Release Date: February 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Perseus Mining Ltd (PMNXF) reported a strong financial performance with gold production reaching 253,709 ounces, which is in the upper half of the guided production range.
• The company achieved an all-in site cost of $1,162 per ounce, well below the guided cost range, indicating efficient cost management.
• Average gold sales price increased by 13% to $2,350 per ounce, contributing to a 27% rise in notional cash flow to $300 million.
• Perseus Mining Ltd (PMNXF) ended the year with a net cash and bullion balance of $704 million, an increase of $117 million over six months.
• The board declared an interim dividend of 2.5 Australian cents, a 100% increase from the previous year, reflecting strong shareholder returns.

Negative Points

• The restructuring costs at the Edikan site amounted to $18.2 million, impacting financials, although it was a one-time expense.
• There are ongoing uncertainties regarding the regulatory framework in Tanzania, which could delay the commencement of the Nan Zaga project.
• The share buyback program has been slower than anticipated, with only 12% of the target achieved due to market blackout periods.
• Potential cost inflationary pressures could impact future financial performance, despite current conservative cost estimations.
• The company's investment in Predictive Discovery is considered expensive, and there is uncertainty about whether it will yield satisfactory returns.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with CHRYY.

Q: Could you elaborate on the restructuring costs of $18.2 million at Edikan and whether there will be any carryover into the second half? A: (Leanne de Bruyn, CFO) The restructuring costs were part of a completed program with no carryover into the next financial year. The changes involved moving staff at Edikan onto fixed-term contracts, triggering redundancy and retrenchment payments. This is a common practice in Ghana, and the program is now concluded.

Q: Can you explain why costs were running under guidance in the first month? A: (Jeff Quartermain, CEO) The lower costs were due to a slower rate of expenditure on sustaining capital and shorter haul distances in mining at Yaoure. While this may even out over time, we have been conservative in our cost estimation, anticipating potential cost inflationary forces.

Q: What are the elements you are waiting for before commencing the Final Investment Decision (FID) for the Nanzaga project? A: (Jeff Quartermain, CEO) We are ensuring there is no ambiguity in the framework agreement with the Tanzanian government, particularly regarding VAT repayment during construction and corporate structure. These are important for a long-term partnership, and we aim to resolve these issues to give them full legal force.

Q: How are you considering mine life extensions in a high-price environment, particularly for Nanzaga? A: (Jeff Quartermain, CEO) For Nanzaga, we confirmed the resource and reserve are solid. We plan a further drill-out program to convert inferred material into measured or indicated, increasing reserves. For other mines, we are evaluating whether higher gold prices justify extending mine lives, considering potential higher costs.

Q: At what point does the Nanzaga project hit a critical path for the January 2027 commissioning? A: (Jeff Quartermain, CEO) If the startup date extends well into the June quarter, the January 2027 commissioning could be under pressure. However, we are hopeful of starting much sooner to meet the timeline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.