Jeff Quartermaine, Managing Director and CEO, Perseus Mining

Perseus Mining is consolidating its presence in West Africa

Perseus Mining acquired Amara Mining earlier this year. Please tell us about the significance of this acquisition.

Perseus has a well-established operation in Ghana, and we decided it was the right time to diversify our portfolio. Perseus already had a relatively small, but economically viable project at Sissingué in Côte d’Ivoire, and we decided to look further for new opportunities. There was a strong strategic rationale to acquire Amara Mining, which had a high quality asset at Yoaure, but limited access to finance. Perseus was able to offer a strong technical team and financing. Thus, it was a very good move for both companies and allowed us to further diversify our portfolio across multiple properties and jurisdictions.

What are the main reasons behind Perseus’ decision to bring Sissingué into production rather than focusing on Yaoure or looking for a larger deposit?

At the moment we are looking to consolidate the business and from there we will move forward. It will take us three to four years before we start generating profit at Yaoure and, because we have Sissingué project, we decided to go ahead with it first, even though it is a smaller project. The major reason to do so is that the Sissingué project is economically very robust. Secondly, it is positive in terms of financing, because by the time we finance the Yaoure project, we will already have a very strong cash flow from Edikan and Sissingué. The third reason is that the development team will first build the Sissingué project and then move straight from that to plan the execution of the Yaoure project, and by then, they will have a better understanding of how to develop a project in Cote d’Ivoire. Therefore, by doing this smaller project now, we are de-risking the development of the larger project. The final reason to develop Sissingué is that we made a number of promises to the Ivorian government and our company always delivers on its promises. Working in partnership with the government is a sensible strategy if we are going to be in the country for a long time, which is what we are going to do.

Preseus began production at Edikan in 2012, when gold was trading at about $1800/oz. What allowed you to stay afloat even after gold prices collapsed, and many of the West Africa gold mines were shut down?

Contrary to what a lot of investors wanted during the bull market, we hedged our gold production at Edikan. Therefore, even when gold prices were falling, we still had the security that we could stay in business. This is what is called risk management. Managing the revenue line was important, managing productivity was very important and managing costs was extremely important. We implemented some major remedial actions and delivered benefits.

What level of production are you hoping to achieve this year?

The forecast for this year is around 220,000 oz. In addition, at the end of next year, the Sissingué project will start producing 75,000 oz per year, on top of the Edikan production, which is going to grow over the next few years. Later, we will we get Yaoure into production. We are well positioned to achieve annual production of 500,000 oz in three to four years.

How would you assess investors’ interest towards West Africa?

Investors have a renewed interest in the mining sector on a global level. However, they are not yet ready to pour money into the marketplace because there is still a residual negative feeling towards especially West Africa from the last bull market. That being said, companies such as Perseus and Endeavour might be in a position to change the situation, as we were successful in advancing our projects. Investors will certainly come back to West Africa, but perhaps not just yet.

Perseus now operates in Ghana and Cote d’Ivoire. With the latter being relatively new on the mining scene, what challenges does this pose for developing a project there?

Côte d’Ivoire is relatively new to the mining business, but the government is very proactive and developing this sector and having zero tolerance towards illegal mining. Moreover, they make it easier for investors to understand how to do business in the country. We have a clear understanding of what is expected from us, which gives us a feeling of certainty about operating in Cote d’Ivoire.

In terms of the labor situation, there are many skilled workers in Côte d’Ivoire and the government is willing to bring in expatriates to train local workers.

What community projects has Perseus Mining been involved in West Africa?

In Ghana, we have recently built a large housing estate. Additionally, we have established a community trust, where we put a certain amount of money every year and the community decides what projects they want to invest in. We invest in projects related to health and education, as we see this as one of the top priorities for local communities.

Do you have a final message from Perseus Mining?

Perseus Mining has evolved in the past three years and we proved to the investor community that we deliver on our promises.


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