African-focused gold miner, Perseus (ASX:PRU), is looking for another solid year after seeing gold production top half a million ounces for the year to June, with revenues likely to be well over US$1.3 billion.
The company anticipates a repeat of the 2023-24 performance in the new 2024-25 financial year, based on upbeat forecasts issued with the quarterly and yearly reports on Tuesday.
Perseus reported gold production for the June 2024 half-year and 2023-24 of 248,400 ounces and 509,977 ounces respectively, exceeding the company’s production guidance ranges of 226,000-254,000 ounces and 491,000-517,000 ounces respectively.
However, output for the year to June 2024 was lower than the 535,281 ounces produced the previous year due to adverse weather conditions at one of the company’s three mines.
For the upcoming half-year (to December), the company expects to produce 220,000 to 260,000 ounces and 468,000 to 508,000 ounces for the year to June 2025, which will again be below the 2022-23 result.
Forecast costs will range from US$1,230 to US$1,330 per ounce for the December half and US$1,182 to US$1,223 per ounce for the full year to next June.
While this is lower than many Australian miners, it will still be higher than the US$1,130 per ounce for the June half-year this year and the US$1,053 for the 2023-24 financial year.
Perseus stated that costs for 2024 were below the bottom of the H2 FY24 cost guidance range of US$1,180 to US$1,340 per ounce and within the middle of the 2023-24 cost guidance range of US$1,000 to US$1,100 per ounce.
The average gold price for the year to June was US$2,014 (US$2,117 in the June quarter), up from the US$1,803 reported for 2022-23.
Perseus reported an average cash margin of US$944 per ounce in the June quarter, resulting in notional operating cash flow of US$117 million for the quarter and US$490 million for 2023-24.
The company’s balance sheet at the end of June included available cash and bullion of US$587 million, plus liquid, listed securities of US$42 million and zero debt, with US$300 million of undrawn debt capacity available.
This followed the company’s near US$260 million cash payment for OreCorp Limited, which will provide Perseus with further growth potential through the large-scale Nyanzaga Gold Project in Tanzania.
In terms of the full year to June, the Yaouré mine in Côte d’Ivoire produced 250,857 ounces of gold (or nearly half of Perseus’s total gold production for the period) at an AISC of US$943 per ounce, exceeding production guidance of 235,000 to 247,000 ounces of gold and comfortably achieving cost guidance for the full financial year of US$900 to US$1,000 per ounce.
The company’s mine in Ghana, Edikan, saw annual production of 195,080 ounces of gold (or 38% of Perseus’s total production for the period) at an AISC of US$1,001 per ounce, comparing favorably to production guidance of 191,000 to 201,000 ounces of gold and cost guidance for the full financial year of US$1,000 to US$1,100 per ounce.
The second mine in Côte d’Ivoire, Sissingué, was the outlier due to prolonged adverse weather. Production of 64,040 ounces of gold (or 12.5% of Perseus’s total output for the period) was at an AISC of US$1,641 per ounce, slightly below the lower end of the production guidance of 65,000 to 69,000 ounces of gold and outside of cost guidance for the full financial year of US$1,400 to US$1,500 per ounce.
“Unfortunately, the Sissingué Gold Mine endured a very poor start to the financial year when, in Q1 FY24, only 10,570 ounces of gold were produced at a high AISC of US$2,095 per ounce, largely due to extreme weather conditions. Despite a significant turnaround in the remaining three quarters of the year, Sissingué did not fully recover from this start, delivering a performance that was disappointing by historical standards.”