Perseus Mining is upbeat about shoring up its production capacity after reaching commercial production in 2021, contracting Geodrill Limited to undertake significant multi-rig long-term drilling contracts to carry out exploration work on its projects in Ghana and Côte d’Ivoire.
The contracts awarded Geodrill are to be completed by August 2023 using up to 15 drill rigs from the company’s existing fleet, generating revenue in excess of $45 million over the contract term.
Geodrill’s expertise and experience within the industry will be leveraged to provide upside growth to Perseus’ operations. Currently, Geodrill has a rig fleet of 71 drill rigs operating in West Africa, Egypt and Peru.
Perseus Mining is targeting a production capacity of 500,000 ounces per year of gold with its three mines in operation, generating a cash margin of more than $400/oz from financial year 2022.
Dave Harper, CEO and President of Geodrill, commented:
“Geodrill continues to build meaningful relationships and revenue by expanding contracts with top-tier gold customers in our core geographic region. These contracts bring top-line growth, improving economies of scale and support our goal of delivering consistent earnings in 2022.”
Dave Harper, CEO and President, Geodrill
Also, Perseus currently has three producing gold mines, one in Ghana and two in Côte d’Ivoire, including the recently commissioned Yaouré Gold Mine which achieved commercial production in March 2021.
Perseus Mining’s Strong Fundamentals
Over the past week, Perseus Mining’s stock underperformed on the Australian Stock Exchange, produced with its stock declining by 4.6 per cent. At first glance, this seemed rather discomforting to investors and shareholders as the share price was affected.
However, given the company’s strong financials, this could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health.
According to Simply Wall Street, Perseus Mining has a fairly decent Return on Equity (ROE). The company’s ROE is similar to the industry average of 13 per cent, and as such this certainly adds some context to Perseus Mining’s exceptional 74 per cent net income growth seen over the past five years, it said.
“We believe that there might also be other aspects that are positively influencing the company’s earnings growth. Such as- high earnings retention or an efficient management in place.
“We then compared Perseus Mining’s net income growth with the industry and we’re pleased to see that the company’s growth figure is higher when compared with the industry which has a growth rate of 24 per cent in the same period”.
Simply Wall Street
Last year, Perseus noted that it expects to complete a maiden mineral resource estimate in the March 2022 quarter.
With regards to its Ghana project, the company’s Edikan mine life is currently forecast to end in full-year 2025, whereas its new discovery at Nkosuo has the potential to extend the mine life well beyond that date.
Jeff Quartermaine, Managing Director of Perseus Mining is cited to have said:
“With our three gold mines now in operation and Perseus moving closer by the day to achieving our goal of producing 500,000 ounces of gold per year, we have turned our sights to finding ways of sustaining this level of gold production from our operations out to the end of the decade and beyond.
“While we are working towards completing a maiden Mineral Resource estimate for Nkosuo in early CY2022, we intend to continue exploring on the Agyakusu, Agyakusu-DML and Domenase exploration licence areas, all of which are under option to Perseus and all of which are located within trucking distance of our Edikan mill.”
Jeff Quartermane, MD, Perseus Mining
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