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Are investors missing the potential of Perseus Mining?

Based on the research produced by Duncan Hughes at Somers & Partners, the answer is a resounding yes. He rates the stock in the gold miner a ‘buy’ with a price target of 69 cents a share, which is around 19% ahead of its current market worth.

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Gold pour: For the three months ended September, output was almost 44,000 ounces of the yellow metal, which was in line with forecasts.
Are investors missing the potential of Perseus Mining (ASX:PRU)?
 
Well, based on the research produced by Duncan Hughes at Somers & Partners, the answer is a resounding yes.
 
He rates the stock in the gold miner a ‘buy’ with a price target of 69 cents a share, which is around 19% ahead of its current market worth. 
 
The analyst repeated his bullish call in the wake of the miner’s quarterly update earlier this week.
 
For the three months ended September, output was almost 44,000 ounces of the yellow metal, which was in line with forecasts, while costs were lower.
 
Perseus is moving from a single asset operation to a multi-mine, multi-country business and in doing this aims to double production to around 500,000 ounces of the yellow metal a year.
 
It is the owner of the Edikan Mine, in Ghana, a large-scale open-pit operation made up of six different ore bodies.
 
The diversification programme kicks off with Sissingue in Cote d’Ivoire, which will require an estimated A$100mln of capital investment.
 
At the end of the quarter, Perseus was sitting on A$137mln after a recent A$102mln equity raise. 
 
The company also has an approved, but undrawn A$60mln debt facility, providing it with the financial wherewithal to complete the planned expansion.
 
After Sissingue is Yaouré, also in Cote d’Ivoire. It was acquired as part of the takeover of Amara Mining of the UK.
 
With a mineral resource of 5.3mln ounces, Yaouré is a world-class asset with the potential to become a long-life, low-cost mine.
 
Looking at Hughes’ research note, the project makes up 40% of the sum-of-the parts valuation.
 
In a recent article, Perseus managing director Jeff Quartermaine was quoted as saying : “We were looking for an asset that was going to give us long-term, high quality ounces and Yaouré ticked that box.”

Quick facts: Perseus Mining Ltd

Price: 1.27 AUD

ASX:PRU
Market: ASX
Market Cap: $1.48 billion
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Perseus Mining registers golden half-year with net profit after tax up 193%

Perseus Mining Limited (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) CEO and managing director Jeff Quartermaine updates Proactive on the West African gold producer’s strong half yearly performance. The company produced almost 135,000 ounces of gold at around US$942 an ounce resulting in the generation...

4 days, 5 hours ago

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