Gold producer Perseus Mining has swung to a full-year net loss for the period ended June 30, as lower output grades, fewer foreign exchange gains and exploration write-off impacted the balance sheet.
The Australian mining firm, which operates in Ghana and Cote d’Ivoire, reported a net loss after tax of US$28.26 million (A$37.5 million) for the period, compared with a net profit after tax of US$69.49 (A$92.2 million) in the previous financial year.
The loss was mainly the result of a decrease in the gold output at its flagship Edikan mine, in Ghana, owing to a lower average head grade and recoveries as a result of processing low-grade stockpiles while the eastern pits were being stripped.
Revenue for the period fell 24.4 per cent year-on-year to US$190.04 (A$252.2 million), impacted by Edikan production falling 27.5 per cent in the period to 153,902 oz, at an all-in site cost of $1 351/oz. From July 1, 2015, to June 30, the price of gold increased by 12.8 per cent to $1,321/oz, which helped counter declining output.
“The 2016 fiscal year has been a challenging period for Perseus, as reflected by the results announced today. However, it has been an important year for us in terms of our corporate development. Not only have we met and overcome some sizeable operating challenges at our Edikan mine, but we have set the platform for a major transformation of Perseus through acquiring the Yaouré gold project in Cote d’Ivoire, committing to the development of our second operation at Sissingué also in Cote d’Ivoire and arranging sufficient finance to enable us to execute our growth plans,” stated Managing Director Jeff Quartermaine.
Perseus delivered 37,810 oz under forward sales contracts at a weighted average price of $1,357/oz, while the balance of the gold sales was made at prevailing spot prices, or under short-dated spot deferred contracts. Included in this are 100,000 oz of hedging contracted at a weighted average price of $1,308/oz specifically to support the proposed Sissingué project finance debt facility.
Perseus expects the Edikan mine to produce between 205,000 oz to 245,000 oz of gold in the 2017 financial year, at an estimated total site cash cost of $1,110/oz to $1,325/oz.
The company recently stated that the successful acquisition of new pre-development assets, together with the equity and planned debt capital raisings, plus future cash flows from Edikan and its Sissingué operation, from the March quarter of 2018, would place the company in the position to fund its growth strategy.
The company expects to transform from a single-country, single-mine enterprise to a multi-mine, multi-country gold producer, with production in excess of 500,000 oz of gold within five years.
Execution plans for the full-scale development of Sissingué have been activated, with first production of gold scheduled to occur in the December 2017 quarter.
Sissingué is currently forecast to produce 385,000 oz at an all-in sustaining cost of $632/oz over a 5.25-year period from first gold production. The total cost to complete construction is forecast to be $100 million.