The rapidly approaching production start-up of ASX-listed Perseus Mining’s third mine, Yaouré, in Côte d’Ivoire marks a pivotal moment in the company’s history – reaching the 500 000 ozpa target which CEO JEFF QUARTERMAINE has been aspiring to achieve for years.
Despite the pressures of COVID-19, its all systems go to achieve the first gold stretch target in December 2020, writes LAURA CORNISH.
Rewind time by three years and Perseus Mining was just a single mine operator, focusing on producing just over 200 000 ozpa from its Edikan mine in Ghana.
Impressively, the company has quickly grown its gold producing profile – bringing its Sissingué mine in Côte d’Ivoire on stream in January 2018 and soon its Yaouré project as well – in essence more than doubling its annual production output in a short timeframe.
“Yaouré will be our biggest success to date,” Quartermaine highlights. “Because it follows in the footsteps of our 80 000 ozpa Sissingué operation which we delivered so successfully, but on a much larger scale and with the same team that delivered our second mine in the country.”
The new flagship
Once in production, the 2.2 g/t Yaouré will be Perseus Mining’s new flagship mine. It will produce 215 000 ozpa in the first five years of its 8.5-year open pit lifespan – delivering the company with a 500 000 ozpa gold production from fiscal year 2022 onwards.
The production target will require 3.3 Mtpa of process plant capacity. The mine is situated in central Côte d’Ivoire, 40km for the capital Yamoussoukro.
At an all-in-sustaining-cost of US$750/oz, the project is economically attractive in a $1 250/oz price environment (with an IRR of 27%) although we will benefit financially well above this should the gold price continue to sit so high above this mark,” Quartermaine notes.
To ensure a lifespan that extends well beyond eight years, Perseus Mining has already delineated an underground resource off the side of Yaouré’s main CMA pit.
A scoping study completed in 2018 has clearly demonstrated the potential for underground mining from this area on a resource of 595 000 oz grading at a high 6.2 g/t, which is open at depth and along strike.
“Not only will this improve the average grade of the mine but will potentially increase its lifespan to at least 10 years,” Quartermaine confirms.
Over and above Yaouré’s underground potential, Perseus Mining is working to secure additional open pit resources within close proximity to the known mine.
“The area has an enormous amount of mineralisation and to date our drilling programmes are already delivering interesting intercepts which could equate to additional surface mining potential which again will extend the mine’s lifespan.”
Construction progress on track
Significant progress has been made on all fronts at the $265 million Yaouré project during Perseus Mining’s March quarter. Costs at the time were reported as slightly under budget and overall development was 52% complete.
“We are dealing with the effects of COVID-19 as well as can be expected and are hopeful that travel ban restrictions will be lifted in the coming months which will ensure we meet our December 2020 production start-up stretch date. If not, Yaouré will likely produce first gold early in 2021,” Quartermaine outlines.
Beside travel restrictions, on-site construction work from the 1 600-strong team of contractors is progressing under a new normalcy – adopted by the company quickly when lockdown rules were implemented.
The company has demarcated different areas around the site with different levels of restrictions and is only allowing personnel on site who have been through a quarantine process first.
Plant engineering was 100% complete in the March quarter and procurement work (including delivery to site) was on schedule at 85% complete.
Critical equipment items – both the SAG and ball mills were delivered to site ahead of schedule in February 2020. During the quarter, procured items moved efficiently through the port of Abidjan in Côte d’Ivoire and at this stage, deliveries to site are taking place on a regular basis, largely unimpeded by the COVID-19 crisis.
Full-scale construction of the processing facilities and associated infrastructure which began in October 2019 are now proceeding in full swing, with various important aspects of the plant ranging from 60% completion to over 90% completion.
“We will receive our power from the Ivorian Electric Company main grid from September 2020,” Quartermaine confirms.
This has required investment in supporting infrastructure including the construction of a two new substations which were in March 56% and 8% complete.
Transformers were shipped to site during the March quarter and fabrication of the transmission line and towers was completed and the bulk of materials delivered to site.
At quarter end, the new camp tented area was complete with 120 persons currently living in this accommodation. Finalisation of landscaping and permanent buildings is expected to be complete by the end of the June 2020 quarter at which time a total of 637 construction or 227 operations residents will be accommodated at this facility.
Operations readiness planning and implementation
Important progress was made during the March quarter in preparation for a seamless transition from development activities to operations at Yaouré by the end of 2020.
A workforce plan has been finalised and the recruitment of key employees has begun. It is envisaged that by the end of commissioning, Perseus Mining will have recruited approximately 285 direct employees at Yaouré, 90% of whom will be national employees and 10% expatriate employees.
Initial discussions have taken place with the Institut National Polytechnique in Yamoussoukro about the provision to provide aptitude and trade related testing of potential candidates for roles at Yaouré.
A longer-term partnership with the Polytechnique to deliver vocational and degree level training and development for Perseus’s employees and possibly also local students selected from villages in the catchment area around Yaouré is also being assessed.
Mining contractor, EPSA Internacional SA (EPSA), a privately owned global earthmoving and mining contractor from Spain, has commenced setting up its operations in Côte d’Ivoire and planning for their site facilities is advancing.
“After evaluating various tenders for the mining contract, we felt EPSA was best aligned with our requirements and our core values as a company. They also have a solid track record,” Quartermaine highlights.
The company currently operates across 15 countries and importantly shares the same time zone as Côte d’Ivoire.
“Their equipment and service offering was well priced and immediately available. Importantly, their emphasis on building and enhancing local communities matched our own local objectives.
“They will recruit locally and upskill as necessary. We will also look at partnering with them to establish fully fledged training facilities with simulators in the country as well.”
Maintaining 500 000 ozpa of gold production
While Perseus Mining can comfortably maintain 500 000 ozpa of gold production for the next four years, which according to known resources will see Sissingué wind down, Quartermaine is already actively looking to ensure a longer term plan that will prevent a drop in output.
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“We are looking for additional projects, either through a Greenfields discovery, or through an acquisition. We are in a strong cash position, especially as Yaouré comes on stream and believe in continually investing in our existing projects while ensuring we reach a point of paying dividends to our shareholders.
“We are in a comfortable position to already be evaluating the next phase of Perseus Mining’s future trajectory,” Quartermaine highlights.
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The company more recently extended the lifespan of Edikan to 7.5-years by revised its mining methodology and life of mine plan. It has also earmarked $15 million for exploration in the coming year in order to find additional reserves across its operations.
“We are a battle hardened operator and mine developer and will continue to deliver on the promises we make to our stakeholders. We will increase our production profile to 500 000 ozpa as we move forward and have even embraced how COVID-19 has impacted our business – teaching our employees to work more efficiently than we have done in the past,” Quartermaine concludes.
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