Nyanzaga Negotiations Delay Could Challenge Perseus’s Growth Momentum

Strong Operational Performance

Perseus Mining has delivered a solid operational and financial performance in the December 2024 quarter (Q2 FY25), reinforcing its status as a leading mid-tier gold producer. Gold production rose by 9% quarter-on-quarter to 132,419 ounces, while the weighted average All-in Site Cost (AISC) fell by 6% to US$1,127 per ounce, underscoring improved cost efficiencies across its portfolio.

The company’s three operating mines, Yaouré and Sissingué in Côte d'Ivoire, and Edikan in Ghana, contributed to these results, with Yaouré notably increasing production by 18% driven by higher ore grades and improved recovery rates. Edikan and Sissingué also maintained steady output, though Sissingué faced some challenges with lower head grades and higher strip ratios impacting costs.

Robust Cashflow and Balance Sheet

Perseus’s operational strength translated into a notional operating cashflow of US$173 million for the quarter and US$536 million for the calendar year 2024. The company ended Q2 FY25 with a cash and bullion balance of US$704 million, complemented by US$67 million in liquid securities and zero debt, alongside an undrawn debt capacity of US$300 million. This strong liquidity position provides Perseus with significant financial flexibility to support ongoing operations and growth initiatives.

Strategic Project Developments

A major milestone was reached with the Final Investment Decision (FID) to develop the CMA underground project at the Yaouré Gold Mine in Côte d'Ivoire. This project marks Côte d'Ivoire’s first mechanised underground mine, with Australian contractor Byrnecut appointed to lead mining operations and workforce training. The CMA project is expected to integrate smoothly with existing open-pit operations, enhancing Perseus’s production profile in the medium term.

Meanwhile, the Nyanzaga Gold Mine in Tanzania remains a focal point, with Perseus advancing negotiations on amendments to the Framework Agreement with the Tanzanian government. These negotiations are critical to finalising the FID for Nyanzaga, which targets first gold production in early 2027. Despite delays in fiscal terms finalisation, Perseus continues preparatory work including resettlement housing, early works, feasibility studies, and front-end engineering design.

Exploration and Sustainability Efforts

Exploration activities remain active across Perseus’s asset base, with ongoing drilling programs in Côte d'Ivoire, Ghana, Tanzania, and Sudan aimed at resource expansion and new discoveries. Notably, infill drilling at Nyanzaga is nearing completion, supporting resource confidence ahead of development decisions.

On the sustainability front, Perseus reported a low Total Recordable Injury Frequency Rate (TRIFR) of 0.66, no fatalities, and stable environmental performance with reduced greenhouse gas intensity. The company also continued its social investments and local employment initiatives, contributing approximately US$175 million to host countries in the quarter.

Market Guidance and Outlook

Looking ahead, Perseus provided production and cost guidance for the June 2025 half year and full financial year 2025, forecasting group gold production between 215,000 to 250,000 ounces for H2 FY25 and 470,000 to 505,000 ounces for FY25, with AISCs expected to remain competitive. The company’s hedging strategy offers downside price protection on about 24% of forecast production, balancing risk and upside exposure.

Overall, Perseus Mining’s December quarter results reflect operational resilience, disciplined cost management, and strategic progress on key growth projects, positioning the company well for the challenges and opportunities ahead.