Perseus Mining Ltd (ASX:PRU) has produced a record 83,881 ounces of gold from its Edikan and Sissingue gold mines in West Africa in the June quarter.
Significantly, this is 31% more than the prior March quarter and results in annual production of 255,916 ounces, 45% higher than FY2017.
This was the second quarter of production from the Sissingue gold mine and demonstrates the company’s strategy to diversify into a multi-mine West African gold producer.
Production records result in strong cash flows
Perseus’s CEO and managing director Jeff Quartermaine said: “Over the last 18 months, Perseus has been steadily improving its production performance at Edikan and with our second mine, Sissingué, successfully coming on stream earlier this year, we have been able to move our production to another level, allowing us to achieve a number of production records and strong operating cash flows this quarter.”
Over the next four years the gold miner hopes to increase production to around 500,000 ounces of gold per year with three operating mines in West Africa by 2020.
Developing a third operation at Yaouré is a key upcoming catalyst
Perseus completed a positive definitive feasibility study (DFS) for a third gold mine, Yaouré, in October 2017.
Quartermaine added: “This strong performance is important for Perseus in the context of our next development, the Yaouré gold mine, which we plan to start developing later this year.
“Based on current market conditions, it is expected that Yaouré will be financed from internally generated cash reserves and debt that is in the process of being arranged.”
The company is targeting end of December 2018 to have funding and execution plans in place to allow for a decision to start full-scale construction.
It is expected to have an 18 month full-scale construction period with first production forecast for 2020.
Second best quarter to date from Edikan
Perseus’s quarterly gold production of 83,881 ounces includes 57,861 ounces from the Edikan gold mine in Ghana.
Notably, this is the second best quarter in the mine’s 6.5-year history of commercial production.
Furthermore, the recently commissioned Sissingué gold mine delivered 26,020 ounces in its first full quarter of production.
The on time, within budget Sissingué development demonstrates management’s ability to deliver on their multi-mine strategy.
Record quarter confirms guidance forecasts
The record June quarter delivered June half production of 147,908 ounces of gold and June annual production 255,916 ounces of gold.
Both production figures were comfortably inside the company’s previously provided guidance ranges of 140,000 to 160,000 ounces for the half and 250,000 to 285,000 ounces for the full year.
Global research coverage
The Perseus story has caught the attention of nine equity research and trading houses including Citi, Credit Suisse, Macquarie, UBS, CLSA, Hartley’s and Canaccord Genuity.
Analysts will be updating their valuations and price targets over the coming days.