DECEMBER 2022 QUARTER REPORT Perseus Mining produces 521,221oz gold at US$941/oz AISC in 2022
24 JANUARY 2023
NEWS RELEASE
DECEMBER 2022 QUARTER REPORT
Perseus Mining produces 521,221oz gold at US$941/oz AISC in 2022
PERTH, Western Australia/ January 24, 2023/Perseus Mining Limited (“Perseus” or the “Company”) (TSX & ASX: PRU) reports on its activities for the three months’ period ended December 31, 2022 (the “Quarter”).
- Key Operating highlights for Quarterly, Half Year and Calendar Year periods ending December 31, 2022 include:
| PERFORMANCE INDICATOR UNIT | DECEMBER 2022 QUARTER | DECEMBER 2022 HALF YEAR | CALENDAR 2022 YEAR | |
|---|---|---|---|---|
| Gold recovered | Ounces | 130,911 | 268,371 | 521,221 |
| Gold poured | Ounces | 130,992 | 270,545 | 523,598 |
| Production Cost | US$/ounce | 881 | 820 | 827 |
| All-In Site Cost (AISC) | US$/ounce | 983 | 930 | 941 |
| Gold sales | Ounces | 203,154 | 261,921 | 504,862 |
| Average sales price | US$/ounce | 1,748 | 1,724 | 1,714 |
| Notional Cashflow | US$ million | 101 | 213 | 402 |
- Gold production in the December Half Year and 2022 Calendar Year exceeded respective production guidance ranges of 240,000 to 265,0000 ounces and 492,850 to 517,850 ounces.
- AISCs in both the December Half Year and 2022 Calendar Year were below the cost guidance ranges of US$1,000 to US$1,100 per ounce and US$980 to US$1,025 per ounce respectively.
- At 130,911 ounces, gold production for the December 2022 quarter achieved an annualised rate of nearly 525,000 ounces and was only slightly less than Perseus’s record gold production of 137,460 ounces achieved in the September 2022 quarter.
- December 2022 quarter weighted average AISCs (US$983 per ounce) were 12% above the September 2022 quarter AISC due to overall reduced gold production at Sissingué and inflation.
- As forecast last quarter, quarterly gold sales increased by 144,387 ounces to 203,154 ounces; average quarter-on-quarter gold sale price increased by 6% to US$1,748 per ounce.
- Average quarterly cash margin of US$765 per ounce of gold was in line with the prior quarter’s cash margin of US$766 per ounce.
- Notional cashflow from operations of US$101 million in the quarter resulted in the full calendar year notional cashflow total of US$402 million, 46% more than in the corresponding period.
- Perseus’s strong performance is forecast to continue in the June 2023 Half Year with gold production of 230,000 to 260,000 ounces at an ASIC of US$1,000 to US$1,200 per ounce.
- Perseus on track to produce 498,370 to 528,370 ounces at an ASIC of US$1,000 to US$1,100 per ounce for the Financial Year ending June 30, 2023.
- Perseus further strengthened its financial position with available cash and bullion of US$405 million (A$594 million), and no debt, at year end, an increase of US$76.2 million net cash this quarter and US$243 million (A$325 million) or 150%, year-on-year.
| PERSEUS MINING LIMITED | |
|---|---|
| Level 2, 437 Roberts Road, Subiaco WA 6008 | |
| ABN: 27 106 808 986 | 1 |
- Front-End Engineering and Design, confirmatory and sterilisation drilling at the Meyas Sand Gold Project (previously referred to as Block 14) in Sudan started during the quarter. Preparations underway for FID in Dec 2023 HY.
- Organic growth activities included feasibility-level studies at the MSGP and CMA Underground, work to increase confidence in existing Mineral Resources, as well as generative exploration.
- Perseus published a comprehensive 2022 Sustainable Development Report, detailing its continually improving sustainability performance, during the quarter.
- Total economic contribution to host countries of Ghana, Côte d’Ivoire and Sudan was ~US$116 million (approximately 33% of revenue) during the quarter.
OPERATIONS
PRODUCTION, COSTS AND NOTIONAL CASHFLOW
Perseus’s three operating gold mines, Yaouré and Sissingué in Côte d’Ivoire, and Edikan in Ghana combined to produce a total of 130,911 ounces of gold in the December 2022 quarter. The weighted average production cost at the operations was US$881 per ounce, while the weighted average AISC incurred during the quarter was US$983 per ounce of gold.
This performance, when combined with record gold production in the September 2022 quarter, gave rise to Half Yearly gold production of 268,371 ounces of gold, produced at an average AISC of US$930 per ounce. This consistently strong performance exceeded market production guidance for the December 2022 Half Year of 240,000 to 265,000 ounces of gold produced and bettered AISC guidance of US$1,000 to US$1,100 per ounce.
When combined with June 2022 Half Year production of 252,850 ounces at an AISC of US$955 per ounce, Perseus delivered total production of 521,221 ounces of gold at an AISC of US$941 per ounce for the full 2022 Calendar Year.
In the December 2022 quarter, combined gold sales from all three operations totalled 203,154 ounces, including sales of 93,634 ounces of bullion on hand at the end of the September quarter. The weighted average gold price realised was US$1,748 per ounce, US$103 per ounce more than the September 2022 quarter price of US$1,645 per ounce.
Perseus’s average cash margin for the December 2022 quarter was US$765 per ounce, in line with the cash margin achieved during the September 2022 quarter. Notional operating cashflow from operations was US$101 million, US$11 million less than the September quarter, driven by slightly lower overall group gold production, combined with higher AISCs at Sissingué and Yaouré.
These strong results, summarised below in Tables 1 and 2 below, confirm Perseus’s position as one of the world’s better performing mid-tier gold producers in 2022.
Table 1: Cost and Production Summary by Mine
| TOTAL GOLD PRODUCED (OUNCES)1 | ALL-IN SITE COST (US$/OUNCE) | |||||||
|---|---|---|---|---|---|---|---|---|
| MINE | DECEMBER | 2022 | DECEMBER | 2022 | ||||
| SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | |
| 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | |
| Yaouré 71,469 Edikan 52,127 Sissingué 13,864 | 65,352 | 136,821 294,892 658 105,977 173,235 1,060 25,573 53,094 1,336 | 798 | 724 685 1,059 1,253 1,490 1,349 | ||||
| 53,850 | 1,058 | |||||||
| 11,709 | 1,672 | |||||||
| Perseus | 137,460 | |||||||
| 268,371 | 521,221 | 879 | 983 | 930 | 941 | |||
| Group | 130,911 |
Notes: 1. Gold recovered
Table 2: Realised Gold Price and Notional Cash Flow by Mine
| REALISED GOLD PRICE (US$ PER OUNCE) | NOTIONAL CASHFLOW FROM OPERATIONS (US$ MILLION) | |||||||
|---|---|---|---|---|---|---|---|---|
| MINE | DECEMBER | 2022 | DECEMBER | 2022 | ||||
| SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | |
| 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | |
| Yaouré 1,748 Edikan 1,626 Sissingué - | 1,726 | 1,727 1,711 78 1,692 1,706 30 1,847 1,755 71 | 61 | 137 303 67 78 9 21 | ||||
| 1,754 | 38 | |||||||
| 1,847 | 2 |
PERSEUSMINING.COM 2
| REALISED GOLD PRICE (US$ PER OUNCE) | NOTIONAL CASHFLOW FROM OPERATIONS (US$ MILLION) | |||||||
|---|---|---|---|---|---|---|---|---|
| MINE | DECEMBER | 2022 | DECEMBER | 2022 | ||||
| SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | SEPTEMBER | DECEMBER | 2022 HALF | CALENDAR | |
| 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | 2022 QUARTER | 2022 QUARTER | YEAR | YEAR | |
| Perseus | 112 | 402 | ||||||
| 1,645 | 1,748 | 1,724 | 1,714 | 101 | 213 | |||
| Group |
Notes:
1. The September Quarter has been adjusted to reflect the actual achieved price of $1,847. No sales of Sissingué gold occurred during the September quarter, the calculation of notional cash flow was based on the average sales price for the Group of US$1,645 per ounce less Sissingué’s AISC, applied to the gold produced by the mine during the quarter.
YAOURÉ GOLD MINE, CÔTE D’IVOIRE
Refer to Table 3 below for details of operating and financial parameters recorded at the Yaouré gold mine during the periods ending 31 December 2022 and relevant prior periods.
During the quarter, Perseus’s Yaouré gold mine produced 65,352 ounces of gold at a production cost of US$707 per ounce and an AISC of US$798 per ounce. The weighted average sales price of the 126,174 ounces of gold sold during the quarter was US$1,726 per ounce, giving rise to a cash margin of US$928 per ounce. Notional operating cashflow generated during the quarter by Yaouré was US$60.7 million, or US$17.2 million less than in the September 2022 quarter.
This performance contributed to half yearly gold production at Yaouré of 136,821 ounces of gold at an average AISC of US$724 per ounce, which was in the upper half of market guidance range for the half year of 130,000 to 140,000 ounces of gold produced and below AISC guidance of US$810 to US$875 per ounce.
The operating performance at Yaouré resulted from sound operating fundamentals relative to the prior quarter, including mill run time (94.3% compared to 90.4%), and gold recovery rates (93.6% compared to 93.1%). The head grade of processed ore (2.17 g/t compared to 2.43 g/t) and throughput rates (481 tph compared to 491 tph) both lagged the outstanding metrics recorded in the prior period, reflecting a shift in the location of mining in the CMA pit.
Table 3: Yaouré Quarterly Performance
| CALENDAR | JUNE 2022 | SEPTEMBER | DECEMBER | DECEMBER 2022 | 2022 CALENDAR | ||
| PARAMETER | UNIT | ||||||
| 2021 YEAR2 | HALF YEAR | 2022 QUARTER | 2022 QUARTER | HALF YEAR | YEAR | ||
| Gold Production & Sales | |||||||
| Total material mined Tonnes 33,190,249 18,176,717 6,991,354 | 9,369,467 | 16,360,821 34,537,538 | |||||
| Total ore mined Tonnes 3,108,440 3,362,317 1,326,508 | 1,280,881 | 2,607,389 5,969,706 | |||||
| Average ore grade g/t gold 1.85 1.90 1.92 | 1.80 | 1.86 1.88 | |||||
| Strip ratio t:t 9.68 4.4 4.3 | 6.3 | 5.3 4.8 | |||||
| Ore milled Tonnes 3,321,759 2,061,676 980,624 | 1,001,560 | 1,982,184 4,043,860 | |||||
| Milled head grade g/t gold 2.02 2.55 2.43 | 2.17 | 2.30 2.43 | |||||
| Gold recovery % 92.3 93.6 93.1 | 93.6 | 93.2 93.5 | |||||
| Gold produced ounces 199,185 158,071 71,469 | 65,352 | 136,821 294,892 | |||||
| Gold sales1 ounces 193,906 145,708 9,000 | 126,174 | 135,174 280,882 | |||||
| Average sales price US$/ounce 1,694 1,697 1,748 | 1,726 | 1,727 1,711 | |||||
| Unit Production Costs | |||||||
| Mining cost US$/t mined 2.71 2.70 2.87 | 2.97 | 2.92 2.80 | |||||
| Processing cost US$/t milled 11.99 13.17 12.18 | 12.00 | 12.09 12.64 | |||||
| G & A cost US$M/month 1.89 1.69 2.24 | 2.14 | 2.19 1.94 | |||||
| All-In Site Cost | |||||||
| Production cost US$/ounce 659 546 541 | 707 | 620 580 | |||||
| Royalties US$/ounce 86 76 93 | 78 | 86 81 | |||||
| Sub-total US$/ounce 745 622 635 | 785 | 706 661 | |||||
| Sustaining capital US$/ounce 15 29 23 | 13 | 18 24 | |||||
| Total All-In Site Cost3 US$/ounce 760 651 658 | 798 | 724 685 | |||||
| Notional Cashflow from Operations | |||||||
| Cash Margin US$/ounce 934 1,046 1,090 | 928 | 1,003 1,026 | |||||
| Notional Cash Flow US$M 165.1 165.3 77.9 | 60.7 | 137.2 302.7 |
Notes:
1. Gold sales are recognised in Perseus’s accounts when gold is delivered to the customer from Perseus’s metal account
PERSEUSMINING.COM 3
2. Includes Yaouré data from declaration of Commercial Production on 31 March 2021.
3. Included in the AISC for the quarter is US$7 million of costs relating to excess waste stripping. When reporting cost of sales, in line with accepted practice under IFRS, this cost will be capitalised and the costs amortised over the remainder of the relevant pit life.
MINERAL RESOURCE TO MILL RECONCILIATION
Table 4 shows the reconciliation of processed ore tonnes, grade, and contained gold relative to the Yaouré Mineral Resource block model. During the last quarter, 16% more ore tonnes were processed at 14% lower grade for zero variance in ounces compared to the Mineral Resource model. In the previous six months and project to date, In the previous six months and project to date, Yaouré has produced more metal than the Mineral Resource model predicted. The performance of the Yaouré Mineral Resource model to date is considered satisfactory, however work will continue to optimise the grade and reduce dilution.
Table 4: Yaouré Block Model to Mill Reconciliation
| BLOCK MODEL TO MILL CORRELATION FACTOR | |||
|---|---|---|---|
| PARAMETER | |||
| 3 MONTHS | 6 MONTHS | PROJECT TO DATE | |
| Tonnes of Ore | 1.16 | 1.16 1.24 | |
| Head Grade | 0.86 | 0.90 0.93 | |
| Contained Gold | 1.00 | 1.04 1.14 |
EDIKAN GOLD MINE, GHANA
Table 5 below summarises the key operating and financial parameters recorded at Edikan during the periods ending 31 December 2022 and relevant prior periods.
Edikan produced 53,850 ounces of gold at a production cost of US$935 per ounce and an AISC of US$1,058 per ounce in the December quarter, slightly bettering the much improved performance in the September 2022 quarter relative to prior periods. Gold sales of 52,601 ounces were 6% more than in the prior quarter, at a weighted average realised gold price of US$1,754 per ounce, generating an average cash margin of US$696 per ounce, a significant improvement on results achieved earlier in the year. In addition, notional cashflow of US$37.5 million was US$8.0 million better than in the prior period.
This quarterly performance contributed to Half Yearly gold production at Edikan of 105,977 ounces of gold, produced at an average AISC of US$1,059 per ounce. This production performance exceeded the top end of the market guidance range for the Half Year of 90,000 to 100,000 ounces of gold produced and was well below the bottom end of the AISC guidance range of US$1,190 to US$1,320 per ounce. This performance was a large improvement compared to the June Half Year with production increasing by 38,719 ounces and AISC falling by US$500 per ounce.
Operating performance at Edikan was generated by sound operating fundamentals generally in line with the prior quarter. Mill run time (95.9% compared to 91.3%) and gold recovery rates (91.4% compared to 89.7%) both improved quarter-on-quarter, while head grade of processed ore (1.02 g/t compared to 1.04 g/t), and throughput rates (846 tph compared to 861 tph) were down slightly on the prior quarter but remaining within acceptable tolerance ranges.
Table 5: Edikan Quarterly Performance
| CALENDAR | JUNE 2022 | SEPTEMBER | DECEMBER | DECEMBER 2022 | 2022 CALENDAR | ||
| PARAMETER | UNIT | ||||||
| 2021 YEAR | HALF YEAR | 2022 QUARTER | 2022 QUARTER | HALF YEAR | YEAR | ||
| Gold Production & Sales | |||||||
| Total material mined Tonnes 30,243,330 13,406,232 6,585,431 | 7,432,736 | 14,018,167 27,424,399 | |||||
| Total ore mined Tonnes 3,593,661 2,532,210 1,523,694 | 1,824,015 | 3,347,709 5,879,919 | |||||
| Average ore grade g/t gold 1.01 1.06 1.07 | 1.03 | 1.05 1.05 | |||||
| Strip ratio t:t 7.4 4.29 3.32 | 3.07 | 3.19 3.66 | |||||
| Ore milled Tonnes 6,767,653 2,884,017 1,736,623 | 1,791,242 | 3,527,865 6,411,882 | |||||
| Milled head grade g/t gold 0.82 0.86 1.04 | 1.02 | 1.03 0.95 | |||||
| Gold recovery % 84.1 84.6 89.7 | 91.4 | 90.5 88.1 | |||||
| Gold produced ounces 150,330 67,258 52,127 | 53,850 | 105,977 173,235 | |||||
| Gold sales1 ounces 147,953 67,524 49,767 | 52,601 | 102,368 169,892 | |||||
| Average sales price US$/ounce 1,604 1,726 1,626 | 1,754 | 1,692 1,706 | |||||
| Unit Production Costs | |||||||
| Mining cost US$/t mined 3.32 3.99 4.38 | 3.94 | 4.14 4.08 | |||||
| Processing cost US$/t milled 8.98 11.26 9.19 | 9.11 | 9.15 10.10 |
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| CALENDAR | JUNE 2022 | SEPTEMBER | DECEMBER | DECEMBER 2022 | 2022 CALENDAR | ||
| PARAMETER | UNIT | ||||||
| 2021 YEAR | HALF YEAR | 2022 QUARTER | 2022 QUARTER | HALF YEAR | YEAR | ||
| G & A cost US$M/month 1.63 1.45 1.49 | 1.61 | 1.55 1.5 | |||||
| All-In Site Cost2 | |||||||
| Production cost US$/ounce 1,201 1,408 945 | 935 | 940 1,122 | |||||
| Royalties US$/ounce 104 116 97 | 117 | 107 111 | |||||
| Sub-total US$/ounce 1,305 1,524 1,042 | 1,052 | 1,047 1,233 | |||||
| Sustaining capital US$/ounce 40 34 18 | 6 | 12 20 | |||||
| Total All-In Site Cost2 US$/ounce 1,345 1,559 1,060 | 1,058 | 1,059 1,253 | |||||
| Notional Cashflow from Operations1 | |||||||
| Cash Margin US$/ounce 259 168 566 | 696 | 633 453 | |||||
| Notional Cash Flow US$M 38.9 11.3 29.5 | 37.5 | 67.1 78.4 |
Notes:
1. Gold sales are recognised in Perseus’s accounts when gold is delivered to the customer from Perseus’s metal account.
2. Included in the AISC for the quarter is US$7.09 million of costs relating to excess waste stripping. When reporting cost of sales, in line with
MINERAL RESOURCE TO MILL RECONCILIATION
Reconciliation of processed ore tonnes, grade and contained ounces relative to the Edikan Mineral Resource block model is in Table 6 below.
During the last three months, grade control has predicted additional tonnes (+9%), exact grade and more ounces (+8%) when compared to the Mineral Resource Estimate (MRE). Over the last six months, Edikan has also recorded more contained metal than predicted by the MRE model but in the 12-month period, contained gold was slightly under that predicted by the MRE. Therefore, Perseus regards the overall outperformance as being within normal industry standards.
Table 6: Edikan Block Model to Mill Reconciliation
| BLOCK MODEL TO MILL CORRELATION FACTOR | |||
|---|---|---|---|
| PARAMETER | |||
| 3 MONTHS | 6 MONTHS | 1 YEAR | |
| Tonnes of Ore | 1.09 | 1.09 1.04 | |
| Head Grade | 1.00 | 1.01 0.91 | |
| Contained Gold | 1.08 | 1.10 0.95 |
SISSINGUÉ GOLD MINE, CÔTE D’IVOIRE
Refer to Table 7 below for details of operating and financial parameters at the Sissingué gold mine during the periods ending 31 December 2022 and relevant prior periods.
Table 7: Sissingué Quarterly Performance
| CALENDAR | JUNE 2022 | SEPTEMBER | DECEMBER | DECEMBER 2022 | 2022 CALENDAR | ||
| PARAMETER | UNIT | ||||||
| 2021 YEAR | HALF YEAR | 2022 QUARTER | 2022 QUARTER | HALF YEAR | YEAR | ||
| Gold Production & Sales | |||||||
| Total material mined Tonnes 2,840,322 2,447,379 1,639,628 | 2,039,033 | 3,678,661 6,126,040 | |||||
| Total ore mined Tonnes 1,200,527 553,739 205,949 | 310,892 | 516,841 1,070,580 | |||||
| Average ore grade g/t gold 1.85 0.9 0.71 | 0.74 | 0.73 0.82 | |||||
| Strip ratio t:t 1.4 3.4 7.0 | 5.6 | 6.1 4.7 | |||||
| Ore milled Tonnes 1,271,788 746,050 389,357 | 410,365 | 799,722 1,545,772 | |||||
| Milled head grade g/t gold 2.23 1.28 1.21 | 0.97 | 1.09 1.18 | |||||
| Gold recovery % 90.9 89.7 91.2 | 91.9 | 91.5 90.6 | |||||
| Gold produced ounces 82,895 27,521 13,864 | 11,709 | 25,573 53,094 | |||||
| Gold sales1 ounces 90,389 29,709 0 | 24,379 | 24,379 54,088 | |||||
| Average sales price US$/ounce 1,655 1,680 0 | 1,847 | 1,847 1,755 | |||||
| Unit Production Costs | |||||||
| Mining cost US$/t mined 6.80 4.58 3.72 | 3.96 | 3.85 4.14 | |||||
| Processing cost US$/t milled 18.40 15.97 16.71 | 16.46 | 16.58 16.30 | |||||
| G & A cost US$M/month 1.14 1.10 1.39 | 1.31 | 1.35 1.22 | |||||
| All-In Site Cost1 |
PERSEUSMINING.COM 5
| CALENDAR | JUNE 2022 | SEPTEMBER | DECEMBER | DECEMBER 2022 | 2022 CALENDAR | ||
| PARAMETER | UNIT | ||||||
| 2021 YEAR | HALF YEAR | 2022 QUARTER | 2022 QUARTER | HALF YEAR | YEAR | ||
| Production cost US$/ounce 680 1,080 1,209 | 1,602 | 1,389 1,229 | |||||
| Royalties US$/ounce 100 110 122 | 63 | 95 103 | |||||
| Sub-total US$/ounce 780 1,190 1,331 | 1,665 | 1,484 1,332 | |||||
| Sustaining capital US$/ounce 18 28 5 | 7 | 6 17 | |||||
| Total All-In Site Cost3 US$/ounce 798 1,218 1,336 | 1,672 | 1,490 1,349 | |||||
| Notional Cashflow from Operations1 | |||||||
| Cash Margin US$/ounce 856 460 3092 | 174 | 357 406 | |||||
| Notional Cash Flow US$M 71.0 12.6 7.12 | 2.0 | 9.1 21.6 |
Notes:
1. Gold sales are recognised in Perseus’s accounts when gold is delivered to the customer from Perseus’s metal account.
2. The September Quarter has been adjusted to reflect the actual achieved price of $1,847. No sales of Sissingué gold occurred during the September quarter, the calculation of notional cash flow was based on the average sales price for the Group of US$1,645 per ounce less Sissingué’s AISC, applied to the gold produced by the mine during the quarter.
3. Included in the AISC for the quarter is US$0.95 million of costs relating to excess waste stripping. When reporting cost of sales, in line with
During the quarter, Sissingué produced 11,709 ounces of gold at a production cost of US$1,602 per ounce and an AISC of US$1,672 per ounce.
During the quarter, the ore processed in the Sissingué mill was mined from the remnants of West Arm, Binkadi and Bagoé pits at Sissingué while access is developed to the satellite pits at Fimbiasso East and West. Notwithstanding this, overall production performance for the mine during the quarter was better than forecast with each of the key operating parameters including runtime (92.1%), throughput rate (202 tph), and recovery (91.9%) in line with or better than the prior quarter. Average head grade (0.97g/t) was down relative to the prior quarter in line with company expectations, and it was this temporary reduction in grade that accounted for lower gold production during the quarter.
The AISC of US$1,672 per ounce was in line with expectations falling in the lower half of the AISC guidance range. This quarter, the AISC was increased by capital investment on infrastructure required to support the mining of the Fimbiasso East and West pits that commenced following the end of the quarter.
The weighted average sales price of the 24,379 ounces of gold sold during the quarter was US$1,847 per ounce, giving rise to an average cash margin of US$174 per ounce. As previously reported, no gold from Sissingué was sold in the September quarter, and was included in the sale of the 24,379 ounces recorded this quarter. Most gold was sold into specifically designated hedge contracts designed to preserve the cash margin during this period of high capital expenditure. While the cash margin during the quarter reduced to US$174 per ounce of gold sold, for the full 2022 calendar year, the cash margin was US$406 per ounce, slightly higher than the minimum cash margin target of US$400 per ounce set by Perseus. Notional cashflow generated by the mine during the quarter totalled US$2 million.
This performance contributed to half yearly gold production at Sissingué of 25,573 ounces of gold, produced at an average AISC of US$1,490 per ounce which exceeded the top end of the market production guidance for the Half Year of 20,000 to 25,000 ounces of gold produced and fell below the bottom end of the AISC market guidance range of US$1,600 to US$1,950 per ounce.
MINERAL RESOURCE TO MILL RECONCILIATION
The reconciliation of processed ore tonnes, grade and contained ounces relative to the Sissingué Mineral Resource block model is in Table 8 below. During the last three months, grade control has predicted additional tonnes (+19%) at a reduced grade (-10%) resulting in an increase in overall ounces (+6%%) when compared to the Mineral Resource Estimate (MRE). Over the last six- and 12-month periods, Sissingué has produced more metal than the Mineral Resource model predicted. Perseus regards the overall outperformance as being within normal industry standards.
Table 8: Sissingué Block Model to Mill Reconciliation
| BLOCK MODEL TO MILL CORRELATION FACTOR | |||
|---|---|---|---|
| PARAMETER | |||
| 3 MONTHS | 6 MONTHS | 1 YEAR | |
| Tonnes of Ore | 1.19 | 1.22 1.27 | |
| Head Grade | 0.90 | 0.87 0.95 | |
| Contained Gold | 1.06 | 1.06 1.22 |
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UPDATE ON DEVELOPMENT PROGRESS OF FIMBIASSO PITS
During the quarter, construction of infrastructure required to support mining ore from the satellite Fimbiasso East and West pits was completed and after the end of the quarter, mining commenced at Fimbiasso East. The first ore from the Fimbiasso pits is expected to be transported to the Sissingué mill for processing in late March 2023.
BAGOÉ MINING LEASE
Perseus’s environmental and social impact assessment (“ESIA”) for its proposed Bagoé mining operation has been approved by the environmental regulator (ANDE) and has been lodged with the Department of Mines, Petroleum and Energy together with the Definitive Feasibility Study of an operation located on the Bagoé exploration permit.
Approval is expected to occur during the March 2023 quarter and an Exploitation Permit should be granted and a Mining Convention covering the operation negotiated. Construction of infrastructure required to support a mining operation on the Bagoé lease will commence as soon as possible following receipt of the Mining Lease.
GROUP GOLD PRODUCTION AND COST MARKET GUIDANCE
Table 9: Production and Cost Guidance
| DECEMBER 2022 HALF YEAR | JUNE 2023 HALF YEAR | 2023 FINANCIAL YEAR | ||
| PARAMETER | UNITS | |||
| (ACTUAL) | (FORECAST) | (FORECAST) | ||
| Yaouré Gold Mine |
Production Ounces 136,821 117,500 to 130,000 254,300 to 266,800 All-in Site Cost USD per ounce 724 900 to 1,000 850 to 900
Sissingué Gold Mine
Production Ounces 25,573 25,000 to 30,000 50,600 to 55,600 All-in Site Cost USD per ounce 1,490 1,750 to 1,850 1,625 to 1,675
Edikan Gold Mine
Production Ounces 105,977 87,500 to 100,000 193,500 to 206,000 All-in Site Cost USD per ounce 1,059 1,100 to 1,200 1,075 to 1,125
PERSEUS GROUP
Production Ounces 268,371 230,000 to 260,000 498,370 to 528,370 All-in Site Cost USD per ounce 930 1,000 to 1,200 1,000 to 1,100
SUSTAINABILITY
SUSTAINABILITY GOVERNANCE
During the quarter, Perseus continued to strengthen its sustainability governance through the following:
- Completed Phase 1 of global health and safety cultural program ‘Safely Home Every Day’, which aims to align the business around a common vision for health and safety and empowering personnel at all levels in Perseus’s organisation to understand their unique contribution in creating a safe workplace. Planning of the Health and Safety improvement program was completed in May 2022. Implementation of Phase 1 of the Health and Safety improvement program which involved all sites was finalized in November 2022. Phase 2 of the implementation will occur in the June 2023 Half Year.
- Finalized the establishment of the Yaouré Community Development Fund, with the Côte d’Ivoire Government signing a new decree specifying the method of operation of the Fund.
- Finalized the Environmental Impact Statement (EIS) for the Bagoé project near Sissingué, with the EIS report validated, recommendations addressed, and the environmental permit for Bagoé granted.
- Conducted several employee and community training and awareness days in partnership with local nongovernmental organisations (NGOs) and community groups, with the intent of improving awareness of heart health, breast cancer, malaria prevention, HIV/AIDs and female empowerment. Sites also conducted employee training on safety culture, safe driving during the festive season, survival swimming, emergency response scenarios and harassment and violence in the workplace.
- Received approval to store and use explosives and a temporary water permit at Fimbiasso near Sissingué.
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- Commenced tracking the societal economic contributions from Sudan operations.
SUSTAINABILITY PERFORMANCE
This quarter, Perseus continued its strong sustainability performance relative to objectives and targets, as shown below in Table 10 and summarised as follows:
- Safety:
- Lost Time Injury Frequency (LTIFR) across the Group reduced from 0.26 to 0.25. The sites achieved a safety milestone, celebrating 1.6 million hours without a Lost Time Incident (LTI) for Edikan, 17.2 million hours without an LTI for Sissingué, and more than 2.4 million hours without an LTI for Yaouré.
- Group Total Recordable Injury Frequency Rates (TRIFR) slightly increased from 1.19 at the end of the September quarter to 1.44 at the end of December 2022, which is higher than the FY23 target of 0.8. This was driven by an increase in Restricted Work Injuries at exploration sites. However, additional focus on safety performance at Yaouré has led to significant improvement at that site over the quarter, from a TRIFR of 1.93 at the end of September 2022 to 1.27 at the end of December 2022.
- Social:
- Total economic contribution to Perseus’s host countries of Ghana, Côte d’Ivoire and Sudan during the quarter was ~US$116 million (approximately 33% of revenue), which included approximately US$99 million paid to local suppliers representing 80% of procurement on Purchase Order Value basis, US$9 million paid as salaries and wages to local employees, US$7 million in payments to government as taxes, royalties and other payments, and around US$1.4 million in social investment (includes accrual for Yaouré). Sudan’s economic contributions have been tracked for the first time this quarter and will continue to be included in future reporting periods. Excluding Sudan, the proportion of procurement sourced from local suppliers was 87% for the quarter ended December 2022, a significant increase from 78% for the quarter ended September 2022.
- Local and national employment continued to remain above 95% for the reporting quarter. Across the Perseus group, gender diversity declined slightly with the proportion of female employees ~14% for the quarter ended September 2022 to 12% for the quarter ended December 2022, reflecting the industry in which we are involved but more particularly, the cultural orientation of our host countries.
- One Category 3 community event occurred in November 2022 where a member of the community barricaded the road towards the mine at Sissingué. A meeting was organised the next day with the community member and the Prefect of the local community and the issue was resolved. Another Category 3 community event occurred on the Agyakusu AM exploration licence during the quarter when access to drill sites was denied by landowners who were hosting illegal small-scale mining activities. Rather than exercise its legal rights, Perseus withdrew from the area pending further discussions with landowners and local authorities.
- Environment:
- Total Scope 1 and 2 Greenhouse Gas emissions intensity per ounce of gold produced increased by 5.5% from 0.47 tCO2-e/oz for the quarter ended September 2022 to 0.496 tCO2-e/oz for the quarter ended December 2022. This continues to be well below peer average (0.78 tCO2-e/oz). Total emissions and emissions intensity has reduced since start of the financial year due to Edikan’s increased use of gas for power.
- Zero significant (Consequence 3) environmental or tailings dam integrity issues occurred during the period.
In achieving the above, the following sustainability challenges were encountered by Perseus during the quarter:
- A total of 11 employee and contractor injuries occurred during the quarter, which included one Medical Treatment Injury (MTI) for a contractor.
- Illegal mining activities on Perseus’s mining and exploration licence areas continue to present challenges for the Company in both Ghana and Côte d’Ivoire. The Company continues to work closely with relevant government authorities to manage these activities that have proven to negatively impact both the environmental and social fabric of local communities.
- There are ongoing tensions within the communities around Yaouré and Sissingué regarding local employment, local business opportunities, pollution, and crop and land compensation.
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Table 10: Sustainability Quarterly Performance
| PERFORMANCE | SUB-AREA | METRIC | UNIT | MARCH 2022 | JUNE 2022 | FY2022 | SEPTEMBER 2022 | DECEMBER 2022 |
| DRIVER | QUARTER | QUARTER | QUARTER | QUARTER |
Governance Compliance Material legal non-compliance Number 0 1 1 110000 0
Social Worker Health, Safety Workplace fatalities Number 0 1 1 0 0 and Wellbeing
| Total Recordable Injury Frequency (TRIF) | Total Recordable | Edikan - 1.38 | Edikan – 0.98 | Edikan – 1.01 | Edikan – 1.02 | Edikan – 1.42 |
|---|---|---|---|---|---|---|
| Injuries per million | Sissingué - 0.00 | Sissingué - 0.00 | Sissingué - 0.00 | Sissingué - 0.54 | Sissingué – 1.05 | |
| hours worked, rolling | Yaouré - 2.78 | Yaouré - 2.59 | Yaouré - 2.59 | Yaouré – 1.93 | Yaouré – 1.27 | |
| 12 months | Exploration - 0.82 | Exploration - 0.66 | Exploration - 0.66 | Exploration - 0.74 | Exploration – 3.35 | |
| Group - 1.45 | Group – 1.21 | Group – 1.29 | Group – 1.19 | Group – 1.44 | ||
| Lost Time Injury Frequency (LTIFR) | Lost Time Injuries | Edikan - 0.39 | Edikan - 0.20 | Edikan - 0.20 | Edikan - 0.41 | Edikan - 0.41 |
| (LTIFR) per million | Sissingué - 0.00 | Sissingué - 0.00 | Sissingué - 0.00 | Sissingué - 0.00 | Sissingué - 0.00 | |
| hours worked, rolling | Yaouré - 0.35 | Yaouré - 0.00 | Yaouré - 0.00 | Yaouré - 0.00 | Yaouré - 0.00 | |
| 12 months | Exploration - 0.82 | Exploration - 0.66 | Exploration - 0.66 | Exploration - 0.00 | Exploration - 0.00 | |
| Group - 0.36 | Group - 0.17 | Group - 0.26 | Group - 0.26 | Group - 0.25 | ||
| COVID-19 Cases | Number | 17 | 0 131 | 5 1 | ||
| Community Number of significant2community events | Number | 0 | 0 | 0 | 0 2 | |
| Community investment | US$ | US$985,0913 | US$877,5463 | US$3,600,8053 | US$925,3673 | US$1,369,6793 |
| Economic Benefit Proportion local and national employment | % of total employees | 96% | 95% | 96% | 96% | 96% |
| Proportion local and national procurement | % of total | 86% | 84% | 81% | 78% | 80% |
procurement
| Gender Diversity | Board gender diversity | % | 33% | 33% | 33% | 33% | 33% |
| Executive gender diversity | % | 40% | 40% | 29%1 | 29%1 | 14% | |
| Proportion of women employees | % | 13.1%4 | 14.0%4 | 13.0%4 | 14.0%4 | 12.0%4 | |
| Responsible Environment | Number of significant2environmental events | Number | 0 | 0 | 0 | 0 | 0 |
Operations
| Tailings | Number of significant2tailings dam integrity failures | Number | 0 | 0 | 0 | 0 | 0 |
| Water stewardship | Water used per ounce of gold produced5 | M3/oz | 7.85 | 7.87 | 7.87 | 5.71 | 6.61 |
| GH Gas Emissions | Scope 1 and 2 Greenhouse Gas Emissions /oz of gold Tonnes of CO2-e/oz | 0.53 | 0.55 | 0.55 | 0.47 | 0.49 |
Notes: 1. Corrected/re-stated figure from the June 2022 and September 2022 Quarter Report.
2. A significant event is one with an actual severity rating of four and above, based on Perseus's internal severity rating scale (tiered from one to five by increasing severity) as defined in our Risk Management Framework.
3. Includes accruals for the CDLM at Yaoure.
4. Permanent employees only.
5. Water intensity calculated using water consumption
6. December 2022 is the first quarter that includes Sudan economic contribution data. Excluding Sudan, local procurement was 87% for the quarter ended December 2022
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ORGANIC BUSINESS GROWTH
PROJECT DEVELOPMENT
MEYAS SAND (FORMERLY BLOCK 14) GOLD PROJECT, SUDAN
Perseus continued to make excellent progress during the quarter on its preparations for developing the Meyas Sand Gold Project in the far north of Sudan, approximately 75 kilometres south of the border with Egypt.
Activities undertaken were aimed at advancing the Project towards a possible Final Investment Decision (FID) in the second half of 2023 and included the following:
- Engineering and Front-End Engineering Design (FEED) studies were performed by Perseus and its engineering contractor, Lycopodium, to optimise previous engineering planning and design work. Internationally recognised drilling contractor, Capital Drilling, mobilised to site to commence a 100,000-metre infill and sterilisation drilling program to infill prior drilling of the GSS deposit and potentially materially increase the estimated Mineral Resource and Ore Reserve. Other work performed by Capital, which mobilised to site during the quarter, included sterilisation drilling of land currently targeted for locating key pieces of mine infrastructure including the tailings dam and waste dumps. A Sudanese contractor, AGE Hydrology, completed a programme of pressure testing, (specifically recharge rates) the aquifer located in Area 5 that will become the primary water source for the Meyas Sand Gold Mine.
In addition to the above, Perseus has been active in Sudan assessing local industrial capacity from which an array of goods and services may be procured as well as starting to upgrade onsite accommodation and administration facilities, to be ready to house workers, during the envisaged development and operating phases of the mine.
Offshore procurement of plant and equipment required to support the above activities commenced proving the logistics arrangements that will ultimately be important in supporting mining and processing activities.
Important work commenced towards reaching agreement with the traditional owners of land covered by the Block 14 Exploration licence on suitable terms of compensation. Productive discussions to establish cordial working relationships and preliminary recruitment of workers from the local catchment area commenced.
The Meyas Sand Gold Project is fully permitted by the Sudanese Government with a Mining Lease, Royalty agreement and a water permit formally granted incorporating attractive fiscal terms, and clearly delineated rights and obligations of key stakeholders.
PROJECT STUDIES
YAOURÉ EXPLOITATION PERMITS
Development of a Feasibility Study for the CMA underground project at the Yaouré gold mine progressed in the December quarter, following from a successful Pre-Feasibility Study in FY2022. Resource drilling activities continued, along with sample selection for the extension of metallurgical (comminution and variability) test work and geotechnical (stress measurement and rock property) test work programs.
EXPLORATION
SUDAN
During the quarter, while most of the work focused on the development of the Galat Sufur South (GSS) deposit at MSGP, as described above, regional exploration continued in the broader Block 14 exploration licence area. Work included RC sterilization trenching and drilling, hydrogeological pump test at GGS as well as mapping and geochemical sampling of a number of prospects mostly in the Eastern Gabgaba terrain. See Figure 1.3 in Appendix 1.
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CÔTE D’IVOIRE
YAOURÉ EXPLORATION AND EXPLOITATION PERMITS
Exploration activities on the Yaouré exploitation permit during the quarter continued to focus on drilling at the CMA Deeps, CMA North-West and CMA North underground prospects, located within 2km of the Yaouré mill (Refer to news release dated 18 January 2023 “Perseus’s Drilling Demonstrates Potential for Additional Gold Resources at Yaoure Gold Mine”). Other programs included auger drilling on the Yaouré West permit and ground magnetics on the Yaouré permit. A total of 65 holes for an aggregate 22,069m were completed during the quarter.
At CMA North-West, drilling targeted the North-West extension of CMA where it parallels the faulted contact between basalts and volcaniclastics over a strike extension of 650m. Drilling during the quarter comprised 2,362m in 10 Reverse Circulation (“RC”) pre-collared diamond (“DD”) holes, achieving 50m down-dip intercepts on 100m spaced sections over a strike length of 650m. Results at the end of the quarter confirmed the extension of CMA to the North-West with high grades but over narrow intervals.
At the CMA North underground prospect, infill drilling to firm up previously defined underground resources extending below the currently planned CMA pit was completed. The program targeted the northern down-dip extension of the CMA lode between 1,000mRL and 900mRL over an initial strike length of 600m, with 60m downdip intercepts on 50m spaced sections. Perseus has previously completed a Pre-Feasibility Study (PFS) on the drilled-out portion of the CMA deposit and announced a maiden Ore Reserve of 2.2 Mt at 3.58 g/t for 259koz beneath the existing CMA open pit.
Drilling during the quarter comprised 13,180m in 38 Reverse Circulation (“RC”) pre-collared diamond (“DD”) holes, to allow conversion of the Inferred resource to Indicated. Results to date from the infill drilling program were generally consistent with those previously encountered in both thickness and grade.
Drilling continued at CMA Deeps during the quarter, with 2,077m completed in two holes. The holes targeted the duplex structure and the deep intrusion identified from the 2020 3D seismic survey. Initial results suggested that the CMA structure extends significantly further down-dip.
On the Yaouré West exploration permit (Refer to Appendix 1, Figure 1.1), auger geochemical drilling continued on a property-wide 800 x 800m grid, with 782m drilled in 73 holes. The augering program is designed to map geology and define potential targets through the delineation of alteration patterns using a combination of multi-element, XRF and mineral spectroradiometry (ASD) analyses. This program was supported by a ground magnetic survey designed to better define suspected Govisou-like granites to the immediate west of the Yaouré deposit.
BAGOÉ EXPLORATION PERMIT
A small auger program was conducted over the Woufiré and Brigette West, two targets defined from regolith interpretation. While there are a few anomalies to follow-up, results from this program were generally disappointing.
GHANA
Exploration activities in Ghana during the quarter focused on the recently acquired Exploration Permits located within trucking distance of the Edikan processing facility, adjacent to the existing mining lease.
AGYAKUSU PROSPECTING LICENCE
During the quarter, Perseus completed drilling aimed at testing the area to the southwest of the Nkosuo deposit. A total of 17 RC, 3 diamond and 1 RC/DD holes were completed for an aggregate of 1,935.60m. While several of the holes on the northern two most drill traverses of this program did intersect the southern extension of the Nkosuo Granite, most holes intersected metasediments. Results are currently being complied and interpreted.
Concurrent with this, Perseus completed an auger drilling program. The program was designed to test a first order geochemical soil anomaly delineated on an adjoining hill approximately 500m west of the Nkosuo deposit for a possible parallel mineralised structure. The program is ongoing and not all assay results have been received but initial indications suggest a deeper AC/RC program will be required to properly evaluate the area.
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AGYAKUSU-DML PROSPECTING LICENCE
The Ghanaian Minister for Lands and Natural Resources has approved the transfer of the Agyakusu DML license to Perseus Mining (Ghana) Limited Company following the exercise of an option by Perseus to acquire the tenement (Refer to Appendix 1, Figure 1.2).
During the quarter, exploration activities continued to focus on completion of an extensive auger drilling program tailored to explore priority gold-in-soil anomalies delineated from an earlier soil program along prospective structural corridors which included the southern extension of the Nkosuo structure. The program is ongoing.
Concurrent with the auger program, mapping and prospecting activities continued on the property and identified mineralised granite at the northwestern end of the property along its boundary with Domenase PL near Dompoase. This structure had been the focus of historical mining activities in the area using shaft and adits and present high hope for discovery. This will be the main focus for drilling activities in the coming quarter.
DOMENASE PROSPECTING LICENCE
The Ghanaian Minister for Lands and Natural Resources has approved the transfer of the Domenase license to Perseus Mining (Ghana) Limited Company following the exercise of an option by Perseus to acquire the tenement.
During the quarter, exploration focused on the reviewing and validating historical data. A small orientation soil sampling program was completed as was a mapping campaign. The mapping program has identified two potential areas, which will be drill tested in the coming quarter.
EXPLORATION EXPENDITURE
Expenditure on Business Growth by members of the Perseus Group up to 31 December 2022 is summarised in Table 11 below.
Table 11: Group Business Growth Expenditure December Quarter
| MARCH 2022 | JUNE 2022 | JUNE 2022 | SEPTEMBER | DECEMBER | 2022 | ||
| REGION | UNITS | QUARTER | QUARTER | HALF-YEAR | 2022 | 2022 | CALENDAR |
| QUARTER | QUARTER | YEAR TO DATE | |||||
| Sudan US$ million | 0.91 | 0.91 | |||||
| Côte d’Ivoire | |||||||
| Sissingué US$ million 0.77 0.54 1.31 0.40 | 0.25 | 1.96 | |||||
| Yaouré US$ million 9.19 4.34 13.53 3.06 | 5.45 | 22.04 | |||||
| Regional US$ million 0.01 0.00 0.01 0.00 | 0.00 | 0.01 | |||||
| Sub-total US$ million 9.97 4.88 14.85 3.46 | 5.70 | 24.01 | |||||
| Ghana US$ million 4.13 1.97 6.1 1.64 | 1.13 | 8.87 | |||||
| Total | US$ million | 14.10 | 6.85 | 20.95 | 5.10 | 7.74 | 33.79 |
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