NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES
Perseus Mining Limited ("Perseus" or the "Company") (TSX:PRU)(ASX:PRU) is
pleased to announce details of its revised Life of Mine Plan ("LOMP") for the
Edikan Gold Mine ("EGM") in Ghana, West Africa.
HIGHLIGHTS
-- The revised LOMP is based on seven open pits designed using US$1,200/oz
pit shells, containing 6% less gold than the previous LOMP but requiring
mining of 15% less ore and waste, resulting in material cash flow
benefits.
-- Production and cost guidance for FY 2014 of +/- 200,000 ounces at an
all-in site cash cost(1) of +/- US$1,100/ounce remains unchanged.
-- For the period from FY2015 to FY2018, average gold production increases
with an increase in grade relative to FY2014 to 240,000 ounces/year at
an average all-in site cash cost of US$1,050/ounce.
-- The LOMP estimates average gold production of 230,000 ounces/year at an
all-in site cash cost of US$937/ounce from FY2014 to FY2024.
-- The independent estimate of the Ore Reserves for the EGM as at 1 July
2013 indicates Proved and Probable Ore Reserves totalling 82.7 million
tonnes of ore grading 1.1 g/t of gold and containing 2.925 million
ounces of gold.
Comments from Perseus's Managing Director, Jeff Quartermaine
"The revised Life of Mine Plan for the Edikan Gold Mine represents a robust and
financially attractive way forward for our flagship operation. The plan clearly
indicates that at a gold price of US$1,200/ounce, a significant amount of
cashflow can be generated at Edikan, and at even lower gold prices the operation
remains viable, based on our assumptions.
Going forward, our financial performance will continue to be highly leveraged to
the gold price and operational improvements, and the revised LOMP represents an
important element in our ongoing efforts to improve our operating performance on
the EGM site."
(1)All in site cash costs include direct production costs, royalties, investment
in waste stripping and sustaining capital expenditure. It does not include
exploration expenditure, income taxes or corporate costs.
MINERAL RESOURCES
Following an infill drilling programme on the EGM mining leases in the period up
to early June 2013, an updated Mineral Resource estimate was prepared for the
Company by mining consultants, RungePincockMinarco ("RPM") in accordance with
the JORC Code - 2004 Edition. A detailed summary of the current Mineral Resource
estimate for each of the mineral deposits identified to date on the EGM mining
leases, calculated using a 0.40 g/t gold cut-off grade, was published in
Perseus's June 2013 Quarterly Report.
In summary, the revised global Measured and Indicated Mineral Resource estimate
for the EGM, which takes into account mining depletion as at 30 April 2013, was
estimated as 162.5 million tonnes grading 1.1g/t gold and containing 5.7 million
ounces of gold. A further 77.4 million tonnes of material grading 1.0g/t gold
and containing a further 2.4 million ounces of gold were classified as an
Inferred Mineral Resource. Details of these estimates are shown below in Tables
1 and 2 respectively.
Table 1: EGM Measured and Indicated Mineral Resources
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Weathering Measured Indicated
Domain
-----------------------------------------------------------------
Grade Contained Grade Contained
'000 (g/t Gold '000 (g/t Gold
Tonnes Au(1)) (oz) Tonnes Au) (oz)
----------------------------------------------------------------------------
Oxides 220 1.5 10,600 600 0.8 16,000
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Transition 764 1.1 28,100 3,100 1.2 119,700
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Fresh 81,220 1.1 2,917,700 76,610 1.0 2,603,200
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TOTAL 82,204 1.1 2,956,400 80,310 1.0 2,738,900
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Weathering Measured + Indicated
Domain
------------------------------------------------------------------
Contained
'000 Grade Gold
Tonnes (g/t Au) (oz)
----------------------------------------------------------------------------
Oxides 820 1.1 26,600
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Transition 3,860 1.2 147,800
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Fresh 157,840 1.1 5,520,900
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TOTAL 162,520 1.1 5,695,300
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Note 1: Denotes grams per tonne of gold
Table 2: EGM Inferred Mineral Resources
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Weathering Domain Inferred
-----------------------------------------------------
Contained
'000 Grade Gold
Tonnes (g/t Au) (oz)
----------------------------------------------------------------------------
Oxides 2,763 1.2 102,700
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Transition 3,284 1.1 113,700
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Fresh 71,400 1.0 2,213,400
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TOTAL 77,447 1.0 2,429,800
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SCENARIO PLANNING
Based on the revised Mineral Resource estimate, the Company examined a range of
development scenarios with the objective of identifying the scenario that would
maximise the net present value of the EGM. This exercise involved varying key
parameters such as the pit development sequence, applying technical assumptions
that reflected actual operating parameters, and working within known constraints
such as the expected timing of access to new mining areas. The planning exercise
was required to achieve the following objectives:
1. Minimise investment in FY2014 without compromising the future by mining
ore from existing pits (Fobinso and AF Gap) and reclaiming ore from
existing ore stockpiles;
2. Commence development of Eastern Pits as early as possible after July
2014;
3. Include new pits (Chirawewa and Bokitsi) not previously included in Ore
Reserves;
4. Give priority to cash generation over marginal gold production; and
5. Preserve the capacity to expand pits in a higher gold price environment.
Based on this work, the following pit development schedule was developed:
http://media3.marketwire.com/docs/904344_graph_1015.pdf.
ORE RESERVES
Following completion of the above, mining consultant RPM was commissioned to
complete an independent estimate of the Ore Reserves for the EGM as at 1 July
2013 in accordance with the requirements of the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004
Edition).
The Ore Reserves, which include material from seven open pits including Abnabna,
Fobinso, Fetish, Chirawewa, Bokitsi, Esuajah North and Esuajah South plus
stockpiles, are as follows:
Table 3: EGM Proved and Probable Ore Reserves
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Contained
Tonnes Grade Gold
Category (Mt) (g/t gold) (oz)
----------------------------------------------------------------------------
Proved 59.6 1.1 2,177,300
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Probable 23.1 1.1 835,700
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TOTAL 82.7 1.1 2,924,500
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Notes:
1. Estimate has been rounded to reflect accuracy
2. All the estimates are on a dry tonne basis
The Ore Reserve estimate for the EGM was based on actual operating performance
and ongoing test work and applied the following criteria:
1. Proven and Probable Mineral Reserves found within the economic pit
limits designed based on Measured and Indicated Mineral Resources;
2. Gold metal price US$1,200/ounce;
3. Key mining parameters include:
a. Mining recovery 100%, mining dilution varies by deposit as result
of block regularisation resulting in a range, due to multiple block
models used, of between 3-12%;
b. Overall pit slopes of 30 to 50 degrees inclusive of berms spaced at
between 5m and 20m vertically and berm widths of 5m to 12m. These
parameters were derived from ongoing geotechnical studies commenced
by George Orr and Associates in August 2012;
c. Pit ramps have been designed for the current 777 truck fleet and
are set at a net 16m (single lane) to 26m (dual lane);
d. Vertical mining advance has been set at 60 to 80m/year based on the
size of the pit.
4. Ore cut-off grades are based on the gold price and mining parameters
described in (2) and (3) above and are as follows:
Table 4: Cut-off grades
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Material Type Gold Grade (g/t)
----------------------------------------------------------------------------
Oxide 0.6
----------------------------------------------------------------------------
Transitional 0.5
----------------------------------------------------------------------------
Sulphide 0.4
----------------------------------------------------------------------------
5. Gold processing recovery ranging from 61% for oxide to 88% for fresh
rock.
6. Processing throughput 7.5Mtpa.
7. Mining operating costs based on rates negotiated in November 2009 with
mining contractor (African Mining Services) adjusted for historical rise
and fall factors, currently at 25% for load and haul cost and 10% for
other mining costs and additional US$2.15/t ore for crusher feed haulage
from the Eastern Pits. The average life of mine mining cost is US$3.43/t
of material moved.
8. Unit processing costs are assumed to be US$9.05/t of ore processed plus
a further US$0.09/t of ore processed for refining costs. A General and
Administration unit cost of US$2.82/t of ore processed has been assumed,
which equates to approximately US$2 million per month.
LIFE OF MINE PLAN
Based on the Ore Reserves stated above, the production profile for the EGM for
next five years is currently expected to be as follows:
Table 5: LOMP Production Statistics
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----------------------------------------------------------------------------
LOMP
Parameter FY2014 FY2015 FY2016 FY2017 FY2018 Avg(1,2)
----------------------------------------------------------------------------
Ore mined (Mt) 5.3 7.7 9.7 9.4 7.4 8.7
Waste mined (Mt) 22.9 26.6 26.5 26.4 28.8 25.1
Strip ratio (t:t) 4.3 3.5 2.7 2.8 3.9 2.9
Ore processed (Mt) 7.5 7.4 7.5 7.5 7.5 7.5
Head grade (g/t) gold 1.0 1.2 1.2 1.1 1.2 1.1
----------------------------------------------------------------------------
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Gold production (kozs) 200 240 240 230 245 230
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Notes: 1. Assumes mining occurs over 9 years from 1 July 2013.
2. Assumes processing of ore over 11 years from 1 July 2013.
Processing of low grade ore stockpile is scheduled to continue
for a further 3 months beyond 30 June 2024 at a lower production
rate and is not included in the above data.
Compared to the previous LOMP for EGM, which was based on the 2012 Ore Reserve,
the updated LOMP results in the following:
- Tonnes of ore and waste moved - Down by 15%
- Life of mine strip ratio - Down by 16%
- Head grade - Steady
- Contained gold in Ore Reserve - Down by 6%
- Life of mine - Increased by 0.6 years to 2024
On a pit by pit basis, the technical parameters of each pit are as follows:
Table 6: Comparison LOMP Production
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Pit 2012 LOMP(1,2)
------------------------------------------------------------
Waste Ore Grade Gold Strip
(Mt) (Mt) (g/t) (koz) Ratio
----------------------------------------------------------------------------
AF Gap 78.1 29.8 1.1 1,015 2.6
Fobinso 40.1 11.5 1.2 429 3.5
----------------------------------------------------------------------------
Sub-total 118.2 41.3 1.1 1,444 2.9
Fetish 53.7 15.8 1.1 576 3.4
Esuajah Sth 73.8 8.2 1.9 493 9.0
Esuajah Nth 32.5 17.1 0.9 501 1.9
Chirawewa - - - - -
Bokitsi - - - - -
ROM S/pile - 4.4 0.6 89 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TOTAL 278.2 86.9 1.1 3,109 3.2
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Pit 2013 LOMP(1,3)
------------------------------------------------------------
Waste Ore Grade Gold Strip
(Mt) (Mt) (g/t) (koz) Ratio
----------------------------------------------------------------------------
AF Gap 63.4 27.5 1.1 954 2.8
Fobinso 30.6 9.3 1.1 330 3.6
----------------------------------------------------------------------------
Sub-total 94.0 36.8 1.1 1,283 2.6
Fetish 29.8 13.9 0.9 442 2.1
Esuajah Sth 56.2 6.9 1.7 382 7.2
Esuajah Nth 22.2 15.7 0.9 465 1.4
Chirawewa 11.2 2.9 1.1 106 3.8
Bokitsi 13.3 2.1 2.3 158 6.3
ROM S/pile - 4.4 0.6 89 -
----------------------------------------------------------------------------
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TOTAL 226.7 82.7 1.1 2,925 2.7
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Notes: 1. Based on Measured and Indicated Mineral Resources only, adjusted
for mining depletion to 30 June 2013.
2. Based on August 2012 Proved and Probable Ore Reserve; 0.4g/t and
0.5g/t cut-off, sub-blocks.
3. Based on the June 2013 Measured and Indicated Mineral Resource;
Oxide - 0.6g/t cut-off; Transitional - 0.5g/t cut-off; Fresh -
0.4g/t cut-off, regular block.
Applying the stated unit cost assumptions to this production profile, the
forecast unit all-in site cash costs for the EGM are estimated to be as follows:
Table 7: LOMP Costs(1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
US$/oz Cost FY2014 FY2015 FY2016 FY2017 FY2018 LOMP Avg
----------------------------------------------------------------------------
Mining 479 481 474 551 486 410
Processing 344 282 291 293 276 297
General & Admin. 118 95 95 96 88 91
Sub-Total 941 858 860 940 851 799
Royalty 79 82 82 78 78 79
Sustaining Capital 87 80 79 101 94 60
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Total All-in Site Cost 1,107 1,020 1,021 1,119 1,022 937
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Note 1: Before taking silver credits of US$5/oz into account .
These estimated unit costs are based on the following assumptions:
1. Mining costs include the total cash cost of mining both ore and waste
(including pre-strip) during the period. Mining costs are based on
contracted rates negotiated in November 2009 with mining contractor,
African Mining Services, adjusted for historical rise and fall factors
(currently at 25% for Load and Haul cost and 10% for other mining costs)
and an additional US$2.15/t ore for crusher feed haulage from the
Eastern Pits. The average life of mine mining cost is US$3.43/t of
material moved.
2. Unit processing costs are assumed to be US$9.05/t of ore processed plus
a further US$0.09/t of ore processed for refining costs. This cost is
based on actual costs adjusted to remove one-off costs incurred in
recent periods that related to one-off maintenance events, electricity
back-pay etc.
3. A General and Administration unit cost of US$2.82/t of ore processed has
been assumed, which equates to approximately US$2 million per month.
4. Future costs do not include estimates of inflation, nor do they assume
that the benefits of cost optimisation programmes being implemented
across the EGM site will be realised;
5. Royalty is based on a US$1,200/oz gold price and assumes a 5% royalty
paid to the Ghanaian government and a 1.5% royalty payable to Franco
Nevada;
6. Sustaining capital expenditure is estimated at US$151 million for the
remaining life of mine, or on average US$13.7 million per year for 11
years of processing. This estimate includes the cost of site
rehabilitation net of equipment salvage value in the final year of the
mine. The single largest item of forecast capital expenditure relates to
the cost of compensating landowners for loss of crops, structures and
livelihood as well as the cost of relocation housing. This accounts for
slightly more than half of the sustaining capital estimate and includes
expenditure associated with accessing open pits on both the western and
eastern sides of the mining lease. The use of underground mining
techniques on the Esuajah South Resource could result in a material
decrease in the estimate. However, as the feasibility of using this
mining technique has not yet been demonstrated, it has been assumed that
open pit methods requiring relocation of infrastructure and dwellings
will be applied.
It is intended that the EGM LOMP will be reassessed annually taking into account
any incremental Mineral Resources delineated during the preceding period and any
revisions to design parameters (including, but not limited to, gold price and
operating costs) in the design of the pit shells.
Jeffrey A Quartermaine, Managing Director and Chief Executive Officer
Competent Person Statement
The information in this report that relates to Mineral Resources for the Edikan
Gold Mine (Tables 1 and 2 of this Report) is based on information compiled by Mr
Trevor Stevenson a Competent Person who is a Fellow of the Australasian
Institute of Mining and Metallurgy and a CP Geo. Mr Stevenson is a full time
employee of RungePincockMinarco. Mr Stevenson has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration
and to the activity that is being undertaken to qualify as a Competent Person as
defined in the 2004 edition of the 'Australasian Code for Reporting of
Exploration Results, Minerals Resources and Ore Reserves' and to qualify as a
"Qualified Person" under National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101"). Mr Stevenson consents to the inclusion in
the report of the matters based on his information in the form and context that
the information appears.
The information in this report that relates to the Ore Reserves of the Edikan
Gold Mine (Table 3 of this Report), is based on information compiled and
reviewed by Mr Joe McDiarmid, who is a Chartered Professional Member of the
Australasian Institute of Mining and Metallurgy, and is an employee of
RungePincockMinarco Ltd. Joe McDiarmid has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined
in the 2004 Edition of the 'Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves' and to qualify as a "Qualified
Person" under National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101"). Joe McDiarmid consents to the inclusion in the report of
the matters based on his information in the form and context in which it
appears.
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 Tengrela, 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
To discuss any aspect of this announcement, please contact:
Managing Director:
Jeff Quartermaine
+61 8 6144 1700
jeff.quartermaine@perseusmining.com (Perth)
Investor Relations:
Nathan Ryan
+61 (0) 420 582 887
nathan.ryan@nwrcommunications.com.au (Melbourne)
Rebecca Greco
+1 416 822 6483
fighouse@yahoo.com (Toronto)
Perseus Mining (TSX:PRU)
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