Perseus Mining Limited (“Perseus” or the “Company”) (TSX & ASX:
PRU) reports on its activities for the three month period ended
March 31, 2020 (the “Quarter”). An executive summary is provided
below. However, full details of activities in the March Quarter,
including reconciled production and all-in site cash costs, are
included in the Company’s March 2020 Quarterly Activity Report
released to the market on April 28, 2020. The full report is
available for download from www.perseusmining.com, www.asx.com.au
and www.sedar.com.
EXECUTIVE SUMMARY
Yaouré development project on
schedule and budget
- Yaouré remains on schedule to achieve the stretch target of
first gold pour in December 2020, subject to no COVID-19 related
delays.
- Development work was 52% complete, with US$186 million (70%) of
the US$265 million budgeted project cost committed and US$129
million (49%) paid to suppliers of goods and services, by March 31,
2020.
Operations continue to deliver strong
cashflows
- Maintained targeted cash margin of more than US$400 per ounce
of gold produced, generating notional cashflow of approximately
US$24 million from operations during the quarter.
- No reported cases of COVID-19 at any of Perseus’s three
operating sites nor in surrounding communities.
- Sissingué continued delivering strong results, while temporary
technical challenges (since addressed) detracted from Edikan’s
recent strong production and cost performance.
- Key operating parameters from Edikan and Sissingué gold mines
were:
Parameter |
Unit |
Edikan |
Sissingué |
PerseusGroup |
Gold production |
Ounces |
38,019 |
19,964 |
57,983 |
Production Cost |
US$/ounce |
1,090 |
685 |
951 |
All-In Site Cost (“AISC”) |
US$/ounce |
1,242 |
781 |
1,083 |
Gold sales |
Ounces |
38,225 |
21,790 |
60,015 |
Average sales price |
US$/ounce |
1,512 |
1,454 |
1,491 |
Notional Cashflow |
US$ million |
10.3 |
13.4 |
23.7 |
- Potential for challenges associated with COVID-19 in the June
2020 quarter have resulted in withdrawal of production and cost
guidance for the Half Year and Full Year ending June 30, 2020.
Balance Sheet strength maintained by
strong cash flows
- Cash and bullion balance of US$162 million at end of the
quarter after notional cashflow from operations of US$24 million
and capital expenditure on Yaouré development of US$29
million.
- Corporate debt fully drawn to US$150 million during the quarter
to provide operating flexibility while managing through the
COVID-19 crisis, giving a net cash and bullion position of US$12
million.
IMPACT OF COVID-19 ON PERSEUS’S
BUSINESS
During the quarter, the coronavirus (COVID-19)
pandemic has presented a series of challenges to operational
continuity at Perseus’s West African operations.
Notwithstanding this, the Company has been well
placed to weather the crisis with seasoned management teams at each
of our West African sites and in Perth, who have successfully
managed several crises in West Africa in recent years, including
the Ebola outbreak during 2014-2016. The Ebola outbreak has
provided Perseus with tested crisis management capabilities and
systems that are material in guiding the Company.
Supply chains for each of Perseus’s operating
sites remain open in both Ghana and Côte d’Ivoire although movement
of both local and foreign employees is currently impacted by
government-imposed travel restrictions. Work rosters have been
materially extended to accommodate travel restrictions. The Company
has implemented a series of protocols at each of its operating
sites aimed at eliminating the possibility of infection of its
employees.
In each of the communities in which the Company
operates, Perseus has, for many years, actively implemented social
programmes for the benefit of host communities. This work continued
during the quarter with an emphasis on initiatives designed to help
combat the spread of infection.
Perseus donated a total of USD387,500, including
both cash and goods, to assist both our host governments and host
communities in Ghana and Côte d’Ivoire in their efforts to fight
the spread of COVID-19. At the same time, we have implemented a
series of measures to ensure the safety and welfare of our
employees, most of whom are citizens of our host countries.
No cases of COVID-19 infection have been
reported by any of Perseus’s employees or contractors operating at
the Edikan and Sissingué gold mines, Yaouré gold mine construction
site or in Perth, Australia. This also extends to the residents of
host communities located immediately adjacent to those
operations.
While we are confident that the measures that we
have put in place will enable the Company to remain operational,
the implementation of these measures could impact productivity of
our workforce in coming months. Given the potential for changes to
the Company’s operating environment as a result of COVID-19,
Perseus is unable to forecast future gold production or costs with
full confidence.
Accordingly, while every effort is being applied
to maintain “business as usual”, and achieving production and costs
as close as possible to previously stated guidance remains a top
priority, the success of this approach cannot be guaranteed under
the circumstances and for this reason, Perseus considers it prudent
to withdraw previously published gold production and cost guidance
for the Half Year and Financial Year ending June 30, 2020.
PROGRAM FOR THE JUNE 2020
QUARTER
Edikan
- Produce gold at a total all-in site cost in line with recently
published LOMP.
- Continue planning and implementing Continuous Improvement
initiatives aimed at increasing gold production and reducing
AISC.
- Prepare and file submissions required for permitting of the
development of the Esuajah South orebody.
- Continue preparations for commencing underground mining
operations at Esuajah South in the December 2020 quarter.
- Continue assessing stranded near mine resources for acquisition
to provide additional mill feed.
- Commence drilling at the Breman prospect on the Agyakusu
permit.
- Commence soil sampling and mapping on the recently optioned
Dompoase permit.
Sissingué
- Produce gold at a total all-in site cost in line with
LOMP.
- Continue planning and implementing Continuous Improvement
initiatives aimed at increasing gold production and reducing
AISC.
- Complete update of Sissingué Life of Mine Plan incorporating
Fimbiasso.
- Continue work on licencing development of the Fimbiasso
deposit.
- Continue drilling at the various prospects in the Zanikan area
and other 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.
- Complete further drilling to potentially extend the Fimbiasso
West prospect at Mahalé.
Yaouré
- Continue full scale construction of Yaouré in line with
approved schedule and budget.
- Complete land, and crop compensation payments to affected land
holders and farmers.
- Complete update of Yaouré Life of Mine Plan.
- 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).
- Complete 3D and 2D seismic surveys over the CMA zone and
environs.
- Process, analyse and interpret data from the VTEM survey over
the Yaouré concessions.
To discuss any aspect of this announcement,
please contact:
Managing Director: |
Jeff
Quartermaine at telephone +61 8 6144 1700 or
emailjeff.quartermaine@perseusmining.com; |
General Manager BD &
IR: |
Andrew Grove at telephone +61 8 6144 1700 or
emailandrew.grove@perseusmining.com |
Media
Relations: |
Nathan Ryan at telephone +61 4 20 582 887 or
emailnathan.ryan@nwrcommunications.com.au (Melbourne) |
Competent Person
Statement: All production targets for Edikan,
Sissingué and Yaouré referred to in this report are underpinned by
estimated Ore Reserves which have been prepared by competent
persons in accordance with the requirements of the JORC
Code.
The information in this report that relates to
Mineral Resources and Ore Reserves for the Esuajah North deposit at
the Edikan Gold Mine was first reported by the Company in
compliance with the JORC Code 2012 and NI43-101 in a market
announcement entitled “Perseus Mining Updates Mineral Resources
& Ore Reserves” released on 29 August 2019. The
information in this report that relates to the Mineral Resources
for the Edikan deposits (other than the Fetish, AFG, Bokitsi South,
Esuajah North and Esuajah South deposits) was first reported by the
Company in compliance with the JORC Code 2012 and NI43-101 in a
market announcement released on 29 August 2018. The
information in this report that relates to Ore Reserves for the
Edikan deposits (other than the Fetish, AFG, Bokitsi South, Esuajah
North and Esuajah South deposits) was first reported by the Company
in compliance with the JORC Code 2012 and NI43-101 in a market
announcement entitled “Perseus Mining Updates Mineral Resources
& Ore Reserves” released on 29 August 2018. The
above-mentioned deposits have been updated for mining depletion as
at 31 December 2019 in a market announcement “Perseus Mining
Updates Edikan Gold Mine’s Mineral Resource & Ore Reserves”
released on 20 February 2020. The information in this report that
relates to the Mineral Resource and Ore Reserve estimates for the
Bokitsi South and Esuajah South underground and to the Ore Reserve
estimates for the Fetish and AFG deposits at the Edikan Gold Mine
was first reported by the Company in compliance with the JORC Code
2012 and NI43-101 in a market announcement “Perseus Mining Updates
Edikan Gold Mine’s Mineral Resource & Ore Reserves” released on
20 February 2020. The Company confirms that it is not aware of any
new information or data that materially affect the information in
those market releases and that all material assumptions
underpinning those estimates and the production targets, or the
forecast financial information derived therefrom, continue to apply
and have not materially changed. The Company further confirms that
material assumptions underpinning the estimates of Ore Reserves
described in “Technical Report — Central Ashanti Gold Project,
Ghana” dated 30 May 2011 continue to apply.
The information in this report that relates to
Mineral Resources and Ore Reserves for Sissingué was first reported
by the Company in compliance with the JORC Code 2012 and NI43-101
in a market announcement released on 20 October 2018 and was
updated for depletion as at 30 June 2019 in a market announcement
released on 28 August 2019. In respect of the Fimbiasso East and
West deposits, previously Bélé East and West respectively, the
Company confirms that material assumptions underpinning the
estimates of Mineral Resources and Ore Reserves described in market
announcements dated 20 February 2017 and 31 March 2017 respectively
continue to apply with the exception that the reported resources
are now constrained to a US$1,800/oz pit shell as advised in a
market announcement dated 29 August 2018. The Company confirms that
it is not aware of any new information or data that materially
affect the information in these market releases and that all
material assumptions underpinning those estimates and the
production targets, or the forecast financial information derived
therefrom, continue to apply and have not materially changed. The
Company further confirms that material assumptions underpinning the
estimates of Ore Reserves described in “Technical Report —
Sissingué Gold Project, Côte d’Ivoire” dated 29 May 2015 continue
to apply.
The information in this report in relation to
Yaouré Mineral Resource and Ore Reserve estimates was first
reported by the Company in compliance with the JORC Code 2012 and
NI43-101 in a market announcement on 28 August 2019. The Company
confirms that all material assumptions underpinning those estimates
and the production targets, or the forecast financial information
derived therefrom, in that market release continue to apply and
have not materially changed. The Company further confirms that
material assumptions underpinning the estimates of Ore Reserves
described in “Technical Report — Yaouré Gold Project, Côte
d’Ivoire” dated 18 December 2017 continue to apply.
The information in this report and the
attachments that relates to exploration drilling results is based
on, and fairly represents, information and supporting documentation
prepared by Dr Douglas Jones, a Competent Person who is a Chartered
Professional Geologist. Dr Jones is the Group General Manager
Exploration of the Company. Dr Jones has sufficient
experience, which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity being
undertaken, to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’”) and to qualify as a
“Qualified Person” under National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”). Dr Jones
consents to the inclusion in this report of the matters based on
his information in the form and context in which it appears.
Caution Regarding Forward Looking
Information: This report contains forward-looking
information which is based on the assumptions, estimates, analysis
and opinions of management made in light of its experience and its
perception of trends, current conditions and expected developments,
as well as other factors that management of the Company believes to
be relevant and reasonable in the circumstances at the date that
such statements are made, but which may prove to be incorrect.
Assumptions have been made by the Company regarding, among other
things: the price of gold, continuing commercial production at the
Edikan Gold Mine and the Sissingué Gold Mine without any major
disruption due to the COVID-19 pandemic or otherwise, development
of a mine at Yaouré, the receipt of required governmental
approvals, the accuracy of capital and operating cost estimates,
the ability of the Company to operate in a safe, efficient and
effective manner and the ability of the Company to obtain financing
as and when required and on reasonable terms. Readers are cautioned
that the foregoing list is not exhaustive of all factors and
assumptions which may have been used by the Company. Although
management believes that the assumptions made by the Company and
the expectations represented by such information are reasonable,
there can be no assurance that the forward-looking information will
prove to be accurate. Forward-looking information involves known
and unknown risks, uncertainties, and other factors which may cause
the actual results, performance or achievements of the Company to
be materially different from any anticipated future results,
performance or achievements expressed or implied by such
forward-looking information. Such factors include, among others,
the actual market price of gold, the actual results of current
exploration, the actual results of future exploration, changes in
project parameters as plans continue to be evaluated, as well as
those factors disclosed in the Company's publicly filed documents.
The Company believes that the assumptions and expectations
reflected in the forward-looking information are reasonable.
Assumptions have been made regarding, among other things, the
Company’s ability to carry on its exploration and development
activities, the timely receipt of required approvals, the price of
gold, the ability of the Company to operate in a safe, efficient
and effective manner and the ability of the Company to obtain
financing as and when required and on reasonable terms.
Readers should not place undue reliance on forward-looking
information. Perseus does not undertake to update any
forward-looking information, except in accordance with applicable
securities laws.
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