Mining Morsels: PRU, SBM

Australian-based African gold miner Perseus Mining (ASX:PRU) boosted sales revenue 66% in the year to June 30 to more than $1.12 billion, thanks to higher production and prices and a tight hold on costs.

The company said on Wednesday the boost in revenue saw EBITDA from operations jump 86% to $564.1 million from the year before, leaving a net profit after tax of $279.9 million for the year, up 101% on the previous year which was also after an exploration write down of $43.4 million.

As a result, directors declared a final unfranked dividend of 1.64 cents a share including a bonus dividend of 0.79 cents a share.

Together with the interim dividend of 0.81 cents a share the total dividend from Perseus for the year to June is 2.45 cents a share.

Investors liked that news and the shares closed up 1% to $1.58.

Perseus said its strong improvement in performance in 2021-22 was due to:

An increase in revenue resulting from higher gold prices combined with higher gold production due to increased production at Yaoure, offset by lower gold production from Edikan and Sissingue.A proportionately smaller increase in cost of sales due to the increased proportion of sales coming from Yaoure that achieved an all-in site cost was US$668 per ounce during the financial year.An income tax benefit of $0.2 million compared to a $23.7 million expense in the prior year due to lower profits at Edikan. Both Yaoure and Sissingue are currently exempt from paying corporate tax under their respective Mining Conventions.Depreciation and amortisation expense of $214.2 million, a 107% increase on the previous financial year largely due to the inclusion of depreciation and amortisation of Yaoure for the full financial year when compared to three months in FY2021.A write down and impairment expense of $43.4 million was taken to account compared with $6.8 million in FY2021. An impairment assessment of the Bagoe project gave rise to a write off A$33.1 million. The balance of the write down and impairment expense related to unsuccessful exploration of near-mine targets at both Sissingue and Edikan.Increase in administration and other corporate expenses of $5.8 million is due to an increase in staff related expenses, insurance, travel, and professional consultant fees.Finance costs increased to $9.7 million from $5.3 million in the comparative period due to a portion of the borrowing costs previously being capitalised at Yaoure prior to declaration of commercial production at the mine at the end of March 2021.
Perseus said it had cash and bullion of $475.8 million, or $403.3 million, net of $72.5 million of outstanding debt.

CEO Jeff Quartermaine said in the statement to the ASX “Our record financial results for FY22 reflect our continued strong operating performance at all levels of our business during the period.”

“Our three gold mines are producing at our targeted rate of production with 494,014 ounces of gold produced in FY22, and our weighted average all-in site cost of US$952 per ounce is very competitive relative to most of our peers.

“Our financial result has allowed us to include a bonus in our final dividend bringing our full year dividend yield to 1.5% and at the same time, our balance sheet has continued to strengthen. This ensures that going forward, we can continue to return capital to our shareholders.

“We are delivering excellent drill results from our organic growth programs targeting mineable Mineral Resources close to our existing operations and the acquisition of Orca Gold Inc. earlier this year has provided us with the opportunity to diversify away from West Africa and access the Nubian Shield precinct in North-East Africa that appears to be one of the more well-endowed and under-explored mineral provinces in the world.


Another annual loss for St Barbara Mines (ASX:SBM) for the June 30 year, taking the total for the past two years to $338 million.

SBM lost $161 million in 2021-22 on top of the $171 million the year before – most of the former figure was due to impairments, write downs and other house cleaning.

But the underlying performance this year wasn’t all that hot – a profit before significant items of $24.1 million, compared to $80.6 million in 2020-21.

Despite the weakness, the shares added half a per cent on Wednesday to end at 92 cents.

The latest year included net significant items of $185 million including the $159 million non-cash impairment of the company’s Atlantic Operations in eastern Canada, costs associated with the company’s transformation program, unrealised fair value loss related to gold call options and the de-recognition tax losses on its Simberi mine in eastern PNG (in case it is sold).

This resulted in the statutory net loss after tax of $161 million for the June year.

The company boasted it had a cash balance of $99 million at June 30, but that was down from $133 million a year earlier.

Group gold production of 280,746 ounces for the year was down 14% from 328,000 the year before and the All-In Sustaining Cost (AISC) of $A1,848 an ounce was up 14% from the year before. The average gold price received was $2,457 up 11% from the previous year.

That saw group revenue fall $60 million from 2020-21 to $680 million in 2021-22.

The fall in gold production compared to 2020-21 was due to problems at the Atlantic (in Canada) mines and at Simberi In PNG.

“At Atlantic, production was impacted by delays in waste rock storage permitting, declining grade from the Touquoy pit and an unusually high number of severe winter weather events.”

“At Simberi, production was significantly impacted in the first half of the year by the temporary break in operations while the Deep-Sea Tailings Placement pipeline (DSTP) was re-established.

“In the second half of the year, the ramp up of production at Simberi was slowed by a COVID-19 outbreak.

“Conversely, production at Leonora increased compared to the prior year, driven by an increase in ore delivery to the mill,” the company said.

CEO Greg Jetson said in Wednesday’s announcement that the company is “making great progress on the Leonora Province Plan, having determined the position for the decline to the Zoroastrian underground deposit, from which we expect first production in Q1 FY24.

“During the year, we added over 3.6Moz of gold to our Mineral Resources through the acquisition of Bardoc and resource growth at Tower Hill and Old South Gwalia. Next quarter, we expect to release an inaugural Ore Reserve for the Tower Hill open pit followed by an inaugural Ore Reserve for Harbour Lights in Q3 FY23.”

“Looking ahead we remain focused on permitting at Atlantic, completing the strategic review at Simberi, starting to construct the new Zoroastrian mine and continuing the turnaround of our Leonora Operations.

“As expected, Gwalia will have a slow start to the year with grade improving in the second and third quarters.

“Availability of skilled labour remains a critical challenge for the industry in Western Australia. We are working closely with our contract partner Macmahon Holdings, to attract and retain the critical talent needed to maintain our underground operations and development rates,” he said.