Perseus completed the construction and commissioning of its third gold mine, Yaouré, in FY2021 while maintaining steady operating performance at its two other gold mines, Sissingué and Edikan.
(, , ) has received a target price lift from Citi Research after delivering a 48% increase in FY2021 net profit to A$139 million, compared to A$94.4 million in the previous financial year – a 47.6% improvement.
Citi has lifted its target price by 5 cents to A$1.80 per share as the West African gold producer made strong progress towards its goal of becoming a multi-mine, multi-jurisdictional producer of more than 500,000 ounces of gold per annum at a cash margin of not less than US$400/ounce.
During the 2021 financial year, Perseus completed the construction and commissioning of its third gold mine, Yaouré, while maintaining steady operating performance at its two other gold mines, Sissingué and Edikan throughout the year.
The following is an extract from Citi’s research update:
FY21 Financials – Revenue lifted 15% YoY to $680m driven by higher gold volumes as Yaoure mine (3rd operating mine) achieved commercial production in MarQ and began ramping up to nameplate capacity. FY21 group gold production 328.6 koz vs FY20 257.6 koz. EBITDA $303m, 8% ahead of CitiE and 21% ahead of Consensus, 11% higher YoY. Underlying NPAT $139m ahead of CitiE and Consensus, 48% lift YoY. Decrease in D&A expense 22% YoY along with ~26% decrease in tax liabilities due to lower profits and ore mine at Edikan (individually negotiated fiscal schedule). Board approved maiden 1.5cps dividend. Established new dividend policy targeting 1% annual yield to be paid semi-annually.
Reserve/Resource update – June 2021 Group ore reserves 71.9Mt at 1.42g/t (cont 3.27Moz) vs June 2020 73Mt at 1.40g/t (cont 3.28Moz). Edikan cont oz fell 10.7% (159koz) with pit depletions. Yaoure drilling and LOM plan update lifted cont oz 72koz net of mining depletion. Sissinge cont oz lifted net 80koz, with +91 koz from Bagoe addition.
Yaoure life of mine plan – Updated mine plan extends life to 8 years, following uplift in reserves. Improved strip ratio and higher gold volumes reduces project costs vs the DFS. NAV lifts 21 % to $0.88/sh. Bagoe FS and Sissingue LOM plan update expected in SepQ.
Changes to estimates – Updating our model with Yaoure LOM plan, reserve/resource, new gold deck released following PRU JunQ and roll-forward of NPV. NAV lifts 2cps to $1.74/sh. FY22E NPAT raised 20% with 9% lift in production. We raise our TP 5cps to $1.80/sh and remain Neutral/HR.