU
Market: ASX
Market Cap: $1.84 billion
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