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Australian gold miner still has plan to drill in war-torn Sudan

5th April 2024

By: Bloomberg

  

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Australian gold producer Perseus Mining hasn’t ditched a long-term plan to mine in war-torn Sudan, even as it chases other deals across Africa to sustain its output.

The third-biggest Australia-listed gold miner by market value has put on hold a final investment decision to build a mine in the North African nation wracked by a complex civil war. But Perseus is still eyeing a potential post-conflict future there, and is preparing to award a new drilling contract for its Meyas Sands asset, which is far from the fighting.

“Sudan’s not lost to our company by any stretch of the imagination,” CEO Jeff Quartermaine said in an interview. “We’re going to develop this one, that’s the plan.”

Perseus is among gold miners looking for new assets as their current ones expire, and as bullion prices hit record highs. It has nearly $1-billion in cash and undrawn debt to fund investments, according to its CEO. It’s trying to acquire the Nyanzaga project in Tanzania via a bid for its owner OreCorp, and is considering whether to join the race for the Akyem mine in Ghana that Newmont has put for sale.

Sudan is a much trickier proposition. The North African nation has been gripped by a full-blown battle for control between the army and a paramilitary group since last April. The United Nations has reported mass graves and gang rapes, 18-million people at risk of hunger, and almost 10-million displaced within the country — in addition to the 1.8-million who’ve fled elsewhere.

The Australian miner is holding out hope that the political backdrop there will stabilize over the longer term. Persian Gulf nations including Saudi Arabia and the United Arab Emirates are emerging as key diplomatic players in the Horn of Africa region, which has rich but largely untapped mineral resources. The rulers of both Saudi Arabia and the UAE are prioritizing overseas investment in the mining sector.

Perseus entered an agreement with Ajlan & Bros, a closely held Saudi conglomerate, last month to co-invest in exploration projects in Saudi Arabia and in northern African countries including Sudan, as well as Algeria, Eritrea, Ethiopia and Egypt.

“By having an influential Saudi company as our partner, that might provide us with a little bit more geopolitical stability, if you will, in the places where we look to explore,” Quartermaine said.

Edited by Bloomberg

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