Earnings call transcript: Perseus Mining sees robust Q1 2024 gold production

Perseus Mining Ltd (ASX:PRU) reported strong financial and operational performance for the first quarter of 2024, driven by significant gold production and a healthy cash position. The company produced 121,605 ounces of gold with a cash margin of over 50%, reflecting its competitive position in the gold mining sector. With a market capitalization of $36.89 billion and an attractive P/E ratio of 13.8, Perseus Mining’s stock showed a 3.1% increase to $3.43, nearing its 52-week high, signaling positive investor sentiment. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics.

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Key Takeaways

• Perseus Mining’s Q1 2024 gold production reached 121,605 ounces.
• The company maintains a strong cash and bullion balance of $801 million.
• Stock price increased by 3.1%, reflecting investor confidence.
• Perseus is advancing significant projects, including the Nianzaga gold project in Tanzania.

Company Performance

Perseus Mining demonstrated robust performance in Q1 2024, with significant contributions from its operations in Côte d’Ivoire and Ghana. The company’s focus on maintaining low all-in site costs and expanding its production profile has positioned it well in the rising gold price environment. With an EBITDA of $3.59 billion and strong cash flows that sufficiently cover interest payments, the successful execution of a $32.74 million share buyback further underscores its financial strength. The company maintains an impressive dividend yield of 5.19% and has consistently raised its dividend for four consecutive years.

Financial Highlights

• Gold production: 121,605 ounces
• All-in site cost: $1,209 per ounce
• Average gold price: $2,462 per ounce
• Cash and bullion balance: $801 million
• Capital expenditure: $17 million
• Taxes paid: $22 million

Outlook & Guidance

Perseus Mining is targeting annual gold production of 500,000 to 600,000 ounces with a cash margin of over $500 per ounce. The company is preparing an updated long-term production forecast and continues to explore growth opportunities, including a potential underground expansion at the Nianzaga project.

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Executive Commentary

CEO Jeff Quartermaine stated, "We believe that the Nianzaga project can and will develop into a world-class operation," highlighting the company’s strategic focus on project optimization and stakeholder benefits. He emphasized Perseus’s commitment to generating economic contributions in all operating countries.

Risks and Challenges

• Grade reconciliation challenges at the Yaoure pit could impact production efficiency.
• Fluctuating gold prices may affect revenue and cash margins.
• Potential operational disruptions in African regions due to geopolitical risks.

Q&A

During the earnings call, analysts inquired about the optimization potential of the Nianzaga project and the future of the Sissingue mine. Perseus addressed concerns regarding grade reconciliation at Yaoure, indicating ongoing efforts to mitigate these challenges.

Full transcript - Perseus Mining Ltd (PRU) Q3 2025:

Nathan, Moderator: Mining managing director and CEO, Jeff Quartermaine. Thank you, Jeff.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: And thanks very much, Nathan, and welcome to Perseus Mining’s webinar to discuss our March report. I’m joined on the call today by two of my colleagues. Our CFO, Lianne DeBrain, needs no introduction. She’s been an integral part of our leadership team for quite some time and has frequently participated in these webinars. We’re also joined today by Jacob Rickdoni.

Now Jacob joined Perseus earlier this year in the role of chief development officer with specific responsibility for exploration tech services and development. And Jacob will be available to respond to any detailed questions that you may have on either our organic growth projects or, you know, similar matters, you know, later in the webinar. So welcome, Leanne and Jacob. Now the agenda for today’s webinar is the same as usual. I’ll start by providing an overview of what Perseus has achieved operationally during the quarter, and then we’ll hold a q and a session to dive into any specific matters that have not been addressed either during the presentation or indeed in the market releases that we have made to the market either on the quarterly or the release we put out last Monday that spoke to the decision to move forward with the Neon Saager development.

For those of you who are participating in this webinar via your computer, you should be able to track the presentation visually on your screen so we get to that point. Now in summary, it seems that every quarter we report months the same thing, namely that our team at Perseus has once again delivered very strong gold production results, competitive all in site costs, and with the help of the rising gold prices, expanded cash margins, and increased free cash flow and cash balances. Now in terms of the Australian gold sector at least and and possibly globally, our performance in closing cash balance, which I might say stands at 801,000,000 US dollars or for our Australian business, Aussie one point two five billion dollars. It’s better than most in the gold sector based on the reports that we’ve seen from our peers so far this month. Now this does beg the question of why our consistently strong operating performance doesn’t translate very accurately into relative share price performance.

This is an issue that’s challenged us for some time, and several theories have been put forward about why we traded a discount to our peers. And these include the African discount, so to speak, and the quality of Percy’s asset portfolio, particularly the remaining lives of our assets. Now I won’t dwell on these observations too much as, in my opinion, both of them are are fairly fundamentally flawed. But rather than complain about the misunderstanding, What we have done this quarter is taken some very decisive action to address both the issue of asset quality and African risk. The two major growth initiatives, both fully funded from existing cash reserves, I might say, have been materially advanced during the quarter or since our last webinar, and they include the CMA underground development at our existing Yaoure gold mine in Cote D’Ivoire, and, of course, the commencement of the development of the Nianzaga project in Tanzania.

Now both of these initiatives will be a subject of more focused discussion in the presentation that follows, as both of these projects will materially upgrade our existing production base that has, I repeat, already been generating outstanding operating results consistently for the last five or six years. Now, hopefully, the quality of these new two new additions will gain some recognition. And, of course, if they don’t, the the new operations will certainly help us to continue the long stream of outstanding results generated by the company. So in summary, things are rolling along very nicely at Perseus, and let’s go to the presentation so that I can demonstrate what I’m talking about. So if we look at the operating and financial results in summary that we’ve we’ve published today.

So for the quarter, production, a hundred and 21,605 ounces, down slightly from the prior quarter, which was in fact an outstanding quarter. The all in site cost across the group is $1,209 an ounce, up slightly for two reasons. One is that the production is down slightly, but also because of the increase in royalty payments due to the higher gold prices that we’ve been receiving. The gold prices averaged $22,462 an ounce, giving us a margin of US $1,253 an ounce. Now on on terms of the margin, I did read in the papers earlier this week, a a very prominent United United Kingdom Investor complaining that the gold sector hadn’t taken the opportunity to generate margins.

Well, I would point out that our cash margin is in excess of a %, and that’s generated something like a hundred and 52,000,000 of notional cash flow for the quarter, resulting in a cash and bullion balance at the end of the quarter of 801,000,000 US dollars. Now I point out that that 801,000,000 US dollars does include 34,208 ounces that of gold that were valued at the spot price on the March 31, which is $3,115. So down from where it is today, in fact. But but, nevertheless, that’s how that number has been arrived. I should say also it does not include any debt.

We don’t have any debt even though we do have a an undrawn line of credit of 300,000,000 US dollars. Now if you look at that in context with what we’ve done in the past, as I said, the the the December was up slightly, but for the last four quarters, there’s been a fairly remarkable consistency in our in our performance. And during that time, we’ve seen the gold price rise, and we’ve seen the the cost kept reasonably steady. All three operations are running reasonably well, although I have to say, not without the challenges as I’ll I’ll mention in in just a moment. But certainly in this rising gold price environment, it is giving us the opportunity to significantly generate our expand our margins and and cash, etcetera, etcetera.

Now looking forward, we’re now, you know, one month pretty much through the the the three months of the quarter. Happy to say that we’re we’re operating bang on targets at the moment, and, you know, we’ll continue to deliver certainly good results into the future if if indeed nothing untoward happens in the next couple of months. Now in terms of what is what we are predicting, this chart this chart that you can see shows the guidance that we have given to the market. Now we’re obviously very well positioned relative to the forecast for the half year and the full financial year. I think if anything, what we’re going to be doing is provided that nothing untoward happens between now and the June, we will end up in the the upper quartile of the production range that we’ve given the market.

And and at this stage, we’re we’re quite some way below the bottom end of the of the cost range. So, you know, that’s a that’s a pleasing outcome. And that that, of course, has occurred notwithstanding the higher royalties, etcetera, that I mentioned before. Now if you look at where the where the productions come from, I’ll just quickly run through the three operations. So Yaoure was the standout again as it has been for some time, 57% of our our total production.

So it’s the main contributor. The cost this quarter were down a bit on where they have been, and we have been the beneficiary this quarter of the fact that we did have accelerated stripping in the last couple of quarters. Now you’ll recall I mentioned on this presentation, you know, for the last couple of quarters that we were we did get behind in our stripping, and we had accelerated stripping in the last couple of quarters to get back on track. We are back on track, and we’re now accessing high grade material. And so that’s been what has caused this pretty good cost performance in the in the the last quarter.

The issue that is challenging us at the moment, if anything, at at Yaoure is the fact that we’re we’ve moved from or we’ve just opened up the Yaoure open pit. We’ve been mining in the CMA Open Pit up until now. So the the geology in the Yaoure Pit is quite complicated, and our grade control procedures, you know, need to be modified to adjust to the new ore body. And at this stage of the game, we haven’t quite got it right. We’ve got a positive reconciliation in tonnes and negative reconciliation on grade, but overall positive on ounces.

But that’s something that we’re working on pretty furiously at the moment to get that right because that is important for us going forward because ore from that Yaoure open pit is going to be blended with ore from the the CMA underground, and I’ll I’ll talk about this in just a moment, but we we signed off on that operation earlier this quarter. Now as far as EdiCAN is concerned, it was it was a little bit disappointing relative to the prior quarter. About 34, 30 five percent of our gold comes from EdiCAN. Right across the board, the metrics were slightly under where we had hoped they would be. But, nevertheless, the costs were still fairly good.

I mean, 1,177 US dollars per ounce at Edikan is is, you know, right in the bottom end of the global cost curve. And, you know, I think if, you know, full credit to the team that we’ve been able to keep a lid on our costs at at Edikan going for you know, over the last few years. Reconciliation there is is is very good or is within market ranges, etcetera, etcetera, so we’re not too concerned there. The we have started mining in the Enkusui Pit, which is a a new pit that was discovered a few years ago by our team. Now this ramp up and this is partly what’s attributed to the performance this quarter.

Our ramp up has been a bit slower than we were we were hoping for as a result of some land access issues in the area. These are gradually being addressed. And and not before time, I might add, given that the AG and fetish pits are are getting towards the end of their life. So we will be mining from Encasuo, you know, in the next quarter in in, you know, full steam ahead. And, hopefully, by then, we’ll have things sorted out.

Now one of the points I might just make on Edicam while we’re talking about, which I think is important in the context of geopolitics, is that our mining licenses at in in Ghana have been renewed. They’ve been signed off by the the minister, and then will be presented to parliament, I believe, as part of a batch in May to get a parliamentary ratification. So, you know, some of the issues that have been reported in Ghana recently, I can say that most certainly don’t apply to Perseus. As far as our our standing in the country, we are in good standing. And we have the opportunity to extend the mine life at Edikanemite.

So we’ve been doing quite a lot of work on strategic options, and we’ll publish this data later on in the year. But, certainly, we believe that, you know, there is a an extended life at at Edikan looking forward. Sissingue Sissingue’s been a little bit disappointing this period as well, and there are once again fairly solid reasons for that. The all of them, the metrics have been reasonably okay other than grade, and the grade is down as a result of not accessing the higher grade material at Phimbioso in the way that we’re wanting to do. Part of that, a large part of that relates to our contractors’ performance, equipment availability, and productivity.

We have addressed those issues by bringing in some additional equipment ourselves and and hiring it back to them, And we will overcome this issue as we move forward. But, certainly, the performance this quarter was not where we would like it to be. Once again, similar sort of thing. We’re getting good reconciliations, know, across the across the site. And I think that, you know, the life of Sissingue, it it can be extended quite materially through these strategic options that we’ve been evaluating, and we will, as I say, communicate those when when all of that work has been been completed.

So the the the product production is in reasonably good shape. I’m now gonna hand to Leanne to address some of the financial metrics, please, Leanne.

Leanne DeBrain, CFO, Perseus Mining: Thanks, Jeff, and hello, everybody. Good to be on the call. You’ll see from the slide in front of you that our cash flow and our overall balance has grown significantly since the last time we reported, which was 704,000,000. It’s now sitting in $801,000,000 including bullion. We have zero debt and but still have our undrawn credit line of US dollar 300,000,000.

We continue to make contributions up to our host countries, contributing this quarter $22,000,000 in tax. The capital expenditure for the period of $17,000,000 points out that does include 11,400,000.0 relating to the Nianzaga pre FID expenditure. And we also in the period contributed $10,000,000 into the share buyback, which I’ll talk a little bit to a little bit later. If we move on to the reconciliation of our all in site costs to our all in sustaining costs, reminding the listeners that Perthes has for many years reported an all in site cost number, which is a pure cash number and doesn’t necessarily agree with the IFRS all in sustaining cost. And so we’ve put the slide in just to explain those differences so everybody is aware.

You’ll see that we have got a reconciliation because we we use produced versus sold. In the period, we had inventory movements because Edikan was building up stockpiles. And then the corporate admin costs, which is included in the all in sustaining cost, is not included in the all in site cost number. Moving on to the hedging position and strategy, we have always continued to focus on downside price protection to ensure the certainty of our cash flows, particularly now that we have committed to the Neandzaga project over the next two years. However, giving consideration to the robust gold environment in which we are operating, we have our revised strategy from using spot deferreds and forward contracts to a zero cost collar approach.

And this does this provides us downside projection, but does allow us for upside participation. And what we’ve set out here, which I won’t go into too much detail, just sets out so you can see what our what our hedge book looks like going forward over the next four years or three and a bit years, should I say, and and how the introduction of this new strategy is giving us that upside participation. The next is the share buyback. This is our position as of the April 9, when we enter the blackout period. And so, we’ve executed at that period 32.78 of the buyback, which was about $32,740,000.

With the release of the Nianzaga FID and the quarterly this morning, we will likely commence participation in the share buyback again. And that’s all for me from the financial side, Jeff.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Okay. Thanks, Leanne. Yeah. The share buyback’s been pretty interesting, I have to say, and I think it has actually materially benefited our shareholders the way we’ve implemented it over the last few months being able to support the market when there were unusual things going on and providing some some real support at times when it was needed. I’d like to now talk about the organic growth piece.

As I said, this is pretty important piece of our business and something we’ve given a lot of attention to in the last couple of quarters. The CMA underground development was the first of the first cab off the rank, and that was we announced the the FID decision, the financial final investment decision in late January. This is a an underground operation off the side of the existing CMA pit. Things are moving along very nicely on in preparation for cutting the first portals in July of this year. We’ve appointed burn cutters, our contractor.

They’ve mobilized on the site, and and preparations are well and truly underway. And we we’ve have gone ahead with the decision based on a an in principle approval by the minister of field mines, petroleum, and energy in Cote D’Ivoire, and we believe that his ministerial decree will be issued in the next week or so as all of the prerequisites for the issuing of the document have have now been completed. So we’re in very good shape as far as the project is concerned. Now if we look at the schedule, as I said, the burn cutter busily on the site working in in getting things organized. Equipment has been been shipped and has been arriving on the site, and we’re getting ready to to get into the portal firings on the on the July 1.

So we’re well and truly on track for that. Quite a deal of work has been done to locate the various portals and and the like. And, you know, where some of those areas have been exposed, some of them will come into the in the future, but we’re, you know, getting getting, you know, very much on the front foot as far as being able to move into that exercise on the on the schedule that we’ve set out. I’ve got a couple of photographs on the slide on the on the screen just showing a few of the site works that have been underway. We’ve had to, obviously expand our accommodation and an office capacity to be able to fit another large contractor and hit workforce in.

We’ve also had to upgrade a few of the services, water power, etcetera, etcetera, to make sure that the the underground operation will be fully serviced when when we get going. So all of those things are moving forward very strongly, and we’re in a very good place, I believe. We’ve been recruiting quite heavily over time, bringing in some very high caliber people in in the underground mining space, which, as people know, is new to to the Perseus business. Now the other very important project that we’ve initiated since the last webinar has been the Nianzaga gold project in Tanzania. We took a an affirmative final investment decision earlier this week, and we announced to the market the position.

So we’re moving ahead with that project. Our budget for the exercise going forward is is around $523,000,000, including contingencies, preproduction costs, etcetera, etcetera. So, you know, it’s it’s pretty much in line with what we were expecting it would be as we were sort of doing the work over the last twelve months. The important thing to note on this is that the funding of this project is coming via non interest bearing loans from Perseus to the operating company and relying on our existing cash balance of 801,000,000 US dollars. So we need we need no external financing to go forward with the project.

We all the money is in place, and and that gives us a a lot of flexibility in terms of of moving forward. One thing I would say is that we we’ve had some very, very constructive engagement with the with the government of Tanzania over the last twelve months, clarifying terms on the existing framework agreement and the shareholders’ agreement. And I would say, well done indeed, call out Leanne and her team who have been leading the charge on that, done a terrific job in being able to establish really strong relationships with the government and convert that into meaningful documentation that’ll govern the project going forward. And just so so slides to show you what we’re talking about. So the, you know, Tanzania is on the Eastern side of of the African continent, and the project, the inside project sits on the southern shores of Lake Victoria.

It’s in an area where there’s been quite a lot of mining in the past, particularly Barrick have been active in their North Mara, Anglo Ashanti, Geita, etcetera. So these are names, Bullion, Ula, these are names that are well known, Golden Prides, and other ones, Wuswagi. These are names that are very well known to the industry. So there is a long history of mining in the in the country, and the Nianzaga project will be the first new project for about seventeen odd years in in Tanzania. So it’s very exciting for everybody.

The site is reasonably compact. You know, it’s we’ve got allocations made for waste dumps and tailings dams, etcetera. It is relatively adjacent to Lake Victoria, so, you know, environmental management is a very, very important piece of what we’re doing going forward. Now the way we’re developing this project is different to the previous owners who were envisaging a small open pit at the top and using that the proceeds from that pit to fund a drive down on on higher grade material at depth and having an underground operation. What we’re doing is we’re going to do a a single large open pit initially, and then we’ll see where we go to from there.

So it’ll this open pit will be developed in a couple of stages. You can see on the slide the white and the blue lines being the various stages that we’ll embark on, and that orange line is the outline of the the the pit that we’ve we’ve approved. Now this is what we’re calling the first phase of the of the this particular project. The difference between the the orange line and the pink line are inferred resources. And we what we’ll be doing, the inferred resources into these areas here, what we’ll be doing over time is drilling those out, converting them into into indicated or measured, and putting them into the mine plan.

And, ultimately, we would expect end up with a pit that some something aligned to that pink line, which will have a a very much expanded ore or mineral resource and ore reserve reporting. The what we’ve done with the processing facility, it’s a larger processing facility than was previously envisaged. This is a 5,000,000 ton nameplate plant designed by our contractors like the podium who we’ve worked with in the past on several of our of all of our, actually, operations. And, of course, like a podium is very well known in Africa having built just about every decent plant in the last fifteen, twenty years, I would think. This plant is is fairly standard.

There’s nothing fancy in the in the process flow sheet. So you got SAG mill, ball mill, thick in a CIL, etcetera, etcetera, and then electrowinning. So nothing terribly terribly fancy around this, and we believe if anything, the the mine the the plant will operate above nameplate as as tends to be the case with these with these local plants. The the metrics that are are related to the project, I guess, the important metric is that we believe that the the the reserve that we’re we’re working for to at this particular point in time is about 2,300,000 ounces, which is recently close to the previously announced reserve, which from which we’ll extract about 2,000,000 ounces of gold. The production will average around 200,000 ounces over the eleven year life.

I mean, it peaks out at about $2.46 at one particular point. But very importantly, the the all in site cost, it runs at around $1,200 an ounce. And that cost is has been, you know, very carefully benchmarked not only against other operations in in Tanzania, but also what we’ve actually done elsewhere on the continent. You know, from an investment point of view, we we have used a a $1,700 pitch shell for the design of the of the of the the mine, but use a $2,100 per ounce long term gold price in calculating our metrics. And as you can see from the slide, you know, the undiscounted cash flows, both pretax and post tax at 2,100 are are pretty pretty interesting, but at 2,700, they’re even more more interesting.

And, certainly, we believe that this will be a project that will generate very, very substantial benefits for all of our stakeholders as we go forward. The production forecasts, as you can see from the slides on you know, as I said, averaging around the 200,000 ounce mark over the life of the the project as it’s currently known, but it does peak out at various times quite a bit higher than that. So it’s a pretty steady production profile and one that will add materially to our overall group profile going forward. So looking forward, we’re we’re very confident in our ability to deliver the project as planned. I mean, Perseus, as you’re aware, has has successfully developed and and is now operating three gold mines on the African Continent, Edikan, Sissingue, and and Yaoure, and doing that fairly successfully.

Now what very importantly, many of the contractors and the employees who were engaged on the Aori bill, for instance, and delivered that one ahead of schedule and under budget during the COVID crisis, they’ll also be working on the Anzaga. So we’ve managed to bring most of the team back together, and we think that that’ll, you know, deliver some significant benefits. Now the other good thing about this project is it’s there’s very significant in country capacity in terms of skilled and unskilled labor and also industrial capacity. Not only that, we’ve got very strong support from our host communities and very importantly, the host government. So all of the ingredients that are needed there are there for the project to go ahead and perform very strongly in its current configuration.

Now I’ve mentioned a couple of times term phase one. We do believe that there will be a second phase to this project. We’re already embarked on a second phase of resource definition drilling, which we believe will add materially to the the mineral resource and the reserve, and that will be announced in due course when all of the data comes in. It’s not only resource definition drilling, might add, but we’re also doing metallurgical and and geotechnical drilling to further inform the design of the pits and the like. And I think there are some real opportunities potentially coming from this work to perhaps improve the cost structure going forward.

Now in terms of the the schedule, you know, we’re we’ve done quite a lot of work already in terms of awarding various packages and getting underway and some early works, etcetera, etcetera, and building how relocation housing. So that’s going along fairly strongly, and we’ll be, you know, moving into full scale development works as you know, very, very soon. Fact, we’re doing it right now, and we’ll be looking to be producing first gold in the first quarter of of two thousand twenty seven. In fact, I think I’d be very surprised if it’s not a tad earlier than that given that everybody is incentivized to deliver that outcome, but we’ll we’ll stick with the q 01/2227 for the time being. And just a couple of photographs to show you what has been happening on the site, and you can see visually that there has been a good deal of preliminary bulk earthworks underway both in terms of preparing for the main camp and the and the process plant.

We’ve we’ve, you know, got the the site pretty well lined demarked with, you know, fence line, etcetera, etcetera, and things are moving along pretty nicely on that front. The relocation housing has been an important piece of of what we’re doing. We’ve got we’re building approximately 260 odd houses, I think it is, for people who will be impacted by our operations. And so far, we’re about 23 and a half percent of the way through that program. We have delivered or we’ve completed 29 houses, and I think 26 of the 29 are are currently occupied by very happy residents, I might say.

So that program is is moving along very nicely and is being very well received by our host communities. The community consultation piece, as I said, is extremely important here. We we do wanna make sure that that the people are kept well informed along the way, and they know exactly what we’re doing. We also wanna make sure that people have the opportunity to gain employment on the mine site and to benefit from commercial activities in the region. So our community teams do spend a lot of time out and about talking to the to the local communities, and I think that, you know, based on our prior experience, that will be beneficial as we go forward.

Also, part of that, as I said, is is educating people and bringing them through into the workforce, and we’ve already started that process of making sure that we recruit locally to to the greatest extent possible and that people are are taking up the learning curve as as as best we can get them because they will be making a significant contribution as we go forward. I’ve mentioned the second phase of resource definition drilling, which is underway. I mean, it’s it’s a fairly healthy program that we’ve got in mind, and we do have some serious expectations about what that will will yield. But I think, you know, the guys have got a pretty good eye on on what the ore body looks like, and the work that’s being done is is is is high quality. And as I said, the aim is to deliver an upgraded reserve before too much longer.

So that’s pretty much it as far as our our growth is concerned. I haven’t mentioned, of course, the other initiatives that we have. I mean, we have the near the mass sand project in in the sedan that we’re looking at various options there to try and see how we can best add value to our shareholders through that exercise. We’ve also got a few unlisted investments around the place. And I think, actually, the value of those unlisted of those listed investments is something like a hundred and 11,000,000 US dollars.

So if you’re looking at the liquidity of the company, you can add a hundred and $11,000,000 to the 801,000,000 of cash in bullion, and that says the Perseus is in fairly good shape to fund its way going forward. Now I’ve a couple of times, particularly in relation to you know, and Ian Zaga, the importance of the sustainability piece, the ESG pieces. And right across the company, that is something that is very important to us. So, you know, safety is a is a primary focus, and the the safety statistics that we we are generating month in, month out, I think, you know, are very, very credible in any company, let alone on the African continent. In fact, they’re as good as you’ll see globally where we’ve got a a TRIFR of 0.74, which is which is well down on a lot of our other peers.

The community contribution, Leanne mentioned that earlier on. We we continue to put quite a strong economic contribution into all of the countries wherever you operate, Ghana, Kadavaya, Tanzania, Sudan. This is not you know, this is takes very several forms. I mean, clearly employment is one and taxation is another, and and, of course, procuring from the local vendors is very important. But fairly significant amounts of money are going into the into the into the economies of those host countries, and we think that is important.

Local employment is terribly important in terms of being able to give people opportunities. And, you know, we do our best in terms of in terms of diversity in all in all the forms that it takes. People like to focus on gender diversity more than some of the other forms. And in that respect, we do you know, we have got about 15% female employees in the workforce. But I would hasten to mention that people should read that number in the context of the cultures that we’re operating in.

This is not Australia. This is these are African countries where they have a different approach to life. And so, you know, quite understandably, the proportion of female employees is down on what you might find in a Western environment. We had no significant community events during the period, and I think that that reflects the work that we put into working with our host communities. And similarly, on an environmental front, we’re in pretty good shape there as well with no significant environmental issues causing concern.

So, look, right across the board, things are traveling quite well. As I said at the start of the call, we have had a good quarter on all fronts, and now we’ve been continuing to produce gold all in sight, cost, cash flow, etcetera, etcetera. And and as I said, look, pleasingly, this work’s been done conducted in a safe manner. We are a little ahead of our safety targeted safety standards, and we do compare fairly well with with our peer group. So that’s extremely, extremely gratifying and important to us.

Now looking forward, our production and cost guidance for the six months to June 25 is unchanged, as I said earlier, and we are predicting, you know, very solid performances relative to that half year and full year guidance that we’ve given. And looking further into the future, we are embarked on our current we’re currently embarked on our annual planning cycle. And before long, we expect to be able to publish an up an updated long term production and cost forecast for the entire Perseus Group based on these revised plans. And I’ve no doubt that what this will do is provide further clear evidence that our strategy of producing between 506 ounces of gold per year at a cash margin of no less, but usually a lot more than $500 an ounce will continue for some time into the future, and that’s irrespective of any other m and a activity we’ll do into the future. Now I have been promising that that that group forecast for some time, and we are we are in the process of putting it together.

What we’re trying to do is to ensure that we maximize value from our existing asset base before we go public, and we don’t want to go prematurely. We want to be able to show our investing public what we’re going to do and then be able to deliver on that plan, and that will be coming out fairly shortly. What we are also trying to do as part of that exercise is to is to smooth out our production profile going forward. And, you know, we’re doing a fairly good job on that, I might say, given that when we took a decision to postpone the development of the Mayo sand project in 2023, it did cause a little bit of a hiccup as far as our production profile is concerned, but that’s been largely addressed through Nianzaga and the CMA underground and the like. But there is more work to be done before we can go public.

And so as soon as we can, as I say, we’ll release that information. Also, you know, look looking forward, the concept of us continuing to look to grow our diversified asset portfolio will remain very important for us, and we believe that, you know, we we are able to by by being involved in multiple operations in multiple countries, we are able to remove a lot of the volatility that comes with operating on the African continent. You know, importantly, this means that as an investor, you can be confident that your investment in Perseus remains in very solid and good hands. And this is an important point, I think, in terms of addressing this issue of African you know, African discount on the share price. We do operate well on the African continent, and we have been doing it for quite a long time.

Now it’s not a guarantee that that’s going to continue into the future, but it’s a pretty good indicator, I think, that, you know, this issue of African discount is somewhat overdone. We will, however, you know, continue to remain very receptive to new ideas. And if the right value creation opportunities come along, then Perseus is in a great position to execute to continue on our growth journey. I’d say these opportunities are fairly few and far between at the moment, but, you know, particularly given where the gold price is. But we do live in hope, and we do have the capacity to execute at a moment’s notice should the right opportunity come by.

So as a company, our focus on generating material benefits for all of our stakeholders is you know, remains probably very prominent for us, and I’m talking about host governments, communities, employees, providers of goods and services, and, of course, our investors. And we will remain very, very focused and vigilant on that and and continue to deliver our stated mission of the company, but and that’s something that we are very proud to have achieved today. Now in conclusion, I do once again want to acknowledge the the fantastic contribution made by all of the men and women that make up the Perseus board management and operating teams in in what is now five countries in which we operate where including Australia where we’re headquartered. There is absolutely no doubt that as a team, our people strongly supported by their families, and I can’t emphasize the importance of the family support enough. We continue to do an an outstanding job, and I want to sincerely thank you all.

Many of you are listening into this call today, but I wanna thank you all for that on behalf of of all of our shareholders and for all of the efforts that you’ve been delivering and helping us to continue delivering on our promises. So thanks very much for your attention today. This brings my presentation to a close. And now Leanne, Jacob, and I are happy to address any questions that you may have. Thank you.

Nathan, Moderator: Thank you, Jeff. Just a reminder, if you would like to ask a question directly to the company, please use the raise hand function within Zoom. Your first question comes from Levi Levi Spry at UBS. Please go ahead, Levi.

Levi Spry, Analyst, UBS: Yeah. Good morning. Thanks, Nathan. Thanks, Jeff, and team. Thanks for the call.

Another another another nice, very nice quarter. Couple of quick questions starting with Ninzagas. So can you just comment on, I guess, the aims of the optimization? So, obviously, in Marcus, we’re always pretty impatient, but some of the some of the assumptions are probably a little bit more conservative than what I’ve had previously. So can you just talk to that second phase, you know, what what the goals are with that reserve update?

Is it is it about life extension and and adding adding value that way, or can you squeeze a bit more grade up upfront early?

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Well, I think we’re looking at at expanding the reserve, full stop, at this particular time. Now whether you know, we do expect that that the grade will be beneficiary, but whether it, you know, whether it, you know, is reflected immediately, I’m not a % sure. But what you know, one of the optimizations or one of the areas where we may see some improved performance through there is in the actual throughput rates of the plants. Every plant that we’ve built in the past with the help of locopodium seems to outperform the nameplate. Now the nameplate of this one is 5,000,000 ton per annum, but it wouldn’t surprise me if we don’t we’re not putting more material through than than that actual name would suggest.

But, certainly, you know, that’s an issue that we where we believe we got some benefit. We believe that we can expand the size of the resource the open pittable resource quite significantly, and that’ll be, you know, say, published within well, before we start actually producing. But the other area that is of interest to us, and I can’t say very much about this at this point other than to say that the guys brought back some dual results at depth the other day. And, you know, there’s not a lot of them, but what we saw of them certainly give us optimism that even though we’re building a very large open pit, you know, full 500 meter deep pit, there is still very significant potential for an underground operation off the bottom of that. You know, as we go forward and as we get further down in the pit, we will be drilling further down there to to confirm that, but that’s an extent possible extension that’s not even remotely factored into any numbers at this particular point.

So, look, we believe that this the inside of the project can and will develop into a world class operation and have very little doubt about that.

Levi Spry, Analyst, UBS: Yep. Good. Yep. Thank you. Thanks, Jeff.

And then just moving to Sissingue, a bit of a tougher quarter there. Can you just talk to the, you know, the future of that operation and any potential for maybe recycling that asset as you’ve got growth elsewhere in the portfolio?

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Yeah. Look. The the plan as it stands at the moment I mean, I think on the reserve, it’s something like about a three year life from now. But but we believe that by by reassessing some of those pits, we can actually extend the life well beyond that. Now what what that involves, of course, is using a a higher cutoff, know, a a higher gold price on the pitch shell.

And and, of course, what that means is that your operating cost goes up, so you need to be able to trade off production against margin, basically. And it does depend on your view on the gold price. Where we’re going with the project now, though, is we’re about to start opening up the Bagway deposits. We’ve been mining at Thimbiaso and Sissingue in you know, over the last couple of years, hauling ore from Thimbiaso back to Sissingue. We’re now about to open up Bagway, and we’ll be hauling back from there later this year.

And we’ll be mining down there in I think there’s three pits down there at the present time that we have have delineated. So, you know, it’s got a reasonable future. And in fact, the production levels come that are budgeted for next year are quite materially above where we are this year because the grade from Bagua is quite attractive. Now what actually happened was that when we when we started mining at Phimbiase, we discovered that, in fact, there was actually quite a lot more ore there than we had originally envisaged. Now what what we decided to do was to mine out those deposits before we went to Bagway.

So we deferred opening Bagway by about a year, basically, while we mined out Phimbiase. Now, you know, while it’s all there, it is at a lower grade than than Bagua. So that’s that’s partly what contributed to the dip in production this year and the like as well as some operating challenges, of course, that I mentioned earlier. But, look, the the you know, Sissingue’s got a pretty decent life ahead of it, pretty decent remaining resource. When you restarted this project, it had a four and a half year mine life.

Well, I think based on what we’re talking about now, you know, nine years from start to finish is certainly not out of the out of the order of possibility. And so, you know, we’ll look at that in the context of our portfolio. If we bring in other assets that are producing a lot more in demand management time, then we may consider, you know, that this project might be better off in somebody’s hands. But we haven’t reached that that decision point at this particular stage, but it it has to be an option that we consider.

Levi Spry, Analyst, UBS: Yep. Got it. Okay. Thank you. And just last one.

Sorry. On a few calls here, but did you mention any of the upcoming catalysts for reviewing your investment in in bank and in PDI?

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: No. I didn’t, actually. But well, you know, I think it’s well known that that we’ve entered into a confidentiality agreement and a a standstill agreement with with with Predictive. We can’t make an investment decision until we’ve had full access to data and evaluated what the the opportunity is worth. I would say, though, that, you know, if you look at if you look at predictive and band can and compare it to, say, Nianzaga, you know, it’s it’s multiples more costly than what the Nianzaga project has ever been.

So, you know, in the current environment, it looks it looks pretty darn difficult, but you never know. You you know, the data may tell us a different story, but we don’t have any plans for it at the present time. We’re very comfortable to sit where we are and and see what the future holds.

Levi Spry, Analyst, UBS: Got it. Thank you. Appreciate your time. Thanks, Jeff.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: No problem.

Nathan, Moderator: Thank you. Your next question comes from Richard Knight at Baranjowie. Please go ahead, Richard.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Hey, Richard. You’re on mute mute.

Richard Knight, Analyst, Baranjowie: Apologies. There we go. Hi, Jeff. Leanne, how are you? Just just one on grade reconciliation or the the the grade and tonnage reconciliation at CMA Open Pit.

I’m I’m just wondering how to think about that over the next twelve months. I mean, obviously, it’s been positive by an order of magnitude, you know, over the last twelve months.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: CMA CMA open pit is fine. Where the challenge is is in the Yaori pit, which is a new one.

Richard Knight, Analyst, Baranjowie: Right. Yep. Okay. And So what yeah.

Levi Spry, Analyst, UBS: Go ahead.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: We’ve no. So the the the the the geology is really quite complicated. There are a number of structures there coming in at different angles and things like that. And and just the the the grade control techniques that we’ve used aren’t weren’t giving us as accurate a result as we’re used to seeing. So we’ve we’ve had Jacob and his team have been working furiously on this to, you know, to to rectify the processes.

And I think Jacob can make comment if need be on it, but, you know, we are making good progress, and we expect to see improvements coming forward. So it is an important point because, you know, there is definitely mineralization, a lot of mineralization there, and we wanna make sure that that mineralization gets captured and put in the mill, not lower grade material.

Richard Knight, Analyst, Baranjowie: So what percentage of the feed over the next twelve months will will come from that Yaori open pit roughly?

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Look. Top of my head, I don’t have that number. But as we go forward, I did have those numbers actually. When we we’ll be using the Yaori open pit in combination with the CMA underground. And I think I think something like 70 to 80% of the ore will come from the Yaori Pit, but 50% of the grade will come from the CMA underground.

It’s something like that. I mean, those numbers are in the public domain, and I I just can’t recall them exactly. But so, you know, getting getting Yaoure right is really important for us, and that’s why, you know, we’ve put such a a a concentrated effort into addressing that reconciliation issue because it’s not something that, you know, we’re comfortable with. It’s something that we have to fix in short order.

Richard Knight, Analyst, Baranjowie: No worries. Thanks. And and just one more follow-up on on Nijanziger. I mean, you’ve talked about the the phase two potential there. Is that something we’re gonna hear about in 2025, or is that sort of a longer term story?

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Well, look, I think it’ll take us all of ’25 to do the drilling, I would say. And and then some so it it won’t be in this calendar year, I don’t expect, but next year, it it will be coming through. So look. You know, it’s it’s just part of the ongoing process of what we do. We could’ve we could’ve deferred development, you know, and and drilled the whole thing out before we started, but we thought that taking what we’ve got for the time being made a lot of sense.

It allowed us to get into into production earlier, you know, to address the longer term production profile of the company, and that, you know, we’ll we’ll backfill with additional reserves as and when they’re delineated, assuming that they are, of course.

Richard Knight, Analyst, Baranjowie: No worries. Makes sense. Thanks. Thanks, guys.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: No problem.

Nathan, Moderator: So I’ll now hand back to Jeff Quartermaine for closing remarks.

Jeff Quartermaine, Managing Director and CEO, Perseus Mining: Okay. Well, look. Thanks very much. I know we’ve taken a lot of time, and today is another busy day for many people, so apologies for that. But, look, we are very comfortable with the way we’re tracking.

I think we’re generating some fairly significant benefits here for our stakeholders, returning money to shareholders both in the form of dividends and the and the share buyback, and we expect that that’ll continue into the future. So look forward to keeping keeping you informed as we go forward. There’s lots on the horizon. We’ve had a very busy three months, but I think it’s been a very productive three months, and long may that continue. So thank you very much, and look forward to talking to you again.

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