Perseus Mining Ltd (ASX:PRU, TSX:PRU, OTC:PMNXF) has increased its net profit by 48% in FY2021 to A$139 million, compared to A$94.4 million in the previous financial year – a 47.6% improvement.
During the 2021 financial year, the West African gold producer made strong progress towards its goal of becoming a multi-mine, multi-jurisdictional producer of more than 500,000 ounces of gold per annum at a cash margin of not less than US$400/ounce.
The company also completed the construction and commissioning of its third gold mine, Yaouré, while maintaining steady operating performance at its two other gold mines, Sissingué and Edikan throughout the year.
PRU managing director and CEO Jeff Quartermaine said the financial results presented further evidence of the transition of Perseus into a high-quality, mid-tier international gold company.
Transformational year of improved earnings
“FY2021 has been a transformational year for us, during which we have successfully brought our third gold mine, Yaouré, on stream and as importantly, converted our group’s strong gold production into improved earnings and cashflow.
“Looking to the future, we expect this trend of improved earnings and cashflow to continue as we close in on our corporate objective of producing more than 500,000 ounces of gold per year, a target that we expect to achieve for the first time in FY2022.”
In light of Perseus’ strong financial performance during the 2021 financial year and confidence in its continuing financial performance, the company’s board of directors has implemented a Dividend Policy - commencing with a maiden return of capital to shareholders of A$0.015 per share, representing a 1% yield for FY2021.
Quartermaine continued: “This year for the first time, we have also been able to start a program of returning capital to our shareholders with the announcement of a capital return of A1.5 cents per share and a Dividend Policy to guide future returns to shareholders.
“The declaration of this maiden return of capital reflects the company’s growing confidence in its ability to generate meaningful cash flow from its operations and have sufficient funds available after managing its balance sheet and funding future growth of the business, to return capital to shareholders on a consistent basis.”
FY2021 highlights
Perseus recorded EBITDA from operations in FY2021 of A$303.1 million, an 11% increase compared to the previous financial year, reflecting an increase in sales revenue of 15% to A$679.7 million and an increase in cost of sales of 19% to A$376.7 million.
The company generated A$302 million (24.6 cents per share) of operating cashflow during the year, resulting in a cash and bullion balance at year-end of A$207.9 million, or A$74.7 million, net of A$133.2 million of outstanding debt.
At June 30, Perseus’ net tangible assets amounted to A $926.5 million, or A$0.76 per share, around 10% more than at the end of the prior financial year.
Improvements in earnings, cashflow and its financial position can be attributed to:
- An increase in revenue resulting from higher gold prices combined with higher gold production, arising from increased production at Sissingué and gold produced at the newly commissioned Yaouré Gold Mine offset by lower gold production from Edikan;
- Depreciation and amortisation expense of A$103.6 million, representing a decrease of 22% during the year, predominately due to 32% less ore mined at Edikan and 14.5% less ore mined at Sissingué;
- An income tax expense of A$23.7 million compared to a A$32.2 million expense in the prior year due to lower profits at Edikan; and
- A write-down and impairment expense of A$6.8 million compared with A$4.5 million in the previous year, that related mainly to exploration expenditure written off on near-mine targets at both Sissingué and Edikan due to the non-discovery of commercially viable resources.
Gold production
Gold production by the Perseus Group during the year totalled 328,6321 ounces (up 27.6% on FY2020) at a weighted average all-in site cost (including production costs, royalties and sustaining capital) (AISC) of US$1,016/ounce (4.5% up on the FY2020).
Gold sales by the Perseus Group during the year totalled 321,199 ounces of gold at an average sales price of US$1,642/ounce.
During the financial year, the group sold 18% more gold, at a price that was approximately 13% higher than in the 2020 financial year.
With its three gold mines now operating at full capacity, Perseus is well positioned to improve on its FY2021 financial performance in the coming financial year by continuing with solid gold production at each of its mines and focussing on improving each of their respective cost structures.
Gold production and cost guidance for the December 2021 half year is as follows:
