JOHANNESBURG (miningweekly.com) – A power supply failure to ASX- and TSX- listed Perseus Mining’s Edikan gold mine, in Ghana, has likely scuppered the miner’s hopes of achieving its revised production guidance of 99 000 oz for the six months ended June 30, which management describes as “extremely disappointing”.

The gold developer said in an operational update on Friday that the June 7 failure of a current transformer at a government-owned substation located at the mine had resulted in damage to all three voltage transformers on the circuit, the failure of the insulators and damage to several of the cables that fed power to the Edikan processing plant.

The exact cause of the failure was unknown.

This had resulted in a total power outage to the plant and subsequent downtime of Edikan’s ore crushing and milling operation while repairs were completed by State-owned power group GridCo.

Following the repairs, the semi-autogenous grinding (SAG) mill was restarted on June 10 after some 73 hours of unscheduled downtime.

“The availability of grid power to Edikan has been frustrating at recent times. We have been working extremely hard to address the matters that we can control, such as operating performance and operating costs and have, in the past 12 months, made major advances on both fronts,” commented CEO Jeff Quartermaine.

As a remedial measure, the voltage transformers and damaged insulators were removed from the power factor correction circuit, which had rendered the circuit inoperable until full repairs can be carried out.

“As a result, Edikan is required to reduce its power demand in the evenings until GridCo is able to source the replacement parts. GridCo is expected on site during the planned SAG mill maintenance shutdown on June 17 to carry out additional works on the substation,” the company noted.

VAT PAYMENT
The company further reported that it had received $6.7-million as a partial payment of the outstanding value-added tax (VAT) debt of $32.7-million owed to the company by the government of Ghana.

Based on “dialogue with government”, two further payments of $3.3-million and $5.8-million were currently scheduled to be made on or around June 24 and July 8, respectively.

Perseus said it would continue to work with the government to agree on a schedule for the repayment of the balance of the outstanding debt and to “avoid a repeat” of a situation in which a large VAT receivable accumulated and remained unpaid “for an extended period”.

Commenting on the anticipated payments, Quartermaine said the group looked forward to putting the issue of the outstanding VAT receivable “behind us”.

“When it comes to the repayment of VAT and the availability of grid power, these are outside of our control but do certainly take the gloss off what would otherwise be a creditable performance by Edikan,” he noted.