Perseus Mining Announces Exploration Success in Côte d’Ivoire
• Perseus Mining has discovered several potential new mining sites
• The company will require further exploration to confirm their findings
• With a solid previous half-year, the company is positioned for growth
Perseus Mining (ASX:PRU) is a gold mining company headquartered in Australia. The company owns and operates three mines in West Africa. Two mines called Sissingué and Yaouré are located in Côte d'Ivoire (the Ivory Coast) and the company’s oldest mine, Edikan, is located in neighbouring Ghana.
For around the last five years, the company has been focused on funding and developing the Sissingué and Yaouré mines, a task which has cost the company nearly US$400 million. The mines are now both operational, Yaouré completed construction and started production in December 2020. Notably, the mine was completed ahead of schedule and budget.
With the mines now complete, the company is free to invest its capital instead on exploration programs to extend the lives of all existing mines and grow the company organically. On 7 April 2021, Perseus announced that its initial exploration programs had been successful.
Drilling at three sites near the Sissingué mine confirmed gold mineralisation levels promising enough for PRU to commit to doing a Definitive Feasibility Study (DFS). The study would determine the viability of a mining and trucking operation that would transport ore from the sites to Sissingué for processing. The DFS is set to be completed in the June 2021 quarter.
The company also reports particularly encouraging results at a site located around three kilometres from Yaouré called Govisou. Drilling revealed several varieties of volcanic rocks that had gold mineralised within them. The current indications suggest that a 'pencil' shaped plunging structure exists underground and could be exploited. However, further drilling will be required to confirm if its composition matches the other mineralised volcanic rocks discovered.
The explorations' results are promising and fall in line with PRU's stated strategy going forward into the next half year. In their half-yearly report, PRU recorded a strong half-year which was aided by strong gold prices. The company reported that profits were up by 61.4 per cent and an increase in Earnings Per Ounce of Gold of 59 per cent.
The newly constructed Yaouré mine's contribution is expected to be a key financial driver for the June Half year. With the significant reduction in capital expenditure now that the mines are completed and in operation, the company expects to focus on exploration and consolidation.
Looking forward, the company intends to focus on financial discipline and implement new balance sheet management initiatives to reduce debt levels. The combination of these initiatives, the solid financial results of the last half-year, and the fact that all mines are now operating and contributing to the balance sheet have management confident that PRU is now well-positioned for future growth. The company is even considering implementing a dividend policy in the future, although the exact timing of these has not been announced.