Perseus Mining Limited (PRU) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Perseus Mining December 2019 Quarterly Call. [Operator Instructions] I would now like to hand the conference over to Mr. Jeff Quartermaine, Managing Director and CEO. Please go ahead.

Thank you very much, and welcome to this conference call to discuss Perseus Mining's December 2019 quarterly report that we released to the market this morning. For those of you who haven't had an opportunity to read the document at this stage, let me briefly summarize it for you. So firstly, this quarter, Perseus' 2 operations at Edikan and Sissingué continue to perform very strongly and in line with our plans, producing 69,155 ounces of gold at a weighted average production cost of USD 843 per ounce and a weighted average all-in site cost to USD 962 per ounce, U.S. those numbers are. Our average cash margin on each ounce of gold produced was USD 453 per ounce, which exceeded our stated strategic target of USD 400 an ounce. The production was about 5% higher this quarter relative to the previous quarter, and all-in site costs were slightly higher than the previous quarter, but when seen in context, that was not a bad result, and I'll speak to this point a little bit further in the presentation. On a half year basis, we produced 134,980 ounces of gold at an all-in site cost of $942 per ounce. Now this compared very favorably to our market guidance for the period of 120,000 to 140,000 ounces at $850 to $1,000 an ounce. And it set us up very well to deliver on our full year guidance of 275,000 to 295,000 ounces for the year at a cost of somewhere between $850 and $950 an ounce. Implementation of our strategy for value creation through developing mineral resources continued as planned. The development of Yaouré, our third gold mine, is now approximately 33% complete. And it's running on time and on budget, and our stretched target of pouring first gold in December 2020 appears to be certainly well within our capacity at this point. I should also note that during the quarter, we delivered on another key promise relating to Yaouré, and that was the signing of a mining convention with the government of Côte d’Ivoire. Now this agreement provides a guarantee of fiscal stability over the life of the mine, and therefore, is a very important milestone for this development. And finally, once again, Perseus has managed to maintain its balance sheet strength through strong cash flows and prudent financial management during the quarter. Now due to the cash margin I referred to earlier, the $453 an ounce, we generated notional cash flow from operations of USD 31.3 million, which was about 5% more than the prior quarter, the September quarter. And allowing for the fact that we invested USD 72 million in the development of the Yaouré project this quarter, paid tax to the government in Ghana, funded exploration and capitalize on in our Perth corporate office, our cash and bullion balance at the end of December was USD 81 million, USD 80.6 million in fact, giving us a net cash position of USD 31 million as a result of our debt of $50 million that's been drawn under our corporate cash advance facility. Now to put that in perspective. So given that, to date, we spent $99 million of the $265 million needed to develop the Yaouré Gold Mine. That means that there's $166 million remaining to be paid. And given that we've got cash on hand of $81 million, and we've got an available undrawn debt of $100 million, the cost to complete the development is more than fully covered, not even taking into account the cash flow that we're generating from operations. And last calendar year alone, we generated notional cash flow of about USD 110 million, U.S. that is. And I expect that between now and the end of this calendar year when construction of Yaouré is due to be completed, we'll have generated at least this amount again and probably a lot more given our production forecast. So we're in a very strong position financially. Our operations are running well and on plan. Growth profile in terms of gold production and cash flow is second to none amongst our peers. And it has been another satisfying quarter for the company, both operationally and financially. And after a long wait by some of our shareholders, our success is starting to be reflected in our share price, which, as you know, has performed fairly strongly relative to peers, both during the December quarter and into this new year. So that's the December quarter in a nutshell. But let's talk a little bit more granularity about exactly what has happened at the -- in each part of the business. So as far as operations is concerned, as I mentioned, we've -- across both operations, we produced 69,155 ounces of gold. 48,250 ounces of that came from Edikan, and the remaining 20,905 came from Sissingué. So that's about a 70-30 split between the 2 operations. That is 5% more than in the previous quarter, and it's in line with our internal expectations. Looking more closely at that production. Production at Edikan was well above our targets this quarter while Sissingué came in a little bit under our -- the internal targets largely due to the revised mining schedule that was implemented earlier in the year to successfully mitigate risk of the wet season which have us mining some lower-grade material in the recent quarter. Interestingly, this situation was the reverse of the previous quarter, the September quarter, when the Sissingué outperformed and Edikan came in a little shorter targets. And clearly, what that does is demonstrates the very distinct benefits of being a multi-mine operation. Last quarter at Edikan, so in the September quarter at Edikan, we said about addressing some challenges that we've previously experienced in getting all through our mill due to hardness of the material coming out of Esuajah North. Now we do this by employing new technology and software to give us better control of material flows and also improving blast techniques to improve material breakage in the Esuajah North pit. Now the benefit of this work -- while we saw some improvement last quarter, the benefit of this work was very evident this quarter with throughput rates continuing to improve. We were at 909 tonnes per hour compared to 880 tonnes in the previous quarter. And at the same time, we're able to maintain our run time and recoveries. It would also help us of course that the grade was up quarter-on-quarter, but the bottom line was that gold production at Edikan was up about 9% quarter-on-quarter, which was a very satisfying result. I should also note that the success of the initiatives that we employed at Edikan were not only recognized in the form of better operating performance this quarter, but the company was awarded a fairly prestigious prize for collaboration on successful implementation of this new technology in the mine processing area at the International Mining and Resources Conference, IMARC, it was held in Melbourne late last year. So that was nice for our team to receive some external recognition for what has been an excellent job. In fact, actually, mechanical performance at both of the mines in terms of run time, throughput rates and recoveries was good during the quarter. And the Sissingué processing facility also performed very, very well in that regard. The difference at Sissingué this quarter was that we were mining in the lower-grade section of the ore body, as I mentioned earlier. And as a result of this, gold production at Sissingué was down about 4% quarter-on-quarter due to the grade. But we do expect this situation will swing back this quarter when we start mining higher-grade material in the main part of the ore body, and we are starting to see a bit of that come through as we speak. Now if we look at the group all-in site costs, our all-in site costs for the group for the quarter was $962 an ounce, which was about 4% higher than the costs in the prior period. That was made up of cost at Edikan of about $1,035 an ounce, which is more or less the same as the previous quarter. The cost of Sissingué were up at $793 an ounce compared to $709, and that was a function of both the number of ounces being produced and also a couple of other one-offs, which we'll come to. At both mines, actually, both Edikan and Sissingué amongst other things, we were required to bring to account various government charges this quarter that bumped up the cost a little. In Ghana, the costs related to back payment of fees for mineral rights dating back several years, we surprisingly received a build-up with quite back [ some way. ] And in Côte d’Ivoire, we brought to account some customs charges relating to the importation of mine equipment and spares very early in the mine life. Now neither of these things are likely to reoccur, and we wouldn't expect them to be putting pressure on price and on costs going forward. Now as I mentioned at the start of the call, our performance for the quarter meant that the December half year was very, very good relative to market guidance, and we have laid a strong platform for a good result in fiscal 2020. Our guidance for the June half year is unchanged. So we're forecasting gold production of 140,000 to 160,000 ounces. And the costs we expect will reduce and fall into a range of $750 to $950 an ounce. This represents quite an improvement relative to the December half year, but we are comfortable with the forecast as we can see strong improvement in grade at both Edikan and Sissingué coming through, as I said. And provided we can maintain that very good mechanical performance that we've seen for a number of quarters now at both mines, and we should acquit ourselves very well relative to that stated guidance range. There's another initiative that I should mention that our technical services team has undertaken during the quarter that is important and very worthy of mention. For both mines, we've revisited our pit designs incorporating the most recent technical and commercial parameters that are being achieved. And we've also looked at the gold price, and we've assume the $1,300 per ounce gold price relative to $1,250 gold price that we've used in the past in our modeling. The result of this work is that later in the quarter, when all the sign-offs are complete, we'll be publishing updated mineral resource and reserve estimates at each mine. And in each case, these point to an incremental improvement in the mine life. In addition to this, at Edikan, we've also revisited the matter of mining in Esuajah South ore body and have evaluated both open pit and underground mining options. Esuajah South currently contributes about 312,000 ounces to the ore reserve estimate using -- based on underground mining methods. But mining of the ore body to date hasn't been incorporated into any of our life of mine plans, mainly due to historic view on risk-weighted returns from the exercise. Now open pit mining options have been considered in the past but have not been adopted due to the challenge of mining a large open pit close to the Ayanfuri village. And of course, that brings with it various compensation and relocation costs. But in any event, the work has gone very well, and the final results of this are going to be reviewed by our Board later in this quarter. And if approved for adoption, we will -- it will result in us updating an updated life of mine plan for the Edikan operation, which we'll duly publish. Around the same time, of course, we also expect to publish an updated life of mine plan for Sissingué that will incorporate the mining of the Zanikan ore body, which will come into the reserve for the first time. Now turning from operations to finance. During the quarter, we sold 61,176 ounces of gold at a weighted average price of $1,415 an ounce, generating positive cash flow at both of our mines. In fact, the split between the 2 was about 60 -- it's about, 60-40 as post production, which was 70-30. Now assuming the $1,415 gold price and our all-in site cost of $962, as I said earlier, that gave us a margin of USD 453 an ounce, which when multiplied by the number of ounces produced gave us that notional free cash flow of $31.3 million. So that was a fairly healthy contribution to be making to the corpus. And it was necessary because during the quarter, we did spend $72 million on the Yaouré Capex, we paid $5 million in tax to the Ghanaian government. As I said, we also met corporate cost, exploration costs, sector movements in debtors and creditors. And after each of these things were brought to account, at the end of December, our cash balance stood at USD 81 million. Now this is lower than the cash balance at the end of September, but it surely is not surprising given that we have moved into full-scale construction of Yaouré, and cash is being spent on that project at a fair rate. A further point to note is that during the quarter, we did draw a further USD 10 million under our USD 150 million revolving line of credit. That brings the total drawn balance to $50 million but does obviously leave a $100 million undrawn. Now what does this mean is that our net cash position, as I said earlier, it's moved at the end of the quarter to about USD 31 million, which is a decrease of around USD 50 million quarter-on-quarter. Now just one other financial matter that I should mention which we're frequently asked about by investors is our gold price hedge book. During the quarter, we've continued to actively manage the hedge book in line with our clearly articulated corporate policy on hedging. We've been talking about this for quite some time, and I think it's fairly well known what we do. At the end of the quarter, our hedge position involved the forward sale of 276,000 ounces of gold at a weighted average price of $1,348 per ounce. Now these sales provide us with downside price protection for approximately 23% of our forecast gold production over the next 3 years. Now noting that the position is currently out of the money with the gold price sitting fairly strongly, investors frequently ask, "Well, what happens if the gold price stays at current levels or trends higher?" Well, the good news is that if this happens, we'll be selling 77% of our production at the higher gold prices. And if it doesn't happen and the gold price falls as it has done in the not-too-distant past, the good news is that we'll be selling 23% of our production at a weighted average cost of $1,348 an ounce. And in the process, ensuring that we can generate enough cash flow to remain liquid. Now this may not be the case, of course, if we decided to bet the entire house on the gold price or bet that the gold price is going to stay up at elevated levels forever. Now turning to development. And speaking of course of our third project, Yaouré. This quarter, the momentum that started to build at Yaouré last quarter has continued, and we've made very strong progress in all fronts. For those of you who are keen to see the progress with your own eyes, I do note that each month, we put video footage taken by our drone on the website. And this literally gives a bird's eye view of what's happening on the ground. And I do recommend that you take a look at this footage as well as the photos that are presented in Appendix A of our quarterly report, which also tell an interesting story. Off-site engineering is now about 99% complete. And the range of procurement contracts have been awarded about 98 of the 101 packages have been awarded, and we're currently reviewing another one. In terms of overall procurement and delivery, that's about 63% complete. So even though we've ordered just about everything, deliveries on-site are still in progress and it'll continue over the next couple of months. Fabrication of structural steel, including the tanks ball mill, SAG mill is very well advanced. And these large and important items are on schedule for progressive delivery to Abidjan in the next couple of months. So they'll be turning up on-site fairly shortly, we would think. We also, during the quarter, awarded a contract for the provision of mining contract services. The successful tenure was an international mining company based out of Spain called EPSA Internacional. They're a very impressive outfit, and they're already establishing themselves in Côte d’Ivoire for -- in preparation for mobilizing their vehicle's fleet to site, training local operators and being ready to start pre-stripping around the third quarter of this year. So that was a very good result as far as we were concerned. As I said, on site, we've made a lot of progress. And you can see that from the videos. As I mentioned, in the plant side area itself, you can see that the primary crusher vault walls have got moving ahead in leaps and bounds. The concreting is about 36% complete. The walls are going up there about 22%. Lime storage facilities, well advanced. The SAG mill pedestal, we're into the third lift of concrete and to the -- on the ball mill pedestal where the formwork for the second lift is in place, and we'll be going ahead. Actually, that was the situation at the end of the year, we've actually gone past that now. The CIL tank floors have been laid. All of them are now in position and in fact, actually seeing some photographs on the weekend. We can start to see steel coming out of those tanks, which is very encouraging. And the concrete floor slab and bund, they're about 90% complete. So building the main processing facility is well and truly underway. As far as the storage, the TSF is concerned, tailings storage facility, the total 65-hectare area of Stage 1 of the TSF's being cleared. And works ongoing on removing top soil, it's about 60%, 70% complete and backfilling artisanal mine shafts in the area. To date, we've backfilled -- we had to backfill about 2,800 holes there. So there's no doubt that there's gold in the area. And about -- there's about 100 more holes to be done, so we're well advanced on that work. In terms of the power supply, construction of the main substations underway, transformers are ordered and will be on-site shortly. The transmission line in towers is being fabricated, pretty close to done and due to be on site fairly shortly. Now works associated with the overall power supply are on course to achieve our target. We're aiming to go live at power out September this year. And that's all working well. We've been working on getting the perimeter fence in place. So we've done about 7 kilometers of fencing so far. We've done, I think, it's about 12 kilometers of clearing the corridor. So that's also well advanced. The permanent camp buildings. They're going along extremely well. You can see that from the video footage. All terraces have now been handed over for building construction. And there's quite a lot of construction work is going on. Roofs and the like has started to be put on the buildings, on the upper benches. So we're aiming to have that well and truly completed during the course of this current quarter. At the end of December, we had expensed $111 million of the cost of the project, and we've actually paid, physically paid $99 million to suppliers of goods and services. So that's about 37% of the budget of $265 million in total. We've also put commitments in place for $165 million. So that means that by the end of December, we pretty much locked in the cost for nearly 2/3 of the capital cost, which is important in terms of restricting potential for cost overruns in the later stages of the project. As I said earlier too, another important milestone was effectively finalized the negotiations with relevant departments inside the Ivorian government on terms of a mining convention that incorporates the guarantee of physical stability to apply throughout the life of the project. This was signed in early December, and it's now in effect. And I have to say, executing this document was a -- it was a very, very important milestone for us. It's not that we have any real concerns. But it is nice to know that the fiscal terms on which we based our feasibility study are going to stay in place for the duration and not be changed as things move on. Now at this point in time, if there are no further delays, our stretched target of producing first gold by December 2020 is achievable. And I can now certainly assure you that we're certainly doing all that we and our contractors can do to deliver on this milestone. So the Yaouré project is very definitely moving forward, and it's on track, and we're very excited about this project here at Perseus and particularly in terms of what it means for us and our ability to deliver on our corporate target of 500,000 ounces of gold a year by 2022. Yaouré was clearly an important part of that. Now the other thing that we've been busy on this quarter's exploration. Now as I mentioned at the end of the last quarter, we've been putting a lot of thought into developing an organic growth strategy for Perseus that will be driven by exploration, both on our leases adjacent to our existing infrastructure at the 3 mines and also landholdings nearby that host stranded assets. Now this strategic planning work was completed during the quarter and at our annual strategic planning retreat that was held around the time of our AGM in late November. We presented our plans to the Board who agreed to allocate capital and have directed management to get on with implementation. So over the next 12 months, we'll be -- we plan to spend around USD 15 million on exploration. The majority of this budget will be spent around Yaouré, where we see enormous potential to add materially to our reserve inventory. But we do need to do work on the ground to make this a reality. The balance of the budget will be spent around Edikan and Sissingué where we have existing infrastructure and have worked up a number of very interesting targets. So hopefully, we'll also add mill feed that will extend the lives of both operations and keep the plateau of the 500,000 ounces that we reach in 2022, extending out well into the future. Now around Sissingué, we've had some recent success, and we plan to report a new mineral resource that's located to the south of the Sissingué pit at a place called Zanikan later this quarter. It's not a huge stand-alone resource, but rather, it will add incrementally to our resource and reserve inventory and will increase the life of the Sissingué operation. And late last year, we announced that we'd entered into an option agreement on a mineral lease called Agyakusu, which is located -- that's underground at just -- located just adjacent to Edikan. Now the paperwork on this deal is nearing final sign off by the relevant government authorities, and work on the ground is due to start very, very shortly. Now this could be a very interesting opportunity for us. The success on this tenement could unlock the thinking on several other regional opportunities. So we are very keen to start work at Agyakusu, and we'll be looking forward to seeing what happens there. Now at Yaouré, as I mentioned, Yaouré is going to be where we spend the bulk of our exploration in the coming year. We've just recently completed drilling 3 deep diamond targets -- holes that we're targeting. The structure that we expect will host a material underground mining operation for some years to come off the site of the CMA pit. Now the first 2 of the 3 holes fits the structure at the targeted depth, and they also exhibited mineralization that was consistent with the CMA pit. The third hole missed the target for some reason, but we do have sufficient information to assist in the forthcoming 3-dimensional seismic survey that will be conducted by HiSeis later this quarter, which will hopefully delineate the structure more clearly and accurately inform future drilling programs targeting what we hope will be mineralized dilations of this structure. Our news flow from each of these exploration activities will become available progressively and of course will be reported to the market when results come to hand. So in conclusion, as I said at the outset of this presentation, the December quarter has been another good quarter for Perseus. In fact, we've continued to deliver key milestones. We continue to do the things that we said we're going to do, and we're now building a very credible track record of consistent operating performance. And in fact, this is the 12th performance -- consecutive quarter where we've hit our targets very nicely. Now operations-wise, next quarter, they should be a little better than they were this quarter in terms of both production and costs. As I said, we're guiding the market to 140,000 to 160,000 ounces for the half year at $750 to $950 an ounce. And as always, our guidance does allow for the unexpected to occur. But if all things go the way we plan, we should comfortably achieve this target, notwithstanding the fact that it does involve a step-up from the most recently completed half year. And in terms of developing -- development, Yaouré, as I said, it's well and truly on the path forward with excellent progress being made both on the ground and off site. We do have a first-class team of developers both in-house and contracted working for us, and we look forward to being able to continue to showcase this progress to investors by posting on our website video footage taken by drones and stationary cameras. Exploration-wise, as I said, we'll be accelerating our efforts to not only extend the life of our existing operations but also, hopefully, discover our next mine. We've certainly worked up some interesting targets and hopefully some positive news will be coming through on that front. So once again, we're gearing up for yet another very busy quarter here at Perseus. And hopefully, the March quarter will be just as successful as the quarter that we've reported today. So thank you very much for your attendance. I'm now happy to take any questions that you may have. I'm joined here by Andrew Grove, our Head of Investor Relations and Business Development. So if you have anything too complicated for me, I'm sure Andrew can assist in responding to your questions. Thank you.

[Operator Instructions] Your first question comes from Reg Spencer with Canaccord Genuity.

Congratulations on another good quarter. I've only got 1 question, and that relates to plans for an updated life of mine plan at Edikan. Just trying to, I guess, think about what the changes to your gold price assumptions might do to your grade. And if you're able to sort of point us in a direction on how we might think about that at this point in time?

Look, it's a very interesting question. I can't really help you at this particular time, Reg. We are putting the Esuajah South work, final work in front of our board later this month. I don't want to absolutely preempt their approval. I am very confident they will. The increase in the gold price is not -- doesn't make a massive impact on it. The fact that we are in a position to hedge some of the underground gold at around $1,500 an ounce guarantees a fairly sizable margin for us, and it does actually take away a lot of the risk of doing that if that was the direction we were heading. But look, the plans will come out fairly shortly. And I think when they are released, you'll be able to see where things are heading. One thing I can say is that the updated life of mine plan for Edikan will certainly give us an extension of the mine life beyond the current. I think it's about 6 years at the moment. It will certainly give us a material increase on that mine life. So that is something that's certainly worth waiting for.

Okay. That's great. So just to clarify, just for Esuajah South, you previously looked at open pit, but its proximity to Ayanfuri made that a little bit more difficult. There's underground potential there, but the high gold price mentioned now considering an open pit. Can you just sort of clarify that for me?

What we've done is we've looked at all options. So we've looked at an open pit, we've looked at an open pit and underground, and we've looked at an underground. Each of them has -- each of those alternatives has their -- has its appeal, specific appeals. And what we've needed to do is to look at the -- look at each step of this work on a risk-weighted basis and say, look, at the end of the day, we get this amount of return for this amount of risk capital. And that's the decision that we are taking to the Board. Now each of those alternatives have risk around them. I mean obviously, on an underground mining venture, there is risk around that. Although we think the ore body is very straightforward, and the mining techniques are well and truly tried and tested, but there is risk around it for us. Similarly, with a large-scale open pit exercise, there is a risk there. And the risk on open pit does relate, as I say, mainly to the cost of relocation and things of that nature because there is -- since we started the -- operating the Edikan mine, the Ayanfuri village has grown from a little country hamlet to quite a busy town now. An open mine would actually involve a lot of relocation. So we've had to weigh all of those things up. And this is why I don't want to preempt any decisions that we will take. But we've had to look exhaustively at all of the options. And as I say, make an intelligent risk analysis of each before we could come to a conclusion about what delivers best outcomes for shareholders.

Your next question comes from Michael Slifirski with Cr?dit Suisse.

Jeff, congratulations. It's great to see the reliability of your projections, very, very comforting. A couple of questions. First of all, the comments about the Sissingué reconciliation issue during the quarter, is that confined to that low-grade area specifically? Or do you have any thoughts about why that actually could compared to the strong positive reconciliation life of mine to date?

Yes. Look, it relates to the settle area, between couple of areas of the pit. And we actually -- when we mined in the very upper benches of that area right at the start of the mine, we had a similar result. So over reconciliation on tonnes under on grade and in line in terms of contained gold. Now as we move into the main ore body, then we were getting positive reconciliation on tonnes, positive reconciliation on grade and very positive reconciliation on contained metal. Now we are -- we're just about through, in fact, the targeted date for full immersion into the main ore body. It's about the 22nd, I think, of this month, and we are starting to see improved grade now as we speak. So we do expect that the trends that we saw in the early stage of the mine will be repeated as we go forward. So we're not overly concerned around that. We are monitoring it very closely, though.

Okay. Secondly, with the mining convention, were there any terms that were disappointing to you that was significantly different? I mean were there swings and roundabouts in the overall thing? Or how do they compare to what your actual expectation was and what you already had in place for Sissingué?

If I told you how they run, I'd be revealing a negotiating strategy which might be too sensible. Now look, the outcome was very good actually. It was a very, very balanced affair. The terms are generally similar to Sissingué. There's a couple of nuances there that relates specifically to Yaouré, but they're not massively different. We're extremely pleased with the outcome, to be frank. I think that -- now for a long-life operation or a long-ish life operation that we're setting up for, to have this certainty around the terms that apply is really, really important. And it gives us a lot of confidence to not only develop what we're doing at the moment but to look at extensions as well. So we are pretty happy with all that.

Yes, great. Having that now in place, I don't know how the timing was compared to what you expected and perhaps based your activity levels on. But I know that there was a limit to how much debt you could draw and you could never have cash flow certainty because you didn't know where the gold price was going anyway. So was there anything in the development schedule to date that's been retired by that mining convention? Or is it...

Absolutely not. I mean we were being a little conservative, I suppose, in thinking about those things, but we absolutely have not been impacted at all. In fact, the thing -- the reality is that we -- I think we could draw up to $40 million or $50 million without the mining convention. And we did that. We drew that amount to pay off the existing debt. But the reality is that we could still more than cover ourselves of existing cash and cash flow. So the answer to your question is absolutely not. We haven't been impeded in any shape or form in the development of Yaouré. Everything has been running pretty much to target. I mean we had a good run with the weather. We were a little concerned early in the piece that we might have been impacted by weather, but that didn't occur at all either, I mean, for 2 reasons. One is that we didn't get super wet season but also the ground conditions at Yaouré are better than they might have been. So all things considered, it's been a good run to date and cross fingers, it will stay like that for the rest of this year. We do have to go through another wet season in the July [Audio Gap] so we'll be up, and we'll be running cables and pipes and things like that. So the way they shouldn't have any impact.

Great. And finally, with respect to the -- you talked about the -- in the report, the float tail leach -- sorry, the float tail storage tailings dam lift. Has there been any further thoughts or analysis of that material and the potential for it to be a future plant feed for reprocessing? Has anything advanced there?

Which one was that, Mike?

Sorry, it's -- at Edikan, the float storage material that contains quite a lot of gold but...

Okay. Yes, okay. There's 2 parts to it. One is the normal float material, but there's also the cyanide tailing. The float material, no is the answer. There's a lot of that, and there's nothing in there that's like big sand, basically. The -- in the cyanide tailings dam, yes, there is some potential for doing that. In fact, what we are doing, what we are doing -- and Andrew can add to this, in the second, what we are -- what we have been doing is we install the carbon column, where we've been recirculating the water out of that dam, and that's actually been generating a nice amount of 300-odd ounces a month fairly consistently now for a number of months, which has certainly paid the cost of putting it in place. But that looks actually kind of interesting. Andrew, do you want to add to that?

Yes. And look, we're still -- Mike, we're still doing the test work on fund growing and other recovery methods out of that, that's still ongoing. It's not a simple process. So we're still looking at the opportunities for that.

But it is an important point to make, though, because one of the things that we've done fairly successfully at Edikan in the last couple of years is implement a very active continuous improvement program. And it's generated a lot of decent ideas that have actually improved our operation quite a lot. And so that -- looking at that CTSF material is certainly part of that program. And -- but these things have to be thoroughly researched before you implement because they all involve capital, and we have to be convinced that we are going to generate a suitable return on that incremental capital before we go ahead.

Your next question comes from Adam Baker with Global Mining Research.

Yes, I just noticed your change in the gold price assumptions for both Edikan and Sissingué from $1,200 to $1,300. I can't see any mention of Yaouré. Are you doing any changes to the gold price assumptions there?

At this stage, we're still working off the base feasibility study. But when we do further mine planning there, then we will be consistent across the group.

Sure. And just offtake a bit. Just wondering if you could talk to the geopolitical situation? And have you seen any uptick in tourism activities in Ghana or Côte d’Ivoire? We've seen the tragic circumstances in Burkina Faso and how that affected SEMAFO. Just wondering if you could explain that a bit.

Well, I wouldn't plan to be a geopolitical expert. But what I can just say from, I guess, our observation is that there is no evidence of that sort of activity in either country. In fact, if anything, there is quite a lot of evidence of the 2 governments being very proactive in working to ensure that, that what's occurred well north of countries doesn't become the norm further south. So we certainly, as a company, we keep a very close eye on what's happening in our region, and we make various plans to ensure the safety of our people, most particularly in our assets, and we're fairly -- we're very comfortable operating in Ghana and Côte d’Ivoire at the present time. But I can't really comment on what has occurred in Burkina Faso as I don't go there. And I don't -- we don't work on the ground. So there are a lot of other people who would have a far better knowledge of that than me.

There are no further questions at this time. I'll now hand back to Mr. Quartermaine for closing remarks.

Okay. Well, thank you very much once again for attending the teleconference of this conference. It has been a good quarter for us. We are very encouraged by the progress that the company is making. We're very grateful to our shareholders for the support that they've given us in the market in the last 6 months as well. And what I can say is that we are looking forward very much to the future. We think that Perseus has a very exciting future, and we, as management team, recognizes our responsibility to deliver on the promises that we've made, and that is something that we will be doing. So thank you very much, and we will speak again in 3 months' time.