Perseus Mining Limited
TSX : PRU
ASX : PRU

Perseus Mining Limited

July 06, 2016 21:25 ET

Perseus Mining Limited Quarterly Update

PERTH, WESTERN AUSTRALIA--(Marketwired - July 7, 2016) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Perseus Mining Limited (ASX:PRU)(TSX:PRU) ("Perseus") intends to release its comprehensive Activities Report for the Quarter ending June 30, 2016 (the "June 2016 Quarter" or "the Quarter") on or about July 25, 2016. As an interim measure, the Company is pleased to provide the following update on recent events:

OPERATIONS

Edikan Gold Mine - Ghana ("Edikan")

  • The intensive work programme implemented earlier this year to improve operating performance at Edikan has been successful in materially improving operating performance at the mine in recent months;

  • Adjusted grade control procedures contributed to the average head grade of ore processed during the Quarter increasing 19% to 1.01g/t. In the month of June 2016 the head grade averaged 1.04g/t. Mill run time has also progressively improved with the plant operating 88% of the time (including downtime for scheduled maintenance) in the month of June 2016;

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

  • As at the date of this report, June 2016 Quarter financial accounts have not been finalised but it is expected that the all-in site costs that will be reported in the full Quarterly Report will also be in line with revised cost guidance;

  • With the recent strong performance at Edikan, previously announced production and cost guidance for FY 2017 is confirmed, as are forecasts for the remaining life of mine that were published in April 2016;

  • Construction of houses required to relocate residents of the Eastern Pits and Esuajah North mine take areas is on schedule and under budget with first houses due for occupation later this month;

  • Commissioning of a diesel fired power station to ensure 100% self-sufficiency for Edikan in the event of a failure of the national power grid is on track for final completion in mid July 2016;

  • Planned upgrades to the processing plant to improve plant run time and reduce maintenance costs are on track for implementation during the six months ending December 31, 2016, with downtime required for installation incorporated into production forecasts.

DEVELOPMENT

Sissingué Gold Project - Côte d'Ivoire ("Sissingué")

  • Execution plans for the full-scale development of Sissingué have been activated with first production of gold scheduled to occur in the December 2017 quarter. At a total cost to complete of US$100 million, Sissingué is currently forecast to produce 385,000ozs of gold at an all-in site cost of US$632/oz over a 5.25 period from first gold production to generate an after tax IRR of 27% at an average gold price of US$1,200/oz;

  • Negotiations with a highly regarded contractor are well advanced on an engineering, procurement and construction "EPC" contract, accounting for approximately 50% of estimated construction scope and involving commencement of site works during the current Quarter;

  • A total of 100,000ozs of gold has been sold forward at an average price of approximately US$1,308/oz in satisfaction of the project lenders' hedging requirement of not less than 100,000ozs at a price of US$1,200/oz or better;

  • Final credit approval and documentation of a US$60 million project financing facility for Sissingué are anticipated to be completed in the coming months.

Yaouré Gold Project - Côte d'Ivoire ("Yaouré")

  • Following Perseus's recent acquisition of Yaouré, contracts for all work major packages required to complete the Yaouré Definitive Feasibility Study have been awarded to a range of consultants and contractors. Runge Pincock Minarco ("RPM") will perform the role of lead consultant for the study;

  • A 42,000 metre infill DD and RC drilling programme involving several drilling contractors is scheduled to commence in the third week of July 2016. The program will include grade control drilling in targeted areas. A RAB drilling program will also be completed to sterilise planned infrastructure sites;

  • The environmental permit or "ESIA" for Yaouré is expected to be formally granted by the government of Côte d'Ivoire during the current quarter.

CORPORATE

  • Following a positive vote by shareholders and approval by the High Court of Justice of England and Wales, the scheme of arrangement under which Perseus acquired all of the shares of Amara Mining plc (the owner of Yaouré) took effect on April 18, 2016;

  • An institutional placement of shares to raise approximately A$61 million and a 1 for 10 pro rata accelerated non-renounceable Entitlement Offer to raise up to approximately A$41 million, for total proceeds of up to approximately A$102 million, was launched on June 20, 2016. The A$94 million institutional component of the A$102 million fund raising successfully closed oversubscribed on June 23, 2016. The A$8 million retail portion of the raising is currently in progress and is scheduled to close on July 15, 2016;

  • The successful equity capital raising when combined with a planned project financing of US$60 million and internally generated cash from Edikan and Sissingué is expected to fully fund Perseus's corporate strategy of transforming from a single mine, single country enterprise to a multi mine, multi country gold producer with production targeting in excess of 500,000ozs of gold within five years.

Competent Person Statement:

The information in this announcement that relates to Mineral Resources and Ore Reserves for Sissingué was first reported by the Company in compliance with the JORC Code 2012 in a market announcement released on April 21, 2015. The Company confirms that it is not aware of any new information or data that materially affects the information in that market announcement and that all material assumptions and technical parameters underpinning the estimates in those market announcements continue to apply and have not materially changed.

All production targets for Edikan and Sissingué referred to in this release are underpinned by estimated Ore Reserves which have been prepared by competent persons in accordance with the requirements of the JORC Code. The Company confirms that all material assumptions underpinning those production targets, or the forecast financial information derived from those production targets, in the market releases dated April 19, 2016 (Edikan) and April 21, 2015 (Sissingué) continue to apply and have not materially changed. Refer "Technical Report - Central Ashanti Gold Project, Ghana" dated May 30, 2011 and "Technical Report - Sissingué Gold Project, Côte d'Ivoire" dated May 29, 2015. Steffen Brammer and Paul Thompson, each of whom is a Qualified Person as defined in NI 43-101 and an employee of the Company, have approved the inclusion of technical and scientific information in this announcement.

Caution Regarding Forward-Looking Information:

This report contains forward-looking information which is based on the assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Assumptions have been made by the Company regarding, among other things: the price of gold, continuing commercial production at the Edikan Gold Mine without any major disruption, development of a mine at Sissingué and/or Yaouré, the receipt of required governmental approvals, the accuracy of capital and operating cost estimates, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used by the Company. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, the actual market price of gold, the actual results of current exploration, the actual results of future exploration, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's publicly filed documents. The Company believes that the assumptions and expectations reflected in the forward-looking information are reasonable. Assumptions have been made regarding, among other things, the Company's ability to carry on its exploration and development activities, the timely receipt of required approvals, the price of gold, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers should not place undue reliance on forward-looking information. Perseus does not undertake to update any forward-looking information, except in accordance with applicable securities laws. This announcement contains forward-looking information in respect of Edikan's forecast production and average All-In Site Costs for the mine. This information supersedes the forward-looking information provided in the Company's updated Life of Mine Plan for Edikan released on April 19, 2016 and the Investor Presentation released on April 20, 2016.

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