Perseus in Talks to Expand Gold Production in West Africa

Perseus Mining Ltd. (PRU), an Australian gold producer with operations in Ghana and Ivory Coast, said it’s in talks to expand in West Africa in a bid to boost output by about half in 2014.

Perseus, based in Perth, is in discussions with companies about buying a mine or setting up a venture to add at least 150,000 ounces of capacity a year, Managing Director Mark Calderwood told reporters after a presentation to investors in Melbourne today. He didn’t provide additional information.

“There are joint-venture discussions at the moment as there are a few companies around that don’t have the rigs or the cash to drill out their own projects,” Calderwood said. “We aim to look for something to add on for 2014.”

Gold producers are buying mines and expanding operations as prices climbed 19 percent in London in the past year. Calderwood said he expects gold to trade in the range of $1,600 to $2,000 an ounce over the “next few years” and that would sustain profit margins at low-cost producers such as Perseus.

The company is targeting output of 280,000 ounces of gold in 2013 from 225,000 ounces this year, mainly from its Edikan mine in Ghana.

Perseus fell 3.5 percent to A$2.52 in Sydney. The stock, up 5 percent this year, is among smaller Australian miners that Citigroup Inc. said are likely to outperform their larger rivals in 2012.

To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net

To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net

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