Issues at the company’s Edikan gold mine in Ghana saw production fall 26% from the September quarter, and guidance for the current half year is now down on previous expectations – 90,000-110,000 ounces at all-in-sustaining-costs (AISC) of $US1000-1220/oz versus 125,000-145,000oz at $995-1135/oz.
Grade issues from the Eastern Pits is behind the downgrade (with resource modelling changed), while the tendency of the fresh rock mined and treated to date to be more weathered than expected leading to less effective processing than targeted.
Still, with the problems identified and now being acted upon accordingly, Perseus managing director Jeff Quartermaine told a conference call the company was now “very, very, very confident we can deliver” on guidance.
Meanwhile Quartermaine indicated the company was also confident with its cash position, with the $A67.5 million it held at the start of the current quarter down $69.4 million on its position three months earlier.
Perseus has now completed a two-year capital investment program at Edikan, while Quartermaine suggested the $US20 million settlement reached with mining contractor BCM (as per a legacy issue that pre-dated Perseus’ acquisition of Amara) was more than Perseus had been expecting.
Elsewhere, work continues on both the proposed Sissingue and Yaoure development scenarios in Cote d’Ivoire that will be the next key chapters in Perseus’ West African gold business story.
Development of those two projects plus Edikan will see annual production rise to about 500,000oz from around the turn of the decade.
News of the latest production downgrade saw shares in Perseus down 17% in early trade to A37c, capitalising the company at just under $400 million.
