Ghana – Estimated remaining life of mine gold production of 1 388 000 oz is 96.6% of the amount estimated for the corresponding period in the previous LOMP. While gold production averages 214 000 ozpa over Edikan’s remaining 6.5 year mine life, it includes production of approximately 240 000 ozpa for the next five years.
The updated LOMP for Edikan commences 1 July 2017, following a re-estimation of mineral resources and ore reserves.
Independently estimated proved and probable ore reserves for Edikan total 56.5 Mt of ore, grading 1.14 g/t gold, containing 2 078 000 oz of gold as at 31 December 2016.
Comparisons of the updated Edikan mineral resource models against ore delineated by grade control during the last three months of 2016 and in January 2017 indicate that the updated resource estimates on which the ore reserves are based are likely to be more reliable predictors of ore tonnes and grades than the resource models used previously, resulting in a closer correlation between forecasts and actual gold production and improved reliability of the LOMP.
Consistent with the revised ore reserve that contains 15% more tonnes, 8% lower grade and 5% more contained gold than previously estimated, the life of mine production profile is slightly flatter but extends for longer than the previous LOMP published in April 2016.
Forecast weighted average all-in site costs including all direct production costs, royalties, waste stripping costs and sustaining capital expenditure (AISC) of US$875/oz in the five year period from 1 July 2017 to 30 June 2022 and $864/oz over the full remaining life of mine.
Forecast sustaining capital costs (including the cost of site rehabilitation) which are included in the estimate of the AISC, total $34.5 million.
The Edikan LOMP forecasts strong positive after tax cash flow totalling approximately $403 million (or A$0.52per share at an A$:US$ exchange rate of 0.75), assuming a flat spot gold price of $1 200/oz for the remaining mine life from 1 January 2017.
The LOMP should be considered in conjunction with previously provided production and cost guidance for the June 2017 half year. With 25% of the June 2017 half year elapsed, Perseus Mining is on track to achieve in the middle of the production guidance range of 90 000 oz to 100 000 oz of gold and is currently positioned towards the middle of the cost guidance range of $1 000 to $1 220/oz.