Perseus Mining Limited (PRU) Earnings Call Transcript & Summary

We have this morning is Jeff Quartermaine from Perseus Mining. Jeff, good morning.

Good morning, Andrew.

Good to see you, Jeff. Record gold production and cash flow here in the December quarter. Tell us a bit more about the results here.

Yes. Well, look, it's been another excellent quarter for Perseus and in the words of our Chairman, the team really has hit the ball out of the park this quarter. So production-wise, we produced 128,738 ounces for the quarter. It's about 14% more than in the September quarter. And at the same time, we managed to reduce our all-in site costs by about 3%, bringing them down to $974 an ounce, including a production cost of about $823. What that meant in terms of market guidance, we had guided the market a 225,000 to 255,000 ounces at $925 to $1,025 an ounce. With the production of 241,164 ounces for the half year at an all-in site cost of $949 million, we very comfortably achieved that market guidance. In fact, production is in the upper half of the range and costs are in the lower half of the range. So that's been very good in terms of delivering on the promise that we made to the market. Now the gold -- our average gold price over the quarter was rounded around $1,669 an ounce, which meant that for every ounce of gold we produced, our margin was about USD $734, $735 per ounce, which resulted in notional operating cash flow of around $94 million for the quarter, about $16 million more than the previous quarter. Where this left us cash-wise at the end of the quarter, we had cash on our balance sheet of about USD 212 million or net cash of $162 million after you take into account our debt of $50 million. And that was after we made a capital return to shareholders during the quarter of $13 million, repaid debt of $50 million and invested in organic growth activities. So we've returned some money to shareholders. We managed our balance sheet and we invested in the future. So once again, it's been a very, very strong quarter, and we're very comfortable with the way all the operations are running. There's always room for improvement, but we're certainly very pleased with the way things are going at the moment.

Since Yaouré mine in Côte d'Ivoire produced more than half of the group's total gold in the first half of full year '22. How important is that mine as far as future growth plans?

Well, look, it is important. There's no question about that. I mean you're quite right, in the quarter, almost 60% of our gold production came from the Yaouré mine, and we believe that we can increase on that from that particular level going forward. In terms of the future, though, yes, it is -- yes, Yaouré is a very important part of what we do. We believe that we have some material extensions to the reserve at Yaouré. We put out a risk last week in which we highlighted some excellent drilling results, and we believe we can extend that mine life for quite a number of years. However, similarly, we also put out another release around the same time relating to the Edikan mine, we believe that there's a significant opportunity there through some recent discoveries to push that life out of that mine out as well. And Sissingué is also in the process of upgrading the life of that particular mine. But look, all 3 mines are traveling well. We believe that all 3 of them can be grown organically. But clearly, Yaouré is the center piece of the business as we stand today and probably into the future.

And of course, Jeff, you've mentioned the 500,000 ounce production target for full year '22. How close to that are you? And what are the other near-term priorities here?

Well, look, we are actually running at the present time. And if you take the production for the quarter of 128,000 and you annualize that, that is in excess of 500,000 ounces per year. So you could say that we are already running at the rate of 500,000 ounces a year. We have given in the quarterly report today, we have given guidance to the market for the next half year, which would result in production -- 471,000 to 506,000 ounces is the guidance. So we're well and truly on track to delivering that outcome. And I think that certainly is going to be delivered as we go forward. Now in terms of other targets and things of that nature. So for many years, first thing is let's worked towards this corporate target of 500,000 ounces of production a year by fiscal 2022. As I say, we believe that we're on track for that and we'll deliver that. And so now we're starting to reset our goals. And I think at this stage, we would say what we aim to do is to maintain that 500,000 ounce level of production until at least the end of the decade. And that's why we're spending money at the present time on organic growth and why we believe that it is important to do that. And that is a way forward for us to be able to deliver this new goal, the 500,000 ounces out to the end of the decade.

Jeff, good to see you. Thanks for your time.

And thank you, Andrew. Pleasure to be here.