Perseus mining gold throughput suffered a decline at its Edikan mine by 26 per cent compared with output in the previous quarter, reflecting a “disappointing” performance.
During the quarter, a total of 28,668 ounces of gold were produced at Edikan at a production cost of US$1,685 per ounce and an AISC of US$1,859 per ounce, 39 per cent higher than in the prior quarter.
Gold sales of 27,691 ounces were 30 per cent less than in the prior quarter, at a weighted average realised gold price of US$1,802 per ounce, US$129 per ounce more than in the prior quarter.
For the June half year, Edikan produced 67,258 ounces of gold at an AISC of US$1,559 per ounce compared to market guidance of 75,000 to 90,000 ounces at US$1,210 to US$1,430 per ounce.
Compared with its Yaoure and Sissingue mine in Ivory Coast, Perseus’s Edikan mine tracks behind the performance of these other two gold mines in the quarter there by “falling short of Perseus’s required standards”.
This was partially due to the availability of Edikan’s processing facility being reduced by 21 per cent during the quarter while the 19-day preventative maintenance shutdown, foreshadowed in the March 2022 quarter report.
That said, this resulted from a combination of inadequate management of previous maintenance activities on the CIL tanks that impacted gold recovery rates, and poor block model to mill reconciliation recorded while mining in the AG Pit cutback area was completed.
Edikan’s Maintenance Shutdown
On a positive note, the maintenance shutdown was successfully completed and since Edikan’s processing operations recommenced in mid-June 2022, almost all processing KPIs were achieved or exceeded.
This helped to partially reduce the deficit caused by the shutdown of operations, but more importantly, providing confidence that with appropriate management, forecasts for the full year 2023 years are achievable.
This generated a cash margin of -US$56 per ounce, approximately $400 per ounce less than the prior quarter. Negative notional cashflow of US$1.7 million resulted which was US$14.6 million worse than in the prior period.
While an allowance was built into the Edikan market production and cost guidance for the June half year and the full financial year to allow for events such as those referred to above, this allowance was insufficient and both production and AISCs for both periods fell short of guidance.
Perseus’s three operating gold mines, Yaouré and Sissingué in Côte d’Ivoire, and Edikan in Ghana have combined to produce a total of 122,327 ounces of gold in the June 2022 quarter, bringing total annual gold production to 494,014
ounces for the first time.
The weighted average production cost of the Perseus group during the quarter was US$881 per ounce, while the weighted average AISC was US$1,004 per ounce of gold produced.
On an annual basis, Perseus’s AISC of US$952 per
ounce placed the Company near the middle of the global gold cost curve, as reported in JP Morgan’s June 2022.
Combined gold sales from all three operations totalled 111,897 ounces in the June quarter at a weighted average gold price realised of US$1,705 per ounce.
Perseus’s average cash margin for the June 2022 quarter was US$701 per ounce, or US$731 per ounce for the full financial year. Notional operating cashflow from operations for the quarter was US$85 million.
According to Perseus Mining this brings the total amount of notional cashflow generated by Perseus during the financial year to June 30, 2022 to US$361 million, the majority of which was generated by Perseus’s Yaoure mine.
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