Perseus Mining Limited (ASX: PRU) Releases September Quarter Results

PRU

Perseus’ stock has jumped 1.351% on strong operating performance achieved in the first three months of Fiscal Year 2019.

In the activity report for September quarter, three month ended 30 September 2018, gold miner Perseus reported 72,477 ounces of gold production at an AISC of US$950 per ounce. It consists of 54,595 ounces of production from Edikan gold mine and 17,882 ounces from Sissingué gold project commenced in January 2018.

Gold sales during the period was 98,361 ounces, 67,358 from Edikan and 31,003 from Sissingué at a combine average sales price of US$1,225 per ounce. 

Perseus (ASX: PRU) flagged 340% increase in net positive cash position of US$15.4 million in September quarter, compared to previous June quarter. It is because the group has delivered a strong cash flow generation during the quarter as even after making debt repayment of A$14.5 million and reducing trade creditors by A$20.3 million, the net cash has gone up by A$16.5 million to A$21.3 million. As at 30 September 2018, the cash and bullion of the group stood at A$93.8 million.

The growth in cash and bullion reflects strong positive operating margin of A$27.4 million, underpinned by Edikan (A$13.8 million) and Sissingué (A$13.9 million) operations, Australian and West African corporate costs (A$5.3 million), VAT refund (A$13.4 million), debt service (A$15.9 million) and a reduction of working capital (A$15 million).

Recently the company has announced the completion of front-end engineering and design (FEED) study and value engineering assessment (VEA) for its third gold mine Yaouré. It has estimated a capital cost of US$264 million in line with DFS estimates. Moreover, the definitive feasibility study (DFS) for the Yaoure Gold Project reported that the project is economically attractive as it is having IRR of 27 percent with a 32-month pay-back period at a $1,250 per ounce of gold.

With the view to advance development of economically rich gold mine, Yaouré, the company plans to raise funds through debt arrangements. Its funding plan includes the deployment of a corporate debt package, combined with existing cash reserves and future cashflow from operations.

The full-scale construction at Yaouré is expected to begin from early 2019 with first gold production in late 2020.

The group aims to achieve the top end of gold production guidance placed at 1,30,000-1,50,000 ounces for first half year of FY19, ending 31 December 2018. Further, based on Edikan and Sissingué’s actual performance achieved in September quarter, the group advances to meet the lower end of cost production guidance, that is US$950-1,150 per ounce in H1 FY19.

Looking into full year cost and production estimates, Perseus forecasts group’s FY19 gold production to range between 2,60,000- 3,00,000 ounces at an expected all-in site cost of US$925-1,050 per ounce.

In the long-term perspective Perseus expects to reach ~500,000 ounces per annum of gold production with an AISC of US$850 per ounce by 2022 underpinned by consistent on-target production from Edikan and Sissingué, combined with development of Yaouré.

With the release of September quarter results, the share price of Perseus has gone up by 1.351% to trade at $0.380, before market close on 18 October 2018.

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