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Perseus improves operating performance at Edikan, first gold at Sissingué expected in 2017

7th July 2016

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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JOHANNESBURG (miningweekly.com) – Dual-listed West African gold producer Perseus Mining’s intensive work programme implemented earlier this year to improve operating performance at its Edikan operation, in Ghana, has successfully improved operating performance at the mine in recent months.

With the strong performance at Edikan, previously announced production and cost guidance for the 2017 financial year was confirmed, as was a forecast for the remaining life-of-mine (LoM), which were published in April, the company noted in a release on Thursday.

According to the updated LoM, gold production would average 222 000 oz/y over Edikan mine’s remaining life, including production of around 258 000 oz/y for the next five years.  A decrease of 10% in the all-in average site costs was also expected in the next five years, to $920/oz, while all-in sustaining costs would average $865/oz over the LoM plan.

Performance updates included adjusted grade control procedures, which contributed to the 19% increase to 1.01 g/t in average head grade of ore processed during the quarter.

In June, the head grade averaged 1.04 g/t. Mill run time had also progressively improved, with the plant operating 88% of the time in that period, including downtime for scheduled maintenance.

Gold production for the quarter totalled 40 058 oz, 8% more than the March 2016 quarter and 24% more than December 2015 quarter. For the six months ended June 30, Perseus produced 77 208 oz, in line with its revised production guidance of 75 000 oz to 90 000 oz of gold.

Developments at Edikan included the commissioning of a diesel-fired power station to ensure 100% self-sufficiency for the operation in the event of a failure of the national power grid. Commissioning was on track for final completion this month.

Further, planned upgrades to the processing plant to improve plant run time and reduce maintenance costs were on track for implementation for the six months ending December 31. The downtime required for installation is incorporated into production forecasts.

FAST-TRACKING DEVELOPMENT
In line with fast-tracking its growth strategy, as well as the construction of its Sissingué project and a definitive feasibility study (DFS) at its Yaouré project, both in Côte d'Ivoire, Perseus reported that execution plans for the full-scale development of Sissingué had been activated. First production of gold was scheduled for the December 2017 quarter.

At a total completion cost of $100-million, Sissingué was currently forecast to produce 385 000 oz of gold, at an all-in site cost of $632/oz over a 5.25-year period from first gold production and to generate an after-tax internal rate of return of 27% at an average gold price of $1 200/oz.

Negotiations with a “highly-regarded” contractor were well advanced on an engineering, procurement and construction contract, accounting for about 50% of estimated construction scope and involving the start of site works during the current quarter, the company noted.

A total of 100 000 oz of gold had been sold at an average price of about $1 308/oz. This was in satisfaction of the project lenders’ hedging requirement of no less than 100 000 oz at a price of $1 200/oz, or better. Final credit approval and documentation of a $60-million project financing facility for Sissingué were anticipated to be completed in the coming months.

Following Perseus’s acquisition of the Yaouré gold project earlier this year, contracts for all major work packages required to complete the Yaouré DFS had been awarded to several consultants and contractors. Mining consultancy and software solutions provider Runge Pincock Minarco had been appointed as lead consultant for the study.

Meanwhile, a 42 000 m infill diamond drilling and reverse-circulation drilling programme involving several contractors was scheduled to start later this month. The programme would include grade control drilling in targeted areas. A rotary air blast drilling programme would also be completed to sterilise planned infrastructure sites.

The environmental permit for Yaouré was expected to be formally granted by the government of Côte d’Ivoire during the current quarter.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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