West African gold producer, Perseus Mining Limited (ASX:PRU) (TSX:PRU), has released its Interim Financial Report for the six months ending 31 December 2021 with significant improvement across key metrics including revenue, EBITDA, profit after tax and operating cash flow, allowing Perseus to declare an interim dividend of 0.81 cents Australian per share.

HIGHLIGHTS

• Revenue increased by 90% to A$545.7 million, on previous corresponding Half Year period
• EBITDA up 101% to $252.4 million and Profit After Tax up 159% period on period to $126.9 million
• Operating Cash Flow of A$245.9 million, up 137% on prior half year
• Declared interim dividend of 0.81 Australian cents per share
• Perseus has achieved targeted gold production rate of 500,000ozpa for the first time in FY22.

Perseus’s Managing Director and CEO Jeff Quartermaine said:

“Our financial results for the December 2021 half year are indicative of our strong operating performance at all levels of our business during the period.

With three gold mines in operation, we are now producing gold at our targeted rate of approximately 500,000 ounces of gold per year, and with excellent drill results coming from our organic growth programmes we are confident of at least maintaining this level of production and associated profitability well into the future.

We have achieved these results in a West African setting with the COVID pandemic providing a backdrop, which I believe speaks volumes of the efforts of individuals in our teams at the mines, in the field and in our offices across Africa and Australia. It also underlines our collective commitment to our mission of creating material benefits for all of our stakeholders, in fair and equitable proportions.”

COMMENTARY

During the six months to 31 December 2021, Perseus made significant progress towards becoming a multi-mine, multi-jurisdictional producer of more than 500,000 ounces of gold per annum, at a cash margin of not less than US$400/oz. Production rates continued to improve at Perseus’s third gold mine, Yaouré, making significant progress towards its nameplate capacity. Consistent performance continued at Sissingué, while Edikan’s performance saw improvement towards the end of the second quarter.

Gold production for the Group during the six months totalled 241,164 ounces at an all-in site cost (including production costs, royalties and sustaining capital) of US$949/oz. This result included: 139,747 ounces produced at Yaouré at an AISC of US$687/oz; 34,132 ounces produced at Sissingué at an AISC of US$917/oz; and 67,285 ounces of gold produced at Edikan at an AISC of US$1,509/oz.

Gold sales by the Group during the half-year totalled 238,136 ounces of gold at an average sales price of US$1,663/oz. This result included: 139,724 ounces sold by Yaouré at a weighted average sales price of US$1,695/oz; 34,870 ounces sold by Sissingué at a weighted average sales price of US$1,631/oz; and 63,541 ounces sold by Edikan at an average sales price of US$1,608/oz. During the 6 months, the Group sold 87% more gold, at a price that was approximately 1% higher than in the 2020 comparative period.

At 31 December 2021, the Company’s net tangible assets amounted to $1,020.3 million, or $0.83 per share which is approximately 18.6% more than at the end of the HY2020.

The Group’s net profit after tax for the period ended 31 December 2021, after bringing to account a foreign exchange loss, was $126.9 million, up 159% on the comparative period (31 December 2020: $49.1 million). Gross profit from operations for the period ended 31 December 2021 was up 91% on the comparative period to $153.4 million (31 December 2020: $80.5 million).

These significant increases are largely attributable to:

• A 90% increase in revenue on the comparative period to $545.7 million (31 December 2020: $286.7 million) from the contribution Yaouré has made to the Group since achieving commercial production. This was supported by steady performance from Sissingué, while Edikan underperformed during the period.
• Depreciation and amortisation expense of $99.0 million, a 118% increase on HY2020 largely due to declaration of commercial production of Yaouré on 1 April 2021, requiring the depreciation and amortisation of the capitalised development costs to commence.
• Finance costs increased to $5.4 million (HY2021) from $1.7 million (HY2020) as previously a portion of finance costs were capitalised to the construction of the Yaouré Project which ended upon declaring commercial production on 1 April 2021.
• Administration and other corporate expenses increased to $8.5 million (HY2021) from $6.3 million (HY2020) commensurate of the increased support associated with commissioning the Yaouré Gold Mine.
• The foreign exchange loss of $7.7 million in the current period compares to a loss of $13.2 million in the comparative period. This is a result of the Australian dollar weakening against the United States dollar during the six months by approximately 3%.
• Income tax expense of $1.6 million, a reduction of $6.8 million on HY2020.

The Group generated Net cash from operating activities for the six months ended 31 December 2021 of $245.9 million, up 137% on the comparative period (31 December 2020: $103.6 million).

As at 31 December 2021, Perseus had on-hand cash of $268.2 million, and 9,342 oz of gold bullion valued at $23.4 million. During the period Perseus repaid in advance US$50 million of the revolving corporate cash advance facility (Corporate Facility), with a remaining balance on that facility of US$50 million at 31 December 2021.

FY22 OUTLOOK

Looking to the future, Perseus expects this positive trend of improved earnings and cashflow to continue in line with our corporate objective of producing more than 500,000 ounces of gold per year. Gold production and cost guidance for the FY2022 is as follows:

COMPETENT PERSON STATEMENT:

All production targets referred to in this report are underpinned by estimated Ore Reserves which have been prepared by competent persons in accordance with the requirements of the JORC Code.

Edikan. The information in this report that relates to AF Gap Mineral Resources and Ore Reserve estimate was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 26 August 2020.  The information in this report that relates to the Mineral Resource and Ore Reserve estimates for the Fetish deposit and the Heap Leach was first reported by the Company in a market announcement “Perseus Mining Updates Edikan Gold Mine’s Mineral Resources and Ore Reserves” released on 20 February 2020. The Mineral Reserve and Ore Reserve estimates for the abovementioned deposits were updated for depletion as at 30 June 2021 in a market announcement. “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 24 August 2021. The information in this report that relates to Esuajah North Mineral Resources estimate was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 29 August 2018. The information in this report that relates to the Mineral Resource and Ore Reserve estimates for Esuajah South Underground deposit was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 24 August 2021. The Company confirms that it is not aware of any new information or data that materially affect the information in those market releases and that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Central Ashanti Gold Project, Ghana” dated 30 May 2011 continue to apply.

Sissingué, Fimbiasso, Bagoé. The information in this report that relates to Mineral Resource and Ore Reserve estimates for the Fimbiasso deposits was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 26 August 2020.  The information in this report that relates to Mineral Resource and Ore Reserve estimates for the Sissingué and Bagoé deposits was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 24 August 2021.  The Company confirms that it is not aware of any new information or data that materially affect the information in these market releases and that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Sissingué Gold Project, Côte d’Ivoire” dated 29 May 2015 continue to apply.

Yaouré. The information in this report that relates to Open Pit and Heap Leach Mineral Resources and Ore Reserves at Yaouré was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 28 August 2019 and updated for mining depletion as at 30 June 2021 in a market announcement released on 24 August 2021. The information in this report that relates to Underground Mineral Resources at Yaouré was first reported by the Company in a market announcement “Perseus Mining Completes Scoping Study for Potential Underground Mine at Yaouré” released on 5 November 2018 and adjusted to exclude material lying within the US$1,800/oz pit shell that constrains the Open Pit Mineral Resources in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 28 August 2019. The information in this report that relates to the Yaouré near mine satellite deposit Mineral Resource and Ore Reserve estimates was first reported by the Company in a market announcement “Perseus Mining Updates Mineral Resources and Ore Reserves” released on 24 August 2021. The Company confirms that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, in that market release continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Yaouré Gold Project, Côte d’Ivoire” dated 18 December 2017 continue to apply.