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. I'll now hand over to Perseus Mining Managing Director and Chief Executive, Craig Jones.

Thank you, Craig. Thanks, Nathan, and welcome to the Perseus Mining quarterly webinar to discuss our September quarter results. Firstly, it's an honour to assume the role of CEO of Perseus Mining following Jeff Watermane's retirement, and he's left a lasting legacy at Perseus. And I'm joined here on the call today by our CFO, Leanne DeBuren. Thanks, Leanne. And also let me just start by acknowledging the exceptional efforts of our teams across the globe who worked tirelessly to deliver another strong quarter of performance for Perseus. So the September quarter marked another solid performance for Perseus in a year where all of our sites are transitioning into new mining areas. Amongst the change, we delivered strong operational results and continued to generate robust cash flows at the same time as marking meaningful progress on our growth initiatives. Firstly, our 12-month rolling average TRFIR is currently sitting at 0.6, which is a very credible performance. From a safety perspective, we're continuing to focus on our fatal risk management process and our safely home each day engagement program as the key pillars for our safety approach. Our gallop production for the quarter was just under 100,000 ounces at an all in site cost of $1,463 per ounce. So whilst our production is lower than the previous quarter, it's in line with our expectations and in line with our full year guidance. Combined gold sales from all three operations totaled 102,000 ounces, sold at an average sales price of $3,075 per ounce, delivering a robust cash margin of $1,612 an ounce, capitalising on strong market conditions. The notional cash flow for the quarter was $161 million and we continued to build on our cash position with the quarter ending with a net cash and bullion of $837 million. The September quarter marked significant transitions for mining locations at Yarrae and Etikamp. Yarrae transitioned from the CMA open pit to the lower grade Yarrae open pit, and Etikamp's focus moved to the higher grade Nkasua pit following the completion of mining at the Agee and Fetish pits. And I'll provide further details on this as we progress through each site's performance for the quarter. Starting with Yarrae. As mentioned, Yarrae goldmine operations have transitioned from the CMA open pit to the Yarrae open pit during the quarter. Yarrae open pit is geologically more complicated than CMA open pit, and there's been a strong focus on improving grade control practices to improve reconciliation to account for the shift in geology. We saw a significant improvement in reconciliation over the quarter, with September's reconciliation being in line with normal tolerances. For the quarter, Yarrow produced just over 55,000 ounces of gold, which was 21% down on the previous quarter, but in line with our expectations. This reduction reflects the lower-grade Yarrow ore consistent with the mine plan, and we can expect to see lower grades associated with the Yarrow pit for the remainder of the year. Production cost for the quarter was $829 an ounce, with an all-in-site cost of $1,110 per ounce. The all-in site cost decreased by 6% compared to the previous quarter, notably due to a decrease in sustaining capital associated with timing of ongoing works on the tail storage facility, which was higher in the June 25 quarter, FY25 quarter. 57,000 ounces of gold was sold at a weighted average sale price of $2,959 per ounce. which delivered an average cash margin of $1,829 per ounce. Notional operating cash generated by Yarrow during the quarter was $102 million, so continuing to generate strong cash flows at Yarrow. Mill run time was steady at 94%, with gold recovery remaining stable as per the previous quarter at 94%. Reconciliation between the block model and the mill for the last three months is 17% positive tonnes and 10% negative on grade for a 5% overall increase in contained ounces. A final goodbye cut was taken in the CMA open pit, with the pit now being used as the access for the CMA underground development, which began during the quarter. The CMA underground will be the first mechanised underground mine in Cote d'Ivoire. And I'll speak further to the CMA progress later on in the presentation. At Eddicam, during the quarter, Eddicam produced 33,000 ounces of gold. The majority of the mining during the quarter was conducted at the Anchor Sewer Pit, following the completion of the AG and the Fetish Pits. The land access of Anchor Sewer Pit was mostly resolved during the quarter, with mining of the footprint progressing. There were some challenging wet conditions, from sustained rainfall that impacted the ore handling and dilution. resulting in processing of some lower-grade stockpiles during the quarter. Stripping was higher due to face positions and access sequencing of the PIP as mining areas became available. Production cost for the quarter was $1,232 per ounce, and an all-in-site cost of $1,603 per ounce, which is $121 per ounce higher than the previous quarter, and the increase is mainly due to mining costs resulting from high waste stripping at Inkasua. 31,000 ounces of gold was sold at a weighted average price of $3,337 an ounce, resulting in an average cash margin of $1,734 per ounce and a notional operating cash generation of $57 million. Mill run time and recovery were 94 and 87.7 respectively, largely in line with the targeted key performance indicators. Reconciliation between the block model and the mill for the last three months is 11% negative on tonnes and 6% negative on grade, for a 16% reduction in contained ounces. And this is mainly associated with the commencement of the Anchor Soil Pit and some of the challenging conditions that were experienced during the quarter. Plans are progressing to commence further cutbacks at the Fethish and Aswaja North Pits in the next calendar year, consistent with the plans we articulated in the five-year outlook in June. During the quarter, Sasingi Complex produced 12,000 ounces of gold and the Sasingi Complex results were attributed to mining and processing operations at the Sasingi Gold Mine. and mining operations at the Thimby Assay Pits located 65 kilometres from the Sasingi Processing Facilities. Production cost for the quarter was $2,458 per ounce and an all in-site cost of $2,745 per ounce. The increase in oil and site costs was a combination of increased royalties linked to gold price and higher production costs resulting from scheduled mill railway line and surge bin apron feeder maintenance and an increase in waste stripping at Vindy Asso West, Susindi Stage 4 and Airport West to access high-grade oil. 13,000 ounces of gold was sold at a weighted average sale price of $2,953 per ounce, resulting in an average cash margin of $208 per ounce and a national operating cash flow of $2 million for the quarter. Mill run time was 91%, which was down from the previous quarter's 96% due to maintenance activities, and gold recovery improved marginally to 90.9% from 88.3% in the previous quarter. Reconciliation between the block model and the mill for the last three months is 4% negative on tonnes and 14% negative on grade, for an 18% reduction in contained ounces. The lower gold grade performance reflects the continuation of higher dilution than anticipated when mining the narrow, variably mineralised structures of Sasinghe Main, Fimbiasso West and Airport West pits. The six- to 12-month trends demonstrate improving correlation, with gold contained now tracking within 7% of the block model over an annual period, and work is ongoing on operational controls to minimise dilution. Oil grade is expected to increase with the mining of the Antoinette deposit at Bagway, which is scheduled to commence in Q2 of FY26. Construction of the site infrastructure is progressing well and remains on schedule. All major contracts have been awarded and key contractor mobilisation is proceeding as planned. So looking ahead for FY26, our guidance remains unchanged. Gold production will be in the range of 400 to 440,000 ounces with production weight to the second half of the year. Our all-own site costs will be between $1,460 and $1,620 per ounce. So our guidance includes Yarray production reducing from this quarter, as we mentioned before, with all of the ore now coming out of the Yarray pit. And Sasingi will increase production with access to the higher-grade material at Bagway. Eddie Quang will also increase in production with the main source of the ore from the higher-grade Encosilla pit. So now I'll pass over to Leanne and she can talk about the financial aspects of the quarter.

Thanks, Craig. And hi, everyone on the call again. As mentioned by Craig, we have ended this quarter strongly with $837 million of cash and bullion on the balance sheet, slightly up on the June 25 quarter. The balance is after operating margin generated by our sites of the US dollar, $170 million. We've also spent on continued investment in organic growth at the sites about $14 million. Capital expenditure was in the region of $67 million for the period, which included $48 million that's been spent on the progression of the Niyanzaga development project and about $12 million on the CMA underground at Yareh. There's been continued investments in our host countries through the payment of a US dollar $29 million dividend payment, which was made to our government partner in Ivory Coast in relation to Yare and their 10% shareholding, and ongoing payments of taxes in the country. Included in this cash flow was also $11 million in the previous share buyback program where we purchased back $84 million in total, Australian dollars in total, of the $100 million Australian share buyback commenced in September 24. The share buyback was renewed in September 25 for another Aussie dollar, $100 million. We remained debt free with the US dollar $100 million facility undrawn in place. Looking at our hedge position, as previously advised, Perseus continues to evaluate its hedging strategy in the current gold price environment. Our hedging program focuses on maintaining downside protection whilst retaining as much upside opportunity as possible while still observing, as we do, prudent cash management practices. giving consideration to the rise in gold price environment we're in. During the year, and particularly during the quarter, we have continued to roll off existing forward contracts, reducing our committed hedge position. Since the end of March 25, we have reduced our committed hedge position from 24% to 14% of our three-year forecast production. In addition, during the quarter, we spent US dollar $1.7 million purchasing uncommitted put options at a strike price of about $2,600 per ounce as part of our capital allocation strategy, which seeks to maintain balance sheet resilience under a range of trading conditions. With that, I'll hand back to Craig to now talk about our organic growth across the group.

Thanks, Leanne. So moving on to the organic growth now, and there's been some fantastic development of our Nianzaga project and CMA projects over the quarter. But we'll start off with Nianzaga. So during the quarter, there were several important milestones achieved at our Nianzaga project in Tanzania. We announced the signing of the critical agreements between the Tanzanian government and Perseus, a mining subsidiary, Nianzaga Mining Company Limited, locking in the key fiscal arrangements related to the project. We've been very active with our drilling program. During the quarter, activities consisted of resource definition drilling on the Nianzaga's Tusca and Kilimani deposits, along with sterilisation and exploration drilling within the Nianzaga mining licence. Reconnaissance drilling on a cluster of exploration targets within the exploration tenements surrounding the Nianzaga mining lease was also undertaken. This drilling continues with encouraging results that could support the potential for a resource and reserve update later this financial year. In terms of construction activities on the ground, you can see from the photos that we've been very busy. There's blinding, formwork and seal fixing commenced on the primary crushing, milling and CIL circuits and a second concrete contractor has been mobilised to site to provide additional capacity Fabrication of the sag and ball mills are progressing well and are ahead of schedule, both of which are on the project critical path. We've completed the bulk earthworks at both camp accommodation and treatment plant work areas and the roofing has been installed on the first accommodation blocks. The other buildings are progressing well as we work towards occupancy later this quarter or this coming quarter. Contracts have been awarded for the installation of the transmission line and transformers and for the tie-in of the permanent power supply. We also continue to make great progress on the resettlement housing project with 163 of the total 262 houses have been delivered to project affected families and as of the end of 19th of October the number has risen to 181 homes. So overall, the Nianzaga project remains on budget and on schedule, with first gold anticipated in January 2027. As we announced during the quarter, a presidential decree was granted authorising the development and operation of the CMA underground at Yarra. The first cuts of the Pauline decline were taken on Monday the 29th of September, marking a significant milestone for the CMA underground project. You can see from the photos it's starting to look like a mine, and as of today, the Pauline decline has progressed to 69 metres. Phase support of the remaining three portals continued, and mining of all three will commence early in quarter two of this current quarter. The administration building to fit out of the support buildings is complete. Other surface infrastructure, including camp facilities, electrical tie-in and maintenance areas to support the underground operations also continue during the quarter. With the commencement of mining at the declines, the next major milestone for the CMA underground project will be first oil production scheduled for Q3 of FY26, with commercial production scheduled for Q3 of financial year 27. So great progress at CMA. So with sustainability, so alongside our financial and operating performance, Perseus continues to deliver tangible value to our host communities and governments. And this slide captures the breadth of our contributions. In the first quarter of FY26, our total economic contribution reached $215 million across our host countries. This includes $141 million in local procurement, which directly supports national supply chains and local business development. We also contributed $58 million in taxes and royalties and $1.87 million in community contributions as we continue to support local development funds and key community initiatives. Our workforce overwhelmingly comes from the regions in which we operate, with 95% of our employees from our host countries, and this is a reflection of our commitment to build local capability and building the skill base that we need for our future growth. Safety remains at the core of how we operate it, and achieving a TFIR of 0.6 and an LTIFR of 0, making the full year without a lost-time injury. That's a significant milestone and a testament to the safety culture that's embedded within our organisation. We've also published our FY25 Sustainable Development Report, which includes a refreshed sustainability strategy and a double materiality assessment. This ensures that our ESG priorities reflect both our business risks and the issues that matter most to our stakeholders, and I encourage you to read that on our website. Sustainability is at the core of our purpose and guides how we deliver results, creating value and building resilience. This is what makes Perseus a trusted partner in achieving its mission of creating material benefits for all stakeholders in fair and equitable proportions. So we continued, so the September quarter capped off another successful quarter for Perseus. We continued to deliver solid operating performance, generate strong financial returns and progress our strategic growth projects, all while maintaining high safety and ESG standards. With a strong balance sheet, high margin operations and clear growth path, we believe that we're well positioned to continue delivering long-term value for our shareholders. So thank you, and I'll now open the floor to questions.

Thanks, Craig. If you would like to ask a question directly to the company, please use the raise hand function within Zoom. Your first question comes from Reg Spencer at Canaccord. Go ahead, Reg.

Thanks, Nathan. Good morning, Craig and Leanne. Congrats on another good quarter. My first question is just in relation to Sasinghe. That delay that you mentioned with respect to the mining conventions, is that delay more to do with the elections or the changes that were recently made to the mining codes, trying to get a handle on the overall environment in Cote d'Ivoire?

The elections were held on Saturday in Cote d'Ivoire and by all accounts it seems to have progressed pretty well. We obviously keep watching that over the next couple of days. In terms of the mining convention, we're just working through the process of obtaining those. It takes a little bit of time.

Yeah, I think, Reg, to your question, I think, no, it's unrelated to the mining code. It's just, as you know, during election time, it's hard to get people to put pen to paper. That said, we've quite progressed with it and it's likely we'll get it sorted out. The mining convention, however, is not relevant to us commencing mining, however. It's just a matter of making sure we've signed up to all the fiscal arrangements that are agreed.

Understood. Thanks, Leanne and Craig. And last one, feel free, Leanne or Craig, to answer this, but I'd be interested to get your views on hedging. Gold price clearly very high at the moment. You've got a relatively low percentage of hedging, and I suppose that's good for cash flow at this point in time. But the outlook, is there an argument to put more hedges in place to lock in current gold prices?

Yeah, I mean, if I had a crystal ball and I knew where gold price was going, I'd be much richer than I am now, Reg. That said, as you know, we're always focused on disciplined cash management, and that's why we've shifted to the structure of paying some of our capital towards buying puts, which are relatively cheap at the moment. So although our committed hedging has come down, which is our forward book and our calls, the shift to puts allows us to protect the downside. So we're still maintaining that downside protection through putting the puts in place, but those puts are not committed hedging, so we don't have to deliverance them, but they are then allowing us to make sure that if gold price drops below $2,600, that we've relatively protected them.

Great. Thanks very much, Leanne. And Craig, I'll pass it on. Thank you.

Thanks, Rich. Thank you. Your next question comes from Richard Knights at Baron Joey. Please go ahead, Richard. Take yourself off mute there, Richard.

There we go. Hi, Craig. Hi, Leanne. How are you doing? Good, Richard. Just a quick one on EDICAN. Obviously, production was down a little bit quarter on quarter. Just wondering about the access issues at NKSUO, and I think you mentioned they're largely resolved. What is remaining, and is that going to have any impact over the rest of the year? And I suppose how should we think about the run rate at EDICAN over the rest of the year?

I think the way to think about the run rate for Etican at the end of the year is, as we've said, it will continue to increase in production as we get deeper into the Incasua pit. We've, when I say largely complete, we've got the majority of access to the entire footprint now and continuing to mine down, which, you know, we did get a little bit out of sequence with the access issues we were having, so hence the stripping that we talked about being a little bit more. And so we're just getting back into sequence now in the pit and don't expect to see any constraints for us moving forward.

No worries. That was it. Thanks very much, guys. Wonderful.

Thanks, Rich. Thank you. Your next question comes from Levi Spry at UBS. Please go ahead, Levi.

Yeah. G'day. Thanks, Nathan. Thanks, Craig and Leanne. Maybe just at Yayori, can you just maybe talk us through the profile over the remainder of the year as the Underground ramps up?

Yeah, so obviously we talked last quarter about... the delays we were having in getting our presidential decree. So that's now resolved and behind us, and we're basically ramping up our mining progress for the CMA Underground. As I mentioned before, we're quite a way down the Pauline Decline now, and we'll continue to get our rhythm and cycle times refined as we move forward. We're pretty confident that that's going to progress well and we should recover some of our time. Obviously, we need a little bit more time of mining before we can really go out and say that we are going to do that. So that's our primary focus at the moment is to get the mining operations efficient and turning over the heading so that we can recover that time.

Yeah, and Levi, I mean, just, you know, high level, as you know, as we mentioned, it is because we're entering the Yare pits, your production will come off slightly for Yare over the next two or three quarters, given that you're in the lower grade Yare pit and ramping up the underground.

So we're essentially, the majority of the gold for the year comes out of the CMA pit. There's only a small contribution from the underground. From the Yare pit. Sorry, the Yare pit. So that's our primary focus now is continuing that, but the grades are lower.

Okay, thank you. And if I can just ask one about Nines Argo. So I think you mentioned the serving resource update coming this year. How do we think about the materiality of that, I guess, given the stage it's at, potential upside and even the pricing assumptions that we'll use in the last cut?

I think we'll have to wait and see for that work to be completed before we can give you any sort of indication on the material materiality of that but you know as we continue to do the drilling we'll continue to update our models we'll look at our our assumptions around prices and so forth and um but everything seems to be going in the right direction at the moment

Yeah, okay. Thanks, Craig. Maybe just on that. So the updates we get on the grade room reconciliation across the operations, is there anything that, you know, has caught your eye in the time you've been in the seat when it comes to that?

Oh, look, I mean, that's obviously a core focus for us. I talked about Sasingi, trying to close the gap on that. And there's been some good progress in terms of Yare closing the gap on the reconciliation and tightening up our processes and mining practices. And we've seen some positive movements in that regard. So it's something that we'll be continuing to focus on. I mean, there's a reason we put it in the report. It's so that we can demonstrate that we have reliability in our ore bodies and we have to mine them reliably as well. So very much a key focus for us.

Nice one. Thank you. Thanks for your time.

Thanks, Levi. Your next question comes from Andrew Bowler at Macquarie. Please go ahead, Andrew.

Yeah, Craig and Leanne, just following on from the hedging questions, I'm not sure if you mentioned it earlier, Leanne, but just the cost of those puts, I'm assuming that's caught up in the working capital and other line on the waterfall chart. Yeah, it is. And how much you're willing to spend, I guess, every quarter from now on.

Yeah, I mean, we spent about, as I said, US$1.7 million in the quarter. We've got a mandate from the board to not overspend on it and we're continually looking at the cost of it but puts at the moment are relatively cheap. I think we're paying between $40 and $70 an ounce or something is what we've been paying.

No worries. And just another one, interesting comments on Sudan, just talking about gradual improvement in security recently. I'm just wondering if that's going to affect the rate of spend for that project. Will we see an uptick for the remainder of the year, or is the budget the budget and doesn't really matter if security improves? That's all we'll see. Excuse my voice, I should say.

I mean, the reports coming out of Sudan are positive, which is a good thing. Obviously, there's a little way to go before we see how all that pans out. But we'll keep watching that. In terms of our current plans, our current plans are as per our budget. And if things change to the point where we think that that would change, then we'll let the market know that at this point in time, we're continuing to progress towards our budget.

Yeah, and remember, Andrew, we've always said the security issues are quite minor for us given where we're located. The thing for us to make a decision there is to make sure the supply chain and logistics pieces are working because that's the most critical part probably to the project over and above security of our people.

No worries. That's all for me. Thanks.

Thanks, Andrew. Thank you. Your next question comes from David Radcliffe at Global Mining Research. Please go ahead, David.

Hi, good morning, Craig. So it's early days for the question, maybe a little bit premature, but look, any thoughts on the opportunities you might have identified in the business so far? And then when you think to the overall strategy, are you sticking to this or have you thought of any way you might sort of think to tweak this in the future?

Thanks for the question, David. The plan is still the plan. So there's a solid platform that Jeff and the team have built over the years and the company has enormous optionality in it. I think for us moving forward, we'll be focusing on delivering the five-year outlook that's been presented to the market. And that means we need to continue to deliver on our operating performance. We need to focus on the delivery of the Neon Zaga project. and ramp that up in the March quarter of 2027. We need to build and operate the CMA project, so that's a shift, the first underground mine in Cote d'Ivoire. But we'll also be focusing on extending the life of our existing assets and doing more exploration in the exploration space, so a lot of focus on near-mine exploration. We're also doing some greenfields work as well, And then beyond that, you know, if any other options come our way, then we'll assess them on their relative merits. But the plan is to continue to run safe and efficient operations, to continue to generate strong cash flows, continue to return capital to shareholders and continue our growth options at the same time. And we think that we're in a position that we can do that. So that's how we're thinking. Well, that's how I'm thinking about it and we're thinking about it at the moment.

Great. Thank you. That was very clear. There may be a follow-up on EDICAN. So Incasua is ramping up. Lots of, you know, a lot of volume of low-grade stocks processed this quarter. So is that going to be, is that going to follow through to next quarter? And then when do the other cutbacks start to deliver all?

Yeah, so the, I'm going to start with Incasua. A lot of the reason for the low-grade stocks at Incasua was the wet season, obviously, in Cote d'Ivoire at the moment, and that finishes pretty much this month. So we're expecting conditions to improve substantially for the rest of the year, and that'll just really get us into the rhythm in Incasua and start to deliver the higher grade that we're expecting. So you should see that grade improve throughout the year. With the other two pits, we'll start that stripping activity in the next half. And there's a fair bit of stripping before we get into the oil there, so that's more focused on next year's grade than this current year.

Great. Thanks. I'll pass it back. Thank you.

Thank you. There are no further questions at this time, so I'll now hand back to Craig for closing remarks.

Thanks, everyone. We're very pleased with the quarter that we've delivered. We're pleased that we're continuing to deliver strong operating performance and create strong financial returns and And really thankful for the hard work of our people across the globe who do put a lot of effort in. And that's one thing I've noticed about this company is there's a huge amount of personal ownership and discretionary effort that sits within the organisation. And that's what helps create the kinds of results that Perseus is known for. So thanks very much for your time and have a good day.