Perseus Mining Limited

Good morning and welcome to the Perseus Mining investor webinar and conference call. All attendees are in a listen-only mode. If you would like to ask a question directly to the company, please use the raise hand function within Zoom or if dialing in via phone, use press star nine. I'll now hand over to Perseus Mining Managing Director and CEO, Jeff Quartermain. Thank you, Jeff.

Thanks very much, Nathan, and welcome to Perseus Binding's webinar to discuss our March 25 quarter report. I'm joined on the call today by two of my colleagues. Our CFO, Leanne DeBrayne, needs no introduction. She's been an integral part of our leadership team for quite some time and has frequently participated in these webinars. We're also joined today by Jacob Riccadoni. Now, Jacob joined Perseus earlier this year in the role of Chief Development Officer with specific responsibility for exploration, tech services and development. And Jacob will be available to respond to any detailed questions that you may have on either our organic growth projects or similar matters later in the webinar. So welcome, Leanne and Jacob. Now, the agenda for today's webinar is the same as usual. I'll start by providing an overview of what Perseus has achieved operationally during the quarter. and then we'll hold a Q&A session to dive into any specific matters that have not been addressed either during the presentation or indeed in the market releases that we have made to the market either on the quarterly or the release we put out last Monday that spoke to the decision to move forward with Indian Saga development. For those of you who are participating in this webinar via your computer, you should be able to track the presentation visually on your screen till we get to that point. Now, in summary, it seems that every quarter we report months the same thing, namely that our team at Perseus has once again delivered very strong gold production results, competitive all-insight costs, and with the help of the rising gold prices, expanded cash margins and increased free cash flow and cash balances. Now, in terms of the Australian gold sector, at least, and possibly globally, our performance in closing cash balance, which I might say stands at US$801 million, or for our Australian listeners, It's better than most in the Gold sector based on the reports that we've seen from our peers so far this month. Now, this does beg the question of why our consistently strong operating performance doesn't translate very accurately into relative share price performance. This is an issue that's challenged us for some time, and several theories have been put forward about why we traded a discount to our peers, and these include the African discount, so to speak, and the quality of Percy's Asset portfolio, particularly the remaining lives of our assets. Now, I won't dwell on these observations too much as, in my opinion, both of them are fairly fundamentally flawed, but rather than complain about the misunderstanding What we have done this quarter is taken some very decisive action to address both the issue of asset quality and African risk. The two major growth initiatives, both fully funded from existing cash reserves, I might say, have been materially advanced during the quarter, or since our last webinar, and they include the CMA underground development at our existing Yayori gold mine in Cote d'Ivoire, and of course the commencement of the development of the Niansaga project in Tanzania. Now both of these initiatives will be a subject of more focused discussion in the presentation that follows as both of these projects will materially upgrade our existing production base that has, I repeat, already been generating outstanding operating results consistently for the last five or six years. Now hopefully the quality of these two new additions will gain some recognition And of course, if they don't, the new operations will certainly help us to continue the long stream of outstanding results generated by the company. So in summary, things are rolling along very nicely at Perseus. And let's go to the presentation so that I can demonstrate what I'm talking about. So if we look at the operating and financial results in summary that we've published today, so for the quarter production 121,605 ounces down slightly from the prior quarter, which was in fact an outstanding quarter. The all-inside cost across the group is $1,209 an ounce, up slightly for two reasons. One is that the production is down slightly, but also because of the increase in royalty payments due to the higher gold prices that we've been receiving. The gold prices averaged $2,462 an ounce, giving us a margin of US $1,253 an ounce. Now, on terms of the margin, I did read in the papers earlier this week, a very prominent United Kingdom investor complaining that the gold sector hadn't taken the opportunity to generate margins. Well, I would point out that our cash margin is in excess of 100%. And that's generated something like $152 million of cash notional cash flow for the quarter, resulting in a cash and bullion balance at the end of the quarter of 801 million US dollars. Now, I point out that that 801 million US dollars does include 34,208 ounces of gold that were valued at the spot price on the 31st of March, which is $3,115, so down from where it is today, in fact. But But nevertheless, that's how that number has been arrived. I should say also, it does not include any debt. We don't have any debt, even though we do have an undrawn line of credit of 300 million US dollars. Now, if you look at that in context with what we've done in the past, as I said, the December quarter was up slightly, but For the last four quarters, there's been a fairly remarkable consistency in our performance. And during that time, we've seen the gold price rise and we've seen the cost kept reasonably steady. All three operations are running reasonably well, although I have to say not without their challenges, as I'll mention in just a moment. But certainly in this rising Gold price environment, it is giving us the opportunity to significantly expand our margins and cash, et cetera, et cetera. Now, looking forward, we're now one month pretty much through the three months of the quarter. Happy to say that we're operating bang on targets at the moment and we'll continue to deliver. There are certainly good results into the future if indeed nothing untoward happens in the next couple of months. Now, in terms of what we are predicting, this chart that you can see shows the guidance that we have given to the market. Now, we're obviously very well positioned relative to the forecast for the half year and the full financial year. I think, if anything, what we're going to be doing is, provided that nothing untoward happens between now and the end of June, we will end up in the upper quartile of the production range that we've given. the market and and at this stage we're quite some way below the bottom end of the of the cost range so you know that's a that's a pleasing outcome um and that that of course has occurred notwithstanding the higher royalties etc that i mentioned before um now if you look at where the where the productions come from i'll just quickly run through the three operations so yayori was the standout again as it has been for some time 57 of our our total production so it's the main The costs this quarter were down a bit on where they have been and we have been the beneficiary this quarter of the fact that we did have accelerated stripping in the last couple of quarters. Now, you'll recall I mentioned on this presentation, you know, for the last couple of quarters that we were We did get behind in our stripping and we had accelerated stripping in the last couple of quarters to get back on track. We are back on track and we're now accessing high-grade material. And so that's been what has caused this pretty good cost performance in the last quarter. The issue that is challenging us at the moment, if anything, at Yayori is the fact that we've moved from, or we've just opened up the Yayori open pit. We've been mining in the CMA open pit up until now. So the geology in the Yayori pit is quite complicated and our grade control procedures and You know, need to be modified to adjust to the new all body. And at this stage of the game, we haven't quite got it right. We've got a positive reconciliation and tons of negative reconciliation on grade, but overall positive on ounces. But that's something that we're working on pretty furiously at the moment to get that right, because that is important. for us going forward because ore from that Yayoi open pit is going to be blended with ore from the CMA underground and I'll talk about this in just a moment but we signed off on that operation earlier this quarter. Now as far as Etiquette is concerned it was a little bit disappointing relative to the prior quarter, about 34-35% of our gold comes from Etican, right across the board, the metrics were slightly under where we had hoped they would be. But nevertheless, the costs were still fairly good. I mean, US$1,177 per ounce at Etican is right in the bottom end of the global cost curve. And I think full credit to the team that we've been able to keep a lid on our costs at Etican over the last few years. um reconciliation there is is is very good or is within market ranges etc etc so we're not too concerned there the we have started mining in the end kasua pit which is a new pit that was discovered a few years ago by our team now this ramp up and this is partly what's attributed to the performance this quarter a ramp up has been a bit slower than we were hoping for as a result of some land access issues in the area. These are gradually being addressed and not before time, I might add, given that the AG and Fetish Pits are getting towards the end of their life. So we will be mining from Nkasuo in the next quarter, full steam ahead. And hopefully by then we'll have things sorted out. Now, one of the points I might just make on EDICAM while we're talking about it, which I think is important in the context of geopolitics, is that our mining licences in Ghana have been renewed. They've been signed off by the Minister and will be presented to Parliament, I believe, as part of a batch in May this year to get a parliamentary ratification. So, you know, some of the issues that have been reported in Ghana recently, I can say that most certainly don't apply to Perseus. As far as our standing in the country, we are in good standing. And we have the opportunity to extend the mine life at Eticanamite. So we've been doing quite a lot of work on strategic options and we'll publish this data later on in the year, but certainly we believe that there is an extended life at Etican looking forward. Sosingi has been a little bit disappointing this period as well and there are once again fairly solid reasons for that. All of the metrics have been reasonably okay other than grade and the grade is down as a result of not accessing the higher grade material at Pimbiosa in the way that we're wanting to do. Part of that, a large part of that relates to Our contractors' performance, equipment availability and productivity. We have addressed those issues by bringing in some additional equipment ourselves and hiring it back to them. And we will overcome this issue as we move forward. But certainly the performance this quarter was not where we would like it to be. Once again, similar sort of thing. We're getting good reconciliations across the site. And I think that the life of Sasingi, it can be extended quite materially through these strategic options that we've been evaluating. And we will, as I say, communicate those when all of that work has been completed. So the production is in reasonably good shape. And I'm now going to hand to Leanne, to address some of the financial metrics, please, Leanne.

Thanks, Jeff, and hello, everybody. Good to be on the call. You'll see from the slide in front of you that our cash flow and our overall balance has grown significantly since the last time we reported, which was $704 million. It's now sitting at $801 million, including bullion. We have zero debt, but we still have our undrawn credit line of US dollars, $300 million. We continue to make contributions to our host countries, contributing this quarter $22 million in tax. The capital expenditure for the period of $17 million points out that does include $11.4 million relating to the Nianzaga pre-FID expenditure. And we also in the period contributed $10 million into the share buyback, which I'll talk a little bit to a little bit later. If we move on to the reconciliation of our all-in site costs to our all-in sustaining costs, reminding the listeners that Perseus has for many years reported an all-in site cost number, which is a pure cash number and doesn't necessarily agree with the IFRS all-in sustaining costs. And so we've put the slide in just to explain those differences so everybody is aware. You'll see that we have got a reconsideration because we use produced versus sold numbers. In the period, we had inventory movements because EDUCAN was building up stockpiles and then the corporate admin costs, which is included in the all and sustaining costs, is not included in the all and five cost number. Moving on to the hedging position and strategy, we have always continued to focus on downside price protection to ensure the certainty of our cash flows, particularly now that we have committed to the Nianzaga project over the next two years. However, giving consideration to the robust gold environment in which we are operating, we have our revised strategy from using spot deferreds and forward contracts to a zero-cost collar approach. And this provides us downside protection, but does allow us for upside participation. And what we've set out here, which I won't go into too much detail, just sets out, you can see what our hedge book looks like going forward over the next four years, well, three and a bit years, should I say, and how the introduction of this new strategy is giving us that upside participation. The next is the share buyback. This is our position as at the 9th of April when we entered the blackout period. And so we've executed at that period 32.78% of the buyback, which was about $32.74 million. With the release of the Nianzaga FID and the quarterly this morning, we will likely commence participation in the share buyback again tomorrow. And that's all for me from the financial side, Jeff.