Perseus Mining Limited (ASX: PRU), a West-Africa based gold miner and developer, announced on 6th May 2019 that the company’s Board finally approved the construction of Yaoure Gold Mine in Cote d’Ivoire. The construction of the approved gold mine will mark a third operational asset for the company.
Perseus received the Exploration Permit from the Government of Cote D’Ivoire for the construction after initially bypassing the initial deadline of 10th April 2019. The company is optimistic about the development of the mine as it believes that the development of the project will provide substantial long-term benefits to all respective shareholders of the company and the local communities associated with the project.
The company previously secured a corporate debt facility of $150 million to develop the proposed mine; however, the initial estimated cost for the proposed development was $265 million. But Perseus mentioned that the rest of the shortfall would be filled by $121 million, which corresponds to cash and bullion currently in the hand of the company.
As per the company, with the projected capital of $265 million, the Yaoure Gold Mine is expected to become a large scale, low-cost operations. The approval of Board Members’ was in line with the granting of the Exploration Permit by the Cote d’Ivoire government to the company’s subsidiary- Perseus Yaoure SARL.
Perseus mentioned that the funding of the project includes the partial deployment of US$150 million and US$121 million. The US$121 million bullion and cash in hand of the company is US$40 million more than US$80 million mentioned previously by the company.
As per the company, the increased US$40 million of cash is from the underwritten exercise of warrants, and strong cash flows from the rest of the company operations, i.e., Edikan and Sissingue gold mines.
Perseus mentioned that the Board’s decision to proceed with the development of the Yaoure Gold mine would take immediate effect, which in turn, opens the way for the execution of the Engineering and Supply Contracts between the company and Lycopodium Limited.
As per the company, it has been involved with Lycopodium- a well-credentialled engineering company, in the past, significantly on the development of the company’s Sissingue Gold Mine, that was commissioned in the early of the year 2018. Perseus also mentioned that Lycopodium developed the previous gold mine in budget and on ahead of time.
The company awarded an Engineering and Supply Contracts to Lycopodium on 10th January 2019, and since then, the teams from both the companies are acting in anticipation of a forthcoming positive development plan. Apart from that, the company also awarded various supply contracts, for the development of the project and processing facility.
Perseus mentioned that these orders will fix around 50 per cent of the capital budget and will assist the development of the project on schedule. As per the company, the first gold is due to be poured from the third mine by 23rd January 2021.
The company paid compensation for outstanding crop, land and sacred site to around 80% of landowners as per the rates specified by the local Prefect’s decree and is now proceeding further and is actively sending various tenders for civil work.
The share of the company was trading at A$0.440 (as on 06th May 2019, AEST: 03:33 PM), unchanged as compared to its previous close.
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