Ghana – This is following the announcement of Perseus Mining’s updated Life of Mine Plan (LOMP) for Edikan which has seen its NPV for the mine’s forecast cash flows increase to US$287 million at a gold price of $1 200/oz after applying a 10% real discount rate.
Gold production will average 222 000 ozpa over Edikan’s entire remaining 7.5 years mine life including production of approximately 258 000 ozpa for the next five years.
There has also been a decrease of 10% in the forecast average all-in site cost (AISC) in the next five years from 1 July 2016 to 30 June 2022 – to $920/oz and an 8% decrease in the average AISC to $865/oz over the LOMP.
[quote]Operating efficiencies achieved over past three years will be maintained and further works are planned to deliver incremental efficiency improvements, enhancing Perseus Mining’s ability to execute the updated LOMP. These include:
- Progressive removal of “bottle necks” in the processing plant to improve operability and plant run time, reduce operating costs and frequency of maintenance shutdowns;
- Completion of the installation of a diesel fired power station to provide flexibility of generating power internally or drawing power from the national power grid to mill run time;
Development of the Esuajah South open pit has been deferred with limited impact to the forecast production schedule but provides positive commercial impacts including:
- A $31 million (42%) decrease in sustaining capital with $44 million now required compared to $75 million in the corresponding period in the previous LOMP;
- FY2018 now represents a highly cash generative year with an additional $43 million net after tax cash flow generated compared to the previous LOMP;
- Optionality remains to reintroduce the development of the Esuajah South deposit using underground mining techniques later in the mine life;
- Additional cash will be available for allocation to the more productive investments in Perseus Mining’s growth pipeline including the Yaouré gold project in Cote d’Ivoire.
Independently estimated proved and probable ore reserves for Edikan total 58.4 Mt of ore grading 1.2 g/t of gold and containing approximately 2.275 Moz of gold as at 1 March 2016.
Perseus Mining’s MD and CEO, Jeff Quartermaine, comments: “Our updated Life of Mine Plan for Edikan forecasts an improved operating cost profile for the remaining years of Edikan’s mine life and a reduction in required capital expenditure, representing a major strengthening in the outlook of the Perseus Mining group.”
“The reshaped forecast cash flow profile from Edikan materially enhances our capacity to finance our project pipeline which will be developed as part of the company’s corporate strategy of transforming from a single mine, single-country company to a multi-mine, geo-politically diverse mid-tier gold producer.”
“The updated LOMP for Edikan underpins this compelling growth story which now relies on our ability to successfully execute all phases of our plan. This is the key focus of Perseus Mining’s management team and we are looking forward to delivering strong returns for our shareholders.”