Perseus Mining Ltd (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) (FRA:P4Q) is one of Canaccord Genuity’s top 16 stock picks across a diverse group of sectors, including mining services, childcare, consumer and retail, health and wellness, sustainability, metals and mining, and technology, media and telecom.
The following is an extract from the report:
Perseus Mining Limited (PRU-ASX): PRU’s 200kozpa Yaoure was commissioned on time and budget by the end of 2020. Successful delivery of the project is expected to see PRU’s Group production increase by ~90% from FY20 to ~500kozpa by FY22. We expect a material increase in earnings and FCF as a result (FY22e FCF yield >30%), noting that at that run rate, PRU would then rank as a Top 5 gold producer on the ASX. BUY rating; target price: A$1.95.
Investment Highlights
PRU remains among our top gold sector picks, with the recent commissioning of the new Yaoure mine in Cote d’Ivoire expected to take annual Group gold production to ~500kozpa in FY22. We expect the operation to move to commercial production in the JunQ, and drive a significant uplift in earnings and FCF (FY21e > FY22e EBITDA +120%, FCF +600%). At Sissingue, a DFS for the Bagoe project (JunQ’21) could provide for much needed mine life extension.
Potential Catalysts
- Commercial production at Yaoure - JunQ’21
- Bagoe DFS (and Sissingue mine life extension) – mid’21
- Yaoure updated LOM - mid ’21
Performance Metrics
PRU is down -8.5% CYTD compared to the ASX All Ords which is up +6.3%.
