Perseus Mining (PRU.AX, PRU.TO) has released its quarterly update for Q1 of the current calendar year. The company recovered almost 122,000 ounces of gold at an all-in site cost of just over $1200/oz. Almost 118,000 of those were also effectively sold at an average price of just under $2500/oz, resulting in a cash margin of around 50% of the sales price.
The strong financial position also allowed the company to move forward with the construction of two new projects. In Cote d’Ivoire, it will develop the CMA underground mining operation at the Yaouré mine while in Tanzania, construction of the Nyanzaga gold mine will kick off as well following an amended framework.
The Nyanzaga project should produce around 2 million ounces of gold at an AISC of $1211/ounce with peak production in FY 2028 with 246,000 ounces of gold, and an average output of 200,000 ounces of gold in the 2028-2035 period. The initial capex is estimated at US$523M. At $2100 gold the after-tax PV10% is US$202M and this triples to $617M when applying a $2700 gold price. And while the base case IRR is pretty disappointing at 15% at $2100 gold, this already increases to 34% at $2700 gold.
Disclosure: The author has no position in Perseus Mining. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read the disclaimer.
