Perseus is on track to realize increased gold throughput this year, having produced a total of 128,378 ounces of gold in the fourth quarter from its operating gold mines, Yaouré and Sissingué in Côte d’Ivoire, and Edikan in Ghana.
This represented a 14 per cent increase compared to that of the prior quarter. The weighted average production cost at the operations was US$823 per ounce, while the weighted average All-In-Sustained Cost (AISC) incurred during the quarter was US$934 per ounce of gold.
Production costs and AISC’s were 4 per cent and 3 per cent respectively, lower than comparative costs in the previous quarter. This performance contributed to half yearly gold production at our three mines of 241,164 ounces of gold, produced at an average AISC of US$949 per ounce.
“This strong performance compared favourably to market guidance for the Half Year of 225,000 to 255,000 ounces of gold produced at an AISC of US$925 to 1,025 per ounce and has positioned Perseus to achieve our corporate objective of producing more than 500,000 ounces of gold at a margin of greater than US$400 per ounce in FY2022”.
Perseus Mining 4th quarter report
Combined gold sales from all three operations totalled 130,486 ounces, 21% more than last quarter. The weighted average gold price realised was US$1,669 per ounce, slightly better than the price received in the September 2021 quarter.
Perseus’s average cash margin for the December 2021 quarter was US$735 per ounce, US$46 per ounce or 7% more than that achieved during the September 2021 quarter.
Notional operating cashflow from operations was US$94.3 million, US$16.5 million or 21 per cent more than that generated in the prior period. This was driven by quarter-on-quarter production growth of 14 per cent, derived largely from improved production performance at all three mines, combined with improved AISCs at Sissingué and Edikan.
In the December 2021 quarter, Perseus produced 35,124 ounces of gold at Edikan (9% more than in the September quarter) at a production cost of US$1,327 per ounce and an AISC of US$1,450 per ounce. Gold sales of 34,196 ounces were 17% more than in the prior quarter, at a weighted average realised gold price of US$1,613 per ounce. This generated a cash margin of US$163 per ounce, a significant improvement on the prior quarter.
Furthermore, notional cashflow of US$5.7 million, was US$4.8 million better than in the prior period. While the overall performance of Edikan was materially better than in the September quarter, there is still significant room for improvement, the company said in a report.
Shortfalls in Mining Operations
Notably, signs of this improvement were evident in the month of December, 2021 when the mill feed was made up predominantly of ore from the AG Pit, the company stated. This further resulted in the head grade of ore treated increasing sharply to 0.86g/t on average and the gold recovery rate increasing to 86.2 per cent.
This quarterly performance contributed to half yearly gold production at Edikan of 67,285 ounces of gold, produced at an average AISC of US$1,509 per ounce. This performance fell short of market guidance for the half year of 70,000 to 80,000 ounces of gold produced at an AISC of US$1,350 to 1,450 per ounce.
In addition, the shortfall in production relative to guidance was a function of several factors including poor reconciliation of tonnes and grade of ore mined from the AG pit in the September 2021 quarter.
As a result, the company took a conscious decision to process ore from low grade ore stockpiles during the December, 2021 quarter, noting that that this was necessary until a comprehensive grade control programme could be completed.
“Business development activities continued to deliver encouraging results, demonstrating potential to materially increase Perseus’s Ore Reserves inventory and extend the economic mine lives of its operation”.
Fourth quarter report
With these strong results, Perseus indicated in the report that, its financial position continues to strengthen with cash and bullion of US$212 million, debt of US$50 million, and net cash flow of US$162 million at the end of the year.
These results were seen as the company, after it returned US$13 million of capital to shareholders, reducing debt by US$50 million and investing US$11 million in organic growth during the quarter, the report highlighted.
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