Perseus Mining Continues Earnings Growth

PERTH, Western Australia, Feb. 15, 2013 /CNW/ - Perseus Mining Limited 
("Perseus" or the "Company") (TSX & ASX:PRU) today announced a net profit 
after tax of $32.497 million or 6.16 cents per share for the six-month period 
ended 31 December 2012, representing a return on funds employed of 7.6%. 
Highlights of the result include: 


RESULT HIGHLIGHTS(1)      31 December 2012 31 December 2011  Change +/-
                                 Half Year         Half Year     A$'000
                                    A$'000            A$'000

Revenue from gold sales            147,065                 -  + 147,065

Net Profit after tax                32,497            13,686   + 18,811

Earnings per Share  (A$               6.16              3.14     + 3.02
cents per share)

Return on Funds Employed               7.6               3.4       +124
(2) (%)

Net cash flows from                 31,805           (3,737)   + 35,542
operating activities

Net cash flows used in            (33,403)          (53,435)   + 20,032
investing activities

Net cash flows from               (60,729)            87,353  - 148,082
financing activities

Available Cash Balance(3)           39,674           131,455   - 91,781

Total assets                       519,653           507,721   + 11,932

Shareholders' equity               390,957           311,601   + 79,356

  1. Assumes 31 December 2012 half year average AUD:USD exchange rate

 of 1.0388 and exchange rate as at 31 December 2012 of 1.0374
  2. Defined as assets less current liabilities
  3. Excludes value of 5,007 ounces of bullion on hand and 6,778 ounces 

     of bullion at the refinery.

Comments from Perseus's Managing Director, Jeff Quartermaine

"The results that we have reported today reflect a challenging six-month 
period at our Edikan Gold Mine in Ghana during which we dealt with a number of 
unexpected operational issues as well as a significant drop in the AUD:USD 
exchange rate that gave rise to an unbudgeted foreign exchange loss. On the 
other side of the ledger we have continued to enjoy historically strong gold 
prices which have helped to boost our earnings."

"The production challenges that reduced first half gold production below 
expectations will be put behind us shortly with the remediation of the crusher 
at Edikan and we are looking forward to an improvement in both our production 
and earnings in the second half of this financial year."

"Taking into account the recent challenges, we are now forecasting that gold 
production for the second half of the fiscal year ending 30 June 2013 will be 
in the range of 105,000 ounces to 125,000 ounces resulting in full financial 
year gold production in the range of 208,700 to 228,700 ounces at a forecast 
"all up" site cash cost, including production and capital costs and royalties, 
of approximately US$1,100/oz."

Financial Commentary

Profit Overview

The group's net profit after tax for the half-year ended 31 December 2012 was 
$32.497 million (31 December 2011: profit of $13.686 million). The increase is 
attributable to the Edikan Gold Mine (EGM) being in commercial production in 
the current period whereas it was in commissioning during the previous period.


Revenue of $147.065 million was earned from the sale of 98,865 ounces of gold 
at an average sale price during the period of US$1,520 per ounce. This average 
sale price excludes the effect of ounces produced in the prior year, and 
recorded as revenue in the prior year, which were used to settle hedges in the 
current period. A total of 44,000 ounces of gold that were delivered into 
forward sales contracts at an average of US$1,231 per ounce while the balance 
of gold sales were made at prevailing spot prices for gold.

Cost of Sales

Costs of sales included mining, processing and site G&A costs (excluding 
salaries) totalling $76.757 million and employee salaries and share based 
payments of $10.539 million before adjusting for movements in inventories 
including ore stockpiles, gold-in-circuit and gold bullion on hand of $19.697 
million and for deferral of excess waste removal costs totalling $10.777 
million. Costs associated with financing during the period totalled $1.567 
million and depreciation and amortisation totalling $10.127 million were also 
charged to the Income Statement during the period.


Royalties totalling $10.051 million were paid to external parties during the 
financial year. The largest royalty of 5% of revenue earned from the EGM was 
paid to the Ghanaian government. Lesser royalties of 1.5% of revenue and 0.25% 
of gold produced were also payable to unrelated private parties in accordance 
with the terms of purchase of the Edikan mining lease.

Income Tax Expense

The income tax expense that has been recognised in the Income Statement 
comprises $23.648 million, primarily relating to the EGM profit for the 
period. The corporate tax rate in Ghana is 35% for mining companies.

Cash Flow

Cash receipts from the sale of gold totalled $141.072 million during the 
period resulting in total cash flow from operations during the period of 
$31.805 million. In addition, the Group held 5,007 ounces of gold at its 
Edikan Gold Mine and a further 6,778 ounces of gold were in the process of 
being refined or in the company's metal account on this date.

The total net cash outflow for the period of $62.327 million (13.61 cents per 
share) included cash inflow from operating activities referred to above plus 
net cash outflows from financing activities of $60.729 million, a result of 
repayment of borrowings, and an outflow of $33.403 million for investing 
activities, most notably exploration, capital works at the EGM in Ghana and 
preliminary works associated with the development of the Sissingué Gold Mine 
in Côte d'Ivoire.

Financial Position

At 31 December 2012 the Company had net assets of $390.957 million (85.37 
cents per share) and working capital defined as the excess of current assets 
over current liabilities of $27.650 million.

Cash and Investments

At 31 December 2012 available cash totalled $39.674 million (8.66 cents per 
share) while additional deposits totalling $9.097 million (1.99 cents per 
share) supported performance guarantees for environmental rehabilitation of 
the EGM.

As at 31 December 2012, Perseus held $10.061 million of equity accounted 
investments comprising security holdings in ASX listed companies Manas 
Resources Limited (23.7% interest) and Burey Gold Limited (23.0% interest).


At 31 December 2012 the Company's current receivables were $11.406 million, 
non-current receivables amounted to $40.860 million. The increase in 
non-current receivables in this period is due to an increase in a VAT refund 
from the Ghana Revenue Authority ("GRA"). The GRA has acknowledged the 
validity of the debt and has been working with the Company to agree a mutually 
acceptable mechanism for repaying the outstanding amount.

Debt Finance

At 31 December 2012 the group's borrowings made under a project debt facility 
provided by Macquarie Bank Limited and Credit Suisse AG to fund the 
construction of the EGM were nil. During the period, the project debt facility 
was restructured into a revolving line of credit with a facility limit of 
US$100 million.

Derivative financial instruments

As at 31 December 2012 the Company held forward sales contracts for 216,000 
ounces of gold and recorded a liability of $66.371 million on its balance 
sheet. These contracts are designated as effective hedge contracts, and the 
movement in mark-to-market value has been recorded as equity. A total of 
$37.993 million of the liability has been classified as a current liability as 
these forward sales contracts will settle within twelve months while the 
balance of $28.378 million has been classified as a non-current liability.

The liability in each case reflects the difference in value of the hedge 
contracts on the respective balance dates relative to the value of the 
contracts on the date of inception of hedge accounting.

The amount of gold sold forward under hedging agreements represents less than 
5% of the gold contained in the Group's currently defined total Ore Reserves 
and approximately 20% of the Group's total forecast gold production to the end 
of 2015.


The Company has established a dividend policy that provides for the payment of 
dividends to shareholders when Directors are confident that such payments can 
be sustained from cash flow on an ongoing basis.

Given the Company's impending significant capital expenditure programme 
associated with the proposed development of its second gold mine at Sissingué 
in the period up to the end of 2014, no dividends were declared or paid during 
the period.

Update on the Remediation of the EGM Crusher

As previously reported, a significant program of remediation work on the EGM 
crusher was commenced in December 2012 with the assistance of FL Smidth 
("FLS"), the original equipment manufacturer of the crusher. As foreshadowed, 
this programme of work has extended into the March 2013 Quarter.

At the date of this report, the status of remedial work and production at the 
EGM is as follows:
    --  A number of temporary repairs to the crusher shaft assembly
        were made to enable the crusher to continue operating until
        permanent repairs can be implemented.  The temporary repairs
        have been effective in enabling the crusher to operate at
        reasonable throughput rates between shutdowns that have been
        required at regular intervals for adjustments to be made.  In
        the month of January 2013, the crusher utilisation rate was
        41%, resulting in 356,564 tonnes of ore being crushed at an
        average rate of 1,123 wet metric tonnes per hour. This hourly
        rate translates to an annualised rate of crushing of 8.2 MTPA
        assuming an availability rate of 80%, illustrating that when
        operating as intended the crushing circuit in conjunction with
        the oxide feed circuit should perform at Perseus's targeted
        throughput for the EGM plant of 8MTPA.
    --  A replacement core and shaft for the crusher have been procured
        and these were delivered to site on 12 February 2013. All other
        parts and equipment needed to complete the permanent crusher
        remediation work are scheduled to be delivered to site by 17
        February 2013.
    --  A team of FLS technicians was mobilised to site on 12 February
        2013 to commence preparations for a crusher shutdown from 18
        February to 20 February 2013 during which the main shaft of the
        crusher and mantle assembly will be replaced. All other
        ancillary remediation work will be completed by the end of
        March 2013 Quarter.
    --  By the end of February 2013, it is expected that the
        refurbished crusher will be available for operating at or
        around the target availability level, thereby producing
        sufficient crushed ore to feed the SAG mill without
        interruption at the rate of 8MPTA.

The total cost of the parts, equipment and additional labour required to 
complete the repairs to the crusher has yet to be finalised given that work is 
continuing as at the date of this report. However, it is estimated that the 
total incremental cost of the remediation work will not exceed US$3 million. 
Some of these costs were expensed during the December 2012 Quarter and the 
balance will be expensed during the March 2013 Quarter which may give rise to 
slightly elevated processing and G&A costs in that period.

Production at EGM

A total of 17,498 ounces of gold were produced in January 2013.

The limited availability of the crusher resulted in interruptions to mill 
feed, constraining the mill utilisation rate to 71% during the month when 
436,415 tonnes of ore were processed at a throughput rate of 825 dry metric 
tonnes per hour. At this processing rate and assuming a steady state 
utilisation of 8,000 hours per annum or a utilisation rate of 91.3%, the 
annual processing rate would be 6.6MTPA, approximately 1.0MTPA above the 
current 5.5 MTPA nameplate capacity of the processing facility. In the 
period from 1 to 12 February 2013, crusher and mill utilisation rates were 
been 71% and 81% respectively.

The average head grade of ore fed to the mill in January 2013 was 1.50 g/t and 
the recovery was 83.4% due to a slightly coarser grind size than budgeted, 
caused by the stop/start nature of processing. In the period from 1 to 12 
February 2013, the average head grade of ore fed to the mill was 1.51g/t and 
the recovery was 83.8%.

Production Guidance

Given the impact of the crusher downtime on the availability of mill feed and 
therefore gold production during the March 2013 Quarter, the forecast of gold 
production for the second half of the fiscal year ending 30 June 2013 has been 
modified from previously announced levels to 105,000 ounces to 125,000 ounces 
resulting in a forecast full financial year production range of 208,700 to 
228,700 ounces.

The forecast cost of producing gold in the quantities predicted above is 
$755/oz (excluding royalties, capital and exploration) for the second half of 
fiscal year 2013 or $645/oz for the full financial year. The "all up" forecast 
site cost at the EGM are in the order of US$1,100/oz.

Perseus is currently engaged on a comprehensive review of longer term 
production plans at the EGM aimed at developing an operating strategy that 
will increase the value of the property above that implied by the current Life 
of Mine Plan. It is expected that results of the review will be available 
for publication during the June 2013 Quarter.

Jeff Quartermaine
Managing Director and Chief Executive Officer

About Perseus Mining Limited

Perseus Mining Limited(ASX/TSX: PRU)has forged a reputation as one of West 
Africa's most successful gold explorers focused on under-explored gold belts 
in West Africa. In August 2011 Perseus became a producer at its Edikan Gold 
Mine (previously known as the Central Ashanti Gold Project) in Ghana. 
Details of the project and mine plan are set out in the technical report 
entitled "Technical Report - Central Ashanti Gold Project, Ghana" dated May 
30, 2011.

Perseus is now also planning the development of its Sissingué Gold Project, 
part of the Tengrela Gold Project in Côte d'Ivoire, with production targeted 
for 2014. Tengrela has the potential to become a significant contributor to 
the Company's goal to develop into a 400,000-ounce per annum gold producer 
during 2014. Details of the project are set out within "Technical Report - 
Tengrela Gold Project, Ivory Coast" dated December 22, 2010.

Perseus will continue its strategy of rapidly increasing its resource and 
reserve base during the ramp-up of the Edikan Gold Mine and development of the 
Sissingué Gold Project.

Competent Person Statement

The information in this report that relates to exploration results, mineral 
resources or ore reserves is based on information compiled by Mr Kevin 
Thomson, who is a Professional Geoscientist with the Association of 
Professional Geoscientists of Ontario. Mr Thomson is an employee of the 
Company. Mr Thomson has sufficient experience, which is relevant to the 
style of mineralisation and type of depositunder consideration and to the 
activity which he is undertaking, 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"). Mr Thomson consents to the inclusion in this report 
of the matters based on his information in the form and context in which it 
appears. For a description of Perseus' data verification process, quality 
assurance and quality control measures, the effective date of the mineral 
resource and mineral reserve estimates contained herein, details of the key 
assumptions, parameters and methods used to estimate the mineral resources and 
reserves set out in this report and the extent to which the estimate of 
mineral resources or mineral reserves set out herein may be materially 
affected by any known environmental, permitting, legal, title, taxation, 
socio-political, marketing or other relevant issues, readers are directed to 
the technical report entitled "Technical Report - Central Ashanti Gold 
Project, Ghana" dated May 30, 2011 and the technical report entitled 
''Technical Report - Tengrela Gold Project, Côte d'Ivoire'' dated December 
22, 2010 in relation to the Edikan Gold Mine (formerly the Central Ashanti 
Gold Project) and the Tengrela Gold Project respectively.

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.

To discuss any aspect of this announcement, please contact: Jeff Quartermaine 
at telephone +61 8 6144 1700 or 
respectively; or Nathan Ryan at telephone +61 3 9622 2159 or (media) Rebecca Greco at telephone 
+1 416 822 6483 or (Toronto)

SOURCE: Perseus Mining Limited

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