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Speaking on a conference call for Perseus’ June quarterly reports Perseus managing director Jeff Quartermaine pointed to the importance of building projects with “operate-ability” in mind, such that plant that is relatively easy to maintain and lower cost to operate is chosen.
This was in contrast to the situation at the company’s Edikan operation in Ghana, which was built in a bull market and as quickly and cheaply as possible, with the idea at that time being to get the operation into production ASAP (to benefit from the market), and worry about operational issues and optimisations “tomorrow”.
However according to Quartermaine, Perseus has more or less been dealing with “tomorrow” issues ever since.
The other lesson learnt is the importance of the development and operational team, with the previous bull market also negatively impacting Perseus in this regard.
So far as Quartermaine is concerned, the best plant and the best orebody doesn’t mean a company won’t struggle without a top operating team also in place.
And according to Quartermaine, Perseus has in more recent times recruited and assembled a quality team.
All of which is fuelling Quartermaine’s confidence that Perseus’ target of being a highly profitable 500,000 ounce per annum producer in 4-5 years is “eminently achievable”.
Currently the company is expected to continue to only break even over the rest of calendar 2016, before Edikan reaches a “cash harvest” mode that will continue for the next 6-7 years – with all in site costs for the plus-200,000 ounce per annum operation falling from current levels of $US1285-1595/oz to $995-1135/oz in the second half of fiscal 2017.
Meanwhile $60 million of debt financing for the 100,000oz per annum Sissingue operation is expected to be finalised this quarter (or early in the next), with Macquarie and BNP Paribas involved.
And feasibility work including 42,000m of infill drilling is effectively now underway at the much larger Yaoure gold project.
Fresh back from Cote d’Ivoire, Quartermaine also spoke very positively in the conference call of the West African country as a jurisdiction for gold miners.
