Perseus Mining Ltd (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) (FRA:P4Q) has unveiled another record quarter with both half and full-year gold production exceeding the top end of guidance.
In the June quarter, the company recorded gold production of 102,788 ounces, up 16% on the March 2021 quarter and up 50% on the December 2020 quarter.
All of the three operating gold mines – Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire – performed strongly in the June quarter.
Half-year gold production stood at 191,246 ounces and FY2021 gold production was 328,632 ounces, with both numbers exceeding the top end of their respective production guidance ranges.
The quarterly gold sales increased 23% to 106,899 ounces at an average realised gold price of US$1,652 per ounce, 1.5% more than the prior quarter.
The weighted average all-in site cost (AISC) was US$1,047 per ounce, US$48 more than in the last quarter.
Notional cashflows from operations for the quarter totalled US$62.1 million, US$20.9 million or 51% more than in the March 2021 quarter.
“Delivering on our promise”
Perseus Mining managing director and chief executive officer Jeff Quartermaine told Proactive: “So it has been an excellent year in terms of production with each of the mines performing very, very well.”
“Things are going exceptionally well. It has been a journey but we are certainly delivering on our promise we have made.”
Well on track
Quartermaine added that the company is “very well on track” to hit its stated objective of achieving track of hitting 500,000 ounces of gold per annum in the current financial year.
He pointed out that guidance for gold production and AISC for the December 2021 half year has been set at 225,000 to 255,000 ounces at a cost of US$925 to US$1,025 per ounce.
At the higher end of the guidance, the company will be easily able to hit the stated objective of 500,000 ounces for the year, especially with the first half of next year expected to be “a little bit stronger.”
Managing the cash pile
Quartermaine also told Proactive that with the higher production, the company has made “quite a lot of cash” during the quarter, with US$190 million of cash flow in the 2021 financial year.
With the cash pile, the company plans to manage its balance sheet, return some to shareholders and maintain the growth profile of the company.
The plan to continue to pay down company debt will continue as it goes forward.
During the quarter, outstanding corporate debt was reduced by US$30 million to US$100 million, resulting in a net cash and bullion balance of US$56.1 million.
It also plans to return some of the cash to shareholders “in the form of dividend or some other method” and was currently looking at how best to proceed.
Cash will also be set aside to ensure that the company continues to maintain its 500,000 ounces annual production for a lot longer either through organic growth or mergers & acquisitions.
He said the company had excellent targets it was currently drilling, which in the next few years would generate an increase in inventory.
“Beyond that, should the opportunity arise in the M&A space, the cash will be used,” Quartermain added.
The available cash and bullion on hand of US$156.1 million and debt of US$100.0 million, gives a net cash position of US$56.1 million at quarter-end, US$50.3 million more than at the end of last quarter.
Perseus remains on track to achieve its goal of producing more than 500,000 ounces of gold per year at a cash operating margin of not less than US$400 per ounce in FY2022.
Exploration programmes continued to generate encouraging results from prospects close to each operating mine, demonstrating potential to organically grow the group’s inventory of mineral resources and ore reserves.
Story by ProactiveInvestors
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