Perseus Mining (ASX:PRU) used its December-quarter webinar to outline a transition-heavy period across its operating sites, provide an update on costs impacted by higher royalties, and discuss progress on key growth projects including the Nyanzaga development and the CMA underground at Yaouré.
Safety update
Managing Director and CEO Craig Jones opened the call by acknowledging the “tragic loss” of two employees of haulage contractor Binkadi who worked at the Bagoué mine and were involved in an off-site vehicle accident two weeks prior to the webinar. Jones said Perseus has been supporting the families and the broader Sissingué team, has commenced an internal investigation, and is cooperating with Ivorian authorities.
Group production, costs, and cash flow
Jones said the December quarter reflected a period where “all of our sites transitioned into new mining areas,” which introduced operational complexity. Despite that, the company reported:
- Gold production: 88,888 ounces at an all-in site cost of $1,800/oz
- Gold sales: 86,607 ounces at an average sale price of $3,437/oz
- Cash margin: $1,637/oz
- Notional cash flow: $145 million
- Net cash and bullion at quarter-end: $755 million
For the December half, Perseus produced 188,841 ounces at an all-in site cost of $1,649/oz, sold gold at an average $3,241/oz, and generated notional cash flow of $301 million.
Management attributed the higher all-in site cost versus the prior quarter primarily to royalties tied to higher realized gold prices, as well as an additional 2% royalty paid on revenue in Côte d’Ivoire. Jones and CFO Lee-Anne said the additional payment was made “in good faith” amid ongoing discussions between the mining industry and the Ivorian government to formalize a revised fiscal arrangement in a high gold price environment.
Perseus said a total of $20 million was paid in FY26 Q2 related to the additional royalty, consisting of $4 million for the December quarter, $5 million for the September quarter, and $11 million related to the second half of FY25. Management also clarified that the Q2 FY26 all-in site cost includes only the additional royalty paid in the quarter itself.
Mine-by-mine performance
Yaouré produced just over 32,000 ounces, down 42% quarter-on-quarter. Jones said the decline primarily reflected lower mill head grade due to higher-than-planned reliance on lower-grade stockpiles, alongside a planned transition in ore sources from the CMA open pit to the Yaouré open pit. He said improved grade control practices and higher strip ratios reduced direct mill feed from the Yaouré pit during the period, requiring more stockpile supplementation.
According to the company, Yaouré’s grade control process is now “well established” and mining rates have “substantially improved,” supporting increased direct feed from the Yaouré open pit. Perseus expects higher grade mill feed in the second half with more Yaouré pit ore and the introduction of higher-grade CMA underground ore.
Yaouré recorded production cost of $1,574/oz and an all-in site cost of $2,092/oz. Management attributed the cost increase versus the prior quarter to lower production (higher fixed costs per ounce), higher royalties, and timing-related sustaining capital including a tailings pipeline relocation. Yaouré sold 34,000 ounces at a weighted average price of $3,243/oz for an average cash margin of $1,151/oz and notional operating cash generation of $37 million.
Edikan produced 38,000 ounces, up nearly 17% from the previous quarter. Production cost was $1,097/oz and all-in site cost was $1,535/oz, down 4% quarter-on-quarter. Perseus sold 37,000 ounces at a weighted average price of $2,700/oz, resulting in an average cash margin of $2,165/oz and notional operating cash generation of $83 million. Jones said improved outcomes were largely due to full mining access at the Nkosuo pit, which restored the mining sequence and improved conditions. Edikan’s production is expected to increase over the next two quarters as Nkosuo grades climb, while cutbacks at Fetish and Esuajah North progressed with regulatory applications submitted.
Sissingué Complex produced 18,000 ounces, up nearly 60% from the September quarter, reflecting production from the Sissingué Gold Mine and satellite sources including Fimbiasso and the newly developed Bagoué project. Perseus said Fimbiasso and Airport West pits were completed in the quarter, with ore now sourced from the Sissingué main pit and the Bagoué and Antoinette deposits. Mining at Bagoué commenced at Antoinette after completing Fimbiasso. All-in site cost was $1,844/oz, with the improvement attributed to higher-grade Bagoué ore, partly offset by higher royalties and the additional 2% Ivorian payment. Sissingué sold 14,000 ounces at $3,227/oz for a cash margin of $1,383/oz and notional operating cash of $25 million.
Guidance, fiscal discussions, and growth projects
Perseus maintained FY2026 gold production guidance of 400,000 to 440,000 ounces, with production weighted to the second half. However, all-in site cost guidance increased to $1,600–$1,760/oz from $1,460–$1,620/oz, reflecting higher gold price assumptions and associated royalty costs, including an assumed 2% royalty increase in Côte d’Ivoire while discussions continue. Jones added that Yaouré is expected to produce in the lower half of its guidance following its Q2 performance.
On the Côte d’Ivoire fiscal negotiations, Jones described “broad conversations” on taxation and government share of proceeds, and said the timeline to finalize a new regime is unclear. He also said Perseus is attempting to steer discussions toward other mechanisms such as corporate income tax, while emphasizing that Perseus has stability agreements and sees “very, very low likelihood” of retrospective changes.
On growth, Jones said the company is progressing updated mineral reserve estimates aimed at extending mine lives, with an updated Nyanzaga estimate expected in Q3 FY2026, followed by Yaouré toward the end of the financial year and Edikan toward December 2026. Jones also discussed Perseus’s unsuccessful offer to acquire the remaining shares of Predictive Discovery after a revised matching offer from another bidder was deemed superior by Predictive’s board; Perseus said it has no current plans to revise its position.
For Nyanzaga, Jones said the project remains on budget and schedule with first gold anticipated in January 2027. Perseus reported $262 million committed through the end of December (about half of the approved budget) and $161 million incurred. Updates included near-completion of resettlement housing, mill fabrication progressing ahead of schedule, camp construction at 70% complete, tailings storage facility work ahead of schedule, and commencement of pre-strip at the Tusker deposit.
At the CMA underground development at Yaouré, Jones said four declines are under development with 800 meters completed, and that first ore was mined from the Bleeker portal in January through development mining. Stoping is anticipated to begin in Q4 FY2026, with commercial production still scheduled for Q3 FY2027. Perseus increased total development capital to $181 million from $172 million due to eastern wall remediation in the CMA pit to mitigate access risks from ground instability.
From a balance-sheet perspective, CFO Lee-Anne said the quarter-end cash and bullion balance of $755 million was down $82 million quarter-on-quarter, reflecting operating margin contribution of $132 million and approximately $60 million in capital investment (including about $28 million for Nyanzaga and $14 million for CMA underground), as well as $13 million in taxes. She also noted Perseus refinanced and upsized its debt facility to $400 million plus a $100 million accordion, with a three-year term and an option to extend for two years, taking the facility out to 2031, and said pricing improved with a 125-basis-point margin reduction.
On hedging, Lee-Anne said Perseus reduced its committed hedging position from 14% to 11% of three-year production, and maintained downside protection via about 215,000 uncommitted put options at an average price of $2,619/oz.
About Perseus Mining (ASX:PRU)
Perseus Mining Limited, together with its subsidiaries, explores, evaluates, develops, and mines for gold properties in West Africa. The company holds interests in the Edikan gold mine project located in Ghana; and the Sissingué and Yaouré gold mine projects located in Republic of Côte d'Ivoire. It also holds 70% interest in the Meyas Sand gold project in Sudan. Perseus Mining Limited was incorporated in 2003 and is based in Subiaco, Australia.
