Perseus Mining is a gold explorer focused on West Africa with plans to develop mines in Ghana and Ivory Coast and discover new gold resources through innovative exploration.
Perseus shares drop as Q2 production misses guidance on “mechanical challenges”
Perseus Mining (TSE:PRU) (ASX:PRU) saw its shares fall over nine per cent Monday, after it reported second quarter production that came in well below its already revised guidance.
Citing mechanical challenges that held back production growth at its Edikan gold mine in Ghana, the company posted gold production of 51,090 ounces, below its guidance of 58,500 to 61,750 ounces, which was revised down from 65,000 to 70,000 ounces in late November.
Shares moved 9.72 per cent lower as at about 10:40 a.m. ET, trading at $1.95.
In July last year, the company provided initial gold production guidance in the range of 65,000 to 70,000 ounces for the second quarter, while combined guidance for the first half of 2013 was forecast in the range of 120,000 to 130,000 ounces - down from its previous production forecast of 135,000 to 145,000 ounces, due to changes in the mine plan and the resulting reduction in feed grade from 1.59 g/t to 1.42 g/t.
The company also announced that for the second half of 2013, it expects gold production in the range of 125,000 to 135,000 ounces.
Production cost for the second quarter of US$588 per ounce was two per cent higher than its expectation of $575 per ounce, and 24 per cent higher than the “abnormally low” first quarter production cost of $475 per ounce.
Perseus said that total ore and waste movements was nine per cent above its expectations, while a head grade of 1.39 grams per tonne (g/t) was six per cent below target and total plant recovery of 84.2 per cent was four per cent below target.
At its Sissingué gold project on the Ivory Coast, the company noted that a full-scale development decision remained on hold during the quarter, pending clarification of the fiscal regime applicable to the project.
The Ivorian government granted the Mbengué, Napié and Mahale Exploration licences to a subsidiary company of Perseus on December 19, 2012.
Also in the second quarter, the company said it completed 10,792 metres of drilling in Ghana and 24,564 metres in the Ivory Coast and returned “significant drill intercepts from multiple prospects”.
Perseus said it had an available cash balance of $39.7 million at the end of the quarter, and had on hand 11,785 ounces of bullion valued at $18.9 million.
The company also has $100 million in a revolving line of credit available for drawdown and had its hedging commitment reduced to 216,000 ounces at a weighted average price of $1,373 per ounce.
Perseus Mining is focused on under-explored gold belts in West Africa.