Perseus Mining powers into net cash with transformative Yaouré project paid up

Drilling at Yaouré, Côte d’Ivoire

PERSEUS Mining moved into net cash at the close of its 2020 financial year owing to strong gold prices, especially in the second half, and significant mining cost reductions at its Edikan mine in Ghana.

As of June 30, net cash totalled $19.8m after outstanding debt of $217.7m was brought to account during the 12 month period – most of which was attached to the development of its $265m Yaouré project in Côte d’Ivoire.

The company in July reported full year output of 257,639 ounces, 5% lower than in 2019, after registering production from January to end-June of 122,659 oz. Full year all in sustaining costs totalled $972 per oz of gold produced.

Once completed and producing first gold, expected in December, Yaouré will take annual production to about 500,000 oz. In addition to Edikan, Perseus also produces gold from its Sissingué gold mine in Côte d’Ivoire.

The average sale price of gold during the year was $1,457/oz, about $200/oz more than in the previous financial year. It saw revenue some 16% higher notwithstanding below spot forward contracts that Perseus has in place. Partly owing to cost reductions at Edikan, earnings before interest, tax, depreciation and amortisation (EBITDA) came in at 273.8m –  a 67% increase compared to the previous financial year.

Net profit after tax was $94.4 m or 8.1 cents per share, compared to a net profit after tax of $7.6m or 0.7c/share in the previous financial year.

The working out of hedging positions, continued elevated gold prices and additional production from Yaouré was likely to result in a further building out of the firm’s net cash position and raised the prospect of dividends, as hinted at by Perseus MD and CEO, Jeff Quartermaine, previously.

“With a continued strong gold price, Perseus will be in a position to generate even more material amounts of free cash flow than it has done in FY2020 and record significant profits that will enable the company to continue to grow, manage its balance sheet and potentially start returning cash to shareholders via a future dividend stream,” he said in notes to the firm’s published annual results on August 26.