PERTH (miningweekly.com) – Dual-listed gold miner Perseus Mining has announced a series of cost reduction measures to cut overheads by some 16% during 2014, as gold production for the six months to June hit target.

The company reported on Tuesday that gold production for the half-year had reached 104 744 oz, while quarterly production was 47 565 oz, in line with the half-year production guidance of between 105 000 oz and 125 000 oz.

Gold production for the quarter was 17% below the production record set in the March quarter of this year, with the lower production attributed to a lower head grade at the Edikan gold mine, in Ghana.

Perseus told shareholders that the short-term production plans for the Edikan gold mine had been revised with the objective of producing a quantity of gold that optimises the balance between gold production and cash margin generated by each ounce of gold produced, with the intention of maximising the net cash flow generated by the mine.

The amended plans would cover the next 18 months and would include a mining focus on the AF Gap and Fobinso pits, as well as blending ore from these pits with ore from the run-of-mine stockpile, eventuating in lower mining costs.

The average grade of the 7.5-million tonnes of ore to be fed through the mill in 2014 was thought to be some 1 g/t gold, which was 29% lower than the average grade of ore treated in 2013, meaning that gold production for the full year was expected to be between 190 000 oz and 210 000 oz in 2014.

Perseus would also undertake a cost reduction programme designed to eliminate discretionary spending and to renegotiate or restructure supply contracts to achieve cost efficiencies.

Discretionary capital expenditure on most of Perseus’ departments, apart from community relations, processing and maintenance, have also been suspended.

A cost reduction programme has also been undertaken at a corporate level, with Perseus hoping to reduce its corporate office costs to A$10-million in 2014. Strategies implemented to achieve this included a 15% reduction in salaries of both executive and nonexecutive directors.